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EXHIBIT 4
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FEDERATED DEPARTMENT STORES, INC.
and
CITIBANK, N.A.
Trustee
SECOND SUPPLEMENTAL TRUST INDENTURE
Dated as of August 26, 1998
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 1/8% Term Enhanced ReMarketable Securities(sm)
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TABLE OF CONTENTS
Page
RECITALS ....................................................................................................... 1
[Form of Face of Security]...................................................................................... 2
[Form of Reverse of Security]................................................................................... 3
ARTICLE I. ISSUANCE OF TERMS.................................................................................... 7
Section 1.1. Issuance of TERMS; Principal Amount; Maturity............................................ 7
Section 1.2. Interest on the TERMS; Payment of Interest............................................... 7
Section 1.3. Execution, Authentication and Delivery of TERMS.......................................... 8
ARTICLE II. CERTAIN DEFINITIONS................................................................................. 8
Section 2.1. Certain Definitions...................................................................... 8
ARTICLE III. TERMS.............................................................................................. 17
Section 3.1. General.............................................................................. 17
Section 3.2. Tender of TERMS; Remarketing......................................................... 19
Section 3.3. Repurchase........................................................................... 21
Section 3.4. Redemption........................................................................... 21
ARTICLE IV. CERTAIN COVENANTS................................................................................... 22
Section 4.1. Liens.................................................................................... 22
Section 4.2. Sale and Leaseback Transactions.......................................................... 22
Section 4.3. Permitting Unrestricted Subsidiaries to Become Restricted
Subsidiaries....................................................................... 23
Section 4.4. Payment Office........................................................................... 23
ARTICLE V. ADDITIONAL EVENTS OF DEFAULT......................................................................... 24
Section 5.1. Additional Events of Default............................................................. 24
ARTICLE VI. DEFEASANCE.......................................................................................... 24
Section 6.1. Applicability of Article V of the Indenture.............................................. 24
ARTICLE VII. MISCELLANEOUS...................................................................................... 25
Section 7.1. Reference to and Effect on the Indenture................................................. 25
Section 7.2. Waiver of Certain Covenants.............................................................. 25
Section 7.3. Supplemental Indenture May be Executed In Counterparts................................... 26
Section 7.4. Effect of Headings....................................................................... 26
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SECOND SUPPLEMENTAL INDENTURE, dated as of August 26, 1998,
between Federated Department Stores, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Company"), and Citibank,
N.A., a national banking association duly incorporated under the laws of the
United States of America, as Trustee (the "Trustee"), supplementing that certain
Indenture, dated as of September 10, 1997, between the Company and the Trustee
(the "Indenture").
RECITALS
A. The Company has duly authorized the execution and delivery
of the Indenture to provide for the issuance from time to time of its unsecured
debentures, notes, or other evidences of indebtedness (the "Securities") to be
issued in one or more series as provided for in the Indenture.
B. The Indenture provides that the Securities of each series
shall be in substantially the form set forth in the Indenture, or in such other
form as may be established by or pursuant to a Board Resolution or in one or
more indentures supplemental thereto, in each case with such appropriate
insertions, omissions, substitutions, and other variations as are required or
permitted by the Indenture, and may have such letters, numbers, or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently 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, Securities
denominated "6 1/8% Term Enhanced Remarketable Securities(sm)" (the "TERMS(sm)")
pursuant to the terms of this Supplemental Indenture and substantially in the
form set forth below, in each case with such appropriate insertions, omissions,
substitutions, and other variations as are required or permitted by the
Indenture and this Supplemental Indenture, and with such letters, numbers, or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of such Securities.
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[Form of Face of Security]
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof, and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange for
or in lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.
FEDERATED DEPARTMENT STORES, INC.
6 1/8% TERM ENHANCED REMARKETABLE SECURITY
No. R- $
Cusip No. _______
FEDERATED DEPARTMENT STORES, INC., a corporation duly
organized and existing under the laws of the State of Delaware (hereinafter
called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to Cede & Co., or registered assigns, the principal sum of $ on September 1,
2011 and to pay interest thereon from August 26, 1998 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on March 1 and September 1 of each year, commencing on March 1,
1999, at the rate of 6 1/8% per annum, until the principal hereof is paid or
made available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall, as provided in said Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the fifteenth calendar day (whether or not a
Business Day) 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.
This Security is subject to mandatory tender for sale by the
record holder hereof, and the scheduled maturity date of this Security, the rate
at which this Security will bear interest and the Interest Payment Date and
Regular Record Dates for such interest are subject to adjustment, in each case
on or after September 1, 2001, as described on the reverse hereof.
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
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for payment of public and private debts; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address
of the Person entitled thereto as such address appears in the Security
Register.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS SET FORTH
ON THE REVERSE HEREOF. SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.
This Security shall not be valid or become obligatory for any
purpose until the certificate of authentication herein has been signed manually
by the Trustee under said Indenture.
IN WITNESS WHEREOF, this instrument has been duly executed in
accordance with the Indenture.
FEDERATED DEPARTMENT STORES, INC.
Date Issued: By:
-------------------------------------
Attest:
By:
-------------------
[Form of Reverse of Security]
FEDERATED DEPARTMENT STORES, INC.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities") issued and to be issued in one
or more series under an Indenture, dated as of September 10, 1997 (herein called
the "Indenture") as supplemented by the Second Supplemental Indenture, dated as
of August 26, 1998 (the "Second Supplemental 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.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Indenture. This Security is one of the series designated
on the face hereof, limited in aggregate principal amount to $350,000,000.
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This Security will bear interest at the annual interest rate
of 6 1/8% to September 1, 2001 (the "Initial Investor Maturity Date"). The
Initial Investor Maturity Date and, if the Initial Investor Maturity Date is
designated as a Window Period Remarketing Date, the Additional Remarketing Date
thereafter, will be the Remarketing Dates for the Securities of this series. If
the Remarketing Dealer elects to remarket the Securities of this series on a
Remarketing Date, except in the limited circumstances described in the Second
Supplemental Indenture, (i) this Security will be subject to mandatory tender to
the Remarketing Dealer at 100% of the principal amount thereof for remarketing
on each such date, on the terms and subject to the conditions described in the
Second Supplemental Indenture, and (ii) on and after such Remarketing Date, this
Security will bear interest at the rate determined by the Remarketing Dealer in
accordance with the procedures set forth in the Second Supplemental Indenture.
If the Remarketing Dealer for any reason does not purchase all of the Securities
of this series on any Remarketing Date, or elects not to remarket the Securities
of this series, or in certain other limited circumstances described in the
Supplemental Indenture, the Company will be required to purchase the Securities
of this series from the Holders thereof on such Remarketing Date, at 100% of the
principal amount thereof plus accrued and unpaid interest, if any.
If the Initial Investor Maturity Date is designated as a
Window Period Remarketing Date, except in the limited circumstances described in
the Second Supplemental Indenture, (i) the Maturity Date of this Security will
be the date that is the tenth anniversary of the Additional Remarketing Date
(whether or not a Business Day), (ii) interest on this Security accruing from
the Additional Remarketing Date will be paid semiannually on each day that is a
six-month anniversary of such date (each such day being an Interest Payment
Date) until the principal thereof is paid or made available for payment, and
(iii) the interest so payable, and punctually paid or duly provided for, on any
such Interest Payment Date shall, as provided in the 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 fifteenth calendar day (whether or
not a Business Day) immediately preceding such Interest Payment Date (each such
day being a Regular Record 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 the Indenture.
This Security is subject to 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.
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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 hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request and shall have failed to institute such proceeding for 60 calendar
days after receipt of such notice, request, and offer of indemnity. The
foregoing shall apply to any suit instituted by the Holder of this Security for
the enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place, and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, shall be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and integral multiples thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like
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aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee, and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security shall be overdue, and
neither the Company, the Trustee, nor any such agent shall be affected by notice
to the contrary.
Unless this Security is presented by an authorized
representative of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) to the Company or its agent for registration of transfer, exchange, or
payment, and any Security issued upon registration of transfer of, or in
exchange for or in lieu of, this Security is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL because the registered owner hereof, Cede & Co., has an interest
herein.
All terms used in this Security that are defined in the
Indenture shall have the respective meanings assigned to them in the Indenture.
D. The Trustee's certificate of authentication shall be in
substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:
--------------------- CITIBANK, N.A., as Trustee
By:
--------------------------------
Authorized Officer
E. All acts and things necessary to make the TERMS, when the
TERMS 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,
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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
TERMS 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 TERMS.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
In order to declare the terms and conditions upon which the
TERMS are authenticated, issued, and delivered, and in consideration of the
premises and of the purchase and acceptance of the TERMS by the Holders thereof,
it is mutually agreed, for the equal and proportionate benefit of the respective
Holders from time to time of the TERMS, as follows:
ARTICLE I. ISSUANCE OF TERMS.
SECTION 1.1. ISSUANCE OF TERMS; PRINCIPAL AMOUNT; MATURITY.
(a) On August 26, 1998 the Company shall issue and deliver to
the Trustee, and the Trustee shall authenticate, TERMS substantially in the form
set forth above, in each case with such appropriate insertions, omissions,
substitutions, and other variations as are required or permitted by the
Indenture and this Supplemental Indenture, and with such letters, numbers, or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such TERMS, as
evidenced by their execution of such TERMS.
(b) The TERMS shall be issued in the aggregate principal
amount of $350,000,000 shall mature on September 1, 2011 unless, pursuant to
Section 3.2(b), the Initial Investor Maturity Date is designated a Window Period
Remarketing Date in which case the TERMS will mature on the date determined
pursuant to Section 3.2(b).
SECTION 1.2. INTEREST ON THE TERMS; PAYMENT OF INTEREST.
(a) The TERMS shall bear interest at the rate of 6 1/8% per
annum from August 26, 1998 to September 1, 2001, except in the case of TERMS
delivered pursuant to Sections 2.05 or 2.07 of the Indenture, which shall bear
interest from the most recent Interest Payment Date to which interest has been
paid or duly provided for, until the principal thereof is paid or made available
for payment. Such interest shall be payable semiannually on March 1 and
September 1 of each year, commencing March 1, 1999.
(b) The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date shall, as provided in the Indenture,
be paid to the Person in whose name a TERMS (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 fifteenth calendar day (whether or not a
Business Day) 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
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Holder on such Regular Record Date and may either be paid to the Person in
whose name the TERMS (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 the TERMS 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 TERMS may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.
(c) Payment of the principal of (and premium, if any) and any
interest on the TERMS 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.
(d) The rate at which the TERMS will bear interest and the
Interest Payment Dates and Regular Record Dates for such interest are subject to
adjustment, in each case on or after September 1, 2001, pursuant to Article III.
The provisions of Section 1.2(c) will continue to be applicable notwithstanding
any such adjustment.
SECTION 1.3. EXECUTION, AUTHENTICATION AND DELIVERY OF TERMS.
The TERMS will be executed on behalf of the Company by the
Chairman or any Vice Chairman of the Board of Directors, the Chief Executive
Officer, the President, or any Vice President of the Company and attested by any
other executive officer of the Company.
ARTICLE II. CERTAIN DEFINITIONS.
SECTION 2.1. CERTAIN DEFINITIONS.
The terms defined in this Section 2.1 (except as herein
otherwise expressly provided or unless the context of this Supplemental
Indenture otherwise requires) for all purposes of this Supplemental Indenture
and of any indenture supplemental hereto have the respective meanings specified
in this Section 2.1. All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP. All other terms used in this
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.
"Accreted Dollar Price" means, with respect to the Additional
Remarketing Date, the Dollar Price as of the Initial Investor Maturity Date
(determined by the Remarketing Dealer on the Notification Date) plus the product
of (i) such Dollar Price less the aggregate principal amount of the TERMS
outstanding as of the Initial Investor Maturity Date, (ii) the weighted
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average per annum Window Period Interest Rate for the Window Period, and (iii)
the number of days in the Window Period divided by 360.
"Additional Remarketing Date" has the meaning set forth in
Section 3.2(b).
"Applicable Spread" means the lowest bid indication, expressed
as a spread (in the form of a percentage or number of basis points) above the
Base Rate, obtained by the Remarketing Dealer on the Re-pricing Date from the
bids quoted by five Reference Corporate Dealers for the full aggregate principal
amount of the TERMS at the Dollar Price, but assuming (i) an issue date of the
Initial Investor Maturity Date (if such date is not a Window Period Remarketing
Date) or the Additional Remarketing Date (if the Initial Investor Maturity Date
is a Window Period Remarketing Date) with settlement on such date without
accrued interest, (ii) a maturity date equal to the Maturity Date of the TERMS,
and (iii) a stated annual interest rate, payable semiannually, equal to the Base
Rate plus the spread bid by the applicable Reference Corporate Dealer.
"Bank Facilities" means the financing provided to the Company
by certain financial institutions pursuant to (i) the Five-Year Credit
Agreement, pursuant to which such financial institutions have provided the
Company with a $1,500,000,000 revolving loan facility and (ii) the 364-Day
Credit Agreement, pursuant to which such financial institutions have provided
the Company with a $500,000,000 revolving loan facility, with Citibank N.A., as
administrative agent and paying agent, The Chase Manhattan Bank as
administrative agent, BankBoston, N.A. as syndication agent, and Bank of America
National Trust & Savings Association, as documentation agent, as the same may be
amended, supplemented, or otherwise modified from time to time.
"Base Rate" means 5.64% per annum.
"Basic Spread" means the lowest bid indication, expressed as a
spread (in the form of a percentage or number of basis points) above the
Reference Rate, obtained by the Remarketing Dealer on the third business Day
prior to the Window Period Remarketing Date from the bids quoted from five
Reference Money Market Dealers on such date for the full aggregate principal
amount of the TERMS at a dollar price equal to par, but assuming (i) an issue
date of the Window Period Remarketing Date, with settlement on such date without
accrued interest, (ii) a maturity date equal to the day that is 52 weeks from
the Window Period Remarketing Date, (iii) that the TERMS are callable by the
Remarketing Dealer on a weekly basis after the Window Period Remarketing Date,
(iv) that the TERMS will be repurchased by the Company at par on the day that is
52 weeks from the Window Period Remarketing Date if not previously called by the
Remarketing Dealer, and (v) a stated annual interest rate, payable on the
Additional Remarketing Date, equal to the Reference Rate plus the spread bid by
the applicable Reference Money Market Dealer.
"Business Day" means any day on which commercial banks are
open for business (including dealings in foreign exchange and foreign currency
deposits in the City of New York and, in the case of the determination of the
Reference Rate that is based upon U.S. Dollar deposits in London, the City of
London.
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"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.
"Dollar Price" means, with respect to the TERMS, the present
value, as of the Initial Investor Maturity Date, of the Remaining Scheduled
Payments discounted to the Initial Investor Maturity Date, on a semiannual basis
(assuming a 360-day year consisting of twelve 30- day months), at the Treasury
Rate; provided that in the case of the Additional Remarketing Date, the Dollar
Price will be the Accreted Dollar Price; and provided, further, that the Dollar
Price in the case of the Initial Investor Maturity or the Additional Remarketing
Date may be any other amount agreed to in writing by the Remarketing Dealer and
the Company.
"Existing Indebtedness" means all Indebtedness under or
evidenced by: (a) the TERMS, (b) the Company's 7% Senior Debentures Due 2028;
(c) the Company's 7.45% Senior Debentures Due 2017; (d) the Company's 6.79%
Senior Debentures Due 2027; (e) the Company's 10% Senior Notes Due 2001; (f) the
Company's 8.125% Senior Notes Due 2002; (g) the Company's 8.5% Senior Notes Due
2003; (h) the Company's 5% Convertible Subordinated Notes Due 2003; (i) the
outstanding principal amount of notes issued pursuant to the Mortgage Note
Agreement between Macy's Primary Real Estate, Inc. and Federated Noteholding
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Corporation; (j) 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; (k) Capital Lease
Obligations of the Company and the Restricted Subsidiaries existing on the date
of issuance of the TERMS; and (l) the other secured Indebtedness of the Company
or secured or unsecured Indebtedness of the Restricted Subsidiaries existing on
the date of issuance of the TERMS.
"Initial Investor Maturity Date" has the meaning set forth in
Section 3.1(b).
"Interest Determination Date" has the meaning set forth in
Section 3.2(c).
"Interest Rate to Maturity" means the interest rate which
shall be determined by the Remarketing Dealer by 3:30 p.m., New York City time,
on the third Business Day immediately preceding the Initial Investor Maturity
Date (if such date is not a Window Period Remarketing Date) or the Additional
Remarketing Date (if the Initial Investor Maturity Date is a Window Period
Remarketing Date) (the "Re-pricing Date"), to the nearest one hundred-
thousandth (.00001) of one percent per annum, and will be equal to the sum of
the Base Rate plus the Applicable Spread.
"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.
"Maturity Date" has the meaning set forth in Section 3.2(b).
"Moody's" means Xxxxx'x 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;
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(b) the applicable Purchase Amount (including, if less than
all the TERMS, 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 TERMS accepted for payment (as
specified in this Supplemental Indenture);
(e) that the Holder of any TERMS may tender for purchase by
the Company all or any portion of such TERMS equal to $1,000 principal
amount or any integral multiple thereof;
(f) the place or places where TERMS are to be surrendered for
tender pursuant to such Offer to Purchase;
(g) any TERMS 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 TERMS and this Supplemental Indenture;
(h) that on the Purchase Date the purchase price shall become
due and payable upon each TERMS (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 TERMS pursuant to
such Offer to Purchase shall be required to surrender such TERMS 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 TERMS 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 TERMS (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 TERMS and (ii) if TERMS 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 TERMS having an aggregate principal amount equal to the
Purchase Amount and (B) the particular TERMS (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 TERMS of a denomination larger than
$1,000;
(k) that, in the case of any Holder whose TERMS is purchased
only in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such TERMS without service
charge, a new TERMS or TERMS of any authorized
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denomination as requested by such Holder in an aggregate principal
amount equal to and in exchange for the unpurchased portion of the
TERMS so tendered; and
(l) any other information required by applicable law to be
included therein.
"Notification Date" has the mean set forth in Section 3.2(a).
"Offer to Purchase" means an offer to purchase TERMS 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.
"Optional Redemption Price" has the meaning set forth in
Section 3.4.
"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 the TERMS 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,
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renewed, refinanced, replaced, or refunded, plus all interest accrued thereon
and all related fees and expenses (including any payments made in connection
with procuring any required lender or similar consents); (b) Liens incurred and
pledges and deposits made in the ordinary course of business in connection with
liability insurance, workers' compensation, unemployment insurance, old-age
pensions, and other social security benefits other than in respect of employee
benefit plans subject to the Employee Retirement Income Security Act of 1974,
as amended; (c) Liens securing performance, surety, and appeal bonds and other
obligations of like nature incurred in the ordinary course of business; (d)
Liens on goods and documents securing trade letters of credit; (e) Liens
imposed by law, such as carriers', warehousemen's, mechanics', materialmen's,
and vendor's Liens, incurred in the ordinary course of business and securing
obligations which are not yet due or which are being contested in good faith by
appropriate proceedings; (f) Liens securing the payment of taxes, assessments,
and governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate legal or administrative proceedings and
as to which adequate reserves shall have been established on the books of the
relevant Person in conformity with GAAP; (g) zoning restrictions, easements,
rights of way, reciprocal easement agreements, operating agreements, covenants,
conditions, or restrictions on the use of any parcel of property that are
routinely granted in real estate transactions or do not interfere in any
material respect with the ordinary conduct of the business of the Company and
its Subsidiaries or the value of such property for the purpose of such
business; (h) Liens on property existing at the time such property is acquired;
(i) purchase money Liens upon or in any property acquired or held in the
ordinary course of business to secure Indebtedness incurred solely for the
purpose of financing the acquisition of such property; (j) Liens on the assets
of any Subsidiary of the Company at the time such Subsidiary is acquired; (k)
Liens with respect to obligations in outstanding amounts not to exceed $100.0
million at any particular time and that (i) are not incurred in connection with
the borrowing of money or obtaining advances or credit (other than trade credit
in the ordinary course of business) and (ii) do not in the aggregate interfere
in any material respect with the ordinary conduct of the business of the
Company and its Subsidiaries; and (l) without limiting the ability of the
Company or any Restricted Subsidiary to create, incur, assume, or suffer to
exist any Lien otherwise permitted under any of the foregoing clauses, any
extension, renewal, or replacement, in whole or in part, of any Lien described
in the foregoing clauses; provided, however, that any such extension, renewal,
or replacement Lien is limited to the property or assets covered by the Lien
extended, renewed, or replaced or substitute property or assets, the value of
which is determined by the Board of Directors of the Company to be not
materially greater than the value of the property or assets for which the
substitute property or assets are substituted.
"Purchase Amount" means the aggregate outstanding principal
amount of the TERMS required to be offered to be purchased by the Company
pursuant to an Offer to Purchase.
"Purchase Date" means, with respect to any Offer to Purchase,
a date specified by the Company in such Offer to Purchase not less than 30
calendar days or more than 60 calendar days after the date of the mailing of the
Notice of such Offer to Purchase (or such other time period as is necessary for
the Offer to Purchase to remain open for a sufficient period of time to comply
with applicable securities laws).
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"Reference Corporate Dealers" means leading dealers of
publicly traded debt securities of the Company in the City of New York (no more
than one of which may be the Remarketing Dealer or an affiliate thereof)
selected by the Company.
"Reference Money Market Dealers" means leading dealers,
selected by the Company, of publicly traded debt securities of the Company in
the City of New York (no more than one of which may be the Remarketing Dealer or
an affiliate thereof) who are also leading dealers in money market instruments.
The Company will notify the Remarketing Dealer of the identity of such Reference
Money Market Dealers no later than four Business Days prior to the Window Period
Remarketing Date.
"Reference Rate" means, with respect to the Window Period, one
of the following reference rates selected by the Company and notified to the
Remarketing Dealer no later than four Business Days prior to the Window Period
Remarketing Date: (i) the per annum rate for deposits in U.S. Dollars for a
period of one week shown on Telerate page 3750 (or any successor page) as of
11:00 a.m., London time, on the Interest Determination Date, or (ii) the per
annum rate equal to the average of the federal funds rates shown on Telerate
page 5 as of 11:00 a.m., New York City time, on the applicable Interest
Determination Date and each of the four Business Days prior to such applicable
Interest Determination Date, or (iii) the one-week "AA" non-financial commercial
paper rate shown on the Internet world wide web page (or any successor page) of
the Board of Governors of the Federal Reserve System at
xxx.xxx.xxx.xxx.xx/xxxxxxxx/XX/ as of 11:00 a.m., New York City time, on the
applicable Interest Determination Date.
"Remaining Scheduled Payments" means, with respect to the
TERMS, the remaining scheduled payments of the principal thereof and interest
thereon, calculated at the Base Rate only and assuming (i) a maturity date equal
to the day that is ten years from the Initial Investor Maturity Date of the
TERMS (whether or not a Business Day) and (ii) that the Company did not elect
the Initial Investor Maturity Date to be a Window Period Remarketing Date.
"Remarketing Agreement" means the Remarketing Agreement, dated
as of August 26, 1998 between the Company and Credit Suisse First Boston
Corporation.
"Remarketing Date" means the Initial Maturity Date and, if
applicable, the Additional Remarketing Date.
"Remarketing Dealer" means Credit Suisse First Boston
Corporation and its successors and assigns under the Remarketing Agreement.
"Re-pricing Date" means the meaning set forth in the
definition of Interest Rate to Maturity.
"Restricted Subsidiary" means any direct or indirect
subsidiary (as that term is defined in Regulation S-X promulgated by the
Securities and Exchange Commission) other than an Unrestricted Subsidiary.
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"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx 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.
"Scheduled Maturity Date" has the meaning set forth in Section
3.1(a).
"Senior Indebtedness" means any Indebtedness of the Company or
its Subsidiaries other than Subordinated Indebtedness.
"Significant Subsidiary" means any Subsidiary that accounts
for (i) 10% or more of the total consolidated assets of the Company and its
Subsidiaries as of any date of determination or (ii) 10% 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 TERMS.
"Treasury Rate" means the yield to maturity of the
offered-side quote for the then current 10-Year US Treasury Bond shown on
Telerate page 500 (or any successor page), as of 11:00 a.m., New York City time,
on the Notification Date (or, if such 10-year US Treasury Bond is not available,
the interpolated yield to maturity using then current US Treasury Bonds). The
10-year offered-side yield will be used to determine the Dollar Price with
respect to the determination of the Interest Rate to Maturity. In the event that
the offered-side quote for the then current 10-Year US Treasury Bond is no
longer shown on Telerate page 500 and there is no successor page, the Treasury
Rate will be calculated by the Remarketing Dealer and will be a yield to
maturity equal to the arithmetic mean of the secondary market bid rates, as of
approximately 11:00 a.m., New York City time, on the Notification Date, of five
leading primary United States government securities dealers (no more than one of
which shall be the Remarketing Dealer or an affiliate thereof) selected by the
Remarketing Dealer, excluding the highest and lowest of such bids, for an
aggregate principal amount of the then current 10-Year US Treasury Bond equal to
the aggregate principal amount of the TERMS (or, if such 10-year US Treasury
Bond is not available, the interpolated yield to maturity using then current US
Treasury Bonds). If fewer than three such United States government securities
dealers provide bids, the Treasury Rate shall be the average of such bids. If
only one such United States government securities dealer provides such a bid,
then the Treasury Rate shall be equal to such a bid.
"Unrestricted Subsidiary" means (a) FDS National Bank, FACS
Group, Inc., Federated Credit Holdings Corporation, Prime Credit Card Master
Trust (to the extent that it is deemed to be a Subsidiary), Prime Credit Card
Master Trust II (to the extent it is deemed to be a Subsidiary), Prime
Receivables Corporation, Prime II Receivables Corporation, Seven Hills
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Funding Corporation, Ridge Capital Trust II (to the extent that it is deemed to
be a Subsidiary), Macy Financial, Inc., X.X. Xxxx Overseas Finance, N.V., Macy
Credit Corp., and Macy's Data and Credit Services Corp., (b) any Subsidiary of
the Company the primary business of which consists of, and is restricted by the
charter, partnership agreement, or similar organizational document of such
Subsidiary to, financing operations on behalf of the Company and its
Subsidiaries, and/or purchasing accounts receivable or direct or indirect
interests therein, and/or making loans secured by accounts receivable or direct
or indirect interests therein (and business related to the foregoing), or which
is otherwise primarily engaged in, and restricted by its charter, partnership
agreement, or similar organizational document to, the business of a finance
company (and business related thereto), which, in accordance with the
provisions of this Supplemental Indenture, has been designated by Board
Resolution as an Unrestricted Subsidiary, in each case unless and until any of
the Subsidiaries of the Company referred to in the foregoing clauses (a) and
(b) is, in accordance with the provisions of this Supplemental Indenture,
designated by a Board Resolution as a Restricted Subsidiary, and (c) any
Subsidiary of the Company of which, in the case of a corporation, more than 50%
of the issued and outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation has or might have voting power upon the occurrence of any
contingency), or, in the case of any partnership or other legal entity, more
than 50% of the ordinary equity capital interests, is at the time directly or
indirectly owned or controlled by one or more Unrestricted Subsidiaries and the
primary business of which 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).
"Window Period" means the period of time from, and including,
the Window Period Remarketing Date to, but excluding, the Additional Remarketing
Date.
"Window Period Interest Rate" has the meaning set forth in
Section 3.2(c).
"Window Period Remarketing Date" has the meaning set forth in
Section 3.2(b).
ARTICLE III. TERMS.
SECTION 3.1. GENERAL.
(a) The TERMS will be unsecured obligations of the Company and
will rank pari passu with all other unsecured and unsubordinated indebtedness of
the Company. The Maturity Date of the TERMS is scheduled to be September 1,
2011 (the "Scheduled Maturity Date") but may be adjusted due to the occurrence,
if any, of the Window Period. Except in the limited circumstances described in
Section 3.3, the TERMS are not subject to redemption by the Company prior to
the Maturity Date.
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(b) September 1, 2001 (the "Initial Investor Maturity Date")
and, if the Initial Investor Maturity Date is designated as a Window Period
Remarketing Date pursuant to Section 3.2(b), the Additional Remarketing Date
thereafter, will be the Remarketing Dates for the TERMS. If the Remarketing
Dealer elects to remarket the TERMS on a Remarketing Date, except in the limited
circumstances described in this Article III, (i) the TERMS will be subject to
mandatory tender to the Remarketing Dealer at 100% of the principal amount
thereof for remarketing on each such date, on the terms and subject to the
conditions described herein, and (ii) on and after such Remarketing Date, the
TERMS will bear interest at the rate specified in Section 3.2.
(c) Pursuant to Section 3.4, the TERMS are subject to
redemption by the Company from the Remarketing Dealer on any Remarketing Date.
If the Remarketing Dealer for any reason does not purchase all of the TERMS on
any Remarketing Date, or elects not to remarket the TERMS, or in certain other
limited circumstances described in Section 3.3, the Company will be required
pursuant to Section 3.3 to repurchase the TERMS from the Holders thereof on such
Remarketing Date at 100% of the principal amount thereof plus accrued and unpaid
interest, if any.
(d) Interest on the TERMS accruing from the Initial Investor
Maturity Date (if such date is not a Window Period Remarketing Date) or the
Additional Remarketing Date (if the Initial Investor Maturity Date is a Window
Period Remarketing Date) will be paid semiannually on each day that is a
six-month anniversary of such date (each such day being an Interest Payment
Date) until the principal of the TERMS is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any such
Interest Payment Date shall, as provided in the Indenture, be paid to the
Persons in whose names the TERMS are registered on the fifteenth calendar day
(whether not a Business Day) immediately preceding such Interest Payment Date
(each such day being a Regular Record Date). Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holders on
such Regular Record Date and may either be paid to the Persons in whose names
the TERMS are 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 TERMS 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
TERMS may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture. Interest on the TERMS accruing
during the Window Period, if applicable, will be payable on the Additional
Remarketing Date to the Persons to whom principal is payable on the Additional
Remarketing Date. Interest on the TERMS will be computed on the basis of a
360-day year of twelve 30-day months, except that interest accruing during the
Window Period will be computed on the basis of the actual number of days in such
period and a 360-day year.
(e) Interest payable on any Interest Payment Date and at the
Maturity Date or date of earlier redemption or repurchase of TERMS will be the
amount of interest accrued from and including the most recent Interest Payment
Date to which interest has been paid or duly provided for (or from and
including the Issue Date if no interest has been paid or duly provided for with
respect to the TERMS) to but excluding such Interest Payment Date or the
Maturity Date or date of redemption or repurchase, as the case may be. If any
Interest Payment
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Date or the Maturity Date or date of earlier redemption or repurchase of TERMS
falls on a day that is not a Business Day, the payment otherwise then due will
be made on the next Business Day with the same force and effect as if it were
made on the date such payment was due and no interest will accrue on the amount
so payable for the period from and after such Interest Payment Date or the
Maturity Date or date of redemption or repurchase, as the case may be.
(f) The TERMS will be issued in denominations of $1,000 and
integral multiples thereof.
SECTION 3.2. TENDER OF TERMS; REMARKETING
(a) MANDATORY TENDER. Provided that the Remarketing Dealer
gives notice to the Company and the Trustee on a Business Day not earlier than
fifteen nor later than five Business Days prior to the Initial Investor Maturity
Date of its intention to purchase the TERMS (the "Notification Date"), each
TERMS will be automatically tendered, or deemed tendered, to the Remarketing
Dealer for purchase on each of (i) the Initial Investor Maturity Date and (ii)
if the Initial Investor Maturity Date is designated as a Window Period
Remarketing Date as described in Section 3.2(b), the Additional Remarketing Date
thereafter, except in the circumstances described in Sections 3.3 and 3.4. The
purchase price for the TERMS to be paid by the Remarketing Dealer on each
Remarketing Date will equal 100% of the principal amount thereof and will be
payable as provided in Section 3.2(d). When the TERMS are tendered to the
Remarketing Dealer on a Remarketing Date, the Remarketing Dealer may remarket
the TERMS for its own account at varying prices to be determined by the
Remarketing Dealer at the time of each sale. If the Remarketing Dealer elects to
purchase the TERMS, the obligation of the Remarketing Dealer to purchase the
TERMS on the applicable Remarketing Date is subject, among other things, to the
condition that no "Termination Event" under the Remarketing Agreement shall have
occurred.
The Initial Investor Maturity Date will be September 1, 2001. The
Maturity Date of the TERMS is scheduled to occur on the Scheduled Maturity Date,
but may be adjusted due to the occurrence, if any, of the Window Period.
(b) REMARKETING DATES; ADJUSTMENT TO MATURITY DATES. If the Remarketing
Dealer elects to purchase the TERMS on the Initial Investor Maturity Date, then
not later than 4:00 p.m., New York City time, on the fourth Business Day prior
to the Initial Investor Maturity Date, the Company may notify the Remarketing
Dealer, the Trustee and DTC by telephone, confirmed in writing that it elects
the Initial Investor Maturity Date to be a Window Period Remarketing Date (the
"Window Period Remarketing Date"). The Company will be eligible to make such
notification if at such time its senior unsecured debt is rated at least "Baa3"
by Xxxxx'x Investors Service and "BBB-" by Standard & Poor's Ratings Group or
the equivalent thereof by such rating agency at the time of such notification;
provided that, the Remarketing Dealer may waive this requirement at its sole
discretion. If the Company does not provide such notification, the Initial
Investor Maturity Date will be the only Remarketing Date and the Maturity Date
will be the Scheduled Maturity Date. If the Company provides such notification,
then (i) the Additional Remarketing Date will be one of the 52 following
one-week anniversary dates of the Initial Investor Maturity Date (or if any
such day is not a Business Day, the next
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following Business Day) designated by the Company not later than the fifth
Business Day prior to such one-week anniversary date (the "Additional
Remarketing Date"); provided that, if the Company fails to so designate the
Additional Remarketing Date, the Additional Remarketing Date will be the date
that is 52 weeks after the Initial Investor Maturity Date (or if such day is
not a Business Day, the next following Business Day) and (ii) the Maturity Date
of the TERMS will be the date that is the tenth anniversary of the Additional
Remarketing Date (whether or not a Business Day).
(c) DETERMINATION OF APPLICABLE INTEREST RATE. From and including the
Initial Investor Maturity Date (if such date is not a Window Period Remarketing
Date) or the Additional Remarketing Date (if the Initial Investor Maturity Date
is a Window Period Remarketing Date), to but excluding the Maturity Date, the
TERMS will bear interest at the Interest Rate to Maturity. During the Window
Period the TERMS will bear interest at the Window Period Interest Rate. The
interest rate for the Window Period will be reset on each Interest Reset Date
during the Window Period and will equal the Reference Rate in respect of the
applicable Interest Reset Date plus the Basic Spread, in each case as calculated
by the Remarketing Dealer (the "Window Period Interest Rate"). The Wednesday of
each week during the Window Period will be an "Interest Reset Date." The
"Interest Determination Date" applicable to an Interest Reset Date will be the
second Business Day preceding such Interest Reset Date. The interest rate in
effect from and including the Window Period Remarketing Date (which is the first
day of the Window Period) to, but excluding, the first Interest Reset Date
during the Window Period will be determined as if the Window Period Remarketing
Date were an Interest Reset Date and the Interest Determination Date for such
Interest Reset Date were the second Business Day prior to the Window Period
Remarketing Date.
(d) NOTIFICATION OF RESULTS; SETTLEMENT. The Remarketing Agreement
provides that, if the Remarketing Dealer has previously notified the Company and
the Trustee on the Notification Date of its intention to purchase all of the
TERMS on the Initial Investor Maturity Date, the Remarketing Dealer will notify
the Company, the Trustee and DTC by telephone, confirmed in writing, by 4:00
p.m., New York City time, on the third Business Day prior to the Initial
Investor Maturity Date (if such date is not a Window Period Remarketing Date) or
the Additional Remarketing Date (if the Initial Investor Maturity Date is a
Window Period Remarketing Date), of the Interest Rate to Maturity. The
Remarketing Agreement provides that, if the Initial Investor Maturity Date is a
Window Period Remarketing Date, the Remarketing Dealer will provide the Company,
the Trustee and DTC with notice in the manner contemplated by the preceding
sentence, on the second Business Day prior to the Initial Investor Maturity
Date, of the Window Period Interest Rate which will initially be in effect.
On each Remarketing Date, all of the TERMS will be
automatically be delivered to the account of the Trustee by book-entry through
DTC pending payment of the purchase or redemption price therefor as provided in
the next following paragraph.
The Remarketing Agreement provides that, if the Remarketing
Dealer purchases the TERMS on a Remarketing Date, the Remarketing Dealer will
make or cause the Trustee to make payment to the DTC participant (each, a "DTC
Participant") of each Holder of TERMS by book-entry through DTC by the close of
business on such date against delivery through DTC of such Holder's TERMS, of
100% of the principal amount of the TERMS that shall have been
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purchased by the Remarketing Dealer. If the Remarketing Dealer does not
purchase all of the TERMS on a Remarketing Date, the Company will make or cause
to be made such payment for the TERMS, pursuant to Section 3.3. In any case,
the Company will make or cause the Trustee to make payment of interest to each
Holder of TERMS on a Remarketing Date by book-entry through DTC by the close of
business on such date. In the event that the Company elects to redeem the TERMS
from the Remarketing Dealer pursuant to Section 3.4, the Company will make, or
cause the Trustee to make, payment to the Remarketing Dealer by book-entry
through DTC by the close of business on such date against delivery through DTC
of such TERMS.
The tender and settlement procedures described above,
including provisions for payment by purchasers of TERMS in the remarketing or
for payment to selling Holders of TERMS, may be modified to the extent required
by DTC or to the extent required to facilitate the tender and remarketing of
TERMS in certificated form, if the book-entry system is no longer available for
the TERMS at the time of the remarketing. In addition, the Remarketing Dealer
may, in accordance with the terms of the Indenture, modify the tender and
settlement procedures set forth above in order to facilitate the tender and
settlement process.
SECTION 3.3. REPURCHASE
In the event that (i) the Remarketing Dealer for any reason
does not notify the Company of the Interest Rate to Maturity or the Window
Period Interest Rate by (a) in the case of the Interest Rate to Maturity, 4:00
p.m., New York City time, on the third Business Day prior to the Initial
Investor Maturity Date (if the Initial Investor Maturity Date is not a Window
Period Remarketing Date) or the Additional Remarketing Date (if the Initial
Investor Maturity Date is a Window Period Remarketing Date), or (b) in the case
of the Window Period Interest Rate, 4:00 p.m., New York City time, on the second
Business Day prior to the Initial Investor Maturity Date, or (ii) prior to the
Notification Date, the Remarketing Dealer has resigned or been terminated and no
successor has been appointed on or before the third Business Day immediately
preceding the Initial Investor Maturity Date, or (iii) a Termination Event under
the Remarketing Agreement shall have occurred, or (iv) the Remarketing Dealer
for any reason elects not to purchase the TERMS on a Remarketing Date, or (v)
the Remarketing Dealer for any reason does not purchase all tendered TERMS on
the applicable Remarketing Date, the Company will repurchase the TERMS as a
whole on such Remarketing Date at a price equal to 100% of the principal amount
of the TERMS plus all accrued and unpaid interest, if any, on the TERMS to such
date. In any such case, payment will be made by the Company to the DTC
Participant of each Holder of TERMS by book-entry through DTC by the close of
business on the Remarketing Date against delivery through DTC of such Holder's
TERMS.
SECTION 3.4. REDEMPTION
If the Remarketing Dealer elects to purchase the TERMS on a
Remarketing Date, the TERMS will be subject to mandatory tender to the
Remarketing Dealer for purchase on such date, in each case subject to the
conditions described in Sections 3.2 and 3.3 and to the Company's right to
redeem the TERMS from the Remarketing Dealer as described in the next sentence.
The Company will notify the Remarketing Dealer and the Trustee, not later than
the fourth Business Day immediately preceding the applicable Remarketing Date,
if the Company irrevocably elects to exercise its right to redeem the TERMS from
the Remarketing Dealer, in
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whole but not in part, on such date at the Optional Redemption Price. In any
such case, payment will be made by the Company to the Remarketing Dealer by
book-entry transfer through DTC by the close of business on such Remarketing
Date against delivery through DTC of the TERMS.
The "Optional Redemption Price" shall be the sum of (i) the
greater of (x) 100% of the full aggregate principal amount of the TERMS or (y)
the Dollar Price as of the applicable Remarketing Date (which, if the applicable
Remarketing Date is the Additional remarketing Date, will equal the Accreted
Dollar Price) plus (ii) in the case of either (x) or (y) above, accrued and
unpaid interest to the applicable Remarketing Date.
ARTICLE IV. CERTAIN COVENANTS.
The following covenants shall be applicable to the Company for
so long as any of the TERMS are outstanding. Nothing in this paragraph will,
however, affect the Company's obligations under any provision of the Indenture
or this Supplemental Indenture.
SECTION 4.1. 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 TERMS are
secured by an equal and ratable Lien on the same assets.
SECTION 4.2. 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 TERMS 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
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the principal amount of such Senior Indebtedness required to be repurchased) at
100% of principal amount, plus accrued and unpaid interest, and to pay related
costs and expenses. Such Offer to Purchase shall be made by mailing of a Notice
to the Trustee and to each Holder at the address appearing in the Security
Register by first class mail, postage prepaid, by the Company or, at the
Company's request, by the Trustee in the name and at the expense of the
Company, on a date selected by the Company not later than 12 months from the
date such Offer to Purchase is required to be made pursuant to the immediately
preceding sentence. To the extent that the aggregate purchase price for TERMS
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 TERMS 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 TERMS of a denomination larger than $1,000), (ii) deposit
with the Paying Agent money sufficient to pay the purchase price of all TERMS
or portions thereof so accepted, and (iii) deliver to the Trustee TERMS so
accepted. The Paying Agent shall promptly mail to the Holders of TERMS so
accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail to such Holders a new TERMS equal in
principal amount to any unpurchased portion of each TERMS surrendered.
Election of the Offer to Purchase by a Holder shall (unless
otherwise provided by law) be irrevocable. The payment of accrued interest as
part of any repurchase price on any Purchase Date shall be subject to the right
of Holders of record on the relevant Regular Record Date to receive interest due
on an Interest Payment Date that is on or prior to such Purchase Date.
If an Offer to Purchase TERMS is made, the Company shall
comply with all tender offer rules, including but not limited to Section 14(e)
under the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to
such Offer to Purchase.
SECTION 4.3. 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 4.4. PAYMENT OFFICE.
The Company shall cause a Payment Office for the TERMS to be
maintained at all times in New York, New York.
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ARTICLE V. ADDITIONAL EVENTS OF DEFAULT.
SECTION 5.1. ADDITIONAL EVENTS OF DEFAULT.
In addition to the Events of Default set forth in the
Indenture, the term "Event of Default," whenever used in the Indenture or this
Supplemental Indenture with respect to the TERMS, 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 repurchase the TERMS when required pursuant
to the terms and conditions thereof or the terms and conditions of this
Supplemental Indenture;
(b) any nonpayment at maturity or other default under any
agreement or instrument relating to any other Indebtedness of the
Company or any Restricted Subsidiary (the unpaid principal amount of
which is not less than $100.0 million), and, in any such case, such
default (i) continues beyond any period of grace provided with respect
thereto and (ii) results in such Indebtedness becoming due prior to its
stated maturity or occurs at the final maturity of such Indebtedness;
provided, however, that, subject to the provisions of Section 9.01 and
8.08 of the Indenture, the Trustee shall not be deemed to have
knowledge of such nonpayment or other default unless either (1) a
Responsible Officer of the Trustee has actual knowledge of nonpayment
or other default or (2) the Trustee has received written notice thereof
from the Company, from any Holder, from the holder of any such
Indebtedness or from the trustee under the agreement or instrument,
relating to such Indebtedness;
(c) the entry of one or more final judgments or orders for the
payment of money against the Company or any Restricted Subsidiary,
which judgments and orders create a liability of $100.0 million or more
in excess of insured amounts and have not been stayed (by appeal or
otherwise), vacated, discharged, or otherwise satisfied within 60
calendar days of the entry of such judgments and orders; and
(d) Events of Default of the type and subject to the
conditions set forth in clauses (vi) and (vii) of Section 8.01(a) of
the Indenture in respect of any Significant Subsidiary or, in related
events, any group of Subsidiaries which, if considered in the
aggregate, would be a Significant Subsidiary of the Company.
ARTICLE VI. DEFEASANCE.
SECTION 6.1. APPLICABILITY OF ARTICLE V OF THE INDENTURE.
(a) The TERMS 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:
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(i) there shall have been delivered to the
Trustee the opinion of a nationally recognized independent public
accounting firm certifying the sufficiency of the amount of the moneys,
U.S. Government Obligations, or a combination thereof, placed on
deposit to pay, without regard to any reinvestment, the principal of
and any premium and interest on the TERMS on the Stated Maturity
thereof or on any earlier date on which the TERMS shall be subject to
repurchase;
(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 TERMS, 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 IV hereof.
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 IV hereof if the Holders
of a majority in principal amount of the Outstanding Senior Notes shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision, or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision, or condition shall remain in full force and effect.
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SECTION 7.3. SUPPLEMENTAL INDENTURE MAY BE EXECUTED IN COUNTERPARTS.
This instrument may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
SECTION 7.4. EFFECT OF HEADINGS.
The Article and Section headings herein are for convenience
only and shall not affect the construction hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
[Seal] FEDERATED DEPARTMENT STORES, INC.
By:
--------------------------------
Name:
Title:
Attest:
-------------------------------------
Name:
Title:
CITIBANK, N.A.,
as Trustee
By:
--------------------------------
Name:
Title:
Attest:
--------------------------------------
Name:
Title:
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STATE OF )
) ss.:
COUNTY OF )
On this ____ day of August, 1998, before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he/she is a
____________________________ of FEDERATED DEPARTMENT STORES, INC., one of the
entities described in and which executed the above instrument; that he/she knows
the seal of said entity; that the seal or a facsimile thereof affixed to said
instrument is such seal; that it was so affixed by authority of the Board of
Directors of said entity, and that he/she signed his/her name thereto by like
authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/
-----------------------------------
Notary Public
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STATE OF ____________ )
) ss.:
COUNTY OF ___________ )
On this ____ day of August, 1998, before me personally came ,
to me known, who, being by me duly sworn, did depose and say that he/she is a
____________________________ of CITIBANK, N.A., one of the entities described in
and which executed the above instrument; that he/she knows the seal of said
entity; that the seal or a facsimile thereof affixed to said instrument is such
seal; that it was so affixed by authority of the Board of Directors of said
entity, and that he/she signed his/her name thereto by like authority.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/
----------------------------
Notary Public
