SECOND AMENDED AND RESTATED OWNERSHIP LIMIT WAIVER AGREEMENT (VORNADO)
 
THIS SECOND AMENDED AND RESTATED OWNERSHIP LIMIT WAIVER AGREEMENT (this
“Agreement”), dated as of December 6, 2010, 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”), as further amended and restated by the Amended and
Restated Ownership Limit Waiver Agreement, dated as of October 27, 2008, between
the Company and VRT (the “First Restatement”), and as further amended by
Amendment No. 1 to the First Restatement, dated April 21, 2009 (the
“Amendment”). Capitalized terms used, but not otherwise defined, in this
Agreement shall have the meanings given to them in the hereinafter-mentioned
Declaration.
 
R E C I T A L S
 
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.           On October 27, 2008, the Company and Vornado entered into the First
Restatement under which Vornado received 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 was estimated to close on or around October 31, 2008 (the date of
the actual closing, the “Settlement Date”).
 
D.           On April 21, 2009, the Company and Vornado entered into the
Amendment under which the Company and Vornado made certain clarifications to the
First Restatement with regard to stock ownership arising out of stock dividends.
 
E.           Vornado has requested an increase in the number of shares of Equity
Stock that are covered by this Agreement, in connection with a purchase of
additional shares of Equity Stock of the Company.
 
 
 

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F.           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.
 
AGREEMENT
 
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) 21,351,461 shares of Equity Stock;
and (2) any lesser number of shares of Equity Stock of the Company owned by
Vornado from time to time after the earlier of December 31, 2013 and the first
date upon which Vornado Beneficially or Constructively Owns the maximum number
of shares of Equity Stock of the Company permitted pursuant to the foregoing
clause (A)(i)(1) (the “Maximum Waiver Date”) (but excluding for the avoidance of
doubt any shares described in Section 1.1(A)(ii) hereof), plus
 
(ii) the number of shares of Equity Stock of the Company issued by the Company
to Vornado by reason of or in connection with any stock dividend declared and
paid pursuant to Revenue Procedure 2008-68 or any similar Revenue Procedure or
private letter ruling with respect to shares of Equity Stock exempt under this
Agreement where the value of Vornado’s Beneficial or Constructive Ownership
expressed as a percentage of the value of all shares of Equity Stock of the
Company does not exceed 23% following such stock dividend (a “Permitted Stock
Dividend”), and
 
(B) upon and subject to Vornado’s compliance with Section 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, (A) 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, (B) under no
circumstances shall this exemption apply to any Equity Stock of the Company
acquired by Vornado at any time after the Maximum Waiver Date, with the
exception of shares of Equity Stock of the Company that are issued by the
Company to Vornado by reason of or in connection with a Permitted Stock
Dividend, and (C) Permitted Stock Dividends shall not include any shares of
Equity Stock issued pursuant to a direct share purchase or dividend reinvestment
plan.
 
 
 

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1.3 No later than three (3) business days after the occurrence of the Maximum
Waiver Date, Vornado shall provide written notification to the Company of (A)
the occurrence of such Maximum Waiver Date and (B) the number of shares and
applicable holder of Equity Stock of the Company Beneficially and Constructively
Owned by Vornado on such 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
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) 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”).
 
 
 

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2.4 For purposes of this Agreement, “Vornado Related Tenant” means any entity:
 
(A) 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”),
 
(B) 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
 
(C) 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 Company and recertify
its acknowledgment and agreement under this Agreement to such Tenant List within
10 (ten) business days of the date of such written notice, which response may
initially be made by email, but shall be followed within 10 (ten) 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 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 Vornado shall so notify the
Company within the Response Period, and the parties shall jointly determine in
good faith, based on the parties’ relative economic interests and REIT
qualification interests with respect to such entity, whether such entity shall
be added to the Tenant List.  Vornado shall advise the Company of the percentage
ownership that its Related Interest represents in each Vornado Related Tenant
not later than five days following the date of the Company’s request for such
information.
 
 
 

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2.5 For purposes of Section 2.4 above, the “Threshold Percentage” shall mean the
percentage which, taking into account the shares or other ownership interests in
the applicable tenant held by each other holder of shares of Equity Stock of the
Company (as of the date of determination) who (as of the date of
determination)has been granted an exemption from the Ownership Limit (an “Exempt
Holder”), would cause the Company to own (actually or Constructively, applying
the provisions of Section 856(d)(5) of the Code) stock or other ownership
interests in such applicable tenant equal to or greater than 7.8%.  If more than
one Exempt Holder owns shares or other ownership interests with respect to the
applicable tenant that, in the aggregate, amount to 7.8% or greater , then each
such Exempt Holder’s Threshold Percentage in such applicable tenant shall mean
the percentage determined by dividing 7.8% by the number of such Exempt Holders
as of the date of determination; provided that Vornado’s Threshold Percentage in
an applicable tenant shall not be shared with (1) the Exempt Holders on Exhibit
C hereto or (2) any additional Exempt Holder to the extent of Vornado’s
ownership in such tenant on the date the Company grants a waiver of Article IX
to such Exempt Holder.  The Company hereby (1) represents and warrants that as
of the date hereof, the Company has granted waivers of Article IX of the
Declaration to those Exempt Holders (other than Vornado) as set forth on Exhibit
C hereto and (2) agrees to give written notice to Vornado thirty (30) days prior
to granting a waiver of Article IX of the Declaration to any additional Exempted
Holder.
 
3. MISCELLANEOUS
 
3.1 All questions concerning the construction, validity and interpretation of
this Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Maryland, without giving effect to any choice of
law or conflict of law provision (whether of the State of Maryland or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Maryland.
 
3.2 This Agreement may be signed by the parties in separate counterparts, each
of which when so signed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
 
3.3 All references to any Code provision shall be deemed to include any
successor provisions of the Code and any regulatory, judicial or administrative
amendment or interpretation of such statutory provisions.
 
3.4 To the extent shares of Equity Stock subject to the Ownership Limitation
Waiver provided for in this Agreement are treated as Excess Shares pursuant to
Article IX of the Declaration, if permitted under applicable law and regulation,
the treatment of shares of Equity Stock as Excess Shares shall be done in a way
that first treats shares of Equity Stock other than shares of Equity Stock
acquired prior to the applicable Maximum Waiver Date as Excess Shares and then
any other shares of Equity Stock, including the shares of Equity Stock acquired
on the applicable Maximum Waiver Date. For the avoidance of doubt, nothing in
this Agreement shall be interpreted, construed or deemed to grant a waiver of
the Ownership Limit to anyone other than Vornado.
 

 
[Signature Page Follows]
 

 
 

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Each of the parties has caused this Agreement to be signed by its duly
authorized officers as of the date set forth in the introductory paragraph
hereof.
 

     
THE COMPANY
VORNADO
       
Lexington Realty Trust
Vornado Realty L.P.
   
 
By: Vornado Realty Trust
General Partner
       
By: /s/ T. Wilson
Eglin                                                              
By: /s/ Alan J. Rice                                                      
 
Name: T. Wilson Eglin
Name: Alan J. Rice
 
Title: Chief Executive Officer
Title: SVP
     

LEGAL_US_E # 89882819.7
 
 

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EXHIBIT A TO THE WAIVER AGREEMENT
 
CERTIFICATE OF REPRESENTATIONS AND COVENANTS
 
FOR
 
OWNERSHIP LIMIT WAIVER
 
The undersigned desires that the Second Amended and Restated Ownership Limit
Waiver Agreement (the “Waiver Agreement”) dated as of December 6, 2010, between
the undersigned and Lexington Realty Trust, a Maryland real estate investment
trust (the “Company”), be applicable to the shares of Equity Stock of the
Company Beneficially Owned or Constructively Owned or to be received by the
undersigned to the extent provided in the Waiver Agreement.  Capitalized terms
used, but not otherwise defined, in this Certificate shall have the meanings
given to them in the Waiver Agreement.
 
In connection with the Waiver Agreement, the undersigned makes the following
representations effective as of the date of execution hereof:
 
(a)  
For U.S. federal income tax purposes, Vornado is a United States person within
the meaning of Section 7701(a)(30) of the Code.

 
(b)  
The Equity Stock of the Company covered by the Waiver Agreement will be acquired
by Vornado for its own account.

 
(c)  
Except as disclosed to the Company in writing, Vornado does not own (actually or
Constructively, applying the provisions of Section 856(d)(5) of the Code) a
Related Interest in any of the entities included in the Tenant List attached
hereto as Schedule A, as the same may be supplemented from time to time in
accordance with the Waiver Agreement.

 
(d)  
Vornado agrees that, during the Waiver Period, it will give ten (10) days’
written notice to the Company following an increase in its ownership in any of
the entities included in the Tenant List attached hereto (1) in excess of the
lesser of (1) 5% and (2) Vornado’s Threshold Percentage less .5%.  Vornado shall
also give ten (10) days’ written notice to the Company during the Waiver Period
following each time its ownership in any of the entities included in the Tenant
List increases more than .5% above the applicable amount in the immediately
preceding sentence.

 
(e)  
Vornado shall not take any affirmative action in the future that could
reasonably be expected to cause the Company to be treated as deriving
“impermissible tenant service income” (within the meaning of Section 856(d)(7)
of the Code), provided that any “independent contractor” for purposes of Section
856 of the Code is identified in Schedule B attached hereto.

 
(f)  
Vornado further represents and warrants to the Company that:

 
(i)  
as of the date of execution and delivery hereof; it Beneficially Owns or
Constructively Owns 18,468,969 shares of Equity Stock of the Company; and

 
(ii)  
no “individual” (as defined in Section 542(a)(2) of the Code) who “owns” (within
the meaning of Section 856(h)(1) of the Code) any of the shares of Equity Stock
of the Company covered by the Ownership Limit Waiver, shall own shares of Equity
Stock of the Company in an amount greater than 9.8% (by number of shares or
value, whichever is more restrictive) of the total outstanding shares of Equity
Stock of the Company.

 
(g)  
The undersigned covenants to notify the Company promptly after the undersigned
obtains knowledge that any of the foregoing representations (including any
disclosures provided in connection with its representation in (c) above) is or
may no longer continue to be accurate.

 
 
 
Vornado Realty L.P.
 

  Dated:_________________     
 

 
By: Vornado Realty Trust
General Partner

                               
 
 
By:
 

 
Name: Alan J. Rice

 
Title: Senior Vice President

 

 

-  -

 
 

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SCHEDULE A TO THE CERTIFICATE
 
TENANT LIST
Omitted from filing.

 

 

 

-  -

 
 

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SCHEDULE B TO THE CERTIFICATE
 
INDEPENDENT CONTRACTOR LIST
 
Omitted from filing.

 

 

-  -

 
 

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EXHIBIT B TO THE WAIVER AGREEMENT
 

TENANT LIST

Omitted from filing.

-  -

 
 

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EXHIBIT C TO THE WAIVER AGREEMENT

 
EXEMPT WAIVER HOLDERS

1.
BlackRock, Inc. up to 15,850,951 shares of Common Stock

2.
Cohen & Steers Capital Management, Inc. up to 15,850,951 shares of Common Stock,
372,880 shares of Series B Preferred Stock, 336,439 shares of Series C Preferred
Stock, and 1,001,443 shares of Series D Preferred Stock