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Exhibit 10.1
MANAGEMENT AND DEVELOPMENT AGREEMENT
THIS MANAGEMENT AND DEVELOPMENT AGREEMENT, dated
as of the 6th day of February, 1995 (the "Management
Agreement"), between ALEXANDER'S, INC., a Delaware
corporation, on behalf of itself and each of the subsidiaries
listed in Exhibit B attached hereto (collectively, "Owner"),
each having an address at 31 West 34th Street, New York, New
York 10001, and Vornado Realty Trust, a Maryland real estate
investment trust having an office at Park 80 West, Plaza II,
Saddle Brook, New Jersey 07663 ("Manager").
IN CONSIDERATION of the mutual promises and
covenants herein contained, Owner and Manager agree as
follows:
ARTICLE I. Appointment of Manager. A. Owner
hereby appoints Manager, on the conditions and for the term
hereinafter provided, to act for it in the management and
direction of all of its business affairs, including, without
limitation, the operation, maintenance and management of the
properties identified on Exhibit A attached hereto and made a
part hereof (each such property being hereafter referred to
individually as a "Property", and all such properties being
hereafter referred to collectively as the "Properties"), which
management duties are more particularly described in Article
IV, and the design, planning, construction and development of
the Properties, which development duties are more particularly
described in Article V. Manager hereby accepts said appoint-
ment to the extent and subject to the conditions set forth
below.
B. It is understood and agreed that in the event
that one or more of the Properties is sold or otherwise
disposed of, Exhibit A shall be deemed amended accordingly and
this Agreement shall, from and after the date of any such sale
or disposition, cease to apply as to any such Property and
shall continue to apply to such remaining Properties as Owner
continues to own.
C. Owner and Manager hereby acknowledge that
affiliates of Owner and Manager have heretofore entered into
that certain Real Estate Retention Agreement, dated as of July
20, 1992 (the "Retention Agreement"), whereby Vornado Realty
Trust, as successor in interest to Vornado, Inc., has agreed to
act as leasing agent with respect to the Properties.
ARTICLE II. Term. A. The term of this Agreement
shall commence on the Effective Date (as hereinafter
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defined) and shall continue until midnight on the date
immediately following the third anniversary of the date hereof
(the "Initial Expiration Date"), subject to paragraph C of
Article III, unless this Agreement shall be terminated and the
obligations of the parties hereunder shall sooner cease and
terminate, as hereinafter provided, provided, however, that
the term of this Management Agreement shall automatically
extend for consecutive one-year periods following the Initial
Expiration Date unless Manager or Board (as hereinafter
defined) provides the other with written notice, at least six
months prior to the beginning of any such additional one-year
period, of its election to terminate this Management
Agreement. The amount of the Management and Development Fee
(as hereinafter defined) shall be subject to review by the
parties at the end of the initial term and at the end of each
one-year term thereafter.
B. The term "Board" shall mean (i) the Board of
Directors of Alexander's, Inc.; or (ii) a committee or officer
designated by such Board of Directors to act on behalf of
Manager in connection with the administration of this
Agreement. The term "Independent Directors" shall mean the
independent directors of the Board of Directors of
Alexander's, Inc. or their designee.
ARTICLE III. Management and Development Fee.
A. Owner shall pay Manager, as Manager's entire
compensation for the services rendered hereunder in connection
with the management of the Properties and the management of
the Owner, a management fee (the "Management Fee") equal to
Three Million Dollars ($3,000,000) per annum, payable in equal
monthly installments, in arrears, in the amount of $250,000
each on the tenth day of each calendar month beginning with
the first calendar month after the Effective Date. All sums
payable to Manager hereunder shall be in addition to the
amounts payable to Manager under the Retention Agreement. In
the event that this Agreement shall commence on a date other
than the first day of a calendar month, or shall terminate on
a date other than the last day of a calendar month, the
installment of the Management and Development Fee (as
hereinafter defined) payable for that month shall be prorated
for the actual number of days that this Agreement is effective
in that calendar month. Notwithstanding anything contained
herein, in the event that the scope of the business of
Alexander's, Inc. shall expand beyond that which is
contemplated on the date hereof, Owner and Manager hereby
agree that the Management Fee shall be equitably adjusted
upward to reflect the increase in services rendered. In the
event that Independent Directors and Manager are unable to
agree on the amount of the upward
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adjustment as provided in this paragraph, then the parties
hereto hereby agree that the dispute shall be submitted
promptly by them to the American Arbitration Association for
the City of New York for determination in accordance with its
rules, and such determination shall be binding upon both
parties.
B. Owner shall pay Manager, as Manager's
compensation for the services rendered hereunder in connection
with the development of the Development Properties, a
development fee (the "Development Fee") (the Development Fee
and the Management Fee are sometimes referred to herein,
collectively, as the "Management and Development Fee") equal
to (i) five percent (5%) of the total Development Costs (as
hereinafter defined), allocated with respect to each Property
based on the Development Costs for that Property, plus (ii)
general overhead and administrative expenses equal to one
percent (1%) of the total Development Costs, allocated with
respect to each Property based on the Development Costs for
that Property. Owner shall pay Manager, on account of the
Development Fee, monthly installments (the "Development
Installments") each in an amount equal to the Specified
Installment Amount (as defined below), with each such
installment payable, in arrears, on the tenth day of each
calendar month, beginning with the calendar month immediately
following the Effective Date. In the event that it is
determined, upon Substantial Completion of any Property, other
than Rego Park I, that the aggregate Development Installments
paid to Manager as of such date on account of the Development
Fee, minus $900,000, total less than the amount of the
Development Fee that is due to Manager hereunder in respect of
all Properties other than Rego Park I, Owner shall pay to
Manager, within 15 days after Substantial Completion of such
Property, an amount equal to such difference. In the event it
is determined, upon Substantial Completion of Rego Park I,
that the Development Fee that is due to Manager hereunder, in
respect of Rego Park I, is greater than $900,000, Owner shall
pay to Manager, within 15 days after substantial completion of
Rego Park I, an amount equal to such difference. Anything in
this Agreement to the contrary notwithstanding, Owner's
obligation to pay the Development Installments, to the extent
of the Minimum Earned Fee Installments, during the twelve
calendar months beginning with the calendar month immediately
following the Effective Date, shall not be affected by the
termination of this Agreement for any reason and the
obligation to pay such amounts shall survive the termination
of this Agreement.
As used herein, the following terms shall have the
following meanings:
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"Development Budget" shall mean, collectively, the
capital budgets and development schedules setting forth
the Development Costs to be incurred in connection with
the Development Properties, as prepared by Manager and
approved by the Board and as more particularly described
in Article V hereof.
"Development Costs" shall mean the costs incurred by
Owner in accordance with the Development Budget in
connection with the planning, design and construction,
and development or redevelopment of the Properties,
including, without limitation, fees of any construction
manager, general contractor or any other third-party
professionals unaffiliated with Manager and costs set
forth in the Development Budget that may be reimbursed by
tenants at the Properties for improvements outside the
leased premises of those tenants. Notwithstanding the
foregoing, in no event shall Development Costs include
costs paid for or reimbursed by the tenants for
improvements inside the leased premises of those tenants,
the Development Fee, costs of the land and, with respect
to loans made to Owner, interest, commitment fees and
points.
"Development Properties" shall mean the Properties
identified in Exhibit A as the "59th Street Property",
the "Kings Plaza Store Property", the "Rego Park I
Property", the "Rego Park II Property" and the "Paramus
Property".
"Specified Installment Amount" means (i) during the
first year of the term of this Agreement, $62,500 plus
the Minimum Earned Fee Installment and (ii) thereafter,
$62,500. "Minimum Earned Fee Installment" means (i)
during the first twelve months of the term of this
Agreement, $75,000 and (ii) thereafter, $0.
"Substantial Completion" shall mean, with respect to
each Property, the date on which (a) all punch list items
and landscaping at that Property have been completed, (b)
the planning, design, construction and development of
that Property have been completed, as certified by the
Owner's architect, in accordance with the plans and
specifications therefor approved by the Board, (c) all
necessary occupancy and other permits have been obtained
with respect to the work completed at that Property for
which Manager has any obligation hereunder and (d) if
leases are then in effect at that Property, the portions
of the Property demised under the leases have been
delivered for possession to the tenants thereunder in
accordance with the terms thereof, the tenants have
otherwise taken possession of
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the demised premises, or, if tenants cannot take
possession due to Owner's obligation to perform tenant
improvement work, tenant improvement work has commenced
thereunder.
C. Notwithstanding the provisions of Article II,
in the event that Substantial Completion of all of the
Development Properties shall not have occurred prior to the
Initial Expiration Date, Manager shall have the option to
cause the term of this Agreement, as it applies to the
development of the Properties, to be extended as to any or all
of the Development Properties as to which construction has
commenced or is scheduled to commence no later than the first
anniversary of the Initial Expiration Date but as to which
Substantial Completion has not occurred. Such option may be
exercised by sending notice to Owner of Manager's intention to
so extend, and listing the Properties as to which the term of
this Agreement shall be extended, not less than thirty (30)
days prior to the Initial Expiration Date, in which event the
rights and obligations of the parties hereto under this
Agreement relating to the development of the Properties, as
provided in Article V, shall be automatically extended with
respect to the Properties listed in such notice, until the
date on which Substantial Completion of all of such Properties
shall have occurred. In the event that the term is so
extended pursuant to this paragraph, no further fee shall be
due to Manager following the Initial Expiration Date until
Substantial Completion of each respective Property. Upon
Substantial Completion of a Property, Owner shall pay to
Manager an amount equal to the positive difference, if any, of
(i) the aggregate Development Fee for the Development
Properties as to which Substantial Completion shall have
occurred minus (ii) the aggregate Development Installments
paid to Manager as of that date. Notwithstanding the
foregoing, in no event shall the rights and obligations of the
parties hereto under this Agreement relating to the management
of Owner's business be deemed to be extended beyond the
Initial Expiration Date except in accordance with Article II
hereof.
D. In the event that (i) Owner shall dispose of
any or all of the Development Properties or (ii) shall not
proceed for any reason with the development of any or all of
the Development Properties, then Manager shall use diligent
efforts to reduce or eliminate all allocable costs and
expenses, both direct or indirect, that would otherwise be
incurred by Manager in the performance of its obligations
hereunder. In such event(s), each subsequent Development
Installment, to the extent in excess of the Minimum Earned Fee
Installment, shall be equitably adjusted downward to reflect
the reduction or elimination of such costs and expenses
resulting from the deletion of services required to
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be provided by Manager. In all cases, however, Manager shall
be compensated for services rendered and reimbursed for costs
and expenses incurred to such date including, without
limitation, salaries and other compensation for employees of
Manager. Manager shall also be compensated for costs and
expenses of employees and other such items that will continue
to be incurred to the extent such costs and expenses are not
avoidable or cannot be mitigated by Manager using its diligent
efforts. In the event that Owner fails to obtain the
financing contemplated by, in and in accordance with, the
Commitment (as hereinafter defined) from Lender (as defined
therein) or from a substitute source within ninety (90) days after
the Effective Date, the Management Fee shall be equitably
adjusted downward, but in no event to an amount less than
$2,500,000, to reflect the reduction in services until such
time as alternate financing in a comparable amount is
obtained, at which time the Management Fee shall be fully
reinstated. In the event that Independent Directors and
Manager are unable to agree on the amount of the downward
adjustment as provided in this paragraph, then the parties
hereto hereby agree that the dispute shall be submitted
promptly by them to the American Arbitration Association for
the City of New York for determination in accordance with its
rules, and such determination shall be binding upon both
parties.
E. Owner and Manager acknowledge that Manager has
heretofore performed certain development planning services for
Owner in connection with the Property identified on Exhibit A
as the "Rego Park I Property", with respect to which
construction has commenced and is continuing.
F. Manager shall receive no commissions, fees or
other compensation (other than the Management and Development
Fee) in connection with any leasing or sale of all or any part
of any of the Properties or the procuring of any financing or
refinancing with respect thereto; provided, however, that
nothing contained herein shall in any way restrict the
commissions, fees and other compensation otherwise payable to
Manager or any affiliate of Manager by Owner or its affiliates
pursuant to the Retention Agreement.
G. In the event that Manager desires to provide
services not required to be performed hereunder ("Additional
Services") for the benefit of a tenant of any Property,
Manager shall notify Owner in advance of its intention to
provide Additional Services to a tenant or tenants where those
services are substantial in nature. The Independent Directors
shall have the right to prohibit Manager from undertaking such
services, if, in its judgment, the performance by Manager of
the Additional Services would
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adversely affect the professional relationship and duties of
Manager created by this Agreement.
ARTICLE IV. Management Services. A. Manager agrees
to operate and manage the day-to-day business of Owner and to
perform all of the executive functions of Owner other than
those performed by the Board, the Independent Directors, and
any officers of Owner (including, without limitation, the
Chief Executive Officer of Owner) designated by the Board,
including, without limitation, the operation and management of
the Properties and to perform, or cause to be performed by
outside contractors and under Manager's supervision, the
following functions on behalf of Owner in an efficient and
diligent manner using the same standard of care, including
bidding and selection processes, segregation of funds,
internal controls and internal auditing, used by Vornado
Realty Trust in connection with its business and in connection
with properties owned and managed by Vornado Realty Trust:
1. Preparing, or causing to be prepared at
Owner's expense, and filing all income, franchise and
other tax returns required to be filed by Owner.
2. Keeping true and complete books of account
in which shall be entered fully and accurately each
transaction of Owner's business. The books shall be kept
in accordance with the accrual method of accounting, and
shall reflect all transactions of Owner's business.
3. Preparing an annual report within ninety
(90) days after the end of each fiscal year of Owner,
including an annual balance sheet, profit and loss
statement and a statement of changes in financial
position.
4. Preparing a quarterly financial report of
Owner, within forty-five (45) days after the end of each
fiscal quarter of Owner.
5. Preparing or causing to be prepared at
Owner's expense, any reports or filings required by the
New York Stock Exchange or the Securities and Exchange
Commission.
6. Except as otherwise provided hereunder,
procuring, at Owner's expense and at the direction of the
Board or the Owner's insurance brokers or insurance
advisors, any insurance required or desirable in
connection with Owner's business or the employees
required to operate Owner's business and errors and
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omissions insurance for Manager, under which Owner shall
be the sole beneficiary. Manager shall not settle any
claim for a settlement amount in excess of $100,000
without the approval of the Board.
7. Providing all general bookkeeping and
accounting services required by the provisions of this
Agreement at the expense of Manager. Any independent
certified public accountant engaged by Manager shall be
subject to the approval of the Board and all fees and
expenses payable to such accountant shall be at Owner's
expense. Manager shall maintain separate books and
records in connection with its management of the
Properties and Owner, which books and records shall be
kept in accordance with generally accepted accounting
principles. Owner shall have the right to examine or
audit the books and records at reasonable times and
Manager will cooperate with Owner in connection with any
such audit.
8. Investing funds not otherwise required to
pay the costs of day-to-day maintenance and operation of
the Properties or in the operation of Owner's business
pursuant to guidelines set by the Board.
9. Repairing, making replacements and
maintaining the Properties and all common areas at the
Properties and purchasing all materials and supplies that
Manager deems necessary to repair and operate and
maintain the Properties, in order that each Property
shall remain in good, sound and clean condition, and
making such improvements, construction, changes and
additions to the Properties (including capital
improvements), as Manager deems advisable, provided that
Manager shall receive approval of the Board prior to
undertaking any improvements, construction, changes or
additions to the Properties. Owner shall pay all fees,
costs and expenses incurred by Manager in connection with
the retention of outside contractors and suppliers for
the performance of all repairs, replacements and
maintenance of the Properties. In the event that Owner
decides to remodel or extensively refurbish any Property,
or any part thereof, Manager shall be entitled to receive
additional compensation for services required to be
rendered by it for services such as supervision of
construction and allocation of overhead expense (i) to
the extent that tenants at that Property reimburse Owner
for such costs and (ii) if such costs are not
reimbursable by the tenants and such remodeling or
refurbishment shall be on a significant scale and shall
require significant work by the
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Manager, the amount of such additional compensation
payable to Manager shall be equal to Manager's costs in
connection with such work, plus twenty percent (20%) of
Manager's costs.
10. Negotiating and executing contracts for
the furnishing to the Properties of all services and
utilities, including electricity, gas, water, steam,
telephone, cleaning, security, vermin extermination,
elevator, escalator and boiler maintenance and any other
utilities or services, including repairs and maintenance
of the buildings, other improvements and common areas at
the Properties, or such of them as Manager deems
advisable to assure that the Properties shall be caused
to be and remain in a good, sound and clean condition and
properly operating. All fees, costs and expenses under
the contracts shall be paid by Owner.
11. Subject to the terms of any loan or credit
agreement entered into by Owner with a lender and
affecting any of the Properties, demanding, receiving and
collecting all rents, income and other revenues, which
Manager shall deposit in a bank account or accounts of
Owner maintained by Manager (with any interest thereon
for the account of Owner) for the deposit of monies in
regard to the Properties; disbursing, deducting and
paying from such rents, income and revenues, such amounts
required to be disbursed or paid in connection with the
repair, maintenance and operation of the Properties and
in the carrying out of Manager's duties. In the event
that Manager shall determine that funds in the accounts
are insufficient to make necessary disbursements or
payments, Manager shall notify Owner promptly of the
amount of such insufficiency. Promptly after (i) Owner
receives such notice, or (ii) Owner independently
determines that such funds are insufficient, Owner shall
determine and notify Manager as to the order of priority
in which disbursements and payments shall be made.
Disbursements or payments shall include, but not be
limited to, the following items:
a. all assessments and charges of every kind
imposed by any governmental authority having
jurisdiction (including real estate taxes,
assessments, sewer rents and/or water charges) and
interest and penalties thereon; provided, however,
that the interest or penalty payments shall be
reimbursed by Manager to Owner if imposed by reason
of delay in payment caused by Manager's gross
negligence, willful misconduct, bad faith or
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material misapplication of funds (to the extent such
material misapplication of funds is not covered by
insurance) (collectively "Malfeasance");
b. debt service on any loans secured by any of
the Properties;
c. license fees, permit fees, insurance
appraisal fees, fines, penalties, legal fees,
accounting fees incurred in the auditing of tenants'
books and records to establish and collect overage
or percentage rents, and all similar fees reasonably
incurred in connection with the ownership,
management or operation of the Properties, provided,
however, that any fines or penalties shall be
reimbursed to Owner by Manager if imposed by reason
of delay in payment caused by Manager's Malfeasance;
d. premiums on all policies of insurance;
e. salaries, wages and other related expenses,
bonuses and fringe benefits for on-site personnel,
service contracts, utilities, repairs, replacements,
on-site administration expenses and Manager's
compensation;
f. the Management and Development Fee and any
other sums payable hereunder to Manager;
g. contributions to merchants associations, if
and as required by any outstanding agreements; and
advertisement and public relations costs for
promotional activities; and
h. any and all other expenses or costs that
are customarily disbursed by managing agents of
properties comparable to the Properties or that are
required in order for Manager to perform its duties.
In no event shall Manager be required to pay any bills or
charges from its own funds, except as otherwise
specifically provided herein.
12. Engaging, at the expense of Owner, any
outside collection agency Manager deems appropriate for
the collection of rent or other revenues or instituting,
in Manager's name (but only if Manager so elects) or in
the name of Owner, but in any event at the expense of
Owner, any and all legal actions or
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proceedings to collect rent or other income from the
Properties or to oust or dispossess tenants or other
persons therefrom, or cancelling or terminating any lease
or the breach thereof or default thereunder by the
tenant, and holding all security deposits posted by
tenants and occupants and applying the same against
defaults by the tenant or occupant. Manager shall hold
all security deposits in a separate account if required
by law or if requested by Owner. Manager shall not
terminate any lease or evict the tenant thereunder
without the prior approval of the Board.
13. Rendering such statements at such times
and in such formats as Owner shall reasonably request and
as shall be customary for properties comparable to the
Properties, including, without limitation, monthly cash
flows, quarterly reports and operating statements and
annual budgets as provided below.
14. Maintaining, at Manager's expense,
insurance with reasonable deductibles, if any, for any
and all claims or causes of action arising from bodily
injury, disease or death of any of Manager's employees,
agents, or representatives and for any and all claims or
causes of action arising from Manager's negligence,
infidelity or wrongful acts in connection with the
performance of this Agreement, as well as employer's
liability and worker's compensation for Manager's
employees and fidelity bonds for employees of Manager
that handle funds and proceeds from the Properties, in
each case, at customary levels of coverage.
15. Causing, at Owner's expense, all such acts
and things to be done in or about the Properties as shall
be necessary to comply with all statutes, ordinances,
laws, rules, regulations, orders and determinations,
ordinary or extraordinary, foreseen or unforeseen of
every kind or nature affecting or issued in connection
with the Properties by any governmental authority having
jurisdiction thereof, as well as with all such orders and
requirements of the Board of Fire Underwriters, Fire
Insurance Exchange, or any other body that may hereafter
exercise similar functions (collectively, "Applicable
Laws"). In the event that Manager's good faith estimate
of the cost of complying with any Applicable Laws shall
exceed $100,000 in connection with any one Property or in
the aggregate, Manager shall not take any action to
comply with Applicable Laws without first obtaining the
consent of the Board. Notwithstanding the foregoing,
however, Owner shall have no obligation to pay for the
expenses incurred in connection with compliance with
Applicable
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Laws to the extent such costs are incurred due to
Manager's Malfeasance or material breach of this
Agreement. Manager shall have the right to contest such
Applicable Laws, and pending the final determination of
the contest, Manager may withhold compliance, provided
that Manager shall receive the Board's prior consent to
so withhold compliance. Manager agrees to contest any
Applicable Law the Board shall request Manager to
contest.
16. Filing applications, in Manager's name
(but only if Manager so elects) or in the name of Owner,
but in any event at Owner's expense, for the reduction of
real estate tax assessments and/or water charges and
sewer rents, and/or for the cancellation or reduction of
any other taxes, assessments, duties, imposts or other
obligations of any nature imposed by law; and instituting
any and all legal actions or proceedings in connection
therewith; filing, settling, trying or appealing of all
such applications and/or proceedings, upon such terms and
conditions as Manager deems appropriate, provided,
however, that Manager shall receive the consent of the
Board prior to the institution or settling of any legal
action or proceeding.
17. Taking, at Owner's expense and with the
prior consent of the Board, any appropriate steps to
protest and/or litigate to final decision in any
appropriate court or forum any violation, order, rule or
regulation affecting any Property.
18. Engaging, at Owner's expense, counsel,
approved by the Board, and paying counsel fees and court
costs and disbursements in connection with any
proceedings involving any Property.
19. Assisting Owner in obtaining financing for
the Properties and complying with all terms, conditions
and obligations of any lease, mortgage or other
agreement, on behalf of Owner and at Owner's expense,
that shall relate to any matters in connection with the
rental, operation or management of each Property, unless
prevented or delayed by strikes, riot, civil commotion,
war, inability to obtain materials because of
governmental restrictions or acts of God or public enemy,
or any other cause beyond Manager's control.
20. Performing administrative services
required in connection with managing the Properties,
including, without limitation, the following:
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a. administration of tenants' insurance and
enforcement of continuing coverage in accordance
with the terms of the leases.
b. confirmation of lease commencement dates and
termination dates.
c. liaison with the tenants as Owner's
representative.
d. supervision of tenant litigation in
conjunction with Owner's legal counsel.
e. obtaining sales volume reports from tenants
and calculating and collecting percentage rents as a
result of those reports.
f. providing necessary information to Owner
for tax reporting, in a format reasonably approved
by Owner and upon Owner's request, initiating
together with Owner's counsel, property tax appeals.
g. providing quarterly financial statements,
in a format reasonably approved by Owner, reflecting
in reasonable detail the operating income and
expense of the Properties.
h. alerting Owner if tenant sales volume
reports appear inaccurate and recommend audits.
i. reporting and making recommendations
regarding unusual tenant problems requiring Owner's
approval.
j. obtaining contractors to maintain, operate
and provide security for the Properties.
k. coordinating with Vornado Realty Trust and
all other consultants retained by Owner in
connection with the Properties.
Notwithstanding anything contained in this Article IV or
elsewhere in this Agreement to the contrary, Manager shall not
be responsible for the day-to-day management of, or the
collection of income from, the Kings Plaza Shopping Center and
Marina; that Property shall continue to be operated in
accordance with the Management and Operating Agreement, dated
as of December 31, 1986, among Kings Plaza Shopping Center of
Flatbush Avenue, Inc. ("KPA"), Kings Plaza Shopping Center of
Avenue U, Inc. and Centercorp., Inc (the "Centercorp
Agreement"); provided, however, that Manager
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shall, in accordance with the terms of this Agreement,
exercise all rights and have all of the responsibilities of
Alexander's Department Stores of Brooklyn, Inc., as successor
interest to KPA, under the Centercorp Agreement, provided
further, however, that the Board shall retain the right to
approve any successor in interest to Centercorp, Inc.
21. Preventing the use of the Properties for any
purpose that would void any insurance policy covering any of
the Properties or that would render any loss thereunder
uncollectible, or that would be in violation of any
governmental restriction, any tenant lease or any reciprocal
easement agreement.
22. Providing all other services customarily
provided by Vornado Realty Trust in connection with properties
owned and managed by Vornado Realty Trust.
B. Owner shall be responsible for, and shall
indemnify Manager against, all costs incurred in connection
with the operation of Owner's business, except to the extent
such costs are incurred in connection with Manager's
Malfeasance or material breach of this Agreement, and all
past, present and future liabilities of Owner, including,
without limitation:
1. all outside professional fees, including
attorneys, accountants and architects;
2. all filing, registration and other fees payable
to the New York Stock Exchange, the Securities and
Exchange Commission and state securities agencies;
3. taxes;
4. insurance (other than workers' compensation
insurance for Manager's employees and as otherwise
provided herein), including retiree health liability
insurance and directors' and officers' liability
insurance;
5. fees and expenses applicable to the Board of
Directors of Owner; and
6. costs that are at the discretion of Owner, for
services not included in this Agreement, including,
without limitation, rent and other expenses for Owner's
offices, salaries and other related expenses of employees
performing services for Owner (other than employees of
Manager), and expenses incurred in connection with the
winding up of Owner's prior
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retailing activities and activities of Owner related to
Owner's Chapter 11 filing, including, without limitation,
salaries and other related expenses for employees whose
sole or primary function is related to such winding up
activities, including, without limitation the salary and
other related expenses of Brian Kurtz.
7. all costs and expenses incurred by Manager in
connection with the transition to Manager of the
management activities contemplated by this Agreement.
ARTICLE V. Development. Manager agrees to design
and plan the development of the Development Properties and to
manage the construction and development of the Development
Properties and to perform, or cause to be performed by outside
contractors, the following functions on behalf of Owner in an
efficient and diligent manner using the same standard of care,
including bidding and selection processes, used by Vornado
Realty Trust in connection with properties owned and managed
by Vornado Realty Trust, and on a Property by Property basis:
1. Obtaining or assisting Owner in obtaining,
on behalf of Owner and at Owner's expense, all required
building permits and other governmental approvals and
consents, along with any zoning variances or other zoning
approval, necessary to initiate the development of any
Development Property.
2. Retaining, at Owner's expense, all
architects, engineers, contractors, construction managers
and consultants (collectively "Consultants") necessary or
desirable in completing the design and planning of the
development of any Development Property and negotiating,
on behalf of Owner, any contracts with Consultants.
3. Monitoring and coordinating the activities
of the Consultants retained for the planning and design
of the Development Properties.
4. Assisting and cooperating with Owner in all
aspects of arranging or acquiring any construction or
other financing required for the Development Properties,
including, without limitation, meeting with and
furnishing information to prospective lenders.
5. Preparing and filing, or causing the
preparation and filing at the expense of Owner of, all
returns (other than income, franchise and other similar
returns), statements, declarations and filings that may
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from time to time be required of Owner in connection with
the planning, design and development of any Development
Property by any municipal, state, federal or other
governmental or statutory authority having jurisdiction
over the development of any Development Property.
6. Preparing an initial budget as soon as
practicable, but in any event prior to the commencement
of any construction at any of the Development Properties
(including, without limitation, an estimate of the timing
of the incurrence of expenditures contained in the
budget) for such Property and make any revisions or
adjustments necessary to acquire approval of the Board
for such budget, the approved budget for any of the
Properties being herein called the "Development Budget".
Manager shall recommend any revision to the Development
Budget that Manager from time to time may deem
appropriate, or as the Board may reasonably request, in
each case to be approved by the Board, provided, however,
that Manager's obligation to seek Board approval of
change orders shall be limited to change orders
exceeding, in the aggregate, ten percent (10%) of the
applicable line item in the initial Development Budget.
The approval by the Board of the Development Budget and
any revisions thereto shall also constitute authorization
by the Board of the expenditures and commitments provided
for therein and, subject to the other provisions of this
Agreement, Manager then shall be entitled to act for
Owner in incurring the expenditures and making
commitments to the extent provided for in the approved
initial or revised Development Budget, as applicable.
7. Recommending, for the Board's approval,
such Consultants as may be necessary or desirable for the
development of any Property and negotiating on behalf of
Owner any contracts and agreements as are necessary or
desirable in connection with the development of any
Property with such Consultants approved by the Board and
supervising the performance by such Consultants
thereunder, including, without limitation, the
supervision and processing of change requests and change
orders.
8. Monitoring and coordinating the activities
of the Consultants and, where appropriate, assisting
Owner in performing Owner's obligations under the
contracts with Consultants.
9. Supervising the collection and review of
all documentation required to be submitted to any
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construction lender or other lender in connection with
the development of any Property and supervising all
disbursements made pursuant to any financing.
10. Supervising the ordering and installation
of equipment or other supplies necessary for the
development of any Property;
11. Preparing (i) quarterly progress reports
regarding the development of the Properties, detailing
any deviations from the Development Budget and providing
explanations for such deviations, (ii) all reports
required under loan agreements affecting Owner and (iii)
promptly after the completion of the development of any
Property, preparing a report of actual Development Costs
incurred in connection with the development of that
Property, separately identifying as estimated items
those, if any, that cannot be finally determined at the
time of the final report.
12. Providing regular and continuing
accounting services, on the basis of standard accounting
practices for similar projects consistently applied, of
all costs and expenses incurred by Owner in connection
with the development of the Properties, and the receipt
and use of borrowed funds or funds otherwise made
available.
13. Attending meetings as reasonably required
or requested by the Board.
14. Assisting Owner in obtaining and
maintaining in full force and effect at all times during
the term of construction at any of the Properties all-
risk builder's risk insurance (including coverage against
collapse and fire) written on a progress basis and
including commercial public liability insurance with
incidental contract coverage, with such insurers, in such
amounts and under such policies as may be reasonably
satisfactory to the Board and the expense of maintaining
such insurance shall be an expense of, chargeable to, or
paid by Owner.
15. Generally performing such other acts and
things as may be reasonably required for coordinating,
monitoring, administering and supervising the full and
complete planning, design construction and development of
the Development Properties.
ARTICLE VI. Annual Budget. A. On or before the
beginning of each fiscal year of Alexander's Inc., Manager
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shall prepare and submit to Owner a proposed budget
(hereinafter referred to as the "Proposed Budget") of the
estimated operating and capital expenses of the Properties
for the next fiscal year or such other operating period as
may be agreed to by the parties.
B. The Board shall have the right to approve or
disapprove the Proposed Budget. The final budget for the
fiscal year is referred to as the "Approved Budget" in this
Agreement. The Approved Budget shall be subject to quarterly
comparisons and revisions, which revisions the Manager and the
Board mutually shall agree to be appropriate, all such
revisions as approved by the Board shall be considered part of
the "Approved Budget". Manager shall make expenditures
without the specific approval of the Board if:
1. The expenditure (or group of related
expenditures) has been generally identified in an
Approved Budget line item and exceeds the amount shown in
respect thereof in such budget line item by no more than
ten percent (10%).
2. The expenditure (or group of expenditures) has
not been generally identified in the Approved Budget but
does not exceed $100,000.
3. The expenditure (or group of related
expenditures) exceeds $100,000 and was either not
anticipated or exceeded the Approved Budget by more than
ten percent, but is not discretionary.
4. The expenditure is required by a condition or
situation that in Manager's professional judgment
constitutes an emergency. In any case where an emergency
situation exists that is of serious financial or physical
consequence, Manager may act in the best interest of
Owner but Manager shall attempt to notify Owner prior to
making the expenditure, but in any event, Manager shall
report verbally the making of the expenditure to Owner no
later than 24 hours after the occurrence of the
emergency.
ARTICLE VII. Chief Executive Officer. Steven Roth,
Chairman of the Board and Chief Executive Officer of Manager,
shall serve as Chief Executive Officer of Alexander's, Inc.
and provide all services normally associated with such
position, to the extent not inconsistent with his position
with Manager. Owner recognizes that Steven Roth has or may
have other business interests, activities and investments,
including, without limitation, interests in connection with
his interest in
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Manager and Manager's affiliates, some of which may be in
conflict or competition with the business of Owner and that he
is entitled to carry on such other business, activities, and
interests and shall have no duty or obligations to offer to
Owner any interest in such business interests, activities and
interests, including, without limitation, any potential
property acquisition, whether or not competitive with the
business interests of Owner. Manager agrees to cause Steven
Roth to excuse himself from any activities of Owner that are
related to the enforcement of this Agreement.
ARTICLE VIII. Owner to Execute Documents; Reserved
Rights. Owner covenants and agrees that wherever in this
Agreement it is provided that Manager may take any action in
the name of or on Owner's behalf, Owner will promptly execute
any documents that may be required by Manager for the purposes
of carrying out any of Manager's functions as same are set
forth. Anything set forth in this Agreement to the contrary
notwithstanding, Owner reserves to itself the performance of
all duties and obligations of Manager hereunder to be
performed with respect to the 59th Street Property (as
described on Exhibit A hereto) as required pursuant to the
amended and restated partnership agreement of Seven Thirty One
Limited Partnership as the same exists on the date hereof;
provided, however, that no such reservation or performance by
Owner will alter any other rights or obligations set forth in
this Agreement (including, without limitation, the payment of
the fees payable to Manager hereunder).
ARTICLE IX. Assignment; Cancellation. A. Neither
Owner nor Manager shall assign this Agreement or any of its
rights hereunder without the consent of the other party;
provided, however, (i) qualification by Alexander's, Inc. as a
REIT (as defined herein) shall not be deemed to constitute an
assignment and (ii) that Manager shall have the right to
assign its rights and delegate its duties under this Agreement
to any Specified Vornado Affiliate without the consent of
Owner provided that, (a) in connection with any such
assignment, Vornado Realty Trust provides to Owner a
guarantee, in form and substance reasonably satisfactory to
Owner, of the duties and obligations of the Specified Vornado
Affiliate under this Agreement and agrees, to the extent
necessary, to make available to the Specified Vornado
Affiliate the resources of Vornado Realty Trust for the
purposes of carrying out such duties and obligations, (b)
notwithstanding any such assignment to a Specified Vornado
Affiliate, the indemnification of Owner by Manager set forth
in Article XII hereof shall remain the obligation of Vornado
Realty Trust and (c) references to the standard of care,
customarily provided services and reporting standards
applicable to Manager in performing its duties under this
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Management Agreement shall be the same standard of care and
reporting standards applicable to Vornado Realty Trust in
connection with properties owned by Vornado Realty Trust. For
purposes of this Article IX, "Specified Vornado Affiliate"
shall mean (i) any wholly-owned subsidiary of Vornado Realty
Trust or (ii) any entity at least 95% of the preferred stock
of which is owned by Vornado Realty Trust.
(b) In the event that there is a change of control of
Vornado Realty Trust or Manager after the date of this
Agreement, the Independent Directors shall have the right to
terminate this Agreement if the Independent Directors shall
determine that such change of control is reasonably likely to
have a material adverse effect on the ability of Manager to
perform its obligations under this Agreement. For purposes of
this Article IX, "change of control" shall mean that the
aggregate interest of Interstate Properties and its partners
in Vornado Realty Trust shall be less than twenty percent of
the ownership interests therein.
(c) This Agreement shall be non-cancelable, except
as permitted by the terms of this Agreement.
ARTICLE X. Breach; Termination. A. If either
party shall commit a material breach of this Agreement, the
other party shall serve written notice upon the allegedly
breaching party, and the notice shall set forth the details of
such alleged breach. Owner covenants and agrees that Manager
shall not be deemed to have committed a material breach of
this Agreement unless Manager wilfully violates any provision
hereof, is grossly negligent in the observance or performance
of any of its obligations hereunder, acts in bad faith in
connection with its duties under this Agreement, or materially
misapplies any funds received from the Properties (to the
extent not covered by insurance).
B. Owner shall, within ten (10) days after its
receipt of said notice, cure such breach unless it disputes
the claim as set forth in Paragraph D of this Article X. If
Owner does not cure within such ten-day period, Manager shall
have the right, but not the obligation, to cease providing
services hereunder until the breach shall be cured. In the
event that Manager shall cease providing services hereunder
pursuant to this Paragraph, Owner shall have the right to
terminate this Agreement and replace Manager in which event
Manager promptly shall deliver to Owner all books and records
with respect to the Properties and Owner that are in Manager's
possession and otherwise comply with paragraph H below, and
upon its receipt of any outstanding payments due to it, shall
cooperate with the successor Manager to effect a smooth
transition in the
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management, operation and development of the Properties and
the management and operation of Owner.
C. Manager shall, within thirty (30) days after its
receipt of a notice under Paragraph A of this Article X, cure
such breach unless it disputes the claim as set forth in
Paragraph D of this Article X; or if said breach cannot be
cured within said thirty (30) day period, Manager shall within
said time period commence and thereafter diligently and
continuously proceed with all necessary acts to cure such
breach, subject to the terms of any loan documents and other
material agreements affecting the Properties. If Manager
shall fail within said time period to cure the said breach,
Owner shall have the right, by sending a second written notice
to Manager, to terminate this Agreement effective immediately
or as of a particular date which shall be specified in said
second notice.
D. If the party who receives the notice of breach
shall, within five (5) days after receipt of such notice, send
the notifying party a written notice disputing the claim of
material breach and demanding arbitration thereof, then the
parties hereto hereby agree that the dispute shall be
submitted promptly by them to the American Arbitration
Association for the City of New York for determination in
accordance with its rules, and such determination shall be
binding upon both parties. During the pendency of said
arbitration, Manager shall continue to perform all of its
obligations as Manager under this Agreement. If it is
determined that the party did commit a breach, then the breach
shall be cured within ten (10) days after service of a copy of
the award or determination on the breaching party; and if not
so cured, this Agreement shall be terminated.
E. If, at any time during the term of this Agree-
ment there shall be filed against either of the parties hereto
in any court, pursuant to any statute either of the United
States or any state, a petition in bankruptcy or insolvency or
for reorganization of or for the appointment of a receiver or
trustee of all or a portion of the property of either party,
and such petition is not discharged within thirty (30) days
after the filing thereof, or if either party makes an
assignment for the benefit of creditors, or petitions for or
enters into an arrangement, or permits this Agreement to be
taken under any writ of execution or attachment, then in any
of such events, the other party hereto shall have the right to
terminate this Agreement by giving written notice, by
certified mail, effective as of a particular date specified in
said notice.
F. Manager and Owner shall each have the further
right to terminate this Agreement or any portion or
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provision thereof or activity thereunder on not less than
thirty (30) days' prior written notice to the other party if
Manager or Owner shall determine in good faith that this
Agreement shall or may deprive Manager or Alexander's, Inc. of
any benefits appurtenant to that Party's future qualification
as a REIT under all applicable laws, including without
limitation, the Internal Revenue Code of 1986, as amended from
time to time (the "Code") or continued benefits if that party
is a REIT.
G. Upon any termination, partial termination with
respect to one or more Properties or as set forth in paragraph
C of Article III or expiration of this Agreement, all of the
obligations of either party to the other shall terminate
immediately except (i) Manager shall comply with the
applicable provisions of Subsection H below, (ii) Owner shall
pay to Manager all Management and Development Fees and
expenses earned and/or due hereunder to the date of
termination or expiration and (iii) as otherwise expressly
stated herein. Upon any termination of any portion, provision
or activity of or under this Agreement, the provisions of the
preceding sentence shall apply in respect of the terminated
portion, provision or activity. Owner shall pay Manager any
amount owed to Manager under this Agreement within 30 days
after any termination of this Agreement.
H. Upon the expiration or earlier termination or
partial termination of this Agreement with respect to any or
all of the Properties, Manager shall:
1. Deliver to Owner, or such other person or
persons designated by Owner, all books and records of any
Property as to which this Agreement has been terminated
and all funds in its possession belonging to Owner or
received by Manager pursuant to this Agreement with
respect to such Properties, together with all leases and
all other contracts related to such Properties; provided,
however, that Manager shall have the right to keep a copy
of all such records; and
2. Assign, transfer or convey to Owner, or
such other person or persons designated by Owner, all
service contracts and personal property of Owner relating
to or used in the operation or maintenance of any
Property as to which this Agreement has been terminated.
Upon the expiration or termination, in whole or in part,
of this Agreement, Manager shall render a full account to
Owner and shall deliver to Owner a statement outlining in
detail all management fees due to Manager hereunder with
respect to such terminated Property, shall cause the net
amount of any
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funds held by Manager in connection with any such
Property to be delivered to Owner and shall cooperate
with Owner in the transition by Owner to a replacement
property manager, if applicable.
Owner shall compensate Manager for all costs and expenses
incurred by Manager in good faith in connection with the
transition of the management of Owner and the management of
the Properties from Manager to any new manager.
ARTICLE XI. No Joint Venture. It is the intent of
this Agreement to constitute Manager as an independent
contractor and as agent of Owner under any contract entered
into by Manager on behalf of Owner in accordance with the
terms of this Agreement, and this Agreement shall be so
construed and Manager agrees at all times to act in conformity
therewith. Nothing herein contained shall be deemed to have
created, or be construed as having created any joint venture
or partnership relationship between Owner and Manager. At all
times during the performance of its duties and obligations
arising hereunder, Manager shall be acting as an independent
contractor.
ARTICLE XII. Indemnity. A. Owner shall, to the
fullest extent permitted by applicable law, indemnify, defend
and hold harmless Manager, its officers, directors, trustees,
partners, agents, employees and representatives against any
losses, claims, damages or liabilities to which such person
may become subject in connection with any matter arising out
of or in connection with this Agreement or Owner's business or
affairs, except for any loss, claim, damage or liability
caused by Manager's Malfeasance. If Manager becomes involved
in any capacity in any action, proceeding or investigation in
connection with any matter arising out of or in connection
with this Agreement or Owner's business or affairs, Owner
shall reimburse Manager for Manager's legal and other expenses
(including the cost of any investigation and preparation) as
they are incurred in connection therewith; provided, however,
that Manager shall promptly repay to Owner the amount of any
such reimbursed expenses paid to it to the extent that it
shall ultimately be determined that Manager, its officers,
directors, trustees or agents were not entitled to be
indemnified by Owner in connection with such action,
proceeding or investigation.
B. Vornado Realty Trust shall indemnify, defend
and hold harmless Owner and each of their respective officers,
directors, trustees, partners, representatives, employees and
agents from and against any and all claims, losses, damages or
liabilities, to which such person may become subject and
arising out of Manager's Malfeasance or
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the Malfeasance of any of its employees, representatives or
agents in performing its or their duties under this Agreement,
except to the extent caused by the Malfeasance of Owner or any
of their respective officers, directors, trustees,
shareholders, partners, representatives, employees or agents.
If Owner becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter
arising out of or in connection with this indemnity, Manager
shall reimburse Owner for Owner's legal and other expenses
(including the cost of any investigation and preparation) as
they are incurred in connection therewith; provided, however,
that Owner shall promptly repay to Manager the amount of any
such reimbursed expenses paid to it to the extent that it
shall ultimately be determined that Owner, its officers,
directors, trustees or agents were not entitled to be
indemnified by Manager in connection with such action,
proceeding or investigation. Notwithstanding anything
contained herein, Manager's liability hereunder shall be
limited (except to the extent covered by insurance) to the
aggregate amount of the Management and Development Fee
received by Manager as of the date such liability is
determined.
C. The terms of this Article XII shall survive the
expiration or termination of this Agreement.
ARTICLE XIII. Notices. Any and all notices,
consents or directives by either party intended for the other
shall be in writing sent by hand delivery or reputable
overnight courier service to the respective addresses first
herein set forth in this Agreement, unless either party shall
have designated different addresses, by serving written
notices of change of addresses on the other party by
registered or certified mail, return receipt requested.
ARTICLE XIV. Miscellaneous. A. This Agreement
cannot be changed or modified, varied or altered except by an
agreement, in writing, executed by each of the parties hereto.
This Agreement constitutes all of the understandings and
agreements of whatsoever kind or nature existing between the
parties in connection with the relationship created herein.
B. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
C. Neither Owner nor Manager shall make (and each
hereby waives) any claim against the other party's directors
personally or against the other party's trustees,
beneficiaries or shareholders personally. Manager shall (and
is hereby authorized to) insert in all leases,
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documents and agreements executed by it on behalf of Owner, a
provision that Manager's directors, trustees, beneficiaries or
shareholders shall not be personally liable thereunder.
D. Owner shall have the right to collaterally
assign this Agreement to a lender providing financing to Owner
and Manager agrees to execute and deliver a recognition
agreement, in a commercially reasonable form, providing that
(a) such lender may assume Owner's interest in this Agreement
without obligation for payment of any fees accrued and payable
to Manager for a time prior to such assumption or with respect
to performance of any obligation relating to a time prior to
such assumption, (b) Manager will perform the services set
forth herein for so long as such lender continues to perform
the obligations of Owner hereunder and (c) any termination
hereof by the lender other than in accordance with the terms
of this Agreement (as opposed to in accordance with the
recognition agreement) shall not relieve Owner of its
obligations hereunder. In no event shall an assumption by the
lender under such a recognition agreement release Owner from
its obligation hereunder with respect to accrued fees or
otherwise.
E. Any approval or consent required by or
requested of any of Owner, the Board, or the Independent
Directors pursuant to the terms of this Agreement may be
withheld in the sole and absolute discretion of Owner, the
Board or the Independent Directors, as applicable, unless
otherwise expressly provided.
F. Manager and Owner hereby expressly acknowledge
and agree that any third party engaged in accordance with the
terms of this Agreement to perform any of the services
contemplated hereunder shall be at Owner's expense.
G. Owner and Manager acknowledge that nothing
contained in this agreement shall restrict or otherwise affect
the rights of Vornado Realty Trust or any affiliate thereto in
connection with any loan facility provided by Vornado Realty
Trust or such affiliate to Alexander's, Inc. and/or its
subsidiary.
H. Anything contained in this Agreement to the
contrary notwithstanding, Manager's agreement to undertake the
obligations set forth in this Agreement shall not constitute
or be deemed to constitute an express or implied warranty
concerning the general affairs, financial position,
stockholders' equity, financial results of operations or
prospects of Owner.
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ARTICLE XV. Declaration of Trust.
A. Manager shall use every reasonable means to
assure that all persons having dealings with Alexander's
through Manager shall be informed that no trustee,
shareholder, officer or agent of Alexander's, or any
subsidiary of Alexander's established for purposes of electing
tax treatment as a REIT, shall be held to any personal
liability, nor shall resort be had to their private property
for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of Owner, but the trust estate
only shall be liable. Manager recognizes and agrees that
every agreement or other written instrument entered into by
Manager on behalf of Owner shall contain a provision stating
the above limitation.
B. Manager represents, warrants and agrees that
neither it nor any affiliated or related person or entity
(including any person or entity owning any interest in
Manager) is now, or shall become during the term of this
Agreement, a borrower of any funds advanced by Alexander's and
Manager shall advise Alexander's promptly, in writing, should
such representation and warranty become untrue. Manager
shall, from time to time, furnish such information as may
reasonably be requested by Owner in order to facilitate
Alexander's qualification as a REIT under the Code.
ARTICLE XVI. Continued Qualification as a REIT. A.
Manager shall make reasonable efforts not to enter into any
agreement (including, without being limited to, any agreement
for the furnishing of non-customary services), without the
consent of Alexander's, with any tenant or other occupant of
any Property, that would result in (A) the disqualification of
Alexander's as a REIT entitled to the benefits of Sections 856
et seq., of the Code, (B) the imposition of any penalty or
similar tax on Alexander's (including, without being limited
to, the tax imposed on the failure to meet certain income
requirements under Section 857(b)(5) of the Code and the tax
imposed on income from prohibited transactions under Section
857(b)(6) of the Code) or (C) any part of the rental or other
consideration paid thereunder by such tenant or occupant to
Alexander's, or to Manager on behalf of Alexander's, being
held not to constitute either "rents from real property" or
"interest on obligations secured by mortgages on real property
or on interests in real property" or "interest on obligations
secured by mortgages on real property or on interest in real
property" or other income described in Sections 856(c)(2) and
(c)(3) of the Code.
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B. Alexander's shall make reasonable efforts to
assure, by prior review of agreements to be entered into by
Manager, that no such agreement contains provisions that would
result in the disqualification of Alexander's as a REIT
entitled to the benefits of Sections 856 et seq. of the Code,
receipt by the Owner of non-qualifying income, or imposition
of a penalty or similar tax (including, without being limited
to, the tax imposed on the failure to meet certain income
requirements under Section 857(b)(5) of the Code and tax
imposed on income from prohibited transactions under Section
857(b)(6) of the Code), and specifically agrees that Manager
shall be entitled to rely upon the advice of Alexander's
designated counsel as to any such matter; provided, however,
that, without regard to whether such review has been performed
or advice rendered, if any document or other written
undertaking entered into or made by or on behalf of Owner or
any constituent entity of Owner shall, in the reasonable
opinion of counsel to Alexander's, contain any provision that
would result in a significant risk of the disqualification of
Alexander's as a REIT, receipt by Alexander's of non-
qualifying income, imposition on Alexander's of any penalty or
similar tax (including, without being limited to, the tax
imposed on the failure to meet certain requirements under
Section 857(b)(5) of the Code and the tax imposed on income
from prohibited transactions under Section 857(b)(6) of the
Code), all as provided for in said Sections 856 et seq., then:
(i) such provision shall promptly be amended or
modified, to the reasonable satisfaction of counsel to
Alexander's so as to remove the risk of such result, such
amendment or modification to be retroactive to the date
of such document or other undertaking, or to a date
approved by counsel to Alexander's; or
(ii) if a satisfactory amendment or modification
cannot be agreed upon as set forth in clause (i) above,
any such document or other undertaking shall be
terminated by Alexander's, such termination to be
retroactive to the date of such document or other
undertaking, or to a date approved by counsel to
Alexander's, and effective as to all terms and provisions
of such document or other undertaking, except such
provisions thereof as call for the making of any
distribution or the payment of any compensation to any
third party, for the purposes of which provisions, the
termination date shall be deemed to be without
retroactive effect.
C. Manager agrees that it shall cooperate with
Owner in accomplishing a satisfactory amendment or
modification of any such document or other undertaking, or
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the termination thereof, and shall, on request, execute and
deliver any and all agreements and other documents reasonably
required to effect such amendment or modification, or such
termination. Manager shall submit any agreement proposed to
be entered into by or on behalf of Owner to Owner's designated
counsel for review a reasonable period of time prior to the
proposed execution of such agreement.
ARTICLE XVII. Effectiveness of this Agreement;
Further Termination Right. This Agreement shall not become
effective until the later of (i) the date the Bankruptcy
Court of the United States District Court for the Southern
District of New York approves this Management Agreement and
(ii) the date on which Vornado Realty Trust shall have
purchased all outstanding shares of stock in Alexander's
held by Citibank, N.A., pursuant to that certain Stock
Purchase Agreement, dated as of February 6, 1995, between
Citibank, N.A. and Vornado Realty Trust and Citibank, N.A.,
shall have transferred to Vornado Realty Trust all such shares
of stock. Manager shall have the right to terminate this
Agreement in the event that Owner shall either (i) fail to use
its best efforts to satisfy the conditions set forth in that
certain commitment letter, dated February 6, 1995, between
Vornado Realty Trust and Alexander's (the "Commitment") and to
take all actions required to be taken to pledge the collateral
and effectuate the Loan (as defined in the Commitment) on the
terms and condition set forth therein; or (ii) breach its
obligations to refrain from soliciting for or accepting any
financing from any party other than as defined in the
Commitment prior to the expiration of the Commitment. In the
event that the Effective Date shall not have occurred by June
30, 1995, this Agreement shall terminate and neither party
shall have any obligations hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have hereunto
executed this Agreement as of the 6th day of February, 1995.
OWNER: ALEXANDER'S INC.
By: /s/STEPHEN MANN
Stephen Mann
Chairman
MANAGER: VORNADO REALTY TRUST
By: /s/JOSEPH MACNOW
Joseph Macnow
Vice President and Chief
Financial Officer
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EXHIBIT A
1. "FORDHAM ROAD PROPERTY"
BUILDING
ADDRESS: commonly known as 2501-2511 Grand
Concourse, Bronx, New York
TAX MAP DESIGNATION:
BLOCK: 3167 LOT: 1
CITY: New York COUNTY: Bronx STATE: New York
PARKING LOT
ADDRESS: commonly known as Creston Avenue, Bronx,
New York
TAX MAP DESIGNATION:
BLOCK: 3167 LOT: 26
CITY: New York COUNTY: Bronx STATE: New York
2. "FLUSHING PROPERTY"
ADDRESS: 136-20 through 136-30 Roosevelt Avenue,
a/k/a 40-17-19 Main Street
Queens, New York
TAX MAP DESIGNATION:
BLOCK: 5019 LOT: 5
CITY: New York COUNTY: Queens STATE: New York
3. "THIRD AVENUE PROPERTY"
ADDRESS: 2948-54 Third Avenue;
633 Bergen Avenue;
2964 Third Avenue; and
2970 Third Avenue
Bronx, New York
TAX MAP DESIGNATION:
SECTION: 9 BLOCK: 2362 LOTS: 44,72,71,52 & 53
CITY: New York COUNTY: Bronx STATE: New York
4. "59TH STREET PROPERTY"
ADDRESS: 162-64 East 59th St a/k/a 976-88 Third Ave
135-39 East 58th St a/k/a 723-33 Lexington Ave
136-40 East 59th St a/k/a 735-41 Lexington Ave
New York, New York
TAX MAP DESIGNATION:
BLOCK: 1313 LOTS: 40, 42, 43 & 50
CITY: New York COUNTY: New York STATE: New York
1
31
5. "KINGS PLAZA STORE PROPERTY"
ADDRESS: Kings Plaza
Brooklyn, New York
TAX MAP DESIGNATION:
BLOCK: 8470 LOT: P/O 55
CITY: New York COUNTY: Kings STATE: New York
6. "KINGS PLAZA SHOPPING CENTER PROPERTY"
ADDRESS: Kings Plaza
Notwithstanding Avenue & Avenue U
Brooklyn, New York
TAX MAP DESIGNATION:
BLOCK: 8470 LOTS: P/O 55, P/O 50 & P/O 1
CITY: New York COUNTY: Kings STATE: New York
7. "REGO PARK PROPERTY"
ADDRESS: Junction Boulevard
Rego Park, New York
"REGO PARK I" (includes store and parking garage)
TAX MAP DESIGNATION:
BLOCK: 2080 LOT: 101
AND
BLOCK: 2084 LOT: 101
CITY: New York COUNTY: Queens STATE: New York
"REGO PARK II" (includes parking lot and "Z" parcel)
TAX MAP DESIGNATION:
BLOCK: 2077 LOTS: 90 & 98
AND
BLOCK: 2076 LOTS: 50 & 63
CITY: New York COUNTY: Queens STATE: New York
8. "PARAMUS PROPERTY"
TAX MAP DESIGNATION:
LOT: 1 BLOCK: 1202 TAX MAP SHEET NO.: 12
2