1
    As filed with the Securities and Exchange Commission on October 8, 1997

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20529

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) September 22, 1997

Commission File Number:  1-11954

                              VORNADO REALTY TRUST
             (Exact name of registrant as specified in its charter)

                 MARYLAND                                     22-1657560
(State or other jurisdiction of incorporation)             (I.R.S. Employer
                                                          Identification Number)

PARK 80 WEST, PLAZA II, SADDLE BROOK, NEW JERSEY                 07663
    (Address of principal executive offices)                   (Zip Code)

                                 (201) 587-1000
              (Registrant's telephone number, including area code)

                                       N/A
          (Former Name or Former Address, if Changed Since Last Report)

                                      -1-
   2
Items 1-4     Not Applicable.

  Item 5.     Other Events.

              CHARLES E. SMITH:

                  On September 22, 1997, Vornado Realty Trust entered into an
              agreement to acquire a 15% limited partnership interest in Charles
              E. Smith Commercial Realty, L.P. for $60 million. Charles E. Smith
              Commercial Realty, L.P. is being formed to own interests in and
              manage approximately 7.2 million square feet of office properties
              in Crystal City, Alexandria, Virginia, a suburb of Washington,
              D.C., and to manage an additional 14 million square feet of office
              and other commercial properties in the Washington, D.C. area. The
              Crystal City properties in which Charles E. Smith Commercial
              Realty, L.P. will own an interest, are now owned by other various
              Charles E. Smith affiliates. The closing, which is expected to
              occur at the end of October, is subject to receipt of consents
              from various parties and other conditions.

              HOTEL PENNSYLVANIA:

                  On September 25, 1997, Vornado Realty Trust acquired a 40%
              interest in the Hotel Pennsylvania, which is located on Seventh
              Avenue in New York City opposite Madison Square Garden. The
              property was acquired in a joint venture with Hotel Properties
              Limited and Planet Hollywood International, Inc. The venture
              intends to create a sports-themed hotel and entertainment complex.
              Under the joint venture agreement, Hotel Properties Limited and
              Planet Hollywood International, Inc. will have 40% and 20%
              interests, respectively. The joint venture acquired the hotel for
              approximately $159 million, of which $120 million is newly-issued
              5 year financing. The Hotel Pennsylvania contains approximately
              800,000 square feet of hotel space with 1,700 rooms and 400,000
              square feet of retail and office space. Vornado will manage the
              site's retail and office space, and Hotel Properties will manage
              the hotel.

              COLD STORAGE:

                  On September 26, 1997, Vornado Realty Trust entered into
              merger agreements pursuant to which its newly formed preferred
              stock affiliates ("Preferred Stock Affiliates") will acquire
              Americold Corporation ("Americold") and URS Logistics, Inc.
              ("URS") (collectively "Cold Storage"). The consideration for the
              Americold transaction is approximately $582 million, including
              $111 million in cash and $471 million in indebtedness. The
              consideration for the URS transaction is approximately $367
              million, including $178 million in cash and $189 million in
              indebtedness.

                                      -2-
   3
                  The Preferred Stock Affiliates entered into an agreement with
              Crescent Real Estate Equities Limited Partnership ("Crescent") to
              make these acquisitions pursuant to which the Preferred Stock
              Affiliates would hold a 60% interest in the investment and
              Crescent a 40% interest.

                  Affiliates of Kelso & Company, Inc., which have a controlling
              interest in both Americold and URS, have granted consents or
              irrevocable proxies with respect to both transactions. Each
              transaction is not conditioned on the closing of the other, and
              both are expected to close in the fourth quarter of 1997.

                  The forgoing is qualified in its entirety by reference to
              Exhibits 99.3 through 99.6.

                  The Charles E. Smith, Hotel Pennsylvania and Cold Storage 
              transactions were arrived at through arm's-length negotiations
              and were consummated through a subsidiary of Vornado Realty L.P..
              Vornado Realty Trust owns 90.4% of Vornado Realty L.P. and is the
              sole general partner.

              STOCK SPLIT:

                  On October 7, 1997, Vornado Realty Trust announced a
              two-for-one stock split by declaring a dividend of one common
              share for each share issued and outstanding as of the close of
              business on October 15, 1997.  As a result of the stock split,
              Vornado's outstanding shares will increase from approximately
              26.56 million shares to 53.12 million shares.  The additional     
              shares will be issued October 20, 1997. 

  Item 6.     Not Applicable.

  Item 7.     Financial Statements, Pro Forma Financial Information and Exhibits

   (a) - (b)     There are filed herewith (a) the historical financial
              statements of Americold, URS, Montehiedra Town Center
              ("Montehiedra") and the Riese Properties ("Riese") commencing on
              page 7 and (b) the Condensed Consolidated Pro Forma Balance Sheet
              of Vornado Realty Trust as of June 30, 1997 and the Condensed
              Consolidated Pro Forma Statement of Income of Vornado Realty Trust
              for the six months ended June 30, 1997 and the year ended December
              31, 1996, commencing on page 68, prepared to give Pro Forma effect
              to the proposed acquisition of Americold and URS, completed
              acquisitions of Montehiedra and Riese and investments in Charles
              E. Smith Commercial Realty L.P. and the Hotel Pennsylvania. The
              Pro Forma data also includes certain previously reported
              acquisitions which were included in Form 8-K's previously filed
              with the Securities and Exchange Commission in 1997.

   (c)        Exhibits.

              Exhibit No.                             Exhibit
              -----------                             -------
                        
                  23.1     Consent of KPMG Peat Marwick LLP

                  23.2     Consent of KPMG Peat Marwick LLP

                  23.3     Consent of Deloitte & Touche LLP

                  23.4     Consent of Deloitte & Touche LLP

                  23.5     Consent of Deloitte & Touche LLP

                                      -3-
   4

               Exhibit No.                    Exhibit
               -----------                    -------
                        
                  99.1     Press Release, dated September 22, 1997, of Vornado
                           Realty Trust, announcing the acquisition of a 15%
                           limited partnership interest in Charles E. Smith
                           Commercial Realty, L.P.

                  99.2     Press Release, dated September 25, 1997, of Vornado
                           Realty Trust, announcing the acquisition of a 40%
                           interest in Hotel Pennsylvania.

                  99.3     Press Release, dated September 29, 1997, of Vornado
                           Realty Trust, announcing the acquisition of Americold
                           Corporation and URS Logistics, Inc. and the formation
                           of a partnership with Crescent Real Estate Equities
                           Company.

                  99.4     Agreement and Plan of Merger, dated as of September
                           26, 1997 among Vornado Realty Trust, Atlanta Parent,
                           Inc., Atlanta Storage Acquisition Co. and URS
                           Logistics, Inc.

                  99.5     Agreement and Plan of Merger, dated as of September
                           26, 1997 among Vornado Realty Trust, Portland Parent,
                           Inc., Portland Storage Acquisition Co. and Americold
                           Corporation.

                  99.6     Agreement dated September 28, 1997 between Atlanta
                           Parent Incorporated, Portland Parent Incorporated
                           and Crescent Real Estate Equities Limited 
                           Partnership.

      Item 8.  Not Applicable.

                                      -4-
   5

                                                                                    Page
      7(a) Financial statements                                                     Reference
                                                                                   ---------
                                                                               
               Americold Corporation

                  Independent Auditors' Report..........................................7
                  Consolidated Balance Sheets as of the
                   last day of February 1996 and 1997...................................8
                  Consolidated Statements of Operations
                   for the years ended on the last day of
                   February 1995, 1996 and 1997........................................10
                  Consolidated Statements of Common Stockholders' Deficit for
                   the years ended on the last day of February 1995, 1996 and
                   1997............................................................... 11
                  Consolidated Statements of Cash Flows for the
                   years ended on the last day of
                       February 1995, 1996 and 1997................................... 12
                  Notes to Consolidated Financial Statements as of
                   the last day of February 1996 and 1997............................. 14
                  Consolidated Balance Sheet as of the last day
                       of August 1997................................................. 35
                  Consolidated Statements of Operations for the
                       six months ended on the last day of
                       August 1996 and 1997........................................... 36
                  Consolidated Statements of Cash Flows, for the
                       six months ended on the last day of
                       August 1996 and 1997........................................... 37
                  Notes to Consolidated Financial Statements as
                       of the last day of August 1996 and 1997........................ 38

               URS Logistics, Inc. and Subsidiary

                  Independent  Auditor's Report....................................... 42
                  Consolidated Balance Sheets as of
                       December 31, 1996 and 1995..................................... 43
                  Consolidated Statements of Operations for the
                       Years ended December 31, 1996, 1995
                       and 1994....................................................... 44
                  Consolidated Statements of Stockholders' Equity
                       for the Years ended December 31, 1996, 1995
                       and 1994....................................................... 45
                  Consolidated Statements of Cash Flows for the
                       Years ended December 31, 1996, 1995 and 1994................... 46
                  Notes to Consolidated Financial Statements as
                       of and for the Years ended December 31, 1996
                       and 1995....................................................... 48

                                      -5-
   6

                                                                                    Page
                                                                                  Reference
                                                                                  ---------
                                                                               
                  Consolidated Balance Sheet as of June 30, 1997..................... 55
                  Consolidated Statements of Operations for the
                       six months ended June 30, 1997 and 1996....................... 57
                  Consolidated Statements of Cash Flows for the
                       six months ended June 30, 1997 and 1996....................... 58
                  Notes to Consolidated Financial Statements
                       as of and for the six months ended
                       June 30, 1997 and 1996........................................ 59

               Montehiedra Town Center

                  Independent Auditors' Report....................................... 60
                  Statements of Revenue and Certain Expenses for
                       the Year ended December 31, 1996 and the
                       three months ended March 31, 1997 and 1996.................... 61
                  Notes to Statements of Revenue and Certain Expenses................ 62

               Riese Properties

                  Independent Auditors' Report....................................... 64
                  Statement of Revenues and Certain Expenses
                       for the Year ended April  30, 1997 and
                       the six months ended April 30, 1997 and 1996.................. 65
                  Notes to Statements of Revenues and Certain Expenses............... 66

 (b)  Pro Forma financial information                                 
                                                                       
                  Condensed Consolidated Pro Forma Balance
                    Sheet as at June 30, 1997........................................ 69
                                                                       
                  Condensed Consolidated Pro Forma Income             
                    Statement for the six months ended                
                    June 30, 1997.................................................... 70
                                                                       
                  Condensed Consolidated Pro Forma Income             
                    Statement for the Year ended                      
                    December 31, 1996................................................ 72
                                                                       
                  Notes to Condensed Consolidated Pro Forma           
                    Financial Statements............................................. 74

                                      -6-

   7
[PEAT MARWICK LLP LETTERHEAD]

                          INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Stockholders
Americold Corporation:

We have audited the consolidated balance sheets of Americold Corporation as of
the last day of February 1996 and 1997, and the related consolidated statements
of operations, common stockholders' deficit and cash flows for each of the years
in the three-year period ended the last day of February 1997. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Americold
Corporation as of the last day of February 1996 and 1997, and the results of
their operations and their cash flows for each of the years in the three-year
period ended the last day of February 1997, in conformity with generally
accepted accounting principles.

                                              /s/  KPMG Peat Marwick LLP

Portland, Oregon
May 2, 1997

                                      -7-
   8
                              AMERICOLD CORPORATION

                           Consolidated Balance Sheets

                       Last day of February 1996 and 1997

                        (In Thousands, Except Share Data)

                       Assets                                                 1996       1997
                       ------                                                 ----       ----
                                                                                
Current assets:
  Cash and cash equivalents                                                $  20,857  $  13,702
  Trade receivables, less allowance for doubtful accounts
    of $218 and $396, respectively                                            25,461     27,560
  Other receivables                                                            3,512      3,138
  Prepaid expenses                                                             4,286      3,828
  Tax refund receivable                                                        3,336      2,636
  Other current assets                                                           845        891
                                                                           ---------   --------

      Total current assets                                                    58,297     51,755

Net property, plant and equipment                                            375,851    384,484
Cost in excess of net assets acquired, less accumulated
  amortization of $22,138 and $24,644, respectively                           77,255     74,749
Debt issuance costs, less accumulated amortization
  of $3,987 and $5,168, respectively                                           6,627     11,041
Other noncurrent assets                                                        8,962      9,005

                                                                        
                                                                           ---------  ---------
        Total assets                                                       $ 526,992  $ 531,034
                                                                           =========  =========

See accompanying notes to consolidated financial statements.

                                      -8-
   9

      Liabilities, Preferred Stock and Common Stockholders' Deficit           1996       1997
      -------------------------------------------------------------           ----       ----
                                                                                  
Current liabilities:
  Accounts payable                                                          $  11,363   $  16,116
  Accrued interest                                                             19,056      18,466
  Accrued expenses                                                             11,604      13,660
  Deferred revenue                                                              5,707       5,555
  Current maturities of long-term debt                                          2,732       5,229
  Other current liabilities                                                     4,630       5,259
                                                                            ---------   ---------

      Total current liabilities                                                55,092      64,285

Long-term debt, less current maturities                                       461,667     465,834
Deferred income taxes                                                         102,041      98,524
Other noncurrent liabilities                                                    9,861      10,347
                                                                            ---------   ---------

      Total liabilities                                                       628,661     638,990
                                                                            ---------   ---------

Preferred stock, Series A, $100 par value.  Authorized 1,000,000
  shares; issued and outstanding 52,936 shares                                  5,771       5,753
                                                                            ---------   ---------

Common stockholders' deficit:
  Common stock, $.01 par value.  Authorized 10,000,000 shares; issued
    and outstanding 4,931,194 and 4,995,556 shares, respectively                   49          50
  Additional paid-in capital                                                   50,173      51,182
  Retained deficit                                                           (157,345)   (164,580)
  Adjustment for minimum pension liability                                       (317)       (361)
                                                                            ---------   ---------

      Total common stockholders' deficit                                     (107,440)   (113,709)

Commitments and contingencies                                                       -           -
                                                                            ---------   ---------

      Total liabilities, preferred stock and common stockholders' deficit   $ 526,992   $ 531,034
                                                                            =========   =========

                                       -9-
   10
                              AMERICOLD CORPORATION

                      Consolidated Statements of Operations

              Years ended last day of February 1995, 1996 and 1997

                      (In Thousands, Except Per Share Data)

                                                                       1995        1996        1997
                                                                       ----        ----        ----
                                                                                    
Net sales                                                            $ 215,207   $ 279,788   $ 310,767
                                                                     ---------   ---------   ---------

Operating expenses:
  Cost of sales                                                        138,132     194,936     228,762
  Amortization of cost in excess of net assets acquired                  2,535       2,773       2,506
  Selling and administrative expenses                                   25,955      28,525      31,142
  Employee stock ownership plan expense                                    750         750         500
                                                                     ---------   ---------   ---------

      Total operating expenses                                         167,372     226,984     262,910
                                                                     ---------   ---------   ---------

      Gross operating margin                                            47,835      52,804      47,857
                                                                     ---------   ---------   ---------

Other income (expense):
  Interest income                                                        1,870       1,199         932
  Interest expense                                                     (55,344)    (56,610)    (56,678)
  Amortization of debt issuance costs                                   (1,276)       (964)     (1,185)
  Gain on insurance settlement                                          16,953           -           -
  Reorganization expenses                                                    -      (7,344)       (771)
  Other, net                                                               753        (591)        701
                                                                     ---------   ---------   ---------
      Total other expense                                              (37,044)    (64,310)    (57,001)
                                                                     ---------   ---------   ---------

      Income (loss) before income taxes and extraordinary item          10,791     (11,506)     (9,144)

Provision (benefit) for income taxes                                     5,227      (3,426)     (2,604)
                                                                     ---------   ---------   ---------

      Income (loss) before extraordinary item                            5,564      (8,080)     (6,540)

Extraordinary item, net of income tax benefit of $1,158                      -      (1,794)          -
                                                                     ---------   ---------   ---------

      Net income (loss)                                              $   5,564   $  (9,874)  $  (6,540)
                                                                     =========   =========   =========

Income (loss) per share:
  Income (loss) before extraordinary item                            $    1.00  $   (1.80)   $   (1.46)
  Extraordinary item                                                         -       (.37)           -
                                                                     ---------  ---------    ---------

      Net income (loss) per common share                             $    1.00   $  (2.17)   $   (1.46)
                                                                     =========   ========    =========

Weighted average number of shares outstanding                            4,864       4,867       4,952
                                                                     =========   =========   =========

See accompanying notes to consolidated financial statements.

                                      -10-
   11
                              AMERICOLD CORPORATION

             Consolidated Statements of Common Stockholders' Deficit

              Years ended last day of February 1995, 1996 and 1997

                        (In Thousands, Except Share Data)

                                                                                    Adjustment
                                                                                       for
                                                          Additional                  minimum     Total common
                                                Common     paid-in      Retained      pension     stockholders'
                                                stock      capital       deficit     liability       deficit
                                                -----      -------       -------     ---------       -------
                                                                                    
Balance last day of February 1994              $     49    $ 49,082    $(151,653)    $    (55)     $(102,577)

Purchase of common stock (3,065 shares)               -         (60)           -            -            (60)
11.5% preferred stock dividend                        -           -         (190)           -           (190)
Undeclared cumulative preferred stock dividend        -           -         (496)           -           (496)
Adjustment for minimum pension liability              -           -            -           12             12
Net income                                            -           -        5,564            -          5,564
                                               --------    --------     --------     --------       --------

Balance last day of February 1995                    49      49,022     (146,775)         (43)       (97,747)

Issuance of common stock (26,685 shares)              -         436            -            -            436
13.5% preferred stock dividend                        -         715         (219)           -            496
Undeclared cumulative preferred stock dividend        -           -         (477)           -           (477)
Adjustment for minimum pension liability              -           -            -         (274)          (274)
Net loss                                              -           -       (9,874)           -         (9,874)
                                               --------    --------     --------     --------      ---------

Balance last day of February 1996                    49      50,173     (157,345)        (317)      (107,440)

Issuance of common stock (64,362 shares)              1       1,009            -            -          1,010
13.5% preferred stock dividend                        -           -         (237)           -           (237)
Undeclared cumulative preferred stock dividend        -           -         (458)           -           (458)
Adjustment for minimum pension liability              -           -            -          (44)           (44)
Net loss                                              -           -       (6,540)           -         (6,540)
                                               --------    --------     --------     --------       --------

Balance last day of February 1997              $     50    $ 51,182    $(164,580)    $   (361)     $(113,709)
                                               ========    ========    =========     ========      =========

See accompanying notes to consolidated financial statements.

                                      -11-
   12
                              AMERICOLD CORPORATION

                      Consolidated Statements of Cash Flows

              Years ended last day of February 1995, 1996 and 1997

                                 (In Thousands)

                                                                        1995        1996        1997
                                                                        ----        ----        ----
                                                                                    
Cash flows from operating activities:
  Net income (loss)                                                 $   5,564   $ (9,874)    $  (6,540)
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
      Depreciation                                                     20,140     19,682        20,697
      Amortization of cost in excess of net assets acquired             2,535      2,773         2,506
      Amortization of debt issuance costs                               1,276        964         1,185
      Amortization of original issue discount                           1,369        430             -
      Gain (loss) on sale of assets                                      (286)      (555)           25
      Gain on insurance settlement                                    (16,953)         -             -
      Other amortization                                                  302        570           570
      Write-off of unamortized issuance costs                               -        962             -
      Write-off of original issuance discount                               -      1,989             -
      Write-off of long-term investment                                     -        750             -
      Change in assets and liabilities:
        Receivables                                                    (6,952)    (6,358)       (1,725)
        Prepaid expenses                                               (1,268)       954           458
        Tax refund receivable                                           1,012     (3,057)          700
        Other current assets                                              (67)      (150)          (46)
        Accounts payable                                                 1,291      4,622        4,753
        Accrued interest                                                   349      1,373         (590)
        Accrued expenses                                                 3,833        259        2,806
        Deferred revenue                                                 1,142       (207)        (152)
        Other current liabilities                                       (1,032)       718          629
        Deferred income taxes                                            1,540     (4,057)      (3,517)
        Other noncurrent liabilities                                    (1,111)       772       (2,901)
                                                                    ----------  ---------    ---------

          Net cash provided by operating activities                     12,684     12,560       18,858
                                                                    ----------  ---------    ---------

See accompanying notes to consolidated financial statements.

                                      -12-
   13
                              AMERICOLD CORPORATION

                Consolidated Statements of Cash Flows, Continued

                                 (In Thousands)

                                                                              1995             1996            1997
                                                                              ----             ----            ----
                                                                                                   
Cash flows from investing activities:
  Proceeds from sale of assets                                             $  1,105        $   6,169        $   1,658
  Expenditures for property, plant and equipment                            (13,203)         (34,183)         (33,634)
  Purchase of long-term investment                                             (447)              --               --
  Proceeds from insurance policies                                           26,343               --               --
  Expenditures for logistics software                                        (1,650)            (230)             (56)
  Other items, net                                                              287              646              943
                                                                           --------        ---------        ---------
        Net cash provided (used) by investing activities                     12,435          (27,598)         (31,089)
                                                                           --------        ---------        ---------

Cash flows from financing activities:
  Principal payments under capital lease and other
    debt obligations                                                         (2,087)          (2,752)          (2,425)
  Proceeds from mortgage                                                     13,475               --           15,222
  Retirement of note and mortgage                                            (9,044)              --          (11,376)
  Proceeds from sale of senior subordinated notes                                --               --          120,000
  Retirement of senior subordinated debentures                                   --               --         (115,000)
  Retirement of mortgage bonds                                                   --          (10,000)              --
  Release of escrow funds                                                     2,714           20,083            4,820
  Deposit of escrow funds                                                        --           (4,768)              --
  Debt issuance costs                                                          (846)            (269)          (5,668)
  Purchase of treasury stock                                                    (60)              --               --
  Issuance of stock                                                              --              438              218
  Preferred stock dividend                                                       --               --             (715)
                                                                           --------        ---------        ---------
          Net cash provided by financing activities                           4,152            2,732            5,076
                                                                           --------        ---------        ---------

          Net increase (decrease) in cash and cash equivalents               29,271          (12,306)          (7,155)

Cash and cash equivalents at beginning of year                                3,892           33,163           20,857
                                                                           --------        ---------        ---------
Cash and cash equivalents at end of year                                   $ 33,163        $  20,857        $  13,702
                                                                           ========        =========        =========

Supplemental disclosure of cash flow information:
  Cash paid during the year for interest, net of
    amounts capitalized                                                    $ 53,626        $  54,806        $  57,268
  Cash paid during the year for income taxes                                  2,675            2,531               58
Supplemental schedule of noncash investing and financing activities:
    Capital lease obligations incurred to lease new
      equipment                                                               1,120              844              243
    Sale proceeds placed in escrow                                            1,483              450            5,334
    Exchange of senior subordinated debentures                                   --          115,000               --
    Employee stock ownership plan contribution made
      with common stock                                                          --               --              750

See accompanying notes to consolidated financial statements.

                                      -13-
   14
                              AMERICOLD CORPORATION

                   Notes to Consolidated Financial Statements

                       Last day of February 1996 and 1997

(1)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Accounting policies and methods of their application that significantly
         affect the determination of financial position, cash flows and results
         of operations are as follows:

         (a)      Business Description

         Americold Corporation (the "Company") provides integrated logistics
         services for the frozen food industry consisting of warehousing and
         transportation management. These services are provided through the
         Company's network of 49 refrigerated warehouses and its refrigerated
         transportation management unit. The Company has a wholly-owned
         warehousing subsidiary, Americold Services Corporation.

         In addition, the Company operates a limestone quarry. This business is
         not significant to the Company as a whole and is not required to be
         reported as a separate industry segment.

         (b)      Principles of Consolidation

         The consolidated financial statements include the accounts of Americold
         Corporation and its wholly-owned subsidiary. All significant
         intercompany transactions, profits and balances have been eliminated.

         (c)      Property, Plant and Equipment

         Property, plant and equipment are stated at cost. Depreciation is
         generally provided on the straight-line method over the estimated
         useful lives of the respective assets ranging from 3 to 45 years for
         financial reporting purposes and on accelerated methods for income tax
         purposes where possible. Property held under capital leases (at
         capitalized value) is amortized on the straight-line method over its
         estimated useful life, limited generally by the lease period. The

                                      -14-
   15
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         amortization of the property held under capital leases is included with
         depreciation expense. Estimated remaining useful lives are reviewed
         periodically for reasonableness and any necessary change is generally
         effected at the beginning of the accounting period in which the
         revision is adopted.

         Maintenance and repairs are expensed in the year incurred; major
         renewals and betterments of equipment and refrigeration facilities are
         capitalized and depreciated over the remaining life of the asset.

         (d)      Cost in Excess of Net Assets Acquired

         On December 24, 1986, all the outstanding capital stock of the Company
         was acquired by a private group consisting of affiliates of Kelso &
         Company, Inc., certain institutional investors and certain key
         employees and members of the Company's management. The acquisition of
         the Company was accounted for as a purchase. An allocation of the
         purchase price was made to the acquired assets and liabilities based on
         their estimated fair market values at the date of acquisition. The
         unallocated purchase price is the Company's estimate of goodwill
         associated with the acquisition and is being amortized using the
         straight-line method over a period of 40 years.

         The Company assesses the recoverability of the goodwill by determining
         whether the amortization of the goodwill balance over its remaining
         useful life can be recovered through projected undiscounted future net
         income. The amount of goodwill impairment, if any, is measured based on
         projected discounted future net income using a discount rate reflecting
         the Company's current average cost of funds.

         (e)      Debt Issuance Costs

         Debt issuance costs incurred are amortized over the term of the related
         debt.

                                      -15-
   16
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         (f)      Income Taxes

         Income taxes are computed using the asset and liability method. Under
         the asset and liability method, deferred income tax assets and
         liabilities are determined based on the differences between the
         financial reporting and tax bases of assets and liabilities and are
         measured using the currently enacted tax rates and laws.

         (g)      Management Estimates and Assumptions

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.

         (h)      Revenue Recognition

         The Company's revenues are primarily derived from services provided to
         customers in both handling and storing frozen products and from freight
         services. Handling and storage revenue is based primarily upon the
         total weight of frozen product received into and held in storage and is
         recognized as earned, not as billed. Differences between revenue earned
         and revenue billed are recorded as deferred revenue. Approximately 50%
         of the handling revenue is deferred until the customer's products are
         released. The freight services revenues and direct costs are recognized
         upon delivery of freight.

         (i)      Income (Loss) Per Share

         Income (loss) per common share is computed by dividing net income
         (loss) less preferred dividend requirements, by the weighted average of
         common shares outstanding.

         (j)      Major Customers

         Consolidated net sales to H. J. Heinz Company and subsidiaries amounted
         to approximately $45.5 million, $108.1 million and $149.9 million in
         the years ended

                                      -16-
   17
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         the last day of February 1995, 1996 and 1997, respectively. No other
         customer accounted for 10% or more of consolidated net sales.

         (k)      Cash and Cash Equivalents

         All highly liquid investments with a maturity of three months or less
         when purchased are considered to be cash equivalents. There were cash
         equivalents of $15.4 million and $10.0 million as of the last day of
         February 1996 and 1997, respectively.

         (l)      New Accounting Standards

         Effective March 1, 1996, the Company adopted Financial Accounting
         Standard Board Statement of Financial Accounting Standards No. 121,
         "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
         Assets to be Disposed Of." This statement generally requires assessment
         of recoverability of an asset after events or circumstances that
         indicate an impairment to the asset and its future cash flows. Any
         impairment loss would be recognized as a one-time charge to earnings
         affecting results of operations, but would not affect the cash flow of
         the Company. There was no impairment loss to report upon adoption.

         Effective March 1, 1996, the Company adopted Financial Accounting
         Standards Board Statement of Financial Accounting Standards No. 123,
         "Accounting for Stock-Based Compensation" ("SFAS No. 123"). SFAS No.
         123 requires that, except for transactions with employees that are
         within the scope of Accounting Principles Board Opinion No. 25 ("APB
         No. 25"), all transactions in which goods or services are the
         consideration received for the issuance of equity instruments are to be
         accounted for based on the fair value of the consideration received or
         the fair value of the equity instrument issued, whichever is more
         reliably measurable. However, it also allows an entity to continue to
         measure compensation costs for those plans using the intrinsic value
         based method of accounting prescribed by APB No. 25. Entities electing
         to follow the accounting methods of APB No. 25 must make pro forma
         disclosures of net income and, if presented, earnings per share, as if
         the fair value method of accounting defined in SFAS No. 123 had been
         applied.

                                      -17-
   18
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         Pro forma disclosures required for entities that elect to continue to
         measure compensation cost using APB No. 25 must include the effects of
         all awards granted in fiscal years that begin after December 15, 1994.
         The Company has elected to continue using APB No. 25 and make the
         necessary SFAS No. 123 pro forma disclosures.

         The Company has not implemented the requirements of Financial
         Accounting Standards Board Statement of Financial Accounting Standards
         No. 128, "Earnings Per Share" ("SFAS No. 128"), although it will be
         required to do so for fiscal years beginning March 1, 1997 and
         thereafter.

         This Statement establishes a different method of computing net income
         per share than is currently required under the provisions of Accounting
         Principles Board Opinion No. 15. Under SFAS No. 128, the Company will
         be required to present both basic net income per share and diluted net
         income per share. The Company estimates that the adoption of SFAS No.
         128 will not have a material impact on its income per share.

(2)      Net Property, Plant and Equipment

         Net property, plant and equipment consists of the following (in
thousands):

                                                Last day
                                               of February
                                         -----------------------
                                           1996           1997
                                           ----           ----
                                                  
Land                                     $ 31,911       $ 35,038
Refrigerated facilities, buildings
and land improvements                     450,402        467,496
Machinery and equipment                    67,661         74,599
                                         --------       --------
                                          549,974        577,133

Less accumulated depreciation             174,123        192,649
                                         --------       --------

                                         $375,851       $384,484
                                         ========       ========

                                      -18-
   19
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

(3)      Other Noncurrent Assets

         Other noncurrent assets consist of the following (in thousands):

                                            Last day
                                           of February
                                           -----------
                                        1996         1997
                                        ----         ----
                                              
Restricted funds held by trustee       $5,037       $5,407
Real estate owned                         300          300
Security deposits                         261          261
Other                                   3,364        3,037
                                       ------       ------

                                       $8,962       $9,005
                                       ======       ======

(4)      Leases

         Assets under capital leases are included in net property, plant and
         equipment and consist of the following (in thousands):

                                           Last day
                                          of February
                                          -----------
                                        1996         1997
                                        ----         ----
                                              
Refrigerated facilities,
buildings and land improvements       $ 7,075       $ 7,075
Machinery and equipment                 4,635         3,124
                                      -------       -------
                                       11,710        10,199
Less accumulated depreciation           4,108         3,368
                                      -------       -------

                                      $ 7,602       $ 6,831
                                      =======       =======

                                      -19-
   20
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         Future minimum lease payments under noncancelable leases for years
         ended after the last day of February 1997 are as follows (in
         thousands):

         Year ending the last                           Capital       Operating
           day of February                              leases         leases
           ---------------                              ------         ------

                  1998                                  $  4,013        $  6,298
                  1999                                       782           5,348
                  2000                                       590           4,290
                  2001                                       509           3,211
                  2002                                       350           3,072
                 Thereafter                                  742          20,540
                                                        --------       ---------

                 Total minimum lease payments           $  6,986        $ 42,759
                                                                        ========

         Less amounts representing interest                1,235
                                                        --------
                 Present value of net minimum
                   lease payments                       $  5,751
                                                        ========

         Included in expenses for the years ended the last day of February 1995,
         1996 and 1997 are approximately $9.5 million, $7.7 million and $7.2
         million, respectively, of rental expense net of sublease rentals for
         operating leases.

         The Company has arranged for up to $25.0 million in lease financing of
         which approximately $17.7 million was used as of the last day of
         February 1997.

         In November 1996, the Company entered into a sale/leaseback transaction
         of its Pasco, Washington facility. Of the approximately $6.8 million of
         net proceeds, the Company received approximately $1.5 million at
         closing and the remaining $5.3 million was placed in escrow with the
         Trustee under the indenture governing the Company's first mortgage
         bonds. The Company has until November 1997 to substitute the
         unencumbered property for the total amount of cash, or any portion
         thereof, held in escrow. Any escrowed funds remaining after the one
         year period will be used to repurchase outstanding mortgage bonds. The
         deferred gain resulting from the sale/leaseback transaction of
         approximately $2.7 million is being amortized over the approximate ten
         year life of the lease.

                                      -20-
   21
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

(5)      Accrued Expenses

         Accrued expenses consist of the following (in thousands):

                                                            Last day
                                                           of February
                                                    -------------------------
                                                      1996             1997
                                                    ---------       ---------
                                                              
         Accrued payroll                            $   3,565       $   3,747
         Accrued vacation pay                           2,462           2,831
         Accrued taxes                                  1,022           1,163
         Accrued employee stock ownership
           plan contribution                              750             500
         Other                                          3,805           5,419
                                                    ---------       ---------

                                                    $  11,604       $  13,660
                                                    =========       =========

(6)      Other Current Liabilities

         Other current liabilities consist of the following (in thousands):

                                                          Last day
                                                         of February
                                                  -------------------------
                                                    1996             1997
                                                  ---------       ---------
                                                            
         Workers' compensation                    $     991       $     693
         Pension                                      1,100           2,110
         Other                                        2,539           2,456
                                                  ---------       ---------

                                                  $   4,630       $   5,259
                                                  =========       =========

                                      -21-
   22
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

(7)      Long-term Debt

         Long-term debt consists of the following (in thousands):

                                                          Last day
                                                         of February
                                                         -----------
                                                     1996           1997
                                                     ----           ----
                                                            
Capital lease obligations (9.3% and 9.1%
  weighted average interest rate,
  respectively)                                    $  6,720       $  5,751
Senior subordinated debentures - 15% fixed
  due May 1, 2007                                   115,000             --
Senior subordinated notes - 12.875% fixed,
  due May 1, 2008.  Interest rate may
  increase by 1% effective November 1, 1997              --        120,000
First mortgage bonds, Series A - 11.45%
  fixed, due June 30, 2002, interest
  payments only to January 1, 1999
  with principal amortization commencing
  July 1, 1999                                      140,000        140,000
First mortgage bonds, Series B - 11.5%
  fixed, due March 1, 2005, interest
  payments only to September 1, 2003
  with a mandatory sinking fund payment
  of $88,125 on March 1, 2004                       176,250        176,250
Mortgage notes payable - various interest
  rates ranging from 8.6% to 13.6% requiring
  monthly principal and interest payments
  with maturities ranging from 2006 to 2017          26,429         29,062
                                                   --------       --------
                                                    464,399        471,063
Less current maturities of long-term debt             2,732          5,229
                                                   --------       --------

                                                   $461,667       $465,834
                                                   ========       ========

                                      -22-
   23
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         The Company has issued first mortgage bonds and the bonds are secured
         by mortgages or deeds of trust on 31 of the Company's facilities. The
         Company entered into an indenture in connection with the issuance of
         the first mortgage bonds which, like the Company's revolving credit
         agreement with the Company's primary bank, requires the Company to meet
         certain affirmative and restrictive covenants. Significant restrictive
         items include, among others, limitations on additional indebtedness,
         liens, dividends, capital expenditures, asset dispositions, lease
         commitments and investments. Also, certain "pro forma debt service"
         ratios and senior debt to net worth ratios must be maintained. At
         February 28, 1997, the Company was in compliance with all such
         covenants.

         The Company was notified in December 1996 that the Metropolitan Life
         Insurance Company (the "Met") sold its entire $140 million holdings of
         the Company's Series A, 11.45% First Mortgage Bonds. As a result of
         such transaction, the Second Amended and Restated Investment Agreement,
         dated May 5, 1995, between the Met and the Company, which included
         certain financial covenants and other restrictive covenants, was
         terminated.

         On April 9, 1996, the Company sold $120.0 million aggregate principal
         amount of the Company's 12.875% Notes. The interest rate on the 12.875%
         Notes can be increased from 12.875% to 13.875% if the 12.875% Notes are
         not rated "B3 or higher" by Moody's Investor Services, and "B- or
         higher" by Standard & Poor's, by November 1, 1997. The 12.875% Notes
         have been rated "B-" by Standard & Poor's since they were issued, and
         as of February 28, 1997, "Caa" by Moody's Investor Services.

         The available amount under the Company's revolving credit agreement was
         $23.1 million as of the last day of February 1997, of which $8.7
         million of letters of credit were outstanding. No cash borrowings were
         outstanding at February 28, 1997.

         As of the last day of February 1997, aggregate annual maturities of
         long-term debt are as follows (in thousands):

                                      -23-
   24
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

               Year ended the last
                 day of February
               -------------------
                                                         
                        1998                                $   5,229
                        1999                                    2,463
                        2000                                   32,502
                        2001                                   38,642
                        2002                                   38,282
                        Thereafter                            353,945
                                                            ---------
                                                            $ 471,063
                                                            =========

(8)      Employee Benefit Plans

         (a)      Defined Benefit Pension Plans

         The Company has defined benefit pension plans which cover substantially
         all employees, other than union employees covered by union pension
         plans under collective bargaining agreements. Benefits under these
         plans are based on years of credited service and compensation during
         the years preceding retirement or on years of credited service and
         established monthly benefit levels.

         Pension expense for all plans, including plans jointly administered by
         industry and union representatives, totaled $1.4 million, $1.7 million
         and $1.9 million for years ended the last day of February 1995, 1996
         and 1997, respectively. Actuarial valuations for defined benefit plans
         are performed as of the end of the plan year. The most recent actuarial
         valuations are as of the last day of February 1997.

         The funded status of the Company's defined benefit pension plans and
         the accrued pension expense amounts recognized in the Company's
         consolidated financial statements within other noncurrent liabilities,
         as of the last day of February 1996 and 1997, are as follows (in
         thousands):

                                      -24-

   25
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

                                                                Last day of                       Last day of
                                                               February 1996                      February 1997
                                                       -----------------------------       ----------------------------
                                                       Plans with        Plans with        Plans with       Plans with
                                                        assets in        accumulated        assets in       accumulated
                                                        excess of        benefits in        excess of       benefits in
                                                       accumulated        excess of        accumulated       excess of
                                                        benefits           assets           benefits          assets
                                                       -----------       -----------       -----------      -----------
                                                                                                
Actuarial present value of benefit obligations:
    Accumulated benefit obligations:
    Vested benefits                                     $ 19,902          $  7,382          $ 19,805          $ 7,740
    Nonvested benefits                                       220               128               947              316
                                                        --------          --------          --------          -------
                                                          20,122             7,510            20,752            8,056

  Effect of assumed future
    compensation increases                                 3,808                --             4,379               --
                                                        --------          --------          --------          -------

      Projected benefit obligations
        for services rendered to date                     23,930             7,510            25,131            8,056

Plan assets at fair value                                 20,644             6,005            22,227            6,659
                                                        --------          --------          --------          -------

      Projected benefit obligations in excess
        of plan assets                                     3,286             1,505             2,904            1,397

Unrecognized prior service cost                             (119)             (108)              (85)            (101)
Unrecognized net gain (loss) from past
  experience different from that assumed
  and effects of changes in assumptions                    1,323              (317)            1,277             (361)
                                                        --------          --------          --------          -------

      Accrued pension liability                         $  4,490          $  1,080          $  4,096          $   935
                                                        ========          ========          ========          =======

         Net periodic pension expense for the years ended the last day of
         February 1995, 1996 and 1997 includes the following components (in
         thousands):

                                                    Last day of February
                                              1995          1996          1997
                                            -------       -------       -------
                                                               
Service cost - benefits earned
  during the period                         $ 1,107       $ 1,165       $ 1,186
Interest cost on projected
  benefit obligation                          2,121         2,293         2,431
Actual return on plan assets                 (2,554)       (4,301)       (2,826)
Net amortization and deferral                  (143)        1,541           109
                                            -------       -------       -------

                                            $   531       $   698       $   900
                                            =======       =======       =======

                                      -25-
   26
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

Actuarial assumptions used for determining pension liabilities were:

                                                       Last day of February
                                                 1995         1996         1997
                                                 ----         ----         ----
                                                                  
  Discount rate for interest cost                 8.5%         8.0%         8.0%
  Rate of increase in future
    compensation levels                           4.0%         4.0%         4.0%
  Expected long-term rate of
    return on plan assets                        10.5%        10.5%        10.5%

Plan assets are assigned to several investment management companies and are
invested in various equity and fixed fund investments in accordance with the
Company's investment policy.

(b)      Employee Stock Ownership Plan

         The Company established an employee stock ownership plan, effective
         March 1, 1987, which is intended to provide qualifying employees an
         equity interest in the Company, as well as potential retirement
         benefits. The trust established under the plan is designed to invest
         primarily in the Company's stock. Contributions by the Company, in the
         form of common or preferred stock of the Company, or cash, or a
         combination thereof, may be made to the trustee on behalf of eligible
         participants for each plan year as determined by the Company's Board of
         Directors. Participating employees with vested benefits, upon
         retirement or termination, have the option of retaining the stock or
         selling it back to the Company at its fair market value.

(c)      Postretirement Benefits Other Than Pensions

         In addition to providing retirement benefits, the Company provides
         certain health care and life insurance benefits for retired employees.
         These benefits are provided to substantially all employees other than
         certain union employees who have elected not to participate.

                                      -26-
   27
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         The total of accumulated postretirement benefits obligation (APBO),
         which is an unfunded obligation, is as follows:

                                                     Last day of February
                                                1995          1996          1997
                                                ----          ----          ----
                                                                 
         Retirees                             $2,314        $2,375        $2,618
         Active employees                      1,511         1,832         2,209
                                              ------        ------        ------

                                              $3,825        $4,207        $4,827
                                              ======        ======        ======

         The components of net periodic postretirement expense for the years
         ended the last day of February are as follows (in thousands):

                                                   1995        1996        1997
                                                  -----       -----       -----
                                                                 
         Service cost benefits earned
           in period                              $ 104       $ 114       $ 123
         Interest cost on APBO                      313         334         383
         Amortization of unamortized
         prior service cost                         (22)        (22)         (8)
                                                  -----       -----       -----

                                                  $ 395       $ 426       $ 498
                                                  =====       =====       =====

         The discount rate used to determine the APBO and net periodic expense
         as of February 28, 1995 was 9.0%, and as of February 29, 1996 and
         February 28, 1997 was 8.5%.

         For fiscal 1997, an 11% increase in the medical cost trend rate was
         assumed. This rate is projected to decrease incrementally to 5.5% after
         nine years. A 1% increase in the medical trend rate would increase the
         APBO by $0.2 million and increase the net periodic expense by a
         negligible amount.

                                      -27-
   28
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

9.       Common Stockholders' Deficit

         The Company has reserved 300,000 shares of common stock for issuance
         under a stock option plan established in 1987. Under the plan, options
         are granted by the Compensation Committee of the Board of Directors to
         purchase common stock at a price not less than 85% of the fair market
         value on the date the option is granted.

         Stock options outstanding and transactions involving the stock option
         plan are summarized for the years ended the last day of February as
         follows:

                                                  1995                            1996                            1997
                                        ------------------------        ------------------------        ------------------------
                                                        Weighted                        Weighted                        Weighted
                                                        Average                         Average                         Average
                                                        Exercise                        Exercise                        Exercise
                                         Shares          Price           Shares          Price           Shares          Price
                                         ------          -----           ------          -----           ------          -----
                                                                                                       
Outstanding at beginning
  of year                               257,934          $16.06         253,795          $16.17         249,656          $15.45

Granted                                      --              --              --              --         160,000           12.30

Exercised                                    --              --              --              --         (21,748)          10.00

Cancelled                                    --              --              --              --        (160,000)          19.77

Forfeited                                (4,139)          10.00          (4,139)          10.00          (2,760)          10.00
                                        -------          ------         -------          ------         -------          ------

Outstanding at end of year              253,795          $16.17         249,656          $16.26         225,148          $11.63
                                        =======          ======         =======          ======         =======          ======

Options exercisable at
  year end                              185,795          $14.57         213,656          $15.45          65,148          $10.00
                                        =======          ======         =======          ======         =======          ======

Weighted average grant date
  fair value of options granted
  during the year                                        $    0                          $    0                          $ 2.67
                                                         ======                          ======                          ======

         The Company has computed the value of all options granted during fiscal
         1997 using the minimum value method as prescribed under SFAS No. 123
         for pro forma disclosure purposes. The following weighted average
         assumptions were used for the grants made in fiscal 1997: risk free
         interest rate at 6.875%; expected life of ten years; and dividend rate
         of zero percent.

                                      -28-
   29
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         The total value of options granted during fiscal 1997 was computed at
         $428,000. The options granted in fiscal 1997 have a five-year vesting
         schedule and compensation will be amortized on a pro forma basis over
         that period.

         The options granted in fiscal 1997 had not vested as of the last day of
         February 1997 and therefore there would be no compensation cost in the
         current year under the pro forma disclosure provisions of SFAS No. 123.

         The effects of applying SFAS No. 123 in the pro forma disclosure are
         not indicative of future amounts.

         As of February 28, 1997, options for 225,148 shares were outstanding
         with exercise prices between $10.00 and $12.30, and a remaining
         weighted average contractual life of 6.7 years.

10.      Preferred Stock

         The Company has contributed shares of its Series A, variable rate,
         cumulative preferred stock to the Americold Employee Stock Ownership
         Plan (ESOP). The preferred stock is redeemable by participants of the
         plan. As of the last day of February 1996 and 1997, dividends not
         declared on the Company's cumulative preferred stock total
         approximately $477,000 and $458,000, respectively.

11.      Income Taxes

         The provision (benefit) for income taxes consists of the following (in
         thousands):

                                          1995            1996            1997
                                        -------         -------         -------
                                                               
         Federal:
           Current                      $ 2,867         $    --         $   250
           Deferred                       1,494          (2,858)         (2,422)
                                        -------         -------         -------

                                          4,361          (2,858)         (2,172)
                                        -------         -------         -------

                                      -29-
   30
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

                                                               
         State:
           Current                          820              --             112
           Deferred                          46            (568)           (544)
                                        -------         -------         -------

                                        $ 5,227         $(3,426)        $(2,604)
                                        =======         =======         =======

         Following is a reconciliation of the difference between income taxes
         computed at the federal statutory rate and the provision for income
         taxes (in thousands):

                                                  1995        1996        1997
                                                  ----        ----        ----
                                                               
         Computed income tax expense
           (benefit) at federal statutory
           rate                                 $ 3,777     $(4,027)    $(3,200)
         State and local income taxes,
           net of federal income tax
           benefits                                 563        (369)       (280)
         Amortization of cost in excess of
           net assets acquired                      887         970         876
                                                -------     -------     -------

                                                $ 5,227     $(3,426)    $(2,604)
                                                =======     =======     =======

         Deferred income taxes reflect the net tax effects of temporary
         differences between the carrying amounts of assets and liabilities for
         financial reporting purposes and the related amounts used for income
         tax purposes. Significant components of the Company's deferred tax
         liabilities as of the last day of February 1996 and 1997 are as follows
         (in thousands):

                                                          1996           1997
                                                          ----           ----
                                                                
         Deferred tax liabilities:
         Property, plant and equipment, due to
           differences in depreciation and
           prior accounting treatment                  $(110,574)     $(109,099)
                                                       ---------      ---------

                                      -30-
   31
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

                                                                 
         Deferred tax assets:
         Receivables, due to allowance for
           doubtful accounts                                   86           155
         Employee compensation and other
           benefits                                         1,879         3,605
         Capital leases, net                                1,714         1,617
         Postretirement benefits other than
           pensions, due to accrual for
           financial reporting purposes                     1,650         1,794
         Alternative minimum tax credit
           carryforwards                                    2,865         3,192
         Other, net                                         1,659         1,532
                                                        ---------      --------

           Total deferred tax assets                        9,853        11,895
                                                        ---------      --------

         Net deferred tax liability
           before valuation allowance                    (100,721)      (97,204)

         Deferred tax asset valuation allowance            (1,320)       (1,320)
                                                        ---------      --------

                                                        $(102,041)     $(98,524)
                                                        =========      ========

         The valuation allowance for deferred tax assets as of March 1, 1995 was
         $1.3 million. The valuation allowance is required to reduce the amount
         of deferred tax assets to an amount which will more likely than not be
         realized.

         At February 28, 1997, the Company has an alternative minimum tax credit
         carryforward of approximately $3.2 million available to offset future
         regular taxes in excess of future alternative minimum taxes.

12.      Extraordinary Item

         In conjunction with the exchange of the senior subordinated debentures
         and the repurchase of the $10.0 million of first mortgage bonds in
         fiscal 1996, as discussed in note 15, unamortized original issue
         discount of approximately $2.0

                                      -31-
   32
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         million and unamortized issuance costs of approximately $1.0 million
         were written off, resulting in an extraordinary loss, net of taxes, of
         approximately $1.8 million.

13.      Disclosures About The Fair Value of Financial Instruments

         Cash, Trade Receivables, Other Receivables, Accounts Payable and
         Accrued Expenses

         The carrying amount of these items approximates fair value because of
         the short maturity of these instruments.

         Long-Term Debt

         The fair values of each of the Company's long-term debt instruments are
         based on (a) the amount of future cash flows associated with each
         instrument discounted using the Company's current borrowing rate for
         similar debt instruments of comparable maturity; (b) in the case of the
         first mortgage bonds Series B and senior subordinated notes, market
         price; or (c) in the case of the first mortgage bonds - Series A, at
         par, because there is not a market for such securities (in thousands).

                                                             As of the last day
                                                              of February 1997
                                                              ----------------
                                                                         Estimated
                                                         Carrying       fair market
                                                          amount          value
                                                          ------          -----
                                                                  
         Senior subordinated notes                       $120,000       $124,500
         First mortgage bonds - Series A                  140,000        140,000
         First mortgage bonds - Series B                  176,250        185,063
         Mortgage notes payable                            29,062         29,062

                                      -32-
   33
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         Limitations

         Fair value estimates are made at a specific point in time, based on
         relevant market information and information about the financial
         instrument. These estimates are subjective in nature and involve
         uncertainties and matters of significant judgment and therefore cannot
         be determined with precision. Changes in assumptions could
         significantly affect the estimates.

14.      Gain on Insurance Settlement

         Gain on insurance settlement of approximately $17.0 million relates to
         the Company's settlement of its first party claims with its insurance
         carriers for business interruption, property damage and out-of-pocket
         expenses with respect to the December 1991 fire at the Company's Kansas
         City, Kansas warehouse facility. No previous income recognition was
         determinable until the Company had settled all of the lawsuits and
         claims related to the fire.

15.      Plan of Reorganization Under Chapter 11

         On May 9, 1995, the Company filed a prepackaged plan of reorganization
         (the "Plan") under Chapter 11 of the United States Bankruptcy Code in
         the United States Bankruptcy Court for the District of Oregon (the
         "Court"). The principal purpose of the Plan was to reduce the Company's
         short-term cash requirements with respect to payments due on its
         subordinated indebtedness and to adjust certain restrictive financial
         covenants and certain other provisions contained in the Amended and
         Restated Investment Agreement, dated March 2, 1993, between the Company
         and the Met. On June 19, 1995, the Court approved the Company's
         Disclosure Statement dated April 14, 1995 and the Company's
         solicitation of votes to accept or reject the Plan, and confirmed the
         Plan. On June 30, 1995, the Plan became effective.

         In connection with the Plan, the Company rejected certain lease
         agreements relating to four warehouse facilities at Watsonville,
         Oakland and San Francisco, California; and Chicago, Illinois. In
         February 1996, the Company settled all lease rejection issues with the
         lessor of three properties located in Watsonville, Oakland

                                      -33-
   34
                              AMERICOLD CORPORATION

            Notes to Consolidated Financial Statements - (continued)

         and San Francisco, California. Such settlement did not involve the
         payment of any damages by the Company. In September 1996, the Company
         settled all lease rejection issues with the lessor of the Chicago,
         Illinois property. Such settlement, representing one year's rent
         recovery by the lessor as provided by the Bankruptcy Code, required a
         payment of approximately $0.4 million.

         The Company has expensed the settlement payment and related
         professional fees and all professional fees and similar expenditures
         incurred related to the prepackaged bankruptcy as "reorganization
         expenses."

                                      -34-
   35
                         PART I - Financial Information

Item 1.  Financial Statements

                              AMERICOLD CORPORATION

                           CONSOLIDATED BALANCE SHEETS
                    Last day of February 1997 and August 1997
                        (In thousands, except share data)

                                                                            Last day of      Last day of
                                                                           February 1997     August 1997
                                                                           -------------     -----------
                                                                                             (Unaudited)
                                                                                       
         ASSETS
Current assets:
  Cash and cash equivalents                                                  $  13,702        $  16,315
  Trade receivables, net                                                        27,560           28,677
  Other receivables, net                                                         3,138            3,319
  Prepaid expenses                                                               3,828            3,276
  Tax refund receivable                                                          2,636            2,669
  Other current assets                                                             891              733
                                                                             ---------        ---------
      Total current assets                                                      51,755           54,989

Property, plant and equipment, less accumulated depreciation
  of $192,649 and $202,385, respectively                                       384,484          375,501
Cost in excess of net assets acquired, less accumulated
  amortization of $24,644 and $25,897, respectively                             74,749           73,496
Other noncurrent assets                                                         20,046           19,425
                                                                             ---------        ---------

      Total assets                                                           $ 531,034        $ 523,411
                                                                             =========        =========

         LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable                                                           $  16,116        $  12,989
  Accrued interest                                                              18,466           18,161
  Accrued expenses                                                              13,660           13,993
  Deferred revenue                                                               5,555            6,022
  Current maturities of long-term debt                                           5,229            5,242
  Other current liabilities                                                      5,259            5,119
                                                                             ---------        ---------
      Total current liabilities                                                 64,285           61,526

Long-term debt, less current maturities                                        465,834          464,581
Deferred income taxes                                                           98,524           97,532
Other noncurrent liabilities                                                    10,347           10,443
                                                                             ---------        ---------
      Total liabilities                                                        638,990          634,082
                                                                             ---------        ---------

Preferred stock, $100 par value; authorized 1,000,000 shares;
  issued and outstanding 52,936 and 46,797 shares, respectively                  5,753            5,477
                                                                             ---------        ---------

Common stockholders' deficit:
  Common stock, $.01 par value; authorized
    10,000,000 shares; issued and outstanding 4,995,556 and
    5,037,823 shares, respectively                                                  50               50
  Additional paid-in capital                                                    51,182           51,870
  Retained deficit                                                            (164,580)        (167,707)
  Equity adjustment to recognize minimum pension liability                        (361)            (361)
                                                                             ---------        ---------
      Total common stockholders' deficit                                      (113,709)        (116,148)
                                                                             ---------        ---------

      Total liabilities, preferred stock and
      common stockholders' deficit                                           $ 531,034        $ 523,411
                                                                             =========        =========

See accompanying notes to consolidated financial statements.

                                      -35-
   36
                              AMERICOLD CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS

          Three and six months ended last day of August 1996 and 1997
                     (In thousands, except per share data)

                                          Three months    Three months    Six months      Six months
                                             ended           ended           ended           ended
                                          last day of     last day of     last day of     last day of
                                          August 1996     August 1997     August 1996     August 1997
                                          -----------     -----------     -----------     -----------
                                          (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)

Net sales                                   $ 73,139        $ 73,299        $152,535        $145,807
                                            --------        --------        --------        --------

Operating expenses:
  Cost of sales                               55,024          53,457         114,489         106,085
  Amortization of cost in excess of
    net assets acquired                          626             626           1,253           1,253
  Selling and administrative expenses          7,312           7,545          15,035          15,219
                                            --------        --------        --------        --------

      Total operating expenses                62,962          61,628         130,777         122,557
                                            --------        --------        --------        --------

Gross operating margin                        10,177          11,671          21,758          23,250
                                            --------        --------        --------        --------
Other (expense) income:
  Interest expense                           (13,721)        (13,893)        (29,256)        (27,816)
  Reorganization expenses                       (403)             --            (403)             --
  Other, net                                     (46)            722             468             785
                                            --------        --------        --------        --------

      Total other expense                    (14,170)        (13,171)        (29,191)        (27,031)
                                            --------        --------        --------        --------

Loss before income taxes                      (3,993)         (1,500)         (7,433)         (3,781)
Benefit for income taxes                       1,320             343           2,424             992
                                            --------        --------        --------        --------

Net loss                                    $ (2,673)       $ (1,157)       $ (5,009)       $ (2,789)
                                            ========        ========        ========        ========

Net loss per common share                   $  (0.58)       $  (0.26)       $  (1.09)       $  (0.62)
                                            ========        ========        ========        ========

Weighted average number of shares
  outstanding                                  4,931           5,012           4,931           5,004
                                            ========        ========        ========        ========

See accompanying notes to consolidated financial statements.

                                      -36-
   37
                              AMERICOLD CORPORATION

                    CONSOLIDATED STATEMENTS OF CASH FLOWS Six
                  months ended last day of August 1996 and 1997
                                 (In thousands)

                                                                   Six months      Six months
                                                                   ended last      ended last
                                                                     day of          day of
                                                                  August 1996     August 1997
                                                                  -----------     -----------
                                                                  (Unaudited)     (Unaudited)
                                                                            
Cash flows from operating activities:
  Net loss                                                        $  (5,009)       $(2,789)
  Adjustments to reconcile net loss to
   net cash provided (used) by operating activities:
    Depreciation                                                     10,203         10,534
    Amortization and other noncash expenses                           2,086          2,310
    Changes in assets and liabilities                                (5,826)          (176)
    Provision for deferred taxes                                     (2,424)          (992)
                                                                  ---------        -------
      Net cash provided (used) by operating activities                 (970)         8,887
                                                                  ---------        -------

Cash flows from investing activities:
  Net expenditures for property, plant
    and equipment                                                   (15,220)        (5,979)
  Other items, net                                                      291            754
                                                                  ---------        -------
      Net cash used by investing activities                         (14,929)        (5,225)
                                                                  ---------        -------

Cash flows from financing activities:
  Principal payments under capitalized
    lease and other debt obligations                                 (1,457)        (1,240)
  Proceeds from sale of senior subordinated notes                   120,000             --
  Retirement of senior subordinated debentures                     (115,000)            --
  Debt issuance costs                                                (5,379)           (50)
  Release of escrowed funds                                           4,820            167
  Issuance of stock                                                      --             74
                                                                  ---------        -------
      Net cash provided (used) by financing activities                2,984         (1,049)
                                                                  ---------        -------
      Net increase (decrease) in cash and cash equivalents          (12,915)         2,613

Cash and cash equivalents at beginning of period                     20,857         13,702
                                                                  ---------        -------

Cash and cash equivalents at end of period                        $   7,942        $16,315
                                                                  =========        =======

Supplemental disclosure of cash flow information:
  Cash paid year-to-date for interest,
    net of amounts capitalized                                    $  28,920        $28,121
                                                                  =========        =======

  Capital lease obligations incurred to lease new equipment       $     231        $    --
                                                                  =========        =======

  Cash paid during the year for income taxes                      $      24        $    34
                                                                  =========        =======

See accompanying notes to consolidated financial statements.

                                      -37-
   38
                              AMERICOLD CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       PRINCIPLES OF CONSOLIDATION

         The consolidated balance sheet as of the last day of August 1997; the
         related consolidated statements of operations for the six months ended
         the last day of August 1996 and August 1997; and the related
         consolidated statements of cash flows for the six months ended the last
         day of August 1996 and August 1997 are unaudited. In the opinion of
         management, all adjustments necessary for a fair presentation of such
         financial statements have been included. Such adjustments consisted of
         normal recurring items. Interim results are not necessarily indicative
         of results for a full year. The financial information presented herein
         should be read in conjunction with the financial statements included in
         the registrant's Annual Report on Form 10-K for the year ended the last
         day of February 1997.

2.       COMMON STOCKHOLDERS' DEFICIT

         The Company has reserved 300,000 shares of common stock for issuance
         under a stock option plan established in 1987. Under the plan, options
         are granted by the Compensation Committee of the Board of Directors to
         purchase common stock at a price not less than 85% of the fair market
         value on the date the option is granted.

         Information with regard to the plan as of the last day of August 1997
         follows:

                                                                           Weighted
                                                                           Average
                                                                           Exercise
                                                         Shares            Price
                                                         ------            -----
                                                                     
                  Outstanding at beginning of year       225,148           $11.63
                  Granted                                      -                -
                  Exercised                               (3,449)           10.00
                  Cancelled                                    -                -
                  Forfeited                                 (690)           10.00
                                                         -------           ------

                  Outstanding                            221,009           $11.66
                                                         =======           ======

                                      -38-
   39

                                                                     

                  Options exercisable                     93,009           $10.79
                                                         =======           ======

         All stock options will become fully exercisable upon the completion of
         the merger discussed in Note 8.

3.       PROVISION FOR INCOME TAXES

         The provision for income taxes was computed using a tax rate of 39.2%.
         The tax rate was applied to loss before income taxes, after adjusting
         for amortization of cost in excess of net assets acquired.

4.       LOSS PER COMMON SHARE

         Loss per common share is computed by dividing net loss, less preferred
         dividend requirements, by the weighted average number of common shares
         outstanding. See Exhibit 11, Statement Regarding Computation of Per
         Share Earnings.

5.       CASH AND CASH EQUIVALENTS

         Cash and cash equivalents includes highly liquid instruments, with
         original maturities of three months or less when purchased. There were
         cash equivalents totaling $10.0 million and $13.0 million as of the
         last day of February 1997 and August 1997, respectively.

6.       LONG-TERM DEBT

         On April 9, 1996, the Company sold $120.0 million aggregate principal
         amount of the Company's 12.875% Senior Subordinated Notes due 2008. The
         Company used $115.0 million of the proceeds to redeem at par on May 9,
         1996 the Company's 15% Senior Subordinated Debentures due 2007. The
         remaining proceeds were used to pay transaction costs. The interest
         rate on the notes can be increased from 12.875% to 13.875% if the notes
         are not rated "B- or higher" by Standard & Poor's and "B3 or higher" by
         Moody's Investors Service by November 1, 1997. The notes have been
         rated "B-" by Standard and Poor's since they were issued, and as of
         September 30, 1997, "Caa" by Moody's Investors Service.

                                      -39-
   40
7.       NEW ACCOUNTING STANDARDS

         The Company has not implemented the reporting requirements of Financial
         Accounting Standards Board Statement of Financial Accounting Standards
         No. 128, "Earnings Per Share" ("SFAS No. 128"), although it will be
         required to do so during the fourth quarter of fiscal 1998 and
         thereafter. This Statement establishes a different method of computing
         net income per share than is currently required under the provisions of
         Accounting Principles Board Opinion No. 15. Under SFAS No. 128, the
         Company will be required to present both basic net income per share and
         diluted net income per share. The Company estimates that the adoption
         of SFAS No. 128 will not have a material impact on its income per
         share.

         The Company has not implemented the reporting requirements of Financial
         Accounting Standards Board Statement of Financial Accounting Standards
         No. 130, "Reporting Comprehensive Income" ("SFAS No. 130"), although it
         will be required to do so during the first quarter of fiscal 1999 and
         thereafter. This Statement establishes standards for reporting and
         display of comprehensive income and its components. The Company does
         not believe that the adoption of SFAS No. 130 will have a material
         impact on its financial statement presentation.

         The Company has not implemented the reporting requirements of Financial
         Accounting Standards Board Statement No. 131, "Disclosures about
         Segments of an Enterprise and Related Information" ("SFAS No. 131"),
         although it will be required to do so for fiscal 1999 and thereafter.
         This statement establishes standards for reporting operating segments
         in annual financial statements and requires selected information about
         operating segments in interim financial statements. The Company
         believes it may be required to show information not currently
         disclosed.

8.       SUBSEQUENT EVENT

         On September 29, 1997, the Company announced that it had entered into a
         merger agreement pursuant to which Vornado Realty Trust ("Vornado")
         would acquire the Company. Vornado announced that, in addition, it had
         also entered into a merger agreement to acquire URS Logistics, Inc.
         (Kelso & Company, who owns a controlling interest in the Company, holds
         approximately 57% of the common equity of URS Logistics, Inc). Vornado
         also announced that it had entered into a partnership agreement with
         Crescent Real Estate Equities Company ("Crescent") to make the
         acquisitions, with Vornado controlling 60% of the partnership and
         Crescent 40%.

                                      -40-

   41
         The consideration for the acquisition of the Company is approximately
         $582 million, including $111 million in cash and $471 million in
         indebtedness. The price to be paid to the shareholders per common share
         is $20.70. The purchase price also includes the redemption of the
         Company's preferred stock for $100 per share, its par value, plus
         accrued and unpaid dividends to the date of closing, and the buyout of
         all existing stock options at $20.70 per share, less the exercise price
         of each option share. The transaction is expected to close no later
         than December 31, 1997.

         The Company believes that the transaction, when completed, will afford
         the Company the opportunity to improve its capital structure and
         provide substantial capital to support warehouse growth.

                                      -41-

   42
INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
URS Logistics, Inc.:

We have audited the accompanying consolidated balance sheets of URS Logistics,
Inc. (the "Company") and subsidiary as of December 31, 1996 and 1995 and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company and subsidiary as of
December 31, 1996 and 1995 and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.

Atlanta, Georgia
March 7, 1997
(October 3, 1997 as to Note 10)

                                       42
   43
URS LOGISTICS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995

ASSETS                                                                 1996           1995
                                                                           
CURRENT ASSETS:
  Cash and cash investments                                       $    904,000   $  1,722,000
  Trade accounts receivable, less allowance for doubtful
     accounts of $100,000 in 1996 and 1995                          17,345,000     14,391,000
  Other current assets                                               2,072,000      1,775,000
  Refundable income taxes                                            1,015,000        190,000
  Deferred income taxes                                              2,303,000      2,206,000
                                                                   -----------    -----------
      Total current assets                                          23,639,000     20,284,000

OTHER ASSETS:
  Loan closing costs                                                 4,334,000      4,952,000
  Investment in partnership                                          2,838,000      2,058,000
  Other                                                                872,000        954,000
                                                                   -----------    -----------
      Total other assets                                             8,044,000      7,964,000

PROPERTY, PLANT, AND EQUIPMENT:
  Land                                                              15,617,000     14,286,000
  Buildings and improvements                                       228,610,000    219,323,000
  Machinery and equipment                                           70,036,000     66,440,000
  Construction-in-progress                                           1,772,000      2,005,000
                                                                   -----------    -----------
                                                                   316,035,000    302,054,000
  Less accumulated depreciation                                     86,474,000     73,209,000

      Property, plant, and equipment, net                          229,561,000    228,845,000

CAPITALIZED LEASES:
  Refrigerated warehouse facilities                                 15,828,000     15,828,000
  Equipment                                                          5,321,000      2,967,000
                                                                   -----------    -----------
                                                                    21,149,000     18,795,000
  Less accumulated depreciation                                      3,401,000      2,720,000
                                                                   -----------    -----------
      Capitalized leases, net                                       17,748,000     16,075,000
                                                                   -----------    -----------
                                                                  $278,992,000   $273,168,000
                                                                  ============   =============

LIABILITIES AND STOCKHOLDERS' EQUITY                                   1996              1995
                                                                               
CURRENT LIABILITIES:
  Accounts payable and accrued expenses                            $ 14,898,000      $ 13,590,000
  Current portion of:
    Long-term debt                                                    5,523,000         4,938,000
    Capitalized lease obligations                                       869,000           470,000
                                                                   ------------      ------------
      Total current liabilities                                      21,290,000        18,998,000

LONG-TERM DEBT - Less current portion                               147,660,000       147,701,000

CAPITALIZED LEASE OBLIGATIONS - Less current portion                 16,499,000        15,015,000

DEFERRED INCOME TAXES                                                50,761,000        51,337,000

OTHER LIABILITIES                                                     1,892,000         1,968,000

STOCKHOLDERS' EQUITY:
  Common stock; par value $.10 per share; 100,000 shares
    authorized; 48,687 shares issued and outstanding at
    December 31, 1996 and 1995                                            5,000             5,000
  Additional paid-in capital                                         44,766,000        44,766,000
  Accumulated deficit                                                (3,296,000)       (6,160,000)
                                                                   -------------       ----------
                                                                     41,475,000        38,611,000
  Less:
     Due from stockholders                                              288,000           361,000
     Treasury stock - 192 shares and 96 shares at December 31,
        1996 and 1995, at cost                                          297,000           101,000
                                                                   ------------      ------------
        Stockholders' equity, net                                    40,890,000        38,149,000
                                                                             --                --
                                                                   ------------      ------------
                                                                   $278,992,000      $273,168,000
                                                                   ============      ============

See notes to consolidated financial statements.

                                       43
   44
URS LOGISTICS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
- ----------------------------------------------------------------------------------
                                         1996             1995            1994
                                                           
REVENUES                           $ 144,229,000    $  138,938,000  $   126,337,000
OPERATING EXPENSES:
  Cost of services                    94,931,000        94,967,000       87,984,000
  General and administrative          12,259,000        10,239,000        9,728,000
  Depreciation and amortization       14,574,000        14,958,000       13,484,000
                                   -------------     -------------  --------------- 
      Total operating expenses       121,764,000       120,164,000      111,196,000
                                   -------------     -------------  ---------------
                                      22,465,000       18,774,000        15,141,000

INTEREST EXPENSE                     (18,037,000)      (18,425,000)     (18,446,000)

INTEREST INCOME                          263,000           215,000          105,000
                                   -------------     -------------  ---------------
                                     (17,774,000)      (18,210,000)     (18,341,000)
                                   -------------     -------------  ---------------
NET INCOME (LOSS) BEFORE 
  INCOME TAXES                         4,691,000           564,000       (3,200,000)

INCOME TAX (EXPENSE) BENEFIT          (1,827,000)         (324,000)         552,000
                                   -------------     -------------  ---------------
NET INCOME (LOSS)                  $   2,864,000     $     240,000  $    (2,648,000)
                                   =============     =============  ===============

See notes to consolidated financial statements.

                                       44

   45
URS LOGISTICS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994

                                       COMMON STOCK                                                             TREASURY STOCK
                                    ----------------        ADDITIONAL                                         ----------------
                                    NUMBER         PAR       PAID-IN         ACCUMULATED       DUE FROM         NUMBER
                                  OF SHARES       VALUE     CAPITAL            DEFICIT        STOCKHOLDERS     OF SHARES   COST

BALANCE - December 31, 1993        40,508       $ 4,000  $36,035,000       $(3,752,000)      $(433,000)

  Sale of common stock:
    Proceeds                        8,179         1,000    9,099,000
    Transaction costs                                       (368,000)
                                                         -----------
                                                           8,731,000

  Purchase of treasury shares                                                                   72,000        96       $(101,000)

  Net loss                                                                  (2,648,000)
                                   ------       -------   -----------      -----------       ---------       ---      ---------- 

BALANCE - December 31, 1994        48,687       $ 5,000   $44,766,000      $(6,400,000)      $(361,000)       96       $(101,000)

  Net income                                                                   240,000
                                   ------        ------   -----------      -----------      ----------       ---      ---------- 
BALANCE - December 31, 1995        48,687         5,000    44,766,000       (6,160,000)       (361,000)       96        (101,000)

  Purchase of treasury shares                                                                   73,000        96        (196,000)
  Net income                                                                 2,864,000

                                   ------        ------   -----------      -----------      ---------        ---      ---------- 
BALANCE - December 31, 1996        48,687       $ 5,000   $44,766,000      $(3,296,000)     $ (288,000)      192      $ (297,000)
                                   ======       =======   ===========      ===========      ==========       ===      ========== 

See notes to consolidated financial statements.

                                       45
   46
URS LOGISTICS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994

                                                                    1996                        1995             1994
                                                                                                    
OPERATING ACTIVITIES:
  Net income                                                   $  2,864,000                $    240,000      $(2,648,000)
  Adjustments to reconcile net income
    to net cash provided by operating activities:
    Depreciation and amortization                                14,574,000                  14,958,000       13,484,000
    Gain on disposal of assets                                       (7,000)                    (20,000)         (24,000)
    Partnership earnings                                           (687,000)                   (172,000)        (125,000)
    Changes in assets and liabilities:
      Trade accounts receivable                                  (2,954,000)                  1,270,000       (1,261,000)
      Other current assets                                         (297,000)                   (293,000)        (455,000)
      Accounts payable and accrued expenses                       1,308,000                    (950,000)       3,983,000
      Deferred income taxes                                        (673,000)                 (1,304,000)      (1,370,000)
      Other liabilities                                             (76,000)                    136,000          137,000
      Refundable income taxes                                      (825,000)                    (42,000)         168,000
                                                                -----------                 -----------      -----------
        Net cash provided by operating activities                13,227,000                  13,823,000       11,889,000

INVESTING ACTIVITIES:
  Additions to property, plant, and equipment                   (13,994,000)                (12,828,000)     (21,212,000)
  Proceeds from disposals of property, plant, and equipment           9,000                      20,000        6,384,000
  Contribution to partnership                                      (630,000)                   (701,000)
  Partnership distributions                                         537,000                     414,000          285,000
  Payments received on notes receivable                              42,000                      33,000           28,000
  Decrease in other long-term assets                                 40,000                      35,000          146,000
                                                                -----------                 -----------      -----------
        Net cash used in investing activities                   (13,996,000)                (13,027,000)     (14,369,000)

FINANCING ACTIVITIES:
  Proceeds from borrowings                                       11,483,000                  21,000,000
  Payments on long-term debt                                    (10,939,000)                (18,765,000)      (4,508,000)
  Principal payments under capital lease obligations               (470,000)                   (708,000)        (570,000)
  Purchase of treasury stock                                       (123,000)                                     (29,000)
  Loan closing costs                                                                         (1,813,000)        (414,000)
  Proceeds from issuance of common stock,
    net of transaction costs                                                                                   8,732,000
  Debt service reserve refunding                                                                  4,000          193,000 
                                                                -----------                 -----------      -----------
        Net cash used in financing activities                       (49,000)                   (282,000)       3,404,000
                                                                -----------                 -----------      -----------
NET CHANGE IN CASH AND CASH INVESTMENTS                            (818,000)                    514,000          924,000

CASH AND CASH INVESTMENTS:
  Beginning of year                                               1,722,000                   1,208,000          284,000
                                                                -----------                 -----------      -----------
  End of year                                                    $  904,000                  $1,722,000      $ 1,208,000
                                                                 ==========                  ==========      ===========

                                                                     (Continued)

                                       46
   47
URS LOGISTICS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994

                                                          1996       1995            1994
                                                                        
SUPPLEMENTAL DISCLOSURES:
  Interest paid, net of amount capitalized          $  18,045,000  $18,396,000   $ 18,444,000
                                                    =============  ===========   ============

  Income taxes paid                                 $   3,324,000  $ 2,138,000   $    423,000
                                                    =============  ===========   ============

SUPPLEMENTAL INFORMATION ABOUT NONCASH FINANCING
  INVESTING AND FINANCING ACTIVITIES:
  Capital lease obligations of $2,353,000 were incurred during the year ended
    December 31, 1996 when the Company entered into new leases for equipment.

See notes to consolidated financial statements.

                                                                     (Concluded)

                                       47

   48
URS LOGISTICS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       The consolidated financial statements include the accounts of URS
       Logistics, Inc. (formerly United Refrigerated Services, Inc. - the
       "Company") and its wholly owned subsidiary, United Refrigerated Services
       of Texarkana, Inc. All significant intercompany accounts and transactions
       have been eliminated in consolidation. The Company operates and manages
       public refrigerated warehouses in the continental United States.

       The preparation of financial statements in conformity with generally
       accepted accounting principles requires management to make estimates and
       assumptions that affect the reported amounts of assets and liabilities
       and disclosure of contingent assets and liabilities at the date of the
       financial statements and the reported amounts of revenues and expenses
       during the reporting period. Actual results could differ from those
       estimates.

       Depreciation and amortization are computed on the straight-line method
       over the estimated remaining useful lives of the respective assets, which
       are generally 50 years for buildings, 20 years for building improvements,
       and 5-12 years for machinery and equipment. Depreciation and amortization
       begin the month in which the asset is placed into service. For federal
       income tax purposes, accelerated depreciation methods and shorter lives
       are utilized.

       Loan closing costs are capitalized and amortized on the straight-line
       method over the term of the loan to which they apply.

       Lease agreements are classified as capital or operating in accordance
       with Statement of Financial Accounting Standards ("SFAS") 13, "Accounting
       for Leases," including subsequent amendments and interpretations.
       Capitalized leases are recorded at the lower of the present value of
       future lease payments or the fair market value of the property.
       Capitalized leases are depreciated on a straight-line basis over the
       lease terms for real estate and the estimated asset life or lease term
       for equipment, whichever is shorter.

       The Company charges construction costs with interest on borrowed funds
       during the construction period of major facilities. This interest is
       subsequently charged to operations through depreciation over the life of
       capitalized property. Approximately $190,000, $280,000, and $406,000 of
       interest was capitalized during the years ended December 31, 1996, 1995
       and 1994, respectively.

       The Company defines "cash and cash investments" as all unrestricted cash
       and highly liquid investments with an original maturity of three months
       or less.

       Revenues include storage and handling fees and management fees for
       locations managed on behalf of third parties. Costs related to managed
       facilities are included in operating expenses.

       The Company charges customers for certain storage and handling in
       advance, but defers the related revenue until it has been earned.
       Unearned revenue of approximately $2,088,000, $2,423,000, and

                                       48
   49
       $2,430,000 is included in accounts payable and accrued expenses at
       December 31, 1996, 1995, and 1994, respectively.

       The Company records deferred income taxes for the difference in the bases
       of assets and liabilities for tax and financial statement purposes and
       the enacted rates in effect in the years that the differences are
       expected to reverse.

       The Company evaluates possible impairment of noncurrent assets and
       recognition of impairment losses whenever circumstances indicate that the
       carrying value of such assets may be less than their fair values.

       Certain reclassifications of prior year balances have been made to
       conform with current year financial statement presentation.

 2.     INVESTMENT IN PARTNERSHIP

       The Company's wholly owned subsidiary is a partner with an unrelated
       third party (collectively the "Partnership") for the purpose of operating
       a public refrigerated warehouse in Texarkana, Arkansas. The investment is
       accounted for using the equity method.

       The Company is entitled to 50% of the Partnership's earnings. Included in
       revenues in 1996, 1995, and 1994 are $687,000, $172,000, and $125,000,
       respectively, representing the Company's equity in the earnings of the
       Partnership.

       The partnership owns land and building and is responsible for the related
       mortgage debt. The Company has guaranteed approximately $3,735,000 that
       represents 50% of the mortgage debt.

3.      LONG-TERM DEBT

                                                           1996               1995
                                                                  
Term Note A                                          $   11,700,000     $16,639,000
Term Note B                                              42,000,000      42,000,000
Term Note C                                              73,000,000      73,000,000
Line of credit borrowings                                26,483,000      21,000,000
Mortgage loan, interest at 11.08%
Equipment notes, interest at 9.75%
  to 11.05%
                                                     --------------    ------------
                                                       153,183,000      152,639,000
Less current portion                                     5,523,000        4,938,000
                                                     --------------    ------------

                                                     $  147,660,000    $147,701,000
                                                     ==============    ============

Term Notes A, B, and C, issued in 1989, require semi-annual payments of interest
only at 11.52% for initial periods of 5, 10, and 15 years, respectively. Term
Note A requires semi-annual principal and interest payments of $3,358,000 from
June 15, 1994 through December 15, 1998. Term Note B requires semi-annual
principal and interest payments of $5,642,000 from June 15, 1999 through
December 15,

                                       49
   50
2003. Term Note C requires semi-annual principal and interest payments of
$9,806,000 from June 15, 2004 through December 15, 2008.

The Company's revolving line of credit currently provides for borrowings of up
to $30,000,000, with availability reduced by outstanding borrowings and letters
of credit issued (outstanding letters of credit totaled $3,517,000 at December
31, 1996). Under certain circumstances, the Company can obtain up to an
additional $10,000,000 in borrowing capacity by meeting certain financial
targets and by providing additional collateral.

Beginning on June 30, 1998, amount of available credit declines under certain
circumstances. The line matures and the outstanding balance becomes payable in
full on June 2, 2000, the fifth anniversary of the line.

At the Company's option, borrowings under the line bear interest at formula
rates based on the Federal Funds rate, the prime rate, or Eurodollar lending
rates. The weighted average interest rate applicable to borrowings at December
31, 1996 was 8.60%.

The Company has entered into interest rate swap agreements to reduce the impact
of changes in interest rates on its line of credit borrowings. At December 31,
1996, the Company had outstanding two interest rate swap agreements with
commercial banks, having a total notional principal amount of $16 million. These
agreements effectively convert the Company's floating reference interest rate
(based on three-month LIBOR) on $16 million of its revolving line of credit
borrowings to a fixed reference rate of 5.42%. The interest rate swap agreements
mature in December 1997. Although the Company is exposed to credit loss in the
event of nonperformance by the other parties to the interest rate swap
agreements, the Company does not anticipate nonperformance by the
counterparties. The interest rate swap agreements resulted in an immaterial
amount of net interest income for the year ended December 31, 1996.

The loan agreements covering the Term Notes and the revolving line of credit
contain covenants requiring maintenance of certain financial ratios, earnings
levels, and net worth. The agreements also place restrictions on additional
borrowings, dividend payments, stock redemptions, mergers, and sale of assets.
The Company is in compliance with all such covenants at December 31, 1996.

The weighted average interest rate on the debt outstanding at December 31, 1996
was 11.02%. All long-term debt is collateralized by substantially all owned
property, plant, and equipment.

As of December 31, 1996 approximate annual principal payments on total
long-term debt are:

                                              
1997                                             $      5,523,000
1998                                                    6,178,000
1999                                                   16,631,000
2000                                                   23,899,000
2001                                                    8,295,000
Thereafter                                              92,657,000
                                                 -----------------
                                                 $     153,183,000
                                                 =================

 4.     LEASE COMMITMENTS

The Company leases two refrigerated warehouse facilities from entities owned by
a significant shareholder. These leases are classified as capital leases. The
lease terms expire on April 1, 2013. Fixed

                                       50
   51
rental payments under these leases aggregate $1,650,000 annually. The Company
also leases under an operating lease one refrigerated warehouse facility from an
entity owned by a significant shareholder. The lease term expires on December
30, 2010 and may be extended for two five-year periods at the option of the
Company. The future minimum lease payments under this lease are set at
$1,120,000 annually.

The Company also has both capital and operating lease agreements for equipment
and other facilities. The Company pays taxes, insurance, and maintenance costs
on substantially all of the leased property. Lease terms generally range from 5
to 20 years with renewal or purchase options.

As of December 31, 1996, future minimum lease payments under these leases are as
follows:

                                Refrigerated Warehouse
                               Facilities and Equipment     Headquarters
                              -------------------------       Facility      Total
                              Capitalized    Operating       Operating    Operating
                                Leases        Leases          Lease         Leases
                                                             
1997                         $ 2,363,000    $8,376,000    $   429,000    $ 8,805,000
1998                           2,401,000     7,312,000        476,000      7,788,000
1999                           2,401,000     6,648,000        487,000      7,135,000
2000                           2,273,000     6,262,000        434,000      6,696,000
2001                           2,398,000     5,920,000        445,000      6,365,000
Thereafter                    18,495,000     35,215,000       913,000     36,128,000
                              ----------     ----------       -------     ----------

Total minimum obligations      30,331,00    $69,733,000    $3,184,000    $72,917,000
                                             ==========     =========     ==========

Less interest portion         12,963,000
                              ----------

Present value of net
  minimum payments            17,368,000

Less current portion             869,000
                                 -------

                             $16,499,000
                             ===========

Included in the above future minimum lease payments are the following future
payments to related parties:

                                                   Capitalized   Operating
                                                      Leases       Leases
                                                           
1997                                                $1,650,000    $1,120,000
1998                                                 1,650,000     1,120,000
1999                                                 1,650,000     1,120,000
2000                                                 1,650,000     1,120,000
2001                                                 1,650,000     1,120,000
Thereafter                                          18,449,000    10,076,000
                                                    ----------    ----------

Total minimum obligations                          $26,699,000    $15,676,000
                                                   ===========    ===========

Rental expense for all operating leases was $9,092,000 in 1996, $9,202,000 in
1995, and $8,261,000 in 1994.

                                       51
   52
 5.     TAXES ON INCOME

Deferred income taxes at December 31, 1996 and 1995 consist of the tax effects
of temporary differences in the basis of assets and liabilities for financial
reporting and tax purposes as follows:

                                                  1996          1995
                                                      
Current assets:
  Deferred revenue                         $      814,000   $  945,000

  Accrued expenses                              1,489,000    1,261,000
                                           --------------   ----------
                                           $    2,303,000   $2,206,000
                                           ==============   ==========

Noncurrent liabilities:
  Depreciation                             $  52,848,000    $54,126,000
  Other                                       (2,087,000)    (2,789,000)
                                           --------------   ----------
                                           $  50,761,000    $1,337,000
                                           =============    ==========

Tax benefit (expense) for December 31, 1996, 1995, and 1994 consists of the
following:

                                               1996         1995             1994
                                                            
Current Expense:
  Federal                               $   (1,707,000)   $(1,109,000)    $ (696,000)
  State                                       (793,000)      (519,000)      (122,000)
                                              --------       --------       --------
                                            (2,500,000)    (1,628,000)      (818,000)
Deferred Benefit                               673,000      1,304,000      1,370,000
                                               -------      ---------      ---------

      Net (Expense) Benefit             $  (1,827,000)    $  (324,000)    $  552,000
                                        =============     ===========     ==========

       Reconciliations of the differences between the federal statutory rate in
       1996, 1995, and 1994 and the effective tax rate in those years are as
       follows:

                                                         
       Federal statutory rate                 35.0%     34.9%     (35.0)%
       State taxes, net of Federal benefit     6.7       6.6        6.4
       Non-deductible expenses                 2.7      17.7        3.4
       Increase in tax credit carryforward    (6.2)      0.0        0.0
       Other                                   0.8      (1.8)       7.9
                                              -------------------------
       Effective tax rate                     38.9%     57.4%     (17.3)%
                                              =========================

       In 1996,the Company amended certain of its previously filed tax returns.
       The amended filings resulted in an increase in certain tax credit
       carryforward amounts, which have been included as a reduction of 1996 tax
       expense.

       The Company has alternative minimum tax credit carryforwards for tax
       purposes of approximately $1,813,000 at December 31, 1996, which have
       been recognized for financial reporting purposes.

6.     SIGNIFICANT CUSTOMERS

       In 1996, revenues from two customers represented 10% each of total
       revenue. In 1995, revenues from one customer represented 10% of total
       revenue. A significant portion of the Company's customers operate in the
       processed foods industry.

7.     FAIR VALUE OF FINANCIAL INSTRUMENTS

       Based on borrowing rates currently available to the Company for loans
       with similar terms and average maturities, the fair value of long-term
       debt was approximately $166,047,000 at December 31, 1996 and $169,283,000
       at December 31, 1995. Based on the contractual interest rates and
       maturity dates of the Company's interest rate swaps, the fair value of
       such swaps at December 31, 1996 was not significant.

                                       52
   53
 8.    EMPLOYEE BENEFIT PLANS

       Profit Sharing - The Company has a defined contribution employee benefit
       plan which covers all eligible employees. The Company's profit sharing
       expense was $1,536,000 in 1996, $1,509,000 in 1995, and $1,378,000 in
       1994. The plan was also allows contributions by plan participants in
       accordance with Section 401(k) of the Internal Revenue Code.

       Deferred Compensation - The Company has deferred compensation and
       supplemental retirement plan agreements with certain of its executives.
       The agreements provide for certain benefits at retirement or disability,
       and also provide for survivor benefits in the event of death of the
       employee. The Company charges expense for the accretion of the liability
       each year.

       The Company is presently funding the plan through a life insurance
       program which protects it against losses due to acceleration of benefits
       arising from disability or death and provides for the funds expected to
       be needed for the normal benefits.

       The net expense for all deferred compensation and supplemental retirement
       plans was approximately $207,000 for 1996, $179,000 for 1995, and
       $170,000 for 1994.

9.     STOCK WARRANTS AND TRANSACTIONS

       In October 1996, the Company issued warrants to certain employees that
       allow the holders to purchase up to 4,535 shares of the Company's
       common stock. These warrants were outstanding and vested at December 31,
       1996 and were exercisable only in the event of a change in control of the
       Company. The warrants were issued in four series, each series becoming
       exercisable if the exit value, as defined, exceeded the threshold value
       specified in each series. Generally, exit value is equivalent to the
       price per share realized in a change in control transaction.

       The exercise price of all warrants is $1,100 per share. In the event of a
       change in control, the warrant holder may elect to receive a cash payment
       equal to the excess of the exit value over the exercise price of the
       warrant. The Company recorded no expense in connection with these
       warrants for the year ended December 31, 1996 (see Note 10).

       On December 1, 1994, a preexisting shareholder purchased an additional
       8,179 shares of common stock for total consideration of $9,100,000,
       $6,100,000 of which was paid in cash and the remaining amount paid by
       means of forgiveness of the Company's $3,000,000 promissory note payable
       to such shareholder. In addition, in consideration of shareholder's prior
       furnishing of the promissory note and its agreement to forego all
       interest due under such note, the shareholder received warrants to
       purchase an additional 1,250 shares of common stock at par value,
       exercisable at any time prior to the tenth anniversary of their issuance.

10.    SUBSEQUENT EVENTS

       On June 27, 1997, the Company entered into an agreement amending and
       restating the credit facility dated June 2, 1995 among the Company's
       various lending institutions party thereto and Bankers Trust Company, as
       agent. The agreement included a $40,000,000 Revolving Credit Facility
       with a five-year term and a $40,000,000 term loan with a six-year
       maturity. Both the term loan and borrowings under the line bear interest
       at formula rates based on the Federal Funds rate, the Prime rate, or
       Eurodollar lending rates. The term loan currently bears a rate of LIBOR
       plus 3%. All amounts outstanding under the original credit agreement were
       paid with proceeds from the term loan. There have been no borrowings
       under the amended and restated Revolving Credit Facility.

       Also on June 27, 1997, the Company executed an agreement to purchase a
       frozen and dry warehouse complex located in Montezuma, Georgia, together
       with related equipment and other tangible and intangible property. In
       addition, the seller engaged the Company to provide on going logistical
       services. Total purchase price of the warehouse complex was approximately
       $9,200,000 and was financed through the term loan.

       On September 26, 1997, the Company's shareholders signed an agreement to
       sell 100% of the Company's common stock to Vornado Realty Trust
       ("Vornado") for approximately $365,000,000 less debt and adjusted for the
       change in working capital, as defined, at final closing. Final
       consummation of the transaction is anticipated by December 31, 1997.

                                       53
   54
       In connection with the sale of the Company to Vornado, warrants issued to
       employees for 3,000 shares of the Company's common stock will become
       exercisable. The remaining 1,535 warrants will expire. The Company
       recorded $6,837,000 of expense in connection with the exercise of these
       warrants.

                                       54
   55
URS LOGISTICS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------

                                                                      JUNE 30,               DECEMBER 31,
                                                                        1997                    1996
ASSETS                                                               (UNAUDITED)
                                                                                      
CURRENT ASSETS:
  Cash and cash investments                                         $  3,728,000            $    904,000
  Trade accounts receivable, less allowance for doubtful
     accounts of $100,000 in 1997 and 1996                            13,359,000              17,345,000
  Other current assets                                                 3,535,000               2,072,000
  Refundable income taxes                                                150,000               1,015,000
  Deferred income taxes                                                2,303,000               2,303,000
                                                                    ------------            ------------

      Total current assets                                            23,075,000              23,639,000

OTHER ASSETS:
  Loan closing costs                                                   5,441,000               4,334,000
  Investment in partnership                                            2,854,000               2,838,000
  Other                                                                1,050,000                 872,000
                                                                    ------------            ------------

      Total other assets                                               9,345,000               8,044,000

PROPERTY, PLANT, AND EQUIPMENT:
  Land                                                                15,704,000              15,617,000
  Buildings and improvements                                         235,776,000             228,610,000
  Machinery and equipment                                             74,284,000              70,036,000
  Construction-in-progress                                             4,909,000               1,772,000
                                                                    ------------            ------------
                                                                     330,673,000             316,035,000
  Less accumulated depreciation                                       93,424,000              86,474,000
                                                                    ------------            ------------

      Property, plant, and equipment, net                            237,249,000             229,561,000

CAPITALIZED LEASES:
  Refrigerated warehouse facilities                                   15,828,000              15,828,000
  Equipment                                                            6,629,000               5,321,000
                                                                    ------------            ------------
                                                                      22,457,000              21,149,000
  Less accumulated depreciation                                        4,014,000               3,401,000
                                                                    ------------            ------------

      Capitalized leases, net                                         18,443,000              17,748,000
                                                                    ------------            ------------

                                                                    $288,112,000            $278,992,000
                                                                    ============            ============

                                                                                              (Continued)

                                       55
   56
URS LOGISTICS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------

                                                                         JUNE 30,            DECEMBER 31,
                                                                          1997                   1996
LIABILITIES AND STOCKHOLDERS' EQUITY                                   (UNAUDITED)
                                                                                      
CURRENT LIABILITIES:
  Accounts payable and accrued expenses                               $  11,932,000         $  14,898,000
  Current portion of:
    Long-term debt                                                        5,841,000             5,523,000
    Capitalized lease obligations                                           895,000               869,000
                                                                      -------------         -------------

      Total current liabilities                                          18,668,000            21,290,000

LONG-TERM DEBT - Less current portion                                   158,175,000           147,660,000

CAPITALIZED LEASE OBLIGATIONS - Less current portion                     17,311,000            16,499,000

DEFERRED INCOME TAXES                                                    49,905,000            50,761,000

OTHER LIABILITIES                                                         1,719,000             1,892,000

STOCKHOLDERS' EQUITY:
  Common stock; par value $.10 per share; 100,000 shares
    authorized; 48,687 shares issued and outstanding at
    June 30, 1997 and December 31, 1996                                       5,000                 5,000
  Additional paid-in capital                                             44,766,000            44,766,000
  Accumulated deficit                                                    (1,999,000)           (3,296,000)
                                                                      -------------         -------------
                                                                         42,772,000            41,475,000
  Less:
     Due from stockholders                                                   91,000               288,000
     Treasury stock - 240 shares and 192 shares at June 30,
        1997 and December 31, 1996, at cost                                 347,000               297,000
                                                                      -------------         -------------

        Stockholders' equity, net                                        42,334,000            40,890,000

                                                                      -------------         -------------

                                                                       $288,112,000         $ 278,992,000
                                                                      -------------         -------------

See notes to condensed consolidated financial statements.
                                                                                              (Concluded)

                                       56
   57
URS LOGISTICS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------

                                              SIX MONTHS ENDED
                                                  JUNE 30,
                                      ----------------------------------
                                            1997                1996
                                        (UNAUDITED)          (UNAUDITED)
                                                      
REVENUES                               $ 76,320,000         $ 71,219,000

OPERATING EXPENSES:
  Cost of services                       51,273,000           46,091,000
  General and administrative              5,968,000            5,060,000
  Depreciation and amortization           7,872,000            7,209,000
                                       ------------         ------------

      Total operating expenses           65,113,000           58,360,000
                                       ------------         ------------

                                         11,207,000           12,859,000

INTEREST EXPENSE                         (9,183,000)          (9,157,000)

INTEREST INCOME                             102,000              141,000
                                       ------------         ------------

      Total expense                      (9,081,000)          (9,016,000)
                                       ------------         ------------

NET INCOME BEFORE INCOME TAXES            2,126,000            3,843,000

INCOME TAX EXPENSE                         (829,000)          (1,499,000)
                                       ------------         ------------

NET INCOME                             $  1,297,000         $  2,344,000
                                       ============         ============

See notes to condensed consolidated financial statements.

                                       57
   58
URS LOGISTICS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------

                                                                           SIX MONTHS ENDED
                                                                               JUNE 30,
                                                                   ---------------------------------
                                                                       1997                 1996
                                                                    (UNAUDITED)          (UNAUDITED)
                                                                                  
OPERATING ACTIVITIES:
  Net income                                                       $  1,297,000         $  2,344,000
  Adjustments to reconcile net income
    to net cash provided by operating activities:
    Depreciation and amortization                                     7,872,000            7,209,000
    Gain on disposal of assets                                                                (1,000)
    Partnership earnings                                               (449,000)            (276,000)
    Changes in assets and liabilities:
      Trade accounts receivable                                       3,986,000            1,074,000
      Other current assets                                           (1,463,000)          (1,315,000)
      Accounts payable and accrued expenses                          (2,966,000)             612,000
      Deferred income taxes                                            (856,000)            (902,000)
      Other liabilities                                                (173,000)              29,000
      Refundable income taxes                                           865,000              190,000
                                                                   ------------         ------------

        Net cash provided by operating activities                     8,113,000            8,964,000

INVESTING ACTIVITIES:
  Additions to property, plant, and equipment                       (14,638,000)          (4,289,000)
  Additions to capitalized leases                                    (1,308,000)
  Proceeds from disposals of property, plant, and equipment                                    2,000
  Contributions to partnership                                                              (630,000)
  Distributions from partnership                                        433,000               26,000
  Payments received on notes receivable                                  17,000               19,000
  Change in other long term assets                                     (195,000)              77,000
                                                                   ------------         ------------

        Net cash used in investing activities                       (15,691,000)          (4,795,000)

FINANCING ACTIVITIES:
  Proceeds from borrowings                                           47,000,000            5,000,000
  Payments on long-term debt                                        (36,167,000)          (7,402,000)
  Additions to capitalized lease obligations                          1,309,000               20,000
  Principal payments under capital lease obligations                   (471,000)            (247,000)
  Payments received on notes receivable shareholders                    197,000
  Purchase of treasury stock                                            (50,000)
  Loan closing costs                                                 (1,416,000)
                                                                   ------------         ------------

        Net cash provided by (used in) financing activities          10,402,000           (2,629,000)
                                                                   ------------         ------------

NET CHANGE IN CASH AND CASH INVESTMENTS                               2,824,000            1,540,000

CASH AND CASH INVESTMENTS:
  Beginning of period                                                   904,000            1,722,000
                                                                   ------------         ------------

  End of period                                                    $  3,728,000         $  3,262,000
                                                                   ============         ============

See notes to condensed consolidated financial statements.

                                       58

   59
URS LOGISTICS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED)
- --------------------------------------------------------------------------------

1.  UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    The condensed consolidated financial statements have been prepared in
    accordance with generally accepted accounting principles which in certain
    instances require the use of management's estimates. The information
    contained in these condensed consolidated financial statements and notes for
    the six-month periods ended June 30, 1997 and 1996 is unaudited but, in the
    opinion of management, all adjustments necessary for a fair presentation of
    such information have been made. All adjustments are of a normal recurring
    nature. Reclassifications of certain 1996 amounts have been made to conform
    with the 1997 presentation. Certain information and footnote disclosures
    normally included in financial statements prepared in accordance with
    generally accepted accounting principles have been omitted pursuant to
    applicable rules and regulations of the Securities and Exchange Commission.

2.  CONSOLIDATION POLICY

    The condensed consolidated financial statements include the accounts of URS
    Logistics, Inc. (formerly United Refrigerated Services, Inc. - the
    "Company") and its wholly owned subsidiary, United Refrigerated Services of
    Texarkana, Inc. All significant intercompany accounts and transactions have
    been eliminated in consolidation.

3.  NATURE OF OPERATIONS

    The Company operates and manages public refrigerated warehouses in the
    continental United States.

    The Company records deferred income taxes for the difference in the bases of
    assets and liabilities for tax and financial statement purposes and the
    enacted rates in effect in the years that the differences are expected to
    reverse.

    The Company evaluates possible impairment of noncurrent assets and
    recognition of impairment losses whenever circumstances indicate that the
    carrying value of such assets may be less than their fair values. There was
    no impact on the Company's financial statements of adopting this policy for
    the year ended December 31, 1995.

    Certain reclassifications of prior year balances have been made to conform
    with current year financial statement presentation.

4.  RECENT EVENTS

    On June 27, 1997, the Company entered into an agreement amending and
    restating the credit facility dated June 2, 1995 among the Company's various
    lending institutions party thereto and Bankers Trust Company, as agent. The
    agreement included a $40,000,000 Revolving Credit Facility with a five-year
    term and a $40,000,000 term loan with a six-year maturity. Both the term
    loan and borrowings under the line bear interest at formula rates based on
    the Federal Funds rate, the Prime rate, or Eurodollar lending rates. The
    term loan currently bears a rate of LIBOR plus 3%. All amounts outstanding
    under the original credit agreement were paid with proceeds from the term
    loan. There have been no borrowings under the amended and restated Revolving
    Credit Facility.

    Also on June 27, 1997, the Company executed an agreement to purchase a
    frozen and dry warehouse complex located in Montezuma, Georgia, together
    with related equipment and other tangible and intangible property. In
    addition, the Seller engaged the Company to provide on-going logistical
    services. Total purchase price of the warehouse complex was approximately
    $9,200,000 and was financed through the term loan.

    On September 26, 1997, the Company's shareholders signed an agreement to
    sell 100% of the Company's common stock to Vornado Realty Trust for
    approximately $365,000,000 less debt and adjusted for change in working
    capital at final closing. Final consummation of the transaction is
    anticipated by December 31, 1997.

    In connection with the sale of the Company to Vornado, warrants issued to
    employees for 2,000 shares of the Company's common stock will become
    exercisable. The remaining 1,525 warrants will expire. The Company recorded
    $6,837,000 of expense in connection with the exercise of these warrants.

                                       59
   60
INDEPENDENT AUDITORS' REPORT

To the Stockholders of Vornado Realty Trust:

We have audited the statement of revenue and certain expenses of The Montehiedra
Town Center (the "Property"), as described in Note 1, for the year ended
December 31, 1996. This financial statement is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in a Form 8-K to be filed by Vornado Realty
Trust, as described in Note 1, and is not intended to be a complete
presentation of the Property's revenue and expenses.

In our opinion, the financial statement referred to above presents fairly, in
all material respects, the statement of revenue and certain expenses of the
Property, as described in Note 1, for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.

Boston, Massachusetts
October 3, 1997

                                       60
   61
THE MONTEHIEDRA TOWN CENTER

STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS OF DOLLARS)

                                             FOR THE          FOR THE
                                       THREE MONTHS ENDED   YEAR ENDED
                                             MARCH 31,      DECEMBER 31,
                                          1997     1996        1996
                                      -------------------   ----------
                                     (UNAUDITED) (UNAUDITED)
                                                  
REVENUE:
  Minimum and percentage rents          $ 2,059   $1,793    $8,086
  Tenant recoveries                         470      350     2,104
  Other income                               57       16       106
                                        -------  -------    ------

            Total revenues                2,586    2,159    10,296
                                        -------  -------    ------
CERTAIN EXPENSES:
  Real estate taxes                          87       88       349
  Management fee                             65       54       211
  General operating expenses                433      403     1,973
                                        -------  -------    ------
            Total certain expenses          585      545     2,533
                                        -------  -------    ------
REVENUES IN EXCESS OF CERTAIN EXPENSES  $ 2,001   $1,614    $7,763
                                        =======   ======    ======

See notes to statements of revenue and certain expenses.

                                       61
   62
THE MONTEHIEDRA TOWN CENTER

NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES

1.  ORGANIZATION AND BASIS OF PRESENTATION

    The statements of revenue and certain expenses reflect the operations of The
    Montehiedra Town Center (the "Property"), a 529,000 square foot shopping
    center located in Rio Piedras, Puerto Rico. The Property was developed and
    owned by Big Beaver of Rio Piedras Development Corporation, a wholly owned
    subsidiary of Kmart Corporation. On April 18, 1997, Big Beaver of Rio
    Piedras Development Corporation sold its interest in the Property to Vornado
    Montehiedra Acquisition L.P. The statements of revenue and certain expenses
    are to be included in a Form 8-K to be filed by Vornado Realty Trust.

    The accounting records of the Property are maintained in accordance with
    generally accepted accounting principles. The accompanying financial
    statement excludes certain expenses such as interest, depreciation and
    amortization, certain professional fees, and other costs not directly
    related to the future operations of the Property.

    The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates and
    assumptions that affect the reported amounts of revenue and expenses during
    the reporting period. Actual results could differ from those estimates.

    The statements of revenue and certain expenses for the three-month periods
    ended March 31, 1997 and 1996 are unaudited; however, in the opinion of
    management, all adjustments (consisting solely of normal recurring
    adjustments) necessary for the fair presentation of these statements of
    revenue and certain expenses for the interim periods have been included. The
    results for such interim periods are not necessarily indicative of the
    results for an entire year.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    REVENUE RECOGNITION - Rental income is recognized from leases with scheduled
    rent increases on a straight-line basis over the lease term. The excess of
    straight-line rent over amounts currently due amounted to $262,662 for the
    year ended December 31, 1996, and $57,015 and $65,665 for the three-month
    periods ended March 31, 1997 and 1996, respectively, and are included in
    minimum rent on the accompanying statements of revenue and certain expenses.
    Percentage rents and escalation rents based upon payments for taxes,
    insurance, utilities and maintenance by tenants are estimated and accrued.

3.  RELATED-PARTY TRANSACTIONS

    Kmart Corporation, the parent company of Big Beaver of Rio Piedras
    Development Corporation, and Builders Square, Inc., a wholly owned
    subsidiary of Kmart Corporation, lease space at the Property. The related
    rental income and reimbursements included in the statements of revenue and
    certain expenses for the year ended December 31, 1996 totaled $2,938,593.

                                       62
   63
4.  RENTAL UNDER OPERATING LEASES

    The Property's operations consist of leasing retail space in an enclosed
    regional shopping center. The leases are operating leases expiring in
    various years through 2019. The leases generally provide for a fixed minimum
    annual rent, percentage rents based on sales volume and reimbursements for
    certain real estate taxes and operating costs. Two of the tenants at the
    shopping center lease a total of 48% of the gross leasable area, and
    accounted for approximately 30% of the total rental income and
    reimbursements for the year ended December 31, 1996. Future minimum fixed
    rents, including related-party leases, in place at December 31, 1996 are as
    follows:

YEAR ENDING
DECEMBER 31                                                          AMOUNT
                                                            
1997                                                           $    7,854,290
1998                                                                7,889,511
1999                                                                7,937,324
2000                                                                8,031,788
2001                                                                8,149,108
Thereafter                                                         76,964,680
                                                               --------------
Total                                                          $  116,826,701
                                                               ==============

                                   * * * * * *

                                       63
   64
                          INDEPENDENT AUDITORS' REPORT

To the Stockholders of Vornado Realty Trust

         We have audited the statement of revenues and certain expenses of the
Riese Properties, as described in Note 1 for the year ended April 30, 1997. This
financial statement is the responsibility of Vornado Realty Trust's management. 
Our responsibility is to express an opinion on this financial statement based on
our audit.

         We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

         The accompanying statement of revenue and certain expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in the Current Report on Form 8-K of
Vornado Realty Trust as described in Note 1, and is not intended to be a
complete presentation of Riese Properties' revenue and expenses.

         In our opinion, the financial statement referred to above presents
fairly, in all material respects, the statement of revenues and certain expenses
of The Riese Properties as described in Note 1 for the year ended April 30, 1997
in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Parsippany, New Jersey
October 7, 1997
                                       64
   65
                              THE RIESE PROPERTIES
                   STATEMENTS OF REVENUES AND CERTAIN EXPENSES
                                 (in thousands)

                                                                                     For the
                                                  For the Six Months Ended             Year
                                                  ------------------------             Ended
                                             April 30, 1997      April 30, 1996   April 30, 1997
                                             --------------      --------------   --------------
                                               (unaudited)       (unaudited)
                                                                         
REVENUES:
         Base rent                                $1,208            $1,232            $2,493
         Tenant recoveries                            65                70               159
         Other income                                 34                30                41
                                                  ------            ------            ------
                Total Revenues                     1,307             1,332             2,693
                                                  ------            ------            ------

CERTAIN EXPENSES:
         Real estate taxes                           402               439               798
         Repairs & maintenance                        47                46               107
         Professional fees                           244               163               431
         Utilities                                    56                58               121
         Insurance                                    35                58                67
         Management fee                              128               129               263
         Administrative                               89                90               154
                                                  ------            ------            ------
                Total Certain Expenses             1,001               983             1,941
                                                  ------            ------            ------

REVENUES IN EXCESS OF
          CERTAIN EXPENSES                        $  306            $  349            $  752
                                                  ======            ======            ======

See notes to Statements of Revenues and Certain Expenses.
                                       65
   66
                              THE RIESE PROPERTIES
              NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

Note 1 - ORGANIZATION AND BASIS OF PRESENTATION

On June 27, 1997, Vornado acquired for approximately $26,000,000 four properties
previously owned by affiliates of the Riese Organization ("The Riese
Properties"). These properties are located in Manhattan, New York. Vornado also
made a $41,000,000 mortgage loan to Riese Affiliates cross collateralized by ten
other Manhattan properties. This increasing rate loan bears an initial interest
rate of 9.75% and has a five year term.

The statements of revenues and certain expenses reflect the operations of the
Riese Properties. The accounting records of the Riese Properties are maintained
in accordance with generally accepted accounting principles. The accompanying
financial statements exclude certain expenses such as interest, depreciation and
amortization, certain professional fees, and other costs not directly related to
the future operations of the Riese Properties.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenues and expenses during the reporting
period. The ultimate results could differ from those estimates.

The statements of revenues and certain expenses for the six month periods ended
April 30, 1997 and 1996 are unaudited; however, in the opinion of management,
all adjustments (consisting solely of normal recurring adjustments) necessary
for the fair presentation of these statements of revenue and certain expenses
for the interim periods have been included. The results for such interim periods
are not necessarily indicative of the results for an entire year.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Rental income is recognized from leases with scheduled rent increases on a
straight-line basis over the lease term. Escalation rents based upon payments
for taxes, insurance, utilities and maintenance by tenants are estimated and
accrued. Total revenues do not include rent for space occupied by Riese. 
                                       66
   67
Note 3 - OPERATING LEASES

The Riese Properties are leased to various tenants with lease terms expiring in
various years through 2008. The following is a schedule, by years, of the
approximate minimum future rentals required under these operating leases as of
April 30, 1997:

               Year Ending
                April 31,                 Amount

                  1998                 $ 4,034,000
                  1999                   3,962,000
                  2000                   3,754,000
                  2001                   3,498,000
                  2002                   3,287,000
               Thereafter               15,486,000
                                       -----------

               Total                   $34,021,000
                                       ===========

                                       67
   68

Pro Forma Financial Information:

       The unaudited condensed consolidated pro forma financial information
attached presents (i) the condensed consolidated pro forma statements of income
for Vornado Realty Trust for the year ended December 31, 1996 and the six months
ended June 30, 1997, as if the previously reported acquisitions (Mendik Company,
90 Park Avenue and Arbor Property Trust) and the acquisition of Americold and
URS (collectively "Cold Storage"), Montehiedra, Riese, Charles E. Smith
Commercial Realty L.P. and the Hotel Pennsylvania (collectively presented as
"Unrelated Acquisitions") had occurred on January 1, 1996 and (ii) the condensed
consolidated pro forma balance sheet of Vornado Realty Trust as of June 30,
1997, as if the above acquisitions had occurred on June 30, 1997 or the date of
acquisition, if earlier.      

       The unaudited condensed consolidated pro forma financial information is
not necessarily indicative of what Vornado Realty Trust's actual results of
operations or financial position would have been had these transactions been
consummated on the dates indicated, nor does it purport to represent Vornado
Realty Trust's results of operations or financial position for any future
period. The results of operations for the period ended June 30, 1997 are not
necessarily indicative of the operating results for the full year.

       The unaudited condensed consolidated pro forma financial information
should be read in conjunction with the Consolidated Financial Statements and
notes thereto included in Vornado's Annual Report on Form 10-K for the year
ended December 31, 1996, as amended, and the Quarterly Report on Form 10-Q for
the period ended June 30, 1997 and the financial statements of Americold, URS,
Montehiedra and Riese included or incorporated by reference herein or
incorporated by reference. In management's opinion, all adjustments necessary to
reflect these transactions have been made. All share and per share amounts have
been restated to reflect the 100% stock dividend announced on October 7, 1997.

                                      68

   69
                 CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
                                  JUNE 30, 1997
                             (AMOUNTS IN THOUSANDS)

                                                          HISTORICAL
                                         ----------------------------------------------                                PREVIOUSLY 
                                                                       PREVIOUSLY                                       REPORTED    
                                                                        REPORTED               PRO FORMA                 COMPANY    
                                                VORNADO               ACQUISITIONS            ADJUSTMENTS               PRO FORMA   
                                         ----------------------    --------------------   --------------------    ------------------
                                                                                                                     
ASSETS:
     Real estate, net                        $    888,027               $ 141,898              $ 185,000 (A)           $ 1,300,750  
                                                                                                 102,100 (B)
                                                                                                 (16,275)(B)
     Cash and cash equivalents                    260,485                                                                  260,485  
     Investment in and advances to
        Preferred Stock Affiliates                                                                                                  
     Investment in and advances to
        Alexander's, Inc.                         108,100                                                                  108,100  
     Investment in partnerships                    38,275                                                                   38,275  
     Investment in and advances to
        management companies                       13,008                                                                   13,008  
     Officer's deferred compensation
        expense                                    10,419                                                                   10,419  
     Mortgage loans receivable                    243,001                                       (185,000)(A)                58,001  
     Receivable arising from straight-
        lining of rents                            19,619                                                                   19,619  
     Other assets                                  65,362                  13,180                 (2,861)(C)                75,681  
                                         -----------------    --------------------   --------------------    ---------------------- 
                                              $ 1,646,296               $ 155,078             $   82,964               $ 1,884,338  
                                         =================    ====================   ====================    ====================== 

LIABILITIES:
     Notes and mortgages payable             $    862,883               $ 124,873                                     $    987,756  
     Deferred leasing fee income                   10,550                                                                   10,550  
     Officer's deferred compensation
        payable                                    25,000                                                                   25,000  
     Other liabilities                             30,429                  13,930                                           44,359  
                                         -----------------    --------------------                           ---------------------- 
                                                  928,862                 138,803                                        1,067,665  
                                         -----------------    --------------------                           ---------------------- 
Minority interest of unitholders in the
     Operating Partnership                        178,093                       -                                          178,093  
                                         -----------------    --------------------                           ---------------------- 

EQUITY                                            539,341                  16,275              $ 102,100 (B)               638,580  
                                                                                                 (16,275)(B)
                                                                                                  (2,861)(C)
                                         -----------------    --------------------   --------------------    ---------------------- 
                                              $ 1,646,296               $ 155,078             $   82,964               $ 1,884,338  
                                         =================    ====================   ====================    ====================== 

                                        
                                        
                                                 PRO FORMA                PRO FORMA
                                                   COLD                   UNRELATED                   COMPANY
                                                  STORAGE                ACQUISITIONS                PRO FORMA
                                            --------------------      -------------------      ----------------------
                                                                                              
ASSETS:
     Real estate, net                                                                                 $    1,300,750

     Cash and cash equivalents                       $ (204,000)(BB)                                          56,485
     Investment in and advances to
        Cold Storage                                    204,000 (BB)                                         204,000
     Investment in and advances to
        Alexander's, Inc.                                                                                    108,100
     Investment in partnerships                                                   77,000 (SS)                115,275
     Investment in and advances to
        management companies                                                                                  13,008
     Officer's deferred compensation
        expense                                                                                               10,419
     Mortgage loans receivable                                                                                58,001
     Receivable arising from straight-
        lining of rents                                                                                       19,619
     Other assets                                                                                             75,681
                                            --------------------      -------------------      ----------------------
                                                $             -               $   77,000              $    1,961,338
                                            ====================      ===================      ======================

LIABILITIES:
     Notes and mortgages payable                                              $   77,000 (SS)         $    1,064,756
     Deferred leasing fee income                                                                              10,550
     Officer's deferred compensation
        payable                                                                                               25,000
     Other liabilities                                                                                        44,359
                                                                      -------------------      ----------------------
                                                                                  77,000                   1,144,665
                                                                      -------------------      ----------------------
Minority interest of unitholders in the
     Operating Partnership                                                                                   178,093
                                        
                                                                                               ----------------------

EQUITY                                                                                                       638,580
                                            --------------------      -------------------      ----------------------
                                                $             -               $   77,000              $    1,961,338
                                            ====================      ===================      ======================

                                       69
   70

                CONDENSED CONSOLIDATED PRO FORMA INCOME STATEMENT
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                          HISTORICAL
                                           -----------------------------------------                              PREVIOUSLY 
                                                                    PREVIOUSLY                                     REPORTED         
                                                                     REPORTED              PRO FORMA                COMPANY         
                                                 VORNADO          ACQUISITIONS (1)        ADJUSTMENTS              PRO FORMA        
                                           --------------------  -------------------- -------------------    --------------------  
                                                                                                                     
REVENUES:
      Property rentals                             $    63,471         $     58,493          $      1,775 (D)         $   123,739   
      Expense reimbursements                            15,161               13,502                                        28,663   
      Other income                                       1,327                3,451                (2,622)(E)               2,156   
                                           -------------------   ------------------   -------------------    --------------------  
                                                        79,959               75,446                  (847)                154,558   
                                           -------------------   ------------------   -------------------    --------------------  
EXPENSES:
      Operating                                         26,658               27,530                                        54,188   
      Depreciation and amortization                      8,429                6,828                   368 (F)              16,608   
                                                                                                      983 (G)
      General and administrative                         4,748                3,453                (1,607)(E)               5,825   
                                                                                                     (769)(H)
      Amortization of officer's deferred
         compensation expense                           12,498                                                             12,498   
                                           -------------------   ------------------   -------------------    --------------------  
                                                        52,333               37,811                (1,025)                 89,119   
                                           -------------------   ------------------   -------------------    --------------------  
Operating income (loss)                                 27,626               37,635                   178                  65,439   
      (Loss) income applicable to
         Cold Storage                                                                                                           -
      Income applicable to Alexander's                   2,842                                                              2,842   
      Equity in net income of
         management companies                              520                                        964 (E)               1,484   
      Equity in net income of investees                    282                  362                   276 (I)                 920   
      Interest income on mortgage
         notes receivable                                4,305                                     (3,045)(J)               1,260   
      Interest and dividend income                       6,774                  899                                         7,673   
      Interest and debt expense                        (17,350)             (13,111)                4,537 (K)             (29,745)
                                                                                                   (4,410)(L)                       
                                                                                                      589 (M)
      Net gain on marketable securities                    579                                                                579   
      Minority interest of unitholders in
         the Operating Partnership                      (2,100)                                    (3,084)(N)              (5,184)
                                           -------------------   ------------------   -------------------    --------------------  
Net income (loss)                                       23,478               25,785                (3,995)                 45,268   
Preferred stock dividends                               (4,855)                                    (5,137)(O)              (9,992)
                                           -------------------   ------------------   -------------------    --------------------  
Net income (loss) applicable to
   common shares                                   $    18,623         $     25,785          $     (9,132)            $    35,276   
                                           ===================   ==================   ===================    ====================  
Net income per common share,
   based on 53,437,682 and
   56,434,764 shares, respectively                 $      0.35                                                                      
                                           ===================                                                                      

OTHER DATA:
Funds from Operations (2):
      Net income (loss) applicable to
         common shares                             $    18,623         $     25,785          $     (9,132)            $    35,276   
      Depreciation and amortization
         of real property                                7,857                4,727                 1,351                  13,935   
      Straight-lining of property rent
         escalations                                    (1,487)               1,169                (1,775)                 (2,093)
      Leasing fees received in excess
         of income recognized                            1,303                                                              1,303   
      Proportionate share of adjustments
         to income from equity
         investments to arrive at FFO                      887                  832                                         1,719   
      Non-recurring lease cancellation
         income and write-off of related
         costs                                                              (11,581)                                      (11,581)
                                           -------------------   ------------------   -------------------    --------------------  
                                                   $    27,183         $     20,932          $     (9,556)            $    38,559   
                                           ===================   ==================   ===================    ====================  

CASH FLOW PROVIDED BY (USED) IN:
        Operating activities                       $    50,989         $     15,377          $     (2,701)            $    63,665   
        Investing activities                       $  (629,813)         $    (5,754)         $   (328,638)            $  (964,205)  
                                                                                                                                   
        Financing activities                       $   688,954          $    (7,126)         $    290,287             $   972,115

                                           
                                           
                                               PRO FORMA               HISTORICAL
                                                 COLD                  UNRELATED             PRO FORMA               COMPANY
                                                STORAGE              ACQUISITIONS (1)       ADJUSTMENTS             PRO FORMA
                                           ------------------      ---------------------------------------------------------------
                                                                                                             
REVENUES:
      Property rentals                                                   $      3,267          $  1,093 (LL)           $  128,099

      Expense reimbursements                                                      535                                      29,198
      Other income                                                                 91                                       2,247
                                                                   -------------------  ----------------      --------------------
                                                                                3,893             1,093                   159,544
                                                                   -------------------  ----------------      --------------------
EXPENSES:
      Operating                                                                 1,586                                      55,774
      Depreciation and amortization                                                               3,697 (II)               20,305
                                           
      General and administrative                                                                                            5,825
                                           
      Amortization of officer's deferred
         compensation expense                                                                                              12,498
                                                                   -------------------  ----------------      --------------------
                                                                                1,586             3,697                    94,402
                                                                   -------------------  ----------------      --------------------
Operating income (loss)                                                         2,307            (2,604)                   65,142
      (Loss) income applicable to
         Cold Storage                           $     (3,970)(CC)                                 6,942 (DD)                2,972
                                           
      Income applicable to Alexander's                                                                                      2,842
      Equity in net income of
         management companies                                                                                               1,484
      Equity in net income of investees                                                           1,899 (MM)                2,819
      Interest income on mortgage
         notes receivable                                                                         1,999 (JJ)                3,259
      Interest and dividend income                                                                                          7,673
      Interest and debt expense                                                                  (7,650)(EE)              (41,392)
                                                                                                 (3,997)(KK)
                                           
      Net gain on marketable securities                                                                                       579
      Minority interest of unitholders in
         the Operating Partnership                                                                                         (5,184)
                                           ------------------      -------------------  ----------------      --------------------
Net income (loss)                                     (3,970)                   2,307            (3,411)                   40,194
Preferred stock dividends                                                                                                  (9,992)
                                           ------------------      -------------------  ----------------      --------------------
Net income (loss) applicable to
   common shares                                $     (3,970)            $      2,307          $ (3,411)               $   30,202
                                           ==================      ===================  ================      ====================
Net income per common share,
   based on 53,437,682 and
   56,434,764 shares, respectively                                                                                     $      .54
                                                                                                              ====================

OTHER DATA:
Funds from Operations (2):
      Net income (loss) applicable to
         common shares                          $     (3,970)            $      2,307          $ (3,411)              $    30,202 
      Depreciation and amortization
         of real property                                                                         3,697                    17,632
      Straight-lining of property rent
         escalations                                                              (57)                                     (2,150)
      Leasing fees received in excess
         of income recognized                                                                                               1,303
      Proportionate share of adjustments
         to income from equity
         investments to arrive at FFO                 15,573                                                               17,292
      Non-recurring lease cancellation
         income and write-off of related
         costs                                                                                                            (11,581)
                                           ------------------      -------------------  ----------------      --------------------  
                                                   $  11,603             $      2,250          $    286               $    52,698
                                           ==================      ===================  ================      ====================

CASH FLOW PROVIDED BY (USED) IN:
        Operating activities                       $  11,190             $      2,250          $    286               $    76,414
        Investing activities                       $ (12,450)            $          -          $      -               $  (976,655)
        Financing activities                       $   6,332             $          -          $      -               $   978,447

                                       70
   71
(1)      Certain revenue and expense items have been reclassified to conform to
         Vornado's presentation.

(2)      Funds from operations does not represent cash generated from operating
         activities in accordance with generally accepted accounting principles
         and is not necessarily indicative of cash available to fund cash needs
         which is disclosed in the Consolidated Statements of Cash Flows for the
         applicable periods. There are no material legal or functional
         restrictions on the use of funds from operations. Funds from operations
         should not be considered as an alternative to net income as an
         indicator of the Company's operating performance or as an alternative
         to cash flows as a measure of liquidity. Management considers funds
         from operations a supplemental measure of Operating performance and
         along with cash flow from operating activities, financing activities,
         and investing activities, it provides investors with an indication of
         the ability of the Company to incur and service debt, to make capital
         expenditures and to fund other cash needs. Funds from operations may
         not be comparable to similarly titled measures employed by other REITs
         since a number of REITs, including the Company's, method of calculating
         funds from operations is different from that used by NAREIT. Funds from
         operations, as defined by NAREIT, represents net income applicable to
         common shares before depreciation and amortization, extraordinary items
         and gains or losses on sales of real estate. Funds from operations as
         disclosed above has been modified to adjust for the effect of
         straight-lining of property rentals for rent escalations and leasing
         fee income.

                                       71

   72
                CONDENSED CONSOLIDATED PRO FORMA INCOME STATEMENT
                      FOR THE YEAR ENDED DECEMBER 31, 1996
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                  HISTORICAL 
                                          ---------------------------                   PREVIOUSLY
                                                       PREVIOUSLY                        REPORTED     PRO FORMA      HISTORICAL
                                                        REPORTED       PRO FORMA         COMPANY        COLD          UNRELATED
                                          VORNADO     ACQUISITIONS(1)  ADJUSTMENTS       PRO FORMA     STORAGE      ACQUISITIONS(1)
                                          ---------   ---------------  ------------     ----------    ---------     ------------
                                                                                                  
REVENUES:
     Property rentals                      $ 87,424     $134,756      $   7,071 (P)     $ 229,207                       $10,579
                                                                            (44)(Q)
     Expense reimbursements                  26,644       35,388                           62,032                         2,263
     Other income                             2,819        5,977         (5,378)(Q)         3,418                           147
                                          ---------   -----------     -----------       ----------                   -----------
                                            116,887      176,121          1,649           294,657                        12,989
                                          ---------   -----------     ----------        ----------                   -----------
EXPENSES:
     Operating                               36,412       78,049            (39)(Q)       114,538                         4,474
                                                                            116 (R)
     Depreciation and amortization           11,589       18,515           (144)(Q)        41,816
                                                                          9,981 (S)
                                                                          1,875 (T)
     General and administrative               5,167        8,956         (3,788)(Q)         8,162
                                                                         (2,173)(U)
     Amortization of officer's deferred
        compensation expense                  2,083                                         2,083
                                          ---------   -----------     ----------       ----------                   -----------
                                             55,251      105,520          5,828           166,599                         4,474
                                          ---------   -----------     ----------       ----------                   -----------
Operating income (loss)                      61,636       70,601         (4,179)          128,058                         8,515
     (Loss) income applicable to
        Cold Storage                                                                                  $ (8,346)(FF)
     Income applicable to Alexander's         7,956                                         7,956
     Equity in net income of
        management companies                  1,855                       1,471 (Q)         3,326
     Equity in net income of investees                     1,663          1,755 (V)         3,418
     Interest income on mortgage
        notes receivable                      2,579                                         2,579
     Interest and dividend income             3,151        2,536            (20)(Q)         5,667
     Interest and debt expense              (16,726)     (34,692)         9,016 (W)       (53,940)
                                                                        (12,775)(X)
                                                                          1,237 (Y)
     Net gain on marketable                     913                                           913
     securities
     Minority interest of unitholders in
        the Operating Partnership                                       (10,372)(Z)       (10,372)
                                          ---------   -----------     ----------       ----------    ----------    ------------
Net income (loss)                            61,364       40,108        (13,867)           87,605       (8,346)           8,515
Preferred stock dividends                                               (19,800)(AA)      (19,800)
                                          ---------   -----------     ----------       ----------    ----------    ------------
Net income (loss) applicable to
   common shares                           $ 61,364     $ 40,108      $ (33,667)        $  67,805     $ (8,346)         $ 8,515
                                          =========   ===========     ==========       ==========    ==========    ============
Net income per common share,
   based on 49,206,884 and
   52,203,966 shares, respectively         $   1.25
                                          =========

OTHER DATA:
Funds from Operations (2):
     Net income (loss) applicable to
        common shares                      $ 61,364     $ 40,108      $ (33,667)          $67,805     $ (8,346)         $ 8,515
     Depreciation and amortization
        of real property                     10,583       18,515         11,712            40,810       
     Straight-lining of property rent
        escalations                          (2,676)      (2,413)        (7,071)          (12,160)                         (263)
     Leasing fees received in excess
        of income recognized                  1,805                                         1,805
     Proportionate share of adjustments
        to income from equity
        investments to arrive at FFO         (1,760)       2,747           (970)               17       30,239
                                          ---------   -----------     ----------       ----------    ----------     -----------
                                           $ 69,316     $ 58,957      $ (29,996)        $  98,277     $ 21,893          $ 8,252
                                          =========   ===========     ==========       ==========    ==========     ===========

CASH FLOW PROVIDED BY (USED) IN:
       Operating activities                $ 70,703     $ 58,016      $      42         $ 128,761     $ 22,614          $   996
       Investing activities                $ 14,912     $ (8,690)     $(513,638)        $(507,416)    $(26,510)         $  (240)
       Financing activities                $(15,046)    $(21,075)     $ 455,209         $ 419,088     $  2,956          $ 1,044

                                              PRO FORMA           COMPANY
                                             ADJUSTMENTS         PRO FORMA
                                            --------------     ---------------
                                                         
REVENUES:
     Property rentals                           $   2,186 (QQ)      $ 241,972

     Expense reimbursements                                            64,295
     Other income                                                       3,565
                                            --------------     ---------------
                                                    2,186             309,832
                                            --------------     ---------------
EXPENSES:
     Operating                                                        119,012

     Depreciation and amortization                  8,126 (NN)         49,942

     General and administrative                                         8,162

     Amortization of officer's deferred
        compensation expense                                            2,083
                                            --------------     ---------------
                                                    8,126             179,199
                                            --------------     ---------------
Operating income (loss)                            (5,940)            130,633
     (Loss) income applicable to
        Cold Storage                               13,885 (GG)          5,539
     Income applicable to Alexander's                                   7,956
     Equity in net income of
        management companies                                            3,326
     Equity in net income of investees              2,191 (RR)          5,609
     Interest income on mortgage                                               
        notes receivable                            3,998 (OO)          6,577  
     Interest and dividend income                                       5,667  
     Interest and debt expense                    (15,300) (HH)       (79,312) 
                                                  (10,072) (PP)                 
                                                                               
     Net gain on marketable                                               913  
     securities                                                                
     Minority interest of unitholders in                                       
        the Operating Partnership                                     (10,372) 
                                            --------------     --------------- 
Net income (loss)                                 (11,238)             76,536  
Preferred stock dividends                                             (19,800)  
                                            --------------     --------------- 
Net income (loss) applicable to                                                
   common shares                                $ (11,238)          $  56,736  
                                            ==============     =============== 
Net income per common share,                                                   
   based on 49,206,884 and                                                     
   52,203,966 shares, respectively                                  $    1.09  
                                                                ==============
                                                                               
OTHER DATA:                                                                    
Funds from Operations (2):                                                     
     Net income (loss) applicable to                                           
        common shares                           $ (11,238)            $56,736  
     Depreciation and amortization                                             
        of real property                            8,126              48,936  
     Straight-lining of property rent                                          
        escalations                                                   (12,423)  
     Leasing fees received in excess                                           
        of income recognized                                            1,805  
     Proportionate share of adjustments                                        
        to income from equity                                                  
        investments to arrive at FFO                                   30,256 
                                            --------------     --------------- 
                                                $  (3,112)          $ 125,310  
                                            ==============     =============== 
                                                                               
CASH FLOW PROVIDED BY (USED) IN:                                               
       Operating activities                     $  (3,112)          $ 147,305  
       Investing activities                     $(130,000)          $(664,166)  
       Financing activities                     $ 130,000           $ 553,088  

                                       72
   73
(1)      Certain revenue and expense items have been reclassified to conform to
         Vornado's presentation.

(2)      Funds from operations does not represent cash generated from operating
         activities in accordance with generally accepted accounting principles
         and is not necessarily indicative of cash available to fund cash needs
         which is disclosed in the Consolidated Statements of Cash Flows for the
         applicable periods. There are no material legal or functional
         restrictions on the use of funds from operations. Funds from operations
         should not be considered as an alternative to net income as an
         indicator of the Company's operating performance or as an alternative
         to cash flows as a measure of liquidity. Management considers funds
         from operations a supplemental measure of Operating performance and
         along with cash flow from operating activities, financing activities,
         and investing activities, it provides investors with an indication of
         the ability of the Company to incur and service debt, to make capital
         expenditures and to fund other cash needs. Funds from operations may
         not be comparable to similarly titled measures employed by other REITs
         since a number of REITs, including the Company's, method of calculating
         funds from operations is different from that used by NAREIT. Funds from
         operations, as defined by NAREIT, represents net income applicable to
         common shares before depreciation and amortization, extraordinary items
         and gains or losses on sales of real estate. Funds from operations as
         disclosed above has been modified to adjust for the effect of
         straight-lining of property rentals for rent escalations and leasing
         fee income.

                                       73
   74
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

PREVIOUSLY REPORTED ACQUISITIONS (MENDIK COMPANIES, 90 PARK AVENUE AND ARBOR
REALTY TRUST):

Pro Forma June 30, 1997 Balance Sheet:

(A)      Reclassification of investment in 90 Park Avenue to real estate.

(B)      Assumed issuance of 2,997,082 common shares, with a fair value of
         $102,100 (based on an average price of $34.066 per share), in exchange
         for all of the common shares of Arbor.

(C)      Write-off of deferred assets of Arbor as reflected in the values
         allocated to the real estate and the debt in accordance with APB No.
         16.

Pro Forma June 30, 1997 Income Statement:

(D)      To adjust rentals for the period from January 1, 1997 to April 14, 1997
         arising from the straight-lining of property rentals for rent
         escalations based on the remaining terms of the applicable Mendik
         leases.

(E)      To reflect adjustments required to record the Company's investment in
         the Mendik management company for the period from January 1, 1997 to
         April 14, 1997 under the equity method of accounting.

(F)      Increase in depreciation for the period from January 1, 1997 to April
         14, 1997 due to allocation of the Mendik purchase price.

(G)      Adjustment to depreciation based on allocation of the Arbor purchase
         price and the reclassification of the 90 Park Avenue investment to real
         estate.

(H)      Reflects the elimination of Arbor management expenses in connection
         with the merger.

(I)      Increase in equity in investees for the period from January 1, 1997 to
         April 14, 1997 due to net decrease in interest expense on refinanced
         Mendik debt.

(J)      Elimination of interest income earned on mortgage loan receivable from
         90 Park Avenue for the period from May 7, 1997 (date of acquisition) to
         June 30, 1997.

(K)      Reflects decrease in interest expense and loan cost amortization for
         the period from January 1, 1997 to April 14, 1997 resulting from the
         reduction and refinancing of Mendik debt.

(L)      Reflects interest expense of $4,410 for the six months ended June 30,
         1997 (January 1, 1997 to May 6, 1997) on the 90 Park Avenue investment
         of $185,000, based on an average interest rate of approximately 7.0%.

(M)      Reflects elimination of amortization of deferred financing costs of
         $589 for the six months ended June 30, 1997 on existing Arbor debt.

(N)      To reflect preferential distributions for the period from January 1,
         1997 to April 14, 1997 relating to the Mendik Transaction.

(O)      To reflect preferred stock dividends at a rate of 6.50% plus
         amortization of the underwriting discount for the period from January
         1, 1997 to April 14, 1997 on the proportionate number of Series A
         Preferred Shares used to fund the Mendik acquisition.

Pro Forma December 31, 1996 Income Statement:

(P)      To adjust rentals arising from the straight-lining of property rentals
         for rent escalations based on the remaining terms of the applicable
         Mendik leases.

(Q)      To reflect adjustments required to record the Company's investment in
         the Mendik management company under the equity method of accounting.

(R)      Increase in Mendik operating expenses due to contract changes.

(S)      Increase in depreciation due to preliminary allocation of the Mendik
         purchase price.

(T)      Adjustment to depreciation based on allocation of the Arbor purchase
         price and the reclassification of the 90 Park Avenue investment to real
         estate.

(U)      Reflects the elimination of Arbor management expenses in connection
         with the merger.

(V)      Increase in equity in investees, due to net decrease in interest
         expense on refinanced Mendik debt.

(W)      Reflects decrease in interest expense and loan cost amortization
         resulting from the reduction and refinancing of the Mendik debt.

(X)      Reflects interest expense on the 90 Park Avenue investment of $185,000,
         based on an average interest rate of approximately 7.0%.

(Y)      Reflects elimination of amortization of deferred financing costs on
         existing Arbor debt.

(Z)      To reflect preferential distributions relating to the Mendik
         Transaction.

(AA)     To reflect preferred stock dividends at a rate of 6.50% plus
         amortization of the underwriting discount on the proportionate number
         of Series A Preferred Shares used to fund the Mendik acquisition.

                                       74
   75
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

COLD STORAGE:

     On September 26, 1997, Vornado entered into merger agreements pursuant to
which its newly formed Preferred Stock Affiliates will acquire Americold
Corporation and URS Logistics, Inc. (collectively, "Cold Storage"). The
Preferred Stock Affiliates entered into an agreement with Crescent Real Estate
Equities Limited Partnership ("Crescent") to make these acquisitions. While a
definitive structure has not yet been determined, it is anticipated that Vornado
will own directly or indirectly an approximate 60% non-voting interest in Cold
Storage. Accordingly Vornado expects to account for this investment on the
equity method. In connection with the acquisition of Americold, certain of
Americold's existing debt may be in default upon completion of the merger. 
Below is summarized pro forma information of Cold Storage:

           COLD STORAGE CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
                                  JUNE 30, 1997
                             (AMOUNTS IN THOUSANDS)

                                                             HISTORICAL
                                                  ------------------------------------                             PRO FORMA
                                                     AMERICOLD              URS             PRO FORMA                COLD
                                                    CORPORATION*      LOGISTICS, INC.      ADJUSTMENT               STORAGE
                                                  -----------------  -----------------  -----------------      -----------------

ASSETS:
     Cash and cash equivalents                         $    16,315         $    3,728                                 $   20,043
     Property, plant, equipment, and
        capitalized leases, net                            375,501            255,692         $  492,833 (a)           1,124,026
     Cost in excess of net assets                                                             $  197,133 (a)             197,133
        acquired, net                                       73,496                               (73,496)(b)                   -
     Other                                                  58,099             28,692            (11,000)(c)              75,791
                                                  -----------------  -----------------  -----------------      -----------------
                                                       $   523,411         $  288,112         $  605,470             $1,416,993
                                                  =================  =================  =================      =================
LIABILITIES:
     Accounts payable, accrued
        expenses and other                             $    60,705         $   13,651                                 $   74,356
     Long-term debt                                        469,823            164,016                                    633,839
     Capitalized leases                                                        18,206                                     18,206
     Deferred income taxes and other                       103,554             49,905            197,133  (a)            350,592
                                                  -----------------  -----------------  -----------------      -----------------
                                                           634,082            245,778            197,133               1,076,993

(DEFICIT) EQUITY                                          (110,671)            42,334         $  492,833 (a)             340,000
                                                                                                 (73,496)(b)
                                                                                                 (11,000)(c)
                                                  -----------------  -----------------  -----------------      -----------------
                                                       $   523,411         $  288,112         $  605,470              $1,416,993
                                                  =================  =================  =================      =================

VORNADO'S SHARE OF EQUITY                                                                                             $  204,000
                                                                                                               =================

* As of the last day of August 1997

(a)   To preliminarily allocate the purchase cost to property, plant and
      equipment, cost in excess of net assets acquired and the tax effect
      thereon.

(b)   To write-off cost in excess of net assets acquired in accordance with
      Accounting Principles Board Opinion No. 16 ("APB No. 16").

(c)   To write-off deferred loan costs in accordance with APB No. 16.

                                       75
   76
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

COLD STORAGE (CONTINUED):

         COLD STORAGE CONDENSED CONSOLIDATED PRO FORMA INCOME STATEMENT
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
                             (AMOUNTS IN THOUSANDS)

                                                          HISTORICAL
                                           ------------------------------------------                             PRO FORMA
                                                AMERICOLD                 URS               PRO FORMA               COLD
                                               CORPORATION*         LOGISTICS, INC.        ADJUSTMENTS             STORAGE
                                           -------------------   --------------------  ------------------     ------------------
                                                                                                  
Revenues                                           $  145,807          $      76,319                              $     222,126
Operating expenses                                    112,023                 57,241        $      1,211  (d)           170,475
                                           -------------------   --------------------  ------------------     ------------------
Gross operating margin                                 33,784                 19,078              (1,211)                51,651

Other income (expense):
      Interest expense                                (27,816)                (9,183)              9,275 (e)            (27,131)
                                                                                                     593 (f)
      Depreciation and amortization                   (10,534)                (7,872)             (5,615)(g)            (24,021)
      Management fees                                                                             (7,084)(h)             (7,084)
      Other, net                                          785                    103                                        888
                                           -------------------   --------------------  ------------------     ------------------

(Loss) income before income taxes                      (3,781)                 2,126              (4,042)                (5,697)
Benefit (provision) for income taxes                      992                   (829)             (1,217)(i)             (1,054)
                                           -------------------   --------------------  ------------------     ------------------
Net (loss) income                               $      (2,789)         $       1,297      $       (5,259)         $      (6,751)
                                           ===================   ====================  ==================     ==================
VORNADO'S SHARE OF NET LOSS                                                                                       $      (3,970)
                                                                                                              ==================

* For the period ended on the last day of August 1997

         COLD STORAGE CONDENSED CONSOLIDATED PRO FORMA INCOME STATEMENT
                      FOR THE YEAR ENDED DECEMBER 31, 1996
                             (AMOUNTS IN THOUSANDS)

                                                          HISTORICAL
                                           ------------------------------------------                              PRO FORMA
                                                AMERICOLD                 URS               PRO FORMA                COLD
                                              CORPORATION*         LOGISTICS, INC.        ADJUSTMENTS               STORAGE
                                           -------------------   --------------------  ------------------     ------------------
                                                                                                        
Revenues                                           $  310,767            $   144,229                              $     454,996
Operating expenses                                    242,213                107,190        $      2,422 (d)            351,825
                                           -------------------   --------------------  ------------------     ------------------
Gross operating margin                                 68,554                 37,039              (2,422)               103,171

Other income (expense):
      Interest expense                                (57,863)               (18,037)             18,549 (e)            (56,166)
                                                                                                   1,185 (f)
      Depreciation and amortization                   (20,697)               (14,574)            (11,229)(g)            (46,500)
      Management fees                                                                            (14,169)(h)            (14,169)
      Other, net                                          862                    263                                      1,125
                                           -------------------   --------------------  ------------------     ------------------

(Loss) income before income taxes                      (9,144)                 4,691              (8,086)               (12,539)
Benefit (provision) for income taxes                    2,604                 (1,827)             (2,433)(i)             (1,656)
                                           -------------------   --------------------  ------------------     ------------------
Net (loss) income                               $      (6,540)        $        2,864       $     (10,519)         $     (14,195)
                                           ===================   ====================  ==================     ==================
VORNADO'S SHARE OF NET LOSS                                                                                       $      (8,346)
                                                                                                              ==================

* For the period ended on the last day of February 1997

(d)      To adjust amortization of cost in excess of net assets acquired in
         accordance with APB No. 16.

(e)      To adjust decrease in interest expense from the refinancing of
         $600,000 of existing debt at a rate of 8.5%.

(f)      To eliminate amortization of deferred loan costs in accordance with APB
         No. 16.

(g)      To adjust depreciation expense based on the preliminary allocation of
         the purchase cost.

(h)      To reflect non-taxable management fees due to Vornado's based on
         1% of the combined Cold Storage assets.

(i)      To reflect income taxes on pro forma adjustments at 40%.

                                       76
   77
         NOTES TO CONDENSED CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

COLD STORAGE (CONTINUED):

The acquisition will be recorded under "purchase accounting" applying the
provisions of APB No. 16. The estimated purchase price at the date of
acquisition is comprised of:

                                                                      Vornado's
                                                     Total            60% Share
                                                   ----------         ----------
                                                                       
Cash                                               $  289,000         $  173,400
Estimated fees and expenses                            51,000             30,600
                                                   ----------         ----------
                                                      340,000            204,000
Debt                                                  660,000            396,000
                                                   ----------         ----------
                                                   $1,000,000         $  600,000
                                                   ==========         ==========

The respective purchase costs were allocated to acquired assets and assumed
liabilities using their relative fair values as of the closing dates, based on
valuations and other studies which are not yet complete. Accordingly, the excess
of the purchase cost over the net assets acquired has not yet been allocated to
individual assets and liabilities. However, Vornado believes that the excess
purchase price will be allocated principally to property, plant and equipment.

FOOTNOTES:

Pro Forma June 30, 1997 Balance Sheet:

(BB) To reflect loan receivable in connection with Cold Storage acquisition.

Pro Forma June 30, 1997 Income Statement:

(CC) To reflect Vornado's share of net loss per the Cold Storage Condensed
     Consolidated Pro Forma Income Statement for the Six Months Ended June 30,
     1997.

(DD) To reflect Vornado's share of the management fee income received from Cold
     Storage. 

(EE) To reflect interest expense at 7.5% on the loans by Vornado in connection
     with the Cold Storage acquisition.

Pro Forma December 31, 1996 Income Statement:

(FF) To reflect Vornado's share of net loss per the Cold Storage Condensed
     Consolidated Pro Forma Income Statement for the Year Ended December 31,
     1996.

(GG) To reflect Vornado's share of the management fee income received from Cold
     Storage. 

(HH) To reflect interest expense at 7.5% on the loans by Vornado in connection
     with the Cold Storage acquisition.

UNRELATED ACQUISITIONS:

On April 18, 1997, Vornado acquired the Montehiedra Town Center in San Juan,
Puerto Rico from Kmart for $74 million of which $63 million is newly issued 10
year financing. The Montehiedra shopping center, which opened in 1994, contains
525,000 square feet, including a 135,000 square foot Kmart.

On June 30, 1997, Vornado acquired for approximately $26 million four properties
previously owned by affiliates of the Riese Organization. These properties are
located in midtown Manhattan. Vornado also made a $41 million mortgage loan to
Riese Affiliates cross collateralized by ten other Manhattan properties. This
five year increasing rate loan bears an initial interest rate of 9.75%.

On September 22, 1997 Vornado entered into an agreement to acquire a 15% limited
partnership interest in Charles E. Smith Commercial Realty Limited Partnership
for $60 million. Charles E. Smith Commercial Realty Limited Partnership is being
formed to own interests in and manage approximately 7.2 million square feet of
office properties in Crystal City, Alexandria, Virginia, a suburb of Washington
D.C., and to manage an additional 14 million square feet of office and other
commercial properties in the Washington D.C. area. The Crystal City properties
in which Charles E. Smith Commercial Realty Limited Partnership will own an
interest are now owned by various Charles E. Smith affiliates.

On September 25, 1997 Vornado acquired a 40% interest in Hotel Pennsylvania,
which is located on Seventh Avenue in New York City, opposite Madison Square
Garden. The property was acquired in a joint venture with Hotel Properties
Limited and Planet Hollywood International, Inc. The venture intends to create a
sports-themed hotel and entertainment complex. Under the joint venture
agreement, Hotel Properties Limited and Planet Hollywood International, Inc.
will have 40% and 20% interests, respectively. The joint venture acquired the
hotel for approximately $159 million, of which $120 million is newly-issued 5
year financing. The Hotel Pennsylvania contains approximately 800,000 square
feet of hotel space with 1,700 rooms and 400,000 square feet of retail and
office space. Vornado will manage the site's retail and office space, and Hotel
Properties will manage the hotel.

FOOTNOTES:

Pro Forma June 30, 1997 Income Statement:

(II) Adjustment to depreciation expense for the period from January 1, 1997 to
     date of acquisitions based on the allocation of the purchase price.

(JJ) Adjustment to interest income for the period from January 1, 1997 to the
     date of the Riese acquisition on mortgage note receivable $41,000 at a rate
     of 9.75%.

(KK) Adjustment to interest expense for the period from January 1, 1997 to date
     of acquisitions based on the amount of the investments.

(LL) To reflect rent from new leases entered into with the Riese organization.

(MM) To reflect equity in income from investment in Charles E. Smith Commercial
     Realty Limited Partnership and the Hotel Pennsylvania.

Pro Forma December 31, 1996 Income Statement:

(NN) Adjustment to depreciation based on the allocation of the purchase price.

(OO) Adjustment to interest income on the mortgage note receivable with the
     Riese organization of $41,000 at a rate of 9.75%.

(PP) Adjustment to interest expense based on the amount of the investments.

(QQ) To reflect rent from new leases entered into with the Riese organization.

(RR) To reflect equity in income from investment in Charles E. Smith Commercial
     Realty Limited Partnership and the Hotel Pennsylvania.

Pro Forma June 30, 1997 Balance Sheet:

(SS) To reflect investments in Charles E. Smith Commercial Realty Limited
     Partnership ($60,000) and Hotel Pennsylvania ($17,000).

                                       77
   78
                              VORNADO REALTY TRUST

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                                 VORNADO REALTY TRUST
                                             -----------------------------------
                                                     (Registrant)

Date:  October 8, 1997                               /s/ Joseph Macnow
                                             -----------------------------------
                                                     JOSEPH MACNOW
                                                     Vice President,
                                                 Chief Financial Officer

                                      78

   79
                              INDEX TO EXHIBITS

                                                                       Page
Exhibit No.                         Exhibit                          Reference
- -----------                         -------                          ---------
   
   23.1                    Consent of KPMG Peat Marwick LLP             80

   23.2                    Consent of KPMG Peat Marwick LLP             81

   23.3                    Consent of Deloitte & Touche LLP             82

   23.4                    Consent of Deloitte & Touche LLP             83

   23.5                    Consent of Deloitte & Touche LLP             84
 
   99.1                    Press Release, dated September 22, 1997,
                           of Vornado Realty Trust, announcing the
                           acquisition of a 15% limited partnership
                           interest in Charles E. Smith Commercial
                           Realty, L.P.                                 85

   99.2                    Press Release, dated September 25, 1997,
                           of Vornado Realty Trust, announcing the
                           acquisition of a 40% interest in Hotel
                           Pennsylvania.                                86
                          
   99.3                    Press Release, dated September 29, 1997,
                           of Vornado Realty Trust, announcing the
                           acquisition of Americold Corporation and
                           URS Logistics, Inc. and the formation of
                           a partnership with Crescent Real Estate
                           Equities Company.                            87

   99.4                    Agreement and Plan of Merger, dated as of
                           September 26, 1997 among Vornado Realty
                           Trust, Atlanta Parent, Inc., Atlanta 
                           Storage Acquisition Co. and URS Logistics,
                           Inc.                                         88
  
   99.5                    Agreement and Plan of Merger, dated as of 
                           September 26, 1997 among Vornado Realty
                           Trust, Portland Parent, Inc. Portland
                           Storage Acquisition Co. and Americold
                           Corporation.                                151
    
   99.6                    Agreement dated September 28, 1997 between 
                           Atlanta Parent Incorporated, Portland
                           Parent Incorporated and Crescent Real 
                           Estate Equities, Limited Partnership.       214

                                      79
   1
                                                                    Exhibit 23.1

                          INDEPENDENT AUDITORS' CONSENT

The Board of Directors and Stockholders
Americold Corporation:

We consent to the incorporation by reference to the Registration Statement No.
333-29013 of Vornado Realty Trust and Vornado Realty L.P. and the Post Effective
Amendment to Registration Statement No. 33-62395 of Vornado Realty Trust both on
Form S-3, of our report dated May 2, 1997, with respect to the consolidated
balance sheets of Americold Corporation as of the last day of February 1996 and
1997, and the related consolidated statements of operations, common
stockholders' deficit and cash flows for each of the years in the three-year
period ended the last day of February 1997, which report appears in the Form
8-K of Vornado Realty Trust dated September 22, 1997.

KPMG PEAT MARWICK LLP

Portland, Oregon
October 6, 1997

                                      80
   1
                                                                    Exhibit 23.2

                          INDEPENDENT AUDITORS' CONSENT

The Board of Directors and Stockholders
Americold Corporation:

We consent to the inclusion of our report dated May 2, 1997, with respect to
the consolidated balance sheets of Americold Corporation as of the last day of
February 1996 and 1997, and the related consolidated statements of operations,
common stockholders' deficit, and cash flows for each of the years in the
three-year period ended the last day of February 1997, which report appears in
the Form 8-K of Vornado Realty Trust dated September 22, 1997.

KPMG PEAT MARWICK LLP

Portland, Oregon
October 6, 1997

                                      81

   1
                                                                    Exhibit 23.3

                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in the Registration Statement No.
333-29013 of Vornado Realty Trust and Vornado Realty L.P. and the Post Effective
Amendment to Registration Statement No. 33-62395 of Vornado Realty Trust both on
Form S-3, of our report dated March 7, 1997 (October 3, 1997 as to Note 10) on 
the consolidated financial statements of URS Logistics, Inc. for the year ended 
December 31, 1996, which report appears in the Form 8-K of Vornado Realty Trust 
dated September 22, 1997.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
October 3, 1997

                                      82

   1
                                                                    Exhibit 23.4

                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in the Registration Statement No.
333-29013 of Vornado Realty Trust and Vornado Realty L.P. and the Post Effective
Amendment to Registration Statement No. 33-62395 of Vornado Realty Trust both on
Form S-3, of our report dated October 3, 1997 on the statement of revenues and
certain expenses of the Montehiedra Town Center for the year ended December 31,
1996, which report appears in the Form 8-K of Vornado Realty Trust dated
September 22, 1997.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
October 3, 1997

                                      83
   1
                                                                    Exhibit 23.5

                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in the Registration Statement No.
333-29013 of Vornado Realty Trust and Vornado Realty L.P. and the Post Effective
Amendment to Registration Statement No. 33-62395 of Vornado Realty Trust both on
Form S-3, of our report dated October 3, 1997 on the combined statement of
revenues and certain expenses of the Riese Properties for the year ended April
30, 1997, which report appears in the Form 8-K of Vornado Realty Trust dated
September 22, 1997.

DELOITTE & TOUCHE LLP

Parsippany, New Jersey
October 7, 1997

                                      84

   1
                                  EXHIBIT 99.1

CONTACT:                   JOSEPH MACNOW
                          (201) 587-1000

                                                            VORNADO REALTY TRUST
                                                          Park 80 West, Plaza II
                                                  Saddle Brook, New Jersey 07663

FOR IMMEDIATE RELEASE - SEPTEMBER 22, 1997

               SADDLE BROOK, NEW JERSEY.......VORNADO REALTY TRUST
(NYSE:VNO) today announced that it has entered into an agreement to acquire a
15% limited partnership interest in Charles E. Smith Commercial Realty, L.P. for
$60 million. Charles E. Smith Commercial Realty, L.P. is being formed to own
interests in and manage approximately 7.2 million square feet of office
properties in Crystal City, Alexandria, Virginia, a suburb of Washington D.C.,
and to manage an additional 14 million square feet of office and other
commercial properties in the Washington, D.C. area. The Crystal City properties
in which Charles E. Smith Commercial Realty, L.P. will own an interest are now
owned by various Charles E. Smith affiliates.

              The closing which is expected to occur at the end of October, is
subject to receipt of consents from various parties and other conditions.

              Vornado Realty Trust is a fully-integrated equity real estate
investment trust.

              Certain statements contained herein may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, risks
associated with the timing of and costs associated with property improvements,
financing commitments and general competitive factors.

                                      ####

                                      85

   1
                                  EXHIBIT 99.2

CONTACT:                   JOSEPH MACNOW
                          (201) 587-1000

                                                            VORNADO REALTY TRUST
                                                          Park 80 West, Plaza II
                                                  Saddle Brook, New Jersey 07663

FOR IMMEDIATE RELEASE - SEPTEMBER 25, 1997

               SADDLE BROOK, NEW JERSEY.......VORNADO REALTY TRUST
(NYSE:VNO) today announced that it has acquired a 40% interest in New York
City's Hotel Pennsylvania, which is strategically located on Seventh Avenue
opposite Madison Square Garden. The property was acquired in a joint venture
with Hotel Properties Limited and Planet Hollywood International, Inc. The
venture intends to create a sports-themed hotel and entertainment complex.

              Under the joint venture agreement, Hotel Properties Limited and
Planet Hollywood International, Inc. will have 40% and 20% interests,
respectively. Hotel Properties Limited, a Singapore publicly listed company
co-founded by Ong Beng Seng, has interests primarily in the retail,
entertainment, lodging and leisure industries.

              The joint venture acquired the hotel for approximately $159
million, of which $120 million is newly-issued 5 year financing.

              The Hotel Pennsylvania contains approximately 800,000 square feet
of hotel space with 1,700 rooms and 400,000 square feet of retail and office
space. Vornado will manage the site's retail and office space, and Hotel
Properties will manage the hotel.

              Vornado Realty Trust is a fully-integrated equity real estate
investment trust.

              Certain statements contained herein may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, risks
associated with the timing of and costs associated with property improvements,
financing commitments and general competitive factors and a change in retailer
or consumer acceptance of products and services.

                                      ####

                                      86

   1
                                  EXHIBIT 99.3

CONTACT:                   JOSEPH MACNOW
                          (201) 587-1000

                                                            VORNADO REALTY TRUST
                                                          Park 80 West, Plaza II
                                                  Saddle Brook, New Jersey 07663

                       VORNADO AND CRESCENT IN PARTNERSHIP
                      TO ACQUIRE TWO COLD STORAGE COMPANIES

FOR IMMEDIATE RELEASE - SEPTEMBER 29, 1997

              SADDLE BROOK, NEW JERSEY.....VORNADO REALTY TRUST (NYSE:VNO) today
announced that it has entered into merger agreements pursuant to which its
preferred stock affiliates will acquire Americold Corporation and URS Logistics,
Inc. The consideration for the Americold transaction is approximately $582
million, including $111 million in cash and $471 million in indebtedness. The
consideration for the URS Logistics transaction is approximately $367 million,
including $178 million in cash and $189 million in indebtedness.

              Vornado also announced that it has entered into a partnership
agreement with Crescent Real Estate Equities Company to make this acquisition.
Vornado will hold a 60% interest in the partnership and Crescent a 40% interest.

              Kelso & Company, Inc., which has a controlling interest in both
Americold and URS, has granted consents or irrevocable proxies with respect to
both transactions. Each transaction is not conditioned on the closing of the
other, and both are expected to close in the fourth quarter of 1997.

              Americold Corporation, headquartered in Portland, Oregon, under
the leadership of CEO Ron Dykehouse, is the nation's largest logistics and cold
storage warehouse company. The company was the first to develop, implement and
manage a fully integrated distribution logistics system serving the frozen food
industry. Today, as the largest provider of third-party, temperature controlled
logistics services, an increasing number of food processors are taking advantage
of Americold's expertise in executing their specific, complex distribution
requirements.

              URS Logistics, Inc. headquartered in Atlanta, Georgia, under the
leadership of CEO Dan McNamara, provides refrigerated and frozen storage and
distribution to the leading food manufacturers in the nation. URS is the volume
leader in frozen food consolidation and distribution services. URS is the first
company in the freezer environment to implement bar-code scanning throughout
their entire network, resulting in the ability to track the movement and
handling of its customers products from point of manufacturer through to the
retailer or food service provider.

              Vornado and Crescent intend to provide growth capital to further
support the long-term development of Americold and URS.

              Vornado Realty Trust is a fully-integrated equity real estate
investment trust.

              Certain statements contained herein may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, risks
associated with the timing of and costs associated with property improvements,
financing commitments and general competitive factors.

                                     # # # #

                                      87

   1
                                  EXHIBIT 99.4

                          AGREEMENT AND PLAN OF MERGER

                                      AMONG

                              VORNADO REALTY TRUST

                              ATLANTA PARENT, INC.

                         ATLANTA STORAGE ACQUISITION CO.

                                       AND

                               URS LOGISTICS, INC.

                         Dated as of September 26, 1997

                                      88
   2
                                TABLE OF CONTENTS

                                                                    Page

ARTICLE I

      DEFINITIONS......................................................1

ARTICLE II

      THE MERGER.......................................................8
      2.1  The Merger..................................................8
      2.2  Certificate of Incorporation................................9
      2.3  By-Laws.....................................................9
      2.4  Directors and Officers......................................9
      2.5  Effective Time..............................................9

ARTICLE III

      DETERMINATION OF WORKING CAPITAL;
      CONVERSION OF SHARES............................................10
      3.1  Working Capital Adjustment.................................10
      3.2  URS Common Stock...........................................12
      3.3  Warrants...................................................13
      3.4  Dissenting Shares..........................................13
      3.5  Acquisition Co. Common Stock...............................14
      3.6  Exchange of Shares and Warrants............................14

ARTICLE IV

      REPRESENTATIONS AND WARRANTIES OF URS...........................18
      4.1  Organization, etc..........................................18
      4.2  Authorization and Binding Obligation.......................19
      4.3  Capitalization.............................................20
      4.4  Consents and Approvals; No Conflicts.......................21
      4.5  Financial Statements.......................................22
      4.6  Undisclosed Liabilities....................................22

                                      89
   3
      4.7  Governmental Approvals and Authorizations..................23
      4.8  Compliance with Laws.......................................23
      4.9      Absence of Certain Payments............................23
      4.10  Real Property.............................................24
      4.11  Personal Property.........................................25
      4.12  Intellectual Property.....................................26
      4.13  Absence of Conflicts of Interest..........................27
      4.14  Contracts.................................................27
      4.15  Labor Matters.............................................27
      4.16  Employee Benefit Plans....................................28
      4.17  Actions Pending...........................................30
      4.18  Affiliate Transactions....................................31
      4.19  Absence of Certain Changes................................31
      4.20  Insurance.................................................31
      4.21  Taxes.....................................................31
      4.22  Environmental Matters.....................................33
      4.23  Brokers, Finders, etc.....................................34

ARTICLE V

      REPRESENTATIONS AND WARRANTIES
      OF VORNADO, THE PARENT AND ACQUISITION CO.......................35
      5.1  Organization and Standing..................................35
      5.2  Authorization and Binding Obligation.......................35
      5.3  Consents and Approvals; No Conflicts.......................36
      5.4  Litigation.................................................37
      5.5  Finders and Investment Bankers.............................37
      5.6  Financing..................................................37

ARTICLE VI

      COVENANTS.......................................................37
      6.1  Conduct of Business........................................37
      6.2  Third-Party Consents.......................................41
      6.3  Compliance with GCL; Filings...............................41
      6.4  Additional Agreements......................................41
      6.5  Acquisition Proposals......................................42
      6.6  Public Announcements.......................................43
      6.7  Consent of the Parent......................................43

                                      90
   4
      6.8  Transfer Taxes.............................................43
      6.9  Treatment of Books and Records.............................43
      6.10  Indemnification of Officers and Directors.................44
      6.11  Access....................................................44
      6.12  Repayment of Indebtedness.................................45
      6.13  Post-Closing True-Up......................................45
      6.14  Management Bonus Amount Arrangements......................45

ARTICLE VII

      CLOSING CONDITIONS..............................................46
      7.1  Conditions Precedent to the Obligations of
      All Parties.....................................................46
      7.2  Additional Conditions to the Obligation of
      URS.............................................................46
      7.3  Conditions Precedent to Obligations of the
      Parent and Acquisition Co.......................................47

ARTICLE VIII

      CLOSING.........................................................49
      8.1  Time and Place.............................................49
      8.2  Filings at the Closing; Other Actions......................49

ARTICLE IX

      NON-SURVIVAL OF REPRESENTATIONS,
      WARRANTIES AND COVENANTS........................................49

ARTICLE X

      TERMINATION RIGHTS..............................................50
      10.1  Termination...............................................50
      10.2  Procedure and Effect of Termination.......................51

ARTICLE XI

      OTHER PROVISIONS................................................51
      11.1  Amendment and Modification................................51

                                      91
   5
      11.2  Benefit and Assignment....................................51
      11.3  No Third-Party Beneficiaries..............................52
      11.4  Entire Agreement..........................................52
      11.5  Expenses..................................................52
      11.6  Headings..................................................53
      11.7  Choice of Law.............................................53
      11.8  Notices...................................................53
      11.9  Counterparts..............................................55

                                      92
   6
SCHEDULES

Schedule 1.31                 Knowledge
Schedule 1.34(a) and (b)      Management Bonus Amount
Schedule 1.58                 Warrants
Schedule 2.4                  Officers of Surviving Corporation
Schedule 4.1(a)               URS Qualification
Schedule 4.1(b)               URS Subsidiaries;  Qualification
Schedule 4.1(c)               Third Party Interests
Schedule 4.3                  Capitalization
Schedule 4.4                  Consents and Approvals; No
                              Conflicts
Schedule 4.5                  Financial Statements
Schedule 4.6                  Undisclosed Liabilities
Schedule 4.7                  Governmental Approvals and
                              Authorization
Schedule 4.8                  Compliance with Laws
Schedule 4.10                 Real Property
Schedule 4.12                 Intellectual Property
Schedule 4.12(b)              Certain Third Party Interests
Schedule 4.13                 Conflicts of Interest
Schedule 4.14                 Contracts
Schedule 4.15                 Labor Matters
Schedule 4.16                 Plans
Schedule 4.16(f)              Retiree Health and Life Benefit
                              Obligations
Schedule 4.16(g)              Conflicts with Employment
                              Arrangements
Schedule 4.17                 Litigation
Schedule 4.18                 Affiliate Transactions
Schedule 4.19                 Adverse Changes
Schedule 4.20                 Insurance
Schedule 4.21                 Taxes
Schedule 4.22                 Environmental Matters
Schedule 4.23                 URS Finders
Schedule 5.5                  Vornado Finders
Schedule 6.1                  Conduct of Business
Schedule 6.1(h)               Post-Signing Bonus Arrangements

                                      93
   7
EXHIBITS

Exhibit 7.3(e)          Form of Waiver Letter

                                      94
   8
                          AGREEMENT AND PLAN OF MERGER

            AGREEMENT AND PLAN OF MERGER, dated as of September 26, 1997 (the
"Agreement"), among Vornado Realty Trust, a Maryland real estate investment
trust ("Vornado"), ATLANTA PARENT, INC. a Delaware corporation (the "Parent"),
ATLANTA STORAGE ACQUISITION CO., a Delaware corporation and a wholly-owned
subsidiary of the Parent ("Acquisition Co."), and URS LOGISTICS, INC., a
Delaware corporation ("URS").

                                    ARTICLE I

                                   DEFINITIONS

            Unless otherwise stated, the following terms when used herein have
the meanings assigned to them below.

            1.1 "Acquisition Co." has the meaning set forth in the preamble to
this Agreement.

            1.2 "Affiliate" means a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified.

            1.3 "Aggregate Exercise Proceeds" means the aggregate Exercise Price
payable upon exercise of all of the Warrants with an Exercise Price of less than
the Per Share Price.

            1.4 "Applicable Law" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws (including, but not limited to, the
common law), rules, regulations, ordinances, codes or orders of any Governmental
Authority and (ii) orders, decisions, rulings, injunctions, judgments, awards
and decrees or consents of or agreements with any Governmental Authority.

                                      95
   9
            1.5 "Board" has the meaning set forth in Section 4.2(b) hereof.

            1.6 "BT Credit Agreement" means the Credit Agreement, dated as of
June 2, 1995, among URS, Bankers Trust Company, as agent, and the various
lending institutions party thereto, as amended and restated as of June 27,
1997.

            1.7 "Business Day," whether or not initially capitalized, means
every day of the week excluding Saturdays, Sundays and federal holidays.

            1.8 "Certificate" has the meaning set forth in Section 3.6(a)
hereof.

            1.9 "Certificate of Merger" has the meaning set forth in Section 2.5
hereof.

            1.10 "Closing" has the meaning set forth in Section 8.1.

            1.11 "Closing Date" means the date on which the Closing occurs.

            1.12 "Closing Statement" has the meaning set forth in Section 3.1.

            1.13 "Code" means the Internal Revenue Code of 1986, as amended,
together with all regulations and rulings issued thereunder by any Governmental
Authority.

            1.14 "Contracts" has the meaning set forth in Section 4.14 hereof.

            1.15 "Debt Payoff Amount" means the aggregate amount that would be
required to repay in full as of the Effective Time all indebtedness under each
of the MetLife Loan Agreement and the BT Credit Agreement, together with any
interest due and unpaid thereon and 74% of the amount

                                      96
   10
(representing the after-tax cost to URS) of any redemption, repayment or
prepayment fees, surcharges, premiums or penalties associated therewith, as
agreed in good faith between Vornado and URS based on letters furnished to URS
by The Metropolitan Life Insurance Company and Bankers Trust Company as of or
shortly before the Closing Date.

            1.16 "Dissenting Shares" has the meaning set forth in Section 3.4
hereof.

            1.17 "Effective Time" has the meaning set forth in Section 2.5
hereof.

            1.18 "Environmental Laws" means all Applicable Laws relating to the
protection of human health, safety or the environment.

            1.19 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, together with the regulations and rulings issued thereunder
by any Governmental Authority.

            1.20 "Exercise Price" means, with respect to any Warrant, the price
at which the holder of such Warrant is entitled to purchase one share of URS
Common Stock upon exercise of such Warrant.

            1.21 "Filings" has the meaning set forth in Section 6.3(b) hereof.

            1.22 "Financial Statements" has the meaning set forth in Section 4.5
hereof.

            1.23 "GAAP" means United States generally accepted accounting
principles.

            1.24 "GCL" means the General Corporation Law of the State of
Delaware.

                                      97
   11
            1.25 "Governmental Approvals" has the meaning set forth in Section
4.7 hereof.

            1.26 "Governmental Authority" means any nation or government, any
state or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, in each case to the extent the same has jurisdiction over the
Person or property in question.

            1.27 "HSRA" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the regulations adopted thereunder.

            1.28 "IRS" means the Internal Revenue Service of the United States.

            1.29 "Kelso" means Kelso & Company.

            1.30 "Kelso Fee" means 74% of the payment (representing the
after-tax cost to URS) to be made to Kelso at the Effective Time, as provided
for in Section 7.2(e) hereof.

            1.31 "Knowledge" means, with respect to URS or any URS Subsidiary,
the actual knowledge of any of the officers set forth on Schedule 1.31 hereto.

            1.32 "Leased Property" has the meaning set forth in Section 4.10
hereto.

            1.33 "Liens" means all debts, liens, security interests, mortgages,
pledges, judgments, trusts, adverse claims, liabilities, encumbrances, material
rights of way, charges which are liens and other impairments of title of any
kind other than Permitted Liens.

            1.34 "Management Bonus Amount" means 74% of the payments
(representing the after-tax cost to URS) to be made

                                      98
   12
at or after the Effective Time to the individuals, and in the aggregate amount
set forth on Schedule 1.34 hereto.

            1.35 "Material Adverse Effect" means a material adverse effect on
the business, assets, properties, liabilities or financial condition of URS and
the URS Subsidiaries, taken as a whole or on the ability of URS timely to
consummate the transactions contemplated hereby.

            1.36 "Merger" has the meaning set forth in Section 2.1 hereof.

            1.37 "Merger Consideration" means the difference of (x) the sum of
$365,000,000 plus or minus, as the case may be, the Working Capital Adjustment,
as determined pursuant to Section 3.1 minus (y) the sum of (A) the Debt Payoff
Amount, plus (B) the Management Bonus Amount, plus (C) the Kelso Fee.

            1.38 "MetLife Loan Agreement" means the Loan Agreement, dated as of
December 23, 1988, by and between Metropolitan Life Insurance Company and United
Refrigerated Services, Inc., as amended by a First Amendment to Loan Agreement
dated as of January 16, 1990, a Second Amendment to Loan Agreement dated as of
October 25, 1990, a Third Amendment to Loan Agreement dated as of May 1, 1991, a
Fourth Amendment to Loan Agreement dated as of April 5, 1993, a Fifth Amendment
to Loan Agreement dated as of November 10, 1994 and a Sixth Amendment to Loan
Agreement dated as of April 16, 1997.

            1.39 "Outstanding URS Shares" means the shares of URS Common Stock
issued and outstanding immediately prior to the Effective Time, assuming the
exercise of all of the Warrants with an Exercise Price of less than the Per
Share Price and the issuance of all of the shares of URS Common Stock issuable
in respect thereof.

            1.40 "Owned Property" has the meaning set forth in Section 4.10
hereof.

                                      99
   13
            1.41 "Parent" has the meaning set forth in the preamble to this
Agreement.

            1.42 "Per Share Price" means the sum of (i) the Merger Consideration
plus (ii) the Aggregate Exercise Proceeds divided by the total number of
Outstanding URS Shares.

            1.43 "Permitted Liens" has the meaning set forth in Section 4.10
hereof.

            1.44 "Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
any Governmental Authority or any other government or political subdivision or
an agency or instrumentality thereof.

            1.45 "Plans" has the meaning set forth in Section 4.16 hereof.

            1.46 "Real Property" has the meaning set forth in Section 4.10
hereof.

            1.47 "Real Estate Laws" means any applicable building, zoning,
subdivision and other land use and similar laws, codes, ordinances, rules,
regulations and orders of Governmental Authorities.

            1.48 "Returns" has the meaning set forth in Section 4.21 hereof.

            1.49 "Surviving Corporation" has the meaning set forth in Section
2.1 hereof.

            1.50 "Surviving Corporation Common Stock" has the meaning set forth
in Section 3.5 hereof.

            1.51 "Tax" has the meaning set forth in Section 4.21 hereof.

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            1.52 "Transfer Taxes" means all sales (including, without
limitation, bulk sales), use, value added, documentary, stamp, gross receipts,
registration, transfer, conveyance, excise, recording, license and other
similar Taxes and fees imposed by any Governmental Authority in connection with
a merger.

            1.53 "URS" has the meaning set forth in the preamble to this
Agreement.

            1.54 "URS Common Stock" means the common stock, par value $.10 per
share, of URS.

            1.55 [Intentionally Omitted]

            1.56 "URS Subsidiary" means any corporation, partnership, limited
liability company, joint venture or other entity of which URS owns, directly or
indirectly, at least a majority of the securities or other ownership interests
having by the terms thereof ordinary voting power or otherwise has the right or
power to elect a majority of the board of directors or other Persons performing
similar functions of such corporation, partnership, limited liability company,
joint venture or other entity.

            1.57 "Vornado" has the meaning set forth in the preamble to this
Agreement.

            1.58 "Warrants" means the warrants to purchase URS Common Stock
issued pursuant to the Warrant Agreements listed on Schedule 1.58 hereto.

            1.59 "Working Capital" shall mean, as of any date of determination,
the excess, determined on a basis consistent with the preparation of the August
31 balance sheet included in the Financial Statements, of (a) the sum of (i) the
aggregate current assets, including cash and cash equivalents, short-term
investments, prepaid expenses, current deferred tax assets and other current
assets, of URS and the URS Subsidiaries on a consolidated basis as of such

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date, plus (ii) all cash expended by URS or any URS Subsidiary on or prior to
such date in respect of (A) the amounts referred to in Section 7.2(e)(i) hereof,
(B) the fee to Kelso referred to in Section 7.2(e)(ii) hereof or (C) any expense
of a type referred to in Section 11.5 hereof (the items referred to in clause
(A), (B) and (C) are collectively, the "Excluded Liabilities"), over (b) the
current liabilities, including accounts payable, current income taxes payable
and accrued expenses and any other current liabilities, of URS and the URS
Subsidiaries on a consolidated basis as of such date, other than any such
liability in respect of any Excluded Liability or any liability for any current
portion of any indebtedness under the MetLife Loan Agreement or the BT Credit
Agreement.

            1.60 "Working Capital Adjustment" shall mean the difference (which
may be a positive or a negative number) between (x) $12,147,000 (i.e., Working
Capital as of August 31, 1997) and (y) Working Capital, as determined pursuant
to Section 3.1.

                                   ARTICLE II

                                   THE MERGER

            2.1 The Merger. In accordance with the provisions of this Agreement
and the GCL, at the Effective Time (i) Acquisition Co. shall be merged with and
into URS (the "Merger"), and URS shall be the surviving corporation of the
Merger (hereinafter sometimes called the "Surviving Corporation") and shall
continue its corporate existence under the laws of the State of Delaware; (ii)
the name, identity, existence, rights, privileges, powers, franchises,
properties and assets of URS shall continue unaffected and unimpaired; and (iii)
the separate existence of Acquisition Co. shall cease, and all of the rights,
privileges, powers, franchises, properties and assets of Acquisition Co. shall
be vested in URS. The name of the surviving corporation shall be "URS Logistics,
Inc."

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            2.2 Certificate of Incorporation. The Restated Certificate of
Incorporation of URS in effect immediately prior to the Effective Time shall be
the Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided therein or by law, except that Article FOURTH thereof shall
be amended and restated in its entirety as follows:

            "The total number of shares of stock which the Company shall have
            authority to issue is 1,000 shares of Common Stock, par value $0.001
            per share."

            2.3 By-Laws. The By-Laws of URS in effect immediately prior to the
Effective Time shall be the By-Laws of the Surviving Corporation until
thereafter amended, altered or repealed as provided therein.

            2.4 Directors and Officers. The directors of Acquisition Co.
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation until his or her
successor is appointed and qualified or until his or her earlier death,
resignation or removal. The individuals set forth on Schedule 2.4 shall be the
officers of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and By-Laws of the Surviving Corporation until
his or her successor is appointed and qualified or until his or her earlier
death, resignation or removal.

            2.5 Effective Time. The Merger shall become effective simultaneously
with the filing of a Certificate of Merger with the Secretary of State of the
State of Delaware in accordance with Sections 251 and 103 of the GCL (the
"Certificate of Merger"). The Certificate of Merger shall be filed
simultaneously with the Closing. The date and time when the Merger shall become
effective is hereinafter referred to as the "Effective Time".

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                                   ARTICLE III

                        DETERMINATION OF WORKING CAPITAL;
                              CONVERSION OF SHARES

            3.1 Working Capital Adjustment. (a) If Working Capital as of
immediately prior to the Effective Time is less than $12,147,000 (i.e., Working
Capital as of August 31, 1997), the Merger Consideration shall be reduced by the
amount by which Working Capital as of immediately prior to the Effective Time is
less than such amount (the "Working Capital Reduction"). If Working Capital as
of the Effective Time is greater than $12,147,000, the Merger Consideration
shall be increased by the amount by which Working Capital as of the Effective
Time is greater than such amount (the "Working Capital Addition"). The dollar
value of the Working Capital Reduction or Working Capital Addition, as the case
may be, is referred to as the "Working Capital Adjustment".

            (b) Not later than 10 days nor earlier than 30 days prior to the
Closing, URS shall prepare in good faith, on a basis consistent with the August
31, 1997 balance sheet included in the Financial Statements, and shall deliver
to Vornado, an estimate (the "Working Capital Estimate") of the Working Capital
Adjustment as of immediately prior to the then anticipated Effective Time, a
statement as to whether the Working Capital Adjustment is estimated to be a
Working Capital Reduction or a Working Capital Addition, and such other
supporting information and documentation as Vornado may reasonably request with
respect thereto. On the Closing Date, the Parent shall deposit into an escrow
account (the "Escrow Account") maintained by Citibank, N.A., as escrow agent
pursuant to an escrow agreement containing such terms as the parties shall
negotiate in good faith (the "Escrow Agreement"), an amount of cash (such cash,
the "Escrowed Funds") equivalent to (i) two, multiplied by (ii) the dollar value
of the Working Capital Estimate (without regard to

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whether the Working Capital Estimate reflects a Working Capital Reduction or
Working Capital Addition); provided that the Escrowed Funds shall not be less
than $3.5 million.

            (c) As soon as practicable following the Effective Time, but in no
event later than 15 days following the Effective Time, Vornado shall prepare in
good faith, on a basis consistent with URS' August 31, 1997 balance sheet, and
deliver to Kelso, as representative of the former holders of URS Common Stock, a
calculation (the "Working Capital Calculation") of the Working Capital
Adjustment as of the Effective Time, together with such supporting information
and documentation as Kelso may reasonably request with respect thereto.

            (d) During the 15-day period following Kelso's receipt of the
Working Capital Calculation, the Surviving Corporation shall provide Kelso
reasonable access, during normal business hours, and upon reasonable notice, to
URS' accounting and financial records and Vornado's working papers relating to
the Working Capital Adjustment; provided that such access does not unreasonably
disrupt the normal operations of URS. The Working Capital Calculation shall
become final and binding upon the parties, and the Working Capital Adjustment
shall be conclusively determined for purposes of this Agreement at the
conclusion of such 15-day period, or earlier if Kelso accepts in writing the
Working Capital Calculation, unless Kelso gives written notice of its
disagreement with the Working Capital Calculation (a "Notice of Disagreement")
to Vornado prior to the end of such period. Any notice of Disagreement shall (i)
specify in reasonable detail the nature of any disagreement so asserted and (ii)
include only disagreements based on (x) mathematical errors or (y) the Working
Capital Calculation not being calculated in accordance with this Agreement. If a
Notice of Disagreement is received by Vornado in a timely manner, then the
Working Capital Calculation shall become final and binding upon the parties and
the holders of URS Common Stock, and the Working Capital Adjustment shall be
conclusively determined for purposes of

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this Agreement, on the earlier of (i) the date Vornado and Kelso resolve in
writing any differences they have with respect to the matters specified in the
Notice of Disagreement, or (ii) the date any disputed matters are finally
resolved in writing by the Arbitrating Auditor (as defined below).

            (e) During the 15-day period following the delivery of a Notice of
Disagreement, Vornado and Kelso shall seek in good faith to resolve in writing
any differences which they may have with respect to the matters specified in the
Notice of Disagreement and URS shall provide Kelso with reasonable access,
during normal business hours, and upon reasonable notice, to URS' accounting and
financial records and Vornado's working papers relating to the Working Capital
Calculation; provided that such access does not unreasonably disrupt the normal
operations of URS. At the end of such 15-day period, Vornado and Kelso shall
submit to the final and unappealable decision of such New York City office of a
"Big Six" auditing firm that is independent with respect to Kelso, URS and
Vornado as shall be selected by mutual agreement of Vornado and Kelso (such
independent auditor, the "Arbitrating Auditor") for review and resolution of any
and all matters which remain in dispute and which were properly included in the
Notice of Disagreement. Vornado and Kelso agree to use reasonable efforts to
cause the Arbitrating Auditor to render a decision resolving the matters
submitted to it within 15 days following submission of the matter thereto.

            3.2 URS Common Stock. (a) At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, each share of
URS Common Stock (except for (i) any shares of URS Common Stock then owned
beneficially or of record by the Parent or Acquisition Co. or any other
subsidiary of the Parent, (ii) shares of URS Common Stock then held in the
treasury of URS or by any URS Subsidiary, and (iii) Dissenting Shares) issued
and outstanding immediately prior to the Effective Time shall be converted into
the right to receive cash from the Parent in

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   20
an amount equal to the Per Share Price, as determined pursuant to Section 1.42.

            (b) Each share of URS Common Stock which is then owned beneficially
or of record by the Parent or Acquisition Co. or any other direct or indirect
subsidiary of the Parent shall, by virtue of the Merger and without any action
on the part of the holder thereof, be canceled and retired and cease to exist,
without any conversion thereof.

            (c) Each share of URS Common Stock held in URS's treasury or by any
URS Subsidiary immediately prior to the Effective Time shall, by virtue of the
Merger, be canceled and retired and cease to exist, without any conversion
thereof.

            (d) The holders of shares of URS Common Stock shall, as of the
Effective Time, cease to have any rights as stockholders of URS, except such
rights, if any, as they may have pursuant to Section 262 of the GCL, or
alternatively, the right to receive their pro rata share of the Merger
Consideration, as determined and paid in the manner set forth in this Agreement.

            3.3 Warrants. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, each Warrant with an
Exercise Price that is less than the Per Share Price issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive cash from the Parent in an amount equal to the product of (i) the number
of shares of URS Common Stock into which such Warrant is exercisable times (ii)
the excess of the Per Share Price, as determined pursuant to Section 3.1, over
the Exercise Price for such Warrant. URS shall cause each Warrant having an
Exercise Price equal to or in excess of the Per Share Price to be cancelled. In
this regard, URS will take all actions required under the Warrant Plan governing
the Warrants.

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            3.4 Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of URS Common Stock which are held by stockholders who
shall have effectively dissented from the Merger and perfected their appraisal
rights in accordance with the provisions of Section 262 of the GCL (the
"Dissenting Shares"), shall not be converted into or be exchangeable for the
right to receive any Merger Consideration, but the holders thereof shall be
entitled to payment from the Surviving Corporation of the appraised value of
such shares in accordance with the provisions of Section 262 of the GCL;
provided, however, that if any such holder shall have failed to perfect such
appraisal rights or shall have effectively withdrawn or lost such rights, his or
her shares of URS Common Stock shall thereupon be converted into and
exchangeable for, at the Effective Time, their pro rata share of the Merger
Consideration, as determined and paid in the manner set forth in this Agreement.

            3.5 Acquisition Co. Common Stock. Each share of common stock, par
value $.01 per share, of Acquisition Co. (the "Acquisition Co. Common Stock"),
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into and exchangeable for one fully paid and non-assessable share of
common stock, par value $.10 per share, of the Surviving Corporation ("Surviving
Corporation Common Stock"). From and after the Effective Time, each outstanding
certificate theretofore representing shares of Acquisition Co. Common Stock
shall be deemed for all purposes to evidence ownership of and to represent the
number of shares of Surviving Corporation Common Stock into which such shares of
Acquisition Co. Common Stock shall have been converted. Promptly after the
Effective Time, the Surviving Corporation shall issue to the Parent a stock
certificate or certificates representing 1,000 shares of Surviving Corporation
Common Stock in exchange for the certificate or certificates which formerly
represented shares of Acquisition Co. Common Stock, which shall be canceled.

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            3.6 Exchange of Shares and Warrants. (a) On and after the Closing
Date, each holder of an outstanding certificate or certificates which prior
thereto represented shares of URS Common Stock (the "Stock Certificates") shall,
upon surrender to the Surviving Corporation of such Stock Certificate or Stock
Certificates, be entitled to the amount of cash into which the aggregate number
of shares of URS Common Stock previously represented by such Stock Certificate
or Stock Certificates surrendered shall have been converted into the right to
receive pursuant to this Agreement. In addition, on the Closing Date, each
holder of an outstanding Warrant which prior thereto represented the right to
purchase shares of URS Common Stock in accordance with the terms of the
applicable Warrant Agreement (the "Warrant Certificates" and together with the
Stock Certificates, the "Certificates") shall, upon surrender to the Exchange
Agent of such Warrant Certificate or Warrant Certificates to the Surviving
Corporation, be entitled to the amount of cash into which such Warrant
Certificate or Warrant Certificates have been converted pursuant to Section 3.3
of this Agreement. All payments in respect of shares of URS Common Stock and
Warrants the Certificates for which are surrendered on the Closing Date shall be
made by the Parent in immediately available funds on the Closing Date, which
shall be paid in respect of each share of URS Common Stock and each Warrant as
follows:

              (i) Payments in respect of the portion of the Per Share Price
      attributable to the portion of the Merger Consideration not deposited in
      the Escrow Account shall be made by the Parent in immediately available
      funds on the Closing Date (in exchange for Stock Certificates which are
      surrendered on the Closing Date) or as soon as practicable following
      surrender of the related Certificates (in the case of Certificates
      surrendered following the Closing Date).

             (ii) If the Working Capital Adjustment is a Working Capital
      Addition, then, promptly following the final determination thereof,
      payments in respect of the

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      portion of the Per Share Price attributable to any Working Capital
      Addition shall be disbursed from the Escrow Account to the holders of
      shares of URS Common Stock and to the holders of Warrants pro rata
      according to their holdings (calculated on a fully-diluted basis), with
      the remaining escrowed funds disbursed to Vornado, in each case as soon as
      practicable following determination of the Working Capital Adjustment in
      accordance with Section 3.1 and, in the case of disbursements to holders
      of shares or Warrants, following the surrender of the related
      Certificates.

            (iii) If the Working Capital Adjustment is a Working Capital
      Reduction, then, promptly following the determination thereof, a payment
      equivalent to the Working Capital Reduction shall be disbursed from the
      Escrow Account to Vornado, with the remaining escrowed funds disbursed
      from the Escrow Account to the holders of shares of URS Common Stock and
      to the holders of Warrants pro rata according to their holdings
      (calculated on a fully-diluted basis), in each case as soon as practicable
      following determination of the Working Capital Adjustment in accordance
      with Section 3.1 and, in the case of disbursements to holders of shares or
      Warrants, following the surrender of the related Certificates.

            All disbursements from the Escrow Account shall be made in
accordance with the provisions of the Escrow Agreement. With respect to any
Certificate alleged to have been lost, stolen or destroyed, the owner or owners
of such Certificate, other than the URS Shareholders, shall be entitled to the
consideration set forth above upon delivery to the Surviving Corporation of an
affidavit of such owner or owners setting forth such allegation and an indemnity
agreement to indemnify the Parent and the Surviving Corporation against any
claim that may be made against either or both of them on account of the alleged
loss, theft or destruction of any such Certificate or the delivery of the
payment set forth above.

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            (b) If consideration is to be delivered to a Person other than the
Person in whose name the Certificate surrendered in exchange therefor is
registered, it shall be a condition to delivery of the consideration that the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the Person requesting such consideration shall pay
any transfer or other Taxes required by reason of the payment to a Person other
than the registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such Tax has been paid or is not
applicable.

            (c) Until surrendered in accordance with the provisions of this
Section 3.6, from and after the Effective Time, each Certificate (other than (i)
Certificates representing shares of URS Common Stock owned beneficially or of
record by the Parent, Acquisition Co. or any other subsidiary of the Parent,
(ii) Certificates representing shares of URS Common Stock held in URS's treasury
or by any URS Subsidiary and (iii) Dissenting Shares in respect of which
appraisal rights are perfected) shall represent for all purposes the right to
receive cash pursuant to Section 3.2(a) or 3.3, as applicable, as determined
and paid in the manner set forth in this Agreement.

            (d) After the Effective Time there shall be no transfers on the
stock transfer books of the Surviving Corporation of the shares of URS Common
Stock or Warrants that were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be canceled and exchanged for the applicable
consideration referred to in Section 3.6(c) hereof.

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                                   ARTICLE IV

                      REPRESENTATIONS AND WARRANTIES OF URS

            URS hereby represents and warrants to Vornado, the Parent and
Acquisition Co. as follows:

            4.1 Organization, etc. (a) URS is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted. URS is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified or licensed would not individually or in the
aggregate have a Material Adverse Effect or materially restrict the ability of
URS to conduct business as presently conducted by it in such jurisdiction. Each
jurisdiction where URS is so qualified is listed on Schedule 4.1(a) hereto.
Except as set forth on Schedule 4.1(b) hereto, there are no URS Subsidiaries
and, except as set forth on Schedule 4.1(b) hereto, URS does not own, directly
or indirectly, any capital stock of or equity interests in any Person. URS has
heretofore delivered or made available to the Parent accurate and complete
copies of the Restated Certificate of Incorporation and By Laws of URS, as
amended and in effect on the date hereof. The stock certificate books and
ledgers of URS, which have been made available to the Parent - accurately
reflect, at the date hereof, the ownership of the issued and outstanding capital
stock of URS.

            (b) Each URS Subsidiary is listed on Schedule 4.1(b) hereto, is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry out its
business as now being conducted. Each

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URS Subsidiary is duly qualified or licensed and in good standing to do business
in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification necessary,
except where the failure to be so qualified or licensed would not individually
or in the aggregate have a Material Adverse Effect or materially restrict the
ability of such URS Subsidiary to conduct business as presently conducted by it
in such jurisdiction. Each jurisdiction where each URS Subsidiary is so
qualified is listed on Schedule 4.1(b) hereto. URS has heretofore delivered to
the Parent accurate and complete copies of the Certificate of Incorporation and
By Laws of each URS Subsidiary, as amended and in effect on the date hereof.

            (c) Except as set forth on Schedule 4.1(c) hereto, URS owns of
record and beneficially 100% of the issued and outstanding capital stock and all
other equity interests in each URS Subsidiary, free and clear of any Liens.

            4.2 Authorization and Binding Obligation. (a) URS has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. URS's execution, delivery and
performance of this Agreement has been duly and validly authorized by all
necessary corporate action on the part of URS and this Agreement has been duly
executed and delivered by URS. Except for the actions referred to in Section
4.2(b) hereof, which actions are in full force and effect, and the giving of
notice in accordance with Section 228(d) of the GCL, no other corporate action
or proceedings on the part of URS are necessary to authorize this Agreement or
the consummation of the transactions contemplated hereby. This Agreement
constitutes the valid and binding obligation of URS, enforceable against URS in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar rights of creditors generally
and by general principles of equity.

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            (b) The URS Board of Directors (the "Board") has authorized the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and has not withdrawn such authorization.
Subsequent to the giving of such authorization, Kelso Investment Associates IV,
L.P., as the beneficial and record owner of the URS Common Stock as set forth in
Schedule 4.3 hereto, has executed and not withdrawn an action by written consent
in lieu of meeting of stockholders adopting this Agreement. A true and complete
copy of such approvals by the Board and such consent of Kelso Investment
Associates IV, L.P. has been delivered to the Parent.

            4.3 Capitalization. (a) The authorized URS Common Stock and other
authorized capital stock of URS and each of the URS Subsidiaries is as set forth
on Schedule 4.3 hereto. All issued and outstanding shares of URS Common Stock
and other equity interests of URS and each of the URS Subsidiaries are duly
authorized, validly issued, fully paid, non-assessable and free of preemptive
rights. Schedule 4.3 hereto sets forth the name of each Person who owns
beneficially or of record any shares of URS Common Stock, each Person who owns
beneficially or of record any shares of capital stock and other equity interests
of any URS Subsidiary and, in the case of URS and each URS Subsidiary, the
number of shares owned by each such Person.

            (b) Except as set forth on Schedule 4.3 hereto, there are not now,
and at the Effective Time there will not be, any options, warrants, calls,
subscriptions, or other rights or other agreements or commitments of any nature
whatsoever obligating URS or any of the URS Subsidiaries to issue, transfer,
deliver or sell, or cause to be issued, transferred, delivered or sold, any
additional shares of URS Common Stock or other equity interest of URS or any of
the URS Subsidiaries, or any securities or obligations convertible into or
exchangeable for any such URS Common Stock or other equity interests, or
obligating URS or any of the URS Subsidiaries to grant, extend or enter into any
such agreement or commitment and no authorization therefor has

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been given or made by URS or any URS Subsidiary. Except for the arrangements
described in Schedule 4.3 hereto, there are no contractual arrangements that
obligate URS or any URS Subsidiary to (i) repurchase, redeem or otherwise
acquire any of its capital stock or its other equity interests or (ii) pay any
Person any consideration that is calculated with reference to the consideration
to be paid to the URS Stockholders under this Agreement.

            4.4 Consents and Approvals; No Conflicts. Except for applicable
requirements of the HSRA and as set forth on Schedule 4.4 hereto and the
approvals referred to in Section 4.2(b) hereof, the giving of notice in
accordance with Section 228(d) of the GCL and the filing and recordation of the
Certificate of Merger as required by the GCL, no filing with, and no permit,
authorization, consent or approval of, any Governmental Authority or other third
party is necessary for the consummation by URS of the transactions contemplated
by this Agreement, except where the failure to make such filing or obtain such
authorization, consent or approval would not individually or in the aggregate
have a Material Adverse Effect. Neither the execution and delivery of this
Agreement by URS nor the consummation by URS of the transactions contemplated
hereby, nor compliance by URS with any of the provisions hereof, will (i) result
in any violation of any provision of the Certificate of Incorporation or By Laws
of URS or any URS Subsidiary, (ii) violate any Applicable Law or (iii) except as
set forth on Schedule 4.4 hereto, result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default or
give rise to a right of any Person to terminate, cancel or accelerate the
payment or performance of any liability, obligation or commitment under any
contract (including any Contract listed in Schedule 4.14 hereto) to which URS or
any of the URS Subsidiaries is a party, or by which any of their respective
properties are bound, except, in the case of clauses (ii) and (iii) above, where
such violation, breach, default or right of termination, cancellation or
acceleration would not individually or in the aggregate have a Material Adverse
Effect.

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   29
            4.5 Financial Statements. URS has furnished the Parent with (i) a
consolidated balance sheet of URS as at December 31, 1996 and consolidated
statements of operations, changes in stockholders' equity (deficit) and cash
flows of URS for such year, together with the related audit report of Deloitte &
Touche and (ii) an unaudited consolidated balance sheet of URS as at August 31,
1997 and a consolidated statement of operations of URS for the eight-month
period ended August 31, 1997. All such financial statements are referred to
herein collectively as the "Financial Statements". Other than as set forth in
Schedule 4.5 hereto, the Financial Statements (including any related schedules
and/or notes) have been prepared in accordance with GAAP consistently applied
throughout the periods presented, except that the unaudited financial statements
are subject to year-end adjustments and do not contain footnotes. The balance
sheets included in the Financial Statements fairly present, in all material
respects, the financial position of URS and the URS Subsidiaries as at the date
thereof, and the statements of operations, changes in stockholders' equity
(deficit) and cash flows included in the Financial Statements fairly present, in
all material respects, the results of the operations, changes in stockholders'
equity (deficit) and cash flows, respectively, of URS and the URS Subsidiaries
for the periods indicated.

            4.6 Undisclosed Liabilities. Except (i) to the extent reflected or
reserved against in the August 31, 1997 balance sheet of URS included in the
Financial Statements, (ii) to the extent specifically set forth on Schedule 4.6
hereto, and/or (iii) for obligations of URS arising in the ordinary course of
the performance of its responsibilities under any Contracts (as defined in
Section 4.14 hereof) listed on Schedule 4.14 or any agreement which is not
required to be listed on Schedule 4.14 because of the limitations set forth in
Section 4.14, neither URS nor any URS Subsidiary has any liabilities or
obligations of any nature, whether liquidated, unliquidated, accrued, absolute,
contingent or otherwise which individually or in the aggregate would have a
Material Adverse Effect.

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            4.7 Governmental Approvals and Authorizations. Except as set forth
in Schedule 4.7 hereto, all approvals, permits, qualifications, authorizations,
licenses, franchises, consents, orders, registrations or other approvals
(collectively, the "Governmental Approvals") of all Governmental Authorities
which are necessary in order to permit URS and the URS Subsidiaries to carry on
their respective businesses have been obtained and are in full force and effect,
except where the failure to obtain such approval, permit, qualification,
authorization, license, franchise, consent, order, registration or other
approval, or the failure to be in full force and effect, would not individually
or in the aggregate have a Material Adverse Effect. There has been no violation,
cancellation, suspension or revocation of any Governmental Approval. This
Section 4.7 does not relate to environmental matters, which are the subject of
Section 4.22.

            4.8 Compliance with Laws. Except as set forth on Schedule 4.8,
neither URS nor any URS Subsidiary is in conflict with or in violation or
breach of or default under (a) any Applicable Law or (b) any provision of its
organizational documents, and since December 31, 1996, neither URS nor any URS
Subsidiary has received any written notice alleging any such conflict,
violation, breach or default, except for any such violations, breaches or
defaults which would not individually or in the aggregate have a Material
Adverse Effect. This Section 4.8 does not relate to environmental matters, which
are the subject of Section 4.22.

            4.9 Absence of Certain Payments. None of Kelso, URS, any URS
Subsidiary, or any director, officer, employee or agent of, or consultant or
other representative of, URS or any URS Subsidiary, or any other Person
authorized to act on behalf thereof, has unlawfully offered, paid or agreed to
pay, directly or indirectly, any money or anything of value to or for the
benefit of any individual who is or was an official or employee or candidate for
office of any Governmental Authority, or any employee or agent of any

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customer or supplier of URS or any URS Subsidiary, except for any such offer,
payment or agreement to pay which would not individually or in the aggregate
have a Material Adverse Effect and would not reasonably be expected to subject
URS or any URS Subsidiary to any damage or penalty in any civil, criminal or
governmental litigation or proceeding.

            4.10 Real Property. Schedule 4.10 hereto sets forth a complete list
of (i) all real property and all interests in real property owned in fee by URS
or the URS Subsidiaries (individually, an "Owned Property") and (ii) all real
property and all interests in real property leased by URS or the URS
Subsidiaries (individually, a "Leased Property"; together with the Owned
Property, the "Real Property"). URS and the URS Subsidiaries have (i) good,
marketable and insurable fee title to all Owned Property, and (ii) good and
valid leasehold interests in all Leased Property, and in the case of all of the
Owned Properties and those leasehold estates covered by the applicable title
insurance policies and update letters or endorsements (as the case may be) set
forth on Schedule 4.10 hereto, such title is free and clear of any Liens, except
(a) those created or permitted under the BT Credit Agreement or the MetLife Loan
Agreement, (b) as disclosed in those certain title insurance policies and update
letters or endorsements, as the case may be, set forth on Schedule 4.10 hereto,
and (c) other easements, rights of way and minor and immaterial liens, charges
or encumbrances that do not interfere with the use of the Real Property in the
normal conduct of the business of URS and the URS Subsidiaries and that do not
materially impair the value of the Real Property (collectively, the "Permitted
Liens"). Complete and correct copies of each lease relating to the Leased
Property described on Schedule 4.10 hereto have been furnished or made
available to the Parent. The current use and operation of the Real Property does
not violate in any material respect any instrument of record affecting the Real
Property. Except as disclosed on Schedule 4.10 hereto, no damage or destruction
has occurred and, to the Knowledge of URS, no condemnation or rezoning
proceeding has been threatened or

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commenced with respect to any of the Real Property that would individually or in
the aggregate materially impair the continued use or operation of the Owned
Property or the Leased Property. The Owned Property is in compliance with all
Real Estate Laws, and neither URS nor any URS Subsidiary has any Knowledge of
any written notice of violation or claimed violation of any Real Estate Law, in
either case except where such violation or lack of compliance would not,
individually or in the aggregate, materially restrict the ability of URS or any
URS Subsidiary to conduct its business as presently conducted by it at any
location. Except as disclosed on Schedule 4.10 hereto, neither URS nor any URS
Subsidiary is obligated under or a party to any option, right of first refusal
or other contractual right to purchase, acquire, sell or dispose of any Real
Property. Neither URS nor any URS Subsidiary is a lessor, sublessor or grantor
under any lease, sublease or other instrument granting to another Person any
right to the possession, lease, occupancy or enjoyment of the Real Property,
other than pursuant to the agreements listed on Schedule 4.14 hereto. This
Section 4.10 does not relate to environmental matters, which are the subject of
Section 4.22.

            4.11 Personal Property. URS has previously delivered to the Parent a
schedule, as of December 31, 1996, which schedule includes a complete list of
each item of tangible personal property or assets owned by URS or any URS
Subsidiary having a value of $5,000 or more. URS and each of the URS
Subsidiaries has good and valid title to all tangible personal property and
assets which it owns, including the material tangible personal property
reflected in the August 31, 1997 balance sheet included in the Financial
Statements as being owned by URS or such URS Subsidiary, as the case may be,
except for such tangible personal property and assets disposed of in the
ordinary course of business, consistent with past practice, since August 31,
1997 having a value not in excess of $250,000. URS and each of the URS
Subsidiaries has a valid legal right to use all tangible personal property and
assets which it does not own but uses in the conduct of its business, except

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where the failure to have such valid legal right would not individually or in
the aggregate have a Material Adverse Effect.

            4.12 Intellectual Property. (a) URS and each URS Subsidiary
possesses all patents, trademarks, service marks, trade names, copyrights and
licenses that are necessary for the use or ownership of its respective
properties and assets, and the maintenance and operation of its respective
businesses as currently conducted. Neither URS nor any URS Subsidiary uses any
registered trademarks, trade names, copyrights or patents (or have applications
therefor pending) in connection with their respective businesses, except for
those set forth on Schedule 4.12 hereto (collectively referred to as the
"Intellectual Property"). Except as set forth on Schedule 4.12 hereto, the
Intellectual Property is owned by URS or a URS Subsidiary, as indicated Schedule
4.12 hereto, and are not subject to any license, royalty arrangement or dispute.
To the Knowledge of URS, no registered trademark or trade name used by URS or
any URS Subsidiary infringes on any trademark or trade name in any state or
country in which such trademark or trade name is used by URS or such URS
Subsidiary. Neither URS nor any URS Subsidiary has received written notification
of infringement of any patent, copyright, trademark or trade name, or any
application therefor, from any Person.

            (b) Each of URS and each URS Subsidiary possesses the right to use
all of its logistics and RF software and related data bases that are necessary
for the conduct of its respective operations as currently conducted. To the
Knowledge of URS, no other Person has any material interest in any such software
or data bases (other than any licensee or licensor thereof which is not an
officer, director or Affiliate of URS or any URS Subsidiary).

            4.13 Absence of Conflicts of Interest. Except as set forth on
Schedule 4.13 hereto, none of the URS Stock-

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holders nor any officer, director or Affiliate of URS or any URS Subsidiary has
any material interest in any material contract or material property (real or
personal), tangible or intangible, used in the business of URS or any URS
Subsidiary.

            4.14 Contracts. Schedule 4.14 hereto lists (or describes in the case
of oral contracts) each contract, note, debt instrument, lease, sublease,
warehouse services agreement, covenant not to compete, supply agreement,
guarantee, licensing agreement, partnership agreement, joint venture agreement,
employment agreement (other than employment agreements set forth on Schedule
4.16 hereto), collective bargaining agreement or other agreement or commitment
of any kind, whether written or oral, to which URS or any URS Subsidiary is a
party (other than agreements set forth on Schedule 4.16 hereto) or by which
either of them is bound (each, a "Contract"), provided that such Schedule need
not list (i) any written or oral Contract or related written Contracts under
which the aggregate payments required to be made by or to URS or any URS
Subsidiary over the life of the Contract or Contracts are less than $300,000,
(ii) any rate quote or (iii) any warehouse receipt. Complete copies of every
written Contract listed on Schedule 4.14 hereto have been previously made
available to the Parent. Each of URS and the URS Subsidiaries has performed all
material obligations required to be performed by it to date under the Contracts
(and every employment contract listed on Schedule 4.16 hereto), and neither URS
nor any URS Subsidiary has received written (or, to the Knowledge of URS, oral)
notice that it is in material default in the performance of any of its
obligations under any Contract.

            4.15 Labor Matters. Except as described on Schedule 4.15 hereto,
since December 31, 1996, there have been no work stoppages or labor difficulties
relating to employees of URS or the URS Subsidiaries. There are no labor
disputes currently subject to any unfair labor practice complaint, grievance
procedure, arbitration or litigation, nor is there any default or any event
which, with

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notice or the passage of time or both, would become a default, under any
agreement with any labor union or association representing employees of URS or
any URS Subsidiary, except for any such dispute, procedure, arbitration,
litigation or default which would not individually or in the aggregate have a
Material Adverse Effect. There are no strikes, picketing, work stoppages or
representation petitions pending or, to URS's Knowledge, threatened with respect
to any employee of URS or any URS Subsidiary.

            4.16 Employee Benefit Plans. (a) Schedule 4.16 hereto contains a
true and complete list of each "employee benefit plan", as such term is defined
in Section 3(3) of ERISA, and each bonus, medical incentive or deferred
compensation, severance, retention, change in control, equity incentive or other
material employee benefit plan, program or policy maintained or contributed to
by URS or any URS Subsidiary for the benefit of its respective employees or
former employees or with respect to which URS or a URS Subsidiary is obligated
to contribute on behalf of its employees and current or former directors
(collectively, the "Plans"). URS has made available to the Parent true and
complete copies of all Plans; all related trust agreements and insurance
contracts forming a part of any Plans; the most recent actuarial and trust
reports prepared for any such Plan; the most recent Form 5500 filed in respect
of each such Plan and all schedules thereto; the most recent determination
letter issued in respect of each such Plan; the current summary plan
descriptions with respect to such Plans for which such a description has been
distributed; and all amendments to any such document.

            (b) Each Plan intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the IRS with respect to
"TRA" (as defined in Section 1 of Rev. Proc. 93-39) as to the qualification
thereof under Section 401(a) of the Code and, to the Knowledge of URS, no
amendment has been made to any such Plan since the date of such determination
letter that has or would result in the disqualification of such Plan

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under Section 401(a) of the Code. Each of the Plans has been operated and
administered in all material respects in accordance with applicable laws,
including but not limited to ERISA and the Code. There are no material pending
or, to the Knowledge of URS, threatened claims by or on behalf of any of the
Plans or by any employee participating therein (other than routine claims for
benefits). All contributions required to have been made by URS and the URS
Subsidiaries to any Plan pursuant to applicable law (including, without
limitation, ERISA and the Code) have been made on a timely basis. Neither URS
nor any of the URS Subsidiaries has engaged in a transaction with respect to any
Plan that, assuming the taxable period of such transaction expired as of the
date hereof, could subject URS or any of the URS Subsidiaries to a tax or
penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA in
an amount which could be material.

            (c) As of the date hereof, no liability under Title IV of ERISA
(other than for the payment of premiums under Section 4007) has been or is
expected to be incurred by URS or any URS Subsidiary with respect to any
ongoing, frozen or terminated "single employee plan", within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by any of them.

            (d) No Plan is or within the preceding six years has been a
multiemployer plan within the meaning of Section 4001(a)(3) of ERISA or a
multiple employer plan within the meaning of Section 4063 or 4064 of ERISA.

            (e) Except for URS and each URS Subsidiary, no other trade or
business, whether or not incorporated, is currently or, within the preceding six
years, has been required to be treated as a "single employer" with URS pursuant
to clause (b), (c) or (m) of Section 414 of the Code.

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            (f) Neither URS nor any URS Subsidiary has any obligations for
retiree health and life benefits under any Plan, except as set forth on Schedule
4.16(f).

            (g) Except as set forth on Schedule 4.16(g) hereto, the consummation
of the transactions contemplated by this Agreement will not (i) entitle any
employees of URS or any URS Subsidiary to severance pay, (ii) accelerate the
time of payments or vesting or trigger any payment of compensation or benefits
under, increase the amount payable or trigger any other material obligation
pursuant to, any Plan or (iii) result in any breach or violation of, or a
default under, any of the Plans.

            4.17 Actions Pending. Except as set forth in Schedule 4.17 hereto,
there is no civil, criminal or administrative action, suit, hearing, claim,
litigation, proceeding or investigation pending or, to the Knowledge of URS,
threatened, against or affecting URS or any URS Subsidiary or the business or
any of the assets of URS or any URS Subsidiary, or which seeks to enjoin or
prohibit, or otherwise questions the validity of, any action taken or to be
taken in connection with this Agreement, and there is no order, decision,
ruling, injunction, judgment, award or decree or consent of or agreements with
any Governmental Authority against or affecting URS or any URS Subsidiary or the
business or assets of URS or any URS Subsidiary, or which enjoins or prohibits,
any action taken or to be taken in connection with this Agreement.

            4.18 Affiliate Transactions. Except as set forth on Schedule 4.18
hereto, there are no existing agreements, understandings or arrangements between
URS or any URS Subsidiary, on the one hand, and any Affiliate of URS or any URS
Subsidiary, on the other hand.

            4.19 Absence of Certain Changes. Except as set forth on Schedule
4.19 hereto, since August 31, 1997, (a) URS and the URS Subsidiaries have
conducted their respective businesses in the ordinary and usual course of

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their respective businesses, and (b) there has not been any change in the
financial condition, assets, owned or leased properties, business or results of
operations of URS or any URS Subsidiary that, individually or in the aggregate,
has had a Material Adverse Effect and (c) neither URS nor any URS Subsidiary has
taken any action of the type described in any clause of Section 6.1.

            4.20 Insurance. Schedule 4.20 hereto lists all material insurance
policies maintained by, or for the benefit of, URS or any URS Subsidiary, as an
insured. All such insurance policies are in full force and effect, all premiums
due thereon have been paid and no notice of termination of any such policy has
been received by the insured thereunder.

            4.21 Taxes. Except as set forth on Schedule 4.21 hereto, or as
reflected or reserved against in the December 31, 1996 balance sheet included
in the Financial Statements, (i) URS and the URS Subsidiaries have (or by the
Closing Date will have) duly and timely filed or caused to be filed all Tax
Returns that are required to be filed on or before the Closing Date or the time
for filing such returns shall have been validly extended to a date after the
Closing Date (collectively, the "Returns"), except to the extent that the
failure to so file would not individually or in the aggregate have a Material
Adverse Effect; (ii) URS and the URS Subsidiaries have paid all Taxes shown or
required to be shown on such Returns, and have (or by the Closing Date will
have) withheld and remitted to the appropriate Taxing Authority, all Taxes that
are required to be withheld on or before the Closing Date, except to the extent
that the failure to so pay, withhold or remit would not individually or in the
aggregate have a Material Adverse Effect; (iii) no claim in writing by the IRS
or any other Taxing Authority for assessment or collection of Taxes, that are or
may become payable by URS or the URS Subsidiaries or chargeable as a Lien upon
the assets thereof, has been received by URS or any URS Subsidiary; (iv) Federal
income tax returns for the taxable years of URS through the taxable year ended
1991

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have been examined and closed; (v) neither URS nor any URS Subsidiary has
granted any extension or waiver of the limitation period applicable to any
Returns, which period (after giving effect to such extension or waiver) has not
yet expired; (vi) neither URS nor any URS Subsidiary has received any notice in
writing of any claim, audit, action, suit, proceeding or investigation now
pending against or with respect to URS or any URS Subsidiary in respect of any
Tax; (vii) there are no requests for rulings or determinations in respect of
any Tax pending between URS or any URS Subsidiary, on the one hand, and any
Taxing Authority on the other; (viii) neither URS nor any URS Subsidiary has (A)
been a member of an affiliated group, or (B) filed or been included in a
combined, consolidated or unitary Return, in each case involving group members
other than URS and the URS Subsidiaries; and (ix) neither URS nor any of the URS
Subsidiaries has (a) elected to be treated as a "real estate investment trust"
for federal income tax purposes for any taxable year ending after December 31,
1993 or (b) acquired, since January 1, 1994, a substantial portion of the assets
of an entity whose election to be treated as a "real estate investment trust"
has been terminated or revoked. Schedule 4.21 hereto contains a list of states,
territories and jurisdictions (whether foreign or domestic) with respect to
which any income Tax Return has been filed by URS or any URS Subsidiary within
the last three taxable years.

            For purposes of this Agreement: (a) "Tax" means any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits, license, withholding on
amounts paid to or by URS or any URS Subsidiary, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profits tax, custom duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or penalty,
addition to tax or additional amount imposed by any Governmental Authority
(domestic or foreign) (a "Taxing Authority"), (b) "Taxes" shall have a
correlative meaning and (c) "Tax Returns" shall mean reports, returns,

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information statements relating to Taxes or other documents filed or maintained
or required to be filed or maintained, in connection with any Tax.

            4.22 Environmental Matters. Except as set forth on Schedule 4.22
hereto and in the environmental reports, studies, assessments, sampling results
or other written environmental analyses listed therein (the "Environmental
Reports"), URS's and each URS Subsidiary's operation and use of its assets and
the Real Property are in compliance in all respects with all Environmental Laws,
except to the extent that any such noncompliance would not individually or in
the aggregate have a Material Adverse Effect. Except as set forth on Schedule
4.22 or in the Environmental Reports listed thereon, URS and the URS
Subsidiaries have obtained all environmental, health and safety permits
necessary for the operation of the business of URS and the URS Subsidiaries as
presently conducted, and all such permits are in full force and effect and URS
and each URS Subsidiary are in compliance in all respects with the terms and
conditions of each such permit, except, in each case, to the extent that any
such failure to obtain or noncompliance would not individually or in the
aggregate have a Material Adverse Effect.

            Except as disclosed in Schedule 4.22 or in the Environmental Reports
and except as could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, (i) no property currently owned or
operated by URS or any URS Subsidiary, including the Owned and Leased
Properties, has been contaminated in any material respect with any substance
regulated under any Environmental Law such that any removal or remedial action
is required under Applicable Law; (ii) URS and the URS Subsidiaries are not
subject to any material liability for any off-site disposal or contamination;
and (iii) there are no other conditions or violations involving URS or any URS
Subsidiary (including the presence of asbestos, underground storage tanks,
chlorofluorocarbons, Freon and polychlorinated biphenyls) that are likely to
result in any material claims,

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liabilities or costs or any restrictions on the ownership, use or transfer of
any Owned or Leased Property in connection with any Environmental Law. Except as
disclosed in Schedule 4.22, URS is not in possession of any environmental
reports, studies, assessments, sampling results or other written environmental
analyses relating to any Owned Property other than the Environmental Reports and
a copy of each of these Environmental Reports has been made available to Parent
at least five days prior to the date hereof.

            4.23 Brokers, Finders, etc. Except as described on Schedule 4.23,
neither URS nor any URS Subsidiary has employed, or is subject to the valid
claim of, any broker, finder or other financial intermediary in connection with
the transactions contemplated by this Agreement or the transactions contemplated
hereby, who might be entitled to a fee or commission in connection herewith or
therewith.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES
                   OF VORNADO, THE PARENT AND ACQUISITION CO.

            Vornado, the Parent and Acquisition Co., jointly and severally,
represent and warrant to URS as follows:

            5.1 Organization and Standing. Vornado is a real estate investment
trust duly organized and in good standing under the laws of the State of
Maryland and has the power and authority to carry on its business as presently
conducted, except where the failure to be so qualified would not have a material
adverse effect on its ability to timely perform its obligations hereunder or
consummate the transactions contemplated hereby. The Parent is a Delaware
corporation duly organized and in good standing under the laws of the State of
Delaware and has the power and authority to carry on its business as presently
conducted, except where the failure to be so qualified would not have a 

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material adverse effect on its ability to timely perform its obligations
hereunder or consummate the transactions contemplated hereby. Acquisition Co.
is a corporation, duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as presently conducted, except where the
failure to be so qualified would not have a material adverse effect on its
ability to timely perform its obligations hereunder or consummate the
transactions contemplated hereby.

            5.2 Authorization and Binding Obligation. Each of Vornado, the
Parent and Acquisition Co. has all necessary corporate or other power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Vornado, the Parent and Acquisition Co. and the consummation by Vornado, the
Parent and Acquisition Co. of the transactions contemplated hereby have been
duly and validly authorized and approved by all necessary corporate (or other)
action on the part of each of Vornado, the Parent and Acquisition Co. and no
other corporate action or other proceedings on the part of Vornado, the Parent
or Acquisition Co. is necessary to authorize this Agreement or the consummation
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of Vornado, the Parent and Acquisition Co. and constitutes
a valid and binding obligation of Vornado, the Parent and Acquisition Co.,
enforceable against Vornado, the Parent and Acquisition Co. in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar rights of creditors generally and by
general principles of equity.

            5.3 Consents and Approvals; No Conflicts. Except for applicable
requirements of the HSRA and filing and recordation of the Certificate of Merger
as required by the GCL, no filing with, and no permit, authorization, consent or
approval of, any public body or authority is necessary for the consummation by
Vornado, the Parent or Acquisition

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Co. of the transactions contemplated by this Agreement, except where the failure
to make such filing or obtain such permit, authorization, consent or approval,
would not have a material adverse effect on such Person's ability to timely
perform its obligations hereunder or consummate the transactions contemplated
hereby. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby, nor compliance by Vornado,
the Parent or Acquisition Co. with any of the provisions hereof will (a) result
in any violation of any provision of the organizational documents of Vornado,
the Parent or Acquisition Co., (b) violate any Applicable Law, or (c) result in
a material violation or breach of, or constitute (with or without due notice or
lapse of time or both) a material default (or give rise to any right of
termination, cancellation or acceleration) under, any material contract,
agreement, note, bond, mortgage, indenture, license, lease, franchise, permit,
Plan or other instrument or obligation to which Vornado, the Parent or
Acquisition Co. is a party, or by which either of them or any of their
respective properties is bound, except in the case of clauses (b) and (c) above,
where such violation, breach, default or right of termination would not have a
material adverse effect on such Person's ability to timely perform its
obligations hereunder or to consummate the transactions contemplated hereby.

            5.4 Litigation. There is no claim, litigation, proceeding or
investigation pending or, to the best of Vornado's, the Parent's or Acquisition
Co.'s knowledge, threatened, which seeks to enjoin or prohibit, or otherwise
questions the validity of, any action taken or to be taken by Vornado, the
Parent or Acquisition Co. in connection with this Agreement or which would have
a material adverse effect on such Person's ability to timely perform its
respective obligations hereunder or to consummate the transactions contemplated
hereby.

            5.5 Finders and Investment Bankers. None of Vornado, the Parent or
Acquisition Co. has employed, or is subject to the valid claim of, any broker,
finder or other

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financial intermediary in connection with the transactions contemplated by this
Agreement or the transactions contemplated hereby, who might be entitled to a
fee or commission in connection herewith or therewith, payable by URS or any URS
Subsidiary.

            5.6 Financing. Vornado has available to it pursuant to existing
credit facilities sufficient cash on hand to allow it to pay the Merger
Consideration, consummate the transactions contemplated hereby and pay related
fees and expenses.

                                   ARTICLE VI

                                    COVENANTS

            6.1 Conduct of Business. During the period from the date hereof to
the Closing Date, URS covenants and agrees that it will and will cause the URS
Subsidiaries to carry on their businesses in the ordinary course of business,
in substantially the same manner as heretofore conducted, and will use its
reasonable commercial efforts to preserve intact its and the URS Subsidiaries'
present business organization, keep available the services of their respective
officers and Employees and preserve their relationships with customers and
suppliers and others having business dealings with them, to the end that their
goodwill and going business shall be maintained following the Closing. Without
limiting the generality of the foregoing, except as expressly permitted by this
Agreement or with the prior written consent of the Parent, such consent not to
be unreasonably withheld or delayed, or as set forth on Schedule 6.1 hereto, URS
covenants and agrees that it will not, and it will not permit any URS Subsidiary
to do, or agree to do, on or after the date hereof, any of the following, on or
before the Closing:

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            (a) amend their respective certificates of incorporation or by-laws
      or other organizational documents;

            (b) rescind, modify, amend or otherwise change or affect any of the
      resolutions of the Board recommending adoption of this Agreement and
      authorization of the Merger;

            (c) issue, sell, transfer, assign, pledge, convey or dispose of any
      security or equity interest or any security convertible into or
      exchangeable or exercisable for any security or equity interest,
      including, without limitation, any subscriptions, options, warrants,
      calls, conversions or other rights, agreements, commitments, arrangements
      or understandings of any kind obligating URS or any URS Subsidiary,
      contingently or otherwise, to issue or sell, or cause to be issued or
      sold, any security or equity interest of URS or any URS Subsidiary or any
      security convertible into or exchangeable or exercisable for any security
      or equity interest;

            (d) split, combine or reclassify any shares of any class of its
      capital stock, declare, set aside or pay any dividend or other
      distribution (whether in cash, stock or property or any combination
      thereof) in respect of any class of its capital stock, or redeem or
      otherwise acquire any shares of such capital stock;

            (e) write off any receivables, except in the ordinary course of
      business consistent with past practice;

            (f) sell, assign, lease or otherwise transfer or dispose of any
      material assets except in the ordinary course of business consistent with
      past practice in an aggregate amount not in excess of $250,000, unless the
      same shall be replaced with assets of equal or greater value and utility;

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            (g) (i) except in the ordinary course of business consistent with
      past practice under existing lines of credit, create, incur or assume any
      liability, including obligations in respect of capital leases, or make or
      commit to make capital expenditures in excess of $100,000 each or $250,000
      in the aggregate, or create, incur, assume, maintain or permit to exist
      any indebtedness in an aggregate amount greater than $250,000 for URS and
      the URS Subsidiaries combined; (ii) assume, guarantee, endorse or
      otherwise become liable or responsible (whether directly, contingently or
      otherwise) for the obligations of any other Person, except for
      assumptions, guarantees or endorsements by URS of the obligations of any
      URS Subsidiary in the ordinary course of business consistent with past
      practice; (iii) except as set forth on Schedule 6.1 hereto, make any
      loans, advances or capital contributions to, or investments in, any other
      Person (other than customary loans or advances in the ordinary course of
      business consistent with past practice to Employees not to exceed $100,000
      in the aggregate and extensions of credit made to customers on a trade
      receivable basis in the ordinary course of business consistent with past
      practice; or (iv) create, assume or permit to exist any Lien upon their
      assets, except for those in existence on the date of this Agreement and
      except for those additional Liens created in the ordinary course of
      business consistent with past practice;

            (h) except as set forth on Schedule 6.1(h) hereto (i) increase or
      modify or agree to increase or modify the compensation, bonuses or other
      benefits or perquisites of any Employee of URS or any URS Subsidiary,
      except for salary increases granted in the ordinary course of business
      consistent with past practice, or (ii) pay or commit to pay any
      compensation, bonus, pension or other retirement benefit or allowance,
      fringe benefit or other benefit not required by the terms of an existing
      Plan, or collective bargaining agreement as in effect on the date hereof
      or

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      otherwise in the ordinary course of business consistent with past
      practice;

            (i) make any new elections, or make any changes to current
      elections, with respect to Taxes;

            (j) change their auditors, fail to maintain their books and records
      in accordance with GAAP or materially change their auditing or bookkeeping
      practices;

            (k) take or fail to take any action that would cause any of its
      representations and warranties not to be true and correct on the Closing
      Date in the manner required by Section 7.3(b) hereof;

            (l) cancel or materially amend or modify any agreements or any real
      or material personal property leases;

            (m) other than in the ordinary course of business, cancel or
      materially amend or modify any agreements with customers; or

            (n) enter into any new agreements with any customers with a duration
      of more than one year.

            6.2 Third-Party Consents. URS covenants and agrees that it will and
will cause each URS Subsidiary to use reasonable commercial efforts to obtain,
prior to Closing, the consents of third parties and Governmental Authorities set
forth on Schedule 4.4 hereto.

            6.3 Compliance with GCL; Filings. (a) As soon as practicable and in
any event within ten (10) days after the date of this Agreement, URS will
prepare and deliver to each stockholder of URS a notice, in accordance with
Sections 228(d) and 262(d)(2) of the GCL, regarding (i) the execution of this
Agreement, (ii) the Board's approval of this Agreement, (iii) the execution by
each URS Stockholder of an action by written consent in lieu of a meeting of

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   48
stockholders adopting the Merger and (iv) the availability of appraisal rights
under Section 262 of the GCL.

            (b) As promptly as practicable, each of URS, the Parent and
Acquisition Co. shall properly prepare and file any filings required under any
Federal, state, county, local or municipal law relating to the Merger and the
transactions contemplated herein (such filings, together with the filings
required under the HSRA, are, collectively, the "Filings"). The Parent and
Acquisition Co., on the one hand, and URS, on the other, shall promptly notify
the other of the receipt of any comments on, or any request for amendments or
supplements to, the Filings by any governmental official, and each of URS, the
Parent and Acquisition Co. will supply the other with copies of all
correspondence between it and each of its subsidiaries and representatives, on
the one hand, and any appropriate governmental official, on the other hand, with
respect to the Filings.

            6.4 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use (and URS shall cause
the URS Subsidiaries to use) their commercially reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and to cooperate
with one another in connection with the foregoing, including using its
commercially reasonable efforts to obtain all necessary consents, approvals and
authorizations as are required to be obtained under Applicable Law, to defend
all lawsuits or other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby, to cause to be lifted or
rescinded any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby, and to effect all necessary registrations and Filings.

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   49
            6.5 Acquisition Proposals. None of URS or any of URS's employees,
representatives or agents (collectively, the "URS Representatives") shall,
directly or indirectly, solicit or initiate inquiries or proposals from or enter
into any agreement with respect to, or provide any confidential information to
or participate in any discussions or negotiations with, any Persons or group
(other than the Parent, Acquisition Co. and their respective subsidiaries and
their respective directors, officers, employees, representatives and agents)
concerning any sale of assets or shares of URS Common Stock, any assets or
shares of capital stock of any URS Subsidiary or any merger, consolidation or
similar transaction involving URS or any URS Subsidiary (except, in all cases,
for any sale of immaterial assets, in the ordinary course of business consistent
with past practices). URS will promptly cease and URS will cause to be
terminated by the URS Subsidiaries any existing discussions or negotiations
with any third parties conducted heretofore with respect to any of the foregoing
and will use its reasonable commercial efforts to retrieve and/or cause to be
destroyed any and all nonpublic information concerning URS or any URS Subsidiary
that has been furnished to third parties in connection therewith.

            6.6 Public Announcements. The Parent and URS will consult with one
another before issuing any press release or otherwise making any public
statement with respect to this Agreement or the Merger and shall not issue any
such press release or make any such public statement prior to such consultation
without the consent of the Parent and URS, except based on the advice of counsel
for URS or the Parent, as the case may be, as required by Applicable Law.

            6.7 Consent of the Parent. The Parent, as the sole shareholder of
Acquisition Co., by executing this Agreement hereby consents to the execution,
delivery and performance of this Agreement by Acquisition Co. and such consent
shall be treated for all purposes as a vote duly

                                     136
   50
adopted at a meeting of the shareholders of Acquisition Co. held for such
purpose.

            6.8 Transfer Taxes. (a) The Parent shall be responsible for the
payment of, and shall indemnify the URS Stockholders against, all Transfer Taxes
arising out of or in connection with or attributable to the transactions
effected pursuant to this Agreement.

            (b) As between the URS Stockholders, on the one hand, and the
Parent, on the other hand, the party that has the primary responsibility under
Applicable Law for filing any Tax return required to be filed in respect of
Transfer Taxes shall prepare and timely file such Tax return, provided that such
party's preparation of such Tax return shall be subject to the other party's
approval, which approval shall not be withheld or delayed unreasonably.

            6.9 Treatment of Books and Records. For a period of three years
after the Closing Date, at least 30 days prior to discarding or destroying any
books or records relating to the business of URS, the Parent shall give Kelso,
as a representative of the URS Stockholders, notice of its intended action and
an opportunity for Kelso to retain any of the books or records proposed to be
discarded or destroyed by the Parent or URS, as the case may be. Prior to the
destruction of any such books or records, Kelso shall have the right, upon
reasonable advance request, to have access to such books and records during
normal business hours to enable any or all of the URS Stockholders to fulfill
their Tax or other ordinary course of business obligations.

            6.10 Indemnification of Officers and Directors. The Parent agrees
that for the entire period from the Effective Time until at least six (6) years
after the Effective Time the Certificate of Incorporation and the By-Laws of the
Surviving Corporation shall contain the provisions with respect to
indemnification and exculpation from liability set forth in URS's Certificate
of 

                                     137

   51
Incorporation and By-Laws as of the date of this Agreement, which provisions
shall not be amended, repealed or otherwise modified during such period in any
manner that would adversely affect the rights thereunder of individuals who on
or prior to the Effective Time were directors, officers, employees or agents of
URS unless such modification is required by Applicable Law.

            6.11 Access. Upon reasonable notice, and except as may otherwise be
required by Applicable Law, URS shall (and shall cause the URS Subsidiaries to)
afford the Parent's officers, agents and advisors reasonable access, during
normal business hours throughout the period prior to the Effective Time, to its
properties, books, contracts and records and, during such period, URS shall (and
shall cause the URS Subsidiaries to) furnish to the Parent and its agents and
advisors all information concerning its business, properties and personnel as
they may reasonably request, provided that no investigation pursuant to this
Section shall affect or be deemed to modify any representation or warranty made
by URS. All such information shall be governed by the terms of the
Confidentiality Agreement referred to in Section 11.4.

            6.12 Repayment of Indebtedness. If requested by the Parent prior to
the Closing, the Company will repay all indebtedness under each of the MetLife
Loan Agreement and the BT Credit Agreement (using funds supplied by the Parent).

            6.13 Post-Closing True-Up. In the event that at any time subsequent
to the Closing, URS repays the indebtedness under the MetLife Loan Agreement
and the aggregate amount of indebtedness repaid, together with any interest due
thereon and the prepayment, redemption or prepayment fees, surcharges, premiums
or penalties associated with such repayment are less than the Prepayment Price
(as defined in Section 1.1 of the MetLife Loan Agreement) that would be payable
at such time were such indebtedness repaid at such time pursuant to the terms of
the MetLife Loan Agreement, as

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in effect on the date hereof (the amount of such difference being referred to
herein as the "Prepayment Shortfall"), then Vornado shall promptly pay to Kelso,
as a representative of the former holders of URS Common Stock an amount equal to
one-half of the Prepayment Shortfall and such payment shall be distributed to
the former holders of URS Common Stock and Warrants with an Exercise Price in
excess of the Per Share Price ratably in proportion to their respective holdings
(calculated on a fully diluted basis).

            6.14 Management Bonus Amount Arrangements. Prior to the Closing,
Parent and URS shall make arrangements, reasonably satisfactory to URS, for the
payment of the portion of the Management Bonus Amount set forth on Schedule
1.34(b) to each of the applicable individuals and in the applicable amounts
specified by URS in writing prior to the Effective Time; it being understood and
agreed that URS shall consult with Vornado regarding the selection of such
individuals and such amounts. Such arrangements shall include an escrow and
shall provide, among other things, that all such payments shall be made to each
individual by no later than 90 days after the Effective Time so long as such
individual has not voluntarily terminated his employment with URS prior to such
90th day after the Effective Time.

                                   ARTICLE VII

                               CLOSING CONDITIONS

            7.1 Conditions Precedent to the Obligations of All Parties. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of each of the following
conditions:

            (a) Any waiting period (and any extension thereof) applicable to
      the consummation of the Merger under the HSRA shall have expired or been
      terminated.

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            (b) No preliminary or permanent injunction or other order, decree or
      ruling issued by a court of competent jurisdiction or by a governmental,
      regulatory or administrative agency or commission nor any statute, rule,
      regulation or executive order promulgated or enacted by any Governmental
      Authority shall be in effect which would be reasonably likely to (i) make
      the consummation of the Merger by Vornado, the Parent, Acquisition Co. or
      URS illegal or (ii) otherwise prevent the consummation of the Merger.

            7.2 Additional Conditions to the Obligation of URS. The obligation
of URS to effect the Merger is also subject to the fulfillment at or prior to
the Effective Time of the following additional conditions:

            (a) The Parent and Acquisition Co. shall each have performed in all
      material respects each of its respective obligations under this Agreement
      required to be performed by it on or prior to the Effective Time pursuant
      to the terms hereof.

            (b) The representations and warranties of the Parent and Acquisition
      Co. contained in this Agreement shall be true and correct in all material
      respects, in each case when made and, unless such representation or
      warranty is made as of a specific date (in which case it shall be true and
      correct in all material respects as of such date), at and as of the
      Effective Time as if made at and as of such time.

            (c) URS shall have received a certificate, dated the Closing Date,
      of the President or any Vice President of the Parent to the effect that
      the conditions specified in paragraphs (a) and (b) of this Section 7.2
      have been fulfilled.

            (d) Each of Parent and Acquisition Co. shall have reaffirmed all of
      URS's obligations under each of the Employment Agreements listed on
      Schedule 4.16 hereto.

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   54
            (e) URS shall have paid, or cause to be paid, (i) the portion of the
      Management Bonus Amount set forth on Schedule 1.34(a) hereto to the
      individuals and in the amounts designated by URS in writing prior to the
      Effective Time and (ii) a fee of $3,000,000 to Kelso in respect of Kelso's
      services in connection with the consummation of the transactions provided
      for hereby.

            (f) URS shall have received the opinion of Sullivan & Cromwell,
      special counsel to Vornado, the Parent and Acquisition Co., in form and
      substance reasonably satisfactory to URS, as to the due authorization,
      execution and delivery of this Agreement by such parties.

            7.3 Conditions Precedent to Obligations of the Parent and
Acquisition Co. The obligations of the Parent and Acquisition Co. to effect the
Merger are also subject to the fulfillment at or prior to the Effective Time of
the following additional conditions:

            (a) URS shall have performed in all material respects each of its
      obligations under this Agreement required to be performed by it on or
      prior to the Effective Time pursuant to the terms hereof.

            (b) The representations and warranties of URS set forth in this
      Agreement that are qualified by reference to a Material Adverse Effect
      shall be true and correct, and all other representations and warranties of
      URS shall be true and correct, except for failures to be true and correct
      as would not, individually or in the aggregate, have a Material Adverse
      Effect, as of the date of this Agreement and as of the Effective Time as
      though made as of the Effective Time (except to the extent any such
      representation or warranty expressly speaks as of an earlier date, in
      which case it shall have been true and correct in all material respects as
      of such date).

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            (c) The Parent shall have received a certificate, dated the Closing
      Date, of the Chief Executive Officer of URS, to the effect that the
      conditions specified in paragraphs (a) and (b) of this Section 7.3 have
      been fulfilled.

            (d) The Consulting Agreement, dated as of November 30, 1994,
      between URS and Rutledge & Company, Inc., the Consulting Agreement, dated
      as of April 6, 1993 between URS and Vero Industries, and the Consulting
      Agreement, dated as of April 6, 1993, between the Company and Kelso &
      Company, shall each have been terminated without further obligation to URS
      or any URS Subsidiary.

            (e) The Waiver Letter, attached hereto as Exhibit 7.3(e) and
      pursuant to which each of Mr. Hanns Pielenz, UniFridge Holding Corporation
      and Refrigerated Warehouse Investments Holding Corporation has waived
      their "property put" rights under each of the Lease Agreements, shall
      continue to be in full force and effect.

            (f) Vornado, the Parent and the Subsidiary shall each have received
      the opinion of Debevoise & Plimpton, special counsel to URS, in form and
      substance reasonably satisfactory to Vornado, as to the due authorization,
      execution and delivery of this Agreement by URS and the absence of any
      agreements among the shareholders of URS or with any potential purchasers
      of URS that conflict with the execution, delivery and performance of this
      Agreement.

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                                  ARTICLE VIII

                                     CLOSING

            8.1 Time and Place. Subject to the satisfaction or waiver of all
applicable conditions in Article VII, the closing of the Merger (the "Closing")
shall take place at the offices of Debevoise & Plimpton, 875 Third Avenue, New
York, N.Y. 10022, at 10:00 a.m., local time, on the third business day following
the satisfaction of the condition set forth in Section 7.1(a) or on such other
date as URS and the Parent may agree.

            8.2 Filings at the Closing; Other Actions. At the Closing, the
Parent and URS shall cause the Certificate of Merger to be filed and recorded in
accordance with the provisions of Sections 103 and 251 of the GCL, and shall
take any and all other lawful actions and do any and all other lawful things
necessary to cause the Merger to become effective.

                                   ARTICLE IX

                        NON-SURVIVAL OF REPRESENTATIONS,
                            WARRANTIES AND COVENANTS

            All of the representations and warranties contained in this
Agreement or any representations and warranties contained in any certificate,
document or instrument delivered pursuant to this Agreement shall terminate as
of the Closing. The covenants set forth in Sections 3.4, 3.5, 6.6, 6.8, 6.9,
6.10, 6.13 and 6.14 herein shall survive for the respective periods set forth
therein.

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                                    ARTICLE X

                               TERMINATION RIGHTS

            10.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time:

            (a) by mutual consent of the Parent and URS;

            (b) by either the Parent or URS if the Merger shall not have been
      consummated on or before January 15, 1998; provided, however, that the
      right to terminate this Agreement shall not be available to any party
      whose failure to fulfill any obligation of this Agreement has been the
      cause of, or resulted in, the failure of the Merger to have occurred on or
      before the aforesaid date;

            (c) by the Parent, if URS shall have materially breached any of its
      covenants herein or if URS shall have made a material misrepresentation
      and not cured the same within 15 days of notice of such breach or
      misrepresentation;

            (d) by URS, if either the Parent or Acquisition Co. shall have
      materially breached any of its covenants herein or if either the Parent or
      Acquisition Co. shall have made a material misrepresentation herein and
      not cured the same within 15 days of notice of such breach or
      misrepresentation; or

            (e) by either the Parent or URS, if any court of competent
      jurisdiction or other governmental agency of competent jurisdiction shall
      have issued an order, decree or ruling or taken any other action
      restraining, enjoining or otherwise prohibiting the Merger, and such
      order, decree, ruling or other action shall have become final and
      non-appealable.

                                       144
   58
            10.2 Procedure and Effect of Termination. In the event of
termination and abandonment of the Merger by the Parent or URS pursuant to
Section 10.1 hereof, notice thereof shall forthwith be given to URS or the
Parent, respectively, and this Agreement shall terminate and the Merger shall be
abandoned, without further action by any of the parties hereto. Vornado and
Acquisition Co. each agrees that any termination by the Parent or URS,
respectively, shall be conclusively binding upon it, whether given expressly on
its behalf or not. If this Agreement is terminated as provided herein, no party
hereto shall have any liability or further obligation to any other party to this
Agreement except that any termination shall be without prejudice to the rights
of any party hereto arising out of a breach by any other party of any covenant
or agreement contained in this Agreement, and except that the provisions of
Sections 6.6, 11.4 and 11.5 hereof shall survive such termination.

                                   ARTICLE XI

                                OTHER PROVISIONS

            11.1 Amendment and Modification. Subject to Applicable Law, this
Agreement may be amended, modified or supplemented only by mutual written
agreement of the parties hereto.

            11.2 Benefit and Assignment. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
successors and assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party to this
Agreement without the prior written consent of the other parties hereto. Any
purported assignment made in contravention of the previous sentence shall be
null and void.

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   59
            11.3 No Third-Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any Person other than the parties hereto and their
respective heirs, successors and permitted assigns, except for the rights set
forth in Sections 3.1, 6.9, 6.10, 6.13 and 6.14 hereof.

            11.4 Entire Agreement. This Agreement and the Confidentiality
Agreement, dated as of July 28, 1997, between URS and Vornado and the exhibits
and schedules hereto and thereto embody the entire agreement and understanding
of the parties hereto and supersede any and all prior agreements, arrangements
and understandings relating to the matters provided for herein and therein. No
amendment, waiver of compliance with any provision or condition hereof or
consent pursuant to this Agreement shall be effective unless evidenced by an
instrument in writing signed by the party against whom enforcement of any
amendment, waiver or consent is sought. Acquisition Co. hereby agrees that any
consent or waiver of compliance given by the Parent hereunder shall be
conclusively binding upon it, whether given expressly on its behalf or not. No
party is making any representation or warranty whatsoever, express or implied,
except the representations and warranties contained in this Agreement and each
party acknowledges and agrees that it has not relied on or been induced to enter
into this Agreement by any representation or warranty other than those expressly
set forth herein.

            11.5 Expenses. Except as otherwise provided in this Agreement, each
of the Parent and Acquisition Co., on the one hand, and URS, on the other hand,
shall be responsible for the payment of their respective expenses, including
legal and accounting fees, in connection with the preparation, negotiation and
closing of this Agreement and the transactions contemplated hereby.

            11.6 Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.

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   60
            11.7 Choice of Law. The construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its principles of conflict of laws, except insofar as the laws of the state
of Delaware are mandatorily applicable to the Merger, and the state and federal
courts of New York shall have exclusive jurisdiction over any controversy or
claim arising out of or relating to this Agreement.

            11.8 Notices. All notices, requests, demands, letters, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax, as follows:

            (a) If to Vornado, the Parent or Acquisition Co., to it at:

                  Vornado Realty Trust
                  Park 80 West, Plaza II
                  Saddle Brook, NJ  07663
                  Telecopy #:  (201) 291-1093

                  Attention:  Mr. Michael D. Fascitelli

                  with copies to:

                  Sullivan & Cromwell
                  1701 Pennsylvania Avenue, N.W.
                  Washington, D.C.  20006
                  Telecopy #:  (202) 293-6330

                  Attention:  Janet T. Geldzahler, Esq.

                                     147
   61
            (b)   If to URS, to it at:

                  URS Logistics, Inc.
                  One Concourse Parkway
                  Suite 450
                  Atlanta, Georgia  30328
                  Telecopy #:  (770) 280-3985

                  Attention:  Mr. Fred Beilstein

                  with copies to:

                  Kelso & Company
                  320 Park Avenue
                  24th Floor
                  New York, NY  10022
                  Telecopy #:  (212) 223-2379

                  Attention:  James J. Connors, II, Esq.

                  and:

                  Arnall Golden & Gregory, LLP
                  2800 One Atlantic Center
                  1201 West Peachtree Street
                  Atlanta, Georgia  30355
                  Telecopy #:  (404) 873-8701

                  Attention: Jonathan Golden, Esq.

or to such other Person or address as any party shall specify by notice in
writing to the party entitled to notice. All such notices, requests, demands,
letters, waivers and other communications shall be deemed to have been received
(w) if by personal delivery on the day after such delivery, (x) if by certified
or registered mail, on the fifth Business Day after the mailing thereof, (y) if
by next-day or overnight mail or delivery, on the day delivered or (z) if by
fax, on the next day following the day on which

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such fax was sent, provided that a copy is also sent by certified or registered
mail.

            11.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.

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   63
            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.

                              VORNADO REALTY TRUST

                              By:   /s/ Michael D. Fascitelli
                                    ________________________
                                    Name:
                                    Title:

                              ATLANTA PARENT, INC.

                              By:   /s/ Michael D. Fascitelli
                                    ________________________
                                    Name:
                                    Title:

                              ATLANTA STORAGE ACQUISITION CO.

                              By:   /s/ Michael D. Fascitelli
                                    __________________________
                                    Name:
                                    Title:

                              URS LOGISTICS, INC.

                              By:   /s/ Daniel F. McNamara
                                    __________________________
                                    Name: Daniel F. McNamara
                                    Title: President and
                                           Chief Executive Officer

                                     150
   1
                                  EXHIBIT 99.5

                          AGREEMENT AND PLAN OF MERGER

                                      AMONG

                              VORNADO REALTY TRUST,

                              PORTLAND PARENT, INC.

                        PORTLAND STORAGE ACQUISITION CO.,

                                       AND

                              AMERICOLD CORPORATION

                         Dated as of September 26, 1997

                                     151
   2
                                TABLE OF CONTENTS

                                                                    Page

ARTICLE I

      DEFINITIONS......................................................1

ARTICLE II

      THE MERGER.......................................................7
      2.1      The Merger..............................................7
      2.2      Articles of Incorporation...............................8
      2.3      By-Laws.................................................8
      2.4      Directors and Officers..................................8
      2.5      Shareholders' Meeting...................................9
      2.6      Effective Time..........................................9

ARTICLE III

      CONVERSION OF SHARES.............................................9
      3.1      Americold Stock.........................................9
      3.2      Options................................................11
      3.3      Dissenting Shares......................................11
      3.4      Acquisition Co. Common Stock...........................11
      3.5      Payment for Shares.  ..................................12
      3.6      Adjustment to Prevent Dilution.........................15

ARTICLE IV

      REPRESENTATIONS AND WARRANTIES OF AMERICOLD.....................15
      4.1      Organization, etc......................................15
      4.2      Authorization and Binding Obligation...................17
      4.3      Capitalization.........................................18
      4.4      Consents and Approvals; No Conflicts...................19
      4.5      Financial Statements; SEC Reports......................20

                                     152
   3
      4.6      Undisclosed Liabilities................................21
      4.7      Governmental Approvals and Authorizations..............22
      4.8      Compliance with Laws...................................22
      4.9      Absence of Certain Payments............................22
      4.10     Real Property..........................................23
      4.11     Property...............................................24
      4.12     Intellectual Property..................................25
      4.13     Absence of Conflicts of Interest.......................26
      4.14     Contracts..............................................26
      4.15     Labor Matters..........................................27
      4.16     Employee Benefit Plans.................................27
      4.17     Actions Pending........................................30
      4.18     Affiliate Transactions.................................30
      4.19     Absence of Certain Changes.  ..........................30
      4.20     Insurance..............................................30
      4.21     Taxes..................................................31
      4.22     Environmental Matters..................................32
      4.23     Brokers, Finders, etc..................................34

ARTICLE V

      REPRESENTATIONS AND WARRANTIES
      OF VORNADO, THE PARENT AND ACQUISITION CO.......................34
      5.1      Organization and Standing..............................34
      5.2      Authorization and Binding Obligation...................35
      5.3      Consents and Approvals; No Conflicts...................35
      5.4      Litigation.............................................36
      5.5      Finders and Investment Bankers.........................36
      5.6      Financing, etc.........................................37

ARTICLE VI

      COVENANTS.......................................................37
      6.1      Conduct of Business....................................37
      6.2      Third-Party Consents...................................40
      6.3      Compliance with OBCA; Filings; Information
               Statement..............................................40
      6.4      Additional Agreements..................................42
      6.5      Acquisition Proposals..................................42

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      6.6      Public Announcements...................................43
      6.7      Consent of the Parent..................................43
      6.8      Transfer Taxes.........................................44
      6.9      Officers' and Directors' Insurance;
               Indemnification of Officers and Directors..............44
      6.10     Americold Indebtedness.................................44
      6.11     Access.................................................45
      6.12     Management Arrangements................................45

ARTICLE VII

      CLOSING CONDITIONS..............................................45
      7.1      Conditions Precedent to the Obligations of
               All Parties............................................45
      7.2      Additional Conditions to the Obligation of
               Americold..............................................46
      7.3      Conditions Precedent to Obligations of
               Vornado, the Parent and Acquisition Co.................47

ARTICLE VIII

      CLOSING.........................................................49
      8.1      Time and Place.........................................49
      8.2      Filings at the Closing; Other Actions..................49

ARTICLE IX

      NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
      COVENANTS.......................................................49

ARTICLE X

      TERMINATION RIGHTS..............................................49
      10.1     Termination............................................49
      10.2     Procedure and Effect of Termination....................50

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ARTICLE XI

      OTHER PROVISIONS................................................51
      11.1     Amendment and Modification.............................51
      11.2     Benefit and Assignment.................................51
      11.3     No Third-Party Beneficiaries...........................51
      11.4     Entire Agreement.......................................51
      11.5     Expenses...............................................52
      11.6     Headings...............................................52
      11.7     Choice of Law..........................................52
      11.8     Notices................................................52
      11.9     Counterparts...........................................54

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SCHEDULES

Schedule 1.5                  Americold Indebtedness
Schedule 1.38                 Knowledge
Schedule 1.48                 Options
Schedule 2.4                  Officers of Surviving Corporation
Schedule 4.1(a)               Americold Qualification
Schedule 4.1(b)               Americold Subsidiaries;
                              Qualification
Schedule 4.1(c)               Third Party Interests
Schedule 4.3                  Capitalization
Schedule 4.4                  Consents and Approvals; No
                              Conflicts
Schedule 4.5                  Financial Statements
Schedule 4.6                  Undisclosed Liabilities
Schedule 4.7                  Governmental Approvals and
                              Authorizations
Schedule 4.8                  Compliance with Laws
Schedule 4.10                 Real Property
Schedule 4.11                 Property
Schedule 4.12                 Intellectual Property
Schedule 4.13                 Contracts
Schedule 4.14                 Conflicts of Interest
Schedule 4.15                 Labor Matters
Schedule 4.16                 Plans
Schedule 4.17                 Litigation
Schedule 4.18                 Affiliate Transactions
Schedule 4.19                 Adverse Changes
Schedule 4.20                 Insurance
Schedule 4.21                 Taxes
Schedule 4.22                 Environmental Matters
Schedule 4.23                 Americold Finders
Schedule 6.1                  Conduct of Business
Schedule 6.1(d)               Certain Agreements
Schedule 6.1(g)               Financing Matters
Schedule 6.1(h)               Employee Matters
Schedule 6.2                  Third Party Consents

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EXHIBITS

Exhibit A               Americold Principal Shareholders

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                          AGREEMENT AND PLAN OF MERGER

            AGREEMENT AND PLAN OF MERGER, dated as of September 26, 1997 (the
"Agreement"), among VORNADO REALTY TRUST, a Maryland real estate investment
trust ("Vornado"), PORTLAND PARENT, INC., a Delaware corporation (the "Parent"),
PORTLAND STORAGE ACQUISITION CO., a Delaware corporation and a wholly-owned
subsidiary of the Parent ("Acquisition Co."), and AMERICOLD CORPORATION, an
Oregon corporation ("Americold").

                                    ARTICLE I

                                   DEFINITIONS

            Unless otherwise stated, the following terms when used herein have
the meanings assigned to them below.

            1.1 "Acquisition Co." has the meaning set forth in the preamble to
this Agreement.

            1.2 "Affiliate" means a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified.

            1.3 "Americold" has the meaning set forth in the preamble to this
Agreement.

            1.4 "Americold Common Stock" means the common stock, par value $.01
per share, of Americold.

            1.5 "Americold Indebtedness" means the indebtedness of Americold
under the agreements and instruments listed in Schedule 1.5 hereto.

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            1.6 "Americold Preferred Stock" means the Series A Variable Rate
Cumulative Preferred Stock, par value $100 per share, of Americold.

            1.7 "Americold Principal Shareholder" means each of the Persons set
forth on Exhibit A to this Agreement.

            1.8 "Americold Representatives" has the meaning set forth in Section
6.5 hereof.

            1.9 "Americold Shareholders' Meeting" has the meaning set forth in
Section 2.5 hereof.

            1.10 "Americold Subsidiary" means any corporation, partnership,
limited liability company, joint venture or other entity of which Americold
owns, directly or indirectly, at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power or
otherwise has the right or power to elect a majority of the board of directors
or other Persons performing similar functions of such corporation, partnership,
limited liability company, joint venture or other entity.

            1.11 "Applicable Law" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws (including, but not limited to, the
common law), rules, regulations, ordinances, codes or orders of any Governmental
Authority and (ii) orders, decisions, rulings, injunctions, judgments, awards
and decrees or consents of or agreements with any Governmental Authority.

            1.12 "Articles of Merger" has the meaning set forth in Section 2.6
hereof.

            1.13 "Board" has the meaning set forth in Section 4.2(b) hereof.

            1.14 "Business Day," whether or not initially capitalized, means
every day of the week excluding Saturdays, Sundays and federal holidays.

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   10
            1.15 "Certificates" has the meaning set forth in Section 3.5(a)
hereof.

            1.16 "Closing" means the closing of the Merger.

            1.17 "Closing Date" means the date on which the Closing occurs.

            1.18 "Code" means the Internal Revenue Code of 1986, as amended,
together with all regulations and rulings issued thereunder by any Governmental
Authority.

            1.19 "Common Stock Consideration" means $20.70.

            1.20 "Contracts" has the meaning set forth in Section 4.14 hereof.

            1.21 "DGCL" means the Delaware General Corporation Law.

            1.22 "Dissenting Shares" has the meaning set forth in Section 3.3
hereof.

            1.23 "Effective Time" has the meaning set forth in Section 2.6
hereof.

            1.24 "Environmental Laws" means all Applicable Laws relating to the
protection of human health or the environment.

            1.25 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, together with the regulations and rulings issued thereunder
by any Governmental Authority.

            1.26 "Exchange Act" means the U.S. Securities Exchange Act of 1934,
as amended.

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   11
            1.27 "Exercise Price" means, with respect to any Option, the price
at which the holder of such Option is entitled to purchase one share of
Americold Common Stock upon exercise of such Option.

            1.28 "Filings" has the meaning set forth in Section 6.3(b) hereof.

            1.29 "Financial Statements" has the meaning set forth in Section 4.5
hereof.

            1.30 "GAAP" means United States generally accepted accounting
principles.

            1.31 "Governmental Approvals" has the meaning set forth in Section
4.7 hereof.

            1.32 "Governmental Authority" means any nation or government, any
state or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, in each case to the extent the same has jurisdiction over the
Person or property in question.

            1.33 "HSRA" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the regulations adopted thereunder.

            1.34 "Information Statement" has the meaning set forth in Section
2.5 hereof.

            1.35 "IRS" means the Internal Revenue Service of the United States.

            1.36 "Kelso" means Kelso & Company.

            1.37 "Kelso Fee" has the meaning set forth in Section 7.2(f).

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   12
            1.38 "Knowledge" means, with respect to Americold or any Americold
Subsidiary, the actual knowledge of any of the individuals set forth on Schedule
1.38 hereto.

            1.39 "Leased Property" has the meaning set forth in Section 4.10
hereof.

            1.40 "Liens" means all debts, liens, security interests, mortgages,
pledges, judgments, trusts, adverse claims, liabilities, encumbrances, material
rights of way, charges which are liens and other impairments of title of any
kind other than Permitted Liens.

            1.41 "Material Adverse Effect" means a material adverse effect on
the business, assets, properties, liabilities or financial condition of
Americold and the Americold Subsidiaries, taken as a whole, or on the ability of
Americold timely to consummate the transactions contemplated hereby.

            1.42 "Merger" has the meaning set forth in Section 2.1 hereof.

            1.43 "Merger Consideration" means the sum of the aggregate Common
Stock Consideration and the aggregate Preferred Stock Consideration.

            1.44 "Merger Filings" has the meaning set forth in Section 2.6
hereof.

            1.45 "Notice" has the meaning set forth in Section 6.3(a) hereof.

            1.46 "OBCA" means the Oregon Business Corporation Act.

            1.47 "Option Consideration" has the meaning set forth in Section 3.2
hereof.

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   13
            1.48 "Options" means the outstanding options to purchase Americold
Common Stock issued prior to the date hereof pursuant to the option plans listed
on Schedule 1.48 hereto.

            1.49 "Owned Property" has the meaning set forth in Section 4.10
hereof.

            1.50 "O.R.S." means the Oregon Revised Statutes, as amended.

            1.51 "Parent" has the meaning set forth in the preamble to this
Agreement.

            1.52 "Permitted Liens" has the meaning set forth in Section 4.10
hereof.

            1.53 "Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
any Governmental Authority or any other government or political subdivision or
an agency or instrumentality thereof.

            1.54 "Plans" has the meaning set forth in Section 4.16 hereof.

            1.55 "Preferred Stock Consideration" means $100.00, plus the amount
per share of all accrued and unpaid dividends on the Preferred Stock to the
Closing Date.

            1.56 "Real Property" has the meaning set forth in Section 4.10
hereof.

            1.57 "Real Estate Laws" means any applicable building, zoning,
subdivision and other land use and similar laws, codes, ordinances, rules,
regulations and orders of Governmental Authorities.

            1.58 "Returns" has the meaning set forth in Section 4.21 hereof.

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   14
            1.59 "SEC" means the United States Securities and Exchange
Commission.

            1.60 "SEC Reports" has the meaning set forth in Section 4.5(b)
hereof.

            1.61 "Surviving Corporation" has the meaning set forth in Section
2.1 hereof.

            1.62 "Surviving Corporation Common Stock" has the meaning set forth
in Section 3.4 hereof.

            1.63 "Tax" has the meaning set forth in Section 4.21 hereof.

            1.64 "Takeover Statute" has the meaning set forth in Section 4.2(d)
hereof.

            1.65 "Transfer Taxes" means all sales (including, without
limitation, bulk sales), use, value added, documentary, stamp, gross receipts,
registration, transfer, conveyance, excise, recording, license and other
similar Taxes and fees imposed by any Governmental Authority in connection with
a merger.

            1.66 "Vornado" has the meaning set forth in the preamble of this
Agreement.

                                   ARTICLE II

                                   THE MERGER

            2.1 The Merger. In accordance with the provisions of this Agreement
and the OBCA and the DGCL, at the Effective Time (i) Acquisition Co. shall be
merged with and into Americold (the "Merger"), and Americold shall be the
surviving corporation of the Merger (hereinafter sometimes called the "Surviving
Corporation") and shall continue its corporate existence under the laws of the
State of Oregon;

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   15
(ii) the name, identity, existence, rights, privileges, powers, franchises,
properties and assets of Americold shall continue unaffected and unimpaired; and
(iii) the separate existence of Acquisition Co. shall cease, and all of the
rights, privileges, powers, franchises, properties and assets of Acquisition Co.
shall be vested in Americold. The name of the surviving corporation shall be
"Americold Corporation."

            2.2 Articles of Incorporation. The Articles of Incorporation of
Americold in effect immediately prior to the Effective Time shall be the
Articles of Incorporation of the Surviving Corporation until thereafter amended
as provided therein or by law, except that Article III thereof shall be amended
and restated in its entirety as follows:

                    "The aggregate number of
                    shares which the
                    Corporation shall have
                    authority to issue is 1,000
                    shares of Common Stock, par
                    value $.01 per share."

            2.3 By-Laws. The By-Laws of Americold in effect immediately prior to
the Effective Time shall be the By-Laws of the Surviving Corporation until
thereafter amended, altered or repealed as provided therein.

            2.4 Directors and Officers. The directors of Acquisition Co.
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation, each to hold office in accordance with the Articles of
Incorporation and By-Laws of the Surviving Corporation until his or her
successor is appointed and qualified or until his or her earlier death,
resignation or removal. The individuals set forth on Schedule 2.4 shall be the
officers of the Surviving Corporation, each to hold office in accordance with
the Articles of Incorporation and By-Laws of the Surviving Corporation until his
or her successor is appointed and

                                     165
   16
qualified or until his or her earlier death, resignation or removal.

            2.5 Shareholders' Meeting. Americold shall, as soon as practicable
following the date of this Agreement, duly call, convene and hold a meeting of
its shareholders (the "Americold Shareholders' Meeting") for the purpose of
obtaining the approval of this Agreement by the shareholders of Americold
entitled to vote thereon.

            2.6 Effective Time. The Merger shall become effective upon the later
to occur of the filing of articles of merger with the Secretary of State of the
State of Oregon in accordance with O.R.S. 60.494 and 60.501 (the "Articles of
Merger") and the filing with the Secretary of State of the State of Delaware of
a certificate of merger in accordance with Sections 252 and 103 of the DGCL
(together with the Articles of Merger, the "Merger Filings"). The Merger Filings
shall be filed simultaneously with the Closing. The date and time when the
Merger shall become effective is hereinafter referred to as the "Effective
Time."

                                   ARTICLE III

                              CONVERSION OF SHARES

            3.1 Americold Stock. (a) At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof, each share of
Americold Common Stock (except for (i) any shares of Americold Common Stock then
owned beneficially or of record by Vornado, the Parent or Acquisition Co. or any
other subsidiary of Vornado, (ii) shares of Americold Common Stock then held in
the treasury of Americold or any Americold Subsidiary, and (iii) Dissenting
Shares) issued and outstanding immediately prior to the Effective Time shall be
converted into the right to receive cash from the Parent in an amount per share
equal to the Common Stock Consideration.

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   17
            (b) At the Effective Time, by virtue of the Merger and without any
action on the part of the holder thereof, each share of Americold Preferred
Stock (except for (i) any shares of Americold Preferred Stock then owned
beneficially or of record by Vornado, the Parent or Acquisition Co. or any
other subsidiary of Vornado and (ii) shares of Americold Preferred Stock then
held in the treasury of Americold or any Americold Subsidiary) issued and
outstanding immediately prior to the Effective Time shall be converted into the
right to receive cash from the Parent in an amount per share equal to the
Preferred Stock Consideration.

            (c) Each share of Americold Common Stock or Americold Preferred
Stock which is then owned beneficially or of record by Vornado, the Parent or
Acquisition Co. or any other direct or indirect subsidiary of Vornado shall, by
virtue of the Merger and without any action on the part of the holder thereof,
be canceled and retired and cease to exist, without any conversion thereof.

            (d) Each share of Americold Common Stock or Americold Preferred
Stock held in the treasury of Americold or any Americold Subsidiary immediately
prior to the Effective Time shall, by virtue of the Merger, be canceled and
retired and cease to exist, without any conversion thereof.

            (e) The holders of certificates representing shares of Americold
Common Stock or Americold Preferred Stock shall, as of the Effective Time, cease
to have any rights as shareholders of Americold, except such rights, if any, as
they may have pursuant to the OBCA, and, except as aforesaid, their sole right
shall be the right to receive their pro rata share of the Common Stock
Consideration or the Preferred Stock Consideration, as the case may be, as
determined and paid in the manner set forth in this Agreement.

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   18
            3.2 Options. Prior to the Effective Time, Americold shall take such
actions as may be necessary such that immediately prior to the Effective Time,
each Option outstanding immediately prior to the Effective Time, whether or not
then exercisable, shall be canceled and only entitle the holder thereof to
receive, as soon as reasonably practicable after the surrender thereof, cash in
an amount (the "Option Consideration") equal to the product of (i) the number of
shares of Americold Common Stock into which such Option is exercisable times
(ii) the excess of the Common Stock Consideration over the Exercise Price for
such Option.

            3.3 Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of Americold Common Stock which are held by shareholders
who shall have effectively dissented from the Merger and perfected their
dissenters' rights in accordance with the provisions of O.R.S. 60.564 and 60.571
(the "Dissenting Shares") shall not be converted into or be exchangeable for the
right to receive any Common Stock Consideration, but the holders thereof shall
be entitled to payment from the Surviving Corporation of the fair value of such
shares in accordance with the provisions of O.R.S. 60.577; provided, however,
that if any such holder shall have failed to perfect such appraisal rights or
shall have effectively withdrawn or lost such rights, pursuant to O.R.S. 60.687
or otherwise, his or her shares of Americold Common Stock shall thereupon be
converted into and exchangeable for, at the Effective Time, their pro rata share
of the aggregate Common Stock Consideration as determined and paid in the
manner set forth in this Agreement.

            3.4 Acquisition Co. Common Stock. Each share of common stock, par
value $.01 per share, of Acquisition Co. (the "Acquisition Co. Common Stock"),
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into and exchangeable for one fully paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation ("Surviving

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   19
Corporation Common Stock"). From and after the Effective Time, each outstanding
certificate theretofore representing shares of Acquisition Co. Common Stock
shall be deemed for all purposes to evidence ownership of and to represent the
number of shares of Surviving Corporation Common Stock into which such shares of
Acquisition Co. Common Stock shall have been converted. Promptly after the
Effective Time, the Surviving Corporation shall issue to the Parent a stock
certificate or certificates representing 1,000 shares of Surviving Corporation
Common Stock in exchange for the certificate or certificates which formerly
represented shares of Acquisition Co. Common Stock, which shall be canceled.

            3.5 Payment for Shares. (a) Prior to the Effective Time, the Parent
shall designate a business entity regularly engaged in such work and which is
reasonably satisfactory to Americold to act as Paying Agent with respect to the
Merger (the "Paying Agent"). Each record holder (other than Vornado, Parent,
Acquisition Co. or any other subsidiary of Vornado) of Americold Common Stock or
Americold Preferred Stock immediately prior to the Effective Time will be
entitled to receive, upon surrender to the Paying Agent of the certificates
representing such shares of Americold Common Stock or Americold Preferred Stock,
as the case may be (collectively, the "Certificates") for cancellation, cash in
an amount equal to the product of the number of shares of Americold Common Stock
or Americold Preferred Stock previously represented by the Certificates
multiplied by the Common Stock Consideration or Preferred Stock Consideration,
as the case may be, subject to any required withholding of taxes. At or prior to
the Effective Time, the Parent shall make available to the Paying Agent
sufficient funds to make all payments in amounts determined pursuant to the
preceding sentence. No interest shall accrue or be paid on the cash payable upon
the surrender of the Certificates. Any funds delivered or made available to the
Paying Agent pursuant to this Section 3.5(a) and not exchanged for Certificates
within six months after the Effective Time will be returned by the Paying Agent
to the

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   20
Surviving Corporation, which thereafter will act as Paying Agent, subject to the
rights of holders of unsurrendered Certificates under this Section 3.5(a), and
any former shareholders of the Company who have not previously exchanged their
Certificates will thereafter be entitled to look only to the Surviving
Corporation for payment of their claim for the consideration set forth in
Section 3.1, without any interest, but will have no greater rights against the
Surviving Corporation than may be accorded to general creditors thereof under
applicable law. Notwithstanding the foregoing, neither the Paying Agent nor any
party hereto shall be liable to a holder of shares of Americold Common Stock or
Americold Preferred Stock for any cash or interest delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws. As
soon as practicable after the Effective Time, the Surviving Corporation will
cause the Paying Agent to mail to each record holder of shares of Americold
Common Stock and Americold Preferred Stock (other than the Americold Principal
Shareholders) (i) a form of letter of transmittal (which will specify that
delivery will be effected, and risk of loss and title to the Certificates will
pass, only upon proper delivery of the Certificates to the Paying Agent), which
letter shall be in customary form, and (ii) instructions for use in effecting
the surrender of the Certificates for payment.

            (b) With respect to any Certificate alleged to have been lost,
stolen or destroyed, the owner or owners of such Certificate shall be entitled
to the consideration set forth above upon delivery to the Surviving Corporation
of an affidavit of such owner or owners setting forth such allegation and an
indemnity agreement to indemnify Vornado, the Parent and the Surviving
Corporation, on terms reasonably satisfactory to Vornado, against any claim that
may be made against any of them on account of the alleged loss, theft or
destruction of any such Certificate or the delivery of the payment set forth
above.

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   21
            (c) Notwithstanding Section 3.5(a), immediately following the
Effective Time, each Americold Principal Shareholder, upon surrender of the
Certificate or Certificates representing all of the shares of Americold Common
Stock and Americold Preferred Stock owned by such Americold Principal
Shareholder together with the related letter of transmittal, shall be entitled
to receive, in immediately available funds, the amount of cash into which the
aggregate number of shares of Americold Common Stock and Americold Preferred
Stock represented by such Certificate or Certificates surrendered shall have
been converted pursuant to this Agreement.

            (d) If consideration is to be delivered to a Person other than the
Person in whose name the Certificate surrendered in exchange therefor is
registered, it shall be a condition to delivery of the consideration that the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the Person requesting such consideration shall pay
any transfer or other Taxes required by reason of the payment to a Person other
than the registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such Tax has been paid or is not
applicable.

            (e) Until surrendered in accordance with the provisions of this
Section 3.5, from and after the Effective Time, each Certificate (other than (i)
Certificates representing shares of Americold Common Stock or Americold
Preferred Stock owned beneficially or of record by Vornado, the Parent,
Acquisition Co. or any other subsidiary of Vornado, (ii) Certificates
representing shares of Americold Common Stock or Americold Preferred Stock held
in the treasury Americold or any Americold Subsidiary and (iii) Dissenting
Shares in respect of which appraisal rights are perfected) shall represent for
all purposes the right to receive the cash pursuant to Section 3.1(a) or (b), as
applicable, as determined and paid in the manner set forth in this Agreement.

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   22
            (f) After the Effective Time there shall be no transfers on the
stock transfer books of the Surviving Corporation of the shares of Americold
Common Stock, shares of Americold Preferred Stock or Options that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged for the applicable consideration referred to in this
Section 3.5.

            3.6 Adjustment to Prevent Dilution. In the event that Americold
changes the number of shares of Americold Common Stock or Americold Preferred
Stock or securities convertible or exchangeable into or exercisable for shares
of Americold Common Stock or Americold Preferred Stock issued and outstanding
prior to the Effective Time as a result of a reclassification, stock split
(including a reverse split), stock dividend or distribution, recapitalization,
merger, subdivision, issuer tender or exchange offer, or other similar
transaction, the Common Stock Consideration and Preferred Stock Consideration
shall be equitably adjusted.

                                   ARTICLE IV

                   REPRESENTATIONS AND WARRANTIES OF AMERICOLD

            Americold hereby represents and warrants to the Parent and
Acquisition Co. as follows:

            4.1 Organization, etc. (a) Americold is a corporation duly organized
and validly existing under the laws of the State of Oregon and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Americold is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified or licensed

                                     172
   23
would not individually or in the aggregate have a Material Adverse Effect or
materially restrict the ability of Americold to conduct business as presently
conducted by it in such jurisdiction. Each jurisdiction where Americold is so
qualified is listed on Schedule 4.1(a) hereto. Except as set forth on Schedule
4.1(b) hereto, there are no Americold Subsidiaries and, except as set forth on
Schedule 4.1(b) hereto, Americold does not own, directly or indirectly, any
capital stock of or equity interests in any Person. Americold has heretofore
delivered or made available to the Parent accurate and complete copies of the
Articles of Incorporation and By-Laws of Americold, as amended and in effect on
the date hereof. The stock certificate books and ledgers of Americold, which
have been made available to the Parent, accurately reflect, at the date hereof,
the ownership of the issued and outstanding capital stock of Americold.

            (b) Each Americold Subsidiary is listed on Schedule 4.1(b) hereto,
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to own, lease and operate its properties and to carry out
its business as now being conducted. Each Americold Subsidiary is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified or licensed would not individually or in the
aggregate have a Material Adverse Effect or materially restrict the ability of
such Americold Subsidiary to conduct business as presently conducted by it in
such jurisdiction. Each jurisdiction where each Americold Subsidiary is so
qualified is listed on Schedule 4.1(b) hereto. Americold has heretofore
delivered to the Parent accurate and complete copies of the Articles of
Incorporation and By-Laws or other organizational documents of each Americold
Subsidiary, as amended and in effect on the date hereof.

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            (c) Except as set forth on Schedule 4.1(c) hereto, Americold owns of
record and beneficially 100% of the issued and outstanding capital stock and all
other equity interests in each Americold Subsidiary, free and clear of any
Liens.

            4.2 Authorization and Binding Obligation. (a) Americold has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. Subject to the approvals
referred to in Section 2.5, Americold's execution, delivery and performance of
this Agreement has been duly and validly authorized by all necessary corporate
action on the part of Americold and this Agreement has been duly executed and
delivered by Americold. Except for the actions referred to in Sections 2.5,
4.2(b) and 4.2(d) hereof, which actions are in full force and effect, and the
giving of notice in accordance with O.R.S. 60.214, 60.561 and 60.567, no other
corporate action or proceedings on the part of Americold are necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby. Subject to the approvals referred to in Section 2.5, this Agreement
constitutes the valid and binding obligation of Americold, enforceable against
Americold in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar rights of
creditors generally and by general principles of equity.

            (b) The Board of Directors of Americold (the "Board") has authorized
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and has not withdrawn such authorization. A
true and complete copy of such approvals by the Board has been delivered to the
Parent. The Board of Directors of Americold has received the opinion of its
financial advisors, Houlihan, Lokey, Howard & Zukin, to the effect that the
consideration to be paid by Parent to the holders of the shares of Americold
Common Stock and Americold Preferred Stock in the Merger is fair to such holders
from a financial point of view.

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            (c) Subsequent to the giving of the authorization referred to in the
preceding paragraph, each Americold Principal Shareholder has executed and
delivered to the Parent an irrevocable proxy authorizing the Parent to vote, at
the Americold Shareholders' Meeting, the shares of Americold Common Stock set
forth opposite such Americold Principal Shareholder's name on Exhibit A hereto,
which shares represent all shares of Americold Common Stock owned beneficially
or of record by such Americold Principal Shareholder, in favor of adopting this
Agreement. Each Americold Principal Shareholder acknowledges, and the proxy
recites, that such proxy is coupled with an interest.

            (d) The Board has taken all appropriate action so that the entry
into this Agreement, the granting of the proxies provided for under Section
4.2(c) hereof and the consummation of the transactions contemplated by this
Agreement shall be exempted from the provisions of O.R.S. 60.801-60.816 and
60.825. No other "fair price," "moratorium," "control share acquisition" or
other similar anti-takeover statute or regulation, including, without
limitation, O.R.S. 60.801-60.816 and 60.825 (each, a "Takeover Statute") or any
applicable anti-takeover provision in the Articles of Incorporation and By-laws
of Americold is, or at the Effective Time will be, applicable to Americold, the
shares of Americold Common Stock and Americold Preferred Stock, the Merger or
the other transactions contemplated by this Agreement.

            4.3 Capitalization. (a) The authorized Americold Common Stock and
other authorized capital stock of Americold and each of the Americold
Subsidiaries is as set forth on Schedule 4.3 hereto. All issued and outstanding
shares of Americold Common Stock and other equity interests of Americold and
each of the Americold Subsidiaries are duly authorized, validly issued, fully
paid, non-assessable and free of preemptive rights. Schedule 4.3 hereto sets
forth the name of each Person who owns beneficially or of record any shares of
capital stock and other equity interests of

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any Americold Subsidiary and, in the case of each Americold Subsidiary, the
number of shares owned by each such Person.

            (b) Except as set forth on Schedule 4.3 hereto, there are not now,
and at the Effective Time there will not be, any options, warrants, calls,
subscriptions, or other rights or other agreements or commitments of any nature
whatsoever obligating Americold or any of the Americold Subsidiaries to issue,
transfer, deliver or sell, or cause to be issued, transferred, delivered or
sold, any additional shares of Americold Common Stock or other equity interest
of Americold or any of the Americold Subsidiaries, or any securities or
obligations convertible into or exchangeable for any such Americold Common Stock
or other equity interests, or obligating Americold or any of the Americold
Subsidiaries to grant, extend or enter into any such agreement or commitment and
no authorization therefor has been given or made by Americold or any Americold
Subsidiary. Except for the arrangements described in Schedule 4.3 hereto, there
are no contractual arrangements that obligate Americold or any Americold
Subsidiary to (i) repurchase, redeem or otherwise acquire any of its capital
stock or its other equity interests or (ii) pay any Person any consideration
that is calculated with reference to the consideration to be paid to the
Americold Shareholders under this Agreement.

            4.4 Consents and Approvals; No Conflicts. Except for applicable
requirements of the HSRA and as set forth on Schedule 4.4 hereto and the
approvals referred to in Sections 2.5 and 4.2(b) hereof, the giving of notice
in accordance with O.R.S. 60.214 and the filing and recordation of the Merger
Filings as required by the OBCA and the DGCL, no filing with, and no permit,
authorization, consent or approval of, any Governmental Authority or other third
party is necessary for the consummation by Americold of the transactions
contemplated by this Agreement, except where the failure to make such filing or
obtain such authorization, consent or approval would not individually or in the
aggregate have a Material Adverse Effect. Subject to

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obtaining such approvals and making such filings, neither the execution and
delivery of this Agreement by Americold nor the consummation by Americold of the
transactions contemplated hereby, nor compliance by Americold with any of the
provisions hereof, will (i) result in any violation of any provision of the
Articles of Incorporation or By-Laws or other organizational documents of
Americold or any Americold Subsidiary, (ii) violate any Applicable Law or (iii)
except as set forth on Schedule 4.4 hereto, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default or
give rise to a right of any Person to terminate, cancel or accelerate the
payment or performance of any liability, obligation or commitment under any
contract (including any Contract listed in Schedule 4.13 hereto) to which
Americold or any of the Americold Subsidiaries is a party, or by which any of
their respective properties are bound, except, in the case of clauses (ii) and
(iii) above, where such violation, breach, default or right of termination,
cancellation or acceleration would not individually or in the aggregate have a
Material Adverse Effect.

            4.5 Financial Statements; SEC Reports. (a) Americold has furnished
the Parent with (i) a consolidated balance sheet of Americold as at February
28, 1997 and consolidated statements of operations, changes in shareholders'
equity (deficit) and cash flows of Americold for such year, together with the
related audit report of KPMG Peat Marwick LLP and (ii) an unaudited consolidated
balance sheet of Americold as of August 31, 1997 and an unaudited consolidated
statement of operations of Americold for the six-month period ended August 31,
1997. All such financial statements are referred to herein collectively as the
"Financial Statements." Other than as set forth in Schedule 4.5 hereto, the
Financial Statements (including any related schedules and/or notes) have been
prepared in accordance with GAAP consistently applied throughout the periods
presented, except that the unaudited financial statements are subject to
year-end adjustments and do not contain footnotes. The balance sheets included
in the

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Financial Statements fairly present, in all material respects, the financial
position of Americold and the Americold Subsidiaries as at the dates thereof,
and the statements of operations, changes in shareholders' equity (deficit) and
cash flows included in the Financial Statements fairly present, in all material
respects, the results of the operations, changes in shareholders' equity
(deficit) and cash flows, respectively, of Americold and the Americold
Subsidiaries for the periods indicated.

            (b) The Company has filed all forms, reports, statements and
schedules with the SEC required to be filed pursuant to the Exchange Act, and
the regulations of the SEC thereunder, since January 1, 1996. As of their
respective dates, all reports (including the financial statements included or
incorporated therein) filed by Americold with the SEC (collectively, the "SEC
Reports") complied in all material respects with all applicable requirements of
the Exchange Act and the regulations of the SEC thereunder applicable to such
SEC Reports, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.

            4.6 Undisclosed Liabilities. Except (i) to the extent reflected or
reserved against in the August 31, 1997 balance sheet of Americold included in
the Financial Statements, (ii) to the extent specifically set forth on Schedule
4.6 hereto, and/or (iii) for obligations of Americold arising in the ordinary
course of the performance of its responsibilities under any Contracts (as
defined in Section 4.14 hereof) listed on Schedule 4.14 or any agreement which
is not required to be listed on Schedule 4.14 because of the limitations set
forth in Section 4.14, neither Americold nor any Americold Subsidiary has any
liabilities or obligations of any nature, whether liquidated, unliquidated,
accrued, absolute, contingent or otherwise which would individually or in the
aggregate have a Material Adverse Effect.

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            4.7 Governmental Approvals and Authorizations. Except as set forth
in Schedule 4.7 hereto, all approvals, permits, qualifications, authorizations,
licenses, franchises, consents, orders, registrations or other approvals
(collectively, the "Governmental Approvals") of all Governmental Authorities
which are necessary in order to permit Americold and the Americold Subsidiaries
to carry on their respective businesses have been obtained and are in full force
and effect, except where the failure to obtain such approval, permit,
qualification, authorization, license, franchise, consent, order, registration
or other approval, or the failure to be in full force and effect, would not
individually or in the aggregate have a Material Adverse Effect. There has been
no violation, cancellation, suspension or revocation of any such Governmental
Approval. This Section 4.7 does not relate to environmental matters, which are
the subject of Section 4.22.

            4.8 Compliance with Laws. Except as set forth on Schedule 4.8
hereto, neither Americold nor any Americold Subsidiary is in conflict with or in
violation or breach of or default under (a) any Applicable Law or (b) any
provision of its organizational documents, and since February 28, 1997, neither
Americold nor any Americold Subsidiary has received any written notice alleging
any such conflict, violation, breach or default, except for any such violations,
breaches or defaults which would not individually or in the aggregate have a
Material Adverse Effect. This Section 4.8 does not relate to environmental
matters, which are the subject of Section 4.22.

            4.9 Absence of Certain Payments. Neither Americold, any Americold
Subsidiary, or any director, officer, employee or agent of, or consultant or
other representative of, Americold or any Americold Subsidiary, or any other
Person authorized to act on behalf thereof, has unlawfully offered, paid or
agreed to pay, directly or indirectly, any money or anything of value to or for
the benefit of any individual who is or was an official or employee or candidate
for office of any Governmental Author-

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ity, or any employee or agent of any customer or supplier of Americold or any
Americold Subsidiary, except for any such offer, payment or agreement to pay
which would not individually or in the aggregate have a Material Adverse Effect
and would not reasonably be expected to subject Americold or any Americold
Subsidiary to any damage or penalty in any civil, criminal or governmental
litigation or proceeding.

            4.10 Real Property. Schedule 4.10 hereto sets forth a complete list
of (i) all real property and all interests in real property owned in fee by
Americold or the Americold Subsidiaries (individually, an "Owned Property") and
(ii) all real property and all interests in real property leased by Americold
or the Americold Subsidiaries (individually, a "Leased Property"; together with
the Owned Property, the "Real Property"). Except as set forth on Schedule 4.10
hereto, Americold and the Americold Subsidiaries have (i) good, marketable and
insurable fee title to all Owned Property, and (ii) good and valid leasehold
interests in all Leased Property, and in the case of all of the Owned Properties
and those leasehold estates covered by the title insurance policies and update
letters or endorsements (as the case may be) set forth on Schedule 4.10 hereto,
such title is free and clear of any Liens, except (a) those created or permitted
under the Americold Indebtedness, (b) as disclosed in those certain owner's
title insurance policies and update letters or endorsements, as the case may be,
set forth on Schedule 4.10 hereto, and (c) other easements, rights of way and
minor and immaterial liens, charges or encumbrances that do not interfere with
the use of the Real Property in the normal conduct of the business of Americold
and the Americold Subsidiaries and that do not materially impair the value of
the Real Property (collectively, the "Permitted Liens"). Complete and correct
copies of each deed or lease relating to the Real Property described on Schedule
4.10 hereto have been furnished or made available to the Parent. The current use
and operation of the Real Property does not violate in any material respect any
instrument of record affecting the Real Property.

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Except as disclosed on Schedule 4.10 hereto, since February 28, 1997, no damage
or destruction has occurred and, to the Knowledge of Americold, no condemnation
or rezoning proceeding has been threatened or commenced with respect to any of
the Real Property that would individually or in the aggregate materially impair
the continued use or operation of the Owned Property or the Leased Property. To
the Knowledge of Americold, the Owned Property is in compliance with all Real
Estate Laws, and neither Americold nor any Americold Subsidiary has any
Knowledge of any written notice of violation or claimed violation of any Real
Estate Law, in either case except where such violation or lack of compliance
would not individually or in the aggregate materially restrict the ability of
Americold or any Americold Subsidiary to conduct its business as presently
conducted by it at any location. Except as disclosed on Schedule 4.10 hereto,
neither Americold nor any Americold Subsidiary is obligated under or a party to
any option, right of first refusal or other contractual right to purchase,
acquire, sell or dispose of any Real Property. Neither Americold nor any
Americold Subsidiary is a lessor, sublessor or grantor under any lease, sublease
or other instrument granting to another Person any right to the possession,
lease, occupancy or enjoyment of the Real Property, other than pursuant to any
agreements listed on Schedule 4.14 hereto. This Section 4.10 does not relate to
environmental matters, which are the subject of Section 4.22.

            4.11 Property. Schedule 4.11 hereto sets forth a complete list as of
August 31, 1997 of each item of property, plant and equipment owned or leased by
Americold or any Americold Subsidiary. Except as set forth on Schedule 4.11
hereto, Americold and each of the Americold Subsidiaries has good and valid
title to all tangible personal property and assets which it owns, including the
material tangible personal property reflected in the balance sheets included in
the Financial Statements as being owned by Americold or such Americold
Subsidiary, as the case may be, except for such tangible personal property and
assets

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disposed of in the ordinary course of business, consistent with past practice,
since August 31, 1997 having a value not in excess of $250,000. Americold and
each of the Americold Subsidiaries has a valid legal right to use all assets
which it does not own but uses in the conduct of its business, except where the
failure to have such valid legal right would not individually or in the
aggregate have a Material Adverse Effect.

            4.12 Intellectual Property. (a) Americold and each Americold
Subsidiary possesses all patents, trademarks, service marks, trade names,
copyrights and licenses that are necessary for the use or ownership of its
respective properties and assets, and the maintenance and operation of its
respective businesses as currently conducted. Neither Americold nor any
Americold Subsidiary uses any registered trademarks, trade names, copyrights or
patents (or have applications therefor pending) in connection with their
respective businesses, except for those set forth on Schedule 4.12 hereto
(collectively referred to as the "Intellectual Property"). Except as set forth
on Schedule 4.12 hereto, the Intellectual Property is owned by Americold or a
Americold Subsidiary, as indicated on Schedule 4.12 hereto, and is not subject
to any license, royalty arrangement or dispute. To the Knowledge of Americold,
except as set forth on Schedule 4.12 hereto, no registered trademark or trade
name used by Americold or any Americold Subsidiary infringes on any trademark or
trade name in any state or country in which such trademark or trade name is used
by Americold or such Americold Subsidiary. Neither Americold nor any Americold
Subsidiary has received written notification of infringement of any patent,
copyright, trademark or trade name, or any application therefor, from any
Person.

            (b) Americold and each Americold Subsidiary possesses the right to
use all of its logistics and RF software and related data bases for the conduct
of its respective operations as currently conducted. To the Knowledge of
Americold, no other Person has any material interest in any such software or
data bases (other than any

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licensor thereof which is not an officer, director or Affiliate of Americold,
any Americold Subsidiary or any Americold Principal Shareholder).

            4.13 Absence of Conflicts of Interest. Except as set forth on
Schedule 4.13 hereto, none of the Americold Principal Shareholders nor any
officer, director or Affiliate of Americold or any Americold Subsidiary has any
material interest in any material contract or material property (real or
personal), tangible or intangible, used in the business of Americold or any
Americold Subsidiary.

            4.14 Contracts. Schedule 4.14 hereto lists (or describes in the case
of oral contracts) each contract, note, debt instrument, lease, sublease,
warehouse services agreement, covenant not to compete, supply agreement,
guarantee, licensing agreement, partnership agreement, joint venture agreement,
employment agreement (other than employment agreements set forth on Schedule
4.16 hereto), collective bargaining agreement or other agreement or commitment
of any kind, whether written or oral, to which Americold or any Americold
Subsidiary is a party (other than agreements set forth on Schedule 4.16 hereto)
or by which either of them is bound (each, a "Contract"), provided that such
Schedule need not list (i) any written or oral Contract or related written
Contracts under which the aggregate payments required to be made by or to
Americold or any Americold Subsidiary over the life of the Contract or Contracts
are less than $300,000, (ii) any rate quote or (iii) any warehouse receipt.
Complete copies of every written Contract listed on Schedule 4.14 hereto have
been previously made available to the Parent. Each of Americold and the
Americold Subsidiaries has performed all material obligations required to be
performed by it to date under the Contracts (and every employment contract
listed on Schedule 4.16 hereto), and neither Americold nor any Americold
Subsidiary has received written (or, to the Knowledge of Americold, oral) notice
that it is in material default in the performance of any of its obligations
under any Contract.

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            4.15 Labor Matters. Except as described on Schedule 4.15 hereto,
since February 28, 1997 there have been no work stoppages or labor difficulties
relating to employees of Americold or the Americold Subsidiaries. There are no
labor disputes currently subject to any unfair labor practice complaint,
grievance procedure, arbitration or litigation, nor is there any default or any
event which, with notice or the passage of time or both, would become a default,
under any agreement with any labor union or association representing employees
of Americold or any Americold Subsidiary, except for any such dispute,
procedure, arbitration, litigation or default which would not individually or
in the aggregate have a Material Adverse Effect. Except as described on Schedule
4.15 hereto, there are no strikes, picketing, work stoppages or representation
petitions pending or, to Americold's Knowledge, threatened with respect to any
employee of Americold or any Americold Subsidiary.

            4.16 Employee Benefit Plans. (a) Schedule 4.16 hereto contains a
true and complete list of each "employee benefit plan," as such term is defined
in Section 3(3) of ERISA, and each bonus, medical, incentive or deferred
compensation, severance, retention, change in control, equity incentive or other
material employee benefit plan, program or policy maintained or contributed to
by Americold or any Americold Subsidiary for the benefit of its respective
employees or former employees or with respect to which Americold or a Americold
Subsidiary is obligated to contribute on behalf of its employees and current or
former Directors (collectively, the "Plans"). Americold has made available to
the Parent true and complete copies of all Plans; all related trust agreements
and insurance contracts forming a part of any Plans; the most recent actuarial
and trust reports prepared for any such Plan; the most recent Form 5500 filed in
respect of each such Plan and all schedules thereto; the most recent
determination letter issued in respect of each such Plan; the current summary
plan descriptions with respect to such Plans for which such

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a description has been distributed; and all amendments to any such document.

            (b) Each Plan intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the IRS with respect to
"TRA" (as defined in Section 1 of Rev. Proc. 93-39) as to the qualification
thereof under Section 401(a) of the Code and, to the Knowledge of Americold, no
amendment has been made to any such Plan since the date of such determination
letter that has or would result in the disqualification of such Plan under
Section 401(a) of the Code. Each of the Plans has been operated and administered
in all material respects in accordance with applicable laws, including but not
limited to ERISA and the Code. There are no material pending or, to the
Knowledge of Americold, threatened claims by or on behalf of any of the Plans or
by any employee participating therein (other than routine claims for benefits).
All contributions required to have been made by Americold and the Americold
Subsidiaries to any Plan pursuant to applicable law (including, without
limitation, ERISA and the Code) have been made on a timely basis. Neither
Americold nor any of the Americold Subsidiaries has engaged in a transaction
with respect to any Plan that, assuming the taxable period of such transaction
expired as of the date hereof, could subject Americold or any of the Americold
Subsidiaries to a tax or penalty imposed by either Section 4975 of the Code or
Section 502(i) of ERISA in an amount which could be material.

            (c) As of the date hereof, no liability under Title IV of ERISA
(other than for the payment of premiums under Section 4007) has been or is
expected to be incurred by Americold or any Americold Subsidiary with respect to
any ongoing, frozen or terminated "single employee plan", within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by any of them.
Americold and any Americold Subsidiary have not incurred and do not expect to
incur any withdrawal liability with respect to a multi-

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employer plan (within the meaning of Section 4063 or 4064 of ERISA).

            (d) No Plan is a multiple employer plan within the meaning of
Section 4063 or 4064 of ERISA.

            (e) Except for Americold and each Americold Subsidiary, no other
trade or business, whether or not incorporated, is currently or, within the
preceding six years, has been required to be treated as a "single employer"
with Americold pursuant to clause (b), (c) or (m) of Section 414 of the Code.

            (f) Neither Americold nor any Americold Subsidiary has any
obligations for retiree health and life benefits under any Plan, except as set
forth on Schedule 4.16(f) hereto.

            (g) Except as set forth in Schedule 4.16 hereto, the consummation of
the transactions contemplated by this Agreement will not (i) entitle any
employees of Americold or any Americold Subsidiary to severance pay, (ii)
accelerate the time of payments or vesting or trigger any payment of
compensation or benefits under, increase the amount payable or trigger any other
material obligation pursuant to, any Plan or (iii) result in any breach or
violation of, or a default under, any of the Plans.

            4.17 Actions Pending. Except as set forth in Schedule 4.17 hereto,
there is no civil, criminal or administrative action, suit, hearing, claim,
litigation, proceeding or investigation pending or, to the Knowledge of
Americold, threatened, against or affecting Americold or any Americold
Subsidiary or the business or any of the assets of Americold or any Americold
Subsidiary, or which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken in connection with this Agreement,
and there is no order, decision, ruling, injunction, judgment, award or decree
or consent of or agreements with any Governmental Authority against or

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affecting Americold or any Americold Subsidiary or the business or assets of
Americold or any Americold Subsidiary, or which enjoins or prohibits, any action
taken or to be taken in connection with this Agreement.

            4.18 Affiliate Transactions. Except as set forth on Schedule 4.18
hereto, there are no existing agreements, understandings or arrangements between
Americold or any Americold Subsidiary, on the one hand, and any Affiliate of
Americold or any Americold Subsidiary, on the other hand.

            4.19 Absence of Certain Changes. Except as set forth on Schedule
4.19 hereto, since August 31, 1997, (a) Americold and the Americold Subsidiaries
have conducted their respective businesses only in the ordinary and usual course
of their respective businesses, and (b) there has not been any material adverse
change in the financial condition, assets, owned or leased properties, business
or results of operations of Americold or any Americold Subsidiary that,
individually or in the aggregate, has had a Material Adverse Effect and (c)
neither Americold nor any Americold Subsidiary has taken any action of the type
described in any clause of Section 6.1.

            4.20 Insurance. Schedule 4.20 hereto lists all material insurance
policies maintained by, or for the benefit of, Americold or any Americold
Subsidiary, as an insured. All such insurance policies are in full force and
effect, all premiums due thereon have been paid and no notice of termination of
any such policy has been received by the insured thereunder.

            4.21 Taxes. Except as set forth on Schedule 4.21 hereto, or as
reflected or reserved against in the February 28, 1997 balance sheet included in
the Financial Statements, (i) Americold and the Americold Subsidiaries have (or
by the Closing Date will have) duly and timely filed or caused to be filed all
Tax Returns that are required to be filed on or before the Closing Date or the
time for filing such returns shall have been validly

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extended to a date after the Closing Date (collectively, the "Returns"), except
to the extent that the failure to so file would not individually or in the
aggregate have a Material Adverse Effect; (ii) Americold and the Americold
Subsidiaries have paid all Taxes shown or required to be shown on such Returns,
and have (or by the Closing will have) withheld to the appropriate Taxing
Authority, all federal and state Taxes that are required to be withheld on or
before the Closing Date, except to the extent that the failure to so pay,
withhold or remit would not individually or in the aggregate have a Material
Adverse Effect; (iii) no claim in writing by the IRS or any other Taxing
Authority for assessment or collection of Taxes, that are or may become payable
by Americold or the Americold Subsidiaries or chargeable as a Lien upon the
assets thereof, has been received by Americold or any Americold Subsidiary; (iv)
taxable years of Americold and the Americold Subsidiaries through the taxable
year ended 1990 have been examined and closed (v) neither Americold nor any
Americold Subsidiary has granted any extension or waiver of the limitation
period applicable to any Returns, which period (after giving effect to such
extension or waiver) has not yet expired; (vi) neither Americold nor any
Americold Subsidiary has received any notice in writing of any claim, audit,
action, suit, proceeding or investigation now pending against or with respect to
Americold or any Americold Subsidiary in respect of any Tax; (vii) there are no
requests for rulings or determinations in respect of any Tax pending between
Americold or any Americold Subsidiary, on the one hand, and any Taxing Authority
on the other; and (viii) neither Americold nor any Americold Subsidiary has (A)
been a member of an affiliated group, or (B) filed or been included in a
combined, consolidated or unitary Return, in each case involving group members
other than Americold and the Americold Subsidiaries and (ix) neither Americold
nor any of its subsidiaries has (a) elected to be treated as a "real estate
investment trust" for federal income tax purposes for any taxable year ending
after December 31, 1993 or (b) acquired, since January 1, 1994, a substantial
portion of the assets of an entity whose election to be

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treated as a "real estate investment trust" has been terminated or revoked.
Schedule 4.21 hereto contains a list of states, territories and jurisdictions
(whether foreign or domestic) with respect to which any income Tax Return has
been filed by Americold or any Americold Subsidiary within the last three
taxable years.

            For purposes of this Agreement: (a) "Tax" means any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits, license, withholding on
amounts paid to or by Americold or any Americold Subsidiary, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profits tax, custom duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty, addition to tax or additional amount imposed by any
Governmental Authority (domestic or foreign) (a "Taxing Authority"), (b) "Taxes"
shall have a correlative meaning and (c) "Tax Returns" shall mean reports,
returns, information statements relating to Taxes or other documents filed or
maintained or required to be filed or maintained, in connection with any Tax.

            4.22 Environmental Matters. Except as set forth on Schedule 4.22
hereto and in the Environmental Reports listed thereon, Americold's and each
Americold Subsidiary's operation and use of its assets and the Real Property are
in compliance in all respects with all Environmental Laws, except to the extent
that any such noncompliance would not individually or in the aggregate have a
Material Adverse Effect. Except as set forth on Schedule 4.22 or in the
Environmental Reports listed thereon, Americold and the Americold Subsidiaries
have obtained all environmental, health and safety permits necessary for the
operation of the business of Americold and the Americold Subsidiaries as
presently conducted, and all such permits are in full force and effect and
Americold and each Americold Subsidiary are in compliance in all respects with
the terms and conditions of each such permit, except, in each case, to the
extent

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that any such failure to obtain or noncompliance would not individually or in
the aggregate have a Material Adverse Effect. Except as disclosed in Schedule
4.22 or in the Environmental Reports listed thereon and except as could not
reasonably be expected to have individually or in the aggregate a Material
Adverse Effect, (i) no property currently owned or operated by Americold or any
Americold Subsidiary, including the Owned and Leased Properties, has been
contaminated in any material respect with any substance regulated under any
Environmental Law such that any removal or remedial action is required under
Applicable Law; (ii) Americold and the Americold Subsidiaries are not subject to
any material liability for any off-site disposal or contamination; and (iii)
there are no other conditions or violations involving Americold or any Americold
Subsidiary (including the presence of asbestos, underground storage tanks,
chlorofluorocarbons, Freon and polychlorinated biphenyls) that are likely to
result in any material claims, liabilities or costs or any restrictions on the
ownership, use or transfer of any Owned or Leased Property in connection with
any Environmental Law. Except as disclosed in Schedule 4.22, to the Knowledge of
Americold, there are not other environmental reports, studies, assessments,
sampling results or other written environmental analyses relating to any Owned
Property ("Environmental Reports") and a copy of each of these Environmental
Reports has been made available to Parent at least five days prior to the date
hereof.

            4.23 Brokers, Finders, etc. Except as described on Schedule 4.23,
neither Americold nor any Americold Subsidiary has employed, or is subject to
the valid claim of, any broker, finder or other financial intermediary in
connection with the transactions contemplated by this Agreement or the
transactions contemplated hereby, who might be entitled to a fee or commission
in connection herewith.

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                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES
                   OF VORNADO, THE PARENT AND ACQUISITION CO.

            Vornado, the Parent and Acquisition Co., jointly and severally,
represent and warrant to Americold as follows:

            5.1 Organization and Standing. Vornado is a real estate investment
trust duly organized and in good standing under the laws of the State of
Maryland and has the power and authority to carry on its business as presently
conducted, except where the failure to be so qualified would not individually
or in the aggregate have a material adverse effect on its ability to timely
perform its obligations hereunder or consummate the transactions contemplated
hereby. The Parent is a corporation duly organized and in good standing under
the laws of the State of Delaware and has the power and authority to carry on
its business as presently conducted, except where the failure to be so qualified
would not individually or in the aggregate have a material adverse effect on its
ability to timely perform its obligations hereunder or consummate the
transactions contemplated hereby. Acquisition Co. is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as presently conducted, except where the failure to be so qualified
would not individually or in the aggregate have a material adverse effect on its
ability to timely perform its obligations hereunder or consummate the
transactions contemplated hereby.

            5.2 Authorization and Binding Obligation. Each of Vornado, the
Parent and Acquisition Co. has all necessary partnership, corporate or other
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Vornado, Parent and Acqui-

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sition Co. and the consummation by Vornado, the Parent and Acquisition Co. of
the transactions contemplated hereby have been duly and validly authorized and
approved by all necessary partnership, corporate (or other) action on the part
of each of Vornado, the Parent and Acquisition Co. and no other corporate action
or other proceedings on the part of Vornado, the Parent or Acquisition Co. is
necessary to authorize this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
of Vornado, the Parent and Acquisition Co. and constitutes a valid and binding
obligation of Vornado, the Parent and Acquisition Co., enforceable against
Vornado, the Parent and Acquisition Co. in accordance with its terms, except as
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar rights of creditors generally and by general principles of equity.

            5.3 Consents and Approvals; No Conflicts. Except for applicable
requirements of the HSRA and filing and recordation of the Merger Filings as
required by the OBCA and the DGCL, no filing with, and no permit, authorization,
consent or approval of, any public body or authority is necessary for the
consummation by Vornado, the Parent or Acquisition Co. of the transactions
contemplated by this Agreement, except where the failure to make such filing or
obtain such permit, authorization, consent or approval, would not individually
or in the aggregate have a material adverse effect on such Person's ability to
timely perform its obligations hereunder or consummate the transactions
contemplated hereby. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby, nor compliance by
Vornado, the Parent or Acquisition Co. with any of the provisions hereof will
(a) result in any violation of any provision of the organizational documents of
Vornado, the Parent or Acquisition Co., (b) violate any Applicable Law, or (c)
result in a material violation or breach of, or constitute (with or without due
notice or lapse of time or both) a material default (or give rise to any right
of termination,

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   43
cancellation or acceleration) under, any material contract, agreement, note,
bond, mortgage, indenture, license, lease, franchise, permit, Plan or other
instrument or obligation to which Vornado, the Parent or Acquisition Co. is a
party, or by which any of them or any of their respective properties is bound,
except in the case of clauses (b) and (c) above, where such violation, breach,
default or right of termination would not individually or in the aggregate have
a material adverse effect on such Person's ability to timely perform its
obligations hereunder or to consummate the transactions contemplated hereby.

            5.4 Litigation. There is no claim, litigation, proceeding or
investigation pending or, to the best of Vornado's, the Parent's or Acquisition
Co.'s knowledge, threatened, which seeks to enjoin or prohibit, or otherwise
questions the validity of, any action taken or to be taken by Vornado, the
Parent or Acquisition Co. in connection with this Agreement or which would
individually or in the aggregate have a material adverse effect on such person's
ability timely to perform its respective obligations hereunder or to consummate
the transactions contemplated hereby.

            5.5 Finders and Investment Bankers. None of Vornado, the Parent or
Acquisition Co. has employed, or is subject to the valid claim of, any broker,
finder or other financial intermediary in connection with the transactions
contemplated by this Agreement or the transactions contemplated hereby, who
might be entitled to a fee or commission in connection herewith or therewith
payable by Americold or any Americold Subsidiary.

            5.6 Financing, etc. Vornado has available to it pursuant to existing
credit facilities sufficient cash on hand to allow it to pay the Merger
Consideration, consummate the transactions contemplated hereby and pay related
fees and expenses. Upon consummation of the Closing, Americold will be in
compliance with Section 9.1 of the Amended and Restated Indenture dated as of
March 9, 1993, and Section

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   44
9.01 of the Indenture dated as of April 9, 1996, each of which Indentures is
referred to in the list of Americold Indebtedness set forth on Schedule 1.6
hereto of the Americold Indebtedness.

                                   ARTICLE VI

                                    COVENANTS

            6.1 Conduct of Business. During the period from the date hereof to
the Closing Date, Americold covenants and agrees that it will and will cause the
Americold Subsidiaries to carry on their businesses in the ordinary course of
business, in substantially the same manner as heretofore conducted, and will use
its reasonable commercial efforts to preserve intact its and the Americold
Subsidiaries' present business organization, keep available the services of
their respective officers and Employees and preserve their relationships with
customers and suppliers and others having business dealings with them, to the
end that their goodwill and going business shall be maintained following the
Closing. Without limiting the generality of the foregoing, except as expressly
permitted by this Agreement or with the prior written consent of the Parent,
such consent not to be unreasonably withheld or delayed, or as set forth on
Schedule 6.1 hereto, Americold covenants and agrees that it will not, and it
will not permit any Americold Subsidiary to do, or agree to do, on or after the
date hereof, any of the following, on or before the Closing:

            (a) amend their respective certificates of incorporation or by-laws
      or other organizational documents;

            (b) rescind, modify, amend or otherwise change or affect any of the
      resolutions of the Board recommending adoption of this Agreement and
      authorization of the Merger;

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   45
            (c) issue, sell, transfer, assign, pledge, convey or dispose of any
      security or equity interest or any security convertible into or
      exchangeable or exercisable for any security or equity interest,
      including, without limitation, any subscriptions, options, warrants,
      calls, conversions or other rights, agreements, commitments, arrangements
      or understandings of any kind obligating Americold or any Americold
      Subsidiary, contingently or otherwise, to issue or sell, or cause to be
      issued or sold, any security or equity interest of Americold or any
      Americold Subsidiary or any security convertible into or exchangeable or
      exercisable for any security or equity interest;

            (d) split, combine or reclassify any shares of any class of its
      capital stock, declare, set aside or pay any dividend or other
      distribution (whether in cash, stock or property or any combination
      thereof) in respect of any class of its capital stock, or redeem or
      otherwise acquire any shares of such capital stock, except as required
      under the agreements listed on Schedule 6.1(d) hereto;

            (e) write off any receivables, except in the ordinary course of
      business consistent with past practice;

            (f) sell, assign, lease or otherwise transfer or dispose of any
      material assets except in the ordinary course of business consistent with
      past practice in an aggregate amount in excess of $350,000 unless the same
      shall be replaced with assets of equal or greater value and utility;

            (g) (i) except as set forth on Schedule 6.1(g) hereto and except in
      the ordinary course of business consistent with past practice under
      existing lines of credit, create, incur or assume any liability, including
      obligations in respect of capital leases, or make or commit to make
      capital expenditures in excess of

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   46
      $250,000 each or $500,000 in the aggregate or create, incur, assume,
      maintain or permit to exist any indebtedness in an aggregate amount
      greater than $250,000 for Americold and the Americold Subsidiaries
      combined; (ii) assume, guarantee, endorse or otherwise become liable or
      responsible (whether directly, contingently or otherwise) for the
      obligations of any other Person, except for assumptions, guarantees or
      endorsements by Americold of the obligations of any Americold Subsidiary
      in the ordinary course of business consistent with past practice; (iii)
      make any loans, advances or capital contributions to, or investments in,
      any other Person (other than customary loans or advances in the ordinary
      course of business consistent with past practice to Employees not to
      exceed $100,000 in the aggregate and extensions of credit made to
      customers on a trade receivable basis in the ordinary course of business
      consistent with past practice); or (iv) create, assume or permit to exist
      any Lien upon their assets, except for those in existence on the date of
      this Agreement and except for those additional Liens created in the
      ordinary course of business consistent with past practice;

            (h) except as set forth on Schedule 6.1(h) hereto (i) increase or
      modify or agree to increase or modify the compensation, bonuses or other
      benefits or perquisites of any Employee of Americold or any Americold
      Subsidiary, except for salary increases granted in the ordinary course of
      business consistent with past practice, or (ii) pay or commit to pay any
      compensation, bonus, pension or other retirement benefit or allowance,
      fringe benefit or other benefit not required by the terms of an existing
      Plan, or collective bargaining agreement as in effect on the date hereof
      or otherwise in the ordinary course of business consistent with past
      practice;

            (i) make any new elections, or make any changes to current
      elections, with respect to Taxes;

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            (j) change their auditors, fail to maintain their books and records
      in accordance with GAAP or materially change their auditing or bookkeeping
      practices;

            (k) take or fail to take any action that would cause any of its
      representations and warranties not to be true and correct on the Closing
      Date in the manner required by Section 7.3(b) hereof;

            (l) cancel or materially amend or modify any real or material
      personal property leases;

            (m) other than in the ordinary course of business, cancel or
      materially amend or modify any agreements with customers; or

            (n) enter into any new agreements with any customers with a duration
      of more than one year.

            6.2 Third-Party Consents. Americold covenants and agrees that it
will and will cause each Americold Subsidiary to use reasonable commercial
efforts to obtain, prior to the Closing, the consents of third parties and
Governmental Authorities set forth on Schedule 4.4 hereto.

            6.3 Compliance with OBCA; Filings; Information Statement. (a) As
soon as practicable and in any event within ten (10) days after the date of this
Agreement, Americold will prepare and deliver to each shareholder of Americold a
notice (the "Notice"), in accordance with O.R.S. 60.214, 60.487 and 60.561,
regarding (i) the execution of this Agreement, (ii) the Board's authorization of
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and (iii) the availability of appraisal rights
under O.R.S. 60.551-60.594. As promptly as practicable, Americold will prepare,
and will provide to Vornado for its review and comment, an information statement
(together with the Notice, the "Information Statement"). As promptly as
practicable thereafter, Americold will deliver to each holder of

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Americold Common Stock a copy of the Information Statement, provided that
Americold will not circulate the Information Statement without Vornado's prior
written consent. Americold agrees that none of the information included or
incorporated by reference in the Information Statement will be false or
misleading with respect to any material fact or will omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading; provided, that the foregoing shall not apply to information supplied
by or on behalf of the Parent or Acquisition Co. specifically for inclusion or
incorporation by reference in the Information Statement. The Parent agrees that
none of the information supplied by or on behalf of the Parent or Acquisition
Co. specifically for inclusion or incorporation by reference in the Information
Statement will be false or misleading with respect to any material fact or will
omit to state any material fact required to be stated therein or necessary in
order to make the statements in such Information Statement, in light of the
circumstances under which they are made, not misleading.

            (b) As promptly as practicable, each of Americold, the Parent and
Acquisition Co. shall properly prepare and file any filings required under any
Federal, state, county, local or municipal law relating to the Merger and the
transactions contemplated herein (such filings, together with the filings
required under the HSRA, are, collectively, the "Filings"). The Parent and
Acquisition Co., on the one hand, and Americold, on the other, shall promptly
notify the other of the receipt of any comments on, or any request for
amendments or supplements to, the Filings by any governmental official, and each
of Americold, the Parent and Acquisition Co. will supply the other with copies
of all correspondence between it and each of its subsidiaries and
representatives, on the one hand, and any appropriate governmental official, on
the other hand, with respect to the Filings.

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            6.4 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use (and Americold shall
cause the Americold Subsidiaries to use) their commercially reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement and to
cooperate with one another in connection with the foregoing, including using its
commercially reasonable efforts to obtain all necessary consents, approvals and
authorizations as are required to be obtained under Applicable Law, to defend
all lawsuits or other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby, to cause to be lifted or
rescinded any injunction or restraining order or other order adversely affecting
the ability of the parties to consummate the transactions contemplated hereby,
and to effect all necessary registrations and Filings.

            6.5 Acquisition Proposals. None of Americold or any of Americold's
employees, representatives or agents (collectively, the "Americold
Representatives") shall, directly or indirectly, solicit or initiate inquiries
or proposals from or enter into any agreement with respect to, or provide any
confidential information to or participate in any discussions or negotiations
with, any Persons or group (other than the Parent, Acquisition Co. and their
respective subsidiaries and their respective directors, officers, employees,
representatives and agents) concerning any sale of assets or shares of Americold
Common Stock, any assets or shares of capital stock of any Americold Subsidiary
or any merger, consolidation or similar transaction involving Americold or any
Americold Subsidiary (except, in all cases, for any sale of immaterial assets in
the ordinary course of business consistent with past practices). Americold will
promptly cease and Americold will cause to be terminated by the Americold
Subsidiaries any existing discussions or negotiations with any third parties
conducted heretofore with respect to any of the foregoing and will use its

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reasonable commercial efforts to retrieve and/or caused to be destroyed any and
all nonpublic information concerning Americold or any Americold Subsidiary that
has been furnished to third parties in connection therewith. Americold will not,
and will cause its controlled Affiliates not to, and will use its best efforts
to cause its noncontrolled affiliates not to, directly or indirectly, make, or
in any way participate, directly or indirectly, in any solicitation of proxies,
or become a participant in a solicitation to vote, or seek to advise or
influence any person to abstain from voting or to vote against the Merger, this
Agreement or any of the transactions contemplated herein, or enter into any
negotiations, discussions or arrangements, or otherwise facilitate, assist or
encourage the efforts of any third party with respect to the foregoing.

            6.6 Public Announcements. The Parent and Americold will consult with
one another before issuing any press release or otherwise making any public
statement with respect to this Agreement or the Merger and shall not issue any
such press release or make any such public statement prior to such consultation
without the consent of the Parent and Americold, except based on the advice of
counsel for Americold or the Parent, as the case may be, as required by
Applicable Law.

            6.7 Consent of the Parent. The Parent, as the sole shareholder of
Acquisition Co., by executing this Agreement hereby consents to the execution,
delivery and performance of this Agreement by Acquisition Co. and such consent
shall be treated for all purposes as a vote duly adopted at a meeting of the
shareholders of Acquisition Co. held for such purpose.

            6.8 Transfer Taxes. The Parent shall be responsible for the payment
of all Transfer Taxes arising out of or in connection with or attributable to
the transactions effected pursuant to this Agreement.

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            6.9 Officers' and Directors' Insurance; Indemnification of Officers
and Directors. The Parent agrees that for the entire period from the Effective
Time until at least six (6) years after the Effective Time (a) the Articles of
Incorporation and the By-Laws of the Surviving Corporation shall contain the
provisions with respect to indemnification and exculpation from liability set
forth in Americold's Articles of Incorporation and By-Laws as of the date of
this Agreement, which provisions shall not be amended, repealed or otherwise
modified during such period in any manner that would adversely affect the rights
thereunder of individuals who on or prior to the Effective Time were directors,
officers, employees or agents of Americold unless such modification is required
by Applicable Law and (b) the Surviving Corporation shall either (x) maintain in
effect Americold's current directors' and officers' liability insurance
covering those persons who are currently covered on the date of this Agreement
by Americold's directors' and officers' liability insurance policy or (y)
purchase a "tail" insurance policy having a policy limit equal to or greater
than the aggregate policy limit of such insurance and covering such persons
against claims made within six (6) years following the Effective Time; provided,
however, that this Section (b) shall not require Vornado or the Parent to pay
annual insurance premiums in excess of 125% of the current annual premium for
Americold's existing directors' and officers' liability insurance.

            6.10 Americold Indebtedness. The Parent and Acquisition Co. shall
furnish such information and certificates as Americold shall reasonably request
in order for Americold and its counsel to be able to deliver the certificates,
opinions and other instruments required under the change of control provisions
of the Americold Indebtedness.

            6.11 Access. Upon reasonable notice, and except as may otherwise be
required by Applicable Law, Americold shall (and shall cause the Americold
Subsidiaries to) afford the Parent's officers, agents and advisors reasonable
access, during normal business hours throughout the period

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prior to the Effective Time, to its properties, books, contracts and records
and, during such period, Americold shall (and shall cause the Americold
Subsidiaries to) furnish to the Parent and its agents and advisors all
information concerning its business, properties and personnel as they may
reasonably request, provided that no investigation pursuant to this Section
shall affect or be deemed to modify any representation or warranty made by
Americold. All such information shall be governed by the terms of the
Confidentiality Agreement referred to in Section 11.4.

            6.12 Management Arrangements. Americold shall enter into bonus
arrangements with Americold management involving payments in the aggregate of
not less than $610,000, and the parties shall negotiate in good faith the
identities of the management recipients of such bonus arrangements, the
respective amounts to be received by each and the respective terms thereof.

                                   ARTICLE VII

                               CLOSING CONDITIONS

            7.1 Conditions Precedent to the Obligations of All Parties. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of each of the following
conditions:

            (a) Any waiting period (and any extension thereof) applicable to
      the consummation of the Merger under the HSRA shall have expired or been
      terminated.

            (b) No preliminary or permanent injunction or other order, decree or
      ruling issued by a court of competent jurisdiction or by a governmental,
      regulatory or administrative agency or commission nor any statute, rule,
      regulation or executive order promulgated or

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      enacted by any Governmental Authority shall be in effect which would be
      reasonably likely to (i) make the consummation of the Merger by Vornado,
      the Parent, Acquisition Co. or Americold illegal or (ii) otherwise prevent
      the consummation of the Merger.

            7.2 Additional Conditions to the Obligation of Americold. The
obligation of Americold to effect the Merger is also subject to the fulfillment
at or prior to the Effective Time of the following additional conditions:

            (a) Vornado, the Parent and Acquisition Co. shall each have
      performed in all material respects each of its respective obligations
      under this Agreement required to be performed by it on or prior to the
      Effective Time pursuant to the terms hereof.

            (b) The representations and warranties of Vornado, the Parent and
      Acquisition Co. contained in this Agreement shall be true and correct in
      all material respects, in each case when made and, unless such
      representation or warranty is made as of a specific date (in which case it
      shall be true and correct in all material respects as of such date), at
      and as of the Effective Time as if made at and as of such time.

            (c) Americold shall have received a certificate, dated the Closing
      Date, of the President or any Vice President of Vornado, to the effect
      that the conditions specified in paragraphs (a) and (b) of this Section
      7.2 have been fulfilled.

            (d) Americold shall have received the opinion of Sullivan &
      Cromwell, special counsel to Vornado, the Parent and Acquisition Co., in
      form and substance reasonably satisfactory to Americold, as to the due
      authorization, execution and delivery of this Agreement by such parties.

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            (e) Each of the Parent and Acquisition Co. shall have reaffirmed all
      of Americold's obligations under each of the Employment Agreements listed
      on Schedule 4.14 hereto.

            (f) Americold shall have paid, or caused to be paid, a fee of
      $2,000,000 to Kelso (the "Kelso Fee") in respect of Kelso's services in
      connection with the consummation of the transactions provided for hereby.

            7.3 Conditions Precedent to Obligations of Vornado, the Parent and
Acquisition Co. The obligations of Vornado, the Parent and Acquisition Co. to
effect the Merger are also subject to the fulfillment at or prior to the
Effective Time of the following additional conditions:

            (a) Americold shall have performed in all material respects each of
      its obligations under this Agreement required to be performed by it on or
      prior to the Effective Time pursuant to the terms hereof.

            (b) The representations and warranties of Americold set forth in
      this Agreement that are qualified by reference to a Material Adverse
      Effect shall be true and correct, and all other representations and
      warranties of Americold shall be true and correct, except for failures to
      be true and correct as would not, individually or in the aggregate, have a
      Material Adverse Effect, as of the date of this Agreement and as of the
      Effective Time as though made as of the Effective Time (except to the
      extent any such representation or warranty expressly speaks as of an
      earlier date, in which case it shall have been true and correct in all
      material respects as of such date).

            (c) Vornado shall have received a certificate, dated the Closing
      Date, of the Chief Executive Officer of Americold, to the effect that the
      conditions specified in paragraphs (a) and (b) of this Section 7.3 have
      been fulfilled.

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            (d) Vornado, the Parent and Acquisition Co. shall each have received
      the opinion of (i) Debevoise & Plimpton, special counsel to Americold, in
      form and substance reasonably satisfactory to Vornado, as to the absence
      of any agreements among the shareholders of Americold or with any
      potential purchaser of Americold that conflict with the execution,
      delivery and performance of this Agreement and (ii) Tonkon, Torp, Galen,
      Marmaduke & Booth, special counsel to Americold, in form and substance
      reasonably satisfactory to Vornado, as to the due authorization, execution
      and delivery of this Agreement and to the effect that the Merger has been
      duly authorized under Oregon law.

            (e) One or more Americold Principal Shareholders shall not have
      revoked or attempted to revoke any of the proxies referred to in Section
      4.2(c) with respect to a majority or more of the outstanding shares of
      Americold Common Stock.

            (f) Americold shall have furnished to Vornado evidence reasonably
      satisfactory to Vornado that immediately prior to the Closing, Americold's
      principal amount of long-term indebtedness does not exceed $471,200,000.

                                  ARTICLE VIII

                                     CLOSING

            8.1 Time and Place. Subject to the satisfaction or waiver of all
applicable conditions in Article VII, the Closing shall take place at the
offices of Debevoise & Plimpton, 875 Third Avenue, New York, N.Y. 10022, at
10:00 a.m., local time, on the third business day following the satisfaction of
the condition set forth in Section 7.1(a), or on such other date as Americold
and the Parent may agree.

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            8.2 Filings at the Closing; Other Actions. At the Closing, the
Parent and Americold shall cause the Merger Filings to be filed and recorded in
accordance with the applicable provisions of the OBCA and the DGCL, and shall
take any and all other lawful actions and do any and all other lawful things
necessary to cause the Merger to become effective.

                                   ARTICLE IX

            NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

            All of the representations and warranties contained in this
Agreement or any representations and warranties contained in any certificate,
document or instrument delivered pursuant to this Agreement shall terminate as
of the Closing. The covenants set forth in Sections 3.3, 3.5, 6.6, 6.8 and 6.9
herein shall survive the Closing.

                                    ARTICLE X

                               TERMINATION RIGHTS

            10.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time:

            (a) by mutual consent of the Parent and Americold;

            (b) by either the Parent or Americold if the Merger shall not have
      been consummated on or before January 15, 1998; provided, however, that
      the right to terminate this Agreement shall not be available to any party
      whose failure to fulfill any obligation of this Agreement has been the
      cause of, or resulted in, the failure of the Merger to have occurred on or
      before the aforesaid date;

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   57
            (c) by the Parent, if Americold shall have materially breached any
      of its covenants herein or if Americold shall have made a material
      misrepresentation and not cured the same within 15 days of notice of such
      breach or misrepresentation;

            (d) by Americold, if either the Parent or Acquisition Co. shall
      have materially breached any of its covenants herein or if either the
      Parent or Acquisition Co. shall have made a material misrepresentation
      herein and not cured the same within 15 days of notice of such breach or
      misrepresentation; or

            (e) by either the Parent or Americold, if any court of competent
      jurisdiction or other governmental agency of competent jurisdiction shall
      have issued an order, decree or ruling or taken any other action
      restraining, enjoining or otherwise prohibiting the Merger, and such
      order, decree, ruling or other action shall have become final and
      non-appealable.

            10.2 Procedure and Effect of Termination. In the event of
termination and abandonment of the Merger by the Parent or Americold pursuant to
Section 10.1 hereof, notice thereof shall forthwith be given to Americold or the
Parent, respectively, and this Agreement shall terminate and the Merger shall be
abandoned, without further action by any of the parties hereto. Each of the
Parent and Acquisition Co. agrees that any termination by Vornado shall be
conclusively binding upon it, whether given expressly on its behalf or not. If
this Agreement is terminated as provided herein, no party hereto shall have any
liability or further obligation to any other party to this Agreement except that
any termination shall be without prejudice to the rights of any party hereto
arising out of a breach by any other party of any covenant or agreement
contained in this Agreement, and except that the provisions of Sections 6.6,
11.4, 11.5 and 11.7 hereof shall survive such termination.

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                                   ARTICLE XI

                                OTHER PROVISIONS

            11.1 Amendment and Modification. Subject to Applicable Law, this
Agreement may be amended, modified or supplemented only by mutual written
agreement of the parties hereto.

            11.2 Benefit and Assignment. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
successors and assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party to this
Agreement without the prior written consent of the other parties hereto. Any
purported assignment made in contravention of the previous sentence shall be
null and void.

            11.3 No Third-Party Beneficiaries. Nothing in this Agreement shall
confer any rights upon any Person other than the parties hereto and their
respective heirs, successors and permitted assigns, except for the provisions
of Section 6.10 hereof.

            11.4 Entire Agreement. This Agreement and the Confidentiality
Agreement, dated as of July 29, 1997, between Americold and Vornado and the
exhibits and schedules hereto and thereto embody the entire agreement and
understanding of the parties hereto and supersede any and all prior agreements,
arrangements and understandings relating to the matters provided for herein and
therein. Acquisition Co. hereby agrees that any consent or waiver of compliance
given by the Parent hereunder shall be conclusively binding upon it, whether
given expressly on its behalf or not. No party is making any representation or
warranty whatsoever, express or implied, except the representations and
warranties contained in this Agreement and each party acknowledges and agrees
that it has not relied on or been induced to enter into this Agreement by any

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representation or warranty other than those expressly set forth herein.

            11.5 Expenses. Except as otherwise provided in this Agreement, each
of Vornado, the Parent and Acquisition Co., on the one hand, and Americold, on
the other hand, shall be responsible for the payment of their respective
expenses, including legal and accounting fees, in connection with the
preparation, negotiation and closing of this Agreement and the transactions
contemplated hereby.

            11.6 Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.

            11.7 Choice of Law. The construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its principles of conflict of laws, except insofar as the laws of the state
of Oregon are mandatorily applicable to the Merger, and the state and federal
courts of New York shall have exclusive jurisdiction over any controversy or
claim arising out of or relating to this Agreement.

            11.8 Notices. All notices, requests, demands, letters, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax, as follows:

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            (a) If to Vornado, the Parent or Acquisition Co., to it at:

                    Vornado Realty Trust
                    Park 80 West, Plaza II
                    Saddle Brook, NJ  07663
                    Attention: Mr. Michael D. Fascitelli

                    Telecopy #: (201) 291-1093

                    Sullivan & Cromwell
                    1701 Pennsylvania Avenue, N.W.
                    Washington, D.C.  20006
                    Attention: Janet T. Geldzahler

                    Telecopy #: (202) 293-6330

            (b)  If to Americold, to it at:

                    Americold Corporation
                    7007 S.W. Cardinal Lane
                    Suite 135
                    Portland, OR  97224
                    Telecopy #: (503) 598-8693

                  Attention: Ronald H. Dykehouse
                             Chief Executive Officer

                  with copies to:

                  Kelso & Company
                  320 Park Avenue
                  24th Floor
                  New York, NY  10022
                  Telecopy #: (212) 223-2379

                  Attention: James J. Connors, II, Esq.

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   61
                  and:

                  Tonkon, Torp, Galen, Marmaduke & Booth
                  1600 Pioneer Tower
                  888 S.W. Fifth Avenue
                  Portland, OR  97204
                  Telecopy #:  (503) 274-8779

                  Attention: Brian G. Booth, Esq.

or to such other Person or address as any party shall specify by notice in
writing to the party entitled to notice. All such notices, requests, demands,
letters, waivers and other communications shall be deemed to have been received
(w) if by personal delivery on the day after such delivery, (x) if by certified
or registered mail, on the fifth Business Day after the mailing thereof, (y) if
by next-day or overnight mail or delivery, on the day delivered or (z) if by
fax, on the next day following the day on which such fax was sent, provided that
a copy is also sent by certified or registered mail.

            11.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.

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   62
            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.

                              VORNADO REALTY TRUST

                              By: /s/ Michael D. Fascitelli
                                 ___________________________
                                 Name:
                                 Title:

                              PORTLAND PARENT, INC.

                              By: /s/ Michael D. Fascitelli
                                 __________________________
                                 Name:
                                 Title:

                              PORTLAND STORAGE ACQUISITION CO.

                              By: /s/ Michael D. Fascitelli
                                 __________________________
                                 Name:
                                 Title:

                              AMERICOLD CORPORATION

                              By:/s/  Ronald H. Dykehouse
                                 __________________________
                                 Name: Ronald H. Dykehouse
                                 Title: Chairman, CEO and President

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                                                                       Exhibit A

                        Americold Principal Shareholders

             Name                               Number of Shares
             ----                               ----------------
                                             
KIA III-Americold, Inc. L.P.                        2,000,000

Kelso Investment Associates II, L.P.                  500,000

Kelso Equity Partners, L.P.                            70,000

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   1
                                  EXHIBIT 99.6

                                                              September 28, 1997

Crescent Real Estate Equities Limited Partnership
777 Main Street
Fort Worth, TX 76102

Dear Sirs:

        Vornado Realty Trust ("VRT") and Vornado, as defined below, have
entered into definitive merger agreements (the "Merger Agreements") to acquire
URS Logistics, Inc. and Americold Corporation (the "Companies"), copies of
which are attached hereto as Exhibit A. Crescent Real Estate Equities Limited
Partnership ("Crescent"), a Delaware limited partnership managed by Crescent
Real Estate Equities Company, a Texas real estate investment trust ("CEI") and
Portland Parent Incorporated and Atlanta Parent Incorporated, both Delaware
corporations (collectively, "Vornado") have agreed to Crescent becoming
Vornado's partner in those investments (the "Investments"), and hereby form a
partnership on the following terms. You acknowledge that you have completed all
due diligence with respect to both Companies and the Merger Agreements and are
satisfied with the results thereof and have all necessary board approvals to
enter into this transaction.

        The agreed upon terms are as follows:

        1. Partnership. As promptly as practicable after the date hereof, the
        parties (a) shall commence the negotiation of a definitive partnership
        agreement evidencing the partnership created hereby and such other terms
        as the parties shall mutually agree and (b) shall execute and deliver,
        or cause to be executed and delivered, as applicable, the partnership
        agreement.

        2. Interim Decisions. From and after the date hereof until the later of
        execution and delivery of the partnership agreement and the closings
        under the Merger Agreements, but subject to the provisions of Section 9
        hereof, all decisions with respect to the acquisition of the
        Investments, including, without limitation, the interpretation and
        performance of Vornado's rights and obligations under the Merger
        Agreements and all operational decisions with respect to the Companies
        shall be made by Vornado.

        3. Structure. As promptly as practicable, we will meet to determine the
        structure of the partnership's investment, taking into account the
        individual REIT structures of VRT and CEI and any structural
        reconfigurations contemplated by either of us, in order to achieve the
        optimal tax vehicle for Vornado. Depending on the structure chosen and
        any potential delay your investment might cause in closing the mergers,
        the timing of your capital contribution to consummate the investment
        could occur either prior to or promptly following the closing of the
        above mergers, at Vornado's option. Prior to the closing of the

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Crescent Real Estate Equities Limited Partnership
September 28, 1997
Page 2

     Merger Agreements, it is anticipated that the rights under this agreement
     will be assigned to affiliates or related entities of Crescent and Vornado
     in such manner and to such extent as may be required to achieve the
     structure determined pursuant to this paragraph.

     4.  Ownership. Crescent will hold 40% and Vornado will hold 60% of the
     ownership, capital and financial interest in the partnership. Vornado will
     contribute 60% and Crescent will contribute 40% of all costs required to
     make the Investments (including all transaction costs and prepayment of all
     debt, including prepayment fees).

     5.  Management.

         a. Each partner will be required to approve the following actions: (i)
         approval of the annual capital and operating budgets of each Company,
         any deviations in any such budget by 10% or more in the aggregate per
         budget, the hiring or firing of a chief executive officer of either
         Company or a combined entity and any required capital contributions by
         the partners in excess of $50 million per year, and (ii) other than
         transactions necessary to effect the tax structuring contemplated by
         paragraph 2 or to preserve either VRT's or CEI's REIT status, any
         transactions with an affiliate of any partner, the sale or acquisition
         of any asset (including, without limitation, equity interests in any
         entity) with a value of more than $25 million, the creation of any
         security interest, lien or other encumbrance on any of the
         partnership's assets which treats one partner differently from another,
         the making of any loan, advance or extension of credit to any partner,
         any guarantee of any direct or indirect obligation of any partner, and
         any sale, liquidation or merger of either Company (other than a
         combination of the two Companies) or a combined entity.

         b. Vornado will serve as operating manager of the Companies and the
         day-to-day liaison to the management. While it is our intention that
         the Companies or a combined entity would operate relatively
         autonomously, any required decisions which would not fall within
         subparagraph (a) of this agreement would be made by Vornado. For such
         services, Vornado shall receive a fee per annum equal to 1% of the cost
         (including for such purposes the amount of indebtedness on the acquired
         entity or assets at the time of acquisition and all expenses (including
         prepayment penalties) incurred in such acquisition) paid to acquire the
         Companies and any entities or assets hereafter acquired.

     6.  Term. Except as otherwise agreed by the partners, the partnership shall
     continue for a term of 30 years from the date hereof, except that it shall
     terminate if the Merger Agreements terminate or if Crescent or any
     affiliate thereof takes any action in violation of Section 9 hereof. The
     partnership shall preserve and maintain its existence and all its rights,
     privileges and franchises. Neither partner shall have the right to withdraw
     from the partnership, except as provided herein, nor shall either partner
     have the right to cause the dissolution, termination, liquidation or
     winding-up of the partnership without the consent of the remaining partner.

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Crescent Real Estate Equities Limited Partnership
September 28, 1997
Page 3

        7. Agreement to Act in Good Faith. The partnership agreement shall
        require each partner to cooperate with the other partner thereto to
        carry out the purpose and intent of the partnership, including without
        limitation the execution and delivery to the appropriate party of all
        such further documents as may reasonably be required in order to carry
        out the terms of the partnership. The parties shall act in a
        commercially reasonable manner in good faith with one another in
        negotiating the terms of the partnership agreement and all of required
        contracts, agreements or documents, in operating the partnership, and in
        carrying out the terms of this agreement.

        8.  Buy/Sell. In the event the partners fail in good faith to reach an
        agreement with respect to any matters set forth in paragraph 5(a) on a
        timely basis during the first three years after the date hereof, Vornado
        shall be entitled to buy Crescent's interest at cost plus a 10% per
        annum return (taking into account all distributions). Thereafter, for
        the next seven years, upon such failure, Vornado may set a price at
        which it commits to either buy Crescent's investment, or sell its own,
        which decision to buy or sell shall be made by Crescent. Thereafter,
        upon such failure, either party may set a price at which its commits to
        either buy the other party's investment, or sell it own, which decision
        to buy or sell shall be made by the other party. In addition, each side
        shall have the right of first refusal with respect to the sale of the
        other party's investment in the partnership, except that during the
        first three years Vornado's purchase price with respect to Crescent's
        shares under such right of first refusal shall be cost plus a 10% return
        (taking into account all distributions).

        9. Exclusivity; Non-Solicitation. Prior to the closings under the Merger
        Agreements, Crescent shall not, and shall not permit any of its
        employees, agents, representatives or affiliates to, (i) without Vornado
        being fully informed thereof and consenting thereto, contact Kelso or
        any officer, director, employee, agent or customer of either Company
        with respect to the Investments, (ii) offer, negotiate, consummate or
        solicit any offer or proposal for a "Sales Transaction" (as hereinafter
        defined), including without limitation holding any discussions or
        engaging in any communications, or entering into any agreement or
        understanding whatsoever with Kelso or the Companies without Vornado
        being fully informed thereof and consenting thereto, or (iii) take any
        action to disrupt the closings under the Merger Agreements. Crescent's
        obligations under the preceding sentence shall survive any termination
        of the partnership and shall terminate only upon the termination of both
        Merger Agreements. For the purposes of this agreement, the term "Sales
        Transaction" means (A) any merger, consolidation, reorganization or
        other business combination pursuant to which the business of either of
        the Companies would be combined with that of Crescent (or an affiliate
        thereof) or (B) the acquisition, directly or indirectly, by a third
        party of any equity interest, debt, or any assets (other than in the
        ordinary course of business) of either of the Companies. Prior to the
        closings under the Merger Agreements, Vorando agrees that neither it 
        nor any of its affiliates will enter into any agreements with the 
        Companies that would require approval as an affiliate transaction under
        paragraph 5(a).

        10.  Expenses. The parties shall each pay their own fees and expenses,
        and those of their agents, advisors, attorneys and accountants, with
        respect to the negotiation of this 

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Crescent Real Estate Equities Limited Partnership
September 28, 1997
Page 4

agreement and the formation of the partnership, and shall evenly split the
expenses incurred on account of the partnership after the date hereof or by
Vornado prior to the date hereof in connection with the negotiation and
execution of the Merger Agreements (including, without limitation, due
diligence).

11.  Assignment. The terms and provisions of this agreement shall not be
assignable by either party without the other party's consent, except as
contemplated by the structure determined pursuant to paragraph 3.

12.  Public Announcement. The parties intend to make a public announcement
regarding the execution of this agreement promptly following the execution
hereof. Vornado will act as spokesperson for the partnership and will provide
notice to Crescent of any proposed press release or other public announcement,
and will work with Crescent on the content of any such press release or public
announcement.

13.  Agreement Not to Compete. The parties agree that so long as the
partnership continues in existence, no partner thereto shall engage in the cold
storage businesses of the type conducted by the Companies except through the
partnership.

14.  Miscellaneous.

   a. This agreement and all transactions hereunder shall be governed by the
   laws of the State of Delaware, without regard to the application of conflict
   of law principles. The parties hereby irrevocably submit to the jurisdiction
   of the courts of the State of Delaware and to the U.S. District Court for the
   Southern District of New York solely in respect of the interpretation and
   enforcement of the provisions of this agreement, and hereby waive, and agree
   not to assert, as a defense in any action, suit or proceeding for the
   interpretation or enforcement hereof or of any such document, that it is not
   subject thereto or that such action, suit of proceeding may not be brought or
   is not maintainable in said courts or that the venue thereof may not be
   appropriate or that this agreement may not be enforced in or by such courts,
   and the parties hereto irrevocably agree that all claims with respect to such
   action or proceeding shall be heard and determined in such a Delaware State
   court or Federal District Court for the Southern District of New York. The
   parties hereby consent to and grant any such court jurisdiction over the
   person of such parties and over the subject matter of such dispute.

   b. This agreement constitutes the entire agreement between the parties with
   respect to the subject matter herein; provided, however, that this agreement
   contemplates the negotiation and execution of definitive agreements after the
   execution of this agreement as provided herein, which definitive agreements
   also shall be binding on the parties thereto following execution thereof.

   c. No amendment or waiver of any provision of this agreement shall be
   effective unless in writing and signed by the party or parties against whom
   enforcement is sought. No failure or delay by any party in exercising any
   right, power or privilege

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Crescent Real Estate Equities Limited Partnership
September 28, 1997
Page 5

     hereunder shall operate as a waiver thereof, nor shall any single or
     partial exercise thereof preclude any other or further exercise thereof or
     the exercise of any other right, power or privilege. The rights and
     remedies herein provided shall be cumulative and not exclusive of any
     rights or remedies provided by law.

     d. The rule that an agreement should be construed against the party
     drafting it shall not apply to this agreement because both parties have
     played a significant role in negotiating and drafting this agreement.

     e. This agreement may be executed in any number of counterparts, each of
     which shall be deemed an original, but all of which together shall
     constitute one and the same instrument.

     f. Signatures may be transmitted by facsimile and will be accepted and
     considered delivered as if an original.

                                Atlanta Parent Incorporated

                                By: /s/ Michael Fascitelli     
                                        -----------------------
                                Name:   Michael Fascitelli
                                Title:  Vice President,
                                        Chief Financial Officer
                                        and Treasurer

                                Portland Parent Incorporated

                                By: /s/ Michael Fascitelli
                                        -----------------------
                                Name:   Michael Fascitelli
                                Title:  Vice President,
                                        Chief Financial Officer
                                        and Treasurer

Agreed to and accepted as of September 28, 1997 by

Crescent Real Estate Equities Limited Partnership

        By: Crescent Real Estate Equities, Ltd.,
            its general partner

        By: /s/ Gerald Haddock
                -----------------------
        Name:   Gerald Haddock
        Title:  President and
                Chief Executive
                Officer

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