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EXHIBIT 1.1
$750,000,000
FEDERATED DEPARTMENT STORES, INC.
6.30% SENIOR NOTES DUE 2009
6.90% SENIOR DEBENTURES DUE 2029
PURCHASE AGREEMENT
March 18, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
XXXXX SECURITIES INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
PNC CAPITAL MARKETS, INC.
As Representatives of the Several Purchasers,
c/o Credit Suisse First Boston Corporation,
Xxxxxx Xxxxxxx Xxxxxx,
Xxx Xxxx, N.Y. 10010-3629
Ladies and Gentlemen:
1. Introductory. Federated Department Stores, Inc., a Delaware
corporation (the "COMPANY"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several initial purchasers named in
Schedule A hereto (the "PURCHASERS") U.S. $350,000,000 principal amount of its
6.30% Senior Notes due April 1, 2009 (the "SENIOR NOTES") and U.S. $400,000,000
principal amount of its 6.90 % Senior Debentures due April 1, 2029 (the "SENIOR
DEBENTURES," and together with the Senior Notes, the "OFFERED SECURITIES") to be
issued under an indenture, dated as of September 10, 1997, (the "INDENTURE") as
supplemented by the Third Supplemental Indenture, to be dated as of March 24,
1999 (the "THIRD SUPPLEMENTAL INDENTURE"), between the Company and Citibank
N.A., as Trustee. The United States Securities Act of 1933 is herein referred to
as the "SECURITIES ACT."
The Company and the several Purchasers hereby agree as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Purchasers that:
a. An offering circular relating to the Offered Securities to be
offered by the Purchasers has been prepared by the Company. Such offering
circular (the "OFFERING CIRCULAR"), as supplemented as of the date of
this Agreement, together with the documents incorporated by reference
listed in Schedule B hereto and any other document approved by the
Company in writing for use in connection with the contemplated resale by
the Purchasers of the Offered
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Securities are hereinafter collectively referred to as the "OFFERING
DOCUMENT". On the date of this Agreement, the Offering Document does not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from the
Offering Document in reliance on and in conformity with written
information furnished to the Company by any Purchaser through Credit
Suisse First Boston Corporation ("CSFBC") specifically for use therein.
The Company's Annual Report on Form 10-K most recently filed with the
Securities and Exchange Commission (the "COMMISSION") and all subsequent
reports (collectively, the "EXCHANGE ACT REPORTS") which have been filed
by the Company with the Commission or sent to stockholders pursuant to the
Securities Exchange Act of 1934 (the "EXCHANGE Act") did not at the time
they were so filed or mailed, include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such documents,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
b. The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Offering Document; and the
Company is duly qualified to do business as a foreign corporation and is
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where failure to be so qualified and in good
standing individually or in the aggregate would not have a material
adverse effect on the business, financial position or results of
operations or reasonably foreseeable prospects of the Company and its
subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT").
c. Each Significant Subsidiary (as such term is defined in Rule 405
under the Securities Act) of the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, except where failure to be duly
incorporated, validly existing and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect.
d. All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; all of the issued shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued,
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are fully paid and non-assessable and (except as otherwise disclosed in
the Offering Document as amended or supplemented) are owned directly or
indirectly by the Company, free and clear of all material liens,
encumbrances, equities or claims; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (except as otherwise disclosed in the
Offering Document as amended or supplemented or where, individually or in
the aggregate, the failure to have been duly and validly authorized and
issued, to be fully paid and non-assessable and to be owned directly or
indirectly by the Company free and clear of liens, encumbrances, equities
or claims would not have a Material Adverse Effect).
e. The Offered Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture, as supplemented by the Third Supplemental Indenture; the
Indenture has been duly authorized, executed and delivered and duly
qualified under the Trust Indenture Act; the Indenture constitutes (and
the Third Supplemental Indenture, when executed and delivered by the
Company and the Trustee, will constitute) a valid and legally binding
instrument, enforceable in accordance with its terms, except as the
enforceability thereof may be limited to bankruptcy, insolvency,
reorganization, and other laws of general applicability relating to or
affecting creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law; and the Offered Securities and the Indenture will
conform in all material respects to the descriptions thereof in the
Offering Circular as amended or supplemented.
f. The issue and sale of the Offered Securities and the compliance
by the Company with all of the provisions of the Offered Securities, the
Indenture, as supplemented by the Third Supplemental Indenture, and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, sale/leaseback agreement, loan
agreement or other similar financing agreement or instrument or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, except for such conflicts, breaches, violations
and defaults as individually or in the aggregate would not have a Material
Adverse Effect, nor will such action result in any material violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any material statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its Significant Subsidiaries or any of their properties, except for such
violations as individually or in the aggregate would not have a Material
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Adverse Effect; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Offered
Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Registration Rights Agreement, dated
the date hereof, between the Company and the Purchasers (the "Registration
Rights Agreement") or the Indenture, as supplemented by the Third
Supplemental Indenture, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Offered Securities by the Purchasers, and the order of the Commission
declaring the Exchange Offer Registration Statement and/or the Shelf
Registration Statement (each as defined in the Registration Rights
Agreement) effective.
g. This Agreement has been duly authorized, executed and delivered
by the Company. The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and, when duly executed
and delivered by the Purchasers, will be a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
h. Except as disclosed in the Offering Document as amended or
supplemented, the Company and its subsidiaries have good and marketable
title to all real property and title to all personal property owned by
them, in each case free from liens, encumbrances and defects except such
as are disclosed in the Offering Document as amended or supplemented, or
as do not, individually or in the aggregate, have a Material Adverse
Effect; and except as disclosed in the Offering Document, the Company and
its subsidiaries hold any leased real property and buildings under valid
and enforceable leases, subject to such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect.
i. Except as disclosed in the Offering Document, as amended or
supplemented, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is party or of which any
property of the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
j. KPMG LLP, who have certified certain financial statements of the
Company and its subsidiaries, are independent certified public accountants
under Rule 101 of the AICPA's Code of Professional Conduct and its
interpretations and rulings.
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k. There has not been any material adverse change in the business,
financial position or results of operations of the Company and its
subsidiaries, taken as a whole, from the date as of which information is
given in the Offering Circular. Neither the Company nor any of its
subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Offering Document
any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Document as amended or
supplemented; and, since the date as of which information is given in the
Offering Document, there has not been any change in the capital stock
(other than issuances and forfeitures of stock in connection with
equity-based compensation plans of executive officers of the Company or as
set forth or contemplated in the Offering Document as amended or
supplemented), or any increase in excess of $25,000,000 in long-term debt
of the Company or any of its subsidiaries otherwise than as set forth or
contemplated in the Offering Document as amended or supplemented, or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Offering Document as amended or supplemented.
l. The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company
Act of 1940 (the "INVESTMENT COMPANY ACT") ; and the Company is not and,
after giving effect to the offering and sale of the Offered Securities and
the application of the proceeds thereof as described in the Offering
Document, will not be an "investment company" as defined in the Investment
Company Act.
m. No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are listed
on any national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system.
n. The offer and sale of the Offered Securities to the Purchasers
and the initial resale of the Offered Securities by the Purchasers, in
each case in the manner contemplated by this Agreement will be exempt from
the registration requirements of the Securities Act by reason of Section
4(2) thereof and Regulation S thereunder and it is not necessary to
qualify an indenture in respect of the Offered Securities under the United
States Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE
ACT").
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o. Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf (i) has, within the six-month period prior
to the date hereof, offered or sold in the United States or to any U.S.
person (as such terms are defined in Regulation S under the Securities
Act) the Offered Securities or any security of the same class or series as
the Offered Securities or (ii) has offered or will offer or sell the
Offered Securities (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or (B) with respect to any such securities
sold in reliance on Rule 903 of Regulation S ("REGULATION S") under the
Securities Act, by means of any directed selling efforts within the
meaning of Rule 902(c) of Regulation S. The Company, its affiliates and
any person acting on its or their behalf have complied and will comply
with the offering restrictions requirement of Regulation S. The Company
has not entered and will not enter into any contractual arrangement with
respect to the distribution of the Offered Securities except for this
Agreement and the Registration Rights Agreement.
3. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, and subject
to the terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and each of the Purchasers agrees, severally and not jointly, to
purchase from the Company, (i) at a purchase price of 99.077 % of the principal
amount thereof plus accrued interest on the Senior Notes from the Closing Date
(as hereinafter defined) to the time of issuance and (ii) at a purchase price of
98.683 % of the principal amount thereof plus accrued interest on the Senior
Debentures from the Closing Date to the time of issuance, the respective
principal amounts of Offered Securities set forth opposite the names of the
several Purchasers in Schedule A hereto.
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global Securities in
definitive form (the "GLOBAL SECURITIES") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Offering Document. Payment for the Offered
Securities shall be made by the Purchasers in federal (same day) funds by wire
transfer to an account designated by the Company for such purpose at a bank
reasonably acceptable to CSFBC at 9:30 A.M. (New York time), on March 24, 1999,
or at such other time not later than seven full business days thereafter as
CSFBC and the Company determine, such time being herein referred to as the
"CLOSING DATE", against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Securities. The Global Securities will
be made available for checking at the office of DTC or its designated custodian
at least 24 hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers. a. Each
Purchaser severally represents and warrants to the Company that it is an
"accredited investor" within the meaning of Regulation D under the Securities
Act.
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b. Each Purchaser severally acknowledges that the Offered Securities
have not been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S or pursuant to another exemption from the
registration requirements of the Securities Act. Each Purchaser severally
represents and agrees that it has offered and sold the Offered Securities, and
will offer and sell the Offered Securities only in accordance with Rule 903 or
Rule 144A under the Securities Act ("RULE 144A"). Accordingly, neither such
Purchaser nor its affiliates, nor any persons acting on its or their behalf,
have engaged or will engage in any directed selling efforts with respect to the
Offered Securities, and such Purchaser, its affiliates and all persons acting on
its or their behalf have complied and will comply with the offering restrictions
requirement of Regulation S and Rule 144A.
c. Each Purchaser severally represents and agrees that it and each
of its affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities except
for any such arrangements with the other Purchasers or affiliates of the other
Purchasers or with the prior written consent of the Company.
d. Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United States by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act, or by means of a public
offering within the meaning of Section 4(2) of the Securities Act, including,
but not limited to (A) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, or (B) any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising. Each Purchaser
severally agrees, with respect to resales made in reliance on Rule 144A of any
of the Offered Securities, to deliver either with the confirmation of such
resale or otherwise prior to settlement of such resale a notice to the effect
that the resale of such Offered Securities has been made in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Rule 144A.
e. Each of the Purchasers severally represents and agrees that (i)
it has not offered or sold and prior to the date six months after the date of
issue of the Offered Securities will not offer or sell any Offered Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the
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Offered Securities in, from or otherwise involving the United Kingdom; and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the Offered
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
5. Certain Agreements of the Company. The Company agrees with the
several Purchasers that:
a. The Company will advise CSFBC promptly of any proposal to amend
or supplement the Offering Document and will not effect such amendment or
supplementation without CSFBC's consent. If, at any time prior to the completion
of the resale of the Offered Securities by the Purchasers, any event occurs as a
result of which the Offering Document as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the Company promptly
will notify CSFBC of such event and promptly will prepare, at its own expense,
an amendment or supplement which will correct such statement or omission.
Neither CSFBC's consent to, nor the Purchasers' delivery to offerees or
investors of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 6.
b. The Company will furnish to CSFBC copies of any preliminary
offering circular, the Offering Document and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as
CSFBC reasonably requests and the Company will furnish to CSFBC on the date
hereof three copies of the Offering Document signed by a duly authorized Officer
of the Company, one of which will include the independent accountant's report
therein manually signed by such independent accountants. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company
will promptly furnish or cause to be furnished to CSFBC (and, upon request, to
each of the other Purchasers) and, upon request of holders and prospective
purchasers of the Offered Securities, to such holders and purchasers, copies of
the information required to be delivered to holders and prospective purchasers
of the Offered Securities pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto) in order to permit compliance with Rule
144A in connection with resales by such holders of the Offered Securities. The
Company will pay the expenses of printing and distributing to applicable persons
referred to above all such documents.
c. The Company will promptly from time to time take such action as
CSFBC may reasonably request to qualify the Offered Securities for sale under
the securities laws of such jurisdictions in the United States and Canada as
CSFBC may request and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdiction for as long as may
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be necessary to complete the resale of the Offered Securities by the Purchasers,
provided that the Company will not be required to qualify as a foreign
corporation, to file a general consent to service of process in any such state
or to take any action that would subject it to general taxation in any
jurisdiction.
d. For so long as the Offered Securities are in global form, the
Company will furnish to CSFBC and, upon request, to each of the other
Purchasers, as soon as practicable after the end of each fiscal year, a copy of
its annual report to stockholders for such year; and the Company will furnish to
CSFBC and, upon request, to each of the other Purchasers (i) as soon as
available, a copy of each report and any definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed to
stockholders and (ii) to furnish to the holders of the Offered Securities all
other documents specified in Section 7.04 of the Indenture, all in the manner so
specified. For a period of three years following the date of this Agreement, the
Company will furnish to CSFBC and, upon request, to each of the other
Purchasers, from time to time, such other information concerning the Company as
CSFBC or such other Purchasers may reasonably request, provided any material
nonpublic information received by CSFBC or the other Purchasers will be held in
confidence and not used in violation of any applicable law.
e. During the period of two years after the Closing Date, the
Company will, upon request, furnish to CSFBC, each of the other Purchasers and
any holder of Offered Securities a copy of the restrictions on transfer
applicable to the Offered Securities.
f. During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined in Rule
144 under the Securities Act) to, resell any of the Offered Securities that have
been reacquired by any of them.
g. During the period of two years after the Closing Date, the
Company will not be or become, an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act.
h. The Company will pay or cause to be paid all expenses incidental
to the performance of its obligations under this Agreement, the Indenture, the
Third Supplemental Indenture and the Registration Rights Agreement (except, in
the case of the Registration Rights Agreement, any underwriting discounts and
commissions and all other costs and expenses customarily borne by security
holders), including (i) the fees and expenses of the Trustee and its
professional advisers in connection with the Indenture, the Third Supplemental
Indenture and the Offered Securities; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the Offered
Securities and, as applicable, the Exchange Securities (as defined in the
Registration Rights Agreement), the preparation and printing of this Agreement,
the Registration Rights Agreement, the Offered Securities, the Indenture, the
Third Supplemental Indenture, the Offering Document and
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amendments and supplements thereto, and any other document relating to the
issuance, offer, sale and delivery of the Offered Securities and as applicable,
the Exchange Securities; (iii) the cost of listing the Offered Securities and
qualifying the Offered Securities for trading in The Portal(SM) Market
("PORTAL") and any expenses incidental thereto; (iv) any expenses (including
fees and disbursements of counsel) incurred in connection with qualification of
the Offered Securities or the Exchange Securities for sale under the laws of
such jurisdictions in the United States and Canada as CSFBC designates,
including the fees and disbursements of counsel for the Purchasers (not to
exceed $5,500 in the aggregate) in connection with such qualification and in
connection with the Blue Sky Memorandum; (v) any fees charged by investment
rating agencies for the rating of the Securities or the Exchange Securities;
(vi) the filing fees incident to, and fees and the disbursements of counsel to
the Purchasers in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Offered
Securities and (vii) the expenses incurred in distributing the Offering Document
(including any amendments and supplements thereto) to the Purchasers. It is
understood, however, that except as provided in this agreement, the Purchasers
will pay for their own expenses, including the fees of their counsel, any
transfer taxes on the resale of any of the Offered Securities by them, and any
advertising expenses connected with any offers they may make.
i. In connection with the offering, until CSFBC shall have notified
the Company and the other Purchasers of the completion of the resale of the
Offered Securities, neither the Company nor any of its affiliates has or will,
either alone or with one or more other persons, bid for or purchase for any
account in which it or any of its affiliates has a beneficial interest any
Offered Securities or attempt to induce any person to purchase any Offered
Securities; and neither it nor any of its affiliates will make bids or purchases
for the purpose of creating actual, or apparent, active trading in, or of
raising the price of, the Offered Securities.
j. During the period beginning on the date hereof and continuing to
and including the Closing Date, the Company will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any United States
dollar-denominated debt securities issued or guaranteed by the Company and
having a maturity of more than one year from the date of issue. The Company will
not at any time offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any securities under circumstances where such offer,
sale, pledge, contract or disposition would cause the exemption afforded by
Section 4(2) of the Securities Act or the safe harbor of Regulation S thereunder
to cease to be applicable to the offer and sale of the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The obligations
of the several Purchasers to purchase and pay for the Offered Securities will be
subject in the sole discretion of the Purchasers to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of the Closing Date, true and correct, the condition that the Company
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shall have performed all of its obligations hereunder theretofore to be
performed and to the following additional conditions precedent:
a. On the Closing Date KPMG LLP shall have furnished to the
Purchasers a letter, dated the Closing Date, substantially in the form
attached hereto as Annex IV);
b. Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any material adverse change in the existing
financial, political or economic conditions in the United States or
elsewhere which, in the judgment of a majority in interest of the
Purchasers including CSFBC, would materially and adversely affect the
financial markets or the market for the Offered Securities and other debt
securities; (ii)(A) any downgrading in the rating accorded any of the
Company's debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g) under the Securities Act, and (B) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities; (iii) any suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (iv) any suspension
in trading in the Company's securities on the New York Stock Exchange; (v)
a general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (vi) any outbreak or escalation
of hostilities involving the United States, or the declaration by the
United States of a national emergency or war if, in the judgment of a
majority in interest of the Purchasers including CSFBC, the effect of any
such outbreak, escalation, declaration, or emergency makes it impractical
or inadvisable to proceed with completion of the offering or sale or
delivery of and payment for the Offered Securities on the terms and in the
manner contemplated in the Offering Document.
c. The Purchasers shall have received an opinion, dated the Closing
Date, of Xxxxx, Day, Xxxxxx & Xxxxx, counsel for the Company, in
substantially the form attached hereto as Annex I.
d. The Purchasers shall have received an opinion, dated the Closing
Date, of the General Counsel or Deputy General Counsel of the Company in
substantially the form attached hereto as Xxxxx XX.
e. The Purchasers shall have received an opinion, dated the Closing
Date, from Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Purchasers, in
substantially the form attached hereto as Xxxxx XXX.
f. The Purchasers shall have received a certificate, dated the
Closing Date, signed on behalf of the Company by the President or any Vice
President and a principal financial or
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accounting officer of the Company in which such officers state on behalf
of the Company that the representations and warranties of the Company in
this Agreement are true and correct, that the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that, subsequent
to the date of the most recent financial statements in the Exchange Act
Reports there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Offering Document or as described in such certificate.
g. (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Offering Document as first
amended or supplemented any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Offering Document as amended or supplemented, and (ii) since the
respective dates as of which information is given in the Offering Document
as amended or supplemented there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Document as amended or supplemented, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Purchasers so
material and adverse as to make it impracticable or inadvisable to proceed
with the offering or the delivery of the Offered Securities on the terms
and in the manner contemplated in the Offering Document as amended or
supplemented.
The Company will furnish the Purchasers with such conformed copies
of such opinions, certificates, letters and documents as the Purchasers
reasonably request. CSFBC may in its sole discretion waive on behalf of the
Purchasers compliance with any conditions to the obligations of the Purchasers
hereunder.
7. Indemnification and Contribution. a. The Company will indemnify
and hold harmless each Purchaser against any losses, claims, damages or
liabilities, joint or several, to which such Purchaser may become subject, under
the Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Offering Document, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were
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made, not misleading, including any losses, claims, damages or liabilities
arising out of or based upon the Company's failure to perform its obligations
under Section 5(a) of this Agreement and will reimburse each Purchaser for any
legal or other expenses reasonably incurred by such Purchaser in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through CSFBC specifically for use therein.
b. Each Purchaser will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Purchaser
through CSFBC specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim damage, liability or action as
such expenses are incurred, provided, however, that the Purchasers shall not be
liable for any losses, claims, damages or liabilities arising out of or based
upon the Company's failure to perform its obligations under Section 5(a) of this
Agreement.
c. Promptly after receipt by an indemnified party under this Section
7 of notice in writing of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in
14
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connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened action
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and does not
include a statement as to and an admission of fault, culpability or failure to
act by or on behalf of any indemnified party.
d. If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Purchasers on the other from the offering of
the Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total discounts and commissions received by the
Purchasers from the Company under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the Offered
Securities purchased by it were resold exceeds the amount of any damages which
such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective purchase obligations and not joint.
e. The obligations of the Company and the Purchasers under this
Section 7 shall be in addition to any liability which the Company or the
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to the partners, directors and officers of the Company or such
Purchaser and each person, if any, who controls the Company or such Purchaser
within the meaning of Section 15 of the Securities Act.
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15
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder and the aggregate
principal amount of Offered Securities that such defaulting Purchaser or
Purchasers agreed but failed to purchase does not exceed 10% of the total
principal amount of the Offered Securities, CSFBC may make arrangements
satisfactory to the Company for the purchase of such Offered Securities by other
persons, including any of the Purchasers, but if no such arrangements are made
by the Closing Date, the non-defaulting Purchasers shall be obligated severally,
in proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Purchasers agreed but failed to purchase. If any
Purchaser or Purchasers so default and the aggregate principal amount of the
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total principal amount of the Offered Securities and arrangements
satisfactory to CSFBC and the Company for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Purchaser or the Company, except as provided in Section 9. As
used in this Agreement, the term "Purchaser" includes any person substituted for
a Purchaser under this Section 8. Nothing herein will relieve a defaulting
Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Purchasers is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Purchasers pursuant to Section 7 shall remain
in effect. If the purchase of the Offered Securities by the Purchasers is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8, the Company will reimburse the Purchasers for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities and the Company shall then be under no further liability to any
Purchaser except as provided in Sections 5(h) and 7 hereof.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to
the Purchasers, c/o Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx
Xxxxxx, Xxx Xxxx, X.X. 10010-3629, Attention: Transactions Advisory Group, or,
if sent to the Company, will be mailed, delivered or telegraphed
16
16
and confirmed to it at 0 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000, Attention:
Chief Financial Officer and Secretary; provided, however, that any notice to a
Purchaser pursuant to Section 7 will be mailed, delivered or telegraphed and
confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and to the
extent provided in Sections 7 and 9 hereof, the officers and directors of the
Company and the controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder, except that holders of
Offered Securities shall be entitled to enforce the agreements for their benefit
contained in the second and third sentences of Section 5(b) hereof against the
Company as if such holders were parties thereto.
12. Representation of Purchasers. You will act for the several
Purchasers in connection with this purchase, and any action under this Agreement
taken by you will be binding upon all the Purchasers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
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If the foregoing is in accordance with the Purchasers'
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Purchasers in accordance with its terms.
Very truly yours,
FEDERATED DEPARTMENT STORES, INC.
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, CFO
and Treasurer
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
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CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
XXXXX SECURITIES INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
PNC CAPITAL MARKETS, INC.
Acting on behalf of themselves
and as the Representative
of the several Purchasers
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
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SCHEDULE A
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
INITIAL PURCHASER OFFERED SENIOR OFFERED SENIOR
----------------- -------------- --------------
NOTES DEBENTURES
-------------- --------------
CREDIT SUISSE FIRST BOSTON CORPORATION $ 168,000,000 $ 192,000,000
XXXXXXX XXXXX XXXXXX INC. 122,500,000 140,000,000
CHASE SECURITIES INC. 26,250,000 30,000,000
NATIONSBANC XXXXXXXXXX SECURITIES LLC 26,250,000 30,000,000
PNC CAPITAL MARKETS, INC. 7,000,000 8,000,000
-------------- --------------
Total ............... $ 350,000,000 $ 400,000,000
============== ==============
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SCHEDULE B
o Federated's Annual Report on form 10-K for the fiscal year ended
January 31, 1998;
o Federated's Quarterly Reports on Form 10-Q for the fiscal
quarters ended May 2, 1998, August 1, 1998 and October 31, 1998;
and
o Federated's Current Reports on form 8-K, dated August 19, 1998,
September 2, 1998, December 3, 1998 and March 18, 1999.
21
ANNEX I
March 24, 1999
Credit Suisse First Boston Corporation
Xxxxxxx Xxxxx Xxxxxx
Xxxxx Securities, Inc.
NationsBanc Xxxxxxxxxx Securities LLC
PNC Capital Markets, Inc.
c/o Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: $ Aggregate Principal Amount of % Senior Notes due
March __, 2009 and $ __________ Aggregate Principal Amount
of ___% Senior Debentures due March __, 2029 of Federated
Department Stores, Inc.
Ladies and Gentlemen:
We have acted as counsel for Federated Department Stores, Inc. (the
"Company") in connection with the sale of $ aggregate principal amount of the
Company's % Senior Notes due 2009 and $________ aggregate principal amount of
___% Senior Debentures due 2029 (the "Offered Securities") pursuant to the
Purchase Agreement, dated March 18, 1999 (the "Purchase Agreement"), among you
and the Company. The Offered Securities are being issued pursuant to the
Indenture, dated as of September 10, 1997 (the "Base Indenture"), between the
Company and Citibank, N.A., as trustee (the "Trustee"), as supplemented by the
Third Supplemental Indenture, dated as of March 24, 1999, between the Company
and the Trustee (the "Supplemental Indenture" and, together with the Base
Indenture, the "Indenture"). This opinion is furnished to you pursuant to
Section 6(c) of the Purchase Agreement. Except as otherwise defined herein,
terms used herein with initial capital letters are so used with the respective
meanings ascribed thereto in the Purchase Agreement.
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Credit Suisse First Boston Corporation, et al. March 24, 1999
We have examined such documents, records and matters of law as we
have deemed necessary for purposes of this opinion. Based thereupon, we are of
the opinion that:
1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with the
requisite corporate power and authority to own its properties and conduct its
business as described in the Offering Document as amended or supplemented prior
to the date hereof;
2. The Purchase Agreement has been duly authorized, executed, and
delivered by the Company;
3. The Registration Rights Agreement has been duly authorized,
executed, and delivered by the Company and, assuming the Registration Rights
Agreement is the valid and binding obligation of the Purchasers, is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be subject to (a)
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and (b) general principles of equity,
regardless of whether enforceability is considered in a proceeding in equity or
at law;
4. The Offered Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and binding obligations
of the Company enforceable against the Company in accordance with their terms
and are entitled to the benefits provided by the Indenture, except as the
enforceability of the Offered Securities and the Indenture may be limited by
bankruptcy, insolvency, reorganization, and other laws of general applicability
relating to or affecting creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law; and the Offered Securities, the Registration Rights Agreement
and the Indenture conform in all material respects to the descriptions thereof
in the Offering Document, as amended or supplemented prior to the date hereof;
5. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming that the Indenture is the valid and binding obligation
of the Trustee, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
and other laws of general applicability relating to or affecting creditors'
rights and to general principles of equity, regardless of whether such
enforceability is considered in
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Credit Suisse First Boston Corporation, et al. March 24, 1999
a proceeding in equity or at law; and the Base Indenture has been duly qualified
under the Trust Indenture Act;
6. No consent, approval, authorization, order, registration or
qualification of or with any United States court or governmental agency or body
is required for the issue and sale of the Offered Securities or the consummation
by the Company of the transactions contemplated by the Purchase Agreement, the
Registration Rights Agreement or the Indenture, except such as may be required
under the Securities Act, the Exchange Act, and the Trust Indenture Act, and
such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Offered Securities by the
Purchasers and except for the order of the Commission declaring the Exchange
Offer Registration Statement or the Shelf Registration Statement effective;
7. The statements set forth in the Offering Document, as amended or
supplemented prior to the date hereof, under the caption "Description of
Securities" and under the caption "Plan of Distribution," insofar as they
purport to summarize the provisions of the laws and agreements to which the
Company or any of its affiliates is a party referred to therein, constitute
accurate summaries of such provisions in all material respects;
8. The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
9. The documents incorporated by reference in the Offering Document
or any amendment or supplement thereto made by the Company prior to the date
hereof (other than the financial statements and related schedules and other
financial or statistical data contained therein, as to which we express no
opinion), when they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder; and
10. No registration of the Offered Securities under the Securities
Act of 1933, as amended, and no qualification of the Indenture under the Trust
Indenture Act of 1939, is required for the offer and sale of the Offered
Securities by the Company to the Purchasers or the reoffer and resale of the
Offered Securities by the Purchasers to the initial purchasers therefrom solely
in the manner contemplated by the Offering Document, the Purchase Agreement, and
the Indenture.
We have participated in the preparation of the Offering Document
(but not the documents incorporated by reference into the Offering Document)
and, based on such participation, no facts have come to our attention which
cause us to believe that, as of the date hereof, the Offering
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Credit Suisse First Boston Corporation, et al. March 24, 1999
Document (including the Exchange Act Documents incorporated by reference
therein), as amended or supplemented prior to the date hereof (other than the
financial statements and related schedules and other financial data contained or
incorporated by reference therein, as to which we express no belief), contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. However,
we have not independently verified, and we assume no responsibility for, the
accuracy, completeness, or fairness of the Offering Document as amended or
supplemented prior to the date hereof (including any documents incorporated or
deemed to be incorporated by reference therein) except to the extent of the
opinion expressed in paragraph 7 hereof and for purposes of expressing the
beliefs referred to in this paragraph we have made inquiry only of the lawyers
who are members of or employed by this Firm involved in the preparation of the
Offering Document.
We express no opinion as to the validity, binding effect, or
enforceability of any provision of the Registration Rights Agreement or any
related provisions of the Indenture that requires or relates to payment of any
interest at a rate or in an amount which a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty
or a forfeiture or any provision of the Registration Rights Agreement that
requires or relates to indemnification or contribution.
In rendering the foregoing opinions, we have assumed (i) the due
authorization, execution, and delivery of the Purchase Agreement by or on behalf
of the Purchasers, (ii) the authenticity of all documents represented to us to
be originals, the conformity to original documents of all copies of documents
submitted to us, the accuracy and completeness of all corporate records made
available to us by the Company, (iii) that the signatures on all documents
examined by us are genuine and that where any such signature purports to have
been made in a corporate, governmental, fiduciary, or other capacity, the person
who affixed such signature to such document had authority to do so, and (iv)
that the representations of the Purchasers and the Company in the Purchase
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Credit Suisse First Boston Corporation, et al. March 24, 1999
Agreement are true and correct and that the statements and certificates
described in the following paragraph are accurate in all material respects at
the date of this opinion.
In rendering the foregoing opinions, we have relied, as to certain
matters of fact, without any independent investigation, inquiry, or
verification, upon statements or certificates of representatives of the Company
and of the Trustee under the Indenture and upon statements or certificates of
public officials. This opinion is limited to the federal laws of the United
States of America, the laws of the State of New York, and the General
Corporation Law of the State of Delaware.
This opinion is limited to the matters expressly stated herein, and
no opinion is implied or may be inferred beyond the matters expressly stated
herein. This opinion is furnished by us, as counsel for the Company, to you
solely for your benefit and solely with respect to the purchase by you of the
Offered Securities from the Company, and may not be relied upon by any other
person for any purpose.
Very truly yours,
Jones, Day, Xxxxxx & Xxxxx
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26
ANNEX II
March 24, 1999
Credit Suisse First Boston Corporation
Xxxxxxx Xxxxx Xxxxxx
Xxxxx Securities, Inc.
NationsBanc Xxxxxxxxxx Securities LLC
PNC Capital Markets, Inc.
c/o Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: $__________ Aggregate Principal Amount of ___% Senior Notes due
March __, 2009 and $__________ Aggregate Principal Amount
of ___% Senior Debentures due March __, 2029
Ladies and Gentlemen:
As General Counsel of Federated Department Stores, Inc. (the
"Company"), I have acted as counsel for the Company in connection with the sale
of $ aggregate principal amount of the Company's % Senior Notes due 2009 and
$________ aggregate principal amount of the Company's ___% Senior Debentures
2029 (the "Offered Securities") pursuant to the Purchase Agreement, dated March
18, 1999 (the "Purchase Agreement"), between you and the Company. This opinion
is furnished to you pursuant to Section 6(d) of the Purchase Agreement. The
Offered Securities are being issued pursuant to the Indenture, dated as of
September 10, 1997 (the "Base Indenture"), between the Company and Citibank,
N.A., as trustee (the "Trustee"), as supplemented by the Third Supplemental
Indenture, dated as of March 24, 1999 (the "Supplemental Indenture" and,
collectively with the Base Indenture, the "Indenture") between the Company and
the Trustee.
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Credit Suisse First Boston Corporation, et al. March 24, 1999
Except as otherwise defined herein, terms used herein with initial capital
letters are so used with the respective meanings ascribed thereto in the
Purchase Agreement.
I have examined such documents, records and matters of law as I have
deemed necessary for purposes of this opinion. Based thereupon, I am of the
opinion that:
1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Offering Document as amended or supplemented prior to the date
hereof;
2. The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each other
jurisdiction in which it is required to be so qualified, except for such
failures to be so qualified and in good standing as individually or in the
aggregate would not have a Material Adverse Effect;
3. Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation; all of the issued shares of capital
stock of each such Significant Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable, and (except as otherwise
disclosed in the Offering Document as amended or supplemented prior to the date
hereof) are owned directly or indirectly by the Company, free and clear of all
material liens, encumbrances, equities or claims; each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, except where the
failure to be duly incorporated, validly existing and in good standing would
not, individually or in the aggregate, have a Material Adverse Effect; and all
of the issued shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims (except as otherwise disclosed in the
Offering Document as amended or supplemented prior to the date hereof or where,
individually or in the aggregate, the failure to have been duly and validly
authorized and issued, to be fully paid and non-assessable or to be owned
directly or indirectly by the Company free and clear of liens, encumbrances,
equities or claims would not have a Material Adverse Effect);
4. To my knowledge, except as otherwise disclosed in the Offering
Document as amended or supplemented prior to the date hereof, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, is reasonably likely individually or in the aggregate to
have a Material Adverse Effect; and, to my knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;
5. The issue and sale of the Offered Securities and the compliance
by the Company with all of the provisions of the Offered Securities, the
Indenture, the Registration Rights
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Credit Suisse First Boston Corporation, et al. March 24, 1999
Agreement and the Purchase Agreement and the consummation of the transactions
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, sale/leaseback agreement, loan agreement or
other financing agreement or any other agreement or instrument known to me to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, except for such conflicts,
breaches, violations and defaults as individually or in the aggregate would not
have a Material Adverse Effect, nor will such action result in any material
violation of the provisions of the Certificate of Incorporation or By-laws of
the Company or (a) any material statute, order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
its Significant Subsidiaries or any of their properties or (b) any statute,
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties, except, with respect to this clause (b) only, for such violations,
defaults and failures as individually or in the aggregate would not have a
Material Adverse Effect it being understood that no opinion is expressed in this
paragraph 5 with respect to any matter governed by the Securities Act, the
Exchange Act, the Trust Indenture Act or any state's or other jurisdiction's
securities or Blue Sky laws;
6. Neither the Company nor any of its Subsidiaries is (a) in
violation of its certificate of incorporation or by-laws (or comparable
governing documents) or (b) in default in the performance or observance of any
material obligation, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument known to
me after due inquiry to which it is a party or by which it or any of its
properties may be bound, except for such violations and defaults as individually
or in the aggregate would not have a Material Adverse Effect;
7. The Purchase Agreement has been duly authorized, executed and
delivered by the Company;
8. The Offered Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and binding obligations
of the Company enforceable against the Company in accordance with their terms
and are entitled to the benefits provided by the Indenture, except as the
enforceability of the Offered Securities and the Indenture may be limited by
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law; and the Offered Securities, the Registration Rights Agreement
and the Indenture conform in all material respects to the descriptions thereof
in the Offering Document, as amended or supplemented prior to the date hereof;
9. The Registration Rights Agreement has been duly authorized,
executed, and delivered by the Company and, assuming that the Registration
Rights Agreement is the valid and legally binding obligation of the Purchasers,
is a valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof may be
subject to (a) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium,
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Credit Suisse First Boston Corporation, et al. March 24, 1999
and other similar laws now or hereafter in effect relating to or affecting
enforcement of creditors' rights generally and (b) general principles of equity,
regardless of whether enforceability is considered in a proceeding at law or in
equity;
10. The Indenture has been duly authorized, executed and delivered
by the Company and, assuming that the Indenture is the valid and binding
obligation of the Trustee, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law; and the
Base Indenture has been duly qualified under the Trust Indenture Act;
11. No consent, approval, authorization, order, registration or
qualification of or with any United States court or governmental agency or body
is required for the issue and sale of the Offered Securities or the consummation
by the Company of the transactions contemplated by the Purchase Agreement, the
Registration Rights Agreement or the Indenture except such as may be required
under the Securities Act, the Exchange Act, and the Trust Indenture Act and such
consents, approvals, authorizations, orders, registrations or qualifications as
may be required under the state securities or Blue Sky laws in connection with
the purchase and distribution of the Offered Securities by the Purchasers and
except for the order of the Commission declaring the Exchange Offer Registration
Statement or the Shelf Registration Statement effective;
12. The statements set forth in the Offering Document, as amended or
supplemented prior to the date hereof, under the caption "Description of
Securities" and under the caption "Plan of Distribution," insofar as they
purport to summarize the provisions of the laws and documents referred to
therein, constitute accurate summaries of such provisions in all material
respects;
13. The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
14. The documents incorporated by reference in the Offering Document
or any amendment or supplement thereto made by the Company prior to the date
hereof (other than the financial statements and related schedules and other
financial or statistical data contained or incorporated by reference therein, as
to which I express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder; and no
facts have come to my attention that cause me to believe that any of the
documents referred to in this paragraph 14, when such documents were so filed,
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed, not
misleading. However, I have not independently verified, and I assume no
responsibility, for the accuracy, completeness or fairness
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Credit Suisse First Boston Corporation, et al. March 24, 1999
of the Offering Document, as amended or supplemented (including any documents
incorporated by reference therein), except to the extent of the opinion
expressed in paragraph 12;
15. I do not know of any exhibits to any documents incorporated by
reference into the Offering Document which are required to be filed which have
not been so filed; and
16. It is not necessary in connection with (i) the offer, sale and
delivery of the Offered Securities by the Company to the several Purchasers
pursuant to the Purchase Agreement or (ii) the resales of the Offered Securities
by the several Purchasers in the manner contemplated by the Purchase Agreement,
to register the Offered Securities under the Securities Act or to qualify an
indenture in respect thereof under the Trust Indenture Act.
In rendering the opinions in paragraphs 8 through 14 and 16 hereof,
I have relied solely on the opinion of Xxxxx, Day, Xxxxxx & Xxxxx furnished to
you pursuant to Section 6(c) of the Purchase Agreement.
I express no opinion as to the validity, legally binding effect or
enforceability of any provision of the Registration Rights Agreement or any
related provisions of the Indenture that requires or relates to payment of any
interest at a rate or in an amount which a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty
or a forfeiture or any provision of the Registration Rights Agreement that
requires or relates to indemnification or contribution.
In rendering this opinion, I have assumed that (i) the signatures on
all documents examined by me are genuine and that, where any such signature
purports to have been made in a corporate, governmental, fiduciary or other
capacity, the person who affixed such signature to such document had authority
to do so and (ii) the representations of the Purchasers in the Purchase
Agreement are true and correct and the statements and certificates described in
the following paragraph are accurate in all material respects at the date of
this opinion.
I am a member of the bar of the State of Ohio, and have not been
admitted to the bar of any other jurisdiction. In rendering the opinions set
forth herein, my examination of matters of law has been limited to the federal
laws of the United States of America, the corporation laws of the States of
Delaware and Ohio, and the laws of the State of New York. In rendering the
opinions in paragraphs 1-13 and paragraphs 15 and 16, I have relied, as to
certain matters of fact, without any independent investigation, inquiry or
verification, upon statements or certificates of representatives of the Company
and of the Trustee under the Indenture and upon statements or certificates of
public officials.
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Credit Suisse First Boston Corporation, et al. March 24, 1999
This opinion is furnished by me, as General Counsel of the Company,
to you solely for your benefit and solely with respect to the purchase by you of
the Offered Securities from the Company, upon the understanding that I am not
assuming hereby any professional responsibility to any other person whatsoever.
Very truly yours,
Xxxxxx X. Xxxxxxxxx
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ANNEX III
March 24, 1999
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX
XXXXX SECURITIES INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
PNC CAPITAL MARKETS, INC.
c/o Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as your counsel in connection with the purchase by you
of $_____________ aggregate principal amount of ___ % Senior Notes due March __,
2009 and $________ aggregate principal amount of ___% Senior Debentures due
March __, 2029 (the "Securities") of Federated Department Stores, Inc., a
Delaware corporation (the "Company"), pursuant to the Purchase Agreement dated
March 18, 1999 (the "Purchase Agreement") among Credit Suisse First Boston
Corporation, Xxxxxxx Xxxxx Xxxxxx, Xxxxx Securities, Inc., NationsBanc
Xxxxxxxxxx Securities LLC and PNC Capital Markets, Inc. as initial purchasers
(the "Initial Purchasers") and the Company.
We have examined the Offering Circular dated March __, 1999 relating
to the sale of the Securities (the "Offering Circular"), which incorporates by
reference the Annual Report on Form 10-K of the Company for the fiscal year
ended January 31, 1998, the Quarterly Reports on Form 10-Q of the Company for
the fiscal quarters ended May 2, 1998, August 1, 1998 and October 31, 1998, the
Current Reports on Form 8-K of the Company, dated August 19, 1998, September 2,
1998, December 3, 1998 and March 18, 1999, (the "Exchange Act Documents"), each
as filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); the Indenture dated as of September 10, 1997, as supplemented by the
Third Supplemental Indenture dated as of March 24, 1999 (the "Indenture")
between the Company and Citibank, N.A., as Trustee (the "Trustee") relating to
the Securities; the Purchase Agreement; and the Registration
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2
Rights Agreement dated as of March 18, 1999 (the "Registration Rights
Agreement") among the Company and the Initial Purchasers. In addition, we have
examined, and have relied as to matters of fact upon, the documents delivered to
you at the closing, and upon originals or duplicates or certified or conformed
copies, of such corporate records, agreements, documents and other instruments
and such certificates or comparable documents of public officials and of
officers and representatives of the Company, and have made such other
investigations, as we have deemed relevant and necessary in connection with the
opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of
Delaware.
2. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming that the Indenture is the valid and legally
binding obligation of the Trustee, constitutes a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms.
3. The Securities have been duly authorized, executed and issued by
the Company and, assuming due authentication thereof by the Trustee and
upon payment and delivery in accordance with the Purchase Agreement, will
constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture.
4. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and, assuming that the Registration
Rights Agreement is the valid and legally binding obligation of the
Initial Purchasers, constitutes a valid and legally binding obligation of
the Company, enforceable against the Company in accordance with its terms.
5. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
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3
6. The statements made in the Offering Document under the caption
"Description of Securities," insofar as they purport to constitute
summaries of certain terms of documents referred to therein, constitute
accurate summaries of the terms of such documents in all material
respects.
7. No registration under the Securities Act of 1933, as amended, of
the Securities and no qualification of the Indenture under the Trust
Indenture Act of 1939, as amended, is required for the offer and sale of
the Securities by the Company to the Initial Purchasers or the reoffer and
resale of the Securities by the Initial Purchasers to the initial
purchasers therefrom solely in the manner contemplated by the Offering
Circular, the Purchase Agreement and the Indenture.
Our opinions in paragraphs 2, 3 and 4 above are subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing. Our opinion in paragraph 4 is further limited by considerations of
public policy.
We express no opinion as to the validity, legally binding effect or
enforceability of any provision of the Registration Rights Agreement or any
related provisions of the Indenture that requires or relates to payment of any
interest at a rate or in an amount which a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty
or a forfeiture. In addition, we express no opinion as to the validity, legally
binding effect or enforceability of the specific performance provisions of the
Registration Rights Agreement.
All legal proceedings taken by the Company in connection with the
offering of the Securities, and the legal opinions, dated the date hereof,
rendered to you by Xxxxxx X. Xxxxxxxxx, General Counsel, Senior Vice President
and Secretary of the Company, and Xxxxx, Day, Xxxxxx & Xxxxx, counsel for the
Company, pursuant to the Purchase Agreement, are in form satisfactory to us.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Offering Circular or the
Exchange Act Documents and take no responsibility therefor, except as and to the
extent set forth in paragraph 6 above. In the course of the preparation by the
Company of the Offering Circular (excluding the Exchange Act
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Documents), we participated in conferences with certain officers and employees
of the Company, with representatives of KPMG LLP and with counsel to the
Company. We did not participate in the preparation of the Exchange Act Documents
or review the Exchange Act Documents prior to their filing with the Securities
and Exchange Commission. Based upon our examination of the Offering Circular and
the Exchange Act Documents, our investigations made in connection with the
preparation of the Offering Circular (excluding the Exchange Act Documents) and
our participation in the conferences referred to above, we have no reason to
believe that Offering Circular (including the Exchange Act Documents) contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that we express
no belief with respect to the financial statements or other financial data
contained or incorporated by reference in Offering Circular or the Exchange Act
Documents.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law.
This opinion letter is rendered to you in connection with the above
described transactions. This opinion letter may not be relied upon by you for
any other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
XXXXXXX XXXXXXX & XXXXXXXX
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