ALEXANDERS INC
AMENDMENT TO REAL ESTATE RETENTION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.I.E.3
<SEQUENCE>18
<FILENAME>y62648exv10wiwew3.txt
<DESCRIPTION>AMENDMENT TO REAL ESTATE RETENTION AGREEMENT
<TEXT>
<PAGE>
                                                               Exhibit 10(i)E(3)


                  AMENDMENT TO REAL ESTATE RETENTION AGREEMENT

            THIS AMENDMENT TO REAL ESTATE RETENTION AGREEMENT (this "Amendment")
is made as of the 3 day of July, 2002, by and among ALEXANDER'S INC., a Delaware
corporation ("Alexander's"), having an address at 210 Route 4 East, Paramus, New
Jersey 07652, (sometimes hereinafter referred to as "Owner"), and VORNADO
REALTY, L.P., a Delaware, having an office at 210 Route 4 East, Paramus, New
Jersey 07652 ("Consultant").

                                 R E C I T A L S

            A. Alexander's and Consultant's predecessors-in-interest, Vornado,
Inc. and Keen Consultants Inc., have heretofore entered into that certain Real
Estate Retention Agreement, dated July 20, 1992 (the "Retention Agreement").

            B. As of the date hereof, Consultant and 731 Commercial LLC and 731
Residential LLC have entered into that certain 59th Street Real Estate Retention
Agreement (the "59th Street Retention Agreement"), relating to the property
located at 731 Lexington Avenue, New York, New York and referenced to in the
Retention Agreement Schedule of Assets as "59th Street, New York City" (the
"59th Street Property").

            C. Whereas, Owner and Manager desire to amend the Retention
Agreement to delete the 59th Street Property from such Retention Agreement and
to make certain other conforming changes.

            NOW THEREFORE, in consideration of One Dollar ($1.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, Owner and Manager hereby agree to the
following amendments to be effective from and after the date hereof (the
"Effective Date"):

            1. Schedule of Assets. The Schedule of Assets to the Retention
      Agreement is hereby amended to delete the 59th Street Property therefrom.

            2. Fee. The third sentence of Article II.C.1.(b) is hereby deleted
      and the following substituted therefor:

                  "Notwithstanding the immediately preceding sentence, Vornado's
                  fee will be payable in an amount not to exceed $2,500,000 in
                  any calendar year or part thereof (or such lesser amount as
                  may be due Vornado hereunder), less any amounts paid to
                  Vornado under the 59th Street Retention Agreement with respect
                  to the same period. The fee shall be paid in equal monthly
                  installments until the present value (applying a discount rate
                  of 9% per annum) of such installments paid to Vornado equals
                  the fee due hereunder that would have been paid had it been
                  paid simultaneously with the closing, assignment or other
                  consummation of the applicable transaction; provided, however,
                  that (i) fees payable in respect of a sale, assignment or
                  Acquisition
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                  Transaction are paid first and (ii) Vornado shall not be
                  entitled to receive any fees in respect of a lease or sublease
                  to the extent the tenant is in default of its payment
                  obligations thereunder, except as a result of a default by the
                  Owner or a termination by Owner of the lease or sublease
                  (other than a termination by the Owner resulting from the
                  tenant's monetary default).

            3. Counterparts. This Amendment may be executed in several
      counterparts, each of which shall be deemed an original, and all of such
      counterparts together shall constitute one and the same instrument.

            4. Defined Terms. All terms capitalized but not defined herein shall
      have the same meaning ascribed to such terms in the Retention Agreement.
      The marginal headings and titles to the paragraphs of this Amendment are
      not a part of this Amendment and shall have no effect upon the
      construction or interpretation of any part hereof.

            5. Amendment. This Amendment is incorporated into and made a part of
      the Retention Agreement, and the Retention Agreement and all terms,
      conditions and provisions of the Retention Agreement are ratified and
      confirmed in all respects and is and shall continue to be in full force
      and effect as modified and amended hereby.

            6. Governing Law. This Amendment shall be governed by and construed
      in accordance with the laws of the State of New York.

            7. No Modification. This Amendment constitutes the entire
      understanding of the parties with respect to the subject hereof and may
      not be amended except in a writing executed by the parties hereto.

            8. Successors and Assigns. This Amendment shall be binding upon and
      inure to the benefit of the parties hereto, and their successors and
      permitted assigns.

            9. Accrued 59th Street Property Fees. Consultant acknowledges and
      agrees that any fees that become payable with respect to the leases listed
      on Schedule A attached hereto shall be payable under the 59th Street
      Retention Agreement and not the Retention Agreement modified by this
      Amendment.




                            [SIGNATURE PAGE FOLLOWS]


                                      -2-

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            IN WITNESS WHEREOF, the parties have executed this Amendment as of
the date first above written.


                                          OWNER:
                                          ALEXANDER'S INC., a
                                          Delaware corporation

                                          By: /s/ Brian Kurtz
                                              --------------------------------
                                              Name:  Brian Kurtz
                                                    --------------------------
                                              Title: Assistant Secretary
                                                     -------------------------


                                          MANAGER:
                                          VORNADO REALTY, L.P.

                                          By: /s/ Joseph Macnow
                                              --------------------------------
                                              Name:  Joseph Macnow
                                                    --------------------------
                                              Title: Executive Vice President
                                                    --------------------------
                                                     Financial & Administration
                                              --------------------------------
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                                   SCHEDULE A


1.    Agreement of Lease, dated as of April 30, 2002, between Seven Thirty
      One Limited Partnership, as landlord ("Landlord"), and Bloomberg L.P.,
      as tenant ("Tenant"), as amended by (i) a letter agreement, dated
      December 20, 2001, between Landlord and Tenant, (ii) a letter
      agreement, dated January 30, 2002, between Landlord and Tenant, (iii)
      the First Amendment of Lease, dated as of April 19, 2002, between
      Landlord and Tenant and (iv) a letter agreement, dated as of June __,
      2002, between Landlord and Tenant with respect to a portion of the
      commercial parcel at 731 Lexington Avenue, New York, New York.

2.    Agreement of Lease, dated as of August 6, 1999, between Seven Thirty
      One Limited Partnership, as landlord ("Landlord"), and H&M Hennes &
      Mauritz Inc., as tenant ("H&M Inc."), as amended by the First Amendment
      of Lease, dated as of August 23, 2001, between Landlord and H&M Hennes
      & Mauritz L.P. ("Tenant") as successor in interest to H&M Inc. with
      respect to a portion of the commercial parcel at 731 Lexington Avenue,
      New York, New York.


                                      -4-

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