-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LQf+CWzKGdl7XKPtiTaD+ybcdAmxN1SYYf2lZmBKsd97hRQkvDdKeHXukp8VWciH XaH4EYS34mVg8WmheZeQzg== 0000038067-98-000004.txt : 19980409 0000038067-98-000004.hdr.sgml : 19980409 ACCESSION NUMBER: 0000038067-98-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980306 ITEM INFORMATION: FILED AS OF DATE: 19980408 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOREST CITY ENTERPRISES INC CENTRAL INDEX KEY: 0000038067 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 340863886 STATE OF INCORPORATION: OH FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-04372 FILM NUMBER: 98589389 BUSINESS ADDRESS: STREET 1: 1100 TERMINAL TOWER STREET 2: 50 PUBLIC SQ CITY: CLEVELAND STATE: OH ZIP: 44113 BUSINESS PHONE: 2162671200 MAIL ADDRESS: STREET 1: 10800 BROOKPARK ROAD CITY: CLEVLAND STATE: OH ZIP: 44130 8-K 1 FOREST CITY ENTERPRISES 8-K 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.) 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 EX-10.1 2 EXHIBIT 10.1 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: 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. (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; (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; (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. (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": "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 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. (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". 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: (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 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 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. . 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 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 EX-10.2 3 EXHIBIT 10.2 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 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 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 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": "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": "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 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 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; (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 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 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 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 -----END PRIVACY-ENHANCED MESSAGE-----