TABLE OF CONTENTS

 

		Page
ARTICLE I THE TRANSACTION		2
1.1	Contribution and Conveyance of Interests	2
1.2	Liabilities to be Assumed by the VNO Transaction Sub	2
1.3	Closing	2
1.4	Title	3
1.5	Consideration	3
1.6	Federal Income Tax Characterization	7
1.7	Escrow; Appointment of Representatives	8
1.8	Transfer Restrictions; Redemption Rights	8
ARTICLE II THE STUDY PERIOD AND DEPOSIT ESCROW		10
2.1	Study Period	10
2.2	Operating Information	10
2.3	Termination	11
2.4	Confidentiality	11
2.5	Deposit	11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF VORNADO		12
3.1	Organization, Good Standing and Power of the Company and the Operating Partnership	12
3.2	Capitalization	13
3.3	Authorization of this Contribution Agreement	13
3.4	Financial Statements	14
3.5	Absence of Certain Changes or Events	14
3.6	Taxes	14

 

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3.7	Absence of Conflicts and Defaults	15
3.8	Vornado SEC Documents	16
3.9	No Securityholder Vote Required	16
3.10	Definition of “Knowledge”	16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNERS		16
4.1	Organization, Good Standing and Qualification	16
4.2	Enforceability	17
4.3	Capital Structure	17
4.4	No Subsidiaries	17
4.5	Property; Equipment Leases	18
4.6	Operating and Other Agreements	18
4.7	Noncontravention	18
4.8	Absence of Certain Changes or Events	19
4.9	Litigation	19
4.10	Intentionally Deleted	19
4.11	Space Leases	19
4.12	Intentionally Deleted	20
4.13	Intentionally Deleted	20
4.14	Environmental Compliance	20
4.15	Compliance with Laws and Other Instruments	20
4.16	Intentionally Deleted	20
4.17	Taxes	21
4.18	Vote Required; Consents	22
4.19	Subject Entity Financial Statements; Undisclosed Liabilities	22
4.20	Intentionally Deleted	23

 

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4.21	Intellectual Property Rights	23
4.22	Investment Company Act of 1940	23
4.23	Intentionally Deleted	23
4.24	Employees	23
4.25	Related Party Transactions	24
4.26	Contracts and Debt Instruments	24
4.27	Standstill Agreements	25
4.28	Brokers and Finders	25
4.29	Definition of “Knowledge”	25
4.30	Securities Law Matters	25
4.31	Evidence of Partnership Interests	25
ARTICLE V COVENANTS		25
5.1	Execution of Tax Reporting and Protection Agreement	25
5.2	Information Statement	25
5.3	Vornado Partnership Agreement Amendment	27
5.4	Assignments of Interest; Limited Partner Acceptance Agreements for the Vornado Partnership Agreement	27
5.5	Reservation of Vornado Common Shares	27
5.6	Registration Rights Agreements	27
5.7	Title Insurance	27
5.8	Distributions	28
5.9	Maintenance of Subject Entities	28
ARTICLE VI CERTAIN COVENANTS PENDING THE TRANSACTION		28
6.1	Restrictions on Transfers of Interests in the Subject Entities	28
6.2	Consummation of Transaction	28

 

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6.3	Conduct of Business by the Subject Entities Pending the Transaction	28
6.4	Other Actions	31
6.5	Commercially Reasonable Efforts; Notification	31
6.6	Public Announcements	32
6.7	Tax Matters	32
6.8	Estoppels	32
6.9	Permits	32
6.10	Binding Commitments	32
6.11	Certain Actions of General Partners	33
6.12	No Negotiations	33
6.13	Pre-Closing Disclosure of Breaches of Representations; Obligation to Cure	34
ARTICLE VII CONDITIONS TO THE CONSUMMATION OF TRANSACTION		35
7.1	Conditions to Each Party’s Obligation to Effect the Transaction	35
7.2	Conditions to the VNO Transaction Sub’s Obligation to Consummate the Transaction	36
7.3	Conditions to the Contributing Partners’ Obligation to Consummate the Transaction	39
ARTICLE VIII SURVIVAL; INDEMNIFICATION		41
8.1	Survival of Representations and Warranties	41
8.2	Indemnification of the Vornado Indemnified Persons	41
8.3	Escrow Agreement; Release of Escrow Units	48
8.4	Indemnification of the Contributing Partners	48
8.5	Costs of Enforcement	50
8.6	Exclusive Remedies	50

 

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8.7	No Right of Offset	50
8.8	Recovery From Insurance Policies and Third Parties	51
ARTICLE IX THE CLOSING		51
9.1	Transaction Expenses	51
9.2	Prorations and Other Adjustments	53
9.3	Prorations Procedures	55
ARTICLE X TERMINATION		56
10.1	Termination	56
ARTICLE XI CASUALTY OR CONDEMNATION		57
11.1	Material Casualty or Condemnation	57
11.2	Immaterial Casualty or Condemnation	57
11.3	Materiality	58
ARTICLE XII GENERAL PROVISIONS		58
12.1	Notices	58
12.2	Specific Performance	58
12.3	Further Assurances	58
12.4	Consents	59
12.5	Binding Effect	59
12.6	Construction	59
12.7	Waiver of Jury Trial	59
12.8	Governing Law; Submission to Jurisdiction; Service of Process	59
12.9	Headings	60
12.10	Assignment	60
12.11	Counterparts	60
12.12	Severability	60

 

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12.13	Entire Agreement; Amendment	60
12.14	No Waiver	60

 

vi

 

ATTACHMENTS TO AGREEMENT

 

ANNEXES
Annex I	Description of Paris Property
Annex II	Description of Geneva Property
DEFINED TERMS
Table of Defined Terms
EXHIBITS
Exhibit A	Form of Assignment of Interest
Exhibit B	Form of Limited Partner Acceptance Agreement of Vornado Partnership Agreement
Exhibit C-1	Form of Escrow Agreement
Exhibit C-2	Form of Deposit Escrow Agreement
Exhibit D	Securities Law Matters
Exhibit E	Form of Tax Reporting and Protection Agreement
Exhibit F	Form of Amendment to the Vornado Partnership Agreement
Exhibit G- 1	Form of Registration Rights Agreement
Exhibit G-2	Form of Amendment to Registration Rights Agreement
SCHEDULES
Schedule 1.1	List of Partners/Interest Holders of the Subject Entities
Schedule 4.3	List of Partners/Interest Holders with Interests Outstanding
Schedule 4.5(a)	Paris Encumbrances
Schedule 4.5(b)	Geneva Encumbrances
Schedule 4.5(e)	Equipment Leases
Schedule 4.7	Consents - Noncontravention
Schedule 4.8	Distributions of Net Cash
Schedule 4.9	Litigation
Schedule 4.10	Governmental Notices
Schedule 4.11(d)	Leasing Commissions
Schedule 4.11(e)	Tenant Improvement Allowances
Schedule 4.17(a)	Tax Returns
Schedule 4.18	Consents Required
Schedule 4.21	Intellectual Property
Schedule 4.25	Related Party Agreements
Schedule 4.26(a)	Derivative Instruments
Schedule 4.26(b)	Prepayment Penalty
Schedule 6.3	Conduct of Business by Subject Entities
Schedule 7.1(c)	Modifications to Governing Documents

 

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Schedule 7.1(d)	Modifications to Geneva LP Governing Documents
Schedule 12.1	Notice Addresses

 

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CONTRIBUTION AGREEMENT

 

THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of May 12, 2005, by and among VORNADO REALTY TRUST (the “Company”), a Maryland real estate investment trust and the sole general partner of Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”), the OPERATING PARTNERSHIP, CESC ROSSLYN L.L.C., a Delaware limited liability company and wholly-owned subsidiary of the Operating Partnership (the “VNO Transaction Sub” and, together with the Company and the Operating Partnership, “Vornado”), and ROBERT H. SMITH and ROBERT P. KOGOD, as members, general partners and limited partners of the Subject Entities (each, a “General Partner” and, collectively, the “General Partners”), as Representatives (as defined herein), and, for purposes of ARTICLE VIII only, each of Mr. Smith and Mr. Kogod, individually.

 

RECITALS

 

WHEREAS , Paris Associates Limited Partnership, a Virginia limited partnership (“Paris LP”) is the owner of certain real property and improvements located in Arlington County, Virginia at 1601 North Kent Street, 1611 North Kent Street, 1621 North Kent Street, 1701 North Kent Street and 100 Wilson Boulevard, as more particularly described on Annex I, as well as a limited partner interest in Geneva LP;

 

WHEREAS , Geneva Associates Limited Partnership, a Virginia limited partnership (“Geneva LP”) is the owner of certain real property and improvements located in Arlington County, Virginia at 1777 North Kent Street, as more particularly described on Annex II;

 

WHEREAS , Rome Associates Limited Partnership, a Virginia limited partnership (“Rome LP”) is the owner of a limited partner interest in Geneva LP;

 

WHEREAS , Paris LLC, a Virginia limited liability company (“Paris LLC,” and together with Paris LP, Geneva LP and Rome LP, the “Subject Entities”), is the owner of the general partner interest in Paris LP;

 

WHEREAS , the Operating Partnership desires to cause the VNO Transaction Sub (which is a disregarded entity for federal tax purposes) to acquire (i) from the General Partners, all member, general partner and limited partner interests of the General Partners in the Subject Entities, and (ii) from the Other Partners, all member, general partner and limited partner interests of the Other Partners in the Subject Entities to the extent that such Other Partners elect to contribute such interests to the VNO Transaction Sub in accordance with this Agreement, all in exchange for Class A Units of limited partnership interest of the Operating Partnership (each, a “Unit” and, collectively, the “Units”; such exchange, the “Transaction”);

 

 

WHEREAS ; the parties hereto wish to set forth the terms and conditions on and subject to which they shall carry out the Transaction.

 

NOW, THEREFORE , in consideration of the foregoing and the mutual promises and covenants set forth herein, the parties hereto do hereby agree as follows:

 

ARTICLE I

 

THE TRANSACTION

 

1.1                                Contribution and Conveyance of Interests.   On the Closing Date, on the terms and subject to the satisfaction or waiver of the applicable conditions set forth herein, the General Partners and all other members, general partners and limited partners of the Subject Entities who are listed on Schedule 1.1 and who elect to participate in the Transaction in accordance with the terms of this Agreement (the “Other Partners,” and collectively with the General Partners, the “Contributing Partners”) shall contribute and convey to the VNO Transaction Sub, and the VNO Transaction Sub shall accept from the Contributing Partners, all of the Contributing Partners’ right, title and interest in and to the member, general partner and limited partner interests in the Subject Entities (collectively, “Contributed Interests”).

 

1.2                                Liabilities to be Assumed by the VNO Transaction Sub.   On the terms and subject to the conditions set forth herein, the VNO Transaction Sub shall assume only the following liabilities of the Contributing Partners relating to the Contributed Interests that they convey to the VNO Transaction Sub on the Closing Date (collectively, the “Assumed Liabilities”), such assumption to be effective as of the Effective Date, except as noted below:  all liabilities in respect of the Contributed Interests arising under the Governing Documents on or after the Closing Date.

 

1.3                                Closing.   The consummation of the Transaction described in Section 1.1 (“Closing”) shall take place on such date and time as the Company and the Operating Partnership may select by at least five (5) days’ prior notice to the General Partners but not more than thirty (30) days following expiration of the later of (i) the Study Period, and (ii) the solicitation period specified in the Information Statement (as defined herein) and the satisfaction or waiver of the applicable conditions to the Closing set forth in ARTICLE VII ; provided, however, that (subject to the satisfaction or waiver of such conditions to the Closing) the Closing Date shall be no later than July 29, 2005, unless the Operating Partnership and the General Partners shall otherwise agree (the “Closing Date”); provided , however , that, subject to Section 1.5(b)(iii) , such date may be extended by Vornado by such additional period, not to exceed 60 days in the aggregate, as may reasonably be necessary to allow the satisfaction of the conditions set forth in Sections 7.1 and 7.2.  The Closing shall be effective as of 12:01 A.M. on the Closing Date unless the parties otherwise agree (“Effective Date”).  The Closing shall be held at the offices of Arnold & Porter LLP, 555 12th Street, N.W., Washington, D.C. 20004, or at such other location as the parties may agree.

 

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1.4                                Title.   On the Closing Date, the VNO Transaction Sub shall acquire good and indefeasible title to the Contributed Interests, free of any Lien, mortgage, deed of trust, reservation, assignment, agreement, condition, restriction, or title defect (each, an “Exception”), other than Permitted Exceptions.  For purposes of this Agreement, a “Lien” shall mean any lien, charge, encumbrance, security interest, assignment (whether absolute, present, future, conditional, collateral or otherwise), pledge, option, transfer restriction, agreement, covenant, adverse claim, order, decree or judgment.  For purposes of this Agreement, “Permitted Exceptions” shall mean, as to the Contributed Interests, the terms and conditions of the Governing Documents.

 

1.5                                Consideration.

 

(a)                                   Issuance of Units - General.  The Units to be issued by the Operating Partnership at Closing shall be calculated separately with respect to the Geneva Property (as set forth in Section 1.5(b) ) and the Paris Property (as set forth in Section 1.5(c) ).  The gross aggregate value of the Geneva Property and Paris Property, not including the adjustment for cash held by the Subject Entities or other prorations and adjustments, all as provided in this Section 1.5 and Section 9.2 , is $170,200,000 (“Exchange Value”).  For purposes of this Agreement:

 

(i)                                      the term “Paris Interest” means a Contributed Interest that is a limited partnership interest in Paris LP or a membership interest in Paris LLC;

 

(ii)                                   the term “Paris Percentage” means, with respect to a given Paris Interest:

 

(A)                               if such Paris Interest is a limited partnership interest in Paris LP, the percentage ownership in Paris LP represented by such interest; and

 

(B)                                 if such Paris Interest is a membership interest in Paris LLC, the product of (x) the percentage ownership in Paris LLC represented by such interest and (y) the percentage ownership in Paris LP held by Paris LLC.

 

(iii)                                the term “Geneva Percentage” means, with respect to a given Contributed Interest:

 

(A)                               if such Contributed Interest is a limited partnership interest in Geneva LP, the percentage ownership in Geneva LP represented by such interest;

 

(B)                                 if such Contributed Interest is a Paris Interest, the product of (x) the Paris Percentage of such interest and (y) the percentage ownership in Geneva LP held by Paris LP; and

 

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(C)                                 if such Paris Interest is a membership interest in Rome LP, the product of (x) the percentage ownership in Rome LP represented by such interest and (y) the percentage ownership in Geneva LP held by Rome LP;

 

(iv)                               the term “Paris Allocation” means 58.871915%, unless such percentage is modified pursuant to Section 5.2(b) ; and

 

(v)                                  the term “Geneva Allocation” means 41.128085%, unless such percentage is modified pursuant to Section 5.2(b) .

 

(b)                                  Issuance of Units – Geneva Property.

 

(i)                                      At Closing, subject to Section 1.5(d) , the Contributing Partners shall receive from the Operating Partnership on behalf of the VNO Transaction Sub, as consideration for the contribution to the VNO Transaction Sub of the Contributed Interests, subject to the Assumed Liabilities, at Closing, a number of Units, equal to (with the following operations being performed in the order set forth):

 

(v)           an amount equal to the Geneva Allocation multiplied by the Exchange Value (the “Geneva Exchange Value”) less (a) the outstanding principal under the Permitted Mortgage Debt allocable to the Geneva Property as of the Closing Date, less (b) the net aggregate credit to Vornado, if any, as a result of the prorations and adjustments made on the Closing Date pursuant to Section 9.2 allocable to the Geneva Property (the “Geneva Closing Date Prorations”), plus (c) the net aggregate debit, if any, to Vornado as a result of the Geneva Closing Date Prorations,

 

multiplied by

 

(w) the sum of the Geneva Percentages represented by the Contributed Interests,

 

less

 

(x) the Specified Vornado Transaction Costs multiplied by the Geneva Allocation,

 

plus

 

(y) the Specified General Partner Transaction Costs multiplied by the Geneva Allocation,

 

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divided by

 

(z) the Deemed Value per Unit.

 

For purposes of this Agreement, the “Deemed Value” per Unit shall be $74.00, subject to Section 1.5(b)(iii) . 

 

(ii)                                   Notwithstanding the foregoing, a number of Units otherwise entitled to be received by the Contributing Partners pursuant to this Section 1.5(b) in exchange for the contribution of the Contributed Interests (collectively, the “Geneva Escrow Units”) shall be retained and held pursuant to the Escrow Agreement in accordance with the terms of this Agreement and the Escrow Agreement.  The number of Geneva Escrow Units shall be calculated as follows:  $1,000,000.00 divided by the Deemed Value per Unit, multiplied by the Geneva Allocation, and rounded in accordance with Section 1.5(d) .

 

(iii)                                Notwithstanding any other provision of this Agreement, if the Closing Date is extended by Vornado pursuant to Section 1.3 to a date after July 29, 2005, then:

 

(w)                                if the VNO Stock Price (as defined below), calculated as of the Closing Date, is greater than or equal to $70.30 and less than or equal to $77.70, then this Section 1.5(b)(iii) shall have no effect.;

 

(x)                                    if the VNO Stock Price, calculated as of the Closing Date, is less than $70.30, then the Deemed Value per Unit shall equal $70.30;

 

(y)                                  if the VNO Stock Price, calculated as of the Closing Date, is greater than $77.70, then the Deemed Value per Unit shall equal $77.70; and

 

(z)                                    for purposes of this Agreement, the term “VNO Stock Price” as a of a given date shall mean the average closing price on the New York Stock Exchange of common shares of Vornado Realty Trust (Ticker Symbol VNO) for the ten (10) consecutive trading days ending on and including the trading day preceding such date.

 

(c)                                   Issuance of Units – Paris Specific Property.

 

(i)                                      At Closing, subject to Section 1.5(d) , and in addition to the Units to be transferred in accordance with Section 1.5(b) , the Contributing Partners who are contributing Paris

 

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Interests shall receive from the Operating Partnership on behalf of the VNO Transaction Sub, as consideration for the contribution to the VNO Transaction Sub of the Paris Interests, subject to the Assumed Liabilities, at Closing, a number of Units, equal to (with the following operations being performed in the order set forth):

 

(v) an amount equal to the Paris Allocation multiplied by the Exchange Value (the “Paris Exchange Value”) less (a) the outstanding principal under the Permitted Mortgage Debt allocable to the Paris Property (other than Paris LP’s interest in Geneva LP) (the “Paris Specific Property”) as of the Closing Date, less (b) the net aggregate credit to Vornado, if any, as a result of the prorations and adjustments made on the Closing Date pursuant to Section 9.2 allocable to the Paris Specific Property (the “Paris Closing Date Prorations”), plus (c) the net aggregate debit, if any, to Vornado as a result of the Paris Closing Date Prorations,

 

multiplied by

 

(w) the sum of the Paris Percentages represented by the Contributed Interests that are Paris Interests,

 

less

 

(x) the Specified Vornado Transaction Costs multiplied by the Paris Allocation,

 

plus

 

(y) the Specified General Partner Transaction Costs multiplied by the Paris Allocation,

 

divided by

 

(z) the Deemed Value per Unit.

 

(ii)                                   Notwithstanding the foregoing, a number of Units otherwise entitled to be received by the Contributing Partners pursuant to this Section 1.5(c) in exchange for the contribution of the Contributed Interests that are Paris Interests (collectively, the “Paris Escrow Units”) shall be retained and held pursuant to the Escrow Agreement in accordance with the terms of this Agreement and the Escrow Agreement.  The number of Paris Escrow Units shall be calculated as follows:  $1,000,000.00 divided by

 

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the Deemed Value per Unit, multiplied by the Paris Allocation, and rounded in accordance with Section 1.5(d) .

 

(d)                                  No Registration.   Notwithstanding any other provision of this Agreement or any other agreement, if the issuance of Units pursuant to this Section 1.5 would constitute an offering or issuance of securities which is required to be registered with appropriate governmental authorities under the laws of any applicable federal, state or other jurisdiction (other than the filing of a notice Form D with the Securities and Exchange Commission (the “Commission”), if applicable), the Operating Partnership shall not be obligated to deliver the Units (and such Units shall not be considered to have been offered), this Agreement shall terminate and no party hereto shall have any further liability under or in respect of this Agreement to any other party hereto.

 

(e)                                   No Fractional Units.   The Operating Partnership shall not issue or deliver any fractional Units in the Transaction or upon the distribution of Units by the Escrow Agent (as defined herein).  Prior to any rounding of Units at Closing pursuant to this Section 1.5(e) , Units to be received by each Contributing Partner pursuant to Section 1.5(b) and, if applicable, Section 1.5(c) , shall be aggregated, and the aggregate amount of Geneva Escrow Units and, if applicable, Paris Escrow Units, shall be calculated.  The aggregate Units so calculated to be issued to a given Contributing Partner or to be withheld from a given Contributing Partner pursuant to the Escrow Agreement shall be rounded such that (i) fractions of a Unit otherwise issuable that are greater than or equal to one-half of a Unit shall be rounded to the next largest integral number of Units, and (ii) fractions of a Unit otherwise issuable that are less than one-half of a Unit shall be rounded down to the next smallest integral number of Units.

 

(f)                                     Admission to the Operating Partnership.   Notwithstanding any other provision contained in this Agreement, upon the Closing, each Contributing Partner acquiring Units shall be automatically admitted to the Operating Partnership as a limited partner of the Operating Partnership, without any further act, approval or vote of any Person.  Each Contributing Partner shall, upon such admission, be subject to, and bound by, the Vornado Partnership Agreement, including all of the terms and conditions of such agreement, the power of attorney granted in Section 15.11 thereof and the terms agreed to in the Limited Partner Acceptance Agreement executed by each such Contributing Partner.  The name of each such Contributing Partner and the number of Units issued to each such Contributing Partner at the Closing shall be recorded by the Company, as general partner of the Operating Partnership, in the books and records of the Operating Partnership.

 

For purposes of this Agreement, “Person” means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or other form of business or legal entity.

 

1.6                                Federal Income Tax Characterization.   The General Partners and Vornado each intends that (i) the Transaction shall be treated as a contribution of the Contributed Interests by the Contributing Partners to the Operating Partnership solely in exchange for Units and within the scope of Section 721 of the Internal Revenue Code of

 

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1986, as amended (the “Code”), and (ii) the VNO Transaction Sub and any other wholly-owned subsidiary of the Operating Partnership that is involved in the Transaction shall be disregarded for federal income tax purposes.  Each Contributing Partner and Vornado shall treat the Transaction as set forth in this Section 1.6 for all federal income tax purposes.

 

1.7                                Escrow; Appointment of Representatives.

 

(a)                                   At the Closing, the Operating Partnership shall deposit or cause to be deposited in escrow with the escrow agent named in the Escrow Agreement (as defined herein) (the “Escrow Agent”) the Geneva Escrow Units and the Paris Escrow Units (collectively, the “Escrow Units”).  Such Units shall be deposited by the Contributing Partners, and shall be held and released in accordance with the terms of this Agreement and that certain Escrow Agreement dated as of the Closing Date, among the Company, the Operating Partnership, Messrs. Smith and Kogod, each in his capacity as an individual and a Representative, and the Escrow Agent in substantially the form attached hereto as Exhibit C-1 (the “Escrow Agreement”).  The voting, distribution and other rights with respect to the Escrow Units shall be as set forth in the Escrow Agreement.

 

(b)                                  The General Partners are hereby authorized and appointed to act for, and on behalf of, the representatives of any and all of the Contributing Partners (the “Representatives”), (with full power of substitution) in connection with the Transaction or this Agreement, including any assertion of any and all claims for satisfaction of a loss by the Company, the Operating Partnership or certain affiliates pursuant to the terms of this Agreement, the provisions of the Escrow Agreement and the Deposit Escrow Agreement pertaining thereto and all actions and determinations in connection therewith.  The General Partners hereby agree that the Company and the Operating Partnership may rely upon the authority of the Representatives to act without any inquiry.  Each Other Partner electing to become a Contributing Partner hereby designates and appoints the General Partners (either of whom may act) as its true and lawful attorney-in-fact to execute and deliver, in its name, place and stead, the Tax Reporting and Protection Agreement.  Each Other Partner electing to become a Contributing Partner shall be bound by this Section 1.7(b) and all other provisions in this Agreement.

 

1.8                                Transfer Restrictions; Redemption Rights.

 

(a)                                   The Contributing Partners shall not have the right, during the period commencing on the Closing Date and ending on the first anniversary thereof, to sell, pledge, hypothecate, transfer or otherwise dispose of, in whole or in part, directly, indirectly or beneficially, any of the Units issued in connection with the Transaction.  Notwithstanding the foregoing, pursuant to Sections 11.3(A) of the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as heretofore amended and as further amended pursuant to Section 5.3 hereof (the “Vornado Partnership Agreement”), the Company, as general partner of the Operating Partnership, hereby agrees that a Contributing Partner may transfer all or a portion of its Units issued in connection with the Transaction (i) in the case of a Contributing Partner who is an

 

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individual, to his or her Immediate Family, any trust formed solely for the benefit of such Contributing Partner and/or any member of his or her Immediate Family, or any partnership, limited liability company, joint venture, corporation or other business entity in which such Contributing Partner and/or any member of his or her Immediate Family, directly or indirectly, own at least seventy-five percent (75%) of the equity interests, (ii) in the case of a Contributing Partner which is a trust, to the beneficiaries of such trust who are accredited investors (each, an “Accredited Investor”), as such term is defined pursuant to Rule 501 of Regulation D, (iii) in the case of a Contributing Partner which is a partnership, limited liability company, joint venture, corporation, or other business entity, to any of its partners, members, joint venturers, stockholders, or other owners, as the case may be, who directly or indirectly owned interests in the Contributing Partner at the time of the proposed transfer and who are Accredited Investors, (iv) pursuant to a gift or other transfer without consideration, (v) pursuant to applicable laws of descent or distribution, and (vi) to a charitable foundation established and maintained by or on behalf of such Contributing Partner or a member of such Contributing Partner’s Immediate Family.  In the case of any transfer described in clauses (i) through (vi) of the preceding sentence, any transfer must also comply with Sections 11.3(C), 11.3(D), 11.3(E), 11.4 and 11.6 of the Vornado Partnership Agreement and then only if the transferee agrees in a writing satisfactory to the Company, as general partner of the Operating Partnership, acting reasonably, to be bound by the transfer restrictions contained in this Section 1.8(a) .  A trust or other entity may be considered formed “for the benefit” of a Contributing Partner’s Immediate Family member even though some other Person has a remainder interest under or with respect to such trust or other entity.  For purposes of this Agreement “Immediate Family” means, in the case of a Partner or a Contributing Partner who is an individual, his or her spouse, parents, descendants (natural, adoptive or by re-marriage), nephews, nieces, brothers, sisters and their respective spouses.

 

Notwithstanding this Section 1.8(a) , without the prior written consent of the Operating Partnership, no Contributing Partner may transfer or redeem Escrow Units (which will continue to be subject to the limitations on transfers and redemptions in the Vornado Partnership Agreement) prior to any release of such units pursuant to the terms of the Escrow Agreement.

 

(b)                                  All Units issued pursuant to this Agreement shall contain an appropriate restrictive legend describing the restrictions on transfer that are applicable to such Units.

 

(c)                                   The Units issued pursuant to this Agreement shall have the redemption rights set forth in the Vornado Partnership Agreement, as amended by the Amendment to the Vornado Partnership Agreement attached as Exhibit F hereto.

 

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ARTICLE II

 

THE STUDY PERIOD AND DEPOSIT ESCROW

 

2.1                                Study Period.   The General Partners shall, from the Execution Date until forty-five (45) days after the Execution Date (the “Study Period”), and if Vornado elects to proceed to Closing under the terms of this Agreement then through the Closing Date, provide to Vornado and its representatives access to (x) all documents, contracts, books and records in the possession of the General Partners or the Subject Entities regarding the Property, (y) the employees, consultants and contractors with responsibility for or material information regarding the Property, and (z) such other information as Vornado reasonably deems necessary (the “Due Diligence”).  Notwithstanding the foregoing, the General Partners shall be entitled to withhold documents relating solely to the marketing for sale of the Property.  Vornado may conduct physical inspections and testing of the Property; provided that, Vornado shall promptly restore any damage caused by such testing to its condition prior to such Due Diligence and shall indemnify and defend the Subject Entities and the General Partners from any and all liability which may arise as a result of the performance of the review of the Due Diligence.  The General Partners shall cooperate and shall use commercially reasonable efforts to cause the Subject Entities’ representatives to cooperate fully with Vornado and its representatives in permitting reasonable access to the Property to conduct the Due Diligence.  Such access may be either during normal business hours or after normal business hours after the giving of reasonable advance notice to either of the General Partners or any of their designated representatives.

 

2.2                                Operating Information.   The parties to this Agreement hereby acknowledge that the General Partners delivered the following to Vornado on or prior to the Execution Date, or shall deliver the same to Vornado within one (1) week after the Execution Date:  (i) an initial Rent Roll (as defined herein) dated as of the Execution Date, (ii) a copy of every Space Lease in effect as of the Execution Date, (iii) a list of all Equipment Leases and Operating Agreements and all employees engaged in the management and operation of the Property, including their salaries, and (iv) all surveys, title policies, evidence of zoning and subdivision, development plans, structural plans and specifications, operation and maintenance plans, ADA audits, environmental and engineering reports and studies related to the Property available to the Subject Entities and/or the General Partners (the “Preliminary Diligence Materials”).  At Closing, the General Partners shall represent and warrant that each Rent Roll is true, correct and complete in all material respects.  Prior to the termination of the Study Period, the General Partners will give the Operating Partnership five (5) days’ prior notice of any proposed lease, renewal, option or other modification with a tenant or any letter of intent with a prospective tenant for space at the Property, other than leases of individual residential units in the ordinary course of business.  In addition, notwithstanding any other provision of this Agreement, the parties acknowledge and agree that the Schedules to this Agreement have not been attached hereto on the Execution Date; the General Partners shall use commercially reasonable efforts to cause such Schedules to be prepared and delivered to Vornado within one (1) week after the Execution Date.

 

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2.3                                Termination.   If, in its sole and absolute discretion, Vornado is not satisfied with any of the results of its review of the Due Diligence or the Preliminary Diligence Materials, or if Vornado chooses, for any reason or for no reason, not to proceed with the Transaction, then Vornado shall have the right to terminate this Agreement by giving written notice (“Termination Notice”) to the General Partners in the manner set forth in Section 12.1 , on or before the expiration of the Study Period.  Following such notice, Vornado shall be entitled to recover any cash or letter of credit deposited, pursuant to the Deposit Escrow Agreement and any earnings thereon.  In the event that this Agreement is terminated pursuant to this Section 2.3 , the parties hereto (except with respect to the indemnification obligation set forth in Section 2.1 and any other continuing obligations specifically provided for in this Agreement) shall be relieved from all further obligation or liability hereunder except that Vornado shall return all materials provided to it pursuant to this ARTICLE II .  In the event that Vornado fails to deliver the Termination Notice as and when required by ARTICLE X , Vornado shall be deemed to have waived its termination right hereunder.

 

2.4                                Confidentiality.   The parties hereto each agree to, and to cause each of its respective subsidiaries or affiliates that is an entity and any employees, agents, officers, directors, shareholders, partners and advisors of itself or any of its subsidiaries or affiliates that are entities to, hold, any nonpublic information now or hereafter acquired from any of the parties in strict confidence and not to use such information for any purpose except in connection with the Transaction or the other transactions contemplated by this Agreement and shall not disclose any such information to any Person other than its own subsidiaries and directors, trustees, officers, employees, accountants, counsel, financial advisors and other representatives and affiliates without the prior written consent of the party whose nonpublic information would be disclosed. 

 

2.5                                Deposit.   Concurrently with the execution of this Agreement, the Operating Partnership shall deposit or cause to be deposited in escrow with the escrow agent named in the Deposit Escrow Agreement the amount of $1,250,000.00 in cash or an irrevocable letter of credit in a form reasonably acceptable to the General Partners and expiring not less than six months after issuance.  Any funds deposited pursuant to the Deposit Escrow Agreement and all earnings thereon shall be held and released in accordance with the terms of this Agreement and that certain Deposit Escrow Agreement of even date herewith among the Company, the Operating Partnership, the General Partners and Walker Title & Escrow Company, Inc. , the escrow agent, in substantially the form attached hereto as Exhibit C-2 (the “Deposit Escrow Agreement”).  If the Operating Partnership elects to terminate this Agreement pursuant to Sections 2.3 and 10.1(g) , the deposit and all earnings thereon shall be returned to the Operating Partnership.  If this Agreement is not terminated at or prior to the expiration of the Study Period, the amount of the deposit under the Deposit Escrow Agreement shall be increased to $2,500,000.00.  Thereafter, if this Agreement is terminated pursuant to (i)  Section 10.1(c) as a result of a failure of the condition set forth in Section 7.3 (other than as a result of a failure of the condition set forth in Section 7.3(f) ), or (ii)  Section 10.1(e) , such deposit and all earnings thereon shall be released to the General Partners.  If this Agreement is terminated other than as set forth in the immediately preceding sentence, including as a result of the failure of a condition to Closing

 

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(including the failure to obtain all necessary consents of the Vornado Board), the deposit and all earnings thereon shall be released to the Operating Partnership in accordance with the terms of the Deposit Escrow Agreement.  At Closing the deposit and all earnings thereon shall be released to the Operating Partnership in accordance with the terms of the Deposit Escrow Agreement.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF VORNADO

 

The Company, the Operating Partnership and the VNO Transaction Sub, jointly and severally, represent and warrant to the Contributing Partners as follows, which representations and warranties will be true and will be given as of the date of this Agreement (the “Execution Date”) and the Closing Date will survive the Closing Date as set forth in Section 8.1 :

 

3.1                                Organization, Good Standing and Power of the Company and the Operating Partnership.   The Company is a real estate investment trust (“REIT”) duly formed and existing under the laws of Maryland in good standing with the State Department of Assessments and Taxation of Maryland, with the trust power to own, lease and operate its properties and to conduct its business as it is currently being conducted and to enter into and perform its obligations under this Agreement.  The Company is duly qualified as a foreign organization to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a material adverse effect on the business, properties, assets, financial condition or results of operations of the Company, the Operating Partnership and the entities in which the Company or the Operating Partnership, directly or indirectly, owns or controls 50% or more of the voting or economic interest (each, a “Vornado Subsidiary” and collectively, the “Vornado Subsidiaries”), taken as a whole (a “Vornado Material Adverse Effect”).  The Company has provided or made available to the General Partners complete and correct copies of its Amended and Restated Declaration of Trust (the “Declaration of Trust”) and Amended and Restated Bylaws (the “Bylaws”), as amended or supplemented to the date of this Agreement (which includes all resolutions of the Board of Trustees of the Company (the “Vornado Board”) taken pursuant to the Declaration of Trust or Bylaws that have the effect of changing or waiving provisions of those documents or designating the terms of equity securities issued pursuant to the Declaration of Trust).  The Operating Partnership has furnished to the General Partners true, correct and complete copies of its Certificate of Limited Partnership and the Vornado Partnership Agreement, both as amended or supplemented to the date of this Agreement.

 

(a)                                   The Company is organized in conformity with the requirements for qualification as a REIT under the Code and currently intends to operate in a manner which allows the Company to continue to meet the requirements for taxation as a REIT under the Code.

 

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(b)                                  The Operating Partnership has been duly formed and is validly existing as a limited partnership in good standing under the laws of the State of Delaware and has the partnership power and authority to own, lease and operate its properties and to conduct its business as it is currently being conducted and is duly qualified as a foreign organization to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Vornado Material Adverse Effect.  The Company is the sole general partner of, and owned an approximately eighty-seven percent (87%) common limited partner interest in, the Operating Partnership as of December 31, 2004.

 

(c)                                   Each Vornado Subsidiary, other than the Operating Partnership, which is covered in paragraph above, has been duly formed and is validly existing in good standing under the laws of the jurisdiction of its organization and has the power and authority to own, lease and operate its properties and to conduct its business as it is currently being conducted and is duly qualified as a foreign organization to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify would not have a Vornado Material Adverse Effect.

 

3.2                                Capitalization.  Each of the Company and the Operating Partnership has the capitalization disclosed in the respective Annual Reports on Form 10-K of the Company and the Operating Partnership for the year ended December 31, 2004 (including all documents incorporated therein by reference) and any reports, schedules, forms, statements and other documents filed with the Commission since January 1, 2005 (collectively, the “Vornado SEC Documents”).  All of the issued and outstanding shares of beneficial interest, par value $.04 per share of the Company (“Vornado Common Shares”) and the issued and outstanding units of beneficial interest in the Operating Partnership have been duly and validly authorized and issued and are fully paid and nonassessable.

 

3.3                                Authorization of this Contribution Agreement.   Each of the Company, the Operating Partnership and the VNO Transaction Sub has the requisite trust, partnership or limited liability company, as the case may be, power and authority to enter into this Agreement and, subject to obtaining the necessary consent of the Vornado Board, to consummate the transactions contemplated by this Agreement to which the Company, the Operating Partnership or the VNO Transaction Sub (as the case may be) is a party.  The execution and delivery of this Agreement by each of the Company, the Operating Partnership and the VNO Transaction Sub and, subject to obtaining the necessary consent of the Vornado Board, the consummation by the Company, the Operating Partnership and the VNO Transaction Sub of the transactions contemplated by this Agreement to which the Company, the Operating Partnership or the VNO Transaction Sub, as the case may be, is a party have been duly authorized by all necessary trust, partnership or limited liability company, as the case may be, action on the part of each of the Company, the Operating Partnership and the VNO Transaction Sub.  This Agreement has been duly executed and delivered by each of the Company, the

 

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Operating Partnership and the VNO Transaction Sub and constitutes a valid and binding obligation of each of the Company, the Operating Partnership, and the VNO transaction Sub, enforceable against each of the Company, the Operating Partnership and the VNO Transaction Sub in accordance with its terms, except as such enforcement may be limited by (i) applicable bankruptcy, insolvency reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) equitable principles of general applicability relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

3.4                                Financial Statements.   The consolidated financial statements of the Company and the Operating Partnership included in their respective Annual Reports on Form 10-K for the year ended December 31, 2004 (collectively, the “Vornado Financial Statements”) complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto, have been prepared in accordance with GAAP applied on a consistent basis during the period involved (except as may be indicated in the notes thereto) and fairly presented, in accordance with the applicable requirements of GAAP, the consolidated financial position of the Company and the Vornado Subsidiaries, taken as a whole, as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended, except for liabilities and obligations which would not have a Vornado Material Adverse Effect.  Except as set forth in the Vornado Financial Statements, to the knowledge of the Company, neither the Company nor any Vornado Subsidiary has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a consolidated balance sheet of the Company or which, individually or in the aggregate, would have a Vornado Material Adverse Effect.

 

3.5                                Absence of Certain Changes or Events.   Except as disclosed in the Vornado SEC Documents, since December 31, 2004, neither the Company nor any of the Vornado Subsidiaries has sustained an occurrence or circumstance that has had a Vornado Material Adverse Effect (a “Vornado Material Adverse Change”), nor has there been any occurrence or circumstance that with the passage of time would reasonably be expected to result in a Vornado Material Adverse Change.

 

3.6                                Taxes.

 

(a)                                   As used in this Agreement, “Taxes” will include all federal, state, local and foreign income, property, sales, employee withholding, excise and other taxes, tariffs or governmental charges of any nature whatsoever, together with penalties, interest or additions to Tax with respect thereto.

 

(b)                                  The Company, (i) beginning with its taxable year ended December 31, 1993 and through the most recent December 31, has been subject to taxation as a REIT within the meaning of the Code and has satisfied all requirements to qualify as a REIT for such years, (ii) has operated, and intends to continue to operate, in such a manner as to qualify as a REIT for the tax year ending December 31, 2005, and (iii) has not taken or omitted to take any action which would reasonably be expected to result in a

 

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challenge to its status as a REIT, and to the knowledge of Vornado, no such challenge is pending or threatened.

 

(c)                                   The Operating Partnership (i) beginning with its taxable year ended December 31, 1997 has qualified as a partnership for federal income tax purposes (and is not classified as an association taxable as a corporation for federal income tax purposes), (ii) has operated, and intends to continue to operate, in such a manner as to qualify as a partnership and avoid classification as a corporation and (iii) has not taken or omitted to take any action which would reasonably be expected to result in a challenge to its status as a partnership, and to the knowledge of Vornado, no such challenge is pending or threatened.  VNO Transaction Sub is an entity that is disregarded for federal income tax purposes with the Operating Partnership treated for federal income tax purposes as owning all assets owned by VNO Transaction Sub.

 

3.7                                Absence of Conflicts and Defaults.   The execution and delivery of this Agreement and the compliance by Vornado with all of the provisions of this Agreement, and the consummation of the transactions contemplated herein, including the issuance of the Units by the Operating Partnership, and any Common Shares issuable upon the redemption of such Units, will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon any of the properties or assets of the Company, the Operating Partnership, the VNO Transaction Sub or any other Vornado Subsidiary under (i) the Declaration of Trust or Bylaws or the comparable organizational documents of any such entity, each as amended or supplemented to the date of this Agreement, (ii) any loan or credit agreement, note, bond, mortgage, indenture, reciprocal easement agreement, lease or other agreement, instrument, permit, concession, franchise or license applicable to the Company, the Operating Partnership, the VNO Transaction Sub or any other Vornado Subsidiary or their respective properties or assets, or (iii) subject to the governmental filings and other matters referred to in the following sentence, any law, ordinance, governmental rule, permit, license, regulation, judgment, order or court decree (collectively, “Laws”) applicable to the Company, the Operating Partnership, the VNO Transaction Sub or any other Vornado Subsidiary or their respective properties or assets, other than, in the case of clause (ii) or (iii), any such conflicts, violations, defaults, rights or Liens that individually or in the aggregate would not (x) have a Vornado Material Adverse Effect, or (y) prevent the consummation of the Transaction.  No consent, approval, order or authorization of, or registration, declaration or filing with, any nation, government, state or political subdivision of or any agency or department of any thereof (collectively, “Governmental Entity”) is required by or with respect to the Company, the Operating Partnership, the VNO Transaction Sub or any other Vornado Subsidiary in connection with the execution and delivery of this Agreement or the consummation by the Company, the Operating Partnership or the VNO Transaction Sub, as the case may be, of any of the transactions contemplated by this Agreement, except for (1) the filing with the Commission of such reports and filings under the Securities Act and under Sections 13(a) and 13(d) of the Exchange Act (as defined herein), as may be required in connection with this Agreement and the transactions contemplated by this Agreement, (2) such filings as may be required in

 

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connection with the payment of any transfer Taxes (as defined herein) and (3) such other consents, approvals, orders, authorizations, registrations, declarations and filings as (A) may be required under (x) federal, state or local environmental laws, or (y) the “blue sky” laws of various states, or (B) which, if not obtained or made, would not, in the aggregate, have a Vornado Material Adverse Effect or prevent the consummation of the Transaction.

 

3.8                                Vornado SEC Documents.   The Company and the Operating Partnership have filed all reports, schedules, forms, statements and other documents required to be filed by them with the Commission since January 1, 2004.  The Vornado SEC Documents, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or Securities Exchange Act of 1934, as amended (the “Exchange Act”), as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

 

3.9                                No Securityholder Vote Required.   No votes of the holders of any class or series of the Company’s shares of beneficial interest or any of the unitholders of any class or series of partnership units of the Operating Partnership is necessary (under applicable law or any of such entity’s organizational documents or otherwise) to approve this Agreement and the transactions contemplated hereby.  Other than the necessary consent of the Vornado Board, no trust, partnership or limited liability company action is necessary to approve this Agreement and the transactions contemplated hereby.

 

3.10                         Definition of “Knowledge.”   As used in this Agreement, “knowledge of Vornado,” “knowledge of the Company,” “knowledge of each of the Company and the Operating Partnership” or “knowledge of any Vornado Subsidiary” (or words of similar import) means the actual knowledge of Joseph Macnow.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF
THE GENERAL PARTNERS

 

The General Partners hereby represent and warrant to Vornado as follows, which representations and warranties will be true and will be given as of the Execution Date and the Closing Date and will survive the Closing Date is set forth in Section 8.1 .

 

4.1                                Organization, Good Standing and Qualification.   Each of Paris LP, Geneva LP and Rome LP has been duly formed and is validly existing as a limited partnership in good standing under the laws of the Commonwealth of Virginia with partnership power and authority to own, lease and operate its properties and conduct the business in which it is engaged.  Paris LLC has been duly formed and is validly existing as a limited liability company in good standing under the laws of the Commonwealth of Virginia with limited liability company power and authority to own, lease and operate its properties and conduct the business in which it is engaged.   Each Subject Entity is duly qualified to transact business and is in good standing under the laws of each jurisdiction

 

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in which it owns or leases properties, or conducts any business, so as to require such qualification other than in such jurisdictions where the failure to be so qualified or licensed, individually or in the aggregate, would not have a Subject Entities Material Adverse Effect (as defined herein).  The General Partners have furnished or made available to the Company and the Operating Partnership true, correct and complete copies of its Certificate of Limited Partnership and the Limited Partnership Agreement of Paris LP, Geneva LP and Rome LP, each as amended or supplemented to the date of this Agreement, and the Articles of Organization and Operating Agreement of Paris LLC, each as amended or supplemented to the date of this Agreement (collectively, the “Governing Documents”).  The Subject Entities are not in violation of the Governing Documents.

 

4.2                                Enforceability.   This Agreement has been duly executed and delivered by the General Partners and constitutes the legal, valid and binding agreement of the General Partners enforceable against them in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) equitable principles of general applicability relating to the availability of specific performance, injunctive relief, or other equitable remedies.

 

4.3                                Capital Structure.   The only interests in the Subject Entities outstanding are those membership or partnership interests indicated on Schedule 4.3 which are held by the Persons that are identified as the holders of such interests on Schedule 4.3 .  Except as set forth in Schedule 4.3 , no interests of the Subject Entities are issued, reserved for issuance or outstanding.  All outstanding interests in the Subject Entities are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights.  There are no bonds, debentures, notes or indebtedness of the Subject Entities or any other entity which give the holder thereof the right to vote (or which are convertible into, or exchangeable for, securities having the right to vote) on any matters on which the holders of interests in the Subject Entities may vote.  Except as set forth in Schedule 4.3 or in the Governing Documents, there are no outstanding securities, options, warrants, calls, rights, convertible securities, commitments, agreements, arrangements or undertakings of any kind to which any of the Subject Entities is a party or by which any of the Subject Entities is bound, obligating any Subject Entity to issue, deliver or sell, or cause to be issued, delivered or sold, additional interests in the Subject Entity to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, arrangement or undertaking.  Except as set forth in Schedule 4.3 , there are no outstanding contractual obligations of any Subject Entity to repurchase, redeem or otherwise acquire any shares of beneficial interest or other ownership interests in any Subject Entity or to make any material investment (in the form of a loan, capital contribution or otherwise) in any Person.

 

4.4                                No Subsidiaries.   No Subject Entity owns, directly or indirectly, any capital stock or other ownership interest in any Person, other than (i) interests in Environmental Control Associates, (ii) in the case of Paris LLC, an interest in Paris LP, (iii) in the case of Rome LP, an interest in Geneva LP, and (iv) in the case of Paris LP, an interest in Geneva LP.

 

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4.5                                Property; Equipment Leases.   Paris LP is the sole owner of good and marketable title to all Paris Property other than the Paris Real Property, free and clear of all Encumbrances other than the Permitted Mortgage Debt and those Encumbrances set forth on Schedule 4.5(a) .

 

(b)                                  Geneva LP is the sole owner of good and marketable title to all Geneva Property other than the Geneva Real Property, free and clear of all Encumbrances other than the Permitted Mortgage Debt and those Encumbrances set forth on Schedule 4.5(b) .

 

(c)                                   Paris LLC has good and marketable title to its general partner interest in Paris LP free and clear of all Exceptions.

 

(d)                                  Rome LP has good and marketable title to its limited partner interest in Geneva LP free and clear of all Exceptions.

 

(e)                                   Schedule 4.5(e) sets forth all Equipment Leases in effect on the date hereof for equipment where the remaining payments under a given lease total $10,000 or more, and the General Partners have made available to Vornado true, accurate and complete copies of such Equipment Leases.  Each of the Equipment Leases is in full force and effect and neither the applicable Subject Entity nor, to the knowledge of the General Partners, any other party thereto, is in default in any material respect thereunder and no event has occurred which, with the lapse of time or the giving of notice, or both, would constitute a default in any material respect thereunder.  The equipment owned by the Subject Entities, together with such equipment, if any, as the Subject Entities have the right to use under an Equipment Lease, is sufficient to permit the full operation of the Property for its intended purpose.

 

4.6                                Operating and Other Agreements.   The General Partners have made available to Vornado a true, accurate and complete copy of each maintenance, construction, service or supply contract that affect any portion of the Paris Real Property, Paris Personal Property, Geneva Real Property or Geneva Personal Property (collectively, “Operating Agreements”) in effect as of the date hereof.  All of the Operating Agreements are cancelable without penalty on not more than sixty (60) days’ notice to the other party.  At the Closing, there will be no agreement in effect relating to the provision of management or leasing services to the Property other than the contracts described on Schedule 4.6 .

 

4.7                                Noncontravention.   Except in connection with consents set forth in Schedule 4.7 , the execution, delivery and performance of this Agreement by the General Partners and the consummation by the Contributing Partners of the Transaction and other transactions contemplated by this Agreement will not conflict with, or result in any violation of, or conflict with, or constitute a default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, amendment, cancellation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any Lien upon the Contributed Interests under (i) the Governing Documents, (ii) any loan or credit agreement, note, bond, mortgage, indenture, reciprocal easement

 

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agreement, lease or other agreement, instrument, permit, concession, franchise or license applicable to any Subject Entity or by which any property or asset of any Subject Entity is bound or affected, or (iii) any Laws applicable to any Subject Entity or by which any property or asset of any Subject Entity is bound or affected.  No consent, approval, order or authorization of, or registration, declaration or filing with, any third party or Governmental Entity (as defined herein) is required by or with respect to the General Partners in connection with the execution and delivery of this Agreement or the consummation by the Contributing Partners of any of the transactions contemplated by this Agreement, except for (A) such filings as may be required in connection with the payment of any transfer Taxes and (B) such other consents, approvals, orders, authorizations, registrations, declarations and filings as are set forth in Schedule 4.7 or which, if not obtained or made, would not, in the aggregate, have a Subject Entities Material Adverse Effect (as defined herein) or prevent the consummation of the Transaction.

 

4.8                                Absence of Certain Changes or Events.   Since December 31, 2003, each Subject Entity has conducted its business in the ordinary course consistent with its past practices and there has not been (i) any occurrence or circumstance affecting any Subject Entity that has had, or that with the passage of time would reasonably be expected to have, a material adverse effect on the results of operations, assets, business, properties, or financial condition of the Subject Entities, taken as a whole (a “Subject Entities Material Adverse Effect”), (ii) any damage, destruction or loss not covered by insurance (subject to deductibles), (iii) any change in accounting methods, principles or practices by any Subject Entity, except insofar as required by a change in GAAP, (iv) except for distributions of net cash in the ordinary course of business of the Subject Entities, or as set forth in Schedule 4.8, or as otherwise provided for in this Agreement, any declaration, setting aside or payment of any distribution (whether in cash, stock or property) with respect to any interests in any Subject Entity, or (v) any split, combination or reclassification of any interests in any Subject Entity or any issuance or the authorization of any issuance of any other securities in respect of, or in lieu of or in substitution for, or giving the right to acquire by exchange or exercise, its interests.

 

4.9                                Litigation.   Except as set forth in Schedule 4.9 , and other than personal injury, routine tort litigation that has arisen from the ordinary course of operation of the Subject Entities and which are covered by adequate insurance (other than deductibles), there is no action, suit or proceeding pending or, to the knowledge of the General Partners, threatened against or affecting the General Partners or Subject Entities which, if determined adversely to the General Partners or Subject Entities, individually or in the aggregate, could reasonably be expected to (A) have a Subject Entities Material Adverse Effect, or (B) prevent the consummation of the Transaction, nor is there any judgment, decree, injunction, rule or order of any Governmental Entity or arbitrator outstanding against the General Partners or Subject Entities having, or which, insofar as reasonably can be foreseen, in the future would have either such effect.

 

4.10                         Intentionally Deleted.

 

4.11                         Space Leases.

 

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(a)                                   With respect to the residential portions of the Property, each of the rent roll provided by the General Partners to the Company and the Operating Partnership dated as of the Execution Date and the rent roll to be provided to the Company and the Operating Partnership at or immediately prior to the Closing pursuant to Section 7.2(a) (each a “Rent Roll” and collectively, the “Rent Rolls”) is accurate and complete in all material respects.  With respect to the non-residential portions of the Property, the General Partners have made or will make available to Vornado true, correct and complete copies of all of such leases or other agreements affecting the occupancy of the Property, including all amendments, modifications, supplements, renewals, extensions and guarantees related thereto (collectively, the “Space Leases”). 

 

(b)                                  Except as set forth on Schedule 4.11(b) , there are no leasing commissions or similar payments that are payable in respect of any of the Space Leases.

 

4.12                         Intentionally Deleted.

 

4.13                         Intentionally Deleted.

 

4.14                         Environmental Compliance.   Except as provided in any environmental report furnished to or obtained by the Company and the Operating Partnership with respect to the Property, to the knowledge of the General Partners (i) none of the Subject Entities nor any other Person has caused or permitted (A) the unlawful presence of any Hazardous Materials on the Property, which presence or occurrence would, in the aggregate, have a Subject Entities Material Adverse Effect; or (B) any unlawful spills, releases, discharges or disposal of Hazardous Materials to have occurred or be presently occurring on or from the Property as a result of any construction on or operation and use of the Property which would, in the aggregate, have a Subject Entities Material Adverse Effect; and (ii) the Property and the Subject Entities are in compliance with all applicable Environmental Laws, except to the extent such failure to comply, in the aggregate, would not have a Subject Entities Material Adverse Effect.

 

4.15                         Compliance with Laws and Other Instruments.   Except as set forth in Schedule 4.15 , to the knowledge of the General Partners, the Subject Entities are not (i) in violation of any Governing Documents, (ii) in default, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject or (iii) in violation of, and the General Partners have not received any notice of any alleged violation, which has not been cured, of any Laws to which it or its property or assets may be subject or has failed to obtain any license, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or the conduct of its business, except for any such violations, defaults or failures to comply described in clauses (ii) or (iii) of this Section 4.15 which would not, in the aggregate, have a Subject Entities Material Adverse Effect.

 

4.16                         Intentionally Deleted.

 

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4.17                         Taxes.

 

(a)                                   Except as set forth in Schedule 4.17(a) , the Subject Entities have (i) duly and timely filed all tax returns and information returns required to be filed by them (after giving effect to any filing extensions properly granted by a Governmental Entity having the authority to do so) and all such returns are accurate and complete in all material respects and (ii) paid or withheld, as applicable, all Taxes required to be shown on such returns and reports or otherwise required to be paid or withheld, as applicable, by them, and the Subject Entity Financial Statements reflect an adequate reserve for all material Taxes payable by the Subject Entities for all taxable periods and portions thereof through the date of such financial statements, except for such failures that do not have a Subject Entities Material Adverse Effect.  Complete and correct copies of all federal, state and local tax returns and reports for the Subject Entities and all written communications relating thereto have been provided or made available to Vornado.  Since the date of the Subject Entity Financial Statements, the Subject Entities have not incurred any material liability for Taxes other than Taxes incurred in the ordinary course of business.  To the knowledge of the General Partners, no event has occurred, and no condition or circumstance exists, which presents a material risk that any material Taxes described in the preceding sentence with respect to the period described in the said sentence will be imposed upon the Subject Entities or the Property.  Except as set forth in Schedule 4.17(a) , or as are reserved for in the Subject Entity Financial Statements, no deficiencies for any Taxes have been assessed or, to the knowledge of the General Partners, proposed or asserted against the Subject Entities or the Property and no requests for waivers of the time to assess such Taxes are pending, except for such deficiencies that do not have a Subject Entities Material Adverse Effect.

 

(b)                                  To the knowledge of the General Partners, the Subject Entities as of the Closing Date, do not own, in the aggregate, securities of any one issuer (other than any other Subject Entity) having a value of more than 10% of the total value of the outstanding securities of such issuer.

 

(c)                                   Each of the Subject Entities and the General Partners, and to the knowledge of the General Partners, the Other Partners, is a “United States person” within the meaning of Section 7701(a)(30) of the Code.

 

(d)                                  To the knowledge of the General Partners, all of the liabilities of the Subject Entities expected to be outstanding as of the Closing qualify as “qualified liabilities” as defined in Treasury Regulations § 1.707-5(a)(6).

 

(e)                                   To the knowledge of the General Partners, the Subject Entities do not currently and, prior to the Closing, will not and will not agree to, directly or indirectly furnish or render services to the tenants of the Real Property or Personal Property, or manage or operate, such property, other than either (i) through an “independent contractor” with respect to the Subject Entities (within the meaning of Section 856(d)(3) of the Code) from whom or which the Subject Entities do not derive or receive any income within the meaning of Section 856(d)(7) of the Code (treating each of the Subject Entities for the purposes of this representation as if it were a “real estate

 

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investment trust” as defined in Section 856(a) of the Code) or (ii) services usually or customarily rendered in connection with the rental of space for occupancy only within the meaning of Treasury Regulations Section 1.512(b)-1(c)(5), or not rendered primarily for the convenience of the occupant of the real property, within the meaning of Treasury Regulations Section 1.512(b)-1(c)(5).

 

(f)                                     To the knowledge of the General Partners, the Subject Entities do not currently and, prior to Closing, will not and will not agree to receive or accrue rent attributable to Personal Property except with respect to a lease of Real Property where the average of the fair market values of the Personal Property at Closing will not exceed 15 percent of the average of the aggregate fair market values at Closing of the Real Property and the Personal Property leased under such lease within the meaning of Section 856(d)(1) of the Code.

 

(g)                                  To the knowledge of the General Partners, the Subject Entities do not currently receive or accrue or have the right to receive or accrue, and, prior to Closing, will not and will not agree to receive or accrue, directly or indirectly, any rent or interest, where the determination of the amount of rent or interest depends, in the case of rent, on the income or profits of any Person from the Property, and, in the case of interest, upon the income or profits of any Person, other than interest or rent that is based on a fixed percentage or percentages of receipts or sales within the meaning of Section 856(d)(2)(A) or Section 856(f)(l)(A) of the Code.

 

4.18                         Vote Required; Consents.   If the Transaction is consummated, other than the consents described on Schedule 4.18 , no vote or consent of the holders of any class or series of interests of any Subject Entity is necessary or required to approve this Agreement, the Transaction and any other transaction contemplated hereby.

 

4.19                         Subject Entity Financial Statements; Undisclosed Liabilities.

 

(a)                                   The audited financial statements for each of Paris LP and Geneva LP for the year ended December 31, 2003 (the “Subject Entity Financial Statements”) have been provided to Vornado, and the Subject Entity Financial Statements fairly present the financial position of Paris LP and Geneva LP, respectively, as of the respective dates, and present the results of operations and changes in financial position for the respective periods, indicated therein, on a basis consistent with prior accounting periods (except as may be stated in the notes thereto).

 

(b)                                  Promptly upon completion of the audited financial statements for each of Paris LP and Geneva LP for the year ended December 31, 2004, the General Partners shall provide to Vornado copies of such financial statements and such financial statements shall be considered Subject Entity Financial Statements.

 

(c)                                   There exist no liabilities (whether accrued, contingent, absolute or otherwise) of the Subject Entities except (i) liabilities reflected in the most recent balance sheets included in the Subject Entity Financial Statements, (ii) liabilities incurred in the ordinary course of business by Paris LP or Geneva LP since the date of such balance

 

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sheet that would not be reasonably expected to have a Subject Entities Material Adverse Effect, or (iii) liabilities that are of the type that would not be required to be reflected on a combined balance sheet of the Subject Entities, or in the notes thereto, if such balance sheet were prepared in accordance with GAAP as of the date hereof.

 

(d)                                  The Subject Entity Financial Statements, and any additions thereto with respect to the quarterly periods in 2005, to be included in the Information Statement will present the results of operations and changes in financial position for the respective periods, indicated therein, on a basis consistent with prior accounting periods (except as may be stated in the notes thereto).  Notwithstanding anything to the contrary contained in this Agreement, this representation and warranty will be effective as of the date of this Agreement, the date of the Information Statement and the date of the Closing.  The Subject Entities have, or as of the date of the distribution of the Information Statement will have, received the necessary approvals, if any, of the Subject Entities’ auditors to the inclusion of such financials in the Information Statement.

 

4.20                         Intentionally Deleted.

 

4.21                         Intellectual Property Rights.   To the knowledge of the General Partners, the Subject Entities own and possess all right, title and interest in and to the intellectual property set forth on Schedule 4.21 .  The Subject Entities own and possess all right, title and interest in or have a valid and enforceable license to use, all material intellectual property rights used in connection with their businesses, and none of such intellectual property rights is subject to any claim, judgment, injunction, order, decree, pledge, encumbrance or agreement restricting in any material respect the use or licensing thereof by the Subject Entities.  Except as set forth in Schedule 4.21 , there are no pending, or, to the knowledge of the General Partners, threatened claims or proceedings (i) alleging that the use or possession by the Subject Entities of any of such intellectual property rights, infringes, misappropriates or violates any third person’s rights; or (ii) challenging the ownership, possession or use of any registration of any such intellectual property rights, and the General Partners are not aware of any grounds for such claims or proceedings.  To the knowledge of the General Partners, no Person is infringing, misappropriating or violating any of such intellectual property rights, except where any such infringement, misappropriation or violation would not have a Subject Entities Material Adverse Effect.

 

4.22                         Investment Company Act of 1940.   No Subject Entity is, or will be at the Closing, an “investment company” as defined in the 1940 Act, and no Subject Entity is controlled by an investment company.

 

4.23                         Intentionally Deleted.

 

4.24                         Employees.   The Subject Entities have no employees (other than any employees of the management companies retained by the Subject Entities that may be deemed to be employees of the Subject Entities as a matter of common law) and have not sponsored, maintained, contributed to or been required to contribute to any “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

 

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4.25                         Related Party Transactions.   Except as set forth in Schedule 4.25 , there are no arrangements, agreements or contracts entered into by the Subject Entities with any General Partner or Person who is an executive officer, director of any Subject Entity or any Person who owns more than a five percent (5%) economic or voting interest of any Subject Entity, or any member of the immediate family or affiliates of any of the foregoing.

 

4.26                         Contracts and Debt Instruments.

 

(a)                                   Schedule 4.26(a)  sets forth a list of each loan or credit agreement, note, bond, mortgage, indenture or any other primary agreement or instrument pursuant to which any indebtedness of the Subject Entities is outstanding or may be incurred, true and correct copies of which have been made available to Vornado (collectively, “Permitted Mortgage Debt”).  Except as set forth in Schedule 4.26(a) , the Subject Entities do not have any derivative instruments outstanding.

 

(b)                                  Except as set forth in Schedule 4.26(b) , the Subject Entities are not a party to any agreement which would restrict any of them from prepaying any of their indebtedness without premium or penalty at any time.

 

(c)                                   The Subject Entities do not have any pending claim or, to the knowledge of the General Partners, any threatened claims regarding material continuing contractual liability (A) for indemnification under any agreement relating to the sale of real estate previously owned, whether directly or indirectly, by the Subject Entities or (B) to pay any additional purchase price for any of the Property.

 

(d)                                  The Subject Entities have not entered into, nor is any of them subject, directly or indirectly, to, any tax protection agreements.  As used herein, a “tax protection agreement” is an agreement, oral or written, (A) that has as one of its purposes to permit a Person to take the position that such Person could defer federal taxable income that otherwise might have been recognized upon a transfer of property to the Subject Entity that is treated as a partnership for federal income tax purposes, and that (i) prohibits or restricts in any manner the disposition of any assets of any Subject Entity, (ii) requires that any Subject Entity to maintain, put in place, or replace, indebtedness, whether or not secured by any of the Property or (iii) requires that any Subject Entity offer to any Person at any time the opportunity to guarantee or otherwise assume, directly or indirectly (including through a “deficit restoration obligation,” guarantee (including a “bottom” guarantee), indemnification agreement or other similar arrangement), the risk of loss for federal income tax purposes for indebtedness or other liabilities of any Subject Entity, (B) that specifies or relates to a method of taking into account book-tax disparities under Section 704(c) of the Code with respect to one or more assets of any Subject Entity, or (C) that requires a particular method for allocating one or more liabilities of any Subject Entity under Section 752 of the Code.  The Subject Entities have not entered into any agreements that specify a method of taking into account book-tax disparities under Section 704(c) of the Code with respect to appreciated assets that have been contributed to the Subject Entities.

 

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4.27                         Standstill Agreements.   No Subject Entity is a party to, or bound by, any confidentiality, standstill or similar agreements.

 

4.28                         Brokers and Finders.   No broker, investment banker, financial advisor or other Person, other than Stanger & Co., the fees and expenses of which have previously been disclosed to Vornado, is entitled, or would, assuming the consummation of the Transaction, be entitled, to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transaction based upon arrangements made by or on behalf of the General Partners or any Subject Entity.

 

4.29                         Definition of “Knowledge.”   As used in this Agreement, knowledge of the General Partners (or words of similar import) means the actual knowledge of Robert H. Smith and Robert P. Kogod.

 

4.30                         Securities Law Matters.   The General Partners make those acknowledgments, representations, warranties, and agreements of the “Investor” set forth on Exhibit D which by the terms of Exhibit D apply to the General Partners.

 

4.31                         Evidence of Partnership Interests.   The only document that has been distributed by any Subject Entity to any member or partner of such Subject Entity evidencing such member’s or partner’s interest in the Subject Entity is a copy of the Governing Documents, including a then-current Schedule “A” thereto, and no certificates or other evidences of interest in any Subject Entity has ever been issued to any member or partner in any Subject Entity.

 

ARTICLE V

 

COVENANTS

 

5.1                                Execution of Tax Reporting and Protection Agreement.   On the Closing Date, the Company, the Operating Partnership and the VNO Transaction Sub shall enter into the Tax Reporting and Protection Agreement in substantially the form attached hereto as Exhibit E, with Messrs. Smith and Kogod, in their capacity as Members, General Partners and Limited Partners of the Subject Entities and in their capacity as the Representatives of and for the benefit of each Contributing Partner (the “Tax Reporting and Protection Agreement”).

 

5.2                                Information Statement.

 

(a)                                   Each of the General Partners, the Company and the Operating Partnership shall use its commercially reasonable efforts to cause the timely preparation and mailing of an information statement in respect of the solicitation of the agreement of each Other Partner to contribute its interests in the Subject Entities as part of the Transaction (the “Information Statement”).  Vornado shall cause the preparation of the Information Statement, subject to consent of the General Partners, not to be unreasonably withheld, delayed or conditioned.  Vornado’s obligation to mail the Information Statement shall be conditioned on Vornado’s receiving a “comfort” letter from Hariton,

 

 

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Mancuso & Jones, P.C., independent public accountants for Paris LP and Geneva LP, of the kind contemplated by the Statement of Auditing Standards with respect to Letters to Underwriters promulgated by the American Institute of Certified Public Accountants (the “AICPA Statement”), dated as of the date of the Information Statement, addressed to the Company, the Vornado Board and the Operating Partnership, in form and substance reasonably satisfactory to the Company and the Operating Partnership, concerning the procedures undertaken by Hariton, Mancuso & Jones, P.C. with respect to the financial statements and information of Paris LP and Geneva LP contained in the Information Statement and the other matters contemplated by the AICPA Statement and otherwise customary in scope and substance for letters delivered by independent public accountants in connection with transactions such as those contemplated by this Agreement.

 

(b)                                  The General Partners shall recommend to each of the Other Partners that they participate in the Transaction and shall use commercially reasonable efforts to obtain in a timely manner the level of participation described in Section 7.2(c) .  Notwithstanding the foregoing, the General Partners’ obligations under this Section 5.2(b)  shall be conditioned upon the receipt by the General Partners, on or before the Expiration of the Study Period, of the fairness opinion of Robert A. Stanger & Co., Inc. (“Stanger & Co.”), the General Partners’ financial advisor (the “Fairness Opinion”), to the effect that, subject to the matters and assumptions set forth in such opinion, (i) the consideration to be received by Contributing Partners pursuant to the Transaction in the aggregate is fair to such Contributing Partners from a financial point of view and (ii) the allocation of the Exchange Value pursuant to this Agreement ( i . e ., a percentage equal to the Paris Allocation being allocated to the Paris Specific Property and a percentage equal to the Geneva Allocation being allocated to the Geneva Property, in each case without taking into account the net Closing Date Prorations); provided , however , that Vornado shall have the right, but not the obligation, to modify the Paris Allocation and the Geneva Allocation to the extent necessary to cause the Fairness Opinion to satisfy clause (ii) of the foregoing condition, so long as the sum of the Paris Allocation and the Geneva Allocation is 100%.

 

(c)                                   The General Partners shall (i) cause Paris LP and Rome LP, in their capacities as limited partners of Geneva LP, to consent to the admission of the VNO Transaction Sub as a general partner of Geneva LP and such other modifications of the Geneva LP Governing Documents as are described on Schedule 7.2(d) ; and (ii) recommend to each of the Other Partners who are limited partners of Geneva LP that they consent to such matters and shall use commercially reasonable efforts to obtain the consents to such matters described in Section 7.2(d) .

 

(d)                                  Without limiting the terms of Section 5.2(b), the General Partners shall cooperate with the Company and the Operating Partnership in the preparation of the Information Statement and shall provide such information regarding the Subject Entities and the Other Partners as the Company and the Operating Partnership may reasonably request for purposes of the Information Statement and for the solicitation of participation by the Other Partners with respect to the Transaction.  All such information shall, to the knowledge of the General Partners, be true, accurate and complete in all material respects.  The General Partners shall promptly respond to inquiries and requests for

 

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information from the Other Partners and inform the Operating Partnership of such inquiries.

 

5.3                                Vornado Partnership Agreement Amendment.   The Company and the Operating Partnership shall cause the Vornado Partnership Agreement to be amended at or prior to the Closing by approving, executing and adopting an amendment to the Vornado Partnership Agreement substantially in the form attached hereto as Exhibit F (the “Vornado Partnership Agreement Amendment”).

 

5.4                                Assignments of Interest; Limited Partner Acceptance Agreements for the Vornado Partnership Agreement.   At the Closing, each General Partner shall execute and deliver to the Operating Partnership (i) an assignment of such General Partner’s Interests Contributed Interests, including warranty of title, substantially in the form attached hereto as Exhibit A , and (ii) a Limited Partner Acceptance Agreement, accepting the terms of such Limited Partner Acceptance Agreement, including the terms of the Vornado Partnership Agreement, substantially in the form attached hereto as Exhibit B .  The Operating Partnership and the General Partners shall require that each Contributing Partner execute and deliver to the Operating Partnership (i) an assignment of Contributed Interests substantially in the form attached hereto as Exhibit A and (ii) a Limited Partner Acceptance Agreement substantially in the form attached hereto as Exhibit B , as conditions to the delivery of any Units issued in the Transaction (including units to be deposited pursuant to the Escrow Agreement) to such Contributing Partner.

 

5.5                                Reservation of Vornado Common Shares.   The Company shall cause to be reserved a sufficient number of Vornado Common Shares to satisfy its obligation to redeem Units (if the Company were to elect to issue Vornado Common Shares upon such redemption) pursuant to the terms of the Vornado Partnership Agreement; provided that the number of Vornado Common Shares so reserved shall be subject to reduction as Units are redeemed (in exchange for either Vornado Common Shares or cash) over time.

 

5.6                                Registration Rights Agreements.   At the Closing, the Company shall enter into (a) a Registration Rights Agreement in substantially the form attached hereto as Exhibit G-1 between the Company and the Contributing Partners other than Messrs. Smith and Kogod, Clarice R. Smith, Arlene R. Kogod and Charles E. Smith Management, Inc., and (b) an amendment in substantially the form of Exhibit G-2 to the Registration Rights Agreement dated as of January 1, 2002, as amended, between the Company and Messrs. Smith and Kogod, Clarice R. Smith, Arlene R. Kogod and Charles E. Smith Management, Inc., in each case for the benefit of the parties named therein with respect to the Vornado Common Shares issued upon redemption of the Units issued to such Persons (or their beneficiaries) in connection with the Transaction (collectively, the “Registration Rights Agreements”).

 

5.7                                Title Insurance.   The General Partners shall cooperate with Vornado in obtaining a survey update and title insurance (including a commercially reasonable non-imputation endorsement) with respect to the Property.

 

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5.8                                Distributions.  Prior to or following the Closing, the General Partners shall not permit the Subject Entities to make any distributions to the Partners other than regular monthly distributions of net cash flow in the ordinary course of business and consistent with historical practices, but specifically excluding special distributions in excess of regular monthly distributions.

 

5.9                                Maintenance of Subject Entities.   Notwithstanding anything to the contrary contained in this Agreement, from and after the Execution Date until the date on which each of the Contributing Partners has executed and delivered a Limited Partner Acceptance Agreement, the General Partn