Exhibit 10.4

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of July 31, 2003 by and between VORNADO REALTY TRUST, a Maryland real estate
investment trust (the “Company”), and the persons identified on Schedule A
hereto (each a “Holder” and collectively, together with their respective assigns
permitted under Section 6.3 hereof, the “Holders”).

 

WHEREAS, the Company, Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), CESC 2101 L Street L.L.C., a Delaware limited
liability company (the “VNO Transaction Sub”), 1100 21st Street Associates
Limited Partnership, a Maryland limited partnership (the “Property
Partnership”), and Robert H. Smith and Ralph S. Dweck, the general partners of
the Property Partnership, are parties to the Contribution Agreement, dated as of
June 16, 2003, pursuant to which the Property Partnership will contribute the
office building located at 2101 L Street N.W. in Washington, DC (along with
certain related assets and liabilities) to the VNO Transaction Sub in exchange
for the issuance by the Operating Partnership of certain Class A Units (such
units, the “Units”) to the Property Partnership for distribution to the Holders
(the “Transaction”) as set forth opposite their names on Schedule A hereto;

 

WHEREAS, pursuant to the terms of Section 8.6 and the other related provisions
of the Second Amended and Restated Agreement of Limited Partnership of the
Partnership (such agreement, as amended from time to time, the “Partnership
Agreement”), commencing on (or shortly after) the first anniversary of the date
of issuance, and subject to the various conditions contained in the Partnership
Agreement and other instruments being delivered in connection with the
Transaction, the Holders will be entitled to redeem their Units for cash or, at
the Company’s election, common shares of beneficial interest, par value $0.04
per share, of the Company (“Common Shares”);

 

WHEREAS, the Company has agreed to grant to the Holders the Registration Rights
(as defined in Section 1 hereof);

 

WHEREAS, capitalized terms not otherwise defined herein shall have the meanings
set forth in the Contribution Agreements; and

 

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

 

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SECTION 1.                            REGISTRATION RIGHTS

 

Subject to the various terms and conditions of the Partnership Agreement and the
limitations upon Holders’ redemption of the Units set forth in other instruments
being delivered in connection with the Transaction, if any Holder receives
Common Shares upon redemption of the Units held by such Holder (“Redemption
Shares”), then, unless the Redemption Shares are issued to the Holder pursuant
to an Issuer Registration Statement as provided in Section 2 below, each Holder
shall be entitled to offer the Redemption Shares for sale pursuant to a shelf
registration statement, subject to the terms and conditions set forth in
Section 3 hereof (the “Registration Rights”).

 

SECTION 2.                            ISSUER REGISTRATION STATEMENT

 

Anything contained herein to the contrary notwithstanding, in the event that the
Redemption Shares are issued by the Company to a Holder and included at the time
of issuance in an effective registration statement (an “Issuer Registration
Statement”) filed with the Securities and Exchange Commission (the
“Commission”), the Company shall be deemed to have satisfied all of its
registration obligations under this Agreement in respect of such Redemption
Shares.

 

SECTION 3.                            DEMAND REGISTRATION RIGHTS

 

3.1                    (a)                       Registration Procedure.  Unless
such Redemption Shares are included at the time of issuance in an Issuer
Registration Statement as provided in Section 2 above, then subject to
Sections 3.1(c) and 3.2 hereof, if any Holder desires to exercise its
Registration Rights with respect to the Redemption Shares, the Holder shall
deliver to the Company a written notice (a “Registration Notice”) informing the
Company of such exercise and specifying the number of shares to be offered by
such Holder (such shares to be offered being referred to herein as the
“Registrable Securities”).  Such notice may be given at any time on or after the
date a notice of redemption is delivered by the Holder to the Partnership
pursuant to the Partnership Agreement, but must be given at least sixty (60)
days prior to the date on which the Holder desires to consummate of the sale of
Registrable Securities.  Upon receipt of the Registration Notice, the Company,
if it has not already caused the Registrable Securities to be included as part
of an existing shelf registration statement and related prospectus that the
Company then has on file with, and has been declared effective by, the
Commission (the “Shelf Registration Statement”) (in which event the Company
shall be deemed to have satisfied its registration obligation under this
Section 3), will cause to be filed with the Commission as soon as reasonably
practicable after receiving the Registration Notice a new registration statement
and related prospectus (a “New Registration Statement”) that complies as to form
in all material respects with applicable Commission rules providing for the sale
by such Holder of the Registrable

 

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Securities, and agrees (subject to Section 3.2 hereof) to use commercially
reasonable efforts to cause such New Registration Statement to be declared
effective by the Commission as soon as practicable.  (As used herein,
“Registration Statement” and “Prospectus” refer to the Shelf Registration
Statement and related prospectus (including any preliminary prospectus) or the
New Registration Statement and related prospectus (including any preliminary
prospectus), whichever is utilized by the Company to satisfy Holder’s
Registration Rights pursuant to this Section 3, including in each case any
documents incorporated therein by reference).

 

Subject to Section 3.2 hereof, the Company agrees to use commercially reasonable
efforts to keep the Registration Statement effective (including the preparation
and filing of any amendments and supplements necessary for that purpose) until
the earlier of (i) the forty-sixth (46th) day following commencement of the
offering contemplated therein (provided, that the forty-five (45) day period
will be extended one day for each day that the Company suspends the offering
pursuant to its rights in Section 3.2 hereof) or, if sooner, the date on which
Holder consummates the sale of all of the Registrable Securities registered
under the Registration Statement and (ii) the date on which all of the
Registrable Securities are eligible for sale pursuant to Rule 144(k) (or any
successor provision) or in a single transaction pursuant to Rule 144(e) (or any
successor provision) under the Securities Act of 1933, as amended (the “Act”). 
The Company agrees to provide each exercising Holder a reasonable number of
copies of the final Prospectus and any amendments or supplements thereto. 
Notwithstanding the foregoing, the Company may at any time, in its sole
discretion and prior to receiving any Registration Notice from any Holder,
include all of any Holder’s Redemption Shares or any portion thereof in any
Registration Statement (in which event the Company shall be deemed to have
satisfied its registration obligation under this Section 3.1(a)).

 

In connection with any Registration Statement utilized by the Company to satisfy
the Registration Rights pursuant to this Section 3, each Holder agrees to
cooperate with the Company in connection with the preparation of the
Registration Statement, and each Holder agrees that it will (i) respond within
five (5) Business Days to any written request by the Company to provide or
verify information regarding Holder or Holder’s Registrable Securities
(including the proposed manner of sale) that may be required to be included in
such Registration Statement pursuant to the rules and regulations of the
Commission, and (ii) provide in a timely manner information regarding the
proposed distribution by such Holder of the Registrable Securities and such
other information as may be requested by the Company from time to time in
connection with the preparation of and for inclusion in the Registration
Statement and related Prospectus.  As used in this Agreement, a “Business Day”
is any Monday, Tuesday, Wednesday, Thursday or Friday other than a day on which
banks and other financial institutions are authorized or required to be closed
for business in the State of New York or Maryland.

 

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(b)                    Offers and Sales.  All offers and sales by a Holder under
the Registration Statement referred to in this Section 3 shall be completed
within the period during which the Registration Statement is required to remain
effective pursuant to Section 3.1(a) above, and upon expiration of such period
no Holder will offer or sell any Registrable Securities under the Registration
Statement.  If directed by the Company, each Holder will return all
undistributed copies of the Prospectus in its possession upon the expiration of
such period.

 

(c)                     Limitations on Registration Rights.  Each exercise of a
Registration Right shall be with respect to a minimum of the lesser of (i) 
Fifty Thousand (50,000) Redemption Shares and (ii) the total number of
Redemption Shares held by the exercising Holder at such time plus the number of
Redemption Shares that may be issued upon redemption of Units by the exercising
Holder.  The right of any Holder to deliver a Registration Notice commences upon
the first date the Holder is permitted to redeem Units pursuant to the
Partnership Agreement and other instruments being delivered in connection with
the Transaction.  The right of any Holder to deliver a Registration Notice shall
expire on the date on which all of the Redemption Shares held by the Holder or
issuable upon redemption of Units held by the Holder are eligible for sale
pursuant to Rule 144(k) (or any successor provision) or in a single transaction
pursuant to Rule 144(e) (or any successor provision) under the Act.

 

3.2                    Suspension of Offering.  Upon any notice by the Company,
either before or after a Holder has delivered a Registration Notice, that a
negotiation or consummation of a transaction by the Company or any of its
affiliates is pending or an event has occurred, which negotiation, consummation
or event would require additional disclosure by the Company in the Registration
Statement of material information which the Company has a bona fide business
purpose for keeping confidential and the nondisclosure of which in the
Registration Statement might cause the Registration Statement to fail to comply
with applicable disclosure requirements (a “Materiality Notice”), each Holder
agrees that it will immediately discontinue offers and sales of the Registrable
Securities under the Registration Statement until the Holder receives copies of
a supplemental or amended Prospectus that corrects the misstatement(s) or
omission(s) referred to above and receives notice that any post-effective
amendment has become effective; provided, that the Company may delay, suspend or
withdraw the Registration Statement for such reason for no more than ninety (90)
days after delivery of the Materiality Notice at any one time.  If so directed
by the Company, Holder will deliver to the Company all copies of the Prospectus
covering the Registrable Securities current at the time of receipt of any
Materiality Notice.

 

3.3                    Qualification.  The Company agrees to use commercially
reasonable efforts to register or qualify the Registrable Securities by the time
the applicable Registration Statement is declared effective by the Commission
under all applicable state securities or “blue sky” laws of such jurisdictions
as any Holder may

 

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reasonably request in writing, to keep each such registration or qualification
effective during the period such Registration Statement is required to be kept
effective pursuant to this Agreement or during the period offers or sales are
being made by Holder after delivery of a Registration Notice to the Company,
whichever is shorter, and to do any and all other similar acts and things which
may be reasonably necessary or advisable to enable Holder to consummate the
disposition of the Registrable Securities owned by Holder in each such
jurisdiction; provided, however, that the Company shall not be required to
(i) qualify generally to do business in any jurisdiction or to register as a
broker or dealer in such jurisdiction where it would not otherwise be required
to qualify but for this Agreement, (ii) take any action that would cause it to
become subject to any taxation in any jurisdiction where it would not otherwise
be subject to such taxation, or (iii) take any action that would subject it to
the general service of process in any jurisdiction where it is not now so
subject.

 

3.4                    Obligations of the Company.  When the Company is required
to effect the registration of Redemption Shares under the Act pursuant to
Section 3.1 of this Agreement, subject to Section 3.2 hereof, the Company shall:

 

(a)                     prepare and file with the Commission (as soon as
reasonably practicable after receiving the Registration Notice, and in any event
within sixty (60) days after receipt of such Registration Notice) the requisite
Registration Statement to effect such registration, which Registration Statement
shall comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the Commission
to be filed therewith, and the Company shall use commercially reasonable efforts
to cause such Registration Statement to become effective; provided, however,
that before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, or comparable statements under securities or “blue sky”
laws of any jurisdiction, the Company shall (i) provide each Holder with an
adequate and appropriate opportunity to participate in the preparation of such
Registration Statement and each Prospectus included therein (and each amendment
or supplement thereto or comparable statement) to be filed with the Commission,
and (ii) not file any such Registration Statement or Prospectus (or amendment or
supplement thereto or comparable statement) with the Commission to which any
Holder shall have reasonably objected on the grounds that such filing does not
comply in all material respects with the requirements of the Act or of the rules
or regulations thereunder;

 

(b)                    prepare and file with the Commission such amendments and
supplements as to the Registration Statement and the Prospectus used in
connection therewith as may be necessary (i) to keep such Registration Statement
effective, and (ii) to comply with the provisions of the Act with respect to the
disposition of the Redemption Shares covered by such Registration Statement, in
each case for such time as is contemplated in Section 3.1(a) above; provided,
that in

 

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any event the period need not extend beyond nine months from the effective date
of the Registration Statement;

 

(c)                     furnish, without charge, to the Holders of the
securities covered by the Registration Statement, such number of copies of the
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits), and the Prospectus included in such Registration
Statement (including each preliminary Prospectus) in conformity with the
requirements of the Act, and other documents, as the Holders may reasonably
request in order to facilitate the public sale or other disposition of the
Redemption Shares owned by the Holders;

 

(d)                    promptly notify the Holders of securities covered by the
Registration Statement:  (i) when the Registration Statement, any pre-effective
amendment, the Prospectus or any prospectus supplement related thereto or
post-effective amendment to the Registration Statement has been filed, and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the Commission or any state
securities or blue sky authority for amendments or supplements to the
Registration Statement or the Prospectus related thereto or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation or
threat of any proceedings for that purpose, and (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any Redemption Shares for sale under the securities or “blue sky” laws of any
jurisdiction or the initiation of any proceeding for such purpose;

 

(e)                     following receipt of a Registration Notice and
thereafter until the sooner of completion, abandonment or termination of the
offering or sale contemplated thereby and the expiring of the period during
which the Company is required to maintain the effectiveness of the related
Registration Statement as set forth in Section 3.1 (a) above, promptly notify
the Holders of securities covered by the Registration Statement:  (i) of the
existence of any fact of which the Company is aware or the happening of any
event which has resulted in (A) the Registration Statement, as then in effect,
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statements
therein not misleading, or (B) the Prospectus included in such Registration
Statement containing an untrue statement of a material fact or omitting to state
a material fact required to be stated therein or necessary to make any
statements therein, in the light of the circumstances under which they were
made, not misleading, and (ii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate or
that there exist circumstances not yet disclosed to the public which make
further sales under such Registration Statement inadvisable pending such
disclosure and post-effective amendment; and, if the notification relates to any
event described in either of the clauses (i) or (ii) of this Section 3.4(e),
subject to Section 3.2 above, at the

 

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request of the Holders, the Company shall prepare and furnish to the Holders of
securities covered by the Registration Statement, a reasonable number of copies
of a supplement or post-effective amendment to such Registration Statement or
related Prospectus or any document incorporated therein by reference or file any
other required document so that (1) such Registration Statement shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (2) as thereafter delivered to the purchasers of the Redemption
Shares being sold thereunder, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

 

(f)                       make available for reasonable inspection by the
Holders and any attorney, accountant or other agent retained by any Holder,
material financial and other relevant information concerning the business and
operations of the Company and the properties of the Company and any subsidiaries
thereof as may be in existence at such time as shall be necessary to enable them
to conduct a reasonable investigation within the meaning of the Act, and cause
the Company’s officers, directors and employees to supply such relevant
information as may be reasonably requested by any such parties in connection
with such Registration Statement; provided, however, that, if the Holders or any
of their advisors or agents request any information that the Company determines
to be confidential or non-public, the Company shall be entitled to condition
access to that information upon the Holders and each other recipient of such
information having entered into a confidentiality agreement with the Company in
form and substance satisfactory to the Company acting reasonably, pursuant to
which each such recipient agrees to maintain that information as confidential
and use it solely for the purposes of exercising rights under this Agreement,
and provided further, that the Company shall not be required to disclose any
information subject to the attorney-client or attorney work product privilege if
and to the extent such disclosure would constitute a waiver of such privilege;

 

(g)                    use commercially reasonable efforts to cause all such
Redemption Shares to be listed on the national securities exchange on which the
Common Shares are then listed, if the listing of Redemption Shares is then
permitted under the rules of such national securities exchange; and

 

(h)                    if requested by any Holder participating in the offering
of Registrable Securities, incorporate in a prospectus supplement or
post-effective amendment such information concerning the Holder or the intended
method of distribution as the Holder reasonably requests to be included therein
and as is appropriate in the reasonable judgment of the Company, including,
without limitation, information with respect to the number of Redemption Shares
being sold, the purchase price being paid therefore and any other material terms
of the

 

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offering of the Redemption Shares to be sold in such offering; provided,
however, that the Company shall not be obligated to include in any such
prospectus supplement or post-effective amendment any requested information that
is unreasonable in scope compared with the Company’s most recent prospectus or
prospectus supplement used in connection with a primary or secondary offering of
equity securities by the Company.

 

3.5                    Indemnification by the Company.  The Company agrees to
indemnify and hold harmless each Holder and each person, if any, who controls
any Holder within the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any of
their officers, directors, employees or representatives, as follows:

 

(i)                           against any and all loss, liability, claim,
damage, judgment and expense whatsoever, as incurred, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto) pursuant to
which the Registrable Securities were registered under the Act, including all
documents incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;

 

(ii)                        against any and all loss, liability, claim, damage,
judgment and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected with the written
consent of the Company; and

 

(iii)                     against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, in
each case whether or not a party, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the

 

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extent that any such expense is not paid under subparagraph (i) or (ii) above;

 

provided, however, that the indemnity provided pursuant to this Section 3.5 does
not apply to any Holder with respect to any loss, liability, claim, damage,
judgment or expense to the extent arising out of (A) any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto), or (B) any Holder’s
failure to deliver an amended or supplemental Prospectus provided to the Holder
by the Company if such loss, liability, claim, damage, judgment or expense would
not have arisen had such delivery occurred.

 

3.6                    Indemnification by Holder.  Each Holder of securities
covered by a Registration Statement (and each permitted assignee of such Holder,
on a several basis) severally and not jointly agrees to indemnify and hold
harmless the Company, and each of its trustees/directors and officers (including
each trustee/director and officer of the Company who signed a Registration
Statement), and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, as follows:

 

(i)                           against any and all loss, liability, claim,
damage, judgment and expense whatsoever, as incurred, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto) pursuant to
which Registrable Securities of such Holder were registered under the Act,
including all documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (or any amendment or supplement thereto), including
all documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;

 

(ii)                        against any and all loss, liability, claim, damage,
judgment and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or

 

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omission, or any such alleged untrue statement or omission, if such settlement
is effected with the written consent of the Holder; and

 

(iii)                     against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened, in
each case whether or not a party, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under subparagraph (i) or (ii)
above;

 

provided, however, that the indemnity provided pursuant to this Section 3.6
shall only apply with respect to any loss, liability, claim, damage, judgment or
expense to the extent arising out of (A) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Holder expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto), or (B) any Holder’s failure to deliver
an amended or supplemental Prospectus provided to the Holder by the Company if
such loss, liability, claim, damage or expense would not have arisen had such
delivery occurred.  Notwithstanding the provisions of this Section 3.6, a Holder
and any permitted assignee shall not be required to indemnify the Company, its
officers, trustees/directors or control persons with respect to any amount in
excess of the amount of the total proceeds to the Holder or such permitted
assignee, as the case may be, from sales of the Registrable Securities of the
Holder under the Registration Statement.

 

3.7                    Conduct of Indemnification Proceedings.  An indemnified
party hereunder shall give reasonably prompt notice to the indemnifying party of
any action or proceeding commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify the indemnifying party (i) shall
not relieve it from any liability which it may have under the indemnity
agreement provided in Section 3.5 or 3.6 above, unless and only to the extent it
did not otherwise learn of such action and the lack of notice by the indemnified
party results in the forfeiture by the indemnifying party of substantial rights
and defenses, and (ii) shall not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification
obligation provided under Section 3.5 or 3.6 above.  If the indemnifying party
so elects within a reasonable time after receipt of such notice, the
indemnifying party may assume the defense of such action or proceeding at such
indemnifying party’s own expense with counsel chosen by the indemnifying party
and approved by the indemnified party, which approval shall not be unreasonably
withheld; provided, however, that the indemnifying party will not settle any
such action or proceeding without the written consent of the

 

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indemnified party unless, as a condition to such settlement, the indemnifying
party secures the unconditional release of the indemnified party; and provided
further, that, if the indemnified party reasonably determines that a conflict of
interest exists where it is advisable for the indemnified party to be
represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in addition to those
available to the indemnifying party, then the indemnifying party shall not be
entitled to assume such defense and the indemnified party shall be entitled to
separate counsel at the indemnifying party’s expense.  If the indemnifying party
is not entitled to assume the defense of such action or proceeding as a result
of the second proviso to the preceding sentence, the indemnifying party’s
counsel shall be entitled to conduct the indemnifying party’s defense and
counsel for the indemnified party shall be entitled to conduct the defense of
the indemnified party, it being understood that both such counsel will cooperate
with each other to conduct the defense of such action or proceeding as
efficiently as possible.  If the indemnifying party is not so entitled to assume
the defense of such action or does not assume such defense, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel for the
indemnified party.  In such event, however, the indemnifying party will not be
liable for any settlement effected without the written consent of the
indemnifying party.  If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
paragraph, the indemnifying party shall not be liable for any fees and expenses
of counsel for the indemnified party incurred thereafter in connection with such
action or proceeding.

 

3.8                    Contribution.  In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Sections 3.5 and 3.6 above is for any reason held to be unenforceable by the
indemnified party although applicable in accordance with its terms, the Company
and the relevant Holder shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company and the Holder, (i) in such proportion as is
appropriate to reflect the relative fault of and benefits to the Company on the
one hand and the Holder on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities, or
expenses or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative fault of, but also the relative benefits to, the Company on the one
hand and the Holder on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.  The relative
benefits to the indemnifying party and indemnified party shall be determined

 

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by reference to, among other things, the total proceeds received by the
indemnifying party and indemnified party in connection with the offering to
which such losses, claims, damages, liabilities or expenses relate.  The
relative fault of the indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, the indemnifying party or the indemnified party, and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such action.

 

The parties hereto agree that it would not be just or equitable if contribution
pursuant to this Section 3.8 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. 
Notwithstanding the provisions of this Section 3.8, a Holder shall not be
required to contribute any amount in excess of the amount of the total proceeds
to the Holder from sales of the Registrable Securities of such Holder under the
Registration Statement.

 

Notwithstanding the foregoing, no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.  For purposes of this Section 3.8, each person, if any, who
controls a Holder within the meaning of Section 15 of the Act shall have the
same rights to contribution as the Holder, and each trustee/director of the
Company, each officer of the Company who signed a Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Act shall have the same rights to contribution as the Company.

 

SECTION 4.                            EXPENSES

 

The Company shall pay all expenses incident to the performance by the Company of
its registration obligations under Sections 2 and 3 above, including (i) all
stock exchange, Commission and state securities registration, listing and filing
fees, (ii) all expenses incurred in connection with the preparation, printing
and distribution of any Issuer Registration Statement or Registration Statement
and Prospectus, and (iii) fees and disbursements of counsel for the Company and
of the independent public accountants of the Company.  Each Holder shall be
responsible for the payment of any brokerage and sales commissions, fees and
disbursements of the Holder’s counsel, accountants and other advisors, and any
transfer taxes relating to the sale or disposition of the Registrable Securities
by such Holder pursuant to this Agreement.

 

SECTION 5.                            RULE 144 COMPLIANCE

 

The Company covenants that it will use its best efforts to timely file the
reports required to be filed by the Company under the Act and the Exchange

 

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Act so as to enable each Holder to sell Registrable Securities pursuant to Rule
144 under the Act.  In connection with any sale, transfer or other disposition
by a Holder of any Registrable Securities pursuant to Rule 144 under the Act,
the Company shall cooperate with the Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold and
not bearing any Securities Act legend, and enable certificates for such
Registrable Securities to be for such number of shares and registered in such
names as Holder may reasonably request at least ten (10) Business Days prior to
any sale of Registrable Securities hereunder.

 

SECTION 6.                            MISCELLANEOUS

 

6.1                    Integration, Amendment.  This Agreement constitutes the
entire agreement among the parties hereto with respect to the matters set forth
herein and supersedes and renders of no force and effect all prior oral or
written agreements, commitments and understandings among the parties with
respect to the matters set forth herein.  Except as otherwise expressly provided
in this Agreement, no amendment, modification or discharge of this Agreement
shall be valid or binding unless set forth in writing and duly executed by the
Company and each Holder against whom such amendment, modification or discharge
is sought to be enforced.

 

6.2                    Waivers.  No waiver by a party hereto shall be effective
unless made in a written instrument duly executed by the party against whom such
waiver is sought to be enforced, and only to the extent set forth in such
instrument.  Neither the waiver by any of the parties hereto of a breach or a
default under any of the provisions of this Agreement, nor the failure of any of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights or privileges hereunder.

 

6.3                    Assignment; Successors and Assigns.  This Agreement and
the rights granted hereunder may not be assigned by any Holder without the
written consent of the Company; provided, however, that a Holder may assign its
rights and obligations hereunder, to a transferee in connection with a transfer
of some or all of such Holder’s Units in accordance with the terms of the
Partnership Agreement, if such transferee agrees in writing to be bound by all
of the provisions hereof.  This Agreement shall inure to the benefit of and be
binding upon of all of the parties hereto and their respective successors and
permitted assigns.

 

6.4                    Notices.  All notices called for under this Agreement
shall be in writing and shall be deemed given upon receipt if delivered
personally or by facsimile transmission and followed promptly by mail, or mailed
by registered or certified mail (return receipt requested), postage prepaid, to
the parties at the

 

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addresses set forth in Schedule A hereto, or to any other address or addressee
as any party entitled to receive notice under this Agreement shall designate,
from time to time, to others in the manner provided in this Section 6.4 for the
service of notices; provided, however, that notices of a change of address shall
be effective only upon receipt thereof.  Any notice delivered to the party
hereto to whom it is addressed shall be deemed to have been given and received
on the day it was received; provided, however, that if such day is not a
Business Day, then the notice shall be deemed to have been given and received on
the Business Day next following such day and if any party rejects delivery of
any notice attempted to be given hereunder, delivery shall be deemed given on
the date of such rejection.  Any notice sent by facsimile transmission shall be
deemed to have been given and received on the Business Day next following the
transmission.

 

6.5                    Specific Performance.  The parties hereto acknowledge
that the obligations undertaken by them hereunder are unique and that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to (i) compel specific performance of the obligations, covenants and agreements
of any other party under this Agreement in accordance with the terms and
conditions of this Agreement and (ii) obtain preliminary injunctive relief to
secure specific performance and to prevent a breach or contemplated breach of
this Agreement in any court of the United States or any State thereof having
jurisdiction.

 

6.6                    Governing Law.  This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the laws of the State of
New York, but not including the choice of law rules thereof.

 

6.7                    Headings.  Section and subsection headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.

 

6.8                    Pronouns.  All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular or plural, as
the identity of the person or entity may require.

 

6.9                    Execution in Counterparts.  To facilitate execution, this
Agreement may be executed in as many counterparts as may be required.  It shall
not be necessary that the signature of or on behalf of each party appears on
each counterpart, but it shall be sufficient that the signature of or on behalf
of each party appears on one or more of the counterparts.  All counterparts
shall collectively constitute a single agreement.  It shall not be necessary in
any proof of this

 

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Agreement to produce or account for more than a number of counterparts
containing the respective signatures of or on behalf of all of the parties.

 

6.10              Severability.  If fulfillment of any provision of this
Agreement, at the time such fulfillment shall be due, shall transcend the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provision contained
in this Agreement operates or would operate to invalidate this Agreement, in
whole or in part, then such clause or provision only shall be held ineffective,
as though not herein contained, and the remainder of this Agreement shall remain
operative and in full force and effect.

 

Signatures on following page

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed on its behalf as of the date first herein above set forth.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

/s/ Joseph Macnow

 

 

Name:

Joseph Macnow

 

Title:

Executive Vice President

 

 

 

 

 

THE HOLDERS IDENTIFIED ON
SCHEDULE A

 

 

 

 

 

By:

Robert H. Smith

 

 

Name:

Robert H. Smith

 

Title:

Representative and Attorney-in-Fact

 

 

 

 

 

By:

Ralph S. Dweck

 

 

Name:

Ralph S. Dweck

 

Title:

Representative and Attorney-in-Fact

 

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