Exhibit 10.2
THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
LEPERCQ CORPORATE INCOME FUND II L.P.
This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF LEPERCQ CORPORATE INCOME FUND II L.P. (this "Amendment")
is made and effective as of December 8, 2004 by and among the entities and
individuals signatory hereto.
A. Lepercq Corporate Income Fund II L.P., a Delaware limited
partnership (the "Partnership") is governed by that certain Second Amended and
Restated Agreement of Limited Partnership, dated effective as of August 27,
1998, as amended by that certain First Amendment thereto effective as of June
19, 2003, and by Second Amendment thereto effective as of June 30, 2003, (the
"Agreement"). Unless otherwise defined, all capitalized terms used herein shall
have such meaning ascribed such terms in the Agreement.
B. Lexington Corporate Properties Trust, a Maryland real estate
investment trust ("LXP") is the sole unitholder of each of (i) Lex GP-1 Trust, a
Delaware statutory trust ("Lex GP") and (ii) Lex LP-1 Trust, a Delaware
statutory trust ("Lex LP"). Lex GP is the general partner of the Partnership,
Lepercq Corporate Income Fund L.P., a Delaware limited partnership, and Net 3
Acquisition L.P., a Delaware limited partnership (collectively, the "Operating
Partnerships"). Lex LP is the Initial Limited Partner of each of the Operating
Partnerships.
C. Pursuant to that certain Underwriting Agreement, dated as of
December 2, 2004, by and among Bear, ▇▇▇▇▇▇▇ & Co. Inc. (the "Underwriter "), on
the one hand, and LXP and the Operating Partnerships, on the other, and as of
the date hereof, LXP has completed the offer and sale (the "Offering") to the
Underwriter of 2,700,000 preferred shares of beneficial interest, classified as
6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per
share, of LXP ("Preferred Shares"), pursuant to a prospectus supplement dated
December 3, 2004 and the accompanying base prospectus dated October 22, 2003.
D. The Preferred Shares carry a (i) cumulative preferred
dividend, (ii) liquidation preference and (iii) conversion right.
E. Pursuant to Section 4.2 of the Agreement, the Partnership may
issue additional partnership interests to LXP and its affiliates in connection
with the issuance of shares by LXP provided LXP makes a capital contribution to
the Partnership of the proceeds raised in connection with such issuance.
F. LXP has agreed to contribute a portion of the proceeds of the
Offering to the Partnership in exchange for Series C Preferred Operating
Partnership Units ("Preferred OP Units") in the Partnership to be issued to an
affiliate of LXP, Lex LP.
G. As required by Section 4.2 of the Agreement, the Preferred OP
Units have designations, preferences and other rights such that the economic
interests are substantially similar to the designations, preferences and other
rights of the Preferred Shares, as further described and set forth in the
Certificate of Designation for the Preferred OP Units attached hereto as Annex I
(the "Certificate of Designation").
H. As of the date hereof, and pursuant to the terms of the
Agreement, the parties hereto desire to amend the Agreement to reflect the
issuance of 439,507 Preferred OP Units to Lex LP as well as all other changes in
the ownership of Partnership Units since the date of the Agreement by amending
and restating Exhibit A to the Agreement and (ii) the admission of Lex LP as a
Limited Partner holding Preferred OP Units (a "Preferred Limited Partner").
NOW, THEREFORE, the undersigned, being desirous of effectuating
the foregoing and amending the Agreement accordingly, hereby enter into this
Amendment and amend the Agreement as follows:
1. Certificate of Designation; Preferred Limited Partner. The
Agreement is hereby amended to the extent necessary to reflect that the rights,
preferences and privileges of the Preferred OP Units and the Preferred Limited
Partner, shall be as set forth in the Certificate of Designation which is hereby
attached as Annex I to the Agreement and made a part hereof. To the extent there
is a conflict between the terms of the Certificate of Designation and the terms
of the Agreement, the terms of the Certificate of Designation shall control.
2. Exhibit A. Exhibit A to the Agreement is deleted in its
entirety and replaced with Exhibit A hereto.
3. Miscellaneous. Except as amended hereby, the Agreement shall
remain unchanged and in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
2
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment on behalf of the Partnership in accordance with the provisions of
Section 14.1 of the Agreement as of the date first written above.
GENERAL PARTNER:
LEX GP-1 TRUST
By: /s/ ▇. ▇▇▇▇▇▇ Eglin
----------------------------
▇. ▇▇▇▇▇▇ Eglin
President
EXHIBIT A
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Percentage
Capital Partnership Interest of Redemption
Name of Partner Contribution Units Class Exemption Date
---------------------------------------------------------------------------------------------------------------
General Partner
---------------
Lex GP-1 Trust $100 35,411 0.72018% N/A
Limited Partner
---------------
Lex LP-1 Trust $100 3,462,082.5 70.41091% N/A
Series B Preferred Limited Partner
----------------------------------
Lex LP-1 Trust $14,199,025 567,961 100% (of N/A
Series B)
Series C Preferred Limited Partner
----------------------------------
Lex LP-1 Trust $21,398,497.06 439,507 100% (of N/A
Series C)
Special Limited Partners 1.11285% N/A
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ _____ 3,354
The LCP Group, L.P. _____ 14,914
▇▇▇▇▇ ▇. ▇▇▇▇ _____ 2,161.5
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ _____ 21,443
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ _____ 8,241
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ _____ 4,605
Phoenix Limited Partner 4.37884% 15-Jan-99
-----------------------
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ G.P. interest 175,306
The E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Family, L.P. 40,000
▇▇▇▇▇▇ Limited Partners (Units 23.34995% 1-Sep-99
----------------------- Contributed)
AGR Trust 2 6,672
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. III 1 3,336
▇▇▇▇▇▇, E. ▇▇▇ 1 3,336
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇ 1 3,336
▇▇▇▇, ▇▇▇▇▇ ▇.(Jr.) & ▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇. 1 3,336
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Percentage
Capital Partnership Interest of Redemption
Name of Partner Contribution Units Class Exemption Date
---------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇ 0.5 1,668
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇, ▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
W.C. & ▇.▇. ▇▇▇▇▇▇▇ Family Trust 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. Revocable 1 3,336
Intervivos Trust
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇, ▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇, ▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇ Family Trust 1 3,336
▇▇▇▇▇▇▇ Living Trust 1 3,336
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇, ▇▇▇ Long & ▇▇▇▇ ▇▇▇ 0.5 1,668
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇, ▇▇▇▇▇ 1 3,336
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇ (▇▇▇▇▇▇ ▇. ▇▇.)Revocable Trust 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 0.5 1,668
Croft (▇▇▇▇▇ ▇.) Trust dtd 6/2/89 1 3,336
▇▇▇▇, ▇▇▇▇▇ (Jr.) & ▇▇▇▇▇▇▇▇ 0.5 1,668
A-2
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Percentage
Capital Partnership Interest of Redemption
Name of Partner Contribution Units Class Exemption Date
---------------------------------------------------------------------------------------------------------------
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. (Jr.) 0.25 834
Dash, ▇▇▇ 1 3,336
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
DMK Trust 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇, ▇▇▇▇▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. 1 3,336
Edelman (▇▇▇▇) Trust 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ 0.333 1,111
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇▇, (▇▇▇▇ ▇. ▇▇.) Ins. Trust 1 3,336
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇ 1 3,336
▇▇▇▇, ▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇, ▇▇▇▇ ▇. & ▇▇▇▇▇ 1 3,336
▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇▇▇ (▇▇▇▇▇ ▇.) Trust u/a/d 5/7/90 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇, ▇▇▇▇ ▇. 1 3,336
Gold, ▇▇▇▇▇▇ ▇. 1 3,336
Goldfinger, ▇▇▇▇▇ ▇. Trust 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇▇▇ ▇. 1 3,336
The LCP Group 1 3,336
A-3
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Percentage
Capital Partnership Interest of Redemption
Name of Partner Contribution Units Class Exemption Date
---------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. & ▇▇▇▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.5 1,668
Hanger, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇, Drexwell 4 13,343
▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
HMSP Realty Co. 1 3,336
Houston, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇ (▇▇▇▇ ▇.) Trust 1 3,336
▇▇▇▇, ▇▇▇▇▇▇▇ 0.5 1,668
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
Irmscher, ▇▇▇▇▇ ▇. 1 3,336
Ito, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 0.5 1,668
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 0.333 1,111
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇ 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. & ▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇ (▇▇▇▇ ▇.) Rev. Trust uad 9/24/91 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇▇ (▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇) Rev Trust 1 3,336
Keto, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. 3 10,007
A-4
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Percentage
Capital Partnership Interest of Redemption
Name of Partner Contribution Units Class Exemption Date
---------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 8 26,686
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 3 10,007
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇ 1 3,336
▇▇▇, ▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
Lesser, ▇▇▇▇▇▇ ▇. 1.5 5,004
Lesser, ▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇▇ (▇▇▇▇▇▇ & ▇▇▇▇▇) Trust 1 3,336
▇▇▇▇, ▇▇▇▇▇ ▇. & ▇▇▇▇ ▇. 1 3,336
▇▇▇▇, ▇▇▇▇▇ 0.5 1,668
▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇. 1 3,336
Love, ▇▇▇▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇, F.F. Revocable Trust 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇. 1 3,336
Markstein Trust 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 0.5 1,668
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇▇▇, Living Trust 0.5 1,668
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇, ▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇, ▇▇▇▇ 0.5 1,668
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 0.5 1,668
Oceans Unlimited Partnership 1 3,336
A-5
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Percentage
Capital Partnership Interest of Redemption
Name of Partner Contribution Units Class Exemption Date
---------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇, ▇▇▇▇ ▇. 1 3,336
O'Meallie, ▇▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 0.5 1,668
Otsuka, ▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 0.25 834
▇▇▇▇▇, Chupendra & Indira 1 3,336
▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 0.5 1,668
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 1 3,336
▇▇▇▇ ▇▇▇▇▇▇▇ Irrevocable Trust 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇ 0.25 834
▇▇▇▇▇, ▇▇▇▇ ▇. & ▇▇▇ ▇. 1 3,336
▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 1 3,336
▇▇▇▇, ▇▇▇▇ ▇. ▇▇. 2 6,672
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇. 0.5 1,668
▇▇▇▇▇▇▇ Family Trust 1 3,336
▇▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇.) Trust 1 3,336
▇▇▇▇▇▇, ▇. ▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 3 10,007
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.& ▇▇▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇, ▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇, ▇▇▇▇▇▇ 5 16,679
▇▇▇▇▇▇, ▇▇▇▇ 1 3,336
▇▇▇▇▇, ▇▇▇▇▇▇ 1 3,336
A-6
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Percentage
Capital Partnership Interest of Redemption
Name of Partner Contribution Units Class Exemption Date
---------------------------------------------------------------------------------------------------------------
St. ▇▇▇▇▇▇, M. ▇▇▇▇▇▇ ▇▇. 1 3,336
▇▇▇▇▇, ▇▇▇▇ Revocable Trust 0.5 1,668
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 0.5 1,668
▇▇▇▇▇▇▇▇▇ (Iris) Marital Trust 1 3,336
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ 0.333 1,111
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust 1 3,336
UBATCO & CO. 0.5 1,668
▇▇▇▇▇▇, ▇▇▇▇▇▇ 1 3,336
Voute, P. ▇▇▇▇▇▇▇ 1 3,336
▇▇▇▇, ▇▇▇▇▇ 0.25 834
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇ ▇. 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇ 1 3,336
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
Worthington (▇▇▇▇▇▇▇ ▇▇▇▇) Special 1 3,336
Trust
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1 3,336
Wu, Yen Bin & ▇▇▇▇ Eng 0.5 1,668
▇▇▇▇▇, ▇▇▇▇▇▇ & Jo ▇▇▇▇ 1 3,336
▇▇▇▇, ▇▇▇▇▇▇ & Muna 1 3,336
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ 1 3,336
Roskind, E. ▇▇▇▇▇▇ 0.302 22,300
▇▇▇▇, ▇▇▇▇▇ ▇. 0.1125 1,575
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 0.121 40,296
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 0.095 53,015
A-7
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Percentage
Capital Partnership Interest of Redemption
Name of Partner Contribution Units Class Exemption Date
---------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.078 35,394
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 0.01 33
The LCP Group, L.P. 373,116
▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇) Trust dtd. 4/5/90 35,214
Roskind, E. ▇▇▇▇▇▇ 2001 Trust 33,333
Third Lero Corp. 3,404
A-8
▇▇▇▇▇▇▇▇ Limited Partners Supplement
------------------------------------
As a result of Lepercq Corporate Income Fund II L.P. (the
"Partnership") and Lexington OC LLC ("LOC") having entered into a Contribution
Agreement with ▇▇▇▇▇▇▇▇ Properties #14 LLC, an Indiana limited liability company
("▇▇▇▇▇▇▇▇ #14") and ▇▇▇▇▇▇▇▇ Properties #16 LLC, an Indiana limited liability
company ("▇▇▇▇▇▇▇▇ #16," collectively with ▇▇▇▇▇▇▇▇ #14, the "▇▇▇▇▇▇▇▇ Entities"
or individually a "▇▇▇▇▇▇▇▇ Entity") on the date hereof, pursuant to which at
the direction of the Partnership, LOC acquired fee title to certain real
property commonly known as 191 and ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in Hebron Business Center
in Hebron, Ohio and the building improvements thereon (the "Property") from the
▇▇▇▇▇▇▇▇ Entities, subject to Seller's Indebtedness (as defined in the Agreement
for Purchase and Sale, dated September 20, 2001, between ▇▇▇▇▇▇▇▇ Entities and
Lexington Corporate Properties Trust in respect of the Property (the "Purchase
Agreement")), the General Partner pursuant to Section 4.2A and Section 14.1.B(2)
of the Partnership Agreement (defined below) has authorized the issuance of
Partnership Units to the ▇▇▇▇▇▇▇▇ Entities. The ▇▇▇▇▇▇▇▇ Entities shall receive
the number of Partnership Units specified in the Schedule. For purposes of
applying the terms and conditions of the Partnership Agreement, the ▇▇▇▇▇▇▇▇
Entities shall be Partners of the Partnership with the rights and obligations of
Additional Limited Partners.
For purposes of Section 5.1 of the Partnership Agreement, the
▇▇▇▇▇▇▇▇ Entities shall be entitled to receive cash distributions with respect
to each Partnership Unit equal to the cash dividend payable with respect to each
share of Lexington Corporate Properties Trust ("LXP") common stock, determined
at the time of each quarterly distribution beginning with the distribution
payable to shareholders of record from and after the date hereof.
For purposes of Sections 6.1A and 6.1B of the Partnership
Agreement, allocations of Net Income and Net Loss by the Partnership generally
shall be made after giving effect to all allocations of taxable income to the
▇▇▇▇▇▇▇▇ Entities. Pursuant to the General Partner's authority in Section
14.1.B(2), Partnership taxable income shall be specially allocated to the
▇▇▇▇▇▇▇▇ Entities in an amount equal to, but not in excess of, all cash
distributions to the ▇▇▇▇▇▇▇▇ Entities; provided, however, that the ▇▇▇▇▇▇▇▇
Entities shall be allocated taxable income as otherwise required in Exhibit B
and C of the Partnership Agreement; provided further, that with respect to
Exhibit C2.A.(1)(a) of the Partnership Agreement that in the case of the
Property, such items attributable thereto shall be allocated among the Partners
using the "traditional method" under Treasury Regulation Section 1.704-3(b)(1).
For purposes of Section 8.4 of the Partnership Agreement, on the
first anniversary of the Closing Date (as such term is defined in the Purchase
Agreement) and on each December 1, March 1, June 1 and September 1 thereafter
(each a "Specified Redemption Date"), the ▇▇▇▇▇▇▇▇ Entities shall have the right
(the "▇▇▇▇▇▇▇▇ Redemption Right") to require the Partnership to redeem on a
Specified Redemption Date the Partnership Units held by the ▇▇▇▇▇▇▇▇ Entities
for the Redemption Amount to be delivered by the Partnership; provided, however,
that the ▇▇▇▇▇▇▇▇ Entities must convert a number of Partnership Units equal to
at least the lesser of (i) 1,000 Partnership Units, or (ii) all of the
Partnership Units held by such Partner. The ▇▇▇▇▇▇▇▇ Redemption Right shall be
exercised pursuant to a Notice of Redemption (substantially in the form of
Exhibits D-1 through D-3 modified to reflect the ▇▇▇▇▇▇▇▇ Entities giving
notice) delivered to the General Partner and LXP on a Specified
A-9
Redemption Date by the ▇▇▇▇▇▇▇▇ Entity who is exercising the redemption right
(the "▇▇▇▇▇▇▇▇ Redeeming Partner"). The ▇▇▇▇▇▇▇▇ Redeeming Partner shall have no
right, with respect to any Partnership Units so redeemed, to receive any
distributions paid after the Specified Redemption Date. The Partnership
covenants to cause the registration of any LXP Common Stock issued in connection
with a redemption in such a manner as is required so that the shares of LXP
Common Stock issued in connection with such redemption are freely transferable.
The Assignee of the ▇▇▇▇▇▇▇▇ Entities may exercise the redemption rights of the
▇▇▇▇▇▇▇▇ Entities, and the ▇▇▇▇▇▇▇▇ Entities shall be deemed to have assigned
such rights to such Assignee and shall be bound by the exercise of such rights
by such Assignee. In connection with any exercise of such rights by such
Assignee on behalf of the ▇▇▇▇▇▇▇▇ Entities, such Redemption Amount shall be
delivered by the Partnership directly to such Assignee and not to the ▇▇▇▇▇▇▇▇
Entities.
The Partnership Units held by the ▇▇▇▇▇▇▇▇ Entities shall be
subject to redemption by the Partnership if otherwise required by the terms of
the Partnership Agreement.
The Partnership hereby covenants not to dispose of its interest
in the Property or repay any of the Seller's Indebtedness with respect to the
Property (other than normal periodic payments of principal and other than a
refinancing that does not result in a reduction of the Seller's Indebtedness)
during the Tax Protection Period without the prior consent of the holders of
fifty one (51%) percent of the Partnership Units held by the ▇▇▇▇▇▇▇▇ Entities,
except that the foregoing covenant shall not apply and no such consent shall be
required in the event of (a) a foreclosure of the Property and any subsequent
sale thereof by any lender or such lender's designee or assignee; (b) sale of
the Property by the Partnership after the disaffirmance or rejection of either
of (i) the Net Lease Agreement dated October 2, 1998, as amended by First
Amendment to Lease Agreement dated as of July 12, 1999, as amended by Second
Amendment to Lease Agreement dated as of March 2, 2001, as amended by Third
Amendment to Lease Agreement, dated as of October 16, 2001, between ▇▇▇▇▇▇▇▇
Properties #16, LLC and ▇▇▇▇▇ Corning in respect of the Property or (ii) the Net
Lease Agreement dated August 25, 1999, as amended by First Amendment to Net
Lease Agreement dated as of March 2, 2001 as amended by Second Amendment to
Lease Agreement, dated as of October 16, 2001, between ▇▇▇▇▇▇▇▇ Properties #14,
LLC and ▇▇▇▇▇ Corning in respect of the Property; (c) a sale of the Property by
the Partnership if the Partnership determines that such disposition is necessary
to ensure its continued qualification as a real estate investment trust, or (d)
an exchange of the Property meeting the requirements of Section 1031 of the
Internal Revenue Code of 1986, as amended (the "Code") (Items a, b, c, and d
above are hereinafter referred to as the "Exempted Transactions"). In any event
in which the Partnership determines to dispose of the Property, the Partnership
agrees to use its best efforts to structure such a disposition as an exchange
that meets the requirements of Section 1031 of the Code.
LXP agrees to enter into a Guaranty Agreement with the
Partnership on the date the ▇▇▇▇▇▇▇▇ Entities are admitted to the Partnership,
on terms reasonably satisfactory to LXP and the Partnership, pursuant to which
LXP shall guaranty the obligations of the Partnership to pay the Redemption
Amount on the Specified Redemption Date. The ▇▇▇▇▇▇▇▇ Redeeming Partner, LXP,
the Partnership and the General Partner shall treat the transaction between LXP
and the ▇▇▇▇▇▇▇▇ Redeeming Partner as a sale of the ▇▇▇▇▇▇▇▇ Redeeming Partner's
Partnership Units to LXP or the General Partner, as the case may be, for federal
income tax purposes. The
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▇▇▇▇▇▇▇▇ Redeeming Partner agrees to execute such documents as the Partnership
may reasonably require in connection with the issuance of REIT shares upon
exercise of the ▇▇▇▇▇▇▇▇ Redemption Right.
"Non-Recourse Built-in Gain" shall mean gain recognized by the
▇▇▇▇▇▇▇▇ Entities under Section 731(a)(1) of the Code as a result of a deemed
distribution under Section 752(b) of the Code.
"Nonrecourse Debt" means the type of indebtedness which is
described in Treasury Regulation Section 1.752-1(a)(2), provided that if under
this Supplement such indebtedness of the Partnership is to be guaranteed by the
▇▇▇▇▇▇▇▇ Entities, then "Nonrecourse Debt" means the type of indebtedness which
would be described in Treasury Regulation Section 1.752-1(a)(2) but for any such
guarantee(s).
"Qualified Debt" means Nonrecourse Debt which also constitutes
"qualified nonrecourse financing" within the meaning of Section 465(b)(6) of the
Code.
"Required Debt Amount" means from time to time, as to the
▇▇▇▇▇▇▇▇ Entities, the amount of indebtedness of the Partnership which needs to
be allocated to the ▇▇▇▇▇▇▇▇ Entities pursuant to Treasury Regulation Section
1.752 such that the ▇▇▇▇▇▇▇▇ Entities will not recognize any Non-Recourse
Built-in Gain. The Required Debt Amount for the ▇▇▇▇▇▇▇▇ Entities as of the date
of this Supplement is set forth on Exhibit A attached hereto. Such amount
(including any modification thereof pursuant to the immediately following
sentence) shall automatically change from time to time as a result of the
operations, allocations of taxable income and loss, and distributions made by
the Partnership. It is understood that the Required Debt Amount set forth on
Exhibit A is believed by the ▇▇▇▇▇▇▇▇ Entities to be the requisite amount as of
the date hereof but until tax returns are completed for the ▇▇▇▇▇▇▇▇ Entities
such amounts are not final, and after the date hereof, until April 25, 2002, the
▇▇▇▇▇▇▇▇ Entities may provide to the Partnership a different, then current
Required Debt Amount to reflect any such final determination, and thirty (30)
days after receipt thereof by the Partnership, Exhibit A shall be deemed amended
to reflect such other amount; provided that in no event shall such amount be
five percent (5%) more or less than the Required Debt Amount set forth on
Exhibit A.
"Tax Protection Period" shall mean the earlier of (i) the span of
time commencing on the date hereof and ending on the second (2nd) anniversary
thereof, or (ii) the date on which all of the Partnership Units issued to the
▇▇▇▇▇▇▇▇ Entities have been redeemed, sold or otherwise disposed of in other
than a non-taxable disposition.
In the event the Partnership (or any entity which obtained the
Property directly or indirectly from the Partnership in a fully or partially
non-taxable transaction) intends to repay or refinance any indebtedness of the
Partnership or any such other entity secured by the Property (or allocated to
the Property as contemplated below) or which indebtedness has been guaranteed
(in part) by the ▇▇▇▇▇▇▇▇ Entities (other than normal periodic payments of
principal or a refinancing which does not result in a reduction of such
indebtedness), the Partnership shall notify the ▇▇▇▇▇▇▇▇ Entities prior to
engaging in any such repayment or refinancing, which notice shall include the
Partnership's good faith estimate of the amount of the reduction in the
Partnership's liabilities that will be allocated to the ▇▇▇▇▇▇▇▇ Entities for
inclusion in its tax
A-11
basis pursuant to Section 752 of the Code as a result of such repayment or
refinancing. The Partnership shall include in its notice how it intends to
provide for compliance with this Section. Any such notice shall be given as soon
as reasonably possible before a proposed repayment or refinancing but in any
event at least fifteen (15) days prior to any such repayment or refinancing.
To the extent the amounts allocated or to be allocated pursuant
to Treasury Regulation 1.752-3(a) are not sufficient to result in the ▇▇▇▇▇▇▇▇
Entities receiving an allocation of Qualified Debt at least equal to the
Required Debt Amount, the Partnership shall be obliged to provide the ▇▇▇▇▇▇▇▇
Entities with the opportunity to make a so-called "bottom-up" guarantee of
either (m) new secured Qualified Debt of the Partnership fulfilling the
requirements set forth immediately below, (n) new unsecured, unsubordinated
Qualified Debt of the Partnership or (o) if no debt of the Partnership under
clauses (m) or (n) is either then being incurred or such debt does not meet the
other requirements of this paragraph applicable to any such debt, existing
secured or unsecured Qualified Debt of the Partnership, but only if the ▇▇▇▇▇▇▇▇
Entities are provided sufficient evidence of the validity under applicable law
of a guarantee thereof made pursuant to this Supplement. In all events under
this paragraph, the general partner(s) of the Partnership shall be exculpated
under the applicable loan documents and no other partner of the Partnership, or
any affiliate of any partner (general or limited), shall be liable for any
portion of any indebtedness described in this paragraph to be guaranteed by the
▇▇▇▇▇▇▇▇ Entities. Any such debt of the Partnership so guaranteed by the
▇▇▇▇▇▇▇▇ Entities for which the ▇▇▇▇▇▇▇▇ Entities are allocated a share of the
Partnership's indebtedness under Treasury Regulation Section 1.752-2 is herein
referred to as "Guaranteed Debt".
The requirements for Qualified Debt under subclause (m) of the
preceding paragraph above shall be that the principal amount of such Qualified
Debt at the time of the making of any proposed guarantee does not exceed a
seventy percent (70%) loan to fair market value ratio and has a commercially
reasonable debt service coverage ratio, and the portion of such Qualified Debt
to be guaranteed by the ▇▇▇▇▇▇▇▇ Entities pursuant hereto does not exceed the
lesser of (1) the bottom sixty percent (60%) of the stated principal amount of
the Qualified Debt or (2) the bottom thirty-five percent (35%) of the fair
market value of the encumbered property, the bottom portion being the amount
such that if the encumbered property were foreclosed upon, the ▇▇▇▇▇▇▇▇ Entities
would not be required to pay or perform under such guarantee unless the proceeds
from the foreclosure sale were less than sixty percent (60%) (or such lesser
percentage of the stated principal in the event a lower limit is set in the
preceding paragraph) of the stated principal amount of the Qualified Debt. If
any Guaranteed Debt is unsecured debt of the Partnership, the portion to be
guaranteed shall be the bottom twenty-five percent (25%) of the stated principal
amount of such unsecured debt.
If and to the extent a ▇▇▇▇▇▇▇▇ Entity redeems, sells or
otherwise disposes of all or any Partnership Units (but not including herein a
conversion or redemption into other Partnership Units), then the provisions of
this Supplement related to the allocation of indebtedness to the ▇▇▇▇▇▇▇▇
Entities as to any such Partnership Units so redeemed, sold or otherwise
disposed of, shall end at the time of such redemption, sale or other
disposition.
This document may be executed in any number of counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same agreement.
A-12
IN WITNESS WHEREOF, the parties hereto have executed this
▇▇▇▇▇▇▇▇ Limited Partner Supplement on or as of December 6, 2001.
▇▇▇▇▇▇▇▇ PROPERTIES #14, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
▇▇▇▇▇▇▇▇ PROPERTIES #16, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
LEPERCQ CORPORATE INCOME FUND II L.P.
By: Lex GP-1, Inc., General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇▇ Entities Required Debt Amount
------------------ --------------------
▇▇▇▇▇▇▇▇ Properties #14 LLC $1,382,641.59
▇▇▇▇▇▇▇▇ Properties #16 LLC $2,807,181.41
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
Capital Partnership Percentage Redemption
Name of Partner Contribution Units Interest Exemption Date
---------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ Limited Partners 0.02727% 1-Dec-02
-------------------------
▇▇▇▇▇▇▇▇ Properties #14 LLC $6,305 443
▇▇▇▇▇▇▇▇ Properties #16 LLC $12,801.07 898
A-13
ANNEX I
CERTIFICATE OF DESIGNATION
OF
SERIES C PREFERRED
OPERATING PARTNERSHIP UNITS
OR LIMITED PARTNERSHIP INTERESTS
OF
LEPERCQ CORPORATE INCOME FUND II L.P.
-------------------------------------------
Series C Preferred Units
------------------------
A series of 504,619 operating units of Preferred Limited Partnership
Interests of LERPERCQ CORPORATE INCOME FUND II L.P., a Delaware limited
partnership (the "Partnership"), shall be created and be designated "Series C
Preferred Units" having the rights and preferences set forth herein.
WHEREAS, Lexington Corporate Properties Trust, a Maryland statutory real
estate investment trust ("LXP"), is the sole beneficial owner of Lex GP-1 Trust,
a Delaware statutory trust and the sole general partner of the Partnership (the
"General Partner");
WHEREAS, pursuant to that certain Underwriting Agreement, dated as of
December 2, 2004, by and among Bear, ▇▇▇▇▇▇▇ & Co. Inc. (the "Underwriter "), on
the one hand, and LXP, the Partnership, Lepercq Corporate Income Fund L.P. and
Net 3 Acquisition L.P., on the other, and as of the date hereof, LXP has (i)
completed the offer and sale (the "Offering") to the Underwriter of 2,700,000
preferred shares of beneficial interest, classified as 6.50% Series C Cumulative
Convertible Preferred Stock, par value $0.0001 per share, of LXP ("Preferred
Shares"), and (ii) granted the Underwriter a 30-day option to purchase an
additional 400,000 Preferred Shares, both pursuant to a prospectus supplement
dated December 3, 2004 and the accompanying base prospectus dated October 22,
2003;
WHEREAS, the Preferred Shares carry a cumulative preferred dividend,
liquidation preference and conversion right further described in the Articles
Supplementary of LXP, dated as of December 8, 2004 (the "Articles
Supplementary");
WHEREAS, pursuant to Section 4.2 of the Second Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of August 27,
1998, as amended (the "Partnership Agreement"), LXP has contributed a portion of
the net proceeds of the Offering to the Partnership in exchange for Series C
Preferred Units; and
WHEREAS, as required by the Partnership Agreement, the Series C
Preferred Units have designations, preferences and other rights such that the
economic interests are substantially similar to the designations, preferences
and other rights of the Preferred Shares;
-1-
FIRST: Pursuant to the authority expressly vested in the General Partner
of the Partnership by Section 4.2 of the Partnership Agreement, and in
accordance with Section 17-302 of the Delaware Revised Uniform Limited
Partnership Act, the General Partner has adopted resolutions designating the
Series C Preferred Units and setting forth the terms of the Series C Preferred
Units, including preferences, conversion or other rights, voting powers,
restrictions, limitations as to distributions, qualifications, or terms or
conditions of redemption and the price.
SECOND: The terms of the Series C Preferred Units as set by the General
Partner, including preferences, conversion or other rights, voting powers,
restrictions, limitations as to distributions, qualifications, or terms or
conditions of redemption, are as follows:
Section 1. Number of Units and Designation.
The Series C Preferred Units shall be a series of preferred Partnership
Units designated as "Series C Preferred Units", and the number of units
constituting such series shall be 504,619.
Section 2. Definitions.
"Articles Supplementary" shall have the meaning set forth in the
Recitals hereto.
"Business Day" shall mean any day other than a Saturday, Sunday or a day
on which state or federally chartered banking institutions in New York, New York
are not required to be open.
"Cash Settlement Average Period" shall have the meaning set forth in the
Articles Supplementary.
"Closing Sale Price" shall have the meaning set forth in the Articles
Supplementary.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Partnership Unit" shall mean a Partnership Unit that receives no
preferential treatment.
"Common Stock" shall mean the common shares of beneficial interest, par
value $0.0001 per share, of LXP.
"Company Conversion Option" shall have the meaning set forth in the
Articles Supplementary.
"Company Conversion Option Date" shall have the meaning set forth in the
Articles Supplementary.
"Conversion Amount" shall equal (x) the fraction with (i) a numerator
consisting of the number of Series C Preferred Units outstanding prior to the
applicable conversion or repurchase, and (ii) a denominator consisting of the
number of Preferred Shares outstanding prior to such conversion or repurchase,
multiplied by (y) the number of Preferred Shares to be converted or repurchased.
-2-
"Conversion Date" shall have the meaning set forth in the Articles
Supplementary.
"Conversion Notice" shall have the meaning set forth in the Articles
Supplementary.
"Conversion Price" shall mean, as of any day, a per Partnership Unit
amount equal to the quotient of the liquidation preference amount of a share of
Series C Preferred Units on that day divided by the Conversion Rate (as adjusted
pursuant to the Articles Supplementary) on such day.
"Conversion Rate" shall have the meaning set forth in the Articles
Supplementary.
"Conversion Right" shall have the meaning set forth in the Articles
Supplementary.
"Conversion Value" shall mean an amount equal to the product of the
applicable Conversion Rate (as adjusted pursuant to the Articles Supplementary)
multiplied by the arithmetic average of the Closing Sale Prices of the Common
Stock during the Cash Settlement Average Period.
"Converted Series C Preferred Units" shall have the meaning set forth in
Section 5(a)(1).
"Distribution Payment Date" shall mean, with respect to each
Distribution Period, the fifteenth day of February, May, August and November of
each year, commencing on February 15, 2005.
"Distribution Period" shall mean the respective periods commencing on
and including January 1, April 1, July 1 and October 1 of each year and ending
on and including the day preceding the first day of the next succeeding
Distribution Period (other than the initial Distribution Period, which shall
commence on the Original Issue Date and end on and include December 31, 2004).
"Distribution Record Date" shall mean the date designated by the Board
of Trustees of the LXP as the Dividend Record Date (as defined in the Articles
Supplementary) with respect to the Preferred Shares.
"Event" shall have the meaning set forth in Section 9(b) hereof.
"General Partner" shall have the meaning set forth in the Recitals
hereto.
"LXP" shall have the meaning set forth in the Recitals hereto.
"Offering" shall have the meaning set forth in the Recitals hereto.
"Original Issue Date" shall mean December 8, 2004.
"Partnership" shall have the meaning set forth in the preamble hereto.
"Partnership Agreement" shall have the meaning set forth in the Recitals
hereto.
-3-
"Partnership Unit" shall have the meaning set forth in Article FIRST of
the Partnership Agreement.
"Preferred Shares" shall have the meaning set forth in Recitals hereof.
"Public Acquirer Common Stock" shall have the meaning set forth in the
Articles Supplementary.
"Repurchase Date" shall have the meaning set forth in Section 6(a)
hereof.
"Repurchase Price" shall have the meaning set forth in Section 6(a)
hereof.
"Repurchase Right" shall have the meaning set forth in Section 6(a)
hereof.
"Repurchased Series C Preferred Units" shall have the meaning set forth
in Section 6(a) hereof.
"Series C Preferred Units" shall have the meaning set forth in preamble
hereof.
"Series B Preferred Units" shall mean the Series B Preferred Units of
the Partnership.
"Trading Day" shall have the meaning set forth in the Articles
Supplementary.
"Underwriter" shall have the meaning set forth in the Recitals hereto.
Section 3. Distributions.
(a) Subject to the preferential rights of the holders of any
class or series of Partnership Units ranking senior to the Series C Preferred
Units as to distributions, the holders of the Series C Preferred Units shall be
entitled to receive, when, as and if declared by the General Partner, out of
funds legally available for the payment of distributions, cumulative cash
distributions at the rate of 6.50% per annum of the $50.00 liquidation
preference per Series C Preferred Unit (equivalent to the annual rate of $3.25
per Series C Preferred Unit). Such distributions shall accrue and be cumulative
from and including the Original Issue Date and shall be payable quarterly in
arrears on each Distribution Payment Date, commencing February 15, 2005 in
respect of the quarterly distribution periods ending on December 31, March 31,
June 30, and September 30, respectively; provided, however, that if any
Distribution Payment Date is not a Business Day, then the distribution which
would otherwise have been payable on such Distribution Payment Date may be paid
on the next succeeding Business Day with the same force and effect as if paid on
such Distribution Payment Date, and no interest or additional distributions or
other sums shall accrue on the amount so payable from such Distribution Payment
Date to such next succeeding Business Day. The distribution payable on the
Series C Preferred Units on February 15, 2005 shall be a pro rata distribution
from the Original Issue Date to December 31, 2004 in the amount of $0.2167 per
Series C Preferred Unit. The amount of any distribution payable on the Series C
Preferred Units for each full Distribution Period shall be computed by dividing
the annual distribution by four (4). The amount of any distribution payable on
the Series C Preferred Units for any partial Distribution Period other than the
initial Distribution Period shall be prorated and computed on the basis of a
360-day year consisting of
-4-
twelve 30-day months. Distributions will be payable to holders of record as they
appear in the Partnership's records at the close of business on the applicable
Distribution Record Date.
(b) No distributions on the Series C Preferred Units shall be
declared by the General Partner or paid or set apart for payment by the
Partnership at such time as the terms and provisions of any agreement of the
Partnership, including any agreement relating to its indebtedness, prohibits
such declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, or payment or setting
apart for payment shall be restricted or prohibited by law.
(c) Notwithstanding anything contained herein to the contrary,
distributions on the Series C Preferred Units shall accrue whether or not the
Partnership has earnings, whether or not there are funds legally available for
the payment of such distributions, and whether or not such distributions are
declared.
(d) Except as provided in Section 3(e) below, unless full
cumulative distributions on the Series C Preferred Units for all past
distribution periods and the then current distribution period shall have been or
contemporaneously are declared and paid in cash or declared and a sum sufficient
for the payment thereof in cash is set apart for such payment, (i) no
distributions, other than distributions in Partnership Units ranking junior to
the Series C Preferred Units as to distributions and upon liquidation, shall be
declared or paid or set apart for payment and no other distributions or
distribution of cash or other property may be declared or made, directly or
indirectly, on or with respect to any other class or series of Partnership Units
ranking, as to distributions, on a parity with or junior to the Series C
Preferred Units (other than pro rata distributions on Series B Preferred Units
or other preferred Partnership Units ranking on parity as to distributions with
the Series C Preferred Units) for any period, nor (ii) shall any other class or
series of Partnership Units ranking, as to distributions or upon liquidation, on
a parity with or junior to the Series C Preferred Units, including without
limitation the Series B Preferred Units, be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such Partnership Units) by the
Partnership (except by conversion into or exchange for other classes or series
of Partnership Units ranking junior to the Series C Preferred Units as to
distributions and upon liquidation).
(e) When distributions are not paid in full (or a sum sufficient
for such full payment is not so set apart) upon the Series C Preferred Units and
the Partnership Units ranking, as to distributions, on a parity with the Series
C Preferred Units, including, without limitation the Series B Preferred Units,
all distributions declared upon the Series C Preferred Units and each such other
class or series of Partnership Units ranking, as to distributions, on a parity
with the Series C Preferred Units including, without limitation the Series B
Preferred Units, shall be declared pro rata so that the amount of distributions
declared per Series C Preferred Unit and such other class or series of
Partnership Units shall in all cases bear to each other the same ratio that
accrued distributions per Series C Preferred Unit and such other class or series
of Partnership Units (which shall not include any accrual in respect of unpaid
distributions on such other class or series of Partnership Units for prior
distribution periods if such other class or series of Partnership Units does not
have a cumulative distribution) bear to each other. No interest, or
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sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on the Series C Preferred Units which may be in
arrears.
(f) Holders of Series C Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or Partnership Units, in excess
of full cumulative distributions on the Series C Preferred Units as provided
herein. Any distribution payment made on the Series C Preferred Units shall
first be credited against the earliest accrued but unpaid distributions due with
respect to such units which remains payable. Accrued but unpaid distributions on
the Series C Preferred Units will accumulate as of the Distribution Payment Date
on which they first become payable.
Section 4. Liquidation Preference.
Upon any voluntary or involuntary liquidation, dissolution or winding-up
of the affairs of the Partnership, before any distribution or payment shall be
made to holders of any other class or series of Partnership Units of the
Partnership ranking, as to liquidation rights, junior to the Series C Preferred
Units, the holders of Series C Preferred Units shall be entitled to be paid out
of the assets of the Partnership legally available for distribution to its
partners a liquidation preference of $50.00 per unit, plus an amount equal to
any accrued and unpaid distributions to the date of payment (whether or not
declared). In the event that, upon such voluntary or involuntary liquidation,
dissolution or winding-up, the available assets of the Partnership are
insufficient to pay the amount of the liquidating distributions on all
outstanding Series C Preferred Units and the corresponding amounts payable on
all other classes or series of Partnership Units of the Partnership ranking, as
to liquidation rights, on a parity with the Series C Preferred Units, including,
without limitation, the Series B Preferred Units, in the distribution of assets,
then the holders of the Series C Preferred Units and each such other class or
series of Partnership Units ranking, as to liquidation rights, on a parity with
the Series C Preferred Units, including, without limitation, shall share ratably
in any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled. Written
notice of any such liquidation, dissolution or winding up of the Partnership,
stating the payment date or dates when, and the place or places where, the
amounts distributable in such circumstances shall be payable, shall be given by
first class mail, postage pre-paid, not less than thirty (30) nor more than
sixty (60) days prior to the payment date stated therein, to each record holder
of Series C Preferred Units at the respective addresses of such holders as the
same shall appear on Schedule I hereto. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Series C
Preferred Units will have no right or claim to any of the remaining assets of
the Partnership. The consolidation or merger of the Partnership with or into any
other partnership, corporation or entity, or the sale, lease, transfer or
conveyance of all or substantially all of the property or business of the
Partnership, shall not be deemed to constitute a liquidation, dissolution or
winding-up of the affairs of the Partnership.
Section 5. Conversion.
(a) General.
(1) Subject to the provisions of Section 5(b) below, on the
date any Preferred Shares are converted, an amount of Series C Preferred Units
equal to the Conversion
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Amount (the "Converted Series C Preferred Units") shall automatically convert
into a number of Common Partnership Units equal to the number of shares of
Common Stock issued by LXP (or shares of Public Acquirer Common Stock, if
applicable) with respect to the Preferred Shares related to the Converted Series
C Preferred Units.
(2) In connection with the conversion of any Series C
Preferred Units, no fractional Common Partnership Units will be issued, but the
Partnership shall pay a cash adjustment in respect of any fractional interest in
an amount equal to the fractional interest multiplied by the Closing Sale Price
on the Trading Day immediately prior to the corresponding Conversion Date or the
Company Conversion Option Date, as applicable. If more than one Series C
Preferred Unit will be surrendered for conversion by the same holder at the same
time, the number of full Common Partnership Units will be computed on the basis
of the total number of Series C Preferred Units so surrendered.
(3) A holder of Series C Preferred Units is not entitled to
any rights of a holder of Common Partnership Units until the Series C Preferred
Units held are converted into Common Partnership Units, and only to the extent
the Series C Preferred Units are deemed to have been converted to Common
Partnership Units in accordance with this Section 5.
(4) Each conversion of Series C Preferred Units shall be
deemed to have been made on the corresponding Conversion Date or Company
Conversion Option Date, as applicable, so that the rights of the holder thereof
as to the Series C Preferred Units being converted as a result, will cease
except for the right to receive the Conversion Value per each converted Series C
Preferred Unit, and, if applicable, the person entitled to receive Common
Partnership Units will be treated for all purposes as having become the record
holder of those Common Partnership Units at that time.
(b) Settlement Upon Conversion. The Partnership shall deliver
the Conversion Value per each converted Series C Preferred Unit, in (i) Common
Partnership Units, cash or a combination of cash and Common Partnership Units,
in accordance with LXP's election with respect to the Preferred Shares being
converted.
(c) Payment of Distributions.
(1) Conversion Right.
(i) If a Series C Preferred Unit is converted as a result of
a Conversion Right, upon conversion, that Series C Preferred Unit shall cease to
cumulate distributions as of the end of the day immediately preceding the
Conversion Date and the holder will not receive any cash payment representing
accrued and unpaid distributions of the Series C Preferred Unit, except in those
limited circumstances discussed in this Section 5(c). Except as provided herein,
the Partnership shall make no payment for accrued and unpaid distributions,
whether or not in arrears, on a Series C Preferred Unit converted pursuant to a
Conversion Right, or for distributions on Common Partnership Units issued upon
such conversion.
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(ii) If the related Conversion Notice is received by LXP
before the close of business on a Distribution Record Date, the holder shall not
be entitled to receive any portion of the distribution payable on such converted
Series C Preferred Units on the corresponding Distribution Payment Date.
(iii) If the related Conversion Notice is received by LXP
after the Distribution Record Date but prior to the corresponding Distribution
Payment Date, the holder on the Distribution Record Date shall receive on that
Distribution Payment Date accrued distributions on those Series C Preferred
Units, notwithstanding the conversion of those Series C Preferred Units prior to
that Distribution Payment Date, because the holder shall have been the holder of
record on the corresponding Distribution Record Date. However, upon conversion,
the holder shall pay an amount equal to the distribution that has accrued and
that will be paid on the related Distribution Payment Date.
(iv) A holder of Series C Preferred Units on a Distribution
Record Date whose Series C Preferred Units are converted into Common Partnership
Units on or after the corresponding Distribution Payment Date shall be entitled
to receive the distribution payable on such Series C Preferred Units on such
Distribution Payment Date, and such holder need not include payment of the
amount of such distribution upon conversion.
(v) If the related Conversion Notice is received by LXP on
or before the close of business on a Distribution Record Date or following such
Distribution Record Date but before the Distribution Payment Date therefore, and
the settlement date for any Common Partnership Units to be issued upon such
conversion is after the close of business on the record date for the payment of
distributions for the corresponding period on such Common Partnership Units,
such holder shall be entitled to receive such Common Partnership Unit
distributions upon the next payment date of distributions on the Common
Partnership Units as if it were the holder of such Common Partnership Units on
such record date.
(2) Company Conversion Option.
(i) In the event a conversion occurs as a result of a
Company Conversion Option, whether the Company Conversion Option Date is prior
to, on or after the Distribution Record Date for the current period, all unpaid
distributions which are in arrears as of the Company Conversion Option Date
shall be payable to the holder of the converted Series C Preferred Units.
(ii) In the event the Company Conversion Option occurs and
the Company Conversion Option Date is a date that is prior to the close of
business on any Distribution Record Date, the holder shall not be entitled to
receive any portion of the distribution payable for such period on such
converted Series C Preferred Units on the corresponding Distribution Payment
Date.
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(iii) In the event the Company Conversion Option occurs and
the Company Conversion Option Date is a date that is on, or after the close of
business on, any Distribution Record Date and prior to the close of business on
the corresponding Distribution Payment Date, all distributions, including
accrued and unpaid distributions, whether or not in arrears, with respect to the
Series C Preferred Units called for conversion on such date, shall be payable on
such Distribution Payment Date to the record holder of such Series C Preferred
Units on such record date.
(d) Maturity; Sinking Fund. The Series C Preferred Units shall
have no stated maturity and shall not be subject to any sinking fund or
mandatory redemption.
(e) Effect of Conversion. All Series C Preferred Units converted
pursuant to this Section 5, repurchased pursuant to Section 6, or otherwise
converted or repurchased shall be authorized but unissued Series C Preferred
Units until reclassified into another class or series of Common Partnership
Units.
Section 6. Purchase of Series C Preferred Units Upon a Fundamental
Change.
-------------------------------------------------------
(a) In the event a holder of Preferred Shares requires LXP to
repurchase (the "Repurchase Right") for cash all or any part of such holder's
Preferred Shares, the Partnership shall repurchase, on the date LXP repurchases
such Preferred Shares (the "Repurchase Date"), an amount of Series C Preferred
Units equal to the Conversion Amount (the "Repurchased Series C Preferred
Units") at a per Series C Preferred Unit repurchase price equal to the per
Preferred Share repurchase price paid by LXP with respect to the Preferred
Shares related to the Repurchased Series C Preferred Units (the "Repurchase
Price").
(b) If the Partnership holds cash sufficient to pay the
Repurchase Price of the Series C Preferred Units on the Trading Day following
the Repurchase Date, then:
(1) the Series C Preferred Units will cease to be
outstanding and distributions (including additional distributions, if any) will
cease to accrue; and
(2) all other rights of the holder will terminate (other
than the right to receive the Repurchase Price upon transfer of the Series C
Preferred Units).
Section 7. Voting Rights.
(a) Holders of the Series C Preferred Units shall not have any
voting rights, except as provided by applicable law.
(b) In any matter in which the Series C Preferred Units may vote
(as expressly provided herein or as may be required by law), each Series C
Preferred Unit shall be entitled to one vote per $25.00 of liquidation
preference.
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Section 8. Redemption.
Except as otherwise set forth herein, the Series C Preferred Units shall
not be redeemable by the Partnership.
Section 9. Ranking.
(a) In respect of rights to the payment of distributions and the
distribution of assets in the event of any liquidation, dissolution or winding
up of the affairs of the Partnership, the Series C Preferred Units shall rank
(i) senior to any class or series of Partnership Units of the Partnership other
than any class or series referred to in clauses (ii) and (iii) of this sentence,
(ii) on a parity with any class or series of Partnership Units of the
Partnership the terms of which specifically provide that such class or series of
Partnership Units ranks on a parity with the Series C Preferred Units as to the
payment of distributions and the distribution of assets in the event of any
liquidation, dissolution or winding up of the Partnership, including, without
limitation the Series B Preferred Units, and (iii) junior to any class or series
of Partnership Units of the Partnership ranking senior to the Series C Preferred
Units as to the payment of distributions and the distribution of assets in the
event of any liquidation, dissolution or winding up of the Partnership. For
avoidance of doubt, any debt of the Partnership which is convertible into or
exchangeable for Partnership Units of the Partnership shall not constitute a
class or series of Partnership Units of the Partnership.
(b) Unless (x) no Series C Preferred Units remain outstanding or
(y) the requisite holders of the Preferred Shares have approved similar actions
with respect to the Preferred Shares in accordance with the Articles
Supplementary (in which event the Partnership may take similar action with
respect to the Series C Preferred Units), the Partnership shall not: (i)
authorize or create, or increase the authorized or issued amount of, any class
or series of Partnership Units ranking senior to the Series C Preferred Units
with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding-up of the affairs of the Partnership or
reclassify any authorized shares of Partnership Units into such Partnership
Units, or create, authorize or issue any obligation or security convertible into
or evidencing the right to purchase any such Partnership Units; or (ii) amend,
alter or repeal the provisions of the Partnership Agreement or this Certificate
of Designation, whether by merger, consolidation, transfer or conveyance of all
or substantially all of its assets or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, or privilege of the
Series C Preferred Units or the holders thereof; provided however, with respect
to the occurrence of any of the Events set forth in (ii) above, so long as the
Series C Preferred Units remains outstanding with the terms thereof materially
unchanged, taking into account that, upon the occurrence of an Event, the
Partnership may not be the surviving entity, the occurrence of such Event shall
not be deemed to materially and adversely affect such rights, preferences,
privileges of holders of Series C Preferred Units. The provisions of this
Section 9(b) shall not, however, prohibit the Partnership from taking the
following actions: (A) any increase, decrease or issuance from time to time of
any class or series of Partnership Units (including the Series C Preferred
Units), or (B) the creation or issuance from time to time of any additional
classes or series of Partnership Units, in each case referred to in clause (A)
or (B) above ranking on a parity with or junior to the Series C Preferred Units
with respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Partnership.
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(c) Notwithstanding anything to the contrary in this Section 9,
nothing herein shall prevent the Partnership from taking such action as may be
necessary or advisable in its sole discretion so as to avoid being treated as an
association taxable as a corporation for federal tax purposes or so as to avoid
adversely affecting (for as long as LXP deems necessary) LXP's ability to
qualify as a REIT for federal tax purposes.
Section 10. Exclusion of Other Rights.
The Series C Preferred Units shall not have any preferences, conversion
or other rights, voting powers, restrictions, limitations as to distributions,
qualifications, or terms or conditions of redemption other than expressly set
forth in the Partnership Agreement and this Certificate of Designation.
Section 11. Headings of Subdivisions.
The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
Section 12. Severability of Provisions.
If any preferences, conversion or other rights, voting powers,
restrictions, limitations as to distributions, qualifications, or terms or
conditions of conversion of the Series C Preferred Units set forth in the
Partnership Agreement and this Certificate of Designation are invalid, unlawful
or incapable of being enforced by reason of any rule of law or public policy,
all other preferences or other rights, voting powers, restrictions, limitations
as to distributions, qualifications or terms or conditions of conversion of
Series C Preferred Units set forth in the Partnership Agreement which can be
given effect without the invalid, unlawful or unenforceable provision thereof
shall, nevertheless, remain in full force and effect and no preferences or other
rights, voting powers, restrictions, limitations as to distributions or other
qualifications or terms or conditions of conversion of the Series C Preferred
Units herein set forth shall be deemed dependent upon any other provision
thereof unless so expressed therein.
Section 13. No Preemptive Rights.
No holder of Series C Preferred Units shall be entitled to any
preemptive rights to subscribe for or acquire any Partnership Units of the
Partnership (whether now or hereafter authorized) or instruments of the
Partnership convertible into or carrying a right to subscribe to or acquire
Partnership Units of the Partnership.
LEPERCQ CORPORATE INCOME FUND II L.P.
By: Lex GP-1 Trust, its General Partner
By: /s/ ▇. ▇▇▇▇▇▇ Eglin
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▇. ▇▇▇▇▇▇ Eglin
President
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