Exhibit 10.9

 

 

OWNERSHIP LIMIT WAIVER AGREEMENT (APOLLO)

THIS OWNERSHIP LIMIT WAIVER AGREEMENT (this “Agreement”), dated as of December
31, 2006, is between Lexington Realty Trust, a Maryland real estate investment
trust (the “Company”), and Apollo Real Estate Investment Fund III, L.P. (“AREIF
3”), a Delaware limited partnership (together with any entity at least 99% of
the voting securities of which are owned by AREIF 3, “Apollo”). 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.          The Company and Newkirk Realty Trust, Inc., a Maryland corporation
(“Newkirk”) have entered into that certain Agreement and Plan of Merger, dated
as of July 23, 2006 (the “Merger Agreement”).

B.          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.

C.          Pursuant to subparagraph (a)(9) of Article IX of the Declaration,
the Company’s Board of Trustees has adopted resolutions approving Apollo’s
exemption from the Ownership Limit on the terms and conditions hereinafter set
forth.

AGREEMENT

1.

WAIVER OF OWNERSHIP LIMIT

1.1        Pursuant to Section 7.26 of the Merger Agreement, the Company exempts
Apollo, effective as of the Effective Time (as defined in the Merger Agreement)
and subject to the terms herein, from the Ownership Limit solely (A) to the
extent of Apollo’s ownership of the lesser of (1) the number of shares of Equity
Stock of the Company into which ____________1 NRT OP Units, NRT Common Stock

_________________________

1 Number will equal the number of NRT OP Units held by Apollo at signing which
will not exceed 23,359,046

 

 

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(each as defined in the Merger Agreement) or any combination thereof are
exchangeable pursuant to the Merger (as defined in the Merger Agreement), (2)
the number of shares of Equity Stock of the Company into which NRT OP Units, NRT
Common Stock or combination thereof, owned by Apollo as of the Effective Time,
are exchangeable pursuant to the Merger, and (3) any lesser number of shares of
Equity Stock of the Company owned by Apollo from time to time following the
Effective Time, and (B) upon and subject to Apollo’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 Apollo.

1.2        For avoidance of doubt, (x) following any sale, assignment, transfer
or other disposition by Apollo of NRT OP Units or shares of Equity Stock of the
Company, the exemption granted by the Company hereunder shall exempt Apollo from
the Ownership Limit only with respect to the maximum aggregate number of NRT OP
Units and shares of Equity Stock of the Company, as the case may be, owned by
Apollo immediately after such sale, assignment, transfer or disposition and
after each such sale, assignment, transfer or disposition by Apollo anytime
thereafter and (y) under no circumstances shall this exemption apply to any NRT
OP Units or shares of Equity Stock of the Company acquired by Apollo at any time
after the date of this Agreement.

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
Apollo’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 an “Apollo 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, Apollo 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

 

 

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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        Apollo 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 Apollo to the effect that Apollo
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, Apollo will cooperate with the Company in investigating any direct
or indirect relationship that Apollo and any Person whose ownership of shares of
Equity Stock of the Company would be attributed to Apollo 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 Apollo’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 Apollo requires the exemptions afforded to Apollo under
this Agreement (the “Waiver Period”).

2.4        For purposes of this Agreement, “Apollo Related Tenant” means any
entity (x) in which Apollo 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 witih a written confirmation copy to follow within one business
day by hand, facisimile or overnight delivery) to Apollo and Apollo shall
promptly review any such revisions to the Tenant List (reflecting substitute or
additional tenants) at the request of the Company and recertify

 

 

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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 Apollo 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 Apollo so notifies the Company within the Response
Period, which response shall include Apollo’s percentage owned in such entity;
provided, further, that if such notice is given at a time when either Apollo’s
interest in such entity has a fair market value of less than $1,000,000 or
Apollo 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 Apollo 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. Apollo shall advise the Company of the percentage ownership that
its Related Interest represents in each Apollo Related Tenant not later than
five days following the date of the Company’s request for such information.

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 or which 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 grater than 9.8%. If more than one Exempt Holder
owns shares or other ownership interests with respect to the applicable tenant
that, in the aggregate, amount to 9.8% or greater, then each such Exempt
Holder’s Threshold Percenage in such applicable tenant shall mean the percentage
determined by dividing 9.8% by the number of such Exempt Holders as of the date
of determination. The Company hereby represents and warrants that as of the date
hereof, the Company has granted waivers of Article IX of the Declaration to
those Persons and in such amounts as set forth on Exhibit C hereto.

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.

 

 

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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.

[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

APOLLO

 

 

Lexington Realty Trust

Apollo Real Estate Investment Fund III, L.P.

 

 

By:   /s/ T. Wilson Eglin

By:  Apollo Real Estate Advisors III, L.P.
General Partner

Name: T. Wilson Eglin

 

Title: Chief Executive Officer

By:   /s/ Stuart Koenig

 

Name: Stuart Koenig

 

Title: Vice President

 

 

 

 

Ownership Limit Waiver Agreement (Apollo)

 

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EXHIBIT A TO THE WAIVER

CERTIFICATE OF REPRESENTATIONS AND COVENANTS

FOR

OWNERSHIP LIMIT WAIVER

The undersigned desires that the Ownership Limit Waiver Agreement (the “Waiver
Agreement”) dated as of December 31, 2006, between the undersigned and Lexington
Corporate Realty Trust, a Maryland real estate investment trust (the “Company”),
be applicable to the shares of Equity Stock of the Company 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, Apollo 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 Apollo for its own account.

 

(c)

Except as disclosed to the Company in writing, Apollo 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)

Apollo agrees that during the Waiver Period, it will not increase its ownership
in any of the entities included in the Tenant List attached hereto without the
prior consent of the Company, which consent will be granted based on the
analysis of the shareholdings of all Exempt Holders.

 

(e)

Apollo 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 .

 

 

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(f)

Apollo further represents and warrants to the Company that:

 

(i)

as of the date of execution and delivery hereof; it Beneficially Owns or
Constructively Owns ____ 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.

 

Dated:_________________

Apollo Real Estate Investment Fund III, L.P.

 

By:

Apollo Real Estate Advisors III, L.P., its

General Partner

 

By:

Apollo Real Estate Capital
Advisors III, Inc., its General
Partner

 

 

By: /s/ Stuart Koenig

Name: Stuart Koenig

Title: Vice President

 

 

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SCHEDULE A TO THE CERTIFICATE

TENANT LIST

 

(i) Structure , LLC (Infocrossing Inc.)

Adolphus Associates/Met Life

Advance PCS, Inc.

Airport Center West

Albertson's Inc.

Allied Holdings, Inc.

Allstate Insurance Company

Alstom Powers, Inc.

American Electric Power

AmeriCredit Corporation

Ameritech Services, Inc. (SBC)

ANDA Pharmaceuticals, Inc.

Ansys

Apria Healthcare

ASM Lithography

Associates First Financial Corp./Citigroup

AT&T

Atlantic Parking

Atlas Cold Storage America LLC

Aventis, Inc. (Aventis Pharma Holding GmbH)

Avnet, Inc.

Baker Hughes

Bank of America NA

Bank of the West

Bank One Indiana, N. A.

Bank One/AEP

BASF Corporation

Bay Valley Foods, LLC

Bell South Mobility

Best Buy Co., Inc.

Biovail Pharmaceuticals

Black Canyon Office Center

Blue Cross Blue Shield of South Carolina, Inc.

BMW Financial Services

Boeing North American Services, Inc.(The Boeing Company)

Cadence Design Systems Inc.

CAE Systems

California Culinary Academy

Capital One Services Inc.

Carlson Restaurants Worldwide, Inc. (Carlson Companies, Inc.)

Catalfumo Construction ltd

Chesebrough Ponds/Unilever

Cingular Wireless

 

 

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Circuit City Stores, Inc.

Citizens Bank

City of Buenaventura

Clear Channel Outdoor

Corning

Corporate Express Office Products, Inc. (Buhrmann N.V.)

Cox Communications, Inc.

CSK Auto (Albertsons Guaranty)

Cummins Engine Company Inc.

Daimler Chrysler

Damar

Dana Corp

Employers Reinsurance Corp.

Entergy Arkansas

Entergy Gulf States

Equant

Exel Logistics Inc. (NFC plc)

Experian Information Solution, Inc.

Faiz Development

FCB

Fedderated Department Stores

Federal Express Corporation

Federal Mogul

Federated Department Stores, Inc.

First USA Management Services, Inc.

Food Lion, Inc. (Delhaize America Inc.)

Frontier Corporation

Furrs Cafeterias

Galderma Laboratories

Gartner, Inc

Gateway

Georgia Power Company

GFS Realty, Inc(Giant Food, Inc.)

Giant Foods/Royal Ahold

Goodyear Tire & Rubber

Greenpoint Mortage Funding/North Fork Bancorp Inc.

Greyhound Lines, Inc.

Hagemeyer North America. Inc.

Haggar

Harbor Freight Tools

Harcourt Brace

Heidelberg

Hercules Credit, Inc.

Hershey Foods Corporation

Hibernia Bank

Higgins Development Partners

 

 

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Hillman Fastener

Hnedak Bobo

Honeywell

Honeywell Consumer Products

Honolulu Superblock

Ikon Office Solution, Inc.

Infocrossing Inc.

ING

Ingram Micro, Inc.

Internet Security Systems Inc.

Invensys

Jacobsen Companies

James Hardie Building Products, Inc. (James Hardie NV)

John Wiley, Inc.

Johnson Controls, Inc.

Jones Apparel Group

Jordan Associates

Joseph Campbell

Kelsey Hayes Company

Kerr-McGee Corporation

Kmart Corp

Kohls Department Stores Inc.

Kraft Foods North America, Inc.

KS Management Services, LLP

La-Z-Boy

Lithia Motors

L'Oreal

Lucent Technologies, Inc.

Marsh Supermarkets, Inc.

Martin Marietta (Lockheed Martin)

McGraw Hill

Mervyns

Metris Direct, Inc.

Michaels Stores, Inc.

Mimeo.com, Inc.

Minesota Mining and Manufacturing

Montgomery County Management Company, LLC

Motel 6 Operating, L.P. (Accor SA)

National Louis University / Primms / James Benes

Nevada Power Company

Newpark Resources Inc. (Park 10 Centre)

Nextel Communications of the Mid-Atlantic, Inc.

Nextel of Texas, Inc

Nissan North America

NJ Natural Gas

Nordstrom, Inc.

 

 

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North American Van Lines (SIRVA, Inc.)

Northrop Grumman

Northwest Pipeline Corp.

OCE Printing Systems USA

ODW Logistics

Owens Corning

Owens-Illinois

Pacificare Health Systems, Inc.

Parkway Chevrolet, Inc

Pathmark Stores, Inc.

PerkinElmer Instruments LLC

Playboy

Principal Financial Group

Progressive Casualty Insurance Company

Quest Diagnostics, Inc.

Quick Shop

Quickie Manufacturing Corp.

Raytheon Company

Reed Elsevier, Inc.

Rotron Inc/EG&G/URS

Royal Appliance Mfg. Co.

Ryder Integrated Logistics, Inc. (Ryder Systems, Inc.)

Safeway, Inc.

Sams Real Estate Business Trust

Scandinavian Health Spa, Inc.(Bally Total Fitness Holding Corp.)

Sears, Roebuck & Company

Siemens Dematic Postal Automation

Silverhorn Golf Club

Six Penn Center

SKF USA, Inc.

Sony

Specialty Laboratories

St Paul Fire and Marine Insurance Co.

Steelcase

Structural Dynamics Research Corp.

Sun Trust Bank

Sygma Network, Inc. (Sysco Corporation)

T Mobile

Temic North America

Tenneco Automotive Operating Company, Inc.(Tenneco Automotive, Inc.)

The Hartford Fire Insurance Company

The Kroger Co.

The Shaw Group, Inc.

The Wackenhut Corp.

TI Automotive

Time Customer Service, Inc. (Time, Inc.)

 

 

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T-Mobile

T-Mobile USA

Tower Automotive Products Company

Toys "R" Us, Inc.

Transocean Inc (Park 10 Centre)

Travelers Express Company, Inc

True North Communications, Inc.

Unisource Worldwide, Inc.

United Technologies Corp.

Vastar Resources, Inc.

Veritas

Visiting Nurse Association/Freeman

Wachovia

Walgreen Company

Washington Mutual Home Loans, Inc.

Wells Fargo & Co.

Wells Fargo Home Mortgage, Inc.

Wells Fargo II

Xerox Corporation

 

 

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SCHEDULE B TO THE CERTIFICATE

INDEPENDENT CONTRACTOR LIST

 

B&Z Properties, Inc.

Billingsley Property Services, Inc.

CAC Real Estate Management & Co. Inc.

Capstar Commercial Real Estate Services

CB Richard Ellis, Inc.

Colliers Monroe Friedlander

Crossgates Management, Inc.

Duke Realty Services Limited Partnership

Easlan Capital Inc.

Faison & Associates

Grubb & Ellis Management Services, Inc.

Highwoods Realty Limited Partnership

Holladay Property Services Midwest, Inc.

Jones Lang LaSalle Americas, Inc.

Lauth Management, LLC

LXP Olympe SA

Means-Knaus Partners, LP

Pitcairn

Pizutti Company

PM Realty Group Inc.

Sares Regis Group

Schnitzer Northwest, LLC

SIMEON Commercial Properties

Trammell Crow Dallas/Fort Worth, LTD.

Trammell Crow Services, Inc.

Travis Commercial Real Estate Services, LTD

Winthrop Management, L.P.

 

 

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EXHIBIT B TO THE WAIVER

 

TENANT LIST

 

 

1.

Linens ‘N Things

 

2.

TNT Logistics North America, Inc.

 

 

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EXHIBIT C TO THE WAIVER

 

EXEMPT WAIVER HOLDERS

 

1.

Apollo Real Estate Investment Fund III

2.

Vornado Realty LP

 

 

 

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