(b) Amendment of Definition of “EBDT”. Section 1 of the Guaranty shall be amended bydeleting the definition for “EBDT” contained therein and replacing it with the following definitionfor “EBDT”:          “EBDT” shall mean, for any period for the Guarantor, (a) the sum of the amounts for suchperiod of (i) net earnings (losses) from operations before depreciation, amortization anddeferred taxes on income for such period as reported on the Form 8-K that is furnished to theSecurities and Exchange Commission with respect to such period, (ii) non-cash expensesincurred in connection with stock-based compensation or as a result of development projectwrite-offs, early extinguishment of Indebtedness and derivative losses, in each case to theextent deducted in determining such net earnings (or losses), (iii) depreciation andamortization expenses incurred in connection with the Nets basketball team segment, to theextent 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 Form8-K that is furnished to the Securities and Exchange Commission with respect to such periodless (b) (i) the amount for such period of any gains resulting from the re-appraisalor 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 ExchangeCommission with respect to such period, in each case as determined in accordance with the ProRata Consolidation Method.          (c) Amendment of Definition of “Indemnification Lien”. Section 1 of the Guarantyshall 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 Guarantyshall be amended by deleting the definition of “Net Operating Income” contained therein andreplacing it with the following definition for “Net Operating Income”:          “Net Operating Income” shall mean for any relevant period, the excess of the Borrower’srevenues over the Borrower’s operating expenses; provided, however, NetOperating Income (a) shall not include any gains or losses from the sale of income producingreal property, other than gains or losses obtained from the sale of outlot parcels up to atotal maximum aggregate amount of $20,000,000 for the immediately preceding four consecutivequarters, (b) shall include adjustments for cash flow of properties pursuant to which theBorrower is receiving a preferred return over and above its ownership percentage in suchproperties, (c) shall not include any gains resulting from the re-appraisal or write-up ofany assets or with respect to derivatives, (d) shall not include non-cash expenses incurredin 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 otherextraordinary, 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 theSecurities and Exchange Commission with respect to such period, in each case (including,without limitation, the calculation of revenues and operating expenses) as determined inaccordance with the Pro Rata Consolidation Method.          (e) Amendment of Definition of “Pro Rata Consolidation Method”. Section 1 of theGuaranty shall be amended by deleting the definition of “Pro Rata Consolidation Method” containedtherein 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 fullyreconciled to GAAP and as reported on each Form 8-K that is furnished by the Guarantor (or onits behalf) to the Securities and Exchange Commission.     2. **AMENDMENT TO SECTION 2 OF THE GUARANTY**. Section 2 of the Guaranty shall be amendedby adding the phrase “and other extensions of credit” immediately after the phrase “for RevolvingLoans” 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 beamended as follows:          (a) Amendment of Section 9.7(d). Section 9.7(d) of the Guaranty shall be amended bydeleting 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” butleaving it the same in all other respects.          (b) Amendment of Section 9.7(e). Section 9.7(e) of the Guaranty shall be amended byadding the word “and” between the words “Securities” and “Exchange” but leaving it the same in allother respects.
 

 
     4. **AMENDMENT TO SECTION 9.8 OF THE GUARANTY**. Section 9.8 of the Guaranty shall beamended by deleting the table contained therein, in its entirety, and replacing it with thefollowing 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 theGuaranty shall be amended by deleting the phrase “Revolving Loans” contained therein and replacingit 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 beamended as follows:          (a) Amendment to Section 10(d). Section 10(d) of the Guaranty shall be amended bydeleting it in its entirety and replacing it with the following:          (d) The Guarantor and/or any Restricted Subsidiary defaults (i) in any payment ofprincipal or interest due and owing upon any Indebtedness in excess of $1,000,000 (whetherdue 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 obligationpermitted to be outstanding or incurred pursuant to Sections 9.10 and/or 9.12 hereof inexcess of $1,000,000, beyond any period of grace provided with respect thereto or (iii) inthe performance of any other agreement, term or condition contained in any agreement underwhich 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 tocause such Indebtedness to become due prior to its stated maturity or to foreclose on anyLien on property of the Guarantor securing the same, except that defaults in payment orperformance of non-recourse obligations of the Guarantor or any Restricted Subsidiary shallnot 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 financialcondition of the Guarantor; provided, that it shall be an Event of Default hereunderif any default occurs (after giving effect to any applicable grace period) under (i) theSenior Notes permitted by Section 9.10(h) of this Guaranty or under the Indenture or (ii) the2006 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 beamended by adding the phrase “(the “Bankruptcy Code”), whether in a voluntary or involuntary caseor 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 bydeleting it in its entirety and replacing it with the following:          (g) The Guarantor shall (i) discontinue business, or (ii) generally not pay its debtsas 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, aninterim trustee or liquidator of all or a substantial part of its assets, or (v) beadjudicated a debtor or have entered against it an order for relief under the BankruptcyCode, whether in a voluntary or involuntary case or proceeding, or (vi) file a voluntarypetition under any chapter or provision of the Bankruptcy Code or file a petition or ananswer seeking reorganization or an arrangement with creditors or seeking to take advantageof any other law (whether federal or state) relating to relief of debtors, or admit (byanswer, by default or otherwise) the material allegations of a petition filed against it inany 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 effectfor thirty (30) consecutive days any judgment, decree or order entered by a court orgovernmental commission of competent jurisdiction, which assumes custody or control of theGuarantor, approves a petition seeking reorganization of the Guarantor or any other judicialmodification 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 itsassets, or (viii) take or omit to take any action in order thereby to effect any of theforegoing, or
 

 
          (d) Amendment of Section 10(h). Section 10(h) of the Guaranty shall be amended bydeleting it in its entirety.          (e) Amendment of Section 10(i). Section 10(i) of the Guaranty shall be amended byre-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 deletingthe phrase “or 10(h)” in each place that it appears in the final paragraph of Section 10 thatfollows Section 10(h).     7. **AMENDMENT TO SECTION 11 OF THE GUARANTY**. Section 11 of the Guaranty shall beamended 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 tothe 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 notassign or transfer any of its rights or obligations hereunder without the prior writtenconsent of all of the Banks (other than any defaulting Bank).     8. **REPRESENTATIONS AND WARRANTIES**. The Guarantor represents and warrants to theAgents and each of the Banks as follows:          (a) INCORPORATION OF REPRESENTATIONS AND WARRANTIES. Each and every representationand warranty made by the Guarantor in Section 7 of the Guaranty is incorporated herein as if fullyrewritten herein at length and is true, correct and complete as of the date hereof and no Event ofDefault or Possible Default exists, or will exist on such date, after giving effect to this FirstAmendment to Guaranty.          (b) REQUISITE AUTHORITY. The Guarantor has all requisite power and authority toexecute and deliver and to perform its obligations in respect of this First Amendment to Guarantyand each and every other agreement, certificate, or document required to be delivered as acondition precedent to this First Amendment to Guaranty or to the First Amendment to Amended andRestated Credit Agreement. The Guarantor has all requisite power and authority to perform itsobligations under the Guaranty as amended by this First Amendment to Guaranty.          (c) DUE AUTHORIZATION; VALIDITY. The Guarantor has taken all necessary action toauthorize the execution, delivery, and performance by it of this First Amendment to Guaranty andevery other instrument, document, and certificate relating thereto. This First Amendment toGuaranty has been duly executed and delivered by the Guarantor and is the legal, valid, and bindingobligation of the Guarantor enforceable against it in accordance with its terms.          (d) NO CONSENT. No consent, approval, or authorization of, or registration with, anygovernmental authority or other Person is required in connection with the execution, delivery, andperformance 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 shallnot (a) constitute a waiver or release of any obligation or liability of the Guarantor under theGuaranty as in effect prior to the effectiveness of this First Amendment to Guaranty, or as amendedhereby, (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 anyterm or condition in the Guaranty or any of the other Related Writings, or (d) give rise to anydefenses or counterclaims to the right of the Agents and the Banks to compel payment of the Debt orto otherwise enforce their rights and remedies under the Guaranty or any Related Writing.     10. **CONDITIONS TO CLOSING**. Except as otherwise expressly provided in this FirstAmendment to Guaranty, prior to or concurrently with the execution and delivery of this FirstAmendment to Guaranty, and as conditions precedent to the effectiveness of the amendments to theGuaranty provided for herein, the Agents and the Banks and their respective counsel shall havereceived such opinions of counsel to the Guarantor, certified copies of resolutions of the Board ofDirectors 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 deliveryof this First Amendment to Guaranty, all in form and substance satisfactory to the Agents and theBanks and their respective counsel; and all costs, fees, and expenses required by the FirstAmendment to Amended and Restated Credit Agreement to have been paid by the Borrower in connectionwith the First Amendment to Amended and Restated Credit Agreement and/or this First Amendment toGuaranty shall have been paid.
 

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

 
     IN WITNESS WHEREOF, the partieshereto have caused this First Amendment to Amended andRestated 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.