AMENDED AND RESTATED OWNERSHIP LIMIT
WAIVER AGREEMENT (VORNADO)
THIS AMENDED AND
RESTATED OWNERSHIP LIMIT WAIVER AGREEMENT (this “
Agreement ”), dated as of October 27, 2008, is
between Lexington Realty Trust, a Maryland real estate investment
trust (the “ Company ”), and Vornado Realty L.P.
(“ VRT ”), a Delaware limited partnership
(together with any entity at least 99% of the voting securities of
which are owned by VRT, “Vornado”) and amends and
restates, as set forth below, that certain Ownership Limit Waiver
Agreement (Vornado), dated as of December 31, 2006, between
the Company and VRT (the “ Original Agreement
”). Capitalized terms used, but not otherwise defined, in
this Agreement shall have the meanings given to them in the
hereinafter-mentioned Declaration.
A. Article IX
of the Company’s Declaration of Trust (the “
Declaration ”) contains (1) a restriction
prohibiting any Person from Beneficially Owning or Constructively
Owning outstanding shares of beneficial interest in the Company
which are classified as Common Stock or Preferred Stock (the
“ Equity Stock ”) in excess of 9.8% of the value
of the outstanding Equity Stock of the Company (the “
Ownership Limit ”) and (2) a restriction setting
forth that any sale, transfer, gift, hypothecation, pledge,
assignment, devise or other disposition of Equity Stock of the
Company that, if effective, would result in any Person Beneficially
Owning or Constructively Owning Equity Stock in excess of the
Ownership Limit shall be void ab initio as to the Transfer of that
number of shares of Equity Stock which would be otherwise
Beneficially or Constructively Owned by such Person in excess of
the Ownership Limit; and the intended transferee shall acquire no
rights in such excess shares of Equity Stock.
B. The
Company and Vornado entered into the Original Agreement in
connection with the merger of Newkirk Realty Trust, Inc. with and
into the Company on December 31, 2006.
C. Vornado
has requested an increase in the number of shares of Equity Stock
that are covered by the Original Agreement in connection with a
purchase of an additional 8.0 million shares of Equity Stock
of the Company which purchase is estimated to close on or about
October 31, 2008 (the date of the actual closing, the “
Settlement Date ”).
D. Pursuant
to subparagraph (a)(9) of Article IX of the Declaration, the
Company’s Board of Trustees has adopted resolutions approving
Vornado’s exemption from the Ownership Limit on the terms and
conditions hereinafter set forth.
1. WAIVER OF
OWNERSHIP LIMIT
1.1 The Company
exempts Vornado, effective as of the date hereof and subject to the
terms herein, from the Ownership Limit solely (A) (i) to the
extent of Vornado’s Beneficial Ownership or Constructive
Ownership of the lesser of (1) 8,000,000 shares of Equity
Stock of
the Company to
be acquired on the Settlement Date plus the number of shares of
Equity Stock of the Company into which 8,149,594 limited
partnership units in The Lexington Master Limited Partnership
(“ MLP Units ”) are redeemable pursuant to the
Second Amended and Restated Limited Partnership Agreement of the
Partnership; and (2) any lesser number of shares of Equity
Stock of the Company owned by Vornado from time to time after the
Settlement Date, plus (ii) the number of shares of
Equity Stock of the Company applicable to Vornado’s
Beneficial Ownership or Constructive Ownership of any Equity Stock
of the Company that is owned by Winthrop Realty Trust or WRT Realty
L.P. (together (“ Winthrop ”), but in no event
more than the lesser of (1) 3,500,000 shares of Equity Stock
of the Company and (2) any lesser number of shares of Equity
Stock of the Company owned by Winthrop from time to time following
the Settlement Date, and (B) upon and subject to
Vornado’s compliance with Section 2.2 below and its
continued compliance with the covenants referred to therein. This
exemption shall not apply to any other shares of Equity Stock of
the Company Beneficially Owned or Constructively Owned by
Vornado.
1.2 For avoidance
of doubt, (x) following any sale, assignment, transfer or
other disposition by Vornado of shares of Equity Stock of the
Company, the exemption granted by the Company hereunder shall
exempt Vornado from the Ownership Limit only with respect to the
maximum aggregate number of shares of Equity Stock of the Company,
as the case may be, owned by Vornado immediately after such sale,
assignment, transfer or disposition and after each such sale,
assignment, transfer or disposition by Vornado anytime thereafter
and (y) under no circumstances shall this exemption apply to
any Equity Stock of the Company acquired by Vornado or Winthrop at
any time after the Settlement Date, with the exception of shares of
Equity Stock of the Company acquired by Vornado upon redemption of
the 8,149,594 MLP Units or that are acquired by Vornado through a
distribution by Winthrop of the 3,500,000 (or such lesser number)
shares of Equity Stock owned by Winthrop on the Settlement
Date.
2. LIMITATIONS
AND OTHER MATTERS
2.1 The exemption
set forth in Section 1 above (the “ Ownership Limit
Waiver ”) shall not be effective if and to the extent
that, as a result of Vornado’s ownership of Equity Stock of
the Company permitted by reason of the Ownership Limit Waiver,
(A) the Company would be considered to own (actually or
Constructively, applying the provisions of Section 856(d)(5)
of the Code) an interest described in Section 856(d)(2)(B) of
the Code in a “Vornado Related Tenant” (as defined in
Section 2.4 herein), or (B) any “individual”
(within the meaning of Section 542(a)(2) of the Code) would be
considered to “own” (within the meaning of Section
856(h) of the Code) any of the shares of Equity Stock of the
Company covered by the Ownership Limit Waiver, of more than 9.8%
(by number of shares or value, whichever is more restrictive) of
the total outstanding shares of Equity Stock of the Company
(whether or not such ownership causes the Company to be
“closely held” under the REIT rules). In addition, if
the Ownership Limit Waiver is not effective as a result of the
operation of any clause(s) of the preceding sentence, the Equity
Stock of the Company that otherwise would be Excess Stock shall be
deemed to have been transferred to the Company in accordance with
subparagraph (b)(1) of Article IX of the
Declaration.
2.2 For the
Ownership Limit Waiver to be effective, Vornado Realty L.P. must
execute a counterpart signature page to this Agreement and complete
and make the
-2-
representations
and covenants set forth in the Certificate of Representations and
Covenants, the form of which is attached hereto as
Exhibit A (the “ Certificate ”), and
must deliver such Certificate to the Company. Except as otherwise
determined by the Board of Trustees of the Company, the Ownership
Limit Waiver shall cease to be effective upon any breach of the
representations or covenants set forth herein or in the
Certificate. In addition, if the Ownership Limit Waiver ceases to
be effective as a result of the operation of the preceding
sentence, the shares of Equity Stock of the Company that would
otherwise be Excess Stock shall be deemed to have been transferred
to the Company in accordance with subparagraph (b)(1) of Article IX
of the Declaration.
2.3 Vornado Realty
L.P. shall deliver to the Company, at such times as may reasonably
be requested by the Company (it being acknowledged that the Company
may reasonably make such request on at least a calendar quarterly
basis), a certificate signed by an authorized officer of Vornado
Realty L.P. to the effect that Vornado Realty L.P. has complied and
expects to continue to comply with its representations and
covenants set forth in this Agreement and the Certificate. If so
requested by the Company, Vornado will cooperate with the Company
in investigating any direct or indirect relationship that Vornado
and any Person whose ownership of shares of Equity Stock of the
Company would be attributed to Vornado under Section 318(a) of the
Code (as modified by Section 856(d)(5) of the Code), may have with
the Company’s tenants or “independent
contractors” (within the meaning of Section 856(d)(3) of
the Code), including but not limited to Vornado’s
relationship with Winthrop, for purposes of determining compliance
with the provisions of this Ownership Limit Waiver and in updating
the Certificate accordingly. However, the Company’s remedies
under this Agreement with respect to Vornado Realty L.P.’s
representations and covenants set forth in this Agreement and the
Certificate shall become effective only if and for the taxable
years of the Company during which Vornado requires the exemptions
afforded to Vornado under this Agreement (the “ Waiver
Period ”).
2.4 For purposes
of this Agreement, “ Vornado Related Tenant ”
means any entity (x) in which Vornado owns during the Waiver
Period (actually or Constructively, applying the provisions of
Section 856(d)(5) of the Code), in the case of a corporation,
shares equal to or greater than the “Threshold
Percentage” (as defined in Section 2.5 herein) of either
the total combined voting power of all classes of stock of such
entity entitled to vote or the total value of shares of all classes
of stock of such entity or, in the case of an entity that is not a
corporation, an interest equal to or greater than the Threshold
Percentage in the assets or net profits of such entity (such actual
or Constructive ownership equal to or greater than the Threshold
Percentage being hereinafter called a “ Related
Interest ”), (y) from which the Company is or will
be deriving rental income (other than a taxable REIT subsidiary, if
the requirements of Section 856(d)(8) of the Code are satisfied)
and (z) included in the tenant list (the “ Tenant
List ”) attached hereto as Exhibit B (or
added to such Tenant List pursuant to the next sentence), unless
the Board of Trustees of the Company has determined that the
Company derives (and is expected to continue to derive) an amount
of gross rental income that is sufficiently small so as not to
adversely affect the Company’s ability to qualify as a REIT.
The Company may add an entity to the Tenant List from time to time
by written notice (which may be made by email with a written
confirmation copy to follow within one business day by hand,
facsimile or overnight delivery) to Vornado and Vornado shall
promptly review any such revisions to the Tenant List (reflecting
substitute or additional tenants) at the request of the
-3-
Company and
recertify its acknowledgment and agreement under this Agreement to
such Tenant List within three (3) business days of the date of
such written notice, which response may initially be made by email,
but shall be followed within two (2) business days thereafter
with a hard copy of recertification of the Certificate in
Exhibit A with the updated Tenant List attached (the “
Response Period ”), provided, however , that if
such notice is delivered at a time when Vornado owns a Related
Interest in such entity that would result in the Company’s
owning (actually or Constructively) an interest in such entity
described in Section 856(d)(2)(B) of the Code, then, subject
to the following proviso, such entity shall not be added to the
Tenant List so long as Vornado so notifies the Company within the
Response Period, which response shall include Vornado’s
percentage owned in such entity; provided , further ,
that if such notice is given at a time when either Vornado’s
interest in such entity has a fair market value of less than
$1,000,000 or Vornado is engaged in active discussions regarding a
potential acquisition of a Related Interest
|
