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Section 1: 10-12B/A (10-12B/A)


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As filed with the Securities and Exchange Commission on November 13, 2014

File No. 001-36523

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



Amendment No. 2 to

FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

URBAN EDGE PROPERTIES†
(Exact name of Registrant as specified in its charter)

Maryland
(State or other jurisdiction of
incorporation or organization)
  47-6311266
(I.R.S. employer
Identification number)

888 Seventh Avenue
New York, New York
(Address of principal executive offices)

 

10019
(Zip Code)

(212) 894-7000
(Registrant's telephone number, including area code)

        Securities to be registered pursuant to Section 12(b) of the Act:

Title of each class to be so registered   Name of each exchange on which
each class is to be registered
Common Shares, par value $0.01 per share   New York Stock Exchange

        Securities to be registered pursuant to Section 12(g) of the Act: None

        Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "small reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer o   Accelerated Filer o   Non-Accelerated Filer ý
(Do not check if a
smaller reporting company)
  Smaller Reporting Company o

   


The registrant was formerly named Vornado SpinCo. As of October 9, 2014, the registrant changed its name to Urban Edge Properties.



URBAN EDGE PROPERTIES

INFORMATION REQUIRED IN REGISTRATION STATEMENT
CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT
AND ITEMS OF FORM 10

        Certain information required to be included herein is incorporated by reference to specifically identified portions of the body of the information statement filed herewith as Exhibit 99.1. None of the information contained in the information statement shall be incorporated by reference herein or deemed to be a part hereof unless such information is specifically incorporated by reference.

Item 1.    Business.

        The information required by this item is contained under the sections of the information statement entitled "Information Statement Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," "Certain Relationships and Related Person Transactions," "The Separation" and "Where You Can Find More Information." Those sections are incorporated herein by reference.

Item 1A.    Risk Factors.

        The information required by this item is contained under the section of the information statement entitled "Risk Factors." That section is incorporated herein by reference.

Item 2.    Financial Information.

        The information required by this item is contained under the sections of the information statement entitled "Summary Historical Combined Financial Data," "Selected Historical Combined Financial Data," "Unaudited Pro Forma Combined Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Index to Financial Statements" and the statements referenced therein. Those sections are incorporated herein by reference.

Item 3.    Properties.

        The information required by this item is contained under the section of the information statement entitled "Business—Our Portfolio." That section is incorporated herein by reference.

Item 4.    Security Ownership of Certain Beneficial Owners and Management.

        The information required by this item is contained under the section of the information statement entitled "Security Ownership of Certain Beneficial Owners and Management." That section is incorporated herein by reference.

Item 5.    Directors and Executive Officers.

        The information required by this item is contained under the section of the information statement entitled "Management." That section is incorporated herein by reference.

Item 6.    Executive Compensation.

        The information required by this item is contained under the section of the information statement entitled "Compensation Discussion and Analysis." That section is incorporated herein by reference.

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Item 7.    Certain Relationships and Related Transactions.

        The information required by this item is contained under the sections of the information statement entitled "Management" and "Certain Relationships and Related Person Transactions." Those sections are incorporated herein by reference.

Item 8.    Legal Proceedings.

        The information required by this item is contained under the section of the information statement entitled "Business—Legal Proceedings." That section is incorporated herein by reference.

Item 9.    Market Price of, and Dividends on, the Registrant's Common Equity and Related Shareholder Matters.

        The information required by this item is contained under the sections of the information statement entitled "Dividend Policy," "Capitalization," "The Separation," and "Description of Shares of Beneficial Interest." Those sections are incorporated herein by reference.

Item 10.    Recent Sales of Unregistered Securities.

        The information required by this item is contained under the section of the information statement entitled "Description of Shares of Beneficial Interest—Sale of Unregistered Securities." That section is incorporated herein by reference.

Item 11.    Description of Registrant's Securities to be Registered.

        The information required by this item is contained under the sections of the information statement entitled "Dividend Policy," "The Separation," "Description of Shares of Beneficial Interest," and "Certain Provisions of Maryland Law and of Our Declaration of Trust and Bylaws." Those sections are incorporated herein by reference.

Item 12.    Indemnification of Directors and Officers.

        The information required by this item is contained under the section of the information statement entitled "Certain Provisions of Maryland Law and of our Declaration of Trust and Bylaws—Limitation of Liability and Indemnification of Trustees and Officers." This section is incorporated herein by reference.

Item 13.    Financial Statements and Supplementary Data.

        The information required by this item is contained under the section of the information statement entitled "Index to Financial Statements" and the financial statements referenced therein. That section is incorporated herein by reference.

Item 14.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

        None.

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Item 15.    Financial Statements and Exhibits.

(a)
Financial Statements

        The information required by this item is contained under the section of the information statement entitled "Index to Financial Statements" and the financial statements referenced therein. That section is incorporated herein by reference.

(b)
Exhibits

        See below.

        The following documents are filed as exhibits hereto:

Exhibit No.   Exhibit Description
  2.1   Form of Separation and Distribution Agreement by and among Vornado Realty Trust, Vornado Realty L.P., Urban Edge Properties and Urban Edge Properties L.P.**

 

3.1

 

Form of Declaration of Trust of Urban Edge Properties, as amended and restated**

 

3.2

 

Form of Amended and Restated Bylaws of Urban Edge Properties**

 

10.1

 

Form of Limited Partnership Agreement of Urban Edge Properties L.P.**

 

10.2

 

Form of Transition Services Agreement by and between Vornado Realty Trust and Urban Edge Properties**

 

10.3

 

Form of Tax Matters Agreement by and between Vornado Realty Trust and Urban Edge Properties**

 

10.4

 

Form of Employee Matters Agreement by and between Vornado Realty Trust, Vornado Realty L.P., Urban Edge Properties and Urban Edge Properties L.P.**

 

10.5

 

Loan and Security Agreement, between the Individual Borrowers party thereto, Towson VF L.L.C. and Vornado Finance II L.P., dated August 18, 2010**

 

10.6

 

Loan Agreement between VNO Bergen Mall Owner LLC and Wells Fargo Bank, National Association, dated March 25, 2013**

 

10.7

 

Amended and Restated Employment Agreement between Vornado Realty Trust and Jeffrey Olson*

 

10.8

 

Form of Indemnification Agreement between Urban Edge Properties and each of its trustees and executive officers*

 

21.1

 

Subsidiaries of Urban Edge Properties**

 

99.1

 

Information Statement of Urban Edge Properties, preliminary and subject to completion, dated November 13, 2014**

*
To be filed by amendment.

**
Filed herewith.

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SIGNATURES

        Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

    URBAN EDGE PROPERTIES

 

 

By:

 

/s/ Stephen W. Theriot

Name: Stephen W. Theriot
Title: Treasurer

Date: November 13, 2014

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URBAN EDGE PROPERTIES INFORMATION REQUIRED IN REGISTRATION STATEMENT CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND ITEMS OF FORM 10
SIGNATURES
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Section 2: EX-2.1 (EX-2.1)


Exhibit 2.1

 

SEPARATION AND DISTRIBUTION AGREEMENT

 

BY AND AMONG

 

VORNADO REALTY TRUST,

 

VORNADO REALTY L.P.,

 

URBAN EDGE PROPERTIES

 

AND

 

URBAN EDGE PROPERTIES L.P.

 

DATED AS OF [·], 2015

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS

2

 

 

 

ARTICLE II THE SEPARATION

13

 

 

 

2.1

Transfer of Assets and Assumption of Liabilities

13

2.2

UE Assets

14

2.3

UE Liabilities; Vornado Liabilities

17

2.4

Approvals and Notifications

18

2.5

Novation of Liabilities

19

2.6

Release of Guarantees

20

2.7

Termination of Agreements

21

2.8

Treatment of Shared Contracts

22

2.9

Bank Accounts; Cash Balances

22

2.10

Ancillary Agreements

23

2.11

Disclaimer of Representations and Warranties

23

2.12

UE Assumption of Indebtedness

24

2.13

Separate Contribution

24

2.14

Financial Information Certifications

25

2.15

Transition Committee

25

 

 

 

ARTICLE III THE DISTRIBUTION

26

 

 

 

3.1

Sole and Absolute Discretion; Cooperation

26

3.2

Actions Prior to the Distribution

26

3.3

Conditions to the Distribution

27

3.4

The Distribution

29

 

 

 

ARTICLE IV MUTUAL RELEASES; INDEMNIFICATION

30

 

 

 

4.1

Release of Pre-Distribution Claims

30

4.2

Indemnification by UE

32

4.3

Indemnification by Vornado

33

4.4

Indemnification Obligations Net of Insurance Proceeds and Other Amounts

34

4.5

Procedures for Indemnification of Third-Party Claims

35

4.6

Additional Matters

37

4.7

Right of Contribution

38

4.8

Covenant Not to Sue

38

4.9

Remedies Cumulative

39

4.10

Survival of Indemnities

39

4.11

Certain Tax Procedures

39

 

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ARTICLE V CERTAIN OTHER MATTERS

43

 

 

 

5.1

Insurance Matters

43

5.2

Late Payments

46

5.3

Treatment of Payments for Tax Purposes

46

5.4

Inducement

46

5.5

Post-Effective Time Conduct

46

5.6

Non-Solicitation Covenant

46

 

 

 

ARTICLE VI EXCHANGE OF INFORMATION; CONFIDENTIALITY

47

 

 

 

6.1

Agreement for Exchange of Information

47

6.2

Ownership of Information

47

6.3

Compensation for Providing Information

47

6.4

Record Retention

48

6.5

Limitations of Liability

48

6.6

Other Agreements Providing for Exchange of Information

48

6.7

Production of Witnesses; Records; Cooperation

48

6.8

Privileged Matters

49

6.9

Confidentiality

51

6.10

Protective Arrangements

52

 

 

 

ARTICLE VII DISPUTE RESOLUTION

53

 

 

 

7.1

Good-Faith Negotiation

53

7.2

Mediation

53

7.3

Arbitration

54

7.4

Litigation and Unilateral Commencement of Arbitration

55

7.5

Conduct During Dispute Resolution Process

55

 

 

 

ARTICLE VIII FURTHER ASSURANCES AND ADDITIONAL COVENANTS

55

 

 

 

8.1

Further Assurances

55

 

 

 

ARTICLE IX TERMINATION

56

 

 

 

9.1

Termination

56

9.2

Effect of Termination

56

 

 

 

ARTICLE X MISCELLANEOUS

57

 

 

 

10.1

Counterparts; Entire Agreement; Corporate Power

57

10.2

Governing Law

57

10.3

Assignability

58

10.4

Third-Party Beneficiaries

58

10.5

Notices

58

10.6

Severability

59

10.7

Force Majeure

59

 

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10.8

No Set-Off

60

10.9

Publicity

60

10.10

Expenses

60

10.11

Headings

60

10.12

Survival of Covenants

60

10.13

Waivers of Default

60

10.14

Specific Performance

60

10.15

Amendments

61

10.16

Interpretation

61

10.17

Limitations of Liability

61

10.18

Performance

62

10.19

Mutual Drafting

62

 

SCHEDULES

 

1.3

UE Contracts

1.4

UE Intellectual Property

1.5

Transferred Entities

1.6

UE Properties

2.1(a)

Plan of Reorganization

2.2(a)(x)

UE Assets

2.2(b)(v)

Vornado Assets

2.3(a)(vi)

UE Liabilities

2.3(b)

Vornado Liabilities

2.7(b)(ii)

Agreements, Arrangements, Commitments or Understandings Which Shall Not Terminate

2.12

UE Assumption of Indebtedness and Other Financing Arrangements

 

EXHIBITS

 

Exhibit A

Form of Amended and Restated Declaration of Trust of UE

Exhibit B

Form of Amended and Restated Bylaws of UE

Exhibit C

Form of UE L.P. Partnership Agreement

Exhibit D

Form of Contribution Agreement

 

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SEPARATION AND DISTRIBUTION AGREEMENT

 

This SEPARATION AND DISTRIBUTION AGREEMENT, dated as of [·], 2015 (this “Agreement”), is by and among Vornado Realty Trust, a Maryland real estate investment trust (“Vornado”), Vornado Realty L.P., a Delaware limited partnership (“VRLP”), Urban Edge Properties, a Maryland real estate investment trust (“UE”), and Urban Edge Properties L.P., a Delaware limited partnership (“UE L.P.”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I.

 

R E C I T A L S

 

WHEREAS, the board of trustees of Vornado (the “Vornado Board”) has determined that it is in the best interests of Vornado and its shareholders to create a new publicly traded company that shall operate the UE Business;

 

WHEREAS, in furtherance of the foregoing, the Vornado Board has determined that it is appropriate and desirable to separate the UE Business from the Vornado Business (the “Separation”);

 

WHEREAS, in furtherance of the Separation and pursuant to the Plan of Reorganization (as defined below), the following transactions, among others, are contemplated to occur:

 

(a)                                 VRLP and certain of its Subsidiaries will contribute the UE Assets and UE Liabilities (other than any such UE Assets and UE Liabilities which will be contributed by VRLP to UE L.P., as provided elsewhere in this Agreement) to UE (the “VRLP Contribution”) in exchange for common shares, par value $0.01 per share, in UE (“UE Shares”) and the assumption by UE and certain other members of the UE Group of such UE Liabilities;

 

(b)                                 VRLP will distribute, in one or more distributions, all of the UE Shares held by VRLP to the holders of record (including Vornado), as of the Record Date, of common limited partnership interests in VRLP entitled to participate in such distributions (“VRLP Interests”), with such distribution to be made on a pro rata basis, with each holder of VRLP Interests as of the Record Date entitled to receive one UE Share for every two VRLP Interests (the “VRLP Distribution”);

 

(c)                                  Vornado will distribute, in one or more distributions, all of the UE Shares it receives from VRLP to the holders of record, as of the Record Date, of common shares of Vornado, par value $0.04 per share (“Vornado Shares”) entitled to participate in such distributions, with such distribution to be made on a pro rata basis, with each holder of Vornado Shares as of the Record Date entitled to receive one UE Shares for every two Vornado Shares (the “Vornado Distribution” and, together with the VRLP Distribution, the “Distribution”);

 



 

(d)                                 VRLP will contribute certain UE Assets and UE Liabilities to UE L.P. (the “Separate Contribution” and, together with the VRLP Contribution, the “Contribution”) in exchange for limited partnership interests in UE L.P. (“UE L.P. Interests”) pursuant to the Contribution Agreement;

 

WHEREAS, in furtherance of the foregoing, the Vornado Board, acting on behalf of Vornado in its capacity as general partner of VRLP, has approved the VRLP Distribution and, acting in its capacity as such, has approved the Vornado Distribution;

 

WHEREAS, UE and UE L.P. have been organized solely for these purposes, and have not engaged in activities except in preparation for the Separation, the VRLP Distribution and the Distribution;

 

WHEREAS, for U.S. federal income tax purposes, the Contribution is intended to qualify as a transaction that is tax-free under Sections 351 and 1032 of the Internal Revenue Code of 1986, as amended (the “Code”), the VRLP Distribution is intended to qualify as a transaction that is tax-free under Section 731 of the Code, and the Vornado Distribution is intended to qualify as a transaction that is tax-free under Section 355 of the Code;

 

WHEREAS, UE and Vornado have prepared, and UE has filed with the SEC, the Form 10, which includes the Information Statement, which sets forth disclosure concerning UE, the Separation and the Distribution; and

 

WHEREAS, each of Vornado and UE has determined that it is appropriate and desirable to set forth the principal corporate transactions required to effect the Separation and the Distribution and certain other agreements that will govern certain matters relating to the Separation and the Distribution and the relationship of Vornado, UE and the members of their respective Groups following the Distribution.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

For the purpose of this Agreement, the following terms shall have the following meanings:

 

Action” shall mean any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

 

Affiliate” shall mean, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, “control

 

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(including with correlative meanings, “controlled by” and “under common control with”), when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that, prior to, at and after the Effective Time, for purposes of this Agreement and the Ancillary Agreements, (a) no member of the UE Group shall be deemed to be an Affiliate of any member of the Vornado Group and (b) no member of the Vornado Group shall be deemed to be an Affiliate of any member of the UE Group.

 

Agent” shall mean the trust company or bank duly appointed by Vornado and VRLP to act as distribution agent, transfer agent and registrar for the UE Shares in connection with the Distribution.

 

Agreement” shall have the meaning set forth in the Preamble.

 

Ancillary Agreement” shall mean all agreements (other than this Agreement) entered into by the Parties and/or members of their respective Groups (but as to which no Third Party is a party) in connection with the Separation, the Distribution, or the other transactions contemplated by this Agreement, including the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Contribution Agreement and the Transfer Documents.

 

Approvals or Notifications” shall mean any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any third Person, including any Governmental Authority.

 

Arbitration Request” shall have the meaning set forth in Section 7.3(a).

 

Assets” shall mean, with respect to any Person, the assets, properties, claims and rights (including goodwill) of such Person, wherever located (including in the possession of vendors or other third Persons or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of such Person, including rights and benefits pursuant to any contract, license, permit, indenture, note, bond, mortgage, agreement, concession, franchise, instrument, undertaking, commitment, understanding or other arrangement.

 

Code” shall mean the Internal Revenue Code of 1986, as amended.

 

Contribution” shall have the meaning set forth in the Recitals.

 

Contribution Agreement” shall have the meaning set forth in Section 2.13(b).

 

CPR” shall have the meaning set forth in Section 7.2.

 

Delayed UE Asset” shall have the meaning set forth in Section 2.4(c).

 

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Delayed UE Liability” shall have the meaning set forth in Section 2.4(c).

 

Disclosure Document” shall mean any registration statement (including the Form 10) filed with the SEC by or on behalf of any Party or any member of its Group, and also includes any information statement (including the Information Statement), prospectus, offering memorandum, offering circular, periodic report or similar disclosure document, whether or not filed with the SEC or any other Governmental Authority, in each case which describes the Separation, the Distribution or the UE Group, or primarily relates to the transactions contemplated hereby.

 

Dispute” shall have the meaning set forth in Section 7.1.

 

Distribution” shall have the meaning set forth in the Recitals.

 

Distribution Date” shall mean the date of the consummation of the Distribution, which shall be determined by the Vornado Board in its sole and absolute discretion.

 

Effective Time” shall mean 12:01 a.m., Eastern time, on the Distribution Date.

 

Employee Matters Agreement” shall mean the employee matters agreement to be entered into by and between Vornado and UE (or certain members of their respective Groups) in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement, as it may be amended from time to time.

 

Environmental Law” shall mean any Law relating to pollution, protection or restoration of or prevention of harm to the environment or natural resources, including the use, handling, transportation, treatment, storage, disposal, Release or discharge of Hazardous Materials or the protection of or prevention of harm to human health and safety.

 

Environmental Liabilities” shall mean all Liabilities relating to, arising out of or resulting from any Hazardous Materials, Environmental Law or contract or agreement relating to environmental, health or safety matters (including all removal, remediation or cleanup costs, investigatory costs, response costs, natural resources damages, property damages, personal injury damages, costs of compliance with any product take-back requirements or with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.

 

Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

 

Force Majeure” shall mean, with respect to a Party, an event beyond the control of such Party (or any Person acting on its behalf), which event (a) does not arise or result from the fault or negligence of such Party (or any Person acting on its behalf) and (b) by its nature would not reasonably have been foreseen by such Party (or such Person), or, if it would reasonably have been foreseen, was unavoidable, and includes acts of God, acts of civil or military authority, embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions, labor problems or, in the case of computer systems,

 

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any failure in electrical or air conditioning equipment. Notwithstanding the foregoing, the receipt by a Party of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such Party’s response thereto, shall not be deemed an event of Force Majeure.

 

Form 10” shall mean the registration statement on Form 10 filed by UE with the SEC to effect the registration of UE Shares pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time prior to the Distribution.

 

Governmental Approvals” shall mean any Approvals or Notifications to be made to, or obtained from, any Governmental Authority.

 

Governmental Authority” shall mean any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof.

 

Group” shall mean either the UE Group or the Vornado Group, as the context requires.

 

Hazardous Materials” shall mean any chemical, material, substance, waste, pollutant, emission, discharge, release or contaminant that could result in Liability under, or that is prohibited, limited or regulated by or pursuant to, any Environmental Law, and any natural or artificial substance (whether solid, liquid or gas, noise, ion, vapor or electromagnetic) that could cause harm to human health or the environment, including petroleum, petroleum products and byproducts, asbestos and asbestos-containing materials, urea formaldehyde foam insulation, electronic, medical or infectious wastes, polychlorinated biphenyls, radon gas, radioactive substances, chlorofluorocarbons and all other ozone-depleting substances.

 

Indemnifying Party” shall have the meaning set forth in Section 4.4(a).

 

Indemnitee” shall have the meaning set forth in Section 4.4(a).

 

Indemnity Payment” shall have the meaning set forth in Section 4.4(a).

 

Information” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data; provided that “Information” shall not include Registrable IP.

 

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Information Statement” shall mean the information statement to be sent to the holders of Vornado Shares and the holders of VRLP Interests in connection with the Distribution, as such information statement may be amended or supplemented from time to time prior to the Distribution.

 

Initial Notice” shall have the meaning set forth in Section 7.1.

 

Insurance Proceeds” shall mean those monies:

 

(a)                                 received by an insured from an insurance carrier; or

 

(b)                                 paid by an insurance carrier on behalf of the insured;

 

in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments) and net of any costs or expenses incurred in the collection thereof.

 

Insurance Termination Date” shall have the meaning set forth in Section 5.1(a).

 

Intellectual Property” shall mean all of the following whether arising under the Laws of the United States or of any other foreign or multinational jurisdiction: (a) patents, patent applications (including patents issued thereon) and statutory invention registrations, including reissues, divisions, continuations, continuations in part, substitutions, renewals, extensions and reexaminations of any of the foregoing, and all rights in any of the foregoing provided by international treaties or conventions, (b) trademarks, service marks, trade names, service names, trade dress, logos and other source or business identifiers, including all goodwill associated with any of the foregoing, and any and all common law rights in and to any of the foregoing, registrations and applications for registration of any of the foregoing, all rights in and to any of the foregoing provided by international treaties or conventions, and all reissues, extensions and renewals of any of the foregoing, (c) Internet domain names, registrations and related rights, (d) copyrightable works, copyrights, moral rights, mask work rights, database rights and design rights, in each case, other than Software, whether or not registered, and all registrations and applications for registration of any of the foregoing, and all rights in and to any of the foregoing provided by international treaties or conventions, (e) confidential and proprietary information, including trade secrets, invention disclosures, processes and know-how, in each case, other than Software, and (f) intellectual property rights arising from or in respect of any Technology.

 

IRS” shall mean the U.S. Internal Revenue Service.

 

Law” shall mean any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty, license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.

 

Liabilities” shall mean all debts, guarantees, assurances, commitments, liabilities, responsibilities, Losses, remediation, deficiencies, damages, fines, penalties, settlements, sanctions, costs, expenses, interest and obligations of any nature or kind, whether

 

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accrued or fixed, absolute or contingent, matured or unmatured, accrued or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or unforeseen, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, claim (including any Third-Party Claim), demand, Action, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority or arbitration tribunal, and those arising under any contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment or undertaking, or any fines, damages or equitable relief that is imposed, in each case, including all costs and expenses relating thereto.

 

Linked” shall have the meaning set forth in Section 2.9(a).

 

Losses” shall mean actual losses (including any diminution in value), costs, damages, penalties and expenses (including legal and accounting fees, and expenses and costs of investigation and litigation), whether or not involving a Third-Party Claim.

 

Mediation Request” shall have the meaning set forth in Section 7.2.

 

NYSE” shall mean the New York Stock Exchange.

 

Other IP” shall mean all Intellectual Property, other than Registrable IP, that is owned by either Party or any member of its Group as of the Effective Time.

 

Parties” shall mean the parties to this Agreement.

 

Permits” means permits, approvals, authorizations, consents, licenses or certificates issued by any Governmental Authority.

 

Person” shall mean an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

 

Plan of Reorganization” shall have the meaning set forth in Section 2.1(a).

 

Prime Rate” means the rate that Bloomberg displays as “Prime Rate by Country United States” at www.bloomberg.com/markets/rates-bonds/key-rates/ or on a Bloomberg terminal at PRIMBB Index.

 

Privileged Information” means any information, in written, oral, electronic, or other tangible or intangible forms, including any communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including attorney work product), as to which a Party or any member of its Group would be entitled to assert or have asserted a privilege, including the attorney-client and attorney work product privileges.

 

Qualifying Income” means income described in Sections 856(c)(2)(A) through (I) and 856(c)(3)(A) through (I) of the Code.

 

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Record Date” shall mean the close of business on the date to be determined by the Vornado Board, acting both on behalf of Vornado in its capacity as the general partner of VRLP and on its own behalf, as the record date for determining holders of VRLP Interests entitled to receive UE Shares pursuant to the VRLP Distribution and for determining holders of Vornado Shares entitled to receive UE Shares pursuant to the Vornado Distribution.

 

Record Holders” shall mean the holders of record of Vornado Shares and the holders of record of the VRLP Interests, in each case, as of the Record Date.

 

Registrable IP” shall mean all patents, patent applications, statutory invention registrations, registered trademarks, registered service marks, registered Internet domain names and copyright registrations.

 

REIT” shall mean “a real estate investment trust” within the meaning of Section 856 of the Code.

 

REIT Guidance” shall mean either a ruling from the IRS or an opinion of Tax counsel selected by the Party who has given the relevant REIT Savings Notice, which opinion shall be reasonably satisfactory to such Party.

 

“REIT Savings Notice” shall mean the written notice delivered by UE or Vornado, as the case may be, pursuant to Section 4.11(a) or Section 4.11(b), respectively.

 

Release” shall mean any release, spill, emission, discharge, leaking, pumping, pouring, dumping, injection, deposit, disposal, dispersal, leaching or migration of Hazardous Materials into the environment (including ambient air, surface water, groundwater and surface or subsurface strata).

 

Representatives” shall mean, with respect to any Person, any of such Person’s directors, trustees, officers, employees, agents, consultants, advisors, accountants, attorneys or other representatives.

 

SEC” shall mean the U.S. Securities and Exchange Commission.

 

Security Interest” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, covenant, condition, easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever.

 

Separate Contribution” shall have the meaning set forth in the Recitals.

 

Separation” shall have the meaning set forth in the Recitals.

 

Shared Contract” shall have the meaning set forth in Section 2.8(a).

 

Software” shall mean any and all (a) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any

 

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and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow charts and other work products used to design, plan, organize and develop any of the foregoing, (d) screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons and (e) documentation, including user manuals and other training documentation, relating to any of the foregoing.

 

Specified REIT Requirements” means the requirements of Sections 856(c)(2) and (3) of the Code.

 

Subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

 

Tangible Information” means information that is contained in written, electronic or other tangible forms.

 

Tax” shall have the meaning set forth in the Tax Matters Agreement.

 

Tax Matters Agreement” shall mean the tax matters agreement to be entered into by and between Vornado and UE (or any members of their respective Groups) in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement, as it may be amended from time to time.

 

Tax Return” shall have the meaning set forth in the Tax Matters Agreement.

 

Technology” shall mean all technology, designs, formulae, algorithms, procedures, methods, discoveries, processes, techniques, ideas, know-how, research and development, technical data, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of authorship in any media, confidential, proprietary or non-public information, and other similar materials, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of the foregoing in any form, whether or not listed herein, in each case, other than Software.

 

Third Party” means any Person other than the Parties or any members of their respective Groups.

 

Third-Party Claim” shall have the meaning set forth in Section 4.5(a).

 

Transfer Documents” shall have the meaning set forth in Section 2.1(b).

 

Transferred Entities” shall mean the entities set forth on Schedule 1.5.

 

Transition Committee” shall have the meaning set forth in Section 2.15.

 

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Transition Services Agreement” shall mean the transition services agreement to be entered into by and between Vornado and UE (or any members of their respective Groups) in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement, as it may be amended from time to time.

 

UE” shall have the meaning set forth in the Preamble.

 

UE Accounts” shall have the meaning set forth in Section 2.9(a).

 

UE Assets” shall have the meaning set forth in Section 2.2(a).

 

UE Balance Sheet” shall mean the unaudited pro forma combined balance sheet of the UE Business, including any notes and subledgers thereto, as of September 30, 2014, as presented in the Information Statement mailed to the Record Holders.

 

UE Business” shall mean the business, operations and activities of the Vornado Group relating primarily to the UE Properties as conducted at any time prior to the Effective Time by either Party or any of their current or former Subsidiaries.

 

UE Bylaws” shall mean the Amended and Restated Bylaws of UE, substantially in the form of Exhibit B.

 

UE Contracts” shall mean the following contracts and agreements to which either Party or any member of its Group is a party or by which it or any member of its Group or any of their respective Assets is bound, whether or not in writing; provided that UE Contracts shall not include (x) any contract or agreement that is contemplated to be retained by Vornado or any member of the Vornado Group from and after the Effective Time pursuant to any provision of this Agreement or any Ancillary Agreement or (y) any contract or agreement that would constitute UE Software or UE Technology:

 

(a)                                 any leases relating primarily to any UE Property pursuant to which a Third Party leases all or any portion of such UE Property;

 

(b)                                 any joint venture, shareholder, equityholder, partnership or similar agreements with any Third Party relating primarily to any UE Property;

 

(c)                                  any customer, distribution, supply, marketing, vendor or other contract, agreement or license, in each case with a Third Party and in effect as of the Effective Time, pursuant to which such Third Party provides or receives products or services to or from either Party or any member of its Group, primarily in connection with the UE Business, excluding any such contracts or agreements for services that are addressed in the Transition Services Agreement or any other Ancillary Agreement;

 

(d)                                 any guarantee, indemnity, representation, covenant, warranty or other Liability of either Party or any member of its Group relating primarily to any other UE Contract, any UE Liability or the UE Business;

 

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(e)                                  any employment, change of control, retention, consulting, indemnification, termination, severance or other similar agreement with any UE Group Employee or consultants of the UE Group that is in effect as of the Effective Time;

 

(f)                                   any contract or agreement that is otherwise expressly contemplated pursuant to this Agreement or any of the Ancillary Agreements to be assigned to UE or any member of the UE Group;

 

(g)                                  any interest rate, currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements related exclusively to the UE Business or entered into by or on behalf of any division, business unit or member of the UE Group;

 

(h)                                 any contract, guarantee, note, mortgage, bond, debenture or other agreement providing for indebtedness, whether secured or unsecured, which relates primarily to the UE Business; and

 

(i)                                     any contracts, agreements or settlements listed on Schedule 1.3, including the right to recover any amounts under such contracts, agreements or settlements.

 

UE Declaration of Trust” shall mean the Amended and Restated Declaration of Trust of UE, substantially in the form of Exhibit A.

 

UE Financing Arrangements” shall have the meaning set forth in Section 2.12(a).

 

UE Group” shall mean (a) prior to the Effective Time, UE and each Person that will be a Subsidiary of UE as of immediately after the Effective Time, including the Transferred Entities, even if, prior to the Effective Time, such Person is not a Subsidiary of UE; and (b) on and after the Effective Time, UE and each Person that is a Subsidiary of UE.

 

UE Group Employee” shall have the meaning set forth in the Employee Matters Agreement.

 

UE Indemnitees” shall have the meaning set forth in Section 4.3.

 

UE Indemnity Payment” shall have the meaning set forth in Section 4.11(a)(i).

 

UE Intellectual Property” shall mean (a) the Registrable IP set forth on Schedule 1.4 and (b) all Other IP owned by, licensed by or to, or sublicensed by or to either Party or any member of its Group as of the Effective Time exclusively used or exclusively held for use in the UE Business, including any Other IP set forth on Schedule 1.4.

 

UE Liabilities” shall have the meaning set forth in Section 2.3(a).

 

UE L.P.” shall have the meaning set forth in the Preamble.

 

UE L.P. Interests” shall have the meaning set forth in the Recitals.

 

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UE L.P. Partnership Agreement” shall have the meaning set forth in Section 2.14(a).

 

UE Permits” shall mean all Permits owned or licensed by either Party or any member of its Group primarily used or primarily held for use in the UE Business as of the Effective Time.

 

UE Properties” means the real properties listed on Schedule 1.6.

 

UE Shares” shall have the meaning set forth in the Recitals.

 

UE Software” shall mean all Software owned or licensed by either Party or any member of its Group exclusively used or exclusively held for use in the UE Business as of the Effective Time.

 

UE Technology” shall mean all Technology owned or licensed by either Party or any member of its Group exclusively used or exclusively held for use in the UE Business as of the Effective Time.

 

Unreleased UE Liability” shall have the meaning set forth in Section 2.5(b).

 

Vornado” shall have the meaning set forth in the Preamble.

 

Vornado Accounts” shall have the meaning set forth in Section 2.9(a).

 

Vornado Assets” shall have the meaning set forth in Section 2.2(b).

 

Vornado Board” shall have the meaning set forth in the Recitals.

 

Vornado Business” shall mean all businesses, operations and activities (whether or not such businesses, operations or activities are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time by either Party or any member of its Group, other than the UE Business.

 

Vornado Distribution” shall have the meaning set forth in the Recitals.

 

Vornado Group” shall mean Vornado and each Person that is a Subsidiary of Vornado (other than UE and any other member of the UE Group).

 

Vornado Indemnitees” shall have the meaning set forth in Section 4.2.

 

Vornado Indemnity Payment” shall have the meaning set forth in Section 4.11(b)(i).

 

Vornado Liabilities” shall have the meaning set forth in Section 2.3(b).

 

Vornado Name and Vornado Marks” shall mean the names, marks, trade dress, logos, monograms, domain names and other source or business identifiers of either Party or any member of its Group using or containing “Vornado Realty” or “Vornado,” either alone or in

 

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combination with other words or elements, and all names, marks, trade dress, logos, monograms, domain names and other source or business identifiers confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.

 

Vornado Shares” shall have the meaning set forth in the Recitals.

 

VRLP” shall have the meaning set forth in the Preamble.

 

VRLP Contribution” shall have the meaning set forth in the Recitals.

 

VRLP Distribution” shall have the meaning set forth in the Recitals.

 

VRLP Interests” shall have the meaning set forth in the Recitals.

 

ARTICLE II
THE SEPARATION

 

2.1                               Transfer of Assets and Assumption of Liabilities.

 

(a)                                 On or prior to the Effective Time, but in any case, prior to the Distribution, in accordance with the plan set forth on Schedule 2.1(a) (the “Plan of Reorganization”):

 

(i)                                     Transfer and Assignment of UE Assets. Vornado shall, and shall cause the applicable members of the Vornado Group to, contribute, assign, transfer, convey and deliver to the applicable members of the UE Group, and the applicable members of the UE Group shall accept from Vornado and the applicable members of the Vornado Group, all of Vornado’s and such Vornado Group members’ respective direct or indirect right, title and interest in and to all of the UE Assets (it being understood that if any UE Asset shall be held by a Transferred Entity or a wholly owned Subsidiary of a Transferred Entity, such UE Asset may be assigned, transferred, conveyed and delivered to UE as a result of the transfer of all of the equity interests in such Transferred Entity from Vornado or the applicable members of the Vornado Group to the applicable member of the UE Group); and

 

(ii)                                  Acceptance and Assumption of UE Liabilities. The applicable members of the UE Group shall accept, assume and agree faithfully to perform, discharge and fulfill all of the UE Liabilities in accordance with their respective terms. The applicable members of the UE Group shall be responsible for all UE Liabilities, regardless of when or where such UE Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such UE Liabilities are asserted or determined (including any UE Liabilities arising out of claims made by Vornado’s or UE’s respective trustees, officers, employees, agents, Subsidiaries or Affiliates against any member of the Vornado Group or the UE Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Vornado Group or the

 

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UE Group, or any of their respective directors, trustees, officers, employees, agents, Subsidiaries or Affiliates.

 

(b)                                 Transfer Documents. In furtherance of the contribution, assignment, transfer, conveyance and delivery of the Assets and the assumption of the Liabilities in accordance with Section 2.1(a), (i) each Party shall execute and deliver, and shall cause the applicable members of its Group to execute and deliver, such bills of sale, quitclaim deeds, stock powers, certificates of title, assignments of contracts and other instruments of transfer, conveyance and assignment as and to the extent necessary to evidence the transfer, conveyance and assignment of all of such Party’s and the applicable members of its Group’s right, title and interest in and to such Assets to the other Party and the applicable members of its Group in accordance with Section 2.1(a), and (ii) each Party shall execute and deliver, and shall cause the applicable members of its Group to execute and deliver, to the other Party such assumptions of contracts and other instruments of assumption as and to the extent necessary to evidence the valid and effective assumption of the Liabilities by such Party and the applicable members of its Group in accordance with Section 2.1(a). All of the foregoing documents contemplated by this Section 2.1(b) shall be referred to collectively herein as the “Transfer Documents.”

 

(c)                                  Misallocations. In the event that at any time or from time to time (whether prior to, at or after the Effective Time), one Party (or any member of such Party’s respective Group) shall receive or otherwise possess any Asset that is allocated to the other Party (or any member of such Party’s Group) pursuant to this Agreement or any Ancillary Agreement, such Party shall promptly transfer, or cause to be transferred, such Asset to the Party so entitled thereto (or to any member of such Party’s Group), and such Party (or member of such Party’s Group) shall accept such Asset. Prior to any such transfer, the Person receiving or possessing such Asset shall hold such Asset in trust for any such other Person. In the event that at any time or from time to time (whether prior to, at or after the Effective Time), one Party hereto (or any member of such Party’s Group) shall receive or otherwise assume any Liability that is allocated to the other Party (or any member of such Party’s Group) pursuant to this Agreement or any Ancillary Agreement, such Party shall promptly transfer, or cause to be transferred, such Liability to the Party responsible therefor (or to any member of such Party’s Group), and such Party (or member of such Party’s Group) shall accept, assume and agree to faithfully perform such Liability.

 

(d)                                 Waiver of Bulk-Sale and Bulk-Transfer Laws. UE, UE L.P. and each member of the UE Group hereby waives compliance by each and every member of the Vornado Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may be applicable with respect to the transfer or sale of any or all of the UE Assets or UE Properties to any member of the UE Group. Vornado, VRLP and each member of the Vornado Group hereby waives compliance by each and every member of the UE Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may be applicable with respect to the transfer or sale of any or all of the Vornado Assets to any member of the Vornado Group.

 

2.2                               UE Assets.

 

(a)                                 UE Assets. For purposes of this Agreement, “UE Assets” shall mean:

 

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(i)                                     all issued and outstanding capital stock or other equity interests of the Transferred Entities that are owned by either Party or any members of its Group as of the Effective Time;

 

(ii)                                  all interests in the UE Properties of whatever nature, including easements, whether as owner, mortgagee or holder of a Security Interest in the UE Properties, lessor, sublessor, lessee, sublessee or otherwise, and including all buildings or barges located thereon, and all associated parking areas, fixtures and all other improvements located thereon, and including all rights, benefits, privileges, tenements, hereditaments, covenants, conditions, restrictions, easements and other appurtenances on any UE Property or otherwise appertaining to or benefitting any UE Property and/or the improvements situated thereon, including all mineral rights, development rights, air and water rights, subsurface rights, vested rights entitling, or prospective rights which may entitle, the owner of any UE Property to related easements, land use rights, air rights, viewshed rights, density credits, water, sewer, electrical and other utility service, credits and/or rebates, strips and gores and any land lying in the bed of any street, road, alley, open or proposed, adjoining any UE Property, and all easements, rights of way and other appurtenances used or connected with the beneficial use or enjoyment of any UE Property;

 

(iii)                               all Assets of either Party or any members of its Group included or reflected as assets of the UE Group on the UE Balance Sheet, subject to any dispositions of such Assets subsequent to the date of the UE Balance Sheet; provided that, except with respect to any contribution by Vornado of cash to be used by the UE Group for general corporate purposes, the amounts set forth on the UE Balance Sheet with respect to any Assets shall not be treated as minimum amounts or limitations on the amount of such Assets that are included in the definition of UE Assets pursuant to this subclause (iii);

 

(iv)                              all Assets of either Party or any of the members of its Group as of the Effective Time that are of a nature or type that would have resulted in such Assets being included as Assets of UE or members of the UE Group on a pro forma combined balance sheet of the UE Group or any notes or subledgers thereto as of the Effective Time (were such balance sheet, notes and subledgers to be prepared on a basis consistent with the determination of the Assets included on the UE Balance Sheet), it being understood that (x) the UE Balance Sheet shall be used to determine the types of, and methodologies used to determine, those Assets that are included in the definition of UE Assets pursuant to this subclause (iv); and (y) the amounts set forth on the UE Balance Sheet with respect to any Assets shall not be treated as minimum amounts or limitations on the amount of such Assets that are included in the definition of UE Assets pursuant to this subclause (iv);

 

(v)                                 all Assets of either Party or any of the members of its Group as of the Effective Time that are expressly provided by this Agreement or any Ancillary Agreement as Assets to be transferred to UE or any other member of the UE Group;

 

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(vi)                              all UE Contracts as of the Effective Time and all rights, interests or claims of either Party or any of the members of its Group thereunder as of the Effective Time;

 

(vii)                           all UE Intellectual Property, UE Software and UE Technology as of the Effective Time and all rights, interests or claims of either Party or any of the members of its Group thereunder as of the Effective Time;

 

(viii)                        all UE Permits as of the Effective Time and all rights, interests or claims of either Party or any of the members of its Group thereunder as of the Effective Time;

 

(ix)                              all rights, interests and claims of either Party or any of the members of its Group as of the Effective Time with respect to Information that is exclusively related to the UE Assets, the UE Liabilities, the UE Business or the Transferred Entities and, subject to the provisions of the applicable Ancillary Agreements, a non-exclusive right to all Information that is related to, but not exclusively related to, the UE Assets, the UE Liabilities, the UE Business or the Transferred Entities; and

 

(x)                                 any and all Assets set forth on Schedule 2.2(a)(x).

 

Notwithstanding the foregoing, the UE Assets shall not in any event include any Asset referred to in subclauses (i) through (v) of Section 2.2(b).

 

(b)                                 Vornado Assets. For the purposes of this Agreement, “Vornado Assets” shall mean all Assets of either Party or the members of its Group as of the Effective Time, other than the UE Assets, it being understood that the Vornado Assets shall include:

 

(i)                                     all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by Vornado, VRLP or any other member of the Vornado Group;

 

(ii)                                  all Contracts of either Party or any of the members of its Group as of the Effective Time (other than the UE Contracts);

 

(iii)                               all Intellectual Property of either Party or any of the members of its Group as of the Effective Time (other than the UE Intellectual Property), including the Vornado Name and Vornado Marks;

 

(iv)                              all Permits of either Party or any of the members of its Group as of the Effective Time (other than the UE Permits); and

 

(v)                                 any and all Assets set forth on Schedule 2.2(b)(v).

 

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2.3                               UE Liabilities; Vornado Liabilities.

 

(a)                                 UE Liabilities. For the purposes of this Agreement, “UE Liabilities” shall mean the following Liabilities of either Party or any of the members of its Group:

 

(i)                                     all Liabilities included or reflected as liabilities or obligations of UE or the members of the UE Group on the UE Balance Sheet, subject to any discharge of such Liabilities subsequent to the date of the UE Balance Sheet; provided that the amounts set forth on the UE Balance Sheet with respect to any Liabilities shall not be treated as minimum amounts or limitations on the amount of such Liabilities that are included in the definition of UE Liabilities pursuant to this subclause (i);

 

(ii)                                  all Liabilities as of the Effective Time that are of a nature or type that would have resulted in such Liabilities being included or reflected as liabilities or obligations of UE or the members of the UE Group on a pro forma combined balance sheet of the UE Group or any notes or subledgers thereto as of the Effective Time (were such balance sheet, notes and subledgers to be prepared on a basis consistent with the determination of the Liabilities included on the UE Balance Sheet), it being understood that (x) the UE Balance Sheet shall be used to determine the types of, and methodologies used to determine, those Liabilities that are included in the definition of UE Liabilities pursuant to this subclause (ii), and (y) the amounts set forth on the UE Balance Sheet with respect to any Liabilities shall not be treated as minimum amounts or limitations on the amount of such Liabilities that are included in the definition of UE Liabilities pursuant to this subclause (ii);

 

(iii)                               all Liabilities, including any Environmental Liabilities, relating to, arising out of or resulting from the actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent that such Liabilities relate to, arise out of or result from the UE Business or any UE Asset;

 

(iv)                              any and all Liabilities that are expressly provided by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by UE or any other member of the UE Group, and all agreements, obligations and Liabilities of any member of the UE Group under this Agreement or any of the Ancillary Agreements;

 

(v)                                 all Liabilities relating to, arising out of or resulting from the UE Contracts, the UE Intellectual Property, the UE Software, the UE Technology or the UE Permits;

 

(vi)                              any and all Liabilities set forth on Schedule 2.3(a)(vi); and

 

(vii)                           all Liabilities arising out of claims made by any Third Party (including Vornado’s or UE’s respective trustees, officers, shareholders, employees and agents) against any member of the Vornado Group or the UE Group to the extent relating

 

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to, arising out of or resulting from the UE Business or any UE Asset or the other business, operations, activities or Liabilities referred to in clauses (i) through (vi) above;

 

provided that, notwithstanding the foregoing, the Parties agree that the Liabilities set forth on Schedule 2.3(b), and any Liabilities of any member of the Vornado Group pursuant to the Ancillary Agreements, shall not be UE Liabilities but instead shall be Vornado Liabilities.

 

(b)                                 Vornado Liabilities. For the purposes of this Agreement, “Vornado Liabilities” shall mean (i) all Liabilities relating to, arising out of or resulting from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time) of any member of the Vornado Group and, prior to the Effective Time, any member of the UE Group, in each case that are not UE Liabilities, including any and all Liabilities set forth on Schedule 2.3(b); and (ii) all Liabilities arising out of claims made by any Third Party (including Vornado’s or UE’s respective trustees, officers, shareholders, employees and agents) against any member of the Vornado Group or the UE Group to the extent relating to, arising out of or resulting from the Vornado Business or the Vornado Assets.

 

2.4                               Approvals and Notifications.

 

(a)                                 Approvals and Notifications for UE Assets. To the extent that the transfer or assignment of any UE Asset, the assumption of any UE Liability, the Separation, or the Distribution requires any Approvals or Notifications, the Parties shall use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except to the extent expressly provided in this Agreement or any of the Ancillary Agreements or as otherwise agreed between Vornado and UE, neither Vornado nor UE shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

 

(b)                                 Delayed UE Transfers. If and to the extent that the valid, complete and perfected transfer or assignment to the UE Group of any UE Asset or assumption by the UE Group of any UE Liability would be a violation of applicable Law or require any Approval or Notification in connection with the Separation or the Distribution that has not been obtained or made by the Effective Time, then, unless the Parties mutually shall otherwise determine, the transfer or assignment to the UE Group of such UE Assets or the assumption by the UE Group of such UE Liabilities, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approvals or Notifications have been obtained or made. Notwithstanding the foregoing, any such UE Assets or UE Liabilities shall continue to constitute UE Assets and UE Liabilities for all other purposes of this Agreement.

 

(c)                                  Treatment of Delayed UE Assets and Delayed UE Liabilities. If any transfer or assignment of any UE Asset or any assumption of any UE Liability intended to be transferred, assigned or assumed hereunder, as the case may be, is not consummated on or prior to the Effective Time, whether as a result of the provisions of Section 2.4(b) or for any other

 

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reason (any such UE Asset, a “Delayed UE Asset” and any such UE Liability, a “Delayed UE Liability”), then, insofar as reasonably possible and subject to applicable Law, the member of the Vornado Group retaining such Delayed UE Asset or such Delayed UE Liability, as the case may be, shall thereafter hold such Delayed UE Asset or Delayed UE Liability, as the case may be, for the use and benefit or burden, as applicable, of the member of the UE Group entitled thereto (at the expense of the member of the UE Group entitled thereto). In addition, the member of the Vornado Group retaining such Delayed UE Asset or such Delayed UE Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Delayed UE Asset or Delayed UE Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the member of the UE Group to whom such Delayed UE Asset is to be transferred or assigned, or which will assume such Delayed UE Liability, as the case may be, in order to place such member of the UE Group in a substantially similar position as if such Delayed UE Asset or Delayed UE Liability had been transferred, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such Delayed UE Asset or Delayed UE Liability, as the case may be, including use, risk of loss, potential for gain, and dominion, control and command over such Delayed UE Asset or Delayed UE Liability, as the case may be, and all costs and expenses related thereto, shall inure from and after the Effective Time to the UE Group.

 

(d)                                 Transfer of Delayed UE Assets and Delayed UE Liabilities. If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any Delayed UE Asset or the deferral of assumption of any Delayed UE Liability pursuant to Section 2.4(b), are obtained or made, and, if and when any other legal impediments for the transfer or assignment of any Delayed UE Asset or the assumption of any Delayed UE Liability have been removed, the transfer or assignment of the applicable Delayed UE Asset or the assumption of the applicable Delayed UE Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement.

 

(e)                                  Costs for Delayed UE Assets and Delayed UE Liabilities. Any member of the Vornado Group retaining a Delayed UE Asset or Delayed UE Liability due to the deferral of the transfer or assignment of such Delayed UE Asset or the deferral of the assumption of such Delayed UE Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by UE or the member of the UE Group entitled to or burdened by the Delayed UE Asset or Delayed UE Liability, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by UE or the member of the UE Group entitled to or burdened by such Delayed UE Asset or Delayed UE Liability.

 

2.5                               Novation of Liabilities.

 

(a)                                 Each of Vornado and UE, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all UE Liabilities and obtain in writing the unconditional release of each member of the Vornado Group that is a party to any such arrangements, so that, in any such case, the members of the UE Group shall be solely responsible for such UE Liabilities; provided, however, that, except as otherwise expressly provided in this Agreement or any of the Ancillary Agreements, neither Vornado nor

 

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UE shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any third Person from whom any such consent, substitution, approval, amendment or release is requested.

 

(b)                                 If Vornado or UE is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release and the applicable member of the Vornado Group continues to be bound by such UE Liability (or any agreement, lease, license or other obligation, in each case, pursuant to which any UE Liability arises) (each, an “Unreleased UE Liability”), UE shall, to the extent not prohibited by Law, as indemnitor, guarantor, agent or subcontractor for such member of the Vornado Group, as the case may be, (i) pay, perform and discharge fully all of the obligations or other Liabilities of such member of the Vornado Group that constitute Unreleased UE Liabilities from and after the Effective Time and (ii) use its commercially reasonable efforts to effect such payment, performance or discharge prior to the time any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Vornado Group. If and when any such consent, substitution, approval, amendment or release shall be obtained or the Unreleased UE Liabilities shall otherwise become assignable or able to be novated, Vornado shall promptly assign, or cause to be assigned, and UE or the applicable UE Group member shall assume, such Unreleased UE Liabilities without exchange of further consideration.

 

2.6                               Release of Guarantees. In furtherance of, and not in limitation of, the obligations set forth in Section 2.5:

 

(a)                                 On or prior to the Effective Time or as soon as practicable thereafter, each of Vornado and UE shall, at the request of the other Party and with the reasonable cooperation of such other Party and the applicable member(s) of such Party’s Group, use commercially reasonable efforts to (i) have any member(s) of the Vornado Group removed as guarantor of, indemnitor of or obligor for any UE Liability to the extent that they relate to UE Liabilities, including the removal of any Security Interest on or in any Vornado Asset that may serve as collateral or security for any such UE Liability; and (ii) have any member(s) of the UE Group removed as guarantor of, indemnitor of or obligor for any Vornado Liability to the extent that they relate to Vornado Liabilities, including the removal of any Security Interest on or in any UE Asset that may serve as collateral or security for any such Vornado Liability.

 

(b)                                 To the extent required to obtain a release from a guarantee or indemnity of:

 

(i)                                     any member of the Vornado Group, UE or one or more members of the UE Group shall execute a guarantee or indemnity agreement in the form of the existing guarantee or indemnity or such other form as is agreed to by the relevant parties to such guarantee or indemnity agreement, which agreement shall include the removal of any Security Interest on or in any Vornado Asset that may serve as collateral or security for any such UE Liability, except to the extent that such existing guarantee or indemnity contains representations, covenants or other terms or provisions either (i) with which UE would be reasonably unable to comply or (ii) which UE would not reasonably be able to avoid breaching; and

 

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(ii)                                  any member of the UE Group, Vornado or one or more members of the Vornado Group shall execute a guarantee or indemnity agreement in the form of the existing guarantee or indemnity or such other form as is agreed to by the relevant parties to such guarantee or indemnity agreement, which agreement shall include the removal of any Security Interest on or in any UE Asset that may serve as collateral or security for any such Vornado Liability, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (i) with which Vornado would be reasonably unable to comply or (ii) which Vornado would not reasonably be able to avoid breaching.

 

(c)                                  Until such time as Vornado or UE has obtained, or has caused to be obtained, any removal or release as set forth in clauses (a) and (b) of this Section 2.6, (i) the Party or the relevant member of its Group that has assumed the Liability related to such guarantee shall indemnify, defend and hold harmless the guarantor or obligor against or from any Liability arising from or relating thereto in accordance with the provisions of Article IV and shall, as agent or subcontractor for such guarantor, indemnitor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor, indemnitor or obligor thereunder; and (ii) each of Vornado and UE, on behalf of itself and the other members of its respective Group, agree not to renew or extend the term of, increase any obligations under, or transfer to a Third Party, any loan, guarantee, lease, contract or other obligation for which the other Party or a member of its Group is or may be liable unless all obligations of such other Party and the members of such other Party’s Group with respect thereto are thereupon terminated by documentation satisfactory in form and substance to such other Party.

 

2.7                               Termination of Agreements.

 

(a)                                 Except as set forth in Section 2.7(b), in furtherance of the releases and other provisions of Section 4.1, UE and each member of the UE Group, on the one hand, and Vornado and each member of the Vornado Group, on the other hand, hereby terminate any and all agreements, arrangements, commitments or understandings, whether or not in writing, between or among UE and/or any member of the UE Group, on the one hand, and Vornado and/or any member of the Vornado Group, on the other hand, effective as of the Effective Time. No such terminated agreement, arrangement, commitment or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Effective Time. Each Party shall, at the reasonable request of the other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.

 

(b)                                 The provisions of Section 2.7(a) shall not apply to any of the following agreements, arrangements, commitments or understandings (or to any of the provisions thereof): (i) this Agreement and the Ancillary Agreements (and each other agreement or instrument expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any of the Parties or any of the members of their respective Groups or to be continued from and after the Effective Time); (ii) any agreements, arrangements, commitments or understandings listed or described on Schedule 2.7(b)(ii); (iii) any agreements, arrangements, commitments or understandings to which any Third Party is a party; (iv) any intercompany accounts payable or accounts receivable accrued as of the Effective Time that are reflected in the books and records of the Parties or otherwise documented in writing in accordance with past practices, which shall

 

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be settled in the manner contemplated by Section 2.7(c); (v) any agreements, arrangements, commitments or understandings to which any non-wholly owned Subsidiary of Vornado or UE, as the case may be, is a party (it being understood that directors’ qualifying shares or similar interests will be disregarded for purposes of determining whether a Subsidiary is wholly owned); and (vi) any Shared Contracts.

 

(c)                                  All of the intercompany accounts receivable and accounts payable between any member of the Vornado Group, on the one hand, and any member of the UE Group, on the other hand, outstanding as of the Effective Time shall, as promptly as practicable after the Effective Time, be repaid, settled or otherwise eliminated by means of cash payments, a dividend, capital contribution, a combination of the foregoing, or otherwise as determined by Vornado in its sole and absolute discretion.

 

2.8                               Treatment of Shared Contracts.

 

(a)                                 Subject to applicable Law and without limiting the generality of the obligations set forth in Section 2.1, unless the Parties otherwise agree or the benefits of any contract, agreement, arrangement, commitment or understanding described in this Section 2.8 are expressly conveyed to the applicable Party pursuant to this Agreement or an Ancillary Agreement, any contract or agreement entered into by a member of the Vornado Group with a Third Party that is not a UE Contract, but pursuant to which the UE Business, as of the Effective Date, has been provided certain revenues or other benefits in respect of the UE Properties (any such contract or agreement, a “Shared Contract”) shall not be assigned in relevant part to the applicable member(s) of the UE Group or amended to give the relevant member(s) of the UE Group any entitlement to such rights and benefits thereunder; provided, however, that the Parties shall, and shall cause each of the members of their respective Groups to, take such other reasonable and permissible actions to cause (i) the relevant member of the UE Group to receive the rights and benefits previously provided in the ordinary course of business, consistent with past practice, to the UE Business pursuant to such Shared Contract and (ii) the relevant member of the UE Group to bear the burden of the corresponding Liabilities under such Shared Contract. Notwithstanding the foregoing, no member of the Vornado Group shall be required by this Section 2.8 to maintain in effect any Shared Contract, and no member of the UE Group shall have any approval or other rights with respect to any amendment, termination or other modification of any Shared Contract.

 

(b)                                 Each of Vornado and UE shall, and shall cause the members of its Group to, (i) treat for all Tax purposes the portion of each Shared Contract inuring to its respective businesses as Assets owned by, and/or Liabilities of, as applicable, such Party, or the members of its Group, as applicable, not later than the Effective Time, and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by applicable Law).

 

2.9                               Bank Accounts; Cash Balances.

 

Except as otherwise provided in the Transition Services Agreement:

 

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(a)                                 Each Party agrees to take, or cause the members of its Group to take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all contracts or agreements governing each bank and brokerage account owned by UE or any other member of the UE Group (collectively, the “UE Accounts”) and all contracts or agreements governing each bank or brokerage account owned by Vornado or any other member of the Vornado Group (collectively, the “Vornado Accounts”) so that each such UE Account and Vornado Account, if currently Linked (whether by automatic withdrawal, automatic deposit or any other authorization to transfer funds from or to, hereinafter “Linked”) to any Vornado Account or UE Account, respectively, is de-Linked from such Vornado Account or UE Account, respectively.

 

(b)                                 It is intended that, following consummation of the actions contemplated by Section 2.9(a), there will be in place a cash management process pursuant to which the UE Accounts will be managed and funds collected will be transferred into one (1) or more accounts maintained by UE or a member of the UE Group.

 

(c)                                  It is intended that, following consummation of the actions contemplated by Section 2.9(a), there will continue to be in place a cash management process pursuant to which the Vornado Accounts will be managed and funds collected will be transferred into one (1) or more accounts maintained by Vornado or a member of the Vornado Group.

 

(d)                                 With respect to any outstanding checks issued or payments initiated by Vornado, UE, or any of the members of their respective Groups prior to the Effective Time, such outstanding checks and payments shall be honored following the Effective Time by the Person or Group owning the account on which the check is drawn or from which the payment was initiated, respectively.

 

(e)                                  As between Vornado and UE (and the members of their respective Groups), all payments made and reimbursements received after the Effective Time by either Party (or member of its Group) that relate to a business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto and, promptly following receipt by such Party of any such payment or reimbursement, such Party shall pay over, or shall cause the applicable member of its Group to pay over, to the other Party the amount of such payment or reimbursement without right of set-off.

 

2.10                        Ancillary Agreements. Effective on or prior to the Effective Time, each of Vornado and UE will, or will cause the applicable members of their Groups to, execute and deliver all Ancillary Agreements to which it (or any member of its Group) is a party.

 

2.11                        Disclaimer of Representations and Warranties. EACH OF VORNADO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE VORNADO GROUP) AND UE (ON BEHALF OF ITSELF AND EACH MEMBER OF THE UE GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR OTHERWISE, IS

 

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REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SET-OFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS, “WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM OF DEED OR CONVEYANCE) AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

 

2.12                        UE Assumption of Indebtedness and Other Financing Arrangements.

 

(a)                                 Prior to and/or immediately after the Effective Time and pursuant to the Plan of Reorganization, (i) UE and/or other member(s) of the UE Group shall continue to be borrowers under and, to the extent the borrowers thereunder are any members of the Vornado Group, shall assume all existing indebtedness which relates primarily to one or more UE Properties, as set forth in further detail on Schedule 2.12, and (ii) UE L.P. shall enter into a senior unsecured revolving credit facility, as set forth in further detail on Schedule 2.12 (the foregoing subclauses (i) and (ii), the “UE Financing Arrangements”).  Vornado and UE agree to take all necessary actions to assure the full release and discharge of Vornado and the other members of the Vornado Group from all obligations pursuant to the UE Financing Arrangements as of no later than the Effective Time. The parties agree that UE or another member of the UE Group, as the case may be, and not Vornado or any member of the Vornado Group, are and shall be responsible for all costs and expenses incurred in connection with the UE Financing Arrangements.

 

(b)                                 Prior to the Effective Time, Vornado and UE shall cooperate in the preparation of all materials as may be necessary or advisable to execute the UE Financing Arrangements.

 

2.13                        Separate Contribution.  Prior to the Distribution, in accordance with the Plan of Reorganization, the Parties shall cause the following to occur:

 

(a)                                 UE shall, in its capacity as the general partner of and a limited partner in UE L.P., and on behalf of and as attorney in fact for the other limited partners, enter into the

 

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limited partnership agreement of UE L.P., effective as of the Effective Time, in the form attached hereto as Exhibit C (the “UE L.P. Partnership Agreement”); and

 

(b)                                 VRLP and UE L.P. shall enter into the contribution agreement providing for the Separate Contribution, effective as of the Effective Time, in the form attached hereto as Exhibit D (the “Contribution Agreement”).

 

2.14                        Financial Information Certifications. Vornado’s disclosure controls and procedures and internal control over financial reporting (as each is contemplated by the Exchange Act) are currently applicable to the UE Group insofar as the members of the UE Group are Subsidiaries of Vornado. In order to enable the principal executive officer and principal financial officer of UE to make the certifications required of them under Section 302 of the Sarbanes-Oxley Act of 2002, Vornado, as soon as reasonably practicable following the Distribution Date and in any event prior to such time as UE is required to file its first quarterly report on Form 10-Q, shall provide UE with one or more certifications with respect to such disclosure controls and procedures, its internal control over financial reporting and the effectiveness thereof. Such certification(s) shall be provided by Vornado (and not by any officer or employee in their individual capacity). Subject to the provisions of the Transition Services Agreement, with respect to any periods following the Distribution Date, the Parties shall cooperate and discuss in good faith any certifications or other supporting documentation required by UE.

 

2.15                        Transition Committee. Prior to the Effective Time, the Parties shall establish a transition committee (the “Transition Committee”) that shall consist of an equal number of members from Vornado and UE. The Transition Committee shall be responsible for monitoring and managing all matters related to any of the transactions contemplated by this Agreement or any Ancillary Agreements. The Transition Committee shall have the authority to (a) establish one (1) or more subcommittees from time to time as it deems appropriate or as may be described in any Ancillary Agreements, with each such subcommittee comprised of one (1) or more members of the Transition Committee or one or more employees of either Party or any member of its respective Group, and each such subcommittee having such scope of responsibility as may be determined by the Transition Committee from time to time; (b) delegate to any such committee any of the powers of the Transition Committee; (c) combine, modify the scope of responsibility of, and disband any such subcommittees, and (d) modify or reverse any such delegations. The Transition Committee shall establish general procedures for managing the responsibilities delegated to it under this Section 2.15, and may modify such procedures from time to time. All decisions by the Transition Committee or any subcommittee thereof shall be effective only if mutually agreed by both Parties. The Parties shall utilize the procedures set forth in Article VII to resolve any matters as to which the Transition Committee is not able to reach a decision.

 

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ARTICLE III
THE DISTRIBUTION

 

3.1                               Sole and Absolute Discretion; Cooperation.

 

(a)                                 Vornado shall, in its sole and absolute discretion, determine the terms of the Distribution, including the form, structure and terms of any transaction(s) and/or offering(s) to effect the Distribution and the timing and conditions to the consummation of the Distribution. In addition, Vornado may, at any time and from time to time until the consummation of the Distribution, modify or change the terms of the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution. Nothing shall in any way limit Vornado’s right to terminate this Agreement or the Distribution as set forth in Article IX or alter the consequences of any such termination from those specified in Article IX.

 

(b)                                 UE shall cooperate with Vornado to accomplish the Distribution and shall, at Vornado’s direction, promptly take any and all actions necessary or desirable to effect the Distribution, including in respect of the registration under the Exchange Act of UE Shares on the Form 10. Vornado shall select any investment bank or manager in connection with the Distribution, as well as any financial printer, solicitation and/or exchange agent and financial, legal, accounting and other advisors for Vornado. UE and Vornado, as the case may be, will provide to the Agent any information required in order to complete the Distribution.

 

3.2                               Actions Prior to the Distribution. Prior to the Effective Time and subject to the terms and conditions set forth herein, the Parties shall take, or cause to be taken, the following actions in connection with the Distribution:

 

(a)                                 Notice to NYSE. Vornado shall, to the extent possible, give the NYSE not less than ten (10) days’ advance notice of the Record Date in compliance with Rule 10b-17 under the Exchange Act.

 

(b)                                 UE Declaration of Trust and UE Bylaws. On or prior to the Distribution Date, Vornado and UE shall take all necessary actions so that, as of the Effective Time, the UE Declaration of Trust and the UE Bylaws shall become the declaration of trust and bylaws of UE, respectively.

 

(c)                                  UE Trustees and Officers. On or prior to the Distribution Date, Vornado and UE shall take all necessary actions so that as of the Effective Time: (i) the trustees and executive officers of UE shall be those set forth in the Information Statement mailed to the Record Holders prior to the Distribution Date, unless otherwise agreed by the Parties; and (ii) UE shall have such other officers as UE shall appoint.

 

(d)                                 NYSE Listing. UE shall prepare and file, and shall use its reasonable best efforts to have approved, an application for the listing of the UE Shares to be distributed in the Distribution on the NYSE, subject to official notice of distribution.

 

(e)                                  Securities Law Matters. UE shall file any amendments or supplements to the Form 10 as may be necessary or advisable in order to cause the Form 10 to become and remain effective as required by the SEC or federal, state or other applicable securities Laws.

 

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Vornado and UE shall cooperate in preparing, filing with the SEC and causing to become effective registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or advisable in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. Vornado and UE will prepare, and UE will, to the extent required under applicable Law, file with the SEC any such documentation and any requisite no-action letters which Vornado determines are necessary or desirable to effectuate the Distribution, and Vornado and UE shall each use its reasonable best efforts to obtain all necessary approvals from the SEC with respect thereto as soon as practicable. Vornado and UE shall take all such action as may be necessary or appropriate under the securities or blue sky laws of the United States (and any comparable Laws under any foreign jurisdiction) in connection with the Distribution.

 

(f)                                   Mailing of Information Statement. Vornado shall, as soon as is reasonably practicable after the Form 10 is declared effective under the Exchange Act and the Vornado Board has approved the Distribution, cause the Information Statement to be mailed to the Record Holders.

 

(g)                                  The Distribution Agent. Vornado shall enter into a distribution agent agreement with the Agent or otherwise provide instructions to the Agent regarding the Distribution.

 

(h)                                 Share-Based Employee Benefit Plans. Vornado and UE shall take all actions as may be necessary to approve the grants of adjusted equity awards by Vornado (in respect of Vornado shares) and UE (in respect of UE shares) in connection with the Distribution in order to satisfy the requirements of Rule 16b-3 under the Exchange Act.

 

3.3                               Conditions to the Distribution.

 

(a)                                 The consummation of the Distribution will be subject to the satisfaction, or waiver by Vornado in its sole and absolute discretion, of the following conditions:

 

(i)                                     The receipt of an opinion of Roberts & Holland LLP, special tax counsel to Vornado, satisfactory to the Vornado Board, to the effect that the VRLP Distribution and the Vornado Distribution, together with certain related transactions, will, with respect to UE, VRLP, Vornado and the shareholders of Vornado, qualify as transactions that are generally tax-free for U.S. federal income tax purposes under Sections 351, 355, and 731 of the Code, including with respect to certain matters relating to these transactions that are not covered by the private letter ruling that Vornado has received from the IRS;

 

(ii)                                  The SEC shall have declared effective the Form 10; no order suspending the effectiveness of the Form 10 shall be in effect; and no proceedings for such purposes shall have been instituted or threatened by the SEC;

 

(iii)                               The Information Statement shall have been mailed to Record Holders;

 

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(iv)                              The transfer of the UE Assets (other than any Delayed UE Asset) and UE Liabilities (other than any Delayed UE Liability) contemplated to be transferred from Vornado to UE on or prior to the Distribution shall have occurred as contemplated by Section 2.1, and the transfer of the Vornado Assets (other than any Delayed Vornado Asset) and Vornado Liabilities (other than any Delayed Vornado Liability) contemplated to be transferred from UE to Vornado on or prior to the Distribution Date shall have occurred as contemplated by Section 2.1, in each case pursuant to the Plan of Reorganization;

 

(v)                                 The actions and filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities Laws or blue sky Laws and the rules and regulations thereunder shall have been taken or made, and, where applicable, have become effective or been accepted by the applicable Governmental Authority;

 

(vi)                              Each of the Ancillary Agreements shall have been duly executed and delivered by the applicable parties thereto;

 

(vii)                           No order, injunction or decree issued by any Governmental Authority of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Separation, the Distribution or any of the transactions related thereto shall be in effect;

 

(viii)                        The UE Shares to be distributed to the holders of Vornado Shares in the Vornado Distribution and to the holders of VRLP Interests in the VRLP Distribution shall have been accepted for listing on the NYSE, subject to official notice of distribution;

 

(ix)                              UE and other members of the UE Group shall have assumed or entered into, as applicable, the UE Financing Arrangements, and Vornado shall be satisfied in its sole and absolute discretion that, as of the Effective Time, it shall have no further Liability whatsoever with respect to the UE Financing Arrangements;

 

(x)                                 UE shall have received an opinion of its counsel, satisfactory to it, to the effect that the manner in which UE is organized and its proposed method of operation will enable it to qualify to be taxed as a REIT under Sections 856 through 859 of the Code following the Distribution; and

 

(xi)                              No other events or developments shall exist or shall have occurred that, in the judgment of the Vornado Board, in its sole and absolute discretion, makes it inadvisable to effect the Separation, the Distribution or the transactions contemplated by this Agreement or any Ancillary Agreement.

 

(b)                                 The foregoing conditions are for the sole benefit of Vornado and shall not give rise to or create any duty on the part of Vornado or the Vornado Board to waive or not waive any such condition or in any way limit Vornado’s right to terminate this Agreement as set forth in Article IX or alter the consequences of any such termination from those specified in Article IX. Any determination made by the Vornado Board prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in Section 3.3(a) shall be

 

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conclusive and binding on the Parties. If Vornado waives any material condition, it shall promptly issue a press release disclosing such fact and file a Current Report on Form 8-K with the SEC describing such waiver.

 

3.4                               The Distribution.

 

(a)                                 Subject to Section 3.3, on or prior to the Effective Time, UE will deliver to the Agent, for the benefit of the Record Holders, book-entry transfer authorizations for such number of the outstanding UE Shares as is necessary to effect the Distribution, and shall cause the transfer agent for the Vornado Shares or the VRLP Interests, as the case may be, to instruct the Agent to distribute at the Effective Time the appropriate number of UE Shares to each such Record Holder or designated transferee or transferees of such Record Holder by way of direct registration in book-entry form. UE will not issue paper share certificates in respect of the UE Shares. The Distribution shall be effective at the Effective Time.

 

(b)                                 Subject to Sections 3.3 and 3.4(c), each Record Holder will be entitled to receive in the Distribution one UE Share for every two Vornado Shares or VRLP Interests, as the case may be, held by such Record Holder on the Record Date, rounded down to the nearest whole number.

 

(c)                                  No fractional shares will be distributed or credited to book-entry accounts in connection with the Distribution, and any such fractional shares interests to which a Record Holder would otherwise be entitled shall not entitle such Record Holder to vote or to any other rights as a shareholder of UE. In lieu of any such fractional shares, each Record Holder who, but for the provisions of this Section 3.4(c), would be entitled to receive a fractional share interest of a UE Share pursuant to the Distribution, as applicable, shall be paid cash, without any interest thereon, as hereinafter provided. As soon as practicable after the Effective Time, Vornado shall direct the Agent to determine the number of whole and fractional UE Shares allocable to each Record Holder, to aggregate all such fractional shares into whole shares, and to sell the whole shares obtained thereby in the open market at the then-prevailing prices on behalf of each Record Holder who otherwise would be entitled to receive fractional share interests (with the Agent, in its sole and absolute discretion, determining when, how and through which broker-dealer and at what price to make such sales), and to cause to be distributed to each such Record Holder, in lieu of any fractional share, such Record Holder’s or owner’s ratable share of the total proceeds of such sale, after deducting any Taxes required to be withheld and applicable transfer Taxes, and after deducting the costs and expenses of such sale and distribution, including brokers fees and commissions. None of Vornado, VRLP, UE or the Agent will be required to guarantee any minimum sale price for the fractional UE Shares sold in accordance with this Section 3.4(c). None of Vornado, VRLP or UE will be required to pay any interest on the proceeds from the sale of fractional shares. Neither the Agent nor the broker-dealers through which the aggregated fractional shares are sold shall be Affiliates of Vornado or UE. Solely for purposes of computing fractional share interests pursuant to this Section 3.4(c) and Section 3.4(d), the beneficial owner of Vornado Shares or VRLP Interests, as the case may be, held of record in the name of a nominee in any nominee account shall be treated as the Record Holder with respect to such shares or interests.

 

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(d)                                 Any UE Shares or cash in lieu of fractional shares with respect to UE Shares that remain unclaimed by any Record Holder one hundred and eighty (180) days after the Distribution Date shall be delivered to UE, and UE shall hold such UE Shares for the account of such Record Holder, and the Parties agree that all obligations to provide such UE Shares and cash, if any, in lieu of fractional share interests shall be obligations of UE, subject in each case to applicable escheat or other abandoned property Laws, and Vornado shall have no Liability with respect thereto.

 

(e)                                  Until the UE Shares are duly transferred in accordance with this Section 3.4 and applicable Law, from and after the Effective Time, UE will regard the Persons entitled to receive such UE Shares as record holders of UE Shares in accordance with the terms of the Distribution without requiring any action on the part of such Persons. UE agrees that, subject to any transfers of such shares, from and after the Effective Time (i) each such holder will be entitled to receive all dividends payable on, and exercise voting rights and all other rights and privileges with respect to, the UE Shares then held by such holder, and (ii) each such holder will be entitled, without any action on the part of such holder, to receive evidence of ownership of the UE Shares then held by such holder.

 

ARTICLE IV
MUTUAL RELEASES; INDEMNIFICATION

 

4.1                               Release of Pre-Distribution Claims.

 

(a)                                 UE Release of Vornado. Except as provided in Sections 4.1(c) and 4.1(d), effective as of the Effective Time, UE does hereby, for itself and each other member of the UE Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, trustees, officers, agents or employees of any member of the UE Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) Vornado and the members of the Vornado Group, and their respective successors and assigns, (ii) all Persons who at any time prior to the Effective Time have been shareholders, directors, trustees, officers, agents or employees of any member of the Vornado Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and (iii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, trustees, officers, agents or employees of a Transferred Entity and who are not, as of immediately following the Effective Time, directors, trustees, officers or employees of UE or a member of the UE Group, in each case from: (A) all UE Liabilities, (B) all Liabilities arising from or in connection with the transactions and all other activities to implement the Separation and the Distribution, and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the UE Business, the UE Assets or the UE Liabilities.

 

(b)                                 Vornado Release of UE. Except as provided in (i) Sections 4.1(c) and 4.1(d), effective as of the Effective Time, Vornado does hereby, for itself and each other member of the Vornado Group and their respective successors and assigns, and, to the extent permitted by

 

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Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, trustees, officers, agents or employees of any member of the Vornado Group (in each case, in their respective capacities as such), remise, release and forever discharge UE and the members of the UE Group and their respective successors and assigns, from (A) all Vornado Liabilities, (B) all Liabilities arising from or in connection with the transactions and all other activities to implement the Separation and the Distribution, and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Vornado Business, the Vornado Assets or the Vornado Liabilities.

 

(c)                                  Obligations Not Affected. Nothing contained in Section 4.1(a) or 4.1(b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that are specified in Section 2.7(b) or the applicable Schedules thereto as not to terminate as of the Effective Time, in each case in accordance with its terms. Nothing contained in Section 4.1(a) or 4.1(b) shall release any Person from:

 

(i)                                     any Liability provided in or resulting from any agreement among any members of the Vornado Group or the UE Group that is specified in Section 2.7(b) or the applicable Schedules thereto as not to terminate as of the Effective Time, or any other Liability specified in Section 2.7(b) as not to terminate as of the Effective Time;

 

(ii)                                  any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement;

 

(iii)                               any Liability for the sale, lease, construction or receipt of goods, property or services purchased, obtained or used in the ordinary course of business by a member of one Group from a member of the other Group prior to the Effective Time;

 

(iv)                              any Liability that the Parties may have with respect to indemnification or contribution or other obligation pursuant to this Agreement, any Ancillary Agreement or otherwise for claims brought against the Parties by third Persons, which Liability shall be governed by the provisions of this Article IV and Article V and, if applicable, the appropriate provisions of the Ancillary Agreements; or

 

(v)                                 any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 4.1.

 

In addition, nothing contained in Section 4.1(a) shall release any member of the Vornado Group from honoring its existing obligations to indemnify any director, trustee, officer or employee of UE who was a director, trustee, officer or employee of any member of the Vornado Group on or prior to the Effective Time, to the extent such director, trustee, officer or employee becomes a named defendant in any Action with respect to which such director, trustee, officer or employee

 

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was entitled to such indemnification pursuant to such existing obligations; it being understood that, if the underlying obligation giving rise to such Action is a UE Liability, UE shall indemnify Vornado for such Liability (including Vornado’s costs to indemnify the director, trustee, officer or employee) in accordance with the provisions set forth in this Article IV.

 

(d)                                 No Claims. UE shall not make, and shall not permit any member of the UE Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Vornado or any other member of the Vornado Group, or any other Person released pursuant to Section 4.1(a), with respect to any Liabilities released pursuant to Section 4.1(a). Vornado shall not make, and shall not permit any other member of the Vornado Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification against UE or any other member of the UE Group, or any other Person released pursuant to Section 4.1(b), with respect to any Liabilities released pursuant to Section 4.1(b).

 

(e)                                  Execution of Further Releases. At any time at or after the Effective Time, at the request of either Party, the other Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 4.1.

 

4.2                               Indemnification by UE. Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, UE L.P. shall, and shall cause its Subsidiaries to, indemnify, defend and hold harmless Vornado, VRLP, each other member of the Vornado Group and each of their respective past, present and future directors, trustees, officers, employees and agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Vornado Indemnitees”), from and against any and all Liabilities of the Vornado Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

 

(a)                                 any UE Liability;

 

(b)                                 any failure of UE, any other member of the UE Group or any other Person to pay, perform or otherwise promptly discharge any UE Liabilities in accordance with their terms, whether prior to, on or after the Effective Time;

 

(c)                                  any breach by UE or any other member of the UE Group of this Agreement or any of the Ancillary Agreements;

 

(d)                                 except to the extent it relates to a Vornado Liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any member of the UE Group by any member of the Vornado Group that survives following the Distribution; and

 

(e)                                  any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the Form 10, the Information Statement (as amended or supplemented if UE shall have furnished any

 

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amendments or supplements thereto) or any other Disclosure Document, other than the matters described in clause (e) of Section 4.3.

 

In order to induce Vornado and VRLP to enter into this Agreement and for other good and valuable consideration, UE hereby irrevocably guarantees the due and punctual performance and observance by UE L.P. of its obligations contained in this Section 4.2, subject, in each case, to all of the terms, provisions and conditions herein, and Vornado, VRLP and the other Vornado Indemnitees shall not be required to seek recovery pursuant to any set-off of any amounts payable under this Agreement or otherwise prior to seeking recovery from UE; provided that UE shall in no event be liable for any percentage of indemnification obligations that exceeds its then current ownership percentage in UE L.P.

 

4.3                               Indemnification by Vornado. Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, VRLP shall, and shall cause its Subsidiaries to, indemnify, defend and hold harmless UE, UE L.P., each other member of the UE Group and each of their respective past, present and future directors, trustees, officers, employees or agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “UE Indemnitees”), from and against any and all Liabilities of the UE Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

 

(a)                                 any Vornado Liability;

 

(b)                                 any failure of Vornado, any other member of the Vornado Group or any other Person to pay, perform or otherwise promptly discharge any Vornado Liabilities in accordance with their terms, whether prior to, on or after the Effective Time;

 

(c)                                  any breach by Vornado or any other member of the Vornado Group of this Agreement or any of the Ancillary Agreements;

 

(d)                                 except to the extent it relates to a UE Liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any member of the Vornado Group by any member of the UE Group that survives following the Distribution; and

 

(e)                                  any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent relating to Vornado or the members of the Vornado Group, in the Form 10, the Information Statement (as amended or supplemented if UE shall have furnished any amendments or supplements thereto) or any other Disclosure Document.

 

In order to induce UE and UE L.P. to enter into this Agreement and for other good and valuable consideration, Vornado hereby irrevocably guarantees the due and punctual performance and observance by VRLP of its obligations contained in this Section 4.3, subject, in each case, to all of the terms, provisions and conditions herein, and UE, UE L.P. and the other UE Indemnitees shall not be required to seek recovery pursuant to any set-off of any amounts payable under this Agreement or otherwise prior to seeking recovery from Vornado; provided

 

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that Vornado shall in no event be liable for any percentage of indemnification obligations that exceeds its then current ownership percentage in VRLP.

 

4.4                               Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

 

(a)                                 The Parties intend that any Liability subject to indemnification, contribution or reimbursement pursuant to this Article IV or Article V will be net of Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) from any Person by or on behalf of the Indemnitee in respect of any indemnifiable Liability. Accordingly, the amount which either Party (an “Indemnifying Party”) is required to pay to any Person entitled to indemnification or contribution hereunder (an “Indemnitee”) will be reduced by any Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) from any Person by or on behalf of the Indemnitee in respect of the related Liability. If an Indemnitee receives a payment (an “Indemnity Payment”) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds or any other amounts in respect of the related Liability, then the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds or such other amounts (net of any out-of-pocket costs or expenses incurred in the collection thereof) had been received, realized or recovered before the Indemnity Payment was made.

 

(b)                                 The Parties agree that an insurer that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of any provision contained in this Agreement or any Ancillary Agreement, have any subrogation rights with respect thereto, it being understood that no insurer or any other Third Party shall be entitled to a “windfall” (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification and contribution provisions hereof. Each Party shall, and shall cause the members of its Group to, use commercially reasonable efforts (taking into account the probability of success on the merits and the cost of expending such efforts, including attorneys’ fees and expenses) to collect or recover any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification or contribution may be available under this Article IV. Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any Action to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or contribution or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement.

 

(c)                                  Any indemnification payment under this Article IV shall be adjusted in accordance with Section 4.4 of the Tax Matters Agreement.

 

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4.5                               Procedures for Indemnification of Third-Party Claims.

 

(a)                                 Notice of Claims. If, at or following the date of this Agreement, an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) who is not a member of the Vornado Group or the UE Group of any claim or of the commencement by any such Person of any Action (collectively, a “Third-Party Claim”) with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to Section 4.2 or 4.3, or any other Section of this Agreement or any Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof as soon as practicable, but in any event within fourteen (14) days (or sooner if the nature of the Third-Party Claim so requires) after becoming aware of such Third-Party Claim. Any such notice shall describe the Third-Party Claim in reasonable detail, including the facts and circumstances giving rise to such claim for indemnification, and include copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of an Indemnitee to provide notice in accordance with this Section 4.5(a) shall not relieve an Indemnifying Party of its indemnification obligations under this Agreement, except to the extent to which the Indemnifying Party is actually prejudiced by the Indemnitee’s failure to provide notice in accordance with this Section 4.5(a).

 

(b)                                 Control of Defense. An Indemnifying Party may elect to defend (and seek to settle or compromise), at its own expense and with its own counsel, any Third-Party Claim; provided that, prior to the Indemnifying Party assuming and controlling defense of such Third-Party Claim, it shall first confirm to the Indemnitee in writing that, assuming the facts presented to the Indemnifying Party by the Indemnitee being true, the Indemnifying Party shall indemnify the Indemnitee for any damages to the extent resulting from, or arising out of, such Third-Party-Claim. Notwithstanding the foregoing, if the Indemnifying Party assumes such defense and, in the course of defending such Third-Party Claim, (i) the Indemnifying Party discovers that the facts presented at the time the Indemnifying Party acknowledged its indemnification obligation in respect of such Third-Party Claim were not true in all material respects and (ii) such untruth provides a reasonable basis for asserting that the Indemnifying Party does not have an indemnification obligation in respect of such Third-Party Claim, then (A) the Indemnifying Party shall not be bound by such acknowledgment, (B) the Indemnifying Party shall promptly thereafter provide the Indemnitee written notice of its assertion that it does not have an indemnification obligation in respect of such Third-Party Claim, and (C) the Indemnitee shall have the right to assume the defense of such Third-Party Claim. Within thirty (30) days after the receipt of a notice from an Indemnitee in accordance with Section 4.5(a) (or sooner, if the nature of the Third-Party Claim so requires), the Indemnifying Party shall provide written notice to the Indemnitee indicating whether the Indemnifying Party shall assume responsibility for defending the Third-Party Claim. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within thirty (30) days after receipt of the notice from an Indemnitee as provided in Section 4.5(a), then the Indemnitee that is the subject of such Third-Party Claim shall be entitled to continue to conduct and control the defense of such Third-Party Claim.

 

(c)                                  Allocation of Defense Costs. If an Indemnifying Party has elected to assume the defense of a Third-Party Claim, then such Indemnifying Party shall be solely liable for all fees and expenses incurred by it in connection with the defense of such Third-Party Claim and shall not be entitled to seek any indemnification or reimbursement from the Indemnitee for

 

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any such fees or expenses incurred by the Indemnifying Party during the course of the defense of such Third-Party Claim by such Indemnifying Party, regardless of any subsequent decision by the Indemnifying Party to reject or otherwise abandon its assumption of such defense. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within thirty (30) days after receipt of a notice from an Indemnitee as provided in Section 4.5(a), and the Indemnitee conducts and controls the defense of such Third-Party Claim and the Indemnifying Party has an indemnification obligation with respect to such Third-Party Claim, then the Indemnifying Party shall be liable for all reasonable fees and expenses incurred by the Indemnitee in connection with the defense of such Third-Party Claim.

 

(d)                                 Right to Monitor and Participate. An Indemnitee that does not conduct and control the defense of any Third-Party Claim, or an Indemnifying Party that has failed to elect to defend any Third-Party Claim as contemplated hereby, nevertheless shall have the right to employ separate counsel (including local counsel as necessary) of its own choosing to monitor and participate in (but not control) the defense of any Third-Party Claim for which it is a potential Indemnitee or Indemnifying Party, but the fees and expenses of such counsel shall be at the expense of such Indemnitee or Indemnifying Party, as the case may be, and the provisions of Section 4.5(c) shall not apply to such fees and expenses. Notwithstanding the foregoing, but subject to Sections 6.7 and 6.8, such Party shall cooperate with the Party entitled to conduct and control the defense of such Third-Party Claim in such defense and make available to the controlling Party, at the non-controlling Party’s expense, all witnesses, information and materials in such Party’s possession or under such Party’s control relating thereto as are reasonably required by the controlling Party. In addition to the foregoing, if any Indemnitee shall in good faith determine that such Indemnitee and the Indemnifying Party have actual or potential differing defenses or conflicts of interest between them that make joint representation inappropriate, then the Indemnitee shall have the right to employ separate counsel (including local counsel as necessary) and to participate in (but not control) the defense, compromise, or settlement thereof, and the Indemnifying Party shall bear the reasonable fees and expenses of such counsel for all Indemnitees.

 

(e)                                  No Settlement. Neither Party may settle or compromise any Third-Party Claim for which either Party is seeking to be indemnified hereunder without the prior written consent of the other Party, which consent may not be unreasonably withheld, unless such settlement or compromise is solely for monetary damages, does not involve any finding or determination of wrongdoing or violation of Law by the other Party and provides for a full, unconditional and irrevocable release of the other Party from all Liability in connection with the Third-Party Claim. The Parties hereby agree that if a Party presents the other Party with a written notice containing a proposal to settle or compromise a Third-Party Claim for which either Party is seeking to be indemnified hereunder and the Party receiving such proposal does not respond in any manner to the Party presenting such proposal within thirty (30) days (or within any such shorter time period that may be required by applicable Law or court order) of receipt of such proposal, then the Party receiving such proposal shall be deemed to have consented to the terms of such proposal.

 

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4.6                               Additional Matters.

 

(a)                                 Timing of Payments. Indemnification or contribution payments in respect of any Liabilities for which an Indemnitee is entitled to indemnification or contribution under this Article IV shall be paid reasonably promptly (but in any event within thirty (30) days of the final determination of the amount that the Indemnitee is entitled to as indemnification or contribution under this Article IV) by the Indemnifying Party to the Indemnitee as such Liabilities are incurred upon demand by the Indemnitee, including reasonably satisfactory documentation setting forth the basis for the amount of such indemnification or contribution payment, including documentation with respect to calculations made and consideration of any Insurance Proceeds that actually reduce the amount of such Liabilities. The indemnity and contribution provisions contained in this Article IV shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee, and (ii) the knowledge by the Indemnitee of Liabilities for which it might be entitled to indemnification hereunder.

 

(b)                                 Notice of Direct Claims. Any claim for indemnification or contribution under this Agreement or any Ancillary Agreement that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the applicable Indemnifying Party as soon as practicable, but in any event within fourteen (14) days (or sooner if the nature of the claim so requires) after becoming aware of such claim; provided that the failure by an Indemnitee to so assert any such claim shall not prejudice the ability of the Indemnitee to do so at a later time except to the extent (if any) that the Indemnifying Party is prejudiced thereby. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such thirty (30)-day period, such specified claim shall be conclusively deemed a Liability of the Indemnifying Party under this Section 4.6(b) or, in the case of any written notice in which the amount of the claim (or any portion thereof) is estimated, on such later date when the amount of the claim (or such portion thereof) becomes finally determined. If such Indemnifying Party does not respond within such thirty (30)-day period or rejects such claim in whole or in part, such Indemnitee shall, subject to the provisions of Article VII, be free to pursue such remedies as may be available to such Party as contemplated by this Agreement and the Ancillary Agreements, as applicable, without prejudice to its continuing rights to pursue indemnification or contribution hereunder.

 

(c)                                  Pursuit of Claims Against Third Parties. If (i) a Party incurs any Liability arising out of this Agreement or any Ancillary Agreement; (ii) an adequate legal or equitable remedy is not available for any reason against the other Party to satisfy the Liability incurred by the incurring Party; and (iii) a legal or equitable remedy may be available to the other Party against a Third Party for such Liability, then the other Party shall use its commercially reasonable efforts to cooperate with the incurring Party, at the incurring Party’s expense, to permit the incurring Party to obtain the benefits of such legal or equitable remedy against the Third Party.

 

(d)                                 Subrogation. In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or

 

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circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

 

(e)                                  Substitution. In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant. If such substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in Section 4.5 and this Section 4.6, and the Indemnifying Party shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts fees and all other external expenses), the costs of any judgment or settlement and the cost of any interest or penalties relating to any judgment or settlement.

 

4.7                               Right of Contribution.

 

(a)                                 Contribution. If any right of indemnification contained in Section 4.2 or Section 4.3 is held unenforceable or is unavailable for any reason, or is insufficient to hold harmless an Indemnitee in respect of any Liability for which such Indemnitee is entitled to indemnification hereunder, then the Indemnifying Party shall contribute to the amounts paid or payable by the Indemnitees as a result of such Liability (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the members of its Group, on the one hand, and the Indemnitees entitled to contribution, on the other hand, as well as any other relevant equitable considerations.

 

(b)                                 Allocation of Relative Fault. Solely for purposes of determining relative fault pursuant to this Section 4.7: (i) any fault associated with the business conducted with the Delayed UE Assets or Delayed UE Liabilities (except for the gross negligence or willful misconduct of a member of the Vornado Group) or with the ownership, operation or activities of the UE Business prior to the Effective Time shall be deemed to be the fault of UE and the other members of the UE Group, and no such fault shall be deemed to be the fault of Vornado or any other member of the Vornado Group; (ii) any fault associated with the business conducted with Delayed Vornado Assets or Delayed Vornado Liabilities (except for the gross negligence or willful misconduct of a member of the UE Group) shall be deemed to be the fault of Vornado and the other members of the Vornado Group, and no such fault shall be deemed to be the fault of UE or any other member of the UE Group; and (iii) any fault associated with the ownership, operation or activities of the Vornado Business prior to the Effective Time shall be deemed to be the fault of Vornado and the other members of the Vornado Group, and no such fault shall be deemed to be the fault of UE or any other member of the UE Group.

 

4.8                               Covenant Not to Sue. Each Party hereby covenants and agrees that none of it, the members of such Party’s Group or any Person claiming through it shall bring suit or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any court, arbitrator, mediator or administrative agency anywhere in the world, alleging that: (a) the assumption of any UE Liabilities by UE or a member of the UE

 

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Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; (b) the retention of any Vornado Liabilities by Vornado or a member of the Vornado Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; or (c) the provisions of this Article IV are void or unenforceable for any reason.

 

4.9                               Remedies Cumulative. The remedies provided in this Article IV shall be cumulative and, subject to the provisions of Article VIII, shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

 

4.10                        Survival of Indemnities. The rights and obligations of each of Vornado and UE and their respective Indemnitees under this Article IV shall survive (a) the sale or other transfer by either Party or any member of its Group of any assets or businesses or the assignment by it of any liabilities; or (b) any merger, consolidation, business combination, sale of all or substantially all of its Assets, restructuring, recapitalization, reorganization or similar transaction involving either Party or any of the members of its Group.

 

4.11                        Certain Tax Procedures.

 

(a)                                 Indemnification Payments to UE.

 

(i)                                     With respect to any period in which UE has made or will make an election to be taxed as a REIT, notwithstanding any other provisions in this Agreement or any Ancillary Agreement, any indemnification payments to be made to any member of the UE Group pursuant to Section 4.3 or 4.4 or any indemnification payments to be made to any member of the UE Group pursuant to any Ancillary Agreement (a “UE Indemnity Payment”) for any calendar year, upon receipt of a REIT Savings Notice from UE at least fifteen (15) business days before the date on which such UE Indemnity Payment is due, shall not exceed the sum of

 

(A)                               the amount that is determined (x) will not be gross income of UE or (y) will be Qualifying Income of UE, in each case for purposes of the Specified REIT Requirements and for any period in which UE has made any election to be taxed as a REIT, with such determination to be set forth in REIT Guidance,

 

plus

 

(B)                               such additional amount that is estimated can be paid to UE in such taxable year without causing UE to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, determined (x) as if the payment of such amount did not constitute Qualifying Income and (y) by taking into account any other payments to UE (and any other relevant member of the UE Group) during such taxable year that do not constitute Qualifying Income, which determination shall be

 

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(xx) made by independent tax accountants to UE, and (yy) submitted to and approved by UE’s outside tax counsel.

 

(ii)                                  Vornado shall place (or cause to be placed) the full amount of any UE Indemnity Payments otherwise required to be made in a mutually agreed escrow account upon mutually acceptable terms, which shall provide that

 

(A)                               the amount in the escrow account shall be treated as the property of Vornado or the applicable member of the Vornado Group, unless it is released from such escrow account to any UE Indemnified Party,

 

(B)                               all income earned upon the amount in the escrow account shall be treated as the property of Vornado or the applicable member of the Vornado Group and reported, as and to the extent required by applicable Law, by the escrow agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned by Vornado or the applicable member of the Vornado Group whether or not said income has been distributed during such taxable year,

 

(C)                               the amount in the escrow account shall be invested only as determined by Vornado in its sole discretion, and

 

(D)                               any portion thereof shall not be released to any UE Indemnified Party unless and until Vornado receives any of the following: (x) a letter from UE’s independent tax accountants indicating the amount that it is estimated can be paid at that time to the UE Indemnified Parties without causing UE to fail to meet the Specified REIT Requirements for the taxable year in which the payment would be made, which determination shall be made by such independent tax accountants or (y) an opinion of outside tax counsel selected by UE, such opinion to be reasonably satisfactory to UE, to the effect that, based upon a change in applicable Law after the date on which payment was first deferred hereunder, receipt of the additional amount of UE Indemnification Payments otherwise required to be paid either would be excluded from gross income of UE for purposes of the Specified REIT Requirements or would constitute Qualifying Income, in either of which events amounts shall be released from the escrow account to the applicable UE Indemnified Parties in an amount equal to the lesser of the unpaid UE Indemnification Payments due and owing (determined without regard to this Section 4.11(a)) or the maximum amount stated in the letter referred to in clause (D)(x) above.

 

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(iii)                               Any amount held in escrow pursuant to Section 4.11(a)(ii) for ten (10) years shall be released from such escrow to be used as determined by Vornado in its sole and absolute discretion.

 

(iv)                              UE shall bear all costs and expenses with respect to the escrow.

 

(v)                                 Vornado shall cooperate in good faith with UE (including amending this Section 4.11(a) at the reasonable request of UE) in order to (1) maximize the portion of the payments that may be made to the UE Indemnified Parties hereunder without causing UE to fail to meet the Specified REIT Requirements, (2) improve UE’s chances of securing a favorable ruling described in this Section 4.11(a), or (3) assist UE in obtaining a favorable opinion from its outside tax counsel or determination from its tax accountants as described in this Section 4.11(a). Such cooperation shall include, for example, agreeing to make payments hereunder to a taxable REIT subsidiary of UE or an affiliate or designee of UE.  UE shall reimburse Vornado for all reasonable costs and expenses of such cooperation.

 

(b)                                 Indemnification Payments to Vornado.

 

(i)                                     With respect to any period in which Vornado has made or will make an election to be taxed as a REIT, notwithstanding any other provisions in this Agreement or any Ancillary Agreement, any indemnification payments to be made to any member of the Vornado Group pursuant to Section 4.2 or 4.4 or any indemnification payments to be made to any member of the Vornado Group pursuant to any Ancillary Agreement (a “Vornado Indemnity Payment”) for any calendar year, upon receipt of a REIT Savings Notice from Vornado at least fifteen (15) business days before the date on which such Vornado Indemnity Payment is due, shall not exceed the sum of

 

(A)                               the amount that is determined (x) will not be gross income of Vornado or (y) will be Qualifying Income of Vornado, in each case for purposes of the Specified REIT Requirements and for any period in which Vornado has made any election to be taxed as a REIT, with such determination to be set forth in REIT Guidance,

 

plus

 

(B)                               such additional amount that is estimated can be paid to Vornado in such taxable year without causing Vornado to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, determined (x) as if the payment of such amount did not constitute Qualifying Income and (y) by taking into account any other payments to Vornado (and any other relevant member of the Vornado Group) during such taxable year that do not constitute Qualifying Income,

 

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which determination shall be (xx) made by independent tax accountants to Vornado, and (yy) submitted to and approved by Vornado’s outside tax counsel.

 

(ii)                                  UE shall place (or cause to be placed) the full amount of any Vornado Indemnity Payments otherwise required to be made in a mutually agreed escrow account upon mutually acceptable terms, which shall provide that

 

(A)                               the amount in the escrow account shall be treated as the property of UE or the applicable member of the UE Group, unless it is released from such escrow account to any Vornado Indemnified Party,

 

(B)                               all income earned upon the amount in the escrow account shall be treated as the property of UE or the applicable member of the UE Group and reported, as and to the extent required by applicable Law, by the escrow agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned by UE or the applicable member of the UE Group whether or not said income has been distributed during such taxable year,

 

(C)                               the amount in the escrow account shall be invested only as determined by UE in its sole discretion, and

 

(D)                               any portion thereof shall not be released to any Vornado Indemnified Party unless and until UE receives any of the following: (x) a letter from Vornado’s independent tax accountants indicating the amount that it is estimated can be paid at that time to the Vornado Indemnified Parties without causing Vornado to fail to meet the Specified REIT Requirements for the taxable year in which the payment would be made, which determination shall be made by such independent tax accountants or (y) an opinion of outside tax counsel selected by Vornado, such opinion to be reasonably satisfactory to Vornado, to the effect that, based upon a change in applicable Law after the date on which payment was first deferred hereunder, receipt of the additional amount of Vornado Indemnity Payments otherwise required to be paid either would be excluded from gross income of Vornado for purposes of the Specified REIT Requirements or would constitute Qualifying Income, in either of which events amounts shall be released from the escrow account to the applicable Vornado Indemnified Parties in an amount equal to the lesser of the unpaid Vornado Indemnity Payments due and owing (determined without regard to this Section 4.11(b))

 

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or the maximum amount stated in the letter referred to in clause (D)(x) above.

 

(iii)                               Any amount held in escrow pursuant to Section 4.11(b)(ii) for ten (10) years shall be released from such escrow to be used as determined by UE in its sole and absolute discretion.

 

(iv)                              Vornado shall bear all costs and expenses with respect to the escrow.

 

(v)                                 UE shall cooperate in good faith with Vornado (including amending this Section 4.11(b) at the reasonable request of Vornado) in order to (1) maximize the portion of the payments that may be made to the Vornado Indemnified Parties hereunder without causing Vornado to fail to meet the Specified REIT Requirements, (2) improve Vornado’s chances of securing a favorable ruling described in this Section 4.11(b), or (3) assist Vornado in obtaining a favorable opinion from its outside tax counsel or determination from its tax accountants as described in this Section 4.11(b). Such cooperation shall include, for example, agreeing to make payments hereunder to a taxable REIT subsidiary of Vornado or an affiliate or designee of Vornado.  Vornado shall reimburse UE for all reasonable costs and expenses of such cooperation.

 

ARTICLE V
CERTAIN OTHER MATTERS

 

5.1                               Insurance Matters.

 

(a)                                 In accordance with the Transition Services Agreement, until June 30, 2015, to the extent permitted by applicable Law, Vornado and VRLP shall, and shall cause the relevant members of the Vornado Group to, maintain the insurance coverage applicable to the UE Business pursuant to the terms and conditions and coverages of the existing insurance policies of the Vornado Group in effect as of the Effective Time; provided, however, that in no event shall Vornado, any other member of the Vornado Group or any Vornado Indemnitee have any Liability or obligation whatsoever to any member of the UE Group in the event that any insurance policy or other contract or policy of insurance shall be terminated or otherwise cease to be in effect for any reason, shall be unavailable or inadequate to cover any Liability of any member of the UE Group for any reason whatsoever or shall not be renewed or extended with respect to the UE Business beyond the current expiration date. With respect to each insurance policy, the “Insurance Termination Date” shall be June 30, 2015, or such earlier date as of which the UE Business ceases to be covered by the insurance policies of the Vornado Group in effect as of the Effective Time in accordance with this Section 5.1(a). Prior to the Insurance Termination Date, Vornado and UE shall discuss in good faith whether to continue any insurance coverages beyond the Insurance Termination Date and shall cooperate in good faith to provide for an orderly transition of insurance coverage following the Insurance Termination Date; provided, however, that Vornado shall not be required to continue any such insurance coverages beyond the Insurance Termination Date.

 

43



 

(b)                                 From and after the Effective Time, with respect to any losses, damages and Liability incurred by any member of the UE Group prior to the Insurance Termination Date, Vornado will provide UE with access to, and UE may, upon ten (10) days’ prior written notice to Vornado, make claims under, Vornado’s third-party insurance policies in place prior to the Insurance Termination Date and Vornado’s historical policies of insurance, but solely to the extent that such policies provided coverage for members of the UE Group prior to the Insurance Termination Date; provided that such access to, and the right to make claims under, such insurance policies, shall be subject to the terms and conditions of such insurance policies, including any limits on coverage or scope, any deductibles and other fees and expenses, and shall be subject to the following additional conditions:

 

(i)                                     UE shall report any claim to Vornado, as promptly as practicable, and in any event in sufficient time so that such claim may be made in accordance with Vornado’s claim reporting procedures in effect immediately prior to the Effective Time (or in accordance with any modifications to such procedures after the Effective Time communicated by Vornado to UE in writing);

 

(ii)                                  UE and the members of the UE Group shall exclusively bear and be liable for (and neither Vornado nor any members of the Vornado Group shall have any obligation to repay or reimburse UE or any member of the UE Group for), and shall indemnify, hold harmless and reimburse Vornado and the members of the Vornado Group for, any deductibles, self-insured retention, fees and expenses to the extent resulting from any access to, or any claims made by UE or any other members of the UE Group or otherwise made in respect of losses of the UE Business under, any insurance provided pursuant to this Section 5.1(b), including any indemnity payments, settlements, judgments, legal fees and allocated claims expenses and claim handling fees, whether such claims are made by members of the UE Group, its employees or third Persons; and

 

(iii)                               UE shall exclusively bear and be liable for (and neither Vornado nor any members of the Vornado Group shall have any obligation to repay or reimburse UE or any member of the UE Group for) all uninsured, uncovered, unavailable or uncollectible amounts of all such claims made by UE or any member of the UE Group under the policies as provided for in this Section 5.1(b). In the event an insurance policy aggregate is exhausted, or believed likely to be exhausted, due to noticed claims, the UE Group, on the one hand, and the Vornado Group, on the other hand, shall be responsible for their pro rata portion of the reinstatement premium, if any, based upon the losses of such Group submitted to Vornado’s insurance carrier(s) (including any submissions prior to the Insurance Termination Date). To the extent that the Vornado Group or the UE Group is allocated more than its pro rata portion of such premium due to the timing of losses submitted to Vornado’s insurance carrier(s), the other party shall promptly pay the first party an amount so that each Group has been properly allocated its pro rata portion of the reinstatement premium. Subject to the following sentence, Vornado may elect not to reinstate the policy aggregate. In the event that, at any time prior to the Insurance Termination Date, Vornado elects not to reinstate the policy aggregate, it shall provide prompt written notice to UE, and UE may direct Vornado in writing to, and Vornado shall, in such case, reinstate the policy aggregate; provided that UE shall be responsible for all reinstatement premiums and other costs associated with such reinstatement.

 

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(c)                                  Except as provided in Section 5.1(b), from and after the Insurance Termination Date, neither UE nor any member of the UE Group shall have any rights to or under any of the insurance policies of Vornado or any other member of the Vornado Group. At the Insurance Termination Date, UE shall, unless it has obtained the prior written consent of Vornado or VRLP, have in effect all insurance programs required to comply with UE’s contractual obligations and such other insurance policies required by Law or as reasonably necessary or appropriate for companies operating a business similar to UE’s. Such insurance programs may include but are not limited to general liability, commercial auto liability, worker’s compensation, employer’s liability, product/completed operations liability, pollution legal liability, surety bonds, professional services liability, property, cargo, employment practices liability, employee dishonesty/crime, directors’ and officers’ liability and fiduciary liability.

 

(d)                                 Neither UE nor any member of the UE Group, in connection with making a claim under any insurance policy of Vornado or any member of the Vornado Group pursuant to this Section 5.1, shall take any action that would be reasonably likely to (i) have an adverse impact on the then-current relationship between Vornado or any member of the Vornado Group, on the one hand, and the applicable insurance company, on the other hand; (ii) result in the applicable insurance company terminating or reducing coverage, or increasing the amount of any premium owed by Vornado or any member of the Vornado Group under the applicable insurance policy; or (iii) otherwise compromise, jeopardize or interfere with the rights of Vornado or any member of the Vornado Group under the applicable insurance policy.

 

(e)                                  All payments and reimbursements by UE pursuant to this Section 5.1 will be made within fifteen (15) days after UE’s receipt of an invoice therefor from Vornado. If Vornado incurs costs to enforce UE’s obligations herein, UE agrees to indemnify and hold harmless Vornado for such enforcement costs, including reasonable attorneys’ fees pursuant to Section 4.6(b). Vornado shall retain the exclusive right to control its insurance policies and programs, including the right to exhaust, settle, release, commute, buy-back or otherwise resolve disputes with respect to any of its insurance policies and programs and to amend, modify or waive any rights under any such insurance policies and programs, notwithstanding whether any such policies or programs apply to any UE Liabilities and/or claims UE has made or could make in the future, and no member of the UE Group shall erode, exhaust, settle, release, commute, buyback or otherwise resolve disputes with Vornado’s insurers with respect to any of Vornado’s insurance policies and programs, or amend, modify or waive any rights under any such insurance policies and programs. UE shall cooperate with Vornado and share such information as is reasonably necessary in order to permit Vornado to manage and conduct its insurance matters as it deems appropriate. Neither Vornado nor any of the members of the Vornado Group shall have any obligation to secure extended reporting for any claims under any Liability policies of Vornado or any member of the Vornado Group for any acts or omissions by any member of the UE Group incurred prior to the Insurance Termination Date.

 

(f)                                   This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any member of the Vornado Group in respect of any insurance policy or any other contract or policy of insurance.

 

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(g)                                  UE does hereby, for itself and each other member of the UE Group, agree that no member of the Vornado Group shall have any Liability whatsoever as a result of the insurance policies and practices of Vornado and the members of the Vornado Group as in effect at any time, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

 

5.2                               Late Payments. Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within thirty (30) days of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to Prime Rate plus two (2%) percent.

 

5.3                               Treatment of Payments for Tax Purposes. For all Tax purposes, the Parties hereto shall treat (i) any payment made pursuant to this Agreement (other than payments representing interest) as either a contribution by the relevant entity or a distribution by the relevant entity (or as adjustments to such contribution or distribution) occurring immediately prior to the applicable Distribution or the VRLP Contribution, as the case may be, or as a payment of an assumed or retained Liability; and (ii) any payment of interest as taxable or deductible, as the case may be, to the Party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in either case except as otherwise required by applicable Law.

 

5.4                               Inducement. UE acknowledges and agrees that Vornado’s willingness to cause, effect and consummate the Separation and the Distribution has been conditioned upon and induced by UE’s covenants and agreements in this Agreement and the Ancillary Agreements, including UE’s assumption of the UE Liabilities pursuant to the provisions of this Agreement and UE’s covenants and agreements contained in Article IV.

 

5.5                               Post-Effective Time Conduct. The Parties acknowledge that, after the Effective Time, each Party shall be independent of the other Party, with responsibility for its own actions and inactions and its own Liabilities relating to, arising out of or resulting from the conduct of its business, operations and activities following the Effective Time, except as may otherwise be provided in any Ancillary Agreement, and each Party shall (except as otherwise provided in Article IV) use commercially reasonable efforts to prevent such Liabilities from being inappropriately borne by the other Party.

 

5.6                               Non-Solicitation Covenant. For a period of two (2) years from and after the Effective Time, UE shall not, and shall procure that the other members of the UE Group shall not, directly or indirectly, solicit or hire any employees of the Vornado Group who have been engaged in providing services to the UE Group pursuant to the Transition Services Agreement without the prior written consent of Vornado; provided, however, that (i) an individual shall not be deemed to have been solicited for employment or hired in violation of this Section 5.6 if such employee has ceased to be employed by any member of the Vornado Group for at least six (6) months prior to the date when any solicitation activity occurs, and (ii) this Section 5.6 shall not

 

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prohibit any general offers of employment to the public, including through a bona fide search firm, so long as it is not specifically targeted toward employees of the Vornado Group.

 

ARTICLE VI
EXCHANGE OF INFORMATION; CONFIDENTIALITY

 

6.1                               Agreement for Exchange of Information.

 

(a)                                 Subject to Section 6.9 and any other applicable confidentiality obligations, each of Vornado and UE, on behalf of itself and each member of its Group, agrees to use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other Party and the members of such other Party’s Group, at any time before, on or after the Effective Time, as soon as reasonably practicable after written request therefor, any information (or a copy thereof) in the possession or under the control of such Party or its Group to the extent that (i) such information relates to the UE Business, or any UE Asset or UE Liability, if UE is the requesting Party, or to the Vornado Business, or any Vornado Asset or Vornado Liability, if Vornado is the requesting Party; (ii) such information is required by the requesting Party to comply with its obligations under this Agreement or any Ancillary Agreement; or (iii) such information is required by the requesting Party to comply with any obligation imposed by any Governmental Authority; provided, however, that, in the event that the Party to whom the request has been made determines that any such provision of information could be detrimental to the Party providing the information, violate any Law or agreement, or waive any privilege available under applicable Law, including any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit compliance with such obligations to the extent and in a manner that avoids any such harm or consequence. The Party providing information pursuant to this Section 6.1 shall only be obligated to provide such information in the form, condition and format in which it then exists, and in no event shall such Party be required to perform any improvement, modification, conversion, updating or reformatting of any such information, and nothing in this Section 6.1 shall expand the obligations of a Party under Section 6.4.

 

6.2                               Ownership of Information. The provision of any information pursuant to Section 6.1 or Section 6.7 shall not affect the ownership of such information (which shall be determined solely in accordance with the terms of this Agreement and the Ancillary Agreements), or constitute a grant of rights in or to any such information.

 

6.3                               Compensation for Providing Information. The Party requesting information agrees to reimburse the other Party for the reasonable costs, if any, of creating, gathering, copying, transporting and otherwise complying with the request with respect to such information (including any reasonable costs and expenses incurred in any review of information for purposes of protecting the Privileged Information of the providing Party or in connection with the restoration of backup media for purposes of providing the requested information). Except as may be otherwise specifically provided elsewhere in this Agreement, any Ancillary Agreement or any other agreement between the Parties, such costs shall be computed in accordance with the providing Party’s standard methodology and procedures.

 

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6.4                               Record Retention. To facilitate the possible exchange of information pursuant to this Article VI and other provisions of this Agreement after the Effective Time, the Parties agree to use their commercially reasonable efforts, which shall be no less rigorous than those used for retention of such Party’s own information, to retain all information in their respective possession or control on the Effective Time in accordance with the policies of Vornado as in effect on the Effective Time or such other policies as may be adopted by Vornado after the Effective Time (provided, in the case of UE, that Vornado notifies UE of any such change); provided, however, that in the case of any information relating to Taxes, such retention period shall be extended to the expiration of the applicable statute of limitations (giving effect to any extensions thereof). Notwithstanding the foregoing in this Section 6.4, the Tax Matters Agreement will govern the retention of Tax-related records.

 

6.5                               Limitations of Liability. Neither Party shall have any Liability to the other Party in the event that any information exchanged or provided pursuant to this Agreement is found to be inaccurate in the absence of gross negligence or willful misconduct by the Party providing such information. Neither Party shall have any Liability to any other Party if any information is destroyed after commercially reasonable efforts by such Party to comply with the provisions of Section 6.4.

 

6.6                               Other Agreements Providing for Exchange of Information.

 

(a)                                 The rights and obligations granted under this Article VI are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of information set forth in any Ancillary Agreement.

 

(b)                                 Any party that receives, pursuant to a request for information in accordance with this Article VI, Tangible Information that is not relevant to its request shall, at the request of the providing Party, (i) return it to the providing Party or, at the providing Party’s request, destroy such Tangible Information; and (ii) deliver to the providing Party written confirmation that such Tangible Information was returned or destroyed, as the case may be, which confirmation shall be signed by an authorized representative of the requesting Party.

 

6.7                               Production of Witnesses; Records; Cooperation.

 

(a)                                 After the Effective Time, except in the case of an adversarial Action or Dispute between Vornado and UE, or any members of their respective Groups, each Party shall use its commercially reasonable efforts to make available to the other Party, upon written request, the former, current and future directors, trustees, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available without undue burden, to the extent that any such person (giving consideration to business demands of such directors, trustees, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any Action in which the requesting Party (or member of its Group) may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all costs and expenses in connection therewith.

 

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(b)                                 If an Indemnifying Party chooses to defend or to seek to compromise or settle any Third-Party Claim, the other Party shall make available to such Indemnifying Party, upon written request, the former, current and future directors, trustees, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available without undue burden, to the extent that any such person (giving consideration to business demands of such directors, trustees, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be, and shall otherwise cooperate in such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be.

 

(c)                                  Without limiting the foregoing, the Parties shall cooperate and consult to the extent reasonably necessary with respect to any Actions.

 

(d)                                 Without limiting any provision of this Section 6.7, each of the Parties agrees to cooperate, and to cause each member of its respective Group to cooperate, with each other in the defense of any infringement or similar claim with respect any Intellectual Property and shall not claim to acknowledge, or permit any member of its respective Group to claim to acknowledge, the validity or infringing use of any Intellectual Property of a third Person in a manner that would hamper or undermine the defense of such infringement or similar claim.

 

(e)                                  The obligation of the Parties to provide witnesses pursuant to this Section 6.7 is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to provide as witnesses, inventors and other officers without regard to whether the witness or the employer of the witness could assert a possible business conflict (subject to the exception set forth in the first sentence of Section 6.7(a)).

 

6.8                               Privileged Matters.

 

(a)                                 The Parties recognize that legal and other professional services that have been and will be provided prior to the Effective Time have been and will be rendered for the collective benefit of each of the members of the Vornado Group and the UE Group, and that each of the members of the Vornado Group and the UE Group should be deemed to be the client with respect to such services for the purposes of asserting all privileges which may be asserted under applicable Law in connection therewith. The parties recognize that legal and other professional services will be provided following the Effective Time, which services will be rendered solely for the benefit of the Vornado Group or the UE Group, as the case may be.

 

(b)                                 The Parties agree as follows:

 

(i)                                     Vornado shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the Vornado Business and not to the UE Business, whether or not the Privileged Information is in the possession or under the control of any member of the Vornado Group or any member of the UE Group. Vornado shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in

 

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connection with any Privileged Information that relates solely to any Vornado Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of any member of the Vornado Group or any member of the UE Group;

 

(ii)                                  UE shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the UE Business and not to the Vornado Business, whether or not the Privileged Information is in the possession or under the control of any member of the UE Group or any member of the Vornado Group. UE shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any UE Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the privileged Information is in the possession or under the control of any member of the UE Group or any member of the Vornado Group; and

 

(iii)                               if the Parties do not agree as to whether certain information is Privileged Information, then such information shall be treated as Privileged Information, and the Party that believes that such information is Privileged Information shall be entitled to control the assertion or waiver of all privileges and immunities in connection with any such information unless the Parties otherwise agree. The Parties shall use the procedures set forth in Article VII to resolve any disputes as to whether any information relates solely to the Vornado Business, solely to the UE Business, or to both the Vornado Business and the UE Business.

 

(c)                                  Subject to the remaining provisions of this Section 6.8, the Parties agree that they shall have a shared privilege or immunity with respect to all privileges and immunities not allocated pursuant to Section 6.8(b) and all privileges and immunities relating to any Actions or other matters that involve both Parties (or one or more members of their respective Groups) and in respect of which both Parties have Liabilities under this Agreement, and that no such shared privilege or immunity may be waived by either Party without the consent of the other Party.

 

(d)                                 If any Dispute arises between the Parties or any members of their respective Group regarding whether a privilege or immunity should be waived to protect or advance the interests of either Party and/or any member of their respective Group, each Party agrees that it shall (i) negotiate with the other Party in good faith; (ii) endeavor to minimize any prejudice to the rights of the other Party; and (iii) not unreasonably withhold consent to any request for waiver by the other Party. Further, each Party specifically agrees that it shall not withhold its consent to the waiver of a privilege or immunity for any purpose except in good faith to protect its own legitimate interests.

 

(e)                                  In the event of any adversarial Action or Dispute between Vornado and UE, or any members of their respective Groups, either Party may waive a privilege in which the other Party or member of such other Party’s Group has a shared privilege, without obtaining consent pursuant to Section 6.8(c); provided that such waiver of a shared privilege shall be effective only as to the use of information with respect to the Action between the Parties and/or

 

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the applicable members of their respective Groups, and shall not operate as a waiver of the shared privilege with respect to any Third Party.

 

(f)                                   Upon receipt by either Party, or by any member of its respective Group, of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Privileged Information subject to a shared privilege or immunity or as to which another Party has the sole right hereunder to assert a privilege or immunity, or if either Party obtains knowledge that any of its, or any member of its respective Group’s, current or former directors, trustees, officers, agents or employees have received any subpoena, discovery or other requests that may reasonably be expected to result in the production or disclosure of such Privileged Information, such Party shall promptly notify the other Party of the existence of the request (which notice shall be delivered to such other Party no later than five (5) business days following the receipt of any such subpoena, discovery or other request) and shall provide the other Party a reasonable opportunity to review the Privileged Information and to assert any rights it or they may have under this Section 6.8 or otherwise, to prevent the production or disclosure of such Privileged Information.

 

(g)                                  Any furnishing of, or access or transfer of, any information pursuant to this Agreement is made in reliance on the agreement of Vornado and UE set forth in this Section 6.8 and in Section 6.9 to maintain the confidentiality of Privileged Information and to assert and maintain all applicable privileges and immunities. The Parties agree that their respective rights to any access to information, witnesses and other Persons, the furnishing of notices and documents and other cooperative efforts between the Parties contemplated by this Agreement, and the transfer of Privileged Information between the Parties and members of their respective Groups pursuant to this Agreement, shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

 

(h)                                 In connection with any matter contemplated by Section 6.7 or this Section 6.8, the Parties agree to, and to cause the applicable members of their Group to, use commercially reasonable efforts to maintain their respective separate and joint privileges and immunities, including by executing joint defense and/or common interest agreements where necessary or useful for this purpose.

 

6.9                               Confidentiality.

 

(a)                                 Confidentiality. Subject to Section 6.10, from and after the Effective Time until the five (5)-year anniversary of the Effective Time, each of Vornado and UE, on behalf of itself and each member of its respective Group, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to Vornado’s confidential and proprietary information pursuant to policies in effect as of the Effective Time, all confidential and proprietary information concerning the other Party or any member of the other Party’s Group or their respective businesses that is either in its possession (including confidential and proprietary information in its possession prior to the date hereof) or furnished by any such other Party or any member of such Party’s Group or their respective Representatives at any time pursuant to this Agreement, any Ancillary Agreement or otherwise, and shall not use any such confidential and proprietary information other than for such purposes as shall be expressly permitted hereunder or thereunder, except, in each case, to the extent that

 

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such confidential and proprietary information has been (i) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any member of such Party’s Group or any of their respective Representatives in violation of this Agreement, (ii) later lawfully acquired from other sources by such Party (or any member of such Party’s Group) which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such confidential and proprietary information, or (iii) independently developed or generated without reference to or use of any proprietary or confidential information of the other Party or any member of such Party’s Group. If any confidential and proprietary information of one Party or any member of its Group is disclosed to the other Party or any member of such other Party’s Group in connection with providing services to such first Party or any member of such first Party’s Group under this Agreement or any Ancillary Agreement, then such disclosed confidential and proprietary information shall be used only as required to perform such services.

 

(b)                                 No Release; Return or Destruction. Each Party agrees not to release or disclose, or permit to be released or disclosed, any information addressed in Section 6.9(a) to any other Person, except its Representatives who need to know such information in their capacities as such (who shall be advised of their obligations hereunder with respect to such information), and except in compliance with Section 6.10. Without limiting the foregoing, when any such information is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement, each Party will promptly after request of the other Party either return to the other Party all such information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or notify the other Party in writing that it has destroyed such information (and such copies thereof and such notes, extracts or summaries based thereon).

 

(c)                                  Third-Party Information; Privacy or Data Protection Laws. Each Party acknowledges that it and members of its Group may presently have and, following the Effective Time, may gain access to or possession of confidential or proprietary information of, or personal information relating to, Third Parties (i) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other Party or members of such Party’s Group, on the other hand, prior to the Effective Time; or (ii) that, as between the two Parties, was originally collected by the other Party or members of such Party’s Group and that may be subject to and protected by privacy, data protection or other applicable Laws. Each Party agrees that it shall hold, protect and use, and shall cause the members of its Group and its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary information of, or personal information relating to, Third Parties in accordance with privacy, data protection or other applicable Laws and the terms of any agreements that were either entered into before the Effective Time or affirmative commitments or representations that were made before the Effective Time by, between or among the other Party or members of the other Party’s Group, on the one hand, and such Third Parties, on the other hand.

 

6.10                        Protective Arrangements. In the event that a Party or any member of its Group either determines on the advice of its counsel that it is required to disclose any information pursuant to applicable Law or receives any request or demand under lawful process or from any Governmental Authority to disclose or provide information of the other Party (or any member of the other Party’s Group) that is subject to the confidentiality provisions hereof,

 

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such Party shall notify the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing such information and shall cooperate, at the expense of the other Party, in seeking any appropriate protective order requested by the other Party. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to the extent required by such Law (as so advised by its counsel) or by lawful process or such Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such information was disclosed, in each case to the extent legally permitted.

 

ARTICLE VII
DISPUTE RESOLUTION

 

7.1                               Good-Faith Negotiation. Subject to Section 7.4, either Party seeking resolution of any dispute, controversy or claim arising out of or relating to this Agreement or Ancillary Agreement (including regarding whether any Assets are UE Assets, any Liabilities are UE Liabilities or the validity, interpretation, breach or termination of this Agreement or any Ancillary Agreement) (a “Dispute”), shall provide written notice thereof to the other Party (the “Initial Notice”), and within thirty (30) days of the delivery of the Initial Notice, the Parties shall attempt in good faith to negotiate a resolution of the Dispute. The negotiations shall be conducted by executives who hold, at a minimum, the title of vice president. All such negotiations shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. Any resolution reached by the applicable executives through negotiation shall be subject to final approval by the Chief Administrative Officer of Vornado and the Chief Operating Officer of UE. If the Parties are unable for any reason to resolve a Dispute within thirty (30) days after the delivery of such notice or if a Party reasonably concludes that the other Party is not willing to negotiate as contemplated by this Section 7.1, the Dispute shall be submitted to mediation in accordance with Section 7.2.

 

7.2                               Mediation. Any Dispute not resolved pursuant to Section 7.1 shall, at the written request of a Party (a “Mediation Request”), be submitted to nonbinding mediation in accordance with the then current International Institute for Conflict Prevention and Resolution (“CPR”) Mediation Procedure, except as modified herein. The mediation shall be held in (i) New York, New York or (ii) such other place as the Parties may mutually agree in writing. The Parties shall have twenty (20) days from receipt by a Party of a Mediation Request to agree on a mediator. If no mediator has been agreed upon by the Parties within twenty (20) days of receipt by a party of a Mediation Request, then a Party may request (on written notice to the other Party), that CPR appoint a mediator in accordance with the CPR Mediation Procedure. All mediation pursuant to this clause shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence, and no oral or documentary representations made by the Parties during such mediation shall be admissible for any purpose in any subsequent proceedings. No Party shall disclose or permit the disclosure of any information about the evidence adduced or the documents produced by the other Party in the mediation proceedings or about the existence, contents or results of the mediation without the prior written

 

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consent of such other Party, except in the course of a judicial or regulatory proceeding or as may be required by Law or requested by a Governmental Authority or securities exchange. Before making any disclosure permitted by the preceding sentence, the Party intending to make such disclosure shall, to the extent reasonably practicable, give the other Party reasonable written notice of the intended disclosure and afford the other party a reasonable opportunity to protect its interests. If the Dispute has not been resolved within sixty (60) days of the appointment of a mediator, or within ninety (90) days after receipt by a Party of a Mediation Request (whichever occurs sooner), or within such longer period as the Parties may agree to in writing, then the Dispute shall be submitted to binding arbitration in accordance with Section 7.3.

 

7.3                               Arbitration.

 

(a)                                 In the event that a Dispute has not been resolved within sixty (60) days of the appointment of a mediator in accordance with Section 7.2, or within ninety (90) days after receipt by a Party of a Mediation Request (whichever occurs sooner), or within such longer period as the Parties may agree to in writing, then such Dispute shall, upon the written request of a Party (the “Arbitration Request”) be submitted to be finally resolved by binding arbitration pursuant to the CPR Arbitration Procedure. The arbitration shall be held in the same location as the mediation pursuant to Section 7.2. Unless otherwise agreed by the Parties in writing, any Dispute to be decided pursuant to this Section 7.3 will be decided (i) before a sole arbitrator if the amount in dispute, inclusive of all claims and counterclaims, totals less than $5 million; or (ii) by a panel of three (3) arbitrators if the amount in dispute, inclusive of all claims and counterclaims, totals $5 million or more.

 

(b)                                 The panel of three (3) arbitrators will be chosen as follows: (i) within fifteen (15) days from the date of the receipt of the Arbitration Request, each Party will name an arbitrator; and (ii) the two (2) Party-appointed arbitrators will thereafter, within thirty (30) days from the date on which the second of the two (2) arbitrators was named, name a third, independent arbitrator who will act as chairperson of the arbitral tribunal. In the event that either Party fails to name an arbitrator within fifteen (15) days from the date of receipt of the Arbitration Request, then upon written application by either Party, that arbitrator shall be appointed pursuant to the CPR Arbitration Procedure. In the event that the two (2) Party-appointed arbitrators fail to appoint the third, then the third, independent arbitrator will be appointed pursuant to the CPR Arbitration Procedure. If the arbitration will be before a sole independent arbitrator, then the sole independent arbitrator will be appointed by agreement of the Parties within fifteen (15) days of the date of receipt of the Arbitration Request. If the Parties cannot agree to a sole independent arbitrator, then upon written application by either party, the sole independent arbitrator will be appointed pursuant to the CPR Arbitration Procedure.

 

(c)                                  The arbitrator(s) will have the right to award, on an interim basis, or include in the final award, any relief which it deems proper in the circumstances, including money damages (with interest on unpaid amounts from the due date), injunctive relief (including specific performance) and attorneys’ fees and costs; provided that the arbitrator(s) will not award any relief not specifically requested by the parties and, in any event, will not award any indirect, punitive, exemplary, remote, speculative or similar damages in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such Liability with respect to a Third-Party Claim). Upon selection of the arbitrator(s) following any

 

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grant of interim relief by a special arbitrator or court pursuant to Section 7.4, the arbitrator(s) may affirm or disaffirm that relief, and the parties will seek modification or rescission of the order entered by the court as necessary to accord with the decision of the arbitrator(s). The award of the arbitrator(s) shall be final and binding on the Parties, and may be enforced in any court of competent jurisdiction. The initiation of mediation or arbitration pursuant to this Article VII will toll the applicable statute of limitations for the duration of any such proceedings.

 

7.4                               Litigation and Unilateral Commencement of Arbitration. Notwithstanding the foregoing provisions of this Article VII, (a) a Party may seek preliminary provisional or injunctive judicial relief with respect to a Dispute without first complying with the procedures set forth in Section 7.1, Section 7.2 and Section 7.3 if such action is reasonably necessary to avoid irreparable damage and (b) either Party may initiate arbitration before the expiration of the periods specified in Section 7.2 and Section 7.3 if (i) such Party has submitted a Mediation Request or Arbitration Request, as applicable, and the other party has failed, within the applicable periods set forth in Section 7.3, to agree upon a date for the first mediation session to take place within thirty (30) days after the appointment of such mediator or such longer period as the Parties may agree to in writing or (ii) such Party has failed to comply with Section 7.3 in good faith with respect to commencement and engagement in arbitration. In such event, the other Party may commence and prosecute such arbitration unilaterally in accordance with the CPR Arbitration Procedure.

 

7.5                               Conduct During Dispute Resolution Process. Unless otherwise agreed to in writing, the Parties shall, and shall cause their respective members of their Group to, continue to honor all commitments under this Agreement and each Ancillary Agreement to the extent required by such agreements during the course of dispute resolution pursuant to the provisions of this Article VII, unless such commitments are the specific subject of the Dispute at issue.

 

ARTICLE VIII
FURTHER ASSURANCES AND ADDITIONAL COVENANTS

 

8.1                               Further Assurances.

 

(a)                                 In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use its reasonable best efforts, prior to, on and after the Effective Time, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.

 

(b)                                 Without limiting the foregoing, prior to, on and after the Effective Time, each Party hereto shall cooperate with the other Party, and without any further consideration, but at the expense of the requesting Party, execute and deliver, or use its reasonable best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all Approvals or Notifications of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument (including any consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by the other Party from

 

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time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the transfers of the UE Assets and the Vornado Assets and the assignment and assumption of the UE Liabilities and the Vornado Liabilities and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each Party will, at the reasonable request, cost and expense of the other Party, take such other actions as may be reasonably necessary to vest in such other Party good and marketable title to the Assets allocated to such Party under this Agreement or any of the Ancillary Agreements, free and clear of any Security Interest, if and to the extent it is practicable to do so.

 

(c)                                  On or prior to the Effective Time, Vornado and UE in their respective capacities as direct and indirect shareholders of the members of their Groups, shall each ratify any actions which are reasonably necessary or desirable to be taken by Vornado, UE or any of the members of their respective Groups, as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.

 

(d)                                 Vornado and UE, and each of the members of their respective Groups, waive (and agree not to assert against any of the others) any claim or demand that any of them may have against any of the others for any Liabilities or other claims relating to or arising out of: (i) the failure of UE or any other member of the UE Group, on the one hand, or of Vornado or any other member of the Vornado Group, on the other hand, to provide any notification or disclosure required under any state Environmental Law in connection with the Separation or the other transactions contemplated by this Agreement, including the transfer by any member of any Group to any member of the other Group of ownership or operational control of any Assets not previously owned or operated by such transferee; or (ii) any inadequate, incorrect or incomplete notification or disclosure under any such state Environmental Law by the applicable transferor. To the extent any Liability to any Governmental Authority or any third Person arises out of any action or inaction described in clause (i) or (ii) above, the transferee of the applicable Asset hereby assumes and agrees to pay any such Liability.

 

ARTICLE IX
TERMINATION

 

9.1                               Termination. This Agreement and all Ancillary Agreements may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Effective Time by Vornado, in its sole and absolute discretion, without the approval or consent of any other Person, including UE or UE L.P. After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the Parties.

 

9.2                               Effect of Termination. In the event of any termination of this Agreement prior to the Effective Time, no Party (nor any of its directors, trustees, officers or employees) shall have any Liability or further obligation to the other Party by reason of this Agreement.

 

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ARTICLE X
MISCELLANEOUS

 

10.1        Counterparts; Entire Agreement; Corporate Power.

 

(a)           This Agreement and each Ancillary Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

 

(b)           This Agreement, the Ancillary Agreements and the Exhibits, Schedules and Appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties other than those set forth or referred to herein or therein.

 

(c)           Vornado represents on behalf of itself and each other member of the Vornado Group, and UE represents on behalf of itself and each other member of the UE Group, as follows:

 

(i)            each such Person has the requisite power and authority and has taken all action necessary in order to execute, deliver and perform this Agreement and each Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby; and

 

(ii)           this Agreement and each Ancillary Agreement to which it is a party has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.

 

(d)           Each Party acknowledges that it and each other Party is executing certain of the Ancillary Agreements by facsimile, stamp or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement or any Ancillary Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement or any Ancillary Agreement. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause each such Ancillary Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

 

10.2        Governing Law. This Agreement and, unless expressly provided therein, each Ancillary Agreement (and any claims or disputes arising out of or related hereto or thereto or to the transactions contemplated hereby and thereby or to the inducement of any party to enter

 

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herein and therein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of New York irrespective of the choice of laws principles of the State of New York including all matters of validity, construction, effect, enforceability, performance and remedies.

 

10.3        Assignability. Except as set forth in any Ancillary Agreement, this Agreement and each Ancillary Agreement shall be binding upon and inure to the benefit of the Parties and the parties thereto, respectively, and their respective successors and permitted assigns; provided, however, that neither Party nor any such party thereto may assign its rights or delegate its obligations under this Agreement or any Ancillary Agreement without the express prior written consent of the other Party hereto or other parties thereto, as applicable. Notwithstanding the foregoing, no such consent shall be required for the assignment of a party’s rights and obligations under this Agreement and the Ancillary Agreements (except as may be otherwise provided in any such Ancillary Agreement) in whole (i.e., the assignment of a party’s rights and obligations under this Agreement and all Ancillary Agreements all at the same time) in connection with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party.

 

10.4        Third-Party Beneficiaries. Except for the indemnification rights under this Agreement of any Vornado Indemnitee or UE Indemnitee in their respective capacities as such, (a) the provisions of this Agreement and each Ancillary Agreement are solely for the benefit of the Parties and are not intended to confer upon any Person except the Parties any rights or remedies hereunder, and (b) there are no third-party beneficiaries of this Agreement or any Ancillary Agreement and neither this Agreement nor any Ancillary Agreement shall provide any third Person with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement or any Ancillary Agreement.

 

10.5        Notices. All notices, requests, claims, demands or other communications under this Agreement and, to the extent applicable and unless otherwise provided therein, under each of the Ancillary Agreements shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.5):

 

If to Vornado, to:

 

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention: [
·]
Facsimile: [
·]

 

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with a copy (until the Effective Time) to:

 

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Attention:              William G. Farrar
Facsimile:              [
·]

 

If to UE, to:

 

Urban Edge Properties
888 Seventh Avenue
New York, New York 10019
Attention: [
·]
Facsimile: [
·]

 

with a copy (until the Effective Time) to:

 

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Attention:              William G. Farrar
Facsimile:              [
·]

 

A Party may, by notice to the other Party, change the address to which such notices are to be given.

 

10.6        Severability. If any provision of this Agreement or any Ancillary Agreement or the application thereof to any Person or circumstance is determined by an arbitration tribunal or a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

 

10.7        Force Majeure. No Party shall be deemed in default of this Agreement or, unless otherwise expressly provided therein, any Ancillary Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder or thereunder so long as and to the extent to which any delay or failure in the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance of such obligations (other than a payment obligation) shall be extended for a period equal to the time lost by reason of the delay. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement and the Ancillary Agreements, as applicable, as soon as reasonably practicable.

 

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10.8        No Set-Off. Except as set forth in any Ancillary Agreement or as otherwise mutually agreed to in writing by the Parties, neither Party nor any member of such Party’s group shall have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement or any Ancillary Agreement; or (b) any other amounts claimed to be owed to either such Party or any member of its Group arising out of this Agreement or any Ancillary Agreement.

 

10.9        Publicity. Prior to the Effective Time, the Chief Executive Officer of UE and the Chief Administrative Officer of Vornado shall consult with each other prior to either Party issuing any press releases or otherwise making public statements with respect to the Separation, the Distribution or any of the other transactions contemplated hereby or under any Ancillary Agreement and prior to making any filings with any Governmental Authority with respect thereto.

 

10.10      Expenses. Except as otherwise expressly set forth in this Agreement or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, all fees, costs and expenses incurred on, prior to or after the Effective Time in connection with the preparation, execution, delivery and implementation of this Agreement and any Ancillary Agreement, the Separation, the Form 10, the Plan of Reorganization and the Distribution and the consummation of the transactions contemplated hereby and thereby shall be borne by the Party or its applicable Subsidiary incurring such fees, costs or expenses.

 

10.11      Headings. The article, section and paragraph headings contained in this Agreement and in the Ancillary Agreements are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement or any Ancillary Agreement.

 

10.12      Survival of Covenants. Except as expressly set forth in this Agreement or any Ancillary Agreement, the covenants, representations and warranties contained in this Agreement and each Ancillary Agreement, and Liability for the breach of any obligations contained herein, shall survive the Separation and the Distribution and shall remain in full force and effect.

 

10.13      Waivers of Default. Waiver by a Party of any default by the other Party of any provision of this Agreement or any Ancillary Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party. No failure or delay by a Party in exercising any right, power or privilege under this Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

 

10.14      Specific Performance. Subject to the provisions of Article VII, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the Party or Parties who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief in respect of its or their rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach,

 

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including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Parties.

 

10.15      Amendments. No provisions of this Agreement or any Ancillary Agreement shall be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification.

 

10.16      Interpretation. In this Agreement and any Ancillary Agreement, (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement) as a whole (including all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement); (c) Article, Section, Schedule, Exhibit and Appendix references are to the Articles, Sections, Schedules, Exhibits and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified; (d) unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement; (e) the word “including” and words of similar import when used in this Agreement (or the applicable Ancillary Agreement) shall mean “including, without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) unless otherwise specified in a particular case, the word “days” refers to calendar days; (h) references to “business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by law to close in the United States or New York, New York; (i) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; and (j) unless expressly stated to the contrary in this Agreement or in any Ancillary Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references to [•], 2015.  In the case of any conflict between this Agreement and any of the Transition Services Agreement, the Tax Matters Agreement, the Contribution Agreement and the Employee Matters Agreement in relation to any matters addressed by such Ancillary Agreement, the applicable Ancillary Agreement shall prevail unless such Ancillary Agreement explicitly states that this Agreement shall control.

 

10.17      Limitations of Liability. Notwithstanding anything in this Agreement to the contrary, but without limiting any recovery expressly provided by Section 7.2, neither UE or any member of the UE Group, on the one hand, nor Vornado or any member of the Vornado Group, on the other hand, shall be liable under this Agreement to the other for any indirect, punitive, exemplary, remote, speculative or similar damages in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such Liability with respect to a Third-Party Claim).

 

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10.18      Performance. Vornado will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Vornado Group. UE will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the UE Group. Each Party (including its permitted successors and assigns) further agrees that it will (a) give timely notice of the terms, conditions and continuing obligations contained in this Agreement and any applicable Ancillary Agreement to all of the other members of its Group and (b) cause all of the other members of its Group not to take any action or fail to take any such action inconsistent with such Party’s obligations under this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby.

 

10.19      Mutual Drafting. This Agreement and the Ancillary Agreements shall be deemed to be the joint work product of the Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the parties have caused this Separation and Distribution Agreement to be executed by their duly authorized representatives.

 

 

VORNADO REALTY TRUST

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

VORNADO REALTY L.P.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

URBAN EDGE PROPERTIES

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

URBAN EDGE PROPERTIES L.P.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title

 

[Signature Page to Separation and Distribution Agreement]

 



(Back To Top)

Section 3: EX-3.1 (EX-3.1)


Exhibit 3.1

 

URBAN EDGE PROPERTIES

 

ARTICLES OF AMENDMENT AND RESTATEMENT

 

FIRST:  Urban Edge Properties, a Maryland real estate investment trust (the “Trust”) formed under Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland (“Title 8”), desires to amend and restate its Declaration of Trust as currently in effect and as hereinafter amended.

 

SECOND:  The following provisions are all the provisions of the Declaration of Trust currently in effect and as hereinafter amended and restated:

 

ARTICLE I

 

FORMATION

 

The Trust is a real estate investment trust within the meaning of Title 8.  The Trust shall not be deemed to be a general partnership, limited partnership, joint venture, joint stock company or a corporation but nothing herein shall preclude the Trust from being treated for tax purposes as an association under the Internal Revenue Code of 1986, as amended (the “Code”).

 

ARTICLE II

 

NAME

 

The name of the Trust is:

 

Urban Edge Properties

 

Under circumstances in which the Board of Trustees of the Trust (the “Board of Trustees” or “Board”) determines that the use of the name of the Trust is not practicable, the Trust may use any other designation or name for the Trust.

 



 

ARTICLE III

 

PURPOSES AND POWERS

 

Section 3.1  Purposes.  The purposes for which the Trust is formed are to invest in and to acquire, hold, manage, administer, control and dispose of property, including, without limitation or obligation, engaging in business as a real estate investment trust within the meaning of Section 856 of the Code (a “REIT”).

 

Section 3.2  Powers. The Trust shall have all of the powers granted to real estate investment trusts by Title 8 or any successor statute and all other powers set forth in the Declaration of Trust of the Trust (the “Declaration of Trust”) which are not inconsistent with law and are appropriate to promote and attain the purposes set forth in the Declaration of Trust.

 

ARTICLE IV

 

RESIDENT AGENT

 

The name of the resident agent of the Trust in the State of Maryland is The Corporation Trust Incorporated, whose post office address is 351 West Camden Street, Baltimore, MD 21201.  The resident agent is a Maryland corporation.  The Trust may have such offices or places of business within or outside the State of Maryland as the Board of Trustees may from time to time determine.

 

ARTICLE V

 

BOARD OF TRUSTEES

 

Section 5.1  Powers.  Subject to any express limitations contained in the Declaration of Trust or in the Bylaws, (a) the business and affairs of the Trust shall be managed under the direction of the Board of Trustees and (b) the Board shall have full, exclusive and absolute power, control and authority over any and all property and business of the Trust.  The Board may take any action as in its sole judgment and discretion is necessary or appropriate to conduct the business and affairs of the Trust.  The Declaration of Trust shall be construed with the presumption in favor of the grant of power and authority to the Board.  Any construction of the Declaration of Trust or determination made by the Board concerning its powers and authority

 

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hereunder shall be conclusive.  The enumeration and definition of particular powers of the Board of Trustees included in the Declaration of Trust or in the Bylaws of the Trust (the “Bylaws”) shall in no way be construed or deemed by inference or otherwise in any manner to exclude or limit the powers conferred upon the Board or the Trustees under the general laws of the State of Maryland or any other applicable laws.

 

The Board, without any action by the shareholders of the Trust, shall have and may exercise, on behalf of the Trust, without limitation, the power to terminate the status under the Code of the Trust as a REIT; to determine that compliance with any restriction or limitations on ownership and transfers of shares of the Trust’s beneficial interest set forth in Article VII of the Declaration of Trust is no longer required in order for the Trust to qualify as a REIT; to adopt, amend and repeal Bylaws; to elect officers in the manner prescribed in the Bylaws; to solicit proxies from holders of shares of beneficial interest of the Trust; and to do any other acts and deliver any other documents necessary or appropriate to the foregoing powers.

 

Section 5.2  Number and Classification.  The number of Trustees (hereinafter the “Trustees”) initially shall be         , which number may be increased or decreased pursuant to the Bylaws.  No reduction in the number of Trustees shall cause the removal of any Trustee from office prior to the expiration of his or her term.  The Trustees (other than any Trustee elected solely by holders of one or more classes or series of Preferred Shares) shall be classified, with respect to the terms for which they severally hold office, into three classes, one class (“Class I”) to hold office initially for a term expiring at the annual meeting of shareholders in 2016, another class (“Class II”) to hold office initially for a term expiring at the annual meeting of shareholders in 2017 and another class (“Class III”) to hold office initially for a term expiring at the annual meeting of shareholders in 2018, with the members of each class to hold office until their successors are duly elected and qualify.  At the annual meeting of shareholders held in 2016, the successors to the Trustees whose terms expire at such meeting shall be elected to hold office for a term expiring at the annual meeting of shareholders held in 2018 and until their successors are duly elected and qualify. At the annual meeting of shareholders held in 2017 and each annual

 

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meeting of shareholders held thereafter, the successors to the Trustees whose terms expire at each annual meeting shall be elected to hold office for a term expiring at the next annual meeting of shareholders and until their successors are duly elected and qualify. The names and class of the Trustees who shall serve until their successors are duly elected and qualify are:

 

Class I

 

 

Class II

 

 

Class III

 

 

The Trustees shall be elected in the manner provided in the Bylaws and (subject to the following paragraph) any vacancy on the Board of Trustees may be filled in the manner provided in the Bylaws.  It shall not be necessary to list in the Declaration of Trust the names and addresses of any Trustees hereinafter elected.

 

The Trust elects, pursuant to Section 3-802(b) of the Maryland General Corporation Law (the “MGCL”), that, except as may be provided by the Board of Trustees in setting the terms of any class or series of Shares, any and all vacancies on the Board of Trustees may be filled only by the affirmative vote of a majority of the remaining Trustees in office, even if the remaining Trustees do not constitute a quorum, and any Trustee elected to fill a vacancy

 

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shall serve for the remainder of the full term of the trusteeship in which such vacancy occurred and until a successor is duly elected and qualifies.

 

Section 5.3  Removal.   Subject to the rights of holders of one or more classes or series of Preferred Shares to elect or remove one or more Trustees, a Trustee may be removed at any time, but only for cause and then only, by the affirmative vote of the holders of two thirds of the Shares then outstanding and entitled to vote generally in the election of Trustees. Any amendment to this Section 5.3 that amends or removes the requirement of cause for the removal of Trustees shall not apply to or affect in any respect the applicability of the preceding sentence with respect to any Trustee in office at the time of such amendment.

 

Section 5.4  Determinations by Board.  The determination as to any of the following matters, made by or pursuant to the direction of the Board of Trustees shall be final and conclusive and shall be binding upon the Trust and every holder of Shares:  the amount of the net income of the Trust for any period and the amount of assets at any time legally available for the payment of dividends, acquisition of Shares or the payment of other distributions on Shares; the amount of paid-in surplus, net assets, other surplus, cash flow, funds from operations, adjusted funds from operations, net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); any interpretation or resolution of any ambiguity with respect to any provision of the Declaration of Trust (including any of the terms, preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of any shares of any class or series of Shares) or of the Bylaws; the number of Shares of any class or series of the Trust; the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Trust or of any Shares of the Trust; any matter relating to the acquisition, holding and disposition of any assets by the Trust; any interpretation of the terms and conditions

 

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of one or more agreements with any person, corporation, association, company, trust, partnership (limited or general) or other organization; the compensation of Trustees, officers, employees or agents of the Trust; or any other matter relating to the business and affairs of the Trust or required or permitted by applicable law, the Declaration of Trust or Bylaws or otherwise to be determined by the Board of Trustees.

 

Section 5.5  Business Opportunities.

 

(a)                                 The Trust shall have the power to renounce, by resolution of the Board of Trustees, any interest or expectancy of the Trust in, or in being offered an opportunity to participate in, business opportunities or classes or categories of business opportunities that are (i) presented to the Trust or (ii) developed by or presented to one or more Trustees or officers of the Trust.

 

(b)                                 If any Trustee of the Trust who is also a trustee, officer, employee or agent of Vornado Realty Trust, a Maryland real estate investment trust (“Vornado”), or any of Vornado’s affiliates (each such Trustee, a “Covered Person”), acquires knowledge of a potential business opportunity, the Trust renounces, on its behalf and on behalf of its subsidiaries, any potential interest or expectation in, or right to be offered or to participate in, such business opportunity to the maximum extent permitted from time to time by Maryland law.  Accordingly, to the maximum extent permitted from time to time by Maryland law, (i) no Covered Person is required to present, communicate or offer any business opportunity to the Trust or any of its subsidiaries and (ii) any Covered Person, on his or her own behalf or on behalf of Vornado or any affiliate of Vornado, shall have the right to hold and exploit any business opportunity, or to direct, recommend, offer, sell, assign or otherwise transfer such business opportunity to any person or entity other than the Trust and its subsidiaries.

 

The taking by a Covered Person for himself or herself, or the offering or other transfer to another person or entity, of any potential business opportunity, shall not constitute or be construed or interpreted as (i) an act or omission of the Trustee committed in bad faith or as the result of active or deliberate dishonesty or (ii) receipt by the Covered Person of an improper

 

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benefit or profit in money, property, services or otherwise.

 

ARTICLE VI

 

SHARES OF BENEFICIAL INTEREST

 

Section 6.1  Authorized Shares.  The beneficial interest of the Trust shall be divided into shares of beneficial interest (the “Shares”).   The Trust has authority to issue                      common shares of beneficial interest, par value $0.01 per share (“Common Shares”), and                      preferred shares of beneficial interest, par value $0.01 per share (“Preferred Shares”). If shares of one class are classified or reclassified into shares of another class of shares pursuant to this Article VI, the number of authorized shares of the former class shall be automatically decreased and the number of shares of the latter class shall be automatically increased, in each case by the number of shares so classified or reclassified, so that the aggregate number of shares of beneficial interest of all classes that the Trust has authority to issue shall not be more than the total number of shares of beneficial interest set forth in the second sentence of this paragraph.  The Board of Trustees, with the approval of a majority of the entire Board and without any action by the shareholders of the Trust, may amend the Declaration of Trust from time to time to increase or decrease the aggregate number of Shares or the number of Shares of any class or series that the Trust has authority to issue.

 

Section 6.2  Common Shares.  Subject to the provisions of Article VII and except as may otherwise be specified in the Declaration of Trust, each Common Share shall entitle the holder thereof to one vote on each matter upon which holders of Common Shares are entitled to vote.  The Board of Trustees may reclassify any unissued Common Shares from time to time into one or more classes or series of Shares.

 

Section 6.3  Preferred Shares.  The Board of Trustees may classify any unissued Preferred Shares and reclassify any previously classified but unissued Preferred Shares of any series from time to time, into one or more series of Shares.

 

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Section 6.4  Classified or Reclassified Shares.  Prior to issuance of classified or reclassified Shares of any class or series, the Board of Trustees by resolution shall (a) designate that class or series to distinguish it from all other classes and series of Shares; (b) specify the number of Shares to be included in the class or series; (c) set, subject to the provisions of Article VII and subject to the express terms of any class or series of Shares outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series; and (d) cause the Trust to file articles supplementary with the State Department of Assessments and Taxation of Maryland (the “SDAT”).  Any of the terms of any class or series of Shares set pursuant to clause (c) of this Section 6.4 may be made dependent upon facts ascertainable outside the Declaration of Trust (including the occurrence of any event, including a determination or action by the Trust or any other person or body) and may vary among holders thereof, provided that the manner in which such facts or variations shall operate upon the terms of such class or series of Shares is clearly and expressly set forth in the articles supplementary filed with the SDAT.

 

Section 6.5  Authorization by Board of Share Issuance.  The Board of Trustees may authorize the issuance from time to time of Shares of any class or series, whether now or hereafter authorized, or securities or rights convertible into Shares of any class or series, whether now or hereafter authorized, for such consideration (whether in cash, property, past or future services, obligation for future payment or otherwise) as the Board of Trustees may deem advisable (or without consideration in the case of a Share split or Share dividend), subject to such restrictions or limitations, if any, as may be set forth in the Declaration of Trust or the Bylaws.

 

Section 6.6  Dividends and Other Distributions.  The Board of Trustees may from time to time authorize, and cause the Trust to declare to shareholders, such dividends or other distributions, in cash or other assets of the Trust or in securities of the Trust or from any other source as the Board of Trustees in its discretion shall determine.  The Board of Trustees shall endeavor to cause the Trust to declare and pay such dividends and other distributions as shall be

 

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necessary for the Trust to qualify under the Code as a REIT; however, shareholders shall have no right to any dividend or distribution unless and until authorized by the Board and declared by the Trust.  The exercise of the powers and rights of the Board of Trustees pursuant to this Section 6.6 shall be subject to the provisions of any class or series of Shares at the time outstanding.  Notwithstanding any other provision in the Declaration of Trust, no determination shall be made by the Board of Trustees nor shall any transaction be entered into by the Trust which would cause any Shares or other beneficial interest in the Trust not to constitute “transferable shares” or “transferable certificates of beneficial interest” under Section 856(a)(2) of the Code or which would cause any distribution to constitute a preferential dividend as described in Section 562(c) of the Code.

 

Section 6.7  General Nature of Shares.  All Shares shall be personal property entitling the shareholders only to those rights provided in the Declaration of Trust.  The shareholders shall have no interest in the property of the Trust and shall have no right to compel any partition, division, dividend or distribution of the Trust or of the property of the Trust.  The death of a shareholder shall not terminate the Trust or give his or her legal representatives any rights against other shareholders, the Trustees or the property of the Trust.  The Trust is entitled to treat as shareholders only those persons in whose names Shares are registered as holders of Shares on the beneficial interest ledger of the Trust.

 

Section 6.8  Fractional Shares.  The Trust may, without the consent or approval of any shareholder, issue fractional Shares, eliminate a fraction of a Share by rounding up or down to a full Share, arrange for the disposition of a fraction of a Share by the person entitled to it, or pay cash for the fair value of a fraction of a Share.

 

Section 6.9  Declaration and Bylaws.  The rights of all shareholders and the terms of all Shares are subject to the provisions of the Declaration of Trust and the Bylaws.

 

Section 6.10  Divisions and Combinations of Shares.  Subject to an express provision to the contrary in the terms of any class or series of beneficial interest hereafter authorized, the Board of Trustees shall have the power to divide or combine the outstanding

 

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shares of any class or series of beneficial interest, without a vote of shareholders, so long as the number of shares combined into one share in any such combination or series of combinations within any period of twelve months is not greater than ten.

 

ARTICLE VII

 

RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

 

Section 7.1  Definitions.  For the purposes of this Article VII, the following terms shall have the following meanings:

 

“Adoption Date” shall mean the first date on which Vornado, distributes to holders of common shares of beneficial interest in Vornado all of the Equity Shares then owned by Vornado.

 

“Beneficial Ownership” shall mean ownership of Equity Shares either directly or constructively through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code.  The terms “Beneficial Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.

 

“Beneficiary” shall mean one or more beneficiaries of the Special Trust as determined pursuant to Section 7.3.6.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

“Constructive Ownership” shall mean ownership of Equity Shares either directly or constructively through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code.  The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.

 

“Constructive Ownership Limit” shall mean 9.8% (in value or in number of shares, whichever is more restrictive), or such other percentage determined by the Board in accordance with Section 7.2.8, of the outstanding Equity Shares of any class or series.

 

“Equity Shares” shall mean Shares of any class or series, including, without limitation, Common Shares and Preferred Shares.

 

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“Market Price” shall mean the last reported sales price of Equity Shares of the relevant class or series reported on the New York Stock Exchange on the trading day immediately preceding the relevant date, or if the Equity Shares of the relevant class or series are not then traded on the New York Stock Exchange, the last reported sales price of Equity Shares of the relevant class or series on the trading day immediately preceding the relevant date, as reported on any other exchange or quotation system over which the Equity Shares of the relevant class or series may be traded, or if the Equity Shares of the relevant class or series are not then traded over any exchange or quotation system, then the market price of the Equity Shares of the relevant class or series on the relevant date as determined by the Board.

 

“Ownership Limit” shall mean 9.8% (in value or in number of shares, whichever is more restrictive), or such other percentage determined by the Board in accordance with Section 7.2.8, of the outstanding Equity Shares of any class or series.

 

“Ownership Limitation Termination Date” shall mean, with respect to any or all of the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfer of Equity Shares set forth herein, the first day after the Adoption Date on which the Board of Trustees determines that it is no longer in the best interests of the Trust to attempt to, or continue to, qualify as a REIT or that compliance with such restriction or limitation on Beneficial Ownership, Constructive Ownership or Transfer of Equity Shares is no longer required in order for the Trust to qualify as a REIT.

 

“Person” shall mean an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity or any government or agency or political subdivision thereof and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, but does not include an underwriter which participates in a

 

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public offering of Equity Shares for a period of 25 days following the purchase by such underwriter of those Equity Shares.

 

“Prohibited Owner” shall mean with respect to any purported Transfer or other event, any Person that, but for the provisions of Section 7.2.2, would have Beneficially Owned or Constructively Owned the Equity Shares that were transferred to a Special Trust and, if appropriate in the context, shall also mean any Person who would have been the record owner of the Equity Shares that the Prohibited Owner would have so owned.

 

“Special Trust” shall mean any trust provided for in Section 7.3.

 

“Special Trustee” shall mean the Person unaffiliated with the Trust and the Prohibited Owner that is appointed by the Trust to serve as trustee of the Special Trust.

 

“Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of Equity Shares (including (i) the granting of any option or entering into any agreement for the sale, transfer or other disposition of Equity Shares or (ii) the sale, transfer, assignment or other disposition of any securities or rights convertible into or exchangeable for Equity Shares), whether voluntary or involuntary, whether of record or beneficially and whether by operation of law or otherwise.

 

Section 7.2  Equity Shares.

 

Section 7.2.1  Restrictions on Ownership and Transfer.

 

(a)                                 Except as provided in Section 7.2.8(a)(ii), from the Adoption Date and prior to the Ownership Limitation Termination Date, no Person shall Beneficially Own Equity Shares of any class or series in excess of the Ownership Limit with respect to Equity Shares of such class or series and no Person shall Constructively Own Equity Shares of any class or series in excess of the Constructive Ownership Limit with respect to Equity Shares of such class or series.

 

(b)                                 Except as provided in Section 7.2.8(a)(ii), from the Adoption Date and prior to the Ownership Limitation Termination Date, any Transfer that, if effective, would result in any Person Beneficially Owning Equity Shares of any class or series in

 

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excess of the Ownership Limit with respect to Equity Shares of such class or series shall be void ab initio as to the Transfer of such Equity Shares that would be otherwise Beneficially Owned by such Person in excess of such Ownership Limit; and the intended transferee shall acquire no rights to such Equity Shares.

 

(c)                                  Except as provided in Section 7.2.8(a)(ii), from the Adoption Date and prior to the Ownership Limitation Termination Date, any Transfer that, if effective, would result in any Person Constructively Owning Equity Shares of any class or series in excess of the Constructive Ownership Limit with respect to Equity Shares of such class or series shall be void ab initio as to the Transfer of such Equity Shares that would be otherwise Constructively Owned by such Person in excess of such Constructive Ownership Limit; and the intended transferee shall acquire no rights in such Equity Shares.

 

(d)                                 From the Adoption Date and prior to the Ownership Limitation Termination Date, any Transfer that, if effective, would result in Equity Shares being beneficially owned by fewer than 100 Persons (within the meaning of Section 856(a)(5) of the Code and the Treasury Regulations promulgated thereunder)  shall be void ab initio as to the Transfer of such Equity Shares that would be otherwise Beneficially Owned by the transferee; and the intended transferee shall acquire no rights in such Equity Shares.

 

(e)                                  From the Adoption Date and prior to the Ownership Limitation Termination Date, any Transfer that, if effective, would result in the Trust being “closely held” (within the meaning of Section 856(h) of the Code) or otherwise failing to qualify as a REIT, shall be void ab initio as to the Transfer of the Equity Shares that would cause the Trust to be “closely held” (within the meaning of Section 856(h) of the Code) or otherwise fail to qualify as a REIT (including, but not limited to, Beneficial Ownership or Constructive Ownership that would result in the Trust owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Trust from such tenant would cause the Trust to fail to satisfy any of the gross income requirements of

 

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Section 856(c) of the Code); and the intended transferee shall acquire no rights in such Equity Shares.

 

(f)                                   From the Adoption Date and prior to the Ownership Limitation Termination Date, no Person shall Beneficially Own or Constructively Own Equity Shares of any class or series that would cause the Trust to be “closely held” (within the meaning of Section 856(h) of the Code) or otherwise fail to qualify as a REIT (including, but not limited to, Beneficial Ownership or Constructive Ownership that would result in the Trust owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by the Trust from such tenant would cause the Trust to fail to satisfy any of the gross income requirements of Section 856(c) of the Code).

 

Section 7.2.2  Transfer of Equity Shares to Special Trust.

 

(a)                                 If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, there is a purported or attempted Transfer that, if effective, would cause any Person to Beneficially Own Equity Shares of any class or series in excess of the Ownership Limit with respect to Equity Shares of such class or series, then, except as otherwise provided in Section 7.2.8(a)(ii), the Equity Shares that would have been Beneficially Owned in excess of such Ownership Limit (rounded up to the nearest whole Share) shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of the purported or attempted Transfer.

 

(b)                                 If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, there is a purported or attempted Transfer that, if effective, would cause any Person to Constructively Own Equity Shares of any class or series in excess of the Constructive Ownership Limit with respect to Equity Shares of such class or series, then, except as otherwise provided in Section 7.2.8(a)(ii), the Equity Shares that would have been Constructively Owned in excess of such Constructive Ownership Limit (rounded up to the nearest whole Share) shall be

 

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transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of the purported or attempted Transfer.

 

(c)                                  If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, there is a purported or attempted Transfer that, if effective, would cause the Trust to become “closely held” (within the meaning of Section 856(h) of the Code) or otherwise fail to qualify as a REIT, then the Equity Shares being Transferred that would have caused the Trust to become “closely held” (within the meaning of Section 856(h) of the Code) or otherwise fail to qualify as a REIT (rounded up to the nearest whole share) shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of the purported or attempted Transfer.

 

(d)                                 If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, any Person (the “Beneficial Purchaser”) purchases or otherwise acquires an interest in a Person that Beneficially Owns Equity Shares (the “Beneficial Purchase”) and, as a result, the Beneficial Purchaser would Beneficially Own Equity Shares of any class or series in excess of the Ownership Limit with respect to Equity Shares of such class or series, then, except as otherwise provided in Section 7.2.8(a)(ii), such number of Equity Shares, the acquisition of Beneficial Ownership of which would cause the Beneficial Purchaser to Beneficially Own Equity Shares in excess of such Ownership Limit (rounded up to the nearest whole Share), shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of the Beneficial Purchase.  In determining which Equity Shares are so transferred to a Special Trust, Equity Shares Beneficially Owned by the Beneficial Purchaser prior to the Beneficial Purchase shall be transferred to the Special Trust before any Equity Shares Beneficially Owned by the Person, an interest in which is being so purchased or acquired, are so transferred.

 

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(e)                                  If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, any Person (the “Constructive Purchaser”) purchases or otherwise acquires an interest in a Person that Constructively Owns Equity Shares (the “Constructive Purchase”) and, as a result, the Constructive Purchaser would Constructively Own Equity Shares of any class or series in excess of the Constructive Ownership Limit with respect to Equity Shares of such class or series, then, except as otherwise provided in Section 7.2.8(a)(ii), such number of Equity Shares, the acquisition of Constructive Ownership of which would cause the Constructive Purchaser to Constructively Own Equity Shares in excess of such Constructive Ownership Limit (rounded up to the nearest whole Share), shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of the Constructive Purchase.  In determining which Equity Shares are so transferred to a Special Trust, Equity Shares Constructively Owned by the Constructive Purchaser prior to the Constructive Purchase shall be transferred to the Special Trust before any Equity Shares Constructively Owned by the Person, an interest in which is being so purchased or acquired, are so transferred.

 

(f)                                   If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, there is a redemption, repurchase, restructuring or similar transaction with respect to a Person that Beneficially Owns Equity Shares (the “Beneficial Entity”) and, as a result, any Person holding a direct or indirect interest in the Beneficial Entity would Beneficially Own Equity Shares of any class or series in excess of the Ownership Limit with respect to Equity Shares of such class or series, then, except as otherwise provided in Section 7.2.8(a)(ii), such number of Equity Shares, the Beneficial Ownership of which by the Beneficial Entity would cause such Person to Beneficially Own Equity Shares in excess of such Ownership Limit (rounded up to the nearest whole Share), shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of such redemption, repurchase, restructuring or similar transaction.  In determining which Equity Shares are so

 

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transferred to a Special Trust, Equity Shares of the relevant class or series Beneficially Owned by the Beneficial Entity shall be transferred to the Special Trust before any Equity Shares Beneficially Owned by the Person holding an interest in the Beneficial Entity (independently of such Person’s interest in the Entity) are so transferred.

 

(g)                                  If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, there is a redemption, repurchase, restructuring or similar transaction with respect to a Person that Constructively Owns Equity Shares (the “Constructive Entity”) and, as a result, any Person holding a direct or indirect interest in the Constructive Entity would Constructively Own Equity Shares of any class or series in excess of the Constructive Ownership Limit with respect to Equity Shares of such class or series, then, except as otherwise provided in Section 7.2.8(a)(ii), such number of Equity Shares, the Constructive Ownership of which by the Constructive Entity would cause such Person to Constructively Own Equity Shares in excess of such Constructive Ownership Limit (rounded up to the nearest whole Share), shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of such redemption, repurchase, restructuring or similar transaction.  In determining which Equity Shares are so transferred to a Special Trust, Equity Shares of the relevant class or series Constructively Owned by the Constructive Entity shall be transferred to the Special Trust before any Equity Shares Constructively Owned by the Person holding an interest in the Constructive Entity (independently of such Person’s interest in the Entity) are so transferred.

 

(h)                                 If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, an event, other than an event described in Sections 7.2.2(a) through (g), occurs that would, if effective, result in any Person Constructively Owning Equity Shares of any class or series in excess of the Constructive Ownership Limit with respect to Equity Shares of such class or series, then, except as otherwise provided in Section 7.2.8(a)(ii), the smallest whole number of Equity Shares of such class or series Constructively Owned by such Person which, if transferred

 

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to a Special Trust, would result in such Person’s Constructive Ownership of Equity Shares not being in excess of such Constructive Ownership Limit, shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of the relevant event.

 

(i)                                     If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, an event, other than an event described in Sections 7.2.2(a) through (g), occurs that would, if effective, result in any Person Beneficially Owning Equity Shares of any class or series in excess of the Ownership Limit with respect to Equity Shares of such class or series, then, except as otherwise provided in Section 7.2.8(a)(ii), the smallest whole number of Equity Shares of such class or series Beneficially Owned by such Person which, if transferred to a Special Trust, would result in such Person’s Beneficial Ownership of Equity Shares not being in excess of such Ownership Limit, shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of the relevant event.

 

(j)                                    If, notwithstanding the other provisions contained in this Article VII, at any time from the Adoption Date and prior to the Ownership Limitation Termination Date, an event, other than an event described in Sections 7.2.2(a) through (g), occurs that, if effective, would cause the Trust to become “closely held” (within the meaning of Section 856(h) of the Code) or otherwise fail to qualify as a REIT, then the Equity Shares that would have caused the Trust to become “closely held” (within the meaning of Section 856(h) of the Code) or otherwise fail to qualify as a REIT (rounded up to the nearest whole share) shall be transferred automatically to a Special Trust, effective as of the close of business on the business day prior to the date of the event that would have caused such violation.

 

(k)                                 To the extent that, upon a transfer of Equity Shares pursuant to this Section 7.2.2, a violation of any provision of this Article VII would nonetheless be continuing (for example, where the ownership of Equity Shares by a single Special Trust would violate the restrictions in Section 7.2.1(d)), then Equity Shares may be transferred to that

 

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number of Special Trusts, each having a distinct Special Trustee and Beneficiary or Beneficiaries that are distinct from those of each other Special Trust, such that no violation of this Article VII results.

 

(l)                                     In determining which Equity Shares are to be transferred to a Special Trust in accordance with this Section 7.2.2, Equity Shares shall be so transferred to the Special Trust in such a manner as minimizes the aggregate value of the Equity Shares that are transferred to the Special Trust and, to the extent not inconsistent herewith, on a pro rata basis.

 

Section 7.2.3  Remedies For Breach.  If the Board of Trustees or its designees shall at any time determine that a Transfer has taken place in violation of Section 7.2.1 or that a Person intends to acquire or has attempted to acquire beneficial ownership (determined under the principles of Section 856(a)(5) of the Code), Beneficial Ownership or Constructive Ownership of any Equity Shares in violation of Section 7.2.1, the Board of Trustees or its designees may take such action as it deems advisable to refuse to give effect or to prevent such Transfer (or any Transfer related to such intent), including, but not limited to, refusing to give effect to such Transfer on the books of the Trust or instituting proceedings to enjoin such Transfer; provided, however, that any Transfers or attempted Transfers in violation of Sections 7.2.1(a) through (c) or Section 7.2.1(e) shall automatically result in the transfer to a Special Trust as provided in Section 7.2.2, irrespective of any action (or non-action) by the Board of Trustees.

 

Section 7.2.4  Notice of Ownership or Attempted Ownership in Violation of Section 7.2.1.  Any Person who acquires or attempts to acquire Beneficial or Constructive Ownership of Equity Shares in violation of Section 7.2.1, shall immediately give written notice to the Trust of such event or, in the case of such a proposed or attempted acquisition, give at least 15 days’ prior written notice, and shall provide to the Trust such other information as the Trust may request in order to determine the effect, if any, of such acquisition or attempted acquisition on the Trust’s status as a REIT.

 

Section 7.2.5  Owners Required to Provide Information.  From the Adoption Date and prior to the Ownership Limitation Termination Date:

 

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(a)                                 Every Beneficial Owner and Constructive Owner of more than 1.0% (or such lower percentage as required by the Code or the Treasury Regulations promulgated thereunder) of the outstanding Equity Shares of any class or series shall, within 30 days after January 1 of each year, give written notice to the Trust stating the name and address of such Beneficial Owner or Constructive Owner, the number of Equity Shares Beneficially Owned and/or Constructively Owned, and a description of how such Equity Shares are held.  Each such Beneficial Owner and Constructive Owner shall provide to the Trust such additional information as the Trust may request in order to determine the effect, if any, of such Beneficial Ownership and/or Constructive Ownership on the Trust’s status as a REIT and to ensure compliance with the Ownership Limit and the Constructive Ownership Limit.

 

(b)                                 Each Person who is a Beneficial Owner or Constructive Owner of Equity Shares and each Person (including the shareholder of record) who is holding Equity Shares for a Beneficial Owner or Constructive Owner shall provide to the Trust such information as the Trust may request in order to determine the Trust’s status as a REIT or to comply with regulations promulgated under the REIT provisions of the Code or the requirements of any other taxing authority or governmental authority, or to determine such compliance.

 

Section 7.2.6  Remedies Not Limited.  Subject to Section 5.1, nothing contained in this Article VII shall limit the power of the Board of Trustees to take such other action as it deems necessary or advisable to preserve the Trust’s status as a REIT.

 

Section 7.2.7  AmbiguityIn the case of an ambiguity in the application of any of the provisions of this Article VII, including any definition contained in Section 7.1 and any ambiguity with respect to which Equity Shares are transferred to a Special Trust in a given situation, the Board of Trustees shall have the power to determine the application of the provisions of this Article VII with respect to any situation based on the facts known to it. In the event Section 7.2 or 7.3 requires an action by the Board of Trustees and the Declaration of Trust fails to provide specific guidance with respect to such action, the Board of Trustees may

 

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determine the action to be taken so long as such action is not contrary to the provisions of Sections 7.1, 7.2 or 7.3.

 

Section 7.2.8  Modifications of Ownership Limit.

 

(a)                                 The Board of Trustees may from time to time, prospectively or retroactively, (i) increase or decrease the Ownership Limit and/or the Constructive Ownership Limit with respect to one or more classes or series of Equity Shares for one or more Persons and increase or decrease the Ownership Limit and the Constructive Ownership Limit with respect to one or more classes or series of Equity Shares for all other Persons and (ii) exempt one or more Persons from the Ownership Limit and Constructive Ownership Limit, as the case may be, with respect to a class or series of Equity Shares, if in each case the Board of Trustees obtains such representations, covenants and undertakings as the Board of Trustees may deem appropriate in order to conclude that increasing or decreasing the Ownership Limit or the Constructive Ownership Limit or granting the exemption, as the case may be, will not cause the Trust to lose its status as a REIT under the Code.

 

(b)                             Prior to modifications or exemptions of any Ownership Limit or Constructive Ownership Limit pursuant to this Section 7.2.8, the Board of Trustees may require such opinions of counsel, affidavits, undertakings or agreements or a ruling from the Internal Revenue Service as it may deem necessary or advisable in order to determine or ensure the Trust’s status as a REIT, and any such modification or exemption may be subject to such conditions or restrictions as the Board may impose.

 

(c)                                  No decreased Ownership Limit or Constructive Ownership Limit will be effective for any Person whose percentage of ownership of Equity Shares is in excess of such decreased Ownership Limit or Constructive Ownership Limit, as applicable, until such time as such Person’s percentage of ownership of Equity Shares equals or falls below the decreased Ownership Limit or Constructive Ownership Limit (the “Reduced Limit Trigger”); provided, however, until the Reduced Limit Trigger occurs, such Person (other than a Person for whom an exemption has been granted pursuant to Section 7.2.8(a)(ii)) shall not be entitled to

 

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make any further acquisition of Equity Shares to the extent such acquisition would result in such Person Beneficially Owning or Constructively Owning in excess of the lesser of (i) the number of Equity Shares owned by such Person on the date the adoption of the decreased Ownership Limit or Constructive Ownership Limit or (ii) if, after the adoption of such decreased Ownership Limit or Constructive Ownership Limit, such Person Transfers Equity Shares, the number of Equity Shares owned by such Person after such Transfer or Transfers, and such acquisition in excess of the lesser of (i) or (ii) above shall be a violation of the Ownership Limit or Constructive Ownership Limit.

 

Section 7.2.9  Legend.  (a) Each certificate for Equity Shares, if certificated, or the notice in lieu of a certificate, if any, shall bear substantially the following legend:

 

The Equity Shares evidenced by this certificate are subject to restrictions on transfer and ownership for the purpose, among others, of the Trust’s maintenance of its status as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”).  Subject to certain further restrictions and except as expressly provided in the Trust’s Declaration of Trust, (i) no Person may Beneficially Own Equity Shares in excess of the Ownership Limit; (ii) no Person may Constructively Own Equity Shares in excess of the Constructive Ownership Limit; (iii) no Person may Transfer Equity Shares if such Transfer would result in the Equity Shares of the Trust being owned by fewer than 100 Persons; and (iv) no Person may Transfer Equity Shares if such Transfer would result in the Trust being “closely held” under Section 856(h) of the Code or otherwise cause the Trust to fail to qualify as a REIT.  Any Person who Beneficially or Constructively Owns or attempts to Beneficially or Constructively Own Equity Shares which causes or will cause a Person to Beneficially or Constructively Own Equity Shares in excess or in violation of the above limitations must immediately notify the Trust.  Attempted Transfers in violation of the restrictions described above will be void ab initio, and if the Beneficial Ownership, Constructive Ownership or Transfer of the Equity Shares represented hereby violates the restrictions on transfer or ownership set forth in clauses (i), (ii) or (iv), the Equity Shares represented hereby will be automatically transferred to a Special Trust for the benefit of one or more Beneficiaries.  In addition, the Trust may redeem Equity Shares upon the terms and

 

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conditions specified by the Board of Trustees in its sole and absolute discretion if the Board of Trustees determines that ownership or a Transfer or other event may violate the restrictions described above.  All capitalized terms in this legend have the meanings set forth in the Declaration of Trust, a copy of which, including the restrictions on transfer and ownership, will be furnished to each holder of Equity Shares of the Trust on request and without charge.  Requests for such a copy may be directed to the Secretary of the Trust at its principal office.

 

Instead of the foregoing legend, a certificate or notice in lieu of a certificate may state that the Trust will furnish a full statement about certain restrictions on transfer and ownership of the Equity Shares to a shareholder on request and without charge.

 

Section 7.3  Transfer of Equity Shares in Special Trust.

 

Section 7.3.1  Ownership in Trust.  The Equity Shares transferred to the Special Trust pursuant to Section 7.2.2 shall be held in trust by a Special Trustee for the exclusive benefit of one or more Beneficiaries.  The Special Trustee shall be appointed by the Trust and shall be a Person unaffiliated with the Trust and any Prohibited Owner.  Each Beneficiary shall be designated by the Trust as provided in Section 7.3.6.  Equity Shares so held in a Special Trust shall be issued and outstanding shares of beneficial interest in the Trust.  The Prohibited Owner shall have no rights in such Equity Shares.  The Prohibited Owner shall not benefit economically from ownership of any Equity Shares held in a Special Trust by the Special Trustee, shall have no rights to dividends or other distributions and shall not possess any rights to vote or other rights attributable to the Equity Shares held in the Special Trust.

 

Section 7.3.2  Dividend Rights.  The Special Trustee shall have all rights to dividends or other distributions with respect to Equity Shares held in a Special Trust, which rights shall be exercised for the exclusive benefit of the Beneficiary.  Any dividend or other distribution paid prior to the discovery by the Trust that the Equity Shares have been transferred to the Special Trustee shall be paid by the recipient of such dividend or other distribution to the Special Trustee upon demand and any dividend or other distribution authorized but unpaid shall

 

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be paid when due to the Special Trustee.  Any dividend or other distribution so paid to the Special Trustee shall be held in trust for the Beneficiary.

 

Section 7.3.3  Voting Rights.  The Special Trustee shall have all voting rights with respect to the Equity Shares held in a Special Trust, which rights shall be exercised for the exclusive benefit of the Beneficiary. The Prohibited Owner shall have no voting rights with respect to Equity Shares held in a Special Trust and, subject to Maryland law, effective as of the date that the Equity Shares have been transferred to the Special Trustee, the Special Trustee shall have the authority (at the Special Trustee’s sole and absolute discretion) (a) to rescind as void any vote cast by Prohibited Owner prior to the discovery by the Trust that the Equity Shares have been transferred to the Special Trustee and (b) to recast such vote; provided, however, that if the Trust has already taken irreversible trust action, then the Special Trustee shall not have the authority to rescind and recast such vote.  Notwithstanding the provisions of this Article VII, until the Trust has received notification that Equity Shares have been transferred into a Special Trust, the Trust shall be entitled to rely on its share transfer and other stockholder records for purposes of preparing lists of stockholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes and determining the other rights of stockholders.

 

Section 7.3.4  Sale of Equity Shares by Special Trustee.  Within 20 days of receiving notice from the Special Trust that Equity Shares have been transferred to a Special Trust, the Special Trustee shall sell such Equity Shares to a Person or Persons designated by the Special Trustee, whose ownership of the Equity Shares will not violate the ownership limitations set forth in Section 7.2.1. Upon such sale, the interest of the Beneficiary in the Equity Shares sold shall terminate and the Special Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Beneficiary as provided in this Section 7.3.4.  The Prohibited Owner shall receive the lesser of (i) the price such Prohibited Owner paid (or proposed to pay) for the Equity Shares, or if the transaction or event that caused the Equity Shares to be transferred to the Special Trust did not involve a purchase of such shares at Market Price, a price per share equal to

 

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the Market Price of such Equity Shares on the date of the event that resulted in the transfer to the Special Trust and (ii) the price per share received by the Special Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the Equity Shares. The Special Trustee may reduce the amount payable to the Prohibited Owner by the amount of dividends and distributions which have been paid to the Prohibited Owner and are owed by the Prohibited Owner to the Special Trustee pursuant to Section 7.3.2 of this Article VII.  Any net sales proceeds in excess of the amount payable to the Prohibited Owner and any other amounts held in the Special Trust with respect to such Equity Shares shall be immediately paid to the Beneficiary.  If, prior to the discovery by the Trust that Equity Shares have been transferred to the Special Trustee, such shares are sold by a Prohibited Owner, then (i) such shares shall be deemed to have been sold on behalf of the Special Trust and (ii) to the extent that the Prohibited Owner received an amount for such shares that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 7.3.4, such excess shall be paid to the Special Trustee upon demand.

 

Section 7.3.5  Purchase Right in Equity Shares.  Equity Shares transferred to a Special Trust shall be deemed to have been offered for sale to the Trust, or its designee, at a price per share equal to the lesser of (i) the price such Prohibited Owner paid (or proposed to pay) for the Equity Shares, or if the transaction or event that caused the Equity Shares to be transferred to the Special Trust did not involve a purchase of such shares at Market Price, a price per share equal to the Market Price of such Equity Shares on the date of the event that resulted in the transfer to the Special Trust and (ii) the Market Price on the date the Trust, or its designee, accepts such offer.  The Trust may reduce the amount so payable by the amount of dividends and other distributions which has been paid to the Prohibited Owner and is owed by the Prohibited Owner to the Special Trustee pursuant to Section 7.3.2 of this Article VII and pay the amount of such reduction to the Special Trustee for the benefit of the Beneficiary.  The Trust shall have the right to accept such offer until the Special Trustee has sold the shares held in the Special Trust pursuant to Section 7.3.4.  Upon such a sale to the Trust, the interest of the Beneficiary in the

 

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Equity Shares sold shall terminate and the Special Trustee shall distribute the net proceeds of the sale to the Prohibited Owner, and distribute any dividends or other distributions held by the Special Trustee with respect to such Equity Shares to the Beneficiary.

 

Section 7.3.6  Designation of Beneficiaries.  By written notice to the Special Trustee, the Trust shall designate one or more nonprofit organizations to be the Beneficiary of the interest in a Special Trust such that (i) the Equity Shares held in the Special Trust would not violate the restrictions set forth in Section 7.2.1(a) in the hands of such Beneficiary and (ii) each such organization must be described in Section 501(c)(3) of the Code and contributions to each such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.  Neither the failure of the Trust to make such designation nor the failure of the Trust to appoint the Special Trustee before the automatic transfer provided in Section 7.2.2 shall make such transfer ineffective, provided that the Trust thereafter makes such designation and appointment.

 

Section 7.4  Severability.  If any provision of this Article VII or any application of any such provision is determined to be invalid by any Federal or state court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.

 

Section 7.5  New York Stock Exchange Transactions.  Nothing in this Article VII, shall preclude the settlement of any transaction entered into through the facilities of the New York Stock Exchange.  The fact that the settlement of any transaction occurs shall not negate the effect of any other provision of this Article VII and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article VII.

 

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ARTICLE VIII

 

SHAREHOLDERS

 

Section 8.1  Meetings.  There shall be an annual meeting of the shareholders, to be held on proper notice at such time (after the delivery of the annual report) and location as shall be determined by or in the manner prescribed in the Bylaws, for the election of the Trustees, if required, and for the transaction of any other business within the powers of the Trust. Except as otherwise provided in the Declaration of Trust, special meetings of shareholders may be called in the manner provided in the Bylaws.  If there are no Trustees, the officers of the Trust shall promptly call a special meeting of the shareholders entitled to vote for the election of successor Trustees.  Any meeting may be adjourned and reconvened as the Trustees determine or as provided in the Bylaws.

 

Section 8.2  Voting Rights.  Subject to the provisions of any class or series of Shares then outstanding, the shareholders shall be entitled to vote only on the following matters: (a) election of Trustees as provided in Section 5.2 and the removal of Trustees as provided in Section 5.3; (b) amendment of the Declaration of Trust as provided in Article X; (c) termination of the Trust as provided in Section 12.2; (d) merger or consolidation of the Trust, to the extent a vote of the shareholders is required by Title 8; (e) the sale or disposition of substantially all of the property of the Trust, to the same extent as a stockholder of a Maryland corporation would be entitled to vote on such sale or disposition under the MGCL; and (e) such other matters with respect to which the Board of Trustees has adopted a resolution declaring that a proposed action is advisable and directing that the matter be submitted to the shareholders for approval or ratification.  Except with respect to the foregoing matters, no action taken by the shareholders at any meeting shall in any way bind the Board of Trustees.

 

Section 8.3  Preemptive and Appraisal Rights.  Except as may be provided by the Board of Trustees in setting the terms of classified or reclassified Shares pursuant to Section 6.4, or as may otherwise be provided by contract approved by the Board of Trustees, no holder of Shares shall, as such holder, have any preemptive right to purchase or subscribe for any

 

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additional Shares of the Trust or any other security of the Trust which it may issue or sell. Holders of shares of beneficial interest shall not be entitled to exercise any rights of an objecting shareholder provided for under Title 8 and Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board of Trustees, upon the affirmative vote of a majority of the Board of Trustees and upon such terms and conditions as may be specified by the Board of Trustees, shall determine that such rights apply, with respect to all or any classes or series of shares of beneficial interest, to one or more transactions occurring after the date of such determination in connection with which holders of such shares would otherwise be entitled to exercise such rights.  Notwithstanding the foregoing, in the event the Trust is subject to the Maryland Control Share Acquisition Act, holders of shares of beneficial interest shall be entitled to exercise rights of an objecting shareholder under Section 3-708(a) of the MGCL.

 

Section 8.4  Extraordinary Actions.  Notwithstanding any provision of law permitting or requiring any action to be taken or authorized by the affirmative vote of the holders of a greater number of votes, any such action shall be effective and valid if taken or approved by the affirmative vote of holders of Shares entitled to cast a majority of all the votes entitled to be cast on the matter.

 

Section 8.5  Board Approval.  The submission of any action of the Trust to the shareholders for their consideration shall first be approved by the Board of Trustees.

 

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Section 8.6  Action By Shareholders without a Meeting.  The Bylaws may provide that any action required or permitted to be taken by the shareholders may be taken without a meeting by the written consent of the shareholders entitled to cast the minimum number of votes that would be necessary to approve the matter at a meeting at which all Shares entitled to vote thereon were present and voted, as required by statute, the Declaration of Trust or the Bylaws, as the case may be.

 

ARTICLE IX

 

LIABILITY LIMITATION, INDEMNIFICATION

 

AND TRANSACTIONS WITH THE TRUST

 

Section 9.1  Limitation of Shareholder Liability.  No shareholder shall be liable for any debt, claim, demand, judgment or obligation of any kind of, against or with respect to the Trust by reason of his being a shareholder, nor shall any shareholder be subject to any personal liability whatsoever, in tort, contract or otherwise, to any person in connection with the property or the affairs of the Trust by reason of his being a shareholder.

 

Section 9.2  Limitation of Trustee and Officer Liability.  To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of trustees and officers of a real estate investment trust, no present or former Trustee or officer of the Trust shall be liable to the Trust or to any shareholder for money damages.  Neither the amendment nor repeal of this Section 9.2, nor the adoption or amendment of any other provision of the Declaration of Trust inconsistent with this Section 9.2, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.  No Trustee or officer of the Trust shall be liable to the Trust or to any shareholder for money damages except to the extent that (a) the Trustee or officer actually received an improper benefit or profit in money, property or services, for the amount of the benefit or profit in money, property or services actually received; or (b) a judgment or other final adjudication adverse to the Trustee or officer is entered in a proceeding based on a finding in the proceeding that the Trustee’s or officer’s action or failure to act was the result of

 

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active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding.

 

Section 9.3 Express Exculpatory Clauses in Instruments.  Neither the shareholders nor the Trustees, officers, employees or agents of the Trust shall be liable under any written instrument creating an obligation of the Trust, and all persons shall look solely to the property of the Trust for the payment of any claim under or for the performance of that instrument. The omission of the foregoing exculpatory language from any instrument shall not affect the validity of enforceability of such instrument and shall not render any shareholder, Trustee, officer, employee or agent liable thereunder to any third party, nor shall the Trustees or any officer, employee or agent of the Trust be liable to anyone for such omission.

 

Section 9.4  Indemnification.  To the maximum extent permitted by Maryland law in effect from time to time, the Trust shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former Trustee or officer of the Trust and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (b) any individual who, while a Trustee or officer of the Trust and at the request of the Trust, serves or has served as a director, trustee, officer, partner, member or manager of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.  The rights to indemnification and advance of expenses provided by this Declaration of Trust shall vest immediately upon election of a Trustee or officer. The Trust may, with the approval of its Board of Trustees, provide such indemnification and advance for expenses to an individual who served a predecessor of the Trust in any of the capacities described in (a) or (b) above and to any employee or agent of the Trust or a predecessor of the Trust.  The indemnification and payment or reimbursement of expenses provided in this Declaration of Trust shall not be deemed exclusive of or limit in any way other rights to which any person seeking

 

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indemnification or payment or reimbursement of expenses may be or may become entitled under any bylaw, resolution, insurance, agreement or otherwise.

 

Neither the amendment nor repeal of this Section 9.4, nor the adoption or amendment of any other provision of this Declaration of Trust inconsistent with this Section 9.4, shall apply to or affect in any respect the applicability of the preceding paragraph of this Section 9.4 with respect to any act or failure to act that occurred prior to such amendment, repeal or adoption.

 

Section 9.5  Transactions Between the Trust and its Trustees, Officers, Employees and Agents.  Subject to any express restrictions in the Declaration of Trust or adopted by the Trustees in the Bylaws or by resolution, the Trust may enter into any contract or transaction of any kind with any person, including any Trustee, officer, employee or agent of the Trust or any person affiliated with a Trustee, officer, employee or agent of the Trust, whether or not any of them has a financial interest in such transaction.

 

Section 9.6  Insurance.  The Trust may, to the fullest extent permitted by law, purchase and maintain insurance on behalf of any person described in the preceding paragraph against any liability which may be asserted against such person.

 

Section 9.7  No Limitation.  The indemnification provided herein shall not be deemed to limit the right of the Trust to indemnify any other person for any such expenses to the fullest extent permitted by law, nor shall it be deemed exclusive of any other rights to which any person seeking indemnification from the Trust may be entitled under any agreement, vote of shareholders or disinterested trustees, or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office.

 

ARTICLE X

 

AMENDMENTS

 

Section 10.1  General.  The Trust reserves the right from time to time to make any amendment to the Declaration of Trust, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the Declaration of Trust,

 

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of any Shares.  All rights and powers conferred by the Declaration of Trust on shareholders, Trustees and officers are granted subject to this reservation.  An amendment to the Declaration of Trust (a) shall be signed and acknowledged by at least a majority of the Trustees, or an officer duly authorized by at least a majority of the Trustees, (b) shall be filed for record as provided in Section 13.5 and (c) shall become effective as of the later of the time the SDAT accepts the amendment for record or the time established in the amendment, not to exceed 30 days after the amendment is accepted for record.  All references to the Declaration of Trust shall include all amendments thereto.

 

Section 10.2  By Trustees.  The Trustees may amend the Declaration of Trust from time to time, in the manner provided by Title 8, without any action by the shareholders, (i) to qualify under the Code as a REIT or as a real estate investment trust under Title 8, (ii) in any respect in which the charter of a corporation may be amended in accordance with Section 2-605 of the Corporations and Associations Article of the Annotated Code of Maryland and (iii) as otherwise provided in the Declaration of Trust.

 

Section 10.3  By Shareholders.  Except as otherwise provided in the Declaration of Trust, any amendment to the Declaration of Trust shall be valid only if approved by the affirmative vote of majority of all the votes entitled to be cast on the matter. Any amendment to Section 5.3 or to this sentence of the Declaration of Trust shall be valid only if approved by the affirmative vote of two thirds of all the votes entitled to be cast on the matter.

 

ARTICLE XI

 

MERGER, CONSOLIDATION OR SALE OF TRUST PROPERTY

 

Subject to the provisions of any class or series of Shares at the time outstanding, the Trust may (a) merge the Trust into another entity, (b) consolidate the Trust with one or more other entities into a new entity or (c) sell, lease, exchange or otherwise transfer all or substantially all of the property of the Trust. Any such action must be approved (a) by the Board of Trustees and (b) if a vote of shareholders is required by Title 8, after notice to all shareholders entitled to vote on the matter, by the affirmative vote of a majority of votes entitled to be cast on the matter.

 

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ARTICLE XII

 

DURATION AND TERMINATION OF TRUST

 

Section 12.1  Duration.  The Trust shall continue perpetually unless terminated pursuant to Section 12.2 or pursuant to any applicable provision of Title 8.

 

Section 12.2  Termination.

 

(a)           Subject to the provisions of any class or series of Shares at the time outstanding, after approval by a majority of the entire Board of Trustees, the Trust may be terminated at any meeting of shareholders, by the affirmative vote of a majority of all the votes entitled to be cast on the matter.  Upon the termination of the Trust:

 

(i)            The Trust shall carry on no business except for the purpose of winding up its affairs.

 

(ii)           The Trustees shall proceed to wind up the affairs of the Trust and all of the powers of the Trustees under the Declaration of Trust shall continue, including the powers to fulfill or discharge the Trust’s contracts, collect its assets, sell, convey, assign, exchange, transfer or otherwise dispose of all or any part of the remaining property of the Trust to one or more persons at public or private sale for consideration which may consist in whole or in part of cash, securities or other property of any kind, discharge or pay its liabilities and do all other acts appropriate to liquidate its business.  The Trustees may appoint any officer of the Trust or any other person to supervise the winding up of the affairs of the Trust and delegate to such officer or such person any or all powers of the Trustees in this regard.

 

(iii) After paying or adequately providing for the payment of all liabilities, and upon receipt of such releases, indemnities and agreements as they deem necessary for their protection, the Trust may distribute the remaining property of the Trust, in cash or in kind or partly each, among the shareholders so that after payment in full or the setting apart for payment of such preferential amounts, if any, to which the holders of any Shares at the time outstanding shall be entitled, the remaining property of the Trust shall, subject to any

 

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participating or similar rights of Shares  at the time outstanding, be distributed ratably among the holders of Common Shares at the time outstanding.

 

(b)           After termination of the Trust, the liquidation of its business and the distribution to the shareholders as herein provided, a majority of the Trustees shall execute and file with the Trust’s records a document certifying that the Trust has been duly terminated, and the Trustees shall be discharged from all liabilities and duties hereunder, and the rights and interests of all shareholders shall cease.

 

ARTICLE XIII

 

MISCELLANEOUS

 

Section 13.1  Governing Law.  The Declaration of Trust is executed by the undersigned Trustees and delivered in the State of Maryland with reference to the laws thereof, and the rights of all parties and the validity, construction and effect of every provision hereof shall be subject to and construed according to the laws of the State of Maryland without regard to conflicts of laws provisions thereof.

 

Section 13.2  Reliance by Third Parties.  Any certificate shall be final and conclusive as to any person dealing with the Trust if executed by the Secretary or an Assistant Secretary of the Trust or a Trustee, and if certifying to: (a) the number or identity of Trustees, officers of the Trust or shareholders; (b) the due authorization of the execution of any document; (c) the action or vote taken, and the existence of a quorum, at a meeting of the Board of Trustees or shareholders; (d) a copy of the Declaration of Trust or of the Bylaws as a true and complete copy as then in force; (e) an amendment to the Declaration of Trust; (f) the termination of the Trust; or (g) the existence of any fact  relating to the affairs of the Trust.  No purchaser, lender, transfer agent or other person shall be bound to make any inquiry concerning the validity of any transaction purporting to be made by the Trust on its behalf or by any officer, employee or agent of the Trust.

 

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Section 13.3  Severability.

 

(a)           The provisions of the Declaration of Trust are severable, and if the Board of Trustees shall determine, with the advice of counsel, that any one or more of such provisions (the “Conflicting Provisions”) are in conflict with the Code, Title 8 or other applicable federal or state laws, the Conflicting Provisions, to the extent of the conflict, shall be deemed never to have constituted a part of the Declaration of Trust, even without any amendment of the Declaration of Trust pursuant to Article X and without affecting or impairing any of the remaining provisions of the Declaration of Trust or rendering invalid or improper any action taken or omitted prior to such determination.  No Trustee shall be liable for making or failing to make such a determination.  In the event of any such determination by the Board of Trustees, the Board shall amend the Declaration of Trust in the manner provided in Section 10.2.

 

(b)           If any provision of the Declaration of Trust shall be held invalid or unenforceable in any jurisdiction, such holding shall apply only to the extent of any such invalidity or unenforceability and shall not in any manner affect, impair or render invalid or unenforceable such provision in any other jurisdiction or any other provision of the Declaration of Trust in any jurisdiction.

 

Section 13.4  Construction.  In the Declaration of Trust, unless the context otherwise requires, words used in the singular or in the plural include both the plural and singular and words denoting any gender include all genders.  The title and headings of different parts are inserted for convenience and shall not affect the meaning, construction or effect of the Declaration of Trust.  In defining or interpreting the powers and duties of the Trust and its Trustees and officers, reference may be made by the Trustees or officers, to the extent appropriate and not inconsistent with the Code or Title 8, to Titles 1 through 3 of the Corporations and Associations Article of the Annotated Code of Maryland.

 

Section 13.5  Recordation.  The Declaration of Trust and any amendment hereto shall be filed for record with the SDAT and may also be filed or recorded in such other places as the Trustees deem appropriate, but failure to file for record the Declaration of Trust or any

 

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amendment hereto in any office other than in the State of Maryland shall not affect or impair the validity or effectiveness of the Declaration of Trust or any amendment hereto.  A restated Declaration of Trust shall, upon filing, be conclusive evidence of all amendments contained therein and may thereafter be referred to in lieu of the original Declaration of Trust and the various amendments  thereto.

 

THIRD:  The amendment to and restatement of the Declaration of Trust of the Trust as hereinabove set forth have been duly advised by the Board of Trustees and approved by the shareholders of the Trust as required by law.

 

FOURTH:  The total number of shares of beneficial interest which the Trust had authority to issue immediately prior to this amendment and restatement was                             , consisting of                             Common Shares, $           par value per share and                          Preferred Shares, $           par value per share.  The aggregate par value of all shares of beneficial interest having par value was $                        .

 

FIFTH:  The total number of shares of beneficial interest which the Trust has authority to issue pursuant to the foregoing amendment and restatement of the Declaration of Trust is                         , consisting of                      Common Shares, $           par value per share, and                      Preferred Shares, $             par value per share.  The aggregate par value of all authorized shares of beneficial interest having par value is $                        .

 

The undersigned acknowledges these Articles of Amendment and Restatement to be the trust act of the Trust and as to all matters or facts required to be verified under oath, the undersigned acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

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IN WITNESS WHEREOF, the Trust has caused these Articles of Amendment and Restatement to be signed in its name and on its behalf by its President and attested to by its Secretary on this               day of                         , 20    .

 

 

ATTEST:

 

Urban Edge Properties

 

 

 

 

 

 

 

 

 

(SEAL)

Secretary

 

President

 

 

 

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(Back To Top)

Section 4: EX-3.2 (EX-3.2)


Exhibit 3.2

 

URBAN EDGE PROPERTIES

 

BYLAWS

 

ARTICLE I

 

OFFICES

 

Section 1.  PRINCIPAL OFFICE.  The principal office of the Trust in the State of Maryland shall be located at such place as the Board of Trustees may designate.

 

Section 2.  ADDITIONAL OFFICES.  The Trust may have additional offices, including a principal executive office, at such places as the Board of Trustees may from time to time determine or the business of the Trust may require.

 

ARTICLE II

 

MEETINGS OF SHAREHOLDERS

 

Section 1.  PLACE.  All meetings of shareholders shall be held at the principal executive office of the Trust or at such other place as shall be set in accordance with these Bylaws and stated in the notice of the meeting.

 

Section 2.  ANNUAL MEETING.  An annual meeting of shareholders for the election of trustees and the transaction of any business within the powers of the Trust shall be held on the date and at the time and place set by the Board of Trustees.

 

Section 3.  SPECIAL MEETINGS.   Each of the chairman of the board, chief executive officer, president and a majority of the Board of Trustees then in office shall have the exclusive power to call a special meeting of shareholders.  A special meeting of shareholders shall be held on the date and at the time and place set by the chairman of the board, chief executive officer, president or Board of Trustees, whoever has called the meeting.

 

Section 4.  NOTICE.  Not less than ten nor more than 90 days before each meeting of shareholders, the secretary shall give to each shareholder entitled to vote at such meeting and to each shareholder not entitled to vote who is entitled to notice of the meeting notice in writing or by electronic transmission stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, by mail, by presenting it to such shareholder personally, by leaving it at the shareholder’s residence or usual place of business or by any other means permitted by Maryland law.  If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the shareholder at the shareholder’s address as it appears on the records of the Trust, with postage thereon prepaid.  If transmitted electronically, such notice shall be deemed to be given when transmitted to the shareholder by an electronic transmission to any address or number of the shareholder at which the shareholder receives electronic transmissions. 

 



 

The Trust may give a single notice to all shareholders who share an address, which single notice shall be effective as to any shareholder at such address, unless such shareholder objects to receiving such single notice or revokes a prior consent to receiving such single notice.  Failure to give notice of any meeting to one or more shareholders, or any irregularity in such notice, shall not affect the validity of any meeting fixed in accordance with this Article II or the validity of any proceedings at any such meeting.

 

Subject to Section 12(a) of this Article II, any business of the Trust may be transacted at an annual meeting of shareholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice.  No business shall be transacted at a special meeting of shareholders except as specifically designated in the notice.  The Trust may postpone or cancel a meeting of shareholders by making a “public announcement” (as defined in Section 12(c)(3) of this Article II) of such postponement or cancellation prior to the meeting.  Notice of the date, time and place to which the meeting is postponed shall be given not less than ten days prior to such date and otherwise in the manner set forth in this section.

 

Section 5. ORGANIZATION AND CONDUCT.  Every meeting of shareholders shall be conducted by an individual appointed by the Board of Trustees to be chairman of the meeting or, in the absence of such appointment or appointed individual, by the chairman of the board or, in the case of a vacancy in the office or absence of the chairman of the board, by one of the following officers present at the meeting in the following order:  the vice chairman of the board, if there is one, the chief executive officer, the president, the vice presidents in their order of rank and seniority, the secretary or, in the absence of such officers, a chairman chosen by the shareholders by the vote of a majority of the votes cast by shareholders present in person or by proxy.  The secretary or, in the secretary’s absence, an assistant secretary, or, in the absence of both the secretary and assistant secretaries, an individual appointed by the Board of Trustees or, in the absence of such appointment, an individual appointed by the chairman of the meeting shall act as secretary.  In the event that the secretary presides at a meeting of shareholders, an assistant secretary or, in the absence of all assistant secretaries, an individual appointed by the Board of Trustees or the chairman of the meeting, shall record the minutes of the meeting.  The order of business and all other matters of procedure at any meeting of shareholders shall be determined by the chairman of the meeting.  The chairman of the meeting may prescribe such rules, regulations and procedures and take such action as, in the discretion of the chairman and without any action by the shareholders, are appropriate for the proper conduct of the meeting, including, without limitation, (a) restricting admission to the time set for the commencement of the meeting; (b) limiting attendance at the meeting to shareholders of record of the Trust, their duly authorized proxies and such other individuals as the chairman of the meeting may determine; (c) limiting participation at the meeting on any matter to shareholders of record of the Trust entitled to vote on such matter, their duly authorized proxies and other such individuals as the chairman of the meeting may determine; (d) limiting the time allotted to questions or comments; (e) determining when and for how long the polls should be opened and when the polls should be closed; (f) maintaining order and security at the meeting; (g) removing any shareholder or any other individual who refuses to comply with meeting procedures, rules or guidelines as set forth by the chairman of the meeting; (h) concluding a meeting or recessing or adjourning the meeting, whether or not a quorum is present, to a later date and time and at a place announced at the

 

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meeting; and (i) complying with any state and local laws and regulations concerning safety and security.  Unless otherwise determined by the chairman of the meeting, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.

 

Section 6.  QUORUM.  At any meeting of shareholders, the presence in person or by proxy of shareholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter shall constitute a quorum; but this section shall not affect any requirement under any statute or the Declaration of Trust of the Trust (the “Declaration of Trust”) for the vote necessary for the approval of any matter.  If such quorum is not established at any meeting of the shareholders, the chairman of the meeting may adjourn the meeting sine die or from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting.  At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.

 

The shareholders present either in person or by proxy, at a meeting which has been duly called and at which a quorum has been established, may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough shareholders to leave fewer than would be required to establish a quorum.

 

Section 7.  VOTING.  A plurality of all the votes cast at a meeting of shareholders duly called and at which a quorum is present shall be sufficient to elect a trustee. Each share may be voted for as many individuals as there are trustees to be elected and for whose election the share is entitled to be voted.  A majority of the votes cast at a meeting of shareholders duly called and at which a quorum is present shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the Declaration of Trust.  Unless otherwise provided by statute or by the Declaration of Trust, each outstanding share of beneficial interest, regardless of class, entitles the holder thereof to cast one vote on each matter submitted to a vote at a meeting of shareholders.  Voting on any question or in any election may be viva voce unless the chairman of the meeting shall order that voting be by ballot or otherwise.

 

Section 8.  PROXIES.  A holder of record of shares of beneficial interest of the Trust may cast votes in person or by proxy executed by the shareholder or by the shareholder’s duly authorized agent in any manner permitted by law.  Such proxy or evidence of authorization of such proxy shall be filed with the secretary of the Trust before or at the meeting.  No proxy shall be valid more than eleven months after its date unless otherwise provided in the proxy.

 

Section 9.  VOTING OF SHARES BY CERTAIN HOLDERS.  Shares of beneficial interest of the Trust registered in the name of a corporation, limited liability company, partnership, joint venture, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, managing member, manager, general partner or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such shares pursuant to a bylaw or a resolution of the

 

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governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such shares.  Any trustee or fiduciary, in such capacity, may vote shares of beneficial interest registered in such trustee’s or fiduciary’s name, either in person or by proxy.

 

Shares of beneficial interest of the Trust directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.

 

The Board of Trustees may adopt by resolution a procedure by which a shareholder may certify in writing to the Trust that any shares of beneficial interest registered in the name of the shareholder are held for the account of a specified person other than the shareholder.  The resolution shall set forth the class of shareholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date, the time after the record date within which the certification must be received by the Trust; and any other provisions with respect to the procedure which the Board of Trustees considers necessary or desirable.  On receipt by the Trust of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the holder of record of the specified shares of beneficial interest in place of the shareholder who makes the certification.

 

Section 10.  INSPECTORS.  The Board of Trustees or the chairman of the meeting may appoint, before or at the meeting, one or more inspectors for the meeting and any successor to the inspector.  Except as otherwise provided by the chairman of the meeting, the inspectors, if any, shall (i) determine the number of shares of beneficial interest represented at the meeting in person or by proxy and the validity and effect of proxies, (ii) receive and tabulate all votes, ballots or consents, (iii) report such tabulation to the chairman of the meeting, (iv) hear and determine all challenges and questions arising in connection with the right to vote, and (v) do such acts as are proper to fairly conduct the election or vote.  Each such report shall be in writing and signed by the inspector or by a majority of them if there is more than one inspector acting at such meeting.  If there is more than one inspector, the report of a majority shall be the report of the inspectors.  The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.

 

Section 11.  REPORTS TO SHAREHOLDERS.  The president or some other executive officer designated by the Board of Trustees shall prepare annually a full and correct statement of the affairs of the Trust, which shall include a balance sheet and a financial statement of operations for the preceding fiscal year.  The statement of affairs shall be submitted at the annual meeting of the shareholders and, within 20 days after the annual meeting of shareholders, placed on file at the principal office of the Trust.

 

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Section 12.  ADVANCE NOTICE OF SHAREHOLDER NOMINEES FOR TRUSTEE AND OTHER SHAREHOLDER PROPOSALS.

 

(a)                                 Annual Meetings of Shareholders.  (1) Nominations of individuals for election to the Board of Trustees and the proposal of other business to be considered by the shareholders may be made at an annual meeting of shareholders (i) pursuant to the Trust’s notice of meeting, (ii) by or at the direction of the Board of Trustees or (iii) by any shareholder of the Trust who was a shareholder of record both at the time of giving of notice by the shareholder as provided for in this Section 12(a) and at the time of the annual meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has complied with this Section 12(a).

 

(2)                                 For any nomination or other business to be properly brought before an annual meeting by a shareholder pursuant to clause (iii) of paragraph (a)(1) of this Section 12, the shareholder must have given timely notice thereof in writing to the secretary of the Trust and any such other business must otherwise be a proper matter for action by the shareholders.  To be timely, a shareholder’s notice shall set forth all information required under this Section 12 and shall be delivered to the secretary at the principal executive office of the Trust not earlier than the 150th day nor later than 5:00 p.m., Eastern Time, on the 120th day prior to the first anniversary of the date of the proxy statement (as defined in Section 12(c)(3) of this Article II) for the preceding year’s annual meeting; provided, however, that, in connection with the Trust’s first annual meeting or in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, in order for notice by the shareholder to be timely, such notice must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th day prior to the date of such annual meeting, as originally convened, or the tenth day following the day on which public announcement of the date of such meeting is first made.  The public announcement of a postponement or adjournment of an annual meeting shall not commence a new time period for the giving of a shareholder’s notice as described above.

 

(3)                                 Such shareholder’s notice shall set forth:

 

(i) as to each individual whom the shareholder proposes to nominate for election or reelection as a trustee (each, a “Proposed Nominee”), all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a trustee in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”);

 

(ii) as to any other business that the shareholder proposes to bring before the meeting, a description of such business, the shareholder’s reasons for proposing such business at the meeting and any material interest in such business of such shareholder or any Shareholder Associated Person (as defined below), individually or in the aggregate, including any anticipated benefit to the shareholder or the Shareholder Associated Person therefrom;

 

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(iii) as to the shareholder giving the notice, any Proposed Nominee and any Shareholder Associated Person,

 

(A) the class, series and number of all shares of beneficial interest or other securities of the Trust or any affiliate thereof (collectively, the “Company Securities”), if any, which are owned (beneficially or of record) by such shareholder, Proposed Nominee or Shareholder Associated Person, the date on which each such Company Security was acquired and the investment intent of such acquisition, and any short interest (including any opportunity to profit or share in any benefit from any decrease in the price of such shares or other security) in any Company Securities of any such person,

 

(B) the nominee holder for, and number of, any Company Securities owned beneficially but not of record by such shareholder, Proposed Nominee or Shareholder Associated Person,

 

(C) whether and the extent to which such shareholder, Proposed Nominee or Shareholder Associated Person, directly or indirectly (through brokers, nominees or otherwise), is subject to or during the last six months has engaged in any hedging, derivative or other transaction or series of transactions or entered into any other agreement, arrangement or understanding (including any short interest, any borrowing or lending of securities or any proxy or voting agreement), the effect or intent of which is to (I) manage risk or benefit of changes in the price of (x) Company Securities or (y) any security of any entity that was listed in the Peer Group in the Share Performance Graph in the most recent annual report to security holders of the Trust (a “Peer Group Company”) for such shareholder, Proposed Nominee or Shareholder Associated Person or (II) increase or decrease the voting power of such shareholder, Proposed Nominee or Shareholder Associated Person in the Trust or any affiliate thereof (or, as applicable, in any Peer Group Company) disproportionately to such person’s economic interest in the Company Securities (or, as applicable, in any Peer Group Company) and

 

(D) any substantial interest, direct or indirect (including, without limitation, any existing or prospective commercial, business or contractual relationship with the Trust), by security holdings or otherwise, of such shareholder, Proposed Nominee or Shareholder Associated Person, in the Trust or any affiliate thereof, other than an interest arising from the ownership of Company Securities where such shareholder, Proposed Nominee or Shareholder Associated Person receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class or series;

 

(iv) as to the shareholder giving the notice, any Shareholder Associated Person with an interest or ownership referred to in clauses (ii) or (iii) of this paragraph (3) of this Section 12(a) and any Proposed Nominee,

 

(A) the name and address of such shareholder, as they appear on the Trust’s share ledger, and the current name and business address, if different, of each such Shareholder Associated Person and any Proposed Nominee,

 

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(B) the investment strategy or objective, if any, of such shareholder and each such Shareholder Associated Person who is not an individual and a copy of the prospectus, offering memorandum or similar document, if any, provided to investors or potential investors in such shareholder and each such Shareholder Associated Person; and

 

(C) whether any such shareholder or any Shareholder Associated Person has received any financial assistance, funding or other consideration from any other person in respect of the nomination or such other business.

 

(v) the name and address of any person who contacted or was contacted by the shareholder giving the notice or any Shareholder Associated Person about the Proposed Nominee or other business proposal prior to the date of such shareholder’s notice; and

 

(vi) to the extent known by the shareholder giving the notice, the name and address of any other shareholder supporting the Proposed Nominee or the proposal of other business on the date of such shareholder’s notice.

 

(4)                                 Such shareholder’s notice shall, with respect to any Proposed Nominee, be accompanied by a certificate executed by the Proposed Nominee (i) certifying that such Proposed Nominee (a) is not, and will not become, a party to any agreement, arrangement or understanding with any person or entity other than the Trust in connection with service or action as a trustee that has not been disclosed to the Trust and (b) will serve as a trustee of the Trust if elected; and (ii) attaching a completed Proposed Nominee questionnaire (which questionnaire shall be provided by the Trust, upon request, to the shareholder providing the notice and shall include all information relating to the Proposed Nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the Proposed Nominee as a trustee in an election contest (even if an election contest is not involved), or would otherwise be required in connection with such solicitation in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act and the rules thereunder, or would be required pursuant to the rules of any national securities exchange on which any securities of the Trust are listed or over-the-counter market on which any securities of the Trust are traded).

 

(5)                                 Notwithstanding anything in this subsection (a) of this Section 12 to the contrary, in the event that the number of trustees to be elected to the Board of Trustees is increased, and there is no public announcement of such action at least 130 days prior to the first anniversary of the date of the proxy statement (as defined in Section 12(c)(3) of this Article II) for the preceding year’s annual meeting, a shareholder’s notice required by this Section 12(a) shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary at the principal executive office of the Trust not later than 5:00 p.m., Eastern Time, on the tenth day following the day on which such public announcement is first made by the Trust.

 

(6)                                 For purposes of this Section 12, “Shareholder Associated Person” of any shareholder shall mean (i) any person acting in concert with, such shareholder, (ii) any beneficial

 

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owner of shares of beneficial interest of the Trust owned of record or beneficially by such shareholder (other than a shareholder that is a depositary) and (iii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such shareholder or Shareholder Associated Person.

 

(b)                                 Special Meetings of Shareholders.  Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Trust’s notice of meeting.  Nominations of individuals for election to the Board of Trustees may be made at a special meeting of shareholders at which trustees are to be elected only (i) by or at the direction of the Board of Trustees or (ii) provided that the special meeting has been called in accordance with Section 3(a) of this Article II for the purpose of electing trustees, by any shareholder of the Trust who is a shareholder of record both at the time of giving of notice provided for in this Section 12 and at the time of the special meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the notice procedures set forth in this Section 12.  In the event the Trust calls a special meeting of shareholders for the purpose of electing one or more individuals to the Board of Trustees, any shareholder may nominate an individual or individuals  (as the case may be) for election as a trustee as specified in the Trust’s notice of meeting, if the shareholder’s notice, containing the information required by paragraphs (a)(3) and (4) of this Section 12 is delivered to the secretary at the principal executive office of the Trust not earlier than the 120th day prior to such special meeting and not later than 5:00 p.m., Eastern Time, on the later of the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Trustees to be elected at such meeting.  The public announcement of a postponement or adjournment of a special meeting shall not commence a new time period for the giving of a shareholder’s notice as described above.

 

(c)                                  General.  (1)  If information submitted pursuant to this Section 12 by any shareholder proposing a nominee for election as a trustee or any proposal for other business at a meeting of shareholders shall be inaccurate in any material respect, such information may be deemed not to have been provided in accordance with this Section 12.  Any such shareholder shall notify the Trust of any inaccuracy or change (within two Business Days of becoming aware of such inaccuracy or change) in any such information.  Upon written request by the secretary or the Board of Trustees, any such shareholder shall provide, within five Business Days of delivery of such request (or such other period as may be specified in such request), (A) written verification, satisfactory, in the discretion of the Board of Trustees or any authorized officer of the Trust, to demonstrate the accuracy of any information submitted by the shareholder pursuant to this Section 12 and (B) a written update of any information (including, if requested by the Trust, written confirmation by such shareholder that it continues to intend to bring such nomination or other business proposal before the meeting) submitted by the shareholder pursuant to this Section 12 as of an earlier date.  If a shareholder fails to provide such written verification or written update within such period, the information as to which written verification or a written update was requested may be deemed not to have been provided in accordance with this Section 12.

 

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(2)                                 Only such individuals who are nominated in accordance with this Section 12 shall be eligible for election by shareholders as trustees, and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with this Section 12.  The chairman of the meeting shall have the power to determine whether a nomination or any other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with this Section 12.

 

(3)                                 For purposes of this Section 12, “the date of the proxy statement” shall have the same meaning as “the date of the company’s proxy statement released to shareholders” as used in Rule 14a-8(e) promulgated under the Exchange Act, as interpreted by the Securities and Exchange Commission from time to time.  “Public announcement” shall mean disclosure (A) in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, PR Newswire or other widely circulated news or wire service or (B) in a document publicly filed by the Trust with the Securities and Exchange Commission pursuant to the Exchange Act or the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

(4)                                 Notwithstanding the foregoing provisions of this Section 12, a shareholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 12.  Nothing in this Section 12 shall be deemed to affect any right of a shareholder to request inclusion of a proposal in, or the right of the Trust to omit a proposal from, the Trust’s proxy statement pursuant to Rule 14a-8 (or any successor provision) under the Exchange Act.  Nothing in this Section 12 shall require disclosure of revocable proxies received by the shareholder or Shareholder Associated Person pursuant to a solicitation of proxies after the filing of an effective Schedule 14A by such shareholder or Shareholder Associated Person under Section 14(a) of the Exchange Act.

 

(5)                                 For purposes of these Bylaws, “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

 

Section 13.  CONTROL SHARE ACQUISITION ACT.  Notwithstanding any other provision of the Declaration of Trust or these Bylaws, Title 3, Subtitle 7 of the Maryland General Corporation Law, or any successor statute (the “MGCL”), shall not apply to any acquisition by any person of shares of beneficial interest of the Trust.  This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.

 

Section 14.  SHAREHOLDERS’ CONSENT IN LIEU OF MEETING.  Any action required or permitted to be taken at any meeting of shareholders may be taken without a meeting (a) if a unanimous consent setting forth the action is given in writing or by electronic transmission by each shareholder entitled to vote on the matter and filed with the minutes of proceedings of the shareholders or (b) if the action is advised, and submitted to the shareholders for approval, by the Board of Trustees and a consent in writing or by electronic transmission of shareholders entitled to cast not less than the minimum number of votes that would be necessary

 

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to authorize or take the action at a meeting of shareholders is delivered to the Trust in accordance with the Maryland REIT Law or the other applicable provisions of the Corporations and Associations Article of the Annotated Code of Maryland (collectively, the “MRL”).  The Trust shall give notice of any action taken by less than unanimous consent to each shareholder not later than ten days after the effective time of such action.

 

ARTICLE III

 

TRUSTEES

 

Section 1.                                           GENERAL POWERS.  The business and affairs of the Trust shall be managed under the direction of its Board of Trustees.

 

Section 2.                                           NUMBER, TENURE, QUALIFICATIONS AND RESIGNATION.  At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board of Trustees may establish, increase or decrease the number of trustees, provided that the number thereof shall never be less than the minimum number required by the MRL, nor more than 15, and further provided that the tenure of office of a trustee shall not be affected by any decrease in the number of trustees.  In case of failure to elect trustees at the designated time, the trustees holding over shall continue to serve as trustees until their successors are elected and qualify.  Any trustee of the Trust may resign at any time by delivering his or her resignation to the Board of Trustees, the chairman of the board or the secretary.  Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation.  The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.

 

Section 3.                                           ANNUAL AND REGULAR MEETINGS.  An annual meeting of the Board of Trustees shall be held immediately after and at the same place as the annual meeting of shareholders, no notice other than this Bylaw being necessary.  In the event such meeting is not so held, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Trustees.  The Board of Trustees may provide, by resolution, the time and place of regular meetings of the Board of Trustees without other notice than such resolution.

 

Section 4.                                           SPECIAL MEETINGS.  Special meetings of the Board of Trustees may be called by or at the request of the chairman of the board, the chief executive officer, the president or a majority of the trustees then in office.  The person or persons authorized to call special meetings of the Board of Trustees the time and place of any special meeting of the Board of Trustees called by them.  The Board of Trustees may provide, by resolution, the time and place for special meetings of the Board of Trustees without other notice than such resolution.

 

Section 5.                                           NOTICE.  Notice of any special meeting of the Board of Trustees shall be delivered personally or by telephone, electronic mail, facsimile transmission, courier or United States mail to each trustee at his or her business or residence address.  Notice by personal delivery, telephone, electronic mail or facsimile transmission shall be given at least 24 hours prior to the meeting.  Notice by United States mail shall be given at least three days prior to the

 

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meeting.  Notice by courier shall be given at least two days prior to the meeting.  Telephone notice shall be deemed to be given when the trustee or his or her agent is personally given such notice in a telephone call to which the trustee or his or her agent is a party.  Electronic mail notice shall be deemed to be given upon transmission of the message to the electronic mail address given to the Trust by the trustee.  Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Trust by the trustee and receipt of a completed answer-back indicating receipt.  Notice by United States mail shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid.  Notice by courier shall be deemed to be given when deposited with or delivered to a courier properly addressed.  Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Trustees need be stated in the notice, unless specifically required by statute or these Bylaws.

 

Section 6.                                           QUORUM.  A majority of the trustees shall constitute a quorum for transaction of business at any meeting of the Board of Trustees, provided that, if less than a majority of such trustees is present at such meeting, a majority of the trustees present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to applicable law, the Declaration of Trust or these Bylaws, the vote of a majority or other percentage of a particular group of trustees is required for action, a quorum must also include a majority or such other percentage of such group.

 

The trustees present at a meeting which has been duly called and at which a quorum has been established may continue to transact business until adjournment, notwithstanding the withdrawal from the meeting of enough trustees to leave fewer than required to establish a quorum.

 

Section 7.                                           VOTING.  The action of a majority of the trustees present at a meeting at which a quorum is present shall be the action of the Board of Trustees, unless the concurrence of a greater proportion is required for such action by applicable law, the Declaration of Trust or these Bylaws.  If enough trustees have withdrawn from a meeting to leave fewer than required to establish a quorum, but the meeting is not adjourned, the action of the majority of that number of trustees necessary to constitute a quorum at such meeting shall be the action of the Board of Trustees, unless the concurrence of a greater proportion is required for such action by applicable law, the Declaration of Trust or these Bylaws.

 

Section 8.                                           ORGANIZATION.  At each meeting of the Board of Trustees, the chairman of the board or, in the absence of the chairman, the vice chairman of the board, if any, shall act as chairman of the meeting.  In the absence of both the chairman and vice chairman of the board, the chief executive officer or, in the absence of the chief executive officer, the president or, in the absence of the president, a trustee chosen by a majority of the trustees present, shall act as chairman of the meeting.  The secretary or, in his or her absence, an assistant secretary of the Trust or, in the absence of the secretary and all assistant secretaries, an individual appointed by the chairman of the meeting, shall act as secretary of the meeting.

 

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Section 9.                                           TELEPHONE MEETINGS.  Trustees may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time.  Participation in a meeting by these means shall constitute presence in person at the meeting.

 

Section 10.                                    CONSENT BY TRUSTEES WITHOUT A MEETING.  Any action required or permitted to be taken at any meeting of the Board of Trustees may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each trustee and is filed with the minutes of proceedings of the Board of Trustees.

 

Section 11.                        VACANCIESIf for any reason any or all the trustees cease to be trustees, such event shall not terminate the Trust or affect these Bylaws or the powers of the remaining trustees hereunder.  Except as may be provided by the Board of Trustees in setting the terms of any class or series of preferred shares of beneficial interest, any vacancy on the Board of Trustees may be filled only by a majority of the remaining trustees, even if the remaining trustees do not constitute a quorum.  Any trustee elected to fill a vacancy shall serve for the remainder of the full term of the trusteeship in which the vacancy occurred and until a successor is elected and qualifies.

 

Section 12.                 COMPENSATION.  Trustees shall not receive any stated salary for their services as trustees but, by resolution of the trustees, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned or leased by the Trust and for any service or activity they performed or engaged in as trustees.  Trustees may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the trustees or of any committee thereof and for their expenses, if any, in connection with each property visit and any other service or activity they perform or engage in as trustees; but nothing herein contained shall be construed to preclude any trustees from serving the Trust in any other capacity and receiving compensation therefor.

 

Section 13.                                    RELIANCE.  Each trustee and officer of the Trust shall, in the performance of his or her duties with respect to the Trust, be entitled to rely on any information, opinion, report or statement, including any financial statement or other financial data, prepared or presented by an officer or employee of the Trust whom the trustee or officer reasonably believes to be reliable and competent in the matters presented, by a lawyer, certified public accountant or other person, as to a matter which the trustee or officer reasonably believes to be within the person’s professional or expert competence, or, with respect to a trustee, by a committee of the Board of Trustees on which the trustee does not serve, as to a matter within its designated authority, if the trustee reasonably believes the committee to merit confidence.

 

Section 14.                                       RATIFICATION.  The Board of Trustees or the shareholders may ratify and make binding on the Trust any action or inaction by the Trust or its officers to the extent that the Board of Trustees or the shareholders could have originally authorized the matter.  Moreover, any action or inaction questioned in any shareholders’ derivative proceeding or any other proceeding on the ground of lack of authority, defective or irregular execution, adverse interest of a trustee, officer or shareholder, non-disclosure, miscomputation, the application of

 

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improper principles or practices of accounting or otherwise, may be ratified, before or after judgment, by the Board of Trustees or by the shareholders, and if so ratified, shall have the same force and effect as if the questioned action or inaction had been originally duly authorized, and such ratification shall be binding upon the Trust and its shareholders and shall constitute a bar to any claim or execution of any judgment in respect of such questioned action or inaction.

 

Section 15.                                       INTERESTED TRUSTEE TRANSACTIONS.  Section 2-419 of the MGCL shall be available for and apply to any contract or other transaction between the Trust and any of its trustees or between the Trust and any other trust, corporation, firm or other entity in which any of its trustees is a trustee or director or has a material financial interest.

 

Section 16.                                    CERTAIN RIGHTS OF TRUSTEES AND OFFICERS.   Any trustee or officer, in his or her personal capacity or in a capacity as an affiliate, employee or agent of any other person, or otherwise, may have business interests and engage in business activities similar to, in addition to or in competition with those of or relating to the Trust.

 

Section 17.                                    EMERGENCY PROVISIONS.  Notwithstanding any other provision in the Declaration of Trust or these Bylaws, this Section 17 shall apply during the existence of any catastrophe, or other similar emergency condition, as a result of which a quorum of the Board of Trustees under Article III of these Bylaws cannot readily be obtained (an “Emergency”).  During any Emergency, unless otherwise provided by the Board of Trustees, (i) a meeting of the Board of Trustees or a committee thereof may be called by any trustee or officer by any means feasible under the circumstances; (ii) notice of any meeting of the Board of Trustees during such an Emergency may be given less than 24 hours prior to the meeting to as many trustees and by such means as may be feasible at the time, including publication, television or radio; and (iii) the number of trustees necessary to constitute a quorum shall be one-third of the entire Board of Trustees.

 

ARTICLE IV

 

COMMITTEES

 

Section 1.                                           NUMBER, TENURE AND QUALIFICATIONS.  The Board of Trustees may appoint from among its members an Executive Committee, an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and other committees, composed of one or more trustees, to serve at the pleasure of the Board of Trustees.

 

Section 2.                                           POWERS.  The Board of Trustees may delegate to committees appointed under Section 1 of this Article IV any of the powers of the Board of Trustees.  Except as may be otherwise provided by the Board of Trustees, any committee may delegate some or all of its power and authority to one or more subcommittees, composed of one or more trustees, as the committee deems appropriate in its sole and absolute discretion.

 

Section 3.                                           MEETINGS.  Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Trustees.  A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the

 

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committee.  The act of a majority of the committee members present at a meeting shall be the act of such committee.  The Board of Trustees may designate a chairman of any committee, and such chairman or, in the absence of a chairman, any two members of any committee (if there are at least two members of the committee) may fix the time and place of its meeting unless the Board shall otherwise provide.  In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another trustee to act in the place of such absent member.

 

Section 4.                                           TELEPHONE MEETINGS.  Members of a committee of the Board of Trustees may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time.  Participation in a meeting by these means shall constitute presence in person at the meeting.

 

Section 5.                                           CONSENT BY COMMITTEES WITHOUT A MEETING.  Any action required or permitted to be taken at any meeting of a committee of the Board of Trustees may be taken without a meeting, if a consent in writing or by electronic transmission to such action is given by each member of the committee and is filed with the minutes of proceedings of such committee.

 

Section 6.                                           VACANCIES.  Subject to the provisions hereof, the Board of Trustees shall have the power at any time to change the membership of any committee, to fill any vacancy, to designate an alternate member to replace any absent or disqualified member or to dissolve any such committee.

 

ARTICLE V

 

OFFICERS

 

Section 1.                                           GENERAL PROVISIONS.  The officers of the Trust shall include a president, a secretary and a treasurer and may include a chairman of the board, a vice chairman of the board, a chief executive officer, one or more vice presidents, a chief operating officer, a chief financial officer, one or more assistant secretaries and one or more assistant treasurers.  In addition, the Board of Trustees may from time to time elect such other officers with such powers and duties as it shall deem necessary or desirable.  The officers of the Trust shall be elected annually by the Board of Trustees, except that the chief executive officer or president may from time to time appoint one or more vice presidents, assistant secretaries and assistant treasurers or other officers.  Each officer shall serve until his or her successor is elected and qualifies or until his or her death, or his or her resignation or removal in the manner hereinafter provided.  Any two or more offices except president and vice president may be held by the same person.  Election of an officer or agent shall not of itself create contract rights between the Trust and such officer or agent.

 

Section 2.                                           REMOVAL AND RESIGNATION.  Any officer or agent of the Trust may be removed, with or without cause, by the Board of Trustees if in its judgment the best

 

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interests of the Trust would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.  Any officer of the Trust may resign at any time by delivering his or her resignation to the Board of Trustees, the chairman of the board, the chief executive officer, the president or the secretary.  Any resignation shall take effect immediately upon its receipt or at such later time specified in the resignation.  The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation.  Such resignation shall be without prejudice to the contract rights, if any, of the Trust.

 

Section 3.                                           VACANCIES.  A vacancy in any office may be filled by the Board of Trustees for the balance of the term.

 

Section 4.                                           CHIEF EXECUTIVE OFFICER.  The Board of Trustees may designate a chief executive officer.  In the absence of such designation, the chairman of the board shall be the chief executive officer of the Trust.  The chief executive officer shall have general responsibility for implementation of the policies of the Trust, as determined by the Board of Trustees, and for the management of the business and affairs of the Trust.  He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Trustees or by these Bylaws to some other officer or agent of the Trust or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Trustees from time to time.

 

Section 5.                                           CHIEF OPERATING OFFICER.  The Board of Trustees may designate a chief operating officer.  The chief operating officer shall have the responsibilities and duties as determined by the Board of Trustees or the chief executive officer.

 

Section 6.                                           CHIEF FINANCIAL OFFICER.  The Board of Trustees may designate a chief financial officer.  The chief financial officer shall have the responsibilities and duties as determined by the Board of Trustees or the chief executive officer.

 

Section 7.                                           CHAIRMAN OF THE BOARD.  The Board of Trustees may designate from among its members a chairman of the board, who shall not, solely by reason of these Bylaws, be an officer of the Trust.  The Board of Trustees may designate the chairman of the board as an executive or non-executive chairman.  The chairman of the board shall preside over the meetings of the Board of Trustees.  The chairman of the board shall perform such other duties as may be assigned to him or her by these Bylaws or the Board of Trustees.

 

Section 8.                                           PRESIDENT.   In the absence of a chief executive officer, the president shall in general supervise and control all of the business and affairs of the Trust.  In the absence of a designation of a chief operating officer by the Board of Trustees, the president shall be the chief operating officer.  He or she may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Trustees or by these Bylaws to some other officer or agent of the Trust or shall be required by law to be otherwise executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Trustees from time to time.

 

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Section 9.                                           VICE PRESIDENTS.  In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to such vice president by the chief executive officer, the president or the Board of Trustees.  The Board of Trustees may designate one or more vice presidents as executive vice president, senior vice president, or vice president for particular areas of responsibility.

 

Section 10.                                    SECRETARY.  The secretary shall (a) keep the minutes of the proceedings of the shareholders, the Board of Trustees and committees of the Board of Trustees in one or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the trust records and of the seal of the Trust; (d) keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; (e) have general charge of the share transfer books of the Trust; and (f) in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Trustees.

 

Section 11.                                    TREASURER.  The treasurer shall have the custody of the funds and securities of the Trust, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Trust, shall deposit all moneys and other valuable effects in the name and to the credit of the Trust in such depositories as may be designated by the Board of Trustees and in general perform such other duties as from time to time may be assigned to him or her by the chief executive officer, the president or the Board of Trustees.  In the absence of a designation of a chief financial officer by the Board of Trustees, the treasurer shall be the chief financial officer of the Trust.

 

The treasurer shall disburse the funds of the Trust as may be ordered by the Board of Trustees, taking proper vouchers for such disbursements, and shall render to the president and Board of Trustees, at the regular meetings of the Board of Trustees or whenever it may so require, an account of all his or her transactions as treasurer and of the financial condition of the Trust.

 

Section 12.                                    ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.  The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the chief executive officer, the president or the Board of Trustees.

 

Section 13.                                    COMPENSATION.  The compensation of the officers shall be fixed from time to time by or under the authority of the Board of Trustees and no officer shall be prevented from receiving such compensation by reason of the fact that he or she is also a trustee.

 

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ARTICLE VI

 

CONTRACTS, CHECKS AND DEPOSITS

 

Section 1.                                           CONTRACTS.  The Board of Trustees may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Trust and such authority may be general or confined to specific instances.  Any agreement, deed, mortgage, lease or other document shall be valid and binding upon the Trust when duly authorized or ratified by action of the Board of Trustees and executed by an authorized person.

 

Section 2.                                           CHECKS AND DRAFTS.  All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Trust shall be signed by such officer or agent of the Trust in such manner as shall from time to time be determined by the Board of Trustees.

 

Section 3.                                           DEPOSITS.  All funds of the Trust not otherwise employed shall be deposited or invested from time to time to the credit of the Trust as the Board of Trustees, the chief executive officer, the president, the chief financial officer, or any other officer designated by the Board of Trustees may determine.

 

ARTICLE VII

 

SHARES

 

Section 1.                                           CERTIFICATES.  Except as may be otherwise provided by the Board of Trustees, shareholders of the Trust are not entitled to certificates evidencing the shares of beneficial interest held by them.  In the event that the Trust issues shares of beneficial interest evidenced by certificates, such certificates shall be in such form as prescribed by the Board of Trustees or a duly authorized officer, shall contain the statements and information required by the MRL and shall be signed by the officers of the Trust in any manner permitted by the MRL.  In the event that the Trust issues shares of beneficial interest without certificates, to the extent then required by the MRL, the Trust shall provide to the record holders of such shares a written statement of the information required by the MRL to be included on share certificates.  There shall be no differences in the rights and obligations of shareholders based on whether or not their shares are evidenced by certificates.

 

Section 2.                                       TRANSFERS.  All transfers of shares shall be made on the books of the Trust, by the holder of the shares, in person or by his or her attorney, in such manner as the Board of Trustees or any officer of the Trust may prescribe and, if such shares are certificated, upon surrender of certificates duly endorsed.  The issuance of a new certificate upon the transfer of certificated shares is subject to the determination of the Board of Trustees that such shares shall no longer be evidenced by certificates.  Upon the transfer of any uncertificated shares the Trust shall provide to the record holders of such shares, to the extent then required by the MRL, a written statement of the information required by the MRL to be included on share certificates.

 

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The Trust shall be entitled to treat the holder of record of any share of beneficial interest as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by the laws of the State of Maryland.

 

Notwithstanding the foregoing, transfers of shares of any class or series of beneficial interest will be subject in all respects to the Declaration of Trust and all of the terms and conditions contained therein.

 

Section 3.                                           REPLACEMENT CERTIFICATE.  Any officer of the Trust may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Trust alleged to have been lost, destroyed, stolen or mutilated, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, destroyed, stolen or mutilated; provided, however, if such shares have ceased to be certificated, no new certificate shall be issued unless requested in writing by such shareholder and the Board of Trustees has determined that such certificates may be issued.  Unless otherwise determined by an officer of the Trust, the owner of such lost, destroyed, stolen or mutilated certificate or certificates, or his or her legal representative, shall be required, as a condition precedent to the issuance of a new certificate or certificates, to give the Trust a bond in such sums as it may direct as indemnity against any claim that may be made against the Trust.

 

Section 4.                                           FIXING OF RECORD DATE.  The Board of Trustees may set, in advance, a record date for the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or determining shareholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of shareholders for any other proper purpose.  Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than 90 days and, in the case of a meeting of shareholders, not less than ten days, before the date on which the meeting or particular action requiring such determination of shareholders of record is to be held or taken.

 

When a record date for the determination of shareholders entitled to notice of and to vote at any meeting of shareholders has been set as provided in this section, such record date shall continue to apply to the meeting if adjourned or postponed, except if the meeting is adjourned or postponed to a date more than 120 days after the record date originally fixed for the meeting, in which case a new record date for such meeting shall be determined as set forth herein.

 

Section 5.                                           SHARE LEDGER.  The Trust shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate share ledger containing the name and address of each shareholder and the number of shares of each class held by such shareholder.

 

Section 6.                                           FRACTIONAL SHARES; ISSUANCE OF UNITS.  The Board of

 

18



 

Trustees may authorize the Trust to issue fractional shares or authorize the issuance of scrip, all on such terms and under such conditions as it may determine.  Notwithstanding any other provision of the Declaration of Trust or these Bylaws, the Board of Trustees may authorize the issuance of units consisting of different securities of the Trust.  Any security issued in a unit shall have the same characteristics as any identical securities issued by the Trust, except that the Board of Trustees may provide that for a specified period securities of the Trust issued in such unit may be transferred on the books of the Trust only in such unit.

 

ARTICLE VIII

 

ACCOUNTING YEAR

 

The Board of Trustees shall have the power, from time to time, to fix the fiscal year of the Trust by a duly adopted resolution.

 

ARTICLE IX

 

DISTRIBUTIONS

 

Section 1.                                           AUTHORIZATION.  Dividends and other distributions upon the shares of beneficial interest of the Trust may be authorized by the Board of Trustees, subject to the provisions of law and the Declaration of Trust.  Dividends and other distributions may be paid in cash, property or shares of beneficial interest of the Trust, subject to the provisions of law and the Declaration of Trust.

 

Section 2.                                           CONTINGENCIES.  Before payment of any dividends or other distributions, there may be set aside out of any assets of the Trust available for dividends or other distributions such sum or sums as the Board of Trustees may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends, for repairing or maintaining any property of the Trust or for such other purpose as the Board of Trustees shall determine, and the Board of Trustees may modify or abolish any such reserve.

 

ARTICLE X

 

INVESTMENT POLICY

 

Subject to the provisions of the Declaration of Trust, the Board of Trustees may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Trust as it shall deem appropriate in its sole discretion.

 

19



 

ARTICLE XI

 

SEAL

 

Section 1.                                           SEAL.  The Board of Trustees may authorize the adoption of a seal by the Trust.  The seal shall contain the name of the Trust and the year of its formation and the words “Formed Maryland.”  The Board of Trustees may authorize one or more duplicate seals and provide for the custody thereof.

 

Section 2.                                           AFFIXING SEAL.  Whenever the Trust is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word “(SEAL)” adjacent to the signature of the person authorized to execute the document on behalf of the Trust.

 

ARTICLE XII

 

INDEMNIFICATION AND ADVANCE OF EXPENSES

 

To the maximum extent permitted by Maryland law in effect from time to time, the Trust shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former trustee or officer of the Trust and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity or (b) any individual who, while a trustee or officer of the Trust and at the request of the Trust, serves or has served as a director, trustee, officer, partner, member or manager of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.  The rights to indemnification and advance of expenses provided by the Declaration of Trust and these Bylaws shall vest immediately upon election of a trustee or officer.  The Trust may, with the approval of its Board of Trustees, provide such indemnification and advance for expenses to an individual who served a predecessor of the Trust in any of the capacities described in (a) or (b) above and to any employee or agent of the Trust or a predecessor of the Trust.  The indemnification and payment or reimbursement of expenses provided in these Bylaws shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment or reimbursement of expenses may be or may become entitled under any bylaw, resolution, insurance, agreement or otherwise.

 

Neither the amendment nor repeal of this Article XII, nor the adoption or amendment of any other provision of the Declaration of Trust or these Bylaws inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph of this Article XII with respect to any act or failure to act that occurred prior to such amendment, repeal or adoption.

 

20



 

ARTICLE XIII

 

WAIVER OF NOTICE

 

Whenever any notice of a meeting is required to be given pursuant to the Declaration of Trust or these Bylaws or pursuant to applicable law, a waiver thereof in writing or by electronic transmission, given by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.  Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice of such meeting, unless specifically required by statute.  The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting has not been lawfully called or convened.

 

ARTICLE XIV

 

EXCLUSIVE FORUM FOR CERTAIN LITIGATION

 

Unless the Trust consents in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Trust, (b) any action asserting a claim of breach of any duty owed by any trustee or officer or other employee of the Trust to the Trust or to the shareholders of the Trust, (c) any action asserting a claim against the Trust or any trustee or officer or other employee of the Trust arising pursuant to any provision of the MRL, the Declaration of Trust or these Bylaws, or (d) any action asserting a claim against the Trust or any trustee or officer or other employee of the Trust that is governed by the internal affairs doctrine.

 

ARTICLE XV

 

AMENDMENT OF BYLAWS

 

The Board of Trustees shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.

 

ARTICLE XVI

 

MISCELLANEOUS

 

All references to the Declaration of Trust shall include all amendments and supplements thereto and any other documents filed with and accepted for record by the State Department of Assessments and Taxation related thereto.

 

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(Back To Top)

Section 5: EX-10.1 (EX-10.1)


Exhibit 10.1

 

 

 

 

LIMITED PARTNERSHIP AGREEMENT

 

OF

 

URBAN EDGE PROPERTIES L.P.

 

Dated as of:  [·], 2015

 

 

 

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

 

IN MAKING AN INVESTMENT DECISION INVESTORS 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.

 



 

TABLE OF CONTENTS

 

 

 

Page

ARTICLE I

DEFINED TERMS

 

 

 

Section 1.1

Definitions

1

 

 

 

“704(c) Value”

1

“Act”

1

“Additional Limited Partner”

1

“Adjusted Capital Account”

1

“Adjusted Capital Account Deficit”

2

“Adjusted Property”

2

“Affiliate”

2

“Agreed Value”

2

“Agreement”

2

“Assignee”

2

“Bankruptcy”

2

“Book-Tax Disparities”

3

“Business Day”

3

“Capital Account”

3

“Capital Contribution”

3

“Carrying Value”

3

“Cash Amount”

3

“Certificate”

3

“Code”

4

“Common Partnership Unit”

4

“Common Partnership Unit Economic Balance”

4

“Consent”

4

“Constructive Ownership” and “Constructively Own”

4

“Contributed Property”

4

“Conversion Factor”

4

“Convertible Funding Debt”

5

“Covered Person”

5

“Debt”

5

“Declaration of Trust”

6

“Depreciation”

6

“Economic Capital Account Balance”

6

“EDGAR”

6

“ERISA”

6

“Exchange Act”

6

“final adjustment”

6

“Funding Debt”

6

“GAAP”

6

 

i



 

“General Partner”

6

“General Partner Entity”

7

“General Partner Payment”

7

“General Partnership Interest”

7

“Immediate Family”

7

“Incapacity”

7

“Indemnitee”

7

“IRS”

8

“Limited Partner”

8

“Limited Partnership Interest”

8

“Liquidating Event”

8

“Liquidating Gains”

8

“Liquidating Losses”

8

“Liquidator”

8

“LTIP Units”

8

“Majority in Interest”

8

“Net Income”

8

“Net Loss”

8

“New Securities”

9

“Nonrecourse Built-in Gain”

9

“Nonrecourse Deductions”

9

“Nonrecourse Liability”

9

“Notice of Redemption”

9

“Partner”

9

“Partner Minimum Gain”

9

“Partner Nonrecourse Debt”

9

“Partner Nonrecourse Deductions”

9

“Partnership”

9

“Partnership Interest”

9

“Partnership Minimum Gain”

10

“Partnership Record Date”

10

“Partnership Unit” or “Unit”

10

“Partnership Year”

10

“Percentage Interest”

10

“Person”

10

“Predecessor Entity”

10

“Pro Rata Portion”

10

“Publicly Traded”

10

“Qualified REIT Subsidiary”

11

“Recapture Income”

11

“Redeeming Partner”

11

“Redemption Amount”

11

“Redemption Right”

11

“Regulations”

11

“REIT”

11

“REIT Expenses”

11

 

ii



 

“REIT Requirements”

11

“Required Cash Payment”

12

“Safe Harbors”

12

“SEC”

12

“Securities Act”

12

“Share”

12

“Shares Amount”

12

“Specified Redemption Date”

12

“Stock Option Plan”

12

“Subsidiary”

12

“Substituted Limited Partner”

12

“Successor Entity”

12

“Tenant”

13

“Terminating Capital Transaction”

13

“Trading Days”

13

“Unit Equivalent”

13

“Valuation Date”

13

“Value”

13

 

ARTICLE II

ORGANIZATIONAL MATTERS

 

Section 2.1

Organization

13

Section 2.2

Name

14

Section 2.3

Registered Office and Agent; Principal Office

14

Section 2.4

Power of Attorney

14

Section 2.5

Term

15

Section 2.6

Admission of Limited Partners

16

 

 

 

ARTICLE III

PURPOSE

 

 

 

Section 3.1

Purpose and Business

16

Section 3.2

Powers

16

Section 3.3

Representations and Warranties by the Parties

16

Section 3.4

Partnership Only for Purposes Specified

18

 

 

 

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ISSUANCES

OF PARTNERSHIP INTERESTS

 

 

 

Section 4.1

Capital Contributions of the Partners

18

Section 4.2

Issuances of Partnership Interests

19

Section 4.3

Contribution of Proceeds of Issuance of Securities by the General Partner

20

Section 4.4

No Preemptive Rights

21

Section 4.5

Other Contribution Provisions

21

Section 4.6

No Interest on Capital

21

 

iii



 

ARTICLE V

DISTRIBUTIONS

 

Section 5.1

Requirement and Characterization of Distributions

21

Section 5.2

Amounts Withheld

22

Section 5.3

Distributions Upon Liquidation

22

Section 5.4

Restricted Distributions

22

Section 5.5

Revisions to Reflect Issuance of Additional Partnership Interests

22

 

 

 

ARTICLE VI

ALLOCATIONS

 

Section 6.1

Allocations For Capital Account Purposes

23

Section 6.2

Revisions to Allocations to Reflect Issuance of Additional Partnership Interests

24

 

 

 

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 7.1

Management

25

Section 7.2

Certificate of Limited Partnership

29

Section 7.3

Restrictions on General Partner Authority

30

Section 7.4

Reimbursement of the General Partner

30

Section 7.5

Outside Activities of the General Partner

31

Section 7.6

Transactions with Affiliates

32

Section 7.7

Indemnification

32

Section 7.8

Liability of the General Partner

34

Section 7.9

Other Matters Concerning the General Partner

35

Section 7.10

Title to Partnership Assets

36

Section 7.11

Reliance by Third Parties

37

Section 7.12

Loans by Third Parties

37

 

 

 

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

 

Section 8.1

Limitation of Liability

37

Section 8.2

Management of Business

37

Section 8.3

Outside Activities of Limited Partners

38

Section 8.4

Return of Capital

38

Section 8.5

Rights of Limited Partners Relating to the Partnership

38

Section 8.6

Redemption Right

40

Section 8.7

Right of Offset

42

 

 

 

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 9.1

Records and Accounting

43

Section 9.2

Fiscal Year

43

 

iv



 

Section 9.3

Reports

43

 

 

 

ARTICLE X

TAX MATTERS

 

Section 10.1

Preparation of Tax Returns

44

Section 10.2

Tax Elections

44

Section 10.3

Tax Matters Partner

45

Section 10.4

Organizational Expenses

46

Section 10.5

Withholding

46

 

 

 

ARTICLE XI

TRANSFERS AND WITHDRAWALS

 

Section 11.1

Transfer

47