1
Exhibit 10.24
COMMERCIAL PAPER DEALER AGREEMENT
between
Federated Department Stores, Inc., as Issuer
and
Citicorp Securities, Inc., as Dealer
Concerning Notes to be issued pursuant to an Issuing and Paying Agency
Agreement dated as of January 30, 1997 between the Issuer and Citibank,
N.A., as Issuing and Paying Agent
Dated As Of
January 30, 1997
2
COMMERCIAL PAPER DEALER AGREEMENT
This agreement ("Agreement") sets forth the understandings between the
Issuer and the Dealer in connection with the issuance and sale by the Issuer of
its short-term promissory notes through the Dealer (the "Notes").
Certain terms used in this Agreement are defined in Section 6 hereof.
The Addendum to this Agreement, and any Annexes or Exhibits described
in this Agreement or such Addendum, are hereby incorporated into this Agreement
and made fully a part hereof.
Section 1. OFFERS, SALES AND RESALES OF NOTES
1.1 While (i) the Issuer has and shall have no obligation to sell the
Notes to the Dealer or to permit the Dealer to arrange any sale of the Notes for
the account of the Issuer, and (ii) the Dealer has and shall have no obligation
to purchase the Notes from the Issuer or to arrange any sale of the Notes for
the account of the Issuer, the parties hereto agree that in any case where the
Dealer purchases Notes from the Issuer, or arranges for the sale of Notes by the
Issuer, such Notes will be purchased or sold by the Dealer in reliance on the
representations, warranties, covenants and agreements of the Issuer contained
herein or made pursuant hereto and on the terms and conditions and in the manner
provided herein. Subject to the foregoing, the Dealer will use all reasonable
efforts to arrange sales of the Notes at the times and in the amounts requested
by the Issuer.
1.2 So long as this Agreement shall remain in effect, and in addition to
the limitations contained in Section 1.7 hereof, the Issuer shall not, without
the consent of the Dealer, offer, solicit or accept offers to purchase, or sell,
any Notes except (a) in transactions with one or more dealers which may from
time to time after the date hereof become dealers with respect to the Notes by
executing with the Issuer one or more agreements which contain provisions
substantially identical to Section 1 of this Agreement, of which the Issuer
hereby undertakes to provide the Dealer prompt notice or (b) in transactions
with the other dealers listed on the Addendum hereto, which are executing
agreements with the Issuer which contain provisions substantially identical to
Section 1 of this Agreement contemporaneously herewith. In no event shall the
Issuer offer, solicit or accept offers to purchase, or sell, any Notes directly
on its own behalf in transactions with persons other than broker-dealers as
specifically permitted in this Section 1.2.
1.3 The Notes shall be in a minimum denomination or minimum amount,
whichever is applicable, of $250,000 or integral multiples of $1,000 in excess
thereof, will bear such interest rates, if interest bearing, or will be sold at
such discount from their face amounts, as shall be agreed upon by the Dealer and
the Issuer, shall have a maturing not exceeding 270 days from the date of
issuance (exclusive of days of grace) and shall not contain any provision for
extension, renewal or automatic "rollover."
1.4 The authentication, delivery and payment of the Notes shall be
effected in accordance with the Issuing and Paying Agency Agreement and the
Notes shall be either individual bearer physical certificates or represented by
book-entry Notes registered in the name of DTC or its nominee in the form or
forms annexed to the Issuing and Paying Agency Agreement. The Dealer agrees to
keep
2
3
confidential the user number identification and password given to it pursuant to
the Issuing and Paying Agency Agreement.
1.5 If the Issuer and the Dealer shall agree on the terms of the
purchase of any Note by the Dealer or the sale of any Note arranged by the
Dealer (including, but not limited to, agreement with respect to the date of
issue, purchase price, principal amount, maturity and interest rate (in the case
of interest-bearing Notes) or discount thereof (in the case of Notes issued on a
discount basis), and appropriate compensation for the Dealer's services
hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be
issued and delivered in accordance with the terms of the Issuing and Paying
Agency Agreement and payment for such Note shall be made by the purchaser
thereof, either directly or through the Dealer, to the Issuer. Except as
otherwise agreed, in the event that the Dealer is acting as an agent and a
purchaser shall either fail to accept delivery of or make payment for a Note on
the date fixed for settlement, the Dealer shall promptly notify the Issuer, and
if the Dealer has theretofore paid the Issuer for the Note, the Issuer will
promptly return such funds to the Dealer against its return of the Note to the
Issuer, in the case of a certificated Note, and upon notice of such failure and
an appropriate book-entry credit in the case of a book-entry Note. If such
failure occurred for any reason other than default by the Dealer, the Issuer
shall reimburse the Dealer on an equitable basis for the Dealer's loss of the
use of such funds for the period such funds were credited to the Issuer's
account.
1.6 All offers and sales of the Notes by the Issuer shall be effected
pursuant to the exemption from the registration requirements of the Securities
Act provided by Section 4(2) thereof, which exempts transactions by an issuer
not involving any public offering. The Dealer and the Issuer hereby establish
and agree to observe the following procedures in connection with offers, sales
and subsequent resales or other transfers of the Notes:
(a) Offers and sales of the Notes shall be made only to the
following types of investors: (i) investors reasonably believed by the Dealer to
be Institutional Accredited Investors or Sophisticated Individual Accredited
Investors, (ii) non-bank fiduciaries or agents that will be purchasing Notes for
one or more accounts, each of which is an Institutional Accredited Investor or
Sophisticated Individual Accredited Investor, and (iii) Qualified Institutional
Buyers.
(b) Resales and other transfers of the Notes by the holders thereof
shall be made only in accordance with the restrictions in the legends described
in clause (e) below.
(c) No general solicitation or general advertising shall be used in
connection with the offering of the Notes. Without limiting the generality of
the foregoing; without the prior written approval of Dealer, the Issuer shall
not issue any press release or place or publish any "tombstone" or other
advertisement relating to the Notes. The Dealer shall not use any materials
other than the Private Placement Memorandum as then approved by the Issuer in
connection with the offer and sale of the Notes.
(d) No sale of Notes to any one purchaser shall be for less than
$250,000 principal or face amount, and no Note shall be issued in a smaller
principal or face amount. If the purchaser is a non-bank fiduciary acting on
behalf of others, each person for whom such purchaser is acting must purchase at
least $250,000 principal or face amount of Notes.
(e) Offers and sales of the Notes by the Issuer through the Dealer
acting as agent for the Issuer shall be made in accordance with Rule 506 under
the Securities Act, and shall be subject to the restrictions described in the
legend appearing on Exhibit A hereto. A legend substantially to the effect of
such Exhibit A shall appear as part of the Private Placement Memorandum used in
connection
3
4
with offers and sales of Notes hereunder, as well as on each Note offered and
sold pursuant to this Agreement.
(f) Dealer shall furnish or shall have furnished to each purchaser
of Notes being sold to an ultimate purchaser for the first time a copy of the
then-current Private Placement Memorandum unless such purchaser has previously
received a copy of the Private Placement Memorandum as then in effect. The
Private Placement Memorandum shall expressly state that any person to whom Notes
are offered shall have an opportunity to ask questions of, and receive
information from, the Issuer and the Dealer and shall provide the names,
addresses and telephone numbers of the persons from whom information regarding
the Issuer may be obtained.
(g) The Issuer agrees, for the benefit of the Dealer and each of the
holders and prospective purchasers from time to time of the Notes that, if at
any time the Issuer shall not be subject to Section 13 or 15(d) of the Exchange
Act, the Issuer will furnish, upon request and at its expense, to the Dealer and
to holders and prospective purchasers of Notes information required by Rule
144A(d)(4)(i) in compliance with Rule 144A(d).
(h) In the event that any Note offered or to be offered by Dealer
would be ineligible for resale under Rule 144A, the Issuer shall immediately
notify Dealer (by telephone, confirmed in writing) of such fact and shall
promptly prepare and deliver to Dealer an amendment or supplement to the Private
Placement Memorandum describing the Notes that are ineligible, the reason for
such ineligibility and any other relevant information relating thereto.
1.7 The Issuer hereby represents and warrants to the Dealer, in
connection with offers, sales and resales of Notes as follows:
The Issuer represents and agrees that the proceeds of the sale
of the Notes are not currently contemplated to be used for the purpose of
buying, carrying or trading securities within the meaning of Regulation T and
the interpretations thereunder by the Board of Governors of the Federal Reserve
System. In the event that the Issuer determines to use such proceeds for the
purpose of buying, carrying or trading securities, whether in connection with an
acquisition of another company or otherwise, the Issuer shall give the Dealer at
least five business days' prior written notice to that effect. The Issuer shall
also give the Dealer prompt notice of the actual date that it commences to
purchase securities with the proceeds of the Notes. Thereafter, in the event
that the Dealer purchases Notes as principal and does not resell such Notes on
the day of such purchase, to the extent necessary to comply with Regulation T
and the interpretations thereunder, the Dealer will sell such Notes only to
offerees it reasonably believes to be QIBs or to QIBs it reasonably believes are
acting for other QIBs, in each case in accordance with Rule 144A.
Section 2. Representations and Warranties of Issuer.
-----------------------------------------
The Issuer represents and warrants that:
2.1 The Issuer is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all the requisite corporate power and authority to execute, deliver and perform
its obligations under the Notes, this Agreement and the Issuing and Paying
Agency Agreement.
2.2 This Agreement and the Issuing and Paying Agency Agreement have been
duly authorized, executed and delivered by the Issuer and constitute legal,
valid and binding obligations of
4
5
the Issuer enforceable against the Issuer in accordance with their terms subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
2.3 The Notes have been duly authorized, and when issued and delivered
as provided in the Issuing and Paying Agency Agreement, will be duly and validly
issued and delivered and will constitute legal, valid and binding obligations of
the Issuer enforceable against the Issuer in accordance with their terms subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
2.4 The offer and sale of Notes in the manner contemplated hereby do not
require registration of the Notes under the Securities Act, pursuant to the
exemption from registration contained in Section 4(2) thereof, and no indenture
in respect of the Notes is required to be qualified under the Trust Indenture
Act of 1939, as amended. Neither the Issuer nor any affiliate (as defined in
Regulation 501(b) of Regulation D), will sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) which will be integrated with the sale of the Notes in a manner
which would require the registration of the Notes under the Securities Act.
2.5 The Notes are unsecured and unsubordinated indebtedness of the
Issuer.
2.6 No consent or action of, or filing or registration with, any
governmental or public regulatory body or authority, including the SEC (except
for the filing of a Form D with the SEC), is required to authorize, or is
otherwise required in connection with the execution, delivery or performance of,
this Agreement, the Notes or the Issuing and Paying Agency Agreement, except as
may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Notes.
2.7 Neither the execution and delivery of this Agreement and the Issuing
and Paying Agency Agreement, nor the issuance and delivery of the Notes in
accordance with the Issuing and Paying Agency Agreement, nor the fulfillment of
or compliance with the terms and provisions hereof or thereof by the Issuer,
will (i) result in the creation or imposition of any mortgage, lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets of the
Issuer, or (ii) violate or result in a breach or an event of default under any
of the terms of the Issuer's charter documents or by-laws, any contract or
instrument to which the Issuer is a party or by which it or its property is
bound, or any law or regulation, or any order, writ, injunction or decree of any
court or government instrumentality, to which the Issuer is subject or by which
it or its property is bound, which breach or event of default might have a
material adverse effect on the condition (financial or otherwise), operations or
reasonably foreseeable business prospects of the Issuer and its subsidiaries
taken as a whole or the ability of the Issuer to perform its obligations under
this Agreement, the Notes or the Issuing and Paying Agency Agreement (a
"Material Adverse Effect").
2.8 There is no litigation or governmental proceeding pending, or to the
knowledge of the Issuer threatened, against or affecting the Issuer or any of
its subsidiaries which might result in a Material Adverse Effect.
2.9 The Issuer is not an "investment company" or an entity "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
5
6
2.10 Neither the Private Placement Memorandum nor the Company
Information contains any untrue statement of a material fact or omits 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, provided that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with the
Dealer Information.
2.11 Each (a) issuance of Notes by the Issuer hereunder and (b)
amendment or supplement of the Private Placement Memorandum shall be deemed a
representation and warranty by the Issuer to the Dealer, as of the date thereof,
that, both before and after giving effect to such issuance and after giving
effect to such amendment or supplement, (i) the representations and warranties
given by the Issuer set forth above in this Section 2 remain true and correct on
and as of such date as if made on and as of such date, (ii) in the case of an
issuance of Notes, the Notes being issued on such date have been duly and
validly issued and constitute legal, valid and binding obligations of the
Issuer, enforceable against the Issuer in accordance with their terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law) and (iii) in the case of an issuance of Notes, since the date of the
most recent Private Placement Memorandum, there has been no material adverse
change in the condition (financial or otherwise), operations or reasonably
foreseeable business prospects of the Issuer and its subsidiaries, taken as a
whole which has not been disclosed to the Dealer in writing.
Section 3. Covenants and Agreements of Issuer
----------------------------------
The Issuer covenants and agrees that:
3.1 The Issuer will give the Dealer prompt notice (but in any event
prior to any subsequent issuance of Notes hereunder) of any amendment to,
modification of, or waiver with respect to, the Notes or the Issuing and Paying
Agency Agreement, including a complete copy of any such amendment, modification
or waiver.
3.2 The Issuer shall, whenever there shall occur any downgrading or
receipt of any notice of intended or potential downgrading or any review for
potential change in the rating accorded any of the Issuer's securities by any
national recognized statistical rating organization which has published a rating
of the Notes, promptly, and in any event prior to any subsequent issuance of
Notes hereunder, notify the Dealer (by telephone, confirmed in writing) of such
changes, development, or occurrence.
3.3 The Issuer shall from time to time furnish to the Dealer such
information as the Dealer may reasonably request (other than material non-public
information), including, without limitation, any press releases or material
provided by the Issuer to any national securities exchange or rating agency,
regarding (i) the Issuer's operations and financial condition, (ii) the due
authorization and execution of the Notes, and (iii) the Issuer's ability to pay
the Notes as they mature.
3.4 The Issuer will take all such action as the Dealer may reasonably
request to ensure that each offer and each sale of the Notes will comply with
any applicable state Blue Sky laws; provided, that the Issuer shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified or
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject.
3.5 The Issuer will not be in default of any of its obligations
hereunder, under the Notes or under the Issuing and Paying Agency Agreement, at
any time that any of the Notes are outstanding.
6
7
3.6 The Issuer shall not issue Notes hereunder until the Dealer shall
have received (a) an opinion of counsel to the Issuer, addressed to the Dealer,
substantially in the form attached hereto, (b) a copy of the executed Issuing
and Paying Agency Agreement, (c) a copy of resolutions adopted by the Board of
Directors of the Issuer, in the form attached hereto and certified by the
Secretary or similar officer of the Issuer, authorizing execution and delivery
by the Issuer of this Agreement the Issuing and Paying Agency Agreement and the
Notes and consummation by the Issuer of the transactions contemplated hereby and
thereby, (d) prior to the issuance of any Notes represented by a book-entry note
registered in the name of DTC or its nominee, a copy of the executed Letter of
Representations among the Issuer, the Issuing and Paying Agent and DTC and (e)
such other certificates, opinions, letters and documents as the Dealer shall
have reasonably requested.
3.7 The Issuer shall reimburse the Dealer for all of the Dealer's
out-of-pocket expenses related to this Agreement, including reasonable expenses
incurred in connection with its preparation and negotiation, and the
transactions contemplated hereby (including, but not limited to, the printing
and distribution of the Private Placement Memorandum), and, if applicable, for
the reasonable fees and out-of-pocket expenses of the Dealer's counsel.
Section 4. DISCLOSURE
----------
4.1 The Private Placement Memorandum and its contents (other than the
Dealer Information) shall be the sole responsibility of the Issuer. The Private
Placement Memorandum shall contain a statement expressly offering an opportunity
for each prospective purchaser to ask questions of, and receive answers from,
the Issuer concerning the offering of Notes and to obtain relevant additional
information which the Issuer possesses or can acquire without unreasonable
effort or expense.
4.2 The Issuer agrees promptly to furnish the Dealer the Company
Information as it becomes available.
4.3 (a) The Issuer further agrees to notify the Dealer promptly upon the
occurrence of any event relating to or affecting the Issuer that would cause the
Private Placement Memorandum or the Company Information then in existence to
include an untrue statement of material fact or to omit to state a material fact
necessary in order to make the statements contained therein, in light of the
circumstances under which they are made, not misleading.
(b) In the event that the Issuer gives the Dealer notice pursuant to
Section 4.3(a) and the Dealer notifies the Issuer that it then has Notes it is
holding in inventory, the Issuer agrees promptly to supplement or amend the
Private Placement Memorandum so that such Private Placement Memorandum, as
amended or supplemented, shall not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and the Issuer shall make such supplement or amendment available to
the Dealer and prospective holders of the Notes.
(c) In the event that (i) the Issuer gives the Dealer notice
pursuant to Section 4.3(a) and (ii) the Dealer does not notify the Issuer that
it is then holding Notes in inventory and (iii) the Issuer chooses not to
promptly amend or supplement the Private Placement Memorandum in the manner
described in clause (b) above, then all solicitations and sales of Notes shall
be suspended until such time as the Issuer has so amended or supplemented the
Private Placement Memorandum, and made such amendment or supplement available to
the Dealer and prospective holders of the Notes.
7
8
Section 5. INDEMNIFICATION AND CONTRIBUTION
--------------------------------
5.1 The Issuer, as the Indemnifying Party, will indemnify and hold
harmless the Dealer, each individual, corporation, partnership, trust,
association or other entity controlling the Dealer, any affiliate of the Dealer
or any such controlling entity and their respective directors, officers,
employees, partners, incorporators, shareholders, servants, trustees and agents
(hereinafter the "Dealer Indemnitees") against any and all liabilities, suits,
causes of action, losses, damages, claims, costs and expenses (including,
without limitation, reasonable fees and disbursements of counsel) or judgments
of whatever kind or nature (each a "Claim"), imposed upon, incurred by or
asserted against the Dealer Indemnitees arising out of or based upon (i) any
allegation that the Private Placement Memorandum, the Company Information or any
information provided by the Issuer to the Dealer in writing expressly for
inclusion in the Private Placement Memorandum included (as of any relevant time)
or includes an untrue statement of a material fact or omitted (as of any
relevant time) or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or (ii) arising out of or based upon the breach by the Issuer of
any agreement, covenant or representation made in or pursuant to this Agreement.
This indemnification shall not apply to the extent that the Claim arises out of
or is based upon Dealer Information.
5.2 The Dealer, as the Indemnifying Party, will indemnify and hold
harmless the Issuer, each individual, corporation, partnership, trust,
association or other entity controlling the Issuer, any affiliate of the Issuer
or any such controlling entity and their respective directors, officers,
employees, partners, incorporators, shareholders, servants, trustees and agents
(hereinafter the "Issuer Indemnitees") against any and all Claims imposed upon,
incurred by or asserted against the Issuer Indemnitees arising out of or based
upon any allegation that the Dealer Information included (as of any relevant
time) or includes an untrue statement of a material fact or omitted (as of any
relevant time) or omits to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
5.3 Provisions relating to claims made for indemnification under this
Section 5 are set forth on Exhibit B to this Agreement.
5.4 If the indemnification provided for in this Section 5 is held to be
unavailable or insufficient to hold harmless an Indemnitee under Sections 5.1 or
5.2 in respect of a Claim, although applicable in accordance with the terms of
this Section 5, each Indemnifying Party shall contribute to the amount paid or
payable by such Indemnitee as a result of such Claim in such proportion as is
appropriate to reflect the relative benefits received by the Issuer on the one
hand and the Dealer on the other from the offering of the Notes, provided,
however, that any such contribution by the Dealer shall not be in excess of the
benefits received by it from the offering of the Notes. The respective benefits
received by the Issuer and the Dealer shall be deemed to be the aggregate net
proceeds received by the Issuer of the Notes issued hereunder and the aggregate
commissions and fees earned by the Dealer hereunder.
8
9
Section 6. DEFINITIONS
-----------
6.1 "Claim" shall have the meaning set forth in Section 5.1.
6.2 "Company Information" at any given time shall mean, to the extent
applicable, (i) the Issuer's most recent report on Form 10-K filed with the SEC
and each report on Form 10-Q or 8-K filed by the Issuer with the SEC since the
most recent Form 10-K, (ii) the Issuer's most recent annual audited financial
statements and each interim financial statement or report prepared subsequent
thereto, if not included in item (i) above, (iii) the Issuer's and its
affiliates' other publicly available recent reports, including, but not limited
to, any publicly available filings or reports provided to their respective
shareholders, (iv) any other information or disclosure prepared pursuant to
Section 4.3 hereof and (v) any information prepared or approved by the Issuer
for dissemination to investors or potential investors in the Notes.
6.3 "Dealer Information" shall mean statements concerning the Dealer or
other matters and provided by the Dealer in writing expressly for inclusion in
the Private Placement Memorandum.
6.4 "DTC" shall mean The Depository Trust Company.
6.5 "Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as amended.
6.6 "Indemnifying Party" shall have the meaning set forth in Section 5.
6.7 "Indemnitees" shall mean the Dealer Indemnitees or the Company
Indemnitees (as such terms are defined in Sections 5.1 and 5.2) as the context
shall require.
6.8 "Institutional Accredited Investor" shall mean an institutional
investor that is an accredited investor within the meaning of Rule 501 under the
Securities Act and that has such knowledge and experience in financial and
business matters that it is capable of evaluating and bearing the economic risk
of an investment in the Notes, including, but not limited to, a bank, as defined
in Section 3(a)(2) of the Securities Act, or a savings and loan association or
other institution, as defined in Section 3(a)(5)(A) of the Securities Act,
whether acting in its individual or fiduciary capacity.
6.9 "Issuing and Paying Agency Agreement" shall mean the issuing and
paying agency agreement described on the cover page of this Agreement, as such
agreement may be amended or supplemented from time to time.
6.10 "Issuing and Paying Agent" shall mean the party designated as such
on the cover page of this Agreement, as issuing and paying agent under the
Issuing and Paying Agency Agreement.
6.11 "Non-bank fiduciary or agent" shall mean a fiduciary or agent other
than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or (b) a
savings and loan association, as defined in Section 3(a)(5)(A) of the Securities
Act.
6.12 "Private Placement Memorandum" shall mean offering materials
prepared in accordance with Section 4 (including materials referred to therein
or incorporated by reference therein) provided to purchasers and prospective
purchasers of the Notes, and shall include amendments and supplements thereto
which may be prepared from time to time in accordance with this Agreement (other
than any amendment or supplement that has been completely superseded by a later
amendment or supplement).
6.13 "Qualified Institutional Buyer" shall have the meaning assigned to
that term in Rule 144A under the Securities Act.
6.14 "Rule 144A" shall mean Rule 144A under the Securities Act.
9
10
6.15 "SEC" shall mean the U.S. Securities and Exchange Commission.
6.16 "Securities Act" shall mean the U.S. Securities Act of 1933, as
amended.
6.17 "Sophisticated Individual Accredited Investor" shall mean an
individual who (a) is an accredited investor within the meaning of Regulation D
under the Securities Act and (b) based on his or her pre-existing relationship
with the Dealer, is reasonably believed by the Dealer to be a sophisticated
investor (i) possessing such knowledge and experience (or represented by a
fiduciary or agent possessing such knowledge and experience) in financial and
business matters that he or she is capable of evaluating and bearing the
economic risk of an investment in the Notes and (ii) having a net worth of at
least $5 million.
Section 7. GENERAL
-------
7.1 Unless otherwise expressly provided herein, all notices under this
Agreement to parties hereto shall be in writing and shall be effective when
received at the address of the respective party set forth in the Addendum to
this Agreement.
7.2 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to its conflict of laws
provisions.
7.3 The Issuer agrees that any suit, action or proceeding brought by the
Issuer against the Dealer in connection with or arising out of this Agreement or
the Notes or the offer and sale of the Notes shall be brought solely in the
United States federal courts located in the borough of Manhattan or the courts
of the State of New York located in the Borough of Manhattan. EACH OF THE DEALER
AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
7.4 This Agreement may be terminated, at any time, by the Issuer, upon
one business day's prior notice to such effect to the Dealer, or by the Dealer
upon one business day's prior notice to such effect to the Issuer. Any such
termination, however, shall not affect the obligations of the parties under
Sections 3.7, 5 and 7.3 hereof or the respective representations, warranties,
agreements, covenants, rights or responsibilities of the parties made or arising
prior to the termination of this Agreement.
7.5 This Agreement is not assignable by either party hereto without the
written consent of the other party, which consent shall not be unreasonably
withheld.
7.6 This Agreement is for the exclusive benefit of the parties hereto,
and their respective successors and permitted assigns hereunder, and (to the
extent provided in Section 5) the Indemnitees, and shall not be deemed to give
any legal or equitable right, remedy or claim to any other person whatsoever. No
purchaser of any of the Notes from the Dealer shall be deemed a successor or
assign by reason merely of such purchase.
10
11
7.7 This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written:
Federated Department Stores, Inc. as Issuer
By: /s/ Karen M. Hoguet
--------------------------------------
Name: Karen M. Hoguet
Title: Senior Vice President
Citicorp Securities, Inc. as Dealer
By: /s/ Christopher P. Daifotis
--------------------------------------
Name: Christopher P. Daifotis
Title: Vice President
11
12
ADDENDUM
1. The other dealers referred to in clause (b) of Section 1.2 of the Agreement
are Lehman Brothers Inc.
2. The following section 3.8 is hereby added to the Agreement:
3.8 Without limiting any obligation of the Issuer pursuant to this
Agreement to provide the Dealer with credit and financial information, the
Issuer hereby acknowledges and agrees that the Dealer may share the Company
Information and any other information or matters relating to the Issuer or
the transactions contemplated hereby with affiliates of the Dealer,
including, but not limited to Citibank, N.A., and that such affiliates may
likewise share information relating to the Issuer or such transactions with
the Dealer, provided, however, that the Dealer for itself and on behalf of
its affiliates acknowledges that it is aware, and that it has advised or
will advise any person or entity to whom or which it divulges or discloses
Company Information or such other information or matters that, in general,
the United States securities laws prohibit any person or entity who or
which possesses material, non-public information regarding a company from
purchasing or selling securities of such company or from communicating such
information to any person or entity.
3. The addresses of the respective parties for purposes of notices under
Section 7.1 are as follows:
For the Issuer: Federated Department Stores, Inc.
Address: 7 West Seventh Street
Cincinnati, Ohio 45202
Attention: Susan P. Storer
Telephone number: 513/579-7775
Fax number: 513/579-7393
For the Dealer: Citicorp Securities, Inc.
Address: 399 Park Avenue, 7th Fl.
New York, New York 10043
Attention: Domestic Money Market Department
Telephone number: 212/291-3986
Fax number: 212/291-3454
12
13
EXHIBIT A
FORM OF LEGEND FOR
PRIVATE PLACEMENT MEMORANDUM AND NOTES
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES
THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT IT
HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER
AND THE NOTES, THAT IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY
DISTRIBUTION THEREOF AND THAT IT IS EITHER (A) AN INSTITUTIONAL INVESTOR OR
HIGHLY SOPHISTICATED INDIVIDUAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN
THE MEANING OF RULE 501(a) UNDER THE ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR"
OR "SOPHISTICATED INDIVIDUAL ACCREDITED INVESTOR", RESPECTIVELY) WITH SUCH
KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT IT IS CAPABLE OF
EVALUATING AND BEARING THE RISKS OF AN INVESTMENT IN THE NOTES AND THAT EITHER
IT IS PURCHASING NOTES FOR ITS OWN ACCOUNT, IS A U.S. BANK (AS DEFINED IN
SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN ASSOCIATION OR OTHER
INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(a) OF THE ACT) ACTING IN ITS
INDIVIDUAL OR FIDUCIARY CAPACITY OR IS A FIDUCIARY OR AGENT (OTHER THAN A U.S.
BANK OR SAVINGS AND LOAN ASSOCIATION) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS
EACH OF WHICH IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR OR SOPHISTICATED
INDIVIDUAL ACCREDITED INVESTOR (i) WHICH ITSELF POSSESSES SUCH KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT SUCH PURCHASER IS CAPABLE OF
EVALUATING THE MERITS AND RISKS OF AN INVESTMENT IN THE NOTES, OR (ii) WITH
RESPECT TO WHICH SUCH PURCHASER HAS SOLE INVESTMENT DISCRETION; OR (B) A
QUALIFIED INSTITUTIONAL BUYER ("QIB") WITHIN THE MEANING OF RULE 144A UNDER THE
ACT WHICH IS ACQUIRING NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS,
EACH OF WHICH IS A QIB AND WITH RESPECT TO EACH OF WHICH THE PURCHASER HAS SOLE
INVESTMENT DISCRETION; AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT THE
SELLER MAY RELY UPON THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5
OF THE ACT PROVIDED BY RULE 144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER
THEREOF SHALL ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF
WILL BE MADE ONLY (A) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT,
EITHER (1) TO THE ISSUER OR TO CITICORP SECURITIES, INC. OR LEHMAN BROTHERS
INC., OR ANOTHER PERSON DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THE
NOTES (COLLECTIVELY, THE
14
"PLACEMENT AGENTS"), NONE OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH
NOTE, (2) THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR OR
HIGHLY SOPHISTICATED INDIVIDUAL INVESTOR OR A QIB BY A PLACEMENT AGENT, OR (3)
TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN
MINIMUM AMOUNTS OF $250,000.
15
EXHIBIT B
FURTHER PROVISIONS RELATING TO INDEMNIFICATION
(a) The Indemnifying Party agrees to reimburse each Indemnitee for all
expenses (including reasonable fees and disbursements of internal and external
counsel) as they are incurred by it in connection with investigating or
defending any loss, claim, damage, liability or action in respect of which
indemnification may be sought under Section 5 of the Agreement (whether or not
it is a party to any such proceedings).
(b) Promptly after receipt by an Indemnitee of notice of the existence
of a Claim, such Indemnitee will, if a claim in respect thereof is to be made
against the Indemnifying Party, notify the Indemnifying Party in writing of the
existence thereof, provided that (i) the omission so to notify the Indemnifying
Party will not relieve it from any liability which it may have hereunder unless
and except to the extent it did not otherwise learn of such Claim and such
failure results in the forfeiture by the Indemnifying Party of substantial
rights and defenses, and (ii) the omission so to notify the Indemnifying Party
will not relieve it from liability which it may have to an Indemnitee otherwise
than on account of this indemnity agreement. In case any such Claim is made
against any Indemnitee and it notifies the Indemnifying Party of the existence
thereof, the Indemnifying Party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the Indemnitee, to
assume the defense thereof, with counsel reasonably satisfactory to such
Indemnitee; provided that if the defendants in any such Claim include both the
Indemnitee and the Indemnifying Party and the Indemnitee shall have concluded
that there may be legal defenses available to it which are different from or
additional to those available to the Indemnifying Party, the Indemnifying Party
shall not have the right to direct the defense of such Claim on behalf of such
Indemnitee, and the Indemnitee shall have the right to select separate counsel
to assert such legal defenses on behalf of such Indemnitee. Upon receipt of
notice from the Indemnifying Party to such Indemnitee of the Indemnifying
Party's election so to assume the defense of such Claim and approval by the
Indemnitee of counsel, the Indemnifying Party will not be liable to such
Indemnitee for expenses incurred thereafter by the Indemnitee in connection with
the defense thereof (other than reasonable costs of investigation) unless (i)
the Indemnitee shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the Indemnifying Party shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel in the jurisdiction in which any Claim is brought), (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
the Indemnitee to represent the Indemnitee within a reasonable time after notice
of existence of the Claim or (iii) the Indemnifying Party has authorized in
writing the employment of counsel for the Indemnitee. The indemnity,
reimbursement and contribution obligations of the Indemnifying Party hereunder
shall be in addition to any other liability the Indemnifying Party may otherwise
have to an Indemnitee and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Indemnifying
Party and any Indemnitee. The Indemnifying Party agrees that without the
Indemnitee's prior written consent, it will not settle, compromise or consent to
the entry of any judgment in any Claim in respect of which indemnification may
be sought under the indemnification provision of the Agreement, unless such
settlement, compromise or consent includes an unconditional release of each
Indemnitee from all liability arising out of such Claim.