Exhibit 10.49

 

CONTRIBUTION AGREEMENT

 

by and among

 

VORNADO REALTY TRUST,

 

VORNADO REALTY L.P.,

 

CESC ROSSLYN L.L.C.,

 

and

 

ROBERT H. SMITH and ROBERT P. KOGOD

 

 

Dated as of May 12, 2005

 

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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

 

iv

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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

 

v

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12.13

Entire Agreement; Amendment

60

 

 

 

12.14

No Waiver

60

 

vi

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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

 

vii

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Schedule 7.1(d)

Modifications to Geneva LP Governing Documents

Schedule 12.1

Notice Addresses

 

viii

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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”);

 

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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.

 

2

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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

 

3

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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,

 

4

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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

 

5

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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

 

6

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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

 

11

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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 Partners shall not dissolve the Subject Entities and shall take all
necessary actions to maintain the good standing and foreign qualifications, as
necessary, of the Subject Entities until such date.

 

ARTICLE VI

 

CERTAIN COVENANTS PENDING THE TRANSACTION

 

The parties hereto hereby covenant and agree that subsequent to the Execution
Date and until the Closing:

 

6.1                               Restrictions on Transfers of Interests in the
Subject Entities.  To the extent permitted under the Governing Documents, from
the Execution Date until the Closing Date, the General Partners shall prohibit
or prevent any transfers by (i) any Other Partner of its interest in any Subject
Entity, (ii) Paris LLC, Paris LP and Rome LP of their respects interests in
Paris LP and/or Geneva LP, and (iii) Paris LP or Geneva LP of any interest in
the Property.  Each of the General Partners hereby agrees that, from the date
hereof until the earlier of the Closing Date or the termination of this
Agreement, he will not consent to the substitution of a limited partner of any
Subject Entity pursuant to the Governing Documents without the prior written
consent of Vornado.

 

6.2                               Consummation of Transaction.  Each of the
General Partners and Vornado shall in good faith use its commercially reasonable
efforts to fulfill or obtain the fulfillment of the conditions to the Closing
and to obtain all required consents or approvals necessary or desirable for the
consummation of the Transaction.

 

6.3                               Conduct of Business by the Subject Entities
Pending the Transaction.  During the period from the Execution Date to the
Closing, the General Partners shall use commercially reasonable efforts to cause
the Subject Entities to (i) maintain, repair, operate and lease (subject to the
express restrictions on leasing set forth in this Agreement) the Property in
substantially the same manner as heretofore conducted, subject to such ordinary
wear and tear as may, in the ordinary course of business remain uncorrected at
the Closing and except for such changes as are expressly required or permitted
by this Agreement, and, to the extent consistent therewith, use commercially
reasonable efforts to preserve intact their current business organization,
goodwill, and ongoing businesses, (ii) maintain insurance policies on the
Property of the same kind and same amount as the insurance policies in effect
with respect to the Property on the Execution Date, (iii) confer on a regular
basis with representatives of the Operating

 

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Partnership regarding material matters relating to such businesses,
(iv) promptly notify the Operating Partnership of any material emergency or
other material change in the condition (financial or otherwise), business,
properties, assets, liabilities, prospects or the normal course of its
businesses or in the operation of the Property, or of any material governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated), and (v) duly and timely file all reports, tax returns
and other documents required to be filed with federal, state, local and other
authorities, subject to extensions permitted by law, provided such extensions do
not adversely affect the status of each Subject Entity as a partnership under
the Code.

 

Without limiting the generality of the foregoing, during the period from the
Execution Date to the Closing, except as set forth in Schedule 6.3, or as
otherwise contemplated by this Agreement, including Section 5.10, without the
written consent of the Operating Partnership, the General Partners shall not
cause or permit any Subject Entity to:

 

(A)                                  (I)                                    
EXCEPT AS EXPRESSLY PERMITTED BY THIS AGREEMENT OR THE DISTRIBUTIONS OF THE
SUBJECT ENTITIES IN THE ORDINARY COURSE OF THEIR BUSINESS AND CONSISTENT WITH
HISTORICAL PRACTICES, DECLARE, SET ASIDE OR PAY DIVIDENDS ON, OR MAKE ANY OTHER
DISTRIBUTIONS IN RESPECT OF, THE BENEFICIAL INTERESTS OR ANY OWNERSHIP INTERESTS
OF THE SUBJECT ENTITIES, (II) SPLIT, COMBINE OR RECLASSIFY ANY BENEFICIAL
INTERESTS OR ANY OTHER OWNERSHIP INTERESTS OR ISSUE OR AUTHORIZE THE ISSUANCE OF
ANY OTHER SECURITIES IN RESPECT OF, IN LIEU OF OR IN SUBSTITUTION FOR SHARES OF
SUCH BENEFICIAL INTEREST, PARTNERSHIP INTERESTS OR OTHER OWNERSHIP INTERESTS, OR
(III) PURCHASE, REDEEM OR OTHERWISE ACQUIRE ANY SHARES OF BENEFICIAL INTEREST,
PARTNERSHIP INTERESTS, “PHANTOM UNITS” OR OTHER OWNERSHIP OR SIMILAR INTERESTS
OR ANY OPTIONS, WARRANTS OR RIGHTS TO ACQUIRE, OR SECURITY CONVERTIBLE INTO,
SHARES OF SUCH BENEFICIAL INTEREST, SUCH PARTNERSHIP INTERESTS OR SUCH OTHER
OWNERSHIP INTERESTS;

 

(B)                                 ISSUE, DELIVER OR SELL, OR GRANT ANY OPTION
OR OTHER RIGHT IN RESPECT OF, ANY VOTING SECURITIES, SHARES OF BENEFICIAL
INTEREST, PARTNERSHIP INTERESTS OR OTHER OWNERSHIP INTERESTS OF THE SUBJECT
ENTITIES OR ANY SECURITIES CONVERTIBLE INTO, OR ANY RIGHTS, WARRANTS OR OPTIONS
TO ACQUIRE, ANY SUCH VOTING SECURITIES, SHARES OF BENEFICIAL INTEREST,
PARTNERSHIP INTERESTS, OTHER OWNERSHIP INTERESTS OR CONVERTIBLE SECURITIES;

 

(C)                                  AMEND THE GOVERNING DOCUMENTS;

 

(D)                                 MERGE OR CONSOLIDATE WITH ANY OTHER PERSON;

 

(E)                                  IN ANY TRANSACTION OR SERIES OF
TRANSACTIONS INVOLVING CAPITAL, SECURITIES OR OTHER ASSETS OR INDEBTEDNESS OF
ANY SUBJECT ENTITY, WITHOUT FIRST OBTAINING THE PRIOR WRITTEN CONSENT OF THE
OPERATING PARTNERSHIP: (I) SELL, LEASE (EXCLUDING TENANT LEASES, LETTERS OF
INTENT OR AGREEMENTS RELATED THERETO FOR WHICH A NOTICE IS REQUIRED PURSUANT TO
THIS AGREEMENT) OR OTHERWISE DISPOSE OF THE PROPERTY (OR ANY INTERESTS THEREIN
OR PORTIONS THEREOF) OR ANY OTHER MATERIAL ASSETS OR BUSINESSES, OR ASSIGN OR
ENCUMBER THE RIGHT TO RECEIVE INCOME, DIVIDENDS, DISTRIBUTIONS AND THE LIKE FROM
SUCH ASSETS OR BUSINESSES; OR (II) INCUR ANY INDEBTEDNESS FOR BORROWED MONEY OR
GUARANTEE ANY SUCH INDEBTEDNESS OF ANOTHER PERSON, ISSUE OR SELL ANY DEBT
SECURITIES OR WARRANTS OR OTHER RIGHTS TO ACQUIRE ANY

 

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DEBT SECURITIES OF THE SUBJECT ENTITIES, ENTER INTO ANY “KEEP WELL” OR OTHER
ARRANGEMENTS TO MAINTAIN ANY FINANCIAL STATEMENT CONDITION OF ANOTHER PERSON OR
ENTER INTO ANY ARRANGEMENT HAVING THE ECONOMIC EFFECT OF ANY OF THE FOREGOING,
PREPAY OR REFINANCE ANY INDEBTEDNESS OR MAKE ANY LOANS, ADVANCES OR CAPITAL
CONTRIBUTIONS TO, OR INVESTMENTS IN, ANY OTHER PERSON;

 

(F)                                    MAKE ANY TAX ELECTION (UNLESS REQUIRED BY
LAW OR NECESSARY TO PRESERVE THE STATUS OF EACH SUBJECT ENTITY FOR FEDERAL
INCOME TAX PURPOSES EITHER AS A PARTNERSHIP OR AN ENTITY THAT IS DISREGARDED AS
A SEPARATE ENTITY);

 

(G)                                 (I) CHANGE IN ANY MATERIAL MANNER ANY OF ITS
METHODS, PRINCIPLES OR PRACTICES OF ACCOUNTING FROM THOSE UPON WHICH THE SUBJECT
ENTITY FINANCIAL STATEMENTS WERE PREPARED OR (II) MAKE OR RESCIND ANY EXPRESS OR
DEEMED ELECTION RELATING TO TAXES, SETTLE OR COMPROMISE ANY CLAIM, ACTION, SUIT,
LITIGATION, PROCEEDING, ARBITRATION, INVESTIGATION, AUDIT OR CONTROVERSY
RELATING TO TAXES, EXCEPT IN THE CASE OF SETTLEMENTS OR COMPROMISES RELATING TO
CERTIORARI PROCEEDINGS WITH RESPECT TO REAL ESTATE TAXES FOR ANY YEARS FOR WHICH
THE APPLICABLE REAL ESTATE TAX RETURNS ARE NOT CLOSED, OR CHANGE ANY OF ITS
METHODS OF REPORTING INCOME OR DEDUCTIONS FOR FEDERAL INCOME TAX RETURNS FOR THE
MOST RECENTLY COMPLETED TAXABLE YEAR EXCEPT, IN THE CASE OF CLAUSE (I), AS MAY
BE REQUIRED BY THE COMMISSION, APPLICABLE LAW OR GAAP;

 

(H)                                 SUBJECT TO SECTION 6.3(I), PAY, DISCHARGE,
SETTLE OR SATISFY ANY CLAIMS, LIABILITIES OR OBLIGATIONS (ABSOLUTE, ACCRUED,
ASSERTED, CONTINGENT OR OTHERWISE), OTHER THAN THE PAYMENT, DISCHARGE OR
SATISFACTION OF ANY OF THE FOREGOING IN THE ORDINARY COURSE OF BUSINESS
CONSISTENT WITH PAST PRACTICE OR IN ACCORDANCE WITH THEIR TERMS, OF LIABILITIES
REFLECTED OR RESERVED AGAINST IN, OR CONTEMPLATED BY, THE SUBJECT ENTITY
FINANCIAL STATEMENTS (OR THE NOTES THERETO) OR INCURRED IN THE ORDINARY COURSE
OF BUSINESS CONSISTENT WITH PAST PRACTICE;

 

(I)                                     SETTLE ANY LITIGATION CLAIMS AGAINST THE
SUBJECT ENTITIES THAT ARE NOT COVERED BY INSURANCE (OTHER THAN DEDUCTIBLES),
INCLUDING ANY CLASS ACTION OR OTHER CLAIMS ARISING OUT OF OR IN CONNECTION WITH
THE TRANSACTION, EXCEPT IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST
PRACTICE;

 

(J)                                     MAKE ANY LOANS, ADVANCES OR CAPITAL
CONTRIBUTIONS TO, OR INVESTMENTS IN, ANY OTHER PERSON;

 

(K)                                  DISTRIBUTE ANY CASUALTY, CONDEMNATION OR
OTHER DISPOSITION PROCEEDS;

 

(L)                                     PRIOR TO THE TERMINATION OF THE STUDY
PERIOD, ENTER INTO, MODIFY, RENEW OR EXTEND (PURSUANT TO AN OPTION AGREEMENT OR
OTHERWISE) A LEASE WITH A TENANT OR ENTER INTO A LETTER OF INTENT WITH A
PROSPECTIVE TENANT FOR SPACE AT THE PROPERTY WITHOUT PROVIDING AT LEAST FIVE
(5) DAYS’ PRIOR NOTICE TO THE OPERATING PARTNERSHIP, OTHER THAN LEASES OF
INDIVIDUAL RESIDENTIAL UNITS IN THE ORDINARY COURSE OF BUSINESS;

 

(M)                               AFTER THE TERMINATION OF THE STUDY PERIOD,
ENTER INTO OR MODIFY A LEASE WITH A TENANT OR A LETTER OF INTENT WITH A
PROSPECTIVE TENANT FOR SPACE AT THE PROPERTY,

 

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OTHER THAN (I) LEASES FOR WHICH A SIGNED LETTER OF INTENT HAS BEEN ENTERED INTO
AND DISCLOSED TO THE COMPANY AND THE OPERATING PARTNERSHIP PRIOR TO THE
EXECUTION DATE AND (II) LEASES OF INDIVIDUAL RESIDENTIAL UNITS WITH INDIVIDUAL
TENANTS IN THE ORDINARY COURSE OF BUSINESS; OR

 

(N)                                 ENTER INTO OR MODIFY ANY OPERATING
AGREEMENTS, EXCEPT FOR ANY SUCH AGREEMENTS THAT ARE CANCELABLE BY THE SUBJECT
ENTITIES WITHOUT PENALTY ON NOT MORE THAN SIXTY (60) DAYS’ NOTICE TO THE OTHER
PARTY.

 

6.4                               Other Actions.  The General Partners shall
not, subject to the Governing Documents, loan agreements binding on the Subject
Entities and the fiduciary duties of the General Partners, take or omit to take
any action in bad faith that would result in (i) any of the representations and
warranties of the General Partners (without giving effect to any “knowledge”
qualifications) set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties (without giving
effect to any “knowledge” qualifications) that are not so qualified becoming
untrue in any material respect or (iii) except as contemplated by this
Agreement, any of the conditions to the Transaction set forth in ARTICLE VII not
being satisfied.

 

6.5                               Commercially Reasonable Efforts; Notification

 

(A)                                  SUBJECT TO THE TERMS AND CONDITIONS HEREIN
PROVIDED, VORNADO AND THE GENERAL PARTNERS SHALL: (I) USE ALL COMMERCIALLY
REASONABLE EFFORTS TO COOPERATE WITH ONE ANOTHER IN (A) DETERMINING WHICH
FILINGS ARE REQUIRED TO BE MADE PRIOR TO THE CLOSING WITH, AND WHICH CONSENTS,
APPROVALS, PERMITS OR AUTHORIZATIONS ARE REQUIRED TO BE OBTAINED PRIOR TO THE
CLOSING FROM, GOVERNMENTAL ENTITIES AND ANY THIRD PARTIES IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTION
AND THE OTHER TRANSACTIONS CONTEMPLATED HEREBY AND (B) TIMELY MAKING ALL SUCH
FILINGS AND TIMELY SEEKING ALL SUCH CONSENTS, APPROVALS, PERMITS AND
AUTHORIZATIONS; (II) USE ALL COMMERCIALLY REASONABLE EFFORTS TO OBTAIN IN
WRITING ANY CONSENTS REQUIRED FROM THIRD PARTIES TO EFFECTUATE THE TRANSACTION,
SUCH CONSENTS TO BE IN FORM REASONABLY SATISFACTORY TO VORNADO AND THE GENERAL
PARTNERS; AND (III) USE ALL COMMERCIALLY REASONABLE EFFORTS TO TAKE, OR CAUSE TO
BE TAKEN, ALL OTHER ACTIONS AND DO, OR CAUSE TO BE DONE, ALL OTHER THINGS
NECESSARY, PROPER OR APPROPRIATE TO CONSUMMATE AND MAKE EFFECTIVE THE
TRANSACTION.  IF AT ANY TIME AFTER THE CLOSING, ANY FURTHER ACTION IS NECESSARY
OR DESIRABLE TO CARRY OUT THE PURPOSE OF THIS AGREEMENT, THE PROPER OFFICERS AND
TRUSTEES OF THE COMPANY, AND, WHERE APPROPRIATE, THE GENERAL PARTNERS, SHALL
TAKE ALL SUCH NECESSARY OR DESIRABLE ACTION.

 

(B)                                 THE GENERAL PARTNERS SHALL GIVE PROMPT
NOTICE TO THE COMPANY AND THE OPERATING PARTNERSHIP, AND THE COMPANY AND THE
OPERATING PARTNERSHIP SHALL GIVE PROMPT NOTICE TO THE GENERAL PARTNERS, OF THE
FAILURE BY IT TO COMPLY WITH OR SATISFY IN ANY MATERIAL RESPECT ANY COVENANT,
CONDITION OR AGREEMENT TO BE COMPLIED WITH OR SATISFIED BY IT UNDER THIS
AGREEMENT; PROVIDED, HOWEVER, THAT NO SUCH NOTIFICATION SHALL AFFECT THE
COVENANTS OR AGREEMENTS OF THE PARTIES OR THE CONDITIONS TO THE OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT.

 

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6.6                               Public Announcements.  The General Partners
shall not issue any press release or make any written public statement with
respect to the Transaction without the consent of Vornado, except as may be
required, based upon advice of counsel, by applicable law or pursuant to court
process (in each of which event the disclosing party shall consult with Vornado
before issuing, and provide Vornado the opportunity to review and comment upon,
any such press release or other public statement).  The parties agree that any
press release to be issued with respect to the Transaction shall be prepared and
issued by Vornado.

 

6.7                               Tax Matters.  Each of the Company and the
Operating Partnership and the General Partners shall use its commercially
reasonable efforts before and after the Closing to cause the Transaction to be
treated as described in Section 1.6 and to obtain the opinions of counsel
referred to in Sections 7.3(f) and 7.3(g).

 

6.8                               Estoppels.  The General Partners shall before
the Closing obtain (a) lease status reports for all General Services
Administration (the “GSA”) Space Leases as of the date of the Rent Roll (the
“GSA Lease Summaries”), and (b) certificates in form and substance reasonably
acceptable to the Operating Partnership from each of the tenants of the Property
as of the date of the Rent Roll (other than tenants of individual residential
units) (the “Tenant Estoppels”) certifying the term of such lease (including all
renewal options) and that, as of the date of the applicable certificates, such
tenant’s Space Lease is in full force and effect, there are no existing defaults
by any Subject Entity which are known to the tenant, that there are no defaults
by the tenants and containing certifications as to such other matters as the
Operating Partnership shall request.  If by the time the other conditions to
Closing are satisfied, the General Partners have only obtained GSA Lease
Summaries or Tenant Estoppels from tenants that in the aggregate lease at least
seventy-five percent (75%) of the leasable space in the Property (excluding, for
this purpose, any space that consists of individual residential units), Vornado
may elect to delay the Closing Date for a period of thirty (30) days to enable
the General Partners to obtain the remaining summaries and/or estoppels.  If the
General Partners remain unable to obtain any such GSA Lease Summaries and/or
Tenant Estoppels after reasonable efforts, the General Partners may elect to
substitute a General Partner estoppel, in form and substance reasonably
acceptable to the Operating Partnership in lieu of Tenant Estoppel certificates
from tenants that individually lease less than five percent (5%) of the leasable
space in the Property and in the aggregate less than ten percent (10%) of the
leasable space in the Property (excluding, for these purposes, space that
consists of individual residential units).

 

6.9                               Permits.  The General Partners shall cause the
Subject Entities to (i) maintain all material Permits in full force and effect,
(ii) make timely filings of all reports, statements, renewal applications and
other required documents, and (iii) make timely payments of all fees and charges
in connection therewith that are required to keep such Permits in full force and
effect.

 

6.10                        Binding Commitments.  Except as otherwise expressly
provided herein, the General Partners shall not permit any Subject Entity to
make any material commitments or representations to any applicable government
authorities, any adjoining

 

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or surrounding property owners, any tenants, any civic association, any utility
or any other similar Person that would in any manner restrict the current use of
the Property and be binding upon any Subject Entity or the Property without the
Company’s and the Operating Partnership’s prior written consent in each case.

 

6.11                        Certain Actions of General Partners.  Each General
Partner hereby consents to and approves the Transaction, and the other
transactions contemplated by this Agreement and agrees to grant, execute and
deliver such further consents, approvals and authorizations, and to take such
other actions, in his capacity as a member, general partner and/or limited
partner of the Subject Entities as shall be necessary or reasonably requested by
the Operating Partnership or the VNO Transaction Sub at, prior to or following
the Closing in order to cause the compliance and performance with the terms of
this Agreement and to consummate and evidence the consummation (if any) of the
Transaction and the other transactions contemplated by this Agreement.  Without
limiting the foregoing, each of the General Partners shall:

 

(A)                                  RECOMMEND THAT THE OTHER PARTNERS AGREE TO
PARTICIPATE IN THE TRANSACTION IN ACCORDANCE WITH THE INFORMATION STATEMENT,
SUBJECT TO SECTION 5.2(B);

 

(B)                                 VOTE IN FAVOR OF THE TRANSACTION AND THE
OTHER TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, TO THE EXTENT THAT ANY SUCH
VOTE IS REQUIRED UNDER THE GOVERNING DOCUMENTS AND IF AND TO THE EXTENT SUCH
GENERAL PARTNER IS ENTITLED TO DO SO; AND

 

(C)                                  REPAY ANY AND ALL OUTSTANDING PROMISSORY
NOTES, LOANS OR OTHER INDEBTEDNESS OF SUCH GENERAL PARTNER TO THE SUBJECT
ENTITIES ON OR PRIOR TO THE CLOSING DATE.

 

Notwithstanding anything to the contrary contained in this Agreement, the
General Partners shall not be obligated to perform any action required by the
terms of this Section 6.11 or of Section 5.2(a) if and to the extent that the
General Partners determine in good faith, based upon the advice of outside
counsel to the General Partners, that the performance of such action by them
would cause them to violate their duties to the Other Partners imposed by the
Governing Documents or applicable law.

 

6.12                        No Negotiations.  So long as this Agreement remains
in effect, the General Partners shall not, and shall use commercial reasonable
efforts to cause each Subject Entity not to, (i) consider any offer from any
other Person for the purchase or other acquisition, directly or indirectly, of
the beneficial ownership interests in the Subject Entities, the Property or any
interest therein (an “Acquisition Proposal”); (ii) solicit any offer from any
Person or enter into any negotiations with respect to any such purchase or other
acquisition, directly or indirectly, of the Property or any interest therein;
(iii) provide any confidential or non-public information or data to, or afford
access to properties, books or records to, any Person relating to, or that may
reasonably be expected to lead to, an Acquisition Proposal; or (iv) enter into
any letter of intent, agreement in principle or agreement relating to an
Acquisition Proposal, or propose publicly to agree to do any of the foregoing,
or otherwise facilitate or cooperate in any

 

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effort or attempt to make or implement an Acquisition Proposal.  The General
Partners acknowledge that they have concluded that the Transaction proposed by
the Company and the Operating Partnership and as provided for herein is the most
favorable to the members and partners of each of the Subject Entities, and that
it is fair and reasonable in such circumstances for the Company and the
Operating Partnership to require this covenant as a condition and inducement to
its entering into this Agreement.

 

6.13                        Pre-Closing Disclosure of Breaches of
Representations; Obligation to Cure.

 

(A)                                  NOTIFICATION BY GENERAL PARTNER OF THEIR
BREACH.  IF (I) ANY GENERAL PARTNER OBTAINS KNOWLEDGE THAT ANY MATTER OR EVENT
SHALL HAVE OCCURRED BETWEEN THE DATE HEREOF AND THE CLOSING DATE THAT IS NOT
EXPRESSLY PERMITTED UNDER ANY PROVISION OF THIS AGREEMENT AND THAT MAKES OR WILL
MAKE ANY WARRANTY OR REPRESENTATION OF THE GENERAL PARTNERS UNTRUE IN ANY
MATERIAL RESPECT AS OF THE CLOSING DATE OR (II) ANY GENERAL PARTNER DISCOVERS
THAT ANY WARRANTY OR REPRESENTATION WAS INACCURATE IN ANY MATERIAL RESPECT AS OF
THE DATE HEREOF, THEN, IN EITHER CASE, THE GENERAL PARTNERS SHALL GIVE VORNADO
NOTICE THEREOF PROMPTLY AFTER OBTAINING SUCH KNOWLEDGE AND IN ANY EVENT PRIOR TO
THE CLOSING.  IF THE GENERAL PARTNERS DO SO, THEY SHALL NOT BE LIABLE TO VORNADO
FOLLOWING THE CLOSING FOR THE BREACH OF THE WARRANTY OR REPRESENTATION IN
QUESTION THAT RESULTS FROM THE OCCURRENCE OF SUCH MATTER, EVENT OR INACCURACY. 
NOTWITHSTANDING THE DELIVERY OF SUCH NOTICE, IN NO EVENT SHALL VORNADO BE
OBLIGATED TO CLOSE HEREUNDER UNLESS THE CONDITIONS PRECEDENT TO VORNADO’S
OBLIGATION TO CLOSE SET FORTH IN THIS AGREEMENT (INCLUDING IN SECTION 7.2(A))
SHALL HAVE BEEN FULFILLED.

 

(B)                                 VORNADO KNOWLEDGE OF GENERAL PARTNER’S
BREACH.  IF VORNADO HAS KNOWLEDGE ON THE DATE HEREOF THAT ANY OF THE GENERAL
PARTNERS’ WARRANTIES OR REPRESENTATIONS IS UNTRUE IN ANY RESPECT, THEN THE
BREACH BY THE GENERAL PARTNERS OF THE WARRANTIES AND REPRESENTATIONS AS TO WHICH
VORNADO SHALL HAVE SUCH KNOWLEDGE SHALL BE DEEMED WAIVED BY VORNADO AND THE
GENERAL PARTNERS SHALL NOT BE DEEMED IN DEFAULT HEREUNDER AND SHALL HAVE NO
LIABILITY TO VORNADO OR ITS SUCCESSORS OR ASSIGNS IN RESPECT THEREOF.  IF, AFTER
THE DATE HEREOF AND PRIOR TO THE CLOSING, VORNADO OBTAINS KNOWLEDGE THAT ANY OF
THE REPRESENTATIONS OR WARRANTIES MADE HEREIN BY THE GENERAL PARTNERS IS UNTRUE,
INACCURATE OR INCORRECT IN ANY MATERIAL RESPECT (OTHER THAN AS A RESULT OF
RECEIPT OF WRITTEN NOTICE THEREOF FROM THE GENERAL PARTNERS), VORNADO SHALL GIVE
THE GENERAL PARTNERS NOTICE THEREOF PROMPTLY AFTER OBTAINING SUCH KNOWLEDGE AND
IN ANY EVENT PRIOR TO THE CLOSING AND THE GENERAL PARTNERS SHALL NOT BE LIABLE
TO VORNADO FOLLOWING THE CLOSING FOR THE BREACH OF SUCH WARRANTIES OR
REPRESENTATIONS.  NOTWITHSTANDING THE PROVISIONS OF THE PRECEDING SENTENCE, IN
NO EVENT SHALL VORNADO BE OBLIGATED TO CLOSE HEREUNDER UNLESS THE CONDITIONS
PRECEDENT TO VORNADO’S OBLIGATION TO CLOSE SET FORTH IN THIS AGREEMENT
(INCLUDING IN SECTION 7.2(A)) SHALL HAVE BEEN FULFILLED.

 

(C)                                  GENERAL PARTNERS’ OBLIGATION TO CURE
BREACH.  IF, AT OR PRIOR TO THE CLOSING, ANY GENERAL PARTNER KNOWS OR OBTAINS
KNOWLEDGE, BY REASON OF NOTICE FROM VORNADO OR OTHERWISE, THAT ANY OF THE
REPRESENTATIONS OR WARRANTIES MADE BY THE GENERAL PARTNERS HEREIN ARE UNTRUE,
INACCURATE OR INCORRECT IN ANY MATERIAL RESPECT, THE GENERAL PARTNERS SHALL BE
OBLIGATED TO USE COMMERCIALLY REASONABLE EFFORTS TO CURE OR CORRECT THE

 

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UNDERLYING CIRCUMSTANCES AS NECESSARY TO ELIMINATE THE ADVERSE EFFECT ON VORNADO
OF SUCH BREACHES OR INACCURACIES, WHICH COMMERCIALLY REASONABLE EFFORTS SHALL
INCLUDE THE EXPENDITURE OF UP TO $575,000 IN THE AGGREGATE FOR THE CURE OR
CORRECTION OF ALL SUCH BREACHES OR INACCURACIES TO THE EXTENT THAT IT IS
POSSIBLE TO EFFECT SUCH CURE OR CORRECTION THROUGH THE EXPENDITURE OF FUNDS. 
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, THE SCHEDULED CLOSING HEREUNDER
SHALL BE EXTENDED, BUT NOT BEYOND AUGUST 31, 2005, IN ORDER TO PROVIDE TO THE
GENERAL PARTNERS SUFFICIENT TIME TO EFFECT SUCH CURE OR CORRECTION.

 

(D)                                 NOTIFICATION BY VORNADO OF ITS BREACH.  IF
(I) VORNADO OBTAINS KNOWLEDGE THAT ANY MATTER OR EVENT SHALL HAVE OCCURRED
BETWEEN THE DATE HEREOF AND THE CLOSING DATE THAT IS NOT EXPRESSLY PERMITTED
UNDER ANY PROVISION OF THIS AGREEMENT AND THAT MAKES OR WILL MAKE ANY WARRANTY
OR REPRESENTATION OF VORNADO UNTRUE IN ANY MATERIAL RESPECT AS OF THE CLOSING
DATE OR (II) VORNADO DISCOVERS THAT ANY WARRANTY OR REPRESENTATION WAS
INACCURATE IN ANY MATERIAL RESPECT AS OF THE DATE HEREOF, THEN, IN EITHER CASE,
VORNADO SHALL GIVE THE GENERAL PARTNERS NOTICE THEREOF PROMPTLY AFTER OBTAINING
SUCH KNOWLEDGE AND IN ANY EVENT PRIOR TO THE CLOSING.  IF VORNADO DOES SO, IT
SHALL NOT BE LIABLE TO THE GENERAL PARTNERS FOLLOWING THE CLOSING FOR THE BREACH
OF THE WARRANTY OR REPRESENTATION IN QUESTION THAT RESULTS FROM THE OCCURRENCE
OF SUCH MATTER, EVENT OR INACCURACY.  NOTWITHSTANDING THE DELIVERY OF SUCH
NOTICE, IN NO EVENT SHALL THE CONTRIBUTING PARTNERS BE OBLIGATED TO CLOSE
HEREUNDER UNLESS THE CONDITIONS PRECEDENT TO THEIR OBLIGATION TO CLOSE SET FORTH
IN THIS AGREEMENT (INCLUDING IN SECTION 7.3(A)) SHALL HAVE BEEN FULFILLED..

 

(E)                                  GENERAL PARTNERS’ KNOWLEDGE OF VORNADO’S
BREACH.  IF ANY GENERAL PARTNER HAS KNOWLEDGE ON THE DATE HEREOF THAT ANY OF
VORNADO’S WARRANTIES OR REPRESENTATIONS IS UNTRUE IN ANY RESPECT, THEN THE
BREACH BY VORNADO OF THE WARRANTIES AND REPRESENTATIONS AS TO WHICH A GENERAL
PARTNER SHALL HAVE SUCH KNOWLEDGE SHALL BE DEEMED WAIVED BY THE GENERAL PARTNERS
AND VORNADO SHALL NOT BE DEEMED IN DEFAULT HEREUNDER AND SHALL HAVE NO LIABILITY
TO THE CONTRIBUTING PARTNERS.  IF, AFTER THE DATE HEREOF AND PRIOR TO THE
CLOSING, ANY GENERAL PARTNER OBTAINS KNOWLEDGE THAT ANY OF THE REPRESENTATIONS
OR WARRANTIES MADE HEREIN BY VORNADO IS UNTRUE, INACCURATE OR INCORRECT IN ANY
MATERIAL RESPECT (OTHER THAN AS A RESULT OF RECEIPT OF WRITTEN NOTICE THEREOF
FROM VORNADO), THE GENERAL PARTNERS SHALL GIVE VORNADO NOTICE THEREOF PROMPTLY
AFTER OBTAINING SUCH KNOWLEDGE AND IN ANY EVENT PRIOR TO THE CLOSING AND VORNADO
SHALL NOT BE LIABLE TO THE CONTRIBUTING PARTNERS FOLLOWING THE CLOSING FOR THE
BREACH OF SUCH WARRANTIES OR REPRESENTATIONS.  NOTWITHSTANDING THE PROVISIONS OF
THE PRECEDING SENTENCE, IN NO EVENT SHALL THE CONTRIBUTING PARTNERS BE OBLIGATED
TO CLOSE HEREUNDER UNLESS THE CONDITIONS PRECEDENT TO THEIR OBLIGATION TO CLOSE
SET FORTH IN THIS AGREEMENT (INCLUDING IN SECTION 7.3(A)) SHALL HAVE BEEN
FULFILLED.

 

ARTICLE VII

 

CONDITIONS TO THE
CONSUMMATION OF TRANSACTION

 

7.1                               Conditions to Each Party’s Obligation to
Effect the Transaction.  The respective obligation of each party to effect the
Transaction and to consummate the other

 

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transactions contemplated to occur at the Closing is subject to the satisfaction
or waiver on or prior to the Closing of the following conditions:

 

(A)                                  NO INJUNCTIONS OR RESTRAINTS.  NO TEMPORARY
RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION OR OTHER ORDER ISSUED BY
ANY COURT OF COMPETENT JURISDICTION OR OTHER LEGAL RESTRAINT OR PROHIBITION
PREVENTING THE CONSUMMATION OF THE TRANSACTION OR ANY OTHER TRANSACTION
CONTEMPLATED BY THIS AGREEMENT SHALL BE IN EFFECT.

 

(B)                                 BLUE SKY LAWS.  THE COMPANY AND THE
OPERATING PARTNERSHIP SHALL HAVE RECEIVED ALL STATE SECURITIES OR “BLUE SKY”
PERMITS AND OTHER AUTHORIZATIONS NECESSARY TO ISSUE THE UNITS ISSUABLE IN THE
TRANSACTION.

 

(C)                                  CONSENT OF GOULD GENERAL PARTNERS.  KINGDON
GOULD, JR. AND KINGDON GOULD III (COLLECTIVELY, “GOULD GENERAL PARTNERS”), AS
MEMBERS AND GENERAL PARTNERS OF THE SUBJECT ENTITIES, SHALL HAVE (I) CONSENTED
TO THE TRANSACTION AND THE ADMISSION OF THE VNO TRANSACTION SUB AS A MEMBER OF
PARIS LLC, AS A GENERAL PARTNER OF GENEVA LP AND ROME LP, AND AS A LIMITED
PARTNER OF PARIS LP, GENEVA LP AND ROME LP, (II) WAIVED ANY RIGHT OF FIRST
REFUSAL OR OTHER RIGHT TO PURCHASE THE INTERESTS OF THE CONTRIBUTING PARTNERS
ARISING AS A RESULT OF THE TRANSACTION, AND CONSENTED TO THE WAIVER OF ANY SUCH
RIGHT HELD BY THE SUBJECT ENTITIES, AND (III) AGREED TO THE MODIFICATIONS OF THE
GOVERNING DOCUMENTS DESCRIBED ON SCHEDULE 7.1(C), ALL IN FORM AND SUBSTANCE
SATISFACTORY TO VORNADO.

 

(D)                                 CONSENT OF BOARD OF TRUSTEES.  THE COMPANY
SHALL HAVE RECEIVED ALL NECESSARY CONSENTS FROM THE VORNADO BOARD APPROVING THE
TRANSACTION.  AFTER THE EXPIRATION OF THE STUDY PERIOD, IF THIS AGREEMENT IS
TERMINATED AS A RESULT OF THE FAILURE OF THE COMPANY TO RECEIVE ALL NECESSARY
CONSENTS, THE DEPOSIT AND ALL EARNINGS THEREON SHALL BE RELEASED TO THE
OPERATING PARTNERSHIP IN ACCORDANCE WITH THE TERMS OF THE DEPOSIT ESCROW
AGREEMENT.

 

(E)                                  CONSENT OF EXISTING LENDER.  BAYERISCHE
VEREINSBANK AG, NEW YORK BRANCH SHALL HAVE ISSUED TO THE GENERAL PARTNERS AND
VORNADO SUCH CONSENTS TO THE TRANSACTION AS MAY BE REQUIRED PURSUANT TO THE
TERMS OF THE PERMITTED MORTGAGE DEBT.

 

7.2                               Conditions to the VNO Transaction Sub’s
Obligation to Consummate the Transaction.  Anything to the contrary
notwithstanding, the parties to this Agreement expressly agree that the
obligation of the VNO Transaction Sub to consummate the Transaction is
conditioned upon the satisfaction (or waiver by the VNO Transaction Sub in its
sole discretion) of each of the following conditions at or prior to the Closing
(or such earlier date as specified with respect to a particular condition):

 

(A)                                  REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES OF THE GENERAL PARTNERS SET FORTH IN THIS
AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS (DETERMINED WITHOUT
GIVING EFFECT TO ANY MATERIALITY QUALIFICATION OR LIMITATION IN ANY INDIVIDUAL
REPRESENTATION OR WARRANTY) AS OF THE CLOSING DATE, WITHOUT REFERENCE TO ANY
MODIFICATIONS AS TO WHICH VORNADO OBTAINS KNOWLEDGE AFTER THE DATE HEREOF AND
PRIOR TO THE CLOSING, BY REASON OF ANY NOTICE DELIVERED BY THE GENERAL PARTNERS

 

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PURSUANT TO SECTION 6.13 OR OTHERWISE, BUT SUBJECT TO CHANGES RESULTING FROM THE
OPERATION OF THE PROPERTY BETWEEN THE DATE HEREOF AND THE CLOSING DATE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.3 AND CHANGES EXPRESSLY PERMITTED
PURSUANT TO THE TERMS OF THIS AGREEMENT.  THE COMPANY AND THE OPERATING
PARTNERSHIP SHALL HAVE RECEIVED A CERTIFICATE (WHICH CERTIFICATE MAY BE
QUALIFIED BY “KNOWLEDGE” TO THE SAME EXTENT AS SUCH REPRESENTATIONS AND
WARRANTIES ARE SO QUALIFIED) SIGNED ON BEHALF OF THE GENERAL PARTNERS TO SUCH
EFFECT.  IN ADDITION, SUCH CERTIFICATE SHALL CONTAIN A LIST AND COPIES OF ANY
SPACE LEASES, EQUIPMENT LEASES, AND OPERATING AGREEMENTS ENTERED INTO AFTER THE
DATE HEREOF IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, OR OTHERWISE NOT
DELIVERED TO THE OPERATING PARTNERSHIP AS OF THE DATE HEREOF, AND IN EFFECT AS
OF THE CLOSING DATE, EACH OF WHICH THE GENERAL PARTNERS SHALL CERTIFY TO BE
TRUE, CORRECT AND COMPLETE AS OF THE CLOSING, AND A RENT ROLL (IN FORM SIMILAR
TO THE RENT ROLL PROVIDED AS OF THE EFFECTIVE DATE), DATED AS OF THE CLOSING
DATE, WHICH THE GENERAL PARTNERS SHALL CERTIFY TO BE TRUE, CORRECT AND COMPLETE
IN ALL MATERIAL RESPECTS AS OF SUCH DATE.

 

(B)                                 PERFORMANCE OF OBLIGATIONS OF THE GENERAL
PARTNERS.  THE GENERAL PARTNERS SHALL HAVE PERFORMED IN ALL MATERIAL RESPECTS
ALL OBLIGATIONS REQUIRED TO BE PERFORMED BY THEM UNDER THIS AGREEMENT AT OR
PRIOR TO THE CLOSING AND THE COMPANY AND THE OPERATING PARTNERSHIP SHALL HAVE
RECEIVED A CERTIFICATE SIGNED BY THE GENERAL PARTNERS, IN SUCH CAPACITY,
CERTIFYING TO SUCH EFFECT.

 

(C)                                  PARTICIPATION OF OTHER PARTNERS.  THE
CONTRIBUTED INTERESTS OWNED BY THE OTHER PARTNERS ELECTING TO PARTICIPATE IN THE
TRANSACTION, TOGETHER WITH THE CONTRIBUTED INTERESTS OF THE GENERAL PARTNERS,
SHALL REPRESENT AN AGGREGATE PARIS PERCENTAGE OF NOT LESS THAN THIRTY PERCENT
(30%) AND AN AGGREGATE GENEVA PERCENTAGE OF NOT LESS THAN THIRTY PERCENT (30%).

 

(D)                                 CONSENT OF GENEVA LP PARTNERS.  ALL OF THE
PARTNERS OF GENEVA LP SHALL HAVE CONSENTED 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).

 

(E)                                  OPINION.  VORNADO SHALL HAVE RECEIVED AN
OPINION LETTER DATED THE CLOSING DATE FROM GROSSBERG, YOCHELSON, FOX & BEYDA,
LLP IN THE FORM AS THE PARTIES REASONABLY SHALL AGREE.

 

(F)                                    COMFORT LETTER.  VORNADO SHALL HAVE
RECEIVED A COMFORT LETTER FROM HARITON, MANCUSO & JONES, P.C., DATED AS OF THE
DATE OF THE INFORMATION STATEMENT, AS DESCRIBED IN SECTION 5.2 AND AN UPDATED
COMFORT LETTER DATED AS OF THE CLOSING DATE.

 

(G)                                 ESCROW AGREEMENT.  MESSRS. SMITH AND KOGOD,
IN THEIR CAPACITIES AS GENERAL PARTNERS AND REPRESENTATIVES, SHALL HAVE EXECUTED
AND DELIVERED THE ESCROW AGREEMENT TO THE OPERATING PARTNERSHIP.

 

(H)                                 LIMITED PARTNER ACCEPTANCE AGREEMENT.  EACH
CONTRIBUTING PARTNER SHALL HAVE EXECUTED AND DELIVERED TO THE OPERATING
PARTNERSHIP A LIMITED PARTNERSHIP ACCEPTANCE AGREEMENT.

 

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(I)                                     ESTOPPELS.  THE GENERAL PARTNERS SHALL
HAVE DELIVERED TO THE COMPANY AND THE OPERATING PARTNERSHIP THE GSA LEASE
SUMMARIES, THE TENANT ESTOPPELS AND SUBSTITUTE GENERAL PARTNER ESTOPPELS, IF
ANY, REQUIRED PURSUANT TO SECTION 6.8.

 

(J)                                     TITLE TO REAL ESTATE AND TITLE
INSURANCE.  PARIS LP AND GENEVA LP SHALL OWN GOOD AND INDEFEASIBLE TITLE TO THE
PARIS PROPERTY AND GENEVA PROPERTY, RESPECTIVELY, FREE OF ANY LIEN, MORTGAGE,
DEED OF TRUST, ENCROACHMENT, RESERVATION, RIGHT OF WAY, EASEMENT, LEASE,
SUBLEASE, LICENSE, ASSIGNMENT, AGREEMENT, CONDITION, RESTRICTION, TIDE DEFECT OR
ANY DISCREPANCY IN ACREAGE, BOUNDARY LINE DISPUTE OR OTHER MATTER THAT WOULD BE
DISCLOSED BY AN ACCURATE SURVEY OR INSPECTION OF THE PROPERTY (EACH, AN
“ENCUMBRANCE”), OTHER THAN PERMITTED ENCUMBRANCES, WITH TITLE TO THE PROPERTY
BEING MARKETABLE, GOOD OF RECORD AND IN FACT AND INSURABLE AND INSURED WITHOUT
EXCEPTIONS (OTHER THAN THE PERMITTED ENCUMBRANCES), INCLUDING A NON-IMPUTATION
ENDORSEMENT AND SUCH OTHER REASONABLE AND CUSTOMARY ENDORSEMENTS REQUIRED BY
VORNADO, AT NO GREATER THAN STANDARD RATES BY A RECOGNIZED NATIONAL TITLE
INSURANCE COMPANY (THE “TITLE COMPANY”) REASONABLY ACCEPTABLE TO VORNADO AND
LICENSED TO DO BUSINESS IN THE COMMONWEALTH OF VIRGINIA.  FOR PURPOSES OF THIS
AGREEMENT, “PERMITTED ENCUMBRANCES” SHALL MEAN, AS TO THE PROPERTY, (I) LIENS IN
RESPECT OF REAL ESTATE TAXES NOT YET DUE AND PAYABLE, (II) RIGHTS OF TENANTS, AS
TENANTS ONLY UNDER THE SPACE LEASES, (III) LIENS CREATED UNDER THE PERMITTED
MORTGAGE DEBT, AND (IV) SUCH OTHER MATTERS AS SHALL HAVE BEEN APPROVED IN
WRITING BY VORNADO ON OR PRIOR TO THE DATE THAT IS FIFTEEN (15) DAYS PRIOR TO
THE CLOSING DATE.

 

(K)                                  CONSENTS.  ALL OTHER THIRD-PARTY CONSENTS
REQUIRED FOR CONSUMMATION OF THE TRANSACTION SHALL HAVE BEEN OBTAINED.

 

(L)                                     RELIANCE UPON REGULATION D.  THE COMPANY
AND THE OPERATING PARTNERSHIP SHALL, BASED ON ADVICE OF ITS COUNSEL, BE
REASONABLY SATISFIED THAT THE ISSUANCE OF UNITS TO THE CONTRIBUTING PARTNERS MAY
BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT IN RELIANCE UPON
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”).

 

(M)                               PERSONAL PROPERTY.  THE SUBJECT ENTITIES SHALL
OWN GOOD TITLE TO ALL PERSONAL PROPERTY, SPACE LEASES, EQUIPMENT LEASES,
OPERATING AGREEMENTS, PERMITS, INTANGIBLE PROPERTY, AND ANY OTHER PROPERTY TO BE
CONVEYED PURSUANT TO THIS AGREEMENT, FREE AND CLEAR OF ALL LIENS, EXCEPT FOR
PERMITTED EXCEPTIONS AND PERMITTED ENCUMBRANCES.

 

(N)                                 RECORDS.  THE DELIVERY BY THE GENERAL
PARTNERS OF, TO THE EXTENT IN THE GENERAL PARTNERS’ POSSESSION OR CONTROL, THE
ORIGINAL SPACE LEASES, EQUIPMENT LEASES, OPERATING AGREEMENTS AND GOVERNING
DOCUMENTS; COPIES OR ORIGINALS OF ALL BOOKS AND RECORDS OF ACCOUNT; COPIES OF
CORRESPONDENCE WITH TENANTS AND SUPPLIERS; RECEIPTS FOR DEPOSITS; PAPERS OR
DOCUMENTS WHICH PERTAIN TO THE CURRENT OR FUTURE OPERATION OF THE PROPERTY; ANY
UNPAID BILLS TO BE PAID BY THE SUBJECT ENTITIES AFTER SUCH CLOSING; ALL
ADVERTISING MATERIALS, BOOKLETS, KEYS AND OTHER ITEMS, IF ANY, USED IN THE
OPERATION OF THE PROPERTY; THE ORIGINAL “AS-BUILT” PLANS AND SPECIFICATIONS AND
ALL OTHER AVAILABLE PLANS AND SPECIFICATIONS RELATING TO THE PROPERTY; AND ANY
ADDITIONAL DOCUMENTS THAT THE VNO

 

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TRANSACTION SUB OR THE TITLE COMPANY MAY REASONABLY REQUIRE FOR THE PROPER
CONSUMMATION OF THE TRANSACTION.

 

(O)                                 RELEASE OF DEPOSITS FROM DEPOSIT ESCROW
AGREEMENT.  THE CASH OR LETTER OF CREDIT, INCLUDING ALL EARNINGS THEREON,
DEPOSITED PURSUANT TO THE DEPOSIT ESCROW AGREEMENT SHALL BE RELEASED TO VORNADO
AT CLOSING.  THE GENERAL PARTNERS SHALL REIMBURSE VORNADO FOR THE AMOUNT, IF
ANY, OF ANY EXPENSES OF THE ESCROW AGENT THAT WERE DUE FROM BUT NOT PAID BY THE
GENERAL PARTNERS IN ACCORDANCE WITH THE TERMS OF THE DEPOSIT ESCROW AGREEMENT,
AND FOR WHICH THE ESCROW AGENT REDUCED THE AMOUNT OF THE ESCROW FUNDS RELEASED
TO VORNADO.

 

(P)                                 CONDITION OF THE PROPERTY.  ALL FIXTURES,
MECHANICAL SYSTEMS AND UTILITIES REQUIRED FOR THE NORMAL OPERATION OF THE
PROPERTY MUST BE PRESENT AND IN GOOD WORKING CONDITION AT THE CLOSING.

 

(Q)                                 OTHER DOCUMENTS.  ANY SUCH OTHER DOCUMENTS
AS MAY BE REQUESTED BY VORNADO IN ITS SOLE DISCRETION, INCLUDING A FIRPTA
CERTIFICATE AND AN OWNER’S AFFIDAVIT IN FORM SATISFACTORY TO BE DELIVERED TO THE
TITLE COMPANY.

 

(R)                                    OTHER CONDITIONS.  ANY SUCH OTHER
CONDITIONS TO THE VNO TRANSACTION SUB’S OBLIGATION TO CONSUMMATE THE TRANSACTION
AS MAY BE SET FORTH IN THE INFORMATION STATEMENT SHALL HAVE BEEN SATISFIED ON
TERMS SATISFACTORY TO THE VNO TRANSACTION SUB IN ITS SOLE DISCRETION.

 

7.3                               Conditions to the Contributing Partners’
Obligation to Consummate the Transaction.  Anything to the contrary
notwithstanding, the parties to this Agreement expressly agree that the
obligation of the Contributing Partners to consummate the Transaction is
conditioned upon the satisfaction (or waiver by the General Partners in their
sole discretion) of each of the following conditions at or prior to the Closing
(or such earlier date as specified with respect to a particular condition):

 

(A)                                  REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES OF VORNADO SET FORTH IN THIS AGREEMENT SHALL BE
TRUE AND CORRECT IN ALL MATERIAL RESPECTS (DETERMINED WITHOUT GIVING EFFECT TO
ANY MATERIALITY QUALIFICATION OR LIMITATION IN ANY INDIVIDUAL REPRESENTATION OR
WARRANTY) AS OF THE CLOSING DATE, WITHOUT REFERENCE TO ANY MODIFICATIONS AS TO
WHICH THE GENERAL PARTNERS OBTAIN KNOWLEDGE AFTER THE DATE HEREOF AND PRIOR TO
THE CLOSING, BY REASON OF ANY NOTICE DELIVERED BY VORNADO PURSUANT TO
SECTION 6.13 OR OTHERWISE.  THE GENERAL PARTNERS SHALL HAVE RECEIVED A
CERTIFICATE (WHICH CERTIFICATE MAY BE QUALIFIED BY “KNOWLEDGE” TO THE SAME
EXTENT AS SUCH REPRESENTATIONS AND WARRANTIES ARE SO QUALIFIED) SIGNED ON BEHALF
OF THE COMPANY AND THE OPERATING PARTNERSHIP TO SUCH EFFECT.

 

(B)                                 PERFORMANCE OF OBLIGATIONS OF VORNADO.  THE
COMPANY, THE OPERATING PARTNERSHIP AND THE VNO TRANSACTION SUB EACH SHALL HAVE
PERFORMED IN ALL MATERIAL RESPECTS ALL OBLIGATIONS REQUIRED TO BE PERFORMED BY
THEM UNDER THIS AGREEMENT AT OR PRIOR TO THE CLOSING AND THE GENERAL PARTNERS
SHALL HAVE RECEIVED A CERTIFICATE SIGNED

 

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ON BEHALF OF THE COMPANY, THE OPERATING PARTNERSHIP AND THE VNO TRANSACTION SUB
CERTIFYING TO SUCH EFFECT.

 

(C)                                  TAX REPORTING AND PROTECTION AGREEMENT. 
THE COMPANY, THE OPERATING PARTNERSHIP AND THE VNO TRANSACTION SUB SHALL HAVE
EXECUTED AND DELIVERED THE TAX REPORTING AND PROTECTION AGREEMENT TO THE GENERAL
PARTNERS.

 

(D)                                 REGISTRATION RIGHTS AGREEMENTS.  THE COMPANY
SHALL HAVE EXECUTED AND DELIVERED THE REGISTRATION RIGHTS AGREEMENTS TO EACH OF
THE PERSONS IDENTIFIED THEREIN.

 

(E)                                  TAX OPINION RELATING TO PARTNERSHIP
STATUS.  THE GENERAL PARTNERS SHALL HAVE RECEIVED THE OPINION OF SULLIVAN &
CROMWELL LLP OR OTHER COUNSEL TO VORNADO REASONABLY SATISFACTORY TO THE GENERAL
PARTNERS, DATED AS OF THE CLOSING DATE, THAT THE OPERATING PARTNERSHIP HAS BEEN
DURING AND SINCE ITS TAXABLE YEAR ENDED DECEMBER 31, 1997, AND CONTINUES TO BE,
TREATED FOR FEDERAL INCOME TAX PURPOSES AS A PARTNERSHIP AND NOT AS A
CORPORATION OR ASSOCIATION TAXABLE AS A CORPORATION, AND THAT, AFTER GIVING
EFFECT TO THE TRANSACTION, THE OPERATING PARTNERSHIP’S PROPOSED METHOD OF
OPERATION WILL ENABLE IT TO CONTINUE TO BE TREATED FOR FEDERAL INCOME TAX
PURPOSES AS A PARTNERSHIP AND NOT AS A CORPORATION OR ASSOCIATION TAXABLE AS A
CORPORATION (WITH CUSTOMARY EXCEPTIONS, ASSUMPTIONS AND QUALIFICATIONS AND BASED
UPON CUSTOMARY REPRESENTATIONS).

 

(F)                                    TAX OPINION RELATING TO THE TRANSACTION. 
THE GENERAL PARTNERS SHALL HAVE RECEIVED AN OPINION DATED THE CLOSING DATE FROM
HOGAN & HARTSON LLP OR OTHER COUNSEL REASONABLY SATISFACTORY TO THE GENERAL
PARTNERS, BASED UPON CUSTOMARY CERTIFICATES AND LETTERS, WHICH LETTERS AND
CERTIFICATES ARE TO BE IN A FORM TO BE AGREED UPON BY THE PARTIES AND DATED THE
CLOSING DATE, TO THE EFFECT THAT THE TRANSACTION WILL NOT RESULT IN THE
RECOGNITION OF TAXABLE GAIN OR LOSS, AT THE TIME OF THE TRANSACTION, TO A
CONTRIBUTING PARTNER: (A) WHO IS A “U.S. PERSON” (AS DEFINED FOR PURPOSES OF
SECTIONS 897 AND 1445 OF THE CODE); (B) WHO DOES NOT EXERCISE ITS REDEMPTION
RIGHT WITH RESPECT TO THE UNITS UNDER THE VORNADO PARTNERSHIP AGREEMENT ON A
DATE SOONER THAN THE DATE TWO YEARS AFTER THE CLOSING FOR THE TRANSACTION;
(C) WHO DOES NOT RECEIVE A CASH DISTRIBUTION IN CONNECTION WITH THE TRANSACTION
(OR A DEEMED CASH DISTRIBUTION RESULTING FROM RELIEF OR A DEEMED RELIEF FROM
LIABILITIES, INCLUDING AS A RESULT OF THE PREPAYMENT OF INDEBTEDNESS OF THE
SUBJECT ENTITIES IN CONNECTION WITH OR FOLLOWING THE TRANSACTION) IN EXCESS OF
SUCH PERSON’S ADJUSTED BASIS IN ITS INTEREST IN THE SUBJECT ENTITIES AT THE TIME
OF THE TRANSACTION; (D) WHO IS NOT REQUIRED TO RECOGNIZE GAIN BY REASON OF THE
APPLICATION OF SECTION 707(A) OF THE CODE AND THE TREASURY REGULATIONS
THEREUNDER TO THE TRANSACTION, WITH THE RESULT THAT THE TRANSACTION IS TREATED
AS PART OF A “DISGUISED SALE”; AND (E) WHOSE “AT RISK” AMOUNT DOES NOT FALL
BELOW ZERO AS A RESULT OF THE TRANSACTION.

 

(G)                                 ESCROW AGREEMENT.  THE COMPANY, THE
OPERATING PARTNERSHIP AND THE VNO TRANSACTION SUB SHALL HAVE EXECUTED AND
DELIVERED THE ESCROW AGREEMENT TO THE GENERAL PARTNERS.

 

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(H)                                 THE VORNADO PARTNERSHIP AGREEMENT
AMENDMENT.  THE VORNADO PARTNERSHIP AGREEMENT AMENDMENT SHALL HAVE BEEN EXECUTED
AND DELIVERED TO THE GENERAL PARTNERS.

 

(I)                                     OPINION.  THE GENERAL PARTNERS SHALL
HAVE RECEIVED AN OPINION LETTER DATED THE CLOSING DATE FROM ARNOLD & PORTER LLP
IN THE FORM AS THE PARTIES REASONABLY SHALL AGREE.

 

ARTICLE VIII

 

SURVIVAL; INDEMNIFICATION

 

8.1                               Survival of Representations and Warranties.

 

(A)                                  THE REPRESENTATIONS AND WARRANTIES OF THE
GENERAL PARTNERS CONTAINED IN THIS AGREEMENT SHALL SURVIVE WITH RESPECT TO ANY
CLAIM FOR AN ALLEGED BREACH THEREOF MADE BY GIVING TIMELY WRITTEN NOTICE
PURSUANT TO SECTION 8.2 HEREOF ON OR BEFORE THE FIRST ANNIVERSARY OF THE CLOSING
DATE (SUCH NOTICE DATE BEING REFERRED TO AS THE “INDEMNITY NOTICE DATE” AND THE
PERIOD BETWEEN THE EXECUTION DATE AND THE INDEMNITY NOTICE DATE BEING REFERRED
TO AS THE “INDEMNITY PERIOD”).  EXCEPT FOR WRITTEN CLAIMS IN RESPECT THEREOF
TIMELY MADE IN ACCORDANCE HEREWITH AND SUBJECT TO THE TERMS, CONDITIONS AND
LIMITATIONS SET FORTH IN THE ESCROW AGREEMENT, THE OPERATING PARTNERSHIP SHALL
NOT HAVE ANY RIGHT TO BE COMPENSATED FOR ANY REPRESENTATION AND WARRANTY LOSS
AND EXPENSES (AS DEFINED HEREIN), DISCLOSURE LOSS AND EXPENSES (AS DEFINED
HEREIN) OR TRANSACTION LOSS AND EXPENSES (AS DEFINED HEREIN).

 

(B)                                 THE REPRESENTATIONS AND WARRANTIES OF THE
COMPANY AND THE OPERATING PARTNERSHIP CONTAINED IN THIS AGREEMENT SHALL SURVIVE
WITH RESPECT TO ANY CLAIM FOR AN ALLEGED BREACH THEREOF MADE BY GIVING TIMELY
WRITTEN NOTICE PURSUANT TO SECTION 8.4 HEREOF TO THE OPERATING PARTNERSHIP ON OR
BEFORE THE INDEMNITY NOTICE DATE.  EXCEPT FOR WRITTEN CLAIMS IN RESPECT THEREOF
TIMELY MADE IN ACCORDANCE WITH THE PROCEDURES OF SECTION 8.4, NO CONTRIBUTING
PARTNER INDEMNIFIED PERSON SHALL HAVE ANY RIGHT TO BE COMPENSATED FOR ANY THE
CONTRIBUTING PARTNER LOSS AND EXPENSES (AS DEFINED HEREIN) INCURRED AS A RESULT
OF ANY BREACH OF ANY SUCH REPRESENTATIONS AND WARRANTIES.

 

8.2                               Indemnification of the Vornado Indemnified
Persons.

 

(A)                                  INDEMNIFICATION.

 

(I)                                     SUBJECT TO THE TERMS AND CONDITIONS OF
THIS ARTICLE VIII AND THE ESCROW AGREEMENT, THE COMPANY AND THE OPERATING
PARTNERSHIP, AND THE OFFICERS, DIRECTORS, EMPLOYEES, EQUITY OWNERS, AFFILIATES,
SUCCESSORS AND PERMITTED ASSIGNS OF SUCH INDEMNITEE (EXCLUDING, HOWEVER, THE
SUBJECT ENTITIES) (EACH, A “VORNADO INDEMNIFIED PERSON”) SHALL BE INDEMNIFIED
AND HELD HARMLESS FROM AND AGAINST ANY AND ALL DAMAGES, CLAIMS, LOSSES,
EXPENSES,

 

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COSTS, OBLIGATIONS AND LIABILITIES (EXCLUDING ALL CONSEQUENTIAL DAMAGES EXCEPT
FOR INDEMNIFICATION OBLIGATIONS FOR THIRD PARTY CLAIMS TO WHICH THIS INDEMNITY
WOULD OTHERWISE BE APPLICABLE, BUT INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND
EXPENSES, INCLUDING REASONABLE EXPERT FEES AND EXPENSES) (“REPRESENTATION AND
WARRANTY LOSS AND EXPENSES”) INCURRED BY THE OPERATING PARTNERSHIP BY REASON OF
OR ARISING OUT OF ANY BREACH AS OF THE CLOSING DATE OF ANY REPRESENTATION AND
WARRANTY MADE BY THE GENERAL PARTNERS IN THIS AGREEMENT (GIVING EFFECT TO ANY
MODIFICATION MADE IN ACCORDANCE WITH SECTION 6.13 BUT WITHOUT GIVING EFFECT TO
QUALIFICATIONS WITH RESPECT TO A SUBJECT ENTITIES MATERIAL ADVERSE EFFECT)
SOLELY BY HAVING THE RIGHT TO RECEIVE DELIVERY OF THE ESCROW UNITS PURSUANT TO
THE ESCROW AGREEMENT (THE “REPRESENTATION AND WARRANTY INDEMNITY”).  THE
REPRESENTATION AND WARRANTY INDEMNITY SHALL EXCLUDE ANY REPRESENTATION AND
WARRANTY MADE BY THE GENERAL PARTNERS TO THE EXTENT THEY RELATE TO ANY
REPRESENTATION AND WARRANTY CONTAINED IN ANY GENERAL PARTNER ESTOPPEL DELIVERED
BY THE GENERAL PARTNERS PURSUANT TO SECTION 6.8 OR A PARTNER CLAIM (AS DEFINED
HEREIN), CLAIMS FOR WHICH ARE COVERED IN SECTIONS 8.2(A)(III) AND 8.2(A)(IV),
RESPECTIVELY.  EXCEPT AS SET FORTH IN THE IMMEDIATELY PRECEDING SENTENCE, THE
INDEMNITY RIGHTS AFFORDED TO THE OPERATING PARTNERSHIP PURSUANT TO THIS
SECTION 8.2(A)(I) AND THE ESCROW AGREEMENT SHALL BE THE EXCLUSIVE REMEDY OF THE
OPERATING PARTNERSHIP FOR A BREACH OF ANY SUCH REPRESENTATIONS AND WARRANTIES. 
FOR PURPOSES OF THIS ARTICLE VIII, ANY LITIGATION MATTERS SET FORTH ON
SCHEDULE 4.9 OR INCLUDED AS A MODIFICATION IN ACCORDANCE WITH SECTION 6.13 SHALL
BE TREATED AS IF THEY HAD NOT BEEN LISTED ON SUCH SCHEDULE OR INCLUDED AS SUCH A
MODIFICATION.

 

(II)                                  SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, EACH VORNADO INDEMNIFIED PERSON AND EACH PERSON, IF ANY, WHO
CONTROLS THE COMPANY WITHIN THE MEANING OF SECTION 15 OF THE SECURITIES ACT OR
SECTION 20 OF THE EXCHANGE ACT (EACH A “VORNADO DISCLOSURE INDEMNIFIED PERSON”)
SHALL BE INDEMNIFIED AND HELD HARMLESS FROM AND AGAINST ANY AND ALL DAMAGES,
CLAIMS, LOSSES, EXPENSES, COSTS, OBLIGATIONS AND LIABILITIES (EXCLUDING ALL
CONSEQUENTIAL DAMAGES AND INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND EXPENSES,
INCLUDING REASONABLE EXPERT FEES AND EXPENSES) INCURRED BY ANY VORNADO
DISCLOSURE INDEMNIFIED PERSON BY REASON OF OR ARISING OUT OF ANY VIOLATION OR
ALLEGED VIOLATION OF ANY APPLICABLE SECURITIES LAWS OR REGULATIONS IN CONNECTION
WITH THE TRANSACTION OR THE ISSUANCE OF THE UNITS THEREIN,

 

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INCLUDING IN CONNECTION WITH ANY INFORMATION STATEMENT, PROSPECTUS, PRIVATE
PLACEMENT MEMORANDUM, REGISTRATION STATEMENT OR OTHER DOCUMENT FILED WITH THE
COMMISSION OR DISTRIBUTED TO THE PARTNERS IN CONNECTION WITH THE TRANSACTION
INSOFAR AS ANY SUCH DAMAGES, CLAIMS, LOSSES, EXPENSES, COSTS, OBLIGATIONS AND
LIABILITIES (COLLECTIVELY, “DISCLOSURE LOSS AND EXPENSES”) ARISE OUT OF, OR ARE
BASED UPON, ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT
OR ANY OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO
BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MATERIALLY
MISLEADING, IN EACH CASE TO THE EXTENT, BUT ONLY TO THE EXTENT, SUCH UNTRUE
STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION WAS MADE
IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED BY THE
GENERAL PARTNERS OR THEIR REPRESENTATIVES (THE “GENERAL PARTNER PROVIDED
INFORMATION”) TO BE INCLUDED AND SET FORTH IN ANY INFORMATION STATEMENT,
PROSPECTUS, PRIVATE PLACEMENT MEMORANDUM, REGISTRATION STATEMENT OR OTHER
DOCUMENT FILED WITH THE COMMISSION OR DISTRIBUTED TO THE OTHER PARTNERS IN
CONNECTION WITH THE TRANSACTION (A “DISCLOSURE CLAIM”), SOLELY BY HAVING THE
RIGHT TO RECEIVE DELIVERY OF THE ESCROW UNITS PURSUANT TO THE ESCROW AGREEMENT
(THE INDEMNITY GRANTED UNDER THIS SECTION 8.2(A)(II) BEING REFERRED TO HEREIN AS
THE “DISCLOSURE INDEMNITY”); PROVIDED, HOWEVER, THAT NONE OF THE ESCROW UNITS
SHALL BE USED TO PROVIDE INDEMNITY TO ANY OF THE VORNADO DISCLOSURE INDEMNIFIED
PERSONS UNDER THIS SECTION 8.2 TO THE EXTENT THAT ANY DISCLOSURE CLAIM OR ANY
DISCLOSURE LOSS AND EXPENSES RESULT FROM WRITTEN INFORMATION FURNISHED BY ANY
VORNADO DISCLOSURE INDEMNIFIED PERSON (“VORNADO PROVIDED INFORMATION”).

 

(III)                               SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, EACH VORNADO INDEMNIFIED PERSON SHALL BE INDEMNIFIED AND HELD
HARMLESS FROM AND AGAINST ANY AND ALL DAMAGES, CLAIMS, LOSSES, EXPENSES, COSTS,
OBLIGATIONS AND LIABILITIES (EXCLUDING ALL CONSEQUENTIAL DAMAGES EXCEPT FOR
INDEMNIFICATION OBLIGATIONS FOR THIRD PARTY CLAIMS TO WHICH THIS INDEMNITY WOULD
OTHERWISE BE APPLICABLE) INCURRED BY ANY VORNADO INDEMNIFIED PERSON BY REASON OF
OR ARISING OUT OF ANY INACCURACY OR OMISSION IN ANY GENERAL PARTNER ESTOPPELS
DELIVERED BY THE GENERAL PARTNERS TO VORNADO PURSUANT TO SECTION 6.8 (“LANDLORD
ESTOPPEL LOSS AND EXPENSES”) WITHOUT REGARD TO THE THRESHOLD ON INDEMNITY CLAIMS
SET FORTH IN THIS ARTICLE VIII SOLELY BY HAVING THE RIGHT TO RECEIVE DELIVERY OF
THE ESCROW UNITS PURSUANT TO

 

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THE ESCROW AGREEMENT (THE INDEMNITY GRANTED UNDER THIS SECTION 8.2(A)(III) BEING
REFERRED TO HEREIN AS THE “LANDLORD ESTOPPEL INDEMNITY”).

 

(IV)                              FROM AND AFTER THE EXECUTION DATE, SUBJECT TO
THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THE ESCROW AGREEMENT, EACH
VORNADO INDEMNIFIED PERSON WHO IS NOW OR IS SUBSEQUENTLY NAMED A DEFENDANT IN
ANY OF THE PARTNER CLAIMS (AS DEFINED HEREIN) OR LIABILITY IS OTHERWISE ASSERTED
AGAINST SUCH VORNADO INDEMNIFIED PERSON (OR SUCH VORNADO INDEMNIFIED PERSON IS
MADE THE SUBJECT OF DISCOVERY OR EVIDENTIARY REQUESTS) BY A CLAIMANT IN ANY OF
THE PARTNER CLAIMS WILL BE INDEMNIFIED AND HELD HARMLESS FROM AND AGAINST ANY
AND ALL DAMAGES, CLAIMS, LOSSES, EXPENSES, COSTS, OBLIGATIONS AND LIABILITIES
(INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND EXPENSES, INCLUDING REASONABLE
EXPERT FEES AND EXPENSES) INCURRED BY SUCH VORNADO INDEMNIFIED PERSON (INCLUDING
LIABILITIES OF THE OPERATING PARTNERSHIP ARISING UNDER THE INDEMNIFICATION
PROVISIONS OF THE VORNADO PARTNERSHIP AGREEMENT (COLLECTIVELY, “TRANSACTION LOSS
AND EXPENSES”)) BY REASON OF OR ARISING OUT OF ANY CLAIM BY ANY CONTRIBUTING
PARTNER (OR ANY PERSON CLAIMING A DIRECT OR INDIRECT INTEREST IN SUCH
CONTRIBUTING PARTNER) ARISING AT OR PRIOR TO THE CLOSING OUT OF THE TRANSACTION
(EACH, A “PARTNER CLAIM”), SOLELY BY HAVING THE RIGHT TO RECEIVE DELIVERY OF THE
ESCROW UNITS PURSUANT TO THE ESCROW AGREEMENT (THE INDEMNITY GRANTED UNDER THIS
SECTION 8.2(A)(IV) BEING REFERRED TO HEREIN AS THE “PARTNER TRANSACTION
INDEMNITY”).  FOR PURPOSES OF THIS AGREEMENT, REPRESENTATION AND WARRANTY LOSS
AND EXPENSES, DISCLOSURE LOSS AND EXPENSES, LANDLORD ESTOPPEL LOSS AND EXPENSES
AND TRANSACTION LOSS AND EXPENSES ARE HEREINAFTER REFERRED TO AS “VORNADO LOSS
AND EXPENSES.”

 

(V)                                 FOR PURPOSES OF CLARIFICATION, THE AMOUNT OF
ANY VORNADO LOSS AND EXPENSES SHALL BE CALCULATED SOLELY WITH RESPECT TO THE
DAMAGES, CLAIMS, LOSSES, EXPENSES, COSTS, OBLIGATIONS AND LIABILITIES AFFECTING
VORNADO INDEMNIFIED PERSONS, AND IF AN INDEMNIFIED DAMAGE, CLAIM, LOSS, EXPENSE,
COST, OBLIGATION OR LIABILITIES IS INCURRED BY A SUBJECT ENTITY, THEN THE AMOUNT
OF SUCH VORNADO LOSS AND EXPENSE SHALL BE LIMITED TO THE PERCENTAGE SHARE OF
OWNERSHIP HELD, DIRECTLY OR INDIRECTLY, BY SUCH VORNADO INDEMNIFIED PERSON IN
SUCH SUBJECT ENTITY.

 

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(B)                                 THIRD PARTY CLAIMS PROCEDURES.  THE
OPERATING PARTNERSHIP SHALL PROMPTLY NOTIFY THE REPRESENTATIVES IN WRITING OF
THE COMMENCEMENT OF ANY ACTION OR OTHER ASSERTION OF A CLAIM BY A THIRD PARTY
FOR WHICH THE OPERATING PARTNERSHIP BELIEVES INDEMNIFICATION IS PROVIDED FOR
PURSUANT TO SECTION 8.2(A) (AS DISTINGUISHED FROM ANY CLAIMS UNDER
SECTION 8.2(A) WHICH DO NOT INVOLVE ANY THIRD PARTY, AS TO WHICH THE
INDEMNIFICATION PROCEDURES SET FORTH IN THIS SECTION 8.2(B) SHALL BE
INAPPLICABLE BUT THE CLAIMS PROCEDURES SET FORTH IN SECTION 8.2(D) SHALL APPLY);
PROVIDED, HOWEVER, THAT THE FAILURE OF THE OPERATING PARTNERSHIP SO TO NOTIFY
THE REPRESENTATIVES OF THE COMMENCEMENT OF ANY SUCH ACTION OR SUCH OTHER CLAIM
SHALL NOT RESULT IN THE FORFEITURE BY THE OPERATING PARTNERSHIP OF ITS RIGHT TO
RECOVER FOR SUCH CLAIM FROM THE ESCROW UNITS IN ACCORDANCE WITH THIS SECTION 8.2
UNLESS SUCH FAILURE IS MATERIALLY INJURIOUS TO THE ABILITY OF THE
REPRESENTATIVES TO DEFEND ANY SUCH ACTION.  IF ANY SUCH ACTION IS BROUGHT OR
CLAIM IS ASSERTED AGAINST THE OPERATING PARTNERSHIP AND THE REPRESENTATIVES ARE
SO NOTIFIED, THEN (SUBJECT TO THE RIGHT TO DISPUTE SUCH CLAIM AS DESCRIBED IN
SECTION 8.2(D)), THE REPRESENTATIVES, THROUGH COUNSEL SELECTED BY THE
REPRESENTATIVES AND REASONABLY ACCEPTABLE TO THE OPERATING PARTNERSHIP (AND
WHICH COUNSEL SHALL BE PAID ITS REASONABLE FEES AND EXPENSES BY THE OPERATING
PARTNERSHIP (WHICH AMOUNTS SHALL BE INCLUDED IN THE EXPENSES SUBJECT TO THE
REPRESENTATION AND WARRANTY INDEMNITY, THE DISCLOSURE INDEMNITY, THE LANDLORD
ESTOPPEL INDEMNITY OR THE TRANSACTION INDEMNITY, SUBJECT TO THE LIMITATIONS SET
FORTH HEREIN) SHALL CONTROL THE DEFENSE OF ANY SUCH ACTION OR CLAIM; PROVIDED
THAT THE REPRESENTATIVES ASSUME THE DEFENSE OF SUCH MATTER (AND NOTIFY THE
OPERATING PARTNERSHIP ACCORDINGLY) WITHIN FIFTEEN (15) DAYS OF RECEIVING NOTICE
OF SUCH MATTER; AND PROVIDED FURTHER, THAT IF THE OPERATING PARTNERSHIP
REASONABLY CONCLUDES THAT THERE MAY BE ONE OR MORE LEGAL DEFENSES AVAILABLE TO
IT THAT ARE DIFFERENT FROM OR IN ADDITION TO (AND ARE INCONSISTENT WITH) THOSE
AVAILABLE TO THE EXISTING DEFENDANTS, OR THAT A CONFLICT COULD REASONABLY BE
LIKELY TO EXIST BETWEEN THE OPERATING PARTNERSHIP AND ANY OF THE PARTNERS, THE
REPRESENTATIVES SHALL NOT HAVE THE RIGHT TO DIRECT THE DEFENSE OF SUCH ACTION ON
BEHALF OF THE OPERATING PARTNERSHIP AND THE OPERATING PARTNERSHIP SHALL DIRECT
THE DEFENSE OF SUCH MATTER THROUGH COUNSEL REASONABLY SATISFACTORY TO THE
REPRESENTATIVES.  THE OPERATING PARTNERSHIP SHALL HAVE THE RIGHT TO EMPLOY ITS
OWN COUNSEL WITH RESPECT TO THE ACTION OR CLAIM, BUT THE FEES, EXPENSES AND
OTHER CHARGES OF SUCH COUNSEL SHALL BE AT ITS OWN EXPENSE UNLESS (I) THE
OPERATING PARTNERSHIP HAS BEEN NAMED AS A DEFENDANT IN ANY SUCH MATTER AND THE
OPERATING PARTNERSHIP REASONABLY CONCLUDES THAT THERE MAY BE ONE OR MORE LEGAL
DEFENSES AVAILABLE TO IT THAT ARE DIFFERENT FROM OR IN ADDITION TO (AND ARE
INCONSISTENT WITH) THOSE AVAILABLE TO THE EXISTING DEFENDANTS OR THAT A CONFLICT
COULD REASONABLY BE LIKELY TO EXIST BETWEEN THE OPERATING PARTNERSHIP AND ANY OF
THE PARTNERS, (II) THE REPRESENTATIVES DO NOT HAVE THE RIGHT TO DIRECT THE
DEFENSE ON BEHALF OF THE OPERATING PARTNERSHIP IN ACCORDANCE WITH THE PRIOR
SENTENCE, OR (III) THE RETENTION OF COUNSEL BY SUCH PARTY HAS BEEN AUTHORIZED IN
WRITING BY THE REPRESENTATIVES.  IT IS UNDERSTOOD THAT THE ESCROW UNITS SHALL
NOT, IN CONNECTION WITH ANY PROCEEDING OR RELATED PROCEEDINGS IN THE SAME
JURISDICTION, BE USED FOR THE FEES, EXPENSES AND OTHER CHARGES OF MORE THAN ONE
SEPARATE FIRM ADMITTED TO PRACTICE IN SUCH JURISDICTION AT ANY ONE TIME FOR THE
OPERATING PARTNERSHIP.  THE REPRESENTATIVES SHALL HAVE THE RIGHT TO SETTLE ANY
MATTER FOR WHICH INDEMNIFICATION MAY BE AVAILABLE PURSUANT TO
SECTION 8.2(A) WITHOUT THE CONSENT OF THE OPERATING PARTNERSHIP, PROVIDED THAT
(1) THE SETTLEMENT SHALL NOT INCLUDE ANY ADMISSION OF WRONGDOING ON THE PART OF
THE OPERATING PARTNERSHIP OR IMPOSE MY

 

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DECREE, RESTRICTION OR LIABILITY ON THE OPERATING PARTNERSHIP OR ITS PARTNERS,
AND (II) THE SETTLEMENT SHALL PROVIDE THE OPERATING PARTNERSHIP (AND ITS
SUBSIDIARIES AND PARTNERS) WITH A RELEASE FROM ALL LIABILITY WITH RESPECT TO
SUCH MATTER.  FURTHER, THE REPRESENTATIVES SHALL BE REQUIRED TO OBTAIN THE
CONSENT OF THE OPERATING PARTNERSHIP FOR THE SETTLEMENT OF ANY MATTER FOR WHICH
INDEMNIFICATION IS PROVIDED PURSUANT TO SECTION 8.2(A) (WHICH CONSENT SHALL NOT
BE UNREASONABLY WITHHELD OR DELAYED) IF (A) THE SETTLEMENT OR ANY RELATED SERIES
OF SETTLEMENTS WOULD RESULT IN A DRAW EQUAL TO OR IN EXCESS OF $45,000 UNDER THE
ESCROW AGREEMENT WITH RESPECT TO SUCH CLAIM (OR RELATED CLAIMS), OR (B) A TOTAL
OF LESS THAN $575,000 IS AVAILABLE TO BE DRAWN UNDER THE ESCROW AGREEMENT WITH
RESPECT TO ANY VORNADO LOSS AND EXPENSES IMMEDIATELY PRIOR TO SUCH SETTLEMENT. 
IF AND ONLY IF THE REPRESENTATIVES FAIL TO ASSUME THE DEFENSE OF ANY ACTION
BROUGHT OR CLAIM ASSERTED AGAINST THE OPERATING PARTNERSHIP UNDER THIS
SECTION 8.2 IN WHICH IT IS ENTITLED TO DO SO, THEN THE OPERATING PARTNERSHIP
SHALL BE ENTITLED TO SETTLE SUCH ACTION OR CLAIM WITHOUT THE CONSENT OF THE
REPRESENTATIVES.

 

(C)                                  LIMITATIONS ON LIABILITY.

 

(I)                                     THRESHOLD.  NOTWITHSTANDING ANYTHING IN
THIS AGREEMENT TO THE CONTRARY, ESCROW UNITS SHALL NOT BE USED TO SATISFY ANY
VORNADO LOSS AND EXPENSES WITH RESPECT TO WHICH INDEMNITY IS PROVIDED PURSUANT
TO THIS SECTION 8.2 UNTIL THE CUMULATIVE AMOUNT OF SUCH VORNADO LOSS AND
EXPENSES, AS THE CASE MAY BE, SHALL EXCEED $45,000, IN WHICH CASE THE ESCROW
UNITS SHALL BE APPLIED TO SATISFY ALL SUCH VORNADO LOSS AND EXPENSES, AS THE
CASE MAY BE (FROM THE FIRST DOLLAR OF SUCH LOSS), SUBJECT TO THE LIMITATIONS SET
FORTH IN SECTION 8.2(C)(II).  THE FOREGOING THRESHOLD SHALL NOT APPLY TO GENERAL
PARTNER ESTOPPEL LOSS AND EXPENSES.  THE PROVISIONS OF THIS
SECTION 8.2(C)(I) SHALL NOT AFFECT THE RIGHTS OF THE PARTIES HERETO WITH RESPECT
TO CONTROL OF THE DEFENSE OF ANY ACTION OR CLAIM, WHICH SHALL BE GOVERNED BY
SECTION 8.2(B).

 

(II)                                  LIABILITY CAP.  THE RECOURSE OF THE
VORNADO INDEMNIFIED PERSONS UNDER THIS SECTION 8.2 SHALL BE LIMITED TO THE
ESCROW UNITS, AND NO CONTRIBUTING PARTNER SHALL HAVE ANY PERSONAL LIABILITY OR
INDEMNITY UNDER THIS SECTION 8.2.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, EACH CONTRIBUTING PARTNER SHALL BE FULLY LIABLE TO THE EXTENT OF THE
FULL VALUE OF UNITS RECEIVED BY SUCH CONTRIBUTING PARTNER FOR ANY AND ALL
DAMAGES, CLAIMS, LOSSES, EXPENSES, COSTS, OBLIGATIONS AND LIABILITIES INCURRED
BY REASON OF OR ARISING OUT OF ANY BREACH OF A REPRESENTATION, WARRANTY OR
COVENANT CONTAINED IN THE ASSIGNMENT OF CONTRIBUTED INTEREST DELIVERED BY SUCH
CONTRIBUTING PARTNER PURSUANT TO SECTION 5.4.

 

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(III)                               PRO RATA LIABILITY.  IN THE EVENT THAT ANY
VORNADO INDEMNIFIED PERSON SUFFERS ANY VORNADO LOSS AND EXPENSES WITH RESPECT TO
A CLAIM FOR WHICH INDEMNIFICATION IS PROVIDED PURSUANT TO THIS SECTION 8.2, THE
ESCROW UNITS USED TO SATISFY THE INDEMNIFICATION OBLIGATIONS PURSUANT TO THIS
SECTION 8.2, SHALL BE ON A PRO RATA BASIS, BASED ON EACH CONTRIBUTING PARTNER’S
PROPORTIONATE INTEREST IN THE NUMBER OF ESCROW UNITS ORIGINALLY DEPOSITED WITH
THE ESCROW AGENT (THE “PRO RATA SHARE OF ESCROW UNITS”) AS CALCULATED PURSUANT
TO THE GOVERNING DOCUMENTS.

 

(D)                                 CLAIMS PROCEDURE FOR VORNADO LOSS AND
EXPENSES.  THE OPERATING PARTNERSHIP SHALL NOTIFY THE REPRESENTATIVES IN WRITING
OF ANY CLAIM THAT IT REASONABLY BELIEVES CONSTITUTES A POTENTIAL VORNADO LOSS
AND EXPENSES TO THE EXTENT NOT ALREADY INDICATED BY MEANS OF A NOTICE GIVEN
UNDER SECTION 8.2(B), DESCRIBING IN REASONABLE DETAIL THE CLAIM AND THE
ESTIMATED AMOUNT OF SUCH CLAIM.  IF THE REPRESENTATIVES DO NOT OBJECT IN WRITING
AS TO THE APPLICABILITY OF THE REPRESENTATION AND WARRANTY INDEMNITY, THE
DISCLOSURE INDEMNITY, THE GENERAL PARTNER ESTOPPEL INDEMNITY OR THE TRANSACTION
INDEMNITY, AS THE CASE MAY BE, WITH RESPECT TO SUCH CLAIM WITHIN TWENTY (20)
DAYS AFTER RECEIVING SUCH NOTICE, THEN THE CLAIM SET FORTH IN THE NOTICE BY THE
OPERATING PARTNERSHIP SHALL BE CONSIDERED VORNADO LOSS AND EXPENSES FOR ALL
PURPOSES OF THIS AGREEMENT.  IF THE REPRESENTATIVES OBJECT IN WRITING TO THE
APPLICABILITY OF THE REPRESENTATION AND WARRANTY INDEMNITY, THE DISCLOSURE
INDEMNITY, THE GENERAL PARTNER ESTOPPEL INDEMNITY OR THE TRANSACTION INDEMNITY,
WITH RESPECT TO SUCH CLAIM WITHIN SUCH TWENTY (20) DAY PERIOD, THEN EITHER THE
OPERATING PARTNERSHIP OR THE REPRESENTATIVES MAY SEEK TO HAVE SUCH DISPUTE
ADJUDICATED BY A COURT OF COMPETENT JURISDICTION.  NO CLAIM ASSERTED BY THE
OPERATING PARTNERSHIP THAT IS DISPUTED BY THE REPRESENTATIVES PURSUANT TO THIS
SECTION 8.2(D) SHALL BE DEEMED TO BE A VORNADO LOSS AND EXPENSES FOR PURPOSES OF
THIS AGREEMENT UNTIL SUCH DISPUTE IS FINALLY RESOLVED BY AGREEMENT BETWEEN THE
OPERATING PARTNERSHIP AND THE REPRESENTATIVES OR BY A FINAL, NONAPPEALABLE ORDER
OF A COURT OF COMPETENT JURISDICTION.

 

(E)                                  SATISFACTION OF VORNADO LOSS AND EXPENSES;
SUBROGATION.  ONCE THE AMOUNT OF VORNADO LOSS AND EXPENSES ARISING OUT OF ANY
CLAIM HAS BEEN ESTABLISHED IN ACCORDANCE WITH SECTION 8.2(D) ABOVE AND THE
THRESHOLD SET FORTH IN SECTION 8.2(C)(I) HAS BEEN EXCEEDED (EXCEPT IN THE CASE
OF A GENERAL PARTNER ESTOPPEL LOSS AND EXPENSES, TO WHICH SUCH THRESHOLD IS NOT
APPLICABLE), THE SOLE REMEDY OF THE OPERATING PARTNERSHIP WITH RESPECT TO SUCH
VORNADO LOSS AND EXPENSES SHALL BE TO EXERCISE ITS RIGHTS TO RECOVERY UNDER THE
ESCROW AGREEMENT IN ACCORDANCE WITH SECTION 8.3.  NONE OF THE CONTRIBUTING
PARTNERS, THE REPRESENTATIVES OR ANY OF THEIR SHAREHOLDERS, MEMBERS OR PARTNERS
SHALL HAVE ANY PERSONAL LIABILITY WITH RESPECT TO THE OBLIGATIONS SET FORTH IN
THIS SECTION 8.2.  UPON THE SATISFACTION OF ANY VORNADO LOSS AND EXPENSES
PURSUANT TO THIS AGREEMENT AND THE ESCROW AGREEMENT, EACH CONTRIBUTING PARTNER
SHALL BE SUBROGATED (BUT ONLY TO THE EXTENT OF SUCH SATISFACTION AND AT NO RISK
OR LIABILITY TO THE OPERATING PARTNERSHIP) TO THE RIGHTS (IF ANY) OF THE
OPERATING PARTNERSHIP AGAINST ANY THIRD PARTIES WITH RESPECT TO SUCH VORNADO
LOSS AND EXPENSES, AND THE OPERATING PARTNERSHIP SHALL COOPERATE WITH THE
GENERAL

 

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PARTNERS (AT NO COST OR LIABILITY TO THE OPERATING PARTNERSHIP) IN PURSUING SUCH
CLAIMS AGAINST ANY THIRD PARTIES.

 

(F)                                    TERMINATION OF REPRESENTATION AND
WARRANTY INDEMNITY, DISCLOSURE INDEMNITY, LANDLORD ESTOPPEL INDEMNITY AND
TRANSACTION INDEMNITY.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, THE INDEMNIFICATION UNDER THIS SECTION 8.2 SHALL TERMINATE AND BE
EXTINGUISHED FOREVER ON THE DATE THAT IS THE LAST DAY OF THE INDEMNITY PERIOD,
UNLESS AND TO THE EXTENT A WRITTEN CLAIM HAS BEEN ASSERTED AND WRITTEN NOTICE
THEREOF HAS BEEN GIVEN TO THE REPRESENTATIVES PURSUANT TO THIS SECTION 8.2 ON OR
PRIOR TO SUCH DATE.  IF SUCH A TIMELY WRITTEN CLAIM HAS BEEN MADE, THE
INDEMNIFICATION SHALL CONTINUE BEYOND THE INDEMNITY NOTICE DATE, BUT ONLY WITH
RESPECT TO SUCH CLAIM AND ONLY UNTIL THE EARLIER OF (I) THE DATE SUCH CLAIM IS
SATISFIED PURSUANT TO THE ESCROW AGREEMENT OR OTHERWISE FINALLY RESOLVED,
(II) IF LEGAL ACTION IS TAKEN WITH RESPECT TO SUCH CLAIM DURING THE INDEMNITY
PERIOD, THE DATE ON WHICH SUCH CLAIM IS SATISFIED PURSUANT TO THE ESCROW
AGREEMENT OR OTHERWISE FINALLY RESOLVED, OR (III) WITH RESPECT TO A CLAIM FOR
WHICH NO LEGAL ACTION HAS BEEN TAKEN DURING THE INDEMNITY PERIOD, TWELVE (12)
MONTHS AFTER THE DATE ON WHICH THE LAST SETTLEMENT OR OTHER SUBSTANTIVE
DISCUSSIONS HAVE TAKEN PLACE WITH RESPECT TO SUCH CLAIM, BUT IN NO EVENT MORE
THAN TWENTY-FOUR (24) MONTHS AFTER THE END OF THE INDEMNITY PERIOD.

 

(G)                                 THE OPERATING PARTNERSHIP TO ACT ON BEHALF
OF VORNADO DISCLOSURE INDEMNIFIED PERSONS.  ALL VORNADO DISCLOSURE INDEMNIFIED
PERSONS AGREE TO PERMIT THE OPERATING PARTNERSHIP TO REPRESENT THEM WITH RESPECT
TO ANY DISCLOSURE CLAIM INDEMNITY ARISING OUT OF THIS SECTION 8.2.

 

8.3                               Escrow Agreement; Release of Escrow Units.  At
the Closing, the Escrow Units shall be delivered by the Operating Partnership to
the Escrow Agent under the Escrow Agreement, and such Escrow Units shall be
available as and to the extent provided in the Escrow Agreement for satisfaction
of (i) Representation and Warranty Loss and Expenses, (ii) Disclosure Loss and
Expenses, (iii) General Partner Estoppel Loss and Expenses, (iv) Transaction
Loss and Expenses, (v) the cost of enforcement pursuant to Section 8.5, and
(vi) certain expenses of the Escrow Agent.  The Escrow Units shall be disbursed
as provided in the Escrow Agreement.

 

8.4                               Indemnification of the Contributing Partners.

 

(A)                                  INDEMNIFICATION.  SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, THE COMPANY AND THE OPERATING PARTNERSHIP JOINTLY
AND SEVERALLY AGREE TO INDEMNIFY THE CONTRIBUTING PARTNERS AND THEIR OFFICERS,
DIRECTORS, EMPLOYEES, SHAREHOLDERS, AND AFFILIATES, AND THEIR SUCCESSORS AND
PERMITTED ASSIGNS (COLLECTIVELY, THE “CONTRIBUTING PARTNER INDEMNIFIED
PERSONS”), FROM AND AGAINST ANY AND ALL DAMAGES, CLAIMS, LOSSES, EXPENSES,
COSTS, OBLIGATIONS AND LIABILITIES (EXCLUDING ALL CONSEQUENTIAL DAMAGES AND
INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND EXPENSES, INCLUDING REASONABLE
EXPERT FEES AND EXPENSES) (THE “CONTRIBUTING PARTNER LOSS AND EXPENSES”)
INCURRED BY ANY OF THE CONTRIBUTING PARTNER INDEMNIFIED PERSON OR ENTITY BY
REASON OF OR ARISING OUT OF (I) ANY BREACH AS OF THE CLOSING DATE OF ANY
REPRESENTATION AND WARRANTY MADE BY VORNADO IN ARTICLE III OF THIS AGREEMENT,
AND (II) ANY VIOLATION OR ALLEGED VIOLATION

 

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OF ANY APPLICABLE SECURITIES LAWS OR REGULATIONS IN CONNECTION WITH THE
TRANSACTION OR THE ISSUANCE OF THE UNITS THEREIN, INCLUDING IN CONNECTION WITH
ANY INFORMATION STATEMENT, PROSPECTUS OR REGISTRATION STATEMENT FILED WITH THE
COMMISSION OR DISTRIBUTED TO THE PARTNERS IN CONNECTION WITH THE TRANSACTION
INSOFAR AS SUCH CONTRIBUTING PARTNER LOSS AND EXPENSE ARISES OUT OF, OR IS BASED
UPON, ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OR A MATERIAL FACT OR ANY
OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO BE
STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MATERIALLY
MISLEADING, IN EACH CASE TO THE EXTENT, BUT ONLY TO THE EXTENT, SUCH UNTRUE
STATEMENT OR ALLEGED UNTRUE STATEMENT OR OMISSION OR ALLEGED OMISSION WAS MADE
IN RELIANCE UPON AND IN CONFORMITY WITH VORNADO PROVIDED INFORMATION TO BE
INCLUDED AND SET FORTH IN ANY PRIVATE PLACEMENT MEMORANDUM, PROSPECTUS OR
REGISTRATION STATEMENT FILED WITH THE COMMISSION OR DISTRIBUTED TO THE PARTNERS
IN CONNECTION WITH THE TRANSACTION (THE “VORNADO INDEMNITY”); PROVIDED, HOWEVER,
THAT NEITHER THE COMPANY, THE OPERATING PARTNERSHIP NOR THE VNO TRANSACTION SUB
SHALL BE OBLIGATED TO INDEMNIFY ANY OF THE CONTRIBUTING PARTNERS, AND THEIR
OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, AND AFFILIATES, AND THEIR
SUCCESSORS AND PERMITTED ASSIGNS UNDER THIS SECTION 8.4(A) TO THE EXTENT THAT
ANY THE CONTRIBUTING PARTNERS LOSS AND EXPENSES RESULT FROM THE GENERAL PARTNER
PROVIDED INFORMATION.

 

(B)                                 LIMITATIONS ON LIABILITY.  NOTWITHSTANDING
ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE COMPANY, THE OPERATING
PARTNERSHIP AND THE VNO TRANSACTION SUB SHALL NOT BE RESPONSIBLE FOR ANY OF THE
CONTRIBUTING PARTNER LOSS AND EXPENSES WITH RESPECT TO WHICH INDEMNITY IS
PROVIDED PURSUANT TO SECTION 8.4(A)(I) (OTHER THAN IN RESPECT OF A BREACH OF ANY
SUCH REPRESENTATION AND WARRANTY ATTRIBUTABLE TO ANY CLAIMS ASSERTED BY ANY
PARTNER, INCLUDING THE REPRESENTATIVES ON BEHALF OF THE PARTNERS, RELATING TO
VIOLATIONS OR ALLEGED VIOLATIONS OF ANY APPLICABLE SECURITIES LAWS BY THE
COMPANY, THE OPERATING PARTNERSHIP OR THE VNO TRANSACTION SUB IN CONNECTION WITH
THE TRANSACTION OR THE ISSUANCE OF UNITS THEREIN, FOR WHICH THE LIMITATIONS OF
THIS SECTION 8.4(B) SHALL NOT APPLY) UNTIL THE CUMULATIVE AMOUNT OF SUCH THE
CONTRIBUTING PARTNER LOSS AND EXPENSES SHALL EXCEED $45,000 IN WHICH CASE THE
COMPANY, THE OPERATING PARTNERSHIP AND THE VNO TRANSACTION SUB SHALL BE JOINTLY
AND SEVERALLY LIABLE FOR ALL SUCH CONTRIBUTING PARTNER LOSS AND EXPENSES (FROM
THE FIRST DOLLAR OF LOSS), SUBJECT TO THE LIMITATION THAT THE CUMULATIVE
INDEMNITY OBLIGATION OF THE COMPANY, THE OPERATING PARTNERSHIP AND THE VNO
TRANSACTION SUB UNDER SECTION 8.4(A)(I) SHALL NOT EXCEED $1,000,000 WITH RESPECT
TO CLAIMS ASSERTED IN WRITING PRIOR TO THE INDEMNITY NOTICE DATE, BUT ONLY TO
THE EXTENT SUCH ASSERTED CLAIM BECOMES AN ACTUAL CONTRIBUTING PARTNER LOSS AND
EXPENSE.

 

(C)                                  TERMINATION OF VORNADO INDEMNITY. 
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE OBLIGATIONS OF
THE COMPANY, THE OPERATING PARTNERSHIP AND THE VNO TRANSACTION SUB UNDER
SECTION 8.4(A) SHALL TERMINATE AND BE EXTINGUISHED FOREVER ON THE INDEMNITY
NOTICE DATE, UNLESS, AND TO THE EXTENT, IN ANY SUCH CASE WRITTEN CLAIM HAS BEEN
ASSERTED ON OR PRIOR TO SUCH DATE.  IF SUCH A TIMELY WRITTEN CLAIM HAS BEEN
MADE, THE INDEMNITY OBLIGATIONS OF THE COMPANY, THE OPERATING PARTNERSHIP AND
THE VNO TRANSACTION SUB SHALL CONTINUE BEYOND THE INDEMNITY NOTICE DATE, BUT
ONLY WITH RESPECT TO SUCH CLAIM AND ONLY UNTIL THE EARLIER OF (X) THE DATE SUCH
CLAIM IS SATISFIED OR OTHERWISE FINALLY RESOLVED, (Y) IF LEGAL ACTION IS TAKEN
WITH RESPECT TO

 

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SUCH CLAIM DURING THE INDEMNITY PERIOD, THE DATE ON WHICH SUCH CLAIM IS
SATISFIED OR OTHERWISE FINALLY RESOLVED, OR (Z) WITH RESPECT TO A CLAIM FOR
WHICH NO LEGAL ACTION HAS BEEN TAKEN DURING THE INDEMNITY PERIOD, TWELVE (12)
MONTHS AFTER THE DATE ON WHICH THE LAST SETTLEMENT OR OTHER SUBSTANTIVE
DISCUSSIONS HAVE TAKEN PLACE WITH RESPECT TO SUCH CLAIM, BUT IN NO EVENT MORE
THAN TWENTY-FOUR (24) MONTHS AFTER THE END OF THE INDEMNITY PERIOD.

 

8.5                               Costs of Enforcement.  In the event that any
dispute arises between the parties hereto as to the validity of any claim under
Section 8.2, or any claim for indemnification under the Vornado Indemnity under
Section 8.4, the non-prevailing party shall pay the reasonable legal fees and
expenses of the prevailing party incurred in connection with such dispute
(including expert and witness fees).  Any such legal fees and expenses required
to be paid in respect of any such claim shall be included in any such loss and
expenses satisfied as part thereof pursuant to the Escrow Agreement.

 

8.6                               Exclusive Remedies.

 

(A)                                  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT,
THE ESCROW AGREEMENT OR OTHERWISE TO THE CONTRARY, EXCEPT FOR LIABILITIES OF THE
CONTRIBUTING PARTNERS UNDER ARTICLE VIII OF THIS AGREEMENT (AS AND TO THE EXTENT
PROVIDED IN THE ESCROW AGREEMENT) AND OBLIGATIONS THAT ARE INTENDED TO SURVIVE
THE CLOSING PURSUANT TO THE TERMS OF THIS AGREEMENT OR ANY OTHER AGREEMENT,
INSTRUMENT OR DOCUMENT EXECUTED AND DELIVERED CONCURRENTLY HEREWITH OR AT OR
PRIOR TO THE CLOSING, NONE OF CONTRIBUTING PARTNERS, THE REPRESENTATIVES OR ANY
OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS OR AFFILIATES SHALL HAVE
ANY LIABILITY AFTER THE CLOSING TO THE COMPANY, THE OPERATING PARTNERSHIP, THE
VNO TRANSACTION SUB OR ANY OF THEIR AFFILIATES WITH RESPECT TO ANY MATTERS
RELATING TO THE TRANSACTION OR OTHERWISE CONTEMPLATED BY THIS AGREEMENT.

 

(B)                                 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT
OR OTHERWISE TO THE CONTRARY, EXCEPT FOR LIABILITIES OF THE COMPANY, THE
OPERATING PARTNERSHIP AND THE VNO TRANSACTION SUB UNDER ARTICLE VIII OF THIS
AGREEMENT, LIABILITIES UNDER APPLICABLE SECURITIES LAWS AND REGULATIONS AND
OBLIGATIONS THAT ARE INTENDED TO SURVIVE THE CLOSING PURSUANT TO THE TERMS OF
THIS AGREEMENT OR ANY OTHER AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED AND
DELIVERED CONCURRENTLY HEREWITH OR AT OR PRIOR TO THE CLOSING, NONE OF THE
COMPANY, THE OPERATING PARTNERSHIP AND THE VNO TRANSACTION SUB OR ANY OF THEIR
OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS OR AFFILIATES SHALL HAVE ANY
LIABILITY AFTER THE CLOSING TO THE CONTRIBUTING PARTNERS OR ANY OF THEIR
AFFILIATES WITH RESPECT TO ANY MATTERS RELATING TO THE TRANSACTION OR OTHERWISE
CONTEMPLATED BY THIS AGREEMENT.

 

8.7                               No Right of Offset.  The parties hereto agree
that, notwithstanding anything contained in the Vornado Partnership Agreement,
as the same may be amended from time to time, in no event shall the Company, the
Operating Partnership or the VNO Transaction Sub have any right of offset
against any of the Contributing Partners or any of their officers, directors,
employees, shareholders or affiliates under the Vornado Partnership Agreement or
any other agreement to which they are a party with respect to any claim under
arising under this Agreement or any other agreement, instrument or document
executed and delivered concurrently herewith or at or prior to the Closing

 

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(including any claim with respect to Representation and Warranty Loss and
Expenses, Disclosure Loss and Expenses, General Partner Estoppel Loss and
Expenses or Transaction Loss and Expenses).

 

8.8                               Recovery From Insurance Policies and Third
Parties.  The amount of any Representation and Warranty Loss and Expenses,
Disclosure Loss and Expenses, General Partner Estoppel Loss and Expenses or
Transaction Loss and Expenses to be paid by any of the parties pursuant to
ARTICLE VIII of this Agreement shall be reduced by the amount of recovery
actually received by the indemnified party with respect to any applicable
insurance policies or from persons or parties not parties to this Agreement or
the Escrow Agreement.  If the Company or the Operating Partnership, at its
option, has made a claim under any applicable insurance policies to recover any
Representation and Warranty Loss and Expenses, Disclosure Loss and Expenses,
General Partner Estoppel Loss and Expenses or Transaction Loss and Expenses, the
Company or the Operating Partnership, as the case may be, shall not be entitled
to recover from an indemnifying party any Representation and Warranty Loss and
Expenses, Disclosure Loss and Expenses, General Partner Estoppel Loss and
Expenses or Transaction Loss and Expenses, as the case may be, to the extent
covered by such insurance claim, until such time as the insurance carrier has
made a determination on the amount of the insurance claim coverage, if any (or,
in the event a claim is made to an insurance carrier and such insurance carrier
does not make a determination of the amount of the insurance claim coverage
within one hundred eighty (180) days following the date on which such claim is
made, the 181st day after which such insurance claim is made).  If the insurance
carrier’s determination for such insurance claim is less than the amount of the
indemnity claim claimed by the Company or the Operating Partnership, as the case
may be, then the difference between (1) such of indemnity amount claimed by the
Company or the Operating Partnership, as the case may be, and (ii) the amount of
claim for which such insurance carrier has made a determination, shall be
payable from the Escrow Units in accordance with this Agreement and the Escrow
Agreement (and subject to the limitations provided herein and therein);
provided, however, that once the insurance carrier has made a determination as
to the amount of the insurance claim, neither the Company nor the Operating
Partnership shall be obligated to pursue legal remedies to recover any further
amounts under the applicable insurance policy.  In the event that an insurance
carrier does not make a determination of the amount of the insurance claim
coverage with respect to which an insurance claim is made within one hundred
eighty (180) days of the date on which such claim is made, the Company and the
Operating Partnership shall be entitled to recover from an indemnifying party
under the terms of this Agreement and the Escrow Agreement from and after the
181st day alter which such insurance claim is made.

 

ARTICLE IX

 

THE CLOSING

 

9.1                               Transaction Expenses.  The following
provisions shall apply to the allocation and payment of the following costs
associated with the closing of the

 

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Transaction and other expenses incurred by the parties in connection with this
Agreement and the agreements, actions and transactions contemplated hereby:

 

(A)                                  VORNADO SHALL PAY THE FOLLOWING EXPENSES,
AND FIFTY PERCENT (50%) OF SUCH EXPENSES SHALL BE DEEMED TO BE “SPECIFIED
VORNADO TRANSACTION COSTS,” AND A CORRESPONDING ADJUSTMENT TO THE NUMBER OF
UNITS ISSUED TO THE CONTRIBUTING PARTNERS SHALL BE MADE IN ACCORDANCE WITH
SECTION 1.5(A)(I)(X):

 

(I)                                     ALL LEGAL FEES INCURRED BY VORNADO IN
CONNECTION WITH THE TRANSACTION (UNLESS OTHERWISE SO PROVIDED IN THIS
AGREEMENT);

 

(II)                                  ALL OF THE TRANSFER AND RECORDATION TAXES
IN CONNECTION WITH THE CONTRIBUTION OF THE CONTRIBUTED INTERESTS;

 

(III)                               THE FEES AND EXPENSES PAYABLE TO THE
RESPECTIVE ESCROW AGENT PURSUANT TO THE DEPOSIT ESCROW AGREEMENT AND THE ESCROW
AGREEMENT;

 

(IV)                              THE FEES AND EXPENSES OF HARITON, MANCUSO &
JONES, P.C. RELATING TO THE PREPARATION AND DELIVERY OF THE SUBJECT ENTITY
FINANCIAL STATEMENTS (TO THE EXTENT THAT THE SAME WOULD NOT OTHERWISE HAVE BEEN
PREPARED BY THE SUBJECT ENTITIES) AND THE PREPARATION AND DELIVERY OF THE
INFORMATION STATEMENT (INCLUDING THE COST OF THE “COMFORT LETTER” DELIVERED TO
VORNADO HEREUNDER) IN CONNECTION WITH THE TRANSACTION;

 

(V)                                 ANY OTHER OUT-OF-POCKET FEES AND EXPENSES
INCURRED IN THE PREPARATION AND DELIVERY OF THE INFORMATION STATEMENT;

 

(VI)                              THE FEES AND EXPENSES PAYABLE TO OR AT THE
DIRECTION OF BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH IN CONNECTION WITH
OBTAINING THE CONSENTS DESCRIBED IN SECTION 7.1(E);

 

(VII)                           THE COSTS OF ALL DUE DILIGENCE UNDERTAKEN BY
VORNADO IN CONNECTION WITH THE TRANSACTION, INCLUDING THE COST OF TITLE
SEARCHES, TITLE INSURANCE, SURVEYS, ENVIRONMENTAL SITE ASSESSMENTS, ENGINEERING
INSPECTIONS AND ASSESSMENTS, ZONING DUE DILIGENCE AND SIMILAR MATTERS; AND

 

(VIII)                        ALL OTHER OUT-OF-POCKET COSTS AND EXPENSES
INCURRED BY VORNADO IN CONNECTION WITH CONSUMMATING THE TRANSACTION.

 

(B)                                 THE GENERAL PARTNERS SHALL PAY THE FOLLOWING
EXPENSES, AND FIFTY PERCENT (50%) OF SUCH EXPENSES SHALL BE DEEMED TO BE
“SPECIFIED GENERAL PARTNER

 

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TRANSACTION COSTS,” AND A CORRESPONDING ADJUSTMENT TO THE NUMBER OF UNITS ISSUED
TO THE CONTRIBUTING PARTNERS SHALL BE MADE IN ACCORDANCE WITH
SECTION 1.5(A)(I)(Y):

 

(I)                                     ALL LEGAL FEES INCURRED BY THE GENERAL
PARTNERS IN CONNECTION WITH THE TRANSACTION (UNLESS OTHERWISE SO PROVIDED IN
THIS AGREEMENT);

 

(II)                                  THE FEES AND EXPENSES OF STANGER & CO.
RELATING TO THE PREPARATION AND DELIVERY OF THE FAIRNESS OPINION; AND

 

(III)                               ALL OTHER OUT-OF-POCKET COSTS AND EXPENSES
INCURRED BY THE GENERAL PARTNERS IN CONNECTION WITH CONSUMMATING THE
TRANSACTION.

 

(C)                                  IN CONSIDERATION FOR CERTAIN INTERNAL COSTS
INCURRED BY VORNADO IN CONNECTION WITH THE TRANSACTION, AN AMOUNT EQUAL TO ONE
HUNDRED PERCENT (100%) OF $200,000 SHALL BE DEEMED A “SPECIFIED VORNADO
TRANSACTION COST,” AND A CORRESPONDING ADJUSTMENT TO THE NUMBER OF UNITS ISSUED
TO THE CONTRIBUTING PARTNERS SHALL BE MADE IN ACCORDANCE WITH
SECTION 1.5(A)(I)(X).  IF FOR ANY REASON CLOSING SHALL FAIL TO OCCUR, THE
GENERAL PARTNERS SHALL PAY TO VORNADO, IN ADDITION TO ANY OTHER AMOUNTS THAT MAY
BE PAYABLE PURSUANT TO THIS AGREEMENT, A FEE IN THE AMOUNT OF $100,000.

 

9.2                               Prorations and Other Adjustments.  The items
in subparagraphs (a) through (g) of this Section 9.2, and other customary items
of income and expense, except as expressly provided below, shall be prorated as
of 12:01 a.m. local time on the Closing Date (the “Proration Time”).  Each item
shall be calculated and prorated on a building-by-building basis, with each item
being allocated to (and only to) either the Geneva Property or the Paris
Specific Property.  If any item cannot reasonably be allocated either to the
Geneva Property or the Paris Specific Property, then such item shall be
allocated for purposes of this Agreement in accordance with the Geneva
Allocation (to the Geneva Property) and the Paris Allocation (to the Paris
Specific Property).  If there is a credit to Vornado (i.e., a debit to the
Contributing Partners) as a result of the net aggregate prorations, then the
amount of such credit shall not be paid, but shall reduce the consideration to
the Contributing Partners pursuant to Section 1.5(b)(i)(v) (if such credit is
calculated with respect to the Geneva Property) or Section 1.5(c)(i)(v) (if such
credit is calculated with respect to the Paris Specific Property).  If there is
a debit to Vornado (i.e., a credit to the Contributing Partners) as a result of
the net aggregate prorations, then the amount of such debit shall not be paid,
but shall increase the consideration to the Contributing Partners pursuant to
Section 1.5(b)(i)(v) (if such debit is calculated with respect to the Geneva
Property) or Section 1.5(c)(i)(v) (if such debit is calculated with respect to
the Paris Specific Property).

 

(A)                                  CASH AND CASH EQUIVALENTS.  VORNADO SHALL
BE DEBITED (I.E., THE CONTRIBUTING PARTNERS SHALL BE CREDITED) AN AMOUNT EQUAL
TO ANY CASH AND CASH EQUIVALENTS HELD BY, ON BEHALF OF, OR IN ACCOUNTS FOR THE
BENEFIT OF, ANY SUBJECT ENTITY AS OF THE PRORATION TIME, INCLUDING DEPOSITS MADE
BY ANY SUBJECT ENTITY, RESERVES OR ESCROWS THAT

 

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ARE HELD BY OR FOR THE BENEFIT OF THE SUBJECT ENTITIES (OTHER THAN SECURITY
DEPOSITS AS DESCRIBED IN SECTION 9.2(E)).

 

(B)                                 RENTALS AND PASS-THROUGHS.

 

(I)                                     RENTALS RECEIVED PRIOR TO CLOSING. 
RENTALS ACTUALLY COLLECTED PRIOR TO CLOSING SHALL BE PRORATED AS OF THE
PRORATION TIME.  ANY SUCH RENTALS FOR THE PERIOD AFTER THE PRORATION TIME SHALL
BE A CREDIT TO VORNADO.  FOR PURPOSES OF THIS AGREEMENT, “RENTALS” MEANS FIXED
RENTALS, ADDITIONAL RENTALS, PERCENTAGE RENTALS, ESCALATION RENTALS, RETROACTIVE
RENTALS, OPERATING COST PASS-THROUGHS, PARKING REVENUES AND OTHER SUMS AND
CHARGES PAYABLE BY TENANTS UNDER THE SPACE LEASES.

 

(II)                                  COLLECTION OF RENTALS AFTER CLOSING.  ANY
RENTALS COLLECTED AFTER THE CLOSING SHALL BE RETAINED BY THE SUBJECT ENTITIES
FOR THE BENEFIT OF VORNADO AND THE OTHER CONTINUING MEMBERS OR PARTNERS OF THE
SUBJECT ENTITIES.  FOR PRORATION PURPOSES, ONLY THE FOLLOWING RECEIVABLES FOR
RENTALS AS OF THE PRORATION TIME SHALL BE A DEBIT TO VORNADO AS FOLLOWS: (1) THE
FULL FACE AMOUNT OF SUCH RECEIVABLE IN THE CASE OF A GSA LEASE; AND (2) THE FULL
FACE AMOUNT OF SUCH RECEIVABLE IN THE CASE OF ANY OTHER COMMERCIAL LEASE, BUT
ONLY IF THERE IS NO MONETARY DEFAULT UNDER SUCH LEASE; AND (3) IN THE CASE OF
ANY RESIDENTIAL LEASE, IF AND ONLY IF SUCH RECEIVABLE IS NO MORE THAN ONE
HUNDRED TWENTY (120) DAYS PAST DUE, AN AMOUNT EQUAL TO THE FACE AMOUNT OF SUCH
RECEIVABLE MULTIPLIED BY THE HISTORICAL COLLECTION RATE FOR RECEIVABLES OF LIKE
AGE AT THE APPLICABLE BUILDING.

 

(C)                                  SERVICE CONTRACTS.  VORNADO SHALL BE
DEBITED AN AMOUNT EQUAL TO ANY REGULAR CHARGES UNDER THE EQUIPMENT LEASES AND
THE OPERATING AGREEMENTS THAT HAVE BEEN PAID BY THE SUBJECT ENTITIES TO THE
EXTENT THEY ARE ATTRIBUTABLE TO THE PERIOD ALTER THE PRORATION TIME.  VORNADO
SHALL BE CREDITED AN AMOUNT EQUAL TO ANY REGULAR CHARGES UNDER THE EQUIPMENT
LEASES AND THE OPERATING AGREEMENTS THAT HAVE NOT BEEN PAID BY THE SUBJECT
ENTITIES TO THE EXTENT THEY ARE ATTRIBUTABLE TO THE PERIOD PRIOR TO THE
PRORATION TIME.

 

(D)                                 UTILITIES.  VORNADO SHALL BE CREDITED AN
AMOUNT EQUAL TO ANY UNPAID CHARGES FOR UTILITIES AT THE PROPERTY AS OF THE
PRORATION TIME (OTHER THAN CHARGES PAID DIRECTLY BY TENANTS).  THE GENERAL
PARTNERS SHALL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE THE METERS, IF ANY,
FOR SUCH UTILITIES TO BE READ WITHIN THREE (3) BUSINESS DAYS BEFORE THE CLOSING
DATE.  THE CHARGES FOR SUCH UTILITIES SHALL BE PRORATED ON THE BASIS OF SUCH
METER READINGS, EXCEPT FOR THE PERIOD AFTER SUCH METER READINGS UNTIL THE
PRORATION TIME (OR IF SUCH METER READINGS ARE NOT AVAILABLE) SUCH CHARGES SHALL
BE PRORATED ON THE BASIS OF THE MOST RECENTLY ISSUED BILLS THEREFOR WHICH ARE
BASED ON METER READINGS.

 

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(E)                                  SECURITY DEPOSITS.  ALL TENANT SECURITY
DEPOSITS REQUIRED UNDER THE SPACE LEASES (AND INTEREST THEREON IF REQUIRED BY
LAW OR CONTRACT TO BE EARNED THEREON), SHALL REMAIN ON DEPOSIT WITH THE SUBJECT
ENTITIES AT CLOSING, AND SHALL NOT RESULT IN ANY DEBIT OR CREDIT TO VORNADO.  TO
THE EXTENT THAT THE SUBJECT ENTITIES DO NOT HOLD SUCH SECURITY DEPOSITS (AND
INTEREST THEREON) IN A SEPARATE ACCOUNT, VORNADO SHALL BE CREDITED AN AMOUNT
EQUAL TO SUCH SECURITY DEPOSITS (AND INTEREST THEREON IF REQUIRED BY LAW OR
CONTRACT TO BE EARNED THEREON).

 

(F)                                    INSURANCE PREMIUMS.  VORNADO SHALL BE
DEBITED AN AMOUNT EQUAL TO PREPAID INSURANCE PREMIUMS PAID ON INSURANCE POLICIES
OF THE SUBJECT ENTITIES AND ATTRIBUTABLE TO THE PERIOD AFTER THE CLOSING DATE.

 

(G)                                 TENANT IMPROVEMENTS AND ALLOWANCES.  VORNADO
SHALL BE CREDITED AN AMOUNT EQUAL TO (I) THE UNPAID COST OF ALL INITIAL TENANT
IMPROVEMENTS THAT ARISE IN CONNECTION WITH THE COMMENCEMENT OF SPACE LEASES
ENTERED INTO ON OR PRIOR TO THE EXECUTION DATE, AND (II) ALL REBATES,
CONCESSIONS, OR OFFSETS, AND ANY AND ALL OTHER BENEFITS AND CHARGES ACCRUED AND
PAYABLE OR ALLOWABLE TO ANY PARTY BY THE LANDLORD ON OR BEFORE THE CLOSING DATE
UNDER ANY SPACE LEASES ENTERED INTO ON OR BEFORE THE EXECUTION DATE.

 

(H)                                 AD VALOREM TAXES AND OTHER OPERATING
EXPENSES.  REAL AND PERSONAL PROPERTY AD VALOREM TAXES AND OTHER OPERATING
EXPENSES (EXCEPT AS OTHERWISE PROVIDED HEREIN) SHALL BE PRORATED TO THE
PRORATION TIME, BASED ON THE ACTUAL NUMBER OF DAYS INVOLVED.  ANY SUCH TAXES AND
OPERATING EXPENSES THAT ARE ALLOCABLE TO THE PERIOD PRIOR TO THE PRORATION TIME
THAT HAVE NOT BEEN PAID SHALL BE CREDITED TO VORNADO, AND VORNADO SHALL BE
DEBITED ANY SUCH TAXES AND OPERATING EXPENSES THAT ARE ALLOCABLE TO THE PERIOD
AFTER THE PRORATION TIME THAT HAVE BEEN PAID.

 

(I)                                     PERMITTED MORTGAGE DEBT.  INTEREST AND
OTHER CHARGES (OTHER THAN PRINCIPAL) PAYABLE IN RESPECT OF THE PERMITTED
MORTGAGE DEBT SHALL BE PRORATED TO THE PRORATION TIME, BASED ON THE ACTUAL
NUMBER OF DAYS INVOLVED.  ANY SUCH INTEREST AND OTHER CHARGES THAT ARE ALLOCABLE
TO THE PERIOD PRIOR TO THE PRORATION TIME THAT HAVE NOT BEEN PAID SHALL BE
CREDITED TO VORNADO.  THE PRINCIPAL AMOUNT OF THE PERMITTED MORTGAGE DEBT AS OF
THE PRORATION TIME SHALL BE A CREDIT TO VORNADO AS DESCRIBED IN
SECTION 1.5(B)(I)(V) OR SECTION 1.5(C)(I)(V), AS APPLICABLE.

 

9.3                               Prorations Procedures.  The General Partners
shall provide to the VNO Transaction Sub such information and verification as
may be reasonably requested by the VNO Transaction Sub in connection with the
prorations and adjustments to be performed pursuant to Section 9.2.  The parties
shall make these prorations and adjustments on the Closing Date measured as of
the Proration Time using the best available information.  At Vornado’s election,
the net proration amounts either (i) shall be finally estimated on the Closing
Date and reasonably agreed to by the General Partners and Vornado, with no
further adjustments after the Closing Date, or (ii) shall be estimated on the
Closing Date by Vornado and shall be reasonably agreed to by the General
Partners and Vornado as promptly as practicable after the Closing Date, with no
further adjustments after the Closing Date.  If the parties proceed under clause
(ii) of the preceding sentence, then the number of Units to be issued to each of
the Contributing Partners shall be estimated on

 

55

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the Closing Date, but such Units shall not finally be issued until the final net
prorations have been agreed upon, whereupon such Units shall be issued effective
as of the Closing Date. 

 

ARTICLE X

 

TERMINATION

 

10.1                        Termination.  At any time prior to the Closing, this
Agreement may be terminated by:

 

(A)                                  THE MUTUAL WRITTEN CONSENT DULY AUTHORIZED
BY THE VORNADO BOARD AND THE GENERAL PARTNERS;

 

(B)                                 VORNADO (IF NONE OF THE COMPANY, THE
OPERATING PARTNERSHIP OR THE VNO TRANSACTION SUB IS IN BREACH OF ANY OF ITS
MATERIAL OBLIGATIONS HEREUNDER) IF THE CONDITIONS SET FORTH IN SECTIONS 7.1 OR
7.2 FOR THE CONSUMMATION OF THE TRANSACTION HAVE NOT BEEN FULLY SATISFIED BY
OCTOBER 31, 2005 (OR SUCH LATER DATE AS MAY BE MUTUALLY AGREED UPON BY THE
COMPANY, THE OPERATING PARTNERSHIP AND THE GENERAL PARTNERS) UPON WRITTEN NOTICE
TO THE OTHER PARTIES AND WITHOUT ANY FURTHER LIABILITY OR OBLIGATION OF ANY
PARTY TO THE OTHER PARTIES UNDER THIS AGREEMENT, EXCEPT FOR ANY OBLIGATION OR
LIABILITY ARISING HEREUNDER PRIOR TO THE DATE OF SUCH TERMINATION, INCLUDING IN
CONNECTION WITH ANY BREACH OF THIS AGREEMENT;

 

(C)                                  THE GENERAL PARTNERS (IF THE CONTRIBUTING
PARTNERS ARE NOT IN BREACH OF ANY OF THEIR MATERIAL OBLIGATIONS HEREUNDER) IF
THE CONDITIONS SET FORTH IN SECTIONS 7.1 AND 7.3 FOR THE CONSUMMATION OF THE
TRANSACTION HAVE NOT BEEN FULLY SATISFIED BY OCTOBER 31, 2005 (OR SUCH LATER
DATE AS MAY BE MUTUALLY AGREED UPON BY THE COMPANY, THE OPERATING PARTNERSHIP
AND THE GENERAL PARTNERS) UPON WRITTEN NOTICE TO THE OTHER PARTIES AND WITHOUT
ANY FURTHER LIABILITY OR OBLIGATION OF ANY PARTY TO THE OTHER PARTIES UNDER THIS
AGREEMENT, EXCEPT FOR ANY OBLIGATION OR LIABILITY ARISING HEREUNDER PRIOR TO THE
DATE OF SUCH TERMINATION, INCLUDING IN CONNECTION WITH ANY BREACH OF THIS
AGREEMENT;

 

(D)                                 VORNADO (IF NONE OF THE COMPANY, THE
OPERATING PARTNERSHIP OR THE VNO TRANSACTION SUB IS IN BREACH OF ANY OF ITS
MATERIAL OBLIGATIONS HEREUNDER) IF THERE HAS BEEN A KNOWING MISREPRESENTATION OR
A KNOWING BREACH OF ANY REPRESENTATION OR WARRANTY AS OF THE DATE HEREOF (OR,
WITH RESPECT TO REPRESENTATIONS WHICH ARE EXPRESSLY BY THE TERMS OF THIS
AGREEMENT TO BE TRUE AND TO BE MADE AS OF THE CLOSING, AT ANY TIME) ON THE PART
OF THE GENERAL PARTNERS SET FORTH IN THIS AGREEMENT SUCH THAT THE CONDITION SET
FORTH IN SECTION 7.2(A) WOULD NOT BE SATISFIED; AND

 

(E)                                  THE GENERAL PARTNERS (IF THE CONTRIBUTING
PARTNERS ARE NOT IN BREACH OF ANY OF THEIR MATERIAL OBLIGATIONS HEREUNDER), IF
THERE HAS BEEN A KNOWING MISREPRESENTATION OR KNOWING BREACH OF ANY
REPRESENTATION OR WARRANTY AS OF THE DATE HEREOF (OR, WITH RESPECT TO
REPRESENTATIONS WHICH ARE EXPRESSLY BY THE TERMS OF THIS AGREEMENT TO BE TRUE
AND TO BE MADE AS OF THE CLOSING, AT ANY TIME) ON THE PART OF

 

56

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VORNADO SET FORTH IN THIS AGREEMENT SUCH THAT THE CONDITION SET FORTH IN
SECTION 7.3(A) WOULD NOT BE SATISFIED;

 

(F)                                    EITHER VORNADO OR THE GENERAL PARTNERS IF
ANY JUDGMENT, INJUNCTION, ORDER, DECREE OR ACTION BY ANY GOVERNMENTAL ENTITY OF
COMPETENT AUTHORITY PREVENTING THE CONSUMMATION OF THE TRANSACTION SHALL HAVE
BECOME FINAL AND NONAPPEALABLE;

 

(G)                                 VORNADO IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 2.3; AND

 

(H)                                 THE TERMS OF SECTION 11.1, UNLESS VORNADO
ELECTS TO PROCEED TO CLOSING AS SET FORTH IN SUCH SECTION.

 

ARTICLE XI

 

CASUALTY OR CONDEMNATION

 

11.1                        Material Casualty or Condemnation.  If all or a
material part (as hereinafter defined) of the Property is damaged or destroyed
by fire or other casualty, or is taken by power of condemnation or eminent
domain, or process or purchase in lieu thereof, prior to the Closing Date, the
General Partners shall promptly notify Vornado of the occurrence of such event
and this Agreement shall terminate twenty (20) days after the date of such
notice (or earlier if the Operating Partnership gives the General Partners a
notice of termination), in which event the deposit and all earnings thereon
deposited under the Deposit Escrow Agreement shall be released to the Operating
Partnership, and neither party shall have any further rights against or
obligations to the other hereunder except as expressly provided in this
Agreement; provided that the Operating Partnership may elect by notice given to
the General Partners within twenty (20) days of the date notice of the
occurrence of such casualty or taking shall have been given to the Operating
Partnership by the General Partners (and, notwithstanding anything else in this
Agreement, the scheduled Closing hereunder shall be extended in order to provide
to the Operating Partnership a complete 20-day period within which to make such
election) to close hereunder without abatement or reduction of the Exchange
Value (except to the extent of the deductible under the Subject Entities’
insurance coverage in the case of casualty, which deductible amount shall be a
reduction in the Paris Exchange Value for a casualty affecting the Paris
Property and the Geneva Exchange Value for a casualty affecting the Geneva
Property).

 

11.2                        Immaterial Casualty or Condemnation.  If an
immaterial part of one or more of the Property is damaged by fire or other
casualty, or is taken by power of condemnation or eminent domain, or process or
purchase in lieu thereof, prior to the Closing Date, this Agreement shall remain
in full force and effect, the Operating Partnership shall be obligated to close
hereunder without any abatement or reduction of the Exchange Value (except to
the extent of the deductible under the Subject Entities’ insurance coverage in
the case of casualty, which deductible amount shall be a reduction in the Paris
Exchange Value for a casualty affecting the Paris Property and the Geneva
Exchange Value for a casualty affecting the Geneva Property).

 

57

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11.3                        Materiality.  For the purposes of this Section,
“material” means, as to any casualty, damage or destruction that is reasonably
estimated to cost more than $2,300,000 in the aggregate to repair, and, with
respect to any condemnation or other taking, a taking that includes any portion
of any building included within the Property or denies reasonable access to any
Property in accordance with applicable law.

 

ARTICLE XII

 

GENERAL PROVISIONS

 

12.1                        Notices.  All notices, demands, requests or other
communications that may be or are required to be given or made by either party
to the other party pursuant to this Agreement shall be in writing and shall be
hand delivered or transmitted by certified mail, express overnight mail or
delivery service, or facsimile transmission to the parties at the addresses
specified in Schedule 12.1 or such other address as the addressee may indicate
by written notice to the other party.

 

Each notice, demand, request or communication that is given or made in the
manner described above shall be deemed sufficiently given or made for all
purposes at such time as it is delivered to the addressee (with the delivery
receipt, the affidavit of messenger or (with respect to a facsimile)
confirmation of transmission being deemed conclusive but not exclusive evidence
of such delivery) or at such time as delivery is refused by the addressee upon
presentation.

 

12.2                        Specific Performance.  The parties agree that
irreparable damages would occur if any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, in addition to any other remedy to which they
are entitled at law or in equity.

 

12.3                        Further Assurances.  The General Partners hereby
agree that they shall, at any time, prior to, at or after the Closing of the
Transaction, duly execute and deliver to Vornado or VNO Transaction Sub any
additional conveyances, assignments, documents aid instruments, and shall take
or cause to be taken such further actions (including the making of filings),
which Vornado may reasonably determine are necessary in connection with the
consummation of the Transaction.  The failure of Vornado or VNO Transaction Sub
to demand such conveyances, assignments, documents, instruments or actions at or
before the Closing shall not affect the obligation of the General Partners to
execute and deliver such conveyances, assignments, documents or instruments, or
to take such actions, at any time, upon the demand of Vornado or VNO Transaction
Sub.  From and after the Closing, each party shall afford to the other
reasonable access to any and all information in its possession concerning the
use or operation of the Property (including the right to copy same at the
expense of the party desiring such copy) if required for purposes of any tax
examination or audit.

 

58

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12.4                        Consents.  If, under this Agreement, the consent of
a party is required, the consent shall be in writing and shall be executed by a
duly authorized officer or agent.

 

12.5                        Binding Effect.  This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns as permitted hereunder.  No person or entity (including
any Contributing Partner) other than the parties hereto is or shall be entitled
to bring any action to enforce any provision of this Agreement against any of
the parties hereto, and the covenants and agreements set forth in this Agreement
shall be solely for the benefit of, and shall be enforceable only by, the
parties hereto or their respective successors and assigns as permitted
hereunder.

 

12.6                        Construction.  Each party hereto hereby acknowledges
that all parties hereto participated equally in the negotiation and drafting of
this Agreement and that, accordingly, no court construing this Agreement shall
construe it more stringently against one party than against the other.  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.  The terms “hereof,” “hereby,” “herein,” “hereunder” and words of
similar import shall be understood to refer to this Agreement as a whole and not
to any specific clause, provision, paragraph, Section or Article of this
Agreement.  The term “including” shall be understood to mean “including, without
limitation.” References to Sections, Schedules, Exhibits and Annexes shall be
understood to refer to the Sections, Schedules, Exhibits and Annexes of this
Agreement, unless otherwise specified.

 

12.7                        Waiver of Jury Trial.  THE PARTIES HERETO EACH
HEREBY WAIVE ANY RIGHT TO JURY TRIAL IN THE EVENT ANY PARTY FILES AN ACTION
RELATING TO THIS AGREEMENT OR TO THE TRANSACTIONS OR OBLIGATIONS CONTEMPLATED
HEREUNDER.

 

12.8                        Governing Law; Submission to Jurisdiction; Service
of Process.  This Agreement, the rights and obligations of the parties hereto
and any claims or disputes relating to such rights and obligations shall be
governed by and construed under the laws of the Commonwealth of Virginia without
regard to the conflicts of laws principles thereof.  Each of the parties hereto
hereby (a) irrevocably and unconditionally submits to, the non-exclusive
jurisdiction of the courts of the Commonwealth of Virginia and of the federal
courts sitting in the Commonwealth of Virginia for the purposes of any action,
suit or proceeding (including appeals to their respective appellate courts)
arising out of this Agreement or the transactions contemplated hereby, and
(b) (1) to the extent such party is not otherwise subject to service of process
in the Commonwealth of Virginia to appoint and maintain an agent in the
Commonwealth of Virginia as such party’s agent for acceptance of legal process
and (2) to the fullest extent permitted by law, that service of process may also
be made on such party by prepaid certified mail with a proof of mailing receipt
validated by the United States Postal Service constituting evidence of valid
service, and that service made pursuant to (b) (1) or (2) above shall have the
same legal force and effect as if served upon such party personally within the
Commonwealth of Virginia.  Each party irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in (i) the courts of
the Commonwealth of Virginia or

 

59

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(ii) the United States District Court for the Eastern District of Virginia
(including appeals to their respective appellate courts), and hereby further
irrevocably and unconditionally to the fullest extent permitted by law waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.

 

12.9                        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.

 

12.10                 Assignment.  None of the parties hereto shall assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of the other parties hereto.  Any purported
assignment contrary to the terms hereof shall be null, void and of no force and
effect.

 

12.11                 Counterparts.  To facilitate execution, this Agreement may
be executed in as many counterparts as may be required.  It shall not be
necessary that the signatures of, or on behalf of, each party, or that the
signatures of all persons required to bind any party, appear on each
counterpart, but it shall be sufficient that the signature of, or on behalf of,
each party, appear on one or more of the counterparts.  All counterparts shall
collectively constitute a single agreement.  It shall not be necessary in making
proof of this 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 hereof.

 

12.12                 Severability.  If any part of any provision of this
Agreement or any other agreement, document or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, such part shall be ineffective to the extent of such invalidity
or unenforceability only, without in any way affecting the remaining parts of
such provisions or the remaining provisions of said agreement so long as the
economic and legal substance of the Transaction is not affected in any manner
materially adverse to either party.

 

12.13                 Entire Agreement; Amendment.  The Annexes, Schedules and
the Exhibits to this Agreement constitute integral parts hereof and are hereby
incorporated into this Agreement as if fully set forth herein.  This Agreement
and the other agreements to be entered into in accordance with the terms hereof
contain the final and entire agreement between the parties hereto with respect
to the Transaction, supersede all prior oral and written memoranda and
agreements with respect to the matters contemplated herein, and are intended to
be an integration of all prior negotiations and understandings.  The General
Partners and Vornado shall not be bound by any terms, conditions, statements,
warranties or representations, oral or written, not contained or referred to
herein or therein.  No change or modification of this Agreement shall be valid
unless the same is in writing and signed by the parties hereto.

 

12.14                 No Waiver.  No delay or failure on the part of either
party hereto in exercising any right, power or privilege under this Agreement or
under any other

 

60

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instrument or document given in connection with or pursuant to this Agreement
shall impair any such right power or privilege or be construed as a waiver of
any default or any acquiescence therein.  No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege.  No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom enforcement of such
waiver is sought and then only to the extent expressly specified therein.

 

[Signatures on following pages]

 

61

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

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

 

 

By:

Vornado Realty Trust,

 

 

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

CESC ROSSLYN L.L.C.

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

Robert P. Kogod

 

62

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AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of June 27,
2005 among Vornado Realty Trust, a Maryland real estate investment trust (the
“Company”), Vornado Realty L.P., a Delaware limited partnership (the “Operating
Partnership”), Vornado Rosslyn LLC, a Delaware limited liability company and
wholly owned subsidiary of the Operating Partnership (the “VNO Transaction
Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General Partner”).

 

A.                                    The parties to this Amendment other than
the VNO Transaction Sub entered into a Contribution Agreement dated May 12, 2005
(as amended to date, the “Existing Agreement”).

 

B.                                    The parties to this Amendment desire to
amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       VNO Transaction Sub.  The Existing
Agreement was purportedly executed by CESC Rosslyn L.L.C., a Delaware limited
liability company, as “VNO Transaction Sub.”  The correct name of the wholly
owned subsidiary of the Operating Partnership that has been formed, pursuant to
a Certificate of Formation filed with the Delaware Secretary of State on May 20,
2005, is “Vornado Rosslyn LLC.”  Notwithstanding anything to the contrary in the
Existing Agreement, (i) the term “VNO Transaction Sub” shall refer exclusively
to Vornado Rosslyn LLC, a Delaware limited liability company, (ii) any
representations or warranties of Vornado in the Existing Agreement shall be
qualified by the fact that the VNO Transaction Sub was not formed prior to
May 20, 2005, and (iii) the VNO Transaction Sub confirms, by its execution of
this Amendment, that it has agreed to be bound by all of the provisions of the
Existing Agreement, as modified by this Amendment.

 

3.                                       Study Period.  Notwithstanding
Section 2.1 of the Existing Agreement, the Study Period shall be extended until
July 8, 2005 for all purposes under the Agreement.

 

4.                                       Specified General Partner Transaction
Costs.  Notwithstanding the provisions of the Existing Agreement, including
Sections 1.5(b)(i)(y), 1.5(c)(i)(y), and 9.1(b) thereof, (i) Vornado shall pay
the expenses listed in Section 9.1(b) of the Existing Agreement,
(ii) notwithstanding the foregoing clause (i), if the

 

--------------------------------------------------------------------------------

 

Agreement shall terminate without consummation of Closing, then Vornado shall
have no further obligation to pay any expenses listed in Section 9.1(b) of the
Existing Agreement (regardless of whether such expenses are then due and
payable), and the General Partners shall be solely responsible for any such
expenses, and the General Partners shall promptly reimburse Vornado for any
amounts paid by Vornado in respect to the expenses listed in Section 9.1(b) of
the Existing Agreement, and (iii) in calculating the Units to be issued at
Closing under Section 1.5 of the Existing Agreement, the Specified General
Partner Transaction Costs shall be treated as Specified Vornado Transaction
Costs (i.e., an amount equal to 50% of the expenses payable by Vornado under the
foregoing clause (i) shall reduce the consideration payable by Vornado pursuant
to Section 1.5(b)(i)(x) and Section 1.5(c)(i)(x) of the Existing Agreement).

 

5.                                       Ratification.  Except as expressly
modified by this Amendment, the Existing Agreement shall continue in full force
and effect in accordance with its terms.  References in the Existing Agreement
or in this Amendment to the “Agreement” shall be deemed to be references to the
Existing Agreement as modified by this Amendment.

 

6.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

3

--------------------------------------------------------------------------------

 

SECOND AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS SECOND AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of
July 8, 2005 among Vornado Realty Trust, a Maryland real estate investment trust
(the “Company”), Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), Vornado Rosslyn LLC, a Delaware limited liability
company and wholly owned subsidiary of the Operating Partnership (the “VNO
Transaction Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General
Partner”).

 

A.                                    The parties to this Amendment entered into
a Contribution Agreement dated May 12, 2005, as amended by an Amendment to
Contribution Agreement dated June 27, 2005 (the “Existing Agreement”).

 

B.                                    The parties to this Amendment desire to
further amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       Study Period.  Notwithstanding
Section 2.1 of the Existing Agreement, the Study Period shall be extended until
July 15, 2005 for all purposes under the Agreement.

 

3.                                       Ratification.  As expressly modified by
this Amendment, the Existing Agreement shall continue in full force and effect
in accordance with its terms.  References in the Existing Agreement or in this
Amendment to the “Agreement” shall be deemed to be references to the Existing
Agreement as modified by this Amendment.

 

4.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

2

--------------------------------------------------------------------------------

 

THIRD AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS THIRD AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of
July 15, 2005 among Vornado Realty Trust, a Maryland real estate investment
trust (the “Company”), Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), Vornado Rosslyn LLC, a Delaware limited liability
company and wholly owned subsidiary of the Operating Partnership (the “VNO
Transaction Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General
Partner”).

 

A.                                    The parties to this Amendment entered into
a Contribution Agreement dated May 12, 2005, as amended by an Amendment to
Contribution Agreement dated June 27, 2005 and by a Second Amendment to
Contribution Agreement dated July 8, 2005 (the “Existing Agreement”).

 

B.                                    The parties to this Amendment desire to
further amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       Study Period.  Notwithstanding
Section 2.1 of the Existing Agreement, the Study Period shall be extended until
July 22, 2005 for all purposes under the Agreement.

 

3.                                       Ratification.  As expressly modified by
this Amendment, the Existing Agreement shall continue in full force and effect
in accordance with its terms.  References in the Existing Agreement or in this
Amendment to the “Agreement” shall be deemed to be references to the Existing
Agreement as modified by this Amendment.

 

4.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

2

--------------------------------------------------------------------------------

 

 

FOURTH AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS FOURTH AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of
July 22, 2005 among Vornado Realty Trust, a Maryland real estate investment
trust (the “Company”), Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), Vornado Rosslyn LLC, a Delaware limited liability
company and wholly owned subsidiary of the Operating Partnership (the “VNO
Transaction Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General
Partner”).

 

A.                                    The parties to this Amendment entered into
a Contribution Agreement dated May 12, 2005, as amended by an Amendment to
Contribution Agreement dated June 27, 2005 and by a Second Amendment to
Contribution Agreement dated July 8, 2005 and by a Third Amendment to
Contribution Agreement dated July 15, 2005 (the “Existing Agreement”).

 

B.                                    The parties to this Amendment desire to
further amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       Study Period.  Notwithstanding
Section 2.1 of the Existing Agreement, the Study Period shall be extended until
July 29, 2005 for all purposes under the Agreement.

 

3.                                       Ratification.  As expressly modified by
this Amendment, the Existing Agreement shall continue in full force and effect
in accordance with its terms.  References in the Existing Agreement or in this
Amendment to the “Agreement” shall be deemed to be references to the Existing
Agreement as modified by this Amendment.

 

4.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

2

--------------------------------------------------------------------------------

 

FIFTH AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS FIFTH AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of
July 29, 2005 among Vornado Realty Trust, a Maryland real estate investment
trust (the “Company”), Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), Vornado Rosslyn LLC, a Delaware limited liability
company and wholly owned subsidiary of the Operating Partnership (the “VNO
Transaction Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General
Partner”).

 

A.                                    The parties to this Amendment entered into
a Contribution Agreement dated May 12, 2005, as amended by an Amendment to
Contribution Agreement dated June 27, 2005, a Second Amendment to Contribution
Agreement dated July 8, 2005, a Third Amendment to Contribution Agreement dated
July 15, 2005 and a Fourth Amendment to Contribution Agreement dated July 22,
2005 (the “Existing Agreement”).

 

B.                                    The parties to this Amendment desire to
further amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       Study Period.  Notwithstanding
Section 2.1 of the Existing Agreement, the Study Period shall be extended until
August 5, 2005 for all purposes under the Agreement.

 

3.                                       Ratification.  As expressly modified by
this Amendment, the Existing Agreement shall continue in full force and effect
in accordance with its terms.  References in the Existing Agreement or in this
Amendment to the “Agreement” shall be deemed to be references to the Existing
Agreement as modified by this Amendment.

 

4.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

2

--------------------------------------------------------------------------------

 

SIXTH AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS SIXTH AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of
August 3, 2005 among Vornado Realty Trust, a Maryland real estate investment
trust (the “Company”), Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), Vornado Rosslyn LLC, a Delaware limited liability
company and wholly owned subsidiary of the Operating Partnership (the “VNO
Transaction Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General
Partner”).

 

A.                                    The parties to this Amendment entered into
a Contribution Agreement dated May 12, 2005, as amended by an Amendment to
Contribution Agreement dated June 27, 2005, a Second Amendment to Contribution
Agreement dated July 8, 2005, a Third Amendment to Contribution Agreement dated
July 15, 2005, a Fourth Amendment to Contribution Agreement dated July 22, 2005
and a Fifth Amendment to Contribution Agreement dated July 29, 2005 (the
“Existing Agreement”).

 

B.                                    The parties to this Amendment desire to
further amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       Consideration.

 

a.                                       Exchange Value.  Section 1.5(a) of the
Existing Agreement is hereby amended by deleting “$170,200,000” and replacing it
with “$166,700,000”.

 

b.                                      Paris Allocation.  Section 1.5(a)(iv) of
the Existing Agreement is hereby amended by deleting “58.871915%” and replacing
it with “59.4481106%”.

 

c.                                       Geneva Allocation. 
Section 1.5(a)(v) of the Existing Agreement is hereby amended by deleting
“41.128085%” and replacing it with “40.5518894%”.

 

3.                                       Deemed Value Per Unit.  The last
sentence of Section 1.5(b)(i) of the Existing Agreement is hereby deleted in its
entirety and replaced with the following:  “For purposes of this Agreement, the
“Deemed Value” per Unit shall be $77.70.”  Section 1.5(b)(iii) of the Existing
Agreement is hereby deleted.  Section 1.3 of

 

--------------------------------------------------------------------------------

 

the Existing Agreement is hereby amended by deleting “, subject to
Section 1.5(b)(iii),”.

 

4.                                       End of Study Period; Additional
Deposit.

 

a.                                       Notwithstanding Section 2.1 of the
Existing Agreement, the parties acknowledge and agree that the Study Period
shall end on August 3, 2005 for all purposes of the Agreement.  From and after
the full execution and delivery of this Amendment, Vornado shall be deemed to
have waived its termination right under Section 2.3 of the Agreement.

 

b.                                      Notwithstanding anything to the contrary
in Section 2.5 of the Agreement, Vornado shall increase the deposit under the
Deposit Escrow Agreement to $2,500,000 by transferring an additional cash
deposit of $1,250,000 to the escrow agent under the Deposit Escrow Agreement
within two (2) business days after full execution and delivery of this
Amendment.

 

5.                                       Modification of Certain Dates and Time
Periods.

 

a.                                       Section 1.3 of the Existing Agreement
is hereby amended by deleting “July 29, 2005” in the eighth line and replacing
it with “September 9, 2005”.  Section 1.3 of the Existing Agreement is hereby
amended by deleting “60 days” in the eleventh line and replacing it with “30
days”.

 

b.                                      Section 6.13(c) of the Existing
Agreement is hereby amended by deleting “August 31, 2005” and replacing it with
“October 10, 2005”.

 

c.                                       Sections 10.1(b) and 10.1(c) of the
Existing Agreement are each hereby amended by deleting “October 31, 2005” and
replacing it with “October 10, 2005”.

 

6.                                       Ratification.  As expressly modified by
this Amendment, the Existing Agreement shall continue in full force and effect
in accordance with its terms.  References in the Existing Agreement or in this
Amendment to the “Agreement” shall be deemed to be references to the Existing
Agreement as modified by this Amendment.

 

7.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

8.                                       Business Day.  If the last day of any
time period under the Agreement, or the deadline for performance of any
obligation under the Agreement, falls on a day that is not a business day, then
such last day or deadline shall automatically be extended to the next business
day.

 

2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

3

--------------------------------------------------------------------------------

 

SEVENTH AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS SEVENTH AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of
October 7, 2005 among Vornado Realty Trust, a Maryland real estate investment
trust (the “Company”), Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), Vornado Rosslyn LLC, a Delaware limited liability
company and wholly owned subsidiary of the Operating Partnership (the “VNO
Transaction Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General
Partner”).

 

A.                                    The parties to this Amendment entered into
a Contribution Agreement dated May 12, 2005, as amended by an Amendment to
Contribution Agreement dated June 27, 2005, a Second Amendment to Contribution
Agreement dated July 8, 2005, a Third Amendment to Contribution Agreement dated
July 15, 2005, a Fourth Amendment to Contribution Agreement dated July 22, 2005,
a Fifth Amendment to Contribution Agreement dated July 29, 2005 and a Sixth
Amendment to Contribution Agreement dated August 3, 2005 (the “Existing
Agreement”).

 

B.                                    The parties to this Amendment desire to
further amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       Modification of Certain Dates and Time
Periods.

 

a.                                       Section 1.3 of the Existing Agreement
is hereby amended and restated in its entirety to read as follows:

 

“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; provided, however, that (subject to the
satisfaction or waiver of the applicable conditions to the Closing set forth in
ARTICLE VII) the Closing Date shall be no later than November 11, 2005, unless
the Operating Partnership and the General Partners shall otherwise agree (the
“Closing Date”).  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.”

 

--------------------------------------------------------------------------------

 

b.                                      Section 6.13(c) of the Existing
Agreement is hereby amended by deleting “October 10, 2005” and replacing it with
“November 11, 2005”.

 

c.                                       Sections 10.1(b) and 10.1(c) of the
Existing Agreement are each hereby amended by deleting “October 10, 2005” and
replacing it with “November 11, 2005”.

 

3.                                       Ratification.  As expressly modified by
this Amendment, the Existing Agreement shall continue in full force and effect
in accordance with its terms.  References in the Existing Agreement or in this
Amendment to the “Agreement” shall be deemed to be references to the Existing
Agreement as modified by this Amendment.

 

4.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

[signatures on following page]

 

2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

3

--------------------------------------------------------------------------------

 

EIGHTH AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS EIGHTH AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of
November 11, 2005 among Vornado Realty Trust, a Maryland real estate investment
trust (the “Company”), Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), Vornado Rosslyn LLC, a Delaware limited liability
company and wholly owned subsidiary of the Operating Partnership (the “VNO
Transaction Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General
Partner”).

 

A.                                    The parties to this Amendment entered into
a Contribution Agreement dated May 12, 2005, as amended by an Amendment to
Contribution Agreement dated June 27, 2005, a Second Amendment to Contribution
Agreement dated July 8, 2005, a Third Amendment to Contribution Agreement dated
July 15, 2005, a Fourth Amendment to Contribution Agreement dated July 22, 2005,
a Fifth Amendment to Contribution Agreement dated July 29, 2005, a Sixth
Amendment to Contribution Agreement dated August 3, 2005 and a Seventh Amendment
to Contribution Agreement dated October 7, 2005 (the “Existing Agreement”).

 

B.                                    The parties to this Amendment desire to
further amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       Modification of Certain Dates and Time
Periods.

 

a.                                       Section 1.3 of the Existing Agreement
is hereby amended and restated in its entirety to read as follows:

 

“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; provided, however, that (subject to the
satisfaction or waiver of the applicable conditions to the Closing set forth in
ARTICLE VII) the Closing Date shall be no later than December 1, 2005, unless
the Operating Partnership and the General Partners shall otherwise agree (the
“Closing Date”).  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.”

 

--------------------------------------------------------------------------------

 

b.                                      Section 6.13(c) of the Existing
Agreement is hereby amended by deleting “November 11, 2005” and replacing it
with “December 1, 2005”.

 

c.                                       Sections 10.1(b) and 10.1(c) of the
Existing Agreement are each hereby amended by deleting “November 11, 2005” and
replacing it with “December 1, 2005”.

 

3.                                       Transaction Costs.  To the extent that
any Specified Vornado Transaction Costs or Specified General Partner Transaction
Costs, as defined in Section 9.1 of the Existing Agreement, are not finally
established on the Closing Date, such amounts shall be treated in the same
manner as net proration amounts pursuant to Section 9.3 of the Existing
Agreement; i.e., such transaction costs will be estimated on the Closing Date
using the best available information, and if the parties proceed under clause
(ii) of the third sentence of Section 9.3, the number of Units will be finalized
as promptly as practicable after the Closing Date based on the final transaction
costs as reasonably agreed by the General Partners and Vornado.

 

4.                                       Ratification.  As expressly modified by
this Amendment, the Existing Agreement shall continue in full force and effect
in accordance with its terms.  References in the Existing Agreement or in this
Amendment to the “Agreement” shall be deemed to be references to the Existing
Agreement as modified by this Amendment.

 

5.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

[signatures on following page]

 

2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

3

--------------------------------------------------------------------------------

 

NINTH AMENDMENT

TO

CONTRIBUTION AGREEMENT

 

THIS NINTH AMENDMENT TO CONTRIBUTION AGREEMENT (“Amendment”) is made as of
December 8, 2005 among Vornado Realty Trust, a Maryland real estate investment
trust (the “Company”), Vornado Realty L.P., a Delaware limited partnership (the
“Operating Partnership”), Vornado Rosslyn LLC, a Delaware limited liability
company and wholly owned subsidiary of the Operating Partnership (the “VNO
Transaction Sub”), and Robert H. Smith and Robert P. Kogod (each, a “General
Partner”).

 

A.                                    The parties to this Amendment entered into
a Contribution Agreement dated May 12, 2005, as amended by an Amendment to
Contribution Agreement dated June 27, 2005, a Second Amendment to Contribution
Agreement dated July 8, 2005, a Third Amendment to Contribution Agreement dated
July 15, 2005, a Fourth Amendment to Contribution Agreement dated July 22, 2005,
a Fifth Amendment to Contribution Agreement dated July 29, 2005, a Sixth
Amendment to Contribution Agreement dated August 3, 2005, a Seventh Amendment to
Contribution Agreement dated October 7, 2005 and an Eighth Amendment to
Contribution Agreement dated November 11, 2005 (the “Existing Agreement”).

 

B.                                    The parties to this Amendment desire to
further amend the Existing Agreement as set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.                                       Definitions.  Each capitalized term
used but not defined in this Amendment shall have the meaning assigned to it in
the Existing Agreement.

 

2.                                       Modification of Certain Dates and Time
Periods.

 

a.                                       Section 1.3 of the Existing Agreement
is hereby amended and restated in its entirety to read as follows:

 

“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; provided, however, that (subject to the
satisfaction or waiver of the applicable conditions to the Closing set forth in
ARTICLE VII) the Closing Date shall be no later than December 21, 2005, unless
the Operating Partnership and the General Partners shall otherwise agree (the
“Closing Date”).  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.”

 

b.                                      Section 6.13(c) of the Existing
Agreement is hereby amended by deleting “December 1, 2005” and replacing it with
“December 21, 2005”.

 

c.                                       Sections 10.1(b) and 10.1(c) of the
Existing Agreement are each hereby amended by deleting “December 1, 2005” and
replacing it with “December 21, 2005”.

 

3.                                       Ratification.  As expressly modified by
this Amendment, the Existing Agreement shall continue in full force and effect
in accordance with its terms.  References in the Existing Agreement or in this
Amendment to the “Agreement” shall be deemed to be references to the Existing
Agreement as modified by this Amendment.

 

4.                                       Counterparts; Execution By Facsimile. 
This Amendment may be executed in any number of counterparts with the same
effect as if all of the parties had signed the same document.  All counterparts
shall be construed together and shall constitute one agreement.  Execution and
delivery of this Amendment by facsimile shall be sufficient for all purposes and
shall be binding on any person who so executes and delivers this Amendment.

 

[signatures on following page]

 

2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be
duly executed and delivered on its behalf as of the date first above written.

 

 

 

VORNADO REALTY TRUST

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

By:                              Vornado Realty Trust,

 

its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

VORNADO ROSSLYN LLC

 

 

 

By:                              Vornado Realty L.P.

 

By:                              Vornado Realty Trust

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

GENERAL PARTNERS:

 

 

 

 

 

 

Robert H. Smith

 

 

 

 

 

 

 

 

Robert P. Kogod

 

3

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