Document:

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                                                                  EXHIBIT 4.2

                                                                EXECUTION COPY
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                           6 1/2% SERIES C CONVERTIBLE
                                 PREFERRED STOCK
                          REGISTRATION RIGHTS AGREEMENT

                          Dated as of January 25, 2000

                                  by and among

                       Pegasus Communications Corporation

                                       and

               Donaldson, Lufkin & Jenrette Securities Corporation
                            Bear, Stearns & Co. Inc.
                         Banc of America Securities LLC
                          Deutsche Bank Securities Inc.
                            CIBC World Markets Corp.

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         This Registration Rights Agreement (this "Agreement") is made and
entered into as of January 25, 2000, by and among Pegasus Communications
Corporation, a Delaware corporation (the "Company"), and Donaldson, Lufkin &
Jenrette Securities Corporation, Bear, Stearns & Co. Inc., Bank of America
Securities LLC, Deutsche Bank Securities Inc. and CIBC World Markets Corp. (each
an "Initial Purchaser" and, collectively, the "Initial Purchasers"), each of
whom has agreed to purchase an aggregate of 2,500,000 shares of the 6 1/2%
Series C convertible preferred stock, par value $0.01, of the Company (the "Firm
Shares") pursuant and subject to the terms and conditions set forth in that
certain purchase agreement, dated as of January 19, 2000, by and among the
Company, as the seller and issuer, and the Initial Purchasers, as initial
purchasers (the "Purchase Agreement"). The Company also proposes to issue and
sell to the Initial Purchasers not more than an additional 500,000 shares of the
6 1/2% Series C convertible preferred stock, par value $0.01, of the Company
(the "Additional Shares"), if requested by the Initial Purchasers, as provided
in Section 2 of the Purchase Agreement. The Firm Shares and the Additional
Shares are herein collectively referred to as the "Shares." The Shares are to be
issued pursuant to the provisions of that certain Certificate of Designation,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof, dated
as of January 24, 2000, of the Company (the "Certificate of Designation"), such
that the Shares will be convertible at the option of the holders thereof into
shares of the Company's Class A common stock, par value $0.01 per share (the
"Class A Common Stock"). The Shares and the Class A Common Stock issuable upon
conversion thereof are herein collectively referred to as the "Securities." The
Securities are more fully described in that certain offering memorandum, dated
January 19, 2000, offering to sell the Shares to the Initial Purchasers (the
"Offering Memorandum").

         In order to induce the Initial Purchasers to purchase the Shares, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers set forth in Section 9 of the Purchase
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to them in the Certificate of Designation.

          The parties hereby agree as follows:

SECTION 1. DEFINITIONS

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

         Act: The Securities Act of 1933, as amended.

         Affiliate: As defined in Rule 144 of the Act.

         Business Day: A day other than a Saturday, a Sunday, or a legal
         holiday on which national banks located in the State of New York are
         not open for general banking business.
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         Closing Date: The date hereof.

         Commission: The Securities and Exchange Commission.

         Effectiveness Deadline: As defined in Section 3(a) hereof

         Exchange Act: The Securities Exchange Act of 1934, as amended.

         Exempt Resales: The transactions in which the Initial Purchasers
         propose to sell the Shares to certain "qualified institutional buyers,"
         as such term is defined in Rule 144A under the Act.

         Filing Deadline: As defined in Section 3(a) hereof.

         Holders: As defined in Section 2 hereof.

         Prospectus: The Prospectus included in a Registration Statement at the
         time such Registration Statement is declared effective, as amended or
         supplemented by any prospectus supplement and by all other amendments
         thereto, including post-effective amendments, all material incorporated
         by reference into such Prospectus and any information previously
         omitted in reliance upon Rule 430A of the Act.

         Recommencement Date: As defined in Section 5(v) hereof.

         Registration Default: As defined in Section 4 hereof

         Regulation S: Regulation S promulgated under the Act.

         Rule 144: Rule 144 promulgated under the Act.

         Shelf Registration Statement: As defined in Section 3 hereof.

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

         Transfer Restricted Securities: The Shares and the Class A Common Stock
         into which the Shares are convertible, upon original issuance thereof,
         and at all times subsequent thereto, until, in the case of any such
         Shares or Class A Common Stock, (a) the date on which such Shares or
         Class A Common Stock have been disposed of in accordance with a Shelf
         Registration Statement, (b) the date on which such Shares of Class A
         Common Stock are distributed to the public pursuant to Rule 144 or are
         saleable pursuant to Rule 144 (or similar provisions then in effect)
         under the Act or (c) the date on which such Shares or Class A Common
         Stock cease to be outstanding.

SECTION 2. HOLDERS

          A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.

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SECTION 3. SHELF REGISTRATION

         (a) Shelf Registration. As soon as practicable after the Closing Date
but in no event later than 90 days after the Closing Date (the such 90th day,
"Filing Deadline"), the Company shall file with the Commission a shelf
registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement"), relating to all Transfer Restricted Securities, and
shall use its reasonable best efforts to cause such Shelf Registration Statement
to be declared effective under the Act on or prior to 180 days after the Closing
Date (such 180th day, the "Effectiveness Deadline").

         The Company shall use its reasonable best efforts to keep any Shelf
Registration Statement required by this Section 3(a) continuously effective,
supplemented and amended as required by and subject to the provisions of
Sections 5(a), 5(b) and 5(c) hereof to the extent necessary to ensure that it is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 3(a), and to ensure that it conforms in
all material respects with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for the shorter of (i) two years (as extended pursuant to Section 5(c) or
Section 5(v) hereof) following the Closing Date) or (ii) the date on which all
Transfer Restricted Securities covered by such Shelf Registration Statement have
been sold pursuant thereto.

         (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act and any other information reasonably requested by the Company for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to special dividends pursuant to Section 4 hereof unless and until
such Holder shall have provided all such information. Each selling Holder agrees
to promptly furnish additional information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading.

         (c) Holder's Obligation. Each Holder agrees, by acquisition of the
Transfer Restricted Securities, that no Holder of Transfer Restricted Securities
shall be entitled to sell any of such Transfer Restricted Securities pursuant to
a Registration Statement or to receive a Prospectus relating thereto, unless
such Holder has furnished the Company with the information reasonably requested
by the Company pursuant to Section 3(b) hereof. Each Holder agrees promptly to
furnish to the Company all information required to be disclosed in order to make
the information previously furnished to the Company by such Holder not
misleading and any other information regarding such Holder and the distribution
of such Transfer Restricted Securities as the Company may from time to time
reasonably request. Any sale of any Transfer Restricted Securities by any Holder
shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set forth

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in the Prospectus delivered by such Holder in connection with such disposition,
that such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan
of distribution and that such Prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such Holder or its
plan of distribution necessary to make the statements in such Prospectus, in
light of the circumstances under which they were made, not misleading.

SECTION 4. SPECIAL DIVIDENDS

         If (i) the Shelf Registration Statement is not filed with the
Commission on or prior to the Filing Deadline (as such Filing Deadline may be
extended pursuant to Section 5(v) hereof), (ii) such Shelf Registration
Statement has not been declared effective by the Commission on or prior to the
Effectiveness Deadline (as such Effectiveness Deadline may be extended pursuant
to Section 5(v) hereof) or (iii) subject to Section 5(c) and Section 5(v)
hereof, such Shelf Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within ten Business Days
by a post-effective amendment to such Shelf Registration Statement that cures
such failure and that is itself declared effective within five Business Days of
filing such post-effective amendment to the Shelf Registration Statement (each
such event referred to in clauses (i) through (iii), a "Registration Default"),
then the Company hereby agrees to pay special dividends to each Holder with
respect to the first 90 consecutive-day period immediately following the
occurrence of such Registration Default in an amount equal to an increase in the
annual dividends on the Series C convertible preferred stock of 0.25% and with
respect to each subsequent 90 consecutive-day period in an amount equal to an
increase in the annual dividends of 0.25% until all Registration Defaults have
been cured, up to a maximum increase in the annual dividends equal to 1.0%;
provided that the Company shall in no event be required to pay special dividends
for more than one Registration Default at any given time. Notwithstanding
anything to the contrary set forth herein, (1) upon filing of the Shelf
Registration Statement, in the case of (i) above, (2) upon the effectiveness of
the Shelf Registration Statement, in the case of (ii) above, or (3) upon the
filing of a post-effective amendment to the Shelf Registration Statement that
causes the Shelf Registration Statement to again be declared effective or made
usable, in the case of (iii) above, the special dividends payable with respect
to the Transfer Restricted Securities as a result of such clause (i), (ii) or
(iii), as applicable, shall cease.

         All accrued special dividends shall be paid to the Holders entitled
thereto, in the manner provided for the payment of dividends in the Certificate
of Designation, on each dividend payment date as more fully set forth in the
Certificate of Designation. Notwithstanding anything herein to the contrary, no
special dividends shall accrue as to any Transfer Restricted Security from and
after the earlier of the date such security is no longer a Transfer Restricted
Security. All of the Company's obligations set forth in this Section 4 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such security have been satisfied
in full.

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SECTION 5. SHELF REGISTRATION PROCEDURES

         In connection with the Shelf Registration Statement, the Company shall:

         (a) use its reasonable best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 3(b) hereof), and
pursuant thereto the Company will prepare and file with the Commission a Shelf
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof (including, without limitation, one or more underwritten
offerings) within the time periods and otherwise in accordance with the
provisions hereof. The Company shall not be permitted to include in the Shelf
Registration Statement any securities other than the Transfer Restricted
Securities;

         (b) use its reasonable best efforts to contact the Holders of Transfer
Restricted Securities and notify each Holder of its right to include its
Transfer Restricted Securities in such Shelf Registration Statement;

         (c) use its reasonable best efforts to keep such Shelf Registration
Statement continuously effective for the period specified in Section 3 of this
Agreement. Upon the occurrence of any event that would cause any such Shelf
Registration Statement or the Prospectus contained therein (i) to contain an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading, including, without limitation,
under circumstances described in this Section 5(c), or (ii) not to be effective
and usable for resale of Transfer Restricted Securities during the period
required by this Agreement, the Company shall file promptly an appropriate
amendment to such Shelf Registration Statement curing such defect, and, if
Commission review is required, use its reasonable best efforts to cause such
amendment to be declared effective as soon as practicable. Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that it is in the best interests of the Company not to disclose the existence of
or facts surrounding any proposed or pending material corporate transaction or
event involving the Company, the Company may, after notice to the Holders of
Transfer Restricted Securities (which notice need not disclose the details of
such transaction or event), suspend the availability of the Shelf Registration
Statement or any Prospectus in connection with such transaction or event for up
to 120 days during the two-year period of effectiveness required by Section 3
hereof, but in no event for any period in excess of 60 consecutive days;

         (d) subject to Section 5(c) hereof, prepare and file with the
Commission such amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep such Shelf Registration
Statement effective for the applicable period set forth in Section 3 hereof,
cause the Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with Rules 424, 430A and 462, as applicable, under the Act in a
timely manner; and comply with the provisions of the Act with respect to the

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disposition of all Transfer Restricted Securities covered by such Shelf
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth in
such Shelf Registration Statement or supplement to the Prospectus;

         (e) advise the Holders and underwriters, if any, promptly and, if
requested by such Persons, confirm such advice in writing, (i) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any Shelf Registration Statement or any
post-effective amendment thereto, when the same has become effective, (ii) of
any request by the Commission for amendments to the Shelf Registration Statement
or amendments or supplements to the Prospectus or for additional information
relating thereto, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement under the Act
or of the suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes and (iv)
subject to Section 5(c) hereof, of the existence of any fact or the happening of
any event that makes any statement of fact made in the Shelf Registration
Statement, the Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Shelf Registration Statement in order to make the
statements therein not misleading, or that requires the making of any additions
to or changes in the Prospectus in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Shelf Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company shall use its reasonable best efforts
to obtain the withdrawal or lifting of such order at the earliest possible time;

         (f) subject to Section 5(c) hereof, if any fact or event contemplated
by Section 5(e)(iv) above shall exist or have occurred, prepare a supplement or
post-effective amendment to the Shelf Registration Statement or related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;

         (g) furnish to each Holder named in any Shelf Registration Statement or
Prospectus and underwriter, if any, in connection with such sale before filing
with the Commission, copies of any Shelf Registration Statement or any
Prospectus included therein or any amendments or supplements to any such Shelf
Registration Statement or Prospectus (including all documents incorporated by
reference after the initial filing of such Shelf Registration Statement), which
documents will be subject to the review and comment of such Persons in
connection with such sale, if any, for a period of at least five Business Days,
and the Company will not file any such Shelf Registration Statement or
Prospectus or any amendment or supplement to any such Shelf Registration
Statement or Prospectus (including all such documents incorporated by reference)
to which such Persons shall reasonably object within five Business Days after
the receipt thereof.

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Any such Person shall be deemed to have reasonably objected to such filing if
such Registration Statement, amendment, Prospectus or supplement, as applicable,
as proposed to be filed, contains an untrue statement of a material fact or
omits to state any material fact necessary to make the statements therein not
misleading or fails to comply with the applicable requirements of the Act;

         (h) prior to effectiveness of the Shelf Registration Statement,
promptly, prior to the filing of any document that is to be incorporated by
reference into a Shelf Registration Statement or Prospectus, provide copies of
such document to the Holders, and underwriters, if any, in connection with such
sale, make the Company's representatives available for discussion of such
document and other customary due diligence matters, and include such information
in such document prior to the filing thereof as such Holders may reasonably
request; provided that such Persons shall first agree in writing with the
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such Persons and shall be used solely
for the purpose of exercising rights under this Agreement, unless (i) disclosure
of such information is required by court or administrative order or is necessary
to respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to federal securities laws in connection with the filing of any Registration
Statement or the use of any prospectus referred to in this Agreement), (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by any such Persons or (iv) such
information becomes available to any such Persons from a source other than the
Company and such source is not bound by a confidentiality agreement;

         (i) make available at reasonable times for inspection by the Holders
and underwriters, if any, and any attorney or accountant retained by such
Holders or underwriters, if any, all relevant financial and other records,
pertinent corporate documents of the Company and cause the Company's officers,
directors and employees to supply all information reasonably requested in
writing by any such Holder, underwriters, if any, attorney or accountant in
connection with such Shelf Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness;

         (j) if requested by any Holders or underwriters, if any, in connection
with such sale, promptly include in any Shelf Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if necessary,
such information as such Holders or underwriters, if any, may reasonably request
to have included therein, including, without limitation, information relating to
the "Plan of Distribution" of the Transfer Restricted Securities; and make all
required filings of such Prospectus supplement or post-effective amendment as
soon as practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment;

         (k) furnish to each Holder and underwriter, if any, without charge, at
least one copy of the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto (other than documents incorporated by
reference therein and exhibits thereto);

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         (l) deliver to each Holder and underwriter, if any, without charge, as
many copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request; the
Company hereby consents to the use (in accordance with law and except during the
period during which a Suspension Notice is in effect and prior to a
Recommencement Date) of the Prospectus and any amendment or supplement thereto
by each Holder and each underwriter, if any, in connection with the offering and
the sale of the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;

         (m) upon the request of any Holder or underwriter, if any, enter into
such agreements (including underwriting agreements) and make such
representations and warranties and take all such other reasonable actions in
connection therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any Shelf Registration Statement
contemplated by this Agreement as may be reasonably requested by such Person in
connection with any sale or resale pursuant to any applicable Shelf Registration
Statement and in such connection, the Company shall:

          (A)  upon request of any Holder or underwriter, if any, furnish (or in
               the case of paragraphs (2) and (3) below, use its reasonable best
               efforts to cause to be furnished) to each Holder or underwriter,
               if any, upon the effectiveness of the Shelf Registration
               Statement:

               (1)  a certificate, dated such date, signed on behalf of the
                    Company by (x) the President or any Vice President and (y) a
                    principal financial or accounting officer of the Company,
                    confirming, as of the date thereof, the matters set forth in
                    Sections 6(aa), 9(a) and 9(b) of the Purchase Agreement and
                    such other similar matters as the Holders may reasonably
                    request;

               (2)  an opinion, dated the date effectiveness of the Shelf
                    Registration Statement, of counsel for the Company covering
                    matters similar to those set forth in paragraph (e) of
                    Section 9 of the Purchase Agreement and such other matter as
                    the selling Holders may reasonably request, and in any event
                    including a statement to the effect that such counsel has
                    participated in conferences with officers and other
                    representatives of the Company, representatives of the
                    independent public accountants for the Company and have
                    considered the matters required to be stated therein and the
                    statements contained therein, although such counsel has not
                    independently verified the accuracy, completeness or
                    fairness of such statements; and that such counsel advises
                    that, on the basis of the foregoing (relying as to
                    materiality to the extent such counsel deems appropriate
                    upon the statements of officers and other representatives of
                    the Company and without independent check or verification),
                    no facts came to such counsel's attention that caused such
                    counsel to believe that the Shelf Registration Statement, at
                    the time such Shelf Registration Statement or any
                    post-effective amendment thereto

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<PAGE>

                    became effective, contained an untrue statement of a
                    material fact or omitted to state a material fact required
                    to be stated therein or necessary to make the statements
                    therein not misleading, or that the Prospectus contained in
                    such Shelf Registration Statement, as of its date, contained
                    an untrue statement of a material fact or omitted to state a
                    material fact necessary in order to make the statements
                    therein, in the light of the circumstances under which they
                    were made, not misleading. Without limiting the foregoing,
                    such counsel may state further that such counsel assumes no
                    responsibility for, and has not independently verified, the
                    accuracy, completeness or fairness of the financial
                    statements, notes and schedules and other financial data
                    included in any Registration Statement contemplated by this
                    Agreement or the related Prospectus; and

               (3)  customary comfort letters, dated as of the date of
                    effectiveness of the Shelf Registration Statement from the
                    Company's independent accountants, in the customary form and
                    covering matters of the type customarily covered in comfort
                    letters to underwriters in connection with underwritten
                    offerings, and affirming the matters set forth in the
                    comfort letters delivered pursuant to Section 9(i) of the
                    Purchase Agreement; and

         (B)  deliver such other documents and certificates as may be reasonably
              requested by the Holders and underwriters, if any, to evidence
              compliance with the matters set forth in clause (A) above and with
              any customary conditions contained in any agreement entered into
              by the Company pursuant to this clause (m);

         (n) prior to any public offering of Transfer Restricted Securities,
cooperate with the Holders, underwriters, if any, and their respective counsel
in connection with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions as such
Persons may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that the Company shall not be required to register or qualify
as a foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Shelf Registration
Statement, in any jurisdiction where it is not now so subject;

         (o) in connection with any sale of Transfer Restricted Securities that
will result in such securities no longer being Transfer Restricted Securities,
cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and to register such Transfer Restricted
Securities in such denominations and such names as the Holders may request at
least two Business Days prior to such sale of Transfer Restricted Securities;

         (p) (i) list all Shares of Class A Common Stock covered by such Shelf
Registration Statement on any securities exchange on which the Class A Common

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Stock is then listed or (ii) authorize for quotation on the Nasdaq National
Market System all Shares of Class A Common Stock covered by such Shelf
Registration Statement if the Class A Common Stock is then so authorized for
quotation;

         (q) use its best efforts to cause the disposition of the Transfer
Restricted Securities covered by the Shelf Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in clause (n) above;

         (r) provide a CUSIP number for all Transfer Restricted Securities not
later than the effective date of a Shelf Registration Statement covering such
Transfer Restricted Securities and provide the transfer agent under the
Certificate of Designation with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with the Depository Trust
Company;

         (s) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders with regard to any applicable Registration Statement, as
soon as practicable, a consolidated earnings statement meeting the requirements
of Rule 158 (which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);

         (t) if underwritten, make appropriate officers of the Company available
to the underwriters for meetings with prospective purchasers of Transfer
Restricted Securities and prepare and present to potential investors customary
"road show" material in a manner consistent with other new issuances of other
securities similar to the Transfer Restricted Securities; and

         (u) provide promptly to each Holder upon request each document filed
with the Commission pursuant to the requirements of Section 13 or Section 15(d)
of the Exchange Act.

         (v) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 5(c) or Section 5(e)(iii) or any notice from the Company of the
existence of any fact of the kind described in Section 5(e)(iv) hereof (in each
case, a "Suspension Notice"), such Holder will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement until (i) such Holder has received copies of the supplemented or
amended Prospectus contemplated by Section 5(f) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "Recommencement
Date"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period

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regarding the effectiveness of the Shelf Registration Statement and the Filing
Deadline set forth in Section 3 hereof shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the date of delivery of the Recommencement
Date or the date that the Holder has received copies of the supplemented or
amended Prospectus, as the case may be.

SECTION 6. REGISTRATION EXPENSES

         (a) All expenses incident to the Company's performance of or compliance
with this Agreement will be borne by the Company, regardless of whether a Shelf
Registration Statement required by this Agreement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Class A Common Stock to be issued upon conversion of the Shares and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company and the Holders of
Transfer Restricted Securities (provided that the Company shall not be liable
for the fees and expenses of more than one separate firm for all Holders of
Transfer Restricted Securities); (v) all application and filing fees in
connection with listing the Class A Common Stock on a national securities
exchange or automated quotation system pursuant to the requirements hereof, and
(vi) all fees and disbursements of independent certified public accountants of
the Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).

         The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.

         (b) In connection with any Shelf Registration Statement required by
this Agreement, the Company will reimburse the Initial Purchasers and the
Holders selling Transfer Restricted Securities pursuant to the "Plan of
Distribution" contained in the Shelf Registration Statement, for the reasonable
fees and disbursements of not more than one counsel, who shall be Latham &
Watkins, unless another firm shall be chosen by the Holders of a majority of
number of the Transfer Restricted Securities for whose benefit such Shelf
Registration Statement is being prepared.

SECTION 7. INDEMNIFICATION

         (a) The Company agrees to indemnify and hold harmless each Holder, its
directors, its officers and each Person, if any, who controls such Holder
(within the meaning of Section 15 of the Act and Section 20 of the Exchange
Act), from and against any and all losses, claims, damages, liabilities,
judgments, (including without limitation, any legal or other expenses incurred
in connection with investigating or defending any matter including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a

                                       11
<PAGE>

material fact contained in any Shelf Registration Statement, preliminary
prospectus or Prospectus (or any amendment or supplement thereto) provided by
the Company to any Holder or any prospective purchaser of the Securities or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by an untrue statement or omission or alleged untrue
statement or omission that is based upon information relating to any of the
Holders furnished in writing to the Company by any of the Holders; provided,
however, that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Holder who failed to deliver a
Prospectus (as then amended or supplemented, provided by the Company to such
Holder in the reasonable quantity requested by such Holder and on a timely basis
to permit proper delivery) to the Person asserting any losses, claims, damages
and liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any preliminary Prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus.

          (b) Each Holder of Transfer Restricted Securities agrees, severally
 and not jointly, to indemnify and hold harmless the Company and its directors
 and officers, and each Person, if any, who controls (within the meaning of
 Section 15 of the Act or Section 20 of the Exchange Act) the Company, to the
 same extent as the foregoing indemnity from the Company set forth in section
 (a) above, but only with reference to information relating to such Holder
 furnished in writing to the Company by such Holder expressly for use in any
 Registration Statement. In no event shall any Holder, its directors, its
 officers or any Person, if any, who controls such Holder be liable or
 responsible for any amount in excess of the amount by which the total amount
 received by such Holder with respect to its sale of Transfer Restricted
 Securities pursuant to a Shelf Registration Statement exceeds (i) the amount
 paid by such Holder for such Transfer Restricted Securities and (ii) the amount
 of any damages that such Holder, its directors, its officers or any Person, if
 any, who controls such Holder has otherwise been required to pay by reason of
 such untrue or alleged untrue statement or omission or alleged omission.

         (c) In case any action shall be commenced involving any Person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the Person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying person shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 7(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by

                                       12
<PAGE>

the indemnifying person, (ii) the indemnifying person shall have failed to
assume the defense of such action or employ counsel reasonably satisfactory to
the indemnified party or (iii) the named parties to any such action (including
any impleaded parties) include both the indemnified party and the indemnifying
person, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying person (in which case the
indemnifying person shall not have the right to assume the defense of such
action on behalf of the indemnified party). In any such case, the indemnifying
person shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by a
majority of the Holders, in the case of the parties indemnified pursuant to
Section 7(a), and by the Company, in the case of parties indemnified pursuant to
Section 7(b). The indemnifying person shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
person shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the indemnifying person) and, prior to the
date of such settlement, the indemnifying person shall have failed to comply
with such reimbursement request. No indemnifying person shall, without the prior
written consent of the indemnified party, effect any settlement or compromise
of, or consent to the entry of judgment with respect to, any pending or
threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action 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) To the extent that the indemnification provided for in this Section
7 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
person, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 7(d)(i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 7(d)(i) above but also the relative
fault of the Company on the one hand, and of the Holders, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Holders, 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

                                       13
<PAGE>

information supplied by the Company, on the one hand, or by the Holders, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and judgments referred to above shall be deemed to include, subject
to the limitations set forth in the second paragraph of Section 7(a), any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.

         The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 7, no Holder, its
directors, its officers or any Person, if any, who controls such holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of its Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities and (ii) the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 7(d) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each of the Holders hereunder and not joint.

SECTION 8. RULE 144A AND RULE 144

         The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144(d)(4) under the Act in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144A, and (ii) is subject to Section 13 or 15(d) of
the Exchange Act, to make all filings required thereby in a timely manner in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144.

                                       14
<PAGE>

SECTION 9. UNDERWRITTEN REGISTRATIONS

         (a) The Company shall not be required to participate in an underwritten
offering unless Holders of at least $100,000,000 (i) in aggregate liquidation
preference of Shares constituting Transfer Restricted Securities or (ii) in
aggregate fair market value (determined at the time of the request referenced
below) of shares of Class A Common Stock constituting Transfer Restricted
Securities so request, nor shall the Company be required to participate in more
than one underwritten offering; provided that, this paragraph in no way alters
the Company's other obligations with respect to this Agreement.

         (b) If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in amount
of such Transfer Restricted Securities included in such offering, subject to the
consent of the Company (which will not be unreasonably withheld or delayed).

         No Holder of Transfer Restricted Securities may participate in any
underwritten registration hereunder unless such Holder (i) agrees to sell its
Transfer Restricted Securities on the basis reasonably provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.

         (c) Each Holder of Transfer Restricted Securities agrees, if requested
(pursuant to a timely written notice) by the managing underwriters in an
underwritten offering made pursuant to a Shelf Registration Statement, not to
effect any private sale or distribution (including a sale pursuant to Rule
144(k) and Rule 144A, but excluding non-public sales to any of its affiliates,
officers, directors, employees and controlling Persons) of any of the Shares, in
the case of an underwritten offering of the Shares, or the Class A Common Stock,
in the case of an underwritten offering of shares of Class A Common Stock,
during the period beginning 10 days prior to, and ending 90 days after, the
closing date of such underwritten offering.

         The foregoing provisions of Section 9(c) shall not apply to any Holder
of Transfer Restricted Securities if such Holder is prevented by applicable
statute or regulation from entering into any such agreement.

         (d) If any of the Transfer Restricted Securities covered by any Shelf
Registration are to be sold in an underwritten offering, the underwriters, their
controlling Persons and their respective officers, directors, employees,
representatives and agents shall be entitled to indemnity (substantially similar
to the indemnity set forth in Section 7 of this Agreement) from the Company and
the Holders, which indemnity may be set forth in an underwriting agreement.

SECTION 10. MISCELLANEOUS

         (a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Section 3 hereof may result in

                                       15
<PAGE>

material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Company's obligations under Section 3 hereof The
Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

         (b) No Inconsistent Agreements. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.

         (c) No Piggybacks on Shelf Registration Statement. The Company shall
not grant to any of its security holders (other than the holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in any Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities; provided that the Company shall
be permitted to fulfill its obligations to holders of piggyback rights pursuant
to agreements entered into prior to the date hereof.

         (d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 4
hereof and this Section 10(d)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of shares of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Company or its
Affiliates). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Transfer Restricted Securities whose securities are being
sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Transfer Restricted Securities
may be given by Holders of at least a majority of Transfer Restricted Securities
being sold by such Holders pursuant to such Registration Statement; 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.

         (e) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect its rights or the rights of Holders hereunder.

         (f) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

             (i) if to a Holder, at the address set forth on the records of the
transfer agent under the Certificate of Designation, with a copy to the transfer
agent under the Certificate of Designation; and

                                       16
<PAGE>

             (ii) if to the Company:

                  Pegasus Communications Corporation
                  c/o Pegasus Management Company
                  225 City Lane Avenue
                  Suite 200
                  Bala Cynwyd, PA 19004

                  Telecopier No.:  (610) 341-1835
                  Attention:       Ted S. Lodge, Esq.

                  With a copy to:

                  Drinker Biddle & Reath LLP
                  1 Logan Square
                  18th and Cherry Streets
                  Philadelphia, PA 19103

                  Telecopier No.:  (215) 988-2757
                  Attention:       Michael B. Jordan, Esq.

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.

         Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the transfer agent at
the address specified in the Certificate of Designation.

         (g) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Securities in violation of the terms hereof or of the
Purchase Agreement or the Certificate of Designation. If any transferee of any
Holder shall acquire Transfer Restricted Securities in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Transfer Restricted Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.

         (h) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which

                                       17
<PAGE>

when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

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

         (j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

         (k) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

         (l) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and 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. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

                                       18
<PAGE>

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

                            PEGASUS COMMUNICATIONS
                            CORPORATION

                            By:  /s/ Scott A. Blank
                                 -------------------------------------
                                 Name:  Scott A. Blank
                                 Title: Vice President,
                                        and Assistant Secretary
                                        of Pegasus Communications Corporation

DONALDSON, LUFKIN & JENRETTE
   SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
CIBC WORLD MARKETS CORP.
DEUTSCHE BANK SECURITIES INC.

Acting severally on behalf of
   themselves and the Initial Purchasers

By: DONALDSON, LUFKIN & JENRETTE
      SECURITIES CORPORATION

    By:   /s/ Stephen J. Ketchum
       -------------------------------
       Name: Stephen J. Ketchum
       Title: Senior Vice President<PAGE>   1
                                                                   Exhibit 10.39

         EMPLOYMENT AGREEMENT

         AGREEMENT by and between Lexington Corporate Properties Trust, a
Maryland real estate investment trust (the "Company") and E. Robert Roskind (the
"Executive"), dated as of the 20th day of September, 1999.

         The Board of Trustees of the Company (the "Board"), has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other real estate
investment trusts. Therefore, in order to accomplish these objectives, the Board
has caused the Company to enter into this Agreement.

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

         1. Certain Definitions. (a) The "Effective Date" shall mean the first
date during the Change of Control Period (as defined in Section 1(b)) on which a
Change of Control (as defined in Section 2) occurs. Anything in this Agreement
to the contrary notwithstanding, if a Change of Control occurs and if the
Executive's employment with the Company is terminated prior to the date on which
the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.

         (b) The "Change of Control Period" shall mean the period commencing on
the date hereof and ending on the second anniversary of the date of a notice to
the Executive from the Company terminating the Change of Control Period;
provided, however, no such notice may be given following the occurrence of a
Change of Control.
<PAGE>   2

         2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:

         (a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding common shares of beneficial interest of the
Company (the "Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of trustees (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of Control: (A) any
acquisition directly from the Company, (B) any acquisition by the Company, (C)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any entity controlled by the Company or (D) any
acquisition by any entity pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this Section 2; or

         (b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a trustee subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the trustees then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or

         (c) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding common shares of beneficial interest and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of trustees, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an
entity which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any entity resulting from

<PAGE>   3

such Business Combination or any employee benefit plan (or related trust) of the
Company or such entity resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the entity resulting from such Business Combination or
the combined voting power of the then outstanding voting securities of such
entity except to the extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of the board of
directors or board of trustees, as the case may be, of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement with the successor or purchasing entity in
respect of such Business Combination, or of the action of the Board, providing
for such Business Combination; or

         (d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

         3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the third anniversary of
such date (the "Employment Period").

         4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements within the Company), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 120-day period immediately preceding the Effective Date and (B) the
Executive's services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or location less
than 35 miles from such location.

            (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto)
<PAGE>   4

subsequent to the Effective Date shall not thereafter be deemed to interfere
with the performance of the Executive's responsibilities to the Company.

         (b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the twelve-month period immediately preceding the month
in which the Effective Date occurs. During the Employment Period, the Annual
Base Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter at
least annually. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term "affiliated companies" shall
include any company or other entity controlled by, controlling or under common
control with the Company.

            (ii) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be awarded, for each fiscal year ending during the Employment Period, an
annual bonus (the "Annual Bonus") in cash at least equal to the Executive's
highest bonus under the Company's annual incentive plans (including, for these
purposes, any grant of restricted stock or other similar transaction which is
made instead of, or as a supplement to, any such bonus), for the last three full
fiscal years prior to the Effective Date (annualized in the event that the
Executive was not employed by the Company for the whole of such fiscal year)
(the "Recent Annual Bonus"). Each such Annual Bonus shall be paid no later than
the end of the third month of the fiscal year next following the fiscal year for
which the Annual Bonus is awarded, unless the Executive shall elect to defer the
receipt of such Annual Bonus.

            (iii) Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all incentive, savings
and retirement plans, practices, policies and programs applicable generally to
other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during the
120-day period immediately preceding the Effective Date or if more favorable to
the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.
<PAGE>   5

            (iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with benefits
which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

            (v) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

            (vi) Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if applicable, use of an
automobile and payment of related expenses, in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.

            (vii) Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

            (viii) Vacation. During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the
<PAGE>   6

Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

         5. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 11(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that, within
the 30 days after such receipt, the Execute shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.

         (b) Cause. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:

            (i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief Executive Officer
of the Company believes that the Executive has not substantially performed the
Executive's duties, or

            (ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there
<PAGE>   7

shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership
of the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.

         (c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:

            (i) the assignment to the Executive of any duties inconsistent in
any respect with the Executive's position (including status, offices, titles and
reporting requirements within the Company (as opposed to any parent or acquiring
Person)), authority, duties or responsibilities as contemplated by Section 4(a)
of this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities within the
Company (as opposed to any parent or acquiring Person), excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Company promptly after receipt of notice thereof
given by the Executive;

            (ii) any failure by the Company to comply with any of the provisions
of Section 4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;

            (iii) the Company's requiring the Executive to be based at any
office or location other than as provided in Section 4(a)(i)(B) hereof or the
Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;

            (iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or

            (v) any failure by the Company to comply with and satisfy Section
10(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive and binding on all parties hereto.
Anything in this Agreement to the contrary notwithstanding, a termination by the
Executive for any reason during the 30-day period immediately following the
first anniversary of the Effective Date shall be deemed to be a termination for
Good Reason for all purposes of this Agreement.
<PAGE>   8

         (d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 11(b) of
this Agreement.  For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicated the specific termination provision
in the Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than thirty days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause  shall not
waive any right of the Executive or the Company, respectively,  hereunder or
preclude the Executive or the Company, respectively, from  asserting such fact
or circumstance in enforcing the Executive's or the Company's rights hereunder.

         (e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause, death or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.

         6. Obligations of the Company upon Termination. (a) Good Reason; Other
Than for Cause, Death or Disability. If, during the Employment Period, the
Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:

            (i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:

                A. (I) the sum of (1) the Executive's Annual Base Salary through
the Date of Termination to the Extent not theretofore paid, (2) the product of
(x) 3 multiplied by (y) the sum of (a) the Executive's Annual Base Salary and
(b) if the termination of employment occurs (I) in 1999, the Annual Bonus for
1998, (II) in 2000, the average of the Annual Bonuses for 1999 and 1998, and
(III) in 2001, the Recent Annual Bonus, including any bonus or portion thereof
which has been earned but deferred (and annualized for any fiscal year
consisting of less than twelve full months or during which the Executive was
employed for less than twelve full months) (such amount
<PAGE>   9

in this clause (b) being referred to as the "Average Annual Bonus") and (3) any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay, in each case to the
extent not theretofore paid, less (II) any amount of base salary and bonus paid
to the Executive following the Effective Date in respect of the amounts earned
for such period (in the case of bonuses paid following the Effective Date, such
bonus shall be deemed to have been earned during the fiscal period of the
Company on a pro rata basis, based on the number of calendar days elapsed before
and after the Effective Date); and

                B. an amount equal to the excess of (a) the actuarial equivalent
of the benefit under the Company's qualified defined benefit retirement plan
(the "Retirement Plan") (utilizing actuarial assumptions no less favorable to
the Executive than those in effect under the Company's Retirement Plan
immediately prior to the Effective Date), and any excess or supplemental
retirement plan in which the Executive participates (together, the "SERP") which
the Executive would receive if the Executive's employment continued for 3 years
after the Date of Termination assuming for this purpose that all accrued
benefits are fully vested, and, assuming that the Executive's compensation in
each of the three years is that required by Section 4(b)(i) and Section
4(b)(ii), over (b) the actuarial equivalent of the Executive's actual benefit
(paid or payable), if any, under the Retirement Plan and the SERP as of the Date
of Termination;

            (ii) for three years after the effectiveness of a Change of Control,
or such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs, practices and
policies described in Section 4(b)(iv) of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies and their families, provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive medical or other welfare benefits under another employer provided
plan, the medical and other welfare benefits described herein shall be secondary
to those provided under such other plan during such applicable period of
eligibility. For purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits pursuant to such
plans, practices, programs and policies, the Executive shall be considered to
have remained employed until three years after the Date of Termination and to
have retired on the last day of such period;

            (iii) the Company shall, at its sole expense as incurred, provide
the Executive with outplacement services the scope and provider of which shall
be selected by the Executive in his sole discretion; and
<PAGE>   10

            (iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").

         (b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. For purposes of the Agreement, "Accrued
Obligations" shall mean the sum of (1) the product of (x) the Average Annual
Bonus and (y) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the denominator of
which is 365 and (2) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid. With respect to
the provisions of Other Benefits, the term Other Benefits as utilized in this
Section 6(b) shall include, without limitation, and the Executive's estate
and/or beneficiaries shall be entitled to receive, benefits at least equal to
the most favorable benefits provided by the Company and affiliated companies to
the estates and beneficiaries of peer executives of the Company and such
affiliated companies under such plans, programs, practices and policies relating
to death benefits, if any, as in effect with respect to other peer executives
and their beneficiaries at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive's estate
and/or the Executive's beneficiaries, as in effect on the date of the
Executive's death with respect to other peer executives of the Company and its
affiliated companies and their beneficiaries.

         (c) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most favorable
of those generally provided by the Company and its affiliated companies to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive's family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and its affiliated companies and their families.
<PAGE>   11

         (d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the Executive (x) his Annual Base Salary through the Date of
Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, the Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.

         7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor, subject to Section
11(f), shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Notwithstanding the foregoing, that compensation and
other benefits described herein shall be "liquidated damages" and the sole and
exclusive remedy for the termination of the Executive by the Company without
Cause or by reason of death or Disability. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except, in the case of the calculation and payment of the Annual Base
Salary and Annual Bonus, as expressly modified by this Agreement.

         8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest by the Company, provided that the Executive prevails in at least one
material issue, the Executive or others of the validly or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the
<PAGE>   12

applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended (the "Code").

         9. Certain Additional Payments by the Company.

         (a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

         (b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG LLP or
such other certified public accounting firm as may be designated by the
Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by
the Company to the Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting Firm shall be binding
upon the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such
<PAGE>   13

Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.

         (c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

            (i) give the Company any information reasonably requested by the
Company relating to such claim,

            (ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,

            (iii) cooperate with the Company in good faith in order effectively
to contest such claim, and

            (iv) permit the Company to participate in any proceedings relating
to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings, taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income
<PAGE>   14

tax (including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

         (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 9(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

         10. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.

         (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

         (c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.

         11. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended
<PAGE>   15

or modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.

         (b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

         If to the Executive:

         E. Robert Roskind
         Barnes Lane
         Purchase, NY  10577

         If to the Company:

         355 Lexington Avenue
         New York, New York  10017

         Attention: Company Secretary

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

         (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

         (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

         (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

         (f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, subject to Section 1 hereof, prior to the Effective Date, the Executive's
employment and/or this
<PAGE>   16

Agreement may be terminated by either the Executive or the Company at any time
prior to the Effective Date, in which case the Executive shall have no further
rights under this Agreement. From and after the Effective Date this Agreement
shall supersede any other agreement between the parties with respect to the
subject matter hereof.

         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

                                                  /s/   E. Robert Roskind
                                                  -----------------------------
                                                        E. Robert Roskind

                                                       LEXINGTON CORPORATE
                                                  PROPERTIES TRUST

                                              By:/s/   T. Wilson Eglin
                                                 -----------------------------
                                                       T. Wilson Eglin
                                                       President
<PAGE>   17

Similar agreements were entered into with the following officers for the
respective years:

           Richard Rouse                3 years
           T. Wilson Eglin              3 years
           Patrick Carroll              2 years
           Stephen Hagen                2 years
           Paul R. Wood                 1 year

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}]]