EXHIBIT 1
EXECUTION COPY
Federated Department Stores, Inc.
7.45% Senior Debentures due 2017
6.79% Senior Debentures due 2027
Underwriting Agreement
July 9, 1997
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Federated Department Stores, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to you (the "Underwriters") an aggregate of $300,000,000
principal amount of 7.45% Senior Debentures due 2017 (the "2017 Debentures") and
an aggregate of $250,000,000 principal amount of 6.79% Senior Debentures due
2027 (the "2027 Debentures" and, together with the 2017 Debentures, the
"Securities").
1. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 33-64973) in
respect of the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to the Underwriters without exhibits thereto, but with
documents incorporated by reference in the prospectus contained therein,
have been declared effective by the Commission in such form; no other
document with respect to such registration statement or document
incorporated by reference therein has heretofore been filed or transmitted
for filing with the Commission (other than prospectuses filed or to be
filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act"), each
in the form heretofore delivered or to be delivered to the Underwriters);
and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424(a) under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement, including
all exhibits thereto and the documents incorporated
by reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective but
excluding Form T-1, each as amended at the time such part of the
registration statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the
Securities, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of
this Agreement, being hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Sections 13(a)
or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement;
and any reference to the Prospectus as amended or supplemented shall be
deemed to refer to the Prospectus as amended or supplemented in relation
to the Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as of
the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein,or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by the
Underwriters through Goldman, Sachs & Co. expressly for use in the
Prospectus as amended or supplemented;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
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make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by the Underwriters through Goldman, Sachs & Co.
expressly for use in the Prospectus as amended or supplemented;
(d) There has not been any material adverse change in the business,
financial position or results of operations of the Company and its
subsidiaries, taken as a whole, from the respective dates as of which
information is given in the Registration Statement and the Prospectus.
Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements included or incorporated
by reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus as amended or supplemented; and, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other than
issuances and forfeitures of stock in connection with equity-based
compensation plans of executive officers of the Company or as set forth or
contemplated in the Prospectus as amended or supplemented), or any
increase in excess of $25,000,000 in long-term debt of the Company or any
of its subsidiaries otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented, or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented;
(e) The Company and its subsidiaries have good and marketable title
to all real property and title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except
such as are disclosed in the Prospectus as amended or supplemented, or as
do not, individually or in the aggregate, have a material adverse effect
on the business, financial position or results of operations or reasonably
foreseeable prospects of the Company and its subsidiaries taken as a whole
(a "Material Adverse Effect"); and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as would
not, individually or in the aggregate, have a Material Adverse Effect;
(f) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus as amended or
supplemented, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it is required to be so qualified, except
where failure to be so qualified and in good standing individually or in
the aggregate would not have a Material Adverse Effect; and each
Significant Subsidiary (as such term is defined in Rule 405 under the Act)
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, except where failure to be duly
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incorporated, validly existing and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect;
(g) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; all of the issued shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable and (except as otherwise disclosed in
the Prospectus as amended or supplemented) are owned directly or
indirectly by the Company, free and clear of all material liens,
encumbrances, equities or claims; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (except as otherwise disclosed in the
Prospectus as amended or supplemented or where, individually or in the
aggregate, the failure to have been duly and validly authorized and
issued, to be fully paid and non-assessable and to be owned directly or
indirectly by the Company free and clear of liens, encumbrances, equities
or claims would not have a Material Adverse Effect);
(h) The 2017 Debentures have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture, dated as of December 15, 1994 (the "Indenture"), as
supplemented by the Eighth Supplemental Indenture dated as of July 14,
1997 (the "Eighth Supplemental Indenture"), between the Company and State
Street Bank and Trust Company (successor to The First National Bank of
Boston), as Trustee (the "Trustee"), under which the 2017 Debentures are
to be issued; the 2027 Debentures 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 Ninth Supplemental
Indenture dated as of July 14, 1997 (the "Ninth Supplemental Indenture",
and, together with the Eighth Supplemental Indenture, the "Supplemental
Indentures"), between the Company and the Trustee, under which the 2027
Debentures are to be issued; the Indenture has been duly authorized,
executed and delivered and duly qualified under the Trust Indenture Act;
the Indenture constitutes (and the Supplemental Indentures, when executed
and delivered by the Company and the Trustee, will constitute) a valid and
legally binding instrument, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, and other laws of general applicability
relating to or affecting creditors' rights and to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law; and the Securities and the Indenture will
conform in all material respects to the descriptions thereof in the
Prospectus as amended or supplemented;
(i) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, as
supplemented by the Supplemental Indentures, 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
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subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any
of its subsidiaries is subject, except for such conflicts, breaches,
violations and defaults as individually or in the aggregate would not have
a Material Adverse Effect, nor will such action result in any material
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any material statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its Significant Subsidiaries or any of their properties, nor
will such action result in any violation of the provisions of any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties except for such violations as individually or in
the aggregate would not have a Material Adverse Effect; and no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the issue
and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, as
supplemented by the Supplemental Indentures, except the registration of
the Securities under the Act, the Exchange Act and such as have been
obtained under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(j) Except for such of the following violations, defaults and
failures as individually or in the aggregate would not have a Material
Adverse Effect, neither the Company nor any of its subsidiaries (i) is in
violation of its certificate of incorporation or by-laws (or comparable
governing documents), (ii) is in default, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound, or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court decree to which it or
its property is subject, or (iv) has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business;
(k) The statements set forth in the Prospectus as amended or
supplemented under the captions "Description of Debt Securities" and
"Description of the Debentures", insofar as they purport to constitute a
summary of the terms of the Securities, and under the captions "Plan of
Distribution" and "Underwriting", insofar as they purport to describe the
provisions of the laws and the documents referred to therein, constitute
accurate summaries of the terms of such documents in all material
respects;
(l) Other than as set forth in the Prospectus as amended or
supplemented, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment
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company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
(n) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
(a) at a purchase price of 98.775% of the principal amount thereof, plus accrued
interest, if any, from July 14, 1997 to the Time of Delivery hereunder,the
principal amount of 2017 Debentures set forth opposite the name of such
Underwriter in Schedule I hereto and (b) at a purchase price of 99.391% of the
principal amount thereof, plus accrued interest, if any, from July 14, 1997 to
the Time of Delivery hereunder,the principal amount of 2027 Debentures set forth
opposite the name of such Underwriter in Schedule I hereto.
3. Upon the authorization by the Underwriters of the release of the
Securities, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
4. (a) The 2017 Debentures and the 2027 Debentures to be purchased
by each Underwriter hereunder will each be represented by one or more definitive
global securities in book-entry form which will be deposited by or on behalf of
the Company with The Depository Trust Company ("DTC") or its designated
custodian. The Company will deliver the Securities to Goldman, Sachs & Co., for
the account of each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor in Federal (same-day) funds by wire
transfer to an account designated by the Company for such purpose, by causing
DTC to credit the Securities to the account of Goldman, Sachs & Co. at DTC. The
Company will cause the certificates representing the Securities to be made
available to Goldman, Sachs & Co. for checking at least twenty-four hours prior
to the Time of Delivery (as defined below) at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on July 14, 1997 or
such other time and date as Goldman, Sachs & Co. and the Company may agree upon
in writing. Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(j) hereof, will be delivered at the offices
of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New
York 10017 (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 2:00 p.m., New York City time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
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5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus as amended or supplemented in a form
approved by the Underwriters and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by Rule
424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus after the date of this Agreement and prior to the
Time of Delivery for which shall be disapproved by the Underwriters
promptly after reasonable notice thereof; to advise the Underwriters
promptly of such amendment or supplement after such Time of Delivery and
furnish the Underwriters with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities, and
during such same period to advise the Underwriters promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed with
the Commission, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating to
the Securities, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement
or Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or
suspending any such qualification, to promptly use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Securities for offering
and sale under the securities laws of such jurisdictions in the United
States as the Underwriters may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Securities, provided that in connection therewith the Company shall
not be required to qualify as a foreign corporation, to file a general
consent to service of process in any jurisdiction or to take any action
that would subject it to general taxation in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the business day
next succeeding the date of this Agreement and from time to time
thereafter, to furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities in New York City as the
Underwriters may reasonably request, and, if the delivery of a prospectus
is required at any time prior to the expiration of nine months after the
time of issue of the Prospectus in connection with the offering or sale of
the Securities and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement such Prospectus
or to file under the Exchange Act any document incorporated by reference
in such Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture
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Act, to notify the Underwriters and, upon your request and subject to your
approval, to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as the
Underwriters may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with sales
of any of the Securities at any time nine months or more after the time of
issue of the Prospectus, upon request of such Underwriter but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as
many copies as such Underwriter may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 9(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158, in which case this Section 5(d) shall not
be construed to require the Company to file any report referred to in Rule
158 prior to the time at which such report is otherwise due);
(e) During the period beginning from the date hereof and continuing
to and including the later of the Time of Delivery and such earlier time
as the Underwriters may notify the Company, not to offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder, any
securities of the Company that are substantially similar to the
Securities;
(f) For so long as 2017 Debentures and the 2027 Debentures are in
global form, to furnish to the holders thereof as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, shareholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail; and to furnish to the
holders of the Securities all other documents specified in Section 7.04 of
the Indenture, all in the manner so specified;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to the Underwriters copies of all
reports or other communications (financial or other) furnished to the
Company's stockholders generally, and to deliver to the Underwriters (i)
as soon as they are available, (A) copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which the Securities or any class of securities of
the Company is listed and (B) the documents specified in Section 7.04 of
the Indenture, as in effect at the Time of Delivery, and (ii) such
additional information concerning the business and financial condition of
the Company as the Underwriters may from time to time reasonably request,
provided that any material nonpublic information received by the
Underwriters will be held in confidence and not used in violation of any
applicable law (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to the
Commission);
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(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Prospectus as amended or supplemented under the caption "Use of Proceeds";
and
(i) To use its reasonable efforts to list the Securities, subject to
official notice of issuance, on the New York Stock Exchange.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of producing any
Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky
Memorandum, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters (not to exceed $15,000 in the aggregate) in connection with such
qualification and in connection with the Blue Sky surveys; (iv) any fees charged
by securities rating services for rating the Securities; (v) the filing fees
incident to, and fees and the disbursements of counsel for the Underwriters in
connection with, any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of
preparing the Securities; (vii) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Sections 7 and 9 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters to purchase the Securities
hereunder shall be subject in the sole discretion of the Underwriters to the
condition that all representations and warranties and other statements of the
Company herein are, at and as of the Time of Delivery, true and correct, the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented, shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under the
Act and in accordance with Section 5(a) hereof and the Indenture shall
have been qualified under the Trust Indenture Act; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of the Underwriters;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to the Underwriters a written opinion, dated the Time of
Delivery, in substantially the form attached hereto as Annex III;
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(c) The General Counsel or Deputy General Counsel of the Company
shall have furnished to the Underwriters his written opinion, dated the
Time of Delivery, in substantially the form attached hereto as Annex IV;
(d) Jones, Day, Reavis & Pogue, counsel for the Company, shall have
furnished to the Underwriters a written opinion, dated the Time of
Delivery, in substantially the form attached hereto as Annex V;
(e) On the date hereof at a time prior to the execution of this
Agreement, and at 9:30 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement, KPMG Peat Marwick LLP shall have
furnished to the Underwriters a letter, dated the date of delivery
thereof, in form and substance satisfactory to the Underwriters, and KPMG
Peat Marwick LLP shall have furnished to the Underwriters a "bring-down"
letter, dated the Time of Delivery, in form and substance satisfactory to
the Underwriters (the executed copy of the letter delivered prior to the
execution of this Agreement is attached hereto as Annex I and draft the
form of the letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of the Time
of Delivery is attached hereto as Annex II);
(f)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as first amended
or supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus as
first amended or supplemented, and (ii) since the respective dates as of
which information is given in the Prospectus as first amended or
supplemented there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus as first amended or
supplemented, the effect of which, in any such case described in clause
(i) or (ii), is in the judgment of the Underwriters so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus as first amended or supplemented;
(g) On or after the date hereof, (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;
(h) On or after the date hereof, there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or
(iv) the
10
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this clause (iv) in the judgment of
the Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus as first amended or supplemented; or
(v) the occurrence of any material adverse change in the existing
financial, political or economic conditions in the United States or
elsewhere which, in the judgment of the Underwriters, would materially and
adversely affect the financial markets or the market for the Securities
and other debt securities;
(i) The Securities shall have been approved for listing, subject to
official notice of issuance, on the New York Stock Exchange; and
(j) The Company shall have furnished or caused to be furnished to
the Underwriters at the Time of Delivery certificates of officers of the
Company satisfactory to the Underwriters as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of this
Section and as to such other matters as the Underwriters may reasonably
request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement or
the Prospectus as amended or supplemented, or any such amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through Goldman, Sachs & Co. expressly for use
therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement or the Prospectus as amended or supplemented, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement or
the Prospectus as amended or
11
supplemented, or any such amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through Goldman, Sachs & Co. expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the
12
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the 2017 Debentures or 2027 Debentures, as the case may be, which it
has agreed to purchase hereunder, the Underwriters may in their discretion
arrange for the Underwriters or another party or other parties to purchase such
2017 Debentures or 2027 Debentures on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Underwriters do not
arrange for the purchase of such 2017 Debentures or 2027 Debentures then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to the Underwriters to
purchase such 2017 Debentures or 2027 Debentures on such terms. In the event
that, within the respective prescribed periods, the Underwriters notify the
Company that they have so arranged for the purchase of such 2017 Debentures or
2027 Debentures or the Company notifies the Underwriters that it has so arranged
for the purchase of such 2017 Debentures or 2027 Debentures, as the case may be,
the Underwriters or the Company shall have the right to postpone the Time of
Delivery for a period of not more than seven days in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus as amended or supplemented or in any other documents or arrangements,
and the Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Underwriters may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such 2017 Debentures or 2027 Debentures, as the case may be.
(b) If, after giving effect to any arrangements for the purchase of
the 2017
13
Debentures or 2027 Debentures, as the case may be, of a defaulting Underwriter
or Underwriters by the Underwriters and the Company as provided in subsection
(a) above, the aggregate principal amount of such 2017 Debentures or 2027
Debentures which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the 2017 Debentures or 2027 Debentures, as the
case may be, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of 2017 Debentures
or 2027 Debentures, as the case may be, which such Underwriter agreed to
purchase hereunder and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the principal amount of 2017 Debentures
or 2027 Debentures, as the case may be, which such Underwriter agreed to
purchase hereunder) of the 2017 Debentures or 2027 Debentures, as the case may
be, of such defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the 2017 Debentures or 2027 Debentures, as the case may be, of a defaulting
Underwriter or Underwriters by the Underwriters and the Company as provided in
subsection (a) above, the aggregate principal amount of 2017 Debentures or 2027
Debentures, as the case may be, which remains unpurchased exceeds one-eleventh
of the aggregate principal amount of all the 2017 Debentures or 2027 Debentures,
as the case may be, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase 2017
Debentures or 2027 Debentures, as the case may be, of a defaulting Underwriter
or Underwriters, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters for all out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities, but the Company shall then be under no further liability to any
Underwriter except as provided in Sections 6 and 8 hereof.
12. All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the Underwriters in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Chief Financial Officer and Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex
14
constituting such Questionnaire, which address will be supplied to the Company
by the Underwriters upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
15
If the foregoing is in accordance with your understanding, please
sign and return to us seven counterparts hereof, and upon the acceptance hereof
by the Underwriters, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters and the Company.
Very truly yours,
FEDERATED DEPARTMENT STORES, INC.
By:
-------------------------------------
Name: Dennis J. Broderick
Title: Senior Vice President
Accepted as of the date hereof:
GOLDMAN, SACHS & CO.,
CREDIT SUISSE FIRST BOSTON CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
By:
----------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
16
SCHEDULE I
Principal Amount
to be Purchased
----------------------------------
2017 Debentures 2027 Debentures
--------------- ---------------
Goldman, Sachs & Co. $165,000,000 $137,500,000
Credit Suisse First Boston Corporation 75,000,000 62,500,000
Prudential Securities Incorporated 60,000,000 50,000,000
------------ ------------
Total $300,000,000 $250,000,000
============ ============
17
ANNEX I
[Attach executed copy of initial comfort letter]
ANNEX II
[Attach form of bring-down comfort letter]
ANNEX III
July 14, 1997
GOLDMAN, SACHS & CO.,
CREDIT SUISSE FIRST BOSTON CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
c/o Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
We have acted as your counsel in connection with the purchase by you
of $300,000,000 principal amount of 7.45% Senior Debentures due 2017 (the "2017
Debentures") and $250,000,000 principal amount of 6.79% Senior Debentures due
2027 (the "2027 Debentures" and, together with the 2017 Debentures, the
"Debentures") of Federated Department Stores, Inc., a Delaware corporation (the
"Company"), pursuant to the Underwriting Agreement dated July 9, 1997 between
you and the Company.
We have examined the Registration Statement on Form S-3 (File No.
33-64973) filed by the Company under the Securities Act of 1933, as amended (the
"Act"), as it became effective under the Act (the "Registration Statement"); and
the Company's prospectus dated January 22, 1996, as supplemented by the
prospectus supplement dated July 9, 1997 (the "Prospectus"), filed by the
Company pursuant to Rule 424(b) of the rules and regulations of the Securities
and Exchange Commission (the "Commission") under the Act, which pursuant to Form
S-3 incorporates by reference the Annual Report on Form 10-K of the Company for
the fiscal year ended February 1, 1997, the Quarterly Report on Form 10-Q of the
Company for the fiscal quarter ended May 3, 1997 [and the Current Report on Form
8-K of the Company dated July , 1997] (the "Exchange Act Documents"), each as
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); and the Indenture dated as of December 15, 1994, (as supplemented by the
Eighth Supplemental Indenture dated as of July 14, 1997 and the Ninth
Supplemental Indenture, dated as of July 14, 1997, the "Indenture") between the
Company and State Street Bank and Trust Company (successor to First National
Bank of Boston), as Trustee (the "Trustee") relating to the Debentures. In
addition, we have examined, and have relied as to matters of fact upon, the
documents delivered to you at the closing, and upon originals or copies,
certified or otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments and such certificates or
comparable documents of public officials and of officers and representatives of
the Company, and have made such other and further investigations, as we have
deemed relevant and necessary as a basis for the opinions hereinafter set forth.
III-1
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of
Delaware.
2. The Indenture has been duly authorized, executed and delivered by
the Company and duly qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and, assuming due authorization,
execution and delivery thereof by the Trustee, constitutes a valid and
legally binding obligation of the Company enforceable against the Company
in accordance with its terms.
3. The Debentures have been duly authorized, executed and issued by
the Company and, assuming due authentication thereof by the Trustee and
upon payment and delivery in accordance with the Underwriting Agreement,
will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture.
4. The statements made in the Prospectus under the captions
"Description of Debt Securities" and "Description of the Debentures,"
insofar as they purport to constitute summaries of certain terms of
documents referred to therein, constitute accurate summaries of the terms
of such documents in all material respects.
5. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
Our opinions set forth in paragraphs 2 and 3 above are subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
All legal proceedings taken by the Company in connection with the
offering of the Debentures, and the legal opinions, dated the date hereof,
rendered to you by Dennis J. Broderick, General Counsel of the Company, and
Jones, Day, Reavis & Pogue, counsel for the Company, pursuant to the
Underwriting Agreement, are in form satisfactory to us.
III-2
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Prospectus or the Exchange Act Documents and take no responsibility therefor,
except as and to the extent set forth in paragraph 4 above. In the course of the
preparation by the Company of the Registration Statement and the Prospectus
Supplement (excluding the Exchange Act Documents), we participated in
conferences with certain officers and employees of the Company, with
representatives of KPMG Peat Marwick LLP and with counsel to the Company. We did
not participate in the preparation of the Exchange Act Documents. Based upon our
examination of the Registration Statement, the Prospectus and the Exchange Act
Documents, our investigations made in connection with the preparation of the
Registration Statement and the Prospectus Supplement (excluding the Exchange Act
Documents) and our participation in the conferences referred to above, (i) we
are of the opinion that the Registration Statement, as of its effective date,
and the Prospectus, as of July 9, 1997, complied as to form in all material
respects with the requirements of the Act, the Trust Indenture Act and the
applicable rules and regulations of the Commission thereunder and that the
Exchange Act Documents complied as to form when filed in all material respects
with the requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder, except that in each case we express no
opinion with respect to the financial statements or other financial data
contained or incorporated by reference in the Registration Statement, the
Prospectus or the Exchange Act Documents, and (ii) we have no reason to believe
that the Registration Statement , as of its effective date (including the
Exchange Act Documents on file with the Commission on such effective date),
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus (including the Exchange
Act Documents) contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that in each case we express no belief with respect to the financial
statements or other financial data contained or incorporated by reference in the
Registration Statement, the Prospectus or the Exchange Act Documents.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law.
This opinion is rendered to you in connection with the above
described transactions. This opinion may not be relied upon by you for any other
purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
III-3
ANNEX IV
July 14, 1997
Goldman, Sachs & Co.,
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: $300,000,000 Aggregate Principal Amount of 7.45% Senior
Debentures due 2017 and $250,000,000 Aggregate Principal Amount
of 6.79% Senior Debentures due 2027 of Federated Department
Stores, Inc.
Ladies and Gentlemen:
As General Counsel of Federated Department Stores, Inc. (the
"Company"), I have acted as counsel for the Company in connection with the sale
of $300,000,000 aggregate principal amount of the Company's 7.45% Senior
Debentures due 2017 (the "2017 Debentures") and $250,000,000 aggregate principal
amount of the Company's 6.79% Senior Debentures due 2027 (the "2027 Debentures",
and, together with the 2017 Debentures, the "Securities") pursuant to the
Underwriting Agreement, dated July 9, 1997 (the "Underwriting Agreement"),
between you and the Company. This opinion is furnished to you pursuant to
Section 7(c) of the Underwriting Agreement. Except as otherwise defined herein,
terms used herein with initial capital letters are so used with the respective
meanings ascribed thereto in the Underwriting Agreement.
I have examined such documents, records and matters of law as I have
deemed necessary for purposes of this opinion. Based thereupon, I am of the
opinion that:
1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented prior to the date hereof;
2. The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each other
jurisdiction in which it is required to be so qualified, except for such
failures to be so qualified and in good standing as individually or in the
aggregate would not have a Material Adverse Effect;
3. Each Significant Subsidiary of the Company has been duly
incorporated
IV-1
Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; all of the issued shares of capital stock of each
such Significant Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable, and (except as otherwise disclosed in the
Prospectus as amended or supplemented prior to the date hereof) are owned
directly or indirectly by the Company, free and clear of all material liens,
encumbrances, equities or claims; each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, except where the failure to be duly
incorporated, validly existing and in good standing would not, individually or
in the aggregate, have a Material Adverse Effect, taken as a whole; and all of
the issued shares of capital stock of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (except as otherwise disclosed in the
Prospectus as amended or supplemented prior to the date hereof or where,
individually or in the aggregate, the failure to have been duly and validly
authorized and issued, to be fully paid and non-assessable or to be owned
directly or indirectly by the Company free and clear of liens, encumbrances,
equities or claims would not have a Material Adverse Effect);
4. To my knowledge, other than as disclosed in the Prospectus as
amended or supplemented prior to the date hereof, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, is reasonably likely individually or in the aggregate to have a
Material Adverse Effect; and, to my knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;
5. The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, as
supplemented by the Supplemental Indentures, and the Underwriting Agreement and
the consummation of the transactions therein contemplated will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
sale/leaseback agreement, loan agreement or other financing agreement or any
other agreement or instrument known to me to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, except for such conflicts, breaches, violations and
defaults as individually or in the aggregate would not have a Material Adverse
Effect, nor will such action result in any material violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or (a) any
material statute, order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its Significant
Subsidiaries or any of their properties or (b) any statute, order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties, except, with
respect to this clause (b) only, for such violations, defaults and failures as
individually or in the aggregate would not have a Material Adverse Effect;
6. Neither the Company nor any of its subsidiaries is (a) in
violation of its
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Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
certificate of incorporation or by-laws (or comparable governing documents) or
(b) in default in the performance or observance of any material obligation,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to me after due inquiry
to which it is a party or by which it or any of its properties may be bound,
except for such violations and defaults as individually or in the aggregate
would not have a Material Adverse Effect;
7. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
8. The 2017 Debentures have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their terms and entitled to the benefits provided by the Indenture, as
supplemented by the Eighth Supplemental Indenture, and the 2027 Debentures have
been duly authorized, executed, authenticated, issued and delivered and
constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the benefits
provided by the Indenture, as supplemented by the Ninth Supplemental Indenture,
except in each case as the enforceability of the Securities and the Indenture,
as so supplemented, may be limited by bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law; and the Securities and the
Indenture, as supplemented by the Supplemental Indentures, conform in all
material respects to the descriptions thereof in the Prospectus, as amended or
supplemented prior to the date hereof;
9. The Indenture, as supplemented by the Supplemental Indentures,
has been duly authorized, executed and delivered and constitutes a valid and
legally binding instrument, enforceable against the Company in accordance with
its terms, except as the enforceability of the Indenture, as supplemented by the
Supplemental Indentures, may be limited by bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law; and the
Indenture, as supplemented by the Supplemental Indentures, has been duly
qualified under the Trust Indenture Act;
10. No consent, approval, authorization, order, registration or
qualification of or with any United States court or governmental agency or body
is required for the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by the Underwriting Agreement or the
Indenture, as supplemented by the Supplemental Indentures, except such as have
been obtained under the Act, the Exchange Act, and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications as may
be required under the state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
11. The statements set forth in the Prospectus, as amended or
supplemented
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Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
prior to the date hereof, under the captions "Description of Debt Securities"
and "Description of the Debentures," and under the captions "Plan of
Distribution" and "Underwriting," insofar as they purport to summarize the
provisions of the laws and documents referred to therein, constitute accurate
summaries of such provisions in all material respects;
12. The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
13. The documents incorporated by reference in the Prospectus or any
amendment or supplement thereto made by the Company prior to the date hereof
(other than the financial statements and related schedules and other financial
or statistical data contained therein, as to which I express no opinion), when
they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder; and no facts have come to my attention which cause
me to believe that any of the documents referred to in this paragraph 13, when
such documents were so filed, contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
documents were so filed, not misleading. However, I have not independently
verified, and I assume no responsibility for the accuracy, completeness or
fairness of the Registration Statement or the Prospectus, as amended or
supplemented (including any documents incorporated by reference therein), except
to the extent of the opinion expressed in paragraph 11; and
14. The Registration Statement and the Prospectus and any amendments
and supplements thereto made by the Company prior to the Time of Delivery (other
than the financial statements and related schedules and other financial or
statistical data therein, as to which I express no opinion) comply as to form in
all material respects with the requirements of the Act and the Trust Indenture
Act and the rules and regulations thereunder; and I do not know of any amendment
to the Registration Statement required to be filed or of any contract or other
document of a character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the Prospectus or
required to be described in the Registration Statement or the Prospectus which
are not filed or incorporated by reference or described as required.
In rendering the opinions in paragraphs 8 through 14 hereof, I have
relied solely on the opinion of Jones, Day, Reavis & Pogue furnished to you
pursuant to Section 7(d) of the Underwriting Agreement.
In rendering this opinion, I have assumed that (i) the signatures on
all documents examined by me are genuine and that, where any such signature
purports to have been made in a corporate, governmental, fiduciary or other
capacity, the person who affixed such signature to such document had authority
to do so and (ii) the statements and certificates described in the following
paragraph are accurate in all material respects at the date of this opinion.
I am a member of the bar of the State of Ohio, and have not been
admitted to the
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Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
bar of any other jurisdiction. In rendering the opinions set forth herein, my
examination of matters of law has been limited to the federal laws of the United
States of America, the corporation laws of the States of Delaware and Ohio, and
the laws of the State of New York. In rendering the opinions in paragraphs 1-12
and paragraph 14, I have relied, as to certain matters of fact, without any
independent investigation, inquiry or verification, upon statements or
certificates of representatives of the Company and of the Trustee under the
Indenture and upon statements or certificates of public officials.
This opinion is furnished by me, as General Counsel of the Company,
to you solely for your benefit and solely with respect to the purchase by you of
the Securities from the Company, upon the understanding that I am not assuming
hereby any professional responsibility to any other person whatsoever.
Very truly yours,
Dennis J. Broderick
IV-5
Annex V
July 14, 1997
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Re: $300,000,000 Aggregate Principal Amount of 7.45% Senior Debentures
due 2017 and $250,000,000 Aggregate Principal Amount of 6.79% Senior
Debentures due 2027 of Federated Department Stores, Inc.
Ladies and Gentlemen:
We have acted as counsel for Federated Department Stores, Inc. (the
"Company") in connection with the sale of $300,000,000 aggregate principal
amount of the Company's 7.45% Senior Debentures due 2017 (the "2017 Debentures")
and $250,000,000 aggregate principal amount of the Company's 6.79% Senior
Debentures due 2027 (the "2027 Debentures" and, together with the 2017
Debentures, the "Securities") pursuant to the Underwriting Agreement, dated July
9, 1997 (the "Underwriting Agreement"), between you and the Company. This
opinion is furnished to you pursuant to Section 7(d) of the Underwriting
Agreement. Except as otherwise defined herein, terms used herein with initial
capital letters are so used with the respective meanings ascribed thereto in the
Underwriting Agreement.
We have examined such documents, records and matters of law as we
have deemed necessary for purposes of this opinion. Based thereupon, we are of
the opinion that:
1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented prior to the date hereof;
2. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
3. The 2017 Debentures have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their terms and entitled to the
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Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
benefits provided by the Indenture, as supplemented by the Eighth Supplemental
Indenture, and the 2027 Debentures have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their terms and entitled to the benefits provided by the Indenture, as
supplemented by the Ninth Supplemental Indenture, except in each case as the
enforceability of the Securities and the Indenture, as so supplemented, may be
limited by bankruptcy, insolvency, reorganization, and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law; and the Securities and the Indenture, as
supplemented by the Supplemental Indentures, conform in all material respects to
the descriptions thereof in the Prospectus, as amended or supplemented prior to
the date hereof;
4. The Indenture, as supplemented by the Supplemental Indentures,
has been duly authorized, executed and delivered and constitutes a valid and
legally binding instrument, enforceable against the Company in accordance with
its terms, except as the enforceability of the Indenture, as supplemented by the
Supplemental Indentures, may be limited by bankruptcy, insolvency,
reorganization, and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law; and the
Indenture, as supplemented by the Supplemental Indentures, has been duly
qualified under the Trust Indenture Act;
5. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the issue and sale of the Securities or the consummation by the Company of
the transactions contemplated by the Underwriting Agreement or the Indenture, as
supplemented by the Supplemental Indentures, except such as have been obtained
under the Act, the Exchange Act, and the Trust Indenture Act, and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
6. The statements set forth in the Prospectus as amended or
supplemented prior to the date hereof under the captions "Description of Debt
Securities" and "Description of the Debentures," and under the captions "Plan of
Distribution" and "Underwriting," insofar as they purport to summarize the
provisions of the laws and documents referred to therein, constitute accurate
summaries of such provisions in all material respects;
7. The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
8. The documents incorporated by reference in the Prospectus or any
amendment or supplement thereto made by the Company prior to the date hereof
(other than the financial statements and related schedules and other financial
or statistical data contained therein, as to which we express no opinion), when
they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the
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Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
rules and regulations of the Commission thereunder; and
9. The Registration Statement and the Prospectus and any amendments
and supplements thereto made by the Company prior to the date hereof (other than
the financial statements and related schedules and other financial or
statistical data contained therein, as to which we express no opinion) comply as
to form in all material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder.
We have participated in the preparation of the Registration
Statement and the Prospectus (but not the documents incorporated into the
Registration Statement or the Prospectus by reference) and, based on such
participation, no facts have come to our attention which cause us to believe
that, as of its effective date, the Registration Statement or any amendment
thereto made by the Company prior to the date hereof (other than the financial
statements and related schedules and other financial data contained therein, as
to which we express no belief) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its date, the
Prospectus or any amendment or supplement thereto made by the Company prior to
the date hereof (other than the financial statements and related schedules and
other financial data contained therein, as to which we express no belief)
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of the date hereof,
either the Registration Statement or the Prospectus or any amendment or
supplement thereto made by the Company prior to the date hereof (other than the
financial statements and related schedules and other financial data contained
therein, as to which we express no belief) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. However, we have not independently verified, and we assume no
responsibility for, the accuracy, completeness or fairness of the Registration
Statement or the Prospectus as amended or supplemented (including any documents
incorporated or deemed to be incorporated by reference therein) except to the
extent of the opinion expressed in paragraph 6.
In rendering the foregoing opinions, we have assumed (i) the due
authorization, execution, and delivery of the Underwriting Agreement by or on
behalf of the Underwriters, (ii) that the signature on all documents examined by
us are genuine and that where any such signature purports to have been made in a
corporate, governmental, fiduciary, or other capacity, the person who affixed
such signature to such document had authority to do so, and (iii) that the
statements and certificates described in the following paragraph are accurate in
all material respects at the date of this opinion.
In rendering the opinions in paragraphs 1 through 9, (i) our
examination of matters of law has been limited to the federal laws of the United
States of America, the laws of the State of New York and the General Corporation
Law of the State of Delaware and (ii) we have relied, as to certain matters of
fact, without any independent investigation, inquiry or verification, upon
statements or certificates of representatives of the Company and of the Trustee
under the Indenture and upon statements or certificates of public officials.
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Goldman, Sachs & Co. July 14, 1997
Credit Suisse First Boston Corporation
Prudential Securities Incorporated
This opinion is furnished by us, as counsel for the Company, to you
solely for your benefit and solely with respect to the purchase by you of the
Securities from the Company, upon the understanding that we are not assuming
hereby any professional responsibility to any other person whatsoever.
Very truly yours,
Jones, Day, Reavis & Pogue
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