exv10w44






EXHIBIT 10.44




AMENDED AND RESTATED GUARANTY OF PAYMENT OF DEBT




OF




FOREST CITY ENTERPRISES, INC.




Dated as of June 6, 2007




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	1. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	2. ACKNOWLEDGMENTS, CONSIDERATION
	 	 	9	 
	 
	 	 	 	 
	3. GUARANTY
	 	 	10	 
	 
	 	 	 	 
	4. REINSTATEMENT
	 	 	10	 
	 
	 	 	 	 
	5. WAIVERS
	 	 	10	 
	 
	 	 	 	 
	6. ADDITIONAL AGREEMENTS
	 	 	11	 
	 
	 	 	 	 
	7. REPRESENTATIONS AND WARRANTIES
	 	 	12	 
	 
	 	 	 	 
	8. NOTICES
	 	 	13	 
	 
	 	 	 	 
	9. COVENANTS
	 	 	13	 
	 
	 	 	 	 
	10. DEFAULT; REMEDIES
	 	 	30	 
	 
	 	 	 	 
	11. MISCELLANEOUS
	 	 	32	 
	 
	 	 	 	 
	12. JURY TRIAL WAIVER
	 	 	33	 
	 
	 	 	 	 
	13. NOTICES
	 	 	33	 
	 
	 	 	 	 
	14. CONSENT TO JURISDICTION
	 	 	33	 
	 
	 	 	 	 
	15. ENTIRE AGREEMENT
	 	 	33	 
	 
	 	 	 	 
	16. INDEPENDENCE OF COVENANTS
	 	 	34	 






 









 





AMENDED AND RESTATED GUARANTY OF PAYMENT OF DEBT




          THIS AMENDED AND RESTATED GUARANTY OF PAYMENT OF DEBT (this “Guaranty”) is made and issued by
FOREST CITY ENTERPRISES, INC., an Ohio corporation (the “Guarantor”), as of this 6th day of June,
2007, in order to induce the Banks (as hereinafter defined), KEYBANK NATIONAL ASSOCIATION, as
administrative agent for the Banks (the “Administrative Agent”), NATIONAL CITY BANK, as syndication
agent for the Banks (the “Syndication Agent” and together with the Administrative Agent, the
“Agents”), and BANK OF AMERICA, N.A., and LASALLE BANK NATIONAL ASSOCIATION, as co-documentation
agents, (the “Co-Documentation Agents”), to enter into, and lend money pursuant to, a certain
Amended and Restated Credit Agreement of even date herewith (said Amended and Restated Credit
Agreement as it may be from time to time amended, restated, or modified being herein called the
“Agreement”), by and among the Banks, the Agents, the Co-Documentation Agents and FOREST CITY
RENTAL PROPERTIES CORPORATION, a subsidiary of the Guarantor (the “Borrower”).



WITNESSETH:




          WHEREAS, the Guarantor previously executed a Guaranty of Payment of Debt, dated as of March
22, 2004, in favor of the Banks (as hereinafter defined)(as amended to the date hereof, the
“Original Guaranty”); and



          WHEREAS, Borrower, the Banks, the Agents and the Co-Documentation Agents desire to amend and
restate the Original Guaranty in its entirety as hereinafter set forth; and



          WHEREAS, in accordance with Section 13.02 of the Agreement, the Agents, the Co-Documentation
Agents and the Banks have consented to the modifications to the Original Guaranty that are
contained herein.



          NOW, THEREFORE, the Original Guaranty is hereby amended and restated as follows:



          1. DEFINITIONS. As used in this Guaranty, the following terms shall have the following
meanings:



          “Banks” shall mean each of the financing institutions that are party to the Agreement as of
the date of this Guaranty, any other bank(s) that may become parties to the Agreement after the
date hereof, and all successors and assigns of any such bank; and “Bank” shall mean any one of the
foregoing.



          “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.



          “Cash Flow Coverage Ratio” shall mean, for any Test Period, the ratio of (i) Consolidated Net
Operating Cash Flow to (ii) Consolidated Corporate Debt Service.



          “Collateral” shall mean, collectively, all property, if any, securing the Debt or any part
thereof at the time in question.



          “Company” shall mean the Guarantor and/or a Subsidiary of the Guarantor.



          “Completion Guaranty” shall mean any performance guarantee by the Guarantor that construction
of a real estate project will be completed in accordance with applicable plans and specifications
and that all costs associated with such completion will be paid, provided, that such costs
may include an interest reserve only through completion of the project and not through
stabilization of such project.



          “Consolidated Corporate Debt Service” shall mean, for any period, the sum of (i) all scheduled
payments of principal of (excluding balloon payments) and interest on any Indebtedness owing by the
Borrower or any of its Subsidiaries (excluding any non-recourse mortgage Indebtedness owing by the
Borrower or any Subsidiary of the Borrower, (ii) all scheduled payments of principal of (excluding
balloon payments) and interest on any Indebtedness owing by the Guarantor and (iii) Dividends paid
by the Guarantor.



          “Consolidated GAAP Shareholders’ Equity” shall mean the consolidated shareholders equity of
the Guarantor, as calculated in accordance with GAAP.



          “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 and
corporate interest expense of the Land Group, (ii) net income (loss) before taxes of the Lumber
Trading Group, (iii) net income (loss) before taxes and corporate interest expense (including, but
not limited to, interest incurred on Debt, subordinated debt or any other third party debt) of the
Corporate Activity Group, (iv) actual cash taxes paid on the Net Operating Income and the income
set forth in subsections (b)(i), (b)(ii) and (b)(iii) above, (v) 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 (vi) 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.



          “Contingent Obligation” shall mean, with respect to any Person at the time of any
determination, without duplication, any obligation, contingent or otherwise, of such



 









 







Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any
other Person in any manner, whether directly or otherwise; provided, that the term
“Contingent Obligation” shall not include endorsements for collection or deposit, in each case in
the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the Indebtedness in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum reasonable anticipated
liability in respect thereof (assuming such Person is required to perform thereunder).



          “Controlled Group” shall mean a controlled group of corporations as defined in Section 1563 of
the Internal Revenue Code of 1986, as may be amended from time to time, of which Guarantor or any
Subsidiary of the Guarantor is a part.



          “Debt” shall mean, collectively, (a) all Indebtedness now owing or hereafter incurred by the
Borrower to the Agents and/or the Banks arising under or in connection with the Agreement, whether
pursuant to commitment or otherwise, and including, without limitation, the principal amount of all
Loans made pursuant to the Agreement, all interest thereon determined as provided in the Agreement,
all fees provided to be paid by the Borrower to the Banks and/or the Agents pursuant to the
Agreement or any Related Writing and all liabilities in respect of letters of credit issued by the
Administrative Agent and/or any of the Banks for the account of the Borrower (but not including
Indebtedness held by any Bank arising and outstanding under any transaction or document referred to
in Sections 8.04 (other than that referred to in subclause (a) thereof), and/or 8.07 of the
Agreement), (b) each renewal, extension, consolidation or refinancing of any such Indebtedness in
whole or in part, and (c) all interest from time to time accruing on any of the foregoing
Indebtedness.



          “Distributions” shall have the meaning set forth in Section 9.13(e) hereof.



          “Dividends” shall include all dividends (in cash or otherwise) declared and/or paid, capital
returned, and other distributions of any kind made on or in respect of any share of Capital Stock
outstanding at any time.



          “EBDT” shall mean net earnings from operations before depreciation, amortization and deferred
taxes on income and excludes provision for decline in real estate, gain (loss) on disposition of
properties and extraordinary gains.



          “Environmental Laws” means all provisions of law, statutes, ordinances, rules, regulations,
permits, licenses, judgments, writs, injunctions, decrees, orders, awards and standards promulgated
by the government of the United States of America or by any state or municipality thereof or by any
court, agency, instrumentality, regulatory authority or commission of any of the foregoing, now or
hereafter in effect, and in each case, as amended, concerning or relating to health, safety and
protection of, or regulation of the discharge of substances into, the environment.



          “ERISA Net Worth” shall mean (a) as to any Subsidiary of the Guarantor, the excess of the net
book value of such Subsidiary’s assets (other than patents, treasury stock, goodwill and similar
intangibles but including unamortized mortgage and lease costs) over all of its liabilities (other
than liabilities to any other Company), such excess being determined in



 









 







accordance with GAAP applied on a basis consistent with the Guarantor’s present accounting
procedures, and (b) as to the Guarantor, the excess of the net book value (after deducting all
applicable reserves and deducting any value attributable to the re-appraisal or write-up of any
asset) of the Guarantor’s assets (other than patents, good will, treasury stock and similar
intangibles but including unamortized mortgage and lease costs) over all of its liabilities as
determined on an accrued and consolidated and consolidating basis and in accordance with GAAP not
inconsistent with the Guarantor’s present accounting principles consistently applied.



          “Event of Default” shall have the meaning set forth in Section 10 hereof.



          “Fiscal Quarterly Date” shall mean each of January 31, April 30, July 31 and October 31.



          “GAAP” shall mean generally accepted accounting principles in the United States of America, in
effect from time to time.



          “Hedge Agreement” shall mean any non-fully paid derivative, such as interest rate swaps or
collar agreements or other similar agreements or arrangements designed to hedge the position of a
Person with respect to interest rates, excluding (a) any such agreements as to which all
obligations of such Person are paid or payable within twelve (12) months of the date such agreement
is entered into by such Person and (b) Total Rate of Return Swaps.



          “Indebtedness” shall mean, with respect to any Person at the time of any determination,
without duplication, all obligations of such Person which in accordance with GAAP should be
classified upon the balance sheet of such Person as liabilities, but in any event including: (a)
all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) all obligations of such Person upon
which interest charges are customarily paid or accrued, (d) all written obligations of such Person
to maintain working capital, equity capital or other financial statement condition of another
Person so as to enable such other Person to pay its Indebtedness or otherwise to protect the holder
of such Indebtedness against loss in respect thereof, (e) all obligations of such Person issued or
assumed as the deferred purchase price of property or services, (f) all obligations of others
secured by any Lien on property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all capitalized lease obligations of such Person, (h) all
obligations of such Person in respect of Hedge Agreements and Total Rate of Return Swaps, (i) all
obligations of such Person, actual or contingent, as an account party in respect of letters of
credit or bankers’ acceptances, and, without duplication, all drafts drawn thereunder, and (j) all
obligations of any partnership or joint venture as to which such Person is or may become personally
liable, provided, that, Indebtedness shall not include (i) any obligations incurred as a
result of fraud, misappropriation, misapplication and environmental indemnities, as are usual and
customary in commercial loan transactions, or (ii) trade payables, deferred revenue, taxes and
accrued expenses, in each case arising in the ordinary course of business and that is due and
payable less than twelve (12) months after the date such debt was incurred.



          “Indemnification Lien” shall mean a Lien granted by the Guarantor pursuant to an Indemnity
Agreement entered into by the Guarantor with respect to one or more



 









 







Performance Surety Bonds; provided, that such Indemnification Lien extends only to the
assigned property on which a Surety provides a Performance Surety Bond and not to other property of
the Guarantor or any Subsidiary of the Guarantor and provided, further, that such
Indemnification Lien shall become effective only in the event that (a) the Guarantor fails to honor
its obligations under the related Indemnity Agreement or Performance Surety Bond; (b) the Guarantor
abandons or breaches a contract on a bonded project; (c) the Guarantor defaults under any other
indebtedness or liability owned to such Surety or (d) the Guarantor makes an assignment for the
benefit of creditors.



          “Indemnity Agreement” shall mean any indemnity agreement in form and substance satisfactory to
the Agents and the Banks, by and between the Guarantor and a Surety, and as each such Indemnity
Agreement may be amended, restated or otherwise modified.



          “Indenture” shall mean the indenture dated as of May 19, 2003, between the Guarantor and The
Bank of New York, as indenture trustee and relating to the Senior Notes.



          “Measured Credit Risk” shall mean the product of (i) the notional amount of a Hedge Agreement
entered into or guaranteed by the Guarantor, the Borrower, FCCC or any other Subsidiary of the
Borrower (other than a SPE Subsidiary), in each case with any Person other than a Bank that has a
remaining period to maturity of greater than twelve (12) months, times (ii) the number of
years remaining to maturity of such Hedge Agreement, times (iii)1.25%.



          “MTA Guaranty” shall mean that certain guaranty dated as of January 23, 2006, by the Guarantor
in favor of the Metropolitan Transit Authority for the State of New York (“MTA”), pursuant to which
the Guarantor has agreed to guarantee the obligations of Atlantic Rail Yards, LLC (“ARY”) under a
temporary entry license agreement between the MTA and ARY and as such MTA Guaranty may, from time
to time, be amended, restated or otherwise modified in accordance with the terms of this Guaranty.



          “Net Earnings” shall mean the Guarantor’s net earnings, as determined separately for each
fiscal year, after taxes, upon a consolidated basis (after deducting minority interests) and in
accordance with GAAP consistently applied.



          “Net Losses” shall mean the Guarantor’s net losses, as determined separately for each fiscal
year, after taxes, upon a consolidated basis (after deducting minority interests) in accordance
with GAAP consistently applied.



          “Net Operating Income” shall mean for any relevant period, the excess of the Borrower’s
revenues over the Borrower’s operating expenses, in each case as determined in accordance with the
Pro Rata Consolidation Method. For purposes of this definition, Net Operating Income (i) shall not
include any gains or losses from the sale of income producing real properties, other than gains or
losses obtained from the sale of net outlot parcels to a maximum aggregate amount of Twenty Million
Dollars ($20,000,000) for the immediately preceding four consecutive quarters and (ii) 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.



 









 





          “Non-Affiliate Construction Project” shall mean any real property and all improvements to be
constructed thereon (collectively, the “Non-Affiliate Property”) (i) with respect to which the
Borrower or a Subsidiary of the Borrower, as the case may be, (a) may make a Permitted
Non-Affiliate Loan, and (b) is the developer pursuant to an agreement with a Non-Affiliated Entity
as owner of the Non-Affiliate Property; and (ii) with respect to which the Borrower or an Affiliate
of the Borrower, as the case may be, holds an irrevocable option from either the Non-Affiliated
Entity or the parent of the Non-Affiliated Entity to acquire, respectively, either (a) the
Non-Affiliate Property, or (b) all of the equity interests owned by the parent of the
Non-Affiliated Entity in and to such Non-Affiliated Entity.



          “Non-Affiliated Entity” shall mean any Person that is not an Affiliate of the Borrower and
that is wholly-owned by another Person.



          “Obligor” shall mean any Person or entity who, or any of whose property is or shall be,
obligated on the Debt or any part thereof in any manner and includes, without limiting the
generality of the foregoing, the Borrower, the Guarantor and any co-maker, endorser, other
guarantor of payment, subordinating creditor, assignor, grantor of a security interest, pledgor,
mortgagor or hypothecator of property, if any.



          “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 Agreement) or this Guaranty, as
applicable, or any other fees or expenses provided hereunder or under the Agreement, when due and
payable, whether at maturity or by acceleration.



          “Performance Surety Bonds” shall mean the bonds, undertakings and like obligations executed by
a Surety for or on behalf of the Guarantor for one or more of the following purposes:



          (a) to guarantee the performance by the Guarantor or a Subsidiary of the Guarantor, as
applicable, that construction of a real estate project will be completed in accordance with
applicable plans and specifications and that all costs associated with such completion will be
paid;



          (b) to insure that any mechanics’ liens incurred in the normal course of constructing a real
estate project are duly paid and discharged;



          (c) as a condition to the issuance of a permit related to a real estate project;



          (d) as a condition to the issuance of state and local licenses required for the construction
and development of a real estate project; or



          (e) to support other obligations related to the construction and development of a real
estate project, provided that such obligations do not constitute Indebtedness.



          “Permitted Debt” shall have the meaning set forth in Section 9.10 hereof.



 









 





          “Permitted Distributions” shall have the meaning set forth in Section 9.13(e) hereof.



          “Permitted Non-Affiliate Loan” shall mean a loan by the Borrower or any Subsidiary of the
Borrower to a Non-Affiliated Entity for the purposes of (a) purchasing or otherwise acquiring a
Non-Affiliate Property or (b) paying construction costs, in each case, in connection with a
Non-Affiliate Construction Project.



          “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.



          “Plan” shall mean any employee pension benefit plan subject to Title IV of the Employee
Retirement Income Security Act of 1974, as amended, established or maintained by the Guarantor, any
Subsidiary of the Guarantor, any member of the Controlled Group, or any such Plan to which the
Guarantor, any Subsidiary of the Guarantor or any member of the Controlled Group is required to
contribute on behalf of its employees.



          “Possible Default” shall mean any event or condition which, with notice or lapse of time or
both, would constitute an Event of Default referred to in Section 10 hereof.



          “Pro Rata Consolidation Method” shall mean the pro rata method of consolidation as opposed to
the full consolidation method of accounting.



          “Puttable Notes Hedge and Warrant Transactions” shall mean the purchased call option and
warrant transactions that may be entered into from time to time by the Guarantor, with respect to
its common stock, in connection with the 2006 Puttable Senior Notes.



          “Receivable” shall mean a claim for moneys due or to become due, whether classified as a
contract right, account, chattel paper, instrument, general intangible or otherwise.



          “Related Writing” shall mean any Note, assignment, mortgage, security agreement, guaranty
agreement, Subordination Agreement, financial statement, audit report, officer’s certificate or
other writing furnished by the Borrower, the Guarantor or any of their respective officers to the
Agents or the Banks.



          “Reportable Event” shall mean a reportable event as that term is defined in Title IV of the
Employee Retirement Income Security Act of 1974, as amended, with respect to a Plan as to which the
thirty (30) day notice requirement has not been waived by the Pension Benefit Guaranty Corporation.



          “Restatement Effective Date” shall mean the date on which all conditions precedent set forth
in Article VI of the Agreement are satisfied or waived by the Administrative Agent and the Required
Banks.



 









 





          “Restricted Company” shall mean the Guarantor or a Restricted Subsidiary.



          “Restricted Subsidiary” shall mean any Subsidiary of the Guarantor other than (a) the
Borrower, and (b) any Subsidiary of the Borrower.



          “Senior Notes” shall mean the 2003 Senior Notes, the 2004 Senior Notes and the 2005 Senior
Notes.



          “Subordination Agreement” shall mean any subordination agreement in form and substance
satisfactory to the Agents and the Banks entered into by a Surety in favor of the Agents and the
Banks, and as each such Subordination Agreement may, from time to time, be amended, restated or
otherwise modified.



          “Subsidiary” of any Person shall mean and include (a) any corporation more than fifty percent
(50%) of whose stock of any class or classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation is at the time owned by such Person directly
or indirectly through Subsidiaries, (b) any partnership, limited liability company, association
(including business trusts) or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a fifty percent (50%) voting or equity interest at the time, and (c)
any corporation, limited liability company, partnership, association or other entity the accounts
of which are consolidated with those of its parent in the parent’s consolidated financial
statements.



          “Surety” means any surety or insurance company reasonably acceptable to the Agents.



          “Surety Bonds” means the bonds, undertakings and other like obligations executed by a Surety
for the Guarantor subject to an Indemnity Agreement and a Subordination Agreement in a maximum
aggregate principal amount of $30,000,000 for all Sureties (excluding Performance Surety Bonds).



          “Test Period” shall mean each period of four consecutive fiscal quarters of the Guarantor or
the Borrower, as applicable, in each case taken as one accounting period, ended after the,
Restatement Effective Date.



          “Total Rate of Return Swap” shall mean a bilateral financial contract between a total rate of
return payer (the legal owner of the reference asset) and a total rate of return receiver where the
total rate of return payer pays the total return of a reference asset and receives a specified
fixed or floating cash flow from the total rate of return receiver.



          “2003 Senior Notes” shall mean the senior notes of the Guarantor issued on May 19, 2003,
pursuant to the Indenture, in an original aggregate principal amount of $300,000,000.



          “2004 Senior Notes” shall mean the senior notes of the Guarantor issued on February 10, 2004,
pursuant to the Indenture, in an original aggregate principal amount of up to $100,000,000.



 









 





          “2005 Senior Notes” shall mean the senior notes of the Guarantor issued on or about January
25, 2005, pursuant to the Indenture, in an original aggregate principal amount of up to
$150,000,000.



          “2006 Indenture” shall mean the indenture dated as of October 10, 2006, between the Guarantor
and The Bank of New York Trust Company, N.A., as indenture trustee, relating to the 2006 Puttable
Senior Notes.



          “2006 Puttable Senior Notes” shall mean the puttable equity-linked senior notes of the
Guarantor issued on or about October 10, 2006, pursuant to the 2006 Indenture, in an original
aggregate principal amount of up to $287,500,000.



          All capitalized terms used herein but not herein defined that are defined in the Agreement
shall have the respective meanings ascribed to them in the Agreement.



          All financial covenants contained in this Guaranty shall be measured on each Fiscal Quarterly
Date.



Accounting Principles




          Any accounting term not specifically defined in this Section 1 or elsewhere in this Guaranty,
shall have the meaning ascribed thereto by GAAP not inconsistent with the Guarantor’s present
accounting procedures, provided, that, if the Guarantor notifies the Administrative Agent
that the Guarantor requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the Restatement Effective Date in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Guarantor that the
Required Lenders request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.



          Notwithstanding the foregoing, the financial statements furnished to the Banks pursuant hereto
shall be made and prepared in accordance with GAAP consistently applied throughout the periods
involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the
Guarantor to the Banks), provided, that (a) all computations determining compliance with
Sections 9.8 and 9.14, including definitions used therein, shall utilize accounting principles
based on the Pro Rata Consolidation Method, (b) all computations determining compliance with
Sections 9.8, 9.14 and 9.15, including definitions used therein, shall exclude interest income
received by the Borrower or any of its Subsidiaries with respect to loans made by the Borrower or
such Subsidiary pursuant to Sections 8.06(b) and (d) of the Agreement, unless such loans are funded
with the proceeds from Revolving Loans or the Senior Notes and (c) such financial statements must
also include a report (in the footnotes thereto or otherwise) of the financial results of the
Guarantor using accounting principles based on the Pro Rata Consolidation Method.



          2. ACKNOWLEDGMENTS, CONSIDERATION. The Guarantor desires that the Agents and the Banks grant
the Borrower and continue the loan(s), credit and



 









 







financial accommodations provided for under the Agreement. The Agreement provides, on and
subject to certain conditions therein set forth, for Revolving Loans by the Banks to the Borrower
up to an aggregate maximum principal amount of Seven Hundred Fifty Million Dollars ($750,000,000).
There exists and will hereafter exist economic and business relationships between the Guarantor and
the Borrower which will be of benefit to the Guarantor. The Guarantor finds it to be in the direct
business and economic interest of the Guarantor that the Borrower obtain the loans, credit and
financial accommodations from the Agents and the Banks provided for in the Agreement. The
Guarantor understands that the Agents and the Banks are willing to grant and continue the loans,
credit and financial accommodations to the Borrower provided for in the Agreement only upon certain
terms and conditions, one of which is that the Guarantor unconditionally guarantee the payment of
the Debt and this instrument is being executed and delivered by the Guarantor to satisfy that
condition and in consideration of the Agents and the Banks entering into the Agreement.



          3. GUARANTY. The Guarantor hereby absolutely, irrevocably and unconditionally guarantees (a)
the punctual and full payment of all and every portion of the Debt when due, by acceleration or
otherwise, whether now owing or hereafter arising, (b) the prompt observance and performance by the
Borrower of each and all of the Borrower’s covenants, undertakings, obligations and agreements set
forth in the Agreement, the Notes and/or any other Related Writing evidencing or pertaining
thereto, and (c) the prompt payment of all expenses and costs, including reasonable attorneys’
fees, incurred by or for the account of the Agents and/or the Banks in connection with any action
to enforce payment or collection of the Debt from the Borrower and/or the Guarantor or to prepare
any amendments, restatements or modifications of the Agreement, the Notes and/or this Guaranty. If
the Debt or any part thereof shall not be paid in full punctually when due and payable, the Agents
and/or the Banks in each case shall have the right to proceed directly against the Guarantor under
this Guaranty regardless of whether or not the Agents and/or the Banks shall have theretofore
proceeded or shall then be proceeding against the Borrower or any other Obligor or Collateral, if
any, or any of the foregoing, it being understood that the Agents and/or the Banks in their sole
discretion may proceed or not proceed against the Borrower, the Obligors and/or any Collateral and
may exercise or not exercise each right, power or privilege that the Agents and/or the Banks may at
any time have, either simultaneously or separately and, in any event, at such time or times and as
often and in such order as the Agents and/or the Banks in their sole discretion, may from time to
time deem expedient, all without affecting the obligations of the Guarantor hereunder or the right
of the Agents and/or the Banks to demand and/or enforce performance by the Guarantor of the
Guarantor’s obligations hereunder.



          4. REINSTATEMENT. This Guaranty shall continue to be effective or be reinstated, as the case
may be, if any amount paid by or on behalf of the Borrower to the Agents or the Banks on or in
respect of the Debt is rescinded, restored or returned in connection with the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any other Obligor, or as
a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any other Obligor or any part of the property of the Borrower or any
other Obligor, or otherwise, all as though such payment had not been made.



          5. WAIVERS. The Guarantor waives any and all contractual, legal and/or equitable rights of
subrogation, contribution, exoneration, indemnity and/or



 









 







reimbursement from or against the Borrower or any Obligor with respect to the Debt and/or any
payments made by the Guarantor on account of this Guaranty.



          6. ADDITIONAL AGREEMENTS. Regardless of the duration of time, regardless of whether the
Borrower may from time to time cease to be indebted to the Banks and irrespective of any act,
omission or course of dealing whatever on the part of the Agents and/or the Banks, the Guarantor’s
liabilities and other obligations under this Guaranty shall remain in full force and effect until
the full and final payment of all of the Debt. Without limiting the generality of the foregoing:



          6.1. The obligations of the Guarantor hereunder shall not be released, discharged or in any
way affected, nor shall the Guarantor have any rights or recourse against the Agents or the Banks
by reason of (a) any action the Agents or the Banks may take or omit to take, or (b) any defense
raised or asserted by the Borrower against enforcement of the Agreement or the Notes or any
challenge to the sufficiency or enforceability of the Agreement, any of the Notes or this Guaranty,
or (c) any act or thing that might otherwise operate as a legal or equitable discharge of a surety,
as to which the Guarantor hereby expressly waives any and all defenses available to a surety except
irrevocable payment in full of the Debt.



          6.2. The obligations of the Guarantor under this Guaranty shall be satisfied strictly in
accordance with the terms of this Guaranty, under all circumstances whatsoever, including, without
limitation, the existence of any claim, setoff, defense or right which the Guarantor or the
Borrower may have at any time against the Agents or the Banks or any other Person or entity,
whether in connection with this Guaranty, the Agreement, the Notes or the transactions contemplated
hereby or any unrelated transaction.



          6.3. The Banks shall at no time be under any duty to the Guarantor to grant any loans, credit
or financial accommodation to the Borrower, irrespective of any duty or commitment of the Banks to
the Borrower, or to follow or direct the application of the proceeds of any such loans, credit or
financial accommodation.



          6.4. The Guarantor waives (a) notice of the granting of any loan to the Borrower or the
incurring of any other Indebtedness, including, but not limited to the creation of the Debt by the
Borrower or the terms and conditions thereof, (b) presentment, notice of nonpayment, demand for
payment, protest, notice of protest and notice of dishonor of the Notes or any other Indebtedness
incurred by the Borrower to the Banks, (c) notice of any indulgence granted to any Obligor, (d)
notice of the Banks’ acceptance of this Guaranty, and (e) any other notice to which the Guarantor
might, but for the within waiver, be entitled.



          6.5. The Agents and/or the Banks in their sole discretion may, without prejudice to their
rights under this Guaranty, at any time or times (a) grant the Borrower whatever loans, credit or
financial accommodations that the Banks, or any thereof, may from time to time deem advisable, even
if the Borrower might be in default and even if those loans, credit or financial accommodations
might not constitute Debt the payment of which is guaranteed hereunder, (b) assent to any renewal,
extension, consolidation or refinancing of the Debt or any part thereof, (c) forbear from demanding
security, if the Agents and/or the Banks shall have the right to do so, (d) release any Obligor or
Collateral or assent to any exchange of



 









 







Collateral, if any, irrespective of the consideration, if any, received therefor, (e) grant
any waiver or consent or forbear from exercising any right, power or privilege that the Agents
and/or the Banks may have or acquire, (f) assent to any amendment, deletion, addition, supplement
or other modification in, to or of any writing evidencing or securing any Debt or pursuant to which
any Debt is created, (g) grant any other indulgence to any Obligor, (h) accept any Collateral for
or other Obligors upon the Debt or any part thereof, or (i) fail, neglect or omit in any way to
realize upon any Collateral or to protect the Debt or any part thereof or any Collateral therefor.



          6.6. The Guarantor’s liabilities and other obligations under this Guaranty shall survive any
merger, consolidation or dissolution of the Guarantor.



          6.7. The Guarantor’s liabilities and other obligations under this Guaranty shall be absolute
and unconditional irrespective of any lack of validity or enforceability of any agreement,
instrument or document evidencing the Debt or related thereto, or any other defense available to
the Guarantor in respect of this Guaranty.



          7. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants that (a) it is a
duly organized and validly existing corporation under the laws of the State of Ohio, (b) the
execution, delivery and performance of this Guaranty have been duly authorized by all necessary
corporate action, (c) there is no prohibition in either its Articles of Incorporation, Code of
Regulations or in any agreement, instrument, judgment, decree or order to which it is a party that
in any way restricts or prohibits the execution, delivery and performance of this Guaranty in any
respect, (d) this Guaranty has been duly executed and delivered by the Guarantor and is a valid and
binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms,
and (e) as of January 31, 2007, there are 56,000,000 shares authorized of Class B Common Stock of
the Guarantor of which 25,254,210 shares are issued and outstanding.



          The Guarantor further represents and warrants that this Guaranty is made in furtherance of the
purposes for which the Guarantor was incorporated and is necessary to promote and further the
business of the Guarantor and that the assumption by the Guarantor of its obligations hereunder
will result in direct financial benefits to the Guarantor.



          This Guaranty is not made in connection with any consumer loan or consumer transaction.



          The Guarantor further represents and warrants that (a) the Guarantor has received
consideration which is the reasonably equivalent value of the obligations and liabilities that the
Guarantor has incurred to the Agents and/or the Banks, (b) the Guarantor is not insolvent as
defined in any applicable state or federal statute, nor will the Guarantor be rendered insolvent by
the execution and delivery of this Guaranty to the Agents and the Banks, (c) the Guarantor is not
engaged or about to engage in any business or transaction for which the assets retained by the
Guarantor shall be an unreasonably small capital, taking into consideration the obligations to the
Agents and the Banks incurred hereunder, and (d) the Guarantor does not intend to, nor does the
Guarantor believe, that the Guarantor will incur debts beyond the Guarantor’s ability to pay as
they become due.



 









 





          The Guarantor further represents and warrants that the Guarantor has no Indebtedness
outstanding from any Subsidiary of the Guarantor to the Guarantor.



          Neither the Guarantor nor any of its Subsidiaries is subject to or in violation of any law,
regulation, or list of any government agency (including, without limitation, the U.S. Office of
Foreign Asset Control list, Executive Order No. 13224 or the USA Patriot Act) that prohibits or
limits the conduct of business with or the receiving of funds, goods or services to or for the
benefit of any Persons specified therein or that prohibits or limits any Bank or the Agents from
making any advances or extensions of credit to the Guarantor or from otherwise conducting business
with the Guarantor.



          8. NOTICES. The Agents and/or the Banks shall be deemed to have knowledge or to have received
notice of any event, condition or thing only if the Agents and/or the Banks shall have received
written notice thereof as provided in the Agreement. A written notice shall be deemed to have been
duly given to the Guarantor whenever a writing to that effect shall have been sent by registered or
certified mail to the Guarantor at the address set forth opposite the Guarantor’s signature below
(or to such other address of the Guarantor as the Guarantor may hereafter furnish to the Banks in
writing for such purpose), but no other method of giving notice to or making a request of the
Guarantor is hereby precluded.



          9. COVENANTS. The Guarantor hereby agrees to perform and observe and to cause each of its
Subsidiaries to perform and observe, all of the following covenants and agreements:



          9.1. INSURANCE. Each Company will:




          (a) insure itself and all of its insurable properties to such extent, by such
insurers and against such hazards and liabilities as is generally done by businesses
similarly situated, it being understood that the Guarantor has obtained a fidelity bond
for such of its employees as handle funds belonging to the Borrower or the Guarantor,




          (b) give the Administrative Agent prompt written notice of any material reduction
or adverse change in that Company’s insurance coverage, and




          (c) forthwith upon any Bank’s or the Administrative Agent’s written request,
furnish to each Bank and the Administrative Agent such information in writing about
that Company’s insurance as any Bank or the Administrative Agent, as applicable, may
from time to time reasonably request.



          9.2. MONEY OBLIGATIONS. Each Company will pay in full:





          (a) prior in each case to the date when penalties would attach, all taxes,
assessments and governmental charges and levies (except only those so long as and, to
the extent that, the same shall be contested in good faith by appropriate and timely
proceedings diligently pursued and taxes and assessments on inconsequential parcels of
vacant land, the nonpayment of which does not materially



 









 







adversely affect the financial condition of the Guarantor) for which it may be or
become liable or to which any or all of its properties may be or become subject,




          (b) all of its wage obligations to its employees in compliance with the Fair Labor
Standards Act (29 U.S.C. Section 206-207) or any comparable provisions, and




          (c) all of its other obligations calling for the payment of money (except only
those so long as and to the extent that the same shall be contested in good faith by
appropriate and timely proceedings diligently pursued) before such payment becomes
overdue; provided that, notwithstanding the foregoing, the Guarantor shall not
make any payment on account of any of the Senior Notes or the 2006 Puttable Senior
Notes in the event of and during the continuance of any Payment Default under the
Agreement or this Guaranty.



          9.3. RECORDS. Each Company will:





          (a) at all times maintain true and complete records and books of account and,
without limiting the generality of the foregoing, maintain appropriate reserves for
possible losses and liabilities, all in accordance with generally accepted accounting
principles applied on a basis not inconsistent with its present accounting procedures,
and




          (b) at all reasonable times permit each Bank to examine that Company’s books and
records and to make excerpts therefrom and transcripts thereof.



          9.4. FRANCHISES. Each Company will preserve and maintain at all times its corporate
existence, rights and franchises; provided, that this Section shall not apply to (a) any
merger of a Subsidiary of the Guarantor into the Guarantor or into another Subsidiary of the
Guarantor, (b) any consolidation of a Subsidiary with another Subsidiary, or (c) any dissolution of
any Subsidiary of the Guarantor, except in each case where the Subsidiary is the Borrower.



          9.5. NOTICE. The Guarantor will cause its Chief Financial Officer, or in his or her absence
another officer designated by the Chief Financial Officer, to promptly notify the Banks whenever
(a) any Event of Default or Possible Default may occur hereunder (including, without limitation,
any default under any of the Senior Notes, the Indenture, the 2006 Puttable Senior Notes, the 2006
Indenture or any other document relating thereto (after giving effect to any applicable grace
period)) or any representation or warranty made herein may for any reason cease in any material
respect to be true and complete, and/or (b) any Restricted Subsidiary shall (i) be in default of
any material (either with respect to the Borrower or the Guarantor) obligation for payment of
borrowed money, or, to the knowledge of the Guarantor, any material obligations in respect of
guarantees, taxes and/or Indebtedness for goods or services purchased by, or other contractual
obligations of, such Subsidiary, and/or (ii) not, to the knowledge of the Guarantor, be in
compliance with any law, order, rule, judgment, ordinance, regulation, license, franchise, lease or
other agreement that has or could reasonably be expected



 









 







to have a material adverse effect on the business, operations, property or financial condition
of such Subsidiary, and/or (c) the Guarantor and/or any Restricted Subsidiary shall have received
notice, or have knowledge, of any actual, pending or threatened claim, notice, litigation,
citation, proceeding or demand relating to any matter(s) described in subclauses (b)(i) and (b)(ii)
of this 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 any of the Senior Notes or
the Indenture or the 2006 Puttable Senior Notes or the 2006 Indenture, whether or not the Guarantor
believes that the consent of the Required Banks is needed therefor pursuant to Section 9.10
(i)(iii) or 9.10(h)(iii), as applicable, of this Guaranty.



          9.6. ERISA COMPLIANCE. No Company will incur any material accumulated funding deficiency
within the meaning of the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations thereunder or any material liability to the Pension Benefit Guaranty
Corporation, established thereunder in connection with any Plan. Each Company will furnish (i) as
soon as possible and in any event within thirty (30) days after such Company knows or has reason to
know that any Reportable Event with respect to any Plan has occurred, a statement of the Chief
Financial Officer of such Company setting forth details as to such Reportable Event and the action
which such Company proposes to take with respect thereto, together with a copy of the notice of
such Reportable Event given to the Pension Benefit Guaranty Corporation if a copy of such notice is
available to such Company, (ii) promptly after the filing thereof with the United States Secretary
of Labor or the Pension Benefit Guaranty Corporation, copies of each annual report with respect to
each Plan established or maintained by such Company for each plan year, including (x) where
required by law, a statement of assets and liabilities of such Plan as of the end of such plan year
and statements of changes in fund balance and in financial position, or a statement of changes in
net assets available for plan benefits, for such plan year, certified by an independent public
accountant satisfactory to the Banks, and (y) an actuarial statement of such Plan applicable to
such plan year, certified by an enrolled actuary of recognized standing acceptable to the Banks,
and (iii) promptly after receipt thereof a copy of any notice such Company, any Subsidiary or any
member of the Controlled Group may receive from the Pension Benefit Guaranty Corporation or the
Internal Revenue Service with respect to any Plan administered by such Company; provided,
that this latter clause shall not apply to notices of general application promulgated by the
Pension Benefit Guaranty Corporation or the Internal Revenue Service. As used in this Section 9.6,
“material” means the measure of a matter of significance which shall be determined as being an
amount equal to five percent (5%) of each Company’s ERISA Net Worth.



          9.7. FINANCIAL STATEMENTS. The Guarantor will furnish to each Bank:




          (a) within forty-five (45) days (or fifty (50) days so long as the Guarantor will
not be reporting an Event of Default on such Form 10-Q report) after the end of each
quarter-annual period of each fiscal year of the Guarantor, a copy of the Guarantor’s
Form 10-Q quarterly report as filed by the Guarantor with the Securities and Exchange
Commission,




          (b) within forty-five (45) days (or fifty (50) days so long as the Guarantor shall
not have reported an Event of Default to the Securities and



 









 







Exchange Commission during such fiscal period nor on its most recent filing with
the Securities and Exchange Commission) after the end of each of the first three (3)
quarter-annual fiscal periods of each fiscal year of the Guarantor, an unaudited
consolidated and consolidating balance sheet of the Guarantor as at the end of that
period and an unaudited consolidated and consolidating statement of income of the
Guarantor for the Guarantor’s current fiscal year to date, all prepared in form and
detail in accordance with GAAP, consistently applied, or the Pro Rata Consolidation
Method, as applicable, and certified by a Senior Officer of the Guarantor, subject to
changes resulting from quarter-end adjustments, together with a certificate of a Senior
Officer of the Guarantor (i) specifying the nature and period of existence of each
Event of Default and/or Possible Default, if any, and the action taken, being taken or
proposed to be taken by the Guarantor in respect thereof or if none, so stating, and
(ii) certifying that the representations and warranties of the Guarantor set forth
herein are true and correct as of the date of such certificate, or, if not, all
respects in which they are not, and (iii) a covenant compliance worksheet in the form
and substance of Schedule 9.7(b) hereof completed as of the end of such fiscal
quarterly period,




          (c) within ninety (90) days (or ninety-five (95) days so long as the Guarantor
shall not have reported an Event of Default to the Securities and Exchange Commission
during such fiscal period nor on its most recent filing with the Securities and
Exchange Commission) after the end of each fiscal year of the Guarantor, an annual
report on Form 10-K as filed by the Guarantor with the Securities and Exchange
Commission, including the complete audited consolidated balance sheets and statements
of income of the Guarantor for that year certified by an independent public accountant
satisfactory to the Banks, and an unaudited consolidating balance sheet and statement
of income of the Parent for the current fiscal year, each in form and detail
satisfactory to the Banks, and prepared in accordance with GAAP, consistently applied,
or the Pro Rata Consolidation Method, as applicable, together with (i) a report of the
independent certified public accountant with an opinion that is not qualified as to the
scope of the audit or as to the status of the Guarantor or the Borrower as a going
concern, (ii) a certificate of the Senior Officer of the Guarantor (X) specifying the
nature and period of existence of each Event of Default and/or Possible Default, if
any, and the action taken, being taken or proposed to be taken by the Guarantor in
respect thereof or if none, so stating, and (Y) certifying that the representations and
warranties of the Guarantor set forth herein are true and correct as of the date of
such certificate, or, if not, all respects in which they are not, and (iii) a fully
completed covenant compliance worksheet in the form and substance of Schedule 9.7(b)
hereof relating to such fiscal year,




          (d) concurrently with furnishing any quarterly financial statement or audit report
pursuant to this Section 9.7, a certificate by Charles A. Ratner, Albert Ratner, Samuel
H. Miller or Thomas G. Smith stating whether any Company has made any guaranty or
incurred any Indebtedness referred to in Section 9.10(d) or Section 9.12(g) hereof and,
if so, the details thereof,



 









 






          (e) as soon as available, copies of all notices, reports, proxy statements and
other similar documents sent by the Guarantor to its shareholders, to the holders of
any of its debentures or bonds or the trustee of any indenture securing the same or
pursuant to which they have been issued, to any securities exchange or to the
Securities Exchange Commission or any similar federal agency having regulatory
jurisdiction over the issuance of the Guarantor’s securities,




          (f) within forty-five (45) days (or fifty (50) days so long as the Guarantor shall
not have reported an Event of Default under the Guaranty to the Securities and Exchange
Commission during such fiscal period nor on its most recent filing with the Securities
and Exchange Commission) after the end of each fiscal quarter of the Guarantor (i) a
schedule setting forth the aggregate Measured Credit Risk as of the last day of such
fiscal quarter, along with the remaining available Measured Credit Risk permitted by
Section 9.10(k) and (ii) a statement of the aggregate notional amount of all Hedge
Agreements on which the Guarantor, the Borrower, FCCC and/or any other Subsidiary of
the Borrower (other than a SPE Subsidiary) are obligated as of the last day of such
fiscal quarter and the aggregate amount of the cash risk to the Guarantor, the
Borrower, FCCC and such other Subsidiaries in respect of such Hedge Agreements as of
the last day of such fiscal quarter,




          (g) concurrently with furnishing any covenant compliance worksheet under Section
9.7(b) or (c) above, such schedules, details and explanations supporting the
calculations contained in such covenant compliance worksheet as may be reasonably
required by the Banks,




          (h) within forty-five (45) days (or fifty (50) days so long as the Guarantor shall
not have reported an Event of Default under the Guaranty to the Securities and Exchange
Commission during such fiscal period nor on its most recent filing with the Securities
and Exchange Commission) after the end of each fiscal quarter of the Guarantor, a
schedule setting forth the face amount and date of each outstanding Performance Surety
Bond issued at the request of the Guarantor pursuant to an Indemnity Agreement along
with all other Surety Bonds then outstanding,




          (i) within one hundred twenty (120) days after the end of each fiscal year of the
Guarantor, a calculation of the consolidated leverage of the Guarantor as of the last
day of such fiscal year, with such details and explanations as may be reasonably
required by the Banks, and




          (j) forthwith upon any Bank’s written request, such other information of any
Company’s financial condition and business, including, but not limited to any
management letters of accountants addressed to the Guarantor or the Borrower.



 









 





     9.8. EBDT. The Guarantor will not suffer or permit its EBDT, as of any Fiscal Quarterly Date
falling within the periods set forth below, for the Test Period ending on such Fiscal Quarterly
Date, to be less than the amount set forth below for the respective periods set forth below:



	 	 	 	 	 
	Period	 	EBDT
	February 1, 2007 through January 31, 2008
	 	$	230,000,000	 
	February 1, 2008 through January 31, 2009
	 	$	240,000,000	 
	February 1, 2009 and thereafter
	 	$	250,000,000	 






          9.9. COMBINATIONS, BULK TRANSFERS. (a) No Restricted Company will be a party to any
consolidation or merger or lease, sell or otherwise transfer all or any substantial part of its
assets or sell, pledge, hypothecate or transfer its stock or other ownership interests in any
Subsidiary of the Guarantor; provided, that this Section 9.9 shall not apply to any
transfer (as opposed to a pledge) effected in the normal course of business on commercially
reasonable terms and provided, further, that a Restricted Company shall only be
permitted to pledge its stock or other ownership interests in any of its Subsidiaries that is a
single asset or special purpose entity (each, a “Pledged Subsidiary”) and such pledge may only
secure the following:




     (i) additional or mezzanine Indebtedness incurred with respect to a
project encumbered by a first mortgage at the time such additional or
mezzanine Indebtedness is incurred, so long as such additional or mezzanine
Indebtedness is permitted under Section 9.10 of this Guaranty
provided, that the sum of the then existing Indebtedness with
respect to such project plus such additional or mezzanine
Indebtedness does not exceed eighty percent (80%) of the appraised value of
the project at the time such additional or mezzanine Indebtedness is
incurred; or




     (ii) primary Indebtedness (or the re-financing thereof) incurred solely
for the purpose of acquiring real property or for construction or
redevelopment purposes, so long as such primary Indebtedness is permitted
under Section 9.10 of this Guaranty; provided, that such primary
Indebtedness (or the re-financing thereof) does not exceed one hundred
percent (100%) of the appraised value of the acquired property at the time
of such financing or re-financing, as applicable.




          (b) In addition to the foregoing, except to the extent permitted by Section
9.19(b)(i), (i) such pledges of stock or other ownership interests in a Pledged
Subsidiary may only be made to secure Indebtedness incurred with respect to a project
owned or to be acquired by such Pledged Subsidiary and not to secure Indebtedness
incurred with respect to a project owned or to be acquired by any other Subsidiary,
(ii) such pledges of stock or other ownership interests in a Pledged Subsidiary given
to secure Indebtedness described in Section 9.9(a)(i) above may only secure the
additional or mezzanine Indebtedness being incurred with respect to



 









 







such project and not all of the Indebtedness on such project and (iii) such
pledges of stock or other ownership interests in a Pledged Subsidiary given to secure
Indebtedness described in Section 9.9(a)(ii) above may only secure the primary
Indebtedness being incurred with respect to the acquisition of real property or such
construction or redevelopment purposes.




          (c) The Guarantor will deliver to the Agents and the Banks an updated schedule, in
the form of Schedule 9.9 attached hereto, listing all of the properties as to which a
pledge of stock or other ownership interests has been provided to a lender in
accordance with Section 9.9(b), within forty-five (45) days after each Fiscal Quarterly
Date.



          9.10. BORROWINGS. No Restricted Company will create, assume or suffer to exist any
Indebtedness of any kind including, but not limited to, leases required to be capitalized under
Financial Accounting Standards Board Standard No. 13 or any reimbursement obligations or other
liabilities with respect to letters of credit issued for any Restricted Company’s account;
provided, that this Section 9.10 shall not apply to any of the following (collectively,
“Permitted Debt”):




          (a) [Reserved],




          (b) any loan obtained from the Guarantor or any Restricted Subsidiary by any
Restricted Subsidiary, other than Portland Lumber Trading, Inc. (fka Forest City
Trading Group, Inc.), provided, that (i) such loans shall be made only in the
ordinary course of business and (ii) Guarantor shall not cause or permit any Restricted
Subsidiary to take any action to enforce any payment of any loan made by the Restricted
Subsidiary to another Restricted Subsidiary without the prior written consent of the
Banks,




          (c) any real estate loan heretofore or hereafter obtained or guaranteed by the
Guarantor for the purpose of financing any building or purchasing equipment, furniture
or fixtures related thereto to be used only for the business of the Guarantor and its
Subsidiaries, provided, that no such loan shall exceed eighty percent (80%) of
the lender’s appraisal of the real estate being financed,




          (d) any loan or letter of credit that is obtained or guaranteed by the Guarantor;
provided, that the Guarantor’s aggregate personal liability in respect of all
such loans (other than any loan obtained by the Guarantor and permitted by any other
clause of this Section 9.10) and letters of credit and in respect of all guaranteed
loans referred to in clause (f) of Section 9.12 hereof, does not then exceed and after
incurring such loan or letter of credit or the guarantee thereof in question would not
exceed, Ten Million Dollars ($10,000,000),




          (e) leases required to be capitalized under Financial Accounting Standards Board
Standard No. 13 in the aggregate amount for all Restricted Subsidiaries of Three
Million Dollars ($3,000,000),



 









 






          (f) any secured Indebtedness of a Restricted Company created in the course of
purchasing or developing real estate or financing construction (or any refinancings
thereof) or other improvements thereon or purchasing furniture, fixtures or other
equipment therefor or any other Indebtedness of any Restricted Company or any
refinancings thereof; provided, that no Restricted Company (other than a
Restricted Company whose sole assets consist of contiguous parcels of land which are
being purchased or developed with such financing, the improvements, if any, thereon,
furniture, fixtures and other equipment used in connection therewith, receivables
arising from tenants in connection therewith and the proceeds of such receivables and
other property directly obtained from the ownership of such assets) shall have any
personal liability for such Indebtedness, the creditors’ recourse being solely to the
property being pledged as collateral for such Indebtedness and the income therefrom,




          (g) any Indebtedness or other obligations under any Performance Surety Bond or the
related Indemnity Agreement; provided, that the terms and conditions of each
such Indemnity Agreement shall be substantially the same as the terms and conditions of
the form of Agreement of Indemnity dated August 23, 2005, between the Guarantor and
Zurich American Insurance Company, that was previously delivered to the Agents,




          (h) any Indebtedness or obligations of the Guarantor under the 2006 Puttable
Senior Notes and/or the Puttable Notes Hedge and Warrant Transactions;
provided, that:




     (i) none of the 2006 Puttable Senior Notes nor the 2006 Indenture nor
the documents evidencing the Puttable Notes Hedge and Warrant Transactions
may provide that an Event of Default under the Agreement or this Guaranty
constitutes a default under any of the 2006 Senior Puttable Notes or the
2006 Indenture or any Puttable Notes Hedge and Warrant Transaction, except
in the case of an Event of Default that constitutes the failure to pay the
principal of any Debt when due and payable after the expiration of any
applicable grace period with respect thereto that results in the Debt
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable or constitutes the failure to
pay any portion of the principal of the Debt when due and payable at
maturity or by acceleration;




     (ii) the Indebtedness represented by the 2006 Senior Puttable Notes and
the Puttable Notes Hedge and Warrant Transactions shall be unsecured, pari
passu with the Guarantor’s obligations under this Guaranty and structurally
subordinate to the Borrower’s Debt to the Banks under the Agreement;




     (iii) none of the 2006 Puttable Senior Notes nor the 2006 Indenture
shall be amended or modified without the prior written consent of the
Required Banks, including, without limitation, (A) to allow the maturity of



 









 







any of the 2006 Puttable Senior Notes to be less than five (5) years
from the date of issue, (B) to provide for payment of interest under any of
the 2006 Puttable Senior Notes more frequently than quarterly, (C) to
provide additional circumstances pursuant to which holders of the 2006
Puttable Senior Notes may put their Notes to the Guarantor or to increase
the put rate available to such holders, other than as provided in the 2006
Indenture, or (D) to permit the Guarantor to redeem the 2006 Puttable Senior
Notes prior to their maturity, other than amendments or modifications that
do not adversely affect the Agreement or this Guaranty or their relationship
to any of the 2006 Puttable Senior Notes or the 2006 Indenture;




     (iv) the outstanding and unredeemed principal amount of the 2006
Puttable Senior Notes shall not, at any time, exceed Two Hundred Eighty
Seven Million Five Hundred Thousand Dollars ($287,500,000) in the aggregate;
and




     (v) the terms and conditions of the 2006 Puttable Senior Notes, the
2006 Indenture and the Puttable Notes Hedge and Warrant Transactions shall
be satisfactory, in form and substance, to the Agents and the Banks,




          (i) any Indebtedness or obligations of the Guarantor under the Senior Notes;
provided, that:




     (i) none of the Senior Notes nor the Indenture may provide that an
Event of Default under the Agreement or this Guaranty constitutes a default
under any of the Senior Notes or the Indenture, except in the case of an
Event of Default that constitutes the failure to pay the principal of any
Debt when due and payable after the expiration of any applicable grace
period with respect thereto and shall have resulted in the acceleration of
such Debt or constitutes the failure to pay any portion of the principal of
the Debt when due and payable after acceleration or maturity;




     (ii) the Indebtedness represented by the Senior Notes shall be
unsecured, pari passu with the Guarantor’s obligations under this Guaranty
and structurally subordinate to the Borrower’s Debt to the Banks under the
Agreement;




     (iii) none of the Senior Notes nor the Indenture shall be amended or
modified without the prior written consent of the Required Banks, including,
without limitation, (A) to allow the maturity of any of the Senior Notes to
be less than ten (10) years from the respective date of issue, (B) to
provide for payment of interest under any of the Senior Notes more
frequently than quarterly, or (C) to modify the redemption provisions
contained therein, including adding additional redemption provisions, other
than amendments or modifications that do not adversely



 









 







affect the Agreement or this Guaranty or their relationship to any of
the Senior Notes or the Indenture,




     (iv) the outstanding and unredeemed principal amount of the Senior
Notes shall not, at any time, exceed Five Hundred Fifty Million Dollars
($550,000,000), in the aggregate; and




     (v) the terms and conditions of the 2003 Senior Notes, the 2004 Senior
Notes and the 2005 Senior Notes and the Indenture shall be satisfactory, in
form and substance, to the Agents and the Banks,




          (j) any Indebtedness or obligations of the Guarantor under the Surety Bonds or the
related Indemnity Agreements to a maximum aggregate principal amount of $30,000,000.00
minus the aggregate stated amount of all letters of credit then outstanding for
the account of the Borrower under the Agreement in excess of $10,000,000;
provided, such Indebtedness is fully subordinated to the obligations of the
Guarantor under this Guaranty as set forth in the related Subordination Agreement,




          (k) any Indebtedness of the Guarantor under any Hedge Agreement relating to
Indebtedness otherwise permitted under this Guaranty or the Credit Agreement,
provided, that, any Hedge Agreement proposed to be entered into or guaranteed
by the Guarantor, along with all Hedge Agreements entered into or guaranteed by the
Borrower, FCCC or any other Subsidiary of the Borrower (other than a SPE Subsidiary),
in each case with a Person that is not a Bank that results in an aggregate Measured
Credit Risk for all Hedge Agreements entered into with Persons other than a Bank, in
excess of $33,500,000, shall require the prior written consent of the Required Banks
(such written consent to be delivered by each consenting Bank to the Administrative
Agent not more than three (3) Business Days after the request for such consent has been
delivered by the Guarantor to the Administrative Agent, provided, that, each
Bank that does not deliver such written consent within such three (3) Business Day
period shall be deemed to have denied the request for such Hedge Agreement),




          (l) any Indebtedness of the Guarantor with respect to deferred taxes that are due
and payable in excess of twelve (12) months from the date of the incurrence of such tax
liability,




          (m) any guarantee or indemnity permitted by Section 9.12 hereof to the extent such
guarantee or indemnity constitutes Indebtedness, or




          (n) any Indebtedness of the Guarantor permitted by Section 9.13(d) hereof that
replaces the Indebtedness evidenced by the Senior Notes.



 









 





          9.11. LIENS. No Restricted Company will:




          (a) sell or otherwise transfer any Receivables, including, but not limited to, any
mortgages held by the Guarantor or any of its Subsidiaries, other than in the ordinary
course of business,




          (b) acquire any property subject to any land contract, conditional sale contract
or other title retention contract, or




          (c) suffer or permit any property now owned or hereafter acquired by it to be or
become encumbered by any mortgage, security interest, financing statement, encumbrance
or Lien of any kind or nature;


provided, that this Section 9.11 shall not apply to:





          (i) any Lien for a tax, assessment or other governmental charge or levy so long
as the payment thereof is not required by Section 9.2(a) hereof,




          (ii) any Lien securing only worker’s compensation, unemployment insurance or
similar obligations,




          (iii) any mechanic’s, warehousemen’s, carrier’s or similar common law or
statutory Lien incurred in the normal course of business,




          (iv) any mortgage, security interest or other Lien encumbering property of any
Restricted Subsidiary for the purpose of securing any Permitted Debt owing by only
that Subsidiary,




          (v) any mortgage, security interest or other Lien encumbering property of the
Guarantor and securing any Indebtedness or liability of the Guarantor permitted by
clause (c) of Section 9.10 or by Section 9.12 hereof,




          (vi) any Lien permitted by Section 8.05 of the Agreement,




          (vii) any Indemnification Lien granted pursuant to an Indemnity Agreement
related to one or more Performance Surety Bonds permitted under this Guaranty,




          (viii) any financing statement perfecting a security interest permitted by this
Section 9.11, or




          (ix) any Lien permitted by Sections 9.19(b)(i) and (vi).



 









 





          9.12. GUARANTEES. No Restricted Company will be or become a guarantor of any kind;
provided, that this Section 9.12 shall not apply to:





          (a) any endorsement of a check or other medium of payment for deposit or
collection through normal banking channels or any similar transaction in the normal
course of business,




          (b) any indemnity or guaranty of a surety bond for the performance by a customer
of a Restricted Company of the customer’s obligations under a land development
contract,




          (c) any guarantee by the Guarantor of a real estate loan permitted by clause (c)
of Section 9.10,




          (d) subject to the limitations set forth in Section 9.19 of this Guaranty, any
Completion Guaranty with respect to a real estate building project, if the Guarantor or
any Company is the developer of the project or has a property interest in the project
(including, but not limited to, a Non-Affiliate Construction Project),




          (e) the guarantee by the Guarantor set forth in Section 3 hereof,




          (f) any other guarantee by the Guarantor, provided, that the Guarantor’s
aggregate personal liability in respect of all of such other guarantees and all
Indebtedness described in subsection (a) of the definition of Indebtedness (other than
any loan permitted by clauses (a) through (c), inclusive, of Section 9.10 hereof) does
not exceed, and after making the guarantee in question would not exceed, Ten Million
Dollars ($10,000,000),




          (g) any unsecured guarantee by the Guarantor or any Restricted Subsidiary of the
equity investment or performance of a Subsidiary of the Guarantor (other than any
Indebtedness of such Subsidiary incurred for borrowed money) in connection with a real
estate project in favor of a partner or member, or a partnership or limited liability
company in which such Subsidiary is a general partner or a member, as applicable, when
the Guarantor or such Restricted Subsidiary, as the case may be, deems it to be in its
best interest not to be a partner, a member, or have a direct interest in the
partnership or limited liability company, as applicable,




          (h) the guarantee by the Guarantor of the obligations of Franklin Town Towers
Associates located in Philadelphia, Pennsylvania, with respect to Museum Towers, in the
original principal amount of Twenty Million Four Hundred Thousand Dollars
($20,400,000), provided, that such obligations shall not be amended, restated
or otherwise modified without the prior written consent of the Banks,




          (i) any guarantee or indemnity by the Guarantor or any Restricted Subsidiary for
fraud, misappropriation, misapplication or environmental problems,



 









 







as are usual and customary in commercial mortgage loan transactions entered into
by the Guarantor and/or such Restricted Subsidiary, provided, that such a
guarantee or indemnity may be given by the Guarantor or a Restricted Subsidiary, but
not both (unless such Restricted Subsidiary is also the borrower in the particular
commercial mortgage loan transaction), in connection with any particular commercial
mortgage loan transaction,




          (j) subject to Section 9.10(k) hereof, any guarantee by the Guarantor of an
unsecured Hedge Agreement permitted by Section 8.04 of the Agreement entered into by a
Subsidiary of the Guarantor (other than the Borrower),




          (k) the MTA Guaranty; provided, that (i) the maximum principal amount of
the Guarantor’s obligations thereunder shall not exceed $40,000,000, (ii) so long as
the MTA Guaranty is outstanding and in full force and effect, the Guarantor shall
maintain or cause to be maintained with a reputable insurer, an environmental liability
insurance policy with respect to the real property related to the MTA Guaranty, with a
self-insured retention of not more than $28,000,000 and a limit of coverage of not less
than $12,000,000 to cover any remediation that may be required and (iii) the Guarantor
shall not enter into or agree to enter into any amendment, supplement or other
modification to the MTA Guaranty that, in the opinion of the Agents, is or would be
materially adverse to the interests of the Banks,




          (l) subject to the limitations set forth in Section 9.19 of this Guaranty, any
Completion Guaranty, or




          (m) the guarantee by the Guarantor in connection with the Park Creek Metropolitan
District and Stapleton Land LLC located in Stapleton, Colorado, with respect to the
$19,000,000 Park Creek District Subordinate Limited Property Tax Revenue Bonds, Series
2003A and the $10,000,000 Park Creek District Subordinate Limited Property Tax Revenue
Bonds, Series 2003-B, provided, that such guarantee obligations shall not be
amended, restated or otherwise modified without the prior written consent of the Banks.



          9.13. REDEMPTIONS, PREPAYMENTS, AND DIVIDENDS.





          (a) The Guarantor will not directly or indirectly purchase, acquire, redeem or
retire any shares of its capital stock at any time outstanding or set aside funds for
any such purpose, except that, from and after the Restatement Effective Date, so long
as no Event of Default or violation of Section 9.14 of this Guaranty shall have
occurred or will result after giving effect to such purchase, acquisition, redemption
or retirement, the Guarantor may purchase, acquire, redeem or retire shares of its
outstanding capital stock in an aggregate amount not to exceed Forty Million Dollars
($40,000,000) minus any amounts paid as permitted by Section 9.13(c) hereof, in
any yearly period measured by the anniversary dates of the Restatement Effective Date
of the Agreement thereafter,



 









 






          (b) The Guarantor will not directly or indirectly pay any principal of, make
sinking fund payments in respect of or purchase any Indebtedness now or hereafter owing
by the Guarantor other than any principal payment, sinking fund payment or purchase the
omission of which would (or with the giving of notice or the lapse of any applicable
grace period or both would) accelerate, or give anyone the right to accelerate, the
maturity of such Indebtedness in accordance with the original terms thereof;
provided, that, notwithstanding the foregoing, the Guarantor shall not make any
payment on account of the Senior Notes or the 2006 Puttable Senior Notes in the event
of and during the continuance of any Payment Default under the Agreement or this
Guaranty,




          (c) The Guarantor will not directly or indirectly declare or pay any Dividends,
except that, from and after the Restatement Effective Date, so long as no Event of
Default shall have occurred and be continuing hereunder and no Event of Default shall
have occurred and be continuing under the Agreement, the Guarantor may pay Dividends in
an aggregate amount not to exceed Forty Million Dollars ($40,000,000) minus any
amounts paid as permitted by Section 9.13(a) hereof, in any yearly period measured by
the anniversary dates of the Restatement Effective Date of the Agreement thereafter,




          (d) The Guarantor shall not directly or indirectly exercise its optional
redemption rights, under the terms of any of the Senior Notes or the Indenture, to
redeem any of the Senior Notes prior to its maturity date, or to deposit monies or
other assets with the trustee under the Indenture for the payment of any one or more
Senior Notes or the release of restrictive covenants thereunder, by defeasance, without
in each case the prior written consent of the Required Banks, except that the Guarantor
may take any of the above listed actions in connection with a refinancing of the
Indebtedness represented by the Senior Notes without the prior consent of the Banks, in
each case only so long as such refinancing does not (i) result in an increase in the
aggregate principal amount of Indebtedness of the Guarantor as of the date of such
proposed refinancing, (ii) create Indebtedness that has a maturity earlier than the
final maturity of the Senior Notes, (iii) create a security interest in any property of
the Guarantor or any of its Subsidiaries, or (iv) result in Indebtedness that is senior
to the Indebtedness owing to the Banks under this Guaranty or the Agreement. Executed
copies of any and all documentation evidencing or relating to such refinancing shall be
delivered to the Administrative Agent within five (5) Cleveland Banking Days of the
execution of such documentation,




          (e) In the event of and during the continuance of any Event of Default under the
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 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 amount sufficient to pay, when due, all interest payments
in respect of the Senior Notes and the 2006



 









 







Puttable Senior Notes and the amounts sufficient to pay, when due, all taxes of
the Guarantor (collectively, “Permitted Distributions”); provided, 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 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.



          9.14. CASH FLOW COVERAGE RATIO. The Guarantor will not permit the Cash Flow Coverage Ratio,
at any time, to be less than 2.25:1.00.



          9.15. CONSOLIDATED GAAP SHAREHOLDERS’ EQUITY. The Guarantor will not permit the Consolidated
GAAP Shareholders’ Equity to be less than (a) on the Restatement Effective Date, Seven Hundred
Seventy-Five Million Dollars ($775,000,000) and (b) at any date of determination thereafter, the
sum of (i) Seven Hundred Seventy-Five Million Dollars ($775,000,000), plus (ii) one hundred
percent (100%) of the cash proceeds from any sale or issuance of equity, plus (iii) fifty
percent (50%) of the Guarantor’s consolidated GAAP net income, in each case, for the year-to-date
period ended on such Fiscal Quarterly Date.



          9.16. ENVIRONMENTAL COMPLIANCE. The Guarantor will comply with any and all Environmental Laws
including, without limitation, all Environmental Laws in jurisdictions in which the Guarantor or
any Restricted Subsidiary owns property, operates, arranges for disposal or treatment of hazardous
substances, solid waste or other wastes, accepts for transport any hazardous substances, solid
waste or other wastes or holds any interest in real property or otherwise. The Guarantor will
furnish to the Banks promptly after receipt thereof a copy of any notice the Guarantor or any
Restricted Subsidiary may receive from any governmental authority, private person or entity or
otherwise that any litigation or proceeding pertaining to any environmental, health or safety
matter has been filed or is threatened against the Guarantor or such Restricted Subsidiary, any
real property in which the Guarantor or such Restricted Subsidiary holds any interest or any past
or present operation of the Guarantor or such Restricted Subsidiary. The Guarantor will not
knowingly allow the storage, release or disposal of hazardous waste, solid waste or other wastes
on, under or to any real property in which the Guarantor holds any interest or performs any of its
operations, in violation of any Environmental Law. As used in this Section, “litigation or
proceeding” means any demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any governmental authority, private person or entity or
otherwise. The Guarantor shall defend, indemnify and hold the Banks harmless against all costs,
expenses, claims, damages, penalties and liabilities of every kind or nature whatsoever (including
attorneys’ fees) arising out of or resulting from the noncompliance of the Guarantor or any
Restricted Subsidiary with any Environmental Law, provided, that, so long as and to the
extent that the Banks are not required to make any payment or suffer to exist any unsatisfied
judgment, order, or assessment against them, the Guarantor may pursue rights of appeal to comply
with such Environmental Laws. In any case of noncompliance with any Environmental Law by a
Restricted Subsidiary, the Banks’ recourse for such indemnity herein shall be limited solely to the
property of the Restricted Subsidiary holding title to the property involved in such noncompliance
and such recovery shall



 









 







not be a lien, or a basis of a claim of lien or levy of execution, against either the
Guarantor’s general assets or the general assets of any of its Restricted Subsidiaries.



          9.17. PLAN. Neither the Guarantor nor any Restricted Subsidiary will suffer or permit any
Plan to be amended if, as a result of such amendment, the current liability under the Plan is
increased to such an extent that security is required pursuant to Section 307 of the Employee
Retirement Income Security Act of 1974, as amended from time to time. As used herein, “current
liability” means current liability as defined in Section 307 of such Act.



          9.18. ANTI-TERRORISM LAWS. Neither the Guarantor nor any of its Subsidiaries shall be in
violation of any law, regulation, or list of any government agency (including, without limitation,
the U.S. Office of Foreign Asset Control list, Executive Order No. 13224 or the USA Patriot Act)
that prohibits or limits the conduct of business with or the receiving of funds, goods or services
to or for the benefit of any Persons specified therein or that prohibits or limits any Bank or
Agent from making any advances or extensions of credit to the Guarantor or from otherwise
conducting business with the Guarantor.



          9.19. CROSS COLLATERALIZATION AND CROSS DEFAULTS.




          (a) Except as expressly permitted by this Section 9.19, neither the Guarantor nor any
Restricted Company will (i) cross-default or agree to cross-default any Permitted Debt to
this Guaranty or the Debt; (ii) agree to any financial covenants based on the performance of
the Guarantor under any other Permitted Debt (other than the Debt); or (iii)
cross-collateralize, or agree to cross-collateralize Permitted Debt (other than the Debt)
owing to any one lender under one or more different loan agreements or arrangements,
provided, that the cross-defaulted and/or cross-collateralized Indebtedness set
forth on Schedule 9.19, dated as of March 22, 2004 (a copy of which is attached hereto)
shall be permitted, provided, further, that such Schedule 9.19 shall not be
amended or otherwise modified after the Restatement Effective Date without the prior written
consent of the Administrative Agent.




          (b) Notwithstanding Section 9.19(a) above:




     (i) with respect to construction projects that are constructed in
multiple phases and/or stabilized properties, any Restricted Company shall
be permitted to cross-default and/or Cross-Collateralize any Permitted Debt
with other Permitted Debt (other than, in each case, the Debt), but only if
the phases to be Cross-Collateralized and/or cross-defaulted consist of a
single identifiable project;




     (ii) under a Completion Guaranty granted by the Guarantor to a
construction lender, the Guarantor shall be permitted to agree to a
financial covenant solely with respect to the Guarantor’s net worth, but
only if (A) the Indebtedness related to such Completion Guaranty is in
excess of One Hundred Million Dollars ($100,000,000), (B) the Indebtedness
related to such Completion Guaranty has a maturity of two (2) years or
greater, not including extensions, (C) any net worth



 









 







financial covenant is calculated in substantially the same manner as
the covenant set forth in Section 9.15 of this Guaranty and requires a net
worth for the Guarantor of not more than Two Hundred Seventy Five Million
Dollars ($275,000,000) and (D) the aggregate of all Indebtedness subject to
such Completion Guaranties shall not exceed Four Hundred Million Dollars
($400,000,000), exclusive of the Indebtedness incurred in connection with
the projects set forth on Schedule 9.19 to this Guaranty;




     (iii) under any Completion Guaranty granted by the Guarantor that
contains the net worth financial covenant referred to in Section 9.19(b)(ii)
above, (A) the construction lender shall not be permitted to call upon such
Completion Guaranty due solely to a violation of such net worth financial
covenant and (B) the construction lender shall only be permitted to call
upon such Completion Guaranty if the project is not performing (i.e. not on
budget and/or schedule);




     (iv) with respect to Hedge Agreements permitted by this Guaranty, the
related documentation may provide that an Event of Default will constitute
an event of default under such Hedge Agreement, provided, that the
Hedge Agreement also provides that the counterparty may not terminate or
exercise any remedy under the Hedge Agreement on account of any Event of
Default unless (A) the Banks have provided a written notice of the Event of
Default to the Borrower, (B) all applicable cure periods have lapsed without
the Event of Default being cured and (C) the Banks may accelerate the
maturity of the Revolving Loans on the basis of the Event of Default;




     (v) the Indenture, the 2006 Indenture and the documents evidencing the
Puttable Notes Hedge and Warrant Transactions may provide that a default by
the Borrower or the Guarantor in the payment of any portion of principal of
the Debt when due and payable after the expiration of any applicable grace
period that results in the Debt becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable or
the failure of the Borrower or the Guarantor to pay any portion of the
principal of the Debt when due and payable at maturity or by acceleration,
constitutes a default under the Indenture, the 2006 Indenture or the
Puttable Notes Hedge and Warrant Transactions, as applicable, and




     (vi) to the extent Permitted Debt of the Borrower or any Subsidiary of
the Borrower may be secured under Section 8.05 of the Agreement, the
Guarantor may provide cash or letters of credit as additional collateral to
secure such Permitted Debt.



          9.20. OWNERSHIP OF LAND. The Guarantor shall not, and shall not permit any Restricted
Subsidiary to purchase, lease or otherwise acquire any real property of any kind after the
Restatement Effective Date, other than any real property to be used only for the



 









 







business of the Guarantor or any such Restricted Subsidiary, in each case, as such business
has been conducted prior to the Restatement Effective Date.



          9.21. PERMITTED NON-AFFILIATE LOAN REPORTS. Within forty-five (45) days after each Fiscal
Quarterly Date, the Guarantor will furnish to each Bank a report setting forth (a) each Permitted
Non-Affiliate Loan that is outstanding as of such Fiscal Quarterly Date and (b) for the three year
period ending on such Fiscal Quarterly Date, the aggregate amount of gain deferred for federal
income tax purposes on the consolidated return of the Guarantor in connection with any
Non-Affiliate Construction Projects, and, if requested by the Agents or any Bank, accompanied by
all applicable tax forms filed or to be filed in connection with such Non-Affiliate Construction
Projects.



          10. DEFAULT; REMEDIES. The Guarantor shall be in default hereunder in the event that any of
the following (each an “Event of Default”) shall occur or exist:




          (a) Any representation or warranty made by the Guarantor, or any of its officers,
herein, or in any written statement or certificate furnished at any time in connection
herewith, shall prove untrue in any material respect as of the date it was made, or




          (b) The Guarantor shall fail to observe, perform, or comply with any obligation,
covenant, agreement, or undertaking of the Guarantor set forth in Sections 3, 9.5, 9.8,
9.13, 9.14 and/or 9.15 hereof, or




          (c) The Guarantor shall fail to observe, perform, or comply with any obligation,
covenant, agreement, or undertaking of the Guarantor set forth in any section or
provision hereof other than those identified specifically in subsections (a) and (b)
above and the Guarantor shall not have corrected such failure within thirty (30) days
after the giving of written notice thereof to the Guarantor by the Administrative Agent
or any Bank that the specified failure is to be corrected, or




          (d) The Guarantor and/or any Restricted Subsidiary defaults in any payment of
principal or interest due and owing upon any Indebtedness in excess of $1,000,000, or,
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 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 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 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




          (e) (i) any Restricted Subsidiary shall (A) generally not pay its debts as such
debts become due, or (B) make a general assignment for the benefit of creditors, or (C)
apply for or consent to the appointment of a receiver, a custodian, a trustee, an
interim trustee or liquidator of itself or all or a substantial part of its assets, or
(D) be adjudicated a debtor or have entered against it an order for relief under Title
11 of the United States Code, as the same may be amended from time to time, or (E) file
a voluntary petition in bankruptcy 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 (F) suffer or permit to continue unstayed
and in effect for thirty (30) consecutive days any judgment, decree or order, entered
by a court of competent jurisdiction, which approves a petition seeking its
reorganization or appoints a receiver, custodian, trustee, interim trustee or
liquidator of itself or of all or a substantial part of its assets, or (G) take or omit
to take any other action in order thereby to effect any of the foregoing or (H) fail to
pay and discharge all lawful taxes, assessments, and governmental charges or levies
imposed upon it or its income, profits, or properties, and/or all lawful claims for
labor, materials, and supplies, which, if unpaid, might become a Lien or charge against
such properties, in all cases before the same shall become in default, or (I) fail to
comply with any and all Environmental Laws applicable to such Subsidiary, its
properties, or activities, or (J) fail to observe, perform, or fulfill any of its
obligations, covenants or conditions contained in any decree, order, judgment, or
instrument to which such Subsidiary is a party or by which it or its assets are bound,
and (ii) any such event or events described in (i) above shall in the reasonable
judgment of the Banks have a material adverse effect on the business or financial
condition of the Guarantor, or




          (f) An Event of Default specified in Article X of the Agreement shall have
occurred and be continuing, or




          (g) The Guarantor shall (i) make a general assignment for the benefit of
creditors, (ii) file a voluntary petition under any chapter or provision of Title 11
United States Code (Bankruptcy), as from time to time in effect (the “Bankruptcy Code”)
or a petition or answer seeking reorganization of the Guarantor or a readjustment of
its Indebtedness under the Bankruptcy Code or any other federal or state law providing
for relief of debtors, reorganization, liquidation, or arrangements with creditors,
(iii) consent to the appointment of a receiver or trustee of its properties, or (iv)
cease to be or be unable to pay its debts generally as they become due, or




          (h) Relief shall be ordered against the Guarantor as debtor in any involuntary
case under the Bankruptcy Code, or a petition or proceedings for



 









 







bankruptcy or for reorganization shall be filed against the Guarantor under the
Bankruptcy Code or any other federal or state law providing for relief of debtors,
reorganization, liquidation, or arrangements with creditors, and the Guarantor shall
admit the material allegations thereof, or an order, judgment or decree entered therein
shall not be vacated or stayed within thirty (30) days of its entry, or a receiver or
trustee shall be appointed for the Guarantor or its properties or any part thereof and
remain in possession thereof for thirty (30) days, or




          (i) The Guarantor defaults in the performance of any obligation in the
Subordination Agreement or in the performance of any other agreement, covenant, term or
condition in the Subordination Agreement,


then, in any such event (other than an Event of Default referred to in Section 10(g) or 10(h)
above), and at any time thereafter, the Administrative Agent and/or the Required Banks may at their
option, by written notice delivered or mailed to the Guarantor, do any one or more of the
following: (a) declare the Debt to be immediately due and payable, and upon any such declaration
such Debt shall become and be forthwith due and payable by Guarantor without any further notice,
presentment, or demand of any kind, all of which are expressly waived by the Guarantor, or (b)
require the Guarantor to purchase the Debt at par value, without recourse, within ten (10) days
after such notice, by paying to the Administrative Agent, in immediately available U.S. funds, an
amount equal to the unpaid principal amount then outstanding on the Notes and any other matured or
unmatured Debt owing to the Banks, plus the unpaid accrued interest on the Notes at the rate or
rates determined in accordance with the Agreement. If any Event of Default referred to in Section
10.07(e), 10.07(f) or 10.07(g) of the Agreement or any Event of Default referred to in Section
10(g) or 10(h) of this Guaranty shall occur, the Debt shall become and thereafter be immediately
due and payable by the Guarantor without any presentment, demand, or notice of any kind, all of
which are hereby waived by the Guarantor. The foregoing rights, powers, and remedies of the
Administrative Agent and the Banks are not exclusive and are in addition to any and all other
rights, powers, and remedies provided for hereunder (including, without limitation, under Section
13 hereof), at law, and/or in equity. The exercise by the Administrative Agent and/or the Banks of
any right, power, or remedy shall not waive or preclude the exercise of any other rights, powers,
and/or remedies.




          11. MISCELLANEOUS. The foregoing rights, powers, and remedies of the Administrative Agent and
the Banks are not exclusive and are in addition to any and all other rights, powers, and remedies
provided for hereunder, at law, and/or in equity. The exercise by the Administrative Agent and/or
the Banks of any right, power, or remedy shall not waive or preclude the exercise of any other
rights, powers, and/or remedies. 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. The provisions of this
Guaranty and the respective rights and duties of the Guarantor and the Agents and/or the Banks
hereunder shall be interpreted and determined in accordance with Ohio law, without regard to
principles of conflict of laws. If at any time one or more provisions of this Guaranty is or
becomes invalid, illegal or unenforceable in whole or in part, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
This Guaranty constitutes a final written expression of all of the terms of this Guaranty, is a
complete and exclusive statement of those terms and supersedes all



 









 







oral representations, negotiations, and prior writings, if any, with respect to the subject
matter hereof. The relationship between the Guarantor and the Agents and/or the Banks with respect
to this Guaranty is and shall be solely that of debtor and creditor, respectively, and the Agents
and/or the Banks have no fiduciary obligation to the Guarantor with respect to this Guaranty or the
transactions contemplated thereby. All representations and warranties of the Guarantor shall
survive the execution and delivery of this Guaranty and be and remain true and correct until this
Guaranty is discharged. Captions herein are for convenient reference only and shall have no effect
on the interpretation of any provision hereof. The Guarantor acknowledges that it, either directly
or indirectly through its representatives, has participated in the drafting of this Guaranty, and
any applicable rule of construction that ambiguities are to be resolved against the drafting party
shall not be applied in connection with the construction or interpretation of this Guaranty.



          12. JURY TRIAL WAIVER. 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 AGREEMENT, THIS
GUARANTY, OR ANY OTHER AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED OR DELIVERED IN CONNECTION
THEREWITH OR THE TRANSACTIONS RELATED THERETO.



          13. NOTICES. Except as otherwise expressly provided herein, all notices, requests, demands
and other communications provided for hereunder shall be in writing (including telegraphic, telex,
facsimile, transmission or cable communication) and mailed, telexed, telegraphed, facsimile
transmitted, cabled or delivered, if to the Guarantor, addressed to it at the address specified on
the signature pages of this Guaranty, if to a Bank, addressed to the address of such Bank specified
on the signature pages of the Agreement and if to the Agents, addressed to them at the address of
the Administrative Agent or the Syndication Agent, as applicable, specified on the signature pages
of the Agreement. All notices, statements, requests, demands and other communications provided for
hereunder shall be deemed to be given or made when delivered or forty-eight (48) hours after being
deposited in the mails with postage prepaid by registered or certified mail or delivered to a
telegraph company, addressed as aforesaid, except that notices from the Guarantor to the Agents or
the Banks pursuant to any of the provisions hereof shall not be effective until received by the
Agents or the Banks.



          14. CONSENT TO JURISDICTION. The Guarantor agrees that any action or proceeding to enforce or
arising out of this Guaranty may be commenced in the Court of Common Pleas for Cuyahoga County,
Ohio or in the District Court of the United States for the Northern District of Ohio, and the
Guarantor waives personal service of process and agrees that a summons and complaint commencing an
action or proceeding in any such court shall be properly served and shall confer personal
jurisdiction over the Guarantor if served to the Guarantor at the address listed opposite the
signature of the Guarantor at the end of this Guaranty or as otherwise provided by the laws of the
State of Ohio or the United States.



          15. ENTIRE AGREEMENT. This Guaranty and any other agreement, document or instrument attached
hereto or referred to herein or executed on or as of the date hereof integrate all the terms and
conditions mentioned herein or incidental hereto and supersede



 









 







all oral representations and negotiations and prior writings with respect to the subject
matter hereof.



          16. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such covenants, the fact that
it would be permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of an Event of Default if such action is taken or condition
exists, and if a particular action or condition is expressly permitted under any covenant, unless
expressly limited to such covenant, the fact that it would not be permitted under the general
provisions of another covenant shall not constitute an Event of Default if such action is taken or
condition exists.



          17. GENERAL LIMITATION OF LIABILITY. No claim may be made by the Guarantor or any Subsidiary
of the Guarantor, against the Agent, the Syndication Agent, any Co-Documentation Agent or any Bank
or the Affiliates, directors, officers, employees, attorneys or agents of any of them for any
damages other than compensatory damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated by the Credit
Agreement, the Notes, this Guaranty or any other Related Writing, or any act, omission or event
occurring in connection therewith; and the Guarantor, hereby, to the fullest extent permitted under
applicable law, waives, releases and agrees not to sue or counterclaim upon any such claim for any
special, consequential or punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor.



[Remainder of page intentionally left blank; signature page follows]





 









 








          IN WITNESS WHEREOF, the Guarantor, by an officer thereunto duly authorized, has caused this
Guaranty to be executed as of the date set forth above.




	 	 	 	 	 
	Address:

1100 Terminal Tower	FOREST CITY ENTERPRISES, INC.



 	 
	Cleveland, Ohio  44113 	By:  	/s/ THOMAS G. SMITH
 	 
	 	 	Thomas G. Smith 	 
	 	 	Executive Vice President, Chief

Financial Officer and Secretary 	 
	 



[Signature page of Amended and Restated Guaranty]





 









 






SCHEDULE 9.7(b)




FORM OF COVENANT COMPLIANCE CERTIFICATE




     I, the undersigned, Chief Financial Officer of Forest City Enterprises, Inc.,
a corporation organized and existing under the laws of the State of Ohio (the
“Company”), do hereby certify, as such officer and not individually, that:



     1. This certificate is furnished pursuant to section 9.7 of the Amended and
Restated Guaranty of Payment of Debt dated as of June 6, 2007, executed and
delivered by Forest City Enterprises, Inc. in favor of the Banks from time to time
party to the Agreement, KeyBank National Association, as Administrative Agent,
National City Bank, as Syndication Agent and Bank of America, N.A. and LaSalle Bank
National Association, as Co-Documentation Agents (such Amended and Restated
Guaranty of Payment of Debt, as in effect on the date of this Certificate, being
herein called the “Guaranty”). Unless otherwise defined herein, capitalized terms
used in this Certificate shall have the meanings set forth in the Guaranty.



     2. On the date hereof, the representations and warranties contained in the
Guaranty are true and correct in all material respects (it being understood and
agreed that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material respects
only as of such specified date).



     3. On the date hereof, no Possible Default or Event of Default has occurred
and is continuing under the Guaranty.



     4. On the date hereof, the Company is in full compliance with the covenants
set forth in sections 9.8, 9.13, 9.14 and 9.15 of the Guaranty as evidenced by the
covenant compliance worksheets accompanying this Certificate.



IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of                     ,
_____.




	 	 	 	 	 
	 	Forest City Enterprises, Inc.

 	 
	 	 	 
	 	Name:  	 	 
	 	Chief Financial Officer 	 
	 




 









 








SCHEDULE 9.9

AS OF April 30, 2007




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pledger	 	Interests Pledged	 	Type of Interest Pledged	 	Property	 	Indebtedness	 	Pledgee	 	Comments
	NONE
	 	 	 	 	 	 	 	 	 	 	 	 






 









 






SCHEDULE 9.19

CONSTRUCTION/PERMANENT LOANS

WITH CROSS-DEFAULT AND/OR CROSS COLLATERALIZATION

PROVISIONS

AS OF JANUARY 31ST, 2004

Excluded Indebtedness




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	ESTIMATED	 	 	 	 	 	 	 
	 	 	COMMITTED	 	 	 	 	 	 	 	 	 	 	COMPLETION	 	 	% PROJECT	 	 	TYPE OF	 
	PROJECT NAME	 	AMOUNT	 	 	BANK	 	 	BORROWER	 	 	DATE	 	 	COMPLETE	 	 	CROSS	 
	I. CONSTRUCTION LOANS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Commercial/Development
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	None
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	COMMERCIAL NEW YORK
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	None
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






	 	 	 	 	 	 	 	 	 
	 	 	COMMITTED	 	 	 	 	 	MATURITY
	 	 	AMOUNT	 	BANK	 	BORROWER	 	DATE
	    II. PERMANENT LOANS
	 	 	 	 	 	 	 	 
	None