Exhibit 10.46
EXECUTION COPY
FIRST AMENDMENT TO
AMENDED AND RESTATED GUARANTY OF PAYMENT OF DEBT
     This FIRST AMENDMENT TO AMENDED AND RESTATED GUARANTY OF PAYMENT OF DEBT
(this “First Amendment to Guaranty”) is made and entered into as of this 10th
day of September, 2008, but shall be effective as of July 31, 2008, by and among
FOREST CITY ENTERPRISES, INC., an Ohio corporation (the “Guarantor”), KEYBANK
NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”),
NATIONAL CITY BANK, as Syndication Agent (the “Syndication Agent” and, together
with the Administrative Agent, the “Agents”), BANK OF AMERICA, N. A., as
Documentation Agent, and the banks party to the Credit Agreement (as hereinafter
defined) as of the date hereof (collectively, the “Banks” and individually, a
“Bank”). Capitalized terms not otherwise defined herein shall have the
respective meanings attributed to them in the Guaranty, as hereinafter defined.
W I T N E S S E T H;
     WHEREAS, Forest City Rental Properties Corporation (the “Borrower”), the
Banks, and the Agents previously entered into a certain Amended and Restated
Credit Agreement, dated as of June 6, 2007 (the “Original Credit Agreement”);
and
     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
Banks a certain Amended and Restated Guaranty of Payment of Debt, dated as of
June 6, 2007 (the “Guaranty”) and the Guarantor agreed to and did execute and
deliver the Guaranty to the Agents and the Banks; and
     WHEREAS, the Borrower and the Guarantor have requested that the Banks and
the Agents agree to certain amendments to the Original Credit Agreement and to
the Guaranty; and
     WHEREAS, the Borrower, the Banks and the Agents have entered into a First
Amendment to Amended and Restated Credit Agreement, dated as of the date hereof
(said Amendment together with the Original Credit Agreement, the “Credit
Agreement”), that requires as one of its conditions to effectiveness that the
Guarantor enter into this First Amendment to Guaranty.
     NOW, THEREFORE, it is mutually agreed as follows:
     1. AMENDMENTS TO SECTION 1 OF THE GUARANTY. Section 1 of the Guaranty shall
be amended as follows:
          (a) Amendment of Definition of “Consolidated Net Operating Cash Flow
“. Section 1 of the Guaranty shall be amended by deleting the definition for
“Consolidated Net Operating Cash Flow” contained therein and replacing it with
the following definition for “Consolidated Net Operating Cash Flow”:
          “Consolidated Net Operating Cash Flow” shall mean, for any Test
Period, Net Operating Income (a) less (i) all scheduled payments of principal of
non-recourse mortgage Indebtedness owing by the Guarantor and/or its
Subsidiaries (excluding any balloon payments), (ii) all interest payments on
such non-recourse Indebtedness, (iii) Twelve Million Dollars ($12,000,000) of
normal recurring capital expenditures and (b) plus (i) net income (loss) before
taxes, corporate interest expense and non-cash expenses incurred in connection
with stock-based compensation, in each case incurred by or charged to the Land
Group, (ii) net income (loss) before taxes, corporate interest expense
(including, but not limited to, interest incurred on Debt, subordinated debt or
any other third party debt) and non-cash expenses incurred in connection with
stock-based compensation, in each case incurred by or charged to the Corporate
Activity Group, (iii) actual cash taxes paid on the Net Operating Income and the
income set forth in subsections (b)(i) and (b)(ii) above, (iv) non-cash interest
expense accrued but not currently payable up to a maximum of Five Million
Dollars ($5,000,000) with respect to Indebtedness owing by the Guarantor and its
Subsidiaries other than Indebtedness owing by the Guarantor and/or its
Subsidiaries to the government of the United States or any state or municipality
thereof or any agencies of any of the foregoing and (v) non-cash interest
expense accrued but not currently payable with respect to Indebtedness by the
Guarantor and/or its Subsidiaries owing to the government of the United States
or any state or municipality thereof or any agencies of any of the foregoing.

 

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          (b) Amendment of Definition of “EBDT”. Section 1 of the Guaranty shall
be amended by deleting the definition for “EBDT” contained therein and replacing
it with the following definition for “EBDT”:
          “EBDT” shall mean, for any period for the Guarantor, (a) the sum of
the amounts for such period of (i) net earnings (losses) from operations before
depreciation, amortization and deferred taxes on income for such period as
reported on the Form 8-K that is furnished to the Securities and Exchange
Commission with respect to such period, (ii) non-cash expenses incurred in
connection with stock-based compensation or as a result of development project
write-offs, early extinguishment of Indebtedness and derivative losses, in each
case to the extent deducted in determining such net earnings (or losses),
(iii) depreciation and amortization expenses incurred in connection with the
Nets basketball team segment, to the extent deducted in determining such net
earnings (or losses) and (iv) other extraordinary, unusual or non-recurring
losses and expenses to the extent disclosed or reported on the Form 8-K that is
furnished to the Securities and Exchange Commission with respect to such period
less (b) (i) the amount for such period of any gains resulting from the
re-appraisal or write-up of any assets or with respect to derivatives and
(ii) other extraordinary, unusual or non-recurring gains except to the extent
such gains described in this clause (ii) are disclosed or reported in the Form
8-K that is furnished to the Securities and Exchange Commission with respect to
such period, in each case as determined in accordance with the Pro Rata
Consolidation Method.
          (c) Amendment of Definition of “Indemnification Lien”. Section 1 of
the Guaranty shall be amended by deleting the word “owned” contained in clause
(c) of the definition of “Indemnification Lien” contained therein and replacing
it with the word “owed.
          (d) Amendment of Definition of “Net Operating Income”. Section 1 of
the Guaranty shall be amended by deleting the definition of “Net Operating
Income” contained therein and replacing it with the following definition for
“Net Operating Income”:
          “Net Operating Income” shall mean for any relevant period, the excess
of the Borrower’s revenues over the Borrower’s operating expenses; provided,
however, Net Operating Income (a) shall not include any gains or losses from the
sale of income producing real property, other than gains or losses obtained from
the sale of outlot parcels up to a total maximum aggregate amount of $20,000,000
for the immediately preceding four consecutive quarters, (b) shall include
adjustments for cash flow of properties pursuant to which the Borrower is
receiving a preferred return over and above its ownership percentage in such
properties, (c) shall not include any gains resulting from the re-appraisal or
write-up of any assets or with respect to derivatives, (d) shall not include
non-cash expenses incurred in connection with stock-based compensation or as a
result of development project write-offs, early extinguishment of Indebtedness
and derivative losses and (e) shall not include other extraordinary, unusual or
non-recurring gains, losses or expenses to the extent such gains, losses or
expenses are disclosed or reported in the Form 8-K that is furnished to the
Securities and Exchange Commission with respect to such period, in each case
(including, without limitation, the calculation of revenues and operating
expenses) as determined in accordance with the Pro Rata Consolidation Method.
          (e) Amendment of Definition of “Pro Rata Consolidation Method”.
Section 1 of the Guaranty shall be amended by deleting the definition of “Pro
Rata Consolidation Method” contained therein and replacing it with the following
definition for “Pro Rata Consolidation Method “:
          “Pro Rata Consolidation Method” shall mean the pro rata method of
consolidation as fully reconciled to GAAP and as reported on each Form 8-K that
is furnished by the Guarantor (or on its behalf) to the Securities and Exchange
Commission.
     2. AMENDMENT TO SECTION 2 OF THE GUARANTY. Section 2 of the Guaranty shall
be amended by adding the phrase “and other extensions of credit” immediately
after the phrase “for Revolving Loans” contained in the second sentence thereof,
but leaving it the same in all other respects.
     3. AMENDMENTS TO SECTION 9.7 OF THE GUARANTY. Section 9.7 of the Guaranty
shall be amended as follows:
          (a) Amendment of Section 9.7(d). Section 9.7(d) of the Guaranty shall
be amended by deleting the phrase “by Charles A. Ratner, Albert Ratner, Samuel
H. Miller or Thomas G. Smith” contained therein and replacing it with the phrase
“from any Senior Officer of the Guarantor” but leaving it the same in all other
respects.
          (b) Amendment of Section 9.7(e). Section 9.7(e) of the Guaranty shall
be amended by adding the word “and” between the words “Securities” and
“Exchange” but leaving it the same in all other respects.

 

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     4. AMENDMENT TO SECTION 9.8 OF THE GUARANTY. Section 9.8 of the Guaranty
shall be amended by deleting the table contained therein, in its entirety, and
replacing it with the following table:

     
     Period
  EBDT  
January 31, 2008 to, but not including, January 31, 2009
  $230,000,000
 
   
January 31, 2009 to, but not including, January 31, 2010
  $240,000,000
 
   
January 31, 2010 and thereafter
  $250,000,000

     5. AMENDMENT TO SECTION 9.19(b)(iv)(C) OF THE GUARANTY.
Section 9.19(b)(iv)(C) of the Guaranty shall be amended by deleting the phrase
“Revolving Loans” contained therein and replacing it with the word “Debt” but
leaving it the same in all other respects.
     6. AMENDMENTS TO SECTION 10 OF THE GUARANTY. Section 10 of the Guaranty
shall be amended as follows:
          (a) Amendment to Section 10(d). Section 10(d) of the Guaranty shall be
amended by deleting it in its entirety and replacing it with the following:
          (d) The Guarantor and/or any Restricted Subsidiary defaults (i) in any
payment of principal or interest due and owing upon any Indebtedness in excess
of $1,000,000 (whether due and owing by scheduled maturity, required prepayment,
acceleration, demand or otherwise), or (ii) in the case of the Guarantor, in the
payment or performance of any obligation permitted to be outstanding or incurred
pursuant to Sections 9.10 and/or 9.12 hereof in excess of $1,000,000, beyond any
period of grace provided with respect thereto or (iii) in the performance of any
other agreement, term or condition contained in any agreement under which any
such obligation is created, if the effect of such default under this clause
(iii) is to accelerate the maturity of the related Indebtedness or to permit the
holder thereof to cause such Indebtedness to become due prior to its stated
maturity or to foreclose on any Lien on property of the Guarantor securing the
same, except that defaults in payment or performance of non-recourse obligations
of the Guarantor or any Restricted Subsidiary shall not constitute Events of
Default under this Section 10(d) unless such defaults have, individually or in
the aggregate, a material adverse effect on the business or financial condition
of the Guarantor; provided, that it shall be an Event of Default hereunder if
any default occurs (after giving effect to any applicable grace period) under
(i) the Senior Notes permitted by Section 9.10(h) of this Guaranty or under the
Indenture or (ii) the 2006 Puttable Senior Notes or under the 2006 Indenture, or
          (b) Amendment of Section 10(e)(i)(D). Section 10(e)(i)(D) of the
Guaranty shall be amended by adding the phrase “(the “Bankruptcy Code”), whether
in a voluntary or involuntary case or proceeding” after the phrase “from time to
time” but leaving it the same in all other respects.
          (c) Amendment of Section 10(g). Section 10(g) of the Guaranty shall be
amended by deleting it in its entirety and replacing it with the following:
          (g) The Guarantor shall (i) discontinue business, or (ii) generally
not pay its debts as such debts become due, or (iii) make a general assignment
for the benefit of creditors, or (iv) apply for or consent to the appointment of
a receiver, a custodian, a trustee, an interim trustee or liquidator of all or a
substantial part of its assets, or (v) be adjudicated a debtor or have entered
against it an order for relief under the Bankruptcy Code, whether in a voluntary
or involuntary case or proceeding, or (vi) file a voluntary petition under any
chapter or provision of the Bankruptcy Code or file a petition or an answer
seeking reorganization or an arrangement with creditors or seeking to take
advantage of any other law (whether federal or state) relating to relief of
debtors, or admit (by answer, by default or otherwise) the material allegations
of a petition filed against it in any bankruptcy, reorganization, insolvency or
other proceeding (whether federal or state) relating to relief of debtors, or
(vii) suffer or permit to continue unstayed and in effect for thirty
(30) consecutive days any judgment, decree or order entered by a court or
governmental commission of competent jurisdiction, which assumes custody or
control of the Guarantor, approves a petition seeking reorganization of the
Guarantor or any other judicial modification of the rights of its creditors, or
appoints a receiver, custodian, trustee, interim trustee or liquidator for the
Guarantor or of all or a substantial part of its assets, or (viii) take or omit
to take any action in order thereby to effect any of the foregoing, or

 

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          (d) Amendment of Section 10(h). Section 10(h) of the Guaranty shall be
amended by deleting it in its entirety.
          (e) Amendment of Section 10(i). Section 10(i) of the Guaranty shall be
amended by re-numbering it as Section 10(h), but leaving it the same in all
other respects.
          (f) Amendment of Section 10. Section 10 of the Guaranty shall be
amended by deleting the phrase “or 10(h)” in each place that it appears in the
final paragraph of Section 10 that follows Section 10(h).
     7. AMENDMENT TO SECTION 11 OF THE GUARANTY. Section 11 of the Guaranty
shall be amended by deleting the third sentence contained therein and replacing
it with the following:
          This Guaranty shall bind the Guarantor and its successors and assigns
and shall inure to the benefit of the Agents and the Banks and their respective
successors and assigns including (without limitation) each holder of any Note,
provided, that the Guarantor may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of all of the Banks
(other than any defaulting Bank).
     8. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants to
the Agents and each of the Banks as follows:
          (a) INCORPORATION OF REPRESENTATIONS AND WARRANTIES. Each and every
representation and warranty made by the Guarantor in Section 7 of the 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, or will exist on such date, after giving effect to this First
Amendment to Guaranty.
          (b) REQUISITE AUTHORITY. The Guarantor has all requisite power and
authority to execute and deliver and to perform its obligations in respect of
this First Amendment to Guaranty and each and every other agreement,
certificate, or document required to be delivered as a condition precedent to
this First Amendment to Guaranty or to the First Amendment to Amended and
Restated Credit Agreement. The Guarantor has all requisite power and authority
to perform its obligations under the Guaranty as amended by this First Amendment
to Guaranty.
          (c) DUE AUTHORIZATION; VALIDITY. The Guarantor has taken all necessary
action to authorize the execution, delivery, and performance by it of this First
Amendment to Guaranty and every other instrument, document, and certificate
relating thereto. This First Amendment to Guaranty has been duly executed and
delivered by the Guarantor and is the legal, valid, and binding obligation of
the Guarantor enforceable against it in accordance with its terms.
          (d) 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 First Amendment
to Guaranty and the transactions contemplated hereby.
     9. NO WAIVER. Except as otherwise expressly provided herein, the
acceptance, execution, and/or delivery of this First Amendment to Guaranty by
the Agents and the Banks shall not (a) 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 First Amendment to Guaranty, or as amended hereby,
(b) waive or release any Event of Default or Possible Default existing at any
time, (c) give rise to any obligation on the part of the Agents and the Banks to
extend, modify or waive any term or condition in the Guaranty or any of the
other Related Writings, or (d) give rise to any defenses or counterclaims to the
right of the Agents and the Banks to compel payment of the Debt or to otherwise
enforce their rights and remedies under the Guaranty or any Related Writing.
     10. CONDITIONS TO CLOSING. Except as otherwise expressly provided in this
First Amendment to Guaranty, prior to or concurrently with the execution and
delivery of this First 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 Board 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 First 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 First
Amendment to Amended and Restated Credit Agreement to have been paid by the
Borrower in connection with the First Amendment to Amended and Restated Credit
Agreement and/or this First Amendment to Guaranty shall have been paid.

 

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     11. CONFIRMATION OF GUARANTY. The Guarantor hereby confirms that the
Guaranty is in full force and effect on the date hereof and that, upon the
amendments herein provided becoming effective, the Guaranty will continue in
full force and effect in accordance with its terms, as hereby amended.
     12. EXECUTION IN COUNTERPARTS. This First Amendment to Guaranty may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this First
Amendment to Guaranty by telecopier or pdf file shall be effective as delivery
of a manually executed counterpart of this First Amendment to Guaranty.
     13. GOVERNING LAW. This First Amendment to Guaranty shall be governed by,
and construed in accordance with, the laws of the State of Ohio, without regard
to its principles of conflict of laws.
     14. WAIVER OF JURY TRIAL. THE GUARANTOR WAIVES THE RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, BETWEEN OR AMONG THE GUARANTOR AND THE AGENTS, THE BANKS, AND/OR THE
BORROWER ARISING OUT OF OR IN CONNECTION WITH THE CREDIT AGREEMENT, THE
GUARANTY, THIS FIRST AMENDMENT TO GUARANTY, OR ANY OTHER AGREEMENT, INSTRUMENT
OR DOCUMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS
RELATED THERETO.

 

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     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
Amended and Restated Guaranty of Payment of Debt to be executed and delivered as
of the date set forth above, each by an officer thereunto duly authorized.

            FOREST CITY ENTERPRISES, INC.
      /s/ CHARLES A. RATNER       Name:   Charles A. Ratner      Title:   Chief
Executive Officer and President        KEYBANK NATIONAL ASSOCIATION individually
and as Agent
      /s/ JOSHUA MAYERS       Name:   Joshua Mayers      Title:   Vice
President        NATIONAL CITY BANK individually and as Syndication Agent
      /s/ JOHN E. WILGUS II       Name:   John E. Wilgus II      Title:   Senior
Vice President        THE HUNTINGTON NATIONAL BANK
      /s/ RYAN TERRANO       Name:   Ryan Terrano      Title:   Vice President 
      U.S. BANK NATIONAL ASSOCIATION
            Name:         Title:        

Signature Page 1 to 3
First Amendment to Amended and Restated Guaranty of Debt

 

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            COMERICA BANK
      /s/ ADAM SHEETS       Name:   Adam Sheets      Title:   Assistant Vice
President        FIRST MERIT BANK
      /s/ EDWARD YANNAYON       Name:   Edward Yannayon      Title:   Senior
Vice President        MANUFACTURERS AND TRADERS TRUST COMPANY
      /s/ DAVID LADORI       Name:   David Ladori      Title:   Assistant Vice
President        FIFTH THIRD BANK
      /s/ ROY C. LANCTOT       Name:   Roy C. Lanctot      Title:   Vice
President        BANK OF AMERICA, N.A.
      /s/ MICHAEL M. POMPOSELLI       Name:   Michael M. Pomposelli     
Title:   Senior Vice President     

Signature Page 2 to 3
First Amendment to Amended and Restated Guaranty of Debt

 

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            RBS CITIZENS, N.A. dba
CHARTER ONE
      /s/ ERIN L. MAHON       Name:   Erin L. Mahon      Title:   Assistant Vice
President        BMO CAPITAL MARKETS FINANCING, INC.
            Name:         Title:           CALYON NEW YORK BRANCH
      /s/ PAUL T. RAGUSIN       Name:   Paul T. Ragusin      Title:   Director 
            /s/ JOHN A. WAIN       Name:   John A. Wain      Title:   Managing
Director        WACHOVIA BANK, N.A.
      /s/ LEONARD CLARK, JR.       Name:   Leonard Clark, Jr.      Title:   Vice
President        THE BANK OF NEW YORK
      /s/ KENNETH R.MCDONNELL       Name:   Kenneth R. McDonnell      Title:  
Vice President     

Signature Page 3 to 3
First Amendment to Amended and Restated Guaranty of Debt