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EXHIBIT 1
FEDERATED DEPARTMENT STORES, INC.
8 1/2% SENIOR NOTES DUE 2010
Underwriting Agreement
May 31, 2000
Credit Suisse First Boston Corporation
Banc of America Securities LLC
Chase Securities Inc.
Salomon Smith Barney Inc.
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
Federated Department Stores, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to you (the "Underwriters") an aggregate of $350,000,000
principal amount of 8 1/2% Senior Notes Due 2010 (the "Notes").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-76789) in
respect of the Notes has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to the Underwriters without exhibits thereto, but with
documents incorporated by reference in the prospectus contained therein,
have been declared effective by the Commission in such form; no other
document with respect to such registration statement or document
incorporated by reference therein has heretofore been filed or transmitted
for filing with the Commission (other than prospectuses filed or to be filed
pursuant to Rule 424(b) of the rules and regulations of the Commission under
the Securities Act of 1933, as amended (the "Act"), each in the form
heretofore delivered or to be delivered to the Underwriters); and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) under the Act
is hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became
effective but excluding Form T-1, each as amended at the time such part of
the registration statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the Notes,
in the form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement, being
hereinafter called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer
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to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated by reference
in such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Sections 13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or supplemented
shall be deemed to refer to the Prospectus as amended or supplemented in
relation to the Notes in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as of the
date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein, or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by the Underwriters through Credit Suisse First
Boston Corporation expressly for use in the Prospectus as amended or
supplemented;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereunder and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters through
Credit Suisse First Boston Corporation expressly for use in the Prospectus
as amended or supplemented;
(d) There has not been any material adverse change in the business,
financial position or results of operations of the Company and its
subsidiaries, taken as a whole, from the respective dates as of which
information is given in the Registration Statement and the Prospectus.
Neither the Company nor any of its subsidiaries has sustained since the date
of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been
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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, repurchases of stock under the Company's existing
stock repurchase program or as set forth or contemplated in the Prospectus
as amended or supplemented), or any increase in excess of $25,000,000 in
long-term debt of the Company or any of its subsidiaries otherwise than as
set forth or contemplated in the Prospectus as amended or supplemented, or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus as amended or supplemented;
(e) The Company and its subsidiaries have good and marketable title to
all real property and title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such as
are disclosed in the Prospectus as amended or supplemented, or as do not,
individually or in the aggregate, have a material adverse effect on the
business, financial position or results of operations or reasonably
foreseeable prospects of the Company and its subsidiaries taken as a whole
(a "Material Adverse Effect"); and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect;
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus as amended or supplemented, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it is required to be so qualified, except where failure to be so
qualified and in good standing individually or in the aggregate would not
have a Material Adverse Effect; and each Significant Subsidiary (as such
term is defined in Rule 405 under the Act) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and each subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, except where failure to
be duly incorporated, validly existing and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect;
(g) All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable; all of the issued shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable and (except as otherwise disclosed in the
Prospectus as amended or supplemented) are owned directly or indirectly by
the Company, free and clear of all material liens, encumbrances, equities or
claims; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims (except as
otherwise disclosed in the Prospectus as amended or supplemented or where,
individually or in the aggregate, the failure to have been duly and validly
authorized and issued, to be fully paid and non-assessable and to be owned
directly or indirectly by the Company free and clear of liens, encumbrances,
equities or claims would not have a Material Adverse Effect);
(h) The Notes 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
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valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture, dated as of September 10, 1997 (the
"Indenture"), as supplemented by the Fourth Supplemental Indenture, to be
dated as of June 6, 2000 (the "Fourth Supplemental Indenture"), between the
Company and Citibank N.A., as Trustee (the "Trustee"), under which the Notes
are to be issued; the Indenture has been duly authorized, executed and
delivered and duly qualified under the Trust Indenture Act; the Indenture
constitutes (and the Fourth Supplemental Indenture, when executed and
delivered by the Company and the Trustee, will constitute) a valid and
legally binding instrument, enforceable in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, and other laws of general applicability relating to or
affecting creditors' rights and to general principles of equity, regardless
of whether such enforceability is considered in a proceeding in equity or at
law; and the Notes and the Indenture will conform in all material respects
to the descriptions thereof in the Prospectus as amended or supplemented;
(i) The issue and sale of the Notes and the compliance by the Company
with all of the provisions of the Notes, the Indenture, as supplemented by
the Supplemental Indenture, and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other similar financing
agreement or instrument or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, except for such
conflicts, breaches, violations and defaults as individually or in the
aggregate would not have a Material Adverse Effect, nor will such action
result in any material violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any material statute, order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its Significant Subsidiaries or any
of their properties, nor will such action result in any violation of the
provisions of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties except for such violations as
individually or in the aggregate would not have a Material Adverse Effect;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Notes or the consummation by the
Company of the transactions contemplated by this Agreement or the Indenture,
as supplemented by the Supplemental Indenture, except the registration of
the Notes under the Act, the Exchange Act and such as have been obtained
under the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Notes
by the Underwriters;
(j) Except for such of the following violations, defaults and failures
as individually or in the aggregate would not have a Material Adverse
Effect, neither the Company nor any of its subsidiaries (i) is in violation
of its certificate of incorporation or by-laws (or comparable governing
documents), (ii) is in default, and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any obligation, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound, or (iii) is in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property is
subject, or (iv) has failed to obtain any license, permit, certificate,
franchise or
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other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business;
(k) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities" and
"Description of the Notes", insofar as they purport to constitute a summary
of the terms of the Notes, and under the captions "Plan of Distribution" and
"Underwriting", insofar as they purport to describe the provisions of the
laws and the documents referred to therein, constitute accurate summaries of
the terms of such documents in all material respects;
(l) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The Company is not and, after giving effect to the offering and
sale of the Notes, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
and
(n) KPMG LLP, who have certified certain financial statements of the
Company and its subsidiaries, are independent public accountants as required
by the Act and the rules and regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of 99.153% of the principal amount thereof, plus accrued
interest, if any, from June 6, 2000 to the Time of Delivery hereunder, the
principal amount of Notes set forth opposite the name of such Underwriter in
Schedule I hereto.
3. Upon the authorization by the Underwriters of the release of the
Notes, the several Underwriters propose to offer the Notes for sale upon the
terms and conditions set forth in the Prospectus as amended or supplemented.
4. (a) The Notes to be purchased by each Underwriter hereunder will be
represented by one or more definitive global securities in book-entry form which
will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the Notes
to Credit Suisse First Boston Corporation, for the account of each Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor in federal (same-day) funds by wire transfer to an account designated
by the Company for such purpose, by causing DTC to credit the Notes to the
account of Credit Suisse First Boston Corporation at DTC. The Company will cause
the certificates representing the Notes to be made available to Credit Suisse
First Boston Corporation for checking at least twenty-four hours prior to the
Time of Delivery (as defined below) at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be 9:30 a.m., New York City time, on June 6, 2000 or such other
time and date as Credit Suisse First Boston Corporation and the Company may
agree upon in writing. Such time and date are herein called the "Time of
Delivery".
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(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Notes and any additional documents requested by the
Underwriters pursuant to Section 7(j) hereof, will be delivered at the offices
of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York 10017
(the "Closing Location"), and the Notes will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at 2:00 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus as amended or supplemented in a form
approved by the Underwriters and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by Rule
424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus after the date of this Agreement and prior to the
Time of Delivery which shall be disapproved by the Underwriters promptly
after reasonable notice thereof; to advise the Underwriters promptly of such
amendment or supplement after such Time of Delivery and furnish the
Underwriters with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Notes, and during such same
period to advise the Underwriters promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Notes, of the suspension of the
qualification of the Notes for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Notes or
suspending any such qualification, to promptly use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the Underwriters
may reasonably request to qualify the Notes for offering and sale under the
securities laws of such jurisdictions in the United States as the
Underwriters may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the Notes, provided that
in connection therewith the Company shall not be required to qualify as a
foreign corporation, to file a general consent to service of process in any
jurisdiction or to take any action that would subject it to general taxation
in any jurisdiction;
(c) Prior to 3:00 p.m., New York City time, on the business day next
succeeding the date of this Agreement and from time to time thereafter, to
furnish the Underwriters with copies of the Prospectus as amended or
supplemented in such quantities in New York City as the Underwriters
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may reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Notes and if
at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement such Prospectus or to file under the Exchange Act any document
incorporated by reference in such Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to notify the Underwriters
and, upon your request and subject to your approval, to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Underwriters may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Notes at any time nine months or more
after the time of issue of the Prospectus, upon request of such Underwriter
but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as such Underwriter may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 9(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the option
of the Company, Rule 158, in which case this Section 5(d) shall not be
construed to require the Company to file any report referred to in Rule 158
prior to the time at which such report is otherwise due);
(e) During the period beginning from the date hereof and continuing to
and including the later of the Time of Delivery and such earlier time as the
Underwriters may notify the Company, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Notes;
(f) For so long as Notes are in global form, to furnish to the holders
thereof as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as practicable
after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail; and to
furnish to the holders of the Notes all other documents specified in Section
7.04 of the Indenture, all in the manner so specified;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to the Underwriters copies of all reports
or other communications (financial or other) furnished to the Company's
stockholders generally, and to deliver to the Underwriters (i) as soon as
they are available, (A) copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which the Notes or any class of securities of the Company is
listed and (B) the documents specified in Section 7.04 of the Indenture, as
in effect at
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the Time of Delivery, and (ii) such additional information concerning the
business and financial condition of the Company as the Underwriters may from
time to time reasonably request, provided that any material nonpublic
information received by the Underwriters will be held in confidence and not
used in violation of any applicable law (such financial statements to be on
a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders
generally or to the Commission); and
(h) To use the net proceeds received by it from the sale of the Notes
pursuant to this Agreement in the manner specified in the Prospectus as
amended or supplemented under the caption "Use of Proceeds."
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Notes under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of producing any
Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky
Memorandum, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Notes; (iii) all expenses in connection with the qualification of the Notes for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters
(not to exceed $5,000 in the aggregate) in connection with such qualification
and in connection with the Blue Sky Memorandum; (iv) any fees charged by
securities rating services for rating the Notes; (v) the filing fees incident
to, and fees and the disbursements of counsel for the Underwriters in connection
with, any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Notes; (vi) the cost of preparing the
Notes; (vii) the fees and expenses of the Trustee and any agent of the Trustee
and the fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Notes; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 7 and 9 hereof, the Underwriters will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Notes by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters to purchase the Notes hereunder
shall be subject in the sole discretion of the Underwriters to the condition
that all representations and warranties and other statements of the Company
herein are, at and as of the Time of Delivery, true and correct, the condition
that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof and the Indenture shall have been
qualified under the Trust Indenture Act; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to the reasonable
satisfaction of the Underwriters;
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(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to the Underwriters a written opinion, dated the Time of
Delivery, in substantially the form attached hereto as Annex III;
(c) The General Counsel or Deputy General Counsel of the Company shall
have furnished to the Underwriters his written opinion, dated the Time of
Delivery, in substantially the form attached hereto as Annex IV;
(d) Jones, Day, Reavis & Pogue, counsel for the Company, shall have
furnished to the Underwriters a written opinion, dated the Time of Delivery,
in substantially the form attached hereto as Annex V;
(e) KPMG LLP shall have furnished to the Underwriters a letter, dated
the Time of Delivery, in form and substance satisfactory to the Underwriters
(the form of the letter to be delivered at the Time of Delivery is attached
hereto as Annex I);
(f)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus as first amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as first
amended or supplemented, and (ii) since the respective dates as of which
information is given in the Prospectus as first amended or supplemented
there shall not have been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus as first amended or supplemented, the
effect of which, in any such case described in clause (i) or (ii), is in the
judgment of the Underwriters so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Notes on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented;
(g) On or after the date hereof, (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the
Company's debt securities;
(h) On or after the date hereof, there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this clause (iv) in the judgment of
the Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Notes on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented; or (v) the
occurrence of any material adverse change in the existing financial,
political or economic
9
<PAGE> 10
conditions in the United States or elsewhere which, in the judgment of the
Underwriters, would materially and adversely affect the financial markets or
the market for the Notes and other debt securities; and
(i) The Company shall have furnished or caused to be furnished to the
Underwriters at the Time of Delivery certificates of officers of the Company
satisfactory to the Underwriters as to the accuracy of the representations
and warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (f) of this Section and as to such other matters as
the Underwriters may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement or
the Prospectus as amended or supplemented, or any such amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through Credit Suisse First Boston Corporation
expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement or the Prospectus as amended or supplemented, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement or
the Prospectus as amended or supplemented, or any such amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through Credit Suisse First Boston Corporation
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any
10
<PAGE> 11
liability which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Notes. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged
11
<PAGE> 12
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Notes which it has agreed to purchase hereunder, the Underwriters may in
their discretion arrange for the Underwriters or another party or other parties
to purchase such Notes on the terms contained herein. If within thirty-six hours
after such default by any Underwriter the Underwriters do not arrange for the
purchase of such Notes, then the Company shall be entitled to a further period
of thirty-six hours within which to procure another party or other parties
satisfactory to the Underwriters to purchase such Notes on such terms. In the
event that, within the respective prescribed periods, the Underwriters notify
the Company that they have so arranged for the purchase of such Notes or the
Company notifies the Underwriters that it has so arranged for the purchase of
such Notes, as the case may be, the Underwriters or the Company shall have the
right to postpone the Time of Delivery for a period of not more than seven days
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Underwriters may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the purchase of the
Notes of a defaulting Underwriter or Underwriters by the Underwriters and the
Company as provided in subsection (a) above, the aggregate principal amount of
such Notes which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Notes, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the principal
amount of Notes which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Notes which such Underwriter agreed to
purchase hereunder) of the Notes of such defaulting Underwriter or Underwriters
for which such arrangements have not been made; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Notes of a defaulting Underwriter or Underwriters by the Underwriters and the
Company as provided in subsection (a) above, the aggregate principal amount of
Notes which remains unpurchased exceeds one-eleventh of the aggregate principal
amount of all the Notes, or if the Company shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase the Notes of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the
12
<PAGE> 13
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Notes.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the Notes are
not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters for all out-of-pocket expenses, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Notes, but the Company
shall then be under no further liability to any Underwriter except as provided
in Sections 6 and 8 hereof.
12. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the Underwriters in care of Credit Suisse First
Boston Corporation, 11 Madison Avenue, New York, New York 10010, Attention:
Investment Banking Department - Transactions Advisory Group; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Registration Statement, Attention:
Chief Financial Officer and Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the Underwriters
upon request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Notes from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
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<PAGE> 14
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
the Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters and the Company.
Very truly yours,
FEDERATED DEPARTMENT STORES, INC.
By: /s/ KAREN M. HOGUET
-------------------------------------
Name: Karen M. Hoguet
Title: Senior Vice President
Accepted as of the date hereof:
CREDIT SUISSE FIRST BOSTON CORPORATION
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
SALOMON SMITH BARNEY INC.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ DAVID RUSSELL
-----------------------------------
On behalf of each of the Underwriters
14
<PAGE> 15
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount of Notes
to be Purchased
-------------------------
<S> <C>
Credit Suisse First Boston Corporation....................................... $192,500,000
Banc of America Securities LLC............................................... 52,500,000
Chase Securities Inc. ....................................................... 52,500,000
Salomon Smith Barney Inc. . ................................................. 52,500,000
------------
Total................................................................... $350,000,000
============
</TABLE>
15
