Exhibit 10.4

 

 

                                          
                                                     

 

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

THE LEXINGTON MASTER LIMITED PARTNERSHIP

 

THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
December 31, 2006, is entered into by and among LEX GP-1 TRUST, a Delaware
statutory trust, as the general partner (the “General Partner”), and LEX LP-1
TRUST, a Delaware statutory trust (the “Lexington Limited Partner”), and each of
the other persons and entities currently reflected on the books and records of
the Partnership as a Limited Partner in the Partnership, together with any other
Persons who become Partners in the Partnership as provided herein (the “Limited
Partners”).

WHEREAS, the Partnership was formed under the name “The Newkirk Master Limited
Partnership” on October 11, 2001, and, on October 23, 2001, the Partnership
adopted an Agreement of Limited Partnership, which agreement was amended and
restated by that certain Amended and Restated Agreement of Limited Partnership,
dated November 7, 2005 (the “Prior Agreement”);

WHEREAS, on July 23, 2006, Newkirk Realty Trust, Inc., a Maryland corporation
(“NKT”), the general partner of the Partnership, was merged with and into
Lexington Corporate Properties Trust, a Maryland real estate investment trust
(the “Merger”) and Lexington Corporate Properties Trust was renamed Lexington
Realty Trust (“LXP”);

WHEREAS, in connection with the Merger, the Partnership has effected a reverse
split pursuant to which each unit of limited partnership interest in the
Partnership has been converted into .80 units of limited partnership interest in
the Partnership (the “Unit Split”);

WHEREAS, in accordance with the terms of the Prior Agreement, effective as of
the date hereof, the then general partner of the Partnership and a
Majority-in-Interest of the Limited Partners consented to (i) the Unit Split and
(ii) the amendment and restatement of the Prior Agreement as provided for
herein, effective as of the date hereof; and

WHEREAS, immediately following the consummation of the Merger, LXP, as the
surviving entity in the Merger, contributed all of its rights and obligations as
the sole general partner of the Partnership to the General Partner and
15,994,701 units of limited partnership interest in the Partnership to the
Lexington Limited Partner, both of which entities are wholly owned by LXP.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the General Partner hereby amends and restates the
Prior Agreement in its entirety as follows:

 

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ARTICLE 1

DEFINED TERMS

The following definitions shall for all purposes be applied to the following
terms used in this Agreement.

“Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be
amended from time to time.

“Actions” has the meaning set forth in Section 7.5.A hereof.

“Additional Limited Partners” means a Person who is admitted to the Partnership
pursuant to Section 4.2.A.

“Adjusted Capital Account” means the Capital Account maintained for each Partner
as of the end of each Partnership Year (i) increased by any amounts which such
Partner is obligated to restore pursuant to any provision of this Agreement or
is deemed to be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition
of Adjusted Capital Account is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

“Adjusted Capital Account Deficit” means, with respect to any Partner, the
deficit balance, if any, in such Partner’s Adjusted Capital Account as of the
end of the relevant Partnership Year.

“Adjusted Property” means any property the Carrying Value of which has been
adjusted pursuant to Exhibit A hereof. Once an Adjusted Property is deemed
distributed by, and re-contributed to, the Partnership for federal income tax
purposes upon a termination thereof pursuant to Section 708 of the Code, such
property shall thereafter constitute a Contributed Property until the Carrying
Value of such property is further adjusted pursuant to Exhibit A hereof.

“Affiliate” means, with respect to any Person, any Person directly or indirectly
controlling, controlled by or under common control with such Person.

“Agreed Value” means (i) the 704(c) Value of such property or other
consideration in the case of any Contributed Property as of the time of its
contribution to the Partnership, reduced by any liabilities either assumed by
the Partnership upon such contribution or to which such property is subject when
contributed, and (ii) in the case of any property distributed to a Partner by
the Partnership, the Partnership’s Carrying Value of such property at the time
such Property is distributed, reduced by any indebtedness either assumed by such
Partner upon such distribution or to which such property is subject at the time
of distribution under Section 752 of the Code and the Regulations thereunder.

“Agreement” means this Second Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.

 

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“Applicable Percentage” has the meaning set forth in Section 8.4.C.

“Assignee” means a Person to whom one or more Partnership Units held by a
Limited Partner have been transferred in a manner permitted under this
Agreement, but who has not become a Substituted Additional Limited Partner and
who has the rights set forth in Section 11.5.

“Book-Tax Disparities” means, with respect to any item of Contributed Property
or Adjusted Property, as of the date of any determination, the difference
between the Carrying Value of such Contributed Property or Adjusted Property and
the adjusted basis thereof for federal income tax purposes as of such date. A
Partner’s share of the Partnership’s Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference
between such Partner’s Capital Account balance as maintained pursuant to Exhibit
A and the hypothetical balance of such Partner’s Capital Account computed as if
it had been maintained strictly in accordance with federal income tax accounting
principles.

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to
close.

“Capital Account” means the Capital Account maintained for a Partner pursuant to
Exhibit A hereof.

“Capital Contributions” means, with respect to any Partner, any cash, cash
equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Section
4.1 or 4.2 hereof.

“Capital Event” means the sale, refinancing or other disposition of a
Partnership asset outside the ordinary course of the Partnership’s business.

“Carrying Value” means (i) with respect to a Contributed Property or Adjusted
Property, the 704(c) Value of such property reduced (but not below zero) by all
Depreciation with respect to such property charged to the Partners’ Capital
Accounts and (ii) with respect to any other Partnership property, the adjusted
basis of such property for federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from time to
time in accordance with Exhibit A hereof, and to reflect changes, additions or
other adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the General Partner.

“Cash Redemption Amount” means an amount equal to the product of (i) the number
of Partnership Units offered for redemption by the Redeeming Partner, multiplied
by (ii)(a) the average Daily Market Price of the REIT Shares for the twenty (20)
Business Days preceding the Specified Redemption Date multiplied by (b) the
Redemption Factor.

“Certificate” means the Certificate of Limited Partnership relating to the
Partnership filed in the office of the Delaware Secretary of State, as amended
from time to time in accordance with the terms hereof and the Act.

 

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“Class A Partnership Common Unit" shall mean such Partnership Units designated
on the books and records of the Partnership as “Class A Partnership Common
Units”.

“Code” means the Internal Revenue Code of 1986, as amended and in effect from
time to time, as interpreted by the applicable regulations thereunder. Any
reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.

“Common Unit” means a fractional, undivided share of the Partnership Interests
of all Partners issued pursuant to Sections 4.1 and 4.2 including, without
limitation, the Class A Partnership Common Units and the Special Voting
Partnership Units.

“Contributed Property” means each property or other asset, in such form as may
be permitted by the Act, but excluding cash, contributed or deemed contributed
to the Partnership (or deemed contributed to the Partnership on termination and
reconstitution thereof pursuant to Section 708 of the Code). Once the Carrying
Value of a Contributed Property is adjusted pursuant to Exhibit A hereof, such
property shall no longer constitute a Contributed Property for purposes of
Exhibit A hereof, but shall be deemed an Adjusted Property for such purposes.

“Contribution Interest Amount” means the number of Common Units calculated as
follows: (i) if the contributed asset is an interest in an Other Partnership the
product of (a) the number of REIT Shares such contributed interest would be
redeemed for under the terms of the applicable Other Partnership’s partnership
agreement assuming the interests in the Other Partnership held by the
contributing entity had the right to be redeemed and the redemption price could
be satisfied by the delivery of REIT Shares on the same basis as similar
interests in the Other Partnership held by partners not affiliated with LXP and
(b) a fraction, the numerator of which is the Other Partnership Redemption
Factor and the denominator of which is the Redemption Factor, and (ii) with
respect to any other contributed assets, (x) the Agreed Value of such
contributed asset divided by the average Daily Market Price of the REIT Shares
for the twenty (20) Business Days preceding the Contribution Date, divided by
(y) the Redemption Factor.

 

“Contributions” means the contribution by LXP of 100% of its economic interests
in each of Lepercq Corporate Income Fund, L.P., Lepercq Corporate Income Fund
II, L.P., and Net 3 Acquisition L.P.

 

“Cut-Off Date” means the fifth (5th) Business Day after the General Partner’s
receipt of a Notice of Redemption.

“Daily Market Price” means the price of REIT Shares on the relevant date,
determined (a) on the basis of the last reported trading price of REIT Shares as
reported on the New York Stock Exchange (the “NYSE”), or if the REIT Shares are
not then listed on the NYSE, as reported on such national securities exchange
upon which the REIT Shares are listed, or (b) if there is no reported sale or
trade on the day in question, on the basis of the average of the closing bid and
asked quotations regular way so reported, or (c) if REIT Shares are not listed
on the NYSE or on any national securities exchange, on the basis of the high bid
and low asked

 

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quotations regular way on the day in question in the over-the-counter market as
reported by the National Association of Securities Dealers Automated Quotation
System, or, if not so quoted, as reported by the National Quotation Bureau,
Incorporated, or a similar organization.

“Declaration of Trust” means the Declaration of Trust of LXP, as amended or
restated from time to time.

“Depreciation” means, for each fiscal year, an amount equal to the federal
income tax depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset for such year, except that if the Carrying
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such year or other period, Depreciation shall be an
amount which bears the same ratio to such beginning Carrying Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization, or other cost
recovery deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Carrying Value using any reasonable method selected
by the General Partner.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“General Partner” means LEX GP 1 Trust, a Delaware statutory trust, in its
capacity as general partner, or its successors as general partner of the
Partnership.

“General Partner Interest” means a Partnership Interest held by the General
Partner that is a general partner interest. A General Partner Interest shall be
expressed as a number of Partnership Units.

“Immediate Family” means, with respect to any natural Person, such natural
Person’s spouse and such natural Person’s natural or adoptive parents,
descendants, nephews, nieces, brothers, and sisters.

“Incapacity” or “Incapacitated” means (i) as to any individual Partner, death,
total physical disability or entry by a court of competent jurisdiction
adjudicating him incompetent to manage his Person or his estate; (ii) as to any
corporation which is a Partner, the filing of a certificate of dissolution, or
its equivalent, for the corporation or the revocation of its charter; (iii) as
to any partnership which is a Partner, the dissolution and commencement of
winding up of the partnership; (iv) as to any estate which is a Partner, the
distribution by the fiduciary of the estate’s entire interest in the
Partnership; (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief under any bankruptcy, insolvency or other similar law now or hereafter in
effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and
nonappealable order for relief under any Bankruptcy, insolvency or similar law
now or hereafter in effect has been entered against the Partner, (c) the Partner
executes and delivers a general assignment for the benefit of the Partner’s
creditors, (d) the Partner files an answer or other

 

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pleading admitting or failing to contest the material allegations of a petition
filed against the Partner in any proceeding of the nature described in clause
(b) above, (e) the Partner seeks, consents to or acquiesces in the appointment
of a trustee, receiver or liquidator for the Partner or for all or any
substantial part of the Partner’s properties, (f) any proceeding seeking
liquidation, reorganization or other relief of or against such Partner under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner’s consent or acquiescence of a
trustee, receiver or liquidator for the assets of the Partner which such
appointment has not been vacated or stayed within ninety (90) days of such
appointment, or (h) an appointment referred to in clause (g) is not vacated
within ninety (90) days after the expiration of any such stay.

“Indemnitee” means (i) any Person made a party to a proceeding by reason of its
status as (a) the General Partner, or (b) a director of the General Partner or
an officer or employee of the Partnership, the General Partner or LXP and (ii)
such other Persons (including Affiliates of the General Partner, LXP or the
Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.

“Initial Redemption Date” means, unless otherwise indicated in the applicable
partnership unit designation, November 7, 2006; provided, however, the “Initial
Redemption Date” for the Class A Partnership Common Units shall be November 1,
2007.

“IRS” means the Internal Revenue Service, which administers the internal revenue
laws of the United States.

“Limited Partner Interest” means a Partnership Interest held by a Limited
Partner in the Partnership that is a limited partner interest. A Limited Partner
Interest shall be expressed as a number of Partnership Units.

“Limited Partners” means any Person reflected as a Limited Partner on the books
and records of the Partnership, or any Substituted Limited Partner or Additional
Limited Partner, in such Person’s capacity as a Limited Partner in the
Partnership.

“Liquidating Event” has the meaning set forth in Section 13.1.

“Liquidator” has the meaning set forth in Section 13.2.

 

“LP Direction Votes” has the meaning set forth in Section 7.1.A(11).

 

“LXP” means Lexington Realty Trust, a Maryland statutory real estate investment
trust.

“LXP LP” means a Person that is an Affiliate of LXP and which is a Limited
Partner including, without limitation, LXP LP 1 Trust, a Delaware statutory
trust.

“Majority-in-Interest of the Limited Partners” means the vote of Limited
Partners holding a majority of the Partnership Units.

 

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“Net Income” means, for any taxable period, the excess, if any, of the
Partnership’s items of income and gain for such taxable period over the
Partnership’s items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Exhibit A. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Income is subjected to the special
allocation rules in Exhibit B, Net Income or the resulting Net Loss, whichever
the case may be, shall be recomputed without regard to such item.

“Net Loss” means, for any taxable period, the excess, if any, of the
Partnership’s items of loss and deduction for such taxable period over the
Partnership’s items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit A. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Loss is subjected to the special
allocation rules in Exhibit B, Net Loss or the resulting Net Income, whichever
the case may be, shall be recomputed without regard to such item.

“Nonrecourse Built-in Gain” means, with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or negative pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Partners pursuant to Section 2.B of Exhibit B if such properties were
disposed of in a taxable transaction in full satisfaction of such liabilities
and for no other consideration.

“Nonrecourse Deductions” has the meaning set forth in Regulations Section
1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(c).

“Nonrecourse Liability” has the meaning set forth in Regulations Section
1.752-1(a)(2).

“Notice of Redemption” means the Notice of Redemption substantially in the form
of Exhibit C to this Agreement.

“Operating Cash Flow” means, for any period, operating revenue from leases on
real property investments, partnership distributions with respect to
partnerships in which the Partnership has interests, and interest on uninvested
funds and other cash investment returns, less operating expenses, capital
expenditures and regularly scheduled principal and interest payments (exclusive
of balloon payments due at maturity) on outstanding mortgage and other
indebtedness. The General Partner may, in its discretion, reduce Operating Cash
Flow for any period by an amount determined by the General Partner to be
necessary to fund reserves required by the Partnership.

“Other Partnerships” means Lepercq Corporate Income Fund, L.P., Lepercq
Corporate Income Fund II, L.P., Net 3 Acquisition L.P., and such other
partnerships in which LXP or its subsidiary is the general partner and which are
commonly considered “UPREIT partnerships” but shall not include joint ventures
and investment vehicles such as Lexington Acquiport Company, LLC Lexington
Acquiport Company II, LLC, Lexington/Lion Venture L.P., Triple Net Investment
Company LLC, Lexington Columbia L.L.C., that certain tenancy in

 

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common referred to as “Oklahoma City” in LXP’s most recent Annual Report on Form
10-K, LXP Olympe Investments S.àr.l. and Lexington Strategic Asset Corp and
joint ventures and investment vehicles similar to the foregoing.

“Other Partnership Redemption Factor” means the “Redemption Factor” or other
similar term in the applicable Other Partnership’s partnership agreement which
sets the number of REIT Shares issuable upon redemption of a limited partnership
interest in such Other Partnership if the limited partnership interest is being
redeemed for REIT Shares.

“Ownership Limit” means the applicable restriction or restrictions on ownership
of shares of LXP imposed under the Declaration of Trust.

“Partner” means the General Partner or any Limited Partner, and “Partners”
means, collectively, the General Partner and the Limited Partners.

“Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse
Debt, equal to the Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Regulations Section 1.704-2(i)(3).

“Partner Nonrecourse Debt” has the meaning set forth in Regulations Section
1.704-2(b)(4).

“Partner Nonrecourse Deductions” has the meaning set forth in Regulations
Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined
in accordance with the rules of Regulations Section 1.704-2(i)(2).

“Partnership” shall have the meaning set forth in Section 2.3 of this Agreement.

“Partnership Interest” means an ownership interest in the Partnership and
includes any and all benefits to which the holder of such a Partnership Interest
may be entitled as provided in this Agreement, together with all obligations of
such Person to comply with the terms and provisions of this Agreement. A
Partnership Interest shall be expressed as a number of Partnership Units.

“Partnership Minimum Gain” has the meaning set forth in Regulations Section
1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net
increase or decrease in Partnership Minimum Gain, for a Partnership Year shall
be determined in accordance with the rules of Regulations Section 1.704-2(d).

“Partnership Record Date” means the record date established by the General
Partner for the distribution of Operating Cash Flow pursuant to Section 5.1
hereof, which record date shall be the same as the record date established by
LXP for a distribution to its stockholders of some or all of such distribution.

 

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“Partnership Unit” means a fractional, undivided share of the Partnership
Interests of all Partners issued pursuant to Sections 4.1 and 4.2 including,
without limitation, Common Units.

“Partnership Year” means the fiscal year of the Partnership, which shall be the
calendar year.

“Percentage Interest” means, as to a Partner, its interest in the Partnership as
determined by dividing the Partnership Units owned by such Partner by the total
number of Partnership Units then outstanding and as specified on the books and
records of the Partnership, as such may be amended from time to time.

“Person” means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company or other
entity.

“Prior Agreement” means the Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of November 7, 2005.

“Qualified REIT Subsidiary” means a qualified REIT subsidiary of the General
Partner within the meaning of Code Section 856(i)(2).

 

“Recapture Income” means any gain recognized by the Partnership upon the
disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.

“Redeeming Partner” has the meaning set forth in Section 8.4.

“Redemption Amount” means the Cash Redemption Amount or, if the General Partner
so elects pursuant to Section 8.4.A. hereof, the Share Redemption Amount to be
delivered by the Partnership to a Redeeming Partner.

“Redemption Factor” means 1.0, provided that in the event that LXP (i) declares
or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a
distribution to all holders of its outstanding REIT Shares in REIT Shares, (ii)
subdivides its outstanding REIT Shares, or (iii) combines its outstanding REIT
Shares into a smaller number of REIT Shares, the Redemption Factor shall be
adjusted by multiplying the Redemption Factor in effect immediately before such
event by a fraction, the numerator of which shall be the number of REIT Shares
issued and outstanding on the record date for such dividend, distribution,
subdivision or combination (assuming for such purposes that such dividend,
distribution, subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of REIT Shares (determined
without the above assumption) issued and outstanding on the record date for such
dividend distribution, subdivision or combination. Any adjustment to the
Redemption Factor shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.

“Redemption Right” has the meaning set forth in Section 8.4.A. hereof.

 

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“Regulations” means the Income Tax Regulations promulgated under the Code, as
such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).

“REIT” means a real estate investment trust under Section 856 of the Code.

“REIT Requirements” means the requirements for qualification as a REIT under the
Code and Regulations, including, without limitation, the distribution
requirements contained in Section 857(a) of the Code.

“REIT Share” shall mean a common share of LXP, $.0001 par value. A REIT Share
shall also mean an excess share of LXP, $.0001 par value, issued in exchange or
upon conversion of a common share of LXP under the circumstances contemplated by
the Declaration of Trust.

“Residual Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Partnership recognized for federal income tax purposes resulting
from a sale, exchange or other disposition of Contributed Property or Adjusted
Property, to the extent such item of gain or loss is not allocated pursuant to
Section 2.B.l(a) or 2.B.2(a) of Exhibit B to eliminate Book-Tax Disparities.

“Rights” has the meaning set forth in “Share Redemption Amount.”

“704(c) Value” of any Contributed Property means the fair market value of such
property or other consideration at the time of contribution as determined by the
General Partner using such reasonable method of valuation as it may adopt;
provided that the 704(c) Value of any property deemed contributed to the
Partnership for federal income tax purposes upon termination and reconstitution
thereof pursuant to Section 708 of the Code shall be determined in accordance
with Exhibit A hereof. Subject to Exhibit A hereof, the General Partner shall,
in its sole and absolute discretion, use such method as it deems reasonable and
appropriate to allocate the aggregate of the 704(c) Values of Contributed
Properties in a single or integrated transaction among the separate properties
on a basis proportional to their respective fair market values.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Share Redemption Amount” means the number of REIT Shares equal to the product
of the number of Partnership Units offered for redemption by a Redeeming
Partner, multiplied by the Redemption Factor; provided that in the event LXP
issues to all holders of REIT Shares rights, options, warrants or convertible or
exchangeable securities entitling the stockholders to subscribe for or purchase
REIT Shares, or any other securities or property (collectively, the “Rights”)
then the Share Redemption Amount shall also include such rights that a holder of
that number of REIT Shares would be entitled to receive.

“Specified Redemption Date” means the tenth (10th) Business Day after receipt by
the General Partner and LXP of a Notice of Redemption; provided, however, that a
Specified

 

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Redemption Date, as well as the closing of a redemption or an acquisition of
Tendered Units by LXP, the General Partner or an LXP LP pursuant to
Section 8.4.C hereof on any Specified Redemption Date, may be deferred, in the
General Partner’s sole and absolute discretion, for such time (but in any event
not more than one hundred fifty (150) days in the aggregate) as may reasonably
be required to effect, as applicable, (i) compliance with the Securities Act or
other laws (including, but not limited to, (a) state “blue sky” or other
securities laws and (b) the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended), or (ii) satisfaction or waiver of other commercially reasonable and
customary closing conditions and requirements for a transaction of such nature

“Special Voting Partnership Units” means all Partnership Units that were issued
and outstanding on November 7, 2005 other than those Partnership Units held by
the General Partner or by an LXP LP.

“Special Voting Preferred Holder” means NKT Advisors LLC, a Delaware limited
liability company, or any other holder of the Special Voting Preferred Stock.

 

“Special Voting Preferred Stock” means the Special Voting Preferred Stock, par
value $.0001 per share, of LXP.

 

“Special Voting Preferred Direction Exclusions” means the following two
permissible exclusions to the Voting Direction Provision: (1) Vornado will not
be granted LP Direction Votes with respect to the election of members of LXP’s
board of trustees at any time when any affiliate of Vornado is serving or
standing for election as a member of the LXP’s board of trustees and (2) at all
other times, Vornado’s right to LP Direction Votes with respect to the election
of the LXP’s board of trustees will be limited to the number of Special Voting
Partnership Units that Vornado then owns, not to exceed an amount of Special
Voting Partnership Units equal to 9.9% of the Common Shares, on a fully diluted
basis that assumes the acquisition by the General Partner of all Common Units
that are subject to the Redemption Right set forth in Section 8.4.A in exchange
for the Share Redemption Amount (whether or not such Redemption Right is then
exercisable).

“Subsequent Partner” means a Person admitted to the Partnership as a Partner
after the date hereof through the sale or issuance by the Partnership of
additional Partnership Interests and not through the transfer of existing
Partnership Interests.

“Subsidiary” means, with respect to any Person, any corporation, partnership or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.

“Substituted Additional Limited Partner” means a Person who is admitted as an
Additional Limited Partner to the Partnership pursuant to Section 11.4.

“Tenant List” has the meaning set forth in Section 3.3 hereof.

 

“Tendered Units” has the meaning set forth in Section 8.4.A hereof.

 

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“Terminating Capital Transaction” means any sale or other disposition of all or
substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.

“Unrealized Gain” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (i) the fair market value of
such property (as determined under Exhibit A hereof) as of such date, over (ii)
the Carrying Value of such property (prior to any adjustment to be made pursuant
to Exhibit A hereof) as of such date.

“Unrealized Loss” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (i) the Carrying Value of such
property (prior to any adjustment to be made pursuant to Exhibit A hereof) as of
such date, over (ii) the fair market value of such property (as determined under
Exhibit A hereof) as of such date.

“Vornado” means Vornado Realty Trust, a Maryland real estate investment trust,
and each of its Affiliates that are Limited Partners.

“Voting Direction Provision” has the meaning set forth in Section 7.1.A(11)
hereof.

ARTICLE 2

ORGANIZATIONAL MATTERS

 

Section 2.1

Organization.

A.            The Partnership is a limited partnership formed pursuant to the
provisions of the Act and upon the terms and conditions set forth in the Prior
Agreement. The Partners hereby amend and restate the Prior Agreement in its
entirety as of the date hereof. Except as expressly provided herein to the
contrary, the rights and obligations of the Partners and the administration and
termination of the Partnership shall be governed by the Act. The Partnership
Interest of each Partner shall be personal property for all purposes.

 

Section 2.2

Name.

The name of the Partnership is The Lexington Master Limited Partnership. The
Partnership’s business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words “Limited Partnership,” “L.P.,” “Ltd.” or
similar words or letters shall be included in the Partnership’s name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time.

 

Section 2.3

Registered Office and Agent Principal Office.

The address of the registered office of the Partnership in the State of Delaware
is located at 160 Greentree Drive, Suite 101, Dover, Delaware 19904, and the
registered agent for

 

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service of process on the Partnership in the State of Delaware at such
registered office is National Registered Agents, Inc. The principal office of
the Partnership is located at One Penn Plaza, Suite 4015, New York, New York
10119-4015, and may be changed to such other place as the General Partner may
from time to time designate. The Partnership may maintain offices at such other
place or places within or outside the State of Delaware as the General Partner
deems advisable.

 

Section 2.4

Term.

Pursuant to Section 17-217(d) of the Act, the term of the Partnership commenced
on October 11, 2001 and shall continue until the Partnership is dissolved
pursuant to the provisions of Article 13 hereof or as otherwise provided by law.

 

Section 2.5

Power of Attorney.

A.           Each Limited Partner hereby constitutes and appoints the General
Partner, any Liquidator, and authorized officers and attorneys-in-fact of each,
and each of those acting singly, in each case with full power of substitution,
as its true and lawful agent and attorney-in-fact, with full power and authority
in its name, place and stead to:

 

(1)          execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (a) all certificates, documents and other instruments
(including, without limitation, this Agreement and the Certificate and all
amendments, supplements or restatements thereof) that the General Partner or the
Liquidator deems appropriate or necessary to form, qualify or continue the
existence or qualification of the Partnership as a limited partnership(or a
partnership in which the Limited Partners have limited liability) in the State
of Delaware and in all other jurisdictions in which the Partnership may or plans
to conduct business or own property; (b) all instruments that the General
Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its terms; (c)
all conveyances and other instruments or documents that the General Partner or
the Liquidator deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; (d) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to, or other events described in, Article 11, Article 12 or
Article 13 hereof or the Capital Contribution of any Partner; and (e) all
certificates, documents and other instruments relating to the determination of
the rights, preferences and privileges relating to Partnership Interests; and

 

(2)          execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or necessary,
in the sole and absolute discretion of the General Partner or any Liquidator, to
make, evidence, give, confirm or ratify any vote, consent, approval, agreement
or other action which is made or given by the Partners hereunder or is
consistent with the terms of this Agreement or appropriate or necessary, in the
sole and absolute discretion of the General Partner or any Liquidator, to
effectuate the terms or intent of this Agreement.

 

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Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Article 14
hereof or as may be otherwise expressly provided for in this Agreement.

 

B.            The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Limited Partners and Assignees will be relying upon the power
of the General Partner and any Liquidator to act as contemplated by this
Agreement in any filing or other action by it on behalf of the Partnership, and
it shall survive and not be affected by the subsequent Incapacity of any Limited
Partner or Assignee and the Transfer of all or any portion of such Limited
Partner’s or Assignee’s Partnership Units or Partnership Interest and shall
extend to such Limited Partner’s or Assignee’s heirs, successors, assigns and
personal representatives. Each such Limited Partner or Assignee hereby agrees to
be bound by any representation made by the General Partner or any Liquidator,
acting in good faith pursuant to such power of attorney; and each such Limited
Partner or Assignee hereby waives any and all defenses that may be available to
contest, negate or disaffirm the action of the General Partner or any
Liquidator, taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner’s or
the Liquidator’s request therefor, such further designation, powers of attorney
and other instruments as the General Partner or the Liquidator, as the case may
be, deems necessary to effectuate this Agreement and the purposes of the
Partnership.

ARTICLE 3

PURPOSE

 

Section 3.1

Purpose and Business.

The purpose and nature of the business to be conducted by the Partnership is (i)
to conduct any business that may be lawfully conducted by a limited partnership
organized pursuant to the Act; provided that such business shall be limited to
and conducted in such a manner as to permit LXP at all times to be classified as
a REIT, unless LXP ceases to qualify as a REIT for reasons other than the
conduct of the business of the Partnership, (ii) to enter into any partnership,
joint venture or other similar arrangement to engage in any of the foregoing or
to own interests in any entity engaged in any of the foregoing and (iii) to do
anything necessary or incidental to the foregoing. In connection with the
foregoing, and without limiting LXP’s right in its sole discretion to cease
qualifying as a REIT, the Partners acknowledge that LXP’s status as a REIT
inures to the benefit of all the Partners and not solely to LXP.

 

Section 3.2

Powers.

The Partnership shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership; provided that the Partnership shall
not take, or refrain from taking, any action which, in the judgment of the
General Partner, in its sole and absolute discretion, (i) could adversely affect
the ability of LXP to continue to qualify as a REIT under the Code, (ii) could
subject LXP to any additional taxes under the Code or (iii) could violate any
law or regulation of

 

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any governmental body or agency having jurisdiction over LXP or its securities,
unless such action (or inaction) shall have been specifically consented to by
LXP in writing.

 

Section 3.3

Representations and Warranties by the Parties.

Each Limited Partner and Substituted Additional Limited Partner, as a condition
to becoming a Limited Partner or a Substituted Additional Limited Partner,
respectively, shall, by executing this Agreement or a counterpart thereof,
represent and warrant to each other Partner that (i) the consummation of the
transactions contemplated by this Agreement to be performed by such Partner will
not result in a breach or violation of, or a default under, any material
agreement by which such Partner or any of such Partner’s property is bound, or
any statute, regulation, order or other law to which such Partner is subject,
(ii) if such Limited Partner is not an individual, all transactions contemplated
by this Agreement to be performed by it have been duly authorized by all
necessary action, including, without limitation, that of its general partner(s),
committee(s), trustee(s), member(s), manager(s), beneficiaries, directors and/or
shareholder(s), as the case may be, as required, (iii) subject to the last
sentence of this Section 3.3.A, such Partner is neither a “foreign person”
within the meaning of Code Section 1445(f) nor a “foreign partner” within the
meaning of Code Section 1446(e), (iv) such Partner does not own, directly or
indirectly, (a) nine and eight tenths percent (9.8%) or more of the total
combined voting power of all classes of stock entitled to vote, or nine and
eight tenths percent (9.8%) or more of the total number of shares of all classes
of stock, of any corporation that is a tenant of either (A) LXP or any Qualified
REIT Subsidiary, (B) the Partnership or (C) any partnership, venture or limited
liability company of which LXP, any Qualified REIT Subsidiary or the Partnership
is a member, as reflected on the then current tenant list maintained by LXP (the
“Tenant List”) or (b) an interest of nine and eight tenths percent (9.8%) or
more in the assets or net profits of any tenant of either (A) LXP or any
Qualified REIT Subsidiary, (B) the Partnership or (C) any partnership, venture,
or limited liability company of which LXP, any Qualified REIT Subsidiary or the
Partnership is a member, as reflected on the Tenant List and (v) this Agreement
is binding upon, and enforceable against, such Partner in accordance with its
terms. Notwithstanding anything contained herein to the contrary, in the event
that the representation contained in the foregoing clause (iii) would be
inaccurate if given by a Partner, such Partner (x) shall not be required to make
and shall not be deemed to have made such representation, if it delivers to the
General Partner in connection with or prior to its execution of this Agreement
written notice that it may not truthfully make such representation, (y) hereby
agrees that it is subject to, and hereby authorizes the General Partner to
withhold, all withholdings to which such a “foreign person” or “foreign
partner”, as applicable, is subject under the Code and (z) hereby agrees to
cooperate fully with the General Partner with respect to such withholdings,
including by effecting the timely completion and delivery to the General Partner
of all governmental forms required in connection therewith.

 

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ARTICLE 4

CAPITAL CONTRIBUTIONS

 

Section 4.1

Capital Contributions and Percentage Interests of the Partners.

As of the date of this Agreement, each Partner shall own Partnership Units as
set forth on the books and records of the Partnership and shall have a
Percentage Interest in the Partnership as set forth on the books and records of
the Partnership, which Percentage Interest shall be adjusted from time to time
by the General Partner to the extent necessary to accurately reflect
redemptions, Capital Contributions, Capital Events, the issuance of additional
Partnership Units or similar events having an effect on a Partner’s Percentage
Interest. Except as expressly provided herein, the Partners shall have no
obligation to make any additional Capital Contributions or loans to the
Partnership.

 

Section 4.2

Issuances of Additional Partnership Interests.

A.            The General Partner is hereby authorized to cause the Partnership
from time to time to issue to the Partners or other Persons additional
Partnership Units or other Partnership Interests in one or more classes, or one
or more series of any of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to existing Partnership Interests,
all as shall be determined by the General Partner in its sole and absolute
discretion, including, without limitation, (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class or
series of Partnership Interests, (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions, and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership.

B.            Notwithstanding any provision of Section 4.2.A to the contrary, no
such additional Partnership Units or other Partnership Interests shall be issued
to the General Partner, LXP, and LXP LP or any of their Subsidiaries unless

(1)       (a) the additional Partnership Interests are issued in connection with
an issuance of shares of LXP, which shares have designations, preferences and
other rights, all such that the economic interests are substantially similar to
the designations, preferences and other rights of the additional Partnership
Interests issued to the General Partner, LXP, an LXP LP or any of their
Subsidiaries in accordance with Section 4.2.A, and (b) LXP through the General
Partner or the Limited Partner makes a Capital Contribution to the Partnership
of a corresponding amount from the proceeds raised in connection with the
issuance of such shares of LXP,

(2)       the additional Partnership Interests are Common Units issued in
consideration for a contribution by the General Partner, LXP, an LXP LP or their
Subsidiaries of all or a portion of such Person’s ownership interest in an Other
Partnership or other entity or asset and the number of Common Units issued do
not exceed the applicable Contribution Interest Amount; or

(3)       the additional Partnership Interests are issued to all Partners in
proportion to their respective Percentage Interests.

 

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Section 4.3          Not Publicly Traded. The General Partner, on behalf of the
Partnership, shall use commercially reasonable efforts not to take any action
which would result in the Partnership being a “publicly traded partnership”
under and as such term is defined in Section 7704(b) of the Code.

ARTICLE 5

DISTRIBUTIONS

 

Section 5.1

Requirement and Characterization of Distributions.

The General Partner shall distribute from time to time, but not less than
semi-annually, to the Partners who are Partners of the Partnership for such
relevant period an amount determined by the General Partner in its sole
discretion in accordance with their respective Percentage Interests on such
applicable Partnership Record Date for such distributions; provided, that in no
event may a Partner receive a distribution of Operating Cash Flow with respect
to a Partnership Unit if such Partner is entitled to receive a distribution out
of such Operating Cash Flow with respect to a REIT Share for which such
Partnership Unit has been redeemed or exchanged.

 

Section 5.2

Amounts Withheld.

All amounts withheld pursuant to the Code or any provisions of any state or
local tax law and Section 10.4 hereof with respect to any allocations, payment
or distribution to the Partners or the Assignees shall be treated as amounts
distributed to the Partners or the Assignees pursuant to Section 5.1 for all
purposes under this Agreement.

 

Section 5.3

Distributions Upon Liquidation.

Proceeds from a Terminating Capital Transaction, and any other cash received or
reductions in reserves made after commencement of the liquidation of the
Partnership, shall be distributed to the Partners in accordance with Section
13.2.

ARTICLE 6

ALLOCATIONS

 

Section 6.1

Allocations For Capital Account Purposes.

For purposes of maintaining the Capital Accounts and in determining the rights
of the Partners among themselves, the Partnership’s items of income, gain, loss
and deduction (computed in accordance with Exhibit A hereof) shall be allocated
among the Partners in each taxable year (or portion thereof) as provided herein
below.

A.            Net Income. After giving effect to the special allocations set
forth in Section 1 of Exhibit B, Net Income shall be allocated to the holders of
Common Units pro rata in accordance with their respective Percentage Interests.
.

B.            Net Losses. After giving effect to the special allocations set
forth in Exhibit B, Net Losses shall be allocated first, to any Partner having a
positive Capital Account pro rata in the ratio that each such Partner’s positive
Capital Account balance bears to the total

 

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aggregate positive Capital Account balance, and thereafter to the Limited
Partners in accordance with their respective Percentage Interests.

C.            Nonrecourse Liabilities. The Partnership shall allocate
“nonrecourse liabilities” and “excess nonrecourse liabilities” in accordance
with and under any method approved by the applicable regulations under Section
752 of the Code as chosen by the General Partner; provided, however, that the
General Partner shall use reasonable efforts to allocate “excess non-recourse
liabilities” in a manner that will avoid or minimize any potential recapture tax
liability of the partners.

D.            Special Allocations Upon Liquidation. Notwithstanding any
provision in this Article VI to the contrary, Net Income or Net Loss realized in
connection with a Terminating Capital Transaction or for any period thereafter
(and, if necessary, constituent items of income, gain, loss and deduction) shall
be specially allocated among the Partners as required so as to cause liquidating
distributions pursuant to Section 13.2.A(4) hereof to be made in the same
amounts and proportions as would have resulted had such distributions instead
been made pursuant to Section 5.1 hereof.

ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 7.1

Management.

A.            Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are and shall
be exclusively vested in the General Partner. The Limited Partners shall not
have any right to participate in or exercise control or management power over
the business and affairs of the Partnership. The General Partner may not be
removed by the Limited Partners. In addition to the powers now or hereafter
granted to a general partner of a limited partnership under applicable law or
which are granted to the General Partner under any other provision of this
Agreement, the General Partner shall have full power and authority to do all
things deemed necessary or desirable by it to conduct the business of the
Partnership, to exercise all powers set forth in Section 3.2 hereof and to
effectuate the purposes set forth in Section 3.1 hereof, including, without
limitation:

(1)       the making of any expenditures, the lending or borrowing of money
(including, without limitation, making prepayments on loans and borrowing money
to permit the Partnership to make distributions to its Partners in such amounts
as will permit LXP (so long as LXP qualifies as a REIT) to avoid the payment of
any federal income tax (including, for this purpose, any excise tax pursuant to
Section 4981 of the Code) and to make distributions to its stockholders
sufficient to permit LXP to maintain REIT status) and the assumption or
guarantee of, or other contracting for, indebtedness and other liabilities;

(2)       the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any assets of the Partnership or the merger or
other combination of the Partnership with or into another entity;

(3)       subject to Section 7.1E hereof, the use of the assets of the
Partnership for any purpose consistent with the terms of this Agreement and on
any terms the

 

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General Partner sees fit, and the making of capital contributions or loans to
its Subsidiaries or its Affiliates;

(4)       the management, operation, leasing, landscaping, repair, alteration,
demolition or improvement of any real property or improvements owned by the
Partnership or any Subsidiary of the Partnership;

(5)       the negotiation, execution and performance of any contracts,
conveyances or other instruments that the General Partner considers useful or
necessary to the conduct of the Partnership’s operations or the implementation
of the General Partner’s powers under this Agreement;

(6)       the distribution of Partnership cash or other Partnership assets in
accordance with this Agreement;

(7)       the formation of, or acquisition of an interest in, and the
contribution of property to, any further limited or general partnerships or
joint ventures that the General Partner deems desirable;

(8)       the undertaking of any action in connection with the Partnership’s
direct or indirect investment in its Subsidiaries or any other Person
(including, without limitation, the contribution or loan of funds by the
Partnership to such Persons);

(9)       the determination of the fair market value of any Partnership property
distributed in kind using such reasonable method of valuation as the General
Partner may adopt;

(10)     the exercise, directly or indirectly, through any attorney-in-fact
acting under a general or limited power of attorney, of any right, including the
right to vote, appurtenant to any asset or investment held by the Partnership;
and

(11)     the making, execution and delivery of any and all deeds, leases, notes,
deeds to secure debt, mortgages, deeds of trust, security agreements,
conveyances, contracts, guarantees, warranties, indemnities, waivers, releases
or legal instruments or agreements in writing necessary or appropriate in the
judgment of the General Partner for the accomplishment of any of the powers of
the General Partner enumerated in this Agreement; provided, however, that any
agreement which governs the rights of the Special Voting Preferred Stock must
contain a provision (the “Voting Direction Provision”) that requires the Special
Voting Preferred Holder to vote the shares of Special Voting Preferred Stock in
proportion to the votes (the “LP Direction Votes”) that the Special Voting
Preferred Holder receives from the holders of the Special Voting Partnership
Units (other than the General Partner), subject to the Special Voting Preferred
Direction Exclusions. The Special Voting Preferred Holder shall be entitled to
vote its Special Voting Preferred Stock in its sole discretion to the extent
Vornado Realty Trust is not granted LP Direction Votes in respect of its
Partnership Units by virtue of the Special Voting Preferred Direction
Exclusions.

 

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B.            At all times from and after the date hereof, the General Partner
may cause the Partnership to obtain and maintain (i) casualty, liability and
other insurance on the properties of the Partnership and (ii) liability
insurance for the Indemnitees hereunder.

C.            At all times from and after the date hereof, the General Partner
may cause the Partnership to establish and maintain any and all reserves,
working capital accounts and other cash or similar balances in such amounts as
the General Partner, in its sole discretion, deems appropriate and reasonable
from time to time.

D.            In exercising its authority under this Agreement, the General
Partner may, but shall not be obligated to, take into account the tax
consequences to any Partner of any action taken by it. The General Partner and
the Partnership shall not, however, have liability to a Limited Partner under
any circumstances as a result of an income tax liability incurred by such
Limited Partner as a result of an action (or inaction) by the General Partner
pursuant to its authority under this Agreement.

E.             Except as otherwise expressly provided in this Section 7.1E and
notwithstanding anything else in this Agreement to the contrary including,
without limitation, the provisions of Section 7.3 hereof, the General Partner
shall not, without the consent of holders of a majority of the outstanding
Common Units excluding those Common Units held by LXP, the General Partner or an
LXP LP, utilize any Partnership assets except (i) to make payments required
pursuant to Section 7.4 hereof, (ii) make Distributions permitted hereunder, or
(iii) to acquire assets or make loans for the exclusive benefit of the
Partnership; provided, however, any loan made to an Affiliate of the General
Partner must be made on the following terms and conditions: (1) if such loan is
made to an Affiliate of the General Partner in which neither LXP nor any
Affiliate of LXP (other than the Partnership) holds an interest, on such terms
and conditions as determined by the General Partner in its sole discretion; or
(2) in all other cases either (x) if such loan is made prior to the
Contributions being consummated, the terms shall be no more favorable to such
Affiliate than such Affiliate could obtain from a third-party or (y) if such
loan is made from and after the Contributions being consummated, the terms shall
be as determined by the General Partner in its sole discretion but in no event
shall the interest charged on such loan be less than the Applicable Federal
Rate.

 

Section 7.2

Certificate of Limited Partnership.

To the extent that such action is determined by the General Partner to be
reasonable and necessary or appropriate, the General Partner shall file
amendments to the Certificate and do all the things to maintain the Partnership
as a limited partnership (or a partnership in which the limited partners have
limited liability) under the laws of the State of Delaware and each other state,
or the District of Columbia, in which the partnership may elect to do business
or own property. The General Partner shall use all reasonable efforts to cause
to be filed such other certificates or documents as may be reasonable and
necessary or appropriate for the formation, continuation, qualification and
operation of a limited partnership (or a partnership in which the limited
partners have limited liability to the extent provided by applicable law) in the
State of Delaware and any other state, or the District of Columbia, in which the
Partnership may elect to do business or own property.

 

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Section 7.3

Contracts with Affiliates.

A.          The Partnership may lend or contribute funds or other assets to its
Subsidiaries or other Persons in which it has an equity investment, and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.

 

B.          Except as otherwise provided herein and subject to Section 3.1
hereof, the Partnership may transfer assets to joint ventures, limited liability
companies, partnerships, corporations, business trusts or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions consistent with this Agreement and applicable law as
the General Partner, in its sole and absolute discretion, believes to be
advisable.

 

C.          Except as expressly permitted by this Agreement, neither the General
Partner nor any of its Affiliates shall sell, transfer or convey any property to
the Partnership, directly or indirectly, except pursuant to transactions that
are determined by the General Partner in good faith to be fair and reasonable
and which shall have been approved by a majority of the independent trustees of
LXP.

 

D.          The General Partner, in its sole and absolute discretion and without
the approval of the Limited Partners, may propose and adopt on behalf of the
Partnership employee benefit plans funded by the Partnership for the benefit of
employees of the General Partner, the Partnership, Subsidiaries of the
Partnership or any Affiliate of any of them in respect of services performed,
directly or indirectly, for the benefit of the Partnership or any of the
Partnership’s Subsidiaries.

 

E.            Subject to the proviso contained Section 7.1A(11), the General
Partner is expressly authorized to enter into, in the name and on behalf of the
Partnership, any services agreement with Affiliates of any of the Partnership or
the General Partner, on such terms as the General Partner, in its sole and
absolute discretion, believes are advisable.

 

Section 7.4

Reimbursement of LXP.

A.            Except as provided in this Section 7.4 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding distributions,
payments and allocations to which it may be entitled), the General Partner shall
not be compensated for its services as general partner of the Partnership.

B.            The Partnership shall be liable for, and shall reimburse LXP and
the General Partner on a monthly basis, or such other basis as the General
Partner may determine in its sole and absolute discretion, for all sums expended
and all expenses incurred in connection with the Partnership’s business,
including but not limited to, overhead expenses and any issuance of REIT Shares
pursuant to Section 4.2 hereof. Notwithstanding the foregoing, the General
Partner shall equitably adjust any amounts required to be paid pursuant to this
Section 7.4.B. to reflect the fact that LXP and the General Partner are subject
to similar obligations pursuant to the partnership agreements of the Other
Partnerships.

 

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C.            In the event that LXP shall elect to purchase from its
shareholders REIT Shares for the purpose of delivering such REIT Shares to
satisfy an obligation under any dividend reinvestment program adopted by LXP,
any employee stock purchase plan adopted by LXP, or any similar obligation or
arrangement undertaken by LXP in the future or for the purpose of retiring such
REIT Shares, the purchase price paid by LXP for such REIT Shares and any other
expenses incurred by LXP in connection with such purchase shall be considered
expenses of the Partnership and shall be advanced or reimbursed to LXP, subject
to the condition that (i) if such REIT Shares subsequently are sold by LXP, LXP
shall pay to the Partnership, through the General Partner or an LXP LP, any
proceeds received by LXP for such REIT Shares (which sales proceeds shall
include the amount of dividends reinvested under any dividend reinvestment or
similar program; provided that a transfer of REIT Shares for Partnership Units
pursuant to Section 8.4 would not be considered a sale for such purpose); and
(ii) if such REIT Shares are not retransferred by LXP within thirty (30) days
after the purchase thereof, or LXP otherwise determines not to retransfer such
REIT Shares, the General Partner shall cause the Partnership to redeem a number
of Partnership Units held by LXP as a Limited Partner (whether directly or
indirectly through a Subsidiary), equal to the result obtained by dividing the
number of such REIT Shares by the Redemption Factor (in which case such
advancement of expenses shall be treated as having been made as a distribution
in redemption of such number of Partnership Units by LXP). Notwithstanding the
foregoing, the General Partner shall equitably adjust any amounts required to be
paid pursuant to this Section 7.4.C. to reflect the fact that LXP and the
General Partner are subject to similar obligations pursuant to the partnership
agreements of the Other Partnerships.

 

Section 7.5

Indemnification.

A.            To the fullest extent permitted by applicable law, the Partnership
shall indemnify each Indemnitee from and against any and all losses, claims,
damages, liabilities(whether joint or several), expenses (including, without
limitation, attorney’s fees and other legal fees and expenses), judgments,
fines, settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership (“Actions”) as set forth in
this Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the Partnership shall
not indemnify an Indemnitee (i) for the act or omission of the Indemnitee
material to the matter giving rise to the proceeding which was committed in bad
faith or was the result of active and deliberate dishonesty; (ii) for any
transaction for which such Indemnitee received an improper personal benefit (in
money, property or services) in violation or breach of any provision of this
Agreement; or (iii) in the case of a criminal proceeding, for an unlawful act or
omission by the Indemnitee for which the Indemnitee had reasonable cause to
believe was unlawful. Without limitation, the foregoing indemnity shall extend
to any liability of any Indemnitee, pursuant to a loan guaranty or otherwise,
for any indebtedness of the Partnership or any Subsidiary of the Partnership
(including, without limitation, any indebtedness which the Partnership or any
Subsidiary of the Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the Partnership, to
enter into one or more indemnity agreements consistent with the provisions of
this Section 7.5 in favor of any Indemnitee having or potentially having
liability for any such indebtedness. It is the intention of this Section 7.5.A
that the Partnership indemnify each Indemnitee to the fullest extent permitted
by law. The termination of any proceeding by

 

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judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this Section 7.5.A.
The termination of any proceeding by conviction of an Indemnitee or upon a plea
of nolo contendere or its equivalent by an Indemnitee, or an entry of an order
of probation against an Indemnitee prior to judgment, does not create a
presumption that such Indemnitee acted in a manner contrary to that specified in
this Section 7.5.A with respect to the subject matter of such proceeding. Any
indemnification pursuant to this Section 7.5 shall be made only out of the
assets of the Partnership, and neither the General Partner nor any Limited
Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.5.

B.            To the fullest extent permitted by law, expenses incurred by an
Indemnitee who is a party to a proceeding or otherwise subject to or the focus
of or is involved in any Action shall be paid or reimbursed by the Partnership
as incurred by the Indemnitee in advance of the final disposition of the Action
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee
of the Indemnitee’s good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in this Section 7.5.A has been
met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount if it shall ultimately be determined that the standard of conduct has
not been met.

C.            The indemnification provided by this Section 7.5 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of the Indemnitee unless otherwise provided in a
written agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.

D.            The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of any of the Indemnitees and such other Persons
as the General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership’s activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.

E.             Any liabilities which an Indemnitee incurs as a result of acting
on behalf of the Partnership or the General Partner (whether as a fiduciary or
otherwise) in connection with the operation, administration or maintenance of an
employee benefit plan or any related trust or funding mechanism (whether such
liabilities are in the form of excise taxes assessed by the IRS, penalties
assessed by the Department of Labor, restitutions to such a plan or trust or
other funding mechanism or to a participant or beneficiary of such plan, trust
or other funding mechanism, or otherwise) shall be treated as liabilities or
judgments or fines under this Section 7.5, unless such liabilities arise as a
result of (i) the act or omission of the Indemnitee material to the matter
giving rise to the proceeding which was committed in bad faith or was the result
of active and deliberate dishonesty; (ii) any transaction for which such
Indemnitee received an improper personal benefit (in money, property or
services) in violation or breach of any provision of this Agreement; or (iii) in
the case of a criminal proceeding, an unlawful act or

 

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omission by the Indemnitee for which the Indemnitee had reasonable cause to
believe was unlawful.

F.             In no event may an Indemnitee subject any of the Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.

G.            An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.5 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

H.            The provisions of this Section 7.5 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.5 or any provision hereof
shall be prospective only and shall not in any way affect the obligations of the
Partnership or the limitations on the Partnership’s liability to any Indemnitee
under this Section 7.5 as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification or
repeal, regardless of when such claims may arise or be asserted.

 

Section 7.6

Liability of the General Partner.

 

A.           Notwithstanding anything to the contrary set forth in this
Agreement, neither the General Partner nor any of its directors or officers
shall be liable or accountable in damages or otherwise to the Partnership, any
Partners or any Assignees for losses sustained, liabilities incurred or benefits
not derived as a result of errors in judgment or mistakes of fact or law or of
any act or omission if the General Partner or such director or officer acted in
good faith.

 

B.           That the General Partner is under no obligation to give priority to
the separate interests of the Limited Partners or the General Partner’s
shareholders (including, without limitation, the tax consequences to Limited
Partners, Assignees or the General Partner’s shareholders) in deciding whether
to cause the Partnership to take (or decline to take) any actions.

 

C.           Subject to its obligations and duties as General Partner set forth
in Section 7.1.A hereof, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its employees or agents (subject to
the supervision and control of the General Partner). The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.

 

D.           To the extent that, at law or in equity, the General Partner has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or the Limited Partners, the General Partner shall not be liable to
the Partnership or to any other Partner for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the

 

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extent that they restrict the duties and liabilities of the General Partner
otherwise existing at law or in equity, to replace such other duties and
liabilities of such General Partner.

 

E.            Notwithstanding anything herein to the contrary, except for fraud,
willful misconduct or gross negligence, or pursuant to any express indemnities
given to the Partnership by any Partner pursuant to any other written
instrument, no Partner shall have any personal liability whatsoever, to the
Partnership or to the other Partner(s), for the debts or liabilities of the
Partnership or the Partnership’s obligations hereunder, and the full recourse of
the other Partner(s) shall be limited to the interest of that Partner in the
Partnership. To the fullest extent permitted by law, no officer, director or
shareholder of the General Partner shall be liable to the Partnership for money
damages except for (i) active and deliberate dishonesty established by a
non-appealable final judgment or (ii) actual receipt of an improper benefit or
profit in money, property or services. Without limitation of the foregoing, and
except for fraud, willful misconduct or gross negligence, or pursuant to any
such express indemnity, no property or assets of any Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. This Agreement is executed by the officers of the General
Partner solely as officers of the same and not in their own individual
capacities.

 

F.            Any amendment, modification or repeal of this Section 7.6 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner’s, and its officers’ and directors’,
liability to the Partnership and the Limited Partners under this Section 7.6 as
in effect immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.

 

 

Section 7.7

Other Matters Concerning the General Partner.

 

A.           The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties.

 

B.           The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers, architects, engineers,
environmental consultants and other consultants and advisers selected by it, and
any act taken or omitted to be taken in reliance upon the opinion of such
Persons as to matters that the General Partner reasonably believes to be within
such Person’s professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such opinion.

 

C.           The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General

 

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Partner in the power of attorney, have full power and authority to do and
perform all and every act and duty that is permitted or required to be done by
the General Partner hereunder.

 

D.            Notwithstanding any other provision of this Agreement or the Act,
any action of the General Partner on behalf of the Partnership or any decision
of the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of LXP to continue to qualify as a
REIT, (ii) for LXP otherwise to satisfy the REIT Requirements, or (iii) to avoid
LXP incurring any taxes under the Code, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.

ARTICLE 8

RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS

 

Section 8.1

Management of Business.

The Limited Partners and Assignees shall not take part in the operation,
management or control of the Partnership’s business, transact any business in
the Partnership’s name or have the power to sign documents for or otherwise bind
the Partnership. The transaction of any such business by the General Partner,
any of its Affiliates or any officer, director, employee, partner, agent or
trustee of the General Partner, the Partnership or any of their Affiliates, in
their capacity as such, shall not affect, impair or eliminate the limitations on
the liability of the Limited Partners or Assignees under this Agreement.

 

Section 8.2

Outside Activities of Limited Partners.

Neither the Partnership nor any Partner shall have any rights by virtue of this
Agreement in any business ventures of any Additional Limited Partner or
Assignee. None of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any business ventures of any other Person (other than the General
Partner to the extent expressly provided herein) and such Person shall have no
obligation pursuant to this Agreement or otherwise to offer any interest in any
such business ventures to the Partnership, any Limited Partner or any such other
Person, even if such opportunity is of a character which, if presented to the
Partnership, any Limited Partner, or such other Person, could be taken by such
Person.

 

Section 8.3

Return of Capital.

Except pursuant to the right of redemption set forth in Section 8.4, no Partner
shall be entitled to the withdrawal or return of his Capital Contribution,
except to the extent of distributions made pursuant to this Agreement or upon
termination of the Partnership as provided herein.

 

Section 8.4

Redemption Rights.

A.            Subject to Section 8.4.B or C and subject to Section 11.3.D, on or
at any time after the Initial Redemption Date, each Limited Partner (other than
an LXP LP) shall have the right (the “Redemption Right”) to require the
Partnership to redeem on a Specified

 

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Redemption Date all or a portion of the Partnership Units held by such Limited
Partner (the “Tendered Units”) for the Cash Redemption Amount to be delivered by
the Partnership; provided, however, that, at the option of the General Partner,
such Partnership Units may be redeemed for the Share Redemption Amount to be
delivered by the Partnership. The Redemption Right shall be exercised pursuant
to a Notice of Redemption delivered to the General Partner by the Limited
Partner who is exercising the Redemption Right (the “Redeeming Partner”). A
Limited Partner may not exercise the Redemption Right for fewer than five
hundred (500) Partnership Units or, if such Limited Partner holds fewer than
five hundred (500) Partnership Units, all of the Partnership Units held by such
Limited 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 Assignee of any Limited Partner may exercise the
rights of such Limited Partner pursuant to this Section 8.4, and such Limited
Partner shall be deemed to have assigned such rights to such Assignee and shall
be bound by the exercise of such rights by such Limited Partner’s Assignee. In
connection with any exercise of such rights by such Assignee on behalf of such
Limited Partner, the Redemption Amount shall be delivered by the Partnership
directly to such Assignee and not to such Limited Partner.

B.            Notwithstanding any other provision of this Agreement, on and
after the date on which the aggregate Percentage Interests of the Limited
Partners (other than LXP LPs) are less than one percent (1%), the General
Partner may require the remaining Limited Partners to redeem their Partnership
Units for the Redemption Amount to be delivered by the Partnership. The right of
the General Partner under this Section 8.4.B shall be exercised pursuant to a
notice delivered to all remaining Limited Partners. Such redemption shall be
effective on the date specified in the notice, which date shall be at least 30
days after the notice is sent to the Limited Partners.

C.            Notwithstanding the provisions of Section 8.4.A hereof, on or
before the close of business on the Cut-Off Date, the General Partner may, in
its sole and absolute discretion but subject to the Ownership Limit and the
transfer restrictions and other limitations of the Declaration of Trust, elect
to acquire, up to 100% of the Tendered Units from the Redeeming Partner (the
percentage elected to be acquired by the General Partner being referred to as
the “Applicable Percentage”) in exchange for the Share Redemption Amount. It
shall be a condition to the General Partner’s ability to deliver the Share
Redemption Amount that any such consideration shall consist of REIT Shares which
shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable. If the General Partner so elects, on the Specified Redemption
Date the Redeeming Partner shall sell the Applicable Percentage of the Tendered
Units to the General Partner in exchange for REIT Shares. The Redeeming Partner
shall submit (i) such information, certification or affidavit as the General
Partner or LXP may reasonably require in connection with the application of the
Ownership Limit and any other restrictions and limitations imposed by the
Declaration of Trust on such acquisition and (ii) such written representations,
investment letters, legal opinions or other instruments necessary in the view of
the General Partner or LXP to effect compliance with the Securities Act. In the
event of a purchase of any Tendered Units by the General Partner pursuant to
this Section 8.4.C, the Redeeming Partner shall no longer have the right to
cause the Partnership to effect a Redemption of such Tendered Units, and, upon
notice to the Redeeming Partner by the General Partner given on or before the
close of business on the Cut-Off Date, that the General Partner has elected to
acquire some or all of the Tendered Units pursuant to this Section 8.4.C, the
Partnership shall

 

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have no obligation to effect a Redemption of the Tendered Units as to which the
notice by the General Partner relates. The Share Redemption Amount shall be
delivered by the General Partner as duly authorized, validly issued, fully paid
and non-assessable REIT Shares and, if applicable, Rights, free of any pledge,
lien, encumbrance or restriction, other than the Ownership Limit and other
restrictions provided in the Declaration of Trust, the Securities Act and
relevant state securities or “blue sky” laws. Neither any Limited Partner whose
Tendered Units are acquired by the General Partner pursuant to this Section
8.4.C, any Partner nor any other interested Person shall have any right to
require or cause LXP to register, qualify or list any REIT Shares owned or held
by such Person, whether or not such REIT Shares are issued pursuant to this
Section 8.4.C, with the SEC, with any state securities commissioner, department
or agency, under the Securities Act or the Exchange Act or with any stock
exchange; provided, however, that this limitation shall not be in derogation of
any registration or similar rights granted pursuant to any other written
agreement between the LXP and any such Person. Notwithstanding any delay in such
delivery, the Redeeming Partner shall be deemed the owner of such REIT Shares
and Rights for all purposes, including, without limitation, rights to vote or
consent, receive dividends, and exercise rights, as of the Specified Redemption
Date. REIT Shares issued upon an acquisition of the Tendered Units by the LXP
pursuant to this Section 8.4.C may contain such legends regarding restrictions
under the Securities Act and applicable state securities laws as the LXP in good
faith determines to be necessary or advisable in order to ensure compliance with
such laws.

D.            Notwithstanding the provisions of Section 8.4.A, a Subsequent
Partner shall not be entitled to exercise the Redemption Right pursuant to
Section 8.4.A if the delivery of REIT Shares to such Subsequent Partner on the
Specified Redemption Date would be prohibited under the Declaration of Trust and
shall be subject in any event to the issuance of REIT Shares being in compliance
with all applicable Federal and State securities laws.

Notwithstanding any other provision of this Agreement, upon the occurrence of a
Capital Event prior to the Specified Redemption Date, the proceeds of which are
distributed to the Partners, and ultimately proportionately to the shareholders
of LXP, the Percentage Interest of each Partner shall, from the date of such
Capital Event, be equal to (i) the product of (a) such Partner’s Percentage
Interest prior to such Capital Event and (b) the difference between (x) the fair
market value of the assets of the Partnership and (y) any amounts distributed to
such Partner as a result of the Capital Event, divided by (ii) the fair market
value of the assets of the Partnership after such distribution. The General
Partner shall adjust the number of Partnership Units owned by each Partner to
appropriately reflect the adjustments made by this Section 8.4.D.

 

Section 8.5

Registration of Common Shares.

A.            In connection with any REIT Shares delivered to any Limited
Partner upon the redemption of Partnership Units held by such Limited Partner,
it is intended that such Limited Partner be able to resell publicly such REIT
Shares pursuant to the provisions of Rule 144 under the Securities Act, but
without the need to comply with the holding period requirements of Rule 144(d).
To the extent that counsel to LXP reasonably determines that resales of any such
REIT Shares cannot be made pursuant to the provisions of Rule 144, and without
the need to comply with the holding period requirements of Rule 144(d), LXP
agrees, at its sole cost and expense, if requested by a Majority-in-Interest of
the Limited Partners

 

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(including REIT Shares delivered upon exchange of such Partnership Units) held
by such Limited Partners to include REIT Shares that may be (or already have
been) acquired by any Limited Partner in an effective registration statement
under the Securities Act of 1933; provided that LXP’s obligations to include
such REIT Shares in such an effective registration statement shall be
conditioned upon a Majority-in-Interest of the Limited Partners (including REIT
Shares delivered upon exchange of such Partnership Units) agreeing to be bound
by a customary registration rights agreements to be prepared by LXP. In
addition, any Limited Partner whose REIT Shares are included in such
registration statement must also agree to be bound by the terms and provisions
of a registration rights agreement.

B.            In order to facilitate the sale of REIT Shares issued in exchange
for Special Voting Partnership Units pursuant to the terms of Section 8.4
hereof, LXP agrees to cause a Registration Statement on Form S-3 to be filed
with the SEC within 45 days of the date hereof registering for sale up to the
number of REIT Shares issuable upon exchange of the Special Voting Partnership
Units.

 

Section 8.6

Mergers.

The General Partner shall not permit the Partnership to be a party to any
consolidation, merger, combination or other transaction pursuant to which the
Partnership Common Units are converted or changed into or exchanged for
partnership interests and/or other securities of another operating partnership
in an UPREIT or similar structure, in each case without the affirmative vote of
the holders of at least a Majority-in-Interest of the Limited Partners, unless
upon consummation of any such consolidation, merger, combination or other
transaction, the holders of Common Units shall receive shares of stock or
beneficial interest or other equity securities of the parent REIT of such
operating partnership with preferences, rights and privileges not materially
inferior to the preferences, rights and privileges of Common Shares. This
Section 8.6 shall not be amended or modified without the prior consent of a
Majority-in-Interest of the Limited Partners.

ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

 

Section 9.1

Records and Accounting.

The General Partner shall keep or cause to be kept at the principal office of
the Partnership those records and documents required to be maintained by the Act
and other books and records deemed by the General Partner to be appropriate with
respect to the Partnership’s business. The books of the Partnership shall be
maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles, or on such other basis
as the General Partner determines to be necessary or appropriate.

Section 9.2  Fiscal Year.

The fiscal year of the Partnership shall be the calendar year.

ARTICLE 10

TAX MATTERS

 

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Section 10.1

Preparation of Tax Returns.

The General Partner shall arrange for the preparation and timely filing of all
returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for federal and state income tax purposes and shall
use all reasonable efforts to furnish, within 180 days of the close of each
taxable year, the tax information reasonably required by the Limited Partners
for federal and state income tax reporting purposes.

 

Section 10.2

Tax Elections.

Except as otherwise provided herein, the General Partner shall, in its sole and
absolute discretion, determine whether to make any available election pursuant
to the Code; provided that, the General Partner shall make the applicable
adjustments under Section 754 of the Code in accordance with applicable
Regulations thereunder. The General Partner shall have the right to seek to
revoke any such elections (including, without limitation, the election under
Section 754 of the Code) upon the General Partner’s determination in its sole
and absolute discretion that such revocation is in the best interests of the
Partners.

 

Section 10.3

Tax Matters Partner.

A.            The General Partner shall be the “tax matters partner” of the
Partnership for federal income tax purposes. The tax matters partner is
authorized but not required, to take any action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review proceeding to
the extent permitted by law.

B.            The taking of any action and the incurring of any expense by the
tax matters partner in connection with any such audit or proceeding, except to
the extent required by law, is a matter in the sole and absolute discretion of
the tax matters partner and the provisions relating to indemnification of the
General Partner set forth in Section 7.5 of this Agreement shall be fully
applicable to the tax matters partner in its capacity as such.

C.            The tax matters partner shall receive no compensation for its
services. All third party costs and expenses incurred by the tax matters partner
in performing its duties as such (including legal and accounting fees and
expenses) shall be borne by the Partnership. Nothing herein shall be construed
to restrict the Partnership from engaging an accounting firm to assist the tax
matters partner in discharging its duties hereunder, so long as the compensation
paid by the Partnership for such services is reasonable.

 

Section 10.4

Withholding.

Each Limited Partner hereby authorizes the Partnership to withhold from or pay
on behalf of or with respect to such Limited Partner any amount of federal,
state, local, or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement.
Any amount paid on behalf of or with respect to a Limited Partner shall
constitute a loan by the Partnership to such Limited Partner which loan shall be
repaid by such Limited Partner within fifteen (15) days after notice from the
General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would

 

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otherwise be made to such Limited Partner or (ii) the General Partner
determines, in its sole and absolute discretion, that such payment may be
satisfied out of the available funds of the Partnership which would, but for
such payment, be distributed to Limited Partner. Any amounts withheld pursuant
to the foregoing clauses (i) or (ii) shall be treated as having been distributed
to such Limited Partner. Any amounts payable by a Limited Partner hereunder
shall bear interest at the base rate on corporate loans at large United States
money center commercial banks, as published from time to time in The Wall Street
Journal, such interest to accrue from the date such amount is due (i.e., fifteen
(15) days after demand) until such amount is paid in full.

ARTICLE 11

TRANSFERS AND WITHDRAWALS

 

Section 11.1

Transfer.

A.            The term “transfer,” when used in this Article 11 with respect to
a Partnership Unit, shall be deemed to refer to a transaction by which a Partner
purports to assign all or any part of its Partnership Interest to another
Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
The term “transfer” when used in this Article 11 does not include any redemption
of Partnership Units by a Limited Partner or acquisition of Partnership Units
from a Limited Partner by the General Partner pursuant to Section 8.4 except as
otherwise provided in Section 8.4 or Section 11.3.D.

B.            No Partnership Interest shall be transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article 11.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article 11 shall be null and void.

 

Section 11.2

Transfer of Partnership Interests by the General Partner.

A.            The General Partner may not transfer any of its General Partner
Interest except to a Qualified REIT Subsidiary or other entity owned directly or
indirectly by LXP or as otherwise permitted hereunder. The General Partner may
not withdraw as General Partner except in connection with the complete transfer
of its Partnership Interest as permitted hereunder.

B.            If LXP acquires any or all of the Partnership Interests of the
General Partner or an LXP LP as permitted hereunder, LXP agrees that it will not
transfer any of its Partnership Interests, except to an LXP LP or to the General
Partner. LXP may not withdraw as Partner except in connection with the complete
transfer of any Partnership Interest as permitted hereunder.

C.            Any transferee who acquires a Partnership Interest under this
Section 11.2 may become a Substituted Additional Limited Partner, or a successor
General Partner upon such terms specified by the General Partner, including the
delivery to the General Partner of such documents or instruments, including
powers of attorney, as may be required in the discretion of the General Partner
in order to effect such Person’s admission as a Partner.

 

Section 11.3

Limited Partners’ Rights to Transfer.

 

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A.            Subject to the provisions of Section 11.3.E, no Limited Partner
shall have the right to transfer all or any portion of its Partnership Interest,
or any of such Limited Partner’s rights as a Limited Partner, without the prior
written consent of the General Partner, which consent may be given or withheld
by the General Partner in its sole and absolute discretion. Any purported
transfer of a Partnership Interest by a Limited Partner in violation of this
Section 11.3.A shall be void ab initio and shall not be given effect for any
purpose by the Partnership.

B.            If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such
Limited Partner’s estate shall have all the rights of a Limited Partner, but no
more rights than those enjoyed by other Limited Partners, as the case may be,
for the purpose of settling or managing the estate and such power as the
Incapacitated Limited Partner possessed to transfer all or any part of its
interest in the Partnership. The Incapacity of a Limited Partner, in and of
itself, shall not dissolve or terminate the Partnership.

C.            The General Partner may prohibit any transfer otherwise permitted
under Section 11.3.E by a Limited Partner of his Partnership Units (i) if, in
the opinion of legal counsel to the Partnership, such transfer would require
filing of a registration statement under the Securities Act or would otherwise
violate any federal, state, or foreign securities laws or regulations applicable
to the Partnership or the Partnership Units or, (ii) if the transferring Limited
Partner, fails or is unable to obtain and deliver to the Partnership, after
request therefor is made by the General Partner, a legal opinion from counsel
acceptable to the General Partner, addressed to the Partnership and the General
Partner, that such registration is not required in connection with such transfer
and that such transfer does not violate any federal, state or foreign securities
laws or regulations applicable to the Partnership or the Partnership Units.

D.            No transfer (including any redemption of any Partnership Unit
pursuant to Section 8.4 hereof) by a Limited Partner of its Partnership Units
may be made to any Person if, during the taxable year of the Partnership, the
sum of the percentage interests in capital or profits (as determined in
accordance with Treasury Regulation Section 1.7704-1(k)) of the Partnership
transferred exceeds two percent of the total interests in the Partnership’s
capital or profits, unless (i) in the opinion of legal counsel for the
Partnership, such transfer would not result in the Partnership being treated as
a publicly traded partnership within the meaning of Section 7704(b) of the Code
or treated as an association taxable as a corporation or(ii) such transfer is
described in any of paragraphs (e), (f) and (g) of Treasury Regulation Section
1.7704-1. The Partnership shall take all actions reasonably available to it to
avoid treatment of the Partnership as a publicly traded partnership with the
meaning of Section 7704(b) of the Code or otherwise as an association taxable as
a corporation. In no event may such transfer be effectuated through an
“established securities market” or a “secondary market (or the substantial
equivalent thereof)” within the meaning of Section 7704(b) of the Code. No
transfer (including any redemption of any Partnership Unit pursuant to Section
8.4 hereof) by a Limited Partner of its Partnership Units may be made to any
Person if, in the opinion of legal counsel for the Partnership, it would cause
LXP to lose its REIT status under the Code.

E.             Notwithstanding the provisions of Section 11.3.A (but subject to
the provisions of Section 11.3.C and 11.3.D), a Limited Partner may, with or
without the consent of the General Partner, transfer all or a portion of his
Partnership Units to (i)(a) a member of his

 

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Immediate Family, or a trust for the benefit of a member of his Immediate
Family, (b) an organization that qualifies under Section 501(c)(3) of the Code
and that is not a private foundation within the meaning of Section 509(a) of the
Code, (c) in the case of a Partner that is a partnership or a limited liability
company, a partner or member in the Limited Partner in a distribution by that
Limited Partner to its partners or members under the partnership agreement or
operating agreement of such Limited Partner or (d) any Person that is at least
95% beneficially owned (as determined in accordance with Rule 13d-3 of the
Exchange Act) by the transferring Limited Partner or its beneficial owners or
(ii) a lender as security for a loan made to or guaranteed by the Limited
Partner, provided that in connection with any such transfer the lender does not
acquire greater rights with respect to the Partnership Units than those held by
the transferring Limited Partner.

 

Section 11.4

Substituted Additional Limited Partners.

A.            No Limited Partner shall have the right to substitute a transferee
in his place. The General Partner shall, however, have the right to consent to
the admission of a transferee of the interest of a Limited Partner pursuant to
this Section 11.4 as a Substituted Additional Limited Partner which consent may
be given or withheld by the General Partner in its sole and absolute discretion.
The General Partner’s failure or refusal to permit a transferee of any such
interests to become a Substituted Additional Limited Partner shall not give rise
to any cause of action against the Partnership or any Partner.

B.            A transferee who has been admitted as a Substituted Additional
Limited Partner in accordance with this Article 11 shall have all the rights and
powers and be subject to all the restrictions and liabilities of the transferor
Limited Partner under this Agreement.

C.            Upon the admission of a Substituted Additional Limited Partner,
the General Partner shall amend the books and records of the Partnership to
reflect the name, address, number of Partnership Units, and Percentage Interest
of such Substituted Additional Limited Partner, and to eliminate or adjust, if
necessary, the name, address and interest of the predecessor of such Substituted
Additional Limited Partner.

 

Section 11.5

Assignees.

If the General Partner, in its sole and absolute discretion, does not consent to
the admission of any permitted transferee under Section 11.3 as an Additional
Limited Partner, as described in Section 11.4, such transferee shall be
considered an Assignee for purposes of this Agreement. An Assignee shall be
deemed to have had assigned to it, and shall be entitled to receive,
distributions from the Partnership and the share of Net Income, Net Losses,
Recapture Income, and any other items of income, gain, loss, deduction and
credit of the Partnership attributable to the Partnership Units assigned to such
transferee, but shall not be deemed to be a holder of Partnership Units for any
other purpose under this Agreement, and shall not be entitled to vote such
Partnership Units in any matter presented to the Limited Partners for a vote
(such Partnership Units being deemed to have been voted on such matter in the
same proportion as all other Partnership Units held by Limited Partners or other
Limited Partners, where applicable, are voted). In the event any such transferee
desires to make a further assignment of any such Partnership Units, such
transferee shall be subject to all the provisions of this Article 11 to the

 

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same extent and in the same manner as any Limited Partner desiring to make an
assignment of Partnership Units.

 

Section 11.6

General Provisions.

A.            No Limited Partner may withdraw from the Partnership other than as
a result of a permitted transfer of all of such Limited Partner’s Partnership
Units in accordance with this Article 11 or pursuant to redemption of all of its
Partnership Units under Section 8.4.

B.            Any Limited Partner who shall transfer all of his Partnership
Units in a transfer permitted pursuant to this Article 11 shall cease to be a
Limited Partner upon the admission of an Assignee of such Partnership Units as a
Substituted Additional Limited Partner. Similarly, any Limited Partner who shall
transfer all of his Partnership Units pursuant to a redemption of all of his
Partnership Units under Section 8.4 shall cease to be a Limited Partner.

C.            Transfers pursuant to this Article 11 may only be made on the
first day of a fiscal quarter of the Partnership, unless the General Partner
otherwise agrees.

D.            If any Partnership Unit is transferred or assigned in compliance
with the provisions of this Article 11, or redeemed or transferred pursuant to
Section 8.4 on any day other than the first day of a Partnership Year, then Net
Income, Net Losses, each item thereof and all other items attributable to such
Partnership Unit for such Partnership Year shall be allocated to the transferor
Partner or the Redeeming Partner, as the case may be, and, in the case of a
transfer or assignment other than a redemption, to the transferee Partner, by
taking into account their varying interests during the Partnership Year in
accordance with Section 706(d) of the Code, using the interim closing of the
books method. Solely for purposes of making such allocations, each of such items
for the calendar month in which a transfer or assignment occurs shall be
allocated to the transferee Partner, and none of such items for the calendar
month in which a transfer or a redemption occurs shall be allocated to the
transferor Partner or the Redeeming Partner, as the case may be. All
distributions of Operating Cash Flow attributable to such Partnership Unit with
respect to which the Partnership Record Date is before the date of such
transfer, assignment or redemption shall be made to the transferor Partner or
the Redeeming Partner, as the case may be, and, in the case of a transfer or
assignment other than a redemption, all distributions of Operating Cash Flow
thereafter attributable to such Partnership Unit shall be made to the transferee
Partner.

 

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ARTICLE 12

ADMISSION OF PARTNERS

 

Section 12.1

Admission of Subsequent Partner.

No Person shall be admitted as a Partner except in accordance with the terms of
this Agreement and upon obtaining the consent of the General Partner. Any
prospective Partner must submit to the General Partner (i) evidence of
acceptance in form satisfactory to the General Partner of all of the terms and
conditions of this Agreement, and (ii) such other documents or instruments,
including powers of attorney, as may be required in the discretion of the
General Partner in order to effect such Person’s admission as a Partner.

A.            The admission of any Person as a Subsequent Partner shall become
effective on the date upon which the name of such Person is recorded in the
books and records of the Partnership, following the consent of the General
Partner to such admission.

B.            If any Subsequent Partner is admitted to the Partnership on any
day other than the first day of a Partnership Year, then Net Income, Net Losses,
each item thereof and all other items allocable among Partners and Assignees for
such Partnership Year shall be allocated among such Subsequent Partner and all
other Partners and Assignees by taking into account their varying interests
during the Partnership Year in accordance with Section 706(d) of the Code, using
the interim closing of the books method. Solely for purposes of making such
allocations, each of such items for the calendar month in which an admission of
any Subsequent Partner occurs shall be allocated among all the Partners and
Assignees including such Limited Partner. All distributions of Operating Cash
Flow with respect to which the Partnership Record Date is before the date of
such admission shall be made solely to Partners and Assignees other than the
Subsequent Partner, and all distributions of Operating Cash Flow thereafter
shall be made to all the Partners and Assignees including such Subsequent
Partner.

 

Section 12.2

Amendment of Agreement and Certificate of Limited Partnership.

For the admission to the Partnership of any Partner, the General Partner shall
take all steps necessary and appropriate under the Act to amend the records of
the Partnership and, if necessary, to prepare as soon as practicable an
amendment of this Agreement and, if required by law, shall prepare and file an
amendment to the Certificate.

 

Section 12.3

Limit on Number of Partners.

If the Partnership shall no longer be a reporting company under the Exchange
Act, then unless otherwise permitted by the General Partner, no Person shall be
admitted to the Partnership as a Limited Partner if the effect of such admission
would be to cause the Partnership to have a number of Partners (including as
Partners for this purpose those Persons indirectly owning an interest in the
Partnership through another partnership, a limited liability company, a
subchapter S corporation or a grantor trust) that would cause the Partnership to
become a reporting company under the Exchange Act.

 

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ARTICLE 13

DISSOLUTION, LIQUIDATION AND TERMINATION

 

Section 13.1

Dissolution.

The Partnership shall not be dissolved by the admission of Substituted
Additional Limited Partners or Subsequent Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership. The Partnership shall dissolve, and
its affairs shall be wound up, upon the first to occur of any of the following
(“Liquidating Events”):

A.            an event of withdrawal of the General Partner, as defined in the
Act, unless (i) at the time of such event there is at least one remaining
general partner of the Partnership who carries on the business of the
Partnership (and each remaining general partner of the Partnership is hereby
authorized to carry on the business of the Partnership in such an event) or (ii)
within ninety (90) days after such event, all Partners agree in writing to
continue the business of the Partnership and to the appointment, effective as of
the date of such event, of LXP as the General Partner of the Partnership (and
LXP agrees to become a general partner of the Partnership);

B.            entry of a decree of judicial dissolution of the Partnership
pursuant to the provision of the Act; or

C.            the sale of all or substantially all of the assets and properties
of the Partnership.

 

Section 13.2

Winding Up.

A.            Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Partners.
No Partner shall take any action that is inconsistent with, or not necessary to
or appropriate for, the winding up of the Partnership’s business and affairs.
The General Partner or, in the event there is no remaining General Partner, any
Person elected by a Majority-in-Interest of the Limited Partners (the General
Partner or such other Person being referred to herein as the “Liquidator”) shall
be responsible for overseeing the winding up and dissolution of the Partnership
and shall take full account of the Partnership’s liabilities and property and
the Partnership property shall be liquidated as promptly as is consistent with
obtaining the fair value thereof, and the proceeds therefrom shall be applied
and distributed in the following order:

(1)       First, to the satisfaction of all of the Partnership’s debts and
liabilities, including all contingent, conditional or immature claims and
obligations to creditors other than the Partners (whether by payment or the
making of reasonable provision for payment thereof);

(2)       Second, to the payment and discharge of all of the Partnership’s debts
and liabilities to the General Partner;

 

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(3)      Third, to the payment and discharge of all of the Partnership’s debts
and liabilities to the other Partners;

(4)       The balance if any, to the Partners in accordance with the positive
Capital Account balances of the Partners, after giving effect to all
contributions, distributions, and allocations for all periods.

The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.

B.            Notwithstanding the provisions of Section 13.2.A hereof which
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership’s assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion (subject to
its obligation to gradually settle and close the Partnership’s business under
Section 17-803 of the Act), defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of the Partnership
(including to those Partners as creditors).

 

Section 13.3

Negative Capital Accounts.

No Partner, general or limited, shall be liable to the Partnership or to any
other Partner for any negative balance outstanding in each such Partner’s
Capital Account, whether such negative Capital Account results from the
allocation of Net Losses, or other items of deduction and loss to such Partner
or from distributions to such Partner.

 

Section 13.4

Rights of the Limited Partners.

Except as otherwise provided in this Agreement, the Limited Partners shall look
solely to the assets of the Partnership for the return of its Capital
Contribution and shall have no right or power to demand or receive property
other than cash from the Partnership.

 

Section 13.5

Waiver of Partition.

Each Partner hereby waives any right to partition of the Partnership property.

ARTICLE 14

AMENDMENT OF PARTNERSHIP AGREEMENT

 

Section 14.1

Amendments.

A.           Amendments to this Agreement may be proposed by the General Partner
or by a Majority-in-Interest of the Limited Partners. Following such proposal,
the General Partner shall submit any proposed amendment to the Limited Partners.
The General Partner shall seek the written consent of the Limited Partners on
the proposed amendment or shall call a meeting to vote thereon and to transact
any other business that the General Partner may deem appropriate. For purposes
of obtaining a written consent, the General Partner may require a response
within a reasonable specified time, but not less than fifteen (15) days, and
failure to

 

37

 

 

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respond in such time period shall constitute a consent that is consistent with
the General Partner’s recommendation with respect to the proposal; provided,
however, that an action shall become effective at such time as requisite
consents are received even if prior to such specified time.

 

B.          Except as otherwise specifically provided herein, the General
Partner shall not, without the prior consent of a Majority-in-Interest of the
Limited Partners, amend, modify or terminate this Agreement.

 

C.          Notwithstanding Section 14.1.B hereof, the General Partner shall
have the power, (i) with the consent of Vornado only to amend the definition of
“Special Voting Preferred Direction Exclusions” and (ii) without the consent of
the Limited Partners, to amend this Agreement as may be required to facilitate
or implement any of the following purposes:

 

(1)       to add to the obligations of the General Partner or surrender any
right or power granted to the General Partner or any Affiliate of the General
Partner for the benefit of the Limited Partners;

 

(2)         to reflect the admission, substitution or withdrawal of Partners or
the termination of the Partnership in accordance with this Agreement;

 

(3)         to reflect a change that is of an inconsequential nature and does
not adversely affect the Limited Partners in any material respect, or to cure
any ambiguity, correct or supplement any provision in this Agreement not
inconsistent with law or with other provisions, or make other changes with
respect to matters arising under this Agreement that will not be inconsistent
with law or with the provisions of this Agreement;

 

(4)         to satisfy any requirements, conditions or guidelines contained in
any order, directive, opinion, ruling or regulation of a federal or state agency
or contained in federal or state law;

 

(5)          (a) to reflect such changes as are reasonably necessary for the
General Partner to maintain or restore LXP’s status as a REIT or to satisfy the
REIT Requirements; or (b) to reflect the Transfer of all or any part of a
Partnership Interest between the General Partner and any Qualified REIT
Subsidiary;

 

(6)         to modify the manner in which Capital Accounts are computed (but
only to the extent set forth in the definition of “Capital Account” or
contemplated by the Code or the Regulations); and

 

(7)         to issue additional Partnership Interests in accordance with
Section 4.2.

 

D.          Notwithstanding Sections 14.1.B and 14.1.C hereof, this Agreement
shall not be amended, and no action may be taken by the General Partner, without
the consent of each Partner adversely affected thereby, if such amendment or
action would (i) convert a Limited

 

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Partner Interest in the Partnership into a General Partner Interest (except as a
result of the General Partner acquiring such Partnership Interest), (ii) modify
the limited liability of a Limited Partner, (iii) alter the rights of any
Partner to receive the distributions to which such Partner is entitled, pursuant
to Article V or Section 13.2.A hereof, or alter the allocations specified in
Article VI hereof (except as otherwise expressly permitted herein), (iv) alter
or modify the Redemption Rights, Cash Redemption Amount, or Share Redemption
Amount as set forth in Section 8.4 hereof, or amend or modify any related
definitions, (v) permit the removal of the General Partner without its consent
or (vi) amend this Section 14.1.D; provided, however, that the consent of each
Partner adversely affected shall not be required for any amendment or action
that affects all Partners holding the same class or series of Partnership Units
on a uniform or pro rata basis. Further, no amendment may alter the restrictions
on the General Partner’s authority set forth elsewhere in this Section 14.2
without the consent specified therein. Any such amendment or action consented to
by any Partner shall be effective as to that Partner, notwithstanding the
absence of such consent by any other Partner.

 

ARTICLE 15

GENERAL PROVISIONS

 

Section 15.1

Addresses and Notice.

Any notice, demand, request or report required or permitted to be given or made
to a Partner or Assignee under this Agreement shall be in writing and shall be
deemed given or made when delivered in person or when sent by first class United
States mail or by other means of written communication to the Partner or
Assignee at the address set forth on the books and records of the Partnership.

 

Section 15.2

Titles and Captions.

All article or section titles or captions in this Agreement are for convenience
only. They shall not be deemed part of this Agreement and in no way define,
limit, extend or describe the scope or intent of any provisions hereof. Except
as specifically provided otherwise, references to “Articles” and “Sections” are
to Articles and Sections of this Agreement.

 

Section 15.3

Pronouns and Plurals.

Whenever the context may require, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa. Each
reference herein to Partnership Units held by the General Partner or a Limited
Partner shall be deemed to be a reference to Partnership Units held by such
Partner in its role as such.

 

Section 15.4

Further Action.

The parties shall execute and deliver all documents, provide all information and
take or refrain from taking action as may be necessary or appropriate to achieve
the purposes of this Agreement.

 

Section 15.5

Binding Effect.

 

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This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

 

Section 15.6

Waiver.

No failure by any party to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or
remedy consequent upon a breach thereof shall constitute waiver or any such
breach or any other covenant, duty, agreement or condition.

 

Section 15.7

Counterparts.

This Agreement may be executed in counterparts, all of which together shall
constitute one agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affirming its
signature hereto.

 

Section 15.8

Applicable Law.

This Agreement shall be construed and enforced in accordance with and governed
by the laws of the State of Delaware, without regard to the principles of
conflicts of law.

 

Section 15.9

Invalidity of Provisions.

If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

 

Section 15.10

Entire Agreement.

This Agreement contains the entire understanding and agreement among the
Partners with respect to the subject matter hereof and supersedes the Prior
Agreement and any other prior written or oral understandings or agreements among
them with respect thereto.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal
as of the date first written above.

GENERAL PARTNER:

 

LEX GP-1 TRUST

 

 

By: /s/ T. Wilson Eglin

Name: T. Wilson Eglin

Title: Chief Executive Officer

 

 

LIMITED PARTNERS:

 

LEX LP-1 TRUST

 

 

By: /s/ T. Wilson Eglin

Name: T. Wilson Eglin

Title: Chief Executive Officer

 

LEX GP-1 TRUST, on behalf of and as attorney in fact for each of the persons and
entities currently reflected on the books and records of the Partnership as a
Limited Partner in the Partnership

 

 

By: /s/ T. Wilson Eglin

Name: T. Wilson Eglin

Title: Chief Executive Officer

 

Second Amended and Restated Agreement of Limited Partnership of the Lexington
MLP

 

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EXHIBIT A

CAPITAL ACCOUNT MAINTENANCE

1.

Capital Accounts of the Partners

A.           The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the rules of Regulations Section 1.704-1(b)(2)(iv).
Such Capital Account shall be increased by (i) the amount of all Capital
Contributions and any other deemed contributions made by such Partner to the
Partnership pursuant to this Agreement and (ii) all items of Partnership income
and gain (including income and gain exempt from tax) computed in accordance with
Section 1.B hereof and allocated to such Partner pursuant to Section 6.1.A of
the Agreement and Exhibit B hereof, and decreased by (x) the amount of cash or
Agreed Value of all actual and deemed distributions of cash or property made to
such Partner pursuant to this Agreement and (y) all items of Partnership
deduction and loss computed in accordance with Section 1.B hereof and allocated
to such Partner pursuant to Section 6.1.B of the Agreement and Exhibit B hereof.

B.           For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners’ Capital Accounts, unless
otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:

(1)       Except as otherwise provided in Regulation Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section 754 of the
Code which may be made by the Partnership; provided that the amounts of any
adjustments to the adjusted bases of the assets of the Partnership made pursuant
to Section 734 of the Code as a result of the distribution of property by the
Partnership to a Partner (to the extent that such adjustments have not
previously been reflected in the Partners’ Capital Accounts) shall be reflected
in the Capital Accounts of the Partners in the manner and subject to the
limitations prescribed in Regulations Section 1.704-1(b)(2)(iv)(m)(4).

(2)       The computation of all items of income, gain, loss and deduction shall
be made without regard to the fact that items described in Sections 705(a)(1)(B)
or 705(a)(2)(B) of the Code are not includable in gross income or are neither
currently deductible nor capitalized for federal income tax purposes.

(3)       Any income, gain or loss attributable to the taxable disposition of
any Partnership property shall be determined as if the adjusted basis of such
property as of such date of disposition were equal in amount to the
Partnership’s Carrying Value with respect to such property as of such date.

 

 

A-1

 

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(4)      In lieu of the depreciation, amortization, and other cash recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such fiscal year.

(5)       In the event the Carrying Value of any Partnership Asset is adjusted
pursuant to Section 1.D hereof, the amount of any such adjustment shall be taken
into account as gain or loss from the disposition of such asset.

(6)       Any items specially allocated under Section 2 of Exhibit B hereof
shall not be taken into account.

C.           Generally, a transferee (including any Assignee) of a Partnership
Unit shall succeed to a pro rata portion of the Capital Account of the
transferor.

D.           (1)         Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section 1.D.(2), the Carrying Values of
all Partnership assets shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property, as
of the times the adjustments provided in Section 1.D.(2) hereto are made, as if
such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of
each such property and allocated pursuant to Section 6.1 of the Agreement.

(2)       Such adjustments may be made, in the discretion of the General
Partner, as of the following times: (a) immediately prior to the acquisition of
an additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis Capital Contribution; (b) immediately prior
to the distribution by the Partnership to a Partner of more than a de minimis
amount of property as consideration for an interest in the Partnership; and (c)
immediately prior to the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g).

(3)       In accordance with Regulations Section 1.704-1(b)(2)(iv)(e) the
Carrying Value of Partnership assets distributed in kind shall be adjusted
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as of the time any such asset is
distributed.

(4)       In determining Unrealized Gain or Unrealized Loss for purposes of this
Exhibit A, the aggregate cash amount and fair market value of all Partnership
assets (including cash or cash equivalents) shall be determined by the General
Partner using such reasonable method of valuation as it may adopt, or in the
case of a liquidating distribution pursuant to Article 13 of the Agreement, be
determined and allocated by the Liquidator using such reasonable methods of
valuation as it may adopt. The General Partner, or the Liquidator, as the case
may be, shall allocate such aggregate value among the assets of the Partnership
(in such manner as it determines in its sole and absolute discretion to arrive
at a fair market value for individual properties).

E.           The provisions of this Agreement (including this Exhibit A and the
other Exhibits to this Agreement) relating to the maintenance of Capital
Accounts are intended to comply with Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such Regulations. In the
event the General Partner shall determine that it is

 

A-2

 

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prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed property or which
are assumed by the Partnership, the General Partner, or the Limited Partners),
are computed in order to comply with such Regulations, the General Partner may
make such modification, provided that it is not likely to have a material effect
on the amounts distributable to any Person pursuant to Article 13 of the
Agreement upon the dissolution of the Partnership. The General Partner also
shall (i) make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership Capital reflected on the Partnership’s balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q),
and (ii) make any appropriate modifications in the event unanticipated events
might otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b).

2.

No Interest

No interest shall be paid by the Partnership on Capital Contributions or on
balances in Partners’ Capital Accounts.

3.

No Withdrawal

No Partner shall be entitled to withdraw any part of his Capital Contributions
or his Capital Account or to receive any distribution from the Partnership,
except as provided in this Agreement.

 

A-3

 

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EXHIBIT B

SPECIAL ALLOCATION RULES

1.

Special Allocation Rules

Notwithstanding any other provision of the Agreement or this Exhibit B, the
following special allocations shall be made in the following order:

A.           Minimum Gain Chargeback. Notwithstanding the provisions of Section
6.1 of the Agreement or any other provisions of this Exhibit B, if there is a
net decrease in Partnership Minimum Gain during any Partnership Year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner’s share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(f)(6). This Section
l.A is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and for purposes of this net decrease only, each
Partner’s Adjusted Capital Account Deficit shall be determined prior to any
other allocations pursuant to Section 6.1 of this Agreement with respect to such
Partnership Year and without regard to any decrease in Partner Minimum Gain
during such Partnership Year.

B.           Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Section 6.1 of the Agreement or any other provisions of this
Exhibit B (except Section l.A. hereof), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
Year, each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to such
Partner’s share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2(i)(4). This Section 1.B is intended to comply
with the minimum gain chargeback requirement in such Section of the Regulations
and shall be interpreted consistently therewith. Solely for the purposes of this
Section 1.B, each Partner’s Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to Section 6.1 of the Agreement or this
Exhibit B with respect to such Partnership Year, other than allocations-pursuant
to Section 1.A hereof.

C.           Qualified Income Offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections l.A and l.B hereof, such Partner has an Adjusted Capital Account
Deficit, items of Partnership income and gain shall be specifically allocated to
such

 

 

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Partner in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, its Adjusted Capital Account Deficit created by such
adjustments, allocations or distributions as quickly as possible.

D.           Nonrecourse Deductions. Nonrecourse Deductions for any Partnership
Year shall be allocated to the Partners in accordance with their respective
Percentage Interests.

E.            Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions
for any Partnership Year shall be specially allocated to the Partner who bears
the economic risk of loss with respect to the Partner Nonrecourse Debt to which
such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(2).

F.            Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to
be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Regulations.

2.

Allocations for Tax Purposes

A.           Except as otherwise provided in this Section 2, for federal income
tax purposes, each item of income, gain, loss and deduction shall be allocated
among the Partners in the same manner as its correlative item of “book” income,
gain, loss or deduction is allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit B.

B.           In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss and
deduction shall be allocated for federal income tax purposes among the Partners
as follows:

(1)         (a)          In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners consistent with the
principles of Section 704(c) of the Code that takes into account the variation
between the 704(c) Value of such property and its adjusted basis at the time of
contribution; and

(b)          any item of Residual Gain or Residual Loss attributable to a
Contributed Property shall be allocated among the Partners in the same manner as
its correlative item of “book” gain or loss is allocated pursuant to Section 6.1
of the Agreement and Section 1 of this Exhibit B.

 

(2)

(a)

In the case of an Adjusted Property, such items shall

(1)          first, be allocated among the Partners in a manner consistent with
the principles of Section 704(c) of the Code to take into account the Unrealized
Gain or Unrealized Loss attributable to such property and the allocations
thereof pursuant to Exhibit A and

 

 

B-2

 

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(2)         second, in the event such property was originally a Contributed
Property, be allocated among the Partners in a manner consistent with Section
2.B.(1) of this Exhibit B; and

(b)          any item of Residual Gain or Residual Loss attributable to an
Adjusted Property shall be allocated among the Partners in the same manner as
its correlative item of “book” gain or loss is allocated pursuant to Section 6.1
of the Agreement and Section 1 of this Exhibit B.

(3)       All other items of income, gain, loss and deduction shall be allocated
among the Partners in the same manner as their correlative item of “book” gain
or loss is allocated pursuant to Section 6.1 of the Agreement and Section 1 of
this Exhibit B.

C.           To the extent Regulations promulgated pursuant to 704(c) of the
Code permit a partnership to utilize creative methods to eliminate the
disparities between the value of property and its adjusted basis (including,
without limitation, the implementation of curative allocations), the General
Partner shall have the authority to elect the method used by the Partnership and
such election shall be binding on the Partners.

Without limiting the foregoing, the General Partner shall take all steps
(including, without limitation, implementing curative allocations) that it
determines are necessary or appropriate to ensure that the amount of taxable
gain required to be recognized by the General Partner upon a disposition by the
Partnership of any Contributed Property or Adjusted Property does not exceed the
sum of (i) the gain that would be recognized by the General Partner if such
property had an adjusted tax basis at the time of disposition equal to the
704(c) Value of such property plus (ii) the deductions for depreciation,
amortization or other cost recovery actually allowed to the General Partner with
respect to such property for federal income tax purposes (after giving effect to
the “ceiling rule”).

D.           Notwithstanding the foregoing, with respect to any Contributed
Property or Adjusted Property owned by the Partnership on the date hereof, the
Partnership shall use the traditional method set forth in Regulations Section
1.704-3(b).

 

 

B-3

 

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EXHIBIT C

NOTICE OF REDEMPTION

The undersigned Limited Partner hereby irrevocably (i) redeems ___________
Partnership Units in The Lexington Master Limited Partnership in accordance with
the terms of the Second Amended and Restated Agreement of Limited Partnership of
The Lexington Master Limited Partnership, as amended, and the Redemption Right
referred to therein, (ii) surrenders such Partnership Units and all right, title
and interest therein, and (iii) directs that the Redemption Amount deliverable
upon exercise of the Redemption Right be delivered to the address and placed in
the name(s) and at the address(es) specified below. The undersigned hereby
represents, warrants, certifies and agrees (a) that the undersigned has good,
marketable and unencumbered title to such Partnership Units, free and clear of
the rights or interests of any other person or entity, (b) that the undersigned
has the full right, power and authority to redeem and surrender such Partnership
Units as provided herein, (c) that the undersigned has obtained the consent or
approval of all persons or entities, if any, having the right to consent to or
approve such redemption and surrender, (d) that if the undersigned is acquiring
REIT Shares, the undersigned is doing so with the understanding that such REIT
Shares may only be resold or distributed pursuant to a registration statement
under the Securities Act of 1933 or in a transaction exempt from the
registration requirements of such Act and (e) that Lexington Corporate
Properties Trust may refuse to transfer such REIT Shares as to which evidence
satisfactory to it of such registration or exemption is not provided to it.

Dated: _____________

Name of Limited Partner:

________________________________________

(Signature of Limited Partner)

 

________________________________________

(Street Address)

 

________________________________________

(City) (State) (Zip Code)

 

Signature Guaranteed by:

_________________________________________

If REIT Shares are issued, issue them to:

Please insert social security or identifying number:

Name:

 

 

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SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

THE LEXINGTON MASTER LIMITED PARTNERSHIP

Dated as of December 31, 2006