Exhibit 10.3

________________________________________________________________________

 

REDEMPTION AGREEMENT

dated as of June 5, 2007,

with effect as of June 1, 2007

by and between

LEXINGTON/LION VENTURE, L.P.

CLPF-LXP/LV, L.P.

and

CLPF-LXP/LION VENTURE GP, LLC

________________________________________________________________________

 

 

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TABLE OF CONTENTS

 

Page

 

ARTICLE 1.

DEFINITIONS

2

ARTICLE 2.

REDEMPTION OF THE INTERESTS AND SURRENDER OF THE CONTRACTUAL RIGHTS

4

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES OF THE REDEEMING LIMITED PARTNER

5

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF THE REDEEMING GENERAL PARTNER

6

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

7

ARTICLE 6.

COVENANTS

8

ARTICLE 7.

INDEMNIFICATION

11

ARTICLE 8.

MISCELLANEOUS

13

 

 

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REDEMPTION AGREEMENT

 

This REDEMPTION AGREEMENT (this “Agreement”) is made and entered into as of June
5, 2007, with effect as of June 1, 2007 by and between LEXINGTON/LION VENTURE,
L.P., a Delaware limited partnership (the “Partnership”), CLPF-LXP/LV, L.P., a
Delaware limited partnership (the “Redeeming Limited Partner”), and
CLPF-LXP/LION VENTURE GP, LLC, a Delaware limited liability company (the
“Redeeming General Partner”).

.

 

W I T N E S SETH:

WHEREAS, prior to the effectiveness of this Agreement, the Partnership, the
Redeeming Limited Partner and Lexington Realty Trust, a Maryland real estate
investment trust (“LXP”), entered into a Partial Redemption Agreement, effective
as of June 1, 2007 (the “Partial Redemption Agreement”);

WHEREAS, after the effectiveness of the Partial Redemption Agreement, but prior
to the effectiveness of this Agreement, LXP and The Lexington Master Limited
Partnership, a Delaware limited partnership (“LMLP”), entered into a
Contribution Agreement, effective as of June 1, 2007, whereby LXP transferred
its interests in the Partnership to LMLP;

WHEREAS, the Redeeming Limited Partner is the owner of certain limited
partnership interests in the Partnership (all of the limited partnership
interests in the Partnership owned by the Redeeming Limited Partner are
hereafter referred to as the “LP Interests”) (A) issued pursuant to the Limited
Partnership Agreement of the Partnership, dated October 1, 2003, as amended by
three amendments that were effective as of (i) December 4, 2003, (ii) August 11,
2004 and (iii) December 2005 (the “LP Agreement”) and (B) as partially redeemed
pursuant to the Partial Redemption Agreement dated as of the date hereof and
effective June 1, 2007;

WHEREAS, the Redeeming General Partner is the owner of certain general
partnership interests in the Partnership (all of the general partnership
interests in the Partnership owned by the Redeeming General Partner are
hereafter referred to as the “GP Interests”) issued pursuant to the LP
Agreement;

WHEREAS, the Redeeming Limited Partner and the Partnership have agreed that the
Partnership will redeem the LP Interests; and

 

WHEREAS, the Redeeming General Partner and the Partnership have agreed that the
Partnership will redeem the GP Interests; and

 

WHEREAS, the Redeeming Limited Partner and the Redeeming General Partner have
agreed to sell to LMLP, and LMLP has agreed to purchase from the Redeeming
Limited Partner and the Redeeming General Partner, a portion of their LP
Interests and GP Interests, respectively, in exchange for the LP Consideration
and GP Consideration, respectively.

 

 

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NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations, warranties and indemnities contained in this Agreement, the
Redeeming Limited Partner, the Redeeming General Partner and the Partnership
hereby agree as follows:

 

ARTICLE 1.

 

DEFINITIONS

1.1       Definitions. For purposes of this Agreement, the following terms shall
have the meanings set forth below:

“Affiliate” shall mean, in reference to any Person: any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person.

 

“Agreement” shall have the meaning set forth in the preamble.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, including, without limitation, successor provisions of succeeding law.

 

“Continuing Guaranty Obligations” shall mean those certain ongoing obligations
of the Partnership and LXP as set forth in Exhibit C hereof.

“Encumbrance” shall mean any lien, charge, restriction, pledge, security
interest, lease or sublease, claim, right of any third party, easement,
mortgage, encroachment or encumbrance.

 

“GP Consideration” shall have the meaning set forth in Section 2.3.

 

“GP Contractual Rights” shall mean all contractual rights of the Redeeming
General Partner arising, embodied by or otherwise relating to the GP Interests
or the Redeeming General Partner’s rights or interests in the Partnership,
including all such rights under the LP Agreement; all such voting rights and
rights to be represented on committees of the Partnership; and all such rights
to receive financial and other information from the Partnership.

 

“GP Interests” shall have the meaning set forth in the recitals.

 

“Indemnitee” shall have the meaning set forth in Section 7.4.

 

“Indemnitor” shall have the meaning set forth in Section 7.4.

 

“LMLP” shall have the meaning set forth in the recitals.

 

“LP Agreement” shall have the meaning set forth in the recitals.

 

“LP Consideration” shall have the meaning set forth in Section 2.3.

 

“LP Contractual Rights” shall mean all contractual rights of the Redeeming
Limited Partner arising, embodied by or otherwise relating to the LP Interests
or the Redeeming Limited

 

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Partner’s rights or interests in the Partnership, including all such rights
under the LP Agreement; all such voting rights and rights to be represented on
committees of the Partnership; and all such rights to receive financial and
other information from the Partnership.

 

“LP Interests” shall have the meaning set forth in the recitals.

 

“LXP” shall have the meaning set forth in the recitals.

 

“Non-Redeemed Partners” shall mean all partners of the Partnership other than
the Redeeming General Partner and the Redeeming Limited Partner.

 

“Partial Redemption Agreement” shall have the meaning set forth in the recitals.

 

“Partnership” shall have the meaning set forth in the preamble.

 

“Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof or any
other entity.

 

“Property Taxes” shall have the meaning set forth in Section 6.3(a).

 

“Redeeming General Partner” shall have the meaning set forth in the preamble.

 

“Redeeming Limited Partner” shall have the meaning set forth in the preamble.

 

“Redemption Consideration” shall mean (a) all of the Partnership’s 100% limited
liability company interest in (i) Lexington Lion San Francisco GP LLC, a
Delaware limited liability company, (ii) Lexington Malvern Manager LLC, a
Delaware limited liability company, (iii) Lexington Lion Dunwoody GP LLC, a
Delaware limited liability company, (iv) Lexington Lion New Lenox GP LLC, a
Delaware limited liability company, (v) Lexington Lion Rancho Cordova GP LLC, a
Delaware limited liability company, and (vi) Lexington Lion Houston GP LLC, a
Delaware limited liability company, and (b) all of the Partnership’s 100%
limited partnership interest in (i) Lexington Lion San Francisco L.P., a
Delaware limited partnership, (ii) Lexington Lion New Lenox L.P., a Delaware
limited partnership, and (iii) Lexington Lion Rancho Cordova L.P., a Delaware
limited partnership, and (c) all of the Partnership’s 99.5% interest in (i)
Lexington Lion Dunwoody L.P., a Delaware limited partnership, and (ii) Lexington
Lion Houston L.P., a Delaware limited partnership.

 

“Retained Entities” shall mean all entities held by the Partnership other than
those described in the definition of Redemption Consideration.

 

 

 

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ARTICLE 2.

 

REDEMPTION OF THE INTERESTS AND

SURRENDER OF THE CONTRACTUAL RIGHTS

2.1       Redemption of the LP Interests and Surrender of the LP Contractual
Rights. Upon the terms and subject to the conditions set forth in this
Agreement, the Redeeming Limited Partner does hereby (i) tender and deliver to
the Partnership, and the Partnership does hereby purchase and redeem, all of the
Redeeming Limited Partner’s right, title and interest in and to the LP
Interests, free and clear of all Encumbrances and (ii) surrender the LP
Contractual Rights to the Partnership. Following the redemption provided in this
Section 2.1, the Redeeming Limited Partner shall (i) be deemed to have resigned
as a limited partner of the Partnership and otherwise to cease to be a limited
partner of the Partnership and will have no right, title, interest, liability or
obligation in or to the Partnership, or its partners, as a partner of the
Partnership or otherwise and (ii) no longer have any LP Contractual Rights,
other than the obligations set forth in this Agreement.

2.2       Redemption of the GP Interests and Surrender of the GP Contractual
Rights. Upon the terms and subject to the conditions set forth in this
Agreement, the Redeeming General Partner does hereby (i) tender and deliver to
the Partnership, and the Partnership does hereby purchase and redeem, all of the
Redeeming General Partner’s right, title and interest in and to the GP
Interests, free and clear of all Encumbrances and (ii) surrender the GP
Contractual Rights to the Partnership. Following the redemption provided in this
Section 2.2, the Redeeming General Partner shall (i) be deemed to have resigned
as a general partner of the Partnership and otherwise to cease to be a general
partner of the Partnership and will have no right, title, interest, liability or
obligation in or to the Partnership, or its partners, as a partner of the
Partnership or otherwise and (ii) no longer have any GP Contractual Rights,
other than the obligations set forth in this Agreement.

2.3       Redemption Consideration. Simultaneously with the execution and
delivery of this Agreement by the parties hereto, the Partnership shall, (a) for
the LP Interests and the surrender of the LP Contractual Rights, (i) convey to
the Redeeming Limited Partner the Redemption Consideration pursuant to an
Assignment Agreement in form and substance as set forth on Exhibit A hereto,
(ii) cause LMLP to pay to the Redeeming Limited Partner $6,622,229 in cash by
wire transfer of immediately available funds to the account designated by the
Redeeming Limited Partner (it being agreed and acknowledged that such payment is
not an expense of the Partnership) and (iii) cause LMLP to convey to the
Redeeming Limited Partner pursuant to an Assignment Agreement in form and
substance as set forth on Exhibit B hereto all of LMLP’s 30% limited partnership
interest in Lexington Malvern L.P., a Delaware limited partnership (such 30%
interest, together with the cash payment set forth in Section 2.3(a)(ii) hereof,
the “LP Consideration”), and (b) for the GP Interests and the surrender of the
GP Contractual Rights, cause LMLP to pay to the Redeeming General Partner $1,000
(the “GP Consideration”) in cash by wire transfer of immediately available funds
to the account designated by the Redeeming General Partner (it being agreed and
acknowledged that such payment is not an expense of the Partnership). All wire
transfers pursuant to this Section 2.3 shall be in accordance with the
instructions set forth on Schedule 1 hereto.

 

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2.4       Effective Date. The parties agree that as of June 1, 2007, (i) the
Redeeming Limited Partner shall have all the benefits and burdens of ownership
of the entities described in the definition of Redemption Consideration and that
any action required to be taken with respect to any of those entities after June
1, 2007 (including, without limitation, the execution of any contracts or
leases) shall be taken by the Partnership only at the express written direction
of the Redeeming Limited Partner; (ii) the Redeeming Limited Partner shall have
all the benefits and burdens of ownership of Lexington Malvern L.P. and that any
action required to be taken with respect to Lexington Malvern L.P. after June 1,
2007 (including, without limitation, the execution of any contracts or leases)
shall be taken by the LMLP only at the express written direction of the
Redeeming Limited Partner and (iii) the Non-Redeemed Partners shall have all the
benefits and burdens of ownership of the Retained Entities and that any action
required to be taken with respect to any of the Retained Entities after June 1,
2007 (including, without limitation, the execution of any contracts or leases)
shall be taken by the Partnership only at the express written direction of the
Non-Redeemed Partners. The Redeeming Limited Partner hereby ratifies, confirms
and approves any actions taken or leases or contracts executed by (x) the
Partnership with respect to the Redemption Consideration and its assets at the
direction of the Redeeming Limited Partnership after June 1, 2007 and (y) LMLP
with respect to Lexington Malvern L.P. and its assets at the direction of the
Redeeming Limited Partnership after June 1, 2007. The Non-Redeemed Partner
hereby ratifies, confirms and approves any actions taken or leases or contracts
executed by the Partnership with respect to the Retained Entities and its assets
at the direction of the Non-Redeemed Partners after June 1, 2007.

2.5       Further Assurances. Each party hereto hereby agrees to take any and
all actions and execute any and all documents and instruments reasonably
requested by another party hereto to facilitate and effectuate the purposes of
this Agreement.

 

ARTICLE 3.

 

REPRESENTATIONS AND WARRANTIES OF THE REDEEMING LIMITED PARTNER

The Redeeming Limited Partner hereby represents and warrants to the Partnership
as follows (it being understood and agreed that each representation and warranty
contained in this Article 3 is made solely as of the date of this Agreement):

 

3.1       Organization. The Redeeming Limited Partner is a limited partnership
duly formed, validly existing and in good standing under the laws of the State
of Delaware.

3.2       Authorization. The Redeeming Limited Partner has all necessary power
and authority to enter into, execute and deliver this Agreement and to perform
all of the obligations to be performed by it hereunder. This Agreement has been
duly authorized, executed and delivered by the Redeeming Limited Partner and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, subject to: (a) laws of general application relating
to bankruptcy, insolvency and the relief of debtors and (b) rules of law
governing specific performance, injunctive relief and other equitable remedies.

 

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3.3       Validity. Neither the execution and delivery of this Agreement by the
Redeeming Limited Partner nor the performance or consummation by the Redeeming
Limited Partner of the transactions contemplated hereby, conflicts with, results
in a breach or violation of, constitutes a default under, or accelerates the
performance provided by the terms of: (a) any law, rule or regulation of any
government or any agency of any government, or any judgment, order, writ,
decree, permit or license of any court or other agency of any government to
which the Redeeming Limited Partner is subject; (b) any contract, agreement,
commitment or instrument to which the Redeeming Limited Partner is a party or by
which the Redeeming Limited Partner or any of its assets is bound; or (c) the
limited partnership agreement of the Redeeming Limited Partner or the
certificate of limited partnership of the Redeeming Limited Partner.

3.4       Ownership of LP Interests. The Redeeming Limited Partner owns the LP
Interests free and clear of all Encumbrances. Simultaneously with the transfer
of the LP Interests to the Partnership and full satisfaction by the Partnership
of the requirements set forth in Section 2.3, the Partnership shall acquire the
LP Interests free and clear of all Encumbrances.

3.5       No Other Representation or Warranty. Except as expressly set forth in
this Article 3, the Redeeming Limited Partner makes no, and no party shall be
entitled to rely upon, any representation or warranty as to any fact or matter
about the Redeeming Limited Partner, the LP Interests or any other matter.

ARTICLE 4.

 

REPRESENTATIONS AND WARRANTIES OF THE REDEEMING GENERAL PARTNER

The Redeeming General Partner hereby represents and warrants to the Partnership
as follows (it being understood and agreed that each representation and warranty
contained in this Article 4 is made solely as of the date of this Agreement):

 

4.1       Organization. The Redeeming General Partner is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware.

4.2       Authorization. The Redeeming General Partner has all necessary power
and authority to enter into, execute and deliver this Agreement and to perform
all of the obligations to be performed by it hereunder. This Agreement has been
duly authorized, executed and delivered by the Redeeming General Partner and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms, subject to: (a) laws of general application relating
to bankruptcy, insolvency and the relief of debtors and (b) rules of law
governing specific performance, injunctive relief and other equitable remedies.

4.3       Validity. Neither the execution and delivery of this Agreement by the
Redeeming General Partner nor the performance or consummation by the Redeeming
General Partner of the transactions contemplated hereby, conflicts with, results
in a breach or violation of, constitutes a default under, or accelerates the
performance provided by the terms of: (a) any law, rule or regulation of any
government or any agency of any government, or any judgment, order, writ,
decree, permit or license of any court or other agency of any government to
which the Redeeming

 

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General Partner is subject; (b) any contract, agreement, commitment or
instrument to which the Redeeming General Partner is a party or by which the
Redeeming General Partner or any of its assets is bound; or (c) the limited
liability company agreement of the Redeeming General Partner or the certificate
of formation of the Redeeming General Partner.

4.4       Ownership of GP Interests. The Redeeming General Partner owns the GP
Interests free and clear of all Encumbrances. Simultaneously with the transfer
of the GP Interests to the Partnership and full satisfaction by the Partnership
of the requirements set forth in Section 2.3, the Partnership shall acquire the
GP Interests free and clear of all Encumbrances.

4.5       No Other Representation or Warranty. Except as expressly set forth in
this Article 4, the Redeeming General Partner makes no, and no party shall be
entitled to rely upon, any representation or warranty as to any fact or matter
about the Redeeming General Partner, the GP Interests or any other matter.

ARTICLE 5.

 

REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

The Partnership hereby represents and warrants to the Redeeming Limited Partner
and the Redeeming General Partner as follows (it being understood and agreed
that each representation and warranty contained in this Article 5 is made solely
as of the date of this Agreement):

 

5.1       Organization. The Partnership is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of Delaware.

5.2       Authorization. The Partnership has all necessary power and authority
to enter into, execute and deliver this Agreement and to perform all of the
obligations to be performed by it hereunder. This Agreement has been duly
authorized, executed and delivered by the Partnership and constitutes its valid
and binding obligation, enforceable against it in accordance with its terms,
subject to: (a) laws of general application relating to bankruptcy, insolvency
and the relief of debtors and (b) rules of law governing specific performance,
injunctive relief and other equitable remedies.

5.3       Validity. Neither the execution and delivery of this Agreement by the
Partnership nor the performance or consummation by the Partnership of the
transactions contemplated hereby, conflicts with, results in a breach or
violation of, constitutes a default under, or accelerates the performance
provided by the terms of: (a) any law, rule or regulation of any government or
any agency of any government, or any judgment, order, writ, decree, permit or
license of any court or other agency of any government to which the Partnership
is subject; (b) any contract, agreement, commitment or instrument to which the
Partnership is a party or by which the Partnership or any of its assets is
bound; or (c) the LP Agreement or the certificate of limited partnership of the
Partnership.

5.4       Ownership of the Redemption Consideration. The Partnership owns the
Redemption Consideration free and clear of all Encumbrances. Simultaneously with
the transfer

 

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of the LP Interests to the Partnership, the Redeeming Limited Partner shall
acquire the Redemption Consideration free and clear of all Encumbrances.

5.5       No Other Representation or Warranty. Except as expressly set forth in
this Article 5, the Partnership makes no, and no party shall be entitled to rely
upon, any representation or warranty as to any fact or matter about the
Partnership, the LP Interests, the GP Interests or any other matter.

ARTICLE 6.

 

COVENANTS

6.1       Fees and Expenses; Taxes. Any sales, use and transfer Taxes, including
but not limited to any value added, stock transfer, gross receipts, stamp duty
and real, personal, or intangible property transfer Taxes, due by reason of the
transactions contemplated in this Agreement, including but not limited to any
interest or penalties in respect thereof (and legal costs related to analysis of
such Taxes) will be borne 50% by the Partnership and 50% by the Redeeming
Limited Partner and the Redeeming General Partner. Other than as contemplated in
the prior sentence, each party hereto shall pay all of its own legal and
accounting fees and expenses incurred in connection with the transactions
contemplated by this Agreement.

6.2       Confidentiality. From and after the effective date hereof, none of the
parties will release or cause or permit to be released any press notices, or
publicity (oral or written) or advertising promotion relating to, or otherwise
announce or disclose or cause or permit to be announced or disclosed, in any
manner whatsoever, the terms, conditions or substance of this Agreement without
first obtaining the written consent of the other parties, which shall not be
unreasonably withheld. The foregoing shall not preclude any party from
discussing the substance or any relevant details of such transactions with any
of its attorneys, accountants, professional consultants, lenders, partners,
investors, or any prospective lender, partner or investor, as the case may be,
or prevent any party hereto, from complying with laws, rules, regulations and
court orders, including without limitation, governmental regulatory, disclosure,
Tax and reporting requirements. A party may disclose this transaction or any
aspect or information related to this transaction as its attorneys deem is
necessary for such party or its Affiliates to comply with applicable law. In
addition to any other remedies available to a party, each party shall have the
right to seek equitable relief, including without limitation injunctive relief
or specific performance, against the other parties in order to enforce the
provisions of this Section 6.2. Notwithstanding the foregoing, any party to this
transaction (and each employee, agent or representative of the foregoing) may
disclose to any and all persons, without limitation of any kind, the Tax
treatment and Tax structure of the transaction and all materials of any kind
(including opinions or other Tax analyses) that are provided to them relating to
such Tax treatment and Tax structure except to the extent maintaining such
confidentiality is necessary to comply with any applicable federal or state
securities laws. The authorization in the preceding sentence is not intended to
permit disclosure of any other information unrelated to the Tax treatment and
Tax structure of the transaction including (without limitation) (i) any portion
of the transaction documents or related materials to the extent not related to
the Tax treatment or Tax structure of the transaction; (ii) the existence or
status of any negotiations unrelated to the Tax issues; or (iii) any other term
or detail not relevant to the Tax treatment or the Tax structure of the

 

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transaction. Notwithstanding anything to the contrary in this Section 6.2, (i)
no party hereto shall be deemed to be in breach hereof for divulging (or if any
of its Affiliates divulge) information in accordance with or as required by
applicable law, regulation (including, without limitation, the Securities and
Exchange Commission regulations or the regulations of any other securities
regulation authority and the regulations or rules (including rules of any
listing agreement) of any securities exchange), court order, legal process or
similar governmental mandate, and (ii) LMLP (or its Affiliates) shall be
entitled to (1) file a Current Report on Form 8-K with the Securities and
Exchange Commission, substantially in the form attached as Exhibit D hereto,
within four business days of the date hereof, (2) publicly disclose the
Agreement and the transactions contemplated hereby pursuant to a press release,
substantially in the form attached as Exhibit E hereto, and (3) make disclosures
regarding the Agreement and the transactions contemplated hereby to the extent
necessary to comply with its obligations to file other periodic reports required
to be filed to the Securities and Exchange Commission, provided that such other
periodic reports do not contain disclosures beyond the disclosures contain in
Exhibits D and E hereto.

6.3       Property Costs and Expenses. The transactions contemplated by this
Agreement and the amount set forth in Section 2.3(a)(ii) reflect the allocation
of the following costs and expenses between the Partnership and the Redeeming
Limited Partner as follows:

(a)       Taxes and Assessments. General real estate Taxes and assessments
imposed by governmental authority and any assessments imposed by private
covenant constituting a lien or charge on the assets for the then current
calendar year or other current Tax period (collectively, “Property Taxes”) not
yet due and payable shall have been be prorated as of the effective date hereof.
If the Partnership did not receive the Tax bill for the calendar year or other
applicable Tax period applicable to the effective date of this Agreement, the
Partnership and the Redeeming Limited Partner shall have prorated Property Taxes
for such calendar year or other applicable Tax period based upon the most recent
ascertainable assessed values and Tax rates; provided, however, that such
amounts shall be re-prorated upon receipt of the final Tax bill.

(b)       Collected Rent. All rent and other income (and any applicable state or
local Tax on rent) under leases in effect on the effective date hereof, whether
collected or uncollected, but net of expected delinquencies on a historical
basis, shall have been prorated as of the effective date hereof. Any prepaid
rents for the period following the effective date hereof shall be paid over by
the Partnership to the Redeeming Limited Partner after making prorations, to the
extent not already transferred to the Redeeming Limited Partner.

(c)       Utilities. Utilities, including water, sewer, electric, and gas, based
upon the last reading of meters prior to the effective date hereof shall have
been prorated as of the effective date hereof. If meter readings are obtained as
of the effective date hereof, there shall have been no proration of such items.
The Partnership shall pay the bills therefor for the period to the day preceding
the effective date hereof, and the Redeeming Limited Partner shall pay the bills
therefor for the period subsequent thereto. If the utility company will not
issue separate bills, the Redeeming Limited Partner will have received a credit
for the Partnership’s portion and will pay the entire bill prior to delinquency
after the effective date hereof. If the Partnership has paid any utilities no
more than thirty (30)

 

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days in advance in the ordinary course of business, then the Redeeming Limited
Partner shall have been charged its portion of such payment.

(d)       Other. All other charges, escrows, inventories, deposits and fees
customarily prorated and adjusted in similar transactions shall have been be so
prorated and adjusted. In the event that accurate prorations and other
adjustments cannot be made as of the effective date hereof because current bills
are not obtainable, the Partnership and the Redeeming Limited Partner shall have
prorated on the best available information, subject to adjustment upon receipt
of the final bills.

(e)       Payments. The parties agree that the allocations set forth in this
Section 6.3 will not result in the Partnership or the Redeeming Limited Partner
owing any amount to the other party after taking into account the amount set
forth in Section 2.3(a)(ii) except with respect to re-prorations as set forth in
this Section 6.3.

 

6.4       Tax Matters. For U.S. federal income tax purposes, the Redeeming
Limited Partner, the Redeeming General Partner, LMLP and the Partnership shall
treat and report the transactions contemplated by this Agreement as (a) first,
(i) a taxable sale of a portion of the LP Interests to LMLP by the Redeeming
Limited Partner in exchange for the LP Consideration and (ii) a taxable sale of
the GP Interests by the Redeeming General Partner to LMLP in exchange for the GP
Consideration; (b) second, a tax-free complete redemption by the Partnership of
the remaining LP Interests, as adjusted as a result of the sale pursuant to the
foregoing Section 6.4(a)(i), in exchange for the Redemption Consideration
pursuant to Section 731 of the Code; and (c) in all respects consistently for
purposes of any federal, state or local Tax. The parties hereto shall not take
any actions or positions inconsistent with the obligations set forth herein. The
Partnership shall make available to the Redeeming Limited Partner and the
Redeeming General Partner, and the Redeeming Limited Partner and the Redeeming
General Partner shall make available to the Partnership, (i) such records as any
such party may reasonably require for the preparation of any Tax Returns
required to be filed by the Partnership, the Redeeming Limited Partner or the
Redeeming General Partner and (ii) such records as the Partnership, the
Redeeming Limited Partner or the Redeeming General Partner may reasonably
require for the defense of any audit, examination, administrative appeal, or
litigation of any Tax Return of the Partnership or in which the Redeeming
Limited Partner or the Redeeming General Partner was included.

For purposes of this Agreement:

“Tax Return” shall mean any report, return or other information required to be
supplied to a taxing authority in connection with Taxes.

“Taxes” shall mean all taxes, charges, fees, duties, levies or other
assessments, including (without limitation) income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, stamp, leasing, lease,
user, transfer, fuel, excess profits, occupational, interest equalization,
windfall profits, severance and employees’ income withholding, unemployment and
Social Security taxes, which are imposed by the United States, or any state,
local or foreign government or subdivision or agency thereof, and such term
shall include any interest, penalties or additions to tax attributable to such
taxes.

 

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6.5       Substitute Guarantors. The Redeeming Limited Partner shall promptly
commence the use of commercially reasonable efforts to substitute the current
guarantor under each of the guaranties set forth on Exhibit C hereto with the
Redeeming Limited Partner or an Affiliate of the Redeeming Limited Partner,
subject to any consent rights and other rights of third parties relating to such
guaranties.

6.6       Use of Lexington Name. The parties hereto agree that (i) each entity
listed in the definition of Redemption Consideration may continue to use the
word “Lexington” in its name on and after the effective date hereof until such
entity is dissolved or otherwise no longer in existence and (ii) each subsidiary
of the Partnership in existence as of June 1, 2007 may continue to use the word
“Lion” in its name on and after the effective date hereof until such entity is
dissolved or otherwise no longer in existence.

ARTICLE 7.

 

INDEMNIFICATION

7.1       Indemnification by the Redeeming Limited Partner. The Redeeming
Limited Partner hereby agrees to defend, indemnify and hold harmless the
Partnership (and, with respect to clause (v), LXP) and its partners, members,
officers, directors, employees, agents, successors and assigns from and against
any claim, damage, liability, loss, cost or expense (including reasonable
attorney fees) to the extent occasioned or caused by, resulting from or arising
out of (excluding any claim, damage, liability, loss, cost or expense resulting
from or arising out of the gross negligence or willful misconduct of the
Partnership, LMLP, LXP, any of their Affiliates or their respective partners,
members, officers, directors, employees and agents): (i) any failure by the
Redeeming Limited Partner to perform its covenants or obligations as set forth
in this Agreement; (ii) any inaccuracy in or breach of any of the
representations or warranties of the Redeeming Limited Partner made to the
Partnership and contained in this Agreement; (iii) the Redeeming Limited
Partner’s ownership of the LP Interests during the period prior to the effective
date of this Agreement, including liabilities for any Taxes, fees, expenses or
other charges determined to be due and payable to any governmental entity or
other third party prior to the effective date of this Agreement; (iv) the
Redeeming Limited Partner’s ownership of the Redemption Consideration on and
after the effective date of this Agreement; and (v) any of the Continuing
Guaranty Obligations which first occurs from and after the effective date of
this Agreement. The obligations of the Redeeming Limited Partner under Section
7.1(v) shall be absolutely, unconditionally and irrevocably guaranteed by
Clarion Lion Properties Fund Holdings, L.P., a Delaware limited partnership, and
Clarion Lion Properties Fund Holdings, L.P. shall maintain a net worth as
required by the Continuing Guaranty Obligations so long as the Continuing
Guaranty Obligations are outstanding.

7.2       Indemnification by the Redeeming General Partner. The Redeeming
General Partner hereby agrees to defend, indemnify and hold harmless the
Partnership and its partners, members, officers, directors, employees, agents,
successors and assigns from and against any claim, damage, liability, loss, cost
or expense (including reasonable attorney fees) to the extent occasioned or
caused by, resulting from or arising out of (excluding any claim, damage,
liability, loss, cost or expense resulting from or arising out of the gross
negligence or willful misconduct of the Partnership, LMLP, LXP, any of their
Affiliates or their respective partners, members,

 

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officers, directors, employees and agents): (i) any failure by the Redeeming
General Partner to perform its covenants or obligations as set forth in this
Agreement; (ii) any inaccuracy in or breach of any of the representations or
warranties of the Redeeming General Partner made to the Partnership and
contained in this Agreement; and (iii) the Redeeming General Partner’s ownership
of the GP Interests during the period prior to the effective date of this
Agreement, including liabilities for any Taxes, fees, expenses or other charges
determined to be due and payable to any governmental entity or other third party
prior to the effective date of this Agreement.

7.3       Indemnification by the Partnership. The Partnership hereby agrees to
defend, indemnify and hold harmless (a) the Redeeming Limited Partner and its
partners, members, officers, directors, employees, agents, successors and
assigns from and against any claim, damage, liability, loss, cost or expense
(including reasonable attorney fees) to the extent occasioned or caused by,
resulting from or arising out of (excluding any claim, damage, liability, loss,
cost or expense resulting from or arising out of the gross negligence or willful
misconduct of the Redeeming Limited Partner, any of its Affiliates or their
respective partners, members, officers, directors, employees and agents): (i)
any failure by the Partnership to perform its covenants or obligations as set
forth in this Agreement; (ii) any inaccuracy in or breach of any of the
representations or warranties of the Partnership made to the Redeeming Limited
Partner and contained in this Agreement; (iii) the Partnership’s ownership of
the LP Interests during the period on and after the effective date of this
Agreement, including liabilities for any Taxes, fees or other governmental
charges attributable to the ownership by the Partnership of the LP Interests on
and after the effective date of this Agreement; and (iv) the Partnership’s
ownership of the Redemption Consideration prior to the effective date of this
Agreement; and (b) the Redeeming General Partner and its partners, members,
officers, directors, employees, agents, successors and assigns from and against
any claim, damage, liability, loss, cost or expense (including reasonable
attorney fees) to the extent occasioned or caused by, resulting from or arising
out of (excluding any claim, damage, liability, loss, cost or expense resulting
from or arising out of the gross negligence or willful misconduct of the
Redeeming General Partner, any of its Affiliates or their respective partners,
members, officers, directors, employees and agents): (i) any failure by the
Partnership to perform its covenants or obligations as set forth in this
Agreement; (ii) any inaccuracy in or breach of any of the representations or
warranties of the Partnership made to the Redeeming General Partner and
contained in this Agreement; and (iii) the Partnership’s ownership of the GP
Interests on and after the effective date of this Agreement, including
liabilities for any Taxes, fees or other governmental charges attributable to
the ownership by the Partnership of the GP Interests on and after the effective
date of this Agreement. For the avoidance of doubt, the Partnership shall have
no responsibility for any amounts arising pursuant to Section 7.1(v).

7.4       Indemnification Procedure. Each Person that is entitled to
indemnification under this Agreement (each, an “Indemnitee”) agrees to give the
party hereto from which it may request indemnification (the “Indemnitor”) prompt
written notice of any event, or any written claim by a third party, of which it
obtains knowledge, which could give rise to any damage, liability, loss, cost or
expense as to which it may request indemnification under this Agreement, but the
failure to give such prompt written notice shall not affect such Indemnitee’s
rights hereunder except to the extent the Indemnitor was adversely prejudiced
thereby. Notice given pursuant to the first sentence of this Section 7.4 shall:
(i) provide details of the event or claim that

 

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is the subject of the notice; (ii) state the section of this Agreement that the
Indemnitee claims has been breached; and (iii) contain as attachments any
documents to the extent material to an understanding of the event or claim that
is the subject of the notice. In connection with any such third-party claim
which could give rise to any damage, liability, loss, cost or expense as to
which indemnification may be requested under this Agreement, if the Indemnitor
shall have acknowledged in writing its obligation to indemnify in respect of
such claim, the Indemnitor may assume the defense of such third-party claim at
its expense, including by selecting counsel to direct such defense (which
counsel shall be reasonably satisfactory to the Indemnitee), and the Indemnitee
shall cooperate with the Indemnitor in determining the validity of any such
claim and its defense thereof. The Indemnitee may, at its expense, participate
in the defense of such third-party claim. Notwithstanding the Indemnitor’s
assumption of the defense of such third-party claim, the Indemnitee shall have
the right to employ one counsel to represent the Indemnitee if, in the
reasonable judgment of the Indemnitee, a conflict of interest exists between the
Indemnitee and the Indemnitor with respect to such third-party claim, and in
such event the reasonable fees and expenses of such separate counsel shall be
paid by the Indemnitor; provided, however, that such counsel shall represent the
Indemnitee only with respect to such matters as to which, in the reasonable
judgment of the Indemnitee, such conflict of interest exists. The Indemnitor
shall not settle any such claim without the consent of the Indemnitee if any
relief, other than the payment of money damages by the Indemnitor, would be
granted by such settlement or if such settlement does not include the
unconditional release of the Indemnitee. The Indemnitee shall not settle any
such claim without the consent of the Indemnitor which consent shall not be
unreasonably withheld.

7.5       Exclusive Remedy. The indemnification provided by this Article 7 shall
be the sole and exclusive remedy of any party hereto with respect to any and all
matters arising out of, relating to or connected with this Agreement other than
as set forth in Section 6.2. In furtherance of the foregoing, each of the
Redeeming Limited Partner, the Redeeming General Partner and the Partnership
hereby irrevocably and unconditionally waives any and all rights, claims and
causes of action which such party may have arising under or based upon any law
or otherwise (except pursuant to the indemnification provisions set forth in
this Article 7).

ARTICLE 8.

 

MISCELLANEOUS

8.1       Survival of Representations and Warranties. All representations and
warranties of the parties made in or pursuant to this Agreement (including the
schedules hereto) shall survive for a period of one (1) year from the effective
date hereof.

8.2       Cumulative Remedies. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.

8.3       Notices. All notices, consents, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given and
received when delivered in person,

 

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when received by facsimile transmission, or one business day after duly sent by
overnight courier, addressed as follows (or at such other address for a party as
shall be specified by like notice):

 

(a)

if to the Redeeming Limited Partner to:

CLPF-LXP/LV, L.P.

c/o ING Clarion Partners, LLC

230 Park Avenue

New York, NY 10169

Fax No. 212-883-2951

Attn: Audrey Greenberg and a copy to:

 

Mayer, Brown, Rowe & Maw LLP
Attention: Jeff Usow

 

71 S. Wacker Drive

Chicago, IL 60606

Fax No.

 

(b)

if to the Redeeming General Partner to:

CLPF-LXP/Lion Venture GP, LLC

c/o ING Clarion Partners, LLC

230 Park Avenue

New York, NY 10169

Fax No. 212-883-2951

Attn: Audrey Greenberg and a copy to:

 

Mayer, Brown, Rowe & Maw LLP
Attention: Jeff Usow

 

71 S. Wacker Drive

Chicago, IL 60606

Fax No.

 

(c)

if to the Partnership to:

Lexington/Lion Venture, L.P.

c/o The Lexington Master Limited Partnership

One Penn Plaza, Suite 4015

New York, NY 10119-4015

 

Fax No. 212-594-6600

Attn: Joseph S. Bonventre and a copy to:

 

 

Post Heymann & Koffler LLP

 

Wing A, Suite 211

 

Two Jericho Plaza

 

Jericho, New York 11753

 

Fax No. 516-433-2777

 

Attn: David Heymann, Esq.

 

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8.4       No Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement may be assigned (a) in the
case of the Partnership, by the Partnership without the prior written consent of
the Redeeming Limited Partner and the Redeeming General Partner, (b) in the case
of the Redeeming Limited Partner, by the Redeeming Limited Partner without the
prior written consent of the Partnership and (c) in the case of the Redeeming
General Partner, by the Redeeming General Partner without the prior written
consent of the Partnership, and, in each case, any attempt to do so will be
void, except for assignments and transfers by operation of law. This Agreement
shall be binding upon, inure to the benefit of, and may be enforced by, each of
the parties to this Agreement and its successors and permitted assigns.

8.5       Waiver. Any party hereto may, by written notice to the others, (a)
extend the time for the performance of any of the obligations or other actions
of the others in favor or for the benefit of such party under this Agreement;
(b) waive any inaccuracies in the representations or warranties of the others in
favor or for the benefit of such party contained in this Agreement or in any
document delivered pursuant to this Agreement; (c) waive compliance with any of
the conditions or covenants of the other parties in favor or for the benefit of
such party contained in this Agreement; or (d) waive or modify performance of
any of the obligations of the others in favor or for the benefit of such party
under this Agreement; provided, however, that any such extension, waiver or
modification shall bind only such party and not any other party in whose favor
or for whose benefit any such obligations, actions, representations, warranties,
conditions or covenants run or are made. Except as provided in the preceding
sentence, no action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance by any other party with any
of the representations, warranties, covenants, conditions, agreements or
indemnities contained in this Agreement. The waiver by any party of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.

8.6       Entire Agreement. This Agreement shall supersede any other agreement,
whether written or oral, that may have been made or entered into by the parties
hereto relating to the matters contemplated hereby and thereby, and this
Agreement constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof.

8.7       Construction. This Agreement shall not be construed more strictly
against the Partnership, the Redeeming Limited Partner or the Redeeming General
Partner merely by virtue of the fact that the same has been prepared by the
Partnership, the Redeeming Limited Partner or the Redeeming General Partner or
their counsel, it being recognized the parties hereto have contributed
substantially and materially to the preparation of this Agreement. When a
reference is made in this Agreement to Articles or Sections, such reference
shall be to an Article or Section to this Agreement unless otherwise indicated.
The words “include,” “includes” and “including” when used herein shall be deemed
in each case to be followed by the words “without limitation” if such words do
not expressly follow.

 

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8.8       Costs of Litigation. In the event of litigation between the parties
with respect to this Agreement or the transactions contemplated hereby, the
prevailing party therein shall be entitled to recover from the losing party
therein its reasonable attorney fees and costs of suit.

8.9       Amendments, Supplements, etc. This Agreement may be amended or
supplemented only by a writing signed by the Partnership, the Redeeming Limited
Partner and the Redeeming General Partner specifically referring to this
Agreement.

8.10     Headings and Captions. The headings and captions in this Agreement are
for reference purposes only and shall not affect the construction or
interpretation of any provision of this Agreement.

8.11     Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.

8.12     Severability. If any provision of this Agreement is held to be invalid
or unenforceable, the remaining provisions shall nevertheless be given full
force and effect.

8.13     Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of law thereof.

8.14     Third-Party Beneficiaries. This Agreement is not intended to, and shall
not, confer upon any Person, other than the parties hereto and the Indemnitees
solely with respect to the indemnification rights set forth in Article 7, any
rights or remedies hereunder.

8.15     Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, AND AGREES THAT
IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER LEGAL PROCEEDING IN CONNECTION WITH
OR RELATING TO THIS AGREEMENT OR ANY MATTER CONTEMPLATED HEREBY.

8.16     Jurisdiction; Venue; Forum. Each party hereto hereby irrevocably and
unconditionally (a) agrees that any action, suit or other legal proceeding
brought in connection with or relating to this Agreement or any matter
contemplated hereby shall be brought exclusively in a court of competent
jurisdiction located in the Borough of Manhattan, New York City, New York,
whether a state or federal court, and shall not be brought in any court or forum
outside the Borough of Manhattan, New York City, New York; (b) consents and
submits to, and agrees that it will not assert (by way of motion, as a defense
or otherwise) that it is not subject to, personal jurisdiction in connection
with any such action, suit or proceeding in any such court; and (c) waives to
the fullest extent permitted by law, and agrees that it will not assert (by way
of motion, as a defense or otherwise), any claim that the laying of venue of any
such action, suit or proceeding in any such court is improper or that any such
action, suit or proceeding brought in any such court was brought in an
inconvenient forum or should be stayed by reason of the pendency of some other
action, suit or other legal proceeding in a court or forum other than any such
court. Notwithstanding the foregoing, a party hereto may bring an action, suit
or other legal

 

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proceeding in a court or forum other than any such court for the sole purpose of
enforcing an order or judgment issued by any such court.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Redeeming Limited Partner, the Redeeming General Partner
and the Partnership have caused this Agreement to be duly executed and delivered
as of the date first above written.

 

REDEEMING LIMITED PARTNER:

 

CLPF-LXP/LV, L.P.

 

By: CLPF-LXP/LV GP, LLC, its general

 

partner

By: Clarion Lion Properties Fund Holdings, L.P., its sole member

 

By: CLPF-Holdings, LLC, its general partner

By: Clarion Lion Properties Fund Holdings REIT, LLC, its sole member

By: Clarion Lion Properties Fund, LLC, its managing member

 

By:

ING Clarion Partners, LLC, its manager

 

 

By:/s/ Stephen B. Hansen

 

Name: Stephen B. Hansen

 

Title: Managing Director

 

REDEEMING GENERAL PARTNER:

 

CLPF-LXP/LION VENTURE GP, LLC

 

 

By: CLPF-LXP/LV, L.P., its sole member

 

 

By: CLPF-LXP/LV GP, LLC, its general

 

partner

By: Clarion Lion Properties Fund Holdings, L.P., its sole member

 

 

--------------------------------------------------------------------------------

By: CLPF-Holdings, LLC, its general partner

By: Clarion Lion Properties Fund Holdings REIT, LLC, its sole member

By: Clarion Lion Properties Fund, LLC, its managing member

 

By:

ING Clarion Partners, LLC, its manager

 

 

By:/s/ Stephen B. Hansen

 

Name: Stephen B. Hansen

 

Title: Managing Director

 

PARTNERSHIP:

LEXINGTON/LION VENTURE, L.P.

 

 

By: LXP GP, LLC, its managing general partner

 

By:/s/ Joseph S. Bonventre

 

Name: Joseph S. Bonventre

 

Title: Senior Vice President

 

SOLELY WITH RESPECT TO SECTION 7.1:

 

CLARION LION PROPERTIES FUND HOLDINGS, L.P., solely with respect to Section 7.1

 

By: CLPF-Holdings, LLC, its general partner

By: Clarion Lion Properties Fund Holdings REIT, LLC, its sole member

By: Clarion Lion Properties Fund, LLC, its managing member

 

 

--------------------------------------------------------------------------------

 

By:

ING Clarion Partners, LLC, its manager

 

 

By:/s/ Stephen B. Hansen

 

Name: Stephen B. Hansen

 

Title: Managing Director

 

 

 

 

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SCHEDULES AND EXHIBITS OMITTED