Document:

EX-4.2

 

Exhibit 4.2

Execution Copy

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of
October 6, 2005, among Lexington Strategic Asset Corp., a Delaware corporation (together with any
successor entity thereto, the “Company”), Friedman, Billings, Ramsey & Co., Inc., a
Delaware corporation (together with any successor entity thereto, “FBR”), for itself and
for the benefit of the persons listed on Exhibit A hereto (the “Initial Holders”),
Lexington Corporate Properties Trust, a Maryland real estate investment trust (together with any
successor entity thereto, “Lexington”), LXP Advisory, LLC, a Delaware limited liability
company (together with any successor entity thereto, the “Advisor”), LSAC Operating
Partnership L.P., a Delaware limited partnership (together with any successor entity thereto (the
“Partnership”), and Patrick Carroll, T. Wilson Eglin, Brendan P. Mullinix, Richard I.
Rouse, E. Robert Roskind and John B. Vander Zwaag (collectively, the “Management Holders”).

     This Agreement is made pursuant to the Purchase/Placement Agreement (the
“Purchase/Placement Agreement”), dated as of September 30, 2005, among the Company, the
Partnership and FBR. In order to induce (i) FBR to enter into the Purchase/Placement Agreement and
to purchase, in its capacity as initial purchaser, the Rule 144A/Reg. S Shares from the Company and
to place, in its capacity as placement agent, the Regulation D Shares pursuant to the terms
thereof, (ii) the investors purchasing the Rule 144A/Reg. S Shares from FBR to purchase such shares
of Common Stock, (iii) the investors purchasing the Regulation D Shares directly from the Company
in the Private Placement to purchase such shares of Common Stock and (iv) Lexington to enter into
the transactions contemplated by the Contribution Agreement, the Company has agreed to provide the
registration rights provided for in this Agreement to FBR, the Initial Holders, Lexington, the
Management Holders and their respective direct and indirect transferees who constitute Holders.
The execution and delivery of this Agreement is a condition to the closing of the transactions
contemplated by the Purchase/Placement Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties
hereto, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

1. Definitions

     As used in this Agreement, the following terms shall have the following meanings:

     Additional Shares: Common Stock or other securities of the Company
issued in respect of the Shares by reason of or in connection with any stock
dividend, stock distribution, stock split, purchase in any rights offering or in
connection with any exchange for or replacement of such shares or any combination of
shares, recapitalization, merger or consolidation, or any other equity securities
issued pursuant to any other pro rata distribution with respect to the Common Stock.

 

 

     Advisor: As defined in the preamble hereof.

     Advisory Agreement: As defined in Section 2(e) hereof.

     Agreement: As defined in the preamble hereof.

     Affiliate: As to any specified Person, (i) any Person directly or
indirectly owning, controlling or holding, with power to vote, ten (10) percent or
more of the outstanding voting securities of such other Person, (ii) any Person ten
(10) percent or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held, with power to vote, by such other Person,
(iii) any Person directly or indirectly controlling, controlled by or under common
control with such other Person, (iv) any executive officer, director, trustee,
managing member or general partner of such Person and (v) any legal entity for which
such Person acts as an executive officer, director, trustee, managing member or
general partner. For purposes of this definition, “control” (including the
correlative meanings of the terms “controlled by” and “under common control with”),
as used with respect to any Person, shall mean the possession, directly, or
indirectly through one or more intermediaries or relationships, of the power to
direct or cause the direction of the management and policies of such Person, whether
by contract, through the ownership of voting securities, partnership or member
interests or other equity interests or otherwise. An indirect relationship shall
include, without limitation, circumstances in which a Person’s spouse, children,
parents, siblings or mother-, father-, sister- or brother-in-law is or has been
associated with a Person.

     Business Day: With respect to any act to be performed hereunder, each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking
institutions in New York, New York are authorized or obligated by applicable law,
regulation or executive order to close.

     Closing Time: October 6, 2005.

     Commission: The Securities and Exchange Commission.

     Common Stock: The common stock, par value $0.0001 per share, of the
Company.

     Company: As defined in the preamble hereof.

     Contribution Agreement: The Contribution Agreement, to be dated on or
about October 6, 2005, between the Company and Lexington pursuant to which, among
other things, Lexington will contribute certain real estate assets and financing
deposits to the Company in exchange for shares of Common Stock having an aggregate
value of approximately $33,188,310 based on the per share offering price set forth
in the Offering Memorandum.

     Controlling Person: As defined in Section 6(a) hereof.

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     End of Suspension Notice: As defined in Section 5(b) hereof.

     Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission thereunder.

     FBR: As defined in the preamble hereof.

     Holder: Each Initial Holder, Lexington, the Management Holders, and
each direct and indirect transferee thereof from time to time that holds any
Registrable Shares.

     Indemnified Party: As defined in Section 6(c) hereof.

     Indemnifying Party: As defined in Section 6(c) hereof.

     IPO Registration Statement: As defined in Section 2(b) hereof.

     Lexington: As defined in the preamble hereof.

     Lexington Shares: The shares of Common Stock having an aggregate value
of approximately $33,188,313, based on the per share offering price set forth in the
Offering Memorandum, issued to Lexington pursuant to the Contribution Agreement, as
more fully described in the Offering Memorandum.

     Liabilities: As defined in Section 6(a) hereof.

     Management Holders: As defined in the preamble hereof.

     Management Shares: The shares of Common Stock collectively held by the
Management Holders as of Closing Time.

     NASD: The National Association of Securities Dealers, Inc.

     Offering Memorandum: The Offering Memorandum of the Company, dated
September 30, 2005, pursuant to which the Rule 144A/Regulation S Shares and the
Regulation D Shares are offered and sold.

     Participant: Any of the investors who purchased Regulation D Shares
directly from the Company in the Private Placement as more fully described in the
Offering Memorandum. The Participants are listed among the Initial Holders on
Exhibit A attached hereto.

     Partnership: As defined in the preamble hereof.

     Partnership Agreement: As defined in Section 2(e) hereof.

     Person: An individual, partnership, limited liability company,
corporation, trust, unincorporated organization, government or agency or political
subdivision thereof, or any other legal entity.

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     Private Placement: As defined in the Purchase/Placement Agreement and
as more fully described in the Offering Memorandum.

     Proceeding: An action (including a class action), claim, suit, demand,
arbitration or other proceeding (including without limitation, an investigation or
partial proceeding, such as a deposition), whether commenced or, to the knowledge of
the Person subject thereto, threatened, by any Person.

     Prospectus: The prospectus included in any Registration Statement,
including any preliminary prospectus, and all other amendments and supplements to
any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in such
prospectus.

     Purchase/Placement Agreement: As defined in the preamble, as amended
from time to time in accordance with the terms thereof.

     Purchaser Indemnitee: As defined in Section 6(a) hereof.

     Registrable Shares: The Shares, upon original issuance thereof, and at
all times subsequent thereto, including upon the transfer thereof by the original
holder or any subsequent holder and any Additional Shares, until the earliest to
occur of (i) the date on which such shares have been sold pursuant to an effective
Registration Statement, (ii) the date on which such shares are sold, transferred or
otherwise disposed of pursuant to Rule 144, (iii) the date on which, in the opinion
of counsel to the Company, such shares not held by Affiliates of the Company are
eligible for sale without registration under the Securities Act pursuant to
subparagraph (k) of Rule 144, (iv) the date on which such shares are sold to the
Company or any of its subsidiaries, or (v) the second anniversary of the initial
effective date of the Shelf Registration Statement or, in the case of any Additional
Shares for which tacking under Rule 144A is not available and which are not included
in the Shelf Registration Statement, until the second anniversary of the issuance of
the Additional Shares (subject to extension pursuant to Section 5(c) hereof).

     Registration Default: As defined in Section 2(e) hereof.

     Registration Expenses: Any and all fees and expenses incident to the
Company’s performance of, or compliance with, this Agreement, including, without
limitation: (i) all Commission, securities exchange, NASD or other registration,
listing, inclusion and filing fees, (ii) all fees and expenses incurred in
connection with compliance with applicable international, federal or state
securities or blue sky laws (including, without limitation, any registration,
listing and filing fees and reasonable fees and disbursements of counsel in
connection with blue sky qualification of any of the Registrable Shares and the
preparation of a blue sky memorandum and compliance with the rules of the NASD),
(iii) all expenses of any Person in preparing or assisting in preparing, word
processing,

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duplicating, printing, delivering and distributing any Registration Statement,
any Prospectus, any amendments or supplements thereto, any underwriting agreements,
agreements among underwriters, securities sales agreements, certificates and any
other documents relating to the performance by the Company under, and compliance by
the Company with, this Agreement, (iv) all fees and expenses incurred in connection
with the listing or inclusion of any of the Registrable Shares on any securities
exchange or national quotation system pursuant to Section 4(n) of this Agreement or
otherwise, (v) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company (including, without limitation, the
expenses of any special audit and “cold comfort” letters required by or incident to
such performance), (vi) reasonable fees and disbursements of one Selling Holders’
Counsel for each Registration Statement (provided that the Company shall not be
required to pay fees and disbursements for such Selling Holders’ Counsel in excess
of $35,000 for each Registration Statement) and the amounts set forth in Section
4(m), and (vii) any fees and disbursements customarily paid by issuers in connection
with issues and sales of securities (including the fees and expenses of any experts
retained by the Company in connection with any Registration Statement); provided,
however, that Registration Expenses shall exclude brokers’ or underwriters’
discounts and commissions, any transfer taxes or transfer fees, if any, relating to
the sale or disposition of Registrable Shares by a Holder and the fees and
disbursements of any counsel to the Holders, except as provided for in clause (vi)
above.

     Registration Obligations: As defined in Section 2(e) hereof.

     Registration Statement: Any Shelf Registration Statement, Subsequent
Shelf Registration Statement or IPO Registration Statement of the Company that
covers the resale of any Registrable Shares, including the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference, if any, in such registration
statement.

     Regulation D: Regulation D (Rules 500-508) promulgated by the
Commission under the Securities Act, as such rules may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission as a
replacement thereto having substantially the same effect as such regulation.

     Regulation D Option Shares: The additional Regulation D Shares that
may be issued pursuant to an additional allotment option granted by the Company to
FBR, which, together with the Rule 144A/Reg. S Option Shares, shall not exceed
1,010,700 shares in the aggregate.

     Regulation D Shares: The shares of Common Stock initially sold by the
Company to “accredited investors” (within the meaning of Rule 501(a) of

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Regulation D promulgated under the Securities Act), including the Regulation D
Option Shares, in the Private Placement.

     Regulation S: Regulation S (Rules 901-905) promulgated by the
Commission under the Securities Act, as such rules may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission as a
replacement thereto having substantially the same effect as such regulation.

     Regulation S Shares: The shares of Common Stock initially resold by
FBR pursuant to the Purchase/Placement Agreement to “non-U.S. persons” (in
accordance with Regulation S) in an “offshore transaction” (in accordance with
Regulation S).

     Rule 144: Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

     Rule 144A: Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

     Rule 144/Reg. S Option Shares: The additional Rule 144A shares that
may be issued pursuant to an additional allotment option granted by the Company to
FBR, which, together with the Regulation D Option Shares, shall not exceed 1,010,700
shares in the aggregate.

     Rule 144A Shares: The shares of Common Stock initially resold by FBR
pursuant to the Purchase/Placement Agreement to “qualified institutional buyers” (as
such term is defined in Rule 144A) in accordance with Rule 144A.

     Rule 144A/Reg. S Shares: The Rule 144A Shares, the Regulation S Shares
and the Rule 144A/Reg. S Option Shares.

     Rule 158: Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

     Rule 415: Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

     Rule 424: Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar

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rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.

     Rule 429: Rule 429 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such rule.

     Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Commission thereunder.

     Selling Holders’ Counsel: Counsel for the Holders that is selected by
the Holders holding a majority of the Registrable Shares included in any
Registration Statement and that is reasonably acceptable to the Company.

     Shares: The Rule 144A/Reg. S Shares, the Regulation D Shares, the
Lexington Shares and the Management Shares.

     Shelf Registration Statement: As defined in Section 2(a) hereof.

     Subsequent Shelf Registration Statement: As defined in Section 2(c)
hereof.

     Suspension Event: As defined in Section 5(b) hereof.

     Suspension Notice: As defined in Section 5(b) hereof.

     Underwritten Offering: A sale of securities of the Company to an
underwriter or underwriters for reoffering to the public.

2. Registration Rights

     (a) Mandatory Shelf Registration. As set forth in Section 4 hereof, subject to Section
2(b)(ii), the Company agrees to file with the Commission no later than the date that is one hundred
fifty (150) calendar days after the date of this Agreement a shelf Registration Statement on Form
S-11 or such other form under the Securities Act then available to the Company providing for the
resale of the Registrable Shares pursuant to Rule 415 from time to time by the Holders, including
for the avoidance of doubt, any Additional Shares that are issued prior to the initial
effectiveness of such Shelf Registration Statement (such registration statement, including the
Prospectus, amendments and supplements to such registration statement or Prospectus, including pre-
and post-effective amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement, the “Shelf
Registration Statement”). The Company shall use its commercially reasonable efforts to cause
such Shelf Registration Statement to be declared effective by the Commission as soon as practicable
following such filing. Such commercially reasonable efforts shall include, without limitation,
responding to any comments issued by the staff of the Commission with respect to any Registration
Statement and filing any related amendment to such Registration Statement as soon as reasonably
practicable after receipt of such comments.

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Any Shelf Registration Statement shall provide for the resale from time to time, and pursuant
to any method or combination of methods legally available (including, without limitation, an
Underwritten Offering), a direct sale to purchasers, a sale through brokers or agents, or sale over
the Internet) by the Holders of any and all Registrable Shares.

     (b) IPO Registration. If the Company proposes to file a registration statement on Form S-11
or such other form under the Securities Act providing for the initial public offering of shares of
Common Stock (such registration statement, including the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement, the “IPO Registration Statement”), the
Company will mail written notices of the filing, within five (5) Business Days after the filing
thereof, to each Holder, and will afford each Holder an opportunity to include in such IPO
Registration Statement all or any part of the Registrable Shares then held by such Holder. Each
Holder desiring to include in any such IPO Registration Statement all or part of the Registrable
Shares held by such Holder shall, within twenty (20) Business Days after receipt of the
above-described written notice by the Company, so notify the Company in writing, and in such notice
shall inform the Company of the number of Registrable Shares such Holder wishes to include in such
IPO Registration Statement. If any Holder fails to so notify the Company in writing of its
election to include all or any part of its Registrable Shares in the IPO Registration Statement,
such Holder’s right to include all or any part of its Registrable Shares in the IPO Registration
Statement shall lapse. Any election by any Holder to include any Registrable Shares in the IPO
Registration Statement will not affect the inclusion of such Registrable Shares in the Shelf
Registration Statement or any Subsequent Shelf Registration Statement until such Registrable Shares
have been sold under the IPO Registration Statement; provided, however, that at such time of sale,
the Company shall have the right to remove from the Shelf Registration Statement or any Subsequent
Shelf Registration Statement the Registrable Shares sold pursuant to the IPO Registration
Statement.

     (i) Right to Terminate IPO Registration. The Company shall have the right to terminate
or withdraw any IPO Registration Statement referred to in this Section 2(b) prior to the
effectiveness of such registration whether or not any Holder has elected to include
Registrable Shares in such registration; provided, however, that the Company must provide
each Holder that elected to include any Registrable Shares in such IPO Registration
Statement prompt written notice of such termination or withdrawal. Furthermore, in the
event the IPO Registration Statement is not declared effective by the Commission within one
hundred twenty (120) Business Days following delivery by the Company of notice to the
Holders of their initial opportunity to include all or any part of the Registrable Shares
then held by such Holders in the IPO Registration Statement, unless a road show for the
Underwritten Offering pursuant to the IPO Registration Statement is actually in progress at
such time, the Company shall promptly provide a new written notice to all Holders giving
them another opportunity to elect to include Registrable Shares in the pending IPO
Registration Statement. Each Holder desiring to include in any such IPO Registration
Statement all or part of the Registrable Shares held by such Holder shall, within ten (10)
Business Days after receipt of the above-described written notice by the Company, so notify
the Company in writing, and in such notice

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shall inform the Company of the number of Registrable Shares such Holder wishes to
include in such IPO Registration Statement.

     (ii) Obligation to File Shelf Registration after Filing of IPO Registration Statement.
Notwithstanding the provisions of Section 2(a) hereof, (a) if the Company files an IPO
Registration Statement before it files the Shelf Registration Statement or any Subsequent
Shelf Registration Statement pursuant to Section 2(a) or 2(c) hereof, the Company shall file
the Shelf Registration Statement no more than sixty (60) days after the filing of the IPO
Registration Statement and the Company shall use its commercially reasonable efforts to
cause such Shelf Registration Statement to be declared effective by the Commission as soon
as practicable following such filing and (b) if the Company files an IPO Registration
Statement after the initial filing of the Shelf Registration Statement or any Subsequent
Shelf Registration Statement but before the effective date of such Shelf Registration
Statement or Subsequent Shelf Registration Statement, the Company shall have the right to
defer causing such Shelf Registration Statement or Subsequent Shelf Registration Statement
to be declared effective by the Commission until sixty (60) days after the effective date of
the IPO Registration Statement. The Company shall have the right to remove from any Shelf
Registration Statement or Subsequent Registration Statement, as applicable, any Registrable
Shares sold pursuant to the IPO Registration Statement.

     (iii) Underwriting. The Company shall give written notice to the Holders who elect to
be included in the IPO Registration Statement of the managing underwriters for the
Underwritten Offering proposed under the IPO Registration Statement. The right of any such
Holder to include Registrable Shares in any IPO Registration Statement pursuant to this
Section 2(b) shall be conditioned upon such Holder’s participation in such Underwritten
Offering and the inclusion of such Holder’s Registrable Shares in the Underwritten Offering
to the extent provided herein. All Holders proposing to distribute their Registrable Shares
through such Underwritten Offering shall enter into an underwriting agreement in customary
form with the managing underwriters selected by the Company for such underwriting and
complete and execute any questionnaires, powers of attorney, indemnities, securities escrow
agreements, custody agreements, lock-up agreements and other documents reasonably required
under the terms of such underwriting, and furnish to the Company such information in writing
as the Company may reasonably request for inclusion in the IPO Registration Statement;
provided, however, that no Holder shall be required to make any representations or
warranties to or agreements (including indemnitees) with the Company or the underwriters
other than representations, warranties or agreements (including indemnitees) as are
customary and reasonably requested by the underwriters. Notwithstanding any other provision
of this Agreement, if at any time the managing underwriters determine in good faith that
marketing factors require a limitation on the number of shares to be included, then the
managing underwriters may exclude shares (including Registrable Shares) from the IPO
Registration Statement and the Underwritten Offering, and any shares included in the IPO
Registration Statement and the Underwritten Offering shall be allocated, first, to
the Company, second, to each of the Holders (other than Lexington and the Management
Holders) requesting inclusion of their Registrable Shares in the IPO Registration Statement
(on a pro rata basis based on the total number of Registrable Shares then

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requested for inclusion by each such Holder), and third, to each of Lexington
and the Management Holders if Lexington and the Management Holders are requesting inclusion
of their Registrable Shares in such IPO Registration Statement (on a pro rata basis based on
the total number of Registrable Shares then requested for inclusion by each such Holder);
provided, however, that the number of Registrable Shares (other than the Lexington Shares
and the Management Shares) to be included in the IPO Registration Statement shall not be
reduced unless all other securities of the Company held by (i) the Company’s directors,
officers, other employees and consultants; and (ii) other holders of the Company’s capital
stock with registration rights that are inferior (with respect to such reduction) to the
registration rights of the Holders set forth herein, are first entirely excluded from the
underwriting and registration.

     If any Holder disapproves of the terms of any such Underwritten Offering that is
undertaken in compliance with the terms hereof, or for any other reason, such Holder may
elect to withdraw from such Underwritten Offering by providing written notice to the Company
and the managing underwriters, delivered not later than the later of (a) sixty (60) days
after the initial filing date of the IPO Registration Statement and (b) five (5) Business
Days prior to the date the preliminary prospectus is printed; provided, however, in the
event the IPO Registration Statement is not declared effective by the Commission within one
hundred twenty (120) Business Days following delivery by the Company of notice to the
Holders of their initial opportunity to include all or any part of the Registrable Shares
then held by such Holders in the IPO Registration Statement, unless a road show for the
Underwritten Offering pursuant to the IPO Registration Statement is in progress at such
time, the Company shall promptly provide written notice to all Holders who have elected to
be included in the IPO Registration Statement giving them another opportunity to elect to
withdraw from the pending IPO Registration Statement, and each Holder desiring to withdraw
from such IPO Registration Statement shall, within ten (10) Business Days after receipt of
the above-described written notice by the Company, provide notice to the Company and the
managing underwriter of such election. Any Registrable Shares excluded or withdrawn from
such Underwritten Offering shall be excluded and withdrawn from the IPO Registration
Statement.

     (iv) Hold-back Agreement. By electing to include Registrable Shares in the IPO
Registration Statement, if any, the Holder of such Registrable Shares shall be deemed to
have agreed not to effect any sale or distribution of securities of the Company of the same
or similar class or classes of the securities included in the IPO Registration Statement or
any securities convertible into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 or Rule 144A under the Securities Act, during such
periods as reasonably requested by the managing underwriter (but in no event for a period
longer than sixty (60) days following the effective date of the IPO Registration Statement);
provided that each of the officers and directors of the Company that hold shares of Common
Stock or securities convertible into or exchangeable or exercisable for shares of Common
Stock are subject to restrictions at least as burdensome as those applicable to the Holders
for not less than the entire time period required of the Holders hereunder.

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     (c) Subsequent Shelf Registration for Additional Shares Issued after Effectiveness of the
Mandatory Shelf Registration Statement. If any Additional Shares are issued or distributed to
Holders after the effectiveness of the Shelf Registration Statement, or such Additional Shares were
otherwise not included in a prior Shelf Registration Statement, then the Company shall as soon as
practicable, but in no event later than sixty (60) days after the issuance of such Additional
Shares, file an additional shelf Registration Statement on Form S-11 or such other form under the
Securities Act then available to the Company providing for the resale of the Additional Shares
pursuant to Rule 415 from time to time by the Holders (such registration statement, including the
Prospectus, amendments and supplements to such registration statement or Prospectus, including pre-
and post-effective amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement, a “Subsequent
Shelf Registration Statement”) in the same manner, and subject to the same provisions in this
Agreement as the Shelf Registration Statement; provided that the provisions of Section 2(e) and
Section 9 (provided that with respect to Section 9, the Company has at the time of the issuance of
the Additional Shares completed an Underwritten Offering pursuant to the IPO Registration
Statement) hereof will not apply to any such Subsequent Shelf Registration Statement.

     (d) Expenses. The Company shall pay all Registration Expenses in connection with the
registration of the Registrable Shares pursuant to this Agreement. Each Holder participating in a
registration pursuant to this Section 2 shall bear such Holder’s proportionate share (based on the
total number of Registrable Shares sold in such registration) of all discounts and commissions
payable to underwriters or brokers and all transfer taxes and transfer fees in connection with a
registration of Registrable Shares pursuant to this Agreement and any other expenses incurred by
such Holder that are not payable by the Company pursuant to this Agreement.

     (e) Suspension of Advisory Fee; Forfeiture of Shares. If the Company (i) does not initially
file the IPO Registration Statement or the Shelf Registration Statement with the Commission within
one hundred fifty (150) days from the date hereof, (ii) files the IPO Registration Statement within
one hundred fifty (150) days from the date hereof and before it files a Shelf Registration
Statement but fails to file a Shelf Registration Statement relating to any Registrable Shares not
registered under and distributed pursuant to an IPO Registration Statement within sixty (60) days
after the date on which the IPO Registration Statement is first filed with the Commission, or (iii)
fails to comply with its obligations set forth in Sections 2 and 4 to file, when and as required,
any documents or other materials necessary to effect, or maintain the effectiveness of, any Shelf
Registration Statement (collectively, the “Registration Obligations”), then (A) the holders
of Class B Units (as defined in the Limited Partnership Agreement, dated October 6, 2005, of the
Partnership (the “Partnership Agreement”)) shall not be entitled to receive from the
Partnership, and the Partnership shall not make or pay to the holders of Class B Units, any
distributions that may become payable to the holders of Class B Units pursuant to the Partnership
Agreement for the period of time beginning with the date that the Company first fails to comply
with the applicable Registration Obligation and continuing until the date that the Company complies
with such Registration Obligation, at which time all amounts due to the holders of Class B Units
under the Partnership Agreement shall become due and payable, without interest thereon, and (B)
each of the Management Holders shall forfeit that number of shares of Common Stock previously
granted to such Management Holders pursuant to

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the Company’s equity incentive plan (as more fully described in the Offering Memorandum) equal
to 1% per day of the aggregate number of shares previously granted to such Management Holder
pursuant to the Company’s equity incentive plan during the period of time beginning with the date
that the Company first fails to comply with the applicable Registration Obligation and continuing
until the date that the Company complies with such Registration Obligation; provided, however, that
the aggregate number of shares forfeited by each Management Holder shall not exceed 50% of the
aggregate number of shares previously purchased by such Management Holder under the Company’s
equity incentive plan; provided further, that in no event shall the forfeiture provided for in this
Section 2(e) apply at any time when the Company has endeavored in good faith to file either the IPO
Registration Statement or Shelf Registration Statement but is unable to make such filing as of such
date as a result of the Commission’s inability (in general and not because of any error associated
with the Company’s filing) to accept electronic filings pursuant to its Electronic Data Gathering
and Retrieval (EDGAR) system; and provided further that the Company shall have an additional five
(5) Business Day grace period after the date that is one hundred fifty (150) days after the date
hereof to file either an IPO Registration Statement or Shelf Registration Statement before any
forfeiture shall be required under clause (B) of this Section 2(e). The remedies set forth in this
Section 2(e) shall be the exclusive remedies available to the Holders for any breach of the
Registration Obligations.

3. Rules 144 and 144A Reporting

     With a view to making available the benefits of certain rules and regulations of the
Commission that may permit the sale of the Registrable Shares to the public without registration,
until such date as no Holder owns any Registrable Shares, the Company agrees to:

     (a) use its commercially reasonable efforts to make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act, at all times after the
effective date of the first registration statement under the Securities Act filed by the Company
for an offering of its securities to the general public;

     (b) use its commercially reasonable efforts to file with the Commission in a timely manner all
reports and other documents required to be filed by the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting requirements);

     (c) if the Company is not required to file reports and other documents under the Securities
Act and the Exchange Act, make available other information as required by, and so long as necessary
to permit sales of Registrable Shares pursuant to, Rule 144 and Rule 144A; and

12

 

     (d) furnish to any Holder promptly upon request (i) a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 (at any time after ninety (90) days
after the effective date of the first registration statement under the Securities Act filed by the
Company for an offering of its securities to the general public), and of the Securities Act and the
Exchange Act (at any time after it has become subject to the reporting requirements of the Exchange
Act), (ii) if not otherwise available on the EDGAR system, a copy of the most recent annual and
quarterly report(s) of the Company, and (iii) such other reports, documents or shareholder
communications of the Company, and take such further actions consistent with this Section 3, as a
Holder may reasonably request in availing, and as is necessary to avail, itself of any rule or
regulation of the Commission allowing a Holder to sell any such Registrable Shares without
registration.

4. Registration Procedures

     In connection with the obligations of the Company with respect to any registration pursuant to
this Agreement, the Company shall, without limitation:

     (a) notify FBR and Selling Holders’ Counsel, if any, in writing, at least fifteen (15)
Business Days prior to filing a Registration Statement (other than an IPO Registration Statement),
of its intention to file a Registration Statement with the Commission and, at least ten (10)
Business Days prior to filing, provide a copy of the Registration Statement to FBR, its counsel and
Selling Holders’ Counsel, if any, for review and comment; prepare and file with the Commission, as
specified in this Agreement, a Registration Statement(s), which Registration Statement(s) (x) shall
comply as to form in all material respects with the requirements of the applicable form and include
all financial statements required by the Commission to be filed therewith and (y) shall be
reasonably acceptable to FBR, its counsel and the Selling Holders’ Counsel, if any; notify FBR and
Selling Holders’ Counsel, if any, in writing, at least five (5) Business Days prior to filing of
any amendment or supplement to such Registration Statement and, at least three (3) Business Days
prior to filing, provide a copy of such amendment or supplement to FBR, its counsel and Selling
Holders’ Counsel, if any, for review and comment; promptly following receipt from the Commission,
provide to FBR, its counsel and Selling Holders’ Counsel, if any, copies of any comments made by
the staff of the Commission relating to such Registration Statement (whether pre-effective or
post-effective) and of the Company’s responses thereto for review and comment; and use its
commercially reasonable efforts to cause such Registration Statement to become effective as soon as
practicable after filing and to remain effective, subject to Section 5 hereof, until the earlier of
(i) such time as all Registrable Shares covered thereby have been sold in accordance with the
intended methods of distribution of such Registrable Shares, and (ii) there are no Registrable
Shares outstanding; provided, however, that the Company shall not be required to cause any IPO
Registration Statement to become effective if it elects to terminate or withdraw the IPO
Registration Statement pursuant to Section 2(b)(i) hereof and the Holders have been so notified;
provided, further, that if the Company has an effective Shelf Registration Statement or Subsequent
Shelf Registration Statement on Form S-11 under the Securities Act and becomes eligible to use Form
S-3 or such other short-form registration statement form under the Securities Act, the Company may,
upon twenty (20) Business Days prior written notice to FBR and all Holders, register any
Registrable Shares registered but not yet distributed under the effective Shelf Registration
Statement or Subsequent Shelf Registration Statement on such a short-form Shelf Registration
Statement and, once the

13

 

short-form Shelf Registration Statement is declared effective, de-register such shares under
the previous Shelf Registration Statement or any Subsequent Shelf Registration Statement or
transfer the filing fees from the previous Shelf Registration Statement (such transfer pursuant to
Rule 429, if applicable) unless the Holders holding a majority of the shares registered by the
Holders under the initial Shelf Registration Statement or any Subsequent Shelf Registration
Statement (excluding Registrable Shares held by the Company, Lexington, the Management Holders or
any of their Affiliates) notify the Company within twenty (20) Business Days of receipt of the
Company notice that such a registration under a new Registration Statement and de-registration of
the initial Shelf Registration Statement or any Subsequent Shelf Registration Statement would
materially interfere with such Holders’ distribution of Registrable Shares already in progress, in
which case the Company shall delay the effectiveness of the short-form Shelf Registration Statement
and de-registration for a period of not less than thirty (30) Business Days from the date that the
Company receives the notice from such Holders requesting a delay;

     (b) subject to Section 4(i) hereof, (i) prepare and file with the Commission such amendments
and post-effective amendments to each such Registration Statement as may be necessary to keep such
Registration Statement effective for the period described in Section 4(a) hereof; (ii) cause each
Prospectus contained therein to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 or any similar rule that may be adopted under the
Securities Act; and (iii) comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by each Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the selling Holders thereof;

     (c) furnish to FBR and the Holders, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement thereto and such other
documents as FBR or such Holder may reasonably request, in order to facilitate the public sale or
other disposition of the Registrable Shares; the Company consents, subject to Section 5, to the use
of such Prospectus, including each preliminary Prospectus, by FBR and the Holders, if any, in
connection with the offering and sale of the Registrable Shares covered by any such Prospectus;

     (d) use its commercially reasonable efforts to register or qualify, or obtain exemption from
registration or qualification for, all Registrable Shares by the time the applicable Registration
Statement is declared effective by the Commission under all applicable state securities or “blue
sky” laws of such United States jurisdictions as FBR or any Holder with Registrable Shares covered
by a Registration Statement may reasonably request in writing, keep each such registration or
qualification or exemption effective during the period such Registration Statement is required to
be kept effective pursuant to Section 4(a) and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Shares owned by such Holder; provided, however, that the Company
shall not be required to take any action to comply with this Section 4(d) if it would require the
Company to (i) qualify generally to do business in any jurisdiction or to register as a broker or
dealer in such jurisdiction where it would not otherwise be required to qualify but for this
Section 4(d) and except as may be required by the Securities Act, (ii) subject itself to taxation
in any such jurisdiction, or (iii) submit to the general service of process in any such
jurisdiction;

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     (e) use its commercially reasonable efforts to cause all Registrable Shares covered by such
Registration Statement to be registered and approved by such other governmental agencies or
authorities in the United States as may be necessary to enable the Holders thereof to consummate
the disposition of such Registrable Shares; provided, however, that the Company shall not be
required to take any action to comply with this Section 4(e) if it would require the Company or any
of its subsidiaries to (i) qualify generally to do business in any jurisdiction or to register as a
broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for
this Section 4(e) and except as may be required by the Securities Act, (ii) subject itself to
taxation in any such jurisdiction, or (iii) submit to the general service of process in any such
jurisdiction;

     (f) notify FBR, Selling Holders’ Counsel, if any, and each Holder with Registrable Shares
covered by a Registration Statement promptly and, if requested by FBR, Selling Holders’ Counsel, if
any, or any such Holder, promptly confirm such advice in writing at the address determined in
accordance with Section 10(c), (i) when such Registration Statement has become effective and when
any post-effective amendments thereto become effective or upon the filing of a supplement to any
Prospectus, (ii) of the issuance by the Commission or any state securities authority of any stop
order suspending the effectiveness of such Registration Statement or the initiation, assertion or,
to the extent known to the Company, threat of any Proceedings for that purpose, (iii) of any
request by the Commission or any other federal, state or foreign governmental authority for
amendments or supplements to such Registration Statement or related Prospectus or for additional
information, and (iv) of any reason, including without limitation, the happening of any event
during the period such Registration Statement is effective, as a result of which such Registration
Statement or the related Prospectus or any document incorporated by reference therein contains any
untrue statement of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading (which information shall be accompanied by an instruction to suspend the
use of the Registration Statement and the related Prospectus until the requisite changes have been
made);

     (g) use its commercially reasonable efforts to avoid the issuance of, or if issued, to obtain
the withdrawal of, any order enjoining or suspending the use or effectiveness of a Registration
Statement or suspending of the qualification (or exemption from qualification) of any of the
Registrable Shares for sale in any jurisdiction, as promptly as practicable;

     (h) upon request, if not otherwise available on the EDGAR system, promptly furnish to FBR,
Selling Holders’ Counsel, if any, and each requesting Holder with Registrable Shares covered by a
Registration Statement, without charge, at least one (1) conformed copy of each Registration
Statement and any post-effective amendment or supplement thereto (without documents incorporated
therein by reference or exhibits thereto, unless requested);

     (i) except as provided in Section 5, upon the occurrence of any event contemplated by Section
4(f)(iv) hereof, use its commercially reasonable efforts to promptly prepare a supplement or
post-effective amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Shares, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated

15

 

therein or necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading; and promptly furnish to FBR, Selling Holders’ Counsel, if any, and
each requesting Holder, without charge, as many copies of such Prospectus and any supplement or
post-effective amendment to the Registration Statement or Prospectus and any document incorporated
therein by reference or so filed, as FBR, Selling Holders’ Counsel, if any, or such Holder may
reasonably request;

     (j) if requested by FBR, Selling Holders’ Counsel, if any, the representative of the
underwriters (in an Underwritten Offering), if any, or any Holders of Registrable Shares being sold
in connection with a Registration Statement, (i) as promptly as reasonably practicable incorporate
in a Prospectus supplement or post-effective amendment such information as FBR, Selling Holders’
Counsel, if any, the representative of the underwriters, if any, or such Holders indicate in
writing relates to them or otherwise reasonably request be included therein, and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;

     (k) in the case of an Underwritten Offering, use its commercially reasonable efforts to
furnish or cause to be furnished to the underwriters a signed counterpart, addressed to FBR and the
underwriters, of: (i) an opinion of counsel for the Company, dated the date of each closing under
the underwriting agreement, reasonably satisfactory to the underwriters (an “Opinion”); and
(ii) a “comfort” letter, dated the effective date of such Registration Statement and the date of
each closing under the underwriting agreement, signed by the independent public accountants who
have certified the Company’s financial statements included in such Registration Statement, covering
substantially the same matters with respect to such Registration Statement (and the Prospectus
included therein) and with respect to events subsequent to the date of such financial statements,
as are customarily covered in accountants’ letters delivered to underwriters in underwritten public
offerings of securities and such other financial matters as the underwriters may reasonably request
(a “Comfort Letter”);

     (l) enter into customary agreements (including in the case of an Underwritten Offering, an
underwriting agreement in customary form and reasonably satisfactory to the Company) and take all
other action in connection therewith in order to expedite or facilitate the distribution of the
Registrable Shares included in such Registration Statement and, in the case of an Underwritten
Offering, make representations, warranties and agreements to the Holders covered by such
Registration Statement and to the underwriters in such form and scope as are customarily made by
issuers to underwriters and holders in underwritten offerings and confirm the same to the extent
customary if and when requested;

     (m) to make available for inspection by Selling Holders’ Counsel, if any, and the
representatives of any underwriters participating in any disposition pursuant to a Registration
Statement, all financial and other records, pertinent corporate documents and properties of the
Company and cooperate with, and cause the respective officers, directors, employees and agents of
the Company to supply all information reasonably requested by Selling Holders’ Counsel, if any, and
the representatives of any underwriters in connection with a Registration Statement and the due
diligence review of the Registration Statement and the information contained or incorporated
therein; provided, however, that such records, documents or information that the

16

 

Company determines, in good faith, to be confidential and with respect to which the Company
notifies Selling Holders’ Counsel, if any, and the representatives of any underwriters in advance
in writing of such confidential nature, shall not be disclosed by Selling Holders’ Counsel, if any,
and the representatives of any underwriters unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a material misstatement or omission in a Registration
Statement or Prospectus, (ii) the release of such records, documents or information is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction, or (iii) such
records, documents or information have been generally made available to the public; concurrently
with the initial filing of a Registration Statement with the Commission, pay the sum of up to
$40,000 to FBR, by wire transfer of immediately available funds, to reimburse FBR’s expenses
associated with its due diligence review of the Registration Statement and the information
contained or incorporated therein;

     (n) use its commercially reasonable efforts to satisfy the criteria for listing and list or
include (if the Company satisfies the criteria for listing or inclusion on such exchange or market)
all Registrable Shares on the New York Stock Exchange or The NASDAQ Stock Market as soon as
practicable (including, without limitation, seeking to cure in the Company’s listing or inclusion
application any deficiencies cited by the exchange or market) and thereafter use commercially
reasonable efforts to maintain such listing;

     (o) to prepare and file in a timely manner all documents and reports required by the Exchange
Act and, to the extent the Company’s obligation to file such reports pursuant to Section 15(d) of
the Exchange Act expires prior to the expiration of the effectiveness period of the Registration
Statement as required by Section 4(a) hereof, the Company shall register the Registrable Shares
under the Exchange Act and shall maintain such registration through the effectiveness period
required by Section 4(a) hereof;

     (p) provide a CUSIP number for all Registrable Shares, not later than the effective date of
the Registration Statement;

     (q) (i) otherwise use its commercially reasonable efforts to comply with all applicable rules
and regulations of the Commission and, as applicable, the New York Stock Exchange, Nasdaq National
Market or other listing standard, (ii) make generally available to its stockholders, as soon as
reasonably practicable, earnings statements covering at least 12 months beginning after the
effective date of the Registration Statement that satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 (or any similar rule promulgated under the Securities Act ) thereunder,
but in no event later than forty-five (45) days after the end of each fiscal quarter of the Company
occurring after the first anniversary of the effective date of the Registration Statement (unless
such fiscal quarter is the last fiscal quarter of the Company’s fiscal year, in which case such
earnings statement shall be delivered no later than sixty (60) days after such fiscal quarter
occurring after the first anniversary of the effective date of the Registration Statement), and
(iii) not file any Registration Statement or Prospectus or amendment or supplement to such
Registration Statement or Prospectus to which FBR, Selling Holders’ Counsel, if any, or any Holder
of Registrable Shares covered by such Registration Statement shall have reasonably objected on the
grounds that such Registration Statement or Prospectus or amendment or supplement does not comply
in all material respects with the requirements of the Securities Act;

17

 

     (r) provide and cause to be maintained a registrar and transfer agent for all Registrable
Shares covered by any Registration Statement from and after a date not later than the first to
occur of (a) the closing date of any initial public offering effected pursuant to an IPO
Registration Statement and (b) the effective date of the Shelf Registration Statement;

     (s) in connection with any sale or transfer of the Registrable Shares (whether or not pursuant
to a Registration Statement) that will result in the security being delivered no longer being
Registrable Shares, cooperate with the Holders and the representative of the underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing the Registrable
Shares to be sold, which certificates shall not bear any transfer restrictive legends (other than
as required by the Company’s certificate of incorporation) and to enable such Registrable Shares to
be in such denominations and registered in such names as the representative of the underwriters, if
any, or the Holders may request at least three (3) Business Days prior to any sale of the
Registrable Shares;

     (t) in connection with the initial filing of a Shelf Registration Statement or any Subsequent
Registration Statement and each amendment thereto with the Commission, prepare and, within one (1)
Business Day of such filing with the Commission, file with the NASD all forms and information
required or requested by the NASD in order to obtain written confirmation from the NASD that the
NASD does not object to the fairness and reasonableness of the underwriting terms and arrangements
(including any deemed underwriting terms and arrangements relating to FBR and any other NASD member
that is the holder of, or is affiliated or associated with an owner of, Registrable Shares included
in the Registration Statement) relating to the resale of Registrable Shares pursuant to the
Registration Statement, including, without limitation, information provided to the NASD through its
COBRADesk system; and

     (u) upon effectiveness of the first Registration Statement filed by the Company under this
Agreement, take such actions and make such filings as are necessary to effect the registration of
the Common Stock under the Exchange Act simultaneously with or immediately following the
effectiveness of the Registration Statement.

     The Company may require the Holders to furnish to the Company such information regarding the
proposed distribution by such Holder of such Registrable Shares as the Company may from time to
time reasonably request in writing or as shall be required to effect the registration of the
Registrable Shares and no Holder shall be entitled to be named as a selling stockholder in any
Registration Statement and no Holder shall be entitled to use the Prospectus forming a part thereof
if such Holder does not provide such information to the Company. Any Holder that sells Registrable
Shares pursuant to a Registration Statement shall be required to be named as a selling stockholder
in the related Prospectus and to deliver or cause to be delivered a Prospectus to purchasers. Each
Holder further agrees to furnish promptly to the Company in writing all information required from
time to time to make the information previously furnished by such Holder not misleading.

     Each Holder agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 4(f)(ii), 4(f)(iii) or 4(f)(iv) hereof, such Holder will
immediately discontinue disposition of Registrable Shares pursuant to a Registration Statement
until such Holder’s receipt of copies of the supplemented or amended Prospectus. If so directed

18

 

by the Company, such Holder will deliver to the Company (at the expense of the Company) all
copies in its possession, other than permanent file copies then in such Holder’s possession, of the
Prospectus covering such Registrable Shares current at the time of receipt of such notice.

5. Black-Out Period

     (a) Subject to the provisions of this Section 5 and a good faith determination by a majority
of the independent members of the Board of Directors of the Company that it is in compliance with
the terms hereof and that it is in the best interests of the Company to suspend the use of the
Registration Statement, following the effectiveness of a Registration Statement (and the filings
with any international, federal or state securities commissions), the Company, by written notice to
FBR, Selling Holders’ Counsel, if any, and the Holders, may direct the Holders to suspend sales of
the Registrable Shares pursuant to a Registration Statement for such times as the Company
reasonably may determine is necessary and advisable (but in no event for more than an aggregate of
ninety (90) days in any rolling twelve (12)-month period commencing on the closing date of the
transactions contemplated by the Purchase/Placement Agreement or more than thirty (30) days in any
rolling ninety (90)-day period), and no more than three (3) separate times in any twelve (12)-month
rolling period, if any of the following events shall occur: (i) the representative of the
underwriters of an Underwritten Offering of primary shares of Common Stock by the Company has
advised the Company that the sale of Registrable Shares pursuant to the Registration Statement
would have a material adverse effect on the Company’s primary offering; (ii) a majority of the
Board of Directors of the Company (including at least a majority of the independent directors)
determines in good faith that (A) the offer or sale of any Registrable Shares would materially
impede, delay or interfere with any proposed acquisition, merger, tender offer, business
combination, corporate reorganization, consolidation or other material transaction involving the
Company, (B) after the advice of counsel, the sale of Registrable Shares pursuant to the
Registration Statement would require disclosure of non-public material information not otherwise
required to be disclosed under applicable law, and (C) (x) the Company has a bona fide business
purposes for preserving the confidentiality of such transaction, (y) disclosure would have a
material adverse effect on the Company or the Company’s ability to consummate such transaction, or
(z) such transaction renders the Company unable to comply with Commission requirements, in each
case under circumstances that would make it impractical or inadvisable to cause the Registration
Statement (or such filings) to become effective or to promptly amend or supplement the Registration
Statement on a post-effective basis, as applicable; or (iii) a majority of the Board of Directors
of the Company (including at least a majority of the independent directors) determines in good
faith, upon the advice of counsel, that it is required by law, rule or regulation to supplement the
Registration Statement or file a post-effective amendment to the Registration Statement in order to
incorporate information into the Registration Statement for the purpose of (1) including in the
Registration Statement any prospectus required under Section 10(a)(3) of the Securities Act; (2)
reflecting in the prospectus included in the Registration Statement any facts or events arising
after the effective date of the Registration Statement (or of the most-recent post-effective
amendment) that, individually or in the aggregate, represents a fundamental change in the
information set forth therein; or (3) including in the prospectus included in the Registration
Statement any material information with respect to the plan of distribution not disclosed in the
Registration Statement or any material change to such information. Upon the occurrence of any such
suspension, the Company shall use its commercially reasonable efforts to cause the Registration
Statement to become effective

19

 

or to promptly amend or supplement the Registration Statement on a post-effective basis or to
take such action as is necessary to make resumed use of the Registration Statement as soon as
possible.

     (b) In the case of an event that causes the Company to suspend the use of a Registration
Statement (a “Suspension Event”), the Company shall give written notice (a “Suspension
Notice”) to FBR and the Holders to suspend sales of the Registrable Shares and such notice
shall state generally the basis for the notice and that such suspension shall continue only for so
long as the Suspension Event or its effect is continuing and the Company is using its commercially
reasonable efforts and taking all reasonable steps to terminate suspension of the use of the
Registration Statement as promptly as possible. The Holders shall not effect any sales of the
Registrable Shares pursuant to such Registration Statement (or such filings) at any time after it
has received a Suspension Notice from the Company and prior to receipt of an End of Suspension
Notice (as defined below). If so directed by the Company, each Holder will deliver to the Company
(at the expense of the Company) all copies other than permanent file copies then in such Holder’s
possession of the Prospectus covering the Registrable Shares at the time of receipt of the
Suspension Notice. The Holders may recommence effecting sales of the Registrable Shares pursuant
to the Registration Statement (or such filings) following further notice to such effect (an
“End of Suspension Notice”) from the Company, which End of Suspension Notice shall be given
by the Company to the Holders and FBR in the manner described above promptly following the
conclusion of any Suspension Event and its effect.

     (c) Notwithstanding any provision herein to the contrary, if the Company shall give a
Suspension Notice with respect to any Registration Statement pursuant to this Section 5, the
Company agrees that it shall extend the period of time during which such Registration Statement
shall be maintained effective pursuant to this Agreement by the number of days during the period
from the date of receipt by the Holders of the Suspension Notice to and including the date of
receipt by the Holders of the End of Suspension Notice and provide copies of the supplemented or
amended Prospectus necessary to resume sales, with respect to each Suspension Event; provided such
period of time shall not be extended beyond the date that the shares of Common Stock covered by
such Registration Statement are no longer Registrable Shares.

6. Indemnification and Contribution

     (a) The Company agrees to indemnify and hold harmless (i) each Holder and any underwriter (as
determined in the Securities Act) for such Holder (including, if applicable, FBR), (ii) each
Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act), any such Person described in clause (i) (any of the Persons referred to
in this clause (ii) being hereinafter referred to as a “Controlling Person”), and (iii) the
respective officers, directors, partners, members, managers, employees, representatives and agents
of any such Person or any Controlling Person (any Person referred to in clause (i), (ii) or (iii)
may hereinafter be referred to as a “Purchaser Indemnitee”), to the fullest extent lawful,
from and against any and all losses, claims, damages, judgments, Proceedings, out-of-pocket
expenses, and other liabilities (collectively, the “Liabilities”), including without
limitation and as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending any Proceeding by any governmental agency or body, including the reasonable
fees and expenses of counsel to any Purchaser Indemnitee, joint or several, directly or indirectly

20

 

related to, based upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or Prospectus (as
amended or supplemented if the Company shall have furnished to such Purchaser Indemnitee any
amendments or supplements thereto), or any preliminary Prospectus or any other document prepared by
the Company used to sell the Registrable Shares, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, except to the extent such
Liabilities arise out of or are based upon (x) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information relating to any
Purchaser Indemnitee furnished to the Company or any underwriter in writing by such Purchaser
Indemnitee expressly for use therein or (y) any untrue statement contained in or omission from a
preliminary Prospectus if a copy of the Prospectus (as then amended or supplemented, if the Company
shall have furnished to or on behalf of the Holder participating in the distribution relating to
the relevant Registration Statement any such amendments or supplements thereto) was not sent or
given by or on behalf of such Holder to the Person asserting any such Liabilities who purchased
Registrable Shares, if such Prospectus (or Prospectus as amended or supplemented) is required by
law to be sent or given at or prior to the written confirmation of the sale of such Registrable
Shares to such Person and the untrue statement contained in or omission from such preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or supplemented). The
Company shall notify FBR and the Holders promptly of the institution, threat or assertion of any
Proceeding of which it shall have become aware in connection with the matters addressed by this
Agreement which involves the Company or a Purchaser Indemnitee. The indemnity provided for herein
shall remain in full force and effect regardless of any investigation made by or on behalf of any
Purchaser Indemnitee.

     (b) In connection with any Registration Statement in which a Holder is participating and as a
condition to such participation, such Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, each Person who signs the Registration Statement or controls the Company
within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act and the
respective directors, officers, members, managers, representatives, employees, partners, trustees
and agents of the Company and each such Person to the same extent as the foregoing indemnity from
the Company to each Purchaser Indemnitee, but only with reference to untrue statements or omissions
or alleged untrue statements or omissions made in reliance upon and in strict conformity with
information relating to such Purchaser Indemnitee furnished to the Company in writing by such
Purchaser Indemnitee expressly for use in any Registration Statement or Prospectus, any amendment
or supplement thereto, or any preliminary Prospectus. The liability of any Purchaser Indemnitee
pursuant to this paragraph shall in no event exceed the net proceeds received by such Purchaser
Indemnitee from sales of Registrable Shares giving rise to such obligations.

     (c) If any Proceeding (including any governmental or regulatory investigation) shall be
brought or asserted against any Person in respect of which indemnity may be sought pursuant to
paragraph (a) or (b) above, such Person (the “Indemnified Party,” or if more than one
Indemnified Party, the “Indemnified Parties”), shall promptly notify the Person against
whom such indemnity may be sought (the “Indemnifying Party”), in writing of the
commencement thereof (but the failure to so notify an Indemnifying Party shall not relieve it from
any liability

21

 

which it may have under this Section 6, except to the extent the Indemnifying Party is
materially prejudiced by the failure to give notice), and the Indemnifying Party, upon request of
the Indemnified Party, shall assume the defense of such Proceeding and retain counsel chosen by the
Indemnifying Party and approved by the Indemnified Party, which approval shall not be unreasonably
withheld, to represent the Indemnified Party and any others the Indemnifying Party may reasonably
designate in such Proceeding and shall pay the reasonable fees and expenses actually incurred by
such counsel related to such Proceeding. Notwithstanding the foregoing, in any such Proceeding,
any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party, unless (i) the Indemnifying Party
and the Indemnified Party shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Party failed within a reasonable time after notice of commencement of the Proceeding
to assume the defense and engage counsel approved by the Indemnified Party as hereinabove provided,
(iii) the Indemnifying Party and its counsel do not in a reasonable manner pursue the defense of
such Proceeding, or (iv) the named parties to any such Proceeding (including any impleaded
parties), include both such Indemnified Party and the Indemnifying Party, or any Affiliate of the
Indemnifying Party, and such Indemnified Party shall have been reasonably advised by counsel that,
either (x) there may be one or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party or such Affiliate of the Indemnifying Party
or (y) a conflict may exist between such Indemnified Party and the Indemnifying Party or such
Affiliate of the Indemnifying Party (in which case the Indemnifying Party shall not have the right
to assume nor direct the defense of such Proceeding on behalf of such Indemnified Party, it being
understood, however, that the Indemnifying Party shall not, in connection with any one such
Proceeding or separate but substantially similar or related Proceedings arising out of the same
general allegations or circumstances, be liable for the fees and expenses of more than one (1)
separate firm of attorneys (in addition to any local counsel), for all such Indemnified Parties,
which firm shall be designated in writing by those Indemnified Parties who sold a majority of the
Registrable Shares sold by all such Indemnified Parties (excluding Registrable Shares sold by the
Company, Lexington, the Management Holders or any of their Affiliates) and any such separate firm
for the Company, the directors, the officers and such control Persons of the Company as shall be
designated in writing by the Company). The Indemnifying Party shall not be liable for any
settlement of any Proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with such consent or if there is a final judgment for the
plaintiff, the Indemnifying Party agrees to indemnify any Indemnified Party from and against any
loss or Liability resulting from such settlement or judgment. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any Proceeding in
respect of which any Indemnified Party is or could have been a party or the subject thereof and
indemnity could have been sought hereunder by such Indemnified Party, unless (i) such settlement
includes an unconditional release of such Indemnified Party from all liability on claims that are
the subject matter of such Proceeding and (ii) does not include a statement as to, or an admission
of, fault, culpability or a failure to act by or on behalf of the Indemnified Party.

     (d) If the indemnification provided for in paragraphs (a) and (b) of this Section 6 is for any
reason held to be unavailable to an Indemnified Party in respect of any Liabilities referred to
therein (other than by reason of the exceptions provided therein) or is insufficient to hold
harmless a party indemnified thereunder, then each Indemnifying Party under such paragraphs, in
lieu of indemnifying such Indemnified Party thereunder, shall contribute to the

22

 

amount paid or payable by such Indemnified Party as a result of such Liabilities (i) in such
proportion as is appropriate to reflect the relative benefits of the Indemnified Party on the one
hand and the Indemnifying Party(ies) on the other in connection with the statements or omissions
that resulted in such Liabilities, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Indemnifying Party(ies)
and the Indemnified Party, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and any Purchaser Indemnitees on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Purchaser Indemnitees and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.

     (e) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation (even if such Indemnified Parties were treated as
one entity for such purpose), or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph 6(d) above. The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to in paragraph 6(d) shall be deemed to
include, subject to the limitations set forth above, any reasonable legal or other expenses
actually incurred by such Indemnified Party in connection with investigating or defending any such
Proceeding. Notwithstanding the provisions of this Section 6, in no event shall a Purchaser
Indemnitee be required to contribute any amount in excess of the amount by which proceeds (net of
discounts and commissions) received by such Purchaser Indemnitee from sales of Registrable Shares
exceeds the amount of any damages that such Purchaser Indemnitee has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. For purposes
of this Section 6, each Person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act) FBR or a Holder shall have the same rights to
contribution as FBR or such Holder, as the case may be, and each Person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act) the
Company, and each officer, director, trustee, partner, member, manager, employee, representative or
agent of the Company shall have the same rights to contribution as the Company. Any party entitled
to contribution will, promptly after receipt of notice of commencement of any Proceeding against
such party in respect of which a claim for contribution may be made against another party or
parties, notify each party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom contribution may be
sought from any obligation it or they may have under this Section 6 or otherwise, except to the
extent that any party is actually and materially prejudiced by the failure to give notice. No
Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act), shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

     (f) The indemnity and contribution agreements contained in this Section 6 will be in addition
to any liability which the Indemnifying Parties may otherwise have to the Indemnified Parties
referred to above. The Purchaser Indemnitee’s obligations to contribute pursuant to this

23

 

Section 6 are several in proportion to the respective number of Registrable Shares sold by
each of the Purchaser Indemnitees hereunder and not joint.

7. Market Stand-off Agreement

     Each Holder hereby agrees that it shall not, to the extent requested in writing by the Company
or a managing underwriter of securities of the Company, directly or indirectly sell, offer to sell
(including without limitation any short sale), pledge, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
for the sale of or otherwise dispose of or transfer any Registrable Shares or other shares of
Common Stock or any securities convertible into or exchangeable or exercisable for shares of Common
Stock then owned by such Holder (other than to donees or partners of the Holder who agree to be
similarly bound) for a period ending (x) in the case of Lexington and the Management Holders, one
hundred eighty (180) days following such effective date; and (y) in the case of all other Holders,
sixty (60) days following such effective date; provided, however, that:

     (a) the restrictions above shall not apply to Registrable Shares sold pursuant to the IPO
Registration Statement;

     (b) all officers and directors of the Company then holding shares of Common Stock or
securities convertible into or exchangeable or exercisable for shares of Common Stock enter into
similar agreements for not less than the entire time period required of Lexington and the
Management Holders hereunder;

     (c) the restrictions above shall not apply to (i) option exercises so long as the optionee
does not transfer the shares of Common Stock received as a result of any such exercise, and (ii)
bona fide gifts or transfers to family members, trusts or affiliates effected for estate planning
purposes; and

     (d) the Holders shall be allowed any concession or proportionate release allowed to Lexington,
any Management Holder or any officer or director of the Company that entered into similar
agreements (with such proportion being determined by dividing the number of shares being released
with respect to Lexington, such Management Holder, officer or director by the total number of
issued and outstanding shares held by Lexington, such Management Holder, officer or director);
provided, that nothing in this Section 7(c) shall be construed as a right to proportionate release
for Lexington, the Management Holders or officers and directors of the Company upon the expiration
of the sixty (60) day period applicable to all Holders other than Lexington, the Management
Holders, officers and directors of the Company.

     In order to enforce the foregoing covenant, the Company shall have the right to place
restrictive legends on the certificates representing the securities subject to this Section 7 and
to impose stop transfer instructions with respect to the Registrable Shares and such other
securities of each Holder (and the securities of every other Person subject to the foregoing
restriction) until the end of such period.

24

 

8. Termination of the Company’s Obligation

     Subject to Section 10(l), the Company shall have no further obligations pursuant to this
Agreement at such time as no Registrable Shares are outstanding.

9. Limitations on Subsequent Registration Rights

     From and after the date of this Agreement, the Company shall not, without the prior written
consent of Holders beneficially owning not less than a majority of the then outstanding Registrable
Shares, enter into any agreement with any holder or prospective holder of any securities of the
Company that would allow such holder or prospective holder (a) to include such securities in any
Registration Statement filed pursuant to the terms hereof, unless under the terms of such
agreement, such holder or prospective holder may include such securities in any such registration
only to the extent that the inclusion of such holder’s or prospective holder’s securities will not
reduce the amount of Registrable Shares of the Holders included in the Registration Statement, or
(b) to have such holder’s or prospective holder’s securities registered on a registration
statement that could be declared effective prior to, or within one hundred eighty (180) days of,
the effective date of any Registration Statement filed pursuant to this Agreement.

10. Miscellaneous

     (a) Remedies. In the event of a breach by the Company of any of its obligations under
this Agreement, each Holder, in addition to being entitled to exercise all rights provided herein
and, in the case of FBR, in the Purchase/Placement Agreement, or granted by law, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. Subject
to Section 6, the Company agrees that monetary damages alone would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby
further agree that, in the event of any action for specific performance in respect of such breach,
it shall waive the defense that a remedy at law would be adequate. Notwithstanding the foregoing,
the remedies set forth in Section 2(e) hereof shall be the exclusive remedies available to the
Holders with respect to any breach by the Company of any of the Registration Obligations (as
defined in Section 2(e) hereof).

     (b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given, without the written consent of the
Company and Holders beneficially owning not less than a majority of the then outstanding
Registrable Shares; provided, however, that for purposes of this Section 10(b), Registrable Shares
that are owned, directly or indirectly, by an Affiliate of the Company shall not be deemed to be
outstanding. No amendment shall be deemed effective unless it applies uniformly to all Holders.
Notwithstanding the foregoing, a waiver or consent to or departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of a Holder whose securities are being
sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of any other Holder may be given by such Holder; provided that the
provisions of this sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence.

25

 

     (c) Notices. All notices and other communications, provided for or permitted
hereunder shall be made in writing and delivered by facsimile (with receipt confirmed), overnight
courier or registered or certified mail, return receipt requested:

     (i) if to a Holder, at the most current address given by the transfer agent and
registrar of the Common Stock;

     (ii) if to the Company, Lexington, the Advisor, the Partnership or the Management
Holders, at One Penn Plaza, Suite 4015, New York, New York 10119, Attention: Joseph S.
Bonventre, Esq. (facsimile (212) 594-6600), with a copy to Paul, Hastings, Janofsky & Walker
LLP, 75 East 55th Street, New York, New York 10022, Attention: Mark Schonberger,
Esq. (facsimile (212) 230-7747); and

     (iii) if to FBR at the offices of FBR at 1001 Nineteenth Street North, 18th Floor,
Arlington, Virginia 22209, Attention: Compliance Department (facsimile (703) 312-9698),
with a copy to Hunton & Williams LLP, Riverfront Plaza, East Tower, 951 East Byrd Street,
Richmond, Virginia 23219, Attention: Daniel M. LeBey, Esq. (facsimile: (804) 788-8218).

Receipt of any notice sent pursuant to this Agreement shall be deemed to occur (x) one (1) Business
Day after sending by facsimile (with receipt confirmed), (y) two (2) Business Days after sending by
overnight courier or (z) three (3) Business Days after mailing by the party giving such notice.
The Company shall cause the transfer agent to use commercially reasonable efforts to maintain
current addresses of the Holders.

     (d) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties hereto, including, without
limitation and without the need for an express assignment or assumption, subsequent Holders. The
Company agrees that the Holders shall be third party beneficiaries to the agreements made hereunder
by FBR and the Company, and each Holder shall have the right to enforce such agreements directly to
the extent it deems such enforcement necessary or advisable to protect its rights hereunder;
provided, however, that such Holder fulfills all of its obligations hereunder.

     (e) Stock Legend. In addition to any other legend that may appear on the stock
certificates evidencing the Registrable Shares, for so long as any Shares remain Registrable Shares
each stock certificate evidencing such Registrable Shares shall contain a legend to the following
effect: “THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AND ENTITLED TO THE OBLIGATIONS
AND BENEFITS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT, DATED OCTOBER 6, 2005”.

     (f) Counterparts. This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement.

     (g) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

26

 

     (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE (INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL
OTHER CHOICE OF LAW AND CONFLICTS OF LAWS RULES). EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT
OF NEW YORK OR ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

     (i) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties
hereto that they would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

     (j) Entire Agreement. This Agreement, together with the Purchase/Placement Agreement,
is intended by the parties hereto as a final expression of their agreement, and is intended to be a
complete and exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. Without limiting the foregoing, this
Agreement supersedes, terminates and replaces all existing stockholders’ agreements and
registration rights agreements relating to the equity securities of the Company.

     (k) Registrable Shares Held by the Company or Its Affiliates. Whenever the consent or
approval of, or a selection by, the Holders of a specified percentage of Registrable Shares is
required hereunder, Registrable Shares held by the Company, Lexington, the Advisor or their
Affiliates (excluding, if necessary, FBR) shall not be counted in determining the number of then
outstanding Registrable Shares or the number of Registrable Shares providing such consent, approval
or selection.

     (l) Survival. This Agreement is intended to survive the consummation of the
transactions contemplated by the Purchase/Placement Agreement. The indemnification and

27

 

contribution obligations under Section 6 and the Company’s obligations under this Section 10
shall survive the termination of the Company’s obligations under Section 2 and Section 8 of this
Agreement.

     (m) Attorneys’ Fees. In any Proceeding brought to enforce any provision of this
Agreement, or where any provision hereof is validly asserted as a defense, the prevailing party, as
determined by the court, shall be entitled to recover its reasonable attorneys’ fees from the
losing party in addition to any other available remedy.

[Signature Page Follows]

28

 

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

	 	 	 	 	 	 	 
	 	 	LEXINGTON STRATEGIC ASSET CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	LEXINGTON CORPORATE PROPERTIES
TRUST	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	LXP ADVISORY LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	LSAC OPERATING PARTNERSHIP L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	LSAC GENERAL PARTNER LLC,	 	 
	 

	 	 	 	          its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	FRIEDMAN, BILLINGS, RAMSEY & CO., INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

 

 

	 	 	 	 	 
	 

	 	MANAGEMENT HOLDERS
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Patrick Carroll	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	T. Wilson Eglin	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Brendan P. Mullinix	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Richard J. Rouse	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	E. Robert Roskind	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	John B. Vander Zwaag	 	 

30

 

EXHIBIT A

Initial Holders

Rule 144A/Reg. S Holders:

Regulation D Holders:

A-1EX-10.1

 

Exhibit 10.1

AGREEMENT OF LIMITED PARTNERSHIP

OF

LSAC OPERATING PARTNERSHIP L.P.

     THIS AGREEMENT OF LIMITED PARTNERSHIP OF LSAC OPERATING PARTNERSHIP L.P. (“Agreement”),
effective as of September 7, 2005 and dated as of October 6, 2005, is entered into by and among
LSAC General Partner LLC (the “General Partner”), a Delaware limited liability company, as the
General Partner and the Persons whose names are set forth on Exhibit A as attached hereto, as the
Limited Partners, together with any other Persons who become Partners in the Partnership as
provided herein.

     NOW THEREFORE, in consideration of the mutual covenants herein contained, and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties hereto do hereby
enter into this Agreement in its entirety and agree to form the Partnership as a limited
partnership under Delaware Revised Uniform Limited Partnership Act, as amended from time to time,
as follows:

ARTICLE 1

DEFINED TERMS

     The following definitions shall be for all purposes, unless otherwise clearly indicated to the
contrary, applied to the terms used in this Agreement.

     “Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101, et seq.,
as it may be amended from time to time, and any successor to such statute.

     “Additional Limited Partner” means a Person admitted to the Partnership as a Limited Partner
pursuant to Section 12.02 hereof and who is shown as such on the books and records of the
Partnership.

     “Adjusted Capital Account” means the Capital Account maintained for each Partner as of the end
of each Partnership Year (i) increased by any amounts which such Partner is obligated to restore
pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by
the items described in Regulations Sections1.704-l(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-l(b)(2)(ii)(d)(6).The foregoing definition of Adjusted Capital Account is intended to comply
with the provisions of Regulations Section 1.704-l(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

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

     “Adjusted Pre-Tax Net Income Per Share” means pre-tax net income per Share and Partnership
Units (other than Class B Units) (based on the fully diluted weighted average number of Shares
outstanding for the applicable quarter), excluding distributions to holders of Class B Units, plus
all depreciation and adjusted for all other non-cash items, including straight line rent
adjustment.

 

 

     “Adjusted Property” means any property the Carrying Value of which has been adjusted pursuant
to Exhibit B hereto.

     “Adjustment Date” has the meaning set forth in Section 4.02.B hereof.

     “Advisor” means LXP Advisory LLC, a Delaware limited liability company.

     “Advisory Agreement” means the agreement entered into by and between LSAC, the Partnership,
and the Advisor.

     “Affiliate” means, with respect to any Person, (i) any Person directly or indirectly
controlling, controlled by or under common control with such Person, (ii) any Person owning or
controlling ten percent (10%) or more of the outstanding voting interests of such Person, (iii) any
Person of which such Person owns or controls ten percent (10%) or more of the voting interests or
(iv) any officer, director, general partner or trustee of such Person or any Person referred to in
clauses (i), (ii), and (iii) above. For purposes of this definition, “control,” when used with
respect to any Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

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

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

     “Assignee” means a Person to whom one or more Partnership Units have been transferred in a
manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and
who has the rights set forth in Section 11.05 hereof.

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

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

2

 

     “Capital Account” means the Capital Account maintained for a Partner pursuant to Exhibit B
hereto.

     “Capital Contribution” means, with respect to any Partner, any cash, cash equivalents or the
Agreed Value of Contributed Property which such Partner contributes or is deemed to contribute to
the Partnership pursuant to Section 4.01 or 4.02 hereof.

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

     “Cash Amount” means an amount of cash equal to the Value on the Valuation Date of the Shares
Amount.

     “Certificate” means the Certificate of Limited Partnership relating to the Partnership filed
in the office of the Delaware Secretary of State on September 7, 2005, as amended from time to time
in accordance with the terms hereof and the Act.

     “Certificate of Incorporation” means the Certificate of Incorporation or other organizational
document governing LSAC, as amended or restated from time to time.

     “Class A Unit” means Class A Units of the Partnership.

     “Class B Unit” means a profits interest of the Partnership issued pursuant to Section 4.02.B.

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

     “Consent” means the consent or approval of a proposed action by a Partner given in accordance
with Section 14.02 hereof.

     “Contributed Property” means each property or other asset contributed to the Partnership, in
such form as may be permitted by the Act, but excluding cash contributed or deemed contributed to
the Partnership. Once the Carrying Value of a Contributed Property is adjusted pursuant to Exhibit
B hereto, such property shall no longer constitute a Contributed Property for purposes of Exhibit B
hereto, but shall be deemed an Adjusted Property for such purposes.

     “Contribution Transaction” means the contribution of certain real estate assets by LXP to LSAC
in connection with the Initial Private Offering.

3

 

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

     “Debt” means, as to any Person, as of any date of determination, (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or services, (ii) all
amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under
letters of credit, surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person, (iii) all indebtedness for borrowed money or for the
deferred purchase price of property or services secured by any lien on any property owned by such
Person, to the extent attributable to such Person’s interest in such property, even though such
Person has not assumed or become liable for the payment thereof, and (iv) obligations of such
Person incurred in connection with entering into a lease which, in accordance with generally
accepted accounting principles, should be capitalized.

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

     “Effective Date” means the date of the closing of LSAC’s Initial Private Offering.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Funding Debt” means the incurrence of any Debt by or on behalf of the General Partner for the
purpose of providing funds to the Partnership.

     “General Partner” means LSAC General Partner LLC, a Delaware limited liability company, or its
successors as general partner of the Partnership.

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

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

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

     “Incapacity” or “Incapacitated” means, (i) as to any individual Partner, death, total physical
disability or entry by a court of competent jurisdiction adjudicating such Partner incompetent to
manage his or her Person or estate,(ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the revocation of its
charter, (iii) as to any partnership which is a Partner, the dissolution and commencement of
winding up of the partnership, (iv) as to any estate which is a Partner, the distribution by the
fiduciary of the estate’s entire interest in the Partnership, (v) as to any trustee of a trust
which is a Partner, the termination of the trust (but not the substitution of a new trustee) or
(vi) as to any Partner, the bankruptcy of such Partner. For purposes of this definition, bankruptcy
of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding
seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a
final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or
hereafter in effect has been entered against the Partner, (c) the Partner executes and delivers a
general assignment for the benefit of the Partner’s creditors, (d) the Partner files an answer or
other pleading admitting or failing to contest the material allegations of a petition filed against
the Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks,
consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner
or for all or any substantial part of the Partner’s properties, (f) any proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law
now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the
commencement thereof, (g) the appointment without the Partner’s consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such
appointment or (h) an appointment referred to in clause (g) is not vacated within ninety (90) days
after the expiration of any such stay.

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

     “Initial Private Offering” means the sale by the Company to Friedman, Billings, Ramsey & Co.,
Inc., as initial purchaser, and the sale by the Company directly to certain individual and
institutional accredited investors, with Friedman, Billings, Ramsey & Co., Inc. as placement

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agent, on October 6, 2005, of up to 6,738,000 shares of Common Stock in transactions exempt
from registration under the Securities Act of 1933, as amended.

     “Limited Partner” means any Person named as a Limited Partner in Exhibit A attached hereto, as
such Exhibit may be amended and restated from time to time, or any Substituted Limited Partner or
Additional Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.

     “Limited Partnership Interest” means a Partnership Interest of a Limited Partner in the
Partnership representing a fractional part of the Partnership Interests of all Limited Partners and
includes any and all benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Limited Partnership Interest may be expressed as a number of
Partnership Units.

     “Liquidating Event” has the meaning set forth in Section 13.01 hereof.

     “Liquidator” has the meaning set forth in Section 13.02.A hereof.

     “LSAC” means Lexington Strategic Asset Corp.

     “LXP” means Lexington Corporate Properties Trust, a Maryland real estate investment trust.

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

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

     “New Securities” means (i) any rights, options, warrants or convertible or exchangeable
securities having the right to subscribe for or purchase shares of capital stock (or other
comparable equity interest) of LSAC, excluding grants under any Stock Option Plan, or (ii) any Debt
issued by LSAC that provides any of the rights described in clause (i).

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

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     “Nonrecourse Liability” has the meaning set forth in Regulations Section 1.704-2(b)(3).

     “Notice of Redemption” means a Notice of Redemption substantially in the form of Exhibit B
attached hereto.

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

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

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

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

     “Partnership” means the limited partnership formed under the Act and continued upon the terms
and conditions set forth in this Agreement, and any successor thereto.

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

     “Partnership Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(b)(2), and
the amount of Partnership Minimum Gain, as well as any net increase or decrease in Partnership
Minimum Gain, for a Partnership Year shall be determined in accordance with the rules of
Regulations Section1.704-2(d).

     “Partnership Record Date” means the record date established by the General Partner either (i)
for distributions pursuant to Section 5.01 hereof, which record date shall be the same as the
record date established by LSAC for a distribution to its stockholders of some or all of its
portion of such distribution received by LSAC, or (ii) if applicable, for determining the Partners
entitled to vote on or consent to any proposed action for which the consent or approval of the
Partners is sought pursuant to Section14.02 hereof.

     “Partnership Unit” means a fractional, undivided share of the Partnership Interests, other
than the General Partnership Interest, of all Partners issued pursuant to Sections 4.01 and 4.02
hereof, and includes Class A Units, Class B Units and any other classes or series of Partnership
Units established after the date hereof. The number of Partnership Units outstanding and the
Percentage Interests represented by such Partnership Units are set forth in Exhibit A hereto, as

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such Exhibit may be amended and restated from time to time. The ownership of Partnership Units
may be evidenced by a certificate in a form approved by the General Partner.

     “Partnership Year” means the fiscal year of the Partnership, which shall commence on July 1
and end on June 30.

     “Percentage Interest” means, as to a Partner holding a class of Partnership Interests, its
interest in such class, determined by dividing the Partnership Units of such class owned by such
Partner by the total number of Partnership Units of such class then outstanding as specified in
Exhibit A attached hereto, as such exhibit may be amended and restated from time to time,
multiplied by the aggregate Percentage Interest allocable to such class of Partnership Interests.

     “Person” means a natural person, partnership (whether general or limited), trust, estate,
association, corporation, limited liability company, unincorporated organization, custodian,
nominee or any other individual or entity in its own or any representative capacity.

     “Publicly Traded” means listed or admitted to trading on the New York Stock Exchange, the
American Stock Exchange or another national securities exchange or designated for quotation on the
NASDAQ National Market, or any successor to any of the foregoing.

     “Redeeming Partner” has the meaning set forth in Section 8.06.A hereof.

     “Redemption Amount” means either the Cash Amount or the Shares Amount, as determined by the
General Partner in its sole and absolute discretion; provided that in the event that the Shares are
not Publicly Traded at the time a Redeeming Partner exercises its Redemption Right the Redemption
Amount shall be paid only in the form of the Cash Amount unless the Redeeming Partner, in its sole
and absolute discretion, consents to payment of the Redemption Amount in the form of the Shares
Amount. A Redeeming Partner shall have no right, without the General Partner’s consent, in its sole
and absolute discretion, to receive the Redemption Amount in the form of the Shares Amount.

     “Redemption Right” has the meaning set forth in Section 8.06.A hereof.

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

     “Residual Gain” or “Residual Loss” means any item of gain or loss, as the case may be, of the
Partnership recognized for federal income tax purposes resulting from a sale, exchange or other
disposition of Contributed Property or Adjusted Property, to the extent such item of gain or loss
is not allocated pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C hereto to eliminate Book-Tax
Disparities.

     “Safe Harbor” has the meaning set forth in Section 11.06.F hereof.

     “Securities Act” means the Securities Act of 1933, as amended.

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     “704(c) Value” of any Contributed Property means the fair market value of such property at the
time of contribution as determined by the General Partner using such reasonable method of valuation
as it may adopt. Subject to Exhibit B hereto, the General Partner shall, in its sole and absolute
discretion, use such method as it deems reasonable and appropriate to allocate the aggregate of the
704(c) Values of Contributed Properties in a single or integrated transaction among each separate
property on a basis proportional to their fair market values.

     “Share” means a share of capital stock (or other comparable equity interest) of LSAC. Shares
may be issued in one or more classes or series in accordance with the terms of the Certificate of
Incorporation. In the event that there is more than one class or series of Shares, the term
“Shares” shall, as the context requires, be deemed to refer to the class or series of Shares that
correspond to the class or series of Partnership Interests for which the reference to Shares is
made. When used with reference to Class A Units, the term “Shares” refers to shares of common stock
(or other comparable equity interest) of LSAC.

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

     “Specially Distributed Assets” has the meaning set forth in Section 7.05.A hereof.

     “Specified Redemption Date” means the tenth Business Day after receipt by the General Partner
of a Notice of Redemption; provided that, if the Shares are not Publicly Traded, the Specified
Redemption Date means the thirtieth Business Day after receipt by the General Partner of a Notice
of Redemption.

     “Stock Option Plan” means any stock incentive plan of the General Partner, the Partnership or
any Affiliate of the Partnership or the General Partner.

     “Stockholders Equity” means the aggregate gross proceeds from all sales of Partnership Units.

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

     “Substituted Limited Partner” means a Person who is admitted as a Limited Partner to the
Partnership pursuant to Section 11.04 hereof.

     “10 Year U.S. Treasury Rate” means the arithmetic average of the weekly average yield to
maturity for actively traded current coupon U.S treasury fixed interest rate securities (adjusted
to a constant maturity of 10 years) published by the Federal Reserve board during a quarter, or, if
such rate is not published by the Federal Reserve board, any Federal Reserve bank or agency or

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department or the federal government selected by us. If the General Partner determines in good
faith that the 10-year U.S. treasury rate cannot be calculated as provided above, then the rate
shall be the arithmetic average of the per annum average yields to maturities, based upon closing
asked prices on each business day during a quarter, for each actively traded marketable U.S.
treasury fixed interest rate security with a final maturity date not less than eight nor more than
12 years from the date of the closing asked prices as chosen and quoted for each business day in
each such quarter in New York City by at least three recognized dealers in United States government
securities selected by the General Partner, in its sole discretion.

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

     “Termination Transaction” has the meaning set forth in Section 11.02.B hereof.

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

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

     “Valuation Date” means the date of receipt by the General Partner of a Notice of Redemption
or, if such date is not a Business Day, the first Business Day thereafter.

     “Value” means, with respect to any outstanding Shares of LSAC that are Publicly Traded, the
average of the daily market price for the ten (10) consecutive trading days immediately preceding
the date with respect to which value must be determined or, if such date is not a Business Day, the
immediately preceding Business Day. The market price for each such trading day shall be the closing
price, regular way, on such day, or if no such sale takes place on such day, the average of the
closing bid and asked prices on such day. In the event that the outstanding Shares of LSAC are
Publicly Traded and the Shares Amount includes rights that a holder of Shares would be entitled to
receive, then the Value of such rights shall be determined by the General Partner acting in good
faith on the basis of such quotations and other information as it considers, in its reasonable
judgment, appropriate. In the event that the Shares of LSAC are not Publicly Traded, the Value of
the Shares Amount per Partnership Unit offered for redemption (which will be the Cash Amount per
Partnership Unit offered for redemption payable pursuant to Sections 8.06 and 8.07 hereof) means
the amount that a holder of one Partnership Unit would receive if each of the assets of the
Partnership were to be sold for its fair market value on the Specified Redemption Date, the
Partnership were to pay all of its outstanding liabilities, and the remaining proceeds were to be
distributed to the Partners in accordance with the terms of this Agreement. Such Value shall be
determined by the General Partner, acting in good faith and based upon a commercially reasonable
estimate of the amount that would be

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realized by the Partnership if each asset of the Partnership (and each asset of each
Partnership, limited liability company, joint venture or other entity in which the Partnership owns
a direct or indirect interest) were sold to an unrelated purchaser in an arms’ length transaction
where neither the purchaser nor the seller were under economic compulsion to enter into the
transaction (without regard to any discount in value as a result of the Partnership’s minority
interest in any property or any illiquidity of the Partnership’s interest in any property). In
connection with determining the value of the Partnership Interest for purposes of determining the
number of additional Partnership Units issuable upon a Capital Contribution funded by an
underwritten public offering of shares of capital stock (or other comparable equity interest) of
the General Partner, the Value of such shares shall be the public offering price per share of such
class of the capital stock (or other comparable equity interest) sold.

ARTICLE 2

ORGANIZATIONAL MATTERS

Section 2.01 Organization and Continuation

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

Section 2.02 Name

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

Section 2.03 Registered Office and Agent; Principal Office

     The address of the registered office of the Partnership in the State of Delaware and the name
and address of the registered agent for service of process on the Partnership in the State of
Delaware is National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, 19904, County
of Kent. The principal office of the Partnership shall be One Penn Plaza, Suite 4015, New York, New
York 10119-4015, or such other place as the General Partner may from time to time designate by
notice to the Limited Partners. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

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Section 2.04 Term

     The term of the Partnership commenced on September 7, 2005, the date the Certificate was filed
in the office of the Secretary of State of Delaware in accordance with the Act and shall continue
in existence unless, the Partnership is dissolved sooner pursuant to the provisions of Article 13
or as otherwise provided by law.

ARTICLE 3

PURPOSE

Section 3.01 Purpose and Business

     The purpose and nature of the business to be conducted by the Partnership is (i) to conduct
any business that may be lawfully conducted by a limited partnership organized pursuant to the Act,
(ii) to enter into any partnership, joint venture or other similar arrangement to engage in any of
the foregoing or to own interests in any entity engaged in any of the foregoing, and (iii) to do
anything necessary or incidental to the foregoing.

Section 3.02 Powers

     The Partnership is empowered to do any and all acts and things necessary, appropriate, proper,
advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and
business described herein and for the protection and benefit of the Partnership, provided that the
Partnership shall not take, or refrain from taking, any action which, in the judgment of the
General Partner, in its sole and absolute discretion, could violate any law or regulation of any
governmental body or agency having jurisdiction over LSAC or the General Partner or either of their
securities, unless such action (or inaction) shall have been specifically consented to by the
General Partner in writing.

Section 3.03 Partnership Only for Purposes Specified

     The Partnership shall be a partnership only for the purposes specified in Section 3.01 above,
and this Agreement shall not be deemed to create a partnership among the Partners with respect to
any activities whatsoever other than the activities within the purposes of the Partnership as
specified in Section 3.01 above.

ARTICLE 4

CAPITAL CONTRIBUTIONS

Section 4.01 Capital Contributions of the Partners

     A. Capital Contributions. On the Effective Date, the Partners will make Capital Contributions
to the Partnership as set forth on Exhibit A hereto. On the Effective Date, the General Partner
will complete Exhibit A hereto to reflect the Capital Contributions made by each Partner, the
Partnership Units assigned to each Partner and the Percentage Interest in the Partnership
represented by such Partnership Units. The Capital Accounts of the Partners and the Carrying Values
of the Partnership’s Assets shall be determined as of the Effective Date pursuant

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to Section 1.D of Exhibit B hereto to reflect the Capital Contributions made on the Effective
Date.

     B. General Partnership Interest. The General Partner shall hold a non-economic general
partner interest in the Partnership. All Partnership Units held by the General Partner shall be
deemed to be Limited Partnership Interests and shall be held by the General Partner in its capacity
as a Limited Partner in the Partnership.

     C. Capital Contributions By Merger. To the extent the Partnership acquires any property by
the merger of any other Person into the Partnership, Persons who receive Partnership Interests in
exchange for their interests in the Person merging into the Partnership shall become Partners and
shall be deemed to have made Capital Contributions as provided in the applicable merger agreement
and as set forth in Exhibit A hereto.

     D. No Obligation to Make Additional Capital Contributions. Except as provided in Sections
7.05 and 10.04 hereof, the Partners shall have no obligation to make any additional Capital
Contributions or provide any additional funding to the Partnership (whether in the form of loans,
repayments of loans or otherwise). No Partner shall have any obligation to restore any deficit that
may exist in its Capital Account, either upon a liquidation of the Partnership or otherwise.

Section 4.02 Issuances of Partnership Interests

     A. The General Partner is hereby authorized to cause the Partnership from time to time to
issue to Partners (including LSAC, the General Partner and its Affiliates) or other Persons
(including, without limitation, in connection with the contribution of property to the Partnership)
Partnership Units or other Partnership Interests in one or more classes, or in one or more series
of any of such classes, with such designations, preferences and relative, participating, optional
or other special rights, powers and duties, including rights, powers and duties senior to Limited
Partnership Interests, all as shall be determined, subject to applicable Delaware law, by the
General Partner in its sole and absolute discretion, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction and credit to each such class or
series of Partnership Interests, (ii) the right of each such class or series of Partnership
Interests to share in Partnership distributions and (iii) the rights of each such class or series
of Partnership Interests upon dissolution and liquidation of the Partnership; provided, that no
such Partnership Units or other Partnership Interests shall be issued to LSAC unless either (a) the
Partnership Interests are issued in connection with the grant, award or issuance of Shares or other
equity interests in LSAC having designations, preferences and other rights such that the economic
interests attributable to such Shares or other equity interests are substantially similar to the
designations, preferences and other rights (except voting rights) of the additional Partnership
Interests issued to LSAC in accordance with this Section 4.02.A or (b) the Partnership Interests
are issued to all Partners holding Partnership Interests in the same class in proportion to their
respective Percentage Interests in such class. In the event that the Partnership issues Partnership
Interests pursuant to this Section 4.02.A, the General Partner shall make such revisions to this
Agreement (including but not limited to the revisions described in Section 5.04, Section 6.02 and
Section 8.06 hereof) as it deems necessary to reflect the issuance of such additional Partnership
Interests.

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     B. Classes of Partnership Units. From and after the Effective Date, subject to Section 4.02.A
above, the Partnership shall have two classes of Partnership Units, entitled “Class A Units” and
“Class B Units.” (1) Class A Units may be issued to newly admitted Partners in exchange for the
contribution by such Partners of cash, real estate partnership interests, stock, notes or other
assets or consideration. (2) On the Effective Date, the General Partner shall issue Class B Units
to the Advisor and the executive officers of LSAC as reflected on Exhibit A. There is no obligation
to contribute any capital in connection with the issuance of the Class B Units. The initial
Capital Accounts of the Holders of the Class B Units in respect of such Units shall be zero.

Section 4.03 No Preemptive Rights

     Except to the extent expressly granted by the Partnership pursuant to another agreement, no
Person shall have any preemptive, preferential or other similar right with respect to (i)
additional Capital Contributions or loans to the Partnership or (ii) issuance or sale of any
Partnership Units or other Partnership Interests.

Section 4.04 Other Contribution Provisions

     In the event that any Partner is admitted to the Partnership and is given a Capital Account in
exchange for services rendered to the Partnership, such transaction shall be treated by the
Partnership and the affected Partner as if the Partnership had compensated such Partner in cash,
and the Partner had contributed such cash to the capital of the Partnership.

Section 4.05 No Interest on Capital

     No Partner shall be entitled to interest on its Capital Contributions or its Capital Account.

ARTICLE 5

DISTRIBUTIONS

Section 5.01 Requirement and Characterization of Distributions

     A. General. Except as otherwise provided herein, the General Partner shall make distributions
at such times and in such amounts as it may determine. Such distributions shall be made to the
Partners who are Partners on the Partnership Record Date for such distribution. Notwithstanding
anything to the contrary contained herein, in no event may a Partner receive a distribution with
respect to a Partnership Unit for a quarter or shorter period if such Partner is entitled to
receive a distribution relating to such period with respect to a Share for which such Partnership
Unit has been redeemed or exchanged. Unless otherwise expressly provided for herein or in an
agreement at the time a new class of Partnership Interests is created in accordance with Article IV
hereof, no Partnership Interest shall be entitled to a distribution in preference to any other
Partnership Interest.

     B. Method. Distributions shall be made (i) first, to the holders of Class B Units as provided
in Section 5.01.C hereof, and to each other holder of a Partnership Interest that is entitled to
any preference in distribution, in accordance with the rights of any such class of Partnership
Interests, and (ii) thereafter, to the holders of Class A Units. All distributions within

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a class of Units shall be pro rata in proportion to the respective Percentage Interests on the
applicable Partnership Record Date.

     C. Distributions When Class B Units Are Outstanding. Holders of Class B Units shall receive
quarterly distributions for each calendar quarter (or portion thereof) in an aggregate amount equal
to (i) 25% of the amount, if any, by which (a) Adjusted Pre-Tax Net Income Per Share for such
quarter exceeds (b) an amount equal to (A) the weighted average of the offering price per Share
sold in the Initial Private Offering and issued in the Contribution Transaction, the offering
prices per Share in any subsequent offerings and the agreed upon value of Partnership Units issued
in connection with an acquisition multiplied by (B) the greater of (1) 2.25% and (2) 0.75% plus one
fourth of the 10-Year U.S. Treasury Rate for such quarter multiplied by (ii) the fully-diluted
weighted average number of Shares outstanding during such quarter. For realized gains or losses,
the amount of gain or loss shall be based on unadjusted book value. The distributions will be
reconciled in the last quarter of each fiscal year (or part thereof) to adjust for any aggregate
overpayments or underpayments (prorated for any partial fiscal year) made to the holders of the
Class B Units under the formula as if the calculations had been made for the operations of the
entire fiscal year (or part therof). These distributions shall be paid to Holders of Class B Units
within 45 days after the end of each quarter. These distributions shall be recalculated at the end
of each fiscal year beginning with the fiscal year ending in 2006. To the extent quarterly
distributions exceed the annual recalculated amount, the Holders of Class B Units shall refund the
excess to the Partnership, and to the extent the annual recalculated amount exceeds the quarterly
distributions made for such year, such excess shall be paid by the Partnership to such Holders
within 90 days after the end of such calendar year.

Section 5.02 Amounts Withheld

     All amounts withheld pursuant to the Code or any provisions of any state or local tax law and
Section 10.05 hereof with respect to any allocation, payment or distribution to the General
Partner, the Limited Partners or Assignees shall be treated as amounts distributed to the General
Partner, Limited Partners, or Assignees pursuant to Section 5.01 for all purposes under this
Agreement.

Section 5.03 Distributions Upon Liquidation

     Proceeds from a Terminating Capital Transaction and any other cash received or reductions in
reserves made after commencement of the liquidation of the Partnership shall be distributed to the
Partners in accordance with Section 13.02.

Section 5.04 Revisions to Reflect Issuance of Additional Partnership Interests

     In the event that the Partnership issues additional Partnership Interests to the General
Partner or any Additional Limited Partner pursuant to Article 4 or Section 7.05.D hereof, the
General Partner shall make such revisions to this Article 5 as it deems necessary to reflect the
issuance of such additional Partnership Interests. Such revisions shall not require the consent or
approval of any other Partner.

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ARTICLE 6

ALLOCATIONS

Section 6.01 Allocations For Capital Account Purposes

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

     A. Net Income. After giving effect to the special allocations set forth in Section 1 of
Exhibit C hereto, Net Income shall be allocated:

(i) first, to the General Partner to the extent that Net Loss previously allocated
to the General Partner, on a cumulative basis, pursuant to the last sentence of
Section 6.01.B below exceed Net Income previously allocated to the General Partner,
on a cumulative basis, pursuant to this clause (i) of Section 6.01.A,

(ii) second, to Holders of Class B Units and to the holders of any other Partnership
Interests that are entitled to any preference in distribution in accordance with the
rights of any such class of Partnership Interests until each such Partnership
Interest has been allocated, on a cumulative basis pursuant to this clause (ii), Net
Income equal to the sum of the amount of distributions theretofore received (or to
be received with respect to the fiscal year of the Partnership in which such Net
Income accrues) with respect to such Partnership Interests pursuant to clause (i) of
Section 5.01.B hereof and the amount of any prior allocations of Net Loss to such
class of Partnership Interests pursuant to Section 6.01.B.(i) below and

(iii) third, with respect to Partnership Interests that are not entitled to any
preference in the allocation of Net Income, pro rata to each such class in
accordance with the terms of such class.

     B. Net Loss. After giving effect to the special allocations set forth in Section 1 of Exhibit
C hereto, Net Loss shall be allocated:

(i) first, to the Holders of Class B Units and to holders of any other Partnership
Interests that are entitled to any preference in distribution in accordance with the
rights of any such class of Partnership Interests to the extent that any prior
allocations of Net Income to such class of Partnership Interests pursuant to Section
6.01.A(ii) above exceed, on a cumulative basis, distributions theretofore received
(or to be received with respect to the fiscal year of the Partnership in which such
Net Income accrues) with respect to such Partnership Interests pursuant to clause
(i) of Section 5.01.B hereof and

(ii) second, with respect to classes of Partnership Interests that are not entitled
to any preference in distribution, pro rata to each such class in accordance with
the terms of such class;

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provided that, Net Loss shall not be allocated to any Limited Partner pursuant to this Section
6.01.B to the extent that such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) at the end of
such taxable year (or portion thereof). All Net Loss in excess of the limitations set forth in this
Section 6.01.B shall be allocated to the General Partner.

     C. Allocations of Items. Notwithstanding the foregoing, in the General Partner’s sole
discretion, allocations of gross items of income, gain, loss, deduction and credit may be made so
as, and to the extent necessary or required by this Agreement, to make allocations match
distributions as closely as possible.

     D. Nonrecourse Liabilities. A Partner’s share of Nonrecourse Liabilities of the Partnership
shall be determined, in the sole discretion of the General Partner, in accordance with the
principles of Regulations Section 1.752-3(a)(3), including any of the permissible methods specified
in such regulation, and any other administrative or judicial guidance.

Section 6.02 Revisions to Allocations to Reflect Issuance of Additional Partnership Interests. In
the event that the Partnership issues additional Partnership Interests to the General Partner or
any Additional Limited Partner pursuant to Article 4 hereof, the General Partner shall make such
revisions to this Article 6 and Exhibit A as it deems necessary to reflect the terms of the
issuance of such additional Partnership Interests, including making preferential allocations to
classes of Partnership Interests that are entitled thereto. Such revisions shall not require the
consent or approval of any other Partner.

ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.01 Management

     A. Powers of General Partner. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are and shall be exclusively
vested in the General Partner, and no Limited Partner shall have any right to participate in or
exercise control or management power over the business and affairs of the Partnership. The General
Partner may not be removed by the Limited Partners with or without cause. In addition to the powers
now or hereafter granted a general partner of a limited partnership under applicable law or which
are granted to the General Partner under any other provision of this Agreement, the General
Partner, subject to Section 7.03 hereof, shall have full power and authority to do all things
deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all
powers set forth in Section 3.02 hereof and to effectuate the purposes set forth in Section 3.01
hereof, including, without limitation:

     (1) the making of any expenditures, the lending or borrowing of money, the assumption
or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance
of evidence of indebtedness (including the securing of same by deed to secure debt,
mortgage, deed of trust or other lien or encumbrance on the Partnership’s assets) and the
incurring of any obligations it deems necessary for the conduct of the activities of the
Partnership;

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     (2) the making of tax, regulatory and other filings, or rendering of periodic or other
reports to governmental or other agencies having jurisdiction over the business or assets of
the Partnership;

     (3) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of any assets of the Partnership (including the exercise or grant of any
conversion, option, privilege, or subscription right or other right available in connection
with any assets at any time held by the Partnership) or the merger or other combination of
the Partnership with or into another entity on such terms as the General Partner deems
proper;

     (4) the use of the assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with the terms of this Agreement and on any terms it sees
fit, including, without limitation, the financing of the conduct of the operations of LSAC,
the General Partner, the Partnership or any of the Partnership’s Subsidiaries, the lending
of funds to other Persons (including, without limitation, the Subsidiaries of the
Partnership and/or LSAC) and the repayment of obligations of the Partnership and its
Subsidiaries and any other Person in which it has an equity investment, and the making of
capital contributions to its Subsidiaries;

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

     (6) the negotiation, execution, and performance of any contracts, conveyances or other
instruments that the General Partner considers useful or necessary to the conduct of the
Partnership’s operations or the implementation of the General Partner’s powers under this
Agreement, including contracting with contractors, developers, consultants, accountants,
legal counsel, other professional advisors and other agents and the payment of their
expenses and compensation out of the Partnership’s assets;

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

     (8) holding, managing, investing and reinvesting cash and other assets of the
Partnership;

     (9) the collection and receipt of revenues and income of the Partnership;

     (10) the establishment of one or more divisions of the Partnership, the selection and
dismissal of employees of the Partnership, any division of the Partnership, or the General
Partner (including, without limitation, employees having titles such as “president,” “vice
president,” “secretary” and “treasurer” of the Partnership, any division of the Partnership,
or the General Partner), and agents, outside attorneys, accountants, consultants and
contractors of the General Partner or the Partnership or any division of the Partnership,
and the determination of their compensation and other terms of employment or hiring;

18

 

     (11) the maintenance of such insurance for the benefit of the Partnership and the
Partners as it deems necessary or appropriate;

     (12) the formation of, or acquisition of an interest in, and the contribution of
property to, any further limited or general partnerships, joint ventures or other
relationships that it deems desirable (including, without limitation, the acquisition of
interests in, and the contributions of property to, its Subsidiaries and any other Person in
which it has an equity investment from time to time);

     (13) the control of any matters affecting the rights and obligations of the
Partnership, including the settlement, compromise, submission to arbitration or any other
form of dispute resolution, or abandonment of, any claim, cause of action, liability, debt
or damages, due or owing to or from the Partnership, the commencement or defense of suits,
legal proceedings, administrative proceedings, arbitration or other forms of dispute,
resolution, and the representation of the Partnership in all suits or legal proceedings,
administrative proceedings, arbitrations or other forms of dispute resolution, the incurring
of legal expense, and the indemnification of any Person against liabilities and
contingencies to the extent permitted by law;

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

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

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

     (17) the exercise of any of the powers of the General Partner enumerated in this
Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other
Person in which the Partnership has a direct or indirect interest, or jointly with any such
Subsidiary or other Person;

     (18) the exercise of any of the powers of the General Partner enumerated in this
Agreement on behalf of any Person in which the Partnership does not have an interest
pursuant to contractual or other arrangements with such Person;

     (19) the making, execution and delivery of any and all deeds, leases, notes, deeds to
secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts,
guarantees, warranties, indemnities, waivers, releases or legal instruments or agreement in
writing necessary or appropriate in the judgment of the General Partner for the
accomplishment of any of the powers of the General Partner enumerated in this Agreement;

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     (20) the distribution of cash to acquire Partnership Units held by a Limited Partner in
connection with a Limited Partner’s exercise of its Redemption Right under Section 8.06
hereof; and

     (21) the amendment and restatement of Exhibit A hereto to reflect accurately at all
times the Capital Contributions and Percentage Interests of the Partners as the same are
adjusted from time to time to the extent necessary to reflect redemptions, Capital
Contributions, the issuance of Partnership Units, the admission of any Additional Limited
Partner or any Substituted Limited Partner or otherwise, which amendment and restatement,
notwithstanding anything in this Agreement to the contrary, shall not be deemed an amendment
of this Agreement, as long as the matter or event being reflected in Exhibit A hereto
otherwise is authorized by this Agreement.

     B. No Approval by Limited Partners. Each of the Limited Partners agrees that the General
Partner is authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provision of this Agreement, the Act or any applicable law,
rule or regulation, to the full extent permitted under the Act or other applicable law. The
execution, delivery or performance by the General Partner or the Partnership of any agreement
authorized or permitted under this Agreement shall not constitute a breach by the General Partner
of any duty that the General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity

     C. Insurance. At all times from and after the date hereof, the General Partner may cause the
Partnership to obtain and maintain (i) casualty, liability and other insurance on the properties of
the Partnership, (ii) liability insurance for the Indemnitees hereunder and (iii) such other
insurance as the General Partner, in its sole and absolute discretion, determines to be necessary.

     D. Working Capital and Other Reserves. At all times from and after the date hereof, the
General Partner may cause the Partnership to establish and maintain at any and all times working
capital accounts and other cash or similar balances in such amounts as the General Partner, in its
sole and absolute discretion, deems appropriate and reasonable from time to time, including,
without limitation, upon liquidation of the Partnership pursuant to Section 13.02.

     E. No Obligations to Consider Tax Consequences of Limited Partners. In exercising its
authority under this Agreement, the General Partner may, but shall be under no obligation to, take
into account the tax consequences to any Partner of any action taken by it. The General Partner
and the Partnership shall not have liability to a Limited Partner under any circumstances as a
result of an income tax liability incurred by such Limited Partner as a result of an action (or
inaction) by the General Partner pursuant to its authority under this Agreement.

Section 7.02 Certificate of Limited Partnership

     The General Partner has previously filed the Certificate with the Secretary of State of
Delaware as required by the Act. The General Partner shall use all reasonable efforts to cause to
be filed such other certificates or documents as may be reasonable and necessary or appropriate

20

 

for the formation, continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability) in the State of Delaware and any
other state, or the District of Columbia, in which the Partnership may elect to do business or own
property. To the extent that such action is determined by the General Partner to be reasonable and
necessary or appropriate, the General Partner shall file amendments to and restatements of the
Certificate and do all the things to maintain the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) under the laws of the State of
Delaware and each other state, or the District of Columbia, in which the Partnership may elect to
do business or own property. Subject to the terms of Section 8.05.A(4) hereof, the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the Certificate or any
amendment thereto to any Limited Partner.

Section 7.03 Title to Partnership Assets

     Title to Partnership assets, whether real, personal or mixed and whether tangible or
intangible, shall be deemed to be owned by the Partnership as an entity, and no Partners,
individually or collectively, shall have any ownership interest in such Partnership assets or any
portion thereof. Title to any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the General Partner may determine,
including Affiliates of the General Partner. The General Partner hereby declares and warrants that
any Partnership assets for which legal title is held in the name of the General Partner or any
nominee or Affiliate of the General Partner shall be held by the General Partner for the use and
benefit of the Partnership in accordance with the provisions of this Agreement; provided, however,
that the General Partner shall use its best efforts to cause beneficial and record title to such
assets to be vested in the Partnership as soon as reasonably practicable. All Partnership assets
shall be recorded as the property of the Partnership in its books and records, irrespective of the
name in which legal title to such Partnership assets is held.

Section 7.04 Reimbursement of the General Partner

     A. No Compensation. Except as provided in this Section 7.04 and elsewhere in this Agreement
(including the provisions of Articles V and VI hereof regarding distributions, payments and
allocations to which it may be entitled), the General Partner shall not be compensated for its
services as general partner of the Partnership.

     B. Responsibility for Partnership Expenses. The Partnership shall be responsible for and
shall pay all expenses relating to the Partnership’s organization, the ownership of its assets and
its operations. The General Partner shall be reimbursed on a monthly basis, or such other basis as
the General Partner may determine in its sole and absolute discretion, for all expenses it incurs
relating to the ownership and operation of, or for the benefit of, the Partnership (including,
without limitation, expenses related to the management and administration of any Subsidiaries of
the General Partner or the Partnership or Affiliates of the Partnership such as auditing expenses
and filing fees); provided that, the amount of any such reimbursement shall be reduced by (i) any
interest earned by the General Partner with respect to bank accounts or other instruments or
accounts held by it as permitted in Section 7.05.A below and (ii) any amount derived by the General
Partner from any investments permitted in Section 7.05.A below; and, provided further, that the
General Partner shall not be reimbursed for (i) income tax liabilities or

21

 

(ii) filing or similar fees in connection with maintaining the General Partner’s continued
corporate existence that are incurred by the General Partner. The General Partner shall determine
in good faith the amount of expenses incurred by it related to the ownership and operation of, or
for the benefit of, the Partnership. In the event that certain expenses are incurred for the
benefit of the Partnership and other entities (including the General Partner), such expenses will
be allocated to the Partnership and such other entities in such a manner as the General Partner in
its sole and absolute discretion deems fair and reasonable. Such reimbursements shall be in
addition to any reimbursement to the General Partner pursuant to Section 10.03.B hereof and as a
result of indemnification pursuant to Section 7.07 below. All payments and reimbursements hereunder
shall be characterized for federal income tax purposes as expenses of the Partnership incurred on
its behalf, and not as expenses of the General Partner.

     C. Partnership and Other Interests Issuance and Repurchase Expenses. The General Partner
shall also be reimbursed for all expenses it incurs relating to any issuance or repurchase of
additional Partnership Interests, Shares, Debt of the Partnership or the General Partner or rights,
options, warrants or convertible or exchangeable securities pursuant to Article 4 hereof
(including, without limitation, all costs, expenses, damages and other payments resulting from or
arising in connection with litigation related to any of the foregoing), all of which expenses are
considered by the Partners to constitute expenses of, and for the benefit of, the Partnership.

     D. Reimbursement not a Distribution. If and to the extent any reimbursement made pursuant to
this Section 7.04 is determined for federal income tax purposes not to constitute a payment of
expenses of the Partnership, the amount so determined shall be treated as a distribution to the
General Partner and there shall be a corresponding special allocation of gross income to the
General Partner, for purposes of computing the Partners’ Capital Accounts.

Section 7.05 Outside Activities of the General Partner and LSAC

     A. General. Notwithstanding anything in this Agreement to the contrary, it is expressly
understood and agreed that the General Partner may, if it determines such action to be in the best
interests of the Partnership, elect to cause some or all of the assets of the Partnership
(including cash expected to be utilized to purchase assets that will be so held) to be distributed
to and held directly by LSAC (the “Specially Distributed Assets”). Concurrently with any such
distribution, the General Partner shall (i) amend Section 5.01 of this Agreement so as to provide
that, from and after the date of such distribution, each Partner other than LSAC will receive the
same distributions that it would have received had the Specially Distributed Assets been held by
the Partnership rather than directly by LSAC (and a corresponding adjustment shall be made to the
distributions to be made to LSAC); and (ii) make such further amendments to this Agreement
(including, without limitation, to the income and loss allocation provisions of Section 6.01
hereof) as may be necessary or appropriate to effect the intention of the parties that the Partners
be placed, as nearly as possible, in the same position they would have been in had such Specially
Distributed Assets been held by the Partnership rather than directly by LSAC; provided, however,
that LSAC shall in no event be required to make contributions to the Partnership to fund
distributions to the other Partners.

     B. Repurchase of Shares. In the event LSAC exercises its rights under the Certificate of
Incorporation to purchase Shares or otherwise elects to purchase from its

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stockholders Shares in connection with a stock repurchase or similar program or for the
purpose of delivering such shares to satisfy an obligation under any dividend reinvestment or stock
purchase program adopted by LSAC, any employee stock purchase plan adopted by LSAC or any similar
obligation or arrangement undertaken by LSAC in the future, then the General Partner shall cause
the Partnership to purchase from LSAC that number of Partnership Units of the appropriate class
equal to the product obtained by multiplying the number of Shares purchased by LSAC divided by the
Conversion Factor, on the same terms and for the same aggregate price that LSAC purchased such
Shares.

     C. Forfeiture of Shares. In the event the Partnership, the General Partner or LSAC acquires
Shares as a result of the forfeiture of such Shares under a restricted or similar share plan, then
the General Partner shall cause the Partnership to cancel that number of Partnership Units of the
appropriate class equal to the number of Shares so acquired divided by the Conversion Factor, and,
if the Partnership acquired such Shares, it shall transfer such Shares to the General Partner for
cancellation.

     D. Issuances of Shares. After the Effective Date, LSAC shall not grant, award, or issue any
additional Shares (other than Shares issued pursuant to Section 8.06 hereof or pursuant to a
dividend or distribution (including any stock split) of Shares to all of its stockholders),other
equity securities of LSAC or New Securities unless (i) the General Partner shall cause, pursuant to
Section 4.02.A hereof, the Partnership to issue to the General Partner Partnership Interests or
rights, options, warrants or securities of the Partnership having designations, preferences and
other rights, all such that the economic interests are substantially the same as those of such
additional Shares, other equity securities or New Securities, as the case may be, and (ii) LSAC
transfers to the Partnership, as an additional Capital Contribution, the proceeds from the grant,
award, or issuance of such additional Shares, other equity securities or New Securities, as the
case may be, or from the exercise of rights contained in such additional Shares, other equity
securities or New Securities, as the case may be. Without limiting the foregoing, LSAC is expressly
authorized to issue additional Shares, other equity securities or New Securities, as the case
maybe, for less than fair market value, and the General Partner is expressly authorized, pursuant
to Section 4.02.A hereof, to cause the Partnership to issue to LSAC corresponding Partnership
Interests, as long as (a) LSAC concludes in good faith that such issuance is in the interests of
LSAC and the Partnership (for example, and not by way of limitation, the issuance of Shares and
corresponding Partnership Units pursuant to a stock purchase plan providing for purchases of
Shares, either by employees or stockholders, at a discount from fair market value or pursuant to
employee stock options that have an exercise price that is less than the fair market value of the
Shares, either at the time of issuance or at the time of exercise) and (b) LSAC transfers all
proceeds from any such issuance or exercise to the Partnership as an additional Capital
Contribution.

     E. Stock Option Plan. If at any time or from time to time, LSAC sells Shares pursuant to
any Stock Option Plan, LSAC shall transfer the net proceeds of the sale of such Shares to the
Partnership as an additional Capital Contribution in exchange for an amount of additional
Partnership Units equal to the number of Shares so sold divided by the Conversion Factor.

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     F. Funding Debt. LSAC may incur a Funding Debt, including, without limitation, a Funding
Debt that is convertible into Shares or otherwise constitutes a class of New Securities, subject to
the condition that LSAC lends to the Partnership the net proceeds of such Funding Debt. If LSAC
enters into any Funding Debt, the loan to the Partnership shall be on comparable terms and
conditions, including interest rate, repayment schedule and costs and expenses, as are applicable
with respect to or incurred in connection with such Funding Debt.

Section 7.06 Transactions with Affiliates

     A. Transactions with Certain Affiliates. Except (i) as expressly permitted by this Agreement
(other than Section 7.01.A hereof which shall not be considered authority for a transaction that
otherwise would be prohibited by this Section 7.06.A) and (ii) all transactions with LXP or its
Affiliates contemplated by LSAC’s initial private offering, the Partnership shall not, directly or
indirectly, sell, transfer or convey any property to, or purchase any property from, or borrow
funds from, or lend funds to, any Partner or any Affiliate of the Partnership or the General
Partner or LSAC that is not also a Subsidiary of the Partnership, except pursuant to transactions
that are on terms that are fair and reasonable and no less favorable to the Partnership than would
be obtained from an unaffiliated third party.

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

     C. Conflict Avoidance. The General Partner is expressly authorized to enter into, in the name
and on behalf of the Partnership, a right of first opportunity arrangement and other conflict
avoidance agreements with various Affiliates of LXP, the Advisor, the Partnership and General
Partner on such terms as the General Partner, in its sole and absolute discretion, believes are
advisable.

Section 7.07 Indemnification

     A. General. The Partnership shall indemnify each Indemnitee from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including, without limitation,
attorneys fees and other legal fees and expenses), judgments, fines, settlements and other amounts
arising from or in connection with any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative incurred by the Indemnitee and relating to the
Partnership or the General Partner or the formation or operations of, or the ownership of property
by, either of them as set forth in this Agreement in which any such Indemnitee may be involved, or
is threatened to be involved, as a party or otherwise, unless it is established by a final
determination of a court of competent jurisdiction that: (i) the act or omission of the Indemnitee
was material to the matter giving rise to the proceeding and either was committed in bad faith or
was the result of active and deliberate dishonesty, (ii) the Indemnitee actually received an
improper personal benefit in money, property or services or (iii) in the case of any criminal
proceeding, the Indemnitee had reasonable cause to believe that the

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act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guarantee, contractual obligations for any
indebtedness or other obligations or otherwise, for any indebtedness of the Partnership or any
Subsidiary of the Partnership (including, without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more
indemnity agreements consistent with the provisions of this Section 7.07 in favor of any Indemnitee
having or potentially having liability for any such indebtedness. The termination of any proceeding
by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct set forth in this Section 7.07.A. The termination of any proceeding
by conviction or upon a plea of nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner
contrary to that specified in this Section 7.07.A with respect to the subject matter of such
proceeding. Any indemnification pursuant to this Section 7.07 shall be made only out of the assets
of the Partnership, and any insurance proceeds from the liability policy covering the General
Partner and any Indemnitees, and neither the General Partner nor any Limited Partner shall have any
obligation to contribute to the capital of the Partnership or otherwise provide funds to enable the
Partnership to fund its obligations under this Section 7.07.

     B. Advancement of Expenses. Reasonable expenses expected to be incurred by an Indemnitee
shall be paid or reimbursed by the Partnership in advance of the final disposition of any and all
claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative
made or threatened against an Indemnitee upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct
necessary for indemnification by the Partnership as authorized in this Section 7.07.B has been met
and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall
ultimately be determined that the standard of conduct has not been met.

     C. No Limitation of Rights. The indemnification provided by this Section 7.07 shall be in
addition to any other rights to which an Indemnitee or any other Person may be entitled under any
agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall
continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in
a written agreement pursuant to which such Indemnitee is indemnified.

     D. Insurance. The Partnership may purchase and maintain insurance on behalf of the
Indemnitees and such other Persons as the General Partner shall determine against any liability
that may be asserted against or expenses that may be incurred by such Person in connection with the
Partnership’s activities, regardless of whether the Partnership would have the power to indemnify
such Person against such liability under the provisions of this Agreement.

     E. Benefit Plan Fiduciary. For purposes of this Section 7.07, (i) the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever
the performance by it of its duties to the Partnership also imposes duties on, or otherwise
involves services by, it to the plan or participants or beneficiaries of the plan, (ii) excise
taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 7.07 and (iii) actions taken or omitted
by the Indemnitee with respect to an employee benefit plan in the performance

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of its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed
to the best interests of the Partnership.

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

     G. Interested Transactions. An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.07 because the Indemnitee had an interest in the transaction with respect
to which the indemnification applies if the transaction was otherwise permitted by the terms of
this Agreement.

     H. Benefit. The provisions of this Section 7.07 are for the benefit of the Indemnitees, their
heirs, successors, assigns and administrators and shall not be deemed to create any rights for the
benefit of any other Persons. Any amendment, modification or repeal of this Section 7.07, or any
provision hereof, shall be prospective only and shall not in any way affect the limitation on the
Partnership’s liability to any Indemnitee under this Section 7.07 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or related to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.

     I. Indemnification Payments Not Distributions. If and to the extent any payments to the
General Partner pursuant to this Section 7.07 constitute gross income to the General Partner (as
opposed to the repayment of advances made on behalf of the Partnership), such amounts shall
constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated
consistently therewith by the Partnership and all Partners, and shall not be treated as
distributions for purposes of computing the Partners’ Capital Accounts.

Section 7.08 Liability of the General Partner

     A. General. Notwithstanding anything to the contrary set forth in this Agreement, the General
Partner and its directors and officers shall not be liable for monetary damages to the Partnership,
any Partners or any Assignees for losses sustained, liabilities incurred or benefits not derived as
a result of errors in judgment or mistakes of fact or law or of any act or omission if the General
Partner or its directors and officers acted in good faith.

     B. No Obligation to Consider Separate Interests of Limited Partners or Stockholders. The
Limited Partners expressly acknowledge that the General Partner is acting on behalf of the
Partnership and LSAC’s stockholders collectively, that the General Partner is under no obligation
to consider the separate interests of the Limited Partners (including, without limitation, the tax
consequences to Limited Partners or Assignees or to such stockholders) in deciding whether to cause
the Partnership to take (or decline to take) any actions. In the event of a conflict between the
interests of the stockholders of LSAC on one hand and the Limited Partners on the other, the
General Partner shall endeavor in good faith to resolve the conflict in manner not adverse to
either the stockholders of LSAC or the Limited Partners; provided, however, that for so long as
LSAC, directly or indirectly, owns a controlling interest in the

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Partnership, any such conflict that cannot be resolved in a manner not adverse to either the
stockholders of LSAC or the Limited Partners shall be resolved in favor of the stockholders of
LSAC. The General Partner shall not be liable for monetary damages or otherwise for losses
sustained, liabilities incurred or benefits not derived by Limited Partners in connection with such
decisions, provided that the General Partner has acted in good faith.

     C. Actions of Agents. Subject to its obligations and duties as General Partner set forth in
Section 7.01.A above, the General Partner may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder either directly or by or through
its employees or agents. The General Partner shall not be responsible for any misconduct or
negligence on the part of any such employee or agent appointed by the General Partner in good
faith.

     D. Effect of Amendment. Any amendment, modification or repeal of this Section 7.08 or any
provision hereof shall be prospective only and shall not in any way affect the limitations on the
General Partner’s liability to the Partnership and the Limited Partners under this Section 7.08 as
in effect immediately prior to such amendment, modification or repeal with respect to claims
arising from or relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.

     E. Certain Definitions. Whenever in this Agreement the General Partner is permitted or
required to make a decision (i) in its “sole discretion “or “discretion,” or under a similar grant
of authority or latitude, the General Partner shall be entitled to consider such interests and
factors as it desires and may consider its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting the Partnership or the Limited
Partners, or (ii) in its “good faith” or under another express standard, the General Partner shall
act under such express standard and shall not be subject to any other or different standards
imposed by this Agreement or by law or any other agreement contemplated herein.

Section 7.09 Other Matters Concerning the General Partner

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

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

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

27

 

and every act and duty which is permitted or required to be done by the General Partner
hereunder.

Section 7.10 Reliance by Third Parties

     Notwithstanding anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner has full power and authority,
without consent or approval of any other Partner or Person, to encumber, sell or otherwise use in
any manner any and all assets of the Partnership, to enter into any contracts on behalf of the
Partnership and to take any and all actions on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if the General Partner were the Partnership’s sole
party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies which may be available against such Person to contest, negate or
disaffirm any action of the General Partner in connection with any such dealing. In no event shall
any Person dealing with the General Partner or its representatives be obligated to ascertain that
the terms of this Agreement have been complied with or to inquire into the necessity or expedience
of any act or action of the General Partner or its representatives. Each and every certificate,
document or other instrument executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery of such certificate,
document or instrument, this Agreement was in full force and effect, (ii) the Person executing and
delivering such certificate, document or instrument was duly authorized and empowered to do so for
and on behalf of the Partnership, and (iii) such certificate, document or instrument was duly
executed and delivered in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.

Section 7.11 Loans by Third Parties

     The Partnership may incur Debt, or enter into similar credit, guarantee, financing or
refinancing arrangements for any purpose (including, without limitation, in connection with any
acquisition of property or other assets) with any Person that is not the General Partner upon such
terms as the General Partner determines appropriate; provided that, the Partnership shall not incur
any Debt that is recourse to the General Partner, except to the extent otherwise agreed to by the
General Partner in its sole discretion.

ARTICLE 8

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.01 Limitation of Liability

     The Limited Partners shall have no liability under this Agreement except as expressly provided
in this Agreement, including Section 10.05 hereof, or under the Act.

Section 8.02 Management of Business

     No Limited Partner or Assignee (other than the General Partner, any of its Affiliates or any
officer, director, employee, partner, member, agent or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such) shall take part in the
operation,

28

 

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

Section 8.03 Outside Activities of Limited Partners

     Subject to Section 7.05 hereof, and subject to any agreements entered into pursuant to Section
7.06.C hereof and to any other agreements entered into by a Limited Partner or its Affiliates with
the Partnership or a Subsidiary, any Limited Partner (other than the General Partner) and any
officer, director, employee, agent, trustee, Affiliate or stockholder of any Limited Partner shall
be entitled to and may have business interests and engage in business activities in addition to
those relating to the Partnership, including business interests and activities in direct or
indirect competition with the Partnership. Neither the Partnership nor any Partners shall have any
rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee.
None of the Limited Partners (other than the General Partner) nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established hereby in any
business ventures of any other Person (other than the General Partner to the extent expressly
provided herein), and such Person shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures to the Partnership, any Limited Partner or any such other
Person, even if such opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.

Section 8.04 Return of Capital

     Except pursuant to the right of redemption set forth in Section 8.06 below, no Limited Partner
shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent of
distributions made pursuant to this Agreement or upon termination of the Partnership as provided
herein. No Limited Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions (except as permitted by Section 4.02.A
hereof) or, except to the extent provided by Exhibit C hereto or as permitted by Sections 4.02.A,
5.01.B, 6.01.A(ii) and 6.01.B(i)hereof or otherwise expressly provided in this Agreement, as to
profits, losses, distributions or credits.

Section 8.05 Rights of Limited Partners Relating to the Partnership

     A. General. In addition to other rights provided by this Agreement or by the Act, and except
as limited by Section 8.05.C hereof, each Limited Partner shall have the right, for a purpose
reasonably related to such Limited Partner’s interest as a limited partner in the Partnership, upon
written demand with a statement of the purpose of such demand and at such Limited Partner’s own
expense (including such copying and administrative charges as the General Partner may establish
from time to time):

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     (1) to obtain a copy of the most recent annual and quarterly reports filed with the
Securities and Exchange Commission by LSAC pursuant to the Securities Exchange Act of 1934;

     (2) to obtain a copy of the Partnership’s federal, state and local income tax returns
for each Partnership Year;

     (3) to obtain a current list of the name and last known business, residence or mailing
address of each Partner;

     (4) to obtain a copy of this Agreement and the Certificate and all amendments thereto,
together with executed copies of all powers of attorney pursuant to which this Agreement,
the Certificate and all amendments thereto have been executed; and

     (5) to obtain true and full information regarding the amount of cash and a description
and statement of any other property or services contributed by each Partner and which each
Partner has agreed to contribute in the future, and the date on which each became a Partner.

     B. Notice of Conversion Factor. The Partnership shall notify each Limited Partner upon
request of the then current Conversion Factor.

     C. Confidentiality. Notwithstanding any other provision of this Section 8.05, the General
Partner may keep confidential from the Limited Partners, for such period of time as the General
Partner determines in its sole and absolute discretion to be reasonable, any information that (i)
the General Partner reasonably believes to be in the nature of trade secrets or other information
the disclosure of which the General Partner in good faith believes is not in the best interests of
the Partnership or could damage the Partnership or is business or (ii) the Partnership is required
by law or by agreements with an unaffiliated third party to keep confidential.

Section 8.06 Class A Redemption Right

     A. General.

     (i) Subject to Section 8.06.C below, on or after the date one (1) year after the
Effective Date, the holder of a Class A Unit (if other than the General Partner or LSAC)
shall have the right (the “Redemption Right”) to require the Partnership to redeem such
Class A Unit on a Specified Redemption Date and at a redemption price equal to and in the
form of the Cash Amount to be paid by the Partnership. Any such Redemption Right shall be
exercised pursuant to a Notice of Redemption delivered to the Partnership (with a copy to
the General Partner) by the Limited Partner who is exercising the Redemption Right (the
“Redeeming Partner”). A Limited Partner may not exercise the Redemption Right for less than
one thousand (1,000) Class A Units or, if such Redeeming Partner holds less than one
thousand (1,000) Class A Units, for less than all of the Class A Units held by such
Redeeming Partner.

     (ii) The Redeeming Partner shall have no right with respect to any Class A Units so
redeemed to receive any distributions paid after the Specified Redemption Date.

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     (iii) The Assignee of any Limited Partner may exercise the rights of such Limited
Partner pursuant to this Section 8.06 and such Limited Partner shall be deemed to have
assigned such rights to such Assignee and shall be bound by the exercise of such rights by
such Limited Partner’s Assignee. In connection with any exercise of the such rights by such
Assignee on behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership
directly to such Assignee and not to such Limited Partner.

     B. LSAC Assumption of Right.

     (i) If a Limited Partner has delivered a Notice of Redemption, LSAC may, in its sole
and absolute discretion (subject to any limitations on ownership and transfer of Shares set
forth in the Certificate of Incorporation), elect to assume directly and satisfy a
Redemption Right by paying to the Redeeming Partner either the Cash Amount or the Shares
Amount, as LSAC determines in its sole and absolute discretion, on the Specified Redemption
Date, whereupon LSAC shall acquire the Class A Units offered for redemption by the Redeeming
Partner and shall be treated for all purposes of this Agreement as the owner of such
Partnership Units. Unless LSAC, in its sole and absolute discretion, shall exercise its
right to assume directly and satisfy the Redemption Right, LSAC shall not have any
obligation to the Redeeming Partner or to the Partnership with respect to the Redeeming
Partner’s exercise of the Redemption Right. In the event LSAC shall exercise its right to
satisfy the Redemption Right in the manner described in the first sentence of this Section
8.06.B and shall fully perform its obligations in connection therewith, the Partnership
shall have no right or obligation to pay any amount to the Redeeming Partner with respect to
such Redeeming Partner’s exercise of the Redemption Right, and each of the Redeeming
Partner, the Partnership and LSAC shall, for federal income tax purposes, treat the
transaction between LSAC and the Redeeming Partner as a sale of the Redeeming Partner’s
Partnership Units to LSAC. Nothing contained in this Section 8.06.B shall imply any right of
LSAC to require any Limited Partner to exercise the Redemption Right afforded to such
Limited Partner pursuant to Section 8.06.A above.

     (ii) In the event that LSAC determines to pay the Redeeming Partner the Redemption
Amount in the form of Shares, the total number of Shares to be paid to the Redeeming Partner
in exchange for the Redeeming Partner’s Partnership Units shall be the applicable Shares
Amount. In the event this amount is not a whole number of Shares, the Redeeming Partner
shall be paid (i) that number of Shares which equals the nearest whole number less than such
amount plus (ii) an amount of cash which LSAC determines, in its reasonable discretion, to
represent the fair value of the remaining fractional Share which would otherwise be payable
to the Redeeming Partner.

     (iii) Each Redeeming Partner agrees to execute such documents as LSAC may reasonably
require in connection with the issuance of Shares upon exercise of the Redemption Right.

     C. Exceptions to Exercise of Redemption Right. Notwithstanding the provisions of Sections
8.06.A and 8.06.B above, a Partner shall not be entitled to exercise the Redemption Right pursuant
to Section 8.06.A above if (but only as long as) the delivery of Shares to such Partner on the
Specified Redemption Date (i) would be prohibited under the Certificate of

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Incorporation or (ii) as long as the Shares are Publicly Traded, would be prohibited under
applicable federal or state securities laws or regulations (in each case regardless of whether LSAC
would in fact assume and satisfy the Redemption Right).

     D. No Liens on Partnership Units Delivered for Redemption. Each Limited Partner covenants and
agrees with LSAC that all Partnership Units delivered for redemption (including Partnership Units
redeemed under Section 8.07) shall be delivered to the Partnership or LSAC, as the case may be,
free and clear of all liens, and, notwithstanding anything contained herein to the contrary,
neither LSAC nor the Partnership shall be under any obligation to acquire Partnership Units which
are or may be subject to any liens. Each Limited Partner further agrees that, in the event any
state or local property transfer tax is payable as a result of the transfer of its Partnership
Units to the Partnership or LSAC, such Limited Partner shall assume and pay such transfer tax.

     E. Additional Partnership Interests. In the event that the Partnership issues Partnership
Interests to any Additional Limited Partner pursuant to Article 4 hereof, the General Partner shall
make such amendments to this Section 8.06 as it determines are necessary to reflect the issuance of
such Partnership Interests (including setting forth any restrictions on the exercise of the
Redemption Right with respect to such Partnership Interests).

Section 8.07 Redemption of Class B Units

     The Class B Units shall be subject to mandatory redemption if the Advisory Agreement is
terminated or not renewed. The General Partner shall send notice of Class B Unit redemption within
ten days after the General Partner sends or receives notice of termination or non-renewal of the
Advisory Agreement. The redemption date shall be the date on which termination of the Advisory
Agreement is effective. The redemption amount, to be paid in cash or by wire transfer on the
redemption date, shall be equal to four times the average annualized distributions on a Class B
Unit relating to the 24-month period preceding the date of termination or non-renewal; and
provided, further, that if the Advisory Agreement is terminated by LSAC for cause (as defined in
the Advisory Agreement), the aggregate redemption amount shall be $100. Upon any such redemption,
the Class B Units will also be entitled to receive any distributions payable with respect to
periods through the redemption date. If such distribution amounts cannot be calculated on or by the
redemption date, they shall be calculated and paid as promptly as possible thereafter, but in no
event later than 30 days after the redemption date.

ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.01 Records and Accounting

     The General Partner shall keep or cause to be kept at the principal office of the Partnership
those records and documents required to be maintained by the Act and other books and records deemed
by the General Partner to be appropriate with respect to the Partnership’s business, including,
without limitation, all books and records necessary to provide to the Limited Partners any
information, lists and copies of documents required to be provided pursuant to Section 9.03 hereof.
Any records maintained by or on behalf of the Partnership in the regular

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course of its business may be kept on, or be in the form of, punch cards, magnetic tape,
photographs, micrographics or any other information storage device, provided that the records so
maintained are convertible into clearly legible written form within a reasonable period of time.
The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an
accrual basis in accordance with generally accepted accounting principles, or such other basis as
the General Partner determines to be necessary or appropriate.

Section 9.02 Fiscal Year

	 
	The fiscal year of the Partnership shall end on June 30th.
	 
	Section 9.03 Reports	 

     A. Annual Reports. As soon as practicable, but in no event later than one hundred five (105)
days after the close of each Partnership Year, the General Partner shall cause to be mailed to each
Limited Partner as of the close of the Partnership Year, an annual report containing financial
statements of the Partnership, or of LSAC if such statements are prepared solely on a consolidated
basis with LSAC, for such Partnership Year, presented in accordance with generally accepted
accounting principles, such statements to be audited by a nationally recognized firm of independent
public accountants selected by the General Partner.

     B. Quarterly Reports. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each fiscal quarter (except the last fiscal quarter of each year),
the General Partner shall cause to be mailed to each Limited Partner as of the last day of the
fiscal quarter, a report containing unaudited financial statements of the Partnership, or of LSAC,
if such statements are prepared solely on a consolidated basis with LSAC, and such other
information as may be required by applicable law or regulation, or as the General Partner
determines to be appropriate.

ARTICLE 10

TAX MATTERS

Section 10.01 Preparation of Tax Returns

     The General Partner shall arrange for the preparation and timely filing of all returns of
Partnership income, gains, deductions, losses and other items required of the Partnership for
federal and state income tax purposes and shall use all reasonable efforts to furnish, within one
hundred and ninety (190) days of the close of each taxable year, the tax information reasonably
required by Limited Partners for federal and state income tax reporting purposes.

Section 10.02 Tax Elections

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

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Section 10.03 Tax Matters Partner

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

     The taking of any action and the incurring of any expense by the tax matters partner in
connection with any such proceeding, except to the extent required by law, is a matter in the sole
and absolute discretion of the tax matters partner and the provisions relating to indemnification
of the General Partner set forth in Section 7.07 of this Agreement shall be fully applicable to the
tax matters partner in its capacity as such.

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

Section 10.04 Withholding

     Each Limited Partner hereby authorizes the Partnership to withhold from or pay on behalf of or
with respect to such Limited Partner any amount of federal, state, local, or foreign taxes that the
General Partner determines that the Partnership is required to withhold or pay with respect to any
amount distributable or allocable to such Limited Partner pursuant to this Agreement, including,
without limitation, any taxes required to be withheld or paid by the Partnership pursuant to
Sections 1441, 1442, 1445, or 1446 of the Code. Any amount paid on behalf of or with respect to a
Limited Partner shall constitute a loan by the Partnership to such Limited Partner, which loan
shall be repaid by such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership withholds such payment from a
distribution which would otherwise be made to the Limited Partner or (ii) the General Partner
determines, in its sole and absolute discretion, that such payment may be satisfied out of the
available funds of the Partnership which would, but for such payment, be distributed to the Limited
Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as
having been distributed to such Limited Partner. Each Limited Partner hereby unconditionally and
irrevocably grants to the Partnership a security interest in such Limited Partner’s Partnership
Interest to secure such Limited Partner’s obligation to pay to the Partnership any amounts required
to be paid pursuant to this Section 10.05. In the event that a Limited Partner fails to pay any
amounts owed to the Partnership pursuant to this Section 10.05 when due, the General Partner may,
in its sole and absolute discretion, elect to make the payment to the Partnership on behalf of such
defaulting Limited Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the Partnership as
against such defaulting Limited Partner. Without limitation, in such event the General Partner
shall have the right to receive distributions that would otherwise be distributable to such
defaulting Limited Partner until such time as such

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loan, together with all interest thereon, has been paid in full, and any such distributions so
received by the General Partner shall be treated as having been distributed to the defaulting
Limited Partner and immediately paid by the defaulting Limited Partner to the General Partner in
repayment of such loan. Any amounts payable by a Limited Partner hereunder shall bear interest at
the lesser of (A) the base rate on corporate loans at large United States money center commercial
banks, as published from time to time in the Wall Street Journal, plus four (4) percentage points,
or (B) the maximum lawful rate of interest on such obligation, such interest to accrue from the
date such amount is due (i.e., fifteen (15) days after demand) until such amount is paid in full.
Each Limited Partner shall take such actions as the Partnership or the General Partner shall
request in order to perfect or enforce the security interest created hereunder.

ARTICLE 11

TRANSFERS AND WITHDRAWALS

Section 11.01 Transfer

     A. Definition. The term “transfer,” when used in this Article 11 with respect to a
Partnership Unit, shall be deemed to refer to a transaction by which the General Partner purports
to assign all or any part of its General Partner Interest to another Person or by which a Limited
Partner purports to assign all or any part of its Limited Partner Interest to another Person, and
includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition by law or otherwise. The term “transfer” when used in this Article 11 does not
include any redemption or repurchase of Partnership Units by the Partnership from a Partner
(including the General Partner) or acquisition of Partnership Units from a Limited Partner by LSAC
pursuant to Section 8.06 hereof or otherwise. No part of the interest of a Limited Partner shall
be subject to the claims of any creditor, any spouse for alimony or support, or to legal process,
and may not be voluntarily alienated or encumbered except as may be specifically provided for in
this Agreement.

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

Section 11.02 Transfer of General Partner’s Partnership Interest or LSAC’s Interest in the General
Partner

     A. The General Partner may not transfer any of its General Partner Interest or Limited
Partnership Interests or withdraw as General Partner except as provided in Section 11.02.B or in
connection with a transaction described in Section 11.02.C. LSAC shall not transfer any of its
Limited Partner Interest or Ownership Interest except in connection with a transaction described in
Section 11.02.B or 11.02.C.

     B. The General Partner and LSAC may transfer Limited Partner Interests held by them to the
Partnership in accordance with Section 7.05.B hereof.

     C. Except as otherwise provided in Section 11.02.D, neither the General Partner nor LSAC shall
engage in any merger, consolidation or other combination with or into another

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Person or sale of all or substantially all of its assets, or effect any reclassification, or
recapitalization or change of outstanding Shares (other than a change in par value, or from par
value to no par value, or as a result of a subdivision or combination as described in the
definition of “Conversion Factor”) (“Transaction”), unless (i) the Transaction also includes a
merger of the Partnership or sale of substantially all of the assets of the Partnership which has
been approved by the requisite Consent of the Partners pursuant to Section 7.03 and as a result of
which all Limited Partners will receive for each Partnership Unit (other than Class A Units, which
will only receive payment if redeemed in accordance with Section 8.07 hereof) an amount of cash,
securities, or other property equal to the product of the Conversion Factor and the greatest amount
of cash, securities or other property paid to a holder of one Share in consideration of one Share
at any time during the period from and after the date on which the Transaction is consummated,
provided that if, in connection with the Transaction, a purchase, tender or exchange offer shall
have been made to and accepted by the holders of more than fifty percent (50%) of the outstanding
Shares, each holder of Partnership Units shall receive the greatest amount of cash, securities, or
other property which such holder would have received had it exercised the Redemption Right and
received Shares in exchange for its Partnership Units immediately prior to the expiration of such
purchase, tender or exchange offer and had thereupon accepted such purchase, tender or exchange
offer and (ii) no more than forty-nine percent (49%) of the equity securities of the acquiring
Person in such transaction shall be owned, after consummation of such Transaction, by the General
Partner or Persons who are Affiliates of the Partnership or the General Partner immediately prior
to the date on which the Transaction is consummated.

     D. Notwithstanding Section 11.02.C, LSAC may merge with another entity if immediately after
such merger substantially all of the assets of the surviving entity, other than Partnership Units
or General Partnership Interest held by the General Partner or the Partnership Units held by LSAC,
are contributed to the Partnership as a Capital Contribution in exchange for Partnership Units with
a fair market value, as reasonably determined by the General Partner, equal to the 704(c) Value of
the assets so contributed.

Section 11.03 Limited Partners’ Rights to Transfer

     A. General. A Limited Partner may not transfer any of such Limited Partner’s rights as a
Limited Partner without the consent of the General Partner, which consent the General Partner may
withhold in its sole discretion.

     B. Incapacitated Limited Partners. If a Limited Partner is subject to Incapacity, the
executor, administrator, trustee, committee, guardian, conservator or receiver of such Limited
Partner’s estate shall have all the rights of a Limited Partner, but not more rights than those
enjoyed by other Limited Partners, for the purpose of settling or managing the estate and such
power as the Incapacitated Limited Partner possessed to transfer all or any part of his or its
interest in the Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.

     C. No Transfers Violating Securities Laws. The General Partner may prohibit any transfer by a
Limited Partner of its Partnership Units if, in the opinion of legal counsel to the Partnership,
such transfer would require filing of a registration statement under the Securities Act

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of 1933 or would otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Unit.

     D. No Transfers Affecting Tax Status of Partnership. No transfer by a Limited Partner of its
Partnership Units may be made to any Person if (i) in the opinion of legal counsel for the
Partnership, it would result in the Partnership being treated as an association taxable as a
corporation, or (ii) such transfer is effectuated through an “established securities market” or a
“secondary market (or the substantial equivalent thereof)” with the meaning of Section 7704 of the
Code or would otherwise result in the Partnership being treated as a “publicly traded partnership”
within the meaning of Section 7704 of the Code.

     E. No Transfers to Holders of Nonrecourse Liabilities. No pledge or transfer of any
Partnership Units may be made to a lender to the Partnership, or to any Person who is related
(within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Partnership,
whose loan constitutes a Nonrecourse Liability without the consent of the General Partner, in its
sole and absolute discretion.

     F. Transfer Register. The General Partner shall keep a register for the Partnership on which
the transfer, pledge or release of Partnership Units shall be shown and pursuant to which entries
shall be made to effect all transfers, pledges or releases as required by Sections 8-207,8-313(1)
and 8-321 of the Uniform Commercial Code, as amended, in effect in the States of New York and
Delaware; provided, however, that if there is any conflict between such requirements, the
provisions of the Delaware Uniform Commercial Code shall govern. The General Partner shall (i)
place proper entries in such register clearly showing each transfer and each pledge and grant of
security interest and the transfer and assignment pursuant thereto, such entries to be endorsed by
the General Partner and (ii) maintain the register and make the register available for inspection
by all of the Partners and their pledgees at all times during the term of this Agreement. Nothing
herein shall be deemed a consent to any pledge or transfer otherwise prohibited under this
Agreement.

Section 11.04 Substituted Limited Partners

     A. Consent of General Partner. No Limited Partner shall have the right to substitute a
transferee as a Limited Partner in his place. The General Partner shall, however, have the right to
consent to the admission of a transferee of the interest of a Limited Partner pursuant to this
Section 11.04 as a Substituted Limited Partner, which consent may be given or withheld by the
General Partner in its sole and absolute discretion. The General Partner’s failure or refusal to
permit a transferee of any such interests to become a Substituted Limited Partner shall not give
rise to any cause of action against the Partnership or any Partner.

     B. Rights of Substituted Limited Partner. A transferee who has been admitted as a Substituted
Limited Partner in accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this Agreement. The
admission of any transferee as a Substituted Limited Partner shall be conditioned upon the
transferee executing and delivering to the Partnership an acceptance of all the terms and
conditions of this Agreement (including, without limitation, the provisions of

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Section 15.11 hereof and such other documents or instruments as may be required to effect the
admission).

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

Section 11.05 Assignees

     If the General Partner, in its sole and absolute discretion, does not consent to the admission
of any permitted transferee under Section 11.03 above as a Substituted Limited Partner, as
described in Section 11.04 above, such transferee shall be considered an Assignee for purposes of
this Agreement. An Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive distributions from the
Partnership and the share of Net Income, Net Losses, gain and loss attributable to the Partnership
Units assigned to such transferee, and shall have the rights granted to the Limited Partners under
Section 8.06 hereof but shall not be deemed to be a holder of Partnership Units for any other
purpose under this Agreement, and shall not be entitled to vote such Partnership Units in any
matter presented to the Limited Partners for a vote (such Partnership Units being deemed to have
been voted on such matter in the same proportion as all other Partnership Units held by Limited
Partners are voted). In the event any such transferee desires to make a further assignment of any
such Partnership Units, such transferee shall be subject to all the provisions of this Article 11
to the same extent and in the same manner as any Limited Partner desiring to make an assignment of
Partnership Units.

Section 11.06 General Provisions

     A. Withdrawal of Limited Partner. No Limited Partner may withdraw from the Partnership other
than as a result of a permitted transfer of all of such Limited Partner’s Partnership Units in
accordance with this Article 11 or pursuant to redemption of all of its Partnership Units under
Section 8.06 hereof.

     B. Termination of Status as Limited Partner. Any Limited Partner who shall transfer all of
its Partnership Units in a transfer permitted pursuant to this Article 11 shall cease to be a
Limited Partner upon the admission of all Assignees of such Partnership Units as Substitute Limited
Partners. Similarly, any Limited Partner who shall transfer all of its Partnership Units pursuant
to a redemption of all of its Partnership Units under Section 8.06 shall cease to be a Limited
Partner.

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

     D. Allocations. If any Partnership Interest is transferred or assigned during any quarterly
segment of the Partnership’s fiscal year in compliance with the provisions of this Article 11 or
redeemed or transferred pursuant to Section 8.06, or any day other than the first day of a
Partnership Year, then Net Income, Net Losses, each item thereof and all other items

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attributable to such interest for such Partnership Year shall be divided and allocated between
the transferor Partner and the transferee Partner by taking into account their varying interests
during the Partnerships year in accordance with Section 706(d) of the Code, using the interim
closing of the books method. Solely for purposes of making such allocations, each of such items for
the calendar month in which the transfer or assignment occurs shall be allocated to the transferee
Partner, and none of such items for the calendar month in which a redemption occurs shall be
allocated to the Redeeming Partner. All distributions of Available Cash attributable to such
Partnership Unit with respect to which the Partnership Record Date is before the date of such
transfer, assignment, or redemption shall be made to the transferor Partner or the Redeeming
Partner, as the case may be, and in the case of a transfer or assignment other than a redemption,
all distributions of Available Cash thereafter attributable to such Partnership Unit shall be made
to the transferee Partner.

     E. Additional Restrictions. In addition to any other restrictions on transfer herein
contained, including without limitation the provisions of this Article 11, in no event may any
transfer or assignment of a Partnership Interest by any Partner (including pursuant to Section 8.06
hereof) be made without the express consent of the General Partner, in its sole and absolute
discretion, (i) to any person or entity who lacks the legal right, power or capacity to own a
Partnership Interest; (ii) in violation of applicable law; (iii) of any component portion of a
Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart
from all other components of a Partnership Interest; (iv) if in the opinion of legal counsel to the
Partnership such transfer would cause a termination of the Partnership for federal or state income
tax purposes (except as a result of the redemption or exchange for Shares of all Partnership Units
held by all Limited Partners or pursuant to a transaction expressly permitted under Section 11.02
hereof); (v) if in the opinion of counsel to the Partnership, such transfer would cause the
Partnership to cease to be classified as a partnership for federal income tax purposes (except as a
result of the redemption or exchange for Shares of all Partnership Units held by all Limited
Partners or pursuant to a transaction expressly permitted under Section 11.02 hereof); (vi) if such
transfer would cause the Partnership to become, with respect to any employee benefit plan subject
to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a
“disqualified person” (as defined in Section 4975(c) of the Code); (vii) without the consent of the
General Partner, to any “benefit plan investor” within the meaning of Department of Labor
Regulations Section 2510.3-101(f); (viii) if such transfer would, in the opinion of counsel to the
Partnership, cause any portion of the assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Department of Labor Regulations Section 2570.3-101; (ix) if such
transfer requires the registration of such Partnership Interest pursuant to any applicable federal
or state securities laws; (x) if such transfer is effectuated through an “established securities
market” or a “secondary market” (or the substantial equivalent thereof) within the meaning of
Section 7704 of the Code or such transfer causes the Partnership to become a “publicly traded
partnership,” as such term is defined in Section 469(k)(2) or Section 7704(b) of the Code; or (xi)
if such transfer subjects the Partnership to regulation under the Investment Company Act of 1940,
the Investment Advisors Act of 1940 or the Employee Retirement Income Security Act of 1974, each as
amended.

     F. Avoidance of “Publicly Traded Partnership” Status. The General Partner shall monitor the
transfers of interests in the Partnership to determine (i) if such interests are being traded on an
“established securities market” or a “secondary market (or the substantial equivalent

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thereof)” within the meaning of Section 7704 of the Code and (ii) whether additional transfers
of interests would result in the Partnership being unable to qualify for at least one of the “safe
harbors” or other provisions set forth in Regulations Section 1.7704-1 (or such other guidance
subsequently published by the IRS setting forth safe harbors or guidance under which interests will
not be treated as “readily tradable” on a secondary market (or the substantial equivalent thereof)
within the meaning of Section 7704 of the Code (the “Safe Harbors”). The General Partner shall take
all steps reasonably necessary or appropriate to prevent any trading of interests or any
recognition by the Partnership of transfers made on such markets and, except as otherwise provided
herein, to insure that at least one of the Safe Harbors is met.

ARTICLE 12

ADMISSION OF PARTNERS

Section 12.01 Admission of Successor General Partner

     A successor to all of the General Partner Interest pursuant to Section 11.02 hereof who is
proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the
General Partner, effective upon such transfer. Any such transferee shall carry on the business of
the Partnership without dissolution. In each case, the admission shall be subject to the successor
General Partner executing and delivering to the Partnership an acceptance of all of the terms and
conditions of this Agreement and such other documents or instruments as may be required to effect
the admission. In the case of such admission on any day other than the first day of a Partnership
Year, all items attributable to the General Partner Interest for such Partnership year shall be
allocated between the transferring General Partner and such successor as provided in Section 11.6.D
hereof.

Section 12.02 Admission of Additional Limited Partners

     A. General. No Person shall be admitted as an Additional Limited Partner without the consent
of the General Partner, which consent shall be given or withheld in the General Partner’s sole and
absolute discretion. A Person who makes a Capital Contribution to the Partnership in accordance
with this Agreement, including, without limitation, pursuant to Section 4.01.C hereof, or who
exercises an option to receive Partnership Units shall be admitted to the Partnership as an
Additional Limited Partner only with the consent of the General Partner and only upon furnishing to
the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all
of the terms and conditions of this Agreement, including, without limitation, the power of attorney
granted in Section 15.11 hereof and (ii) such other documents or instruments as may be required in
the discretion of the General Partner in order to effect such Person’s admission as an Additional
Limited Partner. The admission of any Person as an Additional Limited Partner shall become
effective on the date upon which the name of such Person is recorded on the books and records of
the Partnership, following the consent of the General Partner to such admission.

     B. Allocations to Additional Limited Partners. If any Additional Limited Partner is admitted
to the Partnership on any day other than the first day of a Partnership Year, then Net Income, Net
Losses, each item thereof and all other items allocable among Partners and Assignees for such
Partnership Year shall be allocated among such Additional Limited Partner

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and all other Partners and Assignees by taking into account their varying interests during the
Partnership Year in accordance with Section 706(d) of the Code, using the interim closing of the
books method (unless the General Partner, in its sole and absolute discretion, elects to adopt a
daily, weekly or monthly proration method, in which event Net Income, Net Losses, and each item
thereof would be prorated based upon the applicable period selected by the General Partner).Solely
for purposes of making such allocations, each of such items for the calendar month in which an
admission of any Additional Limited Partner occurs shall be allocated among all the Partners and
Assignees including such Additional Limited Partner. All distributions with respect to which the
Partnership Record Date is before the date of such admission shall be made solely to Partners and
Assignees other than the Additional Limited Partner, and all distributions thereafter shall be made
to all the Partners and Assignees including such Additional Limited Partner.

Section 12.03 Amendment of Agreement and Certificate of Limited Partnership

     For the admission to the Partnership of any Partner, the General Partner shall take all steps
necessary and appropriate under the Act to amend the records of the Partnership (including an
amendment and restatement of Exhibit A hereto) and, if necessary, to prepare as soon as practical
an amendment of this Agreement and, if required by law, shall prepare and file an amendment to the
Certificate and may for this purpose exercise the power of attorney granted pursuant to Section
15.11 hereof.

ARTICLE 13

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 13.01 Dissolution

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

     A. an event of withdrawal of the General Partner, as defined in the Act (other than an event
of bankruptcy), unless, within ninety (90) days after such event of withdrawal a majority in
interest of the remaining Partners agree in writing to continue the business of the Partnership and
to the appointment, effective as of the date of withdrawal, of a successor General Partner;

     B. an election to dissolve the Partnership made by the General Partner, in its sole and
absolute discretion;

     C. entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of
the Act;

     D. the sale of all or substantially all of the assets and properties of the Partnership; or

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     E. a final and non-appealable judgment is entered by a court of competent jurisdiction ruling
that the General Partner is bankrupt or insolvent, or a final and non-appealable order for relief
is entered by a court with appropriate jurisdiction against the General Partner, in each case under
any federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless prior to
the entry of such order or judgment all of the remaining Partners agree in writing to continue the
business of the Partnership and to the appointment, effective as of a date prior to the date of
such order or judgment, of a substitute General Partner.

Section 13.02 Winding Up

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

     (1) First, to the payment and discharge of all of the Partnership’s debts and
liabilities to creditors other than the Partners;

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

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

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

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

     B. Deferred Liquidation. Notwithstanding the provisions of Section 13.02.A hereof which
require liquidation of the assets of the Partnership, but subject to the order of priorities set
forth therein, if prior to or upon dissolution of the Partnership the Liquidator determines that an
immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue
loss to the Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the
Partnership (including to those Partners as creditors) and/or distribute to the Partners, in lieu
of cash, as tenants in common and in accordance with the provisions of Section 13.02.A hereof,
undivided interests in such Partnership assets as the Liquidator deems not suitable for

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liquidation. Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the Partners, and shall
be subject to such conditions relating to the disposition and management of such properties as the
Liquidator deems reasonable and equitable and to any agreements governing the operation of such
properties at such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.

Section 13.03 Compliance with Timing Requirements of Regulations

     In the discretion of the General Partner, a pro rata portion of the distributions that would
otherwise be made to the General Partner and Limited Partners pursuant to this Article 13 may be:
(A) distributed to a trust established for the benefit of the General Partner and Limited Partners
for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership and
paying any contingent or unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership (in which case the assets of any such
trust shall be distributed to the General Partner and Limited Partners from time to time, in the
reasonable discretion of the General Partner, in the same proportions as the amount distributed to
such trust by the Partnership would otherwise have been distributed to the General Partner and
Limited Partners pursuant to this Agreement); or (B) withheld to provide a reasonable reserve for
Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any
installment obligations owed to the Partnership, provided that such withheld amounts shall be
distributed to the General Partner and Limited Partners as soon as practicable.

Section 13.04 Rights of Limited Partners

     Except as otherwise provided in this Agreement, each Limited Partner shall look solely to the
assets of the Partnership for the return of its Capital Contributions and shall have no right or
power to demand or receive property other than cash from the Partnership. Except as otherwise
provided in this Agreement, no Limited Partner shall have priority over any other Partner as to the
return of its Capital Contributions, distributions, or allocations.

Section 13.05 Notice of Dissolution

     In the event a Liquidating Event occurs or an event occurs that would, but for the provisions
of an election or objection by one or more Partners pursuant to Section 13.01, result in a
dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Partners.

Section 13.06 Termination of Partnership and Cancellation of Certificate of Limited Partnership

     Upon the completion of the liquidation of the Partnership cash and property as provided in
Section 13.02 hereof, the Partnership shall be terminated, a certificate of cancellation shall be
filed, and all qualifications of the Partnership as a foreign limited partnership in jurisdictions
other than the State of Delaware shall be canceled and such other actions as may be necessary to
terminate the Partnership shall be taken.

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Section 13.07 Reasonable Time for Winding-Up

     A reasonable time shall be allowed for the orderly winding-up of the business and affairs of
the Partnership and the liquidation of its assets pursuant to Section 13.02 hereof, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement
shall remain in effect between the Partners during the period of liquidation.

Section 13.08 Waiver of Partition

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

ARTICLE 14

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

Section 14.01 Amendments

     A. General. Amendments to this Agreement may be proposed by the General Partner or by any
Limited Partners holding twenty-five percent (25%) or more of the Partnership Interests (not
including any interest on account of the Preferred Units). Following such proposal, the General
Partner shall submit any proposed amendment to the Limited Partners. The General Partner shall seek
the written vote of the Partners on the proposed amendment or shall call a meeting to vote thereon
and to transact any other business that it may deem appropriate. For purposes of obtaining a
written vote, the General Partner may require a response within a reasonable specified time, but
not less than fifteen (15) days, and failure to respond in such time period shall constitute a vote
which is consistent with the General Partner’s recommendation with respect to the proposal. Except
as provided in Section 14.01.B, 14.01.C or 14.01.D, a proposed amendment shall be adopted and be
effective as an amendment hereto if it is approved by the General Partner and it receives the
Consent of Partners holding a majority of the Percentage Interests of the holders of Class A Units
(including Limited Partner Interests held by the General Partner and LSAC).

     B. Amendments Not Requiring Limited Partner Approval. Notwithstanding Section 14.01.A or
Section 14.01.C hereof, the General Partner shall have the power, without the consent of the
Limited Partners, to amend this Agreement as may be required to facilitate or implement any of the
following purposes:

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

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

     (3) to set forth the designations, rights, powers, duties, and preferences of the
holders of any additional Partnership Interests issued pursuant to Article 4 hereof;

     (4) to reflect a change that is of an inconsequential nature and does not adversely
affect the Limited Partners in any material respect, or to cure any ambiguity,

44

 

correct or supplement any provision in this Agreement not inconsistent with law or with
other provisions, or make other changes with respect to matters arising under this Agreement
that will not be inconsistent with law or with the provisions of this Agreement;

     (5) to adjust the terms of hereof to reflect any Specially Distributed Assets, as
contemplated in Section 7.05.A hereof; and

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

The General Partner shall provide notice to the Limited Partners when any action under this Section
14.01.B is taken.

     C. Amendments Requiring Limited Partner Approval (Excluding General Partner) Notwithstanding
Section 14.01.A above, without the Consent of the Limited Partners (not including Limited Partner
Interests held by the General Partner), the General Partner shall not amend Section 4.02.A, Section
7.01.A (second sentence only), Section 7.05, Section 7.06, Section 7.08, Section 11.02, Section
13.01, this Section 14.01.C or Section 14.02.

     D. Other Amendments Requiring Certain Limited Partner Approval. Notwithstanding anything in
this Section 14.01 to the contrary, this Agreement shall not be amended with respect to any Partner
adversely affected without the Consent of such Partner adversely affected if such amendment would
(i) convert a Limited Partner’s interest in the Partnership into a general partner’s interest, (ii)
modify the limited liability of a Limited Partner, (iii) amend Article 5, Article 6, or
Section13.02.A(4) (except as permitted pursuant to Sections 4.02, 5.04, 6.02 and 14.01(B)(3)), (iv)
amend Section 8.06 or any defined terms set forth in Article 1 that relate to the Redemption Right
(except as permitted in Section 8.06.E), or (v) amend this Section 14.01.D. Moreover, this
Agreement may be amended by the General Partner to provide that certain Limited Partners have the
obligation, upon liquidation of their interests in the Partnership (within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g)), to restore to the Partnership the amounts of their
negative Capital Account balances, if any, for the benefit of creditors of the Partnership or
Partners with positive Capital Account balances or both, together with any necessary corresponding
amendments (including corresponding amendments to Sections 6.01.A, 6.01.B and Exhibit C), with the
consent of only such Limited Partners and of any other Limited Partners already subject to such a
restoration obligation whose restoration obligation may be affected by such amendment.

     E. Amendment and Restatement of Exhibit A Not An Amendment. Notwithstanding anything in this
Article XIV or elsewhere in this Agreement to the contrary, any amendment and restatement of
Exhibit A hereto by the General Partner to reflect events or changes otherwise authorized or
permitted by this Agreement, whether pursuant to Section 7.01.A(20) hereof or otherwise, shall not
be deemed an amendment of this Agreement and may be done at any time and from time to time, as
necessary by the General Partner without the Consent of the Limited Partners.

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Section 14.02 Meetings of the Partners

     A. General. Meetings of the Partners may be called by the General Partner and shall be called
upon the receipt by the General Partner of a written request by Limited Partners holding
twenty-five percent (25%) or more of the Partnership Interests (not including any interest on
account of the Preferred Units). The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners not less than seven (7) days nor more
than thirty (30) days prior to the date of such meeting. Partners may vote in person or by proxy at
such meeting. Whenever the vote or Consent of the Partners is permitted or required under this
Agreement, such vote or Consent may be given at a meeting of the Partners or may be given in
accordance with the procedure prescribed in Section 14.01.A hereof. Except as otherwise expressly
provided in this Agreement, the Consent of holders of a majority of the Percentage Interests held
by Limited Partners (including Limited Partnership Interests held by the General Partner) shall
control.

     B. Actions Without a Meeting. Any action required or permitted to be taken at a meeting of
the Partners may be taken without a meeting if a written consent setting forth the action so taken
is signed by a majority of the Percentage Interests of the Partners (or such other percentage as is
expressly required by this Agreement). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a majority of the Percentage
Interests of the Partners (or such other percentage as is expressly required by this Agreement).
Such consent shall be filed with the General Partner. An action so taken shall be deemed to have
been taken at a meeting held on the effective date so certified.

     C. Meetings. Each Limited Partner may authorize any Person or Persons to act for him by proxy
on all matters in which a Limited Partner is entitled to participate, including waiving notice of
any meeting, or voting or participating at a meeting. Every proxy must be signed by the Limited
Partner or his attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months
from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the Limited Partner executing it, such revocation to be effective upon the
Partnership’s receipt of or written notice such revocation from the Limited Partner executing such
proxy.

     D. Proxy. Each meeting of the Partners shall be conducted by the General Partner or such
other Person as the General Partner may appoint pursuant to such rules for the conduct of the
meeting as the General Partner or such other Person deems appropriate. Without limitation, meetings
of Partners may be conducted in the same manner as meetings of the shareholders of LSAC and may be
held at the same time, and as part of, meetings of the shareholders of LSAC.

ARTICLE 15

GENERAL PROVISIONS

Section 15.01 Addresses and Notice

     Any notice, demand, request or report required or permitted to be given or made to a Partner
or Assignee under this Agreement shall be in writing and shall be deemed given or made when
delivered in person or when sent by first class United States mail or by other means of

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written communication to the Partner or Assignee at the address set forth in Exhibit A or such
other address of which the Partner shall notify the General Partner in writing.

Section 15.02 Titles and Captions

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

Section 15.03 Pronouns and Plurals

     Whenever the context may require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice versa.

Section 15.04 Further Action

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

Section 15.05 Binding Effect

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

Section 15.06 Creditors

     Other than as expressly set forth herein with respect to the Indemnitees, none of the
provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor
of the Partnership.

Section 15.07 Waiver

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

Section 15.08 Counterparts

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

47

 

Section 15.09 Applicable Law

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

Section 15.10 Invalidity of Provisions

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

Section 15.11 Entire Agreement

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

Section 15.12 Power of Attorney

     A. General. Each Limited Partner and each Assignee who accepts Partnership Units (or any
rights, benefits or privileges associated therewith) is deemed to irrevocably constitute and
appoint the General Partner, any Liquidator and authorized officers and attorneys-in-fact of each,
and each of those acting singly, in each case with full power of substitution, as its true and
lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:

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

     (2) execute, swear to, acknowledge and file all ballots, consents, approvals, waivers,
certificates and other instruments appropriate or necessary, in the sole and absolute
discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or
ratify any vote, consent, approval, agreement or other action which is made or

48

 

given by the Partners hereunder or is consistent with the terms of this Agreement or
appropriate or necessary, in the sole discretion of the General Partner or any Liquidator,
to effectuate the terms or intent of this Agreement.

     Nothing contained in this Section 15.11 shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.

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

Section 15.13 No Rights as Stockholders

     Nothing contained in this Agreement shall be construed as conferring upon the holders of the
Partnership Units any rights whatsoever as stockholders of LSAC, including, without limitation, any
right to receive dividends or other distributions made to stockholders of LSAC or to vote or to
consent or receive notice as stockholders in respect to any meeting of stockholders for the
election of directors of LSAC or any other matter.

49

 

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

	 	 	 	 	 
	 	GENERAL PARTNER:

LSAC GENERAL PARTNER LLC

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	Name: 
Title: 	 	 
	 

	 	 	 	 	 
	 	THE LIMITED PARTNERS AS SET

FORTH ON EXHIBIT A HERETO:

 	 
	 	By: 	LSAC GENERAL PARTNER LLC, as
attorney-
in-fact pursuant to the power of attorney set
 forth
in
Section 15.11 hereof 	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	 	 
	 	 	Name: 
Title: 	 	 

50

 

EXHIBIT A

PARTNERS AND PARTNERSHIP INTERESTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Percentage	 	 
	 	 	Capital	 	Partnership	 	Interest of	 	Redemption
	Name and Address of Partner	 	Contribution	 	Units	 	Class	 	Exercise Date
	General Partner

LSAC General Partner LLC

c/o Lexington Corporate Properties Trust

One Penn Plaza, Suite 4015

New York, NY 10119-4015
	 	$	0	 	 	 	N/A	 	 	 	N/A	 	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class A Limited Partner

Lexington Strategic Asset Corp.

c/o Lexington Corporate Properties Trust

One Penn Plaza, Suite 4015

New York, NY 10119-4015
	 	$	62,733,400	 	 	 	6,273,340	 	 	 	100	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Class B Limited Partner

LXP Advisory LLC

c/o Lexington Corporate Properties Trust

One Penn Plaza, Suite 4015

New York, NY 10119-4015
	 	$	0	 	 	 	60	 	 	 	60	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	E. Robert Roskind
	 	$	0	 	 	 	8	 	 	 	8	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	T. Wilson Eglin
	 	$	0	 	 	 	8	 	 	 	8	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Richard J. Rouse
	 	$	0	 	 	 	7.2	 	 	 	7.2	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Patrick Carroll
	 	$	0	 	 	 	6	 	 	 	6	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	John B. Vander Zwaag
	 	$	0	 	 	 	6	 	 	 	6	%	 	 	N/A	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Brendan P. Mullinix
	 	$	0	 	 	 	4.8	 	 	 	4.8	%	 	 	N/A	 

A-1

 

EXHIBIT B

CAPITAL ACCOUNT MAINTENANCE

1. Capital Accounts of the Partners

     A. The Partnership shall maintain for each Partner a separate Capital Account in accordance
with the rules of Regulations Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by
(i) the amount of all Capital Contributions and any other deemed contributions made by such Partner
to the Partnership pursuant to this Agreement and (ii) all items of Partnership income and gain
(including income and gain exempt from tax) computed in accordance with Section 1.B hereof and
allocated to such Partner pursuant to Section 6.01 of the Agreement and Exhibit C hereof, and
decreased by (x) the amount of cash or Agreed Value of all actual and deemed distributions of cash
or property made to such Partner pursuant to this Agreement and (y) all items of Partnership
deduction and loss computed in accordance with Section 1.B hereof and allocated to such Partner
pursuant to Section 6.01 of the Agreement and Exhibit C hereof.

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

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

          (2) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing Net Income or Net Loss, shall be subtracted from
such taxable income or loss.

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

B-1

 

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

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

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

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

     D. (1) Consistent with the provisions of Regulations Section 1.704-1(b)(2)(iv)(f), and as
provided in Section 1.D(2), the Carrying Value of all Partnership assets shall be adjusted upward
or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership
property, as of the times of the adjustments provided in Section 1.D(2) hereof, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property and
allocated pursuant to Section 6.01 of the Agreement.

          (2) Such adjustments may be made, at the General Partner’s sole discretion, in accordance with
Regulation Section 1.704-1(b)(2)(iv)(f) as of the following times: (a) immediately prior to the
acquisition of an interest in the Partnership by any new or existing Partner in exchange for more
than a de minimis Capital Contribution; (b) immediately prior to the distribution by the
Partnership to a Partner of more than a de minimis amount of money or property as consideration for
an interest in the Partnership; (c) immediately prior to the liquidation of the Partnership within
the meaning of Regulation Section 1.704-1(b)(2)(ii)(g); and (d) immediately prior to the grant of a
more than de minimis interest in the Partnership as consideration for the provision of services to
or for the benefit of the Partnership by a new or existing partner acting in a partner capacity or
in anticipation of being a partner.

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

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

B-2

 

     E. The provisions of this Agreement (including this Exhibit B and other Exhibits to this
Agreement) relating to the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such
Regulations. In the event the General Partner shall determine that it is prudent to modify (i) the
manner in which the Capital Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities which are secured by contributed or
distributed property or which are assumed by the Partnership, the General Partner, or the Limited
Partners) are computed or (ii) the manner in which items are allocated among the Partners for
federal income tax purposes in order to comply with such Regulations or to comply with Section
704(c) of the Code, the General Partner may make such modification without regard to Article 14 of
the Agreement, provided that it is not likely to have a material effect on the amounts
distributable to any Person pursuant to Article 13 of the Agreement upon the dissolution of the
Partnership. The General Partner also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership’s balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this Agreement not to comply
with Regulations Section 1.704-1(b). In addition, the General Partner may adopt and employ such
methods and procedures for (i) the maintenance of book and tax capital accounts, (ii) the
determination and allocation of adjustments under Sections 704(c), 734 and 743 of the Code, (iii)
the determination of Net Income, Net Loss, taxable income, taxable loss and items thereof under
this Agreement and pursuant to the Code, (iv) the adoption of reasonable conventions and methods
for the valuation of assets and the determination of tax basis, (v) the allocation of asset value
and tax basis, and (vi) conventions for the determination of cost recovery, depreciation and
amortization deductions, as it determines in its sole discretion are necessary or appropriate to
execute the provisions of this Agreement and to comply with federal and state tax laws.

2. No Interest

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

3. No Withdrawal

     No Partner shall be entitled to withdraw any part of his Capital Contribution or his Capital
Account or to receive any distribution from the Partnership, except as provided in Articles 4, 5, 7
and 13 of the Agreement.

B-3

 

EXHIBIT C

SPECIAL ALLOCATION RULES

1. Special Allocation Rules

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

     A. Minimum Gain Chargeback. Notwithstanding the provisions of Section 6.01 of the Agreement
or any other provisions of this Exhibit C, if there is a net decrease in Partnership Minimum Gain
during any Partnership taxable year, each Partner shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent years) in an amount equal to such
Partner’s share of the net decrease in Partnership Minimum Gain, as determined under Regulations
Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Partner pursuant thereto. The items to be
so allocated shall be determined in accordance with Regulations Section 1.704-2(f)(6). This Section
1.A is intended to comply with the minimum gain chargeback requirements in Regulations Section
1.704-2(f) and shall be interpreted consistently therewith. Solely for purposes of this Section
1.A, each Partner’s Adjusted Capital Account Deficit shall be determined prior to any other
allocations pursuant to Section 6.01 of Partner Minimum Gain during such Partnership taxable year.

     B. Partner Minimum Gain Chargeback. Notwithstanding any other provision of Section 6.01 of
this Agreement or any other provisions of this Exhibit C (except Section 1.A hereof), if there is a
net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any
Partnership taxable year, each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.702-2(i)(5),
shall be specially allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Partner’s share of the net decrease in Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Partner pursuant thereto. The items to be
so allocated shall be determined in accordance with Regulations Section 1.704-2(i)(4). This Section
1.B is intended to comply with the minimum gain chargeback requirement in such Section of the
Regulations and shall be interpreted consistently therewith. Solely for purposes of the Section
1.B, each Partner’s Adjusted Capital Account Deficit shall be determined prior to any other
allocations pursuant to Section 6.01 of the Agreement or this Exhibit with respect to such
Partnership taxable year, other than allocations pursuant to Section 1.A hereof.

     C. Qualified Income Offset. In the event any Partner unexpectedly receives any adjustments,
allocations or distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations
required under Sections 1.A and 1.B hereof, such Partner has an Adjusted Capital Account Deficit,
items of Partnership income and gain (consisting of a pro rata portion of each item of Partnership
income, including gross income and gain for the Partnership taxable year)

C-1

 

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

     D. Nonrecourse Deductions. Nonrecourse Deductions for any Partnership taxable year shall be
allocated to the Partners in accordance with their respective Percentage Interests. If the General
Partner determines in its good faith discretion that the Partnership’s Nonrecourse Deductions must
be allocated in a different ratio to satisfy the safe harbor requirements of the Regulations
promulgated under Section 704(b) of the Code, the General Partner is authorized, upon notice to the
Limited Partners, to revise the prescribed ratio to the numerically closest ratio for such
Partnership taxable year which would satisfy such requirements. In the sole discretion of the
General Partner, the allocations of Nonrecourse Deductions shall be offset by minimum gain
chargebacks pursuant to Section 1.A hereof and not by allocations of Net Income pursuant to this
Agreement in order to avoid the result illustrated in Example 1 of Treasury Regulations Section
1.704-2(f)(7). The preceding sentence shall be interpreted and applied in a manner that is
consistent with such intent.

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

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

     G. Curative Allocations. The allocations set forth in Section 1.A through F of this Exhibit C
(the “Regulatory Allocations”) are intended to comply with certain requirements of the Regulations
under Section 704(b) of the Code. The Regulatory Allocations may not be consistent with the manner
in which the Partners intend to divide Partnership distributions. Accordingly, the General Partner
is hereby authorized to divide other allocations of income, gain, deduction and loss among the
Partners so as to prevent the Regulatory Allocations from distorting the manner in which
Partnership distributions will be divided among the Partners. In general, the Partners anticipate
that this will be accomplished by specially allocating other items of income, gain, loss and
deduction among the Partners so that the net amount of the Regulatory Allocations and such special
allocations to each person is zero. However, the General Partner will have discretion to accomplish
this result in any reasonable manner; provided, however, that no allocation pursuant to this
Section 1.G shall cause the Partnership to fail to comply with the requirements of Regulations
sections 1.704-1(b)(2)(ii)(d), -2(e) or -2(i).

C-2

 

2. Allocations for Tax Purposes

     A. Except as otherwise provided in this Section 2, for federal income tax purposes, each item
of income, gain, loss and deduction shall be allocated among the Partners in the same manner as its
correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section 6.01 of
the Agreement and Section 1 of this Exhibit C.

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

          (1) (a) In the case of a Contributed Property, such items attributable thereto shall be
allocated among the Partners consistent with the principles of Section 704(c) of the Code and the
Regulations thereunder to take into account the variation between the 704(c) Value of such property
and its adjusted basis at the time of contribution; and (b) any item of Residual Gain or Residual
Loss attributable to a Contributed Property shall be allocated among the Partners in the same
manner as its correlative item of “book” gain or loss is allocated pursuant to Section 6.01 of the
Agreement and Section 1 of this Exhibit C.

          (2) (a) In the case of an Adjusted Property, such items shall

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

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

   (b) any item of Residual Gain or Residual Loss attributable to an Adjusted
Property shall be allocated among the Partners in the same manner its correlative
item of “book” gain or loss is allocated pursuant to Section 6.01 of the Agreement
and Section 1 of this Exhibit C.

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

     C. To the extent that the Treasury Regulations promulgated pursuant to Section 704(c) of the
Code permit the Partnership to utilize alternative methods to eliminate the disparities between the
Carrying Value of property and its adjusted basis, the General Partner shall have the authority to
elect the method to be used by the Partnership and such election shall be binding on all Partners.

C-3

 

3. No Withdrawal

     No Partner shall be entitled to withdraw any part of his Capital Contribution or his Capital
Account or to receive any distribution from the Partnership, except as provided in Articles 4, 5, 8
and 13 of the Agreement.

C-4

 

EXHIBIT D

NOTICE OF REDEMPTION

     The undersigned hereby irrevocably (i) tenders for redemption Partnership Units in LSAC
Operating Partnership L.P. in accordance with the terms of the Agreement of Limited Partnership of
LSAC Operating Partnership L.P., as amended, and the Redemption Right referred to therein, (ii)
surrenders such Partnership Units and all right, title and interest therein and (iii) directs that
the Cash Amount or Shares Amount (as determined by the General Partner) deliverable upon exercise
of the Redemption Right be delivered to the address specified below, and if Shares are to be
delivered, such Shares be registered or placed in the name(s) and at the address(es) specified
below. The undersigned hereby represents, warrants, and certifies that the undersigned (a) has
marketable and unencumbered title to such Partnership Units, free and clear of the rights of or
interests of any other person or entity, (b) has the full right, power and authority to redeem and
surrender such Partnership Units as provided herein and (c) has obtained the consent or approval of
all persons or entities, if any, having the right to consult or approve such redemption and
surrender.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name of Limited Partner:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Please Print
	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Signature of Limited Partner)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	(Street Address)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	(City)          (State)          (Zip Code)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Signature Witnessed by:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	If Shares are to be issued, issue to:	 	 
	 
	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Please insert social security or identifying number:
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 

D-1

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	Article 1

	 	DEFINED TERMS
	 	 	1	 
	Article 2

	 	ORGANIZATIONAL MATTERS
	 	 	11	 
	Article 3

	 	PURPOSE
	 	 	12	 
	Article 4

	 	CAPITAL CONTRIBUTIONS
	 	 	13	 
	Article 5

	 	DISTRIBUTIONS
	 	 	14	 
	Article 6

	 	ALLOCATIONS
	 	 	16	 
	Article 7

	 	MANAGEMENT AND OPERATIONS OF BUSINESS
	 	 	17	 
	Article 8

	 	RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
	 	 	28	 
	Article 9

	 	BOOKS, RECORDS, ACCOUNTING AND REPORTS
	 	 	32	 
	Article 10

	 	TAX MATTERS
	 	 	33	 
	Article 11

	 	TRANSFERS AND WITHDRAWALS
	 	 	35	 
	Article 12

	 	ADMISSION OF PARTNERS
	 	 	40	 
	Article 13

	 	DISSOLUTION, LIQUIDATION AND TERMINATION
	 	 	41	 
	Article 14

	 	AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
	 	 	44	 
	Article 15

	 	GENERAL PROVISIONS
	 	 	47	 

-i-

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