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EXHIBIT 10.5
VOI SHARE PURCHASE OPTION AGREEMENT
This VOI SHARE PURCHASE OPTION AGREEMENT (this "AGREEMENT") is
made and entered into this 23rd day of January, 1998, by and between Vornado
Operating Inc., a Delaware corporation ("VOI"), and Merchandise Mart
Enterprises, L.L.C., a Delaware limited liability company (the "PURCHASER").
W I T N E S S E T H :
WHEREAS, the Purchaser, Vornado Realty Trust, a Maryland real
estate investment trust ("VORNADO"), Vornado Realty L.P., a Delaware limited
partnership ("VRLP"), and certain other entities identified therein as the "MM
Contributors" have entered into the Contribution Agreement, of even date
herewith (the "CONTRIBUTION AGREEMENT");
WHEREAS, Vornado owns all of the outstanding shares of capital
stock of VOI, which shares are classified as shares of common stock, par value
$0.01 per share ("COMMON STOCK");
WHEREAS, Vornado intends to contribute to VRLP and VRLP
intends to distribute (the "DISTRIBUTION") all of the outstanding shares of
Common Stock to the holders of Common Partnership Units of VRLP (as such term is
defined in VRLP's First Amended and Restated Partnership Agreement, dated as of
April 15, 1997), all as described in the Registration Statement of VOI on Form
S-11, first filed with the Securities and Exchange Commission (the "SEC") on
November 20, 1997, as the same may be amended from time to time (the
"REGISTRATION STATEMENT");
WHEREAS, Purchaser has expressed an interest in subscribing
for and purchasing shares of Common Stock and VOI has agreed to make such shares
available to the Purchaser upon the conditions set forth below;
WHEREAS, the Purchaser has conditioned its willingness to
enter into the Contribution Agreement upon also receiving the option rights set
forth in this Agreement;
NOW, THEREFORE, in consideration of these premises and the
mutual agreements hereinafter contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
each of the parties hereto, the parties hereto do hereby agree as follows:
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1. Representations, Warranties and Agreements of VOI. VOI
represents and warrants to, and agrees with, the Purchaser that:
(a) VOI is duly organized, validly existing and in good
standing under the laws of the State of Delaware. VOI has all of the
requisite power and authority to enter into this Agreement and to
issue, sell, assign, transfer and deliver the Shares in accordance
herewith.
(b) This Agreement has been duly authorized, executed and
delivered by VOI and constitutes a valid and legally binding obligation
of VOI, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles.
(c) None of the execution or delivery of this Agreement or the
sale of the shares of Common Stock that VOI agrees to cause to be sold
pursuant to paragraph 3(b) thereof (the "Shares") or VOI's performance
of any of its covenants and agreements hereunder will, directly or
indirectly, (i) contravene, conflict with or result in a violation of
the charter or bylaws, or other governing instruments, of VOI; (ii)
contravene, conflict with, or result in a violation of any law, rule,
or regulation applicable to VOI, (iii) contravene, conflict with, or
result in a violation or breach of, or give any person the right to
exercise any remedy under, or accelerate the maturity or performance
of, or cancel, terminate or modify any material agreement or instrument
to which VOI is a party or by which VOI is bound or to which any of
VOI's properties are subject, or (iv) give any person the right to
prevent, delay, or otherwise interfere in any material respect with any
of the transactions contemplated hereby; except, in each case, for
contraventions, conflicts and violations which, individually or in the
aggregate, could not be expected to prevent or adversely affect in any
material respect VOI's ability to perform its obligations hereunder.
(d) No consent, approval, authorization or order of, or filing
with, any person, court or governmental agency or body is required for
the consummation of the transactions contemplated by this Agreement
(other than such approvals as shall have been obtained prior to the
Closing).
(e) The Shares, when issued and delivered against payment
therefor as provided herein, will have been duly and validly authorized
and will be duly and validly issued, fully paid and non-assessable.
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2. Representations and Warranties of the Purchaser. The
Purchaser represents and warrants to, and agrees with, VOI that:
(a) To the extent such Purchaser is not an individual, the
Purchaser has all requisite power and authority to enter into this
Agreement and to purchase the Shares that may become available to it
hereunder in accordance herewith.
(b) This Agreement has been duly executed and delivered by
such Purchaser and constitutes a valid and legally binding obligation
of such Purchaser, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
3. Purchase and Sale of Shares.
(a) If, and only if, the Registration Statement is declared
effective by the SEC and VRLP completes the Distribution on or prior to
the Closing Date (as defined in the Contribution Agreement), then prior
to or concurrently with the declaration of effectiveness of the
Registration Statement VOI will provide a copy of the final Prospectus
contained in the Registration Statement to Xxxxxx X. Xxxxx, as
representative of the Purchaser. The Purchaser shall have a period of
three (3) Business Days (as defined in the Contribution Agreement) from
the date on which the Registration Statement is first declared
effective by the SEC to deliver to VOI (i) letters in the form of
Exhibit I hereto from the Purchaser and each person who was an
"affiliate" (as that term is used in Rule 145 promulgated under the
Securities Act of 1933, as amended (the "Act") of the Purchaser at the
time the transactions contemplated hereby were approved by the members
of the Purchaser) and (ii) an irrevocable written notice in the form of
Exhibit II hereto (the "Subscription Notice") of its subscription to
purchase a number of shares of Common Stock up to the Maximum Number of
Shares (as defined in paragraph 3), which number of shares shall be
specified in the Subscription Notice, at a purchase price per share
equal to the amount calculated pursuant to clause (y) of paragraph 3(c)
below and on the other terms set forth in paragraphs 3(b) and (d)
below; provided, however, that if, as of the Closing Date, any stop
order has been issued revoking or suspending the registration of such
shares under the Securities Act of 1933, as amended, or such shares are
not listed on the same nationally recognized securities exchange, if
any, on which the other outstanding shares of Common Stock are then
listed, then in either case the Purchaser shall be entitled to revoke
the Subscription Notice. If the Purchaser does not deliver a
Subscription Notice within such three (3) Business Day period, then the
all rights of the Purchaser hereunder shall expire and be of no further
effect as of 8:00 p.m. on such third (3rd) Business Day.
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(b) If the Purchaser delivers the Election Notice to VOI
within the time allowed in clause (a) above, VOI agrees that it will
thereafter, on the later of the Distribution Date or the sixth (6th)
Business Day following the effectiveness of the Registration Statement,
cause to be issued and sold to the Purchaser the number of shares of
Common Stock set forth in the Subscription Notice, provided that in no
event shall VOI be required to issue any shares of Common Stock to the
Purchaser in excess of the Maximum Number of Shares.
(c) The "Maximum Number of Shares" that the Purchaser shall be
entitled to subscribe for and purchase hereunder shall be a number of
shares of Common Stock equal to (x) the aggregate value of the
additional Common Units the Purchaser is entitled to receive pursuant
to Section 1.2.1 (iv) of the Contribution Agreement, based on the
assumed value of $45.5875 per Common Unit, divided by (y) the (i) total
stockholders' equity stated in the Company's Pro Forma Consolidated
Financial Data appearing in the final Prospectus divided by (ii) the
number of shares to be distributed by to partners of VRLP in the
Distribution.
(d) To the extent that any Purchaser exercises the
subscription rights granted herein, VOI agrees that it will cause
certificates evidencing the shares of Common Stock so subscribed to the
Purchaser upon receipt by VOI of payment by such Purchaser of the
Purchase Price for all (but not less than all) of the Shares subscribed
for by the Purchaser in the Subscription Notice by wire transfer of
immediately available funds to the account of VOI at a bank to be
identified to such Purchaser at least two business days prior to the
closing of such sale. Such delivery shall take place at the offices of
Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other location as VOI and the Purchaser may agree to in writing.
The purchase of the Shares for the Purchase Price therefor is herein
referred to as the "CLOSING". The date on which such Closing occurs is
herein referred to as the "CLOSING DATE".
4. Covenants of VOI. VOI covenants to, and agrees with, each
Purchaser that:
(a) On or prior to the business day preceding the Closing
Date, VOI will deliver to the Purchaser (for inspection but subject, as
to delivery, to satisfaction of the closing conditions set forth
herein) the certificates evidencing the Shares to be issued to the
Purchaser at the Closing.
(b) VOI will take such other actions as the Purchaser
reasonably requests in order to confirm and assure the Purchaser's
title to the Shares.
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5. Expenses. VOI agrees with the Purchaser that VOI will pay
or cause to be paid (i) all of its own costs and expenses, including the fees,
disbursements and expenses of counsel to VOI in connection with the transactions
contemplated by this Agreement and (ii) any transfer, stamp or other similar
taxes imposed with respect to the sale. The Purchaser will pay all of its own
costs and expenses, including the fees, disbursements and expenses of
Purchaser's counsel.
6. Specific Performance. The parties hereto each acknowledge
that in view of the uniqueness of the subject matter hereof they would not have
an adequate remedy at law for money damages in the event that this Agreement
were not performed in accordance with its terms, and therefore agree that the
parties shall be entitled to specific enforcement of the terms hereof in
addition to any other remedy to which the parties may be entitled at law or in
equity.
7. Survival of Agreements, Etc. All representations,
warranties, covenants and agreements made herein or in connection with the
transactions contemplated hereby shall survive the execution and delivery of
this Agreement and the Closing of the purchase and sale of the Shares.
8. Headings. The headings in this Agreement are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
9. Amendments. This Agreement cannot be modified, amended or
terminated except by an instrument in writing signed by each of the parties
hereto; provided, however, that any provision of this Agreement may be waived
only by the party to be charged with the waiver but only by a duly executed
writing.
10. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
11. Notices. All notices and other communications hereunder
shall be in writing and shall be sent by facsimile with a hard copy to follow by
overnight courier as follows:
If to the Purchaser:
Merchandise Mart Enterprises, L.L.C.
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
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with copies to
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to VOIs:
x/x Xxxxxxx Xxxxxx Xxxxx
Xxxx 00 Xxxx, Xxxxx XX
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Irvine X. Xxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the Purchaser, on the one hand, and VOI, on
the other hand, and supersedes all prior agreements and understandings relating
to the subject matter hereof.
13. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
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IN WITNESS WHEREOF, the Purchaser and VOI have executed this
Agreement as of the day and year first above written.
PURCHASER:
MERCHANDISE MART ENTERPRISES, L.L.C.
By: ___________________________
Name: Xxxxxx X. Xxxxx
Title: Manager
VOI:
VORNADO OPERATING INC.
By:__________________________
Name:
Title:
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