EXCHANGE AGREEMENT (Unrestricted Notes)
Exhibit 10.1
(Unrestricted Notes)
(including any other persons or entities exchanging Existing Notes
hereunder for whom the undersigned Holder holds contractual and investment authority, the “Holder”)
enters into this Exchange Agreement (the “Agreement”) with Forest City Enterprises, Inc., a Ohio
corporation, (the “Company”) on , 2009 whereby the Holder will exchange (the “Exchange”)
the Company’s 3.625% Puttable Equity-Linked Senior Notes due 2011 (the “Existing Notes”) for the
Company’s new 3.625% Puttable Equity-Linked Senior Notes due 2014 (the “New Notes”) that will be
issued pursuant to the provisions of an Indenture dated as of , 2009 among the Company
and Bank of New York Trust Company, N.A., as Trustee (the “Trustee”), as it may be supplemented or
amended from time to time (the “Indenture”).
On and subject to the terms hereof, the parties hereto agree as follows:
Article I: Exchange of the Existing Notes for New Notes
At the Closing (as defined herein), the Holder hereby agrees to exchange and deliver to the
Company the following Existing Notes, and in exchange therefor the Company hereby agrees to issue
to the Holder the principal amount of New Notes described below:
Principal Amount of Existing Notes to be Exchanged: |
$ | ||
| (the “Exchanged Notes”). | |||
Principal amount of New Notes to be issued in Exchange: |
$ | ||
| (the “Holder’s New Notes”). |
The closing of the Exchange (the “Closing”) shall occur 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 all right, title and interest in and to the Exchanged Notes free and clear
of any mortgage, lien, pledge, charge, security interest, encumbrance, title retention agreement,
option, equity or other adverse claim thereto (collectively, “Liens”), together with any documents
of conveyance or transfer that the Company may deem necessary or desirable to transfer to and
confirm in the Company all right, title and interest in and to the Exchanged Notes free and clear
of any Liens, and (b) the Company shall issue to the Holder the Holder’s New Notes; provided,
however, that the parties acknowledge that the issuance of the Holder’s New Notes 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 one or more global notes representing the New Notes, (ii)
such delay is no longer than three business days, and (iii) interest shall accrue on such New Notes
from the date of the Indenture. Simultaneously with or after the Closing, the Company may issue
New Notes to one or more other holders of outstanding Existing Notes, subject to the terms of the
Indenture.
On October 15, 2009, the Company is scheduled to and will make a payment to the Holder
representing the accrued but unpaid interest on the Exchanged Notes through October 15, 2009 (the
“Scheduled Coupon Interest Payment”). The Holder acknowledges that it is only entitled to the
accrued but unpaid interest on the Exchanged Notes through the date of Closing. At Closing, in
anticipation of the Scheduled Coupon Interest Payment, the Holder will remit to the Company the
balance of the Scheduled Coupon Interest Payment described below:
Accrued Interest on the Exchanged Notes From the Date of Closing through October 15, 2009: |
$ | ||
| (the “Coupon Interest Remittance”). |
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 at the Closing,
to the Company, Lazard Frères & Co. LLC and Lazard Capital Markets LLC, and all such covenants,
representations and warranties shall survive the Exchange.
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 Exchange contemplated
hereby. If the Holder that is signatory hereto is executing this Agreement to effect the exchange
of Exchanged Notes beneficially owned 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 a beneficial owner of Exchanged Notes, and (b) Exhibit A hereto is a
true, correct and complete list of (i) the name of each party delivering (as beneficial owner)
Exchanged Notes hereunder, (ii) the principal amount of such Holder’s Exchanged Notes, (iii) the
principal amount of Holder’s New Notes to be issued to such Holder in respect of its Exchanged
Notes, and (iv) the amount of the Coupon Interest Remittance to be tendered to the Company pursuant
to Article I of this Agreement.
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 regardless of whether such enforceability is
considered in a proceeding of law or equity (the “Enforceability Exceptions”). This Agreement and
consummation of the Exchange 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 Title to the Exchanged Notes. The Holder is the sole legal and beneficial
owner of the Exchanged Notes, and the Holder has good, valid and marketable title to the Exchanged
Notes, free and clear of any Liens (other than pledges or security interests that the Holder may
have created in favor of a prime broker under and in accordance with its prime brokerage agreement
with such broker). The Holder has not, in whole or in part, except as described in the preceding
sentence, (a) assigned, transferred, hypothecated, pledged, exchanged or otherwise disposed of any
of the Exchanged Notes or its rights in the Exchanged Notes, or (b) given any person or entity any
transfer order, power of attorney or other authority of any nature whatsoever with respect to the
Exchanged Notes. Upon the Holder’s delivery of the Exchanged Notes to the Company pursuant to the
Exchange, the Exchanged Notes shall be free and clear of all Liens created by the Holder.
Section 2.4 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 2.5 No Affiliate, Related Party or 5% Stockholder Status. The Holder is not,
and has not been during the consecutive three month period preceding the date hereof, a director,
officer or “affiliate” within the meaning of Rule 144 promulgated under the Securities Act (an
“Affiliate”) of the Company. To its knowledge, the Holder did not acquire any of the Exchanged
Notes, directly or indirectly, from an Affiliate of the Company. The Holder and its Affiliates
collectively beneficially own and will beneficially own as of the date of the Closing (but without
giving effect to the Exchange) less than 5% of the outstanding Class A common stock, par value
$0.33 1/3 per share, of the Company (the “Common Stock”). 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 (each such director, officer or
beneficial owner, a
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“Related Party”). To its knowledge, no Related Party beneficially owns 5% or more of 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 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 New Notes 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 Exchange).
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 Exchange and has had the opportunity to review the Company’s
filings with the Securities and 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 Exchange, (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 exchange of the Existing Notes pursuant hereto and to make an
informed investment decision with respect to such Exchange 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) the publicly available filings made by the Company with the SEC under the Exchange Act and (ii)
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 New Notes, and that there is no assurance that a public market will ever develop for the New
Notes.
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 at the Closing,
to the Holder, Lazard Frères & Co. LLC and Lazard Capital Markets LLC, and all such covenants,
representations and warranties shall survive the Exchange.
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 and the Indenture, to perform its
obligations hereunder and thereunder, and to consummate the Exchange 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,
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enforceable against the Company in accordance with its terms, except that such enforcement may be
subject to the Enforceability Exceptions. At the Closing, the Indenture, substantially in the form
of Exhibit B hereto, will have been duly executed and delivered by the Company and will
govern the terms of the New Notes, and the Indenture will constitute 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. This Agreement, the
Indenture and consummation of the Exchange will not violate, conflict with or result in a breach of
or default under (i) the charter, bylaws or other organizational documents of the 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 New Notes. The Holder’s New Notes have been duly
authorized by the Company and, when executed and authenticated in accordance with the provisions of
the Indenture and delivered to the Holder pursuant to the Exchange against delivery of the
Exchanged Notes in accordance with the terms of this Agreement, the Holder’s New Notes will be
valid and binding obligations of the Company, enforceable in accordance with their terms, except
that such enforcement may be subject to the Enforceability Exceptions, and the Holder’s New Notes
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 New Notes (a) will be issued in the Exchange exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) of the Securities Act, (b) will be free of any
restrictions on resale by the Holder pursuant to Rule 144 promulgated under the Securities Act, and
(c) will be issued in compliance with all applicable state and federal laws concerning the issuance
of the Holder’s New Notes.
Section 3.4 Validity of Underlying Common Stock. The Holder’s New Notes will have an
equity-linked put right whereby the Holder’s New Notes may be converted into shares (the “Puttable
Equity-Linked Shares”) of the Common Stock, in accordance with the terms of the Holder’s New Notes.
The Puttable Equity-Linked Shares have been duly authorized and reserved by the Company for
issuance upon the exercise of the equity-linked put right and, when issued in connection with such
equity-linked put right in accordance with the terms of the Holder’s New Notes, will be validly
issued, fully paid and non-assessable, and the issuance of the Puttable Equity-Linked Shares will
not be subject to any preemptive, participation, rights of first refusal and other similar rights.
Section 3.5 Listing Approval. The Puttable Equity-Linked 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 Exchange (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 Exchange 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
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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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[Signature page to follow]
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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”: | FOREST CITY ENTERPRISES, INC. | |||||||||
By: |
By: | |||||||||
Name: |
Name: | |||||||||
Title: |
Title: | |||||||||
EXHIBIT A
Exchanging Beneficial Owners
Exchanging Beneficial Owners
| Name of | Principal Amount of | Principal Amount of | Coupon Interest | ||||||||
| Beneficial Owner | Exchanged Notes | Holder’s New Notes | Remittance | ||||||||
EXHIBIT B
Indenture
Indenture
