PRIVATE PLACEMENT PURCHASE AGREEMENT
Exhibit 10.2
(including any other persons or entities purchasing Preferred Stock (as
defined below) hereunder for whom the undersigned Holder holds contractual and investment
authority, the “Holder”) enters into this Private Placement Purchase Agreement (the “Agreement”)
with Forest City Enterprises, Inc., an Ohio corporation (the “Company”), on , 2010
whereby the Holder will purchase (the “Purchase”) the Company’s ___% Series A Cumulative Perpetual
Convertible Preferred Stock (“Preferred Stock”) governed by a Preferred Stock Designation of the
___% Series A Cumulative Perpetual Convertible Preferred Stock (the “Preferred Stock Designation”)
that will constitute a part of the Company’s Amended Articles of Incorporation at Closing (as
defined below).
On and subject to the terms hereof, the parties hereto agree as follows:
Article I: Purchase of Preferred Stock
The Holder hereby agrees to purchase from the Company, and the Company hereby agrees to issue
and sell to the Holder, the number of shares of Preferred Stock described below for the cash
purchase price specified below:
Number of Shares of Preferred Stock to be Purchased: |
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| (the “Holder’s Preferred Stock”) | ||
Purchase Price for Preferred Stock: |
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| (the “Purchase Price”) |
The closing of the Purchase (the “Closing”) shall occur on a date (the “Closing Date”) no
later than three business days after the date of this Agreement. At the Closing, (a) the Holder
shall deliver or cause to be delivered to the Company the Purchase Price, and (b) the Company shall
issue to the Holder the Holder’s Preferred Stock; provided, however, that the parties acknowledge
that the issuance of the Holder’s Preferred Stock to the Holder may be delayed due to procedures
and mechanics within the system of the Depository Trust Company and that such delay will not be a
default under this Agreement so long as (i) the Company is using its best efforts to effect the
issuance of the Holder’s Preferred Stock, (ii) such delay is no longer than three business days,
and (iii) dividends shall accrue on the Holder’s Preferred Stock from the Closing Date.
Simultaneously with or after the Closing, the Company may issue Preferred Stock to others.
Article II: Covenants, Representations and Warranties of the Holder
The Holder hereby covenants as follows, and makes the following representations and
warranties, each of which is and shall be true and correct on the date hereof and on the Closing
Date, to the Company, Lazard Frères & Co. LLC and Lazard Capital Markets LLC, and all such
covenants, representations and warranties shall survive the Purchase.
Section 2.1 Power and Authorization. The Holder is duly organized, validly existing
and in good standing, and has the power, authority and capacity to execute and deliver this
Agreement, to perform its obligations hereunder, and to consummate the Purchase contemplated
hereby. If the Holder that is signatory hereto is executing this Agreement to effect the purchase
of the Preferred Stock by one or more other persons or entities (who are thus included in the
definition of “Holder” hereunder), (a) such signatory Holder has all requisite discretionary
authority to enter into this Agreement on behalf of, and bind, each such other person or entity
that is acquiring Holder’s Preferred Stock, and (b) Exhibit A hereto is a true, correct and
complete list of
(i) the name of each party acquiring (as beneficial owner) Holder’s Preferred Stock hereunder,
and (ii) the number of shares of Holder’s Preferred Stock being acquired by such Holder.
Section 2.2 Valid and Enforceable Agreement; No Violations. This Agreement has been
duly executed and delivered by the Holder and constitutes a legal, valid and binding obligation of
the Holder, enforceable against the Holder in accordance with its terms, except that such
enforcement may be subject to (a) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting or relating to enforcement of creditors’ rights
generally, and (b) general principles of equity, whether such enforceability is considered in a
proceeding at law or in equity (the “Enforceability Exceptions”). This Agreement and consummation
of the Purchase will not violate, conflict with or result in a breach of or default under (i) the
Holder’s organizational documents, (ii) any agreement or instrument to which the Holder is a party
or by which the Holder or any of its assets are bound, or (iii) any laws, regulations or
governmental or judicial decrees, injunctions or orders applicable to the Holder.
Section 2.3 Accredited Investor. The Holder is an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the
“Securities Act”).
Section 2.4 Restricted Stock. The Holder (a) acknowledges that the issuance of the
Holder’s Preferred Stock pursuant to the Purchase, and the issuance of any of the shares of the
Company’s Class A common stock, par value $0.33 1/3 per share (the “Class A Common Stock”) upon
conversion of the Holder’s Preferred Stock (the “Conversion Shares”), have not been and will not be
registered under the Securities Act or any state securities laws, and the Holder’s Preferred Stock
and Conversion Shares are being offered and sold in reliance upon exemptions provided in the
Securities Act and state securities laws for transactions not involving any public offering and,
therefore, cannot be sold, transferred, offered for sale, pledged, hypothecated or otherwise
disposed of unless they are subsequently registered and qualified under the Securities Act and
applicable state laws or unless an exemption from such registration and qualification is available,
and that evidence of the Holder’s Preferred Stock and Conversion Shares will bear a legend to such
effect, and (b) is purchasing the Holder’s Preferred Stock and Conversion Shares for investment
purposes only for the account of the Holder and not with any view toward a distribution thereof or
with any intention of selling, distributing or otherwise disposing of the Holder’s Preferred Stock
or Conversion Shares in a manner that would violate the registration requirements of the Securities
Act. The Holder is able to bear the economic risk of holding the Holder’s Preferred Stock and
Conversion Shares for an indefinite period and has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and risk of its investment in the
Holder’s Preferred Stock and Conversion Shares. The Holder has received all such information
regarding the Purchase and the Holder’s Preferred Stock and Conversion Shares as it deems necessary
to make a decision with respect to the Purchase.
Section 2.5 No Related Party or 5% Shareholder Status. The Holder and its affiliates
collectively beneficially own and will beneficially own as of the Closing Date (but without giving
effect to the Purchase) (i) less than 5% of the aggregate number of outstanding shares of Class A
Common Stock and the Company’s Class B common stock, par value $0.33 1/3 per share (the “Class B
Common Stock;” together with the Class A Common Stock, the “Common Stock”)and (ii) less than 5% of
the aggregate number of votes that may be cast by holders of those outstanding securities of the
Company that entitle the holders thereof to vote generally on all matters submitted to the
Company’s shareholders for a vote (the “Voting Power”) of the Company. The Holder is not a
subsidiary, affiliate or, to its knowledge, otherwise closely-related to any director or officer of
the Company or beneficial owner of 5% or more of the outstanding Common Stock or Voting Power (each
such director, officer or beneficial owner, a “Related Party”). To its knowledge, no Related Party
beneficially owns 5% or more of the outstanding voting equity, or votes entitled to be cast by the
outstanding voting equity, of the Holder.
Section 2.6 No Illegal Transactions. The Holder has not, directly or indirectly, and
no person acting on behalf of or pursuant to any understanding with the Holder has, engaged in any
transactions in the securities of the Company (including, without limitation, any Short Sales (as
defined below) involving any of
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the Company’s securities) since the time that such Holder was first contacted by either the
Company, Lazard Frères & Co. LLC or Lazard Capital Markets LLC or any other person regarding an
investment in the Preferred Stock or the Company. Such Holder covenants that neither it nor any
person acting on its behalf or pursuant to any understanding with such Holder will engage, directly
or indirectly, in any transactions in the securities of the Company (including Short Sales) prior
to the time the transactions contemplated by this Agreement are publicly disclosed. “Short Sales”
include, without limitation, all “short sales” as defined in Rule 200 of Regulation SHO promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and all types of direct
and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps,
derivatives and similar arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker-dealers or foreign regulated brokers. Solely for purposes of
this Section 2.6, subject to the Holder’s compliance with its obligations under the U.S. federal
securities laws and the Holder’s internal policies, “Holder” shall not be deemed to include any
subsidiaries or affiliates of the Holder that are effectively walled off by appropriate “Chinese
Wall” information barriers approved by the Holder’s legal or compliance department (and thus have
not been privy to any information concerning the Purchase).
Section 2.7 Adequate Information; No Reliance. The Holder acknowledges and agrees
that (a) the Holder has been furnished with all materials it considers relevant to making an
investment decision to enter into the Purchase and has had the opportunity to review the Company’s
filings with the Securities Exchange Commission (the “SEC”), including, without limitation, all
filings made pursuant to the Exchange Act, (b) the Holder has had a full opportunity to ask
questions of the Company concerning the Company, its business, operations, financial performance,
financial condition and prospects, and the terms and conditions of the Purchase, (c) the Holder has
had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to
evaluate the risks involved in the Purchase, and make an informed investment decision with respect
to such Purchase, and (d) the Holder is not relying, and has not relied, upon any statement, advice
(whether legal, tax, financial, accounting or other), representation or warranty made by the
Company or any of its affiliates or representatives including, without limitation, Lazard Frères &
Co. LLC and Lazard Capital Markets LLC, except for (i) a Term
Sheet, together with a Summary Description of Series A Cumulative
Perpetual Convertible Preferred Stock from the Company, dated
, 2010 describing the terms of the Preferred Stock, (ii) the publicly available filings
made by the Company with the SEC under the Exchange Act, and (iii) the representations and
warranties made by the Company in this Agreement.
Section 2.8 No Public Market. The Holder understands that no public market exists for
the Holder’s Preferred Stock, and that there is no assurance that a public market will ever develop
for the Holder’s Preferred Stock.
Article III: Covenants, Representations and Warranties of the Company
The Company hereby covenants as follows, and makes the following representations and
warranties, each of which is and shall be true and correct on the date hereof and on the Closing
Date, to the Holder, Lazard Frères & Co. LLC and Lazard Capital Markets LLC, and all such
covenants, representations and warranties shall survive the Purchase.
Section 3.1 Power and Authorization. The Company is duly incorporated, validly
existing and in good standing under the laws of its state of incorporation, and has the power,
authority and capacity to execute and deliver this Agreement, to perform its obligations hereunder,
and to consummate the Purchase contemplated hereby.
Section 3.2 Valid and Enforceable Agreements; No Violations. This Agreement has been
duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms, except that such
enforcement may be subject to the Enforceability Exceptions. At the Closing, the Preferred Stock
Designation, substantially in the form of Exhibit B hereto, will constitute a part of the
Company’s Amended Articles of Incorporation and will govern the terms of the Preferred Stock. This
Agreement and consummation of the Purchase will not violate, conflict with or result in a breach of
or default under (i) the charter, bylaws or other organizational documents of the
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Company, (ii) any agreement or instrument to which the Company is a party or by which the
Company or any of its assets are bound, or (iii) any laws, regulations or governmental or judicial
decrees, injunctions or orders applicable to the Company.
Section 3.3 Validity of the Holder’s Preferred Stock. The Holder’s Preferred
Stock has been duly authorized by the Company and, when issued and delivered to the
Holder pursuant to the Purchase against delivery of the Purchase Price in accordance with the terms
of this Agreement, the Holder’s Preferred Stock will be validly issued, fully paid and
non-assessable, and the Holder’s Preferred Stock will not be subject to any preemptive,
participation, rights of first refusal and other similar rights. Assuming the accuracy of the
Holder’s representations and warranties hereunder, the Holder’s Preferred Stock (a) will be issued
in the Purchase exempt from the registration requirements of the Securities Act pursuant to
Section 4(2) of the Securities Act, and (b) will be issued in compliance with all applicable state
and federal laws concerning the issuance of the Holder’s Preferred Stock.
Section 3.4 Validity of Underlying Class A Common Stock. The Holder’s Preferred Stock
is convertible into shares of the Company’s Class A Common Stock in accordance with the terms of
the Preferred Stock Designation. The Conversion Shares have been duly authorized and reserved by
the Company for issuance upon conversion of the Holder’s Preferred Stock and, when issued upon
conversion of the Holder’s Preferred Stock in accordance with the terms of the Preferred Stock
Designation, will be validly issued, fully paid and non-assessable, and the issuance of the
Conversion Shares will not be subject to any preemptive, participation, rights of first refusal and
other similar rights.
Section 3.5 Listing Approval. The Conversion Shares have been listed on the New York
Stock Exchange.
Section 3.6 Disclosure. On or before the first business day following the date of
this Agreement, the Company shall issue a publicly available press release or file with the SEC a
Current Report on Form 8-K disclosing all material terms of the Purchase (to the extent not
previously publicly disclosed).
Article IV: Miscellaneous
Section 4.1 Entire Agreement. This Agreement and any documents and agreements
executed in connection with the Purchase embody the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof and supersede all prior and
contemporaneous oral or written agreements, representations, warranties, contracts, correspondence,
conversations, memoranda and understandings between or among the parties or any of their agents,
representatives or affiliates relative to such subject matter, including, without limitation, any
term sheets, emails or draft documents.
Section 4.2 Construction. References in the singular shall include the plural, and
vice versa, unless the context otherwise requires. References in the masculine shall include the
feminine and neuter, and vice versa, unless the context otherwise requires. Headings in this
Agreement are for convenience of reference only and shall not limit or otherwise affect the
meanings of the provisions hereof. Neither party, nor its respective counsel, shall be deemed the
drafter of this Agreement for purposes of construing the provisions of this Agreement, and all
language in all parts of this Agreement shall be construed in accordance with its fair meaning, and
not strictly for or against either party.
Section 4.3 Governing Law. This Agreement shall in all respects be construed in
accordance with and governed by the substantive laws of the State of New York, without reference to
its choice of law rules.
Section 4.4 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together shall constitute one and the
same instrument. Any counterpart or other signature hereon delivered by facsimile shall be deemed
for all purposes as constituting good and valid execution and delivery of this Agreement by such
party.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of
the date first above written.
| “HOLDER”: | “COMPANY”: | |||||||||
| FOREST CITY ENTERPRISES, INC. | ||||||||||
By:
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By: | |||||||||
Name:
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Name: | |||||||||
Title:
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Title: | |||||||||
EXHIBIT A
Purchasing Beneficial Owners
Purchasing Beneficial Owners
| Number of Shares of | ||
| Name of | Holder’s Preferred | |
| Beneficial Owner | Stock | |
EXHIBIT B
Preferred Stock Designation
Preferred Stock Designation
