GUARANTY OF PAYMENT OF DEBT
THIS GUARANTY OF PAYMENT OF DEBT (this "Guaranty") is made and issued by
FOREST CITY ENTERPRISES, INC., an Ohio corporation (the "Guarantor"), as of this
10th day of December, 1997, in order to induce the Banks (as hereinafter
defined), KEYBANK NATIONAL ASSOCIATION, as agent for the Banks (the "Agent") and
NATIONAL CITY BANK, as syndication agent for the Banks (the "Syndication Agent"
and together with the Agent, the "Agents"), to enter into, and lend money
pursuant to, a certain Credit Agreement of even date herewith (said 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 and FOREST
CITY RENTAL PROPERTIES CORPORATION, a subsidiary of the Guarantor (the
"Borrower").
1. DEFINITIONS. As used in this Guaranty, the following terms shall have
the following meanings:
1.1. "Banks" shall mean COMERICA BANK, FIRST MERIT BANK, THE HUNTINGTON
NATIONAL BANK, KEYBANK NATIONAL ASSOCIATION, NATIONAL CITY BANK, STAR BANK,
CREDIT LYONNAIS, MANUFACTURERS AND TRADERS TRUST COMPANY, any other bank(s) that
may become parties to the Agreement, and all successors and assigns of any such
bank; and "Bank" shall mean any one of the foregoing;
1.2. "Cash Flow Coverage Ratio" shall mean the ratio of (i) Consolidated
Net Operating Cash Flow to (ii) the sum of (X) all scheduled payments of
principal of and interest on any indebtedness owing by the Borrower (excluding
any non-recourse mortgage indebtedness owing by Borrower or any Subsidiary of
Borrower), (Y) all scheduled payments of principal of and interest on any
indebtedness owing by the Parent and (Z) Dividends;
1.3. "Collateral" shall mean, collectively, all property, if any, securing
the Debt or any part thereof at the time in question;
1.4. "Company" shall mean Guarantor and/or a Subsidiary of Guarantor;
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1.5. "Consolidated Shareholder's GAAP Equity" shall mean the consolidated
shareholder equity of the Borrower and the Parent, as calculated in accordance
with GAAP;
1.6. "Consolidated Net Operating Cash Flow" shall mean Net Operating Income
(a) less (i) all scheduled payment of principal of non-recourse mortgage
indebtedness (excluding any balloon payments), (ii) all interest payments on
such non-recourse indebtedness, (iii) Ten Million Dollars ($10,000,000) 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 and (v)
non-cash interest expense accrued with respect to Terminal Investments, Inc. and
Grant Liberty Development Group Associates;
1.7. "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 is a part;
1.8. "Debt" shall mean, collectively, (a) all indebtedness now owing or
hereafter incurred by 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 and all liabilities in respect of letters of
credit issued by the 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;
1.9. "Dividends" shall include all cash dividends (other than dividends
payable only in capital stock of any Company) declared and/or paid, capital
return and other distributions of any kind made on any share of capital stock
outstanding at the time;
1.10. "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.
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1.11. "ERISA Net Worth" shall mean (a) as to any Subsidiary, 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 generally accepted
accounting principles applied on a basis consistent with Guarantor's present
accounting procedures, and (b) as to 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 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
generally accepted accounting principles not inconsistent with Borrower's
present accounting principles consistently applied;
1.12. "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;
1.13. "Event of Default" shall have the meaning set forth in Section 10
hereof;
1.14. "Funded Indebtedness" shall mean indebtedness (including any renewal
or extension in whole or in part) that by its terms matures or remains unpaid
more than twelve (12) months after the date on which originally incurred;
1.15. "GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time;
1.16. "Net Earnings" shall mean 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 generally accepted
accounting principles consistently applied;
1.17. "Net Losses" shall mean Guarantor's net losses, as determined
separately for each fiscal year, after taxes, upon a consolidated basis (after
deducting minority interests) in accordance with generally accepted accounting
principles consistently applied;
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1.18. "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 GAAP. 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 Fifteen Million
Dollars ($15,000,000) 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;
1.19. "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, Borrower,
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;
1.20. "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 Guarantor, any Subsidiary, any member of the
Controlled Group, or any such Plan to which Guarantor, any Subsidiary or any
member of the Controlled Group is required to contribute on behalf of its
employees;
1.21. "Possible Default" shall mean an event or condition which, with
notice or lapse of time or both, would constitute an Event of Default referred
to in Section 10 hereof;
1.22. "Quarterly Date" shall mean each of January 1, April 1, July 1 and
October 1 and "Fiscal Quarterly Date" shall mean each of January 31, April 30,
July 31 and October 31.
1.23. "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;
1.24. "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;
1.25. "Restricted Company" shall mean Guarantor or a Restricted Subsidiary;
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1.26. "Restricted Subsidiary" shall mean any Subsidiary of Guarantor other
than (a) Borrower, and (b) any Subsidiary of Borrower;
1.27. "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 and (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;
1.28. "Trading Loans" shall mean any loans that are now or hereafter
outstanding from Forest City Trading Group, Inc. (but not from any other lender,
whether or not such lender is a Subsidiary of the Guarantor) to the Guarantor.
1.29. 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.
1.30. All financial covenants contained in this Guaranty shall be measured
on each Fiscal Quarterly Date.
2. ACKNOWLEDGMENTS, CONSIDERATION. Guarantor desires that the Agent and the
▇▇▇▇▇ ▇▇▇▇▇ Borrower 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 Term Loans and Revolving Loans by the Banks to
the Borrower up to an aggregate maximum principal amount of Two Hundred Seven
Million Dollars ($207,000,000). There exists and will hereafter exist economic
and business relationships between the Guarantor and the Borrower which will be
of benefit to the Guarantor. Guarantor finds it to be in the direct business and
economic interest of Guarantor that Borrower obtain the loans, credit and
financial accommodations from the Agents and the Banks provided for in the
Agreement. Guarantor understands that the Agents and the Banks are willing to
grant the loans, credit and financial accommodations to 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 Guarantor to satisfy that condition and in
consideration of the Agents and the Banks entering into the Agreement.
3. GUARANTY. 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 Borrower's covenants,
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undertakings, obligations and agreements set forth in the Agreement, the Notes
and/or any other instruments 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 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 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 Guarantor of
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. Guarantor waives any and all contractual, legal and/or
equitable rights of subrogation, contribution, exoneration, indemnity and/or
reimbursement from or against Borrower or any Obligor with respect to the Debt
and/or any payments made by Guarantor on account of this Guaranty.
6. ADDITIONAL AGREEMENTS. Regardless of the duration of time, regardless of
whether 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, 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
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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.
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 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 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.
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6.6. Guarantor's liabilities and other obligations under this Guaranty
shall survive any merger, consolidation or dissolution of Guarantor.
6.7. 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 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, and (d) this Guaranty has been duly
executed and delivered by the Guarantor and is a valid and binding obligation of
the Guarantor enforceable against Guarantor in accordance with its terms.
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
provided to the Agent three copies of all promissory notes or other writings
evidencing any
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Trading Loans outstanding on the date hereof and that the Guarantor has no other
indebtedness for borrowed money or Funded Indebtedness outstanding from any
Subsidiary to 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 Subsidiary 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 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 Agent's written request, furnish to
each Bank and the Agent such information in writing about that Company's
insurance as any Bank or the 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,
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(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.
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 into the Guarantor or into another
Subsidiary, (b) any consolidation of a Subsidiary with another Subsidiary, or
(c) any dissolution of any Subsidiary.
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 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 Subsidiary 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 the Subsidiary,
and/or (iii) the Guarantor and/or the 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
(i) and (ii) of this Section 9.5.
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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 per
cent (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 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 filed by the Guarantor with the Securities Exchange Commission,
(b) within forty-five (45) days 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 and its
Subsidiaries as at the end of that period and an unaudited consolidated and
consolidating statement of earnings for the Guarantor and its Subsidiaries for
the Guarantor's current fiscal year to the end of that period, all prepared in
form and detail in accordance with GAAP, consistently applied, and certified by
a financial officer of the Guarantor, subject to
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changes resulting from year-end adjustments, together with a certificate of
the Chief Financial 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 9.70 hereof completed as of the end of such fiscal
quarterly period,
(c) within ninety (90) days after the end of each fiscal year of the
Guarantor, complete audited annual financial statements of the Guarantor and its
Subsidiaries for that year prepared on a consolidated basis certified by an
independent public accountant satisfactory to the Banks and on an unaudited
consolidating basis and in each case, in form and detail satisfactory to the
Banks, together with (i) a certificate of the Chief Financial 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 (ii) a fully completed covenant
compliance worksheet in the form and substance of Schedule 9.70 hereof relating
to such fiscal year duly certified by the Guarantor's accountants,
(d) concurrently with furnishing any quarterly financial statement or audit
report pursuant to this Section 9.7, a certificate by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 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,
and
(f) forthwith upon any Bank's written request such other information of any
Company's financial condition and business.
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9.8. EBDT. The Guarantor will not suffer or permit its EBDT at any time to
fall below the amounts set forth below for the respective periods set forth
below:
Period EBDT
Fiscal year ending
January 31,1998 $ 95,000,000
Fiscal year ending
January 31, 1999 $100,000,000
Fiscal year ending
January 31, 2000 $105,000,000
Fiscal year ending January 31, 2001 and for each fiscal year ending on each
January 31 thereafter $110,000,000
9.9. COMBINATIONS, BULK TRANSFERS. 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 interests in any Subsidiary; provided, that this Section 9.9
shall not apply to any transfer effected in the normal course of business on
commercially reasonable terms.
9.10. BORROWINGS. No Restricted Company will create, assume or suffer to
exist any indebtedness for borrowed money or any Funded Indebtedness of any kind
including, but not limited to, leases required to be capitalized under Financial
Accounting Standards Board Standard No. 13; provided, that this Section 9.10
shall not apply to:
(a) any loan obtained by Forest City Trading Group, Inc., formerly known as
American International Forest Products, Inc. (or any of its wholly- owned
subsidiaries) from any lender other than the Companies,
(b) any loan obtained from the Guarantor by any Restricted Subsidiary and,
in the ordinary course of business by Forest City Trading Group, Inc. (or any of
its wholly-owned subsidiaries),
(c) any real estate loan heretofore or hereafter obtained or guaranteed by
the Guarantor for the purpose of financing any building to be used
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only for the business of Guarantor and its Subsidiaries, provided that
no such loan shall exceed eighty per cent (80%) of the lender's
appraisal of the real estate being financed,
(d) any loan 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 in respect of all guaranteed loans referred to in
clause (f) of Section 9.12 hereof, does not then exceed and after incurring the
indebtedness in question would not exceed, Four Million Five Hundred Thousand
Dollars ($4,500,000) minus all amounts subject to guarantees permitted by
Section 8.07 of the Agreement,
(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 indebtedness created in the course of purchasing or developing real
estate or financing construction or other improvements thereon or purchasing
furniture, fixtures or other equipment therefor or any other indebtedness of any
Restricted Company for borrowed money 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 incurred by 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 Trading Loans, provided that, each of the following conditions is
satisfied as to each of such Trading Loans:
(i) the aggregate principal amount of all the Trading Loans may not exceed
Ten Million Dollars ($10,000,000);
(ii) no interest shall accrue or be payable with respect to any Trading
Loan;
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(iii) there shall be no scheduled principal payments prior to the maturity
date of any Trading Loan, as any promissory notes evidencing such Trading Loans
may be extended from time to time; no principal payments shall be made on any
Trading Loan at any time that a Possible Default or Event of Default exists
under the Guaranty or the Agreement, or at any time that the Agent has
determined, in its sole discretion, that there has been a material adverse
change in the financial condition of the Guarantor; and the Trading Loans,
either individually or in the aggregate, shall not be revolving loans and, if
any principal payments are made on any Trading Loan, the Ten Million Dollars
($10,000,000) maximum amount of permissible Trading Loans set forth above shall
automatically and irrevocably decline by like amount upon such payment;
(iv) each Trading Loan shall be expressly subordinate in right of payment
to the prior payment in full of the indebtedness under the Guaranty and the
Agreement, whether such indebtedness arises due to a Term Loan, a Revolving Loan
or otherwise;
(v) an event of default as to any Trading Loan(s) will automatically
constitute an Event of Default under the Agreement, the Term Notes, the
Revolving Notes and the Guaranty; and
(vi) each Trading Loan shall be evidenced by a written promissory note,
including the terms set forth above in clauses (i) through (v) and shall
otherwise be in form and substance approved in advance by the Agent, executed by
the Guarantor and Forest City Trading Group, Inc. and, in the case of any
Trading Loan(s) on or after the date of the date hereof, executed by such
parties not later than the date of the first disbursement of such Trading Loan,
a copy of which note(s) shall be provided within ten (10) days after execution,
or
(h) any indebtedness or obligations of the Guarantor created by or arising
out of an interest rate lock agreement among Guarantor, as obligor, and an
affiliate of Daiwa Finance Corp. or another financial institution approved in
advance by the Administrative Agent, as the counterparty (the "Interest Rate
Lock Agreement"), which Interest Rate Lock Agreement is related to the interest
rate under the terms of the permanent loan commitment from Daiwa Finance Corp.
to Forest City Finance Corporation, an affiliate of the Guarantor and the
Borrower, dated August 14, 1997, which commitment is with respect to a project
in Cambridge, Massachusetts that will include two office buildings with
aggregate square footage of 225, 000 square feet and a 532 - car parking garage
(the "University Park Project"), and provides for an initial loan amount not
exceed $55,000,000, with an earn out based on a debt service coverage test that
will be applied at the time of the permanent loan closing, and will be assigned
by Forest City Finance Corporation to FC 45/75 ▇▇▇▇▇▇, Inc., an affiliate of the
Guarantor and the Borrower (the "University Park Permanent Loan Commitment").
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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 workmen'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 indebtedness 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 transfer made in the ordinary course of business by Forest City
Trading Group, Inc. (or any of its wholly-owned subsidiaries), or
(vii) any financing statement perfecting a security interest permitted by
this Section 9.11
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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 guaranty by Guarantor of a real estate loan permitted by clause (c)
of Section 9.10,
(d) any guarantee of the completion of a real estate building project, if
Guarantor or any Company is the developer of the project or has a property
interest in the project,
(e) the guaranty by Guarantor set forth in Section 3 hereof,
(f) any other guaranty by Guarantor, provided that Guarantor's aggregate
personal liability in respect of all those other guarantees and all indebtedness
for borrowed money (other than any loan permitted by clauses (a) through (c),
both inclusive, of Section 9.10 hereof) does not exceed, and after making the
guaranty in question would not exceed, Four Million Five Hundred Thousand
Dollars ($4,500,000) minus all amounts subject to guarantees permitted by
Section 8.07 of the Agreement,
(g) any guarantee by Guarantor of the equity investment of performance of a
Subsidiary (other than any obligations of such Subsidiary incurred for borrowed
money) in connection with a real estate project in favor of a partner or
partnership in which such Subsidiary is a general partner, when Guarantor deems
it to be in its best interest not to be a partner or have a direct interest in
the partnership,
(h) any indebtedness or obligations of the Guarantor created by or arising
out of the Interest Rate Lock Agreement, or
(i) the guaranty by Guarantor of the obligations of Wisconsin Park
Associates Limited Partnership to make a deposit of $6,800,000 into a cash
collateral
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account in connection with the high rise luxury apartment facility to be
known as Lenox at White Flint to be located in Rockville, Maryland.
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 in an amount greater than Ten Million Dollars
($10,000,000), including any amounts paid as permitted by section 9.13 (c), in
any yearly period measured by anniversary dates of the 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 Funded Indebtedness now
or hereafter owing by 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) accelerate, or give any one
the right to accelerate, the maturity of such Funded Indebtedness in accordance
with the original terms thereof,
(c) The Guarantor will not directly or indirectly declare or pay any
Dividends, except that, 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, Guarantor may pay Dividends in aggregate amounts
not exceeding Ten Million Dollars ($10,000,000), including any amounts paid as
permitted by Section 9.13(a), in any yearly period measured by anniversary dates
of the date of the Agreement thereafter.
9.14. CASH FLOW COVERAGE RATIO. (a) The Guarantor will not permit the Cash
Flow Coverage Ratio (i) for any fiscal year to be less than 1.75:1.00 and (ii)
for any four (4) consecutive quarters to be less than 1.50:1.00.
(b) In the event of a violation of Section 9.14(a), the Guarantor will have
thirty (30) days from the due date of the most recent financial statement and
covenant compliance certificate delivered in accordance with Section 9.7 to
correct such violation. If the Guarantor is unwilling or unable to cure such
violation within such thirty (30) day period, the Revolving Loan Commitments
will be terminated and the then outstanding amount of the Revolving Loans will
be converted to Additional Loans as provided in Section 2.02(a) of the
Agreement. From and after such conversion, the Guarantor will not permit the
Cash Flow Coverage Ratio to be less than 1.25:1.00.
9.15. CONSOLIDATED SHAREHOLDER'S GAAP EQUITY. The Guarantor will not permit
at any time, the Consolidated Shareholder's GAAP Equity to be less
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than (a) on the Closing Date, Two Hundred Fifty Million Dollars ($250,000,000),
(b) on each Fiscal Quarterly Date thereafter (other than the January 31 Fiscal
Quarterly Date), the sum of (i) Two Hundred Fifty Million Dollars
($250,000,000), (ii) one hundred percent (100%) of the cash proceeds from any
sale or issuance of equity, and (iii) twenty-five percent (25%) of the
Guarantor's consolidated net income for such period calculated in accordance
with GAAP, and (c) on each January 31 Fiscal Quarterly Date thereafter, the sum
of (i) Two Hundred Fifty Million Dollars ($250,000,000), (ii) one hundred
percent (100%) of the cash proceeds from any sale or issuance of equity, and
(iii) fifty percent (50%) of the Guarantor's consolidated net income for such
period calculated in accordance with GAAP.
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 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
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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.
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 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 Guarantor set forth in any
section or provision hereof other than those identified specifically in
subsection (b) above and Guarantor shall not have corrected such failure within
thirty (30) days after the giving of written notice thereof to Guarantor by
Agent or any Bank that the specified failure is to be corrected, or
(d) Guarantor and/or any Restricted Subsidiary defaults in any payment of
principal or interest due and owing upon any obligation for borrowed money 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, 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 Guarantor securing the same, except that
defaults in payment or performance of non-recourse obligations of Guarantor or
any Restricted Subsidiary shall not constitute Events of Default under this
Section 10(d) unless such defaults have, or individually or in the aggregate, a
material adverse effect on the business or financial condition of Guarantor, 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
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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
evidence of indebtedness or other contract, 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 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 Guarantor under the Bankruptcy Code or
any other federal or state law providing for relief of debtors, reorganization,
liquidation, or arrangements with creditors, and Guarantor shall admit the
material allegations thereof, or an order, judgment or decree entered therein
shall not be vacated or stayed within
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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,
then, in any such event, and at any time thereafter, the Agent and/or the 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 indebtedness 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 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. The foregoing rights, powers, and
remedies of the 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 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 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 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 Agent 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 Agent 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 Agent and/or the Banks with respect to this Guaranty is and
shall be solely that of debtor and creditor, respectively, and the Agent 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.
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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 Agent, the Banks, and/or
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. This waiver shall not in any way
affect, waive, limit, amend or modify the rights or powers of the Agent and/or
the Banks to pursue remedies pursuant to any confession of judgment or cognovit
provision contained in this instrument, any note or any other guaranty of
payment, agreement, instrument or document related thereto.
13. WARRANT OF ATTORNEY. The Guarantor authorizes any attorney at law at
any time or times to appear in any state or federal court of record in the
United States of America after the Debt or any part thereof shall have become
due and payable (whether the payment becomes due by lapse of time or by
acceleration of maturity or otherwise) and in each case to waive the issuance
and service of process, to admit the maturity of the Debt and the nonpayment
thereof when due, to present each evidence of the Debt in question or any part
thereof to the court and to certify the amount of the Debt then owing thereon,
to confess judgment against the Guarantor in favor of the Agents and/or the
Banks for the amount of the Debt then appearing due, together with interest and
costs of suit, and thereupon to release all errors and waive all rights of
appeal and stay of execution. The foregoing warrant of attorney shall survive
any judgment, and should any judgment be vacated for any reason the Agent and/or
the Banks may nevertheless utilize the foregoing warrant of attorney in
thereafter obtaining additional judgment or judgments against the Guarantor. The
Guarantor expressly authorizes any attorneys for the Agent and/or the Banks to
receive compensation from the Agent and/or the Banks for services rendered in
exercising the foregoing warrant of attorney and in the enforcement of any
judgment obtained against the Guarantor in favor of the Agent and/or the Banks
on this Guaranty, and the Guarantor expressly waives any conflict of interest to
which any attorneys for the Agent and/or the Banks may be subject that may arise
in connection with such attorneys exercising any of the rights and/or powers of
the Agent and/or the Banks provided for herein or the enforcement of any
judgment hereon in favor of the Agent and/or the Banks.
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"WARNING--BY SIGNING THIS PAPER YOU GIVE UP YOUR
RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY
BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN
BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY
WITH THE AGREEMENT, OR ANY OTHER CAUSE."
Address: FOREST CITY ENTERPRISES,
INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President, Chief
Financial Officer and Secretary
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