Exhibit 10.1
EXCHANGE AGREEMENT
(Unrestricted Notes)
                                                   (including any other persons
or entities exchanging Existing Notes hereunder for whom the undersigned Holder
holds contractual and investment authority, the “Holder”) enters into this
Exchange Agreement (the “Agreement”) with Forest City Enterprises, Inc., a Ohio
corporation, (the “Company”) on                     , 2009 whereby the Holder
will exchange (the “Exchange”) the Company’s 3.625% Puttable Equity-Linked
Senior Notes due 2011 (the “Existing Notes”) for the Company’s new 3.625%
Puttable Equity-Linked Senior Notes due 2014 (the “New Notes”) that will be
issued pursuant to the provisions of an Indenture dated as of
                    , 2009 among the Company and Bank of New York Trust Company,
N.A., as Trustee (the “Trustee”), as it may be supplemented or amended from time
to time (the “Indenture”).
          On and subject to the terms hereof, the parties hereto agree as
follows:
Article I: Exchange of the Existing Notes for New Notes
          At the Closing (as defined herein), the Holder hereby agrees to
exchange and deliver to the Company the following Existing Notes, and in
exchange therefor the Company hereby agrees to issue to the Holder the principal
amount of New Notes described below:

       
Principal Amount of Existing Notes to be Exchanged:
  $  
 
     
 
    (the “Exchanged Notes”).
 
     
Principal amount of New Notes to be issued in Exchange:
  $  
 
     
 
    (the “Holder’s New Notes”).

          The closing of the Exchange (the “Closing”) shall occur no later than
three business days after the date of this Agreement. At the Closing, (a) the
Holder shall deliver or cause to be delivered to the Company all right, title
and interest in and to the Exchanged Notes free and clear of any mortgage, lien,
pledge, charge, security interest, encumbrance, title retention agreement,
option, equity or other adverse claim thereto (collectively, “Liens”), together
with any documents of conveyance or transfer that the Company may deem necessary
or desirable to transfer to and confirm in the Company all right, title and
interest in and to the Exchanged Notes free and clear of any Liens, and (b) the
Company shall issue to the Holder the Holder’s New Notes; provided, however,
that the parties acknowledge that the issuance of the Holder’s New Notes to the
Holder may be delayed due to procedures and mechanics within the system of the
Depository Trust Company and that such delay will not be a default under this
Agreement so long as (i) the Company is using its best efforts to effect the
issuance of one or more global notes representing the New Notes, (ii) such delay
is no longer than three business days, and (iii) interest shall accrue on such
New Notes from the date of the Indenture. Simultaneously with or after the
Closing, the Company may issue New Notes to one or more other holders of
outstanding Existing Notes, subject to the terms of the Indenture.
          On October 15, 2009, the Company is scheduled to and will make a
payment to the Holder representing the accrued but unpaid interest on the
Exchanged Notes through October 15, 2009 (the “Scheduled Coupon Interest
Payment”). The Holder acknowledges that it is only entitled to the accrued but
unpaid interest on the Exchanged Notes through the date of Closing. At Closing,
in anticipation of the Scheduled Coupon Interest Payment, the Holder will remit
to the Company the balance of the Scheduled Coupon Interest Payment described
below:

       
Accrued Interest on the Exchanged Notes From the Date of Closing through
October 15, 2009:
  $  
 
     
 
    (the “Coupon Interest Remittance”).

 

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Article II: Covenants, Representations and Warranties of the Holder
          The Holder hereby covenants as follows, and makes the following
representations and warranties, each of which is and shall be true and correct
on the date hereof and at the Closing, to the Company, Lazard Frères & Co. LLC
and Lazard Capital Markets LLC, and all such covenants, representations and
warranties shall survive the Exchange.
           Section 2.1     Power and Authorization. The Holder is duly
organized, validly existing and in good standing, and has the power, authority
and capacity to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the Exchange contemplated hereby. If the Holder
that is signatory hereto is executing this Agreement to effect the exchange of
Exchanged Notes beneficially owned by one or more other persons or entities (who
are thus included in the definition of “Holder” hereunder), (a) such signatory
Holder has all requisite discretionary authority to enter into this Agreement on
behalf of, and bind, each such other person or entity that is a beneficial owner
of Exchanged Notes, and (b) Exhibit A hereto is a true, correct and complete
list of (i) the name of each party delivering (as beneficial owner) Exchanged
Notes hereunder, (ii) the principal amount of such Holder’s Exchanged Notes,
(iii) the principal amount of Holder’s New Notes to be issued to such Holder in
respect of its Exchanged Notes, and (iv) the amount of the Coupon Interest
Remittance to be tendered to the Company pursuant to Article I of this
Agreement.
           Section 2.2     Valid and Enforceable Agreement; No Violations. This
Agreement has been duly executed and delivered by the Holder and constitutes a
legal, valid and binding obligation of the Holder, enforceable against the
Holder in accordance with its terms, except that such enforcement may be subject
to (a) bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or other similar laws affecting or relating to enforcement of creditors’ rights
generally, and (b) general principles of equity regardless of whether such
enforceability is considered in a proceeding of law or equity (the
“Enforceability Exceptions”). This Agreement and consummation of the Exchange
will not violate, conflict with or result in a breach of or default under
(i) the Holder’s organizational documents, (ii) any agreement or instrument to
which the Holder is a party or by which the Holder or any of its assets are
bound, or (iii) any laws, regulations or governmental or judicial decrees,
injunctions or orders applicable to the Holder.
           Section 2.3     Title to the Exchanged Notes. The Holder is the sole
legal and beneficial owner of the Exchanged Notes, and the Holder has good,
valid and marketable title to the Exchanged Notes, free and clear of any Liens
(other than pledges or security interests that the Holder may have created in
favor of a prime broker under and in accordance with its prime brokerage
agreement with such broker). The Holder has not, in whole or in part, except as
described in the preceding sentence, (a) assigned, transferred, hypothecated,
pledged, exchanged or otherwise disposed of any of the Exchanged Notes or its
rights in the Exchanged Notes, or (b) given any person or entity any transfer
order, power of attorney or other authority of any nature whatsoever with
respect to the Exchanged Notes. Upon the Holder’s delivery of the Exchanged
Notes to the Company pursuant to the Exchange, the Exchanged Notes shall be free
and clear of all Liens created by the Holder.
           Section 2.4     Accredited Investor. The Holder is an “accredited
investor” within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the “Securities Act”).
           Section 2.5     No Affiliate, Related Party or 5% Stockholder Status.
The Holder is not, and has not been during the consecutive three month period
preceding the date hereof, a director, officer or “affiliate” within the meaning
of Rule 144 promulgated under the Securities Act (an “Affiliate”) of the
Company. To its knowledge, the Holder did not acquire any of the Exchanged
Notes, directly or indirectly, from an Affiliate of the Company. The Holder and
its Affiliates collectively beneficially own and will beneficially own as of the
date of the Closing (but without giving effect to the Exchange) less than 5% of
the outstanding Class A common stock, par value $0.33 1/3 per share, of the
Company (the “Common Stock”). The Holder is not a subsidiary, affiliate or, to
its knowledge, otherwise closely-related to any director or officer of the
Company or beneficial owner of 5% or more of the outstanding Common Stock (each
such director, officer or beneficial owner, a

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“Related Party”). To its knowledge, no Related Party beneficially owns 5% or
more of the outstanding voting equity of the Holder.
          Section 2.6     No Illegal Transactions. The Holder has not, directly
or indirectly, and no person acting on behalf of or pursuant to any
understanding with the Holder has, engaged in any transactions in the securities
of the Company (including, without limitation, any Short Sales (as defined
below) involving any of the Company’s securities) since the time that such
Holder was first contacted by either the Company, Lazard Frères & Co. LLC or
Lazard Capital Markets LLC or any other person regarding an investment in the
New Notes or the Company. Such Holder covenants that neither it nor any person
acting on its behalf or pursuant to any understanding with such Holder will
engage, directly or indirectly, in any transactions in the securities of the
Company (including Short Sales) prior to the time the transactions contemplated
by this Agreement are publicly disclosed. “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 of Regulation SHO
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and all types of direct and indirect stock pledges, forward sale
contracts, options, puts, calls, short sales, swaps, derivatives and similar
arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker-dealers or foreign regulated brokers.
Solely for purposes of this Section 2.6, subject to the Holder’s compliance with
its obligations under the U.S. federal securities laws and the Holder’s internal
policies, “Holder” shall not be deemed to include any subsidiaries or affiliates
of the Holder that are effectively walled off by appropriate “Chinese Wall”
information barriers approved by the Holder’s legal or compliance department
(and thus have not been privy to any information concerning the Exchange).
           Section 2.7     Adequate Information; No Reliance. The Holder
acknowledges and agrees that (a) the Holder has been furnished with all
materials it considers relevant to making an investment decision to enter into
the Exchange and has had the opportunity to review the Company’s filings with
the Securities and Exchange Commission (the “SEC”), including, without
limitation, all filings made pursuant to the Exchange Act, (b) the Holder has
had a full opportunity to ask questions of the Company concerning the Company,
its business, operations, financial performance, financial condition and
prospects, and the terms and conditions of the Exchange, (c) the Holder has had
the opportunity to consult with its accounting, tax, financial and legal
advisors to be able to evaluate the risks involved in the exchange of the
Existing Notes pursuant hereto and to make an informed investment decision with
respect to such Exchange and (d) the Holder is not relying, and has not relied,
upon any statement, advice (whether legal, tax, financial, accounting or other),
representation or warranty made by the Company or any of its affiliates or
representatives including, without limitation, Lazard Frères & Co. LLC and
Lazard Capital Markets LLC, except for (i) the publicly available filings made
by the Company with the SEC under the Exchange Act and (ii) the representations
and warranties made by the Company in this Agreement.
           Section 2.8     No Public Market. The Holder understands that no
public market exists for the New Notes, and that there is no assurance that a
public market will ever develop for the New Notes.
Article III: Covenants, Representations and Warranties of the Company
          The Company hereby covenants as follows, and makes the following
representations and warranties, each of which is and shall be true and correct
on the date hereof and at the Closing, to the Holder, Lazard Frères & Co. LLC
and Lazard Capital Markets LLC, and all such covenants, representations and
warranties shall survive the Exchange.
           Section 3.1     Power and Authorization. The Company is duly
incorporated, validly existing and in good standing under the laws of its state
of incorporation, and has the power, authority and capacity to execute and
deliver this Agreement and the Indenture, to perform its obligations hereunder
and thereunder, and to consummate the Exchange contemplated hereby.
           Section 3.2     Valid and Enforceable Agreements; No Violations. This
Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company,

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enforceable against the Company in accordance with its terms, except that such
enforcement may be subject to the Enforceability Exceptions. At the Closing, the
Indenture, substantially in the form of Exhibit B hereto, will have been duly
executed and delivered by the Company and will govern the terms of the New
Notes, and the Indenture will constitute a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except that such enforcement may be subject to the Enforceability Exceptions.
This Agreement, the Indenture and consummation of the Exchange will not violate,
conflict with or result in a breach of or default under (i) the charter, bylaws
or other organizational documents of the Company, (ii) any agreement or
instrument to which the Company is a party or by which the Company or any of its
assets are bound, or (iii) any laws, regulations or governmental or judicial
decrees, injunctions or orders applicable to the Company.
           Section 3.3     Validity of the Holder’s New Notes. The Holder’s New
Notes have been duly authorized by the Company and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to the Holder pursuant to the Exchange against delivery of the Exchanged Notes
in accordance with the terms of this Agreement, the Holder’s New Notes will be
valid and binding obligations of the Company, enforceable in accordance with
their terms, except that such enforcement may be subject to the Enforceability
Exceptions, and the Holder’s New Notes will not be subject to any preemptive,
participation, rights of first refusal and other similar rights. Assuming the
accuracy of the Holder’s representations and warranties hereunder, the Holder’s
New Notes (a) will be issued in the Exchange exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) of the Securities
Act, (b) will be free of any restrictions on resale by the Holder pursuant to
Rule 144 promulgated under the Securities Act, and (c) will be issued in
compliance with all applicable state and federal laws concerning the issuance of
the Holder’s New Notes.
           Section 3.4     Validity of Underlying Common Stock. The Holder’s New
Notes will have an equity-linked put right whereby the Holder’s New Notes may be
converted into shares (the “Puttable Equity-Linked Shares”) of the Common Stock,
in accordance with the terms of the Holder’s New Notes. The Puttable
Equity-Linked Shares have been duly authorized and reserved by the Company for
issuance upon the exercise of the equity-linked put right and, when issued in
connection with such equity-linked put right in accordance with the terms of the
Holder’s New Notes, will be validly issued, fully paid and non-assessable, and
the issuance of the Puttable Equity-Linked Shares will not be subject to any
preemptive, participation, rights of first refusal and other similar rights.
           Section 3.5     Listing Approval. The Puttable Equity-Linked Shares
have been listed on the New York Stock Exchange.
           Section 3.6     Disclosure. On or before the first business day
following the date of this Agreement, the Company shall issue a publicly
available press release or file with the SEC a Current Report on Form 8-K
disclosing all material terms of the Exchange (to the extent not previously
publicly disclosed).
Article IV: Miscellaneous
           Section 4.1     Entire Agreement. This Agreement and any documents
and agreements executed in connection with the Exchange embody the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior and contemporaneous oral or written
agreements, representations, warranties, contracts, correspondence,
conversations, memoranda and understandings between or among the parties or any
of their agents, representatives or affiliates relative to such subject matter,
including, without limitation, any term sheets, emails or draft documents.
           Section 4.2     Construction. References in the singular shall
include the plural, and vice versa, unless the context otherwise requires.
References in the masculine shall include the feminine and neuter, and vice
versa, unless the context otherwise requires. Headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meanings of the provisions hereof. Neither party, nor its

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respective counsel, shall be deemed the drafter of this Agreement for purposes
of construing the provisions of this Agreement, and all language in all parts of
this Agreement shall be construed in accordance with its fair meaning, and not
strictly for or against either party.
           Section 4.3     Governing Law. This Agreement shall in all respects
be construed in accordance with and governed by the substantive laws of the
State of New York, without reference to its choice of law rules.
           Section 4.4     Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. Any counterpart or other
signature hereon delivered by facsimile shall be deemed for all purposes as
constituting good and valid execution and delivery of this Agreement by such
party.
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[Signature page to follow]

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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first above written.

                      “HOLDER”:       FOREST CITY ENTERPRISES, INC.    
 
                   
 
           
 
                   
By:
          By:        
 
   
 
 
                   
Name:
        Name:                       
 
                   
Title:
          Title:      
 
   
 

 

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EXHIBIT A
Exchanging Beneficial Owners

                                                    Name of     Principal Amount
of     Principal Amount of     Coupon Interest     Beneficial Owner    
Exchanged Notes     Holder’s New Notes     Remittance    
 
                     
 
                     
 
                     
 
                     
 
                     
 
                     
 
                     
 
                     
 
                     
 
                     

 

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EXHIBIT B
Indenture