<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 1999
EXHIBIT INDEX ON PAGE 6
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 31, 1998
VORNADO OPERATING COMPANY
(Exact Name of Registrant as Specified in Charter)
Delaware 333-40701 22-3569068
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Park 80 West, Plaza II, Saddle Brook, New Jersey 07663
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 587-1000
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 1. NOT APPLICABLE.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 31, 1998 a subsidiary of Vornado Operating
Company, a Delaware corporation (the "Company"), purchased from a subsidiary of
Vornado Realty Trust approximately 1.7% of the outstanding partnership units of
Charles E. Smith Commercial Realty, L.P. ("CESCR"), a Delaware limited
partnership that owns and manages office properties and affiliated retail space
in the Washington D.C. and Northern Virginia region, for an aggregate purchase
price of approximately $12.9 million, or $34 per unit (which is the price at
which CESCR issued partnership units in October 1998 in connection with a
significant "roll-up" transaction). After giving effect to this purchase,
Vornado Realty Trust continues to own approximately 9.6% of CESCR. CESCR paid
distributions of $1.28 per unit in 1998.
In connection with this purchase, Vornado Realty Trust has
granted to the Company an option to require Vornado Realty Trust to repurchase
all of the CESCR units at the price at which the Company purchased the CESCR
units from Vornado Realty Trust, plus a cumulative return on such amount at a
rate of 10% per annum, less distributions received or receivable by the Company
from CESCR during the period of its ownership in the units. This non-assignable
option may be exercised at any time prior to December 31, 1999.
Vornado Realty Trust proposed this transaction in order to
increase its tax planning flexibility, and the Company agreed to the
transaction because it concluded that doing so was in the best interest of the
Company and its stockholders.
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The Company and Vornado Realty Trust are parties to an intercompany
agreement described in a Prospectus, dated October 14, 1998, which forms part of
the Company's Registration Statement on Form S-11 with the Securities and
Exchange Commission. In addition, the Company has obtained a $75 million
unsecured five-year revolving credit facility from a subsidiary of Vornado
Realty Trust pursuant to a revolving credit agreement described in such
Prospectus. Steven Roth, the Chairman of the Board of Directors and Chief
Executive Officer of the Company, Michael D. Fascitelli, a Director and the
President of the Company, Richard West, a Director of the Company, and Russell
B. Wight, Jr., a Director of the Company, are also Trustees of Vornado Realty
Trust. Mr. Roth is also the Chairman of the Board of Trustees and Chief
Executive Officer of Vornado Realty Trust, Mr. Fascitelli is also the President
of Vornado Realty Trust, and each of the other members of the Company's senior
management holds a corresponding position with Vornado Realty Trust.
ITEMS 3-6. NOT APPLICABLE.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS.
Any financial information required by this item will be filed not
later than 60 days after the date that this report is filed.
The following exhibits are furnished in accordance with the provisions
of Item 601 of Regulation S-K:
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Exhibit No. Description
----------- -----------
2.1 Assignment Agreement, dated as of December 31,
1998, between Vornado Realty Trust, as assignor,
and Vornado Operating Company, as assignee.
2.2 Put Agreement, dated as of December 31,
1998, between Vornado Realty Trust, as
grantor, and Vornado Operating Company, as
grantee.
99.1* Financial information.
99.2 Press release of Vornado Operating Company,
dated December 31, 1998.
ITEM 8. NOT APPLICABLE.
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* To be filed by amendment, if required.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VORNADO OPERATING COMPANY
Dated: January 15, 1999 By: /s/ IRWIN GOLDBERG
-------------------------------
Irwin Goldberg
Vice President --
Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
2.1 Assignment Agreement, dated as of December
31, 1998, between Vornado Realty Trust, as
assignor, and Vornado Operating Company,
as assignee.
2.2 Put Agreement, dated as of December
31, 1998, between Vornado Realty
Trust, as grantor, and Vornado
Operating Company, as grantee.
99.1* Financial information.
99.2 Press Release dated December 31, 1998.
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* To be filed by amendment, if required.
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<PAGE> 1
Exhibit 2.1
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT ("Agreement") is made as of this 31st day of
December, 1998, by and between Vornado CESCR L.L.C., a Delaware limited
liability company ("Assignor"), and Vornado Operating L.P., a Delaware limited
partnership ("Assignee").
WITNESSETH:
In consideration of TEN DOLLARS and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and the mutual
covenants and agreements set forth herein, the parties hereto do hereby agree as
follows:
1. Assignment.
Assignment of Partnership Interests. Subject to and in
accordance with the terms and conditions stated herein, Assignor hereby sells,
transfers, assigns and conveys (without any representations or warranties except
as expressly set forth herein) to Assignee and Assignee hereby accepts all of
Assignor's right, title and interest in and to THREE HUNDRED EIGHTY THOUSAND
(380,000) Class C Units of Charles E. Smith Commercial Realty L.P., a Delaware
limited partnership ("CESCR") (the "Partnership Interests"). In furtherance of
the foregoing, (i) the Assignor hereby assigns, transfers and conveys to the
Assignee the power to sell, transfer or otherwise dispose of the Partnership
Interests, and the Assignor hereby agrees to sell, transfer or otherwise dispose
of the Partnership Interests as may be directed by the Assignee (subject to any
limitations thereon that may be imposed by the applicable partnership agreement
of CESCR (the "CESCR Partnership Agreement") or any other applicable agreement,
law, regulation, rule, judgment, order or decree), (ii) the Assignor hereby
agrees to vote interests in CESCR held by it in such a way as to give effect to
the direction by the Assignee of its desire to have the Partnership Interests
voted in a specified manner on any matter submitted to the vote of the limited
partners of CESCR, and (iii) the Assignor hereby assigns, transfers and conveys
(and agrees to pay over to the Assignee to the extent received by the Assignor)
all economic attributes of the Partnership Interests relating to the period of
the ownership by the Assignee of the Partnership Interests,
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including, without limitation, the right to receive distributions from CESCR and
any proceeds from the sale, transfer or other disposition of the Partnership
Interests accruing during the period of the ownership by the Assignee of the
Partnership Interests, the right to share in the allocations of income and
losses of CESCR in respect of the Partnership Interests accruing during the
period of the ownership by the Assignee of the Partnership Interests, and the
right to exercise, or cause the exercise, of any applicable redemption rights in
respect of the Partnership Interests under the CESCR Partnership Agreement
during the period of the ownership by the Assignee of the Partnership Interests
(it being understood and agreed that the Assignee will pay over to the Assignor
any such distributions received by the Assignee in respect of the period of
ownership by the Assignor of the Partnership Interests and that the Assignor
will be entitled to such allocations and such rights during the period of the
ownership of the Partnership Interests by the Assignor). Notwithstanding the
foregoing, each of the Assignor and the Assignee agrees that (i) in the event
that the Assignor shall be deemed for any purpose to be the owner of the
Partnership Interests during the period of the ownership of the Partnership
Interests by the Assignee, the Assignor shall be deemed to be such an owner
during such period solely as a nominee for the Assignee; (ii) the Assignor and
the Assignee will notify CESCR of the assignment and transfer of the Partnership
Interests contemplated by this Agreement; (iii) no request will be made to have
the Assignee admitted as a Substitute Limited Partner (as defined in the CESCR
Partnership Agreement) of CESCR until the expiration of the right (without the
exercise thereof) of the Assignee to cause the Assignor to purchase the
Partnership Interests under the terms of the Put Agreement, dated as of December
31, 1998, between the Assignee and Vornado Realty Trust; and (iv) upon the
expiration of such right (without the exercise thereof) the Assignor will
request to have the Assignee or its assignee or transferee admitted as a
Substitute Limited Partner of CESCR.
2. Consideration.
The total consideration from Assignee in respect of the
assignment of the Partnership Interests is the sum of TWELVE MILLION, NINE
HUNDRED TWENTY THOUSAND AND NO/100 DOLLARS ($12,920,000) (the "Acquisition
Consideration"). The Acquisition Consideration shall be paid in cash by wire
transfer of funds to an account designated by the Assignor. No additional
consideration will be paid by the Assignee in
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respect of any accrued distributions in respect of the Partnership Interests;
provided, however, that the Assignor will retain or receive, as applicable, (and
the Assignee will pay over to the Assignor if received by the Assignee) all
distributions in respect of the Partnership Interests for the period of the
ownership by the Assignor of the Partnership Interests, and the Assignee will
receive or retain, as applicable, (and the Assignor will pay over to the
Assignee if received by the Assignor) all distributions in respect of the
Partnership Interests for the period of the ownership by the Assignee of the
Partnership Interests.
3. Representations, Warranties and Indemnities of the Assignee.
The Assignee represents and warrants to the Assignor, as of the
date of this Agreement and as of the Closing, that:
(a) The Assignee is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite limited partnership power and authority to own and operate its
properties and assets and to carry on its business as presently conducted.
(b) The Assignee has requisite limited partnership power and authority
and has taken all limited partnership action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. This Agreement is a valid and binding
agreement of the Assignee enforceable against the Assignee in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(c) No notices, reports or other filings are required to be made by the
Assignee with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Assignee from, any governmental or
regulatory authority, agency, commission, court, body or other governmental
entity ("Governmental Entity") or any other third party, except those that the
failure to make or obtain are not, individually or in the aggregate, reasonably
likely to have a material adverse effect on the Assignor or prevent, materially
delay or materially impair the ability
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of the Assignee to consummate the transactions contemplated by this Agreement.
(d) The execution, delivery and performance of this Agreement by the
Assignee and the consummation by the Assignee of the transactions contemplated
hereby will not constitute or result in (A) a breach or violation of, or a
default under, the certificate of limited partnership or agreement of limited
partnership of the Assignee, or (B) a breach or violation of, or a default or
the loss of any material benefit under, or the acceleration of any obligations
or the creation of a lien, pledge, security interest or other encumbrance on the
assets of the Assignee (with or without notice, lapse of time or both) pursuant
to, any agreement, lease, contract, note, mortgage, indenture, license,
arrangement or other obligation binding on the Assignee, except for any breach,
violation, default, loss of benefits, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to have a material
adverse effect on the Assignor or prevent, materially delay or materially impair
the ability of the Assignee to consummate the transactions contemplated by this
Agreement.
(e) Assignee hereby agrees to indemnify and hold harmless the Assignor
from any and all claims, liabilities, damages, fees and expenses (including
attorney's fees and expenses of counsel selected by Assignor) and any and all
taxes (collectively, "Losses") incurred, assessed or asserted against the
Assignor in connection with the performance of this Agreement by the Assignor in
accordance with the instructions of the Assignee as provided herein; provided,
however, that the Assignee shall not be required to indemnify the Assignor under
this Agreement in respect of Losses incurred, assessed or asserted against the
Assignor as a result of the wilful breach of this Agreement by the Assignor.
4. Representations, Warranties and Indemnities of the Assignor.
The Assignor represents and warrants to the Assignee, as of the
date of this Agreement and as of the Closing, that:
(a) The Assignor is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite limited liability company power and authority to own and operate
its
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properties and assets and to carry on its business as presently conducted.
(b) The Assignor has requisite limited liability company power and
authority and has taken all limited liability company action necessary in order
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement is a valid and
binding agreement of the Assignor enforceable against the Assignor in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(c) No notices, reports or other filings are required to be made by the
Assignor with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Assignor from, any Governmental
Entity or any other third party, except those that the failure to make or obtain
are not, individually or in the aggregate, reasonably likely to have a material
adverse effect on the Assignee or prevent, materially delay or materially impair
the ability of the Assignor to consummate the transactions contemplated by this
Agreement.
(d) The execution, delivery and performance of this Agreement by the
Assignor, and the consummation by the Assignor of the transactions contemplated
hereby will not constitute or result in (A) a breach or violation of, or a
default under, the limited liability company agreement or certificate of
formation of the Assignor, or (B) a breach or violation of, or a default or the
loss of any material benefit under, or the acceleration of any obligations or
the creation of a lien, pledge, security interest or other encumbrance on the
assets of the Assignor (with or without notice, lapse of time or both) pursuant
to, any agreement, lease, contract, note, mortgage, indenture, license,
arrangement or other obligation binding on the Assignor, except for any breach,
violation, default, loss of benefits, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to have a material
adverse effect on the Assignee or prevent, materially delay or materially impair
the ability of the Assignor to consummate the transactions contemplated by this
Agreement.
(e) The Assignor has good title to the Partnership Interests being
assigned free of any liens or encumbrances.
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(f) Assignor hereby agrees to indemnify and hold harmless the Assignee
from any and all Losses incurred, assessed or asserted against the Assignee
resulting from the willful breach by the Assignor of this Agreement.
5. Miscellaneous.
5.1. Notices. Any notice, request, demand, instruction or other
communication to be given to either party hereunder (except those required to be
delivered at Closing) shall be in writing, and shall be deemed to be delivered
upon the earlier to occur of (i) actual receipt if delivered by hand or by
commercial courier to the address indicated or (ii) the third (3rd) Business Day
after deposit in registered or certified United States Postal Service mail,
return receipt requested, postage prepaid, addressed as follows:
IF TO ASSIGNOR:
Vornado CESCR L.L.C.
c/o Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
Attention: Joseph Macnow
IF TO ASSIGNEE:
Vornado Operating L.P.
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
Attention: Irwin Goldberg
COPIES TO:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Joseph C. Shenker, Esq
The addresses and addressees for the purpose of this Paragraph may be
changed by either party by giving written notice of such change to the other
party in the manner provided herein.
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5.2. Severability. If any provision hereof shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions, or parts thereof, shall not in any way be affected or
impaired thereby.
5.3. Counterparts. This Agreement may be executed in any number of
identical counterparts, all of which shall together constitute one and the same
instrument.
5.4. Entire Agreement and Modification. This Agreement constitutes the
entire agreement between Assignor and Assignee with respect to the subject
matter hereof and supersedes all prior agreements and understandings (if any)
relating to the subject matter hereof. This Agreement cannot be amended,
modified or altered, or any provision waived, except by an agreement in writing
executed by both the Assignor and the Assignee.
5.5. Binding Effect. This Agreement shall be binding upon the parties
and their respective successors and assigns and shall inure to the benefit of
the parties hereto and their respective assigns.
5.6. No Third Part Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.
5.7. Headings. Paragraph headings are for convenience
of reference only and shall in no way affect the
interpretation of this Agreement.
5.8. Governing Law. THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS
AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
ASSIGNOR:
VORNADO CESCR L.L.C.
By: /s/ Irwin Goldberg
----------------------------
Name:
Title:
ASSIGNEE:
VORNADO OPERATING L.P.
By: Vornado Operating Company,
General Partner
By: /s/ Irwin Goldberg
----------------------------
Name: Irwin Goldberg
Title: Vice President - Chief
Financial Officer
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<PAGE> 1
Exhibit 2.2
PUT AGREEMENT
PUT AGREEMENT (this "Agreement"), dated as of December 31,
1998, by and between VORNADO REALTY TRUST, a Maryland real estate investment
trust ("Vornado"), and Vornado Operating L.P., a Delaware limited partnership
("Operating").
W I T N E S S E T H
WHEREAS, pursuant to the Assignment Agreement, dated as of
December 31, 1998, Vornado CESCR L.L.C. sold, assigned, transferred and conveyed
to Operating all of its beneficial interest in THREE HUNDRED EIGHTY THOUSAND
(380,000) Class C Units of Charles E. Smith Commercial Realty L.P., a Delaware
limited partnership (the "Assigned Interests"); and
WHEREAS, Operating desires to acquire from Vornado, and
Vornado desires to grant to Operating, a put option on the Assigned Interests on
the terms herein described.
NOW, THEREFORE, the parties, intending to be bound, hereby
agree as follows:
ARTICLE I
PUT OPTION
Section 1.1 Grant. Vornado hereby grants to Operating an
option to require Vornado or a designated affiliate of Vornado to purchase all
(but not less than all) of the Assigned Interests (the "Put Option"), which
obligation, subject to the terms and conditions hereof, shall be irrevocable and
unconditional, on the terms set forth below.
Section 1.2 Exercise of Put Option; Option Price. (a) The Put
Option shall be exercisable in the manner described in Section 2.1 below at any
time during the period (the "Exercise Period") from the date hereof through
December 31, 1999.
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(b) Upon exercise of the Put Option, the purchase price per unit payable for the
Assigned Interests shall be equal to the excess, if any, of (i) the sum of (x)
TWELVE MILLION, NINE HUNDRED TWENTY THOUSAND AND NO/100 DOLLARS ($12,920,000)
purchase price plus (y) a cumulative, quarterly compounded, return on such
amount at a rate of 10% per annum (taking into account the timing and amounts of
all previous distributions in respect of the Assigned Interests received or
receivable by Operating) in respect of the period in which the Assigned
Interests are owned by Operating minus (ii) the sum of all distributions
received by Operating in respect of the Assigned Interests from the date hereof
through the date of such exercise (the "Option Price"). Any overpayments or
underpayments of the Option Price resulting from receipt of distributions in
respect of the Assigned Interests after the Closing Date will be subject to a
true-up after the receipt of such distributions. In the event that the Assigned
Interests are converted or otherwise changed into other securities, there is a
distribution of partnership units or other securities in respect of the Assigned
Interests, or there is a reclassification, recapitalization or similar
transaction involving the Assigned Interests, the term "Assigned Interests"
shall be deemed to mean (or include, as applicable) any such other securities
into which the Assigned Interests are converted or changed, any such securities
received in respect of the Assigned Interests and any such securities received
in any such transaction, as applicable, and the Option Price payable upon
exercise of the Put Option shall be equitably adjusted to give effect to any
such transaction or event.
ARTICLE II
EXECUTION OF OPTION
Section 2.1 Exercise Mechanics. (a) Operating may (upon the
approval of the disinterested directors of Operating) exercise the Put Option in
respect of all (but not less than all) of the outstanding Assigned Interests on
any business day during the Exercise Period (the "Exercise Date") by giving
notice of demand, which notice shall specify the Exercise Date and the Closing
Date (which date shall be not less than 60, and not more than 90, days after the
date such notice is received by Vornado), in accordance with the requirements of
Section 4.1 hereof. Such notice, once given, shall be irrevocable.
(b) On the Closing Date:
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(i) Vornado shall pay the Option Price in cash in immediately
available funds to an account designated by Operating;
(ii) Operating shall deliver to Vornado an assignment, in form
and substance reasonably satisfactory to Vornado, of the Assigned Interests,
together with any certificate or certificates representing the Assigned
Interests then in the possession of Operating; and
(iii) Operating hereby covenants that upon assignment of any
of the Assigned Interests to Vornado pursuant to the Put Option and payment
therefor by Vornado, Vornado will receive all of Operating's right, title and
interest in and to such Assigned Interests free and clear of any security
interest or other lien.
Section 2.2 Default Interest. If Vornado shall fail to pay the
Option Price on the Closing Date, Vornado shall pay interest on the Option Price
at a rate of 15% per annum, from and including the Closing Date to but excluding
the date of actual payment of the Option Price. Such interest shall be
compounded daily and calculated on the basis of actual days elapsed in a year of
365 days.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Each party represents and warrants to the other party as
follows as of the date of this Agreement:
Section 3.1 Organization. It is a real estate investment trust
or limited partnership, as applicable, duly organized, validly existing and in
good standing under the laws of the State of Maryland or the State of Delaware,
as applicable. It has the requisite trust or limited partnership, as applicable,
power and authority to enter into this Agreement and the other agreements
contemplated hereby to which it is a party, to exercise its rights hereunder and
thereunder and to perform and comply with its obligations hereunder and
thereunder.
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Section 3.2 Authorization and Validity of Agreements. Each of
this Agreement and the other agreements contemplated hereby to which it is a
party has been duly authorized, executed and delivered by it and (assuming that
it is a valid and binding agreement of the other party hereto and thereto)
constitutes a valid and binding agreement of it enforceable in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
Section 3.3 Non-Contravention. The execution, delivery and
performance by it of this Agreement and the other agreements contemplated hereby
to which it is a party do not and will not (i) violate any provision of its
organizational documents, (ii) conflict with, or result in a breach of, or
constitute a default under, or result in the termination, cancellation or
acceleration (whether after notice or lapse of time or both) of any right or
obligation of it under, any agreement, license, permit or undertaking to which
it is a party or by which it is bound or to which any of its assets are subject,
result in the creation of any liens, charges, encumbrances, security interests,
options, pledges, restrictions or any other claims or third party rights upon
said assets, or (iii) violate or result in a breach of or constitute a default
under any judgment, order, injunction, decree, law, rule, regulation or other
restriction of any court or governmental or monetary authority to which it is
subject.
Section 3.4 Authorizations. There is no authorization,
approval, consent or waiver required to have been obtained by it from, or notice
or filing required to have been given by it to or made by it with, any
governmental authority or other person or entity in connection with the
execution, delivery and performance of this Agreement and the other agreements
contemplated hereby to which it is a party other than those that have been
obtained or made prior to the date hereof or relate to the ongoing
administration of it.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.1 Notices. Any notice pursuant to this Agreement
shall be in writing signed by or on behalf of the party giving it and may be
served by sending it by confirmed facsimile, prepaid recorded delivery or
registered post to the address of the other party set forth below (or
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to such other address as such other party shall have specified by a notice given
in accordance with this Section 4.1). Notices will be effective when received.
The details for notices are:
IF TO VORNADO:
Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
Attention: Joseph Macnow
IF TO OPERATING:
Vornado Operating L.P.
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
Attention: Irwin Goldberg
COPIES TO:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Joseph C. Shenker, Esq.
Section 4.2 Assignment; Certain Matters Relating to Exercise
of Put Option. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Nothwithstanding the foregoing, (i) neither
this Agreement nor any of the rights granted herein, nor any of the other
interests and obligations created hereunder, shall be assigned or delegated in
whole or in part by Operating (whether directly or indirectly or by sale,
transfer, merger or otherwise) without the prior express written consent of
Vornado, and any such attempted assignment or delegation shall be void and (ii)
Vornado may delegate or assign the obligation to acquire the Assigned Interests
upon exercise of the Put Option to a third party (provided that notwithstanding
any such delegation or assignment, Vornado shall remain liable for its
obligations hereunder). Without limitation of the foregoing, in the event of any
sale, transfer, disposition or similar transaction involving the Assigned
Interests by or at the direction of Operating (other than any transfer of an
interest in the Assigned Interests to Operating as
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contemplated by the Assignment Agreement), the Put Option shall lapse and be of
no further force or effect.
Section 4.3 Governing Law; Jurisdiction. This Agreement is
governed by, and shall be construed in accordance with, the laws of the State of
New York, without regard to the conflicts of laws principles thereof.
Section 4.4 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have hereunto signed their
names in the space provided below as of the date first above written.
VORNADO REALTY TRUST
By: /s/ Irwin Goldberg
----------------------------------
Name: Irwin Goldberg
Title: Vice President -
Chief Financial
Officer
VORNADO OPERATING L.P.
By: Vornado Operating Company,
General Partner
By: /s/ Irwin Goldberg
----------------------------------
Name: Irwin Goldberg
Title: Vice President -
Chief Financial
Officer
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<PAGE> 1
Exhibit 99.2
CONTACT: JOSEPH MACNOW
(201) 587-1000
[Vornado Operating Company logo]
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
FOR IMMEDIATE RELEASE - December 31, 1998
SADDLE BROOK, NEW JERSEY . . . . . Vornado Operating Company (AMEX:
VOO) announced today that it has purchased from Vornado Realty Trust (NYSE: VNO)
approximately 1.7% of the outstanding partnership units in Charles E. Smith
Commercial Realty, L.P. ("CESCR"), a Virginia limited partnership that owns and
manages office properties and affiliated retail space in the Washington D.C. and
Northern Virginia region, for a purchase price of approximately $12.9 million.
Vornado Realty Trust will own approximately 9.6% of CESCR after the purchase by
VOO.
Vornado Operating Company is based in Saddle Brook, New Jersey.
Certain statements contained herein may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, risks associated
with the operating and financial results of Vornado Operating Company and CESCR,
the results and performance of which may be subject to factors that might cause
a material difference, including, but not limited to, (a) changes in the general
economic climate, (b) local conditions such as the oversupply of space or a
reduction in demand for real estate in the area, (c) conditions of tenants, (d)
competition from other available space, (e) increased operating costs and
interest expense, (f) the timing of and costs associated with property
improvements, (g) changes in taxation or zoning laws, (h) government
regulations, (i) availability of financing on acceptable terms, (j) potential
liability under environmental or other laws and regulations, (k) general
competitive factors, and (l) the impact of the Year 2000 issue, including the
effect of third parties' failure to address the Year 2000 issue as well as the
Company's and CESCR's own readiness.
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