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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 6, 1998
FOREST CITY ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Ohio 1-4372 34-0863886
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1100 Terminal Tower, 50 Public Square Cleveland, Ohio 44113
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 216-621-6060
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
This Form 8-K is being filed to submit the following:
Exhibit 10.1 - Second Amendment to Credit Agreement, dated as of March 6,
1998, by and among Forest City Rental Properties Corporation, the banks named
therein, KeyBank National Association, as administrative agent, and National
City Bank, as syndication agent.
Exhibit 10.2 - Second Amendment to Guaranty of Payment of Debt, dated as of
March 6, 1998, by and among Forest City Enterprises, Inc., the banks named
therein, KeyBank National Association, as administrative agent, and National
City Bank, as syndication agent.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Forest City Enterprises, Inc.
(Registrant)
Date April 6, 1998 By /s/ Thomas G. Smith
Thomas G. Smith, Senior Vice President
and Chief Financial Officer
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT is made and entered into as of
this 6th day of March, 1998 by and among FOREST CITY RENTAL PROPERTIES
CORPORATION, an Ohio corporation (the "Borrower"), KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent (the "Agent"), NATIONAL CITY BANK, as Syndication Agent
(the "Syndication Agent" and, together with the Agent, the "Agents") and the
banks from time to time party hereto (collectively, the "Banks" and individually
a "Bank"),
W I T N E S S E T H;
WHEREAS, the Borrower, the Banks other than U.S. Bank National Association
(the "Original Banks"), and the Agents have previously entered into a certain
Credit Agreement dated as of December 10, 1997, (the "Original Credit
Agreement") and the Borrower, the Banks and the Agents have also previously
entered into a First Amendment to Credit Agreement dated as of January 20, 1998;
(the "First Amendment"; the Original Credit Agreement as amended by the First
Amendment being referred to herein as the "Credit Agreement");
WHEREAS, in connection with the Original Credit Agreement, Forest City
Enterprises, Inc. (the "Parent") made and entered into a certain Guaranty of
Payment of Debt in favor of the Original Banks, dated as of December 10, 1997,
(the "Original Guaranty") and in connection with the First Amendment to Credit
Agreement, entered into a First Amendment to Guaranty of Payment of Debt among
the Parent, the Banks, and the Agents, dated as of January 20, 1998 (the "First
Amendment to Guaranty"; the Original Guaranty as amended by the First Amendment
to Guaranty being referred to herein as the "Guaranty");
WHEREAS, as set forth in the letter agreement among the Borrower, the
Parent, the Banks, and the Agents, dated February 25, 1998, (the "Letter
Agreement") the Borrower and the Parent have requested that the Banks and the
Agents agree to certain amendments to the Credit Agreement and to the Guaranty,
relating to the Senior Notes (as hereinafter defined) proposed to be issued by
the Parent, which indebtedness is not permitted by the terms of the Guaranty;
WHEREAS, as set forth in the Letter Agreement, the Banks and the Agents are
willing to amend the Credit Agreement and the Guaranty, on the respective terms
and conditions set forth herein and in the Second Amendment to Guaranty of
Payment of Debt (the "Second Amendment to Guaranty") of even date herewith,
respectively, and such terms and conditions are agreeable to the Borrower and to
the Parent; and
WHEREAS, the Borrower, the Banks, and the Agent desire to make certain
further amendments to the Credit Agreement, all on the terms and conditions
herein set forth, which further amendments are acceptable to the Parent.
NOW, THEREFORE, it is mutually agreed as follows:
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1. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to
the Agents and the Banks as follows:
(a) SENIOR NOTES. The Parent shall issue the Senior Notes under the terms
of the Indenture; the Final Drafts of the Senior Notes and the Indenture shall
be in compliance with the requirements of this Second Amendment to Credit
Agreement;
(b) USE OF NET PROCEEDS OF SENIOR NOTES TO PREPAY LOANS. The Parent shall
pay to Borrower, and the Borrower shall accept from the Parent, as a
contribution to capital, the entire net proceeds of the Senior Notes; and,
notwithstanding the provisions of Section 2.01(b) of the Credit Agreement or any
other provisions of the Credit Agreement to the contrary, a portion of the funds
so received by the Borrower shall be used immediately to pre-pay the entire
outstanding balance of the Initial Term Loans and the Revolving Loans, in
accordance with Section 5.05 of the Credit Agreement;
(c) USE OF BALANCE OF NET PROCEEDS OF SENIOR NOTES. The balance of the
entire net proceeds of the Senior Notes shall be used by the Borrower for
general corporate purposes of the Borrower, including projects under current
development;
(d) INCORPORATION OF REPRESENTATIONS AND WARRANTIES. Each and every
representation and warranty made by the Borrower in Article IX of the Credit
Agreement is incorporated herein as if fully rewritten herein at length and is
true, correct and complete as of the date hereof;
(e) REQUISITE AUTHORITY. The Borrower has all requisite power and authority
to execute and deliver and to perform its obligations in respect of this Second
Amendment to Credit Agreement and each and every other agreement, certificate,
or document required by this Second Amendment to Credit Agreement;
(f) DUE AUTHORIZATION; VALIDITY. The Borrower has taken all necessary
action to authorize the execution, delivery, and performance by it of this
Second Amendment to Credit Agreement and every other instrument, document, and
certificate relating thereto. This Second Amendment to Credit Agreement has been
duly executed and delivered by the Borrower and when executed and delivered by
the Borrower will be a legal, valid, and binding obligation of the Borrower
enforceable against it in accordance with its terms; and
(g) NO CONSENT. No consent, approval, or authorization of, or registration
with, any governmental authority or other Person is required in connection with
the execution, delivery, and performance of this Second Amendment to Credit
Agreement and the transactions contemplated hereby, except for the registration
of the Senior Notes with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, and any applicable "Blue Sky" laws.
2. CONDITIONS TO CLOSING AND TO EFFECTIVENESS OF SECOND AMENDMENT.
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(a) CLOSING CONDITIONS. Except as otherwise expressly provided in this
Second Amendment to Credit Agreement, prior to or concurrently with the Second
Amendment Closing Date (as hereinafter defined), and as conditions precedent to
the effectiveness of the amendments to the Credit Agreement provided for herein,
the following actions shall be taken, all in form and substance satisfactory to
the Agents and the Banks and their respective counsel:
(i) CORPORATE AND LOAN DOCUMENTS. The Borrower shall deliver or cause to be
delivered to the Agent and the Banks the following documents, in all cases duly
executed, and delivered by the Borrower and/or the Parent, and/or certified, as
the case may be:
(1) Certified copies of the resolutions of the board of directors of the
Borrower evidencing approval of the execution, delivery, and performance of this
Second Amendment to Credit Agreement and the Revolving Loan Notes in the form
attached as Exhibit D (such notes, in the form attached as Exhibit D, are
sometimes referred to herein as the "amended Revolving Loan Notes");
(2) Certified copies of resolutions of the Board of Directors of the Parent
evidencing approval of the execution, delivery, and performance of the Second
Amendment to Guaranty;
(3) Copies of the Articles of Incorporation of the Borrower, certified by
the Ohio Secretary of State as of a recent date;
(4) Copies of the Articles of Incorporation of the Parent, certified by the
Ohio Secretary of State as of a current date;
(5) Code of Regulations of the Borrower, certified as true and complete as
of the Second Amendment Closing Date by the Secretary of the Borrower;
(6) Code of Regulations of the Parent, certified as true and complete as of
the Second Amendment Closing Date by the Secretary of the Parent;
(7) A Borrower good standing certificate;
(8) A Parent good standing certificate;
(9) A certificate of the secretary or assistant secretary of the Borrower
certifying the names of the officers of Borrower authorized to sign this Second
Amendment to Credit Agreement and the amended Revolving Loan Notes, together
with the true signatures of such officers;
(10) A certificate of the secretary or assistant secretary of the Parent
certifying the names of the officers of the Parent authorized to sign the Second
Amendment to Guaranty, together with the true signatures of such officers;
(11) Counterparts of the Second Amendment to Credit Agreement, executed and
delivered by the Borrower, the Agents, and the Banks;
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(12) Counterparts of the Second Amendment to Guaranty, executed and
delivered by the Parent, the Agents, and the Banks; and
(13) A certificate of the secretary or assistant secretary of the Borrower
certifying that as of the date of this Second Amendment to Credit Agreement no
Event of Default or Possible Default exists under the Credit Agreement.
(ii) OPINION OF COUNSEL FOR PARENT. The Borrower shall deliver or caused to
be delivered to the Agents and the Banks a favorable opinion of counsel for the
Parent as to the due authorization, execution, and delivery, and legality,
validity, and enforceability of the Second Amendment to Guaranty and such other
matters as the Agent and the Banks may request.
(iii) OPINION OF COUNSEL FOR BORROWER. The Borrower shall deliver or caused
to be delivered to the Agents and the Banks a favorable opinion of counsel for
the Borrower as to the due authorization, execution, and delivery, and legality,
validity, and enforceability of the Second Amendment to Credit Agreement and the
amended Revolving Loan Notes and such other matters as the Agent and the Banks
may request.
(iv) PAYMENT OF FEES TO BANKS. On or before the Second Amendment Closing
Date, the Borrower shall have paid to the Agents and the Banks all costs, fees,
and expenses incurred by them through the Second Amendment Closing Date in the
preparation, negotiation, and execution of the Letter Agreement and of this
Second Amendment to Credit Agreement and the Second Amendment to Guaranty
(including, without limitation, legal fees and expenses of Thompson Hine & Flory
LLP), together with a fee equal to 25 basis points times the $60,000,000
increase in the aggregate Revolving Loan Commitment provided for herein. The
Borrower shall pay such fee to the Agent for distribution to the Banks Pro rata,
based upon the Maximum Amount of the Revolving Loan Commitment of each Bank.
(b) FURTHER CONDITIONS TO EFFECTIVENESS OF SECOND AMENDMENT TO CREDIT
AGREEMENT. Except as provided in Section 7 or Section 12 hereof, or as otherwise
expressly provided in this Second Amendment to Credit Agreement, as further
conditions precedent to the effectiveness of the amendments to the Credit
Agreement provided for herein, the following actions shall be taken, all in form
and substance satisfactory to the Agents and the Banks and their respective
counsel:
(i) FINAL DRAFTS OF SENIOR NOTES DOCUMENTS. The Borrower shall have
delivered or caused to be delivered to the Agent and the Banks a true and
complete copy of the Final Drafts of the Senior Notes and of the Indenture;
(ii) ISSUANCE OF SENIOR NOTES, ETC. The Guarantor shall have completed the
issuance of the Senior Notes not later than August 28, 1998; the Guarantor
immediately thereafter shall have paid to the Borrower, as a contribution to
capital, the entire net proceeds of the Senior Notes; the Borrower immediately
thereafter shall have paid a portion of the contribution so received to the
Banks, to pre-pay the entire outstanding balance of the Initial Term Loans and
the Revolving Loans, in accordance with the pre-payment provision of the Credit
Agreement;
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(iii) CERTIFICATION OF COMPLIANCE. The Agents and the Banks shall have
received a certification by a financial officer of the Borrower, confirming that
all of the requirements set forth above in this Section 2(b) have been met; and
(iv) DELIVERY OF AMENDED REVOLVING LOAN NOTES. The Borrower shall have
executed and delivered the amended Revolving Loan Notes; and
(v) UPDATED CLOSING DOCUMENTS. To the extent required by the Agent, the
Borrower shall deliver or cause to be delivered to the Agent and the Banks
updated forms of the closing documents listed in Section 2(a) of this Second
Amendment to Credit Agreement, all in form and substance satisfactory to the
Agents and the Banks and their respective counsel; and
(vi) PAYMENT OF FEES TO BANKS. The Borrower shall have paid to the Agents
and the Banks all costs, fees, and expenses incurred by them through the Second
Amendment Effective Date in connection with the confirmation of the
effectiveness of this Second Amendment to Credit Agreement and the Second
Amendment to Guaranty (including, without limitation, legal fees and expenses of
Thompson Hine & Flory LLP).
The date on which the conditions set forth in Section 2(a) and above in this
Section 2(b) have been satisfied is referred to herein as the "Second Amendment
Effective Date". Notwithstanding any other provision of this Second Amendment to
Credit Agreement to the contrary, in the event that the Second Amendment
Effective Date has not occurred by August 28, 1998, then this Second Amendment
to Credit Agreement shall be null and void thereafter, except that Borrower's
obligation to pay the costs, fees, and expenses referred to in Sections 2(a) and
(b) shall survive until satisfied in full. Upon the effectiveness of this Second
Amendment to Credit Agreement, the Banks will be deemed to have approved the
issuance of the Senior Notes by the Company, the taking of actions by the
Company to authorize the issuance of the Senior Notes and/or the Company
entering into an underwriting agreement as to the Senior Notes, and, to the
extent that the taking of any one or more such actions prior to the
effectiveness of this Second Amendment to Credit Agreement constitutes a
Possible Default or an Event of Default under the limitations on indebtedness
contained in the Credit Agreement or the Guaranty, the Banks will be deemed to
have waived such default(s).
3. AMENDMENT TO ARTICLE I OF CREDIT AGREEMENT.
(a) AMENDMENT TO DEFINITION OF "AFFILIATE". Article I of the Credit
Agreement is hereby amended by deleting the definition of "Affiliate" set forth
therein and replacing it with the following:
"Affiliate" of any Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person. For purposes of this
definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
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(b) ADDITION OF DEFINITION OF "BOARD OF DIRECTORS". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of "Board
of Directors":
"Board of Directors" shall mean either the board of
directors of the Parent or any duly constituted committee thereof.
(c) AMENDMENT TO DEFINITION OF "CHANGE OF OWNERSHIP EVENT". Article I of
the Credit Agreement is hereby amended by deleting the definition of "Change of
Ownership Event" set forth therein and replacing it with the following:
"Change of Ownership Event" shall be deemed to have
occurred at such time as either (a) any Person (other than a Permitted
Holder) or any Persons acting together that would constitute a "group"
(a "Group") for purposes of Section 13(d) of the Exchange Act or any
successor provision thereto (other than Permitted Holders), together
with any Affiliates or Related Persons thereof, shall beneficially own
(within the meaning of Rule 13d-3 under the Exchange Act, or any
successor provision thereto) at least 30% of the aggregate voting power
of all classes of Voting Stock of the Parent; or (b) any Person or
Group (other than Permitted Holders), together with any Affiliates or
Related Persons thereof, shall succeed in having a sufficient number of
its nominees elected to the Board of Directors of the Parent such that
such nominees, when added to any existing director remaining on the
Board of Directors of the Parent after such election who was a nominee
of or is an Affiliate or Related Person of such Person or Group, will
constitute a majority of the Board of Directors of the Parent; or (c)
the Parent shall cease to own at least one hundred percent (100%) on a
fully diluted basis, of the economic and voting interests of the
Borrower
(d) ADDITION OF DEFINITION OF "CAPITAL STOCK". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Capital Stock":
"Capital Stock" of any Person shall mean any and all
shares, interests, participations, or other equivalents (however
designated) of corporate stock or other equity participations or
interests including, without limitation, partnership interests, whether
general or limited, and membership interests, whether of managing or
non-managing members, of such Person.
(e) ADDITION OF DEFINITION OF "COMMON STOCK". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Common Stock":
"Common Stock" of any Person shall mean Capital Stock
of such Person that does not rank prior, as to the payment of dividends
or as to other amounts upon any voluntary or involuntary liquidation,
dissolution, or winding up of such Person, to shares of Capital Stock
of any other class of such Person.
(f) ADDITION OF DEFINITION OF "DISTRIBUTIONS". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Distributions":
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"Distributions" shall have the meaning set forth in Section 8.14 hereof.
(g) ADDITION OF DEFINITION OF "DIVIDENDS". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Dividends":
"Dividends" shall mean all dividends (in cash or otherwise) declared and/or
paid, capital returned, and other distributions of any kind made on any share of
Capital Stock outstanding at the time.
(h) ADDITION OF DEFINITION OF "EXCHANGE ACT". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Exchange Act":
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor provision thereto.
(i) ADDITION OF DEFINITION OF "FINAL DRAFTS". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of "Final
Drafts":
"Final Drafts" shall mean the final drafts of the Senior Notes and the
Indenture, as in effect and utilized at the time of issuance of the Senior
Notes, which final drafts shall contain no change of a material nature as
compared to the indenture in the form attached hereto as Exhibit G without the
prior written consent of the Banks, other than as to the insertion of pricing
information in the various blanks, which pricing information may be inserted
without the consent of any Banks; provided, however, that the maturity date of
the Senior Notes shall be at least ten (10) years after the issuance date of the
Senior Notes, the interest payments shall be not less frequently than
semi-annually and there shall be no change in any redemption provisions included
therein, nor shall any additional redemption provisions be added (other than
insertion of the redemption dates and prices, provided, however, that the
lockout periods for optional redemptions, which are specified in the Indenture
to end on March ___, 2003 and on March ___, 2001, shall not be decreased).
(j) AMENDMENT TO DEFINITION OF "GUARANTY". Article I of the Credit
Agreement is thereby amended by deleting the definition of "Guaranty" set forth
therein and replacing it with the following:
"Guaranty" means the Guaranty of Payment of Debt issued by the Parent to
the Agent and the Banks, in substantially the form and substance of Exhibit B
attached hereto, as such Guaranty may be from time to time, amended, restated or
otherwise modified.
(k) ADDITION OF DEFINITION OF "INDENTURE". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Indenture":
"Indenture" shall mean the indenture relating to the
Senior Notes, in the form attached to this Credit Agreement as Exhibit
G; provided, however, that the indenture may be modified to insert
pricing information in the various blanks without the consent of any
Bank; provided, further, however, that the maturity date of the Senior
Notes shall be at least ten (10) years after the issuance date of the
Senior Notes, the interest payments shall be not less
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frequently than semi-annually, and there shall be no change in any
redemption provisions included therein, nor shall any additional
redemption provisions be added (other than insertion of the redemption
dates and prices, provided, however, that the lockout periods for
optional redemptions, which are specified in the Indenture to end on
March ___, 2003 and on March ___, 2001, shall not be decreased);
provided, however, that, from and after the issuance of the Senior
Notes, the term "Indenture" shall mean the Final Draft thereof.
(l) ADDITION OF DEFINITION OF "PAYMENT DEFAULT". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Payment Default":
"Payment Default" shall mean any failure by the
Borrower or the Parent to make payment of principal, interest, or any
other charge due, whether at maturity or by acceleration, under the
Credit Agreement or the Guaranty.
(m) ADDITION OF DEFINITION OF "PERMITTED DISTRIBUTIONS". Article I of the
Credit Agreement is hereby amended by adding thereto the following definition of
"Permitted Distributions":
"Permitted Distributions" shall have the meaning set forth in Section 8.14
hereof.
(n) ADDITION OF DEFINITION OF "PERMITTED HOLDER". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Permitted Holder":
"Permitted Holder" shall mean (i) any of Samuel H. Miller, Albert B.
Ratner, Charles A. Ratner, James A. Ratner, Ronald A. Ratner, Nathan Shafran or
any spouse of any of the foregoing, and any trusts for the benefit of any of the
foregoing, (ii) RMS, Limited Partnership and any general partner or limited
partner thereof and any Person (other than a creditor) that upon the dissolution
or winding up of RMS, Limited Partnership receives a distribution of Capital
Stock of the Company, (iii) any group (as defined in Section 13(d) of the
Exchange Act) of two or more Persons or entities that are specified in the
immediately preceding clauses (i) and (ii), and (iv) any successive
recombination of the Persons or groups that are specified in the immediately
preceding clauses (i), (ii), and (iii).
(o) ADDITION OF DEFINITION OF "RELATED PERSON". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Related Person":
"Related Person" of any Person shall mean any other
Person directly or indirectly owning (a) 5% or more of the outstanding
Common Stock of such Person (or, in the case of a Person that is not a
corporation, 5% or more of the equity interest in such Person), or (b)
5% or more of the combined voting power of the Voting Stock of such
Person.
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(p) ADDITION OF DEFINITION OF "SECOND AMENDMENT CLOSING DATE". Article I of
the Credit Agreement is hereby amended by adding thereto the following
definition of "Second Amendment Closing Date":
"Second Amendment Closing Date" shall mean the date
upon which the Second Amendment to the Credit Agreement is executed and
delivered by all of the parties thereto.
(q) ADDITION OF DEFINITION OF "SECOND AMENDMENT EFFECTIVE DATE". Article I
of the Credit Agreement is hereby amended by adding thereto the following
definition of "Second Amendment Effective Date":
"Second Amendment Effective Date" shall have the
meaning set forth in Section 2(b) of the Second Amendment to Credit
Agreement.
(r) ADDITION OF DEFINITION OF "SECOND AMENDMENT TO CREDIT AGREEMENT".
Article I of the Credit Agreement is hereby amended by adding thereto the
following definition of "Second Amendment to Credit Agreement":
"Second Amendment to Credit Agreement" shall mean the
document, entitled Second Amendment to Credit Agreement, entered into
among the Borrower, the Banks, and the Agents as of March ___, 1998,
amending the Credit Agreement as in effect prior to the date thereof.
(s) ADDITION OF DEFINITION OF "SENIOR NOTES". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Senior Notes":
"Senior Notes" shall mean the senior notes of the
Parent, in the original principal amount not to exceed $200,000,000, to
be issued under the terms of the Final Draft of the Indenture;
provided, however, that, from and after the issuance of the Senior
Notes, the term "Senior Notes" shall mean the Final Draft thereof.
(t) ADDITION OF DEFINITION OF "VOTING STOCK". Article I of the Credit
Agreement is hereby amended by adding thereto the following definition of
"Voting Stock":
"Voting Stock" of any Person shall mean Capital Stock
of such Person which ordinarily has voting power for the election of
directors (or persons performing similar functions) of such Person,
whether at all times or only so long as no senior class of securities
has such voting power by reason of any contingency.
4. AMENDMENT TO SECTION 2.02(b) OF THE CREDIT AGREEMENT. To reflect the
prepayment in full of the outstanding balance of the Initial Term Loans prior to
or concurrently with the Second Amendment Effective Date, Section 2.02(b) of the
Credit Agreement is hereby amended by deleting therefrom the words "minus the
corresponding quarterly installment due and payable on the Initial Term Loans
pursuant to Section 2.01(b), if any".
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5. AMENDMENTS TO SECTION 3.02(a) OF THE CREDIT AGREEMENT.
a. TO REPLACE EXHIBIT A. Exhibit A to the Credit Agreement is hereby
amended by replacing it with Exhibit A hereto, setting forth an amended Maximum
Amount of the Revolving Loan Commitment of each Bank, with the amended aggregate
Revolving Loan Commitments equal to $225,000,000.
b. TO PROVIDE FOR QUARTERLY REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
Section 3.02(a) of the Credit Agreement is hereby amended by deleting it in its
entirety and substituting therefor the following:
SECTION 3.02 REVOLVING LOAN COMMITMENTS. (a) As used
in this Agreement, the "Revolving Loan Commitment" of each Bank at any
time means the several obligations of each Bank to advance, subject to
the terms and conditions set forth herein, up to the Maximum Amount set
forth for such Bank on Exhibit A hereto; provided, however, that, on
each Quarterly Date commencing with April 1, 1998, the aggregate
Revolving Loan Commitment shall be reduced by $2,500,000 and the
Maximum Amount of the Revolving Loan Commitment of each Bank shall be
reduced by such Bank's Pro rata share of the aggregate $2,500,000
reduction. If, and to the extent that, upon giving effect to such
reduction, the outstanding principal balance of the Loans will exceed
the aggregate Revolving Loan Commitment, then, notwithstanding any
other provision of the Credit Agreement to the contrary, the Borrower
also shall, on such Quarterly Date, make a prepayment of principal, in
accordance with the requirements of Section 5.05 of this Credit
Agreement, sufficient to reduce the outstanding principal balance of
the Loans to an amount less than or equal to the reduced aggregate
Revolving Loan Commitment.
6. AMENDMENTS TO SECTION 3.05 OF THE CREDIT AGREEMENT.
(a) Section 3.05(a) of the Credit Agreement shall be amended by adding the
words "Second Amendment" immediately before the words "Closing Date" contained
therein.
Exhibit D to the Credit Agreement is hereby amended by deleting it in its
entirety and substituting therefor a promissory note substantially in the form
of Exhibit D attached hereto and made a part hereof.
(b) Section 3.05(b)(ii) of the Credit Agreement is hereby amended by
deleting the words "the Closing Date" and substituting therefor the words "as
shown on Exhibit D".
(c) Section 3.05(b)(iv) of the Credit Agreement is hereby amended by
deleting the words "January 1, 2001 unless extended in accordance with Section
3.09 hereof" contained therein and substituting therefor the phrase "the
Termination Date".
7. AMENDMENT TO SECTION 4.03(b) OF THE CREDIT AGREEMENT. Section 4.03(b) of
the Credit Agreement is hereby amended by deleting it in its entirety and
substituting therefor the following:
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(b) Interest on all Loans subject to the LIBOR Rate
Option shall be payable in arrears on the first day of each calendar
month.
8. AMENDMENT TO SECTION 5.05 OF THE CREDIT AGREEMENT. Section 5.05 of the
Credit Agreement is hereby amended by designating the existing text thereof as
paragraph (a), entitled "Optional Prepayment", and by adding thereto the
following paragraph (b):
(b) MANDATORY PREPAYMENT. Notwithstanding anything to
the contrary in this Credit Agreement, immediately after the net
proceeds of the Senior Notes are contributed by the Parent as capital
to the Borrower, the Borrower shall prepay the entire outstanding
balance due under the Term Loans and the Revolving Loans. Such
prepayment shall be subject to all of the terms and conditions of this
Credit Agreement relating to prepayments, including, without
limitation, the prepayment premium provisions set forth in Section
5.05(a) of this Credit Agreement. Upon such prepayment, notwithstanding
anything to the contrary herein, the Borrower shall no longer be
entitled to, and the Banks shall have no obligation to make or advance,
the Initial Term Loans, and the only Term Loans provided for under the
Credit Agreement shall be Additional Term Loans.
9. ADDITION OF SECTION 7.18 TO THE CREDIT AGREEMENT. Article VII of the
Credit Agreement is hereby amended by adding thereto the following Section 7.18:
SECTION 7.18 USE OF PROCEEDS OF THE SENIOR NOTES. The
net proceeds of the Senior Notes, as the same shall be contributed by
the Parent to the Borrower as capital, shall be used by the Borrower to
prepay the outstanding balance of the Term Loans and the Revolving
Loans and the balance shall be used for general corporate purposes of
the Borrower, including projects under current development.
10. AMENDMENTS TO ARTICLE VIII OF THE CREDIT AGREEMENT.
a. AMENDMENT TO SECTION 8.07. Section 8.07 of the Credit Agreement is
hereby amended by deleting the portion of the first sentence thereof up to and
including the colon and by substituting therefor the following:
The Borrower will not and will not permit any Subsidiary to pledge its
credit or property in any manner for the payment or other performance
of the indebtedness, contract or other obligation of another
(including, without limitation, the indebtedness of the Parent under
the Senior Notes), whether as guarantor (whether of payment or of
collection), surety, co-maker, endorser or by agreeing conditionally or
otherwise to make any purchase, loan or investment in order thereby to
enable another to prevent or correct a default of any kind or
otherwise, except for:
b. ADDITION OF SECTION 8.14. Article VIII of the Credit Agreement is hereby
amended by adding the following Section 8.14 thereto:
Section 8.14(a) RESTRICTIONS ON DISTRIBUTIONS DURING AN EVENT OF DEFAULT
OTHER THAN A PAYMENT DEFAULT. In the event of and during the
<PAGE>
continuance of any Event of Default under this Credit Agreement or
under the Guaranty other than a Payment Default, the Borrower shall not
directly or indirectly declare, make, or pay any Dividends in respect
of its Capital Stock, or, notwithstanding any other provision of the
Credit Agreement to the contrary, any loans or advances to the Parent,
(any such Dividends, loans, or advances are referred to hereinafter as
"Distributions") in excess of the sum of the amounts sufficient to pay,
when due, all interest payments in respect of the Senior Notes and the
amounts sufficient to pay, when due, all taxes of the Parent
(collectively, "Permitted Distributions"); provided, however, that any
Permitted Distributions shall be applied by the Parent strictly to the
permitted uses specified above.
Section 8.14(b) RESTRICTIONS ON DISTRIBUTIONS DURING
A PAYMENT DEFAULT. In the event of and during the continuance of any
Payment Default, notwithstanding the provisions of Section 8.14(a) of
this Credit Agreement, the Borrower shall not directly or indirectly
declare or pay any Distributions to the Parent.
11. AMENDMENT TO SECTION 10.10 OF THE CREDIT AGREEMENT. Section 10.10 of
the Credit Agreement is hereby amended by deleting it in its entirety and
substituting therefor the following:
SECTION 10.10. DEFAULT UNDER GUARANTY OR SENIOR
NOTES. If the Parent defaults in the payment or performance of any
obligation in the Guaranty or in the performance of any other
agreement, covenant, term, or condition in the Guaranty, other than a
violation of Section 9.14(a) of the Guaranty, or in the payment or
performance of any obligation under the Senior Notes or the Indenture
(after giving effect to any applicable grace periods), or in the
performance of any other agreement, covenant, term, or condition in the
Senior Notes or the Indenture (after giving effect to any applicable
grace periods).
12. DEFINITIONS; CONSEQUENCES OF DELAY IN SECOND AMENDMENT EFFECTIVE DATE
UNTIL AFTER THE SECOND AMENDMENT CLOSING DATE. Capitalized terms used in this
Second Amendment to Credit Agreement that are defined in the Credit Agreement
shall have the respective meanings ascribed to them in the Credit Agreement,
with the amendments to and additions of capitalized terms set forth in this
Second Amendment to Credit Agreement effective upon the Second Amendment
Effective Date. Notwithstanding the foregoing and the delay otherwise in the
effectiveness of this Second Amendment to Credit Agreement until the
satisfaction of all of the conditions set forth in Section 2(a) and (b), the
amendments to capitalized terms previously included in the Credit Agreement that
are set forth in this Second Amendment to Credit Agreement, and the defined
terms newly added to the Credit Agreement by this Second Amendment to Credit
Agreement, shall be effective from and after the Second Amendment Closing Date
for purposes of the use of such capitalized or defined terms in Sections 1, 2,
12, 13, and 14 hereof. In the event that the Second Amendment Effective Date
does not occur by August 28, 1998, then this Second Amendment to Credit
Agreement shall be null and void for all purposes, other than as to the
obligation of Borrower to pay the fees and expenses referred to in Section 2(a)
and (b), which obligation shall survive until satisfied in full.
13. NO WAIVER. Except as otherwise expressly provided herein, the execution
and delivery of this Second Amendment to Credit Agreement by the Agents and the
Banks
<PAGE>
shall not constitute a waiver or release of any obligation or liability of the
Borrower under the Credit Agreement as in effect prior to the effectiveness of
this Second Amendment to Credit Agreement or as amended hereby or waive or
release any Event of Default or Possible Default existing at any time.
14. EFFECT ON OTHER PROVISIONS. Except as expressly amended by this Second
Amendment to Credit Agreement, all provisions of the Credit Agreement continue
unchanged and in full force and effect and are hereby confirmed and ratified.
All provisions of the Credit Agreement shall be applicable to this Second
Amendment to Credit Agreement. .
<PAGE>
IN WITNESS WHEREOF, the parties hereto, each by an officer thereunto duly
authorized, have caused this Second Amendment to Credit Agreement to be executed
and delivered as of the date first above written.
Address: FOREST CITY RENTAL PROPERTIES
1100 Terminal Tower CORPORATION
Cleveland, Ohio 44113
By: Thomas G. Smith
Title: Vice President and Assistant Secretary
Address: KEYBANK NATIONAL ASSOCIATION,
127 Public Square Individually and as Administrative Agent
Cleveland, Ohio 44114
By: Michael D. Mitro
Title: Vice President
Address: NATIONAL CITY BANK, Individually and
1900 East Ninth Street as Syndication Agent
Cleveland, Ohio 44114
By: Anthony DiMare
Title: Senior Vice President
Address: THE HUNTINGTON NATIONAL BANK
917 Euclid Avenue
Cleveland, Ohio 44114 By: James R. Logan
Title: Senior Vice President
Address: COMERICA BANK
Overnight Mail:
500 Woodward Avenue By: David J. Campbell
Detroit, Michigan 48226 Title: Vice President
7th Floor
U.S. Mail:
PO Box 75000
Detroit, Michigan 48275-3256
<PAGE>
Address: FIRST MERIT BANK
123 West Prospect Avenue
Cleveland, Ohio 44115 By: John F. Newmann
Title: Vice President
Address: CREDIT LYONNAIS NEW YORK BRANCH
1301 Avenue of the Americas
New York, New York 10019 By: Greg Allen
Title: Vice President
Address: STAR BANK
1350 Euclid Avenue
Suite 211 By: Perry D. Quick
Cleveland, Ohio 44115 Title: Senior Vice President
Address: MANUFACTURERS AND TRADERS
One Fountain Plaza TRUST COMPANY
Buffalo, New York 14203-1495
By: Kevin B. Quinn
Title: Assistant Vice President
Address: U.S. BANK NATIONAL ASSOCIATION
U.S. Bank Place (M.S. MPFP-0802)
601 Second Avenue South By: Peter A. Brockelman
Minneapolis, Minnesota 55402 Title: Assistant Vice President
CONSENT OF GUARANTOR
FOREST CITY ENTERPRISES, INC., an Ohio corporation, Guarantor under that
certain Guaranty of Payment of Debt issued on or about December 10, 1997, as
amended (the "Guaranty of Payment of Debt") to and in favor of the Agents and
the Banks in respect of, inter alia., the indebtedness of FOREST CITY RENTAL
PROPERTIES CORPORATION under the Credit Agreement referenced in the foregoing
Second Amendment to Credit Agreement, hereby acknowledges that it consents to
the foregoing Second Amendment to Credit Agreement and confirms and agrees that
its Guaranty of Payment of Debt, as amended to the date hereof, is and shall
remain in full force and effect with respect to the Credit Agreement as in
effect prior to, and from and after, the amendment thereof pursuant to the
foregoing Second Amendment to Credit Agreement.
Dated: March 6, 1998 FOREST CITY ENTERPRISES, INC.
By: Thomas G. Smith
Title: Chief Financial Officer,
Senior Vice President & Secretary
<PAGE>
EXHIBIT A
Bank Maximum Amount
KeyBank National Association $40,000,000.00
National City Bank 40,000,000.00
The Huntington National Bank 32,500,000.00
First Merit Bank 22,500,000.00
Comerica Bank 18,000,000.00
Credit Lyonnais 18,000,000.00
Star Bank 18,000,000.00
Manufacturers and Traders Trust
Company 18,000,000.00
U.S. Bank National Association 18,000,000.00
TOTAL $225,000,000.00
<PAGE>
SECOND AMENDMENT TO GUARANTY OF PAYMENT OF DEBT
This SECOND AMENDMENT TO GUARANTY OF PAYMENT OF DEBT ("Second Amendment to
Guaranty") is made and entered into as of this 6th day of March, 1998 by and
among FOREST CITY ENTERPRISES, INC., an Ohio corporation ("Guarantor'), KEYBANK
NATIONAL ASSOCIATION, as Administrative Agent (the "Agent"), NATIONAL CITY BANK,
as Syndication Agent (the "Syndication Agent" and, together with the Agent, the
"Agents") and the banks from time to time party hereto (the "Banks"),
W I T N E S S E T H;
WHEREAS, Forest City Rental Properties Corporation (the "Borrower"), the
Banks other than U.S. Bank National Association (the "Original Banks"), and the
Agents previously entered into a certain Credit Agreement dated as of December
10, 1997 (the "Original Credit Agreement");
WHEREAS, the Banks required, as a condition to entering into the Original
Credit Agreement, that the Guarantor execute and deliver to the Agents and the
Original Banks a certain Guaranty of Payment of Debt, dated December 10, 1997,
(the "Original Guaranty") and the Guarantor agreed to and did execute and
deliver the Original Guaranty to the Agents and the Original Banks; and
WHEREAS, the Borrower, the Banks, and the Agents have also previously
entered into a First Amendment to Credit Agreement, dated as of January 20, 1998
(together with the Original Credit Agreement, the "Credit Agreement");
WHEREAS, the Banks required, as a condition to entering into the First
Amendment to Credit Agreement, that the Guarantor execute and deliver to the
Agents and the Banks a certain First Amendment to Guaranty of Payment of Debt,
dated January 20, 1998 (together with the Original Guaranty, the "Guaranty") and
the Guarantor agreed to and did execute and deliver the First Amendment to
Guaranty of Payment of Debt to the Agents and the Original Banks;
WHEREAS, as set forth in the letter agreement among the Borrower, the
Parent, the Banks, and the Agents, dated February 25, 1998, (the "Letter
Agreement") the Borrower and the Guarantor have requested that the Banks and the
Agents agree to certain amendments to the Credit Agreement and to the Guaranty,
relating to the indebtedness to be evidenced by the Senior Notes (as hereinafter
defined), proposed to be issued by the Guarantor, which indebtedness is not
permitted by the terms of the Guaranty;
WHEREAS, as set forth in the Letter Agreement, the Banks and the Agents are
willing to amend the Credit Agreement and the Guaranty, on the respective terms
and
<PAGE>
conditions set forth in the Second Amendment to Credit Agreement of even date
herewith and set forth herein, respectively, which conditions include, without
limitation, that the Guarantor enters into this Second Amendment to Guaranty,
and such terms and conditions are agreeable to the Guarantor.
NOW, THEREFORE, it is mutually agreed as follows:
1. AMENDMENTS TO SECTION 1 OF THE GUARANTY. In order to facilitate the
addition of defined terms to Section 1 of the Guaranty, Section 1 of the
Guaranty is hereby amended by deleting the subsection numbers set forth therein
(e.g., 1.1, 1.2, etc.) and by ending each defined term with a period rather than
a comma, with no change to the text of the defined terms set forth in such
subsections except as provided below in this Second Amendment to Guaranty. Any
new defined terms added by this Second Amendment to Guaranty shall be inserted
in Section 1 so as to maintain the list of defined terms in Section 1 in
alphabetical order.
(a) ADDITION OF DEFINITION OF "CAPITAL STOCK". Section 1 of the Guaranty is
hereby amended by adding thereto the following definition of "Capital Stock":
The term "Capital Stock" of any Person as used herein
shall mean any and all shares, interests, participations, or other
equivalents (however designated) of corporate stock or other equity
participations or interests including, without limitation, partnership
interests, whether general or limited, and membership interests,
whether of managing or non-managing members, of such Person.
(b) ADDITION OF DEFINITION OF "DISTRIBUTIONS". Section 1 of the Guaranty is
hereby amended by adding thereto the following definition of "Distributions":
"Distributions" shall have the meaning set forth in Section 9.13(e) hereof.
(c) AMENDMENT TO DEFINITION OF "DIVIDENDS". Section 1 of the Guaranty is
hereby amended by deleting the definition of "Dividends" set forth therein and
replacing it with the following:
"Dividends" shall include all dividends (in cash or
otherwise) declared and/or paid, capital returned, and other
distributions of any kind made on any share of Capital Stock
outstanding at the time.
(d) ADDITION OF DEFINITION OF "FINAL DRAFTS". Section 1 of the Guaranty is
hereby amended by adding thereto the following definition of "Final Drafts":
"Final Drafts" shall have the meaning set forth in Section 9.10(h)(i)
hereof.
(e) ADDITION OF DEFINITION OF "INDENTURE". Article I of the Guaranty is
hereby amended by adding thereto the following definition of "Indenture":
<PAGE>
"Indenture" shall mean the indenture relating to the
Senior Notes, in the form attached to the Credit Agreement as Exhibit
G; provided, however, that the indenture may be modified to insert
pricing information in the various blanks without the consent of any
Bank; provided, further, however, that the maturity date of the Senior
Notes shall be at least ten (10) years after the issuance date of the
Senior Notes, the interest payments shall be not less frequently than
semi-annually, and there shall be no change in any redemption
provisions included therein, nor shall any additional redemption
provisions be added (other than insertion of the redemption dates and
prices, provided, however, that the lockout periods for optional
redemptions, which are specified in the Indenture to end on March ___,
2003 and on March ___, 2001, shall not be decreased); provided,
however, that, from and after the issuance of the Senior Notes, the
term "Indenture" shall mean the Final Draft thereof.
(f) ADDITION OF DEFINITION OF "PAYMENT DEFAULT". Section 1 of the Guaranty
is hereby amended by adding thereto the following definition of "Payment
Default":
"Payment Default" shall mean any failure by the
Borrower or the Guarantor to make payment of principal of, or interest
on, any Note (as defined in the Credit Agreement), or any other charge
provided hereunder or under the Credit Agreement, when due and payable,
whether at maturity or by acceleration.
(g) ADDITION OF DEFINITION OF "PERMITTED DISTRIBUTIONS". Section 1 of the
Guaranty is hereby amended by adding thereto the following definition of
"Permitted Distributions":
"Permitted Distributions" shall have the meaning set forth in Section
9.13(e) hereof.
(h) ADDITION OF DEFINITION OF "PERSON". Section 1 of the Guaranty is hereby
amended by adding thereto the following definition of "Person":
"Person" shall mean an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including, without limitation, a governmental or political
subdivision or an agency or instrumentality thereof.
(i) ADDITION OF DEFINITION OF "SECOND AMENDMENT EFFECTIVE DATE". Section 1
of the Guaranty is hereby amended by adding thereto the following definition of
"Second Amendment Effective Date":
"Second Amendment Effective Date" shall have the meaning set forth in the
Credit Agreement.
(j) ADDITION OF DEFINITION OF "SENIOR NOTES". Section 1 of the Guaranty is
hereby amended by adding thereto the following definition of "Senior Notes":
<PAGE>
"Senior Notes" shall mean the senior notes of the
Guarantor, in the original principal amount not to exceed $200,000,000,
to be issued under the terms of the Final Draft of the Indenture;
provided, however, that, from and after the issuance of the Senior
Notes, the term "Senior Notes" shall mean the Final Draft thereof.
2. AMENDMENT TO SECTION 2 OF THE GUARANTY. Section 2 of the Guaranty is
hereby amended by deleting the second sentence therein and replacing it with the
following sentence:
The Agreement provides, on and subject to certain conditions therein
set forth, for Additional Term Loans and Revolving Loans by the Banks
to the Borrower up to an aggregate maximum principal amount of Two
Hundred Twenty-Five Million Dollars ($225,000,000).
3. AMENDMENT TO SECTION 9.2(c) of the Guaranty. Section 9.2(c) of the
Guaranty is hereby amended by adding the following proviso to the end thereof :
; provided, however, that, notwithstanding the foregoing, the Guarantor
shall not make any payment on account of the Senior Notes in the event
of and during the continuance of any Payment Default under the Credit
Agreement or this Guaranty.
4. AMENDMENT TO SECTION 9.5 OF THE GUARANTY. Section 9.5 of the Guaranty is
hereby amended by adding the words "(including, without limitation, any default
under the Senior Notes, the indenture or any other document relating thereto
(after giving effect to any applicable grace period))" after the word
"hereunder" in the third line of Section 9.5, and by adding the following
sentence to the end of Section 9.5:
Further, the Guarantor shall notify the Banks not less than thirty (30)
days in advance of entering into any proposed amendment or modification
of the Final Drafts of the Senior Notes or the Indenture, whether or
not the Guarantor believes that the consent of the Required Banks is
needed therefor pursuant to Section 9.10(h) of this Guaranty.
5. AMENDMENT TO SECTION 9.10 of the Guaranty. Section 9.10 of the Guaranty
is hereby amended by deleting ", or" at the end of paragraph (g)(vi), by adding
the following new paragraph (h) thereto:
(h) any indebtedness or obligations of the Guarantor under the Senior
Notes; provided that
(i) the Senior Notes are issued by the Guarantor not later than August 28,
1998, and provided, further, that the final drafts of the Senior Notes and the
Indenture, as in effect and utilized at the time of issuance of the Senior
Notes, contain no change of a material nature as compared to the indenture in
the form attached to the Credit Agreement as Exhibit G without the prior written
consent of the Banks, other than as to the insertion of pricing information in
the various blanks, which pricing information may be inserted without the
consent of any Bank; provided, however, that the maturity date of the Senior
<PAGE>
Notes shall be at least ten (10) years after the issuance date of the
Senior Notes, the interest payments shall be not less frequently than
semi-annually and there shall be no change in any redemption provisions
included therein, nor shall any additional redemption provisions be
added (other than insertion of the redemption dates and prices,
provided, however, that the lockout periods for optional redemptions,
which are specified in the Indenture to end on March ___, 2003 and on
March ___, 2001, shall not be decreased) (such Senior Notes and
Indenture, conforming with the provisions of this subparagraph
9.10(h)(i), are referred to as the "Final Drafts");
(ii) The Senior Notes or the Indenture may not provide that an
Event of Default under the Credit Agreement or this Guaranty
constitutes a default under the Senior Notes or the Indenture, except
in the case of an Event of Default that results in the acceleration of
the payment of the Debt or constitutes the failure to pay the Debt when
due after acceleration or maturity; and
(iii) the Senior Notes or the Indenture shall not be amended
or modified after the issuance of the Senior Notes without the prior
written consent of the Required Banks, other than amendments or
modifications that do not adversely affect the Credit Agreement and the
Guaranty or their relationship to the Senior Notes or the Indenture, or
and by re-lettering old paragraph (h) as paragraph (i).
5. AMENDMENT TO SECTION 9.13(b) OF THE GUARANTY. Section 9.13(b) of the
Guaranty is hereby amended by adding the following proviso to the end thereof:
; provided, however, that, notwithstanding the foregoing, the Guarantor
shall not make any payment on account of the Senior Notes in the event
of and during the continuance of any Payment Default under the Credit
Agreement or this Guaranty,.
6. ADDITION OF SECTIONS 9.13(d), (e), AND (f) TO THE GUARANTY. Section 9.13
of the Guaranty is hereby amended by replacing the period at the end thereof
with a comma, and adding the following new paragraphs (d), (e), and (f) thereto:
(d) The Guarantor shall not directly or indirectly
exercise its optional redemption rights, under the terms of the Senior
Notes or the Indenture, to redeem the Senior Notes before the maturity
date of the Senior Notes, or to deposit monies or other assets with the
trustee under the Indenture for the Senior Notes for the payment of the
Senior Notes or the release of restrictive covenants thereunder, by
defeasance, without in each case the prior written consent of the
Required Banks,
(e) In the event of and during the continuance of any
Event of Default under the Credit Agreement or under this Guaranty
other than a Payment Default, the Guarantor shall not cause the
Borrower to declare, pay, or make, and shall not accept payment of, any
Dividends in respect of Capital Stock of the Borrower, or,
notwithstanding any other provision of the Credit Agreement or this
Guaranty to the
<PAGE>
contrary, any loans or advances to the Guarantor, (any such Dividends
or loans are referred to herein as "Distributions") in excess of the
sum of the amounts sufficient to pay, when due, all interest payments
in respect of the Senior Notes and the amounts sufficient to pay, when
due, all taxes of the Guarantor (collectively, "Permitted
Distributions"); provided, however, that any Permitted Distributions
shall be applied by the Guarantor strictly to the permitted uses
specified above, and
(f) Notwithstanding the provisions of Section 9.13(e)
of this Guaranty, in the event of and during the continuance of any
Payment Default, the Guarantor shall not cause the Borrower to pay or
make, and shall not accept payment of, any Distributions.
7. AMENDMENT TO SECTION 10(d) OF THE GUARANTY. Section 10(d) of the
Guaranty is hereby amended by adding the following proviso prior to the word
"or" at the end thereof:
; provided, however, that it shall be an Event of Default hereunder if
any default occurs (after giving effect to any applicable grace period)
under the Senior Notes permitted by Section 9.10(h) of this Guaranty,
or under the Indenture,.
8. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants to
the Agents and each of the Banks as follows:
(a) SENIOR NOTES. The Guarantor shall issue the Senior Notes under the
terms of the Indenture; the Final Drafts of the Senior Notes and the Indenture
shall be in compliance with the requirements of this Second Amendment to
Guaranty;
(b) USE OF NET PROCEEDS OF SENIOR NOTES TO PREPAY LOANS. The
Guarantor shall pay to Borrower, as a contribution to capital, the entire net
proceeds of the Senior Notes; notwithstanding the provisions of Section 2.01(b)
of the Credit Agreement or any other provisions of the Credit Agreement to the
contrary, the Guarantor shall cause the Borrower to use a portion of the funds
so received by the Borrower immediately to prepay the entire outstanding balance
of the Initial Term Loans and the Revolving Loans, in accordance with Section
5.05 of the Credit Agreement;
(c) USE OF BALANCE OF NET PROCEEDS OF SENIOR NOTES. The Guarantor shall
cause the Borrower to use the balance of the entire net proceeds of the Senior
Notes for general corporate purposes of the Borrower, including projects under
current development;
(d) INCORPORATION OF REPRESENTATIONS AND WARRANTIES. Each and every
representation and warranty made by the Guarantor in Section 7 of the Original
Guaranty is incorporated herein as if fully rewritten herein at length and is
true, correct and complete as of the date hereof and no Event of Default or
Possible Default exists on such date;
<PAGE>
(e) REQUISITE AUTHORITY. The Guarantor has all requisite power and
authority to execute and deliver and to perform its obligations in respect of
this Second Amendment to Guaranty and each and every other agreement,
certificate, or document required to be delivered as a condition precedent to
this Second Amendment to Guaranty or to the Second Amendment to Credit
Agreement;
(f) DUE AUTHORIZATION; VALIDITY. The Guarantor has taken all necessary
action to authorize the execution, delivery, and performance by it of this
Second Amendment to Guaranty and every other instrument, document, and
certificate relating thereto. This Second Amendment to Guaranty has been duly
executed and delivered and when executed and delivered will be a legal, valid,
and binding obligation of the Guarantor enforceable against it in accordance
with its terms; and
(g) NO CONSENT. No consent, approval, or authorization of, or registration
with, any governmental authority or other Person is required in connection with
the execution, delivery, and performance of this Second Amendment to Guaranty
and the transactions contemplated hereby, except for the registration of the
Senior Notes with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, and any applicable "Blue Sky" laws.
9. NO WAIVER. Except as otherwise expressly provided herein, the
acceptance, execution, and/or delivery of this Second Amendment to Guaranty of
Payment of Debt by the Agents and the Banks shall not constitute a waiver or
release of any obligation or liability of the Guarantor under the Guaranty as in
effect prior to the effectiveness of this Second Amendment to Guaranty or as
amended hereby or waive or release any Event of Default or Possible Default
existing at any time.
10. CONDITIONS TO CLOSING AND TO EFFECTIVENESS.
(a) CLOSING CONDITIONS. Except as otherwise expressly provided in this
Second Amendment to Guaranty, prior to or concurrently with the execution and
delivery of this Second Amendment to Guaranty, and as conditions precedent to
the effectiveness of the amendments to the Guaranty provided for herein, the
Agents and the Banks and their respective counsel shall have received such
opinions of counsel to the Guarantor, certified copies of resolutions of the
Boards of Directors of the Guarantor, and such other documents as shall be
required by the Agents, the Banks, or their respective counsel to evidence and
confirm the due authorization, execution, and delivery of this Second Amendment
to Guaranty, all in form and substance satisfactory to the Agents and the Banks
and their respective counsel, and all costs, fees, and expenses required by the
Second Amendment to Credit Agreement to have been paid by the Borrower in
connection with the Second Amendment to Credit Agreement and/or this Second
Amendment to Guaranty shall have been paid.
(b) FURTHER CONDITIONS TO EFFECTIVENESS OF SECOND AMENDMENT TO CREDIT
AGREEMENT. As further conditions precedent to the effectiveness of the
amendments to the Guaranty provided for herein, the following actions shall
<PAGE>
be taken, all in form and substance satisfactory to the Agents and the
Banks and their respective counsel:
(i) FINAL DRAFTS OF SENIOR NOTES DOCUMENTS. The Guarantor shall have
delivered or caused to be delivered to the Agent and the Banks a true and
complete copy of the Final Drafts of the Senior Notes and the Indenture;
(ii) ISSUANCE OF SENIOR NOTES, ETC. The Guarantor shall have completed the
issuance of the Senior Notes not later than August 28, 1998; the Guarantor
immediately thereafter shall have paid to the Borrower, as a contribution to
capital, the entire net proceeds of the Senior Notes; the Borrower immediately
thereafter shall have paid a portion of the contribution so received to the
Banks, to pre-pay the entire outstanding balance of the Initial Term Loans and
the Revolving Loans, in accordance with the pre-payment provision of the Credit
Agreement;
(iii) CERTIFICATION OF COMPLIANCE. The Agents and the Banks shall have
received a certification by the Chief Financial Officer, or in his or her
absence, another officer designated by the Chief Financial Officer, confirming
that all of the requirements set forth above in this Section 10(b) have been
met;
(v) UPDATED CLOSING DOCUMENTS. To the extent required by the Agents, the
Guarantor shall deliver or cause to be delivered to the Agents and the Banks
updated forms of the closing documents listed in Section 10(a) of this Second
Amendment to Guaranty, all in form and substance satisfactory to the Agents and
the Banks and their respective counsel; and
(vi) PAYMENT OF FEES TO BANKS. The Borrower shall have paid to the Agents
and the Banks all costs, fees, and expenses incurred by them through the Second
Amendment Effective Date in connection with the confirmation of the
effectiveness of the Second Amendment to Credit Agreement and this Second
Amendment to Guaranty (including, without limitation, legal fees and expenses of
Thompson Hine & Flory LLP).
The date on which the conditions set forth in Section 10(a) and above in this
Section 10(b) have been satisfied is referred to herein as the "Second Amendment
Effective Date". Notwithstanding any other provision of this Second Amendment to
Guaranty to the contrary, in the event that the Second Amendment Effective Date
has not occurred by August 28, 1998, then this Second Amendment to Guaranty
shall be null and void thereafter, except that Borrower's obligation to pay the
costs, fees, and expenses referred to in Sections 10(a) and (b) shall survive
until satisfied in full.
11. DEFINITIONS; CONSEQUENCES OF DELAY IN SECOND AMENDMENT
EFFECTIVE DATE UNTIL AFTER THE SECOND AMENDMENT CLOSING DATE. Capitalized terms
used in this Second Amendment to Guaranty that are defined in the Credit
Agreement or the Guaranty shall have the respective meanings ascribed to them in
the Credit Agreement or the Guaranty, as the case may be, with the amendments to
and additions of capitalized terms set forth in the Second Amendment to Credit
Agreement or in this
<PAGE>
Second Amendment to Guaranty, as the case may be, effective upon the Second
Amendment Effective Date. Notwithstanding the foregoing and the delay otherwise
in the effectiveness of this Second Amendment to Guaranty until the satisfaction
of all of the conditions set forth in Section 10(a) and (b) of this Second
Amendment to Guaranty, the amendments to capitalized terms previously included
in the Credit Agreement that are set forth in the Second Amendment to Credit
Agreement and those that were previously included in the Guaranty that are set
forth in this Second Amendment to Guaranty, and the defined terms newly added to
the Credit Agreement by the Second Amendment to Credit Agreement or newly added
to the Guaranty by this Second Amendment to Guaranty, as the case may be, shall
be effective from and after the Second Amendment Closing Date for purposes of
the use of such capitalized or defined terms in Sections 2, 8, 9, 10, 11, and 12
hereof. In the event that the Second Amendment Effective Date does not occur by
August 28, 1998, then this Second Amendment shall be null and void for all
purposes, other than as to the obligation of Borrower to pay the fees and
expenses referred to in Section 10(a) and (b) of this Second Amendment to
Guaranty, which obligation shall survive until satisfied in full.
12. CONFIRMATION OF GUARANTY. The Guarantor hereby confirms that the
Guaranty is in full force and effect on the date hereof and that, upon the
amendment herein provided becoming effective, the Guaranty will continue in full
force and effect in accordance with its terms, as hereby amended.
IN WITNESS WHEREOF, the parties hereto, each by an officer thereunto duly
authorized, have caused this Second Amendment to Guaranty of Payment of Debt to
be executed and delivered as of the date first above written.
FOREST CITY ENTERPRISES, INC.
By: Thomas G. Smith
Title: Chief Financial Officer,
Senior Vice President and Secretary
KEYBANK NATIONAL ASSOCIATION,
Individually and as Administrative Agent
By: Michael D. Mitro
Title: Vice President
NATIONAL CITY BANK, Individually and as
Syndication Agent
By: Anthony DiMare
Title: Senior Vice President
<PAGE>
THE HUNTINGTON NATIONAL BANK
By: James R. Logan
Title: Senior Vice President
FIRST MERIT BANK
By: John F. Neumann
Title: Vice President
COMERICA BANK
By: David J. Campbell
Title: Vice President
CREDIT LYONNAIS
By: Greg Allen
Title: Vice President
STAR BANK
By: Perry D. Quick
Title: Vice President
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: Kevin B. Quinn
Title: Assistant Vice President
U.S. BANK NATIONAL ASSOCIATION
By: Peter A. Brockelman
Title: Assistant Vice President
<PAGE>
