<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1999.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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FEDERATED DEPARTMENT STORES, INC.
(Exact Name of Registrant as Specified in Its Charter)
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<S> <C> <C>
DELAWARE 5311 13-3324058
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Control Number) Identification No.)
</TABLE>
151 WEST 34TH STREET
NEW YORK, NEW YORK 10001
(212) 494-1601
AND
7 WEST SEVENTH STREET
CINCINNATI, OHIO 45202
(513) 579-7000
(Principal Executive Offices)
DENNIS J. BRODERICK, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
FEDERATED DEPARTMENT STORES, INC.
7 WEST SEVENTH STREET
CINCINNATI, OHIO 45202
(513) 579-7000
(Agent For Service)
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Copy to:
MARK E. BETZEN, ESQ.
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 220-3939
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] .
------------------
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] .
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(2)
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6.30% Senior Notes due 2009............ $350,000,000 100% $350,000,000 $97,300
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6.90% Senior Debentures due 2029....... $400,000,000 100% $400,000,000 $111,200
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(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457 of the Securities Act of 1933.
(2) The registration fee for the securities offered hereby has been calculated
under Rule 457(f)(2) of the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
The information in this prospectus is not complete and may be changed. Federated
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 22, 1999
PROSPECTUS
EXCHANGE OFFER
FOR
ALL OUTSTANDING
6.30% SENIOR NOTES DUE 2009
AND
ALL OUTSTANDING
6.90% SENIOR DEBENTURES DUE 2029
OF
FEDERATED DEPARTMENT STORES, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1999, UNLESS EXTENDED.
---------------------
TERMS OF THE EXCHANGE OFFER
- Federated is offering to exchange registered 6.30% Senior Notes due 2009
for all of its original unregistered 6.30% Senior Notes due 2009 and
registered 6.90% Senior Debentures due 2029 for all of its original
unregistered 6.90% Senior Debentures due 2029.
- The terms of the exchange notes are identical in all material respects to
the terms of the original notes and the terms of the exchange debentures
are identical in all material respects to the terms of the original
debentures, except that the registration rights and related liquidated
damages provisions, and the transfer restrictions, applicable to the
original securities are not applicable to the exchange securities.
- Subject to the satisfaction or waiver of specified conditions, Federated
will exchange the applicable exchange securities for all original
securities that are validly tendered and not withdrawn prior to the
expiration of the exchange offer.
- You may withdraw tenders of original securities at any time prior to the
expiration of the exchange offer.
- The exchange of original securities for exchange securities pursuant to
the exchange offer generally will not be a taxable event for U.S. federal
income tax purposes. See "Material United States Federal Income Tax
Considerations."
- Federated will not receive any proceeds from the exchange offer.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED WHETHER
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------
This Prospectus is dated , 1999.
<PAGE> 3
TABLE OF CONTENTS
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PAGE
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WHERE YOU CAN FIND MORE INFORMATION......................... 3
INCORPORATION OF DOCUMENTS BY REFERENCE..................... 3
PROSPECTUS SUMMARY.......................................... 4
FEDERATED................................................... 8
USE OF PROCEEDS............................................. 8
SELECTED FINANCIAL DATA..................................... 9
RATIO OF EARNINGS TO FIXED CHARGES.......................... 9
CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING
STATEMENTS................................................ 10
THE EXCHANGE OFFER.......................................... 10
DESCRIPTION OF EXCHANGE SECURITIES.......................... 18
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS.... 36
PLAN OF DISTRIBUTION........................................ 39
LEGAL MATTERS............................................... 39
EXPERTS..................................................... 39
</TABLE>
2
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WHERE YOU CAN FIND MORE INFORMATION
Federated files reports, proxy statements, and other documents with the
Securities and Exchange Commission in accordance with the requirements of the
Securities Exchange Act of 1934. Federated's SEC filings are available to the
public over the Internet at the Commission's web site at http://www.sec.gov. You
may also read and copy any document Federated files at the Commission's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information regarding the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. In addition, because Federated's common stock is
listed on the New York Stock Exchange, you may read reports, proxy statements,
and other documents relating to Federated at the offices of the New York Stock
Exchange at 20 Broad Street, New York, New York 10005.
Additional information regarding Federated and the exchange securities is
contained in the registration statement of which this prospectus is a part,
including the exhibits thereto. The statements contained in this prospectus
regarding the provisions of any other document are not necessarily complete.
Accordingly, each such statement is qualified in its entirety by reference to
the copy of such document filed as an exhibit to the registration statement or
otherwise filed with the Commission.
INCORPORATION OF DOCUMENTS BY REFERENCE
This prospectus incorporates important business and financial information
about Federated that is not included in or delivered with this prospectus. The
documents specified below, which have been or are to be filed by Federated with
the Commission, are incorporated by reference into this prospectus. The
information contained in those documents is considered to be part of this
prospectus, except that the information contained in later-dated documents will
supplement, modify, or supersede, as applicable, the information contained in
earlier-dated documents.
Federated incorporates by reference into this prospectus the documents
listed below and all documents filed by Federated with the Commission under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 after
the date of this prospectus and prior to the time that the offering made hereby
is completed.
- Federated's annual report on Form 10-K for the fiscal year ended January
30, 1999;
- Federated's current report on Form 8-K dated March 18, 1999.
You may obtain without charge a copy of any of the documents incorporated
by reference herein, except for any exhibits to those documents that are not
expressly incorporated by reference in those documents, by writing or
telephoning Federated Department Stores, Inc., 7 West Seventh Street,
Cincinnati, Ohio 45202, Attention: Investor Relations (telephone: (513)
579-7780).
In order to assure timely delivery, any request for copies of the
indenture, supplemental indenture, or other agreements referred to in this
prospectus, should be directed to Federated at the address referred to above no
later than , 1999.
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PROSPECTUS SUMMARY
This brief summary highlights selected information from the prospectus. It
may not contain all of the information that is important to you. Federated urges
you to carefully read and review the entire prospectus and the other documents
to which it refers to fully understand the terms of the exchange securities and
the exchange offer.
SUMMARY OF THE TERMS OF THE EXCHANGE OFFER
General.................... On March 24, 1999, Federated completed a private
offering of the original securities, which consist
of $350,000,000 aggregate principal amount of its
6.30% Senior Notes due 2009 and $400,000,000
aggregate principal amount of its 6.90% Senior
Debentures due 2029. In connection with the private
offering, Federated entered into a registration
rights agreement in which it agreed, among other
things, to deliver this prospectus to you and to
complete an exchange offer for the original
securities.
The Exchange Offer......... Federated is offering to exchange up to
$350,000,000 aggregate principal amount of its
6.30% Senior Notes due 2009 which have been
registered under the Securities Act for a like
aggregate principal amount of the original notes
and up to $400,000,000 aggregate principal amount
of its 6.90% Senior Debentures due 2029 which have
been registered under the Securities Act for a like
aggregate principal amount of the original
debentures.
The terms of the exchange notes are identical in
all material respects to the terms of the original
notes, and the terms of the exchange debentures are
identical in all material respects to the terms of
the original debentures, except that the
registration rights and related liquidated damages
provisions, and the transfer restrictions,
applicable to the original securities are not
applicable to the exchange securities.
Original securities may be tendered only in $1,000
increments. Subject to the satisfaction or waiver
of specified conditions, Federated will exchange
the applicable exchange securities for all original
securities that are validly tendered and not
withdrawn prior to the expiration of the exchange
offer. Federated will cause the exchange to be
effected promptly after the expiration of the
exchange offer.
UPON COMPLETION OF THE EXCHANGE OFFER, THERE MAY BE
NO MARKET FOR THE ORIGINAL SECURITIES AND YOU MAY
HAVE DIFFICULTY SELLING THEM.
Resales.................... Based on interpretations by the staff of the
Commission, Federated believes that exchange
securities issued in the exchange offer may be
offered for resale, resold, or otherwise
transferred by you, without compliance with the
registration and prospectus delivery requirements
of the Securities Act, if:
(1) you acquire the exchange securities in the
ordinary course of your business;
(2) you are not engaging in and do not intend to
engage in a distribution of the exchange
securities;
(3) you do not have an arrangement or understanding
with any person to participate in a
distribution of the exchange securities; and
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(4) you are not an affiliate of Federated within
the meaning of Rule 405 under the Securities
Act.
If you are an affiliate of Federated, or are
engaging in or intend to engage in, or have any
arrangement or understanding with any person to
participate in, a distribution of the exchange
securities:
(1) you cannot rely on the applicable
interpretations of the staff of the Commission;
and
(2) you must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any resale
transaction.
If you are a broker or dealer seeking to receive
exchange securities for your own account in
exchange for original securities that you acquired
as a result of market-making or other trading
activities, you must acknowledge that you will
deliver this prospectus in connection with any
offer to resell, resale, or other transfer of the
exchange securities that you receive in the
exchange offer.
Expiration Date............ The exchange offer will expire at 5:00 p.m., New
York City time, on , 1999, unless
extended by Federated.
Withdrawal................. You may withdraw the tender of your original
securities at any time prior to the expiration of
the exchange offer. Federated will return to you
any of your original securities that are not
accepted for exchange for any reason, without
expense to you, promptly after the expiration or
termination of the exchange offer.
Interest on the Exchange
Securities and the
Original Securities...... The exchange securities will bear interest at the
applicable rate per annum set forth on the cover
page of this prospectus from the most recent date
to which interest has been paid on the original
securities or, if no interest has been paid on the
original securities, from March 24, 1999. Such
interest will be payable semi-annually on each
April 1 and October 1, commencing October 1, 1999.
No interest will be paid on original securities
following their acceptance for exchange.
Conditions to the Exchange
Offer...................... The exchange offer is subject to customary
conditions. Federated may assert or waive these
conditions in its sole discretion. See "The
Exchange Offer -- Conditions to the Exchange
Offer."
Exchange Agent............. Citibank, N.A. is serving as exchange agent for the
exchange offer.
Procedures for Tendering
Original Securities...... If you wish to tender your original securities, you
must properly complete, sign, and date the
accompanying letter of transmittal and deliver it,
together with your original securities and any
other required documentation, to the exchange
agent, at the address set forth in the letter of
transmittal, no later than 5:00 p.m., New York City
time, on the expiration date. By executing the
letter of transmittal, you will represent to
Federated that you are acquiring the exchange
securities in the ordinary course of your business,
that you are not participating, do not intend to
participate, and have no arrangement or
understanding with any person to participate, in a
distribution of
5
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exchange securities, and that you are not an
"affiliate" of Federated. See "The Exchange
Offer -- Procedures for Tendering."
Special Procedures for
Beneficial Owners.......... If you are the beneficial owner of original
securities that are registered in the name of your
broker, dealer, commercial bank, trust company, or
other nominee, and you wish to participate in the
exchange offer, you should promptly contact the
person through which you beneficially own your
original securities and instruct that person to
tender original securities on your behalf. See "The
Exchange Offer -- Procedures for Tendering."
Guaranteed Delivery
Procedures................. If you wish to tender your original securities and
you cannot deliver your securities, the letter of
transmittal, or any other required documents to the
exchange agent before 5:00 p.m., New York City
time, on the expiration date, you may tender your
original securities according to the guaranteed
delivery procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures."
Acceptance of Original
Securities and Delivery of
Exchange Securities...... Subject to the satisfaction or waiver of the
conditions to the exchange offer, Federated will
accept for exchange any and all original securities
that are properly tendered and not withdrawn prior
to 5:00 p.m., New York City time, on the expiration
date. Federated will cause the exchange to be
effected promptly after the expiration of the
exchange offer.
Material U.S. Federal
Income Tax
Considerations........... The exchange of original securities for exchange
securities pursuant to the exchange offer generally
will not be a taxable event for U.S. federal income
tax purposes. See "Material United States Federal
Income Tax Considerations."
Use of Proceeds............ Federated will not receive any proceeds from the
issuance of exchange securities pursuant to the
exchange offer. Federated will pay all expenses
incident to the exchange offer.
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SUMMARY OF THE TERMS OF THE EXCHANGE SECURITIES
The terms of the exchange notes are identical in all material respects to
the terms of the original notes and the terms of the exchange debentures are
identical in all material respects to the original debentures, except that the
registration rights and related liquidated damages provisions, and the transfer
restrictions, applicable to the original securities are not applicable to the
exchange securities. The exchange notes will evidence the same debt as the
original notes, and the exchange debentures will evidence the same debt as the
original debentures. The exchange securities and the original securities will be
governed by the same indenture and supplemental indenture. Except where the
context requires otherwise, references in this prospectus to "notes,"
"debentures," or "securities" are references to both original notes and exchange
notes, both original debentures and exchange debentures, or both original
securities and exchange securities, as the case may be.
Aggregate Amount........... $350.0 million principal amount of 6.30% Senior
Notes Due 2009, and $400.0 million principal amount
of 6.90% Senior Debentures Due 2029.
Interest Payment Dates..... April 1 and October 1 of each year, commencing
October 1, 1999.
Maturity Date.............. The exchange notes mature on April 1, 2009, and the
exchange debentures mature on April 1, 2029.
Optional Redemption........ Federated, at its option, may redeem all or any
portion of either tranche of the exchange
securities on not less than 30 nor more than 60
days' prior notice at the redemption price stated
in "Description of Exchange
Securities -- Redemption" plus accrued interest to
the date of redemption.
Events of Default.......... The indenture and the supplemental indenture
describe the circumstances that constitute events
of default with respect to the exchange securities.
See "Description of Exchange Securities -- Events
of Default."
Restrictive Covenants...... The indenture and the supplemental indenture impose
limitations on the ability of Federated and its
subsidiaries to, among other things, create liens,
enter into certain sale and leaseback transactions,
and consolidate or merge with or sell all or
substantially all of its properties assets to
another person. See "Description of Exchange
Securities -- Covenants of Federated."
Use of Proceeds............ Federated will not receive any proceeds from the
exchange offer. For a description of the use of
proceeds of the offering of original securities,
see "Use of Proceeds."
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FEDERATED
GENERAL
Federated is one of the leading operators of full-line department stores in
the United States with over 400 department stores in 33 states as of January 30,
1999. Federated's department stores sell a wide range of merchandise, including
men's, women's, and children's apparel and accessories, cosmetics, home
furnishings, and other consumer goods. Federated's department stores are
diversified by size of store, merchandising character, and character of
community served. Federated's department stores are located at urban or suburban
sites, principally in densely populated areas across the United States.
Federated operates its department stores under the names "Macy's,"
"Bloomingdale's," "The Bon Marche," "Burdines," "Goldsmith's," "Lazarus,"
"Rich's," and "Stern's." Federated also operates direct mail catalog businesses
under the names "Bloomingdale's By Mail" and "Macy's By Mail" and an electronic
commerce catalog business under the name "macys.com."
On March 18, 1999, Federated acquired Fingerhut Companies, Inc. Fingerhut
is a leading database marketing company that sells a broad range of products and
services through catalogs, direct marketing, and the Internet. In addition to
the core Fingerhut catalog business, Fingerhut owns:
- Figi's, a specialty food and gift catalog business;
- Arizona Mail Order and Bedford Fair, both apparel catalog businesses; and
- Popular Club, a membership-based general merchandise catalog business.
Fingerhut also offers a broad range of business services to third parties,
including telemarketing, direct marketing, information management, warehousing,
product fulfillment and distribution, order and returns processing, and customer
service, and has investments in several providers of Internet-based merchandise
and services.
Federated's principal executive offices are located at 151 West 34th
Street, New York, New York 10001, and 7 West Seventh Street, Cincinnati, Ohio
45202. Federated's telephone numbers at such offices are (212) 494-1601 and
(513) 579-7000, respectively.
USE OF PROCEEDS
The exchange offer is intended to satisfy Federated's obligations under the
registration rights agreement that Federated entered into in connection with the
private offering of the original securities. Federated will not receive any cash
proceeds from the issuance of the exchange securities. The original securities
that are surrendered in exchange for the exchange securities will be retired and
canceled and cannot be reissued. As a result, the issuance of the exchange
securities will not result in any increase or decrease in Federated's
indebtedness.
Federated used the net proceeds from the private offering of the original
securities to repay short-term borrowings used by Federated to finance the
acquisition of Fingerhut. At the time of such repayment, such borrowings bore
interest at a weighted-average rate of approximately 5% per annum.
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SELECTED FINANCIAL DATA
The selected financial data set forth below should be read in conjunction
with the consolidated financial statements and the notes thereto incorporated by
reference into this prospectus.
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FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR
ENDED ENDED ENDED ENDED ENDED
JANUARY 30, JANUARY 31, FEBRUARY 1, FEBRUARY 3, JANUARY 28,
1999 1998 1997 1996 1995
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(MILLIONS EXCEPT PER SHARE DATA)
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CONSOLIDATED STATEMENT OF INCOME DATA:
Net sales, including leased department
sales................................. $15,833 $15,668 $15,229 $15,049 $ 8,316
------- ------- ------- ------- -------
Cost of sales........................... 9,616 9,581 9,354 9,410 5,146
Selling, general and administrative
expenses.............................. 4,762 4,746 4,982 4,976 2,620
------- ------- ------- ------- -------
Operating income........................ 1,455 1,341 893 663 550
Interest expense........................ (304) (418) (499) (508) (262)
Interest income......................... 12 35 47 47 43
------- ------- ------- ------- -------
Income before income taxes and
extraordinary items................... 1,163 958 441 202 331
Federal, state and local income tax
expense............................... (478) (383) (175) (127) (143)
------- ------- ------- ------- -------
Income before extraordinary items....... 685 575 266 75 188
Extraordinary items(a).................. (23) (39) -- -- --
------- ------- ------- ------- -------
Net income.................... $ 662 $ 536 $ 266 $ 75 $ 188
======= ======= ======= ======= =======
Basic earnings per share:
Income before extraordinary items..... $ 3.27 $ 2.74 $ 1.28 $ .39 $ 1.41
Net income............................ 3.16 2.56 1.28 .39 1.41
Diluted earnings per share:
Income before extraordinary items..... $ 3.06 $ 2.58 $ 1.24 $ .39 $ 1.40
Net income............................ 2.96 2.41 1.24 .39 1.40
Average number of shares outstanding.... 209.1 209.2 207.5 191.5 132.9
Depreciation and amortization........... $ 624 $ 590 $ 533 $ 497 $ 286
Capital expenditures.................... $ 695 $ 696 $ 846 $ 699 $ 398
BALANCE SHEET DATA (AT YEAR END):
Cash.................................... $ 307 $ 142 $ 149 $ 173 $ 206
Working capital......................... 2,904 3,134 2,831 3,262 2,376
Total assets............................ 13,464 13,738 14,264 14,295 12,277
Short-term debt......................... 524 556 1,095 733 463
Long-term debt.......................... 3,057 3,919 4,606 5,632 4,529
Shareholders' equity.................... 5,709 5,256 4,669 4,274 3,640
</TABLE>
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(a) The extraordinary items for the fiscal year ended January 30, 1999 and the
fiscal year ended January 31, 1998 were after-tax expenses associated with
debt prepayments.
RATIO OF EARNINGS TO FIXED CHARGES
Federated's ratio of earnings to fixed charges for each of the periods set
forth below has been computed on a consolidated basis and should be read in
conjunction with the consolidated financial statements, including the notes
thereto, and other information set forth in the reports filed by Federated with
the Commission.
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR FISCAL YEAR
ENDED ENDED ENDED ENDED ENDED
JANUARY 30, JANUARY 31, FEBRUARY 1, FEBRUARY 3, JANUARY 28,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- -----------
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Consolidated ratio of earnings to fixed
charges (unaudited)................... 3.8x 2.8x 1.7x 1.3x 2.0x
</TABLE>
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For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income from continuing operations before income taxes and
extraordinary items plus fixed charges (excluding capitalized interest). Fixed
charges consist of interest incurred on indebtedness, amortization of debt
expense and the portion of rental expense under operating leases deemed to be
the equivalent of interest.
CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference forward-looking
statements. Forward-looking statements are based upon the beliefs and
assumptions of, and on information available to, the management of Federated.
Forward-looking statements include statements regarding possible future
results of operations, competitive position, and growth opportunities of
Federated. In addition, the following statements are or may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995: (1) statements preceded by, followed by or that
include the words "may," "will," "could," "should," "believe," "expect,"
"future," "potential," "anticipate," "intend," "plan," "estimate," or "continue"
or the negative or other variations thereof and (2) other statements regarding
matters that are not historical facts. Forward-looking statements are subject to
various risks and uncertainties, including the following:
- risks and uncertainties relating to the possible invalidity of the
underlying beliefs and assumptions;
- possible changes or developments in social, economic, business, industry,
market, legal, and regulatory circumstances and conditions; and
- actions taken or omitted to be taken by third parties, including
customers, suppliers, business partners, competitors, and legislative,
regulatory, judicial, and other governmental authorities and officials.
In addition to the foregoing and any risks and uncertainties specifically
identified in the text surrounding forward-looking statements, any statements in
this prospectus or in the reports, proxy statements, and other documents
referred to in "Where You Can Find More Information" that warn of risks or
uncertainties associated with future results, events, or circumstances may
identify important factors that could cause actual results, events, and
circumstances to differ materially from those reflected in forward-looking
statements.
THE EXCHANGE OFFER
INTRODUCTION
Federated hereby offers to exchange a like principal amount of exchange
notes for any or all outstanding original notes and a like principal amount of
exchange debentures for any or all outstanding original debentures, in each case
on the terms and subject to the conditions set forth in this prospectus and the
accompanying letter of transmittal. The offer described in the immediately
preceding sentence is referred to in this prospectus as the "exchange offer."
Holders may tender some or all of their original securities pursuant to the
exchange offer. However, original securities tendered in the exchange offer must
be in denominations of $1,000 or any integral multiple of $1,000.
As of the date of this prospectus, $350,000,000 aggregate principal amount
of the original notes and $400,000,000 aggregate principal amount of original
debentures are outstanding. This prospectus, together with the letter of
transmittal, is first being sent to holders of original securities on or about
, 1999.
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TERMS OF THE EXCHANGE OFFER
On the terms and subject to the conditions set forth in this prospectus and
in the accompanying letter of transmittal, Federated will accept for exchange
pursuant to the exchange offer original securities that are validly tendered and
not withdrawn prior to the expiration date. As used in this prospectus, the term
"expiration date" means 5:00 p.m., New York City time, on , 1999.
However, if Federated, in its sole discretion, extends the period of time for
which the exchange offer is open, the term "expiration date" will mean the
latest time and date to which Federated shall have extended the expiration of
the exchange offer.
The exchange offer is subject to the conditions set forth in "-- Conditions
to the Exchange Offer." Federated reserves the right, but will not be obligated,
to waive any or all of the conditions to the exchange offer.
Federated reserves the right, at any time or from time to time, to extend
the period of time during which the exchange offer is open by giving written
notice of such extension to the exchange agent and by making a public
announcement of such extension. There can be no assurance that Federated will
exercise its right to extend the exchange offer. During any extension period,
all original securities previously tendered will remain subject to the exchange
offer and may be accepted for exchange by Federated. Assuming the prior
satisfaction or waiver of the conditions to the exchange offer, Federated will
accept for exchange, and exchange, promptly after the expiration date, in
accordance with the terms of the exchange offer, all original securities validly
tendered pursuant to the exchange offer and not withdrawn prior to the
expiration date. Any original securities not accepted by Federated for exchange
for any reason will be returned without expense to the tendering holder promptly
after the expiration or termination of the exchange offer.
Federated reserves the right, at any time or from time to time, to (1)
terminate the exchange offer, and not to accept for exchange any original
securities not previously accepted for exchange, upon the occurrence of any of
the events set forth in "-- Conditions to the Exchange Offer," by giving written
notice of such termination to the exchange agent and (2) waive any conditions or
otherwise amend the exchange offer in any respect, by giving written notice to
the exchange agent. An extension, termination, or amendment of the exchange
offer will be followed as promptly as practicable by public announcement, the
announcement in the case of an extension to be issued no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
expiration date. Without limiting the manner in which Federated may choose to
make any public announcement, Federated will have no obligation to make or
communicate any such announcement otherwise than by issuing a release to the Dow
Jones News Service or as otherwise may be required by law.
Holders of original securities do not have any appraisal or dissenters'
rights under the General Corporation Law of the State of Delaware, the
indenture, or the supplemental indenture in connection with the exchange offer.
Federated intends to conduct the exchange offer in accordance with the
applicable requirements of the Securities Act, the Exchange Act, and the rules
and regulations of the Commission promulgated under those Acts.
PROCEDURES FOR TENDERING
Except as set forth below, a holder who wishes to tender original
securities for exchange pursuant to the exchange offer must deliver a properly
completed and duly executed letter of transmittal, including all other documents
required by the letter of transmittal, to Citibank, N.A., the exchange agent, at
the address set forth below under "-- Exchange Agent" prior to the expiration
date. In addition to such letter of transmittal and such other documents, the
exchange agent must receive prior to the expiration date:
- the certificates representing the original securities; or
- a timely confirmation of book-entry transfer of the original securities
into the exchange agent's account at The Depository Trust Company
("DTC"), pursuant to the procedure for book-entry transfer described
below.
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The method of delivery of original securities, letters of transmittal, and
all other required documents is at your election and risk. If the delivery is by
mail, Federated recommends that you use registered mail, properly insured, with
return receipt requested. In all cases, you should allow sufficient time to
assure timely delivery. You should not send letters of transmittal or
certificates representing original securities to Federated.
Any beneficial owner of original securities that are registered in the name
of a broker, dealer, commercial bank, trust company, or other nominee who wishes
to participate in the exchange offer should promptly contact the person through
which it beneficially owns such original securities and instruct that person to
tender original securities on behalf of such beneficial owner. Any registered
holder of original securities that is a participant in DTC's Book-Entry Transfer
Facility system may make book-entry delivery of the original securities by
causing DTC to transfer the original securities into the exchange agent's
account in accordance with DTC's procedures for such transfer.
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the original securities surrendered for
exchange are tendered:
- by a registered holder of the original securities who has not completed
the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal; or
- for the account of an eligible institution.
In the event that signatures on a letter of transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, the guarantees
must be made by a firm that is an eligible institution -- including most banks,
savings and loan associations, and brokerage houses -- that is a participant in
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program, or the Stock Exchanges Medallion Program.
If the letter of transmittal is signed by a person or persons other than
the registered holder or holders of the original securities, the letter of
transmittal must be accompanied by a written instrument or instruments of
transfer or exchange in a form satisfactory to Federated, in its sole
discretion, and duly executed by the registered holder or holders with the
signature guaranteed by an eligible institution. Certificates representing the
original securities must be endorsed or accompanied by appropriate powers of
attorney, in either case signed exactly as the name or names of the registered
holder or holders appear on the certificates representing the original
securities.
If the letter of transmittal or any certificates representing original
securities, instruments of transfer or exchange, or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, the persons should so indicate when signing, and, unless waived by
Federated, proper evidence satisfactory to Federated of their authority to so
act must be submitted.
By tendering original securities pursuant to the exchange offer, each
holder will represent to Federated that, among other things:
- the holder has full power and authority to tender, sell, assign,
transfer, and exchange the original securities tendered;
- when such original securities are accepted by Federated for exchange,
Federated will acquire good and unencumbered title to the original
securities, free and clear of all liens, restrictions, charges,
encumbrances, and adverse claims;
- the exchange securities acquired pursuant to the exchange offer are being
acquired in the ordinary course of business of the person receiving the
exchange securities (whether or not the person is the holder of the
original securities);
- neither the holder nor any such other person is engaging in or intends to
engage in a distribution of the exchange securities;
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<PAGE> 14
- neither the holder nor any such other person has an arrangement or
understanding with any person to participate in a distribution of the
exchange securities; and
- neither the holder nor any such other person is an affiliate of
Federated, or if either is an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities Act.
In addition, each broker-dealer that is to receive exchange securities for
its own account in exchange for original securities must represent that such
original securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities, and must acknowledge that
it will deliver a prospectus that meets the requirements of the Securities Act
in connection with any resale of the exchange securities. The letter of
transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. See "Plan of Distribution."
Federated will interpret the terms and conditions of the exchange offer,
including the letter of transmittal and the instructions to the letter of
transmittal, and will resolve all questions as to the validity, form,
eligibility (including time of receipt), and acceptance of original securities
tendered for exchange. Federated's determinations in this regard will be final
and binding on all parties. Federated reserves the absolute right to reject any
and all tenders of any particular original securities not properly tendered or
to not accept any particular original securities if the acceptance might, in
Federated's or its counsel's judgment, be unlawful. Federated also reserves the
absolute right to waive any defects or irregularities or conditions of the
exchange offer as to any particular original securities either before or after
the expiration date, including the right to waive the ineligibility of any
holder who seeks to tender original securities in the exchange offer.
Unless waived, any defects or irregularities in connection with tenders of
original securities for exchange must be cured within such reasonable period of
time as Federated determines. Neither Federated, the exchange agent, nor any
other person will be under any duty to give notification of any defect or
irregularity with respect to any tender of original securities for exchange, nor
will any of them incur any liability for any failure to give notification. Any
original securities received by the exchange agent that are not properly
tendered and as to which the irregularities have not been cured or waived will
be returned by the exchange agent to the tendering holder, unless otherwise
provided in the letter of transmittal, promptly after the expiration date.
ACCEPTANCE OF ORIGINAL SECURITIES FOR EXCHANGE; DELIVERY OF EXCHANGE SECURITIES
Upon satisfaction or waiver of all of the conditions to the exchange offer,
Federated will accept, promptly after the expiration date, all original
securities that have been validly tendered and not withdrawn, and will issue the
applicable exchange securities in exchange for such original securities promptly
after its acceptance of such original securities. See "-- Conditions to the
Exchange Offer" below. For purposes of the exchange offer, Federated will be
deemed to have accepted validly tendered original securities for exchange when,
as, and if Federated has given written notice of such acceptance to the exchange
agent.
For each original note or original debenture accepted for exchange, the
holder of the original note or original debenture, as the case may be, will
receive an exchange note or exchange debenture, respectively, having a principal
amount equal to that of the surrendered original security. The exchange
securities will bear interest from the most recent date to which interest has
been paid on the original securities or, if no interest has been paid on the
original securities, from March 24, 1999. Accordingly, registered holders of
exchange securities on the relevant record date for the first interest payment
date following the completion of the exchange offer will receive interest
accruing from the most recent date to which interest has been paid or, if no
interest has been paid, from March 24, 1999. Original securities accepted for
exchange will cease to accrue interest from and after the date on which they are
accepted for exchange. Holders whose original securities are accepted for
exchange will not receive any payment for accrued interest on the original
securities otherwise payable on any interest payment date if the record date
occurs on or after date
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<PAGE> 15
on which they are accepted for exchange and will be deemed to have waived their
rights to receive the accrued interest on the original securities.
In all cases, issuance of exchange securities for original securities that
are accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of:
- the certificates representing the original securities, or a timely
confirmation of book-entry transfer of the original securities into the
exchange agent's account at the book-entry transfer facility;
- a properly completed and duly executed letter of transmittal; and
- all other required documents.
If any tendered original securities are not accepted for any reason or if
original securities are submitted for a greater principal amount than the holder
desires to exchange, such unaccepted or non-exchanged original securities will
be returned without expense to the tendering holder of the original securities
or, if the original securities were tendered by book-entry transfer, the
non-exchanged original securities will be credited to an account maintained with
the book-entry transfer facility. In either case, the return of such original
securities will be effected promptly after the expiration or termination of the
exchange offer.
BOOK-ENTRY TRANSFER
The exchange agent has advised Federated that it will establish an account
with respect to the original securities at The Depository Trust Company, as
book-entry transfer facility, for purposes of the exchange offer within two
business days after the date of this prospectus. Any financial institution that
is a participant in the book-entry transfer facility's system may make
book-entry delivery of original securities by causing the book-entry transfer
facility to transfer the original securities into the exchange agent's account
at the facility in accordance with the facility's procedures for transfer.
However, although delivery of original securities may be effected through
book-entry transfer at the facility, a properly completed and duly executed
letter of transmittal, with any required signature guarantees and any other
required documents, must, in any case, be transmitted to, and received by, the
exchange agent at the address set forth below under "-- Exchange Agent" prior to
the expiration date, unless the holder has strictly complied with the guaranteed
delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of original securities desires to tender the
original securities, and the original securities are not immediately available,
or time will not permit the holder's original securities or other required
documents to reach the exchange agent before the expiration date, or the
procedure for book-entry transfer described above cannot be completed on a
timely basis, a tender may nonetheless be effected if:
- the tender is made through an eligible institution;
- prior to the expiration date, the exchange agent receives from an
eligible institution a properly completed and duly executed letter of
transmittal and notice of guaranteed delivery, substantially in the form
provided by Federated, by facsimile transmission, mail, or hand delivery,
(a) setting forth the name and address of the holder of original
securities and the amount of original securities tendered, (b) stating
that the tender is being made thereby, and (c) guaranteeing that, within
three NYSE trading days after the expiration date, the certificates for
all physically tendered original securities, in proper form for transfer,
or a book-entry confirmation, as the case may be, and any other documents
required by the letter of transmittal will be deposited by the eligible
institution with the exchange agent; and
- the certificates for all physically tendered original securities, in
proper form for transfer, or a book-entry confirmation, as the case may
be, and all other documents required by the letter of
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<PAGE> 16
transmittal, are received by the exchange agent within three NYSE trading
days after the expiration date.
WITHDRAWAL RIGHTS
You may withdraw tenders of original securities at any time prior to 5:00
p.m., New York City time, on the expiration date. Withdrawals may be made of any
portion of such original securities in integral multiples of $1,000 principal
amount.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the exchange agent at the address or, in the case of eligible
institutions, at the facsimile number, set forth below under "-- Exchange Agent"
prior to 5:00 p.m., New York City time, on the expiration date. Any such notice
of withdrawal must:
- specify the name of the person who tendered the original securities to be
withdrawn;
- identify the original securities to be withdrawn, including the
certificate number or numbers and principal amount of the original
securities;
- contain a statement that the holder is withdrawing his election to have
the original securities exchanged;
- be signed by the holder in the same manner as the original signature on
the letter of transmittal by which the original securities were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer to have the registrar with respect to the original
securities (i.e., the trustee) register the transfer of such original
securities in the name of the person withdrawing the tender; and
- specify the name in which such original securities are registered, if
different from that of the person who tendered the original securities.
If original securities have been tendered pursuant to the procedure for
book-entry transfer described above, any notice of withdrawal must specify the
name and number of the account at the book-entry transfer facility to be
credited with the withdrawn original securities and otherwise comply with the
procedures of the facility. All questions as to the validity, form, and
eligibility, including time of receipt, of notices of withdrawal will be
determined by Federated, whose determination will be final and binding on all
parties. Any original securities so withdrawn will be deemed not to have been
validly tendered for exchange for purposes of the exchange offer. Properly
withdrawn original securities may be retendered by following the procedures
described under "-- Procedures for Tendering" above at any time prior to 5:00
p.m., New York City time, on the expiration date.
CONDITIONS TO THE EXCHANGE OFFER
Federated will not be required to accept for exchange, or to issue exchange
securities in exchange for, any original securities, and may terminate or amend
the exchange offer, if at any time before the acceptance of the original
securities for exchange or the exchange of the exchange securities for the
original securities:
- there shall be threatened, instituted, or pending any action or
proceeding before, or any injunction, order, or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission (1) seeking to restrain
or prohibit the making or consummation of the exchange offer or any other
transaction contemplated by the exchange offer, or assessing or seeking
any damages as a result of such transaction, or (2) resulting in a
material delay in Federated's ability to accept for exchange or exchange
some or all of the original securities pursuant to the exchange offer; or
any statute, rule, regulation, order, or injunction shall be sought,
proposed, introduced, enacted, promulgated, or deemed applicable to the
exchange offer or any of the transactions contemplated by the exchange
offer by any government or governmental authority,
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<PAGE> 17
domestic or foreign, or any action shall have been taken, proposed, or
threatened, by any government, governmental authority, agency, or court,
domestic or foreign, that in Federated's sole judgment might directly or
indirectly result in any of the consequences referred to in clauses (1)
or (2) above or, in Federated's sole judgment, might result in the
holders of exchange securities having obligations with respect to resales
and transfers of exchange securities which are greater than those
described in the interpretation of the Commission referred to above, or
would otherwise make it inadvisable to proceed with the exchange offer;
or
- there shall have occurred:
(1) any general suspension of or general limitation on prices for, or
trading in, securities on any national securities exchange or in the
over-the-counter market;
(2) any limitation by a governmental agency or authority which may
adversely affect Federated's ability to complete the transactions
contemplated by the exchange offer;
(3) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or any limitation by any
governmental agency or authority which adversely affects the extension of
credit; or
(4) a commencement of a war, armed hostilities, or other similar
international calamity directly or indirectly involving the United States
or, in the case of any of the foregoing existing at the time of the
commencement of the exchange offer, a material acceleration or worsening of
such calamities; or
- any change, or any development involving a prospective change, shall have
occurred or be threatened in Federated's business, properties, assets,
liabilities, financial condition, operations, results of operations, or
prospects and those of its subsidiaries taken as a whole that, in
Federated's sole judgment, is or may be adverse to Federated, or
Federated shall have become aware of facts that, in its sole judgment,
have or may have adverse significance with respect to the value of the
original securities or the exchange securities or would otherwise make it
inadvisable to proceed with the exchange offer and/or with such
acceptance for exchange or with such exchange.
The foregoing conditions are for Federated's benefit only and may be
asserted by Federated regardless of the circumstances giving rise to any such
condition, or may be waived by Federated in whole or in part at any time and
from time to time in its sole discretion. Federated's failure at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
In addition, Federated will not accept for exchange any original securities
tendered, and no exchange securities will be issued in exchange for any such
original securities, if at such time any stop order shall be threatened or in
effect with respect to the registration statement of which this prospectus
constitutes a part or the qualification of the indenture under the Trust
Indenture Act of 1939.
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EXCHANGE AGENT
Citibank, N.A. has been appointed as the exchange agent for the exchange
offer. Citibank, N.A. also acts as trustee under the indenture. All executed
letters of transmittal should be directed to the exchange agent at the address
set forth below. Questions and requests for assistance, requests for additional
copies of this prospectus or of the letter of transmittal, and requests for
notices of guaranteed delivery should be directed to the exchange agent
addressed as follows:
DELIVERY TO: CITIBANK, N.A. EXCHANGE AGENT
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier By Hand:
Delivery:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data c/o Citicorp Data Corporate Trust Window
Distribution, Inc. Distribution, Inc. 111 Wall Street, 5th Floor
P.O. Box 7072 404 Sette Drive New York, New York 10005
Paramus, New Jersey 07653 Paramus, New Jersey 07652
</TABLE>
By Facsimile for Eligible Institutions:
(201) 262-3240
Facsimile Confirmation Only:
(800) 422-2077
For Information:
(800) 422-2077
IF YOU DELIVER THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMIT INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE, SUCH DELIVERY OR INSTRUCTIONS WILL NOT BE EFFECTIVE.
FEES AND EXPENSES
Federated will not make any payment to brokers, dealers, or others for
soliciting acceptances of the exchange offer. Federated will pay the estimated
cash expenses to be incurred in connection with the exchange offer. Federated
estimates these expenses, excluding the registration fee paid to the Commission,
to be approximately $150,000.
ACCOUNTING TREATMENT
Federated will not recognize any gain or loss for accounting purposes upon
the consummation of the exchange offer. Federated will amortize the expense of
the exchange offer over the term of the exchange securities under generally
accepted accounting principles.
TRANSFER TAXES
Holders who tender their original securities for exchange will not be
obligated to pay any related transfer taxes, except that holders who instruct
Federated to register exchange securities in the name of, or request that
original securities not tendered or not accepted in the exchange offer be
returned to, a person other than the registered tendering holder will be
responsible for the payment of any applicable transfer taxes on such transfer.
RESTRICTIONS ON TRANSFER OF ORIGINAL SECURITIES
The original securities were originally issued in a transaction exempt from
registration under the Securities Act, and may be offered, sold, pledged, or
otherwise transferred only:
- in the United States to a person whom the seller reasonably believes is a
qualified institutional buyer (as defined in Rule 144A under the
Securities Act);
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<PAGE> 19
- outside the United States in an offshore transaction in accordance with
Rule 904 under the Securities Act;
- pursuant to an exemption from registration under the Securities Act
provided by Rule 144, if available; or
- pursuant to an effective registration statement under the Securities Act.
The offer, sale, pledge, or other transfer of original securities must also
be made in accordance with any applicable securities laws of any state of the
United States, and the seller must notify any purchaser of the original
securities of the restrictions on transfer described above. Holders of original
securities who do not exchange their original securities for exchange securities
pursuant to the exchange offer will continue to be subject to the restrictions
on transfer of such original securities. As discussed below in "Description of
Exchange Securities -- Exchange Offer; Registration Rights," Federated does not
currently anticipate that it will register original securities under the
Securities Act.
TRANSFERABILITY OF EXCHANGE SECURITIES
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, Federated believes that exchange
securities issued pursuant to the exchange offer may be offered for resale,
resold, or otherwise transferred by holders that are not affiliates of Federated
within the meaning of Rule 405 under the Securities Act, without compliance with
the registration and prospectus delivery provisions of the Securities Act if
such exchange securities are acquired in the ordinary course of such holders'
business and such holders do not engage in, and have no arrangement or
understanding with any person to participate in, a distribution of such exchange
securities. However, the Commission has not considered the exchange offer in the
context of a no-action letter. Federated cannot assure that the staff of the
Commission would make a similar determination with respect to the exchange
offer. If any holder of original securities is an affiliate of Federated or is
engaged in or intends to engage in, or has any arrangement or understanding with
any person to participate in a distribution of the exchange securities to be
acquired pursuant to the exchange offer, such holder:
(1) cannot rely on the interpretations of the staff of the Commission
set forth in the no-action letters referred to above; and
(2) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or transfer
of the original securities or the exchange securities.
Each broker-dealer that is to receive exchange securities for its own
account in exchange for original securities must represent that such original
securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities and must acknowledge that it will deliver
a prospectus in connection with any resale of the exchange securities. In
addition, to comply with the securities laws of certain jurisdictions, if
applicable, the exchange securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdiction or an exemption from
registration or qualification, with which there has been compliance, is
available. See "Plan of Distribution."
DESCRIPTION OF EXCHANGE SECURITIES
GENERAL
The form and terms of the exchange notes and the original notes and the
form and terms of the exchange debentures and the original debentures are
identical in all material respects except that the registration rights and
related liquidated damages provisions, and the transfer restrictions applicable
to the original notes and the original debentures do not apply to the exchange
notes or the exchange debentures.
The exchange securities will be issued under an indenture, dated as of
September 10, 1997, between Federated and Citibank, N.A., as trustee, as
supplemented by a third supplemental indenture, dated as of
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<PAGE> 20
March 24, 1999, relating to the securities. The following discussion includes a
summary description of certain material terms of the indenture, the supplemental
indenture, the registration rights agreement, and the exchange securities.
Because this is a summary, it does not include all of the information that is
included in the indenture, the supplemental indenture, the registration rights
agreement, or the exchange securities. This description of the exchange
securities contains definitions of terms, including those defined under the
caption "-- Definitions of Certain Terms Used in the Indenture or the
Supplemental Indenture," that are used in the indenture and the supplemental
indenture and are necessary to understand this section of the prospectus. You
should read the indenture, the supplemental indenture, and the registration
rights agreement carefully and in their entirety because they, and not this
description, define your rights as holders of the securities. You may request
copies of these documents at Federated's address set forth under "Where You Can
Find More Information."
The exchange securities are senior unsecured obligations of Federated. The
exchange notes are limited to $350,000,000 aggregate principal amount, and the
exchange debentures are limited to $400,000,000 aggregate principal amount. The
exchange notes will mature on April 1, 2009, and the exchange debentures will
mature on April 1, 2029. The exchange notes and the exchange debentures will
bear interest at the applicable rate per annum shown on the cover page of this
prospectus from the most recent date to which interest has been paid on the
original securities or, if no interest has been paid on the original securities,
from March 24, 1999. Federated will pay such interest semiannually on April 1
and October 1 of each year commencing October 1, 1999, to the person in whose
name such exchange securities (or any predecessor security) are registered at
the close of business on the March 15 or September 15, respectively, preceding
the interest payment date. Interest on the exchange securities will be
calculated on the basis of a 360-day year consisting of 12 months of 30 days
each.
The original notes and the exchange notes constitute a single class of
securities and will vote and consent together on all matters as one series, and
neither the original notes nor the exchange notes will have the right to vote or
consent as a class or series separate from one another on any matter. The
original debentures and the exchange debentures constitute a single class of
securities and will vote and consent together on all matters as one series, and
neither the original debentures nor the exchange debentures will have the right
to vote or consent as a class or series separate from one another on any matter.
Principal of and premium, if any, and interest on the exchange securities
will be payable, and the exchange securities will be exchangeable and transfers
thereof will be registrable, at an office or agency of Federated, one of which
will be maintained for such purpose in New York, New York (which initially will
be the corporate trust office of the trustee) or such other office or agency
permitted under the indenture.
Federated does not intend to list the exchange securities on a national
securities exchange.
Neither the indenture nor the supplemental indenture contains any
provisions that would limit the ability of Federated to incur indebtedness or
require the maintenance of financial ratios or specified levels of net worth or
liquidity. However, the supplemental indenture does:
- provide that, subject to certain exceptions, neither Federated nor any
Restricted Subsidiary will subject its property or assets to any mortgage
or other encumbrance unless the exchange securities are secured equally
and ratably with such other indebtedness thereby secured; and
- contain certain limitations on the ability of Federated and its
Restricted Subsidiaries to enter into certain sale and leaseback
arrangements.
In addition, neither the indenture nor the supplemental indenture contains any
provisions that would require Federated to repurchase or redeem or otherwise
modify the terms of any of the exchange securities upon a change in control or
other events involving Federated that may adversely affect the creditworthiness
of the exchange securities. See "-- Covenants of Federated."
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<PAGE> 21
REDEMPTION
Federated, at its option, may at any time redeem all or any portion of
either tranche of exchange securities on not less than 30 nor more than 60 days'
prior notice mailed to the holders of the tranche of exchange securities to be
redeemed. The exchange securities will be redeemable at a redemption price, plus
accrued interest to the date of redemption, equal to the greater of (1) 100% of
the principal amount of the exchange securities to be redeemed or (2) the sum of
the remaining scheduled payments of principal and interest on the exchange
securities to be redeemed that would be due after the related redemption date
but for such redemption (except that, if the redemption date is not an interest
payment date with respect to such exchange securities, the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued thereon to the redemption date), 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 in the case of the exchange notes, and at
the Treasury Rate plus 25 basis points in the case of the exchange debentures.
"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 applicable tranche of exchange securities. "Independent Investment
Banker" means one of the Reference Treasury Dealers appointed by Federated.
"Comparable Treasury Price" means, with respect to any redemption date, (1)
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 (2) 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" means each of Credit Suisse First Boston
Corporation, Salomon Smith Barney Inc., Chase Securities Inc., NationsBanc
Montgomery Securities LLC, and PNC Capital Markets, Inc. and their respective
successors and two other nationally recognized investment banking firms that are
Primary Treasury Dealers specified from time to time by Federated, except that
if any of the foregoing ceases to be a primary U.S. Government securities dealer
in New York City (a "Primary Treasury Dealer"), Federated is required to
designate as a substitute another nationally recognized investment banking firm
that is a Primary Treasury Dealer.
"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.
On and after any redemption date, interest will cease to accrue on the
exchange securities called for redemption. Prior to any redemption date,
Federated is required to deposit with a paying agent money sufficient to pay the
redemption price of and accrued interest on the exchange securities to be
redeemed on such date. If Federated is going to redeem less than all the
exchange securities of the tranche, the trustee must select the exchange
securities to be redeemed by such method as the trustee deems fair and
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appropriate in accordance with methods generally used at the time of selection
by fiduciaries in similar circumstances.
BOOK-ENTRY SYSTEM
Federated will initially issue the exchange securities in the form of one
or more global securities. The global securities will be deposited with, or on
behalf of, DTC and registered in the name of DTC or its nominee. Except as set
forth below, the global securities may be transferred, in whole but not in part,
only to DTC or another nominee of DTC. You may hold your beneficial interests in
the global securities directly through DTC if you have an account with DTC or
indirectly through organizations which have accounts with DTC.
DTC has advised Federated that DTC is a limited-purpose trust company
organized under the Banking Law of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold the
securities of institutions that have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers (which may include the initial purchasers), banks, trust companies,
clearing corporations, and certain other organizations. Access to DTC's
book-entry system is also available to others, such as banks, brokers, dealers,
and trust companies (collectively, the "indirect participants") that clear
through or maintain a custodial relationship with a participant, either directly
or indirectly.
Federated expects that pursuant to procedures established by DTC, upon the
deposit of the global securities with DTC, DTC will credit, on its book-entry
registration and transfer system, the principal amount of exchange securities
represented by such global securities to the accounts of participants. Ownership
of beneficial interests in the global securities will be limited to participants
or persons that may hold interests through participants. Ownership of beneficial
interests in the global securities will be shown on, and the transfer of those
ownership interests will be effected only through, records maintained by DTC
(with respect to participants' interest), the participants and the indirect
participants (with respect to the owners of beneficial interests in the global
securities other than participants). The laws of some jurisdictions may require
that certain purchasers of securities take physical delivery of the securities
in definitive form. Such limits and laws may impair your ability to transfer or
pledge beneficial interests in the global securities.
So long as DTC, or its nominee, is the registered holder and owner of the
global securities, DTC or its nominee, as the case may be, will be considered
the sole legal owner and holder of any related exchange securities evidenced by
the global securities for all purposes of the exchange securities and the
indenture. Except as set forth below, as an owner of a beneficial interest in
the global securities, you will not be entitled to have the exchange securities
represented by the global securities registered in your name, will not receive
or be entitled to receive physical delivery of certified exchange securities,
and will not be considered to be the owner or holder of any exchange securities
represented by the global securities. Accordingly, each person owning a
beneficial interest in the global securities must rely on the procedures of DTC
and, if a person is not a participant in the book-entry registration and
transfer system of DTC, on the procedures of the participant through which such
person owns its interest, to exercise any rights of an owner or holder of the
exchange securities under the indenture and the supplemental indenture.
Federated understands that, under existing industry practice, if an owner
of a beneficial interest in global securities desires to give any notice or take
any action that DTC, as the owner or holder of the global securities is entitled
to give or take, DTC would authorize the participants to give such notice or
take such action and the participants would authorize beneficial owners owning
through such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
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Federated will make payments of principal of, premium, if any, and interest
on exchange securities represented by the global securities registered in the
name of and held by DTC or its nominee to DTC or its nominee, as the case may
be, as the registered owner and holder of the global securities.
Federated expects that DTC or its nominee, upon receipt of any payment of
principal of, premium, if any, or interest on the global securities will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global securities
as shown on the records of DTC or its nominee. Federated also expects that
payments by participants or indirect participants to owners of beneficial
interests in the global securities held through such participants or indirect
participants will be governed by standing instructions and customary practices
and will be the responsibility of such participants or indirect participants.
None of Federated, the trustee, the registrar, or any paying agent for the
exchange securities will have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests in global securities for any exchange securities or for maintaining,
supervising, or reviewing any records relating to such beneficial ownership
interests or for any other aspect of the relationship between DTC and its
participants or indirect participants and the owners of beneficial interests in
the global securities owned through such participants.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the global securities among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. None of Federated, the trustee, the
registrar, or any paying agent for the exchange securities will have any
responsibility or liability for the performance by DTC or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
CERTIFICATED EXCHANGE SECURITIES
The exchange securities represented by the global securities are
exchangeable for certificated exchange securities in definitive form of like
tenor as such exchange securities in denominations of $1,000 and integral
multiples of $1,000 if:
(1) DTC notifies Federated that it is unwilling or unable to continue
as depositary for the global securities or if at any time DTC ceases to be
a clearing agency registered under the Exchange Act and a successor
depositary is not appointed by Federated within 90 days of such notice;
(2) Federated in its discretion at any time determines not to have all
of the exchange securities represented by the global securities; or
(3) an Event of Default has occurred and is continuing.
Any exchange security that is exchangeable pursuant to the preceding sentence is
exchangeable for certificated exchange securities issuable in authorized
denominations of $1,000 and integral multiples thereof and registered in such
names as DTC shall direct. Subject to the foregoing, the global securities are
not exchangeable, except for global securities of the same aggregate
denomination to be registered in the name of DTC or its nominee.
None of Federated, the trustee, the registrar, or any paying agent for the
exchange securities will be liable for any delay by DTC or any participant in
identifying the beneficial owners of the related exchange securities and each
such person may conclusively rely on, and will be protected in relying on,
instructions from DTC for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of the exchange
securities to be issued).
PAYMENT
The payment of principal of and interest on exchange securities represented
by a global security will be made in accordance with the applicable requirements
of the depositary for the global securities. The payment of principal of and
interest on any other exchange securities will be made at the office or agency
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of Federated maintained for that purpose or, at Federated's option, by mailing a
check to such holder's registered address.
COVENANTS OF FEDERATED
Maintenance of Office or Agency. Federated is required to maintain an
office or agency in each place of payment for each tranche of the exchange
securities for notice and demand purposes and for the purposes of presenting or
surrendering the exchange securities for payment, registration of transfer, or
exchange.
Paying Agents, Etc. If Federated acts as its own paying agent with respect
to the exchange notes or the exchange debentures, on or before each due date of
the principal of or interest on those exchange securities, it will be required
to segregate and hold in trust for the benefit of the persons entitled to
payment a sum sufficient to pay the amount due and to notify the trustee
promptly of its action or failure to act. If Federated has one or more paying
agents for the exchange notes or the exchange debentures, prior to each due date
of the principal of or interest on the applicable exchange securities, it will
be required to deposit with a paying agent a sum sufficient to pay the amount
due and, unless the paying agent is the trustee, to promptly notify the trustee
of its action or failure to act. All moneys paid by Federated to a paying agent
for the payment of principal of or interest on any of the exchange securities
that remain unclaimed for two years after such principal or interest has become
due and payable may be repaid to Federated, and thereafter the holder of such
exchange securities may look only to Federated for payment thereof.
Payment of Taxes and Other Claims. Federated will be required to pay and
discharge, before the same become delinquent:
- all taxes, assessments and governmental charges levied or imposed upon
Federated or any Subsidiary of Federated or their properties; and
- all claims that if unpaid would result in a lien on their property and
have a material adverse effect on the business, assets, financial
condition, or results of operations of Federated and its subsidiaries,
taken as a whole (a "Material Adverse Effect");
unless, in either case, the same are being contested by proper proceedings.
Maintenance of Properties. Federated will be required to cause all
properties used in the business of Federated or any subsidiary of Federated to
be maintained and kept in good condition, repair, and working order and to make
any necessary renewals, replacements, and improvements to such properties,
except to the extent that the failure to do so would not have a Material Adverse
Effect.
Existence. Federated will be required to, and will be required to cause its
Subsidiaries to, preserve and keep in full force and effect their existence,
charter rights, statutory rights, and franchises, except to the extent that the
failure to do so would not have a Material Adverse Effect.
Compliance with Laws. Federated will be required to, and will be required
to cause its Subsidiaries to, comply with all applicable laws to the extent that
the failure to do so would have a Material Adverse Effect.
Limitation on Liens. Federated and the Restricted Subsidiaries will not be
permitted to create, incur, assume, or suffer to exist any liens upon any of
their respective assets, other than Permitted Liens, unless the exchange
securities are secured by an equal and ratable lien on the same assets. The
terms of other existing and future indebtedness of Federated may require that
such other indebtedness be similarly secured by an equal and ratable lien on
such assets.
Limitation on Sale and Leaseback Transactions. Federated and the Restricted
Subsidiaries may not 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 from such sale and leaseback transaction
that have not been reinvested in the business of Federated or its Subsidiaries
or used to reduce Senior
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Indebtedness of Federated or its Subsidiaries within 12 months of the receipt of
such proceeds exceeds $100.0 million ("Excess Sale Proceeds") from time to time,
Federated will offer to repurchase with the Excess Sale Proceeds the securities
(on a pro rata basis with any other Senior Indebtedness of Federated 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 their principal amount, plus
accrued and unpaid interest, and to pay related costs and expenses.
To the extent that the aggregate purchase price for the securities or other
Senior Indebtedness tendered pursuant to such an offer to purchase is less than
the aggregate purchase price offered in such offer, an amount of Excess Sale
Proceeds equal to such shortfall will cease to be Excess Sale Proceeds and may
thereafter be used for general corporate purposes. If the aggregate purchase
price for the exchange securities or other Senior Indebtedness tendered pursuant
to such an offer to purchase exceeds the amount of such Excess Sale Proceeds,
the trustee will select the exchange securities or other Senior Indebtedness to
be purchased by such method as the trustee deems fair and appropriate.
The net cash proceeds from any sale or leaseback transaction will be
determined net of the following:
- all fees and expenses incurred and all taxes and reserves required to be
accrued as a liability as a consequence of such a sale and leaseback
transaction;
- all payments made on any Indebtedness that is secured by assets subject
to a sale and leaseback transaction; and
- all distributions and other payments made to minority interest holders in
Subsidiaries of Federated or joint ventures as a result of a sale and
leaseback transaction.
Cash Equivalents will be 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 will be deemed to be proceeds upon receipt of such payments.
If an offer to purchase the exchange securities is made, Federated will
comply with all tender offer rules, including but not limited to Section 14(e)
of the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such
offer to purchase.
Limitation on Merger and Other Transactions. Prior to the satisfaction and
discharge of the indenture and the supplemental indenture, Federated may not
consolidate with or merge with or into any other person, or transfer all or
substantially all of its properties and assets to another person, unless:
- either:
(1) Federated is the continuing or surviving person in the consolidation
or merger; or
(2) the person (if other than Federated) formed by the consolidation or
into which Federated is merged or to which all or substantially all
of the properties and assets of Federated are transferred is a
corporation organized and validly existing under the laws of the
United States, any state thereof or the District of Columbia, and
expressly assumes, by a supplemental indenture, all of the
obligations of Federated under the exchange securities, the
indenture, and the supplemental indenture;
- immediately after the transaction and the incurrence or anticipated
incurrence of any Indebtedness to be incurred in connection therewith, no
Event of Default exists; and
- an officer's certificate is delivered to the trustee to the effect that
both of the conditions set forth above have been satisfied and an opinion
of outside counsel has been delivered to the trustee to the effect that
the first condition set forth above has been satisfied.
The continuing, surviving, or successor person will succeed to and be
substituted for Federated with the same effect as if it had been named in the
indenture as a party thereto, and thereafter the predecessor person will be
relieved of all obligations and covenants under the indenture and the exchange
securities.
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EVENTS OF DEFAULT
The following are "Events of Default" with respect to each tranche of the
securities:
(1) failure to pay principal of or premium, if any, on any security of
such tranche when due;
(2) failure to pay any interest on any security of such tranche when
due, which failure continues for 30 calendar days;
(3) failure to perform, or breach of, any other covenant of Federated
in the indenture or the supplemental indenture (other than a covenant
included therein solely for the benefit of a series of debt securities
other than the securities of such tranche), which failure or breach
continues for 60 calendar days after written notice as provided in the
indenture or the supplemental indenture;
(4) any nonpayment at maturity or other default (beyond any applicable
grace period) under any agreement or instrument relating to any other
Indebtedness of Federated or any Restricted Subsidiary (the unpaid
principal amount of which is not less than $100.0 million), which default
results in the acceleration of the maturity of such Indebtedness prior to
its stated maturity or occurs at the final maturity thereof;
(5) the entry of any final judgments or orders against Federated or
any of its Restricted Subsidiaries in excess of $100.0 million individually
or in the aggregate (not covered by insurance) that is not paid, discharged
or otherwise stayed (by appeal or otherwise) within 60 calendar days after
the entry of such judgments or orders;
(6) specified events of bankruptcy, insolvency, or reorganization of
Federated or any Significant Subsidiary or any group of Subsidiaries of
Federated that, if considered in the aggregate, would be a Significant
Subsidiary; and
(7) the failure to redeem the securities of the tranche when required
pursuant to the terms and conditions of the securities or to pay the
repurchase price for any securities required by the terms of the
supplemental indenture to be repurchased.
Federated will be required to provide the trustee with notice of any uncured
Event of Default within 10 calendar days after any responsible officer of
Federated becomes aware of or receives actual notice of the occurrence thereof.
The trustee will be required, within 90 calendar days after the occurrence of a
default in respect of a tranche of the securities, to give to the holders of the
securities of that tranche notice of all uncured defaults known to it, except
that:
- in the case of a default in the performance of any covenant of the
character contemplated in clause (3) above, no notice will be given until
at least 30 calendar days after the occurrence of such default; and
- in the case of a default of the character contemplated in clause (1) or
(2) above, the trustee may withhold notice if and so long as it in good
faith determines that the withholding of notice is in the interests of
the holders of the securities of that tranche.
If an Event of Default described in clause (6) above occurs with respect to
Federated, the principal of, premium, if any, and accrued interest on the
securities of the applicable tranche will become immediately due and payable
without any declaration or other act on the part of the trustee or any holder of
the securities of the tranche. If any other Event of Default with respect to a
tranche of the securities occurs and is continuing, either the trustee or the
holders of at least 25% in principal amount of the securities of the tranche, by
notice as provided in the indenture, may declare the principal amount of the
securities of the tranche to be due and payable immediately. However, at any
time after a declaration of acceleration with respect to the securities of
either tranche has been made, but before a judgment or decree based on such
acceleration has been obtained, the holders of a majority in principal amount of
the securities of the tranche may, under certain circumstances, rescind and
annul the acceleration.
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Subject to the duty of the trustee to act with the required standard of
care during an Event of Default, the trustee will have no obligation to exercise
any of its rights or powers under the indenture at the request or direction of
the holders of the securities unless such holders shall have offered to the
trustee reasonable security or indemnity. Subject to the provisions of the
indenture, including those requiring security or indemnification of the trustee,
the holders of a majority in principal amount of a tranche of the securities
will have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the trustee, or exercising any trust or
power conferred on the trustee, with respect to the securities of that tranche.
No holder of a security will have any right to institute any proceeding
with respect to the indenture or the supplemental indenture or for any remedy
thereunder unless:
- the holder has previously given to the trustee written notice of a
continuing Event of Default;
- the holders of at least 25% in aggregate principal amount of the
outstanding securities of the tranche have requested the trustee to
institute a proceeding in respect of such Event of Default;
- the holder or holders have offered reasonable indemnity to the trustee to
institute the proceeding as trustee;
- the trustee has not received from the holders of a majority in principal
amount of the outstanding securities of the tranche a direction
inconsistent with the request; and
- the trustee has failed to institute the proceeding within 60 calendar
days.
However, the limitations described above do not apply to a suit instituted
by a holder of securities of that tranche for enforcement of payment of the
principal of and interest on the securities on or after the applicable due dates
expressed in the securities.
Federated is required to furnish to the trustee annually a statement as to
the performance by Federated of its obligations under the indenture and as to
any default in its performance.
MODIFICATION AND WAIVER
Except as described below, modifications and amendments of the indenture
may be made by Federated and the trustee with the consent of the holders of a
majority in aggregate principal amount of the securities of the tranche affected
thereby and a majority of the holders of each other series of debt securities
affected thereby. However, no such modification or amendment may, without the
consent of the holder of each security of the tranche affected thereby:
- change the stated maturity of, or any installment of principal of, or
interest on, the tranche of the securities;
- reduce the principal amount of, the rate of interest on, or the premium,
if any, payable upon the redemption of, the tranche of the securities;
- reduce the amount of principal of an original issue discount security
payable upon acceleration of the maturity of the tranche of the
securities;
- change the place or currency of payment of principal of, or premium, if
any, or interest on the tranche of the securities;
- impair the right to institute suit for the enforcement of any payment on
or with respect to the tranche of the securities on or after the stated
maturity or prepayment date thereof; or
- reduce the percentage in principal amount of the tranche of the
securities required for modification or amendment of the indenture or for
waiver of compliance with certain provisions of the indenture or for
waiver of certain defaults.
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In addition, if such modification or amendment would have any such effect on any
other series of debt securities issued under the indenture, the consent of each
holder of each debt security of each other series affected thereby would also be
required.
The holders of at least a majority in principal amount of the applicable
tranche of the securities may, on behalf of the holders of all securities of
that tranche, waive compliance by Federated with specified covenants of the
indenture. The holders of at least a majority in principal amount of each
tranche of the securities may, on behalf of the holders of all securities of
that tranche, waive any past default under the indenture with respect to that
tranche, except:
- a default in the payment of the principal of, or premium, if any, or
interest on, the securities of that tranche; or
- a default of a provision of the indenture that cannot be modified or
amended without the consent of the holder of each security of that
tranche.
DEFEASANCE
Except as described below, upon compliance with the applicable requirements
described below, Federated:
(1) will be deemed to have been discharged from its obligations with
respect to a tranche of the securities; or
(2) will be released from its obligations to comply with the covenants
described under "-- Covenants of Federated" above with respect to the
securities of that tranche, and the occurrence of an event described in any
of clauses (3), (4), (5) and (7) under "-- Events of Default" above will no
longer be an Event of Default with respect to the exchange securities of
that tranche,
except to the limited extent described below.
Following any defeasance described in clause (1) or (2) above, Federated
will continue to have specified obligations under the indenture, including
obligations to register the transfer or exchange of the securities of that
tranche; replace destroyed, stolen, lost, or mutilated securities of that
tranche; maintain an office or agency in respect of the securities of that
tranche; and hold funds for payment to holders of securities of that tranche in
trust. In the case of any defeasance described in clause (2) above, any failure
by Federated to comply with its continuing obligations may constitute an Event
of Default with respect to the securities of that tranche as described in clause
(3) under "-- Events of Defaults" above.
In order to effect any defeasance described in clause (1) or (2) above,
Federated must irrevocably deposit with the trustee, in trust, money or
specified government obligations (or depositary receipts therefor) that through
the payment of principal and interest in accordance with their terms will
provide money in an amount sufficient to pay all of the principal of and any
interest on the securities of that tranche on the dates such payments are due in
accordance with the terms of such tranche of securities. In addition:
- no Event of Default or event that, with the giving of notice or lapse of
time, or both, would become an Event of Default under the indenture or
the supplemental indenture with respect to that tranche of the securities
shall have occurred and be continuing on the date of such deposit;
- no Event of Default described in clause (6) under "-- Events of Default"
above with respect to Federated or event that with the giving of notice
or lapse of time, or both, would become such an Event of Default shall
have occurred and be continuing at any time on or prior to the 124th
calendar day following the date of deposit;
- in the event of defeasance described in clause (1) above, Federated shall
have delivered an opinion of counsel stating that (a) Federated has
received from, or there has been published by, the Internal Revenue
Service a ruling or (b) there has been a change in applicable federal
law, in
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either case to the effect that, among other things, the holders of the
applicable tranche of the securities will not recognize gain or loss for
United States federal income tax purposes as a result of such deposit or
defeasance and will be subject to United States federal income tax in the
same manner as if such defeasance had not occurred;
- in the event of defeasance described in clause (2) above, Federated shall
have delivered an opinion of counsel to the effect that, among other
things, the holders of the applicable tranche of the securities will not
recognize gain or loss for United States federal income tax purposes as a
result of such deposit or defeasance and will be subject to United States
federal income tax in the same manner as if such defeasance had not
occurred;
- Federated shall have delivered to the trustee an opinion of a nationally
recognized independent public accounting firm certifying the sufficiency
of the amount of any moneys or government obligations placed on deposit
to pay, without regard to any reinvestment, the accrued interest,
principal, interest, and premium, if any, on the tranche of securities;
and
- such defeasance shall not result in a breach or violation of, or
constitute a default under, any other agreement to which Federated is a
party or violate any law to which Federated is subject.
If Federated fails to comply with its remaining obligations under the
indenture and the supplemental indenture with respect to a tranche of the
securities following a defeasance described under clause (2) above and the
securities of that tranche are declared due and payable because of the
occurrence of any undefeased Event of Default, the amount of money and
government obligations on deposit with the trustee may be insufficient to pay
amounts due on the securities of that tranche at the time of the acceleration
resulting from such Event of Default. However, Federated will remain liable in
respect of such payments.
SATISFACTION AND DISCHARGE
Federated, at its option, may satisfy and discharge the indenture and the
supplemental indenture (except for specified obligations of Federated and the
trustee, including, among others, the obligations to apply money held in trust)
when:
- either:
(1) all debt securities of Federated previously authenticated and
delivered under the indenture (subject to specified exceptions
relating to debt securities that have otherwise been satisfied or
provided for) have been delivered to the trustee for cancellation;
or
(2) all debt securities of Federated not previously delivered to the
trustee for cancellation have become due and payable, will become
due and payable at their stated maturity within one year, or are to
be called for redemption within one year under arrangements
satisfactory to the trustee for the giving of notice of redemption
by the trustee, and Federated has deposited or caused to be
deposited with the trustee as trust funds for such purpose an amount
sufficient to pay and discharge the entire indebtedness on such debt
securities for principal and any premium and interest to the date of
such deposit (in the case of debt securities which have become due
and payable) or to the stated maturity or redemption date, as the
case may be;
- Federated has paid or caused to be paid all other sums payable under the
indenture by Federated; and
- Federated has delivered to the trustee an officer's certificate and an
opinion of counsel, each to the effect that all conditions precedent
relating to the satisfaction and discharge of the indenture have been
satisfied.
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GOVERNING LAW
The indenture, the supplemental indenture, and the exchange securities will
be governed by, and construed in accordance with, the laws of the State of New
York.
EXCHANGE OFFER; REGISTRATION RIGHTS
In connection with the sale of the original securities by Federated to the
initial purchasers of the original securities, Federated and the initial
purchasers entered into a registration rights agreement.
In the registration rights agreement, Federated agreed to:
- file with the Commission no later than June 22, 1999 a registration
statement relating to an offer to exchange the exchange securities for
original securities;
- use its reasonable best efforts to cause the registration statement to be
declared effective by the Commission no later than September 20, 1999;
- offer to exchange the exchange securities for original securities
promptly after the effectiveness of the registration statement; and
- keep the exchange offer open for not less than 30 days (or longer if
required by applicable law) after the date on which notice of the
exchange offer is mailed to the holders of the original securities.
The registration rights agreement also requires Federated to take
additional action in the following circumstances:
- if Federated is not permitted to consummate the exchange offer because
the exchange offer is not permitted by applicable law or Commission
policy;
- if any of the initial purchasers of the original securities directly from
Federated so requests with respect to original securities not eligible to
be exchanged for exchange securities in the exchange offer and held by it
following consummation of the exchange offer;
- if any holder of Transfer Restricted Securities (as defined below) is not
eligible to participate in the exchange offer or, in the case of any
holder (other than a broker-dealer) that participates in the exchange
offer, such holder does not receive freely tradeable exchange securities;
or
- if the exchange offer is not consummated by October 30, 1999.
In these circumstances, Federated would be required to:
- file with the Commission as promptly as practicable, a shelf registration
statement relating to resales of the affected original securities or
exchange securities, as the case may be;
- use its reasonable best efforts to cause the shelf registration statement
to be declared effective under the Securities Act; and
- use its reasonable best efforts to keep the shelf registration statement
effective (with certain exceptions) until the earlier of (1) two years
from the effective date and (2) the date on which all securities
registered thereunder cease to be Transfer Restricted Securities.
Federated will be permitted to suspend the effectiveness of the shelf
registration statement or the use of the prospectus that is part of the shelf
registration statement during specified periods ("Suspension Periods") in
specified circumstances, including circumstances relating to the pending
corporate developments.
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"Transfer Restricted Securities" means each security until the earliest to
occur of:
- the date on which the security has been exchanged by a person other than
a broker-dealer for a freely tradeable exchange security in the exchange
offer;
- following the exchange by a broker-dealer in the exchange offer of an
original security for an exchange security, the date on which the
exchange security is sold to a purchaser who receives from such
broker-dealer on or prior to the date of sale a copy of this prospectus;
- the date on which the security has been effectively registered under the
Securities Act and disposed of in accordance with the shelf registration
statement; and
- the date on which the security is distributed to the public pursuant to
Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k)
under the Securities Act.
Federated has agreed to pay additional interest on the original securities
if any of the following events (each of which constitutes a "registration
default") occurs:
(1) at the close of business on October 30, 1999, the exchange offer
has not been consummated and, if required to be filed in lieu of the
exchange offer, the shelf registration statement is not declared effective
by the Commission; or
(2) after either the registration statement or the shelf registration
statement is declared effective, (a) such registration statement ceases to
be effective or (b) such registration statement or the related prospectus
ceases to be usable (excluding any Suspension Periods) in connection with
resales of Transfer Restricted Securities during the applicable periods
specified in the registration rights agreement because either:
- any event occurs as a result of which the related prospectus forming part
of such registration statement would include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein in the light of the circumstances under which they
were made not misleading; or
- it is necessary to amend such registration statement or supplement the
related prospectus to comply with the Securities Act or the Exchange Act
or the respective rules thereunder.
Additional interest will accrue on the affected original securities over
and above the interest set forth in the title of the original securities from
and including the date on which any registration default occurs to but excluding
the date on which all such registration defaults have been cured, at a rate of
0.50% per annum (regardless of number of registration defaults).
Any holders (other than the initial purchasers) of original securities who
are eligible to participate in the exchange offer but fail to, or elect not to,
participate therein will continue to hold Transfer Restricted Securities and
will have no further rights to exchange their original securities or have such
original securities registered under the registration rights agreement.
REGARDING THE TRUSTEE
The indenture contains specified limitations on the right of the trustee,
should it become a creditor of Federated within three months of, or subsequent
to, a default by Federated to make payment in full of principal of or interest
on any debt securities issued pursuant to the indenture when and as the same
becomes due and payable, to obtain payment of claims, or to realize for its own
account on property received in respect of any such claim as security or
otherwise, unless and until such default is cured. However, the trustee's rights
as a creditor of Federated will not be limited if the creditor relationship
arises from, among other things:
- the ownership or acquisition of securities issued under any indenture or
having a maturity of one year or more at the time of acquisition by the
trustee;
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- specified advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by the indenture;
- disbursements made in the ordinary course of business in its capacity as
indenture trustee, transfer agent, registrar, custodian, or paying agent
or in any other similar capacity;
- indebtedness created as a result of goods or securities sold in a cash
transaction or services rendered or premises rented; or
- the acquisition, ownership, acceptance, or negotiation of specified
drafts, bills of exchange, acceptances, or other obligations.
The indenture does not prohibit the trustee from serving as trustee under
any other indenture to which Federated may be a party from time to time or from
engaging in other transactions with Federated. If the trustee acquires any
conflicting interest within the meaning of the Trust Indenture Act of 1939 and
any debt securities issued pursuant to the indenture are in default, it must
eliminate the conflict or resign.
DEFINITIONS OF CERTAIN TERMS USED IN THE INDENTURE OR THE SUPPLEMENTAL INDENTURE
Capitalized terms used but not defined herein have the meanings given to
such terms in the indenture and the supplemental indenture. In addition, for
purposes of the indenture and the supplemental indenture, the following
definitions apply:
"Bank Facilities" means the financing provided for by (a) the 364-day
Credit Agreement and (b) the Five-Year Credit Agreement, each dated as of July
28, 1997 and each by and among Federated, certain financial institutions,
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:
(1) 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;
(2) 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
(a) such depository institution or trust company has, at the time of
Federated'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 (b) the
commercial paper of such depository institution or trust company, at the
time of Federated'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;
(3) 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 Federated'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;
(4) 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 (2) above; and
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(5) Investments in money market or mutual funds that invest
predominantly in Cash Equivalents of the type described in clauses (1),
(2), (3), and (4) above; provided, however, that, in the case of the
clauses (1) through (3) 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 (1) all
current liabilities and (2) 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 Federated and its
consolidated Subsidiaries and computed in accordance with GAAP.
"Existing Indebtedness" means all Indebtedness under or evidenced by:
- the original securities and the exchange securities;
- Federated's 6.125% Term Enhanced ReMarketable Securities;
- Federated's 7% Senior Debentures Due 2028;
- Federated's 7.45% Senior Debentures Due 2017;
- Federated's 6.79% Senior Debentures Due 2027;
- Federated's 10% Senior Notes Due 2001;
- Federated's 8.125% Senior Notes Due 2002;
- Federated's 8.5% Senior Notes Due 2003;
- Fingerhut's 7.375% Senior Notes Due 1999;
- the outstanding principal amount of notes issued pursuant to the Mortgage
Note Agreement between Macy's Primary Real Estate, Inc. and Federated
Noteholding Corporation;
- 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;
- capital lease obligations of Federated and the Restricted Subsidiaries
existing on the date of issuance of the original securities; and
- the other secured Indebtedness of Federated or secured or unsecured
Indebtedness of the Restricted Subsidiaries existing on the date of
issuance of the original securities.
"Indebtedness" means, as applied to any Person, without duplication:
(1) all obligations of such Person for borrowed money;
(2) all obligations of such Person for the deferred purchase price of
property or services (other than property and services purchased, and
expense accruals and deferred compensation items arising, in the ordinary
course of business);
(3) all obligations of such Person evidenced by notes, bonds,
debentures, mandatorily redeemable preferred stock, or other similar
instruments (other than performance, surety, and appeals bonds arising in
the ordinary course of business);
(4) all payment obligations created or arising under any conditional
sale, deferred price, or other title retention agreement with respect to
property acquired by such Person (unless the rights and remedies of the
seller or lender under such agreement in the event of default are limited
to repossession or sale of such property);
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(5) any capital lease obligation of such Person;
(6) all reimbursement, payment or similar obligations, contingent or
otherwise, of such Person under acceptance, letter of credit, or similar
facilities (other than letters of credit in support of trade obligations or
incurred in connection with public liability insurance, workers'
compensation, unemployment insurance, old-age pensions, and other social
security benefits other than in respect of employee benefit plans subject
to ERISA);
(7) all obligations of such Person, contingent or otherwise, under any
guarantee by such Person of the obligations of another Person of the type
referred to in clauses (1) through (6) above; and
(8) all obligations referred to in clauses (1) through (6) above
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage or security
interest in property (including without limitation accounts, contract
rights, and general intangibles) owned by such Person and as to which such
Person has not assumed or become liable for the payment of such obligations
other than to the extent of the property subject to such mortgage or
security interest;
except that Indebtedness of the type referred to in clauses (7) and (8) above
will be included within the definition of "Indebtedness" only to the extent of
the least of (a) the amount of the underlying Indebtedness referred to in the
applicable clause (1) through (6) above; (b) in the case of clause (7), the
limit on recoveries, if any, from such Person under obligations of the type
referred to in clause (7) above, and (c) in the case of clause (8), the
aggregate value (as determined in good faith by Federated's board of directors)
of the security for such Indebtedness.
"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 writeoffs with respect to such Investment.
"Moody's" means Moody's Investors Service, Inc. or any successor to the
rating agency business thereof.
"Permitted Liens" means:
(1) 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
(1) principal payments actually made by Federated 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 (1)(i) below) and (2) 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 (1)(i) below), except that under no circumstances will the
total allowable indebtedness under this clause (1)(b) be less than
$1,250.0 million (subject to increase from and after the date of
issuance of the original securities at a rate, compounded annually,
equal to 3% per annum) if incurred for the purpose of providing
Federated and its Subsidiaries with working capital including 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 issuance of the
securities of any Subsidiary of Federated engaged primarily in the
business of owning or leasing real property;
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(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 Federated or a Subsidiary
of Federated 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 Federated 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 Federated or the Restricted
Subsidiaries; provided 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);
(2) liens incurred and pledges and deposits made in the ordinary
course of business in connection with liability insurance, workers'
compensation, unemployment insurance, old-age pensions, and other social
security benefits other than in respect of employee benefit plans subject
to ERISA;
(3) liens securing performance, surety, and appeal bonds and other
obligations of like nature incurred in the ordinary course of business;
(4) liens on goods and documents securing trade letters of credit;
(5) liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's, and vendors' 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;
(6) liens securing the payment of taxes, assessments, and governmental
charges or levies (a) either (1) not delinquent or (2) being contested in
good faith by appropriate legal or administrative proceedings and (b) as to
which adequate reserves shall have been established on the books of the
relevant Person in conformity with GAAP;
(7) 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 Federated and its Subsidiaries or the value of
such property for the purpose of such business;
(8) liens on property existing at the time such property is acquired;
(9) 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;
(10) liens on the assets of any Subsidiary of Federated at the time
such Subsidiary is acquired;
(11) liens with respect to obligations in outstanding amounts not to
exceed $100.0 million at any particular time and that (a) are not incurred
in connection with the borrowing of money or obtaining
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advances or credit (other than trade credit in the ordinary course of
business) and (b) do not in the aggregate interfere in any material respect
with the ordinary conduct of the business of Federated and its
Subsidiaries; and
(12) without limiting the ability of Federated 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, 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 Federated to be not materially greater than
the value of the property or assets for which the substitute property or
assets are substituted.
"Person" means any individual, partnership, corporation, joint stock
company, business trust, trust, unincorporated association, joint venture, or
other entity, or a government or political subdivision or agency thereof.
"Restricted Subsidiary" means any Subsidiary of Federated other than an
Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies, Inc., or any successor to the rating agency business thereof.
"Senior Indebtedness" means any Indebtedness of Federated or its
Subsidiaries other than Subordinated Indebtedness.
"Significant Subsidiary" means any Subsidiary of Federated that accounts
for (1) 10% or more of the total consolidated assets of Federated and its
Subsidiaries as of any date of determination or (2) 10% or more of the total
consolidated revenues of Federated and its Subsidiaries for the most recently
concluded fiscal quarter.
"Subordinated Indebtedness" means any Indebtedness of Federated which is
expressly subordinated in right of payment to the securities.
"Subsidiary" means, as applied, with respect to any Person, any
corporation, partnership or other business entity of which, in the case of a
corporation, more than 50% of the issued and outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation has or might have voting power upon the
occurrence of any contingency), or, in the case of any partnership or other
legal entity, more than 50% of the ordinary equity capital interests, is at the
time directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries.
"Unrestricted Subsidiary" means any entity designated as such (1) in the
supplemental indenture (including Federated's existing receivables finance
Subsidiaries, 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 of Federated), Prime Credit Card Master Trust II (to the extent
it is deemed to be a Subsidiary of Federated), 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 of Federated), Macy
Financial, Inc., R.H. Macy Overseas Finance, N.V., Macy Credit Corp., Macy's
Data and Credit Services Corp., Fingerhut Receivables, Inc., PCP Receivables
Corp., Fingerhut Master Trust (to the extent it is deemed to be a Subsidiary of
Federated), Fingerhut National Bank, PCP Master Trust (to the extent it is
deemed to be a Subsidiary of Federated), and Fingerhut Funding Co.) or (2) by
Federated's board of directors, provided that such entity is a special purpose
entity formed for financing purposes.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain United States federal
income tax consequences associated with the exchange of the original securities
for the exchange securities pursuant to the exchange offer and the ownership and
disposition of the exchange securities. This summary applies only to a holder of
an exchange security who acquired an original security from an initial purchaser
and who acquires the exchange security pursuant to the exchange offer. This
discussion is based on provisions of the Internal Revenue Code of 1986 ("Code"),
Treasury regulations promulgated thereunder, and administrative and judicial
interpretations of the foregoing, all as in effect on the date hereof and all of
which are subject to change, possibly with retroactive effect. This discussion
does not address tax consequences (1) of the purchase, ownership, or disposition
(other than pursuant to the exchange offer) of the original securities to any
holder of the original securities, or (2) of the purchase, ownership, or
disposition of the exchange securities to subsequent purchasers of the exchange
securities, and is limited to investors who hold the exchange securities as
capital assets. The tax treatment of the holders of the securities may vary
depending upon their particular situations. In addition, certain holders
(including insurance companies, tax exempt organizations, financial
institutions, broker-dealers, and Non-U.S. Holders (as defined below) that are
engaged in a trade or business in the United States or that have ceased to be
United States citizens or to be taxed as resident aliens) may be subject to
special rules not discussed below. EACH HOLDER SHOULD CONSULT ITS TAX ADVISOR
REGARDING THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE EXCHANGE OF THE
ORIGINAL NOTES FOR THE EXCHANGE NOTES PURSUANT TO THE EXCHANGE OFFER AND THE
OWNERSHIP DISPOSITION OF THE EXCHANGE NOTES, AS WELL AS ANY TAX CONSEQUENCES
THAT MAY ARISE UNDER THE LAWS OF ANY RELEVANT FOREIGN, STATE, LOCAL, OR OTHER
TAXING JURISDICTION.
UNITED STATES HOLDERS
As used herein, the term "United States Holder" means a holder of an
exchange security that is, for United States federal income tax purposes, (1) a
citizen or resident of the United States, (2) a corporation or other entity
treated as a corporation, created or organized in or under the laws of the
United States or of any political subdivision thereof, (3) an estate the income
of which is subject to United States federal income taxation regardless of its
source, (4) a trust if (a) a United States court is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust or
(b) the trust was in existence on August 20, 1996, was treated as a United
States person prior to that date, and elected to continue to be treated as a
United States person, and (5) a partnership, or other entity treated as a
partnership, created or organized in or under the laws of the United States or
of any political subdivision thereof, except as Treasury regulations may
otherwise provide.
Exchange Offer
The exchange of an original security for an exchange security pursuant to
the exchange offer will not constitute a "significant modification" of the
original security for United States federal income tax purposes and,
accordingly, the exchange security received will be treated as a continuation of
the original security in the hands of the holder. As a result, there will be no
United States federal income tax consequences to a United States Holder who
exchanges an original security for an exchange security pursuant to the exchange
offer and any such holder will have the same adjusted tax basis and holding
period in the exchange security as that holder had in the original security
immediately before the exchange.
Payment of Interest
Interest payable on a exchange security generally will be included in the
gross income of a United States Holder as ordinary interest income at the time
accrued or received, in accordance with such United States Holder's method of
accounting for United States federal income tax purposes.
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Disposition of the Exchange Securities
Upon the sale, exchange, retirement at maturity, or other taxable
disposition of an exchange security (collectively, a "disposition"), a United
States Holder generally will recognize capital gain or loss equal to the
difference between the amount realized by such holder (except to the extent such
amount is attributable to accrued interest, which will be treated as ordinary
interest income) and such holder's adjusted tax basis in the exchange security.
Such capital gain or loss will be long-term capital gain or loss if such United
States Holder's holding period for the exchange security exceeds one year at the
time of the disposition.
Backup Withholding and Information Reporting
Backup withholding tax at a rate of 31%, and information reporting
requirements, will apply in certain circumstances to interest and principal
payments on, and proceeds from the disposition of, an exchange security held by
a United States Holder other than a corporation. Backup withholding will apply
to such a United States Holder in the event of a failure by that United States
Holder to furnish his, her or its correct taxpayer identification number to the
relevant payor or otherwise fails to comply with, or to establish an exemption
from, the backup withholding requirements. Corporate United States Holders
generally will be exempt from information reporting and backup withholding
requirements, but may be required to certify their status on a Form W-9 in order
to secure that exemption.
Backup withholding is not an additional tax. Any amounts withheld from a
payment to a United States Holder under the backup withholding rules will be
allowed as a credit against the holder's United States federal income tax
liability and may entitle the holder to a refund, provided that the required
information is furnished to the United States Internal Revenue Service.
Under current Treasury Regulations, payments on the sale, exchange, or
other disposition of an exchange security made to or through a foreign office of
a foreign broker generally will not be subject to backup withholding or
information reporting. However, if such broker is, for United States federal
income tax purposes, a United States person, a controlled foreign corporation, a
foreign person 50% or more of whose gross income is effectively connected with a
United States trade or business for a specified three-year period or (in the
case of payments made after December 31, 1999) a foreign partnership with
certain connections to the United States, then information reporting will be
required unless the broker has in its records documentary evidence that the
beneficial owner is not a United States person and certain other conditions are
met or the beneficial owner otherwise establishes an exemption. Backup
withholding may apply to any payment that such broker is required to report if
the broker has actual knowledge that the payee is a United States person.
Payments to or through the United States office of a broker will be subject to
backup withholding and information reporting unless the holder certifies, under
penalties of perjury, that it is not a United States person or otherwise
establishes an exemption.
NON-UNITED STATES HOLDERS
As used herein, the term "Non-U.S. Holder" means any beneficial owner of an
exchange security that is not a United States Holder.
Exchange Offer
The exchange of an original security for an exchange security pursuant to
the exchange offer will not constitute a "significant modification" of the
original security for United States federal income tax purposes and,
accordingly, the exchange security received will be treated as a continuation of
the original security in the hands of the holder. As a result, there will be no
United States federal income tax consequences to a Non-U.S. Holder who exchanges
an original security for an exchange security pursuant to the exchange offer and
any such holder will have the same adjusted tax basis and holding period in the
exchange security as that holder had in the original security immediately before
the exchange.
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Payment of Interest
Subject to the discussion below concerning backup withholding, payment of
interest on the exchange securities to any Non-U.S. Holder will not be subject
to United States federal withholding tax, provided that (1) such holder does not
own, actually or constructively, 10% or more of the total combined voting power
of all classes of stock of Federated entitled to vote, is not a controlled
foreign corporation related, directly or indirectly, to Federated through stock
ownership, and is not a bank receiving interest described in Section
881(c)(3)(a) of the Code and (2) the requirement to certify such holder's
non-U.S. status, as set forth in Section 871(h) or Section 881(c) of the Code,
has been fulfilled with respect to the beneficial owner.
Disposition of the Exchange Securities
Subject to the discussion below concerning backup withholding, a Non-U.S.
Holder of an exchange security will not be subject to United States federal
income tax on gain realized on the sale, exchange, or other disposition of that
exchange security, unless (1) the Non-U.S. Holder is an individual who is
present in the United States for 183 days or more in the taxable year of
disposition, and certain other conditions are met, or (2) the gain is
effectively connected with the conduct by the Non-U.S. Holder of a trade or
business in the United States.
Backup Withholding and Information Reporting
Under current United States federal income tax law, backup withholding at a
rate of 31% will not apply to payments by Federated or any paying agent thereof
on an exchange security if the certifications required by Sections 871(h) and
881(c) of the Code are received, provided in each case that Federated or such
paying agent, as the case may be, does not have actual knowledge that the payee
is a United States person.
Under current Treasury Regulations, payments on the sale, exchange, or
other disposition of an exchange security made to or through a foreign office of
a foreign broker generally will not be subject to backup withholding or
information reporting. However, if such broker is, for United States federal
income tax purposes, a United States person, a controlled foreign corporation, a
foreign person 50% or more of whose gross income is effectively connected with a
United States trade or business for a specified three-year period, or (in the
case of payments made after December 31, 1999) a foreign partnership with
certain connections to the United States, then information reporting will be
required unless the broker has in its records documentary evidence that the
beneficial owner is not a United States person and certain other conditions are
met or the beneficial owner otherwise establishes an exemption. Backup
withholding may apply to any payment that such broker is required to report if
the broker has actual knowledge that the payee is a United States person.
Payments to or through the United States office of a broker will be subject to
backup withholding and information reporting unless the holder certifies, under
penalties of perjury, that it is not a United States person or otherwise
establishes an exemption. Recently enacted Treasury Regulations, effective for
payments after December 31, 1999, provide certain presumptions under which
Non-U.S. Holders will be subject to backup withholding or information reporting
unless such holder certifies its non-U.S. status.
Non-U.S. Holders of exchange securities should consult their tax advisors
regarding the application of information reporting and backup withholding in
their particular situations, the availability of an exemption therefrom, and the
procedure for obtaining such an exemption, if available. Any amounts withheld
from a payment to a Non-U.S. Holder under the backup withholding rules will be
allowed as a credit against that holder's United States federal income tax
liability and may entitle that holder to a refund, provided that the required
information is furnished to the United States Internal Revenue Service.
38
<PAGE> 40
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange securities for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange securities. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of exchange securities received in
exchange for original securities where such original securities were acquired as
a result of market-making activities or other trading activities. Federated has
agreed that, for a period of 135 days after the expiration date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale.
Federated will not receive any proceeds from any sale of exchange
securities by broker-dealers. Exchange securities received by broker-dealers for
their own account pursuant to the exchange offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the exchange securities, or
through a combination of such methods of resale, at market prices prevailing at
the time of resale, at prices related to such prevailing market prices, or at
negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer or the purchasers of any
such exchange securities. Any broker-dealer that resells exchange securities
that were received by it for its own account pursuant to the exchange offer and
any broker or dealer that participates in a distribution of such exchange
securities may be deemed to be an "underwriter" within the meaning of the
Securities Act and any profit on any such resale of exchange securities and any
commission or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
Federated has agreed, for a period of 135 days after the expiration date to
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests such documents
in the letter of transmittal. Federated has also agreed to pay all expenses
incident to the exchange offer (including the expenses of one counsel for the
initial purchasers of the original securities directly from Federated) and will
indemnify the holders of the securities (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act to the
extent they arise out of or are based upon (1) any untrue statement or alleged
untrue statement of a material fact contained in the registration statement or
prospectus or (2) an omission or alleged omission to state in the registration
statement or the prospectus a material fact that is necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. This indemnification obligation does not extend to statements or
omissions in the registration statement or prospectus made in reliance upon and
in conformity with written information pertaining to the holder that is
furnished to Federated by or on behalf of the holder.
LEGAL MATTERS
Certain legal matters relating to the exchange notes and exchange
debentures offered hereby will be passed upon for Federated by Jones, Day,
Reavis & Pogue.
EXPERTS
The financial statements of Federated, from Federated's annual report on
Form 10-K for the fiscal year ended January 30, 1999, and Fingerhut, from
Federated's current report on Form 8-K dated March 18, 1999, have been
incorporated by reference herein in reliance upon the reports of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
39
<PAGE> 41
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERATED
DEPARTMENT STORES, INC.
$350,000,000 6.30% SENIOR NOTES DUE 2009
$400,000,000 6.90% SENIOR DEBENTURES DUE 2029
---------------------
PROSPECTUS
---------------------
, 1999
EXCEPT FOR THE INFORMATION CONTAINED IN THIS PROSPECTUS, FEDERATED HAS NOT
AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION IN
CONNECTION WITH THE OFFER TO EXCHANGE THESE SECURITIES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, IMPLY THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 42
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Federated's certificate of incorporation provides, as do the charters of
many other publicly held companies, that the personal liability of directors of
Federated to Federated is eliminated to the maximum extent permitted by Delaware
law. Federated's certificate of incorporation and by-laws provide for the
indemnification of the directors, officers, employees, and agents of Federated
and its subsidiaries to the full extent permitted by Delaware law from time to
time and, in the case of the by-laws, for various procedures relating thereto.
Certain provisions of Federated's certificate of incorporation protect
Federated's directors against personal liability for monetary damages resulting
from breaches of their fiduciary duty of care. Federated's certificate of
incorporation absolves directors of liability for negligence in the performance
of their duties, including gross negligence. However, Federated's directors
remain liable for breaches of their duty of loyalty to Federated and its
stockholders, as well as for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law and transactions
from which a director derives improper personal benefit. Federated's certificate
of incorporation also does not absolve directors of liability under Section 174
of the General Corporation Law of the State of Delaware, which makes directors
personally liable for unlawful dividends or unlawful stock repurchases or
redemptions in certain circumstances and expressly sets forth a negligence
standard with respect to such liability.
Under Delaware law, directors, officers, employees, and other individuals
may be indemnified against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement in connection with specified actions,
suits, or proceedings, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the corporation -- a "derivative
action") if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard of conduct is applicable in the case of
a derivative action, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement of
such an action and Delaware law requires court approval before there can be any
indemnification of expenses where the person seeking indemnification has been
found liable to the corporation.
Federated's certificate of incorporation provides, among other things, that
each person who was or is made a party to, or is threatened to be made a party
to, or is involved in, any action, suit, or proceeding by reason of the fact
that he or she is or was a director or officer of Federated (or was serving at
the request of Federated as a director, officer, employee, or agent for another
entity), will be indemnified and held harmless by Federated to the full extent
authorized by Delaware law against all expense, liability, or loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts
to be paid in settlement) reasonably incurred by such person in connection
therewith. The rights conferred thereby will be deemed to be contract rights and
will include the right to be paid by Federated for the expenses incurred in
defending the proceedings specified above in advance of their final disposition.
Federated's by-laws provide for, among other things, (1) the
indemnification by Federated of its directors and officers to the extent
described above, (2) the advancement of attorneys' fees and other expenses, and
(3) the establishment, upon approval by the board of directors, of trusts or
other funding mechanisms to fund Federated's indemnification obligations.
II-1
<PAGE> 43
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
<C> <S>
1.1 -- Purchase Agreement, dated March 18, 1999, between
Federated and the purchasers named therein.
4.1 -- Indenture, dated as of September 10, 1997, between
Federated and Citibank, N.A., as Trustee (incorporated by
reference to Exhibit 4.4 to Registration Statement No.
333-34321)
4.2 -- Third Supplemental Indenture, dated as of March 24, 1999,
between Federated and Citibank, N.A., as Trustee.
4.3 -- Registration Rights Agreement, dated as of March 18, 1999
among Federated, Credit Suisse First Boston Corporation,
Salomon Smith Barney Inc., Chase Securities Inc.,
NationsBank Montgomery Securities LLC, and PNC Capital
Markets, Inc.
5.1 -- Opinion of Jones, Day, Reavis & Pogue
12.1 -- Statement re: Computation of Ratios
23.1 -- Consent of KPMG LLP
23.2 -- Consent of Jones, Day, Reavis & Pogue (included in
Exhibit 5.1)
24.1 -- Powers of Attorney
25.1 -- Statement of Eligibility and qualification under the
Trust Indenture Act of 1939 on Form T-1 of Citibank, N.A.
to act as Trustee under the Indenture
99.1 -- Form of Letter of Transmittal
99.2 -- Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
99.3 -- Form of Letter to Clients
99.4 -- Form of Notice of Guaranteed Delivery
</TABLE>
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
registration statement:
a. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
b. To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
c. To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
II-2
<PAGE> 44
provided, however, that the undertakings set forth in paragraphs (a) and
(b) above shall not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment will be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be deemed to
be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
4. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this registration statement will
be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time will be
deemed to be the initial bona fide offering thereof.
5. To respond to requests for information that is incorporated by
reference into this prospectus pursuant to Item 4, 10(b), 11, or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
6. To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE> 45
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, there unto duly authorized, in the City of Cincinnati, State of
Ohio on April 22, 1999.
FEDERATED DEPARTMENT STORES, INC.
By: /s/ DENNIS J. BRODERICK
----------------------------------
Dennis J. Broderick,
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on April 22, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Chairman of the Board and Chief Executive
- ----------------------------------------------------- Officer (principal executive officer)
James M. Zimmerman
* President and Chief Merchandising Officer and
- ----------------------------------------------------- Director
Terry J. Lundgren
* Vice Chairman and Director
- -----------------------------------------------------
Ronald W. Tysoe
* Senior Vice President, Chief Financial Officer
- ----------------------------------------------------- and Treasurer (principal financial officer)
Karen M. Hoguet
* Vice President and Controller (principal
- ----------------------------------------------------- accounting officer)
Joel A. Belsky
* Director
- -----------------------------------------------------
Meyer Feldberg
* Director
- -----------------------------------------------------
Earl G. Graves, Sr.
* Director
- -----------------------------------------------------
George V. Grune
* Director
- -----------------------------------------------------
Sara Levinson
* Director
- -----------------------------------------------------
Joseph Neubauer
</TABLE>
II-4
<PAGE> 46
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Director
- -----------------------------------------------------
Joseph A. Pichler
* Director
- -----------------------------------------------------
Karl M. von der Heyden
Director
- -----------------------------------------------------
Craig E. Weatherup
* Director
- -----------------------------------------------------
Marna C. Whittington
</TABLE>
- ---------------
* The undersigned, by signing his name hereto, does sign and execute this
registration statement pursuant to the Powers of Attorney executed by the
above-named persons.
/s/ DENNIS J. BRODERICK
------------------------------------
Dennis J. Broderick,
Attorney-in-Fact
II-5
<PAGE> 47
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<C> <S>
1.1 -- Purchase Agreement, dated March 18, 1999, between
Federated and the purchasers named therein.
4.1 -- Indenture, dated September 10, 1997, between Federated
and Citibank, N.A., as Trustee (incorporated by reference
to Exhibit 4.4 to Registration Statement No. 333-34321)
4.2 -- Third Supplemental Indenture, dated as of March 24, 1999,
between Federated and Citibank, N.A., as Trustee.
4.3 -- Registration Rights Agreement, dated as of March 18, 1999
among Federated, Credit Suisse First Boston Corporation,
Salomon Smith Barney Inc., Chase Securities Inc.,
NationsBanc Montgomery Securities LLC, and PNC Capital
Markets, Inc.
5.1 -- Opinion of Jones, Day, Reavis & Pogue
12.1 -- Statement re: Computation of Ratios
23.1 -- Consent of KPMG LLP
23.2 -- Consent of Jones, Day, Reavis & Pogue (included in
Exhibit 5.1)
24.1 -- Powers of Attorney
25.1 -- Statement of Eligibility and qualification under the
Trust Indenture Act of 1939 on Form T-1 of Citibank, N.A.
to act as Trustee under the Indenture
99.1 -- Form of Letter of Transmittal
99.2 -- Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
99.3 -- Form of Letter to Clients
99.4 -- Form of Notice of Guaranteed Delivery
</TABLE>
<PAGE> 1
EXHIBIT 1.1
$750,000,000
FEDERATED DEPARTMENT STORES, INC.
6.30% SENIOR NOTES DUE 2009
6.90% SENIOR DEBENTURES DUE 2029
PURCHASE AGREEMENT
March 18, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
PNC CAPITAL MARKETS, INC.
As Representatives of the Several Purchasers,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Ladies and Gentlemen:
1. Introductory. Federated Department Stores, Inc., a Delaware
corporation (the "COMPANY"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several initial purchasers named in
Schedule A hereto (the "PURCHASERS") U.S. $350,000,000 principal amount of its
6.30% Senior Notes due April 1, 2009 (the "SENIOR NOTES") and U.S. $400,000,000
principal amount of its 6.90 % Senior Debentures due April 1, 2029 (the "SENIOR
DEBENTURES," and together with the Senior Notes, the "OFFERED SECURITIES") to be
issued under an indenture, dated as of September 10, 1997, (the "INDENTURE") as
supplemented by the Third Supplemental Indenture, to be dated as of March 24,
1999 (the "THIRD SUPPLEMENTAL INDENTURE"), between the Company and Citibank
N.A., as Trustee. The United States Securities Act of 1933 is herein referred to
as the "SECURITIES ACT."
The Company and the several Purchasers hereby agree as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Purchasers that:
a. An offering circular relating to the Offered Securities to be
offered by the Purchasers has been prepared by the Company. Such offering
circular (the "OFFERING CIRCULAR"), as supplemented as of the date of
this Agreement, together with the documents incorporated by reference
listed in Schedule B hereto and any other document approved by the
Company in writing for use in connection with the contemplated resale by
the Purchasers of the Offered
<PAGE> 2
2
Securities are hereinafter collectively referred to as the "OFFERING
DOCUMENT". On the date of this Agreement, the Offering Document does not
include any untrue statement of a material fact or omit 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. The
preceding sentence does not apply to statements in or omissions from the
Offering Document in reliance on and in conformity with written
information furnished to the Company by any Purchaser through Credit
Suisse First Boston Corporation ("CSFBC") specifically for use therein.
The Company's Annual Report on Form 10-K most recently filed with the
Securities and Exchange Commission (the "COMMISSION") and all subsequent
reports (collectively, the "EXCHANGE ACT REPORTS") which have been filed
by the Company with the Commission or sent to stockholders pursuant to the
Securities Exchange Act of 1934 (the "EXCHANGE Act") did not at the time
they were so filed or mailed, include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such documents,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
b. The Company has been duly incorporated and is an existing
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 Offering Document; and the
Company is duly qualified to do business as a foreign corporation and is
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where failure to be so qualified and in good
standing individually or in the aggregate would not 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").
c. Each Significant Subsidiary (as such term is defined in Rule 405
under the Securities Act) of the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the
jurisdiction of its 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.
d. 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,
<PAGE> 3
3
are fully paid and non-assessable and (except as otherwise disclosed in
the Offering Document as amended or supplemented) are owned directly or
indirectly by the Company, free and clear of all material liens,
encumbrances, equities or claims; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (except as otherwise disclosed in the
Offering Document 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).
e. The Offered 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, as supplemented by the Third Supplemental Indenture; the
Indenture has been duly authorized, executed and delivered and duly
qualified under the Trust Indenture Act; the Indenture constitutes (and
the Third 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 to 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 Offered Securities and the Indenture will
conform in all material respects to the descriptions thereof in the
Offering Circular as amended or supplemented.
f. The issue and sale of the Offered Securities and the compliance
by the Company with all of the provisions of the Offered Securities, the
Indenture, as supplemented by the Third 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, except for such
violations as individually or in the aggregate would not have a Material
<PAGE> 4
4
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 Offered
Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Registration Rights Agreement, dated
the date hereof, between the Company and the Purchasers (the "Registration
Rights Agreement") or the Indenture, as supplemented by the Third
Supplemental Indenture, except 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
Offered Securities by the Purchasers, and the order of the Commission
declaring the Exchange Offer Registration Statement and/or the Shelf
Registration Statement (each as defined in the Registration Rights
Agreement) effective.
g. This Agreement has been duly authorized, executed and delivered
by the Company. The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and, when duly executed
and delivered by the Purchasers, will be a valid and legally binding
obligation of the Company enforceable against the Company 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.
h. Except as disclosed in the Offering Document as amended or
supplemented, 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 from liens, encumbrances and defects except such
as are disclosed in the Offering Document as amended or supplemented, or
as do not, individually or in the aggregate, have a Material Adverse
Effect; and except as disclosed in the Offering Document, the Company and
its subsidiaries hold any leased real property and buildings under valid
and enforceable leases, subject to such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect.
i. Except as disclosed in the Offering Document, as amended or
supplemented, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is 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.
j. KPMG LLP, who have certified certain financial statements of the
Company and its subsidiaries, are independent certified public accountants
under Rule 101 of the AICPA's Code of Professional Conduct and its
interpretations and rulings.
<PAGE> 5
5
k. 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 date as of which information is
given in the Offering Circular. 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 Offering Document
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 Offering Document as amended or
supplemented; and, since the date as of which information is given in the
Offering Document, 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 Offering Document 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 Offering Document 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 Offering Document as amended or supplemented.
l. The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company
Act of 1940 (the "INVESTMENT COMPANY ACT") ; and the Company is not and,
after giving effect to the offering and sale of the Offered Securities and
the application of the proceeds thereof as described in the Offering
Document, will not be an "investment company" as defined in the Investment
Company Act.
m. No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are listed
on any national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system.
n. The offer and sale of the Offered Securities to the Purchasers
and the initial resale of the Offered Securities by the Purchasers, in
each case in the manner contemplated by this Agreement will be exempt from
the registration requirements of the Securities Act by reason of Section
4(2) thereof and Regulation S thereunder and it is not necessary to
qualify an indenture in respect of the Offered Securities under the United
States Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE
ACT").
<PAGE> 6
6
o. Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf (i) has, within the six-month period prior
to the date hereof, offered or sold in the United States or to any U.S.
person (as such terms are defined in Regulation S under the Securities
Act) the Offered Securities or any security of the same class or series as
the Offered Securities or (ii) has offered or will offer or sell the
Offered Securities (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or (B) with respect to any such securities
sold in reliance on Rule 903 of Regulation S ("REGULATION S") under the
Securities Act, by means of any directed selling efforts within the
meaning of Rule 902(c) of Regulation S. The Company, its affiliates and
any person acting on its or their behalf have complied and will comply
with the offering restrictions requirement of Regulation S. The Company
has not entered and will not enter into any contractual arrangement with
respect to the distribution of the Offered Securities except for this
Agreement and the Registration Rights Agreement.
3. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, and subject
to the terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and each of the Purchasers agrees, severally and not jointly, to
purchase from the Company, (i) at a purchase price of 99.077 % of the principal
amount thereof plus accrued interest on the Senior Notes from the Closing Date
(as hereinafter defined) to the time of issuance and (ii) at a purchase price of
98.683 % of the principal amount thereof plus accrued interest on the Senior
Debentures from the Closing Date to the time of issuance, the respective
principal amounts of Offered Securities set forth opposite the names of the
several Purchasers in Schedule A hereto.
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global Securities in
definitive form (the "GLOBAL SECURITIES") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Offering Document. Payment for the Offered
Securities shall be made by the Purchasers in federal (same day) funds by wire
transfer to an account designated by the Company for such purpose at a bank
reasonably acceptable to CSFBC at 9:30 A.M. (New York time), on March 24, 1999,
or at such other time not later than seven full business days thereafter as
CSFBC and the Company determine, such time being herein referred to as the
"CLOSING DATE", against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Securities. The Global Securities will
be made available for checking at the office of DTC or its designated custodian
at least 24 hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers. a. Each
Purchaser severally represents and warrants to the Company that it is an
"accredited investor" within the meaning of Regulation D under the Securities
Act.
<PAGE> 7
7
b. Each Purchaser severally acknowledges that the Offered Securities
have not been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S or pursuant to another exemption from the
registration requirements of the Securities Act. Each Purchaser severally
represents and agrees that it has offered and sold the Offered Securities, and
will offer and sell the Offered Securities only in accordance with Rule 903 or
Rule 144A under the Securities Act ("RULE 144A"). Accordingly, neither such
Purchaser nor its affiliates, nor any persons acting on its or their behalf,
have engaged or will engage in any directed selling efforts with respect to the
Offered Securities, and such Purchaser, its affiliates and all persons acting on
its or their behalf have complied and will comply with the offering restrictions
requirement of Regulation S and Rule 144A.
c. Each Purchaser severally represents and agrees that it and each
of its affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities except
for any such arrangements with the other Purchasers or affiliates of the other
Purchasers or with the prior written consent of the Company.
d. Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United States by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act, or by means of a public
offering within the meaning of Section 4(2) of the Securities Act, including,
but not limited to (A) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, or (B) any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising. Each Purchaser
severally agrees, with respect to resales made in reliance on Rule 144A of any
of the Offered Securities, to deliver either with the confirmation of such
resale or otherwise prior to settlement of such resale a notice to the effect
that the resale of such Offered Securities has been made in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Rule 144A.
e. Each of the Purchasers severally represents and agrees that (i)
it has not offered or sold and prior to the date six months after the date of
issue of the Offered Securities will not offer or sell any Offered Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the
<PAGE> 8
8
Offered Securities in, from or otherwise involving the United Kingdom; and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the Offered
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
5. Certain Agreements of the Company. The Company agrees with the
several Purchasers that:
a. The Company will advise CSFBC promptly of any proposal to amend
or supplement the Offering Document and will not effect such amendment or
supplementation without CSFBC's consent. If, at any time prior to the completion
of the resale of the Offered Securities by the Purchasers, any event occurs as a
result of which the Offering Document 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 the light of the
circumstances under which they were made, not misleading, the Company promptly
will notify CSFBC of such event and promptly will prepare, at its own expense,
an amendment or supplement which will correct such statement or omission.
Neither CSFBC's consent to, nor the Purchasers' delivery to offerees or
investors of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 6.
b. The Company will furnish to CSFBC copies of any preliminary
offering circular, the Offering Document and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as
CSFBC reasonably requests and the Company will furnish to CSFBC on the date
hereof three copies of the Offering Document signed by a duly authorized Officer
of the Company, one of which will include the independent accountant's report
therein manually signed by such independent accountants. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company
will promptly furnish or cause to be furnished to CSFBC (and, upon request, to
each of the other Purchasers) and, upon request of holders and prospective
purchasers of the Offered Securities, to such holders and purchasers, copies of
the information required to be delivered to holders and prospective purchasers
of the Offered Securities pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto) in order to permit compliance with Rule
144A in connection with resales by such holders of the Offered Securities. The
Company will pay the expenses of printing and distributing to applicable persons
referred to above all such documents.
c. The Company will promptly from time to time take such action as
CSFBC may reasonably request to qualify the Offered Securities for sale under
the securities laws of such jurisdictions in the United States and Canada as
CSFBC may request and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdiction for as long as may
<PAGE> 9
9
be necessary to complete the resale of the Offered Securities by the Purchasers,
provided that the Company will not be required to qualify as a foreign
corporation, to file a general consent to service of process in any such state
or to take any action that would subject it to general taxation in any
jurisdiction.
d. For so long as the Offered Securities are in global form, the
Company will furnish to CSFBC and, upon request, to each of the other
Purchasers, as soon as practicable after the end of each fiscal year, a copy of
its annual report to stockholders for such year; and the Company will furnish to
CSFBC and, upon request, to each of the other Purchasers (i) as soon as
available, a copy of each report and any definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed to
stockholders and (ii) to furnish to the holders of the Offered Securities all
other documents specified in Section 7.04 of the Indenture, all in the manner so
specified. For a period of three years following the date of this Agreement, the
Company will furnish to CSFBC and, upon request, to each of the other
Purchasers, from time to time, such other information concerning the Company as
CSFBC or such other Purchasers may reasonably request, provided any material
nonpublic information received by CSFBC or the other Purchasers will be held in
confidence and not used in violation of any applicable law.
e. During the period of two years after the Closing Date, the
Company will, upon request, furnish to CSFBC, each of the other Purchasers and
any holder of Offered Securities a copy of the restrictions on transfer
applicable to the Offered Securities.
f. During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined in Rule
144 under the Securities Act) to, resell any of the Offered Securities that have
been reacquired by any of them.
g. During the period of two years after the Closing Date, the
Company will not be or become, an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act.
h. The Company will pay or cause to be paid all expenses incidental
to the performance of its obligations under this Agreement, the Indenture, the
Third Supplemental Indenture and the Registration Rights Agreement (except, in
the case of the Registration Rights Agreement, any underwriting discounts and
commissions and all other costs and expenses customarily borne by security
holders), including (i) the fees and expenses of the Trustee and its
professional advisers in connection with the Indenture, the Third Supplemental
Indenture and the Offered Securities; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the Offered
Securities and, as applicable, the Exchange Securities (as defined in the
Registration Rights Agreement), the preparation and printing of this Agreement,
the Registration Rights Agreement, the Offered Securities, the Indenture, the
Third Supplemental Indenture, the Offering Document and
<PAGE> 10
10
amendments and supplements thereto, and any other document relating to the
issuance, offer, sale and delivery of the Offered Securities and as applicable,
the Exchange Securities; (iii) the cost of listing the Offered Securities and
qualifying the Offered Securities for trading in The Portal(SM) Market
("PORTAL") and any expenses incidental thereto; (iv) any expenses (including
fees and disbursements of counsel) incurred in connection with qualification of
the Offered Securities or the Exchange Securities for sale under the laws of
such jurisdictions in the United States and Canada as CSFBC designates,
including the fees and disbursements of counsel for the Purchasers (not to
exceed $5,500 in the aggregate) in connection with such qualification and in
connection with the Blue Sky Memorandum; (v) any fees charged by investment
rating agencies for the rating of the Securities or the Exchange Securities;
(vi) the filing fees incident to, and fees and the disbursements of counsel to
the Purchasers in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Offered
Securities and (vii) the expenses incurred in distributing the Offering Document
(including any amendments and supplements thereto) to the Purchasers. It is
understood, however, that except as provided in this agreement, the Purchasers
will pay for their own expenses, including the fees of their counsel, any
transfer taxes on the resale of any of the Offered Securities by them, and any
advertising expenses connected with any offers they may make.
i. In connection with the offering, until CSFBC shall have notified
the Company and the other Purchasers of the completion of the resale of the
Offered Securities, neither the Company nor any of its affiliates has or will,
either alone or with one or more other persons, bid for or purchase for any
account in which it or any of its affiliates has a beneficial interest any
Offered Securities or attempt to induce any person to purchase any Offered
Securities; and neither it nor any of its affiliates will make bids or purchases
for the purpose of creating actual, or apparent, active trading in, or of
raising the price of, the Offered Securities.
j. During the period beginning on the date hereof and continuing to
and including the Closing Date, the Company will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any United States
dollar-denominated debt securities issued or guaranteed by the Company and
having a maturity of more than one year from the date of issue. The Company will
not at any time offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any securities under circumstances where such offer,
sale, pledge, contract or disposition would cause the exemption afforded by
Section 4(2) of the Securities Act or the safe harbor of Regulation S thereunder
to cease to be applicable to the offer and sale of the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The obligations
of the several Purchasers to purchase and pay for the Offered Securities will be
subject in the sole discretion of the Purchasers to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of the Closing Date, true and correct, the condition that the Company
<PAGE> 11
11
shall have performed all of its obligations hereunder theretofore to be
performed and to the following additional conditions precedent:
a. On the Closing Date KPMG LLP shall have furnished to the
Purchasers a letter, dated the Closing Date, substantially in the form
attached hereto as Annex IV);
b. Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any material adverse change in the existing
financial, political or economic conditions in the United States or
elsewhere which, in the judgment of a majority in interest of the
Purchasers including CSFBC, would materially and adversely affect the
financial markets or the market for the Offered Securities and other debt
securities; (ii)(A) any downgrading in the rating accorded any of 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) under the Securities Act, and (B) 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; (iii) any suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (iv) any suspension
in trading in the Company's securities on the New York Stock Exchange; (v)
a general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (vi) any outbreak or escalation
of hostilities involving the United States, or the declaration by the
United States of a national emergency or war if, in the judgment of a
majority in interest of the Purchasers including CSFBC, the effect of any
such outbreak, escalation, declaration, or emergency makes it impractical
or inadvisable to proceed with completion of the offering or sale or
delivery of and payment for the Offered Securities on the terms and in the
manner contemplated in the Offering Document.
c. The Purchasers shall have received an opinion, dated the Closing
Date, of Jones, Day, Reavis & Pogue, counsel for the Company, in
substantially the form attached hereto as Annex I.
d. The Purchasers shall have received an opinion, dated the Closing
Date, of the General Counsel or Deputy General Counsel of the Company in
substantially the form attached hereto as Annex II.
e. The Purchasers shall have received an opinion, dated the Closing
Date, from Simpson Thacher & Bartlett, counsel for the Purchasers, in
substantially the form attached hereto as Annex III.
f. The Purchasers shall have received a certificate, dated the
Closing Date, signed on behalf of the Company by the President or any Vice
President and a principal financial or
<PAGE> 12
12
accounting officer of the Company in which such officers state on behalf
of the Company that the representations and warranties of the Company in
this Agreement are true and correct, that the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that, subsequent
to the date of the most recent financial statements in the Exchange Act
Reports there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Offering Document or as described in such certificate.
g. (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 Offering Document 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
Offering Document as amended or supplemented, and (ii) since the
respective dates as of which information is given in the Offering Document
as amended or supplemented there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Document as amended or supplemented, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Purchasers so
material and adverse as to make it impracticable or inadvisable to proceed
with the offering or the delivery of the Offered Securities on the terms
and in the manner contemplated in the Offering Document as amended or
supplemented.
The Company will furnish the Purchasers with such conformed copies
of such opinions, certificates, letters and documents as the Purchasers
reasonably request. CSFBC may in its sole discretion waive on behalf of the
Purchasers compliance with any conditions to the obligations of the Purchasers
hereunder.
7. Indemnification and Contribution. a. The Company will indemnify
and hold harmless each Purchaser against any losses, claims, damages or
liabilities, joint or several, to which such Purchaser may become subject, under
the Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Offering Document, 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 in order to
make the statements therein, in the light of the circumstances under which they
were
<PAGE> 13
13
made, not misleading, including any losses, claims, damages or liabilities
arising out of or based upon the Company's failure to perform its obligations
under Section 5(a) of this Agreement and will reimburse each Purchaser for any
legal or other expenses reasonably incurred by such Purchaser in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will 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 in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through CSFBC specifically for use therein.
b. Each Purchaser will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, 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 reliance upon and in
conformity with written information furnished to the Company by such Purchaser
through CSFBC specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim damage, liability or action as
such expenses are incurred, provided, however, that the Purchasers shall not be
liable for any losses, claims, damages or liabilities arising out of or based
upon the Company's failure to perform its obligations under Section 5(a) of this
Agreement.
c. Promptly after receipt by an indemnified party under this Section
7 of notice in writing of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may 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 will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in
<PAGE> 14
14
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened action
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and does not
include a statement as to and an admission of fault, culpability or failure to
act by or on behalf of any indemnified party.
d. If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Purchasers on the other from the offering of
the Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Purchasers 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 discounts and commissions received by the
Purchasers from the Company under this Agreement. 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 or the Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of 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 action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the Offered
Securities purchased by it were resold exceeds the amount of any damages which
such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective purchase obligations and not joint.
e. The obligations of the Company and the Purchasers under this
Section 7 shall be in addition to any liability which the Company or the
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to the partners, directors and officers of the Company or such
Purchaser and each person, if any, who controls the Company or such Purchaser
within the meaning of Section 15 of the Securities Act.
<PAGE> 15
15
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder and the aggregate
principal amount of Offered Securities that such defaulting Purchaser or
Purchasers agreed but failed to purchase does not exceed 10% of the total
principal amount of the Offered Securities, CSFBC may make arrangements
satisfactory to the Company for the purchase of such Offered Securities by other
persons, including any of the Purchasers, but if no such arrangements are made
by the Closing Date, the non-defaulting Purchasers shall be obligated severally,
in proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Purchasers agreed but failed to purchase. If any
Purchaser or Purchasers so default and the aggregate principal amount of the
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total principal amount of the Offered Securities and arrangements
satisfactory to CSFBC and the Company for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Purchaser or the Company, except as provided in Section 9. As
used in this Agreement, the term "Purchaser" includes any person substituted for
a Purchaser under this Section 8. Nothing herein will relieve a defaulting
Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Purchasers is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Purchasers pursuant to Section 7 shall remain
in effect. If the purchase of the Offered Securities by the Purchasers is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8, the Company will reimburse the Purchasers for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities and the Company shall then be under no further liability to any
Purchaser except as provided in Sections 5(h) and 7 hereof.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to
the Purchasers, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or,
if sent to the Company, will be mailed, delivered or telegraphed
<PAGE> 16
16
and confirmed to it at 7 West Seventh Street, Cincinnati, Ohio 45202, Attention:
Chief Financial Officer and Secretary; provided, however, that any notice to a
Purchaser pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and to the
extent provided in Sections 7 and 9 hereof, the officers and directors of the
Company and the controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder, except that holders of
Offered Securities shall be entitled to enforce the agreements for their benefit
contained in the second and third sentences of Section 5(b) hereof against the
Company as if such holders were parties thereto.
12. Representation of Purchasers. You will act for the several
Purchasers in connection with this purchase, and any action under this Agreement
taken by you will be binding upon all the Purchasers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
<PAGE> 17
17
If the foregoing is in accordance with the Purchasers'
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Purchasers in accordance with its terms.
Very truly yours,
FEDERATED DEPARTMENT STORES, INC.
By: /s/ Karen Hoguet
-----------------------------------
Name: Karen M. Hoguet
Title: Senior Vice President, CFO
and Treasurer
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
<PAGE> 18
18
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
PNC CAPITAL MARKETS, INC.
Acting on behalf of themselves
and as the Representative
of the several Purchasers
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ David Russell
-------------------------------
Name: David Russell
Title: Managing Director
<PAGE> 19
19
SCHEDULE A
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
INITIAL PURCHASER OFFERED SENIOR OFFERED SENIOR
----------------- -------------- --------------
NOTES DEBENTURES
-------------- --------------
<S> <C> <C>
CREDIT SUISSE FIRST BOSTON CORPORATION $ 168,000,000 $ 192,000,000
SALOMON SMITH BARNEY INC. 122,500,000 140,000,000
CHASE SECURITIES INC. 26,250,000 30,000,000
NATIONSBANC MONTGOMERY SECURITIES LLC 26,250,000 30,000,000
PNC CAPITAL MARKETS, INC. 7,000,000 8,000,000
-------------- --------------
Total ............... $ 350,000,000 $ 400,000,000
============== ==============
</TABLE>
<PAGE> 20
20
SCHEDULE B
o Federated's Annual Report on form 10-K for the fiscal year ended
January 31, 1998;
o Federated's Quarterly Reports on Form 10-Q for the fiscal
quarters ended May 2, 1998, August 1, 1998 and October 31, 1998;
and
o Federated's Current Reports on form 8-K, dated August 19, 1998,
September 2, 1998, December 3, 1998 and March 18, 1999.
<PAGE> 21
ANNEX I
March 24, 1999
Credit Suisse First Boston Corporation
Salomon Smith Barney
Chase Securities, Inc.
NationsBanc Montgomery Securities LLC
PNC Capital Markets, Inc.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Re: $ Aggregate Principal Amount of % Senior Notes due
March __, 2009 and $ __________ Aggregate Principal Amount
of ___% Senior Debentures due March __, 2029 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 $ aggregate principal amount of the
Company's % Senior Notes due 2009 and $________ aggregate principal amount of
___% Senior Debentures due 2029 (the "Offered Securities") pursuant to the
Purchase Agreement, dated March 18, 1999 (the "Purchase Agreement"), among you
and the Company. The Offered Securities are being issued pursuant to the
Indenture, dated as of September 10, 1997 (the "Base Indenture"), between the
Company and Citibank, N.A., as trustee (the "Trustee"), as supplemented by the
Third Supplemental Indenture, dated as of March 24, 1999, between the Company
and the Trustee (the "Supplemental Indenture" and, together with the Base
Indenture, the "Indenture"). This opinion is furnished to you pursuant to
Section 6(c) of the Purchase Agreement. Except as otherwise defined herein,
terms used herein with initial capital letters are so used with the respective
meanings ascribed thereto in the Purchase Agreement.
I-1
<PAGE> 22
Credit Suisse First Boston Corporation, et al. March 24, 1999
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 the
requisite corporate power and authority to own its properties and conduct its
business as described in the Offering Document as amended or supplemented prior
to the date hereof;
2. The Purchase Agreement has been duly authorized, executed, and
delivered by the Company;
3. The Registration Rights Agreement has been duly authorized,
executed, and delivered by the Company and, assuming the Registration Rights
Agreement is the valid and binding obligation of the Purchasers, is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be subject to (a)
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and (b) general principles of equity,
regardless of whether enforceability is considered in a proceeding in equity or
at law;
4. The Offered Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and binding obligations
of the Company enforceable against the Company in accordance with their terms
and are entitled to the benefits provided by the Indenture, except as the
enforceability of the Offered Securities and the Indenture may be limited by
bankruptcy, insolvency, reorganization, and other laws of general applicability
relating to or affecting creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law; and the Offered Securities, the Registration Rights Agreement
and the Indenture conform in all material respects to the descriptions thereof
in the Offering Document, as amended or supplemented prior to the date hereof;
5. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming that the Indenture is the valid and binding obligation
of the Trustee, constitutes a valid and binding obligation of the Company,
enforceable against the Company 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
I-2
<PAGE> 23
Credit Suisse First Boston Corporation, et al. March 24, 1999
a proceeding in equity or at law; and the Base Indenture has been duly qualified
under the Trust Indenture Act;
6. 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 Offered Securities or the consummation
by the Company of the transactions contemplated by the Purchase Agreement, the
Registration Rights Agreement or the Indenture, except such as may be required
under the Securities Act, the Exchange Act, and the Trust Indenture Act, and
such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Offered Securities by the
Purchasers and except for the order of the Commission declaring the Exchange
Offer Registration Statement or the Shelf Registration Statement effective;
7. The statements set forth in the Offering Document, as amended or
supplemented prior to the date hereof, under the caption "Description of
Securities" and under the caption "Plan of Distribution," insofar as they
purport to summarize the provisions of the laws and agreements to which the
Company or any of its affiliates is a party referred to therein, constitute
accurate summaries of such provisions in all material respects;
8. 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;
9. The documents incorporated by reference in the Offering Document
or any amendment or supplement thereto made by the Company prior to the date
hereof (other than the financial statements and related schedules and other
financial or statistical data contained therein, as to which we express no
opinion), when they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder; and
10. No registration of the Offered Securities under the Securities
Act of 1933, as amended, and no qualification of the Indenture under the Trust
Indenture Act of 1939, is required for the offer and sale of the Offered
Securities by the Company to the Purchasers or the reoffer and resale of the
Offered Securities by the Purchasers to the initial purchasers therefrom solely
in the manner contemplated by the Offering Document, the Purchase Agreement, and
the Indenture.
We have participated in the preparation of the Offering Document
(but not the documents incorporated by reference into the Offering Document)
and, based on such participation, no facts have come to our attention which
cause us to believe that, as of the date hereof, the Offering
I-3
<PAGE> 24
Credit Suisse First Boston Corporation, et al. March 24, 1999
Document (including the Exchange Act Documents incorporated by reference
therein), as amended or supplemented prior to the date hereof (other than the
financial statements and related schedules and other financial data contained or
incorporated by reference 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, in
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 Offering Document as amended or
supplemented prior to the date hereof (including any documents incorporated or
deemed to be incorporated by reference therein) except to the extent of the
opinion expressed in paragraph 7 hereof and for purposes of expressing the
beliefs referred to in this paragraph we have made inquiry only of the lawyers
who are members of or employed by this Firm involved in the preparation of the
Offering Document.
We express no opinion as to the validity, binding effect, or
enforceability of any provision of the Registration Rights Agreement or any
related provisions of the Indenture that requires or relates to payment of any
interest at a rate or in an amount which a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty
or a forfeiture or any provision of the Registration Rights Agreement that
requires or relates to indemnification or contribution.
In rendering the foregoing opinions, we have assumed (i) the due
authorization, execution, and delivery of the Purchase Agreement by or on behalf
of the Purchasers, (ii) the authenticity of all documents represented to us to
be originals, the conformity to original documents of all copies of documents
submitted to us, the accuracy and completeness of all corporate records made
available to us by the Company, (iii) that the signatures 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 (iv)
that the representations of the Purchasers and the Company in the Purchase
I-4
<PAGE> 25
Credit Suisse First Boston Corporation, et al. March 24, 1999
Agreement are true and correct and that the statements and certificates
described in the following paragraph are accurate in all material respects at
the date of this opinion.
In rendering the foregoing opinions, 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 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.
This opinion is limited to the matters expressly stated herein, and
no opinion is implied or may be inferred beyond the matters expressly stated
herein. 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
Offered Securities from the Company, and may not be relied upon by any other
person for any purpose.
Very truly yours,
Jones, Day, Reavis & Pogue
I-5
<PAGE> 26
ANNEX II
March 24, 1999
Credit Suisse First Boston Corporation
Salomon Smith Barney
Chase Securities, Inc.
NationsBanc Montgomery Securities LLC
PNC Capital Markets, Inc.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Re: $__________ Aggregate Principal Amount of ___% Senior Notes due
March __, 2009 and $__________ Aggregate Principal Amount
of ___% Senior Debentures due March __, 2029
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 $ aggregate principal amount of the Company's % Senior Notes due 2009 and
$________ aggregate principal amount of the Company's ___% Senior Debentures
2029 (the "Offered Securities") pursuant to the Purchase Agreement, dated March
18, 1999 (the "Purchase Agreement"), between you and the Company. This opinion
is furnished to you pursuant to Section 6(d) of the Purchase Agreement. The
Offered Securities are being issued pursuant to the Indenture, dated as of
September 10, 1997 (the "Base Indenture"), between the Company and Citibank,
N.A., as trustee (the "Trustee"), as supplemented by the Third Supplemental
Indenture, dated as of March 24, 1999 (the "Supplemental Indenture" and,
collectively with the Base Indenture, the "Indenture") between the Company and
the Trustee.
II-1
<PAGE> 27
Credit Suisse First Boston Corporation, et al. March 24, 1999
Except as otherwise defined herein, terms used herein with initial capital
letters are so used with the respective meanings ascribed thereto in the
Purchase 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 Offering Document as amended or supplemented prior to the date
hereof;
2. The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each other
jurisdiction in which it is required to be so qualified, except for such
failures to be so qualified and in good standing as individually or in the
aggregate would not have a Material Adverse Effect;
3. Each Significant Subsidiary of the Company has been duly
incorporated 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 Offering Document 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; 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
Offering Document 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, except as otherwise disclosed in the Offering
Document 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 Offered Securities and the compliance
by the Company with all of the provisions of the Offered Securities, the
Indenture, the Registration Rights
II-2
<PAGE> 28
Credit Suisse First Boston Corporation, et al. March 24, 1999
Agreement and the Purchase Agreement and the consummation of the transactions
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, sale/leaseback agreement, loan agreement or
other financing agreement or any other agreement or instrument known to me to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, except for such conflicts,
breaches, violations and defaults as individually or in the aggregate would not
have a Material Adverse Effect, nor will such action result in any material
violation of the provisions of the Certificate of Incorporation or By-laws of
the Company or (a) any material statute, order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
its Significant Subsidiaries or any of their properties or (b) any statute,
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties, except, with respect to this clause (b) only, for such violations,
defaults and failures as individually or in the aggregate would not have a
Material Adverse Effect it being understood that no opinion is expressed in this
paragraph 5 with respect to any matter governed by the Securities Act, the
Exchange Act, the Trust Indenture Act or any state's or other jurisdiction's
securities or Blue Sky laws;
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 Purchase Agreement has been duly authorized, executed and
delivered by the Company;
8. The Offered Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and binding obligations
of the Company enforceable against the Company in accordance with their terms
and are entitled to the benefits provided by the Indenture, except as the
enforceability of the Offered Securities and the Indenture may be limited by
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law; and the Offered Securities, the Registration Rights Agreement
and the Indenture conform in all material respects to the descriptions thereof
in the Offering Document, as amended or supplemented prior to the date hereof;
9. The Registration Rights Agreement has been duly authorized,
executed, and delivered by the Company and, assuming that the Registration
Rights Agreement is the valid and legally binding obligation of the Purchasers,
is a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof may be
subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium,
II-3
<PAGE> 29
Credit Suisse First Boston Corporation, et al. March 24, 1999
and other similar laws now or hereafter in effect relating to or affecting
enforcement of creditors' rights generally and (b) general principles of equity,
regardless of whether enforceability is considered in a proceeding at law or in
equity;
10. The Indenture has been duly authorized, executed and delivered
by the Company and, assuming that the Indenture is the valid and binding
obligation of the Trustee, constitutes a valid and binding obligation of the
Company, enforceable against the Company 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
Base Indenture has been duly qualified under the Trust Indenture Act;
11. 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 Offered Securities or the consummation
by the Company of the transactions contemplated by the Purchase Agreement, the
Registration Rights Agreement or the Indenture except such as may be required
under the Securities Act, the Exchange Act, and the Trust Indenture Act and such
consents, approvals, authorizations, orders, registrations or qualifications as
may be required under the state securities or Blue Sky laws in connection with
the purchase and distribution of the Offered Securities by the Purchasers and
except for the order of the Commission declaring the Exchange Offer Registration
Statement or the Shelf Registration Statement effective;
12. The statements set forth in the Offering Document, as amended or
supplemented prior to the date hereof, under the caption "Description of
Securities" and under the caption "Plan of Distribution," 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;
13. The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
14. The documents incorporated by reference in the Offering Document
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 or incorporated by reference 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 that cause me to believe that any of the
documents referred to in this paragraph 14, when such documents were so filed,
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed, not
misleading. However, I have not independently verified, and I assume no
responsibility, for the accuracy, completeness or fairness
II-4
<PAGE> 30
Credit Suisse First Boston Corporation, et al. March 24, 1999
of the Offering Document, as amended or supplemented (including any documents
incorporated by reference therein), except to the extent of the opinion
expressed in paragraph 12;
15. I do not know of any exhibits to any documents incorporated by
reference into the Offering Document which are required to be filed which have
not been so filed; and
16. It is not necessary in connection with (i) the offer, sale and
delivery of the Offered Securities by the Company to the several Purchasers
pursuant to the Purchase Agreement or (ii) the resales of the Offered Securities
by the several Purchasers in the manner contemplated by the Purchase Agreement,
to register the Offered Securities under the Securities Act or to qualify an
indenture in respect thereof under the Trust Indenture Act.
In rendering the opinions in paragraphs 8 through 14 and 16 hereof,
I have relied solely on the opinion of Jones, Day, Reavis & Pogue furnished to
you pursuant to Section 6(c) of the Purchase Agreement.
I express no opinion as to the validity, legally binding effect or
enforceability of any provision of the Registration Rights Agreement or any
related provisions of the Indenture that requires or relates to payment of any
interest at a rate or in an amount which a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty
or a forfeiture or any provision of the Registration Rights Agreement that
requires or relates to indemnification or contribution.
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 representations of the Purchasers in the Purchase
Agreement are true and correct and 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 1-13 and paragraphs 15 and 16, 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.
II-5
<PAGE> 31
Credit Suisse First Boston Corporation, et al. March 24, 1999
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 Offered 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
II-6
<PAGE> 32
ANNEX III
March 24, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY
CHASE SECURITIES INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
PNC CAPITAL MARKETS, 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 $_____________ aggregate principal amount of ___ % Senior Notes due March __,
2009 and $________ aggregate principal amount of ___% Senior Debentures due
March __, 2029 (the "Securities") of Federated Department Stores, Inc., a
Delaware corporation (the "Company"), pursuant to the Purchase Agreement dated
March 18, 1999 (the "Purchase Agreement") among Credit Suisse First Boston
Corporation, Salomon Smith Barney, Chase Securities, Inc., NationsBanc
Montgomery Securities LLC and PNC Capital Markets, Inc. as initial purchasers
(the "Initial Purchasers") and the Company.
We have examined the Offering Circular dated March __, 1999 relating
to the sale of the Securities (the "Offering Circular"), which incorporates by
reference the Annual Report on Form 10-K of the Company for the fiscal year
ended January 31, 1998, the Quarterly Reports on Form 10-Q of the Company for
the fiscal quarters ended May 2, 1998, August 1, 1998 and October 31, 1998, the
Current Reports on Form 8-K of the Company, dated August 19, 1998, September 2,
1998, December 3, 1998 and March 18, 1999, (the "Exchange Act Documents"), each
as filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); the Indenture dated as of September 10, 1997, as supplemented by the
Third Supplemental Indenture dated as of March 24, 1999 (the "Indenture")
between the Company and Citibank, N.A., as Trustee (the "Trustee") relating to
the Securities; the Purchase Agreement; and the Registration
III-1
<PAGE> 33
2
Rights Agreement dated as of March 18, 1999 (the "Registration Rights
Agreement") among the Company and the Initial Purchasers. 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 duplicates or certified or conformed
copies, of such corporate records, agreements, documents and other instruments
and such certificates or comparable documents of public officials and of
officers and representatives of the Company, and have made such other
investigations, as we have deemed relevant and necessary in connection with 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, assuming that the Indenture is the valid and legally
binding obligation of the Trustee, constitutes a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms.
3. The Securities 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 Purchase 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 Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and, assuming that the Registration
Rights Agreement is the valid and legally binding obligation of the
Initial Purchasers, constitutes a valid and legally binding obligation of
the Company, enforceable against the Company in accordance with its terms.
5. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
III-2
<PAGE> 34
3
6. The statements made in the Offering Document under the caption
"Description of Securities," 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.
7. No registration under the Securities Act of 1933, as amended, of
the Securities and no qualification of the Indenture under the Trust
Indenture Act of 1939, as amended, is required for the offer and sale of
the Securities by the Company to the Initial Purchasers or the reoffer and
resale of the Securities by the Initial Purchasers to the initial
purchasers therefrom solely in the manner contemplated by the Offering
Circular, the Purchase Agreement and the Indenture.
Our opinions in paragraphs 2, 3 and 4 above are subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing. Our opinion in paragraph 4 is further limited by considerations of
public policy.
We express no opinion as to the validity, legally binding effect or
enforceability of any provision of the Registration Rights Agreement or any
related provisions of the Indenture that requires or relates to payment of any
interest at a rate or in an amount which a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty
or a forfeiture. In addition, we express no opinion as to the validity, legally
binding effect or enforceability of the specific performance provisions of the
Registration Rights Agreement.
All legal proceedings taken by the Company in connection with the
offering of the Securities, and the legal opinions, dated the date hereof,
rendered to you by Dennis J. Broderick, General Counsel, Senior Vice President
and Secretary of the Company, and Jones, Day, Reavis & Pogue, counsel for the
Company, pursuant to the Purchase 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 Offering Circular or the
Exchange Act Documents and take no responsibility therefor, except as and to the
extent set forth in paragraph 6 above. In the course of the preparation by the
Company of the Offering Circular (excluding the Exchange Act
III-3
<PAGE> 35
4
Documents), we participated in conferences with certain officers and employees
of the Company, with representatives of KPMG LLP and with counsel to the
Company. We did not participate in the preparation of the Exchange Act Documents
or review the Exchange Act Documents prior to their filing with the Securities
and Exchange Commission. Based upon our examination of the Offering Circular and
the Exchange Act Documents, our investigations made in connection with the
preparation of the Offering Circular (excluding the Exchange Act Documents) and
our participation in the conferences referred to above, we have no reason to
believe that Offering Circular (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 we express
no belief with respect to the financial statements or other financial data
contained or incorporated by reference in Offering Circular or the Exchange Act
Documents.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law.
This opinion letter is rendered to you in connection with the above
described transactions. This opinion letter 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> 1
EXHIBIT 4.2
EXECUTION COPY
- --------------------------------------------------------------------------------
FEDERATED DEPARTMENT STORES, INC.
and
CITIBANK, N.A.
Trustee
THIRD SUPPLEMENTAL TRUST INDENTURE
Dated as of March 24, 1999
Supplementing that certain
INDENTURE
Dated as of September 10, 1997
Authorizing the Issuance and Delivery of
Senior Securities
consisting of $350,000,000 aggregate principal amount of
6.30% Senior Notes Due 2009
and
consisting of $400,000,000 aggregate principal amount of
6.90% Senior Debentures Due 2029
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C> <C>
RECITALS .........................................................................................2
ARTICLE I. CERTAIN DEFINITIONS ..................................................................3
Section 1.1. Certain Definitions .......................................................3
ARTICLE II. ISSUANCE OF THE SECURITIES .........................................................11
Section 2.1. Form of Securities; Issuance of Initial Securities .......................11
Section 2.2. Execution; Authentication and Delivery of Securities .....................12
Section 2.3. Transfer and Exchange ....................................................13
Section 2.4. Certificated Securities ..................................................16
Section 2.5. Voting and Consent Rights ................................................17
ARTICLE III. CERTAIN COVENANTS .................................................................17
Section 3.1. Liens. ...................................................................17
Section 3.2. Sale and Leaseback Transactions ..........................................17
Section 3.3. Permitting Unrestricted Subsidiaries to Become Restricted Subsidiaries ...18
Section 3.4. Payment Office ...........................................................19
ARTICLE IV. ADDITIONAL EVENTS OF DEFAULT ........................................................19
Section 4.1. Additional Events of Default .............................................19
ARTICLE V. DEFEASANCE ...........................................................................20
Section 5.1. Applicability of Article V of the Indenture ..............................20
ARTICLE VI. REDEMPTION OF SECURITIES ............................................................20
Section 6.1. Right of Redemption ......................................................20
ARTICLE VII. MISCELLANEOUS ......................................................................21
Section 7.1. Reference to and Effect on the Indenture .................................21
Section 7.2. Waiver of Certain Covenants ..............................................21
Section 7.3. Supplemental Indenture May be Executed In Counterparts ...................21
Section 7.4. Effect of Headings .......................................................21
[Form of Face of Initial Securities] .................................................... Exhibit A
[Form of Reverse of Initial Securities] ................................................. Exhibit A
[Form of Face of Exchange Securities/ Private Exchange Securities] ...................... Exhibit B
[Form of Reverse of Exchange Securities/ Private Exchange Securities] ................... Exhibit B
</TABLE>
<PAGE> 3
THIRD SUPPLEMENTAL INDENTURE, dated as of March 24, 1999, 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 organized and validly existing 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 to be issued in one or
more series as provided for in the Indenture.
B. The Indenture provides that the securities of each series issued
thereunder 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 therewith, be determined 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, (1) securities
denominated "6.30% Senior Notes Due 2009" (the "Senior Notes") and "6.90% Senior
Debentures Due 2029" (the "Senior Debentures" and, together with the Senior
Notes, the "Initial Securities"), and (2), if and when issued in exchange for
Initial Securities as provided in the Registration Rights Agreement (as
hereinafter defined in this Supplemental Indenture), securities denominated
"6.30% Series B Senior Notes Due 2009" (the "Exchange Notes") and "6.90% Series
B Senior Debentures Due 2029" (the "Exchange Debentures" and, together with the
Exchange Notes, the "Exchange Securities") and (3) if and when issued in
exchange for Initial Securities pursuant to a private exchange as provided in
the Registration Rights Agreement, securities denominated "6.30% Series C Senior
Notes Due 2009" (the "Private Exchange Notes") and "6.90% Series C Senior
Debentures Due 2029" (the "Private Exchange Debentures" and, together with the
Private Exchange Notes, the "Private Exchange Securities" and, together with the
Initial Securities and the Exchange Securities, the "Securities") pursuant to
the terms of this Supplemental Indenture and substantially in the form provided
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> 4
2
D. All acts and things necessary to make the Securities, when the
Securities 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 Securities have
in all respects been duly authorized; and the Company, in the exercise of legal
right and power in it vested, has executed and delivered the Indenture and is
executing and delivering this Supplemental Indenture and proposes to make,
execute, issue, and deliver the Securities.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
In order to declare the terms and conditions upon which the
Securities are authenticated, issued, and delivered, and in consideration of the
premises and of the purchase and acceptance of the Securities by the Holders
thereof, it is mutually agreed, for the equal and proportionate benefit of the
respective Holders from time to time of the Securities, as follows:
ARTICLE I. CERTAIN DEFINITIONS.
SECTION 1.1. CERTAIN DEFINITIONS.
The terms defined in this Section 1.1 (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 1.1. All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP. All other terms used in this
Supplemental Indenture that are defined in the Indenture or the Trust Indenture
Act, either directly or by reference therein (except as herein otherwise
expressly provided or unless the context of this Supplemental Indenture
otherwise requires), have the respective meanings assigned to such terms in the
Indenture or the Trust Indenture Act, as the case may be, as in force at the
date of this Supplemental Indenture as originally executed.
"Additional Interest" has the meaning provided in the Registration
Rights Agreement.
"Agent Members" has the meaning provided in Section 2.1(d).
"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
<PAGE> 5
3
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.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns.
"Exchange Debentures" has the meaning provided in the recitals
hereto.
"Exchange Notes" has the meaning provided in the recitals hereto.
"Exchange Securities" has the meaning provided in the recitals
hereto.
"Existing Indebtedness" means all Indebtedness under or evidenced
by: (a) the Securities; (b) the Company's 7% Senior Debentures Due 2028; (c)
the Company's "6 1/8% Term Enhanced Remarketable Securities(SM)"; (d) the
Company's 6.79% Senior Debentures Due 2027; (e)
<PAGE> 6
4
the Company's 10% Senior Notes Due 2001; (f) the Company's 8.125% Senior Notes
Due 2002; (g) the Company 8 1/2% Senior Notes due 2003; (h) the Company's 7.45%
Senior Debentures due 2017; (i) Fingerhut's 7.375% Senior Notes due 1999; (j)
the outstanding principal amount of notes issued pursuant to the Mortgage Note
Agreement, between Macy's Primary Real Estate, Inc. and Federated Noteholding
Corporation; (k) 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; (l) Capital Lease
Obligations of the Company and the Restricted Subsidiaries existing on the date
of issuance of the Initial Securities; and (m) 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 Initial Securities.
"Fingerhut" means Fingerhut Companies, Inc.
"Global Securities" has the meaning provided in Section 2.1(c).
"Initial Purchasers" means Credit Suisse First Boston Corporation,
Salomon Smith Barney Inc., Chase Securities Inc., NationsBanc Montgomery
Securities LLC and PNC Capital Markets, Inc.
"Initial Securities" has the meaning provided in the recitals
hereto.
"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;
<PAGE> 7
5
(b) the applicable Purchase Amount (including, if less than all the
Securities, the calculation thereof pursuant to the Section hereof
requiring such Offer to Purchase);
(c) the applicable Purchase Date;
(d) the purchase price to be paid by the Company for each $1,000
principal amount at maturity of Securities accepted for payment (as
specified in this Supplemental Indenture);
(e) that the Holder of any Security may tender for purchase by the
Company all or any portion of such Security equal to $1,000 principal
amount or any integral multiple thereof;
(f) the place or places where Securities are to be surrendered for
tender pursuant to such Offer to Purchase;
(g) that any Security 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 Security and this Supplemental Indenture;
(h) that on the Purchase Date the purchase price shall become due
and payable upon each Security (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 Security pursuant to such
Offer to Purchase shall be required to surrender such Security 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 Security 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 Securities (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 Securities and (ii) if Securities 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 Securities having an aggregate principal amount equal to the
Purchase Amount and (B) the particular Securities (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 Securities of a denomination larger than $1,000;
(k) that, in the case of any Holder whose Security is purchased only
in part, the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new
Security or Security of any authorized denomination
<PAGE> 8
6
as requested by such Holder in an aggregate principal amount equal to and
in exchange for the unpurchased portion of the Security so tendered; and
(l) any other information required by applicable law to be included
therein.
"Offer to Purchase" means an offer to purchase Securities 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 Securities 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, unemployment insurance, old-age pensions, and other social
security benefits other than in respect of employee benefit plans subject to the
Employee
<PAGE> 9
7
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.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial allotment, a like aggregate principal
amount of Private Exchange Securities.
"Private Exchange Debentures" has the meaning provided in the
recitals hereto.
"Private Exchange Notes" has the meaning provided in the recitals
hereto.
"Private Exchange Securities" has the meaning provided in the
recitals hereto.
"Purchase Agreement" means the Purchase Agreement dated March 18,
1999, among the Company and the Initial Purchasers.
"Purchase Amount" means the aggregate outstanding principal amount
of the Securities required to be offered to be purchased by the Company pursuant
to an Offer to Purchase.
<PAGE> 10
8
"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).
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Rights Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities.
"Registration Rights Agreement" means the Registration Rights
Agreement dated March 18, 1999, among the Company and the Initial Purchasers.
"Registration Statement" has the meaning provided in the
Registration Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"Rule 144A" means rule 144A under the Securities Act.
"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.
"Securities" means the Initial Securities, the Exchange Securities
and the Private Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the
Global Securities (as appointed by the Depositary), or any successor person
thereto, and shall initially be the Trustee.
<PAGE> 11
9
"Senior Indebtedness" means any Indebtedness of the Company or its
Subsidiaries other than Subordinated Indebtedness.
"Senior Debentures" has the meaning provided in the recitals hereto.
"Senior Notes" has the meaning provided in the recitals hereto.
"Shelf Registration Statement" has the meaning provided in the
Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary of the Company 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 Securities.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.
"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 of the Company), Prime Credit
Card Master Trust II (to the extent it is deemed to be a Subsidiary of the
Company), 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 of the Company), Macy Financial, Inc., R.H. Macy
Overseas Finance, N.V., Macy Credit Corp., Macy's Data and Credit Services
Corp., Fingerhut Receivables, Inc., PCP Receivables Corp., Fingerhut Master
Trust (to the extent it is deemed to be a Subsidiary of the Company), Fingerhut
National Bank, PCP Master Trust (to the extent it is deemed to be a Subsidiary
of the Company) and Fingerhut Funding Co. (b) any Subsidiary of the Company the
primary business of which consists of, and is restricted by the charter,
partnership agreement, or similar organizational document of such Subsidiary to,
financing operations on behalf of the Company and its Subsidiaries, and/or
purchasing accounts receivable or direct or indirect interests therein, and/or
making loans secured by accounts receivable or direct or indirect interests
therein (and business related to the foregoing), or which is otherwise primarily
engaged in, and restricted by its charter, partnership agreement, or similar
organizational document to, the business of a finance company (and business
related thereto), which, in accordance with the provisions of this Supplemental
Indenture, has been designated by Board Resolution as an Unrestricted
Subsidiary, in each case unless and until any of the Subsidiaries of the Company
referred to in the foregoing clauses (a) and (b) is, in accordance with the
provisions of this Supplemental Indenture, designated by a Board Resolution as a
Restricted Subsidiary, and (c) any Subsidiary of the Company of which, in the
case of a corporation, more than 50% of the issued and outstanding capital stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation has or might have voting power upon the
occurrence of any contingency), or, in the case of any partnership or other
legal entity, more than 50% of the ordinary
<PAGE> 12
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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 II. ISSUANCE OF THE SECURITIES.
SECTION 2.1. FORM OF SECURITIES; ISSUANCE OF INITIAL SECURITIES.
(a) Form of Securities. Certain provisions relating to the Initial
Securities, the Exchange Securities and the Private Exchange Securities are set
forth in Exhibits A and B to this Supplemental Indenture, which are hereby
incorporated in and expressly made a part of this Supplemental Indenture. The
Initial Securities and the related Trustee's certificate of authentication shall
be substantially in the form of Exhibit A to this Supplemental Indenture, which
is hereby incorporated in and expressly made a part of this Supplemental
Indenture. The Exchange Securities, the Private Exchange Securities and the
related Trustee's certificate of authentication shall be substantially in the
form of Exhibit B, which is hereby incorporated in and expressly made a part of
this Supplemental Indenture. Subject to the foregoing, certificates representing
Securities may reflect such appropriate insertions, omissions, substitutions,
and other variations as are required or permitted by the Indenture and this
Supplemental Indenture, and such letters, numbers, or other marks of
identification and such legends or endorsements 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.
(b) Issuance of Initial Securities. The Initial Securities are being
issued and sold by the Company to the Initial Purchasers pursuant to the
Purchase Agreement.
The Senior Notes shall be issued in the aggregate principal
amount of $350,000,000 and shall mature on April 1, 2009. The Senior Debentures
shall be issued in the aggregate principal amount of $400,000,000 and shall
mature on April 1, 2029.
(c) Global Securities. Initial Securities offered and sold to a QIB
in reliance on Rule 144A or in reliance on Regulation S, in each case as
provided in the Purchase Agreement, shall be issued initially in the form of one
or more permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit A hereto (each, a "Global Security"), which shall be
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Trustee as custodian for the Depositary (or with such other
custodian as the Depositary may direct), and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary or its
nominee as hereinafter provided.
<PAGE> 13
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(d) Book-Entry Provisions. This Section 2.1(d) shall apply only to a
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(d), authenticate and deliver initially one or more Global
Securities that (i) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (ii)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under the Indenture with respect to any Global Security
held on their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(e) Certificated Securities. Except as provided in this Section 2.1
or Section 2.3 or 2.4, owners of beneficial interests in Global Securities will
not be entitled to receive physical delivery of certificated Securities.
SECTION 2.2. EXECUTION; AUTHENTICATION AND DELIVERY OF SECURITIES.
(a) 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 the
Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of
the Company.
(b) The Trustee shall authenticate and deliver: (1) Senior Notes for
original issue in an aggregate principal amount of U.S. $350,000,000; (2) Senior
Debentures for original issue in an aggregate principal amount of U.S.
$400,000,000; (3) Exchange Notes and, if applicable, Private Exchange Notes for
issue in exchange for a like principal amount of Senior Notes upon the
consummation of a Registered Exchange Offer and, if applicable, a Private
Exchange pursuant to the Registration Rights Agreement; and (4) Exchange
Debentures and, if applicable, Private Exchange Debentures in exchange for a
like principal amount of Senior Debentures upon the consummation of a Registered
Exchange Offer and, if applicable, a Private Exchange pursuant to the
Registration Rights Agreement; in each case upon a written order of the Company,
as specified in Section 2.2(a) above. Such order shall specify (1) the amount of
the Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated, (2) whether the Securities are to be Initial
Securities, Exchange Securities, or Private Exchange Securities, and (3)
delivery instructions for such Securities, including applicable CUSIP numbers.
<PAGE> 14
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SECTION 2.3. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Securities. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with the Indenture and this Supplemental
Indenture (including all applicable restrictions on transfer set forth herein,
if any) and the procedures of the Depositary therefor. The transferor of a
beneficial interest in a Global Security shall deliver to the Security Registrar
a written order given in accordance with the Depositary's procedures containing
information regarding the participant accounts of the Depositary to be debited
and credited with such beneficial interest in the Global Security in connection
with such transfer. The Security Registrar shall, in accordance with such
instructions, instruct the Depositary to debit the participant account specified
in such instructions from which such beneficial interest in the Global Security
is to be transferred and to credit the participant account specified in such
instructions to which such beneficial interest in the Global Security is to be
transferred.
(ii) Notwithstanding any other provisions of this Supplemental
Indenture (other than the provisions set forth in Section 2.4), a Global
Security may not be transferred as a whole except (A) by the Depositary to
a nominee of the Depositary, (B) by a nominee of the Depositary to the
Depositary or another nominee of the Depositary, or (C) by the Depositary
or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(iii) In the event that a Global Security representing Transfer
Restricted Securities is exchanged for certificated Securities in
definitive registered form pursuant to Section 2.4 of this Supplemental
Indenture or Section 2.06 of the Indenture, such Transfer Restricted
Securities may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.3 (including
the certification requirements set forth in Exhibit A intended to ensure
that such transfers comply with Rule 144A or Regulation S, as the case may
be) and such other procedures as may from time to time be adopted by the
Company.
(b) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each certificate evidencing Securities shall bear a legend in
substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
<PAGE> 15
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THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY (i) INSIDE THE UNITED STATES TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (iii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE)
OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Security Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Security for a certificated Security that does not bear
the legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security, if the Holder certifies in writing to
the Security Registrar that its request for such exchange was made in
reliance on Rule 144 (such certification to be in the form set forth on the
reverse of the Security).
(iii) After a transfer of any Initial Securities or Private
Exchange Securities during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Securities or Private
Exchange Securities, as the case may be, all requirements pertaining to
legends on such Initial Securities or such Private Exchange Securities will
cease to apply, the requirements requiring such Initial Securities or such
Private Exchange Securities issued to certain Holders be issued in global
form will cease to apply, and certificated Initial Securities or Private
Exchange Securities that do not bear the legend set forth above will be
available to the transferee of the Holder of such Initial Securities or
Private Exchange Securities upon exchange of such transferring Holder's
certificated Initial Securities or Private Exchange Securities or
directions to transfer such Holder's interest in the Global Security, as
applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which certain Holders of such
Initial Securities are offered Exchange Securities in exchange for their
Initial Securities, the requirements of Section 2.1(c) that Initial
Securities issued to certain Holders be issued in global form will cease to
<PAGE> 16
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apply and, subject to the provisions of Section 2.4(a) of this Supplemental
Indenture, certificated Initial Securities that bear the legend set forth
above will be available to Holders of such Initial Securities that do not
exchange their Initial Securities, and Exchange Securities in certificated
or global form that do not bear the legend set forth above will be
available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to
the Initial Securities pursuant to which Holders of such Initial Securities
are offered Private Exchange Securities in exchange for their Initial
Securities, the requirements of Section 2.1(c) that Initial Securities
issued to certain Holders be issued in global form will still apply, and
Private Exchange Securities in global form that bear the legend set forth
above will be available to Holders that exchange such Initial Securities in
such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged
for certificated Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to the Depositary for cancellation or retained
and canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Securities
Custodian for such Global Security to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities and Global Securities at the Security Registrar's or any
co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchange or transfer pursuant to
Section 2.05 of the Indenture).
(iii) The Security Registrar or co-Security Registrar shall not
be required to register the transfer of or exchange of (A) any Securities
selected for redemption (except, in the case of a Security to be redeemed
in part, the portion of the Security not to be redeemed) or (B) any
Security for a period beginning 15 Business Days before the mailing of a
notice of an offer to repurchase or redeem such Securities or 15 Business
Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer
of any Security, the Company, the Trustee, the Paying Agent, the Security
Registrar or any co-Security Registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such Security
for the purpose of receiving payment of Principal of and interest on such
Security and for all other purposes whatsoever, whether or not such
Security is overdue, and none of the Company, the Trustee, the Paying
Agent, the Security Registrar or any co-Security Registrar shall be
affected by notice to the contrary.
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(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Supplemental Indenture shall evidence the
same debt and shall be entitled to the same benefits under this
Supplemental Indenture and the Indenture as the Securities surrendered upon
such transfer or exchange.
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a participant in
the Depositary or other Person with respect to the accuracy of the records
of the Depositary or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect to
the delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the written order of the registered Holders (which
shall be the Depositary or its nominee in the case of a Global Security).
The rights of beneficial owners in any Global Security shall be exercised
only through the Depositary subject to the applicable rules and procedures
of the Depositary. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depositary with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under the Indenture, this Supplemental Indenture or under
applicable law with respect to any transfer of any interest in any Security
(including any transfers between or among Depositary participants, members
or beneficial owners in any Global Security) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms of
this Supplemental Indenture and the Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
SECTION 2.4. CERTIFICATED SECURITIES.
(a) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so transferable and
such transfers shall be registerable.
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(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depositary to the Trustee located in the Borough of Manhattan, The City of New
York, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate principal amount of
certificated Securities of authorized denominations. Any portion of a Global
Security transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 and any integral multiple thereof
and registered in such names as the Depositary shall direct. Any certificated
Security delivered in exchange for an interest in the Global Security shall,
except as otherwise provided by Section 2.3(b), bear the restricted securities
legend set forth in Exhibit A hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action that a Holder is entitled to take under the
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a), the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
SECTION 2.5. VOTING AND CONSENT RIGHTS
(a) The Senior Notes, the Exchange Notes and the Private Exchange
Notes shall constitute a single series of securities (as such term is defined in
the Indenture) and shall vote and consent together on all matters as one series
and none of the Senior Notes, the Exchange Notes or the Private Exchange Notes
shall have the right to vote or consent as a class or series separate from one
another on any matter, and (b) the Senior Debentures, the Exchange Debentures
and the Private Exchange Debentures shall constitute a single series of
securities (as such term is defined in the Indenture) and shall vote and consent
together on all matters as one series and none of the Senior Debentures, the
Exchange Debentures or the Private Exchange Debentures will have the right to
vote or consent as a class or series separate from one another on any matter.
ARTICLE III. CERTAIN COVENANTS.
The following covenants shall be applicable to the Company for so
long as any of the Securities are Outstanding. Nothing in this paragraph will,
however, affect the Company's rights or obligations under any other 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 Securities are
secured by an equal and ratable Lien on the same assets.
<PAGE> 19
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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
repurchase pursuant to an Offer to Purchase Securities 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 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 Securities 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 Securities 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 Securities of a
denomination larger than $1,000), (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Securities or portions thereof so
accepted, and (iii) deliver to the Trustee Securities so accepted. The Paying
Agent shall promptly mail to the Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and mail to such Holders a new Security equal in principal amount to any
unpurchased portion of each Security 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
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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 Securities is made, the Company shall comply
with all tender offer rules, including but not limited to Section 14(e) of 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.
SECTION 3.4. PAYMENT OFFICE.
The Company shall cause a Payment Office for the Securities 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 a series of the Securities, 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 such Securities when required pursuant to
the terms and conditions thereof or to pay the repurchase price for such
Securities 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;
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(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.
ARTICLE V. DEFEASANCE.
SECTION 5.1. APPLICABILITY OF ARTICLE V OF THE INDENTURE.
(a) The Securities of each series 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 such Securities on the Stated Maturity thereof or on any earlier date
on which such Securities 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) of the Indenture, 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
Securities of either series, 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 with respect to such
Securities.
<PAGE> 22
20
ARTICLE VI. REDEMPTION OF SECURITIES.
SECTION 6.1. RIGHT OF REDEMPTION.
The Securities may be redeemed by the Company in accordance with
provisions of the applicable form of Securities attached hereto.
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 with respect to
the Securities of either series if the Holders of a majority in principal amount
of the Outstanding Securities of such series 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.
<PAGE> 23
21
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
[Seal]
FEDERATED DEPARTMENT STORES, INC.
By: /s/ Karen Hoguet
-----------------------------------
Name: Karen M. Hoguet
Title: Senior Vice President, CFO
and Treasurer
Attest:
/s/ Susan P. Storer
- -----------------------------------
Name: Susan P. Storer
Title: OVP and Assistant Treasurer
CITIBANK, N.A.,
as Trustee
By: /s/ R. Duma
-----------------------------------
Name: R. Duma
Title: Senior Trust Officer
Attest:
/s/ Nancy Forte
- -----------------------------------
Name: Nancy Forte
Title: Trust Officer
<PAGE> 24
22
STATE OF OHIO )
) ss.:
COUNTY OF HAMILTON )
On this 22nd day of March, 1999, before me personally came Karen
Hoguet, to me known, who, being by me duly sworn, did depose and say that he/she
is a Senior Vice President/CFO 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/ Jason C. Bruewer
--------------------------------
Notary Public
<PAGE> 25
23
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 23rd day of March, 1999, before me personally came R. Duma,
to me known, who, being by me duly sworn, did depose and say that he/she is a
Senior Trust Officer 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/ Jeffry Berger
--------------------------------
Notary Public
<PAGE> 26
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITIES]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) INSIDE
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(iii)
<PAGE> 27
2
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
<PAGE> 28
Federated Department Stores, Inc.
No. __ Principal Amount $_____________
CUSIP NO. _________
[6.30% Senior Note Due 2009]
[6.90% Senior Debenture Due 2029]
Federated Department Stores, Inc., a Delaware corporation, promises
to pay to Cede & Co., or registered assigns, the principal sum of
________________________ Dollars on April 1, [2009] [2029].
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated: _______ __, ____ FEDERATED DEPARTMENT STORES, INC.
By:
---------------------------------------------------------------------
Attest:
-----------------------------------------------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: ________ __, ____
CITIBANK, N.A.
as Trustee, certifies that
this is one of the Securities
referred to in the Indenture,
as supplemented by the
Supplemental Indenture
related to these Securities.
By:
----------------------------------
Authorized Signatory
<PAGE> 29
[FORM OF REVERSE SIDE OF INITIAL SECURITIES]
(Reverse of Security)
[6.30% Senior Note Due 2009]
[6.90% Senior Debenture Due 2029]
1. Interest
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 April 1, [2009] [2029] and
to pay interest thereon from March 24, 1999 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semiannually
on April 1 and October 1 of each year, commencing on October 1, 1999 at the rate
per annum shown above, until the principal hereof is paid or made available for
payment; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional cash interest will accrue on
this Security at a rate of 0.50% per annum (regardless of the number of
Registration Defaults) from and including the date on which any such
Registration Default shall occur (subject to the terms of the Registration
Rights Agreement) to but excluding the date on which all Registration Defaults
have been cured. Such interest is calculated on the principal amount of this
Security as of the date on which such interest is payable. Such interest is
payable in addition to any other interest payable from time to time with respect
to this Security. The Trustee will not be deemed to have notice of a
Registration Default until it shall have received actual notice of such
Registration Default.
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 March 15 or September 15 (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.
<PAGE> 30
2
2. Method of Payment
Subject in the case of any Global Security to any applicable
requirements of the Depositary, the 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.
3. Indenture
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 [$350,000,000]
[$400,000,000].
The Securities are senior unsecured obligations of the Company. The
Initial Securities issued on the Closing Date and all Exchange Securities or
Private Exchange Securities issued in exchange therefor will be treated as a
single series for all purposes under the Indenture.
4. Redemption
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][25] basis points, together in either case with accrued interest
on the principal amount being redeemed to the Redemption Date.
"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
<PAGE> 31
3
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, Salomon Smith Barney Inc., Chase Securities Inc., NationsBanc
Montgomery Securities LLC and PNC Capital Markets, 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 shall 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, 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.
<PAGE> 32
4
5. Registration Rights; Holders' Compliance
The Company is party to a Registration Rights Agreement, dated as of
March 18, 1999, among the Company, Credit Suisse First Boston Corporation,
Salomon Smith Barney Inc., Chase Securities Inc., NationsBanc Montgomery
Securities LLC and PNC Capital Markets, Inc. pursuant to which it is obligated
to pay Additional Interest upon the occurrence of certain Registration Defaults
(as defined therein).
Each Holder of a Security, by acceptance, hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
6. Amendment, Waiver
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.
7. Defaults and Remedies
This Security is subject to the provisions of the Indenture which
provide 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.
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
<PAGE> 33
5
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.
8. Obligation Absolute
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.
9. Denominations; Transfer; Exchange
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 or
her 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.
10. Persons Deemed Owners
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 Depositary 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 Depositary Trust Company and
payment hereon
<PAGE> 34
6
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.
11. Defined Terms
All terms used in this Security that are defined in the Indenture
shall have the respective meanings assigned to them in the Indenture.
<PAGE> 35
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
- --------------------------------------------------------------------------------
Date: ____________________ Your Signature: ___________________
Signature Guarantee: ______________________________
(Signature must be guaranteed)
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the expiration of the period referred to
in Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with their
terms:
CHECK ONE BOX BELOW:
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [ ] inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer
is being made in reliance on Rule 144A, in each case pursuant
to and in compliance with Rule 144A under the Securities Act of
1933; or
(4) [ ] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
<PAGE> 36
2
(5) [ ] pursuant to the exemption from registration provided by
Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered holder thereof; provided, however, that if box (4) or (5) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
------------------------------
Signature
Signature Guarantee:
- ------------------------- ------------------------------
Signature
Signature must be guaranteed
- ------------------------------------------------------------
<PAGE> 37
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
---------------- --------------------------------
NOTICE: To be executed by
an executive officer
<PAGE> 38
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Security authorized officer of
Date of Principal Amount of Principal Amount of following such Trustee or Securities
Exchange this Global Security this Global Security decrease or increase Custodian
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 39
1
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.2 of the Third Supplemental Indenture; check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.2 of the Third Supplemental Indenture, state
the amount in principal amount: $
Date: Your Signature:
-------------------- -------------------
Signature Guarantee: ______________________________
(Signature must be guaranteed)
<PAGE> 40
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY [OR PRIVATE
EXCHANGE SECURITY]]
*
**
Federated Department Stores, Inc.
No. __ Principal Amount $_____________
CUSIP NO. _________
[6.30% Senior Note Due 2009]
[6.90% Senior Debenture Due 2029]
Federated Department Stores, Inc., a Delaware corporation, promises
to pay to Cede & Co., or registered assigns, the principal sum of
________________________ Dollars on April 1, [2009] [2029].
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated: _______ __, ____ FEDERATED DEPARTMENT STORES, INC.
By:
--------------------------------------
- --------------------
* [If the Security is to be issued in global form add the Global
Securities Legend from Exhibit A and the attachment from such Exhibit A
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY".]
** [If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its
initial allotment, add the Restricted Securities Legend from Exhibit A
and replace the Assignment Form with that included in such Exhibit A.]
<PAGE> 41
2
Attest:
----------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated: _______ __, ____
CITIBANK, N.A.
as Trustee, certifies that
this is one of the Securities
referred to in the Indenture,
as supplemented by the
Supplemental Indenture
related to these Securities.
By:
--------------------------------
Authorized Signatory
<PAGE> 42
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY [OR
PRIVATE EXCHANGE SECURITY]]
[__% Senior Note Due 2009]
[__% Senior Debenture Due 2029]
1. Interest
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 April 1, [2009] [2029] and
to pay interest thereon from March 24, 1999 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semiannually
on April 1 and October 1 of each year, commencing on October 1, 1999 at the rate
per annum shown above, until the principal hereof is paid or made available for
payment [; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional cash interest will accrue on
this Security at a rate of 0.50% per annum (regardless of the number of
Registration Defaults) from and including the date on which any such
Registration Default shall occur (subject to the terms of the Registration
Rights Agreement) to but excluding the date on which all Registration Defaults
have been cured. Such interest is calculated on the principal amount of this
Security as of the date on which such interest is payable. Such interest is
payable in addition to any other interest payable from time to time with respect
to this Security. The Trustee will not be deemed to have notice of a
Registration Default until it shall have received actual notice of such
Registration Default.]***
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 March 15 or September 15 (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.
- ------------------------------
*** Insert only on Private Exchange Security prior to satisfaction of all
registration obligations with respect to such Private Exchange
Security.
<PAGE> 43
2
2. Method of Payment
Subject in the case of any Global Security to any applicable
requirements of the Depositary, the 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.
3. Indenture
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 [$350,000,000]
[$400,000,000].
The Securities are senior unsecured obligations of the Company. The
Initial Securities issued on the Closing Date and all Exchange Securities or
Private Exchange Securities issued in exchange therefor will be treated as a
single series for all purposes under the Indenture.
4. Redemption
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][25] basis points, together in either case with accrued interest
on the principal amount being redeemed to the Redemption Date.
"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
<PAGE> 44
3
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, Salomon Smith Barney Inc., Chase Securities Inc., NationsBanc
Montgomery Securities LLC and PNC Capital Markets, 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 shall 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, 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.
<PAGE> 45
4
5. Registration Rights; Holders' Compliance****
The Company is party to a Registration Rights Agreement, dated as of
March 18, 1999, among the Company, Credit Suisse First Boston Corporation,
Salomon Smith Barney Inc., Chase Securities Inc., NationsBanc Montgomery
Securities LLC and PNC Capital Markets, Inc. pursuant to which it is obligated
to pay Additional Interest upon the occurrence of certain Registration Defaults
(as defined therein).
Each Holder of a Security, by acceptance, hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
6. Amendment, Waiver
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.
7. Defaults and Remedies
This Security is subject to the provisions of the Indenture which
provides 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.
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
- ---------------------------
**** If all registration obligations with respect to the applicable Exchange
Securities or Private Exchange Securities have been satisfied, this Section 5
shall be deleted.
<PAGE> 46
5
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.
8. Obligations Absolute
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 provided.
9. Denominations; Transfer; Exchange
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 or
her 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 amounts 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.
10. Persons Deemed Owners
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.
<PAGE> 47
6
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 is 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.
11. Defined Terms
All terms used in this Security that are defined in the Indenture
shall have the respective meanings assigned to them in the Indenture.
<PAGE> 48
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
-------------------- -------------------
Signature Guarantee: ______________________________
(Signature must be guaranteed)
Sign exactly as your name appears on the other side of this Security.
[Include the following if it is a Private Exchange Security:]
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the expiration of the period referred to
in Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with their
terms:
CHECK ONE BOX BELOW:
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [ ] inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer
is being made in reliance on Rule 144A, in each case pursuant
to and in compliance with Rule 144A under the Securities Act of
1933; or
(4) [ ] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
<PAGE> 49
2
(5) [ ] pursuant to the exemption from registration provided by
Rule 144 under the Securities act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered holder thereof; provided, however, that if box (4) or (5) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
------------------------------
Signature
Signature Guarantee:
- ------------------------- ------------------------------
Signature
Signature must be guaranteed
- ---------------------------------------------------------
<PAGE> 50
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
---------------- -------------------------------------
NOTICE: To be executed by
an executive officer
<PAGE> 51
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Security authorized officer of
Date of Principal Amount of Principal Amount of following such Trustee or Securities
Exchange this Global Security this Global Security decrease or increase Custodian
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 52
1
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.2 of the Third supplemental Indenture; check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.2 of the Third Supplemental Indenture, state
the amount in principal amount: $
Date: Your Signature:
-------------------- -------------------
Signature Guarantee: ______________________________
(Signature must be guaranteed)
<PAGE> 1
EXHIBIT 4.3
$750,000,000
FEDERATED DEPARTMENT STORES, INC.
6.30% SENIOR NOTES DUE 2009
6.90% SENIOR DEBENTURES DUE 2029
REGISTRATION RIGHTS AGREEMENT
March 18, 1999
Credit Suisse First Boston Corporation
Salomon Smith Barney
Chase Securities Inc.
NationsBanc Montgomery Securities LLC
PNC Capital Markets, Inc.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Ladies and Gentlemen:
Federated Department Stores, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to Credit Suisse First Boston
Corporation, Salomon Smith Barney Chase Securities Inc., NationsBanc Montgomery
Securities LLC and PNC Capital Markets, Inc. (collectively, the "INITIAL
PURCHASERS"), upon the terms set forth in a purchase agreement of even date
herewith (the "PURCHASE AGREEMENT"), $350,000,000 aggregate principal amount of
its 6.30% Senior Notes due 2009 (the "INITIAL NOTES") and $400,000,000 aggregate
principal amount of its 6.90% Senior Debentures due 2029 (the "INITIAL
DEBENTURES" and, together with the Initial Notes, the "INITIAL SECURITIES"). The
Initial Securities will be issued pursuant to an Indenture, dated as of
September 10, 1997, as supplemented by the Third Supplemental Indenture, to be
dated as of March 24, 1999 (the "INDENTURE"), between the Company and Citibank,
N.A. as trustee (the "TRUSTEE"). As an inducement to the Initial Purchasers to
enter into the Purchase Agreement, the Company agrees with the Initial
Purchasers, for the benefit of the holders of the Initial Securities (including,
without limitation, the Initial Purchasers), the Exchange Securities (as defined
below) and any Private Exchange Securities (as defined below) (collectively the
"HOLDERS"), as follows:
1. Registered Exchange Offer. The Company shall, at its own cost,
prepare and, not later than 90 days (or if the 90th day is not a business day,
the first business day thereafter) after the date of original issue of the
Initial Securities (the "ISSUE DATE"), file with
<PAGE> 2
2
the Securities and Exchange Commission (the "COMMISSION") a registration
statement (the "EXCHANGE OFFER REGISTRATION STATEMENT") on an appropriate form
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), with
respect to a proposed offer (the "REGISTERED EXCHANGE OFFER") to the Holders of
Transfer Restricted Securities (as defined in Section 6 hereof), who are not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer, to issue and deliver (a) to such Holders that hold
Initial Notes, in exchange for the Initial Notes, a like aggregate principal
amount of debt securities of the Company issued under the Indenture and
identical in all material respects to the Initial Notes (except for the transfer
restrictions relating to the Initial Notes and the provisions relating to the
matters described in Section 6 hereof) that would be registered under the
Securities Act (the "EXCHANGE NOTES") and (b) to such Holders that hold Initial
Debentures, in exchange for the Initial Debentures, a like aggregate principal
amount of debt securities of the Company issued under the Indenture and
identical in all material respects to the Initial Debentures (except for the
transfer restrictions relating to the Initial Debentures and the provisions
relating to the matters described in Section 6 hereof) that would be registered
under the Securities Act (the "EXCHANGE DEBENTURES" and, together with the
Exchange Notes, the "EXCHANGE SECURITIES"). The Company shall use its reasonable
best efforts to cause such Exchange Offer Registration Statement to become
effective under the Securities Act within 180 days (or if the 180th day is not a
business day, the first business day thereafter) after the Issue Date of the
Initial Securities and shall keep the Exchange Offer Registration Statement
effective for not less than 30 days (or longer, if required by applicable law)
after the date notice of the Registered Exchange Offer is mailed to the Holders
of Initial Securities (such period being called the "EXCHANGE OFFER REGISTRATION
Period").
If the Company effects the Registered Exchange Offer, the Company will
be entitled to close the Registered Exchange Offer 30 days after the
commencement thereof provided that the Company has accepted all the Initial
Securities theretofore validly tendered and not withdrawn in accordance with the
terms of the Registered Exchange Offer.
Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Securities (as defined in Section 6
hereof) electing to exchange Initial Securities for Exchange Securities
(assuming that such Holder is not an affiliate of the Company within the meaning
of the Securities Act, acquires the Exchange Securities in the ordinary course
of such Holder's business, has no arrangements with any person to participate in
the distribution of the Exchange Securities and is not prohibited by any law or
policy of the Commission from participating in the Registered Exchange Offer) to
trade such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act (other than the prospectus
delivery requirements referred to in clause (i) of the next paragraph, if and to
the extent applicable) and without material restrictions under the securities
laws of the several states of the United States.
<PAGE> 3
3
The Company acknowledges that, pursuant to current interpretations by
the Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder that is a broker-dealer electing
to exchange Initial Securities, acquired for its own account as a result of
market making activities or other trading activities, for Exchange Securities
(an "EXCHANGING DEALER"), is required to deliver a prospectus containing the
information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in
the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, and (c) Annex C hereto in the "Plan of Distribution" section of such
prospectus in connection with a sale of any such Exchange Securities received by
such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an
Initial Purchaser that elects to sell Private Exchange Securities (as defined
below) acquired in exchange for Initial Securities constituting any portion of
an unsold allotment is required to deliver a prospectus containing the
information required by Items 507 or 508 of Regulation S-K under the Securities
Act, as applicable, in connection with such sale.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein, in order to permit such prospectus to be lawfully
delivered by all persons subject to the prospectus delivery requirements of the
Securities Act for such period of time as such persons must comply with such
requirements in order to resell the Exchange Securities; provided, however, that
(i) in the case where such prospectus and any amendment or supplement thereto
must be delivered by an Exchanging Dealer or an Initial Purchaser, such period
shall be the lesser of 135 days and the date on which all Exchanging Dealers and
the Initial Purchasers have sold all Exchange Securities held by them (unless
such period is extended pursuant to Section 3(j) below) and (ii) the Company
shall make such prospectus and any amendment or supplement thereto available to
any broker-dealer for use in connection with any resale of any Exchange
Securities for a period of not less than 135 days after the consummation of the
Registered Exchange Offer.
If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds Initial Securities acquired by it as part of its initial
distribution, the Company, simultaneously with the delivery of the Exchange
Securities pursuant to the Registered Exchange Offer, shall issue and deliver to
such Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "PRIVATE EXCHANGE") for (a) the Initial Notes held by such Initial
Purchaser, a like principal amount of debt securities of the Company issued
under the Indenture and identical in all material respects (including the
existence of restrictions on transfer under the Securities Act and the
securities laws of the several states of the United States) to the Initial Notes
(the "PRIVATE EXCHANGE NOTES" and (b) the Initial Debentures held by such
Initial Purchaser, a like principal amount of debt securities of the Company
issued under the Indenture and identical in all material respects (including the
existence of restrictions on transfer under the Securities Act and the
securities laws of the several states of the United States) to the Initial
Debentures (the "PRIVATE EXCHANGE DEBENTURES" and, together with the Private
Exchange Notes, the "PRIVATE EXCHANGE SECURITIES"). The Initial Securities, the
Exchange Securities and the Private Exchange Securities are herein collectively
called the "SECURITIES".
<PAGE> 4
4
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30
days (or longer, if required by applicable law) after the date notice
thereof is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of
New York, which may be the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last business day
on which the Registered Exchange Offer shall remain open; and
(e) otherwise comply with all applicable laws.
As soon as practicable after the close of the Registered Exchange Offer
or the Private Exchange, as the case may be, the Company shall:
(x) accept for exchange all the Securities validly tendered and
not withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
(y) deliver to the Trustee for cancellation all the Initial
Securities so accepted for exchange; and
(z) cause the Trustee to authenticate and deliver promptly to
each Holder of the Initial Securities, Exchange Securities or Private
Exchange Securities, as the case may be, equal in principal amount to
the Initial Securities of such Holder so accepted for exchange.
The Indenture will provide that (a) the Exchange Securities will not be
subject to the transfer restrictions set forth in the Indenture, (b) the Initial
Notes, the Exchange Notes and the Private Exchange Notes will vote and consent
together on all matters as one class and that none of the Initial Notes, the
Exchange Notes or the Private Exchange Notes will have the right to vote or
consent as a class separate from one another on any matter, and (c) the Initial
Debentures, the Exchange Debentures and the Private Exchange Debentures will
vote and consent together on all matters as one class and that none of the
Initial Debentures, the Exchange Debentures or the Private Exchange Debentures
will have the right to vote or consent as a class separate from one another on
any matter.
<PAGE> 5
5
Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Initial Securities surrendered in exchange therefor or, if no interest has been
paid on the Initial Securities, from the date of original issue of the Initial
Securities.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Initial Securities or the Exchange Securities within the
meaning of the Securities Act, (iii) such Holder is not an "affiliate," as
defined in Rule 405 of the Securities Act, of the Company or if it is an
affiliate, such Holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, (iv) such Holder is
not engaged in, and does not intend to engage in, the distribution of the
Exchange Securities and (v) if such Holder is a broker-dealer, that it will
receive Exchange Securities for its own account in exchange for Initial
Securities that were acquired as a result of market-making activities or other
trading activities and that it will deliver a prospectus in connection with any
resale of such Exchange Securities.
Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, 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 and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
2. Shelf Registration. If, (i) because of any change in law or in
applicable interpretations thereof by the staff of the Commission, the Company
is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (ii) the Registered Exchange Offer is not consummated within
220 days of the Issue Date, (iii) any Initial Purchaser so requests with respect
to the Initial Securities not eligible to be exchanged for Exchange Securities
in the Registered Exchange Offer (or the Private Exchange Securities) and held
by it following consummation of the Registered Exchange Offer or (iv) any Holder
of Transfer Restricted Securities (other than an Exchanging Dealer) is not
eligible to participate in the Registered Exchange Offer or, in the case of any
Holder (other than an
<PAGE> 6
6
Exchanging Dealer) that participates in the Registered Exchange Offer, such
Holder does not receive freely tradeable Exchange Securities on the date of the
exchange, the Company shall take the following actions:
(a) The Company shall, at its cost, as promptly as practicable
(but in no event more than 90 days after so required or requested
pursuant to this Section 2) file with the Commission and thereafter
shall use its reasonable best efforts to cause to be declared effective
a registration statement (the "SHELF REGISTRATION STATEMENT" and,
together with the Exchange Offer Registration Statement, a
"REGISTRATION STATEMENT") on an appropriate form under the Securities
Act relating to the offer and sale of the Transfer Restricted
Securities (as defined in Section 6 hereof) by the Holders thereof from
time to time in accordance with the methods of distribution set forth
in the Shelf Registration Statement and Rule 415 under the Securities
Act (hereinafter, the "SHELF REGISTRATION"); provided, however, that no
Holder (other than an Initial Purchaser) shall be entitled to have the
Transfer Restricted Securities held by it covered by such Shelf
Registration Statement unless such Holder agrees in writing to be bound
by all the provisions of this Agreement applicable to such Holder.
(b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit
the prospectus included therein to be lawfully delivered by the Holders
of the relevant Transfer Restricted Securities for a period of two
years (or for such longer period if extended pursuant to Section 3(j)
below) from the date of its effectiveness or such shorter period that
will terminate when all the Securities covered by the Shelf
Registration Statement cease to be Transfer Restricted Securities;
provided, however, that the Company shall not be obligated to keep the
Shelf Registration Statement continuously effective to the extent set
forth above, or to keep the prospectus included therein usable for
offers and sales of Securities, if (i) the Company determines, in its
reasonable judgment, upon the advice of counsel, that the continued
effectiveness of the Shelf Registration Statement or usability of any
prospectus included therein would (x) require the disclosure of
material information, which the Company has a bona fide business reason
for preserving as confidential, or (y) interfere with any financing,
acquisition, corporate reorganization or other material transaction or
development involving the Company or any of its subsidiaries or the
contemplated timing thereof, and (ii) the Company promptly thereafter
complies with the requirements of Section 3(j) hereof, if applicable.
The number of days of any actual Suspension Period (as defined below)
shall be added on to the end of the two-year period specified above.
Any such period during which the Company is excused from keeping the
Shelf Registration Statement effective and the prospectus included
therein usable for offers and sales of Securities is referred to herein
as a "SUSPENSION PERIOD." A Suspension Period shall commence on and
include the date that the Company gives notice that the Shelf
Registration Statement is no longer effective or the prospectus
included therein is no longer usable for offers and sales of Securities
<PAGE> 7
7
and shall end on the earlier to occur of (1) the date on which each
seller of Securities covered by the Shelf Registration Statement either
receives the copies of the supplemented or amended prospectus
contemplated by Section 3(j) hereof or is advised in writing by the
Company that the use of the prospectus may be resumed, and (2) the
occurrence of a Suspension Period Limit (as defined below). There shall
be no more than three Suspension Periods in any 12-month period and the
aggregate number of days of such Suspension Periods shall not exceed 90
days in such 12-month period or 45 days in any three month period
(collectively, the "SUSPENSION PERIOD LIMITS"). Except as provided
above, the Company shall be deemed not to have used its reasonable best
efforts to keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result
in Holders of Transfer Restricted Securities covered thereby not being
able to offer and sell such Securities during that period, unless such
action is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and
the related prospectus and any amendment or supplement thereto, as of
the effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Registered
Exchange Offer contemplated by Section 1 hereof, the following provisions shall
apply:
(a) The Company shall (i) furnish to each Initial Purchaser,
prior to the filing thereof with the Commission, a copy of the
Registration Statement and each amendment thereof and each supplement,
if any, to the prospectus included therein and, in the event that an
Initial Purchaser (with respect to any portion of an unsold allotment
of Initial Securities) is participating in the Registered Exchange
Offer or the Shelf Registration Statement, the Company shall use its
reasonable best efforts to reflect in each such document, when so filed
with the Commission, such comments as such Initial Purchaser reasonably
may propose; (ii) include the information set forth in Annex A hereto
on the cover, in Annex B hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section and in Annex C
hereto in the "Plan of Distribution" section of the prospectus forming
a part of the Exchange Offer Registration Statement and include the
information set forth in Annex D hereto in the Letter of Transmittal
delivered pursuant to the Registered Exchange Offer; (iii) if requested
by an Initial Purchaser, include the information required by Items 507
or 508 of Regulation S-K under the
<PAGE> 8
8
Securities Act, as applicable, in the prospectus forming a part of the
Exchange Offer Registration Statement; (iv) include within the
prospectus contained in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution," reasonably acceptable to the
Initial Purchasers, which shall contain a summary statement of the
positions taken or policies made by the staff of the Commission with
respect to the potential "underwriter" status of any broker-dealer that
is the beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT")) of Exchange
Securities received by such broker-dealer in the Registered Exchange
Offer (a "PARTICIPATING BROKER-DEALER"), whether such positions or
policies have been publicly disseminated by the staff of the Commission
or such positions or policies, in the reasonable judgment of the
Initial Purchasers based upon advice of counsel (which may be in-house
counsel), represent the prevailing views of the staff of the
Commission; and (v) in the case of a Shelf Registration Statement,
include the names of the Holders who propose to sell Securities
pursuant to the Shelf Registration Statement as selling
securityholders.
(b) The Company shall give written notice to the Initial
Purchasers, and (i) in the case of a Shelf Registration Statement, the
Holders of the Securities covered thereby, or (ii) in the case of an
Exchange Offer Registration Statement, the Holders of the Initial
Securities and any Participating Broker-Dealer from whom the Company
has received prior written notice that it will be a Participating
Broker-Dealer in the Registered Exchange Offer (which notice pursuant
to clauses (ii)-(v) hereof shall be accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have been
made):
(i)when the Registration Statement or any amendment thereto
has been filed with the Commission and when the Registration
Statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus
included therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of
any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or
the initiation or, threatening of any proceeding for such
purpose; and
(v) of the occurrence of any event, including, without
limitation, any event resulting in a Suspension Period, that
requires the Company to
<PAGE> 9
9
make changes in the Registration Statement or the prospectus in
order that the Registration Statement or the prospectus do not
contain an untrue statement of a material fact nor omit to state
a material fact required to be stated therein or necessary to
make the statements therein (in the case of the prospectus, in
light of the circumstances under which they were made) not
misleading.
(c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement.
(d) The Company shall furnish to each Holder of Securities
included within the coverage of the Shelf Registration, without charge,
at least one copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules, and, if the Holder so requests in writing, all exhibits
thereto (including those, if any, incorporated by reference).
(e) The Company shall deliver to each Exchanging Dealer and each
Initial Purchaser, and to any other Holder who so requests, without
charge, at least one copy of the Exchange Offer Registration Statement
and any post-effective amendment thereto, including financial
statements and schedules, and, if any Initial Purchaser or any such
Holder requests, all exhibits thereto (including those incorporated by
reference).
(f) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Securities included within the coverage of
the Shelf Registration, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as
such person may reasonably request. The Company consents, subject to
the provisions of this Agreement, to the use of the prospectus or any
amendment or supplement thereto by each of the selling Holders of the
Securities in connection with the offering and sale of the Securities
covered by the prospectus, or any amendment or supplement thereto,
included in the Shelf Registration Statement.
(g) The Company shall deliver to each Initial Purchaser, any
Exchanging Dealer, any Participating Broker-Dealer and such other
persons required to deliver a prospectus following the Registered
Exchange Offer, without charge, as many copies of the final prospectus
included in the Exchange Offer Registration Statement and any amendment
or supplement thereto as such persons may reasonably request. The
Company consents, subject to the provisions of this Agreement, to the
use of the prospectus or any amendment or supplement thereto by any
Initial Purchaser, if any Participating Broker-Dealer and such other
persons required to deliver a prospectus following the Registered
Exchange Offer in connection with the offering and sale of
<PAGE> 10
10
the Exchange Securities covered by the prospectus, or any amendment or
supplement thereto, included in such Exchange Offer Registration
Statement.
(h) Prior to any public offering of the Securities pursuant to
any Registration Statement the Company shall register or qualify or
cooperate with the Holders of the Securities included therein and their
respective counsel in connection with the registration or qualification
of such Securities for offer and sale under the securities or "blue
sky" laws of such states of the United States as any Holder of such
Securities reasonably requests in writing and do any and all other acts
or things reasonably necessary or advisable to enable the offer and
sale in such jurisdictions of the Securities covered by such
Registration Statement; provided, however, that the Company shall not
be required to (i) qualify generally to do business in any jurisdiction
where it is not then so qualified or (ii) take any action which would
subject it to general service of process or to taxation in any
jurisdiction where it is not then so subject.
(i) The Company shall cooperate with the Holders of the
Securities to facilitate the timely transfer of the Securities to be
sold pursuant to any Registration Statement free of any restrictive
legends and, to the extent consistent with the terms of the Indenture,
facilitate the timely preparation and delivery of certificates
representing the Securities in such denominations and registered in
such names as the Holders may request a reasonable period of time prior
to sales of the Securities pursuant to such Registration Statement.
(j) Upon the occurrence of any event (other than an event
resulting in a Suspension Period, in which case the Company must comply
with this Section 3(j) within 90 days of the termination of such
Suspension Period) contemplated by paragraphs (ii) through (v) of
Section 3(b) above during the period for which the Company is required
to maintain an effective Registration Statement, the Company shall
promptly prepare and file a post-effective amendment to the
Registration Statement or a supplement to the related prospectus and
any other required document so that, as thereafter delivered to Holders
of Securities or purchasers of Securities, the prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. If the Company notifies the Initial Purchasers,
the Holders of the Securities and any known Participating Broker-Dealer
in accordance with paragraphs (ii) through (v) of Section 3(b) above to
suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Initial Purchasers, the Holders of
the Securities and any such Participating Broker-Dealers shall suspend
use of such prospectus, and the period of effectiveness of the Shelf
Registration Statement provided for in Section 2(b) above and the
Exchange Offer Registration Statement provided for in Section 1 above
shall each be extended by the number of days, without duplication of
any extension under Section 2(b), from and including the date
<PAGE> 11
11
of the giving of such notice to and including the date when the Initial
Purchasers, the Holders of the Securities and any known Participating
Broker-Dealer, as applicable, shall have received such amended or
supplemented prospectus pursuant to this Section 3(j).
(k) Not later than the effective date of the applicable
Registration Statement, the Company will provide a CUSIP number for the
Initial Securities, the Exchange Securities or the Private Exchange
Securities, as the case may be, and provide the applicable trustee with
certificates for the Initial Securities, the Exchange Securities or the
Private Exchange Securities, as the case may be, in a form eligible for
deposit with The Depository Trust Company.
(l) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make
generally available to its security holders (or otherwise provide in
accordance with Section 11(a) of the Securities Act) an earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90
days, if such period is a fiscal year) beginning with the first month
of the Company's first fiscal quarter commencing after the effective
date of the Registration Statement, which statement shall cover such
12-month period.
(m) The Company shall cause the Indenture to be qualified under
the Trust Indenture Act of 1939, as amended, in a timely manner and
containing such changes, if any, as shall be necessary for such
qualification. In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall
appoint a new trustee thereunder pursuant to the applicable provisions
of the Indenture.
(n) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company
such information regarding the Holder and the distribution of the
Securities as the Company may from time to time reasonably require for
inclusion in the Shelf Registration Statement, and the Company may
exclude from such registration the Securities of any Holder that fails
to furnish such information within a reasonable time after receiving
such request.
(o) The Company shall enter into such customary agreements
(including, if requested, an underwriting agreement in customary form)
and take all such other action, if any, as any Holder of the Securities
shall reasonably request in order to facilitate the disposition of the
Securities pursuant to any Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall (i)
make reasonably available for inspection by the Holders of the
Securities, any underwriter
<PAGE> 12
12
participating in any disposition pursuant to the Shelf Registration
Statement and any attorney, accountant or other agent retained by such
Holders of the Securities or any such underwriter all relevant
financial and other records, pertinent corporate documents and
properties of the Company and (ii) use its reasonable best efforts to
cause the Company's officers, directors, employees, accountants and
auditors to supply all relevant information reasonably requested by the
Holders of the Securities covered by such Shelf Registration Statement
or any such underwriter, attorney, accountant or agent in connection
with the Shelf Registration Statement, in each case, as shall be
reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that the foregoing inspection and information
gathering shall be coordinated on behalf of the Initial Purchasers by
you and on behalf of the other parties, by one counsel designated by
and on behalf of such other parties as described in Section 4 hereof;
provided, further, however, that any such records, documents and
properties and such information that is designated in writing by the
Company, in good faith, as confidential at the time of delivery of such
records, documents, properties or information shall be kept
confidential by any such Holder, underwriter, attorney, accountant or
other agent and shall be used only in connection with such Shelf
Registration Statement, unless disclosure thereof is made in connection
with a court proceeding or required by law, or such information has
become available (otherwise than in violation of this Agreement) to the
public generally.
(q) In the case of any Shelf Registration, the Company, if
requested by the selling Holder(s) of Securities covered thereby, shall
cause (i) its counsel to deliver an opinion and updates thereof
relating to the Securities in customary form addressed to such Holders
and the managing underwriters, if any, thereof and dated, in the case
of the initial opinion, the effective date of such Shelf Registration
Statement covering the matters customarily covered in opinions rendered
in connection with underwritten offerings by the Company; (ii) its
officers to execute and deliver on behalf of the Company all customary
documents and certificates and updates thereof requested by any
underwriters of the applicable Securities and (iii) its independent
public accountants to provide to the selling Holders of the applicable
Securities and any underwriter therefor a comfort letter in customary
form and covering matters of the type customarily covered in comfort
letters in connection with primary underwritten offerings, subject to
receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.
(r) In the case of the Registered Exchange Offer, if requested by
any Initial Purchaser or any known Participating Broker-Dealer, the
Company shall cause (i) its counsel to deliver to such Initial
Purchaser or such Participating Broker-Dealer signed opinions in the
respective forms set forth in Annex I and Annex II of the Purchase
Agreement with such changes as are customary in connection with the
preparation of a Registration Statement and (ii) its independent public
accountants to deliver to such Initial Purchaser or such Participating
Broker-Dealer a comfort
<PAGE> 13
13
letter, in customary form, meeting the requirements as to the substance
thereof as set forth in Section 6(a) of the Purchase Agreement, with
appropriate date changes.
(s) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Initial Securities by Holders to the
Company (or to such other Person as directed by the Company) in
exchange for the Exchange Securities or the Private Exchange
Securities, as the case may be, the Company shall mark, or caused to be
marked, on the Initial Securities so exchanged that such Initial
Securities are being canceled in exchange for the Exchange Securities
or the Private Exchange Securities, as the case may be; in no event
shall the Initial Securities be marked as paid or otherwise satisfied.
(t) The Company will use its reasonable best efforts to (i) if
the Initial Securities have been rated prior to the initial sale of
such Initial Securities, confirm such ratings will apply to the
Securities covered by a Registration Statement, or (ii) if the Initial
Securities were not previously rated, cause the Securities covered by a
Registration Statement to be rated with the appropriate rating
agencies, if so requested by Holders of a majority in aggregate
principal amount of Securities covered by such Registration Statement,
or by the managing underwriters, if any.
(u) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Securities to be sold pursuant to the
Shelf Registration Statement or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution"
(within the meaning of the Conduct Rules (the "RULES") of the National
Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a
Holder of such Securities or as an underwriter, a placement or sales
agent or a broker or dealer in respect thereof, or otherwise, the
Company will assist such broker-dealer in complying with the
requirements of such Rules, including, without limitation, by (i) if
such Rules, including Rule 2720, shall so require, engaging a
"qualified independent underwriter" (as defined in Rule 2720) to
participate in the preparation of the Registration Statement relating
to such Securities, to exercise usual standards of due diligence in
respect thereto and, if any portion of the offering contemplated by
such Registration Statement is an underwritten offering or is made
through a placement or sales agent, to recommend the yield of such
Securities, (ii) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof and (iii) providing such information to
such broker-dealer as may be required in order for such broker-dealer
to comply with the requirements of the Rules.
(v) The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration of the Securities
covered by a Registration Statement contemplated hereby. The Initial
Purchasers agree to provide any reasonable assistance requested by the
Company in complying with its obligations
<PAGE> 14
14
pursuant to this Section 3, including, without limitation, identifying
and contacting Holders entitled to participate in the Registered
Exchange Offer.
4. Registration Expenses. The Company shall bear all fees and expenses
incurred in connection with the performance of its obligations under Sections 1
through 3 hereof (including the reasonable fees and expenses, if any, of Simpson
Thacher & Bartlett, counsel for the Initial Purchasers, incurred in connection
with the Registered Exchange Offer), whether or not the Registered Exchange
Offer or a Shelf Registration is filed or becomes effective, and, in the event
of a Shelf Registration, shall bear or reimburse the Holders of the Securities
covered thereby for the reasonable fees and disbursements of one firm of counsel
designated by the Holders of a majority in principal amount of the Securities
covered thereby to act as counsel for the Holders of the Securities in
connection therewith. Notwithstanding the foregoing, such Holders shall be
responsible for any and all underwriting discounts and commissions and all other
costs and expenses customarily borne by securityholders in similar
circumstances.
5. Indemnification. (a) The Company will indemnify and hold harmless
each Holder of the Securities and any Participating Broker-Dealer and each
person, and their respective officers, directors and, in the case of
transactions pursuant to Section 3(o) hereof, underwriters and each person who
controls such Holder or such Participating Broker-Dealer within the meaning of
the Securities Act or the Exchange Act (each Holder, any Participating
Broker-Dealer and such controlling persons are referred to collectively as the
"INDEMNIFIED PARTIES") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof (including, but
not limited to, any losses, claims, damages, liabilities or actions relating to
purchases and sales of the Securities) to which each Indemnified Party may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, 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, in the light of the circumstances
under which they were made, not misleading, and shall reimburse, as incurred,
the Indemnified Parties for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that (i) the Company
shall not be liable in any such case to the extent that such loss, claim,
damage, liability or action arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration in reliance
upon and in conformity with written information pertaining to such Holder and
furnished to the Company by or on behalf of such Indemnified Party or any
affiliate thereof specifically for inclusion therein and (ii) with respect to
any untrue statement or omission or alleged untrue statement or omission made in
any preliminary prospectus relating to a Shelf Registration Statement, the
indemnity agreement
<PAGE> 15
15
contained in this subsection (a) shall not inure to the benefit of any Holder or
Participating Broker-Dealer from whom the person asserting any such losses,
claims, damages or liabilities purchased the Securities concerned (or any
affiliate of such Holder or Participating Broker-Dealer), to the extent that a
prospectus relating to such Securities was required to be delivered by such
Holder or Participating Broker-Dealer under the Securities Act in connection
with such purchase and any such loss, claim, damage or liability of such Holder
or Participating Broker-Dealer or any affiliate thereof results from the fact
that there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Securities to such person, a copy of the final
prospectus if the Company had previously furnished copies thereof to such Holder
or Participating Broker-Dealer; provided further, however, that this indemnity
agreement will be in addition to any liability which the Company may otherwise
have to such Indemnified Party.
(b) Each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the Company or any such controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, 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, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
omission or alleged untrue statement or alleged omission was made in reliance
upon and in conformity with written information pertaining to such Holder and
furnished to the Company by or on behalf of such Holder specifically for
inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, shall reimburse, as incurred, the Company for any legal
or other expenses reasonably incurred by the Company or any such controlling
person in connection with investigating or defending any loss, claim, damage,
liability or action in respect thereof. This indemnity agreement will be in
addition to any liability which such Holder may otherwise have to the Company or
any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this Section 5
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to
<PAGE> 16
16
assume the defense thereof, with counsel reasonably 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 will not be liable to such indemnified
party under this Section 5 for any legal or other expenses, other than
reasonable costs of investigation, subsequently incurred by such indemnified
party in connection with the defense thereof. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the exchange of the Securities,
pursuant to the transactions contemplated by the applicable Registration
Statement or prospectus, or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the
one hand and the indemnified party on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties 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
such Holder or such other indemnified party, as the case may be, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of 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 action or
claim which is the subject of this subsection (d). Notwithstanding any other
provision of this Section 5(d), the Holders of the Securities shall not be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Securities pursuant to a
Registration Statement exceeds the amount of damages which such Holders have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each
<PAGE> 17
17
person, if any, who controls such indemnified party within the meaning of the
Securities Act or the Exchange Act shall have the same rights to contribution as
such indemnified party and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act shall have the same rights
to contribution as the Company.
(e) The agreements contained in this Section 5 shall survive the sale
of the Securities pursuant to a Registration Statement and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
(6) Additional Interest Under Certain Circumstances. Additional
interest (the "ADDITIONAL INTEREST") with respect to the Initial Securities and
the Private Exchange Securities shall be assessed as follows if any of the
following events occur (each such event in clauses (i) through (iii) below a
"REGISTRATION DEFAULT":
(i) If by June 22, 1999, neither the Exchange Offer
Registration Statement nor a Shelf Registration Statement has been
filed with the Commission;
(ii) If by October 30, 1999, neither the Registered Exchange
Offer is consummated nor, if required in lieu thereof, the Shelf
Registration Statement is declared effective by the Commission; or
(iii) If after either the Exchange Offer Registration
Statement or the Shelf Registration Statement is declared effective
(A) such Registration Statement thereafter ceases to be effective
or (B) such Registration Statement or the related prospectus ceases
to be usable (excluding any Suspension Periods) in connection with
resales of Transfer Restricted Securities in each case during the
period the Company is required to keep such Registration Statement
effective as specified in Section 1 or 2(b), as applicable, because
either (1) any event occurs as a result of which the related
prospectus forming part of such Registration Statement would
include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or (2) it shall be necessary to amend such Registration
Statement or supplement the related prospectus, to comply with the
Securities Act or the Exchange Act or the respective rules
thereunder.
Additional Interest shall accrue on the Initial Securities and the Private
Exchange Notes over and above the interest set forth in the title of the Initial
Securities or the Private Exchange Notes, as applicable, from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all such Registration Defaults have been cured, at a rate of 0.50%
per annum (regardless of the number of Registration Defaults).
<PAGE> 18
18
(b) A Registration Default referred to in Section 6(a)(iii) hereof
shall be deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related prospectus during any Suspension Period if
(i) such Registration Default has occurred solely as a result of (x) the filing
of a post-effective amendment to such Shelf Registration Statement to
incorporate annual audited financial information with respect to the Company
where such post-effective amendment is not yet effective and needs to be
declared effective to permit Holders to use the related prospectus or (y) other
material events, with respect to the Company that would need to be described in
such Shelf Registration Statement or the related prospectus and (ii) in the case
of clause (y), the Company is proceeding promptly and in good faith to amend or
supplement such Shelf Registration Statement and related prospectus to describe
such events; provided, however, that in any case if such Registration Default
occurs for a continuous period in excess of 30 days, Additional Interest shall
be payable in accordance with the above paragraph from the day such Registration
Default occurs until such Registration Default is cured or until the Company is
no longer required to keep such Registration Statement effective or such
prospectus usable pursuant to the terms of this Agreement.
(c) Any amounts of Additional Interest due pursuant to clause (i), (ii)
or (iii) of Section 6(a) above will be payable in cash on the regular interest
payment dates with respect to the Securities. The amount of Additional Interest
will be determined by multiplying the applicable Additional Interest rate by the
principal amount of the Initial Securities or Private Exchange Notes, as the
case may be, multiplied by a fraction, the numerator of which is the number of
days such Additional Interest rate was applicable during such period (determined
on the basis of a 360-day year comprised of twelve 30-day months), and the
denominator of which is 360.
(d) "TRANSFER RESTRICTED SECURITIES" means each Security until (i) the
date on which such Security has been exchanged by a person other than a
broker-dealer for a freely transferable Exchange Security in the Registered
Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered
Exchange Offer of an Initial Security for an Exchange Security, the date on
which such Exchange Security is sold to a purchaser who receives from such
broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Security has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement or (iv) the date
on which such Security is distributed to the public pursuant to Rule 144 under
the Securities Act or is saleable pursuant to Rule 144(k) under the Securities
Act.
7. Rules 144 and 144A. The Company shall use its reasonable best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of their Transfer Restricted Securities
pursuant to Rules 144 and 144A. The Company covenants that it will take such
further
<PAGE> 19
19
action as any Holder of Transfer Restricted Securities may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Transfer Restricted Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A
(including the requirements of Rule 144A(d)(4)). The Company will provide a copy
of this Agreement to prospective purchasers of Initial Securities identified to
the Company by the Initial Purchasers upon request. Upon the request of any
Holder of Initial Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements. Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the Company
to register any of its securities pursuant to the Exchange Act.
8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering ("MANAGING UNDERWRITERS") will be selected by
the Holders of a majority in aggregate principal amount of such Transfer
Restricted Securities to be included in such offering.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
9. Miscellaneous.
(a) Amendments and Waivers . The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority in principal amount of the Securities
affected by such amendment, modification, supplement, waiver or consents.
(b) Notices . All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(1) if to a Holder of the Securities, at the most current address
given by such Holder to the Company.
(2) if to the Initial Purchasers;
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-8278
Attention: Transactions Advisory Group
<PAGE> 20
20
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017-3954
Fax No.: (212) 455-2502
Attention: Vincent Pagano
(3) if to the Company, at its address as follows:
Federated Department Stores, Inc.
7 West Seventh Street
Cincinnati, OH 45202
Fax No.: (513) 579-7555
Attention: Chief Financial Officer and General Counsel
with a copy to:
Jones, Day Reavis & Pogue
2001 Ross Avenue, Suite 2300
Dallas, TX 75201
Fax No.: (214) 969-5100
Attention: Mark Betzen
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(c) No Inconsistent Agreements. The Company has not, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(d) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so
<PAGE> 21
21
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
(h) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(i) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
<PAGE> 22
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the several Initial Purchasers and the Company in accordance with its
terms.
Very truly yours,
FEDERATED DEPARTMENT STORES, INC.
By: /s/ Karen Hoguet
---------------------------------
Name: Karen M. Hoguet
Title: Senior Vice President, CFO
and Treasurer
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY
CHASE SECURITIES INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
PNC CAPITAL MARKETS, INC.
by: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ David Russell
------------------------------------
Name: David Russell
Title: Managing Director
<PAGE> 23
ANNEX A
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Securities received in exchange for Initial Securities
where such Initial Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 135 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."
<PAGE> 24
ANNEX B
Each broker-dealer that receives Exchange Securities for its own
account in exchange for Initial Securities, where such Initial Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities. See "Plan of
Distribution."
<PAGE> 25
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Initial Securities where such Initial Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 135 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until [______ __], 1999,
all dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities. Any broker-dealer that resells Exchange Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For a period of 135 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
Holders of the Securities) other than commissions or concessions of any brokers
or dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
<PAGE> 26
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
---------------------------------------------
Address:
------------------------------------------
------------------------------------------
The undersigned represents that it is not engaged in, and does not intend to
engage in, a distribution of Exchange Securities. If the undersigned is a
broker-dealer that will receive Exchange Securities for its own account in
exchange for Initial Securities, it represents that such Initial Securities were
acquired by it as a result of market-making activities or other trading
activities, and acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
<PAGE> 1
EXHIBIT 5.1
JONES, DAY, REAVIS & POGUE
2300 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
April 22, 1999
Federated Department Stores, Inc.
7 West Seventh Street
Cincinnati, OH 45202
Re: Registration Statement on Form S-4 for Federated Department
Stores, Inc.
Ladies and Gentlemen:
We are acting as counsel to Federated Department Stores, Inc., a
Delaware corporation (the "Company"), in connection with the offering of
$350,000,000 aggregate principal amount of the Company's 6.30% Senior Notes due
2009 (the "Exchange Notes") and $400,000,000 aggregate principal amount of the
Company's 6.90% Senior Debentures due 2029 (the "Exchange Debentures" and,
together with the Exchange Notes, the "Exchange Securities") pursuant to the
registration statement on Form S-4 to which this opinion is Exhibit 5.1 (the
"Registration Statement"). As contemplated by the Registration Statement, the
Exchange Notes are to be issued pursuant to an exchange offer (the "Exchange
Offer") in exchange for a like principal amount of the issued and outstanding
6.30% Senior Notes due 2009 of the Company (the "Original Notes"), and the
Exchange Debentures are to be issued pursuant to the Exchange Offer in exchange
for a like principal amount of the issued and outstanding 6.90% Senior
Debentures due 2029 of the Company (the "Original Debentures" and, together with
the Original Notes, the "Original Securities"). The Exchange Securities will be
issued under an Indenture, dated as of September 10, 1997 (the "Base
Indenture"), between the Company and Citibank, N.A., as trustee (the "Trustee"),
as supplemented by the Third Supplemental Indenture, dated as of March 24, 1999,
between the Company and the Trustee (the "Supplemental Indenture" and, together
with the Base Indenture, the "Indenture").
We have examined such documents, records, and matters of law as we have
deemed necessary for purposes of this opinion. Based upon such examination and
the assumptions set forth below, we are of the opinion that the Exchange
Securities, when (a) duly executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture and (b) delivered
upon the consummation of the Exchange Offer against receipt of Original
Securities surrendered in exchange therefor in accordance with the terms of the
Exchange Offer, will be valid and binding obligations of the Company.
In rendering this opinion, we have assumed (i) the Base Indenture and
the Supplemental Indenture are valid and binding obligations of the Trustee,
(ii) the Registration Statement, and any amendment thereto, will have become
effective, and (iii) the Exchange Securities are issued in compliance with
applicable federal and state securities laws.
In rendering this opinion, we have relied as to certain factual matters
upon statements or certificates of representatives of the Company and statements
or certificates of public officials, and we have not independently checked or
verified the accuracy of such statements or certificates. This opinion is
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, as
in effect on the date hereof.
This opinion is limited to the matters expressly stated herein, and no
opinion is implied or may be inferred beyond the matters expressly stated
herein.
<PAGE> 2
Federated Department Stores, Inc.
April 22, 1999
Page 2
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to us in the related prospectus
under the caption "Legal Matters."
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue
<PAGE> 1
EXHIBIT 12.1
FEDERATED DEPARTMENT STORES, INC.
COMPUTATION OF HISTORICAL RATIOS OF EARNINGS TO FIXED CHARGES(a)
(IN MILLIONS, EXCEPT RATIO DATA)
<TABLE>
<CAPTION>
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended Ended Ended
1/30/99 1/31/98 2/1/97 2/3/96 1/28/95
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Income before income taxes and
extraordinary items ........................ $1,163 $ 958 $ 441 $ 202 $ 331
Add: Portion of rents representative of
the interest factor ........................ 113 120 117 134 71
Interest Expense ........................... 304 418 499 508 262
------ ------ ------ ------ ------
Adjusted Income .............................. $1,580 $1,496 $1,057 $ 844 $ 664
====== ====== ====== ====== ======
Fixed Charges:
Interest Expense ........................... $ 304 $ 418 $ 499 $ 508 $ 262
Capitalized Interest ....................... 3 2 1 1 1
Portion of rents representative of the
interest factor .......................... 113 120 117 134 71
------ ------ ------ ------ ------
Total Fixed Charges .......................... $ 420 $ 540 $ 617 $ 643 $ 334
====== ====== ====== ====== ======
Ratio of earnings to fixed charges ........... 3.8x 2.8x 1.7x 1.3x 2.0x
</TABLE>
- ------------
(a) For purposes of determining the ratio of earnings to fixed charges,
earnings consist of income before income taxes and extraordinary items plus
fixed charges (excluding interest capitalized). Fixed charges represent interest
incurred, amortization of debt expenses, and that portion of rental expense on
operating leases deemed to be the equivalent of interest.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Federated Department Stores, Inc.
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the registration statement.
/s/ KPMG LLP
Cincinnati, Ohio
April 21, 1999
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby constitutes
and appoints Ronald W. Tysoe, Dennis J. Broderick, John R. Sims, and Padma Tatta
Cariappa, or any of them, the true and lawful attorneys-in-fact of the
undersigned, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, to sign on his or her behalf, as a
director or officer, or both, as the case may be, of Federated Department
Stores, Inc., a Delaware corporation (the "Corporation"), a Registration
Statement on Form S-4 (the "Registration Statement") relating to the
registration under the Securities Act of 1933, as amended, of up to $750,000,000
aggregate principal amount of debt securities to be issued by the Corporation in
exchange for a like amount of outstanding debt securities of the Corporation and
to sign any or all amendments and any or all post-effective amendments to the
Registration Statement, whether on Form S-4 or otherwise, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys or
attorneys-in-fact full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys or attorneys-in-fact or any of
them or their substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Dated: April 20, 1999
/s/ James M. Zimmerman /s/ George V. Grune
- ------------------------------ ------------------------------
James M. Zimmerman George V. Grune
/s/ Terry J. Lundgren /s/ Sara Levinson
- ------------------------------ ------------------------------
Terry J. Lundgren Sara Levinson
/s/ Ronald W. Tysoe /s/ Joseph Neubauer
- ------------------------------ ------------------------------
Ronald W. Tysoe Joseph Neubauer
/s/ Karen M. Hoguet /s/ Joseph A. Pichler
- ------------------------------ ------------------------------
Karen M. Hoguet Joseph A. Pichler
/s/ Joel A. Belsky /s/ Karl M. von der Heyden
- ------------------------------ ------------------------------
Joel A. Belsky Karl M. von der Heyden
/s/ Meyer Feldberg
- ------------------------------ ------------------------------
Meyer Feldberg Craig E. Weatherup
/s/ Earl G. Graves, Sr. /s/ Marna C. Whittington
- ------------------------------ ------------------------------
Earl G. Graves, Sr. Marna C. Whittington
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305 (b)(2) ____
------------------------
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
-----------------------
FEDERATED DEPARTMENT STORES, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-3324058
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
151 West 34 Street
New York, New York 10001
and
7 West Seventh Street
Cincinnati, Ohio 45202
(Addresses of principal executive offices) (Zip Codes)
-------------------------
Debt Securities
(Title of the indenture securities)
<PAGE> 2
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Name Address
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, NY
33 Liberty Street
New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as exhibits hereto.
Exhibit 1 - Copy of Articles of Association of the Trustee, as now in
effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to commence
business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise corporate
trust powers. (Exhibit 3 to T-1 to Registration Statement
No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to
T-1 to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
<PAGE> 3
Exhibit 6 - The consent of the Trustee required by Section 321(b) of
the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration
Statement No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A.
(as of December 31, 1998 - attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
------------------
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 22nd day
of April, 1999.
CITIBANK, N.A.
By /s/Nancy Forte
----------------------------
Nancy Forte
Trust Officer
<PAGE> 4
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
CITIBANK, N.A.
of New York in the State of New York, at the close of business on December 31,
1998, published in response to call made by Comptroller of the Currency, under
Title 12, United States Code, Section 161. Charter Number 1461 Comptroller of
the Currency Northeastern District.
ASSETS
<TABLE>
<CAPTION>
THOUSANDS
OF DOLLARS
<S> <C>
Cash and balances due from de-
pository institutions:
Noninterest-bearing balances
and currency and coin .............. $ 8,052,000
Interest-bearing balances .......... 15,782,000
Held-to-maturity securities ................. 0
Available-for-sale securities ............... 37,330,000
Federal funds sold and
securities purchased under
agreements to resell ............... 8,039,000
Loans and lease financing receivables:
Loans and Leases, net of un-
earned income ...................... $ 182,508,000
LESS: Allowance for loan
and lease losses 4,709,000
---------
Loans and leases, net of un-
earned income, allowance,
and reserve ........................ $ 177,799,000
Trading assets .............................. 31,683,000
Premises and fixed assets (includ-
ing capitalized leases) ............ 4,022,000
Other real estate owned ..................... 458,000
Investments in unconsolidated
subsidiaries and associated com-
panies ............................. 1,154,000
Customers' liability to this bank
on acceptances outstanding ......... 1,281,000
Intangible assets ........................... 3,504,000
Other assets ................................ 11,791,000
-------------
TOTAL ASSETS ................................ $ 300,895,000
=============
LIABILITIES
Deposits:
In domestic offices .................... $ 39,355,000
Noninterest-
bearing ..............$ 13,199,000
Interest-
bearing .................26,156,000
----------
In foreign offices, Edge and
Agreement subsidiaries, and
IBFs ................................... 163,573,000
Noninterest-
bearing .............. 10,803,000
Interest-
bearing .............. 152,770,000
-----------
Federal funds purchased and
securities sold under agree-
ments to repurchase ................ 9,752,000
Trading liabilities ......................... 30,753,000
Other borrowed money (includes
mortgage indebtedness and
obligations under capitalized
leases):
With a remaining maturity of one
year or less ....................... 13,308,000
With a remaining maturity of more
than one year through three years .. 1,528,000
With a remaining maturity of more
than three years ................... 2,110,000
Bank's liability on acceptances ex-
ecuted and outstanding ............. 1,382,000
Subordinated notes and
debentures ......................... 6,600,000
Other liabilities ........................... 12,802,000
-------------
TOTAL LIABILITIES ........................... $ 281,163,000
=============
EQUITY CAPITAL
Perpetual preferred stock
and related surplus ................ 0
Common stock ................................ $ 751,000
Surplus ..................................... 9,397,000
Undivided profits and capital re-
serves ............................. 10,356,000
Net unrealized holding gains (losses)
on available-for-sale securities ... (113,000)
Cumulative foreign currency
translation adjustments ............ (659,000)
-------------
TOTAL EQUITY CAPITAL ........................ $ 19,732,000
-------------
TOTAL LIABILITIES, LIMITED-
LIFE PREFERRED STOCK, AND
EQUITY CAPITAL ..................... $ 300,895,000
=============
</TABLE>
I, Roger W. Trupin, Controller of the above-named bank do hereby declare that
this Report of Condition is true and correct to the best of my knowledge and
belief.
ROGER W. TRUPIN
CONTROLLER
We, the undersigned directors, attest to the correctness of this Report of
Condition. We declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions and
is true and correct.
PAUL J. COLLINS
JOHN S. REED
WILLIAM R. RHODES
DIRECTORS
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
EXCHANGE OFFER FOR ALL OUTSTANDING
6.30% SENIOR NOTES DUE 2009
AND
6.90% SENIOR DEBENTURES DUE 2029
OF
FEDERATED DEPARTMENT STORES, INC.
PURSUANT TO THE PROSPECTUS DATED ________, 1999
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_____________ ___ , 1999 UNLESS EXTENDED (THE "EXPIRATION DATE").
The Exchange Agent for the Exchange Offer is:
Citibank, N.A.
<TABLE>
<CAPTION>
By Mail: By Overnight Courier Delivery: By Hand:
<S> <C> <C>
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distribution, Inc. Corporate Trust Window
P.O. Box 7072 404 Sette Drive 111 Wall Street, 5th Floor
Paramus, New Jersey 07653 Paramus, New Jersey 07652 New York, New York 10005
</TABLE>
By Facsimile for Eligible Institutions:
(201) 262-3240
Facsimile Confirmation Only:
(800) 422-2077
For Information:
(800) 422-2077
IF YOU DELIVER THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMIT INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE, SUCH DELIVERY OR INSTRUCTIONS WILL NOT BE EFFECTIVE. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR AND COMPLETE
THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
Federated Department Stores, Inc. (the "Company") is offering, upon the
terms and subject to the conditions set forth in the Prospectus, dated
_______________ ___, 1999 (the "Prospectus"), and in this Letter of Transmittal
(which, together with any supplements or amendments hereto or thereto,
collectively constitute the "Exchange Offer") to exchange its 6.30% Senior Notes
due 2009 (the "Exchange Notes") which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), for a like principal amount of
its outstanding 6.30% Senior Notes due 2009 (the "Original Notes"), and to
exchange its 6.90% Senior Debentures due 2029 (the "Exchange Debentures," and
together with the Exchange Notes, the "Exchange Securities") which have been
registered under the Securities Act for a like principal amount of its 6.90%
Senior Debentures due 2029 (the "Original Debentures" and, together with the
Original Notes, the "Original Securities"). Terms used herein with initial
capital letters have the respective meanings ascribed to them in the Prospectus.
This Letter of Transmittal is to be completed by holders of Original
Securities if either (i) certificates representing Original Securities
("Certificates") are to be forwarded herewith or (ii) delivery of Original
Securities is to be made by book-entry transfer to the account maintained by the
Exchange Agent at the Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in the Prospectus under the
caption "The Exchange Offer-Book-Entry Transfer." Holders whose Certificates are
not immediately available or who cannot deliver their Certificates and all other
required documents to the Exchange Agent prior to the Expiration Date, or who
cannot complete the procedures for book-entry transfer on a timely basis, may
tender their Original Securities pursuant to the guaranteed delivery procedures
set forth in the Prospectus under the caption "The Exchange Offer-Guaranteed
Delivery Procedures." See Instruction 1. Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Exchange Agent.
<PAGE> 2
List below the Original Securities to which this Letter of Transmittal
relates. If the space provided below is inadequate, list the certificate numbers
and principal amount of Original Notes or Original Debentures on a separate
signed schedule and affix the list to this Letter of Transmittal.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES
- -----------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) AGGREGATE PRINCIPAL
OF REGISTERED HOLDERS AMOUNT OF ORIGINAL NOTES AGGREGATE PRINCIPAL AMOUNT
(PLEASE COMPLETE, IF BLANK) CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) OF ORIGINAL NOTES TENDERED**
--------------------------- ---------------------- ----------------------------- ----------------------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL
AMOUNT TENDERED:
- -----------------------------------------------------------------------------------------------------------------------------------
* Need not be completed if Original Notes are being tendered by book-entry.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered the entire principal amount of its
Original Notes.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL DEBENTURES
- -----------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
OF REGISTERED HOLDERS AMOUNT OF ORIGINAL DEBENTURES AMOUNT OF ORIGINAL
(PLEASE COMPLETE, IF BLANK) CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) DEBENTURES TENDERED**
--------------------------- ---------------------- ----------------------------- ----------------------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL
AMOUNT TENDERED:
- -----------------------------------------------------------------------------------------------------------------------------------
* Need not be completed if Original Debentures are being tendered by book-entry.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered the entire principal amount of its
Original Debentures.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF TENDERED ORIGINAL SECURITIES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
-------------------------------------------------
Account Number: Transaction Code Number:
--------------------------- -----------
[ ] CHECK HERE IF TENDERED ORIGINAL SECURITIES ARE BEING DELIVERED PURSUANT TO
A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) of Original Securities:
------------------------
Window Ticket Number (if any):
-------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
----------------------------
Name of Institution that Guaranteed Delivery:
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO AND COMPLETE THE FOLLOWING.
Name:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------
2
<PAGE> 3
Ladies and Gentlemen:
On the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of
Original Notes and/or Original Debentures indicated above. Subject to, and
effective upon, the acceptance for exchange of the Original Securities tendered
hereby, the undersigned hereby (i) sells, assigns, and transfers to, or upon the
order of, the Company all right, title, and interest in and to the Original
Securities tendered hereby and (ii) irrevocably constitutes and appoints the
Exchange Agent as its true and lawful agent and attorney-in-fact (with full
knowledge that the Exchange Agent also acts as the agent of the Company) with
respect to such Original Securities, with full power of substitution (such power
of attorney deemed to be an irrevocable power of attorney coupled with an
interest), to (a) deliver Certificates evidencing such Original Securities, or
transfer ownership of such Original Securities on the account books maintained
by the Book-Entry Transfer Facility, together, in any such case, with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Company, (b) present such Original Securities for transfer on the books of
the registrar for the Original Securities, and (c) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Original
Securities.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign, transfer, and exchange the
Original Securities tendered hereby and that, when the same are accepted by the
Company for exchange, the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances, and
adverse claims. The undersigned hereby further represents that (i) any Exchange
Securities acquired in exchange for Original Securities tendered hereby are
being acquired in the ordinary course of business of the person receiving such
Exchange Securities, whether or not such person is the holder of such Original
Securities, (ii) neither the undersigned nor any such other person is engaging
in or intends to engage in a distribution of the Exchange Securities, (iii)
neither the undersigned nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such
Exchange Securities, and (iv) neither the undersigned nor any such other person
is an "affiliate" (as defined in Rule 405 under the Securities Act) of the
Company, or, if either is an affiliate, it will comply with the registration and
prospectus delivery requirements of the Securities Act. If the undersigned is a
broker-dealer that is to receive Exchange Securities for its own account in
exchange for Original Securities, it further represents that such Original
Securities were acquired as a result of market-making activities or other
trading activities, and acknowledges that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of such
Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" with respect to such Exchange Securities within the meaning of the
Securities Act.
The undersigned acknowledges that this Exchange Offer is being made in
reliance upon interpretations by the staff of the Securities and Exchange
Commission (the "Commission"), as set forth in no-action letters issued to third
parties, that indicate that the Exchange Securities issued in exchange for the
Original Securities pursuant to the Exchange Offer may be offered for resale,
resold, or otherwise transferred by the holders thereof (other than any such
holder that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, if such Exchange
Securities are acquired in the ordinary course of such holders' business and
such holders have no arrangement or understanding with any person to participate
in a distribution of such Exchange Securities. However, the Commission has not
considered the Exchange Offer in the context of a no-action letter and there can
be no assurance that the staff of the Commission would make a similar
determination with respect to the Exchange Offer. If any holder of Original
Securities is an affiliate of the Company or is engaged in, or intends to engage
in or has any arrangement or understanding with any person to participate in,
the distribution of the Exchange Securities to be acquired pursuant to the
Exchange Offer, such holder (i) cannot rely on the applicable interpretations of
the staff of the Commission and (ii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the sale, assignment, and transfer of the Original
Securities tendered hereby.
All authority conferred or agreed to be conferred by this Letter of
Transmittal and every obligation of the undersigned hereunder shall be binding
upon the undersigned's heirs, executors, administrators, trustees in bankruptcy,
legal representatives, successors, and assigns and shall survive the death,
incapacity, or dissolution of the undersigned.
The undersigned understands that the valid tender of Original
Securities pursuant to the procedures set forth in the Prospectus under the
caption "The Exchange Offer-Procedures for Tendering" and in the instructions
hereto will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Exchange Offer.
Unless otherwise indicated herein under "Special Issuance
Instructions," please issue the Certificates representing the Exchange
Securities and return any Original Securities not tendered or not accepted for
exchange in the name(s) of the undersigned or, in the case of a book-entry
delivery of Original Securities, please credit the account indicated above
maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise
indicated herein under "Special Delivery Instructions," please mail the
Certificates representing the Exchange Securities issued in exchange for the
Original Securities accepted for exchange and any certificates for Original
Securities not tendered or not accepted for exchange (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). The undersigned recognizes that the Company has no
obligation pursuant to the "Special Issuance Instructions" and "Special Delivery
Instructions" to transfer any Original Securities from the name of the
registered holder(s) thereof if the Company does not accept for exchange any of
the Original Securities so tendered.
3
<PAGE> 4
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF
ORIGINAL NOTES" OR "DESCRIPTION OF ORIGINAL DEBENTURES" ABOVE AND SIGNING THIS
LETTER OF TRANSMITTAL, WILL BE DEEMED TO HAVE TENDERED THE ORIGINAL NOTES OR THE
ORIGINAL DEBENTURES AS SET FORTH IN SUCH BOX ABOVE.
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3, 4 and 6)
To be completed ONLY (i) if Certificates for Exchange Securities and
any Original Securities that are not accepted for exchange are to be issued in
the name of and sent to someone other than the undersigned or (ii) if Original
Securities tendered by book-entry transfer that are not accepted for exchange
are to be returned by credit to an account maintained at the Book-Entry Transfer
Facility other than the account indicated above.
Issue Certificate(s) to:
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Include Zip Code)
[ ] Credit unexchanged Original Securities delivered by book-entry transfer
to the Book-Entry Transfer Facility Account set forth below.
------------------------------------------------------------------------------
(Taxpayer Identification or Social Security No.)
(Please Also Complete Substitute Form W-9)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3, 4 and 6)
To be completed ONLY if Certificates for Exchange Securities and any
Original Securities that are not accepted for exchange are to be sent to someone
other than the undersigned, or to the undersigned at an address other than that
shown above.
Mail Certificate(s) to:
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES
FOR ORIGINAL SECURITIES OR A BOOK-ENTRY CONFIRMATION AND ALL
OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY)
MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW
YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
4
<PAGE> 5
IMPORTANT:
SIGN HERE AND COMPLETE SUBSTITUTE FORM W-9 BELOW
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S) OF ORIGINAL SECURITIES
Dated: , 1999
------------------------------
(MUST BE SIGNED BY THE REGISTERED HOLDER(S) OF ORIGINAL SECURITIES AS
THEIR NAME(S) APPEAR(S) ON THE CERTIFICATES FOR THE ORIGINAL SECURITIES OR ON A
SECURITY POSITION LISTING, OR BY PERSON(S) AUTHORIZED TO BECOME REGISTERED
HOLDER(S) BY ENDORSEMENTS AND DOCUMENTS TRANSMITTED HEREWITH. IF SIGNATURE IS BY
TRUSTEES, EXECUTORS, ADMINISTRATORS, GUARDIANS, ATTORNEYS-IN-FACT, AGENTS,
OFFICERS OF CORPORATIONS, OR OTHERS ACTING IN A FIDUCIARY OR REPRESENTATIVE
CAPACITY, PLEASE PROVIDE THE FOLLOWING INFORMATION. SEE INSTRUCTION 3.)
Name:
---------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Capacity (Full Title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE A ZIP CODE)
Area Code and Telephone No.:
----------------------------------------------------
(HOME)
----------------------------------------------------
(BUSINESS)
Tax Identification or
Social Security No.:
----------------------------------------------------------
(COMPLETE SUBSTITUTE FORM W-9 BELOW)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTION 3)
Authorized Signature(s):
--------------------------------------------------------
Name:
---------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Title:
--------------------------------------------------------------------------
Name of Firm:
-------------------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE A ZIP CODE)
Area Code and Telephone No.:
----------------------------------------------------
Dated: , 1999
------------------------------
5
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND ORIGINAL SECURITIES;
GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be completed by
holders of Original Securities if either (a) Certificates are to be forwarded
herewith or (b) delivery of Original Securities is to be made by book-entry
transfer pursuant to the procedures set forth in the Prospectus under the
caption "The Exchange Offer-Book-Entry Transfer." Certificates for all
physically tendered Original Securities, or Book-Entry Confirmation (as defined
below), as the case may be, as well as a properly completed and duly executed
Letter of Transmittal and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at the address set forth
herein prior to the Expiration Date, or the tendering holder must comply with
the guaranteed delivery procedures set forth below. Original Securities tendered
hereby must be in denominations of principal amount of $1,000 and any integral
multiple thereof. Holders whose Certificates are not immediately available or
who cannot deliver their Certificates and all other required documents to the
Exchange Agent prior to the Expiration Date, or who cannot complete the
procedures for book-entry transfer on a timely basis, may tender their Original
Securities pursuant to the guaranteed delivery procedures set forth in the
Prospectus under the caption "The Exchange Offer-Guaranteed Delivery
Procedures." Pursuant to such procedures, (a) such tender must be made through
an Eligible Institution prior to 5:00 p.m., New York City time, on the
Expiration Date, (b) the Exchange Agent must receive from such Eligible
Institution a properly completed and duly executed Letter of Transmittal and
Notice of Guaranteed Delivery, substantially in the form provided by the Company
(by facsimile transmission, mail or hand delivery), setting forth the name and
address of the holder of Original Securities and the amount of Original
Securities tendered, stating that the tender is being made thereby, and
guaranteeing that within three New York Stock Exchange ("NYSE") trading days
after the Expiration Date, the Certificates for all physically tendered Original
Securities, in proper form for transfer, or confirmation of the book-entry
transfer of the Original Securities into the Exchange Agent's account at the
Book-Entry Transfer Facility (a "Book-Entry Confirmation"), as the case may be,
and any other documents required by this Letter of Transmittal will be deposited
by the Eligible Institution with the Exchange Agent, and (c) the Certificates
for all physically tendered Original Securities, in proper form for transfer, or
a Book-Entry Confirmation, as the case may be, and all other documents required
by this Letter of Transmittal, must be received by the Exchange Agent within
three NYSE trading days after the Expiration Date. The method of delivery of
this Letter of Transmittal, the Original Securities, and all other required
documents is at the election and risk of the tendering holders, but the delivery
will be deemed made only when actually received or confirmed by the Exchange
Agent. If Original Securities are sent by mail, it is suggested that the mailing
be registered mail, properly insured, with return receipt requested, made
sufficiently in advance of the Expiration Date to permit delivery to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
See "The Exchange Offer" in the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO SECURITY HOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If less than all of the Original Securities evidenced by a
submitted Certificate are to be tendered, the tendering holder(s) should fill in
the aggregate principal amount of Original Securities to be tendered in the box
above entitled "Description of Original Notes-Aggregate Principal Amount of
Original Notes Tendered" or "Description of Original Debentures-Aggregate
Principal Amount of Original Debentures Tendered," as applicable. A reissued
Certificate representing the balance of nontendered Original Securities will be
sent to such tendering holder, unless otherwise provided in the appropriate box
on this Letter of Transmittal, promptly after the Expiration Date. ALL OF THE
ORIGINAL SECURITIES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN
TENDERED UNLESS OTHERWISE INDICATED.
3. SIGNATURES ON THIS LETTER; BOND POWERS AND ENDORSEMENTS; GUARANTEE
OF SIGNATURES. If this Letter of Transmittal is signed by the registered holder
of the Original Securities tendered hereby, the signature must correspond
exactly with the name as written on the face of the Certificates without any
change whatsoever. If any tendered Original Securities are owned of record by
two or more joint owners, all of such owners must sign this Letter of
Transmittal. If any tendered Original Securities are registered in different
names on several Certificates, it will be necessary to complete, sign, and
submit as many separate copies of this Letter of Transmittal as there are
different registrations of Certificates. When this Letter of Transmittal is
signed by the registered holder or holders of the Original Securities specified
herein and tendered hereby, no endorsements of Certificates or separate bond
powers are required. If, however, the Exchange Securities are to be issued, or
any untendered Original Securities are to be reissued, to a person other than
the registered holder, then endorsements of any Certificates transmitted hereby
or separate bond powers are required. Signatures on such Certificate(s) must be
guaranteed by an Eligible Institution. If this Letter of Transmittal is signed
by a person other than the registered holder or holders of any Certificate(s)
specified herein, such Certificate(s) must be endorsed or accompanied by
appropriate bond powers, in either case signed exactly as the name or names of
the registered holder or holders appear(s) on the Certificate(s) and signatures
on such Certificate(s) must be guaranteed by an Eligible Institution. If this
Letter of Transmittal or any Certificates or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations, or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted. ENDORSEMENTS ON CERTIFICATES FOR ORIGINAL SECURITIES OR SIGNATURES ON
BOND POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM THAT IS
A FINANCIAL INSTITUTION (INCLUDING MOST BANKS, SAVINGS AND LOAN ASSOCIATIONS,
AND BROKERAGE HOUSES) THAT IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS
MEDALLION PROGRAM, THE NEW YORK STOCK EXCHANGE MEDALLION SIGNATURE PROGRAM, OR
THE STOCK EXCHANGES MEDALLION PROGRAM (EACH AN "ELIGIBLE INSTITUTION").
SIGNATURES ON THIS LETTER OF TRANSMITTAL NEED NOT BE GUARANTEED BY AN ELIGIBLE
INSTITUTION, PROVIDED THE ORIGINAL SECURITIES ARE TENDERED: (i) BY A REGISTERED
HOLDER OF ORIGINAL SECURITIES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER,
INCLUDES ANY PARTICIPANT IN THE
6
<PAGE> 7
BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME APPEARS ON A SECURITY POSITION
LISTING AS THE HOLDER OF SUCH ORIGINAL SECURITIES) WHO HAS NOT COMPLETED THE BOX
ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" OR "SPECIAL DELIVERY INSTRUCTIONS"ON
THIS LETTER OF TRANSMITTAL OR (ii) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of
Original Securities should indicate in the applicable box the name and address
to which Exchange Securities issued pursuant to the Exchange Offer and or
substitute Certificates evidencing Original Securities not exchanged are to be
issued or sent, if different from the name or address of the person signing this
Letter of Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Security holders tendering Original Securities by book-entry transfer
may request that Original Securities not exchanged be credited to such account
maintained at the Book-Entry Transfer Facility as such security holder may
designate hereon. If no such instructions are given, such Original Securities
not exchanged will be returned to the name and address of the person signing
this Letter of Transmittal.
5. TAXPAYER IDENTIFICATION NUMBER. Federal income tax law generally
requires that a tendering holder whose Original Securities are accepted for
exchange must provide the Company (as payer) with such holder's correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9 below, which in the case of
a tendering holder who is an individual, is his or her social security number.
If the Company is not provided with the current TIN or an adequate basis for an
exemption from backup withholding, such tendering holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, the Exchange Agent
may be required to withhold 31% of the amount of any reportable payments made
after the exchange to such tendering holder of Exchange Securities. If
withholding results in an overpayment of taxes, a refund may be obtained. Exempt
holders of Original Securities (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. See the enclosed Guidelines of Certification of Taxpayer
Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for
additional instructions. To prevent backup withholding, each tendering holder of
Original Securities must provide its correct TIN by completing the Substitute
Form W-9 set forth below, certifying, under penalties of perjury, that the TIN
provided is correct (or that such holder is awaiting a TIN) and that (a) the
holder is exempt from backup withholding, (b) the holder has not been notified
by the Internal Revenue Service that such holder is subject to backup
withholding as a result of a failure to report all interest or dividends, or (c)
the Internal Revenue Service has notified the holder that such holder is no
longer subject to backup withholding. If the tendering holder of Original
Securities is a nonresident alien or foreign entity not subject to backup
withholding, such holder must give the Exchange Agent a completed Form W-8,
Certificate of Foreign Status. These forms may be obtained from the Exchange
Agent. If the Original Securities are in more than one name or are not in the
name of the actual owner, such holder should consult the W-9 Guidelines for
information on which TIN to report. If such holder does not have a TIN, such
holder should consult the W-9 Guidelines for instructions on applying for a TIN,
check the box in Part 2 of the Substitute Form W-9 and write "applied for" in
lieu of its TIN. Note: Checking this box and writing "applied for" on the form
means that such holder has already applied for a TIN or that such holder intends
to apply for one in the near future. If the box in Part 2 of the Substitute Form
W-9 is checked, the Exchange Agent will retain 31% of reportable payments made
to a holder during the 60-day period following the date of the Substitute Form
W-9. If the holder furnishes the Exchange Agent with his or her TIN within 60
days of the Substitute Form W-9, the Exchange Agent will remit such amounts
retained during such 60-day period to such holder and no further amounts will be
retained or withheld from payments made to the holder thereafter. If, however,
such holder does not provide its TIN to the Exchange Agent within such 60-day
period, the Exchange Agent will remit such previously withheld amounts to the
Internal Revenue Service as backup withholding and will withhold 31% of all
reportable payments to the holder thereafter until such holder furnishes its TIN
to the Exchange Agent.
6. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the transfer of Original Securities to it or its order pursuant to
the Exchange Offer. If, however, Exchange Securities and/or substitute Original
Securities not exchanged are to be delivered to, or are to be registered or
issued in the name of, any person other than the registered holder of the
Original Securities tendered hereby, or if tendered Original Securities are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
transfer of Original Securities to the Company or its order pursuant to the
Exchange Offer, the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted herewith, the amount of such transfer taxes will be billed directly to
such tendering holder. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE
NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE ORIGINAL SECURITIES
SPECIFIED IN THIS LETTER OF TRANSMITTAL.
7. WAIVER OF CONDITIONS. The Company reserves the absolute right to
waive satisfaction of any or all conditions to the Exchange Offer set forth in
the Prospectus.
8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular, or
contingent tenders will be accepted. All tendering holders of Original
Securities, by execution of this Letter of Transmittal, shall waive any right to
receive notice of the acceptance of their Original Securities for exchange.
Neither the Company, the Exchange Agent, nor any other person is obligated to
give notice of any defect or irregularity with respect to any tender of Original
Securities nor shall any of them incur any liability for failure to give any
such notice.
7
<PAGE> 8
9. MUTILATED, LOST, STOLEN, OR DESTROYED ORIGINAL SECURITIES. Any
holder whose Original Securities have been mutilated, lost, stolen, or destroyed
should contact the Exchange Agent at the address indicated above for further
instructions.
10. WITHDRAWAL RIGHTS. Tenders of Original Securities may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date. For
a withdrawal of a tender of Original Securities to be effective, a written
notice of withdrawal must be received by the Exchange Agent at the address, or
in the case of eligible institutions, at the facsimile number set forth above
prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice
of withdrawal must (a) specify the name of the person who tendered the Original
Securities to be withdrawn (the "Depositor"), (b) identify the Original
Securities to be withdrawn (including certificate number or numbers and the
principal amount of such Original Securities), (c) contain a statement that such
holder is withdrawing his election to have such Original Securities exchanged,
(d) be signed by the holder in the same manner as the original signature on the
Letter of Transmittal by which such Original Securities were tendered (including
any required signature guarantees) or be accompanied by documents of transfer to
have the registrar with respect to the Original Securities register the transfer
of such Original Securities in the name of the person withdrawing the tender,
and (e) specify the name in which such Original Securities are registered, if
different from that of the Depositor. If Original Securities have been tendered
pursuant to the procedure for book-entry transfer set forth in the Prospectus
under the caption "The Exchange Offer-Book-Entry Transfer," any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Original Securities and
otherwise comply with the procedures of such facility. All questions as to the
validity, form, and eligibility (including time of receipt) of such notices will
be determined by the Company, whose determination shall be final and binding on
all parties. Any Original Securities so withdrawn will be deemed not to have
been validly tendered for exchange for purposes of the Exchange Offer. Any
Original Securities that have been tendered for exchange but which are not
exchanged for any reason will be returned to the holder thereof without cost to
such holder (or, in the case of Original Securities tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry transfer procedures set forth in the Prospectus under
the caption "The Exchange Offer-Book-Entry Transfer," such Original Securities
will be credited to an account maintained with the Book-Entry Transfer Facility
for the Original Securities) promptly after the expiration or termination of the
Exchange Offer. Properly withdrawn Original Securities may be retendered by
following the procedures described above at any time prior to 5:00 p.m., New
York City time, on the Expiration Date.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to
the procedure for tendering, requests for additional copies of the Prospectus
and this Letter of Transmittal, and requests for Notices of Guaranteed Delivery
and other related documents may be directed to the Exchange Agent, at the
address and telephone number indicated above.
8
<PAGE> 9
PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: CITIBANK, N.A.
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE PART 1 - PLEASE PROVIDE YOUR TIN IN Social Security Number
THE BOX AT RIGHT AND CERTIFY BY
FORM W-9 SIGNING AND DATING BELOW. -------------------------------------
OR
-------------------------------------
DEPARTMENT OF THE Employer Identification Number
TREASURY -------------------------------------------------------------------------------------
INTERNAL REVENUE SERVICE PART 2 - TIN Applied For [ ]
-------------------------------------------------------------------------------------
PART 3 - CERTIFICATION - Under penalties of perjury, I certify that (1) the
number shown on this form is my correct taxpayer identification number (or
PAYER'S REQUEST FOR I am waiting for a number to be issued to me) AND (2) I am not subject to
TAXPAYER IDENTIFICATION backup withholding because (a) I am exempt from backup withholding, or (b)
NUMBER ("TIN") I have not been notified by the Internal Revenue Service (the "IRS") that I
CERTIFICATION am subject to backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding. (You must cross out Item (2) above if you
have been notified by the IRS that you are subject to backup withholding
because of underreporting of interest or dividends on your return.)
SIGNATURE DATE
-------------------------------------------------- ------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF
SUBSTITUTE FORM W-9.
- -------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Center or Social Security Administration Office or (b) I intend
to mail or deliver an application in the near future. I understand that if I do
not provide a taxpayer identification number at the time of the exchange, 31% of
all reportable payments made to me thereafter will be withheld until I provide a
number.
- ------------------------------------------- --------------
Signature Date
- -------------------------------------------------------------------------------
9
<PAGE> 10
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GUIDE
THE PAYER. - Social Security Numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer Identification Numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------- -------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF
- ------------------------------------------------------- -------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined
funds, any one of the individuals (1)
3. Custodian account of a minor (Uniform Gift to The minor (2)
Minors Act)
4. (a) The usual revocable savings trust account The grantor-trustee (1)
(grantor is also trustee)
(b) So-called trust account that is not a legal The actual owner (1)
or valid trust under state law
5. Sole proprietorship account The owner (3)
<CAPTION>
- ------------------------------------------------------- -------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION
NUMBER OF
- ------------------------------------------------------- -------------------------------------------------------
<S> <C>
6. A valid trust, estate, or pension trust The legal entity (4)
7. Corporate account The corporation
8. Association, club, religious, charitable, The organization
educational or other tax-exempt organization
9. Partnership The partnership
10. A broker or registered nominee The broker or nominee
11. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a state
or local government, school district, or prison)
that receives agricultural program payments
</TABLE>
- ------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's Social Security Number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the identifying number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
If no name is circled when more than one name is listed, the number will be
considered to be that of the first name listed.
10
<PAGE> 11
Section references are to the Internal Revenue Code.
OBTAINING A NUMBER
If you don't have a Taxpayer Identification Number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on broker transactions
include the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under Section 501(a), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
o An international organization or any agency or instrumentality
thereof.
o A dealer in securities or commodities registered in the United States
or a possession of the United States.
o A real estate investment trust.
o A common trust fund operated by a bank under Section 584(a).
o An entity registered at all times during the tax year under the
Investment Company Act of 1940.
o A foreign central bank of issue.
o A person registered under the Investment Advisors Act of 1940 who
regularly acts as a broker.
PAYMENTS OF DIVIDENDS AND PATRONAGE DIVIDENDS NOT GENERALLY SUBJECT TO BACKUP
WITHHOLDING ALSO INCLUDE THE FOLLOWING:
o Payments to nonresident aliens subject to withholding under Section
1441.
o Payments to partnerships not engaged in a trade or business in the
United States and which have at least one nonresident partner.
o Payments of patronage dividends not paid in money.
o Payments made by certain foreign organizations.
PAYMENTS OF INTEREST NOT GENERALLY SUBJECT TO BACKUP WITHHOLDING ALSO INCLUDE
THE FOLLOWING:
o Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is
$600 or more and is paid in the course of the payer's trade or
business and you have not provided your correct taxpayer
identification number to the payer.
o Payments of tax-exempt interest (including exempt interest dividends
under section 852).
o Payments described in section 6049(b)(5) to nonresident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Mortgage interest paid by you.
11
<PAGE> 12
Payments that are not subject to information reporting are also not subject
to backup withholding. For details see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A and 6050N, and the regulations under such sections.
Exempt payees described above should file Substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER.
PRIVACY ACT NOTICE - Section 6109 requires you to give your correct Taxpayer
Identification Number to payers who must report the payments to the IRS. The IRS
uses the numbers for identification purposes. Payers must be given the numbers
whether or not you are required to file a tax return. Payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a Taxpayer Identification Number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER - If you fail
to furnish your correct Taxpayer Identification Number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING - If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION - Wilfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE IRS.
12
<PAGE> 1
EXHIBIT 99.2
EXCHANGE OFFER FOR ALL OUTSTANDING
6.30% SENIOR NOTES DUE 2009
AND
6.90% SENIOR DEBENTURES DUE 2029
OF
FEDERATED DEPARTMENT STORES, INC.
PURSUANT TO THE PROSPECTUS DATED ________, 1999
To: Brokers, Dealers, Commercial Banks,
Trust Companies, and Other Nominees:
Federated Department Stores, Inc. (the "Company") is offering, upon the
terms and subject to conditions set forth in the Prospectus, dated ________ __,
1999 (the "Prospectus"), and the enclosed Letter of Transmittal (the "Letter of
Transmittal"), to exchange its 6.30% Senior Notes due 2009 which have been
registered under the Securities Act of 1933 for a like principal amount of its
outstanding 6.30% Senior Notes due 2009 (the "Original Notes"), and to exchange
its 6.90% Senior Debentures due 2029 which have been registered under the
Securities Act of 1933 for a like principal amount of its outstanding 6.90%
Senior Debentures due 2029 (the "Original Debentures" and, together with the
Original Notes, the "Original Securities"). The Exchange Offer is being made in
order to satisfy certain obligations of the Company contained in the
Registration Rights Agreement, dated March 18, 1999, by and among the Company
and the initial purchasers of the Original Securities from the Company.
Please forward to your clients for whose accounts you hold Original
Securities registered in your name or in the name of your nominee copies of the
following enclosed documents:
1. Prospectus dated ________ ___, 1999;
2. The Letter of Transmittal to tender Original Securities for your use and
for the information of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if the other procedures for tendering Original Securities set forth in the
Prospectus cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account you
hold Original Securities registered in your name or the name of your nominee,
with space provided for obtaining such clients' instructions with regard to the
Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to Citibank, N.A., the Exchange Agent for the
Exchange Offer.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON ________ __, 1999, UNLESS EXTENDED BY THE COMPANY
(THE "EXPIRATION DATE"). ORIGINAL SECURITIES TENDERED PURSUANT TO THE EXCHANGE
OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal, with any required signature guarantees and any
other required documents, should be sent to the Exchange Agent and certificates
representing the Original Securities should be delivered to the Exchange Agent,
all in accordance with the instructions set forth in the Letter of Transmittal
and the Prospectus.
If holders of Original Securities desire to tender their Original
Securities, but it is impracticable for them to deliver the certificates for
such Original Securities or other required documents or to complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures described in the
Prospectus under the caption "The Exchange Offer-Guaranteed Delivery
Procedures."
The Company will, upon request, reimburse brokers, dealers, commercial
banks, and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding the Prospectus and the related
<PAGE> 2
documents to the beneficial owners of Original Securities held by them as
nominee or in a fiduciary capacity. The Company will pay or cause to be paid all
stock transfer taxes applicable to the exchange of Original Securities pursuant
to the Exchange Offer, except as set forth in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed to Citibank,
N.A., the Exchange Agent for the Exchange Offer, at its address and telephone
number set forth on the front of the Letter of Transmittal.
Very truly yours,
FEDERATED DEPARTMENT STORES, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
2
<PAGE> 1
EXHIBIT 99.3
EXCHANGE OFFER FOR ALL OUTSTANDING
6.30% SENIOR NOTES DUE 2009
AND
6.90% SENIOR DEBENTURES DUE 2029
OF
FEDERATED DEPARTMENT STORES, INC.
PURSUANT TO THE PROSPECTUS DATED ________, 1999
To Our Clients:
Enclosed for your consideration is a Prospectus, dated ______________ __,
1999 (the "Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") by Federated
Department Stores, Inc. (the "Company") to exchange its 6.30% Senior Notes due
2009 which have been registered under the Securities Act of 1933 (the "Exchange
Notes") for a like principal amount of its outstanding 6.30% Senior Notes due
2009 (the "Original Notes"), and to exchange its 6.90% Senior Debentures due
2029 which have been registered under the Securities Act of 1933 (the "Exchange
Debentures" and, together with the Exchange Notes, the "Exchange Securities")
for a like principal amount of its outstanding 6.90% Senior Debentures due 2029
(the "Original Debentures" and, together with the Original Notes, the "Original
Securities"), upon the terms and subject to the conditions described in the
Prospectus and the Letter of Transmittal. The Exchange Offer is being made in
order to satisfy certain obligations of the Company contained in the
Registration Rights Agreement, dated March 18, 1999, by and among the Company
and the initial purchasers of the Original Securities from the Company.
We are (or our nominee is) the holder of record of Original Securities held
by us for your account. A tender of such Original Securities can be made only by
the holder of record and pursuant to your instructions. The Letter of
Transmittal accompanying this letter is furnished to you for your information
only and cannot be used by you to tender Original Securities held by us for your
account.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Original Securities held by us for your account, pursuant to the
terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal. Your instructions should be forwarded to us as promptly as possible
in order to permit us to tender Original Securities on your behalf (should you
so desire) in accordance with the provisions of the Exchange Offer.
Your attention is directed to the following:
1. Federated is offering to exchange the Exchange Notes for any and all
of the Original Notes and to exchange the Exchange Debentures for any and
all of the Original Debentures.
2. The terms of the Exchange Notes are identical in all material
respects to the terms of the Original Notes, and the terms of the Exchange
Debentures are identical in all material respects to the terms of the
Original Debentures, except that the registration rights and related
liquidated damages provisions, and the transfer restrictions, applicable to
the Original Securities are not applicable to the Exchange Securities.
3. Subject to the satisfaction or waiver of certain conditions set
forth in the Prospectus in the section captioned "The Exchange
Offer-Conditions to the Exchange Offer," Federated will exchange the
applicable Exchange Securities for all Original Securities that are validly
tendered and not withdrawn prior to the expiration of the Exchange Offer.
4. The Exchange Offer will expire at 5:00 p.m., New York City time, on
__________ __, 1999, unless extended by the Company.
5. You may withdraw tenders of Original Securities at any time prior to
the expiration of the Exchange Offer.
6. The exchange of Original Securities for Exchange Securities pursuant
to the Exchange Offer generally will not be a taxable event for U.S.
federal income tax purposes. See "Material United States Federal Income Tax
Considerations" in the enclosed Prospectus.
<PAGE> 2
If you wish to have us tender your Original Notes or Original Debentures,
please so instruct us by completing, executing and returning to us the
instruction form on the back of this letter. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
ORIGINAL SECURITIES HELD BY US FOR YOUR ACCOUNT.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Federated
Department Stores, Inc. with respect to the Original Securities. Terms used
herein with initial capital letters have the respective meanings ascribed to
them in your letter.
This will instruct you to tender the Original Notes or Original Debentures
held by you for the account of the undersigned, upon and subject to the terms
and conditions set forth in the Prospectus and the related Letter of
Transmittal.
[ ] Please tender the Original Notes or Original Debentures held by you for
my account as indicated below:
$________ Aggregate Principal Amount of 6.30% Senior Notes due 2009
$________ Aggregate Principal Amount of 6.90% Senior Debentures due 2029
[ ] Please do not tender any Original Notes held by you for my account.
[ ] Please do not tender any Original Debentures held by you for my account.
Dated: __________ __, 1999
Signatures(s):
------------------------------------------------------------------
Print Name(s) here:
-------------------------------------------------------------
Print Address(es):
--------------------------------------------------------------
Area Code and Telephone Number(s):
----------------------------------------------
Tax Identification or Social Security Number(s):
--------------------------------
None of the Original Securities held by us for your account will be
tendered unless we receive written instructions from you to do so. If you
authorize the tender of Original Securities held by us for your account, all
such Original Securities will be tendered unless a specific contrary instruction
is given in the space provided.
3
<PAGE> 1
EXHIBIT 99.4
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
6.30% SENIOR NOTES DUE 2009
AND/OR
6.90% SENIOR DEBENTURES DUE 2029
OF
FEDERATED DEPARTMENT STORES, INC.
This notice or one substantially equivalent hereto must be used to accept
the Exchange Offer of Federated Department Stores, Inc. (the "Company") made
pursuant to the Prospectus, dated ________________ __, 1999 (the "Prospectus"),
if certificates for the outstanding 6.30% Senior Notes due 2009 and/or 6.90%
Senior Debentures due 2029 of the Company (the "Original Securities") are not
immediately available or if the procedure for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach Citibank, N.A., as exchange agent (the "Exchange Agent"), prior to 5:00
p.m., New York City time, on the Expiration Date of the Exchange Offer.
This notice may be delivered or transmitted by facsimile transmission,
mail, or hand delivery to the Exchange Agent as set forth below. In order to
utilize the guaranteed delivery procedure to tender Original Securities pursuant
to the Exchange Offer, both this notice and a properly completed and duly
executed Letter of Transmittal must be received by the Exchange Agent prior to
5:00 p.m., New York City time, on the Expiration Date.
The Exchange Agent for the Exchange Offer is:
Citibank, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier Delivery: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distribution, Inc. Corporate Trust Window
P.O. Box 7072 404 Sette Drive 111 Wall Street, 5th Floor
Paramus, New Jersey 07653 Paramus, New Jersey 07652 New York, New York 10005
By Facsimile for Eligible Institutions:
(201) 262-3240
Facsimile Confirmation Only:
(800) 422-2077
For Information:
(800) 422-2077
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Federated Department Stores, Inc. (the
"Company") the principal amount of 6.30% Senior Notes due 2009 of the Company
("Original Notes") and/or the principal amount of 6.90% Senior Debentures due
2029 of the Company ("Original Debentures") set forth below pursuant to the
guaranteed delivery procedure described in "The Exchange Offer-Guaranteed
Delivery Procedures" section of the Company's prospectus, dated _________, 1999
(the "Prospectus"). Terms used herein with initial capital letters have the
respective meanings ascribed to them in the Prospectus.
<TABLE>
<S> <C>
- ---------------------------------------------- ---------------------------------------------------
Principal Amount of Original Notes Tendered Principal Amount of Original Debentures Tendered
(must be an integral multiple of $1,000): (must be an integral multiple of $1,000):
$ $
--------------------------------------------- --------------------------------------------------
Certificate Nos. (if available): Certificate Nos. (if available):
- ---------------------------------------------- ---------------------------------------------------
If Original Notes will be delivered book-entry If Original Debentures will be delivered book-entry
transfer to the Depository Trust Company, transfer to the Depository Trust Company, provide
provide account number below. account number below.
- ---------------------------------------------- ---------------------------------------------------
</TABLE>
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE
DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
- --------------------------------------------------------------------------------
IMPORTANT:
SIGN HERE AND COMPLETE ENCLOSED SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S) OF ORIGINAL SECURITIES
Dated: , 1999
---------------------
MUST BE SIGNED BY THE REGISTERED HOLDER(S) OF ORIGINAL SECURITIES EXACTLY
AS THEIR NAME(S) APPEAR(S) ON THE CERTIFICATES FOR THE ORIGINAL SECURITIES OR ON
A SECURITY POSITION LISTING, OR BY PERSON(S) AUTHORIZED TO BECOME REGISTERED
HOLDER(S) BY ENDORSEMENT AND DOCUMENTS TRANSMITTED WITH THIS NOTICE OF
GUARANTEED DELIVERY. IF SIGNATURE IS BY TRUSTEES, EXECUTORS, ADMINISTRATORS,
GUARDIANS, ATTORNEYS-IN-FACT, OFFICERS OF CORPORATIONS, OR OTHERS ACTING IN A
FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE PROVIDE THE FOLLOWING INFORMATION.
Name:
---------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Capacity (Full Title):
----------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE A ZIP CODE)
Area Code and Telephone No.:
----------------------------------------------------
(HOME)
------------------------------------------------------------------------
(BUSINESS)
- --------------------------------------------------------------------------------
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a financial institution that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program, or the Stock Exchanges Medallion Program, hereby
guarantees that the certificates representing the principal amount of Original
Notes or Original Debentures tendered hereby in proper form for transfer, or
timely confirmation of the book-entry transfer of such Original Notes or
Original Debentures into the Exchange Agent's account at the Depository Trust
Company pursuant to the procedures set forth in "The Exchange Offer-Guaranteed
Delivery Procedures" section of the Prospectus, together with any required
signature guarantee and any other documents required by the Letter of
Transmittal, will be received by the Exchange Agent at the address set forth
above, no later than three New York Stock Exchange trading days after the
Expiration Date.
- ---------------------------------- ----------------------------------
Name of Firm Authorized Signature
- ---------------------------------- ----------------------------------
Name of Person Signing
- ---------------------------------- ----------------------------------
Address Title of Person Signing
- ---------------------------------- ----------------------------------
Telephone Number Date
NOTE: DO NOT SEND CERTIFICATES FOR ORIGINAL SECURITIES WITH THIS FORM.
CERTIFICATES FOR ORIGINAL SECURITIES SHOULD BE SENT ONLY WITH A COPY OF
YOUR PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL.
3
