Exhibit 10.2

 

 

Execution Version

 

 

 

 

 

 

 

 

PURCHASE AGREEMENT

 

among

 

LEXINGTON REALTY TRUST,

 

 

LXP CAPITAL TRUST I

 

 

and

 

BEAR, STEARNS & CO. INC.

 

________________

 

Dated as of March 21, 2007

 

________________

 

 

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PURCHASE AGREEMENT

($96,875,000 Trust Preferred Securities)

THIS PURCHASE AGREEMENT, dated as of March 21, 2007 (this “Purchase Agreement”),
is entered into among Lexington Realty Trust, a Maryland real estate investment
trust (the “Company”), and LXP Capital Trust I, a Delaware statutory trust (the
“Trust”, and together with the Company, the “Sellers”), on the one hand, and
Bear, Stearns & Co. Inc. or its assignee (the “Purchaser”), on the other hand.

WITNESSETH:

WHEREAS, the Sellers propose to issue and sell Ninety-Six Thousand Eight Hundred
Seventy-Five (96,875) Floating Rate Preferred Securities of the Trust, having a
stated liquidation amount of $1,000 per security, bearing a fixed rate of 6.804%
per annum through the interest payment date in April 2017 and a variable rate,
reset quarterly, equal to LIBOR (as defined in the Indenture (as defined below))
plus 1.70% thereafter (the “Preferred Securities”);

WHEREAS, the proceeds from the sale of the Preferred Securities will be combined
with proceeds from the sale by the Trust to the Company of its common securities
(the “Common Securities”), and will be used by the Trust to purchase Ninety-Nine
Million Eight Hundred Seventy-Eight Thousand One Hundred Twenty-Five
($99,878,125) in principal amount of the unsecured junior subordinated notes of
the Company (the “Junior Subordinated Notes”);

WHEREAS, the Preferred Securities and the Common Securities for the Trust will
be issued pursuant to the Amended and Restated Trust Agreement (the “Trust
Agreement”), dated as of the Closing Date (as defined below), among the Company,
as depositor, The Bank of New York Trust Company, National Association, a
national banking association, as property trustee (in such capacity, the
“Property Trustee”), The Bank of New York (Delaware), a national banking
association, as Delaware trustee (in such capacity, the “Delaware Trustee”), the
Administrative Trustees named therein (in such capacities, the “Administrative
Trustees”); and

WHEREAS, the Junior Subordinated Notes will be issued pursuant to a Junior
Subordinated Indenture, dated as of the Closing Date (the “Indenture”), between
the Company and The Bank of New York Trust Company, National Association, a
national banking association, as indenture trustee (in such capacity, the
“Indenture Trustee”).

NOW, THEREFORE, in consideration of the mutual agreements and subject to the
terms and conditions herein set forth, the parties hereto agree as follows:

1.             Definitions. The Preferred Securities, the Common Securities and
the Junior Subordinated Notes are collectively referred to herein as the
“Securities.” This Purchase Agreement, the Indenture, the Trust Agreement and
the Securities are collectively referred to herein as the “Operative Documents.”
All other capitalized terms used but not defined in this Purchase Agreement
shall have the respective meanings ascribed thereto in the Indenture.

 

 

 

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2.

Purchase and Sale of the Preferred Securities.

(a)                              The Sellers agree to sell to the Purchaser, and
the Purchaser agrees to purchase from the Sellers, the Preferred Securities for
an amount (the “Purchase Price”) equal to Ninety-Six Million Eight Hundred
Seventy-Five Thousand Dollars ($96,875,000); provided, however, that the
Sellers’ obligation to sell the Preferred Securities to the Purchaser and
consummate the transactions contemplated by this Agreement are conditioned on
the purchase of additional Preferred Securities of the Trust pursuant to each of
the other purchase agreements, dated as of the date hereof, by and among the
Sellers, on the one hand, and the Purchaser named therein, on the other. The
Sellers shall use the Purchase Price, together with the proceeds from the sale
of the Common Securities, to purchase the Junior Subordinated Notes.

(b)                              Delivery or transfer of, and payment for, the
Preferred Securities shall be made at 11:00 A.M. New York time, on March 21,
2007 (such date and time of delivery and payment for the Preferred Securities
being herein called the “Closing Date”). The Preferred Securities shall be
transferred and delivered to the Purchaser against the payment of the Purchase
Price to the Sellers made by wire transfer in immediately available funds on the
Closing Date to a U.S. account designated in writing by the Company at least two
business days prior to the Closing Date.

(c)                              Delivery of the Preferred Securities shall be
made at such location, and in such names and denominations, as the Purchaser
shall designate at least two business days in advance of the Closing Date. The
Company and the Trust agree to have the Preferred Securities available for
inspection and checking by the Purchaser in New York, New York, not later than
2:00 P.M. New York time on the business day prior to the Closing Date. The
closing for the purchase and sale of the Preferred Securities shall occur at the
offices of Thelen Reid Brown Raysman & Steiner LLP, 875 Third Avenue, New York,
NY 10022, or such other place as the parties hereto shall agree.

3.             Conditions. The obligations of the parties under this Purchase
Agreement are subject to the following conditions:

(a)                              The representations and warranties contained
herein shall be accurate as of the Closing Date.

 

(b)

Reserved.

(c)                              Joseph Bonventre, general counsel for the
Company and the Trust (the “General Counsel”), Paul, Hastings, Janofsky &
Walker, LLP, counsel for the Company and the Trust (the “Company Counsel”) and
Venable LLP, Maryland counsel for the Company (“Venable”), shall have delivered,
in the aggregate, opinions, dated the Closing Date, addressed to the Purchaser
and its successors and assigns and The Bank of New York Trust Company, National
Association, in substantially the form set out in Annex A-1 hereto and the
Company shall have furnished to the Purchaser the opinion of the General Counsel
or a certificate signed by the Company’s Chief Executive Officer, President, an
Executive Vice President, Chief Financial Officer, Treasurer or Assistant
Treasurer, dated the Closing Date, addressed to the

 

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Purchaser, in substantially the form set out in Annex A-2 hereto. In rendering
such opinions, the General Counsel, the Company Counsel and Venable may rely as
to factual matters upon certificates or other documents furnished by officers,
directors and trustees of the Company and the Trust and by government officials
(provided, however, that copies of any such certificates or documents are
delivered to the Purchaser) and by and upon such other documents as each such
counsel may, in its reasonable opinion, deem appropriate as a basis for such
opinions. Each of the General Counsel, Company Counsel and Venable may specify
the jurisdictions in which such counsel is admitted to practice and that such
counsel is not admitted to practice in any other jurisdiction and is not an
expert in the law of any other jurisdiction. Such opinions shall not state that
they are to be governed or qualified by, or that they are otherwise subject to,
any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).

(d)              Company Counsel and Venable shall have delivered, in the
aggregate, opinions, dated the Closing Date, addressed to the Purchaser and its
successors and assigns and The Bank of New York Trust Company, National
Association, in substantially the form set out in Annex A-3 hereto. In rendering
their opinion, the Company Counsel and Venable may rely as to factual matters
upon certificates or other documents furnished by officers, directors and
trustees of the Company and the Trust and by government officials (provided,
however, that copies of any such certificates or documents are delivered to the
Purchaser) and by and upon such other documents as such counsel may, in their
reasonable opinion, deem appropriate as a basis for such opinions. The Company
Counsel and Venable may specify the jurisdictions in which they are admitted to
practice and that they are not admitted to practice in any other jurisdiction
and are not experts in the law of any other jurisdiction. Such opinions shall
not state that they are to be governed or qualified by, or that they are
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).

(e)                              The Purchaser shall have been furnished the
opinion of Thelen Reid Brown Raysman & Steiner LLP, dated the Closing Date,
addressed to the Purchaser and its successors and assigns and The Bank of New
York Trust Company, National Association, in substantially the form set out in
Annex B hereto.

(f)                              The Purchaser shall have received the opinion
of Richards, Layton & Finger, P.A., special Delaware counsel for the Delaware
Trustee, dated the Closing Date, addressed to the Purchaser and its successors
and assigns, The Bank of New York Trust Company, National Association, the
Delaware Trustee and the Company, in substantially the form set out in Annex C
hereto.

(g)                              The Purchaser shall have received the opinion
of Gardere Wynne Sewell LLP, special counsel for the Property Trustee and the
Indenture Trustee, dated the Closing Date, addressed to the Purchaser and its
successors and assigns, in substantially the form set out in Annex D hereto.

(h)                              The Purchaser shall have received the opinion
of Richards, Layton & Finger, P.A., special Delaware counsel for the Delaware
Trustee, dated the Closing Date,

 

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addressed to the Purchaser and its successors and assigns and The Bank of New
York Trust Company, National Association, in substantially the form set out in
Annex E hereto.

(i)                              The Company shall have furnished to the
Purchaser a certificate of the Company, signed by the Chief Executive Officer,
President or an Executive Vice President, and Chief Financial Officer, Treasurer
or Assistant Treasurer of the Company, and the Trust shall have furnished to the
Purchaser a certificate of the Trust, signed by an Administrative Trustee of the
Trust, in each case dated the Closing Date, and, in the case of the Company, as
to (i) and (ii) below and, in the case of the Trust, as to (i) below:

(i)              the representations and warranties in this Purchase Agreement
are true and correct on and as of the Closing Date with the same effect as if
made on the Closing Date, and the Company and the Trust have complied with all
the agreements and satisfied all the conditions on either of their part to be
performed or satisfied at or prior to the Closing Date; and

(ii)              since the date of the Financial Statements (as defined below),
there has been no material adverse change in the condition (financial or
otherwise), earnings, business or assets of the Company and its subsidiaries
taken as a whole, whether or not arising from transactions occurring in the
ordinary course of business (a “Material Adverse Change”).

 

(j)

Reserved.

(k)                              Prior to the Closing Date, the Company and the
Trust shall have furnished to the Purchaser and its counsel such further
information, certificates and documents as the Purchaser or its counsel may
reasonably request.

If any of the conditions specified in this Section 3 shall not have been
fulfilled when and as provided in this Purchase Agreement, or if any of the
opinions, certificates and documents mentioned above or elsewhere in this
Purchase Agreement shall not be reasonably satisfactory in form and substance to
the Purchaser or its counsel, this Purchase Agreement and all the Purchaser’s
obligations hereunder may be canceled at, or at any time prior to, the Closing
Date by the Purchaser. Notice of such cancellation shall be given to the Company
and the Trust in writing or by telephone or facsimile confirmed in writing.

Each certificate signed by any trustee of the Trust or any officer of the
Company and delivered to the Purchaser or the Purchaser’s counsel in connection
with the Operative Documents and the transactions contemplated hereby and
thereby shall be deemed to be a representation and warranty of the Trust and/or
the Company, as the case may be, and not by such trustee or officer in any
individual capacity.

4.             Representations and Warranties of the Company and the Trust. The
Company and the Trust jointly and severally represent and warrant to, and agree
with the Purchaser, as follows (each of the representations and warranties being
made only as of the Closing Date):

 

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(a)                              Neither the Company nor the Trust, nor any of
their “Affiliates” (as defined in Rule 501(b) of Regulation D (“Regulation D”)
under the Securities Act (as defined below)), nor any person acting on its or
their behalf, has, directly or indirectly, made offers or sales of any security,
or solicited offers to buy any security, under circumstances that would require
the registration of any of the Securities under the Securities Act of 1933, as
amended (the “Securities Act”).

(b)                              Neither the Company nor the Trust, nor any of
their Affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of any of the Securities.

(c)                              The Securities (i) are not and have not been
listed on a national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or quoted on a
U.S. automated inter-dealer quotation system and (ii) are not of an open-end
investment company, unit investment trust or face-amount certificate company
that is, or is required to be, registered under Section 8 of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), and the
Securities otherwise satisfy the eligibility requirements of Rule 144A(d)(3)
promulgated pursuant to the Securities Act (“Rule 144A(d)(3)”).

(d)                              Neither the Company nor the Trust, nor any of
their Affiliates, nor any person acting on its or their behalf, has engaged, or
will engage, in any “directed selling efforts” within the meaning of Regulation
S under the Securities Act with respect to the Securities.

(e)                              Neither the Company nor the Trust is, and,
immediately following consummation of the transactions contemplated hereby and
the application of the net proceeds therefrom, will not be, an “investment
company” or an entity “controlled” by an “investment company,” in each case
within the meaning of Section 3(a) of the Investment Company Act.

(f)                              Neither the Company nor the Trust has paid or
agreed to pay to any person any compensation for soliciting another to purchase
any of the Securities, except for the preferred securities commission of 2.25%
of the aggregate purchase price for all Preferred Securities to be issued by the
Company on the date hereof that the Company has agreed to pay to Taberna
Securities, LLC and Bear, Stearns & Co. Inc. in accordance with the Flow of
Funds Memorandum, dated as of the date hereof, by and among the Company, the
Trust and the Property Trustee.

(g)                              The Trust has been duly created and is validly
existing in good standing as a statutory trust under the Delaware Statutory
Trust Act, 12 Del. C. § 3801, et seq. (the “Statutory Trust Act”) with all
requisite power and authority to own property and to conduct the business it
transacts and proposes to transact and to enter into and perform its obligations
under the Operative Documents to which it is a party. The Trust is duly
qualified to transact business as a foreign entity and is in good standing in
each jurisdiction in which such qualification is necessary, except where the
failure to so qualify or be in good standing would not

 

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have a material adverse effect on the condition (financial or otherwise),
earnings, business, liabilities or assets (taken as a whole) or business
prospects of the Company and its consolidated subsidiaries taken as a whole,
whether or not occurring in the ordinary course of business (a “Material Adverse
Effect”). The Trust is not a party to or otherwise bound by any material
agreement other than the Operative Documents. The Trust will be operated in such
a manner such that, under current law, it will be classified for federal income
tax purposes as a grantor trust and not as an association or publicly traded
partnership taxable as a corporation.

(h)                              The Trust Agreement has been duly authorized by
the Company and, on the Closing Date specified in Section 2(b) hereof, will have
been duly executed and delivered by the Company and the Administrative Trustees
of the Trust, and, assuming due authorization, execution and delivery thereof by
the Property Trustee and the Delaware Trustee, will be a legal, valid and
binding obligation of the Company and the Administrative Trustees, enforceable
against them in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and to general
principles of equity. Each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to execute
and deliver the Trust Agreement.

(i)                              The Indenture has been duly authorized by the
Company and, on the Closing Date, will have been duly executed and delivered by
the Company, and, assuming due authorization, execution and delivery thereof by
the Indenture Trustee, will be a legal, valid and binding obligation of the
Company enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally and to general principles of equity.

(j)                              The Preferred Securities and the Common
Securities have been duly authorized by the Trust and, when issued and delivered
against payment therefor on the Closing Date in accordance with this Purchase
Agreement, in the case of the Preferred Securities, and in accordance with the
Common Securities Subscription Agreement, in the case of the Common Securities,
will be validly issued, fully paid and non-assessable and will represent
undivided beneficial interests in the assets of the Trust entitled to the
benefits of the Trust Agreement, enforceable against the Trust in accordance
with their terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general principles of equity. The
issuance of the Securities is not subject to any preemptive or other similar
rights. On the Closing Date, all of the issued and outstanding Common Securities
will be directly owned by the Company free and clear of any pledge, security
interest, claim, lien or other encumbrance of any kind (each, a “Lien”).

(k)                              The Junior Subordinated Notes have been duly
authorized by the Company and, on the Closing Date, will have been duly executed
and delivered to the Indenture Trustee for authentication in accordance with the
Indenture and, when authenticated in the manner provided for in the Indenture
and delivered to the Trust against payment therefor in accordance with that
certain Junior Subordinated Note Purchase Agreement of even date herewith
between the Company and the Trust (the “Junior Subordinated Note Purchase
Agreement”), will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the Company in
accordance with their terms,

 

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subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally and to general principles of equity.

(l)                              This Purchase Agreement has been duly
authorized, executed and delivered by the Company and the Trust.

(m)                              Neither the issuance and sale of the Common
Securities, the Preferred Securities or the Junior Subordinated Notes, nor the
purchase of the Common Securities by the Company and the purchase of the Junior
Subordinated Notes by the Trust, nor the execution and delivery of and
compliance with the Operative Documents by the Company or the Trust, nor the
consummation of the transactions contemplated herein or therein or the use of
proceeds therefrom, (i) will conflict with or constitute a violation or breach
of the Trust Agreement or the declaration of trust, charter or bylaws or similar
organizational documents of the Company or any Significant Subsidiary of the
Company or any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, governmental authority, agency or instrumentality
or court, domestic or foreign, or arbitrator having jurisdiction over the Trust
or the Company or any of its Significant Subsidiaries or their respective
properties or assets (collectively, the “Governmental Entities”), (ii) will
conflict with or constitute a violation or breach of, or a default or Repayment
Event (as defined below) under, or result in the creation or imposition of any
Lien upon any property or assets of the Trust, the Company or any of the
Company’s Significant Subsidiaries pursuant to any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
(A) the Trust, the Company or any of its Significant Subsidiaries is a party or
by which it or any of them may be bound, or (B) to which any of the property or
assets of any of them is subject, or any judgment, order or decree of any court,
Governmental Entity or arbitrator, except, in the case of this clause (ii), for
such conflicts, breaches, violations, defaults, Repayment Events or Liens which
(X) would not, singly or in the aggregate, adversely affect the consummation of
the transactions contemplated by the Operative Documents and (Y) would not,
singly or in the aggregate, have a Material Adverse Effect or (iii) require the
consent, approval, authorization or order of any court or Governmental Entity.
As used herein, a “Repayment Event” means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any person
acting on such holder’s behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Trust or the
Company or any of its Significant Subsidiaries prior to its scheduled maturity.

(n)                              The Company has been duly and properly
organized and is validly existing as a real estate investment trust in good
standing under the laws of Maryland, with all requisite trust power and
authority to own, lease and operate its properties and conduct the business it
transacts and proposes to transact, and is duly qualified to transact business
and is in good standing in each jurisdiction where the nature of its activities
requires such qualification, except where the failure of the Company to be so
qualified would not, singly or in the aggregate, have a Material Adverse Effect.

(o)                              Schedule 1 sets forth all of the “significant
subsidiaries” (as defined in Securities and Exchange Commission Regulation S-X)
of the Company (collectively, the “Significant Subsidiaries”). Each Significant
Subsidiary is a corporation, partnership or

 

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limited liability company duly and properly incorporated or organized or formed,
as the case may be, validly existing and in good standing under the laws of the
jurisdiction in which it is chartered or organized or formed, with all requisite
corporate, partnership or limited liability company power and authority, as the
case may be, to own, lease and operate its properties and conduct the business
it transacts and proposes to transact. Each Significant Subsidiary is duly
qualified to transact business as a foreign corporation, partnership or limited
liability company, as applicable, and is in good standing in each jurisdiction
where the nature of its activities requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect. Except as set forth on Schedule 4(o), no Significant
Subsidiary of the Company (other than a taxable REIT subsidiary, if any) is
currently prohibited, directly or indirectly, under any agreement or other
instrument, other than as required by applicable law, to which it is a party or
is subject, from paying any dividends to the Company, from making any other
distribution on such Significant Subsidiary’s capital stock or other Equity
Interests, from repaying to the Company any loans or advances to such
Significant Subsidiary from the Company or from transferring any of such
Significant Subsidiary’s properties or assets to the Company or any other
subsidiary of the Company.

(p)                              Each of the Trust, the Company and each of the
Company’s Significant Subsidiaries holds all necessary approvals,
authorizations, orders, licenses, consents, registrations, qualifications,
certificates and permits (collectively, the “Governmental Licenses”) of and from
Governmental Entities necessary to conduct their respective businesses as now
being conducted, and neither the Trust, the Company nor any of the Company’s
Significant Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Government License, except where the
failure to be so licensed or approved or the receipt of an unfavorable decision,
ruling or finding, would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity or the failure of such Governmental Licenses
to be in full force and effect, would not, singly or in the aggregate, have a
Material Adverse Effect; and the Company and its Significant Subsidiaries are in
compliance with all applicable laws, rules, regulations, judgments, orders,
decrees and consents, except where the failure to be in compliance would not,
singly or in the aggregate, have a Material Adverse Effect.

(q)                              All of the issued and outstanding Equity
Interests of the Company and each of its Significant Subsidiaries are validly
issued, and, if corporate stock, fully paid and non-assessable; except as set
forth on Schedule 4(q), all of the issued and outstanding Equity Interests of
each Significant Subsidiary of the Company is owned by the Company, directly or
through subsidiaries, free and clear of any Lien, claim or equitable right; and
none of the issued and outstanding Equity Interests of the Company or any
Significant Subsidiary was issued in violation of any preemptive or similar
rights arising by operation of law, under the declaration of trust, charter or
by-laws or similar organizational documents of such entity or under any
agreement to which the Company or any of its Significant Subsidiaries is a
party, except as would not, singly or in the aggregate, have a Material Adverse
Effect.

(r)                              Neither the Company nor any of its Significant
Subsidiaries is (i) in violation of its respective declaration of trust, charter
or by-laws or similar organizational documents or (ii) in default in the
performance or observance of any obligation, agreement,

 

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covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the Company or
any such Significant Subsidiary is a party or by which it or any of them may be
bound or to which any of the property or assets of any of them is subject,
except, in the case of clause (ii), where such violation or default would not,
singly or in the aggregate, have a Material Adverse Effect.

(s)                              There is no action, suit or proceeding before
or by any Governmental Entity, arbitrator or court, domestic or foreign, now
pending or, to the knowledge of the Company or the Trust after due inquiry,
threatened against or affecting the Trust or the Company or any of the Company’s
subsidiaries, except for such actions, suits or proceedings that, if adversely
determined, would not, singly or in the aggregate, adversely affect the
consummation of the transactions contemplated by the Operative Documents or have
a Material Adverse Effect; and the aggregate of all pending legal or
governmental proceedings to which the Trust or the Company or any of its
subsidiaries is a party or of which any of their respective properties or assets
is subject, including ordinary routine litigation incidental to the business,
are not expected to result in a Material Adverse Effect.

(t)                              The accountants of the Company who certified
the Financial Statements (as defined below) are independent public accountants
of the Company and its subsidiaries within the meaning of the Securities Act,
and the rules and regulations of the Securities and Exchange Commission (the
“Commission”) thereunder.

(u)                              The audited consolidated financial statements
(including the notes thereto) and schedules of the Company and its consolidated
subsidiaries for the fiscal year ended December 31, 2006 (the “Financial
Statements”) provided to the Purchaser are the most recent available audited
consolidated financial statements of the Company and its consolidated
subsidiaries, respectively, and fairly present in all material respects, in
accordance with U.S. generally accepted accounting principles (“GAAP”), the
financial position of the Company and its consolidated subsidiaries, and the
results of operations and changes in financial condition as of the dates and for
the periods therein specified. Such consolidated financial statements and
schedules have been prepared in accordance with GAAP consistently applied
throughout the periods involved (except as otherwise noted therein).

(v)                              None of the Trust, the Company nor any of the
Company’s subsidiaries has any material liability, whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due, including any liability for taxes (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit, proceeding, hearing, charge, complaint, claim or demand against
the Trust, the Company or the Company’s subsidiaries that could give rise to any
such liability), except for (i) with respect to the consolidated subsidiaries,
liabilities set forth in the Financial Statements, (ii) with respect to any
subsidiaries other than the consolidated subsidiaries, liabilities incurred in
the ordinary course of business and (iii) normal fluctuations in the amount of
the liabilities referred to in clause (i) above occurring in the ordinary course
of business of the Trust, the Company and all of its subsidiaries since the date
of the most recent balance sheet included in such Financial Statements.

 

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(w)                              Since the date of the Financial Statements,
there has not been (A) any Material Adverse Change or (B) any dividend or
distribution of any kind declared, paid or made by the Company on any class of
its Equity Interests other than regular distributions on the Company’s Equity
Interests and a special distribution to holders of the Company’s Equity
Interests made on or about January 16, 2007.

(x)                              The documents of the Company filed with the
Commission in accordance with the Exchange Act, from and including the
commencement of the fiscal year covered by the Company’s most recent Annual
Report on Form 10-K, at the time they were or hereafter are filed by the Company
with the Commission (collectively, the “1934 Act Reports”), complied and will
comply in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder (the “1934 Act
Regulations”), and, at the date of this Purchase Agreement and on the Closing
Date, do not and will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and other than such instruments, agreements, contracts and
other documents as are filed as exhibits to the Company’s Annual Report on Form
10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, there are
no instruments, agreements, contracts or documents of a character described in
Item 601 of Regulation S-K promulgated by the Commission to which the Company or
any of its subsidiaries is a party that are required to be filed with the
Commission. The Company is in compliance in all material respects with all
currently applicable requirements of the Exchange Act and the rules and
regulations promulgated thereunder that were added by or resulted from the
Sarbanes-Oxley Act of 2002.

(y)                              No labor dispute with the employees of the
Trust, the Company or any of its Significant Subsidiaries exists or, to the
knowledge of the executive officers of the Trust or the Company, is imminent,
except those which would not, singly or in the aggregate, have a Material
Adverse Effect.

(z)                              No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of, any
Governmental Entity, other than those that have been made or obtained, is
necessary or required for the performance by the Trust or the Company of their
respective obligations under the Operative Documents, as applicable, or the
consummation by the Trust and the Company of the transactions contemplated by
the Operative Documents.

(aa)                              Each of the Trust, the Company and each
Significant Subsidiary of the Company has good and marketable title to all of
its respective real and personal properties, in each case free and clear of all
Liens and defects, except (i) for mortgages and credit facilities disclosed in
the Company’s 1934 Act Reports; and (ii) for those that would not, singly or in
the aggregate, have a Material Adverse Effect. All of the leases and subleases
under which the Trust, the Company or any Significant Subsidiary of the Company
holds properties are in full force and effect, except where the failure of such
leases and subleases to be in full force and effect would not, singly or in the
aggregate, have a Material Adverse Effect, and none of the Trust, the Company or
any Significant Subsidiary of the Company has any notice of any claim of any
sort that has been asserted by anyone adverse to the rights of the Trust, the
Company or any Significant Subsidiary of the Company under any such leases or
subleases, or affecting or

 

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questioning the rights of such entity to the continued possession of the leased
or subleased premises under any such lease or sublease, except for such claims
that would not, singly or in the aggregate, have a Material Adverse Effect.

 

(bb)

Reserved.

(cc)                              Commencing with its taxable year ended
December 31, 1993, the Company has been organized and operated in conformity
with the requirements for qualification and taxation as a real estate investment
trust (a “REIT”) under sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the “Code”), and, taking into account the transactions
contemplated hereby, the Company’s proposed method of operation will enable it
to continue to meet the requirements for qualification and taxation as a REIT
under the Code, and no actions have been taken (or not taken which are required
to be taken) which would cause such qualification to be lost. As long as the
Board of Trustees believes that it is in the best interests of the Company to
qualify as a REIT, the Company expects to continue to be organized and to
operate in a manner so as to qualify as a REIT in the taxable year ending
December 31, 2007 and succeeding taxable years.

(dd)                              The Company and each of the Significant
Subsidiaries have timely and duly filed all material Tax Returns (as defined
below) required to be filed by them, and all such Tax Returns are true, correct
and complete in all material respects. The Company and each of the Significant
Subsidiaries have timely and duly paid in full all material Taxes (as defined
below) required to be paid by them (whether or not such amounts are shown as due
on any Tax Return). Except as set forth on Schedule 4(dd), there are no federal,
state, or other Tax audits or deficiency assessments proposed or pending with
respect to the Company or any of the Significant Subsidiaries, and no such
audits or assessments are threatened. As used herein, the terms “Tax” or “Taxes”
mean (i) all federal, state, local, and foreign taxes, and other assessments of
a similar nature (whether imposed directly or through withholding), including
any interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts arising
as a result of being a member of any affiliated, consolidated, combined, unitary
or similar group, as a successor to another person or by contract. As used
herein, the term “Tax Returns” means all federal, state, local, and foreign Tax
returns, declarations, statements, reports, schedules, forms, and information
returns and any amendments thereto filed or required to be filed with any
Governmental Entity.

(ee)                              The Trust is not subject to U.S. federal
income tax with respect to income received or accrued on the Junior Subordinated
Notes, interest payable by the Company on the Junior Subordinated Notes is
deductible by the Company, in whole or in part, for U.S. federal income tax
purposes, and the Trust is not, or will not be within ninety (90) days of the
date hereof, subject to more than a de minimis amount of other taxes, duties or
other governmental charges. To the knowledge of the Company, there are no
rulemaking or similar proceedings before the U.S. Internal Revenue Service or
comparable federal, state, local or foreign government bodies which involve or
affect the Company or any Significant Subsidiary, which, if the subject of an
action unfavorable to the Company or any such Significant Subsidiary, could
result in a Material Adverse Effect.

 

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(ff)                              The books, records and accounts of the Company
and its subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its subsidiaries. The Company and each of its
subsidiaries maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
accordance with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(gg)                              The Company and the Significant Subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts in all material respects as are customary
in the businesses in which they are engaged or propose to engage after giving
effect to the transactions contemplated hereby including but not limited to,
real or personal property owned or leased against theft, damage, destruction,
act of vandalism and all other risks customarily insured against. All policies
of insurance and fidelity or surety bonds insuring the Company or any of the
Significant Subsidiaries or the Company’s or Significant Subsidiaries’
respective businesses, assets, employees, officers and directors are in full
force and effect. The Company and each of the Significant Subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects. Neither the Company nor any Significant Subsidiary has reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect. Within the past twelve months, neither the Company nor
any Significant Subsidiary has been denied any insurance coverage that it has
sought or for which it has applied.

(hh)                              The Company and its subsidiaries or any person
acting on behalf of the Company or its subsidiaries including, without
limitation, any director, officer, agent or employee of the Company or its
subsidiaries has not, directly or indirectly, while acting on behalf of the
Company and its subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.

(ii)                              The information provided by the Company and
the Trust, pursuant to this Purchase Agreement and the transactions contemplated
hereby, does not, as of the date hereof, and will not as of the Closing Date,
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

(jj)                              Except as would not, individually or in the
aggregate, result in a Material Adverse Effect, (i) the Company and its
subsidiaries have been and are in compliance

 

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with applicable Environmental Laws (as defined below), (ii) none of the Company,
any of its subsidiaries or, to the best of the Company’s knowledge, any other
owners of any of the real properties currently or previously owned, leased or
operated by the Company or any of its subsidiaries (collectively, the
“Properties”) at any time or any other party, has at any time released (as such
term is defined in CERCLA (as defined below)) or otherwise disposed of Hazardous
Materials (as defined below) on, to, in, under or from the Properties, (iii)
neither the Company nor any of its subsidiaries has used nor intends to use the
Properties or any subsequently acquired properties, other than in compliance
with applicable Environmental Laws, (iv) neither the Company nor any of its
subsidiaries has received any notice of, or has any knowledge of any occurrence
or circumstance which, with notice or passage of time or both, would give rise
to a claim under or pursuant to any Environmental Law with respect to the
Properties, or their respective assets or arising out of the conduct of the
Company or its subsidiaries, (v) none of the Properties are included or, to the
best of the Company’s knowledge, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency or, to the best of the Company’s knowledge, proposed for
inclusion on any similar list or inventory issued pursuant to any other
Environmental Law or issued by any other Governmental Entity, (vi) none of the
Company, any of its subsidiaries or agents or, to the best of the Company’s
knowledge, any other person or entity for whose conduct any of them is or may be
held responsible, has generated, manufactured, refined, transported, treated,
stored, handled, disposed, transferred, produced or processed any Hazardous
Material at any of the Properties, except in compliance with all applicable
Environmental Laws, and has not transported or arranged for the transport of any
Hazardous Material from the Properties to another property, except in compliance
with all applicable Environmental Laws, (vii) no lien has been imposed on the
Properties by any Governmental Entity in connection with the presence on or off
such Property of any Hazardous Material or with respect to an Environmental Law,
and (viii) none of the Company, any of its subsidiaries or, to the best of the
Company’s knowledge, any other person or entity for whose conduct any of them is
or may be held responsible, has entered into or been subject to any consent
decree, compliance order, or administrative order in connection with an
Environmental Law with respect to the Properties or any facilities or
improvements or any operations or activities thereon.

(kk)                              As used herein, “Hazardous Materials” shall
include, without limitation, any flammable materials, explosives, radioactive
materials, hazardous materials, hazardous substances, hazardous wastes, toxic
substances or related materials, asbestos, petroleum, petroleum products and any
hazardous material as defined by any federal, state or local environmental law,
statute, ordinance, rule or regulation, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. §§ 9601-9675 (“CERCLA”), the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. §§ 5101-5127, the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. §§ 6901-6992k, the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
§§ 11001-11050, the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2692, the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y, the
Clean Air Act, 42 U.S.C. §§ 7401-7642, the Clean Water Act (Federal Water
Pollution Control Act), 33 U.S.C. §§ 1251-1387, the Safe Drinking Water Act, 42
U.S.C. §§ 300f-300j-26, and the Occupational Safety and Health Act, 29 U.S.C.
§§ 651-678, and any analogous state laws, as any of the above may be

 

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amended from time to time and in the regulations promulgated pursuant to each of
the foregoing (including environmental statutes and laws not specifically
defined herein) (individually, an “Environmental Law” and collectively, the
“Environmental Laws”) or by any Governmental Entity.

5.             Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to, and agrees with, the Company and the Trust as
follows:

(a)                              The Purchaser is aware that the Preferred
Securities have not been and will not be registered under the Securities Act and
may not be offered or sold within the United States or to “U.S. persons” (as
defined in Regulation S under the Securities Act) except in accordance with Rule
903 of Regulation S under the Securities Act or pursuant to an exemption from
the registration requirements of the Securities Act. Accordingly, neither the
Purchaser nor its affiliates, nor any persons acting on its or their behalf,
have engaged in any directed selling efforts with respect to the Securities,
and, with respect to the sale and issuance of the Preferred Securities as
contemplated by this Agreement, the Purchaser, its affiliates and all persons
acting on its or their behalf have complied with the offering restrictions
requirement of Regulation S and Rule 144A promulgated under the Securities Act.

(b)                              The Purchaser is an “accredited investor,” as
such term is defined in Rule 501(a) of Regulation D under the Securities Act.

(c)                              Neither the Purchaser, nor any of the
Purchaser’s Affiliates, nor any person acting on the Purchaser’s or any of the
Purchaser’s Affiliate’s behalf has engaged, or will engage, in any form of
“general solicitation or general advertising” (within the meaning of Regulation
D under the Securities Act) in connection with any offer or sale of the
Preferred Securities, including, but not limited to (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. The Purchaser agrees, with respect to resales made in reliance on
Rule 144A of any of the Preferred Securities, to comply with the provisions set
forth in Section 5.7 of the Trust Agreement.

(d)                              The Purchaser understands and acknowledges that
(i) no public market exists for any of the Preferred Securities and that it is
unlikely that a public market will ever exist for the Preferred Securities, (ii)
the Purchaser is purchasing the Preferred Securities for its own account, for
investment and not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act or other applicable
securities laws, subject to any requirement of law that the disposition of its
property be at all times within its control and subject to its ability to resell
such Preferred Securities pursuant to an effective registration statement under
the Securities Act or pursuant to an exemption therefrom or in a transaction not
subject thereto, and the Purchaser agrees to the legends and transfer
restrictions applicable to the Preferred Securities contained in the Indenture,
and (iii) the Purchaser has had the opportunity to ask questions of, and receive
answers and request additional information from, the Company and is aware that
it may be required to bear the economic risk of an investment in the Preferred
Securities.

 

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(e)                              The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction in which it is organized with all requisite (i) corporate power and
authority to execute, deliver and perform (including its purchase of the
Preferred Securities) the Operative Documents to which it is a party, to make
the representations and warranties specified herein and therein and to
consummate the transactions contemplated herein.

(f)                              This Purchase Agreement has been duly
authorized, executed and delivered by the Purchaser and no filing with, or
authorization, approval, consent, license, order registration, qualification or
decree of, any governmental body, agency or court having jurisdiction over the
Purchaser, other than those that have been made or obtained, is necessary or
required for the performance by the Purchaser of its obligations under this
Purchase Agreement or to consummate the transactions contemplated herein.

(g)                              The Purchaser is a “Qualified Purchaser” as
such term is defined in Section 2(a)(51) of the Investment Company Act.

(h)                              The Purchaser (i) is able to bear the economic
risk and lack of liquidity of an investment in the Company and the Preferred
Securities and (ii) is able to bear the risk of loss of its entire investment in
the Company and the Preferred Securities.

(i)                              The Purchaser recognizes that (i) an investment
in the Preferred Securities involves certain risks, (ii) the Preferred
Securities will be subject to certain restrictions on transferability as
described in the Trust Agreement and (iii) as a result of the foregoing, the
marketability of the Preferred Securities will be limited.

6.             Covenants and Agreements of the Company and the Trust. The
Company and the Trust jointly and severally agree with the Purchaser as follows:

 

(a)

Reserved.

(b)                              The Company and the Trust will arrange, at the
Purchaser’s sole cost and expense, for the qualification of the Preferred
Securities for sale under the laws of such jurisdictions as the Purchaser may
designate and will maintain such qualifications in effect so long as required
for the sale of the Preferred Securities. The Company or the Trust, as the case
may be, will promptly advise the Purchaser of the receipt by the Company or the
Trust, as the case may be, of any notification with respect to the suspension of
the qualification of the Preferred Securities for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose.

 

(c)

Reserved.

(d)                              Neither the Company nor the Trust will, nor
will either of them permit any of their Affiliates or any person acting on their
behalf to, engage in any “directed selling efforts” within the meaning of
Regulation S under the Securities Act with respect to the Securities.

 

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(e)                              Neither the Company nor the Trust will, nor
will either of them permit any of their Affiliates or any person acting on their
behalf to, directly or indirectly, (i) sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) that would or could be integrated with the sales of the
Preferred Securities in any manner that would cause the registration of the
Securities under the Securities Act or (ii) make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of any of the Securities under the Securities Act.

(f)                              Neither the Company nor the Trust will, nor
will either of them permit any of its Affiliates or any person acting on their
behalf to, engage in any form of “general solicitation or general advertising”
(within the meaning of Regulation D) in connection with any offer or sale of the
any of the Securities.

(g)                              So long as any of the Securities are
outstanding, (i) the Securities shall not be listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted in a U.S.
automated inter-dealer quotation system, (ii) neither the Company nor the Trust
shall be an open-end investment company, unit investment trust or face-amount
certificate company that is, or is required to be, registered under Section 8 of
the Investment Company Act, and, the Securities shall otherwise satisfy the
eligibility requirements of Rule 144A(d)(3) and (iii) neither the Company nor
the Trust shall engage in any activity that would cause it to be an “investment
company” under the provisions of the Investment Company Act.

(h)                              If the Company is no longer subject to the
reporting requirements of the Exchange Act, each of the Company and the Trust
shall furnish to (i) the holders, and subsequent holders, of the Preferred
Securities, (ii) Taberna Capital Management, LLC (at 450 Park Avenue, 11th
Floor, New York, New York 10022, or such other address as designated by Taberna
Capital Management, LLC) and (iii) any beneficial owner of the Securities
reasonably identified to the Company and the Trust (which identification may be
made by either such beneficial owner or by Taberna Capital Management, LLC), a
duly completed and executed certificate in the form attached hereto as Annex F,
including the financial statements referenced in such Annex, which certificate
and financial statements shall be so furnished by the Company and the Trust not
later than forty-five (45) days after the end of each of the first three fiscal
quarters of each fiscal year of the Company and not later than ninety (90) days
after the end of each fiscal year of the Company.

(i)                              Each of the Company and the Trust will, during
any period in which it is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, or it is not exempt from such reporting requirements
pursuant to and in compliance with Rule 12g3-2(b) under the Exchange Act, shall
provide to each holder of the Securities and to each prospective purchaser (as
designated by such holder) of the Securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Securities Act. If the Company and the Trust are required
to register under the Exchange Act, such reports filed in compliance with Rule
12g3-2(b) shall be sufficient information as required above. This covenant is
intended to be for the benefit of the Purchaser, the holders of the

 

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Securities, and the prospective purchasers designated by the Purchaser and such
holders, from time to time, of the Securities.

(j)                              Neither the Company nor the Trust will, until
one hundred eighty (180) days following the Closing Date, without the
Purchaser’s prior written consent, offer, sell, contract to sell, grant any
option to purchase or otherwise dispose of, directly or indirectly, (i) any
Preferred Securities or other securities substantially similar to the Preferred
Securities other than as contemplated by this Purchase Agreement or (ii) any
other securities convertible into, or exercisable or exchangeable for, any
Preferred Securities or other securities substantially similar to the Preferred
Securities, unless the Company provides the Purchaser with an opinion of counsel
(such counsel to have experience and sophistication in the matters addressed in
such opinion) addressed to the Purchaser stating that any such offer, sale or
other disposition will not result in the Preferred Securities being integrated
in a transaction that would require registration under the Securities Act. For
the avoidance of doubt, other than the restrictions on the issuance by the
Company or the Trust of Preferred Securities or other securities substantially
similar to the Preferred Securities or securities convertible into, or
exercisable or exchangeable for Preferred Securities or other securities
substantially similar to the Preferred Securities, as described in clauses (i)
and (ii) of the first sentence of this Section 6(j), this Section 6(j) does not
limit the Company’s or its subsidiaries’ right to issue Debt or equity
securities.

(k)                              The Company will use its commercially
reasonable efforts to meet the requirements to qualify as a REIT under sections
856 through 860 of the Code, effective for the taxable year ending December 31,
2007 (and each fiscal quarter of such year) and to be organized in conformity
with the requirements for qualification as a REIT under the Code and to conduct
its operations in a manner so as to enable it to meet the requirements for
qualification and taxation as a REIT under the Code for succeeding taxable
years, unless and until such time as the Company’s Board of Trustees determines
that it is no longer advisable to maintain its status as a REIT.

(l)                              Neither the Company nor the Trust will identify
any of the Indemnified Parties (as defined below) in a press release or any
other public statement without the consent of such Indemnified Party, other than
with respect to the 1934 Act Reports or as such disclosure is required by
applicable statute or court of law.

(m)                              The Purchaser shall have the right under this
Purchase Agreement, Indenture and the Trust Agreement to request the
substitution of new notes for all or a portion of the Junior Subordinated Notes
held by the Trust, provided, that such substitution and any actions in
connection therewith will not cause any of the Notes or Replacement Notes to be
treated as other than indebtedness for U.S. federal income tax purposes and will
not cause the Trust to be treated as an association or other entity taxable as a
corporation or partnership or other than a grantor trust for U.S. federal income
tax purposes. The Trust shall be required under the terms of this Purchase
Agreement, the Indenture and the Trust Agreement to accept such newly issued
notes (the “Replacement Notes”) from the Company and surrender a like amount of
Junior Subordinated Notes to the Company. The Replacement Notes shall bear terms
identical to the Junior Subordinated Notes with the sole exception of interest
payment dates (and corresponding redemption date and maturity date), which will
be specified by the Purchaser. In no event will

 

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the interest payment dates (and corresponding redemption date and maturity date)
on the Replacement Notes vary by more than sixty (60) calendar days from the
original interest payment dates (and corresponding redemption date and maturity
date) under the Junior Subordinated Notes. Each of the Company and the Trust
acknowledges and agrees that, to the extent of the principal amount of the
Replacement Notes issued to the Trust under the Indenture, the Purchaser (and
each successor to the Purchaser’s interest in the Preferred Securities) will
require the Trust to issue a new series of Preferred Securities having a
principal amount related to the principal amount of the Replacement Notes (the
“Replacement Securities”) to designated holders of Preferred Securities,
provided that any such Replacement Securities, and any distributions from the
Trust to the holders of Replacement Securities, must relate solely to the
Trust’s interest in the Replacement Notes and in no event will the Preferred
Securities other than the Replacement Securities share in the returns from any
Replacement Notes. The Replacement Securities shall have payment dates (and
corresponding redemption date and maturity date) that relate to the Replacement
Notes. Each of the Company and the Trust agrees to cooperate with all reasonable
requests of the Purchaser in connection with any of the foregoing, provided that
no action requested of the Company or the Trust in connection with such
cooperation shall materially increase the obligations or materially decrease the
rights of the Company pursuant to such documents. The Purchaser shall pay all
fees and expenses in connection with the issuance of the Replacement Notes and
the Replacement Securities, including, without limitation, the reasonable fees
and expenses of the Trust and the Company.

7.             Payment of Expenses. The Company, as depositor of the Trust,
agrees to pay all costs and expenses incident to the performance of the
obligations of the Company and the Trust under this Purchase Agreement,
including (i) all costs and expenses incident to the authorization, issuance,
sale and delivery of the Preferred Securities and any taxes payable in
connection therewith; (ii) the following amounts: (x) a $2,000 acceptance fee to
be paid to the Property Trustee, (y) $3,500 for the fees and expenses of
Richards, Layton & Finger, P.A., special Delaware counsel retained by the
Delaware Trustee in connection with the Closing, and (z) $4,000 in
administrative fees annually to be paid to the Property Trustee; (iv) $50,000
for the fees and expenses of Thelen Reid Brown Raysman & Steiner LLP, special
counsel retained by Taberna Capital Management, LLC; and (vi) a due diligence
fee in an amount equal to $12,500 payable to Taberna Securities, LLC.

8.             Indemnification. (a)  The Sellers agree, jointly and severally,
to indemnify and hold harmless the Purchaser, the Purchaser’s affiliates,
Taberna Capital Management, LLC, Taberna Securities, LLC, and their respective
affiliates (collectively, the “Indemnified Parties”) each person, if any, who
controls any of the Indemnified Parties within the meaning of the Securities Act
or the Exchange Act, and the Indemnified Parties’ respective directors,
officers, employees and agents against any losses, claims, damages or
liabilities, joint or several, to which the Indemnified Parties may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are connected with the execution and delivery by the Sellers, and the
consummation thereby of the transactions contemplated by, this Purchase
Agreement or any other Operative Document. The Sellers agree, jointly and
severally, to reimburse the Indemnified Parties for any legal or other expenses
reasonably incurred by the Indemnified Parties in connection with investigating
or defending any

 

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such loss, claim, damage or liability or action arising out of or being
connected with the execution and delivery by the Sellers, and the consummation
by the Sellers of the transactions contemplated by, this Purchase Agreement or
the other Operative Documents. This indemnity agreement will be in addition to
any liability that any of the Sellers may otherwise have.

(b)                              The Company agrees to indemnify the Trust
against all loss, liability, claim, damage and expense whatsoever due from the
Trust under paragraph (a) above.

(c)                              Promptly after receipt by an Indemnified Party
under this Section 8 of notice of the commencement of any action, such
Indemnified Party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, promptly notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve the indemnifying party from liability
under paragraph (a) above unless and to the extent that such failure results in
the forfeiture by the indemnifying party of material rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any Indemnified Party other than the indemnification obligation provided in
paragraph (a) above. The Sellers shall be entitled to appoint counsel to
represent the Indemnified Party in any action for which indemnification is
sought, which counsel shall be reasonably acceptable to the Indemnified Party.
Notwithstanding the foregoing, the Indemnified Party shall have the right to
employ its own counsel in any action for which indemnification is sought, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (x) the employment of such counsel shall have been
authorized in writing by the indemnifying party in connection with the defense
of such action, (y) the indemnifying party shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action or (z) such Indemnified Party shall have
reasonably concluded that there may be defenses available to it that are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to direct the defense
of such action on behalf of the Indemnified Party), in any of which events such
fees and expenses shall be borne by the indemnifying party. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, that counsel to the indemnifying party shall not (except with the
consent of the Indemnified Party) also be counsel to the Indemnified Party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all Indemnified Parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, unless an Indemnified Party
believes that its interests are not aligned with the interests of another
Indemnified Party or that a conflict of interest might result. An indemnifying
party will not, without the prior written consent of the Indemnified Parties,
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the Indemnified Parties
are actual or potential parties to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising out of such claim, action,
suit or proceeding. An Indemnified Party will not, without the prior written
consent of the indemnifying parties, which consent shall not be unreasonably
withheld, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of

 

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which indemnification may be sought hereunder (whether or not the indemnifying
parties are actual or potential parties to such claim, action, suit or
proceeding).

9.             Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and the Trust or their respective officers or trustees and of the
Purchaser set forth in or made pursuant to this Purchase Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of the Purchaser, the Company or the Trust or any of the their respective
officers, directors, trustees or controlling persons, and will survive delivery
of and payment for the Preferred Securities. The provisions of Sections 7 and 8
shall survive the termination or cancellation of this Purchase Agreement.

10.          Amendments. This Purchase Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement by each of the parties hereto.

11.          Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Purchaser, will be mailed,
delivered by hand or courier or sent by facsimile and confirmed to the Purchaser
c/o Taberna Capital Management, LLC, 450 Park Avenue, 11th Floor, New York, New
York 10022, Attention: Thomas Bogal, Facsimile: (212) 735-1499; with a copy to
Thelen Reid Brown Raysman & Steiner LLP, 875 Third Avenue, New York, NY 10022,
Attention: Sarah Hewitt, Esq., Facsimile: (212) 603-2001 or other address as the
Purchaser shall designate for such purpose in a notice to the Company and the
Trust; and if sent to the Company or the Trust, will be mailed, delivered by
hand or courier or sent by facsimile and confirmed to it at Lexington Realty
Trust, One Penn Plaza, Suite 4015, New York, New York 10119-4015, Attention:
Joseph Bonventre, Esq., General Counsel, Facsimile: (212) 594-6600; with a copy
to Paul, Hastings, Janofsky & Walker, LLP, Park Avenue Tower, 75 E. 55th Street,
First Floor, New York, NY 10022, Attention: Mark Schonberger, Esq., Facsimile:
(212) 230-7747.

12.          Successors and Assigns. This Purchase Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing expressed or mentioned in this
Purchase Agreement is intended or shall be construed to give any person other
than the parties hereto and the affiliates, directors, officers, employees,
agents and controlling persons referred to in Section 8 hereof and their
successors, assigns, heirs and legal representatives, any right or obligation
hereunder. None of the rights or obligations of the Company or the Trust under
this Purchase Agreement may be assigned, whether by operation of law or
otherwise, without the Purchaser’s prior written consent. The rights and
obligations of the Purchaser under this Purchase Agreement may be assigned by
the Purchaser without the Company’s or the Trust’s consent; provided that the
assignee assumes the obligations of the Purchaser under this Purchase Agreement.

13.          Applicable Law. THIS PURCHASE AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW).

 

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14.          Submission To Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR
AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS PURCHASE
AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK,
IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF
MANHATTAN). BY EXECUTION AND DELIVERY OF THIS PURCHASE AGREEMENT, EACH PARTY
ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS
THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
PURCHASE AGREEMENT.

15.          Counterparts and Facsimile. This Purchase Agreement may be executed
by any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument. This Purchase Agreement may be
executed by any one or more of the parties hereto by facsimile.

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, this Purchase Agreement has been entered into as of the date
first written above.

 

 

 

LEXINGTON REALTY TRUST

 

 

 

By:

/s/ T. Wilson Eglin

 

 

Name: T. Wilson Eglin

 

 

Title: Chief Executive Officer

 

 

 

LXP CAPITAL TRUST I

 

 

 

By: LEXINGTON REALTY TRUST, as Depositor

 

 

 

By:

/s/ T. Wilson Eglin

 

 

Name: T. Wilson Eglin

 

 

Title: Chief Executive Officer

 

 

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BEAR, STEARNS & CO. INC.

 

 

 

 

 

By:

/s/ Thomas S. Dunstan

 

 

Name: Thomas S. Dunstan

 

 

Title: Senior Managing Director

 

 

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