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EXHIBIT 2.2
AGREEMENT FOR CONTRIBUTION OF INTERESTS
IN
ELEVEN PENN PLAZA COMPANY
BY AND AMONG
THE MENDIK COMPANY, L.P.;
THE PARTNERS IN M/F ASSOCIATES,
M/F ELEVEN ASSOCIATES,
M/S ASSOCIATES AND
M/S ELEVEN ASSOCIATES;
AND
BERNARD H. MENDIK
IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION, THE UNITS TO BE ISSUED
HEREUNDER WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. ACCORDINGLY, NO UNITS MAY
BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS SUBSEQUENTLY
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND UNLESS THE OTHER
TRANSFER RESTRICTIONS ON SUCH UNITS HAVE BEEN SATISFIED. CONTRIBUTORS SHOULD BE
AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THEIR OWNERSHIP
OF UNITS FOR AN INDEFINITE PERIOD OF TIME.
IN MAKING AN INVESTMENT DECISION CONTRIBUTORS MUST RELY ON THEIR OWN EXAMINATION
OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
PAGE
1. Contributions.............................................................2
2. Consideration; Distributions Prior to Closing.............................2
3. Acceptance of Contributions...............................................5
4. Closing Time and Place....................................................5
5. Representations and Warranties of Operating Partnership...................5
5.1 Organization, Power and Authority, and Qualification...................5
5.2 Authority Relative to this Agreement...................................5
5.3 Binding Obligation.....................................................6
5.4 Insolvency.............................................................6
5.5 Brokers................................................................6
5.6 Valid Consideration....................................................6
6. Representations, Warranties and Agreements of Contributors................6
6.1 Title; Authority to Assign.............................................6
6.2 No Breach of Partnership Agreement.....................................7
6.3 Insolvency.............................................................7
6.4 Litigation.............................................................7
6.5 Binding Obligation, etc................................................7
6.6 Brokers................................................................7
6.7 Securities Act and Other Representations and Agreements................7
7. Conditions to Completion.................................................10
7.1 Representations, Warranties and Covenants.............................10
7.2 Consents..............................................................10
7.3 No Order or Injunction................................................10
7.4 Instruments of Conveyance............................................11
8. The Closing..............................................................11
8.1 Contributors' and General Partner's Closing Documents.................11
8.2 Operating Partnership's Closing Documents.............................11
9. Transfer Taxes and Closing Costs.........................................12
10. Operation in the Ordinary Course........................................12
11. General Provisions......................................................12
11.1 Survival of Representations and Warranties...........................12
11.2 Notices..............................................................13
11.3 Governing Law........................................................13
11.4 Headings.............................................................13
11.5 Benefit and Assignment...............................................13
11.6 Severability.........................................................13
11.7 Entire Agreement; Amendment..........................................14
11.8 No Waiver............................................................14
11.9 Consent and Power of Attorney........................................14
Exhibit A List of Partners
Exhibit B Committed Capital Expenditures
Exhibit C Contingent Leasing Expenditures
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AGREEMENT FOR CONTRIBUTION OF INTERESTS
[ELEVEN PENN PLAZA]
THIS AGREEMENT for the Contribution of Interests (this "Agreement") is
made and entered into as of Aprik 15, 1997, by and among The Mendik Company,
L.P. ("Operating Partnership"), a Delaware limited partnership, whose general
partner as of the date hereof is The Mendik Company, Inc., a Maryland
corporation, each of the parties listed on Exhibit A annexed hereto who executes
a Partner Consent (hereinafter defined) agreeing to become a party to this
Agreement (collectively referred to herein as "Contributors") and Bernard H.
Mendik (in his capacity as a general partner of each of the Partnerships
(hereinafter defined), the "General Partner").
WHEREAS, it is desired to consolidate (the "Consolidation") the assets
of Vornado Realty Trust, a Maryland real estate investment trust (the "REIT"),
and interests in seven general or limited partnerships or limited liability
companies of which the General Partner or an affiliate is a general partner or
managing member, together with the assets of Mendik Realty Company, Inc. and
Mendik Management Company, Inc., each a New York corporation and an affiliate of
the General Partner, with and into Operating Partnership;
WHEREAS, upon completion of and after the Consolidation, the REIT will
become and be the managing general partner of the Operating Partnership;
WHEREAS, Contributors are owners of interests (the "Contributed
Interests") in one or more of M/F Associates, a New York limited partnership,
M/F Eleven Associates, a New York limited partnership, M/S Associates, a New
York limited partnership, and M/S Eleven Associates, a New York limited
partnership (collectively, the "Partnerships"), which together own all of the
partnership interests in M393 Associates, a New York general partnership, and M
Eleven Associates, a New York general partnership (collectively, the "Middle
Partnerships"), which together own all of the interests in Eleven Penn Plaza
Company, a New York joint venture ("Eleven Penn"), which owns land and
improvements (the "Property") known as Eleven Penn Plaza, New York, New York;
WHEREAS, the Contributed Interests represent a 51.25% percentage
interest in Eleven Penn (the "Percentage"); and
WHEREAS, in connection with the consummation of the Consolidation, the
parties hereto desire that Operating Partnership and, if designated by Operating
Partnership, one or more special purpose subsidiary partnerships or limited
liability companies of Operating Partnership or one or more other entities
controlled by Operating Partnership (each a "Designated Subsidiary") acquire all
of the interests in the Partnerships owned by the Contributors through the
contribution of such interests to Operating Partnership and/or one or more
Designated Subsidiaries upon the terms and conditions provided herein, and
acquire all
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of the interests in the Partnerships owned by a major partner and its affiliates
(collectively, the "Major Partner") pursuant to an Agreement (the "Major Partner
Agreement") between the Major Partner and the Operating Partnership.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants set forth herein, Operating Partnership, Contributors and
the General Partner hereby agree as follows:
1. Contributions. Upon the Closing (hereinafter defined), and
subject to the satisfaction or waiver by Operating Partnership of the conditions
set forth in Section 7 of this Agreement, Contributors shall contribute, convey
and assign to Operating Partnership (and/or Designated Subsidiary) and Operating
Partnership (and/or Designated Subsidiary) shall acquire from Contributors all
of Contributors' right, title and interest in the Contributed Interests (the
"Contributions"), including, without limitation, all of Contributors' interest
in the profits, losses, property and capital of the Partnership allocable to the
Contributed Interests, upon the terms and conditions set forth in this
Agreement.
2. Consideration; Distributions Prior to Closing.
(a) In full consideration for the contribution of the
Contributed Interests, Operating Partnership shall deliver to Contributors (or
their designees as provided below) at the Closing, with respect to the Exchange
Value (as such term is defined in the Confidential Solicitation of Consents and
Private Placement Memorandum (the "Memorandum") dated March 29, 1997) for the
Property, an aggregate of 408,035 units of limited partnership interests
("Units") in the Operating Partnership, such Units being allocated among the
Contributors as set forth on Exhibit A, subject to adjustment as provided in
Section 2(b) hereof.
Prior to the Closing, subject to compliance with all
applicable securities laws, any Contributor that is a partnership may give
notice to the Operating Partnership to allocate all or a portion of the Units
otherwise issuable to it among its partners in a manner set forth in the notice
and to issue the Units directly to those partners, and any Contributor who holds
interests in which another person or entity has a beneficial interest may give
notice to the Operating Partnership to issue all or a portion of the Units
otherwise issuable to that Contributor to the beneficial owner of that interest.
In such event, as a condition to receiving any Units, any such partners of any
Contributor or any such beneficial holder shall execute a Partner Consent (the
"Partner Consent") in the form annexed to and made part of the Memorandum and
shall make to the Operating Partnership the representations and warranties and
agreements in Section 6.7(a), (b), (c) and (d) pursuant to an instrument
reasonably satisfactory to the Operating Partnership (in addition to the Partner
Consent to be executed by the Contributor).
(b) If the aggregate amount of the Net Other Assets
(hereinafter defined) of Eleven Penn as of the close of business on the day
preceding the date of the Closing (the "Closing Date") exceeds $0, Operating
Partnership shall issue additional Units (valued at the average of the closing
prices on the New York Stock Exchange of shares of the
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REIT for the last ten trading days ending on the third trading day prior to the
Closing Date) with a value equal to the Percentage times the amount of the
excess Net Other Assets, and such additional Units shall be issued to each
Contributor in the same proportion as the Units will be issued in accordance
with Exhibit A.
As used in this Agreement, the following terms have the
following meanings:
(i) "Net Other Assets" means the excess of
Certain Other Assets over Certain Other Liabilities (as such terms are
hereinafter defined).
(ii) "Certain Other Assets" means, subject to
Section 2(e), cash and cash equivalents (other than any condemnation or casualty
proceeds held by Eleven Penn), marketable securities, amortization from November
1, 1996 through the Closing on the first mortgage loan to Eleven Penn from The
Equitable Life Assurance Society of the United States, accounts receivable
(including an estimate of any rent escalations payable by tenants with respect
to the period through the Closing Date, but excluding any amounts payable by
tenants with respect to any period after the Closing Date, as well as any amount
payable by tenants after the Closing Date to the extent such amount has been
recognized as income prior to the Closing), prepaid expenses (excluding any
prepaid leasing costs relating to leases entered into prior to October 1, 1996),
escrow deposits made by Eleven Penn, capital expenditures (other than tenant
improvements or building improvements required by the terms of any lease and
other than those committed capital expenditures listed on Exhibit B annexed
hereto) made on or after October 1, 1996, amounts paid for leasing costs, tenant
and building improvements or tenant acquisition costs relating to (1) leases
entered into on or after October 1, 1996 and (2) leases entered into prior to
October 1, 1996, but only to the extent of any leasing expenditures with respect
to such leases entered into prior to October 1, 1996 which are set forth on
Exhibit C annexed hereto. For the purpose of calculating Certain Other Assets,
the accounts receivable of Eleven Penn shall be valued at the face amount of the
accounts receivable, net of a reserve for doubtful accounts determined in
accordance with generally accepted accounting principles consistently applied,
and without giving effect to the straight-line requirement of FASB 13.
(iii) "Certain Other Liabilities" means accounts
payable, accrued interest payable and other accrued liabilities (including any
liability or obligation for leasing costs, tenant or building improvements or
tenant acquisition costs payable relating to leases entered into prior to
October 1, 1996, but excluding any liability or obligation for leasing costs,
tenant or building improvements or tenant acquisition costs payable relating to
(1) leases entered into on or after October 1, 1996 and (2) leases entered into
prior to October 1, 1996, but only to the extent of any leasing expenditures
with respect to such leases entered into prior to October 1, 1996 which are set
forth on Exhibit C annexed hereto), the unpaid remaining cost of any committed
capital expenditures listed on Exhibit B annexed hereto and prepaid rent
received from tenants.
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For purposes of this Section 2, the exercise of an
option to renew a lease or to rent additional space pursuant to a lease shall be
deemed a new lease entered into on the effective date of the renewal option.
(c) The General Partner shall prepare and submit to the
REIT, not later than five days prior to the Closing Date, its best, good faith
estimate of the Net Other Assets as of the close of business on the day
preceding the Closing Date; such estimate shall be determined based upon the
books and records of Eleven Penn. The estimate submitted to the REIT shall be
accompanied by (i) a statement setting forth in reasonable detail the
calculation of the estimated Net Other Assets as of the close of business on the
day preceding the Closing Date, and (ii) a certificate signed by the General
Partner confirming that the estimate was calculated in accordance with the terms
of this Section 2. The estimate shall be final and binding on the parties
unless, at least two days prior to the Closing, the REIT gives written notice to
the General Partner that it objects to any item. The REIT and the General
Partner shall immediately consult with respect to any item objected to and their
joint determination with respect to any items in dispute shall be final and
binding on the parties. The number of additional Units to be delivered at
Closing shall be based on the statement of Net Other Assets delivered by the
General Partner if there is no objection thereto by the REIT (or the undisputed
amount of Net Other Assets if there is such an objection) and additional Units,
if any, shall be delivered to the General Partner, as agent for the
Contributors, promptly after the accountants' determination referred to in the
next sentence, it being understood that the Contributors shall be deemed to own
such additional Units, if any, as of the Closing Date. If the REIT and the
General Partner are unable to reach agreement on the amount of Net Other Assets
prior to Closing, within ten days after the Closing, the dispute shall be
referred to and resolved by a "Big 6" firm of independent certified public
accountants proposed by the REIT and reasonably acceptable to the General
Partner, and the determination by that accounting firm shall be final and
binding on the parties. The fees and expenses of the accounting firm shall be
borne by Operating Partnership.
(d) Any amounts collected by Eleven Penn after the
Closing Date relating to the period through the Closing Date with respect to
refunds of real estate taxes paid by Eleven Penn (less any costs incurred by
Eleven Penn, the Partnerships or the Operating Partnership in obtaining such
refunds and less any portion of such refunds required or, in the REIT's
reasonable determination, estimated to be required to be paid to tenants) shall
be paid to the General Partner, as agent for the Contributors and certain other
persons, not later than 10 days after the end of the month in which such amounts
are collected, and the General Partner shall promptly distribute such amounts to
the Contributors.
(e) An amount equal to $1,900,000 (plus any additional
Conveyance Taxes (hereinafter defined) payable as a result of the value of the
Units issued hereunder or under the Major Partner Agreement (based on the value
of the shares of the REIT) exceeding $52 per Unit) shall be deducted from the
Partnership's cash on hand prior to the calculation of Net Other Assets,
regardless of the actual amount of the Conveyance Taxes. On the Closing Date,
the General
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Partner shall cause each of the Middle Partnerships and each of the Partnerships
to satisfy any outstanding liabilities and, then on the Closing Date, the
General Partner shall cause Eleven Penn to distribute to the Partnerships and
the Partnerships to distribute to the General Partner, as agent for the
Contributors and the Major Partner, an amount (estimated at $1,900,000 based on
a value of $52 per Unit) sufficient to pay the Conveyance Taxes payable by the
Major Partner and by the Contributors pursuant to Section 9(b) hereof, assuming
that the Contributions hereunder and under the Major Partner Agreement are
treated as "qualifying REIT transfers" under the laws referred to in Section
9(a) hereof, it being understood that the funds referred to in the first
sentence of this clause (e) shall be applied toward satisfaction of this
distribution requirement.
3. Acceptance of Contributions. Subject to satisfaction of the
conditions listed or referred to in Section 7, Operating Partnership hereby
agrees that at the Closing it shall accept or, at its election, cause a
Designated Subsidiary to accept all or part of, the Contributions and shall
assume any and all rights, obligations and responsibilities of Contributors as
owners of the Contributed Interests that arise subsequent to the Closing Date.
4. Closing Time and Place. Unless another date or place is agreed
to by the parties, the closing of the Contributions (the "Closing") shall take
place contemporaneously with the closing of the Consolidation at the offices of
Proskauer Rose Goetz & Mendelsohn LLP, 1585 Broadway, New York, New York 10036,
or such other place and time as Operating Partnership and the General Partner
shall agree, upon the satisfaction or waiver of all conditions to the Closing
set forth in Section 7 hereof.
5. Representations and Warranties of Operating Partnership.
Operating Partnership hereby represents and warrants to Contributors as follows,
which representations and warranties shall be true and correct on the Closing
Date:
5.1 Organization, Power and Authority, and Qualification.
Operating Partnership is a limited partnership duly organized, validly existing
and in good standing under the laws of the State of Delaware. The REIT is a real
estate investment trust duly organized, validly existing and in good standing
under the laws of the State of Maryland. Each of Operating Partnership and the
REIT has the requisite power and authority to carry on its respective business
as it is now being conducted. Each of Operating Partnership and the REIT is
qualified to do business and is in good standing in each jurisdiction in which
the character of its property owned or leased or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
and in good standing would not have a material adverse effect on the business or
financial condition of Operating Partnership or the REIT, as the case may be.
5.2 Authority Relative to this Agreement. Operating Partnership
has taken all action necessary to authorize the execution, delivery and
performance of this Agreement by Operating Partnership and no other proceedings
on the part of Operating Partnership are necessary to authorize the execution
and delivery of this Agreement and the consummation of the Contributions.
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None of the execution and delivery of this Agreement by Operating
Partnership, the consummation by Operating Partnership of the Contributions or
compliance by Operating Partnership with any of the provisions hereof shall (i)
conflict with or result in any breach of any provisions of the Partnership
Agreement of Operating Partnership; (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
Operating Partnership is a party or by which it or any of its properties or
assets may be bound; or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Operating Partnership; except in the
case of (ii) or (iii) for violations, breaches, or defaults (A) that would not
in the aggregate have a material adverse effect on the business or financial
condition of Operating Partnership or the REIT, and that shall not impair the
effectiveness of the Contributions contemplated hereby, or (B) for which waivers
or consents have been or shall be obtained prior to the Closing Date.
5.3 Binding Obligation. This Agreement has been duly and validly
executed and delivered by Operating Partnership and constitutes a valid and
binding agreement of Operating Partnership, enforceable against Operating
Partnership in accordance with its terms, except that such enforcement may be
subject to bankruptcy, conservatorship, receivership, insolvency, moratorium, or
similar laws affecting creditors' rights generally or the rights of creditors of
limited partnerships and to general principles of equity.
5.4 Insolvency. There are no attachments, executions or
assignments for the benefit of creditors, or voluntary or involuntary
proceedings in bankruptcy, or under any other debtor relief laws, contemplated
by or pending or threatened against Operating Partnership.
5.5 Brokers. Neither Operating Partnership nor the REIT has
employed or dealt with any broker or finder, or incurred any liability therefor,
in connection with the Contributions.
5.6 Valid Consideration. The Units, when issued in accordance with
this Agreement and the Partnership Agreement of Operating Partnership, will be
duly and validly issued, and the issuance thereof will not be subject to
preemptive or other similar rights.
6. Representations, Warranties and Agreements of Contributors.
Each Contributor, in his, her or its capacity as a partner of the Partnerships,
hereby represents and warrants to and agrees with Operating Partnership with
respect to his, her or its Contributed Interests as follows, which
representations and warranties shall also be true and correct on the Closing
Date:
6.1 Title; Authority to Assign. Contributor (i) owns good and
marketable, legal and beneficial (except for holders of beneficial interests in
the amounts payable with respect to such Contributed Interests who have no other
rights with respect to those interests) title in and to his, her or its
Contributed Interests which as of the Closing Date will be held
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free of any liens, encumbrances, judgments, adverse interests, pledges or
security interests, other than pledges of partnership interests to the
Partnerships or the other partners to secure a partner's obligations to meet
capital calls or other obligations as set forth in the Partnership Agreement of
the Partnerships (as to which no amounts are outstanding and no amounts will be
outstanding as of the Closing Date), (ii) holds the entire right, title and
interest in and to his, her or its Contributed Interests, and (iii) has the full
right, power, capacity and authority to validly contribute and convey his, her
or its Contributed Interests pursuant to this Agreement.
6.2 No Breach of Partnership Agreement. None of the execution and
delivery of this Agreement by Contributor, the consummation by Contributor of
the Contribution or compliance by Contributor with any of the provisions hereof
shall as of the Closing Date conflict with or result in any breach of any
provisions of the Partnership Agreements of the Partnerships or any other
agreement to which Contributor is a party.
6.3 Insolvency. There are no attachments, executions or
assignments for the benefit of creditors, or voluntary or involuntary
proceedings in bankruptcy, or under any other debtor relief laws, contemplated
by or pending or, to the knowledge of Contributor, threatened against
Contributor.
6.4 Litigation. Contributor has no knowledge of any actual or
pending litigation or proceeding by any organization, person, individual or
governmental agency against Contributor with respect to or against or
potentially affecting his, her or its Contributed Interests.
6.5 Binding Obligation, etc. This Agreement has been duly and
validly executed and delivered by Contributor to Operating Partnership and
constitutes a legal, valid and binding agreement of Contributor, enforceable
against Contributor in accordance with its terms, except as such enforcement may
be limited by bankruptcy, conservatorship, receivership, insolvency, moratorium
or similar laws affecting creditors' rights generally and to general principles
of equity. Contributor further represents and warrants that if Contributor is a
corporation, partnership, trust or other entity, it has the power to, and is
duly authorized and otherwise duly qualified to, purchase and hold securities
such as Units and Common Shares (as hereinafter defined) and such entity has its
principal place of business as set forth on Exhibit A.
6.6 Brokers. Contributor has not employed or dealt with any broker
or finder, or incurred any liability therefor, in connection with the
Contribution.
6.7 Securities Act and Other Representations and Agreements.
(a) (i) Upon the issuance of Units to Contributor (or a
designee as provided in Section 2), Contributor (or designee) shall become
subject to, and shall be bound by, the terms and provisions of the Partnership
Agreement of Operating Partnership, including the terms of the power of attorney
contained in Section 15.11 thereof,
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as the Partnership Agreement may be amended and restated from time to time in
accordance with its terms.
(ii) Contributor or his, her or its advisor(s)
have had a reasonable opportunity to ask questions of and receive information
and answers from a person or persons acting on behalf of the Partnerships and
Operating Partnership concerning the Consolidation, and, as Contributor may deem
necessary, to verify the information contained in the Memorandum, receipt of
which is acknowledged, and any other information provided to Contributor by the
Partnerships or Operating Partnership and all such questions have been answered
and all such information has been provided to the full satisfaction of
Contributor.
(iii) Contributor is acquiring Units for his, her
or its own account as principal, for investment and not with a view to resale or
distribution, and the Units may not be transferred or otherwise disposed of by
Contributor otherwise than in transactions pursuant to a registration statement
filed by the Operating Partnership (which it has no obligation to file) or that
are exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and all applicable state and foreign securities
laws, and the REIT may refuse to transfer any Units as to which evidence of such
registration or exemptions from such registration satisfactory to the REIT is
not provided to it, which evidence may include the requirement of legal opinions
regarding the exemption from such registration. If the REIT elects, in its sole
discretion, to deliver to any Contributor common shares of beneficial interest
of the REIT ("Common Shares") upon redemption of any Units, the Common Shares
will be acquired for his, her or its own account as principal, for investment
and not with a view to resale or distribution, and the Common Shares may not be
transferred or otherwise disposed of by Contributor otherwise than in
transactions pursuant to any registration statement filed by the REIT with
respect to such Common Shares (which it has an obligation to file only pursuant
to the Registration Rights Agreement described in the Memorandum) or that are
exempt from the registration requirements of the Securities Act and all
applicable state and foreign securities laws, and the REIT may refuse to
transfer any Common Shares as to which evidence of such registration or
exemptions from such registration satisfactory to the REIT is not provided to
it, which evidence may include the requirements of legal opinions regarding the
exemption from such registration.
(iv) Contributor (either alone or with his, her
or its advisors) has sufficient knowledge and experience in financial, tax and
business matters to enable him, her or it to evaluate the merits and risks of an
investment in Units. Contributor has the ability to bear the economic risk of
acquiring the Units. Contributor acknowledges that (1) the transactions
contemplated by this Agreement and the Memorandum involve complex tax
consequences for each Contributor and each Contributor is relying solely on the
advice of his, her or its own tax advisors in evaluating such consequences, and
(2) neither Operating Partnership nor the General Partner has made (or shall be
deemed to have made) any representations or warranties as to the tax
consequences of such transaction to any Contributor. Each Contributor remains
solely responsible for all tax matters relating to each Contributor.
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(v) If needed, Contributor has discussed with
his, her or its professional, legal, tax or financial advisors the suitability
of an investment in Units or Common Shares for his, her or its particular tax
and financial situation. Nothing contained herein or in the Memorandum shall be
deemed to imply any representation by Operating Partnership or the General
Partner as to a particular tax effect that may be obtained by any Contributor.
(vi) All information that Contributor has
provided to Operating Partnership concerning himself or herself or itself and
his, her or its financial position is correct and complete as of the date
hereof, and if there should be any material change in such information prior to
issuance of Units to the Contributors, he, she or it shall immediately provide
such changed information to Operating Partnership.
(vii) Contributor has not disclosed any
information contained in the Memorandum to anyone other than his or her spouse
or his, her or its professional, legal, tax or financial advisors advising him,
her or it in connection with this investment and has not reproduced the
Memorandum other than for such use by such advisors.
(b) Status as a United States Person. (i) Unless
otherwise indicated on the Partner Consent, Contributor certifies that
Contributor is not a foreign person within the meaning of Section 1445 of the
Internal Revenue Code ("Section 1445"). To the extent that Contributor is not a
foreign person within the meaning of Section 1445, (1) Contributor's U.S.
taxpayer identification number that has previously been provided to the
Partnership is accurate, (2) Contributor's home address (in the case of an
individual) or office address (in the case of an entity) is that address
indicated on Exhibit A of this Agreement and (3) if Contributor subsequently
becomes a foreign person within the meaning of Section 1445, Contributor shall
notify Operating Partnership prior to the Closing.
(ii) If Contributor is or prior to the Closing
becomes a foreign person within the meaning of Section 1445, Operating
Partnership shall, and is authorized to, withhold ten percent (10%) of the
amount realized (as such term is defined in Section 1001 of the Internal Revenue
Code) by Contributor in connection with the Contribution, unless Operating
Partnership shall receive from Contributor a notice of nonrecognition transfer
with respect to the Contribution by Contributor (in a form to be provided by
Operating Partnership).
(c) Indemnification. Contributor hereby agrees to
indemnify and hold harmless the Partnerships, the REIT, Operating Partnership,
The Mendik Company, Inc. and the General Partner and any of the employees,
agents, officers, directors and affiliated persons of the foregoing from any and
all damages, losses, costs and expenses (including reasonable attorneys' fees)
which they, or any of them, may incur by reason of a failure by Contributor to
fulfill any of its obligations under this Agreement or by reason of the breach
by Contributor of any of the representations and warranties contained herein.
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(d) Waiver and Contribution. Contributor understands that
(i) the Units to be issued pursuant to the Consolidation have not been
registered under the Securities Act and (ii) the failure to register such Units
could result in Contributor being granted certain rights under the Federal
securities laws, including a right to rescind Contributor's consent to the
Consolidation. For the benefit of Operating Partnership, and in consideration of
Operating Partnership's consummating the Consolidation, Contributor (x) hereby
waives any and all rights he or she now has or may hereafter be granted to
rescind his or her consent to the Consolidation on the basis that the Units
issued in connection with the Consolidation were not registered (the "Waiver")
and (y) agrees that if the Waiver is deemed void or unenforceable for any
reason, including, without limitation, under Section 14 of the Securities Act,
the entire beneficial interest in all property and amounts received by
Contributor in any action to rescind the Consolidation (regardless of whether
such action was initiated by Contributor) or otherwise received by Contributor
as damages for failure to register the Units under the Securities Act, shall be
promptly paid over and contributed by Contributor to Operating Partnership, for
no additional consideration from Operating Partnership, other than the Units
originally issued pursuant to the Consolidation.
Whenever the context shall require, all words in the male, female or
neuter gender shall be deemed to include the other genders, all singular words
shall include the plural, and all plural words shall include the singular. All
representations, covenants and agreements of Contributor set forth in this
Agreement shall survive the consummation of the Consolidation contemplated by
the Memorandum.
7. Conditions to Completion. In addition to the conditions to
completion of the Consolidation set forth in the Memorandum, the obligations of
Operating Partnership to consummate the transactions contemplated by this
Agreement shall be subject to fulfillment (or waiver by Operating Partnership)
at or prior to the Closing of the following conditions:
7.1 Representations, Warranties and Covenants. The
representations, warranties and covenants made by Contributors in this Agreement
or in any document delivered by any of them pursuant to this Agreement shall be
true and correct in all material respects when made and on and as of the Closing
as though such representations, warranties and covenants were made on and as of
such date.
7.2 Consents. Any and all consents required by the Partnership
Agreements of the Partnerships, and any certificates, agreements, contribution
and assumption instruments and other documents necessary or advisable to
evidence the conveyance of the Contributed Interests and the admission of
Operating Partnership (or Designated Subsidiary) into the Partnerships by virtue
of the contribution of the Contributed Interests, shall have been obtained.
7.3 No Order or Injunction. The consummation of the Contributions
shall not have been restrained, enjoined or prohibited by any order or
injunction of any court or governmental authority of competent jurisdiction.
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7.4 Instruments of Conveyance. The Contributors shall have
delivered the instruments evidencing conveyance of their interests referred to
in Section 8.1.
8. The Closing.
8.1 Contributors' and General Partner's Closing Documents. At
Closing, each Contributor shall deliver (or cause to be delivered pursuant to
the Power of Attorney referred to in Section 11.9) or the General Partner shall
deliver the following (all of which shall be duly executed and acknowledged
where required):
(a) A written document of conveyance contributing to
Operating Partnership (and/or any Designated Subsidiary) title to Contributor's
Contributed Interests, free and clear of any adverse claim or interest;
(b) Such documents and certificates as Operating
Partnership reasonably may require to establish the authority of the parties
executing any documents in connection with the Contributions including, in the
case of any Contributor that is a corporation, partnership, limited liability
company or other similar entity (other than a trust or estate), an opinion of
counsel, reasonably satisfactory to the Operating Partnership, as to the due
execution and delivery of such documents;
(c) Such consents and instruments of admission as are
contemplated by Section 7.2 hereof; and
(d) Such other documents, instruments and certificates as
Operating Partnership and the General Partner, as agent for the Contributors,
reasonably agree are necessary or appropriate, including without limitation
recording and transfer forms and affidavits.
8.2 Operating Partnership's Closing Documents. At Closing,
Operating Partnership shall deliver or cause to be delivered to the General
Partner, as agent for the Contributors, the following:
(a) The Units referred to in Section 2(a);
(b) Copies of the executed Partnership Agreement of the
Operating Partnership and the Registration Rights Agreement and Unit Redemption
Agreement referred to in Section 11.09; and
(c) Such other documents and instruments as the General
Partner, as agent for the Contributors, and Operating Partnership agree are
necessary or appropriate, including without limitation recording and transfer
forms and affidavits.
9. Transfer Taxes and Closing Costs.
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(a) The General Partner and Operating Partnership shall
join on the Closing Date in completing, executing, delivering and verifying the
returns, affidavits and other documents required in connection with the
documentary stamps in accordance with the New York State Real Estate Transfer
Tax imposed by Article 31 of the Tax Law, the New York City Real Property
Transfer Tax imposed by Chapter 46 of Title 11 of the Administrative Code of the
City of New York, and any other tax payable by reason of the contribution of the
Contributed Interests (collectively, the "Conveyance Taxes").
(b) The Contributors hereby agree to pay and shall be
solely responsible for the Conveyance Taxes due on the conveyance of the
Contributed Interests including, but not limited to, any Conveyance Taxes
imposed due to the Contributor's failure to satisfy any holding period or
continuity requirements for qualifying for a reduced rate of Conveyance Taxes,
including the holding period requirements with respect to certain transfers to a
REIT imposed in connection with the New York Real Estate Transfer Tax imposed by
Article 31 of the Tax Law and the New York City Real Property Transfer Tax
imposed by Chapter 46 of Title 11 of the Administrative Code of the City of New
York. Using the amount distributed to the General Partner pursuant to Section
2(e) hereof, the General Partner, as agent for the Contributors and the Major
Partner, shall timely pay to the appropriate tax collecting agency or official
the amount of all Conveyance Taxes payable by reason of the Contributors' and
the Major Partner's agreement to pay the Conveyance Taxes (assuming satisfaction
of the requirements set forth in the preceding sentence). The Contributors shall
indemnify, defend and hold harmless Operating Partnership and the Partnerships
from and against all claims, liabilities, costs and expenses (including
reasonable attorney's fees), incurred by Operating Partnership or the
Partnerships by reason of the failure of the Contributors to pay any Conveyance
Taxes assessed or alleged to be due at any time with respect to the transfer of
the Interests to Operating Partnership, including, without limitation, all
interest and penalties thereon.
(c) Operating Partnership shall also pay or provide for
the payment of all other costs associated with the closing of the contributions
of the Contributed Interests pursuant to this Agreement, as described in and
subject to the terms of the Memorandum.
10. Operation in the Ordinary Course. The General Partner shall
use reasonable efforts to operate the Partnership and the Property in the
ordinary course of business between the date hereof and the closing of the
Consolidation, including making any necessary capital expenditures and leasing
expenditures consistent with past practices to maintain the quality and value of
the Property.
11. General Provisions.
11.1 Survival of Representations and Warranties. It is the express
intention and agreement of the parties hereto that the representations and
warranties of the parties set forth in this Agreement shall survive the
consummation of the Contributions and the Closing.
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11.2 Notices. All notices, demands, requests or other
communications that may be or are required to be given or made by any party to
the other parties pursuant to this Agreement shall be in writing and shall be
hand delivered or transmitted by certified mail, express overnight mail or
delivery service, telegram, telex or facsimile transmission to the parties at
the addresses specified in Exhibit A 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 telex) the answer back
being deemed conclusive but not exclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
11.3 Governing Law. 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 State of
New York.
11.4 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.
11.5 Benefit and Assignment. No Contributor shall assign this
Agreement, in whole or in part, whether by operation of law or otherwise,
without the prior written consent of Operating Partnership. Any purported
assignment contrary to the terms hereof shall be null, void and of no force and
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 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.
The Operating Partnership may designate one or more Designated
Subsidiaries to acquire all or any part of the Contributed Interests (in which
case the Designated Subsidiary shall execute a certificate at closing making the
same representations and warranties as are made by Operating Partnership and
references to Operating Partnership shall include the Designated Subsidiaries
except where the context clearly indicates otherwise).
11.6 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
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parts of such provisions or the remaining provisions of said agreement so long
as the economic and legal substance of the Contributions is not affected in any
manner materially adverse to either party.
11.7 Entire Agreement; Amendment. The Schedules and the Exhibits
attached hereto are hereby incorporated into the Agreement as if fully set forth
herein. This Agreement, and the Schedules and Exhibits attached hereto, together
with the Memorandum, contain the final and entire agreement between the parties
hereto with respect to the Contributions, 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.
Contributors and Operating Partnership 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.
11.8 No Waiver. No delay or failure on the part of any party hereto
in exercising any right, power or privilege under this Agreement or under any
other 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.
11.9 Consent and Power of Attorney. The General Partner hereby
consents to the contribution of the Contributed Interests pursuant hereto by
each of the Contributors. Each Contributor is executing a Partner Consent
pursuant to which such Contributor (a) is executing this Agreement, and (b) is
consenting to each matter set forth therein. In addition, by executing this
Agreement pursuant to the Consent, each Contributor is constituting and
appointing each of David R. Greenbaum, John J. Silberstein and Christopher G.
Bonk, individually, with full power of substitution, the true and lawful
attorney-in-fact (the "Attorney") of such Contributor, with full power and
authority in the name of and for and on behalf of such Contributor, to execute
an instrument of conveyance contributing his, her or its Contributed Interests
to Operating Partnership pursuant to the Consolidation on the terms set forth in
the Memorandum, to execute the Partnership Agreement of Operating Partnership
and the Registration Rights Agreement and a Unit Redemption Agreement (if the
Contributor elects to redeem its Units for cash immediately after the Closing)
and to execute any instruments required to be filed in connection with the
Conveyance Taxes, and to execute any other instruments that the General Partner
reasonably determines necessary or appropriate in connection with the
contribution of the Contributed Interests pursuant to this Agreement and the
consummation of the Consolidation.
Each Contributor shall promptly notify the General Partner if any of
the representations and warranties by that partner were not true and correct
when made or become untrue at any time prior to the Closing.
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IN WITNESS WHEREOF, each of the Contributors has executed a separate
Partner Consent agreeing to be bound by the terms of this Agreement and each of
Operating Partnership, and the General Partner has caused this Agreement to be
duly executed and delivered on its or his behalf as of the date first above
written.
THE MENDIK COMPANY, L.P.
By: The Mendik Company, Inc., general partner
By: /s/ David R. Greenbaum
--------------------------------
Name: David R. Greenbaum
Title: President
/s/ Bernard H. Mendik
------------------------------------
Bernard H. Mendik
[ADDITIONAL SIGNATURES OMITTED]
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Exhibit A
M/F Associates
M/F Eleven Associates
List of Partners
Number
of Units
--------
Equby Associates 143,212
c/o Richard Vespa
Goldschmidt & Goldschmidt
641 Lexington Avenue
New York, NY 10022-4503
INS Realty Associates )
c/o Weissbarth, Altman & Michaelson )
156 56th Street )
New York, NY 10019 )
) 134,758
INS Eleven Associates )
c/o Weissbarth, Altman & Michaelson )
156 West 56th Street )
New York, NY 10019 )
Bernard H. Mendik 162,210
330 Madison Avenue
New York, NY 10017
The Mendik Partnership, L.P. (Not contributing interests equal
330 Madison Avenue to the override held by Rcay, S.A.)
New York, NY 10017
Mendik Realty Company, Inc. 8,758
330 Madison Avenue
New York, NY 10017
--------
448,938
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Exhibit B
Committed Capital Expenditures
Completion of the HVAC replacement project
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Exhibit C
Contingent Leasing Expenditures
BOMA $105,187
Newbridge Networks 400,000
Faulkner & Gray 210,000
TOTAL $715,187
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