LEXINGTONREALTY TRUST, Issuer, CERTAINSUBSIDIARIES OF LEXINGTON REALTY TRUST, SubsidiaryGuarantors, and U.S.BANK NATIONAL ASSOCIATION, Trustee SIXTHSUPPLEMENTAL INDENTURE Dated asof January 26, 2010 6.00%Convertible Guaranteed Notes due 2030 SIXTHSUPPLEMENTAL INDENTURE

Issuer,

 

 

Subsidiary Guarantors,

 

and

 

Trustee

 

Dated as of January 26, 2010

 

 

 

 

THIS SIXTH SUPPLEMENTAL INDENTURE (this “Sixth Supplemental Indenture”), is entered into as of January 26, 2010, among LEXINGTON REALTY TRUST, a Maryland real estate investment trust (the “Issuer”), CERTAIN SUBSIDIARIES OF THE ISSUER SIGNATORIES HERETO (including subsidiaries of the Issuer subsequently becoming guarantors, the “Subsidiary Guarantors” or “Guarantors”) and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States, as Trustee hereunder (the “Trustee”), having its Corporate Trust Office at 100 Wall Street, Suite 1600, New York, New York 10005.

 

WHEREAS, The Lexington Master Limited Partnership, a former subsidiary of the Issuer (the “MLP”), as issuer, the Issuer, as parent guarantor, the Guarantors and the Trustee entered into that certain Indenture dated as of January 29, 2007 (the “Original Indenture”), relating to the Issuer’s unsecured debt securities authenticated and delivered under the Original Indenture;

 

WHEREAS, pursuant to Section 901(1) of the Original Indenture, the MLP, the Issuer, the Guarantors and the Trustee amended certain provisions of the Original Indenture to evidence the succession of the Issuer to the MLP and the assumption by the Issuer of the covenants of the MLP, therein and in the Securities pursuant to that Fourth Supplemental Indenture dated as of December 31, 2008 among the Issuer, the Guarantors and the Trustee (the “Fourth Supplemental Indenture”);

 

WHEREAS, pursuant to Section 901 of the Original Indenture, the Issuer, the Guarantors and the Trustee may enter into supplemental indentures to establish the form or terms of a series of Securities issued pursuant to the Original Indenture;

 

WHEREAS, pursuant to Section 301 of the Original Indenture, the Issuer, the Guarantors and the Trustee desire to establish the terms of a series of Securities entitled the “6.00% Convertible Guaranteed Notes due 2030” of the Issuer in respect of which the Guarantors shall be guarantors (the “Notes”); and

 

WHEREAS, the Issuer, the Guarantors and the Trustee have duly authorized the execution and delivery of this instrument to establish the terms of the Notes set forth herein and have done all things necessary to make this instrument (together with the Original Indenture and the Fourth Supplemental Indenture, the “Indenture”) a valid agreement of the parties hereto, in accordance with its terms.

 

NOW, THEREFORE, in consideration of the promises and the covenants and agreements contained herein, and for other good and valuable consideration the receipt of which is hereby acknowledged, and for the equal and proportionate benefit of the Holders of the Notes, the Issuer, the Guarantors and the Trustee agree as follows:

 

 

ARTICLE ONE

DEFINITIONS

 

Section 1.01.    Definitions.  (a) Capitalized terms used in this instrument and not otherwise defined herein shall have the meanings assigned to such terms in the Original Indenture or in the form of Note attached as Exhibit A hereto.

 

“Additional Interest” has the meaning provided in Section 2.05(b) hereof.

 

“Additional Notes” has the meaning provided in Section 2.02 hereof.

 

“Additional Shares” has the meaning specified in Section 2.10.

 

“Applicable Conversion Period” means, with respect to any Note:

 

(i)           if the relevant Conversion Date occurs prior to the date that is 15 Business Days prior to the Stated Maturity and a Cash Settlement or Combination Settlement applies, the 10 consecutive Trading-Day period beginning on and including the second Trading Day after the related Conversion Date; and

 

(ii)          if the relevant Conversion Date occurs on or after the date that is 15 Business Days prior to the Stated Maturity, and regardless of the Settlement Method, the 10 consecutive Trading Days beginning on and including the 12th Scheduled Trading Day immediately preceding the Stated Maturity.

 

“Applicable Consideration” has the meaning specified in Section 2.11 hereof.

 

“Business Day” means, with respect to any Note, any day, other than a Saturday, Sunday or any other day on which banking institutions in The City of New York are authorized or obligated by law or executive order to close.

 

“Cash Settlement” has the meaning set forth in Section 12.12 hereof.

 

 

“Change of Control” means the occurrence at any time of any of any of the following events: (1) consummation of any transaction or event (whether by means of a share exchange or tender offer applicable to Lexington Common Shares, a liquidation, consolidation, recapitalization, reclassification, combination or merger of the Issuer or a sale, lease or other transfer of all or substantially all of the Issuer’s consolidated assets) or a series of related transactions or events pursuant to which all of the outstanding Lexington Common Shares are exchanged for or converted into the right to receive cash, securities or other property; (2) any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable), other than the Issuer or any Operating Partnership or any of their respective majority-owned Subsidiaries or any employee benefit plan of the Issuer or such Subsidiaries, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power in the aggregate of all classes of shares of beneficial interest of the Issuer then outstanding entitled to vote generally in elections of trustees; (3) during any period of 12 consecutive months after the date of original issuance of the Notes, persons who at the beginning of such 12-month period constituted the Board of Trustees of the Issuer, together with any new persons whose election, appointment, designation or nomination was approved by a vote of a majority of the persons then still comprising the Board of Trustees of the Issuer who were either members of the Board of Trustees of the Issuer at the beginning of such period or whose election, appointment, designation or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Trustees of the Issuer; or (4) the Issuer or a wholly-owned Subsidiary of the Issuer ceases to be the general partner of all of the Operating Partnerships. Notwithstanding the foregoing, even if any of the events specified in the preceding clauses (1) through (4) have occurred, except as specified in clause (x), a Change of Control shall not be deemed to have occurred if either: (x) the Closing Sale Price of Lexington Common Share for any five Trading Days within (i) the period of 10 consecutive Trading Days ending immediately after the later of the Change of Control or the public announcement of the Change of Control, in the case of a Change of Control relating to an acquisition of shares of beneficial interest, or (ii) the period of 10 consecutive Trading Days ending immediately after the Change of Control, in the case of a Change of Control relating to a merger, consolidation or asset sale, lease or other transfer, equals or exceeds 105% of the Conversion Price applicable to the Notes in effect on each of those Trading Days; provided, however, that the exception to the definition of “Change of Control” specified in this clause (x) shall not apply in the context of a Change of Control for purposes of Section 2.10 or Section 2.11(d); or (y) at least 90% of the consideration paid for Lexington Common Shares (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in a merger, consolidation or other transaction otherwise constituting a Change of Control consists of shares of common stock (or depositary receipts or other certificates representing or evidencing common equity interests) traded on a national securities exchange or quoted on an established automated over-the-counter trading market in the United States (or will be so traded or quoted immediately following such merger, consolidation or other transaction) and as a result of the merger, consolidation or other transaction the Notes become exchangeable or convertible into such shares of common stock (or depositary receipts or other certificates representing or evidencing common equity interests). For the purposes of this definition, “person” includes any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

 

“Change of Control Purchase Date” has the meaning provided in Section 2.09 hereof.

 

“Change of Control Purchase Notice” has the meaning provided in Section 2.09 hereof.

 

“Change of Control Purchase Price” has the meaning provided in Section 2.09 hereof.

 

“Closing Sale Price” means, with respect to the Lexington Common Shares or other capital stock or similar equity interests or other publicly traded securities on any date, the closing sale price per share (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) on such date as reported on the principal United States securities exchange on which the Lexington Common Shares or such other capital stock or similar equity interests or other securities are traded or, if the Lexington Common Shares or such other capital stock or similar equity interests or other securities are not listed on a United States national or regional securities exchange, as reported by Pink Sheets LLC or another established over-the-counter trading market in the United States. The Closing Sale Price shall be determined without regard to after-hours trading or extended market making. In the absence of the foregoing, the Issuer shall determine the Closing Sale Price on such basis as it considers appropriate.

 

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

 

“Combination Settlement” has the meaning set forth in Section 12.12 hereof.

 

“Conversion Agent” means the office or agency designated by the Issuer where the Notes may be presented for conversion.

 

“Conversion Price” means, as of any date of determination, for $1,000 principal amount of Notes, the quotient of $1,000 divided by the Conversion Rate in effect as of such date, rounded to the nearest $0.01, with $0.005 rounded upward.

 

“Conversion Obligation” has the meaning provided in Section 2.12 hereof.

 

“Conversion Rate” means the number of Lexington Common Shares into which each $1,000 principal amount of Notes are convertible into, as the same shall be adjusted from time to time in accordance with the provisions hereof and of the Notes, which initially shall be 141.1383 Lexington Common Shares for each $1,000 principal amount of Notes.

 

“Daily Conversion Value” means, for each of the 10 consecutive Trading Days during the Applicable Conversion Period, 1/10 of the product of (i) the Conversion Rate on such day and (ii) the Daily VWAP of Lexington Common Shares on such day.

 

“Daily Settlement Amount” has the meaning provided in Section 2.12 hereof.

 

“Daily VWAP” means for each of the 10 consecutive Trading Days during the Applicable Conversion Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “LXP.N <equity> AQR” (or any successor thereto) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one Lexington Common Share on such Trading Day, determined using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by us). Daily VWAP will be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours

 

“Declaration of Trust of the Issuer” means the Amended and Restated Declaration of Trust of the Issuer, dated as of December 31, 2006, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Depositary” has the meaning provided in Section 2.03 hereof.

 

 

“Effective Date” has the meaning specified in Section 2.10.

 

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

 

“Expiration Time” has the meaning specified in Section 2.14.

 

“Guarantee” means the full and unconditional guarantee provided by each of the Guarantors in respect of the Notes as made applicable to the Notes in accordance with the provisions of Section 2.20 hereof.

 

“Guarantor” means each Subsidiary of the Issuer in existence on the date hereof that is a Lexington Credit Agreement Obligor, and any future Subsidiary Guarantor that is required to guarantee the Securities under the terms of the Original Indenture; provided, however, that, in the event any Subsidiary Guarantor is released pursuant to Section 1404 of the Original Indenture, such entity shall no longer be deemed a “Guarantor.”

 

“Initial Purchasers” means each of Merrill Lynch, Pierce, Fenner & Smith Incorporated; J.P. Morgan Securities Inc.; KeyBanc Capital Markets Inc.; Barclays Capital Inc.; BB&T Capital Markets, a division of Scott & Stringfellow, LLC; and RBS Securities Inc. (each, an “Initial Purchaser”).

 

“interest” means, when used with reference to the Notes, any interest payable under the terms of the Notes, including Additional Interest, if any.

 

“Indenture” has the meaning provided in the preamble of this instrument.

 

“Interest Payment Date” has the meaning provided in Section 2.05 hereof.

 

“Issuer” has the meaning specified in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of the Indenture, and thereafter “Issuer” shall mean such successor Person.

 

“Issuer Notice” has the meaning provided in Section 2.09 hereof.

 

“Lexington Common Shares” means shares of beneficial interest, par value $0.0001 per share, of the Issuer classified as “common stock.”

 

“Lexington Credit Agreement” means the Credit Agreement, dated as of February 13, 2009, among the Issuer and the Operating Partnerships, collectively as borrowers, each of the lenders party thereto, and KeyBanc, National Association, as agent, as the same may be amended, supplemented or otherwise modified from time to time, and any successor credit agreement thereto (whether by renewal, replacement, refinancing or otherwise) that the Issuer in good faith designates to be its principal credit agreement (taking into account the maximum principal amount of the credit facility provided thereunder, the recourse nature of the agreement and such other factors as the Issuer deems reasonable in light of the circumstances), such designation (or the designation that at a given time there is no principal credit agreement) to be made by an Officers’ Certificate delivered to the Trustee.

 

 

“Lexington Credit Agreement Obligor” means every Subsidiary of the Issuer that is a borrower or guarantor under the Lexington Credit Agreement from time to time; provided that, to the extent that any or all of such Subsidiaries cease to be borrowers or guarantors under the Lexington Credit Agreement, such Subsidiaries shall cease to be Lexington Credit Agreement Obligors.

 

“Market Disruption Event” means (i) a failure by the primary United States national or regional securities exchange or market on which Lexington Common Shares are listed or admitted to trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for Lexington Common Shares for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or market or otherwise) in Lexington Common Shares or in any options, contracts or future contracts relating to Lexington Common Shares.

 

“Notes” has the meaning provided in Section 2.01 hereof which shall be substantially in the form attached as Exhibit A hereto.

 

“Operating Partnership” means each of Lepercq Corporate Income Fund L.P., Lepercq Corporate Income Fund II L.P. and Net 3 Acquisition L.P. and their respective successors.

 

“Optional Repurchase Date” has the meaning provided in Section 2.08 hereof.

 

“Optional Repurchase Notice” has the meaning provided in Section 2.08 hereof.

 

“Optional Repurchase Price” has the meaning provided in Section 2.08 hereof.

 

“Person” means any individual, firm, corporation, partnership, association, joint venture, tribunal, limited liability company, trust, government or political subdivision or agency or instrumentality thereof, or any other entity or organization.

 

“Physical Settlement” has the meaning set forth in Section 12.12 hereof.

 

“PORTALSM Market” means The PORTAL Market operated by the Nasdaq Stock Market or any successor thereto.

 

“Purchase Agreement” means the Purchase Agreement dated January 20, 2010, among the Issuer, the Operating Partnerships party thereto and the Initial Purchasers.

 

“Redemption Date” means, with respect to any Note or portion thereof to be redeemed in accordance with the provisions of Section 2.07 hereof, the date fixed for such redemption in accordance with the provisions of Section 2.07 hereof.

 

“Redemption Price” has the meaning provided in Section 2.07 hereof.

 

 

“Reference Dividend” has the meaning specified in Section 2.14, subject to adjustment as provided in Section 2.14.

 

“Regular Record Date” has the meaning provided in Section 2.05 hereof.

 

“Restricted Securities” has the meaning specified in Section 2.25.

 

“Rule 144 Obligations” has the meaning specified in Section 2.05(b)(ii) hereof.

 

“Rule 144A” means Rule 144A as promulgated under the Securities Act as it may be amended from time to time hereafter.

 

 “Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the primary United States national securities exchange or market on which Lexington Common Shares are listed or admitted for trading. If Lexington Common Shares are not so listed or admitted for trading, “Scheduled Trading Day” means a Business Day.

 

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

 

“Settlement Method” means Cash Settlement, Combination Settlement, or Physical Settlement.

 

“Specified Dollar Amount” has the meaning set forth in Section 12.12 hereof.

 

“Share Price” has the meaning specified in Section 2.10 hereof.

 

“Spin-Off” has the meaning specified in Section 2.14 hereof.

 

“Trading Day” means a day during which trading in securities generally occurs on the New York Stock Exchange or, if Lexington Common Shares are not then listed on the New York Stock Exchange, on the principal other United States national or regional securities exchange on which Lexington Common Shares are then traded.

 

“Trading Price” means, with respect to the Notes on any date of determination, the average of the secondary market bid quotations per $1,000 principal amount of Notes obtained by the Trustee for a $2,000,000 principal amount of Notes at approximately 3:30 p.m., New York City time, on such determination date from two independent nationally recognized securities dealers selected by the Issuer, which may include one or more of the Initial Purchasers or any successor to such entities.  If at least two such bids cannot reasonably be obtained by the Trustee, but one such bid can reasonably be obtained by the Trustee, then one bid shall be used.  If the Trustee cannot reasonably obtain at least one bid for a $2,000,000 principal amount of Notes from a nationally recognized securities dealer or, in the reasonable judgment of the Issuer, the bid quotations are not indicative of the secondary market value of the Notes, then the Trading Price per $1,000 principal amount of Notes shall be deemed to be less than 98% of the product of the Closing Sale Price of Lexington Common Shares and the Conversion Rate on such determination date.

 

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at the date as of which the Original Indenture was executed; provided, however, that in the event the Trust Indenture Act is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

 

(b)           References to “interest” in the Indenture shall be deemed to include Additional Interest, if any, payable in respect of the Notes, except to the extent otherwise provided or where the context otherwise requires.

 

ARTICLE TWO

TERMS

 

Section 2.01.    Title.  The Notes shall constitute a series of Securities designated as the “6.00% Convertible Guaranteed Notes due 2030” of the Issuer in respect of which the Guarantors shall be guarantors.

 

Section 2.02.    Aggregate Principal Amount.  The aggregate principal amount of Notes which may be authenticated and delivered under the Indenture is initially limited in aggregate principal amount to $100,000,000 (or up to $115,000,000 if the Initial Purchasers’ option to purchase additional Notes described in the Purchase Agreement is exercised), except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305, 306, 906, 1107 or 1203 of the Original Indenture and except for any Notes which, pursuant to Section 303 of the Original Indenture, are deemed never to have been authenticated and delivered thereunder; provided that the Issuer may from time to time, without the consent of the Holders of the Notes, subject to compliance with the terms of the Indenture, increase the principal amount of the Notes by issuing additional Securities in the future (the “Additional Notes”) having the same terms and ranking equally and ratably with the Notes in all respects and with the same CUSIP number as the Notes, except for the difference in the issue price and interest accrued prior to the issue date of such Additional Notes, provided that such Additional Notes constitute part of the same issue as the Notes for U.S. federal income tax purposes.  Any Additional Notes shall be treated as a single series with the Notes under the Indenture and shall have the same terms as to status, redemption, repurchase, exchange and otherwise as the Notes.  For clarity, the limitations in this Section 2.02, including the limitation on the aggregate principal amount of the Notes which may be authenticated and delivered under the Indenture, shall not apply or be construed to apply to any series of Securities, other than the Notes, that may be authenticated and delivered under the Indenture.

 

Section 2.03.    Registered Securities in Book-Entry Form.  The Notes shall be issuable initially in the form of one or more global Securities registered in the name of The Depository Trust Company’s nominee, and shall be deposited with, or on behalf of, The Depository Trust Company, New York, New York (the “Depositary”).  The Notes may be surrendered for registration of transfer and for conversion pursuant to Section 305 of the Original Indenture at the office or agency of the Issuer (including the Trustee) maintained for such purpose in the Borough of Manhattan, The City of New York, or at any other office or agency maintained by the Issuer for such purpose.

 

 

Section 2.04.    Stated Maturity of Principal.  The Stated Maturity of the principal of the Notes shall be January 15, 2030.

 

Section 2.05.    (a) Interest.  The Notes shall bear interest at the rate of 6.00% per annum from, and including, January 26, 2010 or from the most recent Interest Payment Date to which interest has been paid or provided for, as the case may be, and shall be payable semi-annually in arrears on January 15 and July 15 of each year (each, an “Interest Payment Date”), commencing on July 15, 2010, until the principal thereof is paid or duly made available for payment, to the Persons in whose names such Notes are registered at the close of business on the January 1 or July 1 (whether or not a Business Day) immediately preceding the applicable Interest Payment Date (each, a “Regular Record Date”).  Interest payable on each Interest Payment Date shall equal the amount of interest accrued for the period commencing on and including the immediately preceding Interest Payment Date in respect of which interest has been paid (or commencing on and including January 26, 2010, if no interest has been paid) and ending on and including the day preceding such Interest Payment Date.  Interest on the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

 

Notwithstanding anything to the contrary contained herein, if the Issuer shall redeem the Notes in accordance with the provisions of Section 2.07 hereof, or if a Holder shall surrender a Note for repurchase by the Issuer in accordance with the provisions of 2.08 or 2.09 hereof, subject to the next succeeding sentence, accrued and unpaid interest (including Additional Interest, if any) shall be payable to the Holder that shall have surrendered such Note for redemption or repurchase, as the case may be.  However, if the Redemption Date or Optional Repurchase Date or Change of Control Purchase Date, as the case may be, for a Note falls after the Regular Record Date and on or prior to the related Interest Payment Date, accrued and unpaid interest (including Additional Interest, if any) due on such Interest Payment Date shall be payable instead to the Person in whose name such Note is registered at the close of business on the related Regular Record Date.

 

(b)  Additional Interest.  The Issuer shall be required to pay additional interest on the Notes (“Additional Interest”) if:

 

(i) at any time during the six-month period beginning on, and including, the date which is six months after the date of original issuance of the Notes, the Issuer fails to timely file any document or report that the Issuer is required to file with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (other than current reports on Form 8-K), or the Notes are not otherwise freely tradable by Holders other than an Affiliate of the Issuer (as a result of restrictions pursuant to U.S. securities law or the terms of this Indenture or the Notes).  Additional Interest under this Section 2.05(b)(i) will accrue on the Notes at the rate of 0.50% per annum of the principal amount of Notes outstanding for each day during such period for which the Issuer’s failure to file continues; provided that the Issuer will have fourteen (14) days, in the aggregate, to cure any such late filings before any Additional Interest shall accrue; or

 

 

(ii) as of the 365th day after the last date of original issuance of the Notes (x) the restrictive legend on the Notes has not been removed, or (y) the Notes are not freely tradable pursuant to Rule 144 under the Securities Act without volume restrictions by Holders other than an Affiliate of the Issuer (without restrictions pursuant to U.S. securities law or the terms of the Indenture or the Notes) (collectively, the “Rule 144 Obligations”).  Additional Interest under this Section 2.05(b)(ii) will accrue on the Notes at the rate of 0.50% per annum of the principal amount of Notes outstanding for each day until the Issuer has satisfied its Rule 144 Obligations.

 

Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as described in Section 2.05(a) hereof.

 

Section 2.06.    Place of Payment.  The principal of and the interest on the Notes shall be payable at the office or agency of the Issuer (including the Trustee) maintained for such purpose in the Borough of Manhattan, The City of New York in the in the manner specified in the Indenture.

 

Section 2.07.    Redemption.  The Issuer shall not have the right to redeem any Notes prior to January 15, 2017, except to preserve the Issuer’s status as a real estate investment trust for U.S. federal income tax purposes.  If, at any time, the Issuer determines it is necessary to redeem the Notes in order to preserve its status as a real estate investment trust for U.S. federal income tax purposes, the Issuer may, upon not less than 30 nor more than 60 days’ prior written notice by mail to the Holders of the Notes, redeem the Notes in whole or in part, for cash equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest (and Additional Interest, if any) to, but not including, the Redemption Date.  In such case, the Issuer shall provide the Trustee with an Officers’ Certificate evidencing that the Board of Trustees of the Issuer has, in good faith, made the determination that it is necessary to redeem the Notes in order to preserve the Issuer’s status as a real estate investment trust for U.S. federal income tax purposes.

 

The Issuer shall have the right to redeem the Notes, in whole or in part at any time or from time to time, on or after January 15, 2017 upon not less than 30 nor more than 60 days’ prior written notice by mail to the Holders of the Notes, at a redemption price (“Redemption Price”) for cash equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest (and Additional Interest, if any) to, but not including, the Redemption Date.  If less than all the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed (in principal amounts of $1,000 and integral multiples thereof) on a pro rata basis or by such other method the Trustee considers fair and appropriate.  The Trustee shall make the selection at least 30 days but not more than 60 days before the Redemption Date from Outstanding Notes not previously called for redemption.  Notes and portions of the principal amount thereof selected for redemption shall be in integral multiples of $1,000.  The Trustee shall notify the Issuer promptly of the Notes or portions of the principal amount thereof to be redeemed.  If the Trustee selects a portion of a Note for partial redemption and a Holder converts a portion of the same Note in accordance with the provisions of Section 2.11 hereof before termination of the conversion right with respect to the portion of the Note so selected, the converted portion of such Note shall be deemed to be from the portion selected for redemption.  Notes that have been converted pursuant to Section 2.11 hereof during a selection of Notes to be redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection.

 

 

In the event of any redemption of the Notes in part, the Issuer shall not be required to: (i) issue or register the transfer or conversion of any Note pursuant to Section 305 of the Original Indenture during a period beginning at the opening of business 15 days before any selection of Notes for redemption and ending at the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all Holders of Notes to be so redeemed, or (ii) register the transfer or conversion pursuant to Section 305 of the Original Indenture of any Note so selected for redemption, in whole or in part, except the unredeemed portion of any Note being redeemed in part.

 

In addition to those matters set forth in Section 1104 of the Original Indenture, a notice of redemption sent to the Holders of Notes to be redeemed in accordance with the provisions of the two preceding paragraphs shall state:

 

(a)         the name and address of the Trustee, the Paying Agent and Conversion Agent;

 

(b)         the then current Conversion Rate;

 

(c)         that Notes called for redemption may be converted pursuant to Section 2.11 hereof at any time prior to the close of business on the second Business Day immediately preceding the Redemption Date; and

 

(d)         that Holders who wish to convert Notes pursuant to Section 305 of the Original Indenture must comply with the procedures relating thereto specified in Section 2.13 hereof.

 

Section 2.08.    Repurchase Rights.  A Holder of Notes shall have the right to require the Issuer to repurchase such Holder’s Notes, in whole or in part (in principal amounts of $1,000 or an integral multiple thereof), on each of January 15, 2017, January 15, 2020 and January 15, 2025 (each, an “Optional Repurchase Date”) for cash equal to 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest (and Additional Interest, if any) to, but not including, the Optional Repurchase Date (such amount, the “Optional Repurchase Price”), subject to satisfaction by or on behalf of the Holder of the requirements set forth below.

 

On or before the 20th Business Day prior to each Optional Repurchase Date, the Issuer shall provide a written notice by first-class mail to the Trustee, any Paying Agent and all Holders (and to beneficial owners as required by applicable law).  The notice shall include a form of Optional Repurchase Notice to be completed by the Holder and shall state:

 

(a)         the date by which the Optional Repurchase Notice must be delivered to the Paying Agent;

 

(b)         the Optional Repurchase Date;

 

(c)         the Optional Repurchase Price;

 

 

(d)         the name and address of the Trustee, the Paying Agent and the Conversion Agent;

 

(e)         that Notes must be surrendered to the Paying Agent to collect payment of the Optional Repurchase Price and the procedures that holders must follow to require the Issuer to repurchase their Notes;

 

(f)         that the Optional Repurchase Price for any Note as to which an Optional Repurchase Notice has been duly given shall be paid within two Business Days after the later of the Optional Repurchase Date or the time at which such Notes are surrendered for repurchase;

 

(g)         that, unless the Issuer defaults in making payment of the Optional Repurchase Price, interest on Notes surrendered for repurchase shall cease to accrue on and after the Optional Repurchase Date;

 

(h)         that Notes in respect of which an Optional Repurchase Notice is provided by a Holder shall not be convertible in accordance with their terms and pursuant to Section 2.11 hereof even if otherwise convertible unless such Holder validly withdraws such Optional Repurchase Notice in accordance with the provisions of this Section 2.08; and

 

(i)          the CUSIP number of the Notes.

 

The Issuer shall also disseminate a press release through PR Businesswire, Dow Jones & Company, Inc. or Bloomberg Business News containing the information specified in such notice or publish such information in a newspaper of general circulation in The City of New York, or through such other public medium as the Issuer shall deem appropriate at such time.  In addition, the Issuer shall post any such press release on its website or disseminate it through any other appropriate public medium.

 

A Holder may exercise its rights specified in this Section 2.08 by delivery of a written notice of repurchase (an “Optional Repurchase Notice”) to the Paying Agent during the period beginning at any time from the opening of business on the date that is 20 Business Days prior to the applicable Optional Repurchase Date until the close of business on the second Business Day prior to such Optional Repurchase Date, stating:

 

(a)         if such Notes are in certificated form, the certificate number(s) of the Notes which the Holder shall deliver to be repurchased;

 

(b)         the portion of the principal amount of the Notes to be repurchased, in integral multiples of $1,000, provided that the remaining principal amount of Notes is in an authorized denomination; and

 

(c)         that such Notes shall be repurchased by the Issuer pursuant to the applicable provisions hereof and the Notes.

 

 

The Paying Agent shall promptly notify the Issuer in writing of the receipt by it of any Optional Repurchase Notice.

 

Book-entry transfer of Notes in book-entry form in compliance with appropriate procedures of the Depositary or delivery of Notes in certificated form, together with all necessary endorsements, to the Paying Agent at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Optional Repurchase Price therefor.  Holders electing to require the Issuer to repurchase Notes must effect such transfer or delivery to the Paying Agent on or prior to the Optional Repurchase Date to receive payment of the Optional Repurchase Price on or within two Business Days after the Optional Repurchase Date.  The Issuer shall pay the Optional Repurchase Price within two Business Days after the later of the Optional Repurchase Date or the time of such transfer or delivery of the Notes.

 

An Optional Repurchase Notice may be withdrawn in whole or in part by a Holder by means of a written notice of withdrawal delivered to the office of the Paying Agent prior to the close of business on the second Business Day prior to the Optional Repurchase Date specifying:

 

(a)         the Holder’s name;

 

(b)         the principal amount of Notes in respect of which the Optional Repurchase Notice is being withdrawn, which must be an integral multiple of $1,000;

 

(c)         if the Notes subject to the notice of withdrawal are in certificated form, the certificate number(s) of all Notes subject to the notice of withdrawal; and

 

(d)         the principal amount of Notes, if any, that remains subject to the Optional Repurchase Notice, which must be an integral multiple of $1,000.

 

If Notes subject to the notice of withdrawal are in book-entry form, the above notices must also comply with the applicable procedures of the Depositary.

 

On or before 10:00 a.m. (New York City time) on the Optional Repurchase Date, the Issuer shall deposit with the Paying Agent (or if the Issuer or an Affiliate of the Issuer is acting as the Paying Agent, shall segregate and hold in trust) money sufficient to pay the aggregate Optional Repurchase Price of the Notes to be purchased pursuant to this Section 2.08.  If the Paying Agent holds, in accordance with the terms of the Indenture, money sufficient to pay the Optional Repurchase Price of such Notes on the Optional Repurchase Date, then on and after such date, such Notes shall cease to be Outstanding and interest on such Notes shall cease to accrue, and all rights of the Holder of such Notes shall terminate (other than the right to receive the Optional Repurchase Price after delivery or transfer of the Notes).  Such shall be the case whether or not book-entry transfer of the Notes in book-entry form is made and whether or not Notes in certificated form, together with the necessary endorsements, are delivered to the Paying Agent.

 

Notwithstanding the foregoing, no Notes may be purchased by the Issuer in accordance with the provisions of this Section 2.08 if there has occurred and is continuing an Event of Default with respect to the Notes (other than a default in the payment of the Optional Repurchase Price).

 

 

To the extent legally required in connection with a repurchase of Notes, the Issuer shall comply with the provisions of Rule 13e-4 and other tender offer rules under the Exchange Act then applicable, if any, and shall file a Schedule TO or any other schedule required under the Exchange Act.

 

The Issuer may arrange for a third party to purchase Notes for which the Issuer has received a valid Optional Repurchase Notice that has not been properly withdrawn, in the manner and otherwise in compliance with the requirements set forth herein and in the Notes.  If a third party purchases any Notes under such circumstances, then interest shall continue to accrue on the Notes and such Notes shall continue to be Outstanding after the Optional Repurchase Date for all purposes of the Indenture and, subject to compliance with applicable law, shall be fungible with all other Notes then Outstanding.

 

Section 2.09.    Repurchase at Option of Holders upon a Change of Control.  If a Change of Control occurs at any time prior to January 15, 2017, a Holder of Notes shall have the right to require the Issuer to repurchase such Holder’s Notes, in whole or in part (in principal amounts of $1,000 or an integral multiple thereof) for cash equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest (and Additional Interest, if any) to, but not including, the Change of Control Purchase Date (such amount, the “Change of Control Purchase Price”), subject to satisfaction by or on behalf of the Holder of the requirements set forth below.  If a Change of Control occurs on or after January 15, 2017, Holders of Notes shall not have any right to require the Issuer to repurchase their Notes, except in accordance with Section 2.08.

 

Within 20 days after the occurrence of a Change of Control, the Issuer shall mail a written notice of Change of Control and of the repurchase right arising as a result of the Change of Control (the “Issuer Notice”) by first-class mail to the Trustee, any Paying Agent and to each Holder (and to beneficial owners as required by applicable law).  The notice shall include a form of Change of Control Purchase Notice to be completed by the Holder and shall state:

 

(a)         the events causing a Change of Control and the date of such Change of Control;

 

(b)         the date by which the Change of Control Purchase Notice must be delivered to the Paying Agent;

 

(c)         the date on which the Issuer shall repurchase Notes upon a Change of Control, which must be not less than 15 days nor more than 30 days after the date of the Issuer Notice (such date, the “Change of Control Purchase Date”);

 

(d)         the Change of Control Purchase Price;

 

(e)         the name and address of the Trustee, the Paying Agent and the Conversion Agent;

 

 

(f)         that Notes in respect of which a Change of Control Purchase Notice is provided by a Holder shall not be convertible pursuant to Section 2.11 hereof unless such Holder validly withdraws such Change of Control Purchase Notice in accordance with the provisions of this Section 2.09;

 

(g)        that Notes must be surrendered to the Paying Agent to collect payment of the Change of Control Purchase Price and the procedures that Holders must follow to require the Issuer to repurchase their Notes;

 

(h)        that the Change of Control Purchase Price for any Note as to which a Change of Control Purchase Notice has been duly given shall be paid within two Business Days after the later of the Change of Control Purchase Date or the time at which such Notes are surrendered for repurchase;

 

(i)         that, unless the Issuer defaults in making payment of the Change of Control Purchase Price, interest on Notes surrendered for repurchase shall cease to accrue on and after the Change of Control Purchase Date; and

 

(j)         the CUSIP number of the Notes.

 

The Issuer shall also disseminate a press release through PR Businesswire, Dow Jones & Company, Inc. or Bloomberg Business News announcing the occurrence of such Change of Control or publish such information in a newspaper of general circulation in The City of New York, or through such other public medium as the Issuer shall deem appropriate at such time.  In addition, the Issuer shall post any such press release on its website or disseminate it through any other appropriate medium.

 

A Holder may exercise its rights specified in this Section 2.09 upon delivery of a written notice of such Holder’s exercise of its repurchase right (a “Change of Control Purchase Notice”) to the Paying Agent at any time prior to the close of business on the third Business Day prior to the Change of Control Purchase Date, stating:

 

(a)         if such Notes are in certificated form, the certificate number(s) of the Notes which the Holder shall deliver to be repurchased;

 

(b)         the portion of the principal amount of the Notes to be repurchased, in multiples of $1,000, provided that the remaining principal amount of Notes is in an authorized denomination; and

 

(c)         that such Note shall be repurchased pursuant to the applicable provisions hereof and of the Notes.

 

The Paying Agent shall promptly notify the Issuer in writing of the receipt by it of any Change of Control Purchase Notice.

 

Book-entry transfer of Notes in book-entry form in compliance with appropriate procedures of the Depositary or delivery of Notes in certificated form (together with all necessary endorsements) to the Paying Agent at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Change of Control Purchase Price therefor.  Holders electing to require the Issuer to repurchase Notes must effect such transfer or delivery to the Paying Agent on or prior to the Change of Control Purchase Date to receive payment of the Change of Control Purchase Price on or within two Business Days after the Change of Control Purchase Date.  The Issuer shall pay the Change of Control Purchase Price within two Business Days after the later of the Change of Control Purchase Date or the time of such transfer or delivery of the Notes.

 

A Change of Control Purchase Notice may be withdrawn in whole or in part by a Holder by means of a written notice of withdrawal delivered to the office of the Paying Agent prior to the close of business on the third Business Day prior to the Change of Control Purchase Date specifying:

 

(a)         the Holder’s name;

 

(b)         if the Notes subject to the notice of withdrawal are in certificated form, the certificate number(s) of all Notes subject to the notice of withdrawal;

 

(c)         the principal amount of Notes in respect of which the Change of Control Purchase Notice is being withdrawn, which must be an integral multiple of $1,000; and

 

(d)         the principal amount of Notes, if any, that remains subject to the Change of Control Purchase Notice, which must be an integral multiple of $1,000.

 

If Notes subject to the notice of withdrawal are in book-entry form, the above notices must also comply with the applicable procedures of the Depositary.

 

On or before 10:00 a.m. (New York City time) on the Change of Control Purchase Date, the Issuer shall deposit with the Paying Agent (or if the Issuer or an Affiliate of the Issuer is acting as the Paying Agent, shall segregate and hold in trust) money sufficient to pay the aggregate Change of Control Purchase Price of the Notes to be purchased pursuant to this Section 2.09.  If the Paying Agent holds, in accordance with the terms of the Indenture, money sufficient to pay the Change of Control Purchase Price of such Notes on the Change of Control Purchase Date, then, on and after such date, such Notes shall cease to be Outstanding and interest on such Notes shall cease to accrue and all rights of the Holders of such Notes shall terminate (other than the right to receive the Change of Control Purchase Price after delivery or transfer of the Notes).  Such shall be the case whether or not book-entry transfer of the Notes in book-entry form is made and whether or not Notes in certificated form, together with the necessary endorsements, are delivered to the Paying Agent.

 

Notwithstanding the foregoing, no Notes may be repurchased by the Issuer in accordance with the provisions of this Section 2.09 if there has occurred and is continuing an Event of Default with respect to the Notes (other than a default in the payment of the Change of Control Purchase Price).

 

To the extent legally required in connection with a repurchase of Notes, the Issuer shall comply with the provisions of Rule 13e-4 and other tender offer rules under the Exchange Act then applicable, if any, and will file a Schedule TO or any other schedule required under the Exchange Act.

 

The Issuer may arrange for a third party to purchase Notes for which the Issuer has received a valid Change of Control Purchase Notice that has not been properly withdrawn, in the manner and otherwise in compliance with the requirements set forth herein and in the Notes.  If a third party purchases any Notes under such circumstances, then interest shall continue to accrue on the Notes and such Notes shall continue to be Outstanding after the Change of Control Purchase Date for all purposes of the Indenture and, subject to compliance with applicable law, shall be fungible with all other Notes then Outstanding.

 

Section 2.10.     Adjustment to Conversion Rate Upon Certain Change of Control Transactions.  If a Change of Control occurs prior to January 15, 2017 as a result of a transaction or event described in clauses (1) or (2) of the definition of Change of Control and a Holder elects to convert its Notes in connection with such Change of Control pursuant to Section 2.11(d), the Issuer shall increase the applicable Conversion Rate for such Notes surrendered for conversion by a number of additional Lexington Common Shares (the “Additional Shares”) as specified below.  A conversion of Notes shall be deemed for these purposes to be “in connection with” such a Change of Control if the notice of conversion of the Notes is received by the Conversion Agent on any date from and including the date that is the Effective Date (as defined below) of such Change of Control up to and including the 30th Business Day following the Effective Date of such Change of Control or, if applicable, the related Change of Control Repurchase Date.

 

The number of Additional Shares shall be determined by reference to the table below and is based on the date on which such Change of Control transaction becomes effective (the “Effective Date”) and the price (the “Share Price”) paid per Lexington Common Share in such Change of Control transaction.  If holders of Lexington Common Shares receive only cash in a Change of Control transaction described in clause (1) of the definition of such term, the Share Price shall be the cash amount paid per Lexington Common Share.  In all other cases, the Share Price shall be the average of the Closing Sale Prices of Lexington Common Shares on the 10 consecutive Trading Days up to but excluding the Effective Date.

 

The Share Prices set forth in the first row of the table (i.e., the column headers) shall be adjusted as of any date on which Conversion Rate of the Notes is adjusted.  The adjusted Share Prices shall equal the Share Prices applicable immediately prior to such adjustment multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving rise to the Share Price adjustment and the denominator of which is the Conversion Rate as so adjusted.  In addition, the number of Additional Shares shall be subject to adjustment in the same manner as the Conversion Rate in accordance with the provisions of Section 2.14 hereof.

 

The following table sets forth the Share Price and number of Additional Shares to be received per $1,000 principal amount of Notes:

 

 

 

The actual Share Prices and Effective Dates may not be set forth in the table, in which case:

 

(a)         if the Share Price is between two Share Price amounts in the table or the Effective Date is between two dates in the table, the Additional Shares shall be determined by straight-line interpolation between the number of Additional Shares set forth for the higher and lower Share Price amounts and the two dates, as applicable, based on a 365-day year;

 

(b)         if the Share Price is in excess of $40.00 per Lexington Common Share (subject to adjustment as specified in the second preceding paragraph), no Additional Shares shall be issued upon a conversion of Notes;

 

(c)         if the Share Price is less than $6.03 per Lexington Common Share (subject to adjustment as specified in the second preceding paragraph), no Additional Shares shall be issued upon a conversion of Notes.

 

Notwithstanding the foregoing, in no event shall the Conversion Rate (including any Additional Shares) issuable upon a conversion of Notes exceed 165.8374 shares per $1,000 principal amount of Notes, subject to adjustment in the same manner as the Conversion Rate pursuant to Section 2.14 hereof.  All calculations under this Section 2.10 shall be the responsibility of the Issuer.

 

Section 2.11.     Conversion Rights.

 

Subject to the restrictions on ownership of Lexington Common Shares as set forth in Section 2.15 hereof and to the conditions set forth herein, Holders may surrender their Notes for conversion into cash, Lexington Common Shares or a combination of cash and Lexington Common Shares, at the Issuer’s option, at the applicable Conversion Rate prior to the close of business on the second Business Day immediately preceding the Stated Maturity of the Notes either (x) at any time on or after January 15, 2029 or (y) under any of the other circumstances set forth in this Section 2.11.

 

(a)      Conversion Upon Satisfaction of Market Price Condition.  A Holder may surrender any of its Notes for conversion during any calendar quarter beginning after March 31, 2010 (and only during such calendar quarter) if, and only if, the Closing Sale Price of Lexington Common Shares for at least 20 Trading Days (whether or not consecutive) in the period of 30 consecutive Trading Days ending on the last Trading Day of the preceding calendar quarter as determined by the Issuer is more than 130% of the Conversion Price per Lexington Common Share in effect on the applicable Trading Day.  The Board of Trustees of the Issuer shall make appropriate adjustments, in its good faith determination, to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the ex-dividend date of the event occurs, during that 30 consecutive Trading-Day period.

 

(b)      Conversion Upon Satisfaction of Trading Price Condition.  A Holder may surrender any of its Notes for conversion during the five consecutive Trading-Day period following any five consecutive Trading Days in which the Trading Price per $1,000 principal amount of Notes (as determined following a reasonable request by a Holder of the Notes) was less than 98% of the product of the Closing Sale Price of Lexington Common Shares multiplied by the applicable Conversion Rate.

 

The Trustee shall have no obligation to determine the Trading Price of the Notes unless the Issuer shall have requested such determination, and the Issuer shall have no obligation to make such request unless a Holder provides the Issuer with reasonable written evidence that the Trading Price per $1,000 principal amount of the Notes would be less than 98% of the product of the Closing Sale Price of Lexington Common Shares and the Conversion Rate, whereupon the Issuer shall instruct the Trustee in writing to determine the Trading Price of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price is greater than or equal to 98% of the product of the Closing Sale Price of Lexington Common Shares and the Conversion Rate.

 

(c)      Conversion Upon Notice of Redemption.  A Holder may surrender for conversion any of the Notes called for redemption at any time prior to the close of business on the second Business Day prior to the Redemption Date, even if the Notes are not otherwise convertible at such time.  The right to convert Notes called for redemption pursuant to this clause (c) shall expire after the close of business on the second Business Day prior to the Redemption Date unless the Issuer defaults in making the payment due upon redemption.

 

(d)      Conversion Upon Specified Transactions.  If the Issuer elects to:

 

(i)           distribute to all holders of Lexington Common Shares rights entitling them to purchase, for a period expiring within 45 days, Lexington Common Shares at less than the Closing Sale Price of Lexington Common Shares on the Trading Day immediately preceding the declaration date of the distribution; or

 

(ii)           distribute to all holders of Lexington Common Shares assets, debt securities or rights to purchase securities of the Issuer or the Operating Partnerships, which distribution has a per share value exceeding 15% of the Closing Sale Price of Lexington Common Shares on the Trading Day immediately preceding the declaration date of such distribution,

 

the Issuer shall notify the Holders of the Notes in writing at least 25 Business Days prior to the ex-dividend date for such distribution.  Following the giving of such notice, Holders may surrender their Notes for conversion at any time until the earlier of the close of business on the Business Day prior to the ex-dividend date or an announcement that such distribution shall not take place; provided, however, that a Holder may not exercise this right to convert if the Holder may participate, on an as-converted basis, in the distribution without a conversion of Notes.  The ex-dividend date is the first date upon which a sale of the Lexington Common Shares does not automatically transfer the right to receive the relevant distribution from the seller of Lexington Common Shares to its buyer.

 

In addition, if the Issuer is party to a consolidation, merger, binding share exchange or a sale, lease or other transfer of all or substantially all of the consolidated assets of the Issuer pursuant to which all of the outstanding Lexington Common Shares would be exchanged for cash, securities or other property that is not otherwise a Change of Control, a Holder may surrender Notes for conversion at any time from and including the date that is 25 Business Days prior to the anticipated effective time of the transaction up to and including five Business Days after the actual date of such transaction.  The Issuer shall notify Holders as promptly as practicable following the date the Issuer publicly announces such transaction (but in no event less than 25 Business Days prior to the anticipated effective time of such transaction).

 

If a Change of Control occurs as a result of a transaction described in clauses (1) or (2) of the definition of “Change of Control”, a Holder shall have the right to convert its Notes at any time from and including the Effective Date of such transaction up to and including the 30th Business Day following the Effective Date of the transaction, provided that, if a Holder has already delivered an Optional Repurchase Notice or a Change of Control Purchase Notice with respect to a Note, such Holder may not surrender such Note for conversion until it has withdrawn such notice in accordance with the applicable provisions of Section 2.08 or 2.09 hereof, as the case may be.  The Issuer shall notify Holders as promptly as practicable following the date that the Issuer publicly announces such Change of Control (but in no event later than five Business Days prior to the Effective Date of such Change of Control).

 

If the Issuer is a party to a consolidation, merger, binding share exchange or a sale, lease or other transfer of all or substantially all of the consolidated assets of the Issuer pursuant to which all of the Lexington Common Shares are exchanged for cash, securities or other property, then from and after the effective time of the transaction, any conversion of Notes, including the Daily Conversion Value and any shares deliverable in connection with such conversion, shall be based on the kind and amount of cash, securities or other property (the “Applicable Consideration”) that the Holder would have received if such Holder had converted its Notes for Lexington Common Shares immediately prior to the effective time of the transaction.  For purposes of the foregoing, where a consolidation, merger, binding share exchange or a sale, lease or other transfer of all or substantially all of the consolidated assets of the Issuer involves a transaction that causes Lexington Common Shares to be converted into the right to receive more than a single type of consideration based upon any form of shareholder election, the Applicable Consideration shall be deemed to be the weighted average of the types and amounts of consideration received by the holders of Lexington Common Shares that affirmatively make such an election.  At the time of any transaction described in this paragraph, the Issuer or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture) providing that each Note shall be convertible into the Applicable Consideration.  Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided in this Sixth Supplemental Indenture.

 

The Issuer shall cause notice of the execution of such supplemental indenture to be mailed to each Holder of Notes, at its address appearing on the Security Register, within 20 days after execution thereof.  Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

 

The above provisions shall similarly apply to successive reclassifications, changes, consolidations, mergers, binding share exchanges, combinations, sales and transfers.

 

If a Change of Control occurs prior to January 15, 2017 as a result of a transaction described in clauses (1) or (2) of the definition thereof, the Issuer shall adjust the Conversion Rate for Notes tendered for conversion in connection with such a Change of Control transaction, as described in Section 2.10 hereof.

 

(e)        Conversion Upon Delisting of Lexington Common Shares.  A Holder of Notes may surrender any of its Notes for conversion at any time beginning on the first Business Day after the Lexington Common Shares have ceased to be listed on a U.S. national or regional securities exchange for a 30 consecutive Trading Day period.  The Issuer shall promptly notify the Trustee in writing upon the delisting of the Lexington Common Shares.

 

(f)         Partial Conversion and Withdrawal of Purchase Notices.  A Holder may convert fewer than all of its Notes so long as the Notes converted are an integral multiple of $1,000 principal amount and the remaining principal amount of Notes is in an authorized denomination.  If a Holder has delivered an Optional Repurchase Notice or a Change of Control Purchase Notice with respect to a Note, such Holder may not surrender such Note for conversion until it has withdrawn such notice in accordance with the applicable provisions of Section 2.08 or 2.09 hereof, as the case may be.

 

Section 2.12.     Conversion Settlement.  (a) Upon a conversion of Notes, the Issuer shall deliver to each converting holder, in respect of each $1,000 principal amount of Notes tendered for conversion, at the Issuer’s election, in full satisfaction of the Issuer’s Conversion Obligation, (1) Lexington Common Shares, together with cash in lieu of fractional shares, if any (a “Physical Settlement”), (2) a cash payment without delivery of any Lexington Common Shares (a “Cash Settlement”) or (3) a combination of cash and Lexington Common Shares, together with cash in lieu of fractional shares, if any (a “Combination Settlement”), in each case, as set forth below (the amounts so deliverable upon conversion of the Notes, the “Conversion Obligation”):

 

For conversions of Notes (other than conversions following a notice of redemption):

 

(i)           that occur prior to the date that is 15 Business days prior to the Stated Maturity, by the close of business on the Business Day following the Conversion Date, the Issuer shall notify converting Holders of the relevant Settlement Method and, if the Issuer elects a Combination Settlement, the dollar amount of the Conversion Obligation (the “Specified Dollar Amount”) that will be settled in cash;

 

(ii)           that occur on or after the date that is 15 Business Days prior to the Stated Maturity, the Issuer shall notify all Holders of the relevant Settlement Method and, if applicable, the related Specified Dollar Amount, by notice on or prior to the date that is 15 Business Days prior to the Stated Maturity (which shall apply to all conversions on or following the date that is 15 Business Days prior to the Stated Maturity).

 

For conversions of Notes that occur following delivery by the Issuer of a notice of redemption, as described in Section 2.11(c) hereof, the Issuer will notify converting Holders of the relevant Settlement Method and, if the Issuer elects Combination Settlement, the related Specified Dollar Amount.

 

If the Issuer does not specify a Settlement Method as set forth above, then Combination Settlement shall apply, and the related Specified Dollar Amount used in the settlement calculation set forth in paragraph (d) below will be $1,000.  Any such notice of a Settlement Method may not be revoked.

 

If the Issuer has elected a Physical Settlement with respect to any Notes tendered for conversion, the Issuer shall deliver, for each $1,000 principal amount of Notes, a number of Lexington Common Shares equal to the Conversion Rate, together with cash in lieu of fractional shares, on the third Business Day following the Conversion Date.

 

If the Issuer has elected a Cash Settlement with respect to any Notes tendered for conversion, the Issuer shall deliver, for each $1,000 principal amount of Notes, a cash payment equal to the sum of the Daily Conversion Values for each Trading Day during the relevant Applicable Conversion Period.  The Issuer shall make such payment on the third Business Day following the last day of the Applicable Conversion Period.

 

If the Issuer has elected or is deemed to have elected a Combination Settlement with respect to any Notes tendered for conversion, the Issuer shall deliver, for each $1,000 principal amount of Notes, the sum of the Daily Settlement Amounts for each Trading Day during the relevant Applicable Conversion Period.

 

The “Daily Settlement Amount” for each Trading Day during the Applicable Conversion Period shall consist of:

 

(i)           cash in an amount equal to the lesser of (x) 1/10 of the Specified Dollar Amount specified by the Issuer in the notice regarding the chosen Settlement Method (the “Daily Specified Dollar Amount”) and (y) the Daily Conversion Value on such Trading Day; and

 

(ii)           if the Daily Conversion Value on such Trading Day exceeds the Daily Specified Dollar Amount, a number of Lexington Common Shares (together with cash in lieu of any fractional shares) equal to (x) the difference between such Daily Conversion Value and the Daily Specified Dollar Amount, divided by (x) the Daily VWAP on such Trading Day.

 

The Issuer shall deliver such cash and Lexington Common Shares on the third Business Day following the last day of the Applicable Conversion Period; provided, however, that the Issuer will deliver the cash and Lexington Common Shares related to a conversion following a notice of redemption, as described in Section 2.11(c) hereof, during the 10-day period following the Redemption Date.

 

(b)        Upon conversion of any Notes, Holders shall not receive any separate cash payment for accrued and unpaid interest, except to the extent specified below.  The Issuer’s delivery to the Holder of Lexington Common Shares, cash or a combination of cash and Lexington Common Shares, as applicable, together with any cash payment for any fractional shares, into which a Note is convertible shall be deemed to satisfy in full the Issuer’s obligation to pay (i) the principal amount of the Notes so converted and (ii) accrued and unpaid interest to, but not including, the Conversion Date.  As a result, accrued and unpaid interest to, but not including, the Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited.  Notes surrendered for conversion during the period from the close of business on any Record Date to the open of business on the immediately following interest payment date must be accompanied by funds equal to the amount of interest payable on the Notes so converted; provided that no such payment need be made (i) for conversions following the Record Date immediately preceding the Stated Maturity or (ii) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Note.

 

(c)        The Issuer shall not issue fractional shares upon conversion of Notes.  If multiple Notes shall be surrendered for conversion at one time by the same Holder, the number of full Lexington Common Shares which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted hereby) so surrendered.  If any fractional share would be issuable upon the conversion of any Notes, the Issuer shall make payment therefor in cash in lieu of fractional shares based on:

 

(i)           if Physical Settlement applies, on the last reported sale price of Lexington Common Shares on the relevant Conversion Date; and

 

(ii)           if Combination Settlement applies, the Daily VWAP of Lexington Common Shares on the final Trading Day of the Applicable Conversion Period.

 

(d)        Solely for purposes of determining the payments and deliveries due upon conversion under this Section 2.12 and for purposes of the definitions of “Applicable Exchange Period,” “Daily VWAP” and “Scheduled Trading Day,”

 

“Trading Day” means a day on which (i) there is no Market Disruption Event and (ii) trading in Lexington Common Shares generally occurs on the New York Stock Exchange or, if Lexington Common Shares are not then listed on the New York Stock Exchange, on the principal other United States national or regional securities exchange on which Lexington Common Shares are then listed or, if Lexington Common Shares are not then listed on a United States national or regional securities exchange, on the principal other market on which Lexington Common Shares are then traded. If Lexington Common Shares (or other security for which a Daily VWAP must be determined) are not so listed or traded, “Trading Day” means a Business Day.

 

Section 2.13.     Conversion Procedures.  To convert Notes, a Holder must satisfy the requirements set forth in this Section 2.13.

 

To convert the Notes, a Holder must (a) (i) complete and manually sign the irrevocable conversion notice on the reverse of the Note (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion Agent at the office maintained by the Conversion Agent for such purpose, (ii) surrender the Notes to the Conversion Agent and (iii) furnish appropriate endorsements and transfer documents if required by the Conversion Agent, the Issuer or the Trustee, with respect to Notes which are in certificated form, or, (b) if the Notes are in book-entry form, comply with the appropriate procedures of the Depositary and, in the case of certificated Notes and Notes in book-entry form, pay any transfer or similar tax, if required.  The date on which the Holder satisfies all such requirements shall be deemed to be the date on which the applicable Notes shall have been tendered for conversion.

 

Notes in respect of which a Holder has delivered an Optional Repurchase Notice or Change of Control Purchase Notice may be converted only if such notice is withdrawn in accordance with the terms of Section 2.08 or Section 2.09, as the case may be.

 

In case any Note shall be surrendered for partial conversion, the Issuer shall execute and the Trustee shall authenticate and deliver to, or upon the written order of, the Holder of the Note so surrendered, without charge to such holder, a new Note or Notes in authorized denominations in an aggregate principal amount equal to the portion of the surrendered Notes not surrendered for conversion.  A Holder may convert fewer than all of such Holder’s Notes so long as the Notes converted are an integral multiple of $1,000 principal amount and the remaining principal amount of the Notes is in an authorized denomination.

 

Upon surrender of a Note for conversion by a Holder, such Holder shall deliver to the Issuer cash equal to the amount that the Issuer is required to deduct and withhold under applicable law in connection with the conversion; provided, however, if the Holder does not deliver such cash, the Issuer may deduct and withhold from the amount of consideration otherwise deliverable to such Holder the amount required to be deducted and withheld under applicable law.

 

Upon conversion of a Note, a Holder shall not receive any cash payment representing accrued and unpaid interest on such Note (unless such conversion occurs after a Regular Record Date and on or prior to the Interest Payment Date to which it relates).  Instead, upon a conversion of Notes, the Issuer shall deliver to tendering Holders only the consideration specified in Section 2.12.  Delivery of Lexington Common Shares and/or cash upon a conversion of Notes shall be deemed to satisfy the Issuer’s obligation to pay the principal amount of the Notes and any accrued and unpaid interest, except as otherwise provided herein.  Accordingly, upon a conversion of Notes, except as otherwise provided herein, any accrued and unpaid interest shall be deemed paid in full rather than cancelled, extinguished or forfeited.  In no event shall the Conversion Rate be adjusted to account for accrued and unpaid interest on the Notes.

 

Holders of Notes at the close of business on a Regular Record Date for an interest payment shall receive payment of interest payable on the corresponding Interest Payment Date notwithstanding the conversion of such Notes at any time after the close of business on the applicable Regular Record Date.  Notes tendered for conversion by a Holder after the close of business on any Regular Record Date for an interest payment and on or prior to the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest that such Holder is to receive on such Notes on such Interest Payment Date; provided, however, that no such payment shall be required to be made (1) if such Notes have been called for redemption on a Redemption Date that is after such Regular Record Date and on or prior to the second Business Day following such Interest Payment Date or (2) with respect to overdue interest (including Additional Interest), if any overdue interest exists at the time of conversion with respect to such Notes.

 

Upon conversion of a Note, the Issuer, if it elects Physical Settlement or Combination Settlement, shall pay any documentary, stamp or similar issue or transfer tax due on the issue of Lexington Common Shares upon the conversion, if any, unless the tax is due because the Holder requests the shares to be issued or delivered to a person other than the Holder, in which case the Holder must pay the tax due prior to the delivery of such shares.  Certificates representing or evidencing Lexington Common Shares shall not be issued or delivered unless all taxes and duties, if any, payable by the Holder have been paid.

 

A Holder of Notes, as such, shall not be entitled to any rights of a holder of Lexington Common Shares.  Such Holder shall only acquire such rights upon the delivery by the Issuer, at its option, of Lexington Common Shares in accordance with the provisions of Section 2.12 in connection with the conversion by a Holder of Notes.

 

The Issuer shall, prior to issuance of any Notes hereunder, and from time to time as may be necessary, reserve out of its authorized but unissued Lexington Common Shares a sufficient number of Lexington Common Shares to permit the conversion of the Notes at the applicable Conversion Rate, assuming an election by the Issuer of Physical Settlement.  Any Lexington Common Shares delivered upon a conversion of Notes shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be free from preemptive rights and free of any lien or adverse claim.

 

The Issuer shall endeavor promptly to comply with all federal and state securities laws regulating the issuance and delivery of Lexington Common Shares, if any, upon a conversion of Notes and, prior to delivering any Lexington Common Shares upon a conversion of the Notes, shall cause to have listed or quoted all such Lexington Common Shares on each U.S. national securities exchange or over-the-counter or other domestic market on which the Lexington Common Shares are then listed or quoted.

 

Except as set forth herein, no other payment or adjustment for interest shall be made upon conversion of Notes.

 

Section 2.14.     Conversion Rate Adjustments.  The Conversion Rate shall be adjusted from time to time as follows:

 

(a)         If the Issuer issues Lexington Common Shares as a dividend or distribution on Lexington Common Shares to all holders of Lexington Common Shares, or if the Issuer effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

 

CR1 =

CR0 x (OS1/OS0)

 

 

CR0 =

the Conversion Rate in effect immediately prior to the adjustment relating to such event

 

CR1 =

the new Conversion Rate in effect taking such event into account

 

OS0 =

the number of Lexington Common Shares outstanding immediately prior to such event

 

OS1 =

the number of Lexington Common Shares outstanding immediately after such event.

 

Any adjustment made pursuant to this paragraph (a) shall become effective on the date that is immediately after (x) the date fixed for the determination of shareholders entitled to receive such dividend or other distribution or (y) the date on which such split or combination becomes effective, as applicable.  If any dividend or distribution described in this paragraph (a) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

(b)         If the Issuer issues to all holders of Lexington Common Shares any rights, warrants, options or other securities entitling them for a period of not more than 45 days after the date of issuance thereof to subscribe for or purchase Lexington Common Shares, or issues to all holders of Lexington Common Shares securities convertible into Lexington Common Shares for a period of not more than 45 days after the date of issuance thereof, in either case at an exercise price per Lexington Common Share or a conversion price per Lexington Common Share less than the Closing Sale Price of Lexington Common Shares on the Business Day immediately preceding the time of announcement of such issuance, the Conversion Rate shall be adjusted based on the following formula:

 

CR1 =

CR0 x ((OS0+X)/(OS0+Y))

 

 

CR0=

the Conversion Rate in effect immediately prior to the adjustment relating to such event

 

CR1 =

the new Conversion Rate taking such event into account

 

OS0 =

the number of Lexington Common Shares outstanding immediately prior to such event

 

X =

the total number of Lexington Common Shares issuable pursuant to such rights, warrants, options, other securities or convertible securities

 

Y =

the number of Lexington Common Shares equal to the quotient of (A) the aggregate price payable to exercise such rights, warrants, options, other securities or convertible securities and (B) the average of the Closing Sale Prices of Lexington Common Shares for the 10 consecutive Trading Days prior to the Business Day immediately preceding the date of announcement for the issuance of such rights, warrants, options, other securities or convertible securities.

 

If the application of the foregoing formula would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate shall be made.

 

For purposes of this paragraph (b), in determining whether any rights, warrants, options, other securities or convertible securities entitle the holders to subscribe for or purchase, or exercise a conversion right for, Lexington Common Shares at less than the applicable Closing Sale Price of Lexington Common Shares, and in determining the aggregate exercise or conversion price payable for such Lexington Common Shares, there shall be taken into account any consideration received by the Issuer for such rights, warrants, options, other securities or convertible securities and any amount payable on exercise or conversion thereof, with the value of such consideration, if other than cash, to be determined by the Board of Trustees of the Issuer.  If any right, warrant, option, other security or convertible security described in this paragraph (b) is not exercised or converted prior to the expiration of the exercisability or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such right, warrant, option, other security or convertible security had not been so issued.

 

(c)        If the Issuer distributes shares of its capital stock, evidences of indebtedness or other assets or property to all holders of Lexington Common Shares, excluding:

 

(i)           dividends, distributions, rights, warrants, options, other securities or convertible securities referred to in paragraph (a) or (b) above,

 

(ii)           dividends or distributions paid exclusively in cash, and

 

(iii)           Spin-Offs described below in this paragraph (c),

 

then the Conversion Rate shall be adjusted based on the following formula:

 

CR1 =

CR0 x (SP0/(SP0-FMV))

 

 

CR0 =

the Conversion Rate in effect immediately prior to the adjustment relating to such event

 

CR1 =

the new Conversion Rate taking such event into account

 

SP0 =

the average of the Closing Sale Prices of Lexington Common Shares for the 10 consecutive Trading Days prior to the Business Day immediately preceding the earlier of the record date or the ex-dividend date for such distribution

 

FMV =

the fair market value (as determined in good faith by the Board of Trustees of the Issuer) of the shares of capital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding Lexington Common Share on the earlier of the record date or the ex-dividend date for such distribution.

 

An adjustment to the Conversion Rate made pursuant to the immediately preceding paragraph shall be made successively whenever any such distribution is made and shall become effective on the day immediately after the date fixed for the determination of holders of Lexington Common Shares entitled to receive such distribution.

 

If the Issuer distributes to all holders of Lexington Common Shares, capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit of the Issuer (a “Spin-Off”), the Conversion Rate shall be adjusted based on the following formula:

 

CR1 =

CR0 x ((FMV0+MP0)/MP0)

 

 

CR0 =

the Conversion Rate in effect immediately prior to the adjustment relating to such event

 

CR1 =

the new Conversion Rate taking such event into account

 

FMV0 =

the value, based on the average of the Closing Sale Prices of the capital stock or similar equity interest distributed to holders of Lexington Common Shares over the first 10 consecutive Trading Days after the effective date of the Spin-Off applicable to one Lexington Common Share

 

MP0 =

the average of the Closing Sale Prices of Lexington Common Shares over the first 10 consecutive Trading Days after the effective date of the Spin-Off.

 

An adjustment to the Conversion Rate made pursuant to the immediately preceding paragraph shall occur on the 10th Trading Day after the effective date of the Spin-Off.

 

If any such dividend or distribution described in this paragraph (c) is declared but not paid or made, the new Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

(d)         If the Issuer makes any cash dividend or distribution during any of its quarterly fiscal periods (without regard to when paid) to all holders of Lexington Common Shares in an aggregate amount that, together with other cash dividends or distributions made in respect of that quarterly fiscal period, exceeds the product of $0.10 (the “Reference Dividend”) multiplied by the number of Lexington Common Shares outstanding on the record date for such distribution, the Conversion Rate shall be adjusted based on the following formula:

 

CR1 =

CR0 x ((SP0-RD)/(SP0-C))

 

 

CR0 =

the Conversion Rate in effect immediately prior to the adjustment relating to such event

 

CR1 =

the new Conversion Rate taking such event into account

 

SP0 =

the average of the Closing Sale Prices of Lexington Common Shares for the 10 consecutive Trading Days prior to the business day immediately preceding the earlier of the record date or the day prior to the ex-dividend date for such distribution

 

RD =

the Reference Dividend

 

C =

the amount in cash per Lexington Common Share that the Issuer distributes to holders of Lexington Common Shares in respect of such quarterly fiscal period.

 

An adjustment to the Conversion Rate made pursuant to this paragraph (d) shall become effective on the date immediately after the date fixed for the determination of holders of Lexington Common Shares entitled to receive such dividend or distribution.  If any dividend or distribution described in this paragraph (d) is declared but not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

Notwithstanding the foregoing, if an adjustment to the Conversion Rate is required to be made as a result of a dividend or distribution that is not a quarterly dividend or distribution either in whole or in part, the Reference Dividend shall be deemed to be zero for purposes of determining the adjustment to the Conversion Rate as a result of such dividend or distribution.

 

The Reference Dividend shall be subject to adjustment in a manner that is inversely proportional to adjustments to the Conversion Rate; provided that no adjustment shall be made to the Reference Dividend for any adjustment made to the Conversion Rate pursuant to this paragraph (d).

 

(e)         If the Issuer or any of its subsidiaries makes a payment in respect of a tender offer or exchange offer for Lexington Common Shares to the extent that the cash and value of any other consideration included in the payment per Lexington Common Share exceeds the Closing Sale Price of a Lexington Common Share on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Expiration Time”), the Conversion Rate shall be adjusted based on the following formula:

 

CR1 =

CR0 x ((AC + (SP1 x OS1))/(SP1 x OS0))

 

 

CR0 =

the Conversion Rate in effect immediately prior to the adjustment relating to such event

 

CR1 =

the new Conversion Rate taking such event into account

 

AC =

the aggregate value of all cash and any other consideration (as determined in good faith by the Board of Trustees of the Issuer) paid or payable for Lexington Common Shares purchased in such tender or exchange offer

 

OS0 =

the number of Lexington Common Shares outstanding immediately prior to the date such tender or exchange offer expires

 

OS1 =

the number of Lexington Common Shares outstanding immediately after such tender or exchange offer expires (after giving effect to the purchase or exchange of shares pursuant to such tender or exchange offer)

 

SP1 =

the average of the Closing Sale Prices of Lexington Common Shares for the 10 consecutive Trading Days commencing on the Trading Day next succeeding the date such tender or exchange offer expires.

 

 

If the application of the foregoing formula would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate shall be made.

 

Any adjustment to the Conversion Rate made pursuant to this paragraph (e) shall become effective on the date immediately following the Expiration Time.  If the Issuer or one of its subsidiaries is obligated to purchase Lexington Common Shares pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would be in effect if such tender or exchange offer had not been made.

 

(f)         Notwithstanding the foregoing, in the event of an adjustment to the Conversion Rate pursuant to paragraph (d) or (e) above, in no event shall the Conversion Rate exceed 500 Lexington Common Shares per $1,000 principal amount of Notes, subject to adjustment pursuant to paragraphs (a), (b) and (c) above.

 

(g)         If the Issuer has in effect a rights plan while any Notes remain Outstanding, Holders of Notes shall receive, upon a conversion of Notes in respect of which the Issuer has elected to deliver Lexington Common Shares, in addition to such Lexington Common Shares, rights under any shareholder rights agreement that the Issuer may then have in effect unless, prior to conversion, the rights have expired, terminated or been redeemed or unless the rights have separated from the Lexington Common Shares.  If the rights provided for in the rights plan adopted by the Issuer have separated from the Lexington Common Shares in accordance with the provisions of the applicable shareholder rights agreement so that Holders of Notes would not be entitled to receive any rights in respect of Lexington Common Shares into which Notes are convertible, the Conversion Rate shall be adjusted at the time of separation as if the Issuer had distributed to all holders of Lexington Common Shares capital stock, evidences of indebtedness or other assets or property pursuant to paragraph (c) above, subject to readjustment upon the subsequent expiration, termination or redemption of the rights.

 

In addition to the adjustments pursuant to paragraphs (a) through (g) above, the Issuer may increase the Conversion Rate in order to avoid or diminish any income tax to holders of Lexington Common Shares resulting from any dividend or distribution of capital stock (or rights to acquire Lexington Common Shares) or from any event treated as such for income tax purposes.  The Issuer may also, from time to time, to the extent permitted by applicable law, increase the Conversion Rate by any amount for any period if the Issuer has determined that such increase would be in the best interests of the Issuer.  If the Issuer makes such determination, it shall be conclusive and Issuer shall mail to Holders of the Notes a notice of the increased Conversion Rate and the period during which it shall be in effect at least fifteen (15) days prior to the date the increased Conversion Rate takes effect in accordance with applicable law.

 

If, in connection with any adjustment to the Conversion Rate as set forth in this Section 2.14, a Holder shall be deemed for U.S. federal tax purposes to have received a distribution or other income from the Issuer, the Issuer may set off any withholding tax it or the Issuer reasonably believes it is required to collect with respect to any such deemed distribution or payment against cash payments of interest in accordance with the provisions of Section 2.05 hereof or from cash and Lexington Common Shares, if any, otherwise deliverable to a Holder upon a conversion of Notes in accordance with the provisions of Section 2.12 hereof or a redemption or repurchase of a Note in accordance with the provisions of Section 2.07, 2.08 or 2.09 hereof.

 

The Issuer shall not make any adjustment to the Conversion Rate if Holders of the Notes are permitted to participate, on an as-converted basis, in the transactions described above without converting their Notes.

 

Notwithstanding anything to the contrary contained herein, in addition to the other events set forth herein on account of which no adjustment to the Conversion Rate shall be made, the applicable Conversion Rate shall not be adjusted for:

 

(i)          the issuance of any Lexington Common Shares pursuant to any public or private follow-on offering of such shares;

 

(ii)         the issuance of any Lexington Common Shares pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Issuer and the investment of additional optional amounts in Lexington Common Shares under any plan;

 

(iii)        the issuance of any Lexington Common Shares or options or rights to purchase those shares pursuant to any present or future employee, trustee or consultant benefit plan, employee agreement or arrangement or program of the Issuer;

 

(iv)        the issuance of any Lexington Common Shares pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security outstanding as of the date the Notes were first issued;

 

(v)         a change in the par value of Lexington Common Shares;

 

(vi)        accumulated and unpaid dividends or distributions;

 

(vii)       as a result of a tender offer solely to holders of less than 100 Lexington Common Shares; and

 

(viii)      the issuance of limited partnership units by the Operating Partnerships for cash or property and the issuance of Lexington Common Shares for cash or property or the payment of cash upon redemption thereof; provided that the acquisition of property upon issuance of the limited partnership units will not result in any anti-dilution adjustments pursuant to this Section 2.14.

 

 

Whenever the Conversion Rate is adjusted as herein provided, the Issuer shall as promptly as reasonably practicable file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  Promptly after delivery of such certificate, the Issuer shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the Holders of the Notes upon request within 20 Business Days of the Effective Date of such adjustment.  Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

 

For purposes of this Section 2.14, the number of Lexington Common Shares at any time outstanding shall not include shares held in the treasury of the Issuer but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Lexington Common Shares.

 

Notwithstanding anything in this Section 2.14 to the contrary, in no event shall the Conversion Rate be adjusted so that the Conversion Price would be less than $0.01.

 

Section 2.15.     Ownership Limit; Withholding.  Notwithstanding any other provision of the Notes or the instructions contained herein, no Person may own, or be deemed to own by virtue of the attribution rules of the Code, more than 9.8% in value of Lexington Common Shares or the issued and outstanding shares of any of the Issuer’s other classes or series of shares of beneficial interest.  In case of requests for waivers or modifications of such limit by Persons that are not individuals or treated as individuals under the Code, the Board of Trustees of the Issuer is required to waive or modify such limit if, among other things, evidence satisfactory to it is presented that such ownership would not jeopardize the Issuer’s status as a real estate investment trust for U.S. federal income tax purposes. Notwithstanding any other provision of the Notes or the instructions contained herein, no Holder of Notes shall be entitled to convert such Notes for Lexington Common Shares to the extent that receipt of such shares would cause such Holder (together with such Holder’s affiliates) to exceed the ownership limit contained in the Declaration of Trust of the Issuer as in effect from time to time.

 

At the Maturity of the principal of the Notes, whether at Stated Maturity or upon earlier redemption or repurchase of Notes or otherwise, and as otherwise required by law, the Issuer may deduct and withhold from the amount of consideration otherwise deliverable to such Holder the amount required to be deducted and withheld under applicable law.

 

Section 2.16.     Merger, Consolidation or Sale.  Solely for purposes of the Notes, Section 801 and Section 803 of the Indenture are hereby modified and amended to include, in addition to clauses (1), (2) and (3), the following additional clause:

 

“(4) if as a result of such transaction the Notes become convertible into common stock or other securities issued by a third party, such third party shall assume or fully and unconditionally guarantee all obligations under the Notes and the Indenture.”

 

Section 2.17.     Satisfaction and Discharge.  The provisions of Sections 401, 402, 403 and 404 of the Original Indenture shall not be applicable to the Notes. This Indenture shall be discharged and shall cease to be of further effect as to all Notes when either (i) all Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid as provided in Section 306 of the Original Indenture) have been delivered to the Trustee for the Notes for cancellation or (ii) (A) all Notes have not theretofore been delivered to the Trustee for cancellation, after the Notes have become due and payable, whether on the date of the Stated Maturity of the principal amount of the Notes, any Redemption Date, Optional Repurchase Date or Change of Control Repurchase Date or upon conversion or otherwise, cash or Lexington Common Shares in accordance with the terms hereof and the Issuer has irrevocably deposited or caused to be deposited with such Trustee as trust funds in trust an amount of cash in any combination of currency or currency unit in which the Notes are payable (except as otherwise specified pursuant to Section 301 of the Original Indenture for the Notes) and/or Lexington Common Shares sufficient to pay and discharge the entire indebtedness on such Notes for principal and accrued and unpaid interest (including Additional Interest, if any), if any, and pay all other sums payable on, and securities deliverable in respect of, the Notes and under the Indenture in respect of such Notes; (B) no Event of Default or event which with the giving of notice or the lapse of time, or both, would become an Event of Default shall have occurred and be continuing on the date of such deposit and no Event of Default under Section 501(6) of the Original Indenture shall have occurred and be continuing on the 123rd day after such date; (C) the Issuer has paid, or caused to be paid, all sums payable by it under the Indenture in respect of the Notes; and (D) the Issuer has delivered irrevocable instructions to the Trustee for the Notes under the Indenture to apply the deposited money and the Lexington Common Shares toward the payment of such Notes.  In addition, the Issuer must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee for the Notes stating that all conditions precedent to satisfaction and discharge have been satisfied.

 

Section 2.18.     Events of Default; Waiver of Past Defaults.

 

(a)      Section 501 of the Original Indenture is modified and amended for purposes of the Notes by deleting “or” at the end of Section 501(8) and by replacing the “.” at the end of Section 501(9) with a “;” and by:

 

(i) adding new paragraphs as follows:

 

“(10) default in the delivery when due of cash, Lexington Common Shares or a combination of cash and Lexington Common Shares on the terms set forth herein and in the Notes, upon exercise of a Holder’s conversion right in accordance with the terms hereof and of the Notes and the continuation of such default for 10 days; or

 

(11) failure of the Issuer to provide an Issuer Notice within 20 days after the occurrence of a Change of Control as provided in Section 2.09 of the Sixth Supplemental Indenture, and such failure continues for 5 Business Days.” and

 

(ii) deleting Section 501(5) of the Original Indenture in its entirety and replace it with the following:

 

“(5) default in the payment of an aggregate principal amount exceeding $25,000,000 of any evidence of recourse indebtedness of the Issuer or any of the Guarantors, such default having continued after the expiration of any applicable grace period or having resulted in the acceleration of the maturity of that recourse indebtedness, but only if that recourse indebtedness is not discharged or such acceleration is not rescinded or annulled, in each case, within 30 days after written notice to the Issuer from the Trustee (or to the Issuer and the Trustee from Holders of at least 25% in principal amount of the Outstanding Notes);”.

 

(b)        Section 513 of the Original Indenture is modified and amended for purposes of the Notes to add the following as clause (3):

 

“(3) in respect of the failure by the Issuer to convert any Notes in accordance with the provisions of this Indenture.”

 

Section 2.19.     Modification.  Section 902 of the Original Indenture, as modified by this Section 2.19, shall apply solely to the Notes, and Section 902 of the Original Indenture, other than as modified by this Section 2.19, shall not apply to the Notes.  As modified by this Section 2.19 with respect to the Notes, Section 902 of the Original Indenture is as follows:

 

“With the consent of the Holders of a majority in principal amount of all Outstanding Notes affected by such supplemental indenture (voting together as a single class), by Act of said Holders delivered to the Issuer and the Trustee, the Issuer, when authorized by or pursuant to a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

 

(a)        change the Stated Maturity of the principal of, or any installment interest (including Additional Interest, if any) on, the Notes;

 

(b)        reduce the principal amount of, the rate of interest (including Additional Interest, if any) on, or change the timing or reduce the amount payable on the redemption of, the Notes;

 

(c)        make any change that impairs or adversely affects the rights of a Holder to convert Notes in accordance herewith;

 

(d)        change the Place of Payment, or the coin or currency, for payment of principal of, or interest (including Additional Interest, if any) on, the Notes;

 

(e)        reduce or alter the method of computation of any amount payable upon redemption, repayment or purchase of any Notes by the Issuer (or the time when such redemption, repayment or purchase may be made);

 

(f)         impair the right to institute suit for the enforcement of any payment on or with respect to Notes or the delivery of cash, Lexington Common Shares or a combination of Lexington Common Shares as required by the Indenture upon a conversion of Notes;

 

(g)        release the Guarantee of any Guarantor (except as otherwise provided in the Indenture) or make any changes to such Guarantees in a manner adverse to the Holders;

 

(h)        reduce the percentage in principal amount of the Outstanding Notes, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver with respect to the Outstanding Notes (or compliance with specified provisions of the Indenture or specified defaults and consequences thereunder) or to reduce the quorum or voting requirements set forth in the Indenture; or

 

(i)         modify any of the provisions of this Section 902, Section 513 or Section 1013 of the Original Indenture, except to increase the required percentage to effect such action or to provide that specified other provisions of the Indenture which may not be modified or waived without the consent of the Holders of each Outstanding Note affected thereby.

 

It shall not be necessary for any Act of Holders under this Section 2.19 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.”

 

Section 2.20.     Full and Unconditional Guarantee by the Subsidiary Guarantors.  The provisions of ARTICLE FOURTEEN of the Original Indenture shall be applicable to the Notes, with each of the Subsidiary Guarantors being guarantors of the Notes.

 

Section 2.21.     [Intentionally Omitted]

 

Section 2.22.     Calculations in Respect of the Notes.  Except as otherwise specifically stated herein or in the Notes, all calculations to be made in respect of the Notes shall be the obligation of the Issuer.  All calculations made by the Issuer or its agent as contemplated pursuant to the terms hereof and of the Notes shall be made in good faith and, absent manifest error, shall be final and binding on the Issuer and the Holders.  The Issuer shall provide a schedule of calculations to the Trustee, and the Trustee shall be entitled conclusively to rely upon the accuracy of the calculations by the Issuer without independent verification.  The Trustee shall forward calculations made by the Issuer to any Holder of Notes upon written request within 20 Business Days after the effective date of any adjustment.

 

The Trustee shall not at any time be under any duty or responsibility to any holder of Notes to determine or calculate the Conversion Rate or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same.  The Trustee shall not be accountable with respect to the validity or value (or the kind or amount) of any Lexington Common Shares, or of any capital stock, other securities or other assets or property, which may at any time be issued or delivered upon the exchange or conversion of any Notes; and the Trustee makes no representations with respect thereto.  The Trustee shall not be responsible for any failure of the Issuer to issue, transfer or deliver any Lexington Common Shares or stock certificates or other securities or property or cash upon the surrender of any Notes for the purpose of exchange or conversion or to comply with any of the duties, responsibilities or covenants of the Issuer contained in this Article 2.  Without limiting the generality of the foregoing, the Trustee shall not be under any responsibility to determine the correctness of any provisions relating either to the kind or amount of shares of capital stock or other securities or other assets or property (including cash) receivable by holders of Notes upon the exchange or conversion of their Notes after any event referred to herein or to any adjustment to be made with respect thereto, but may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Issuer shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

 

Section 2.23.     Authorized Denominations.  The Notes shall be issued in denominations of $1,000 and integral multiples thereof and payments of principal and interest (including Additional Interest) on the Notes shall be made in U.S. dollars.

 

Section 2.24.     Conversion Agent, Paying Agent and Securities Registrar.  U.S. Bank National Association is hereby appointed as Conversion Agent, Paying Agent and the Security Registrar for the Notes.  The Security Register for the Notes shall be maintained by the Security Registrar in the Borough of Manhattan, The City of New York.  The rights, privileges, protections, immunities and benefits given to the Trustee pursuant to the Indenture, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities with respect to the Notes.

 

Section 2.25.     Restrictions on Transfer. (a) Every Note (and all Notes issued in exchange therefor or in substitution thereof) that bears or is required under this Section 2.25(a) to bear the legend set forth in this Section 2.25(a) (together with any Lexington Common Shares issued upon conversion of such Notes, collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.25(a) (including those set forth in the legend below) unless such restrictions on transfer shall be waived by written consent of the Issuer, and the Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer.  As used in this Section 2.25(a), the term “transfer” means any sale, pledge, loan, transfer or other disposition whatsoever of any Restricted Security or any interest therein.

 

Until the expiration of the holding period applicable to sales of Restricted Securities under Rule 144(b)(1) under the Securities Act (or any successor provision), any certificate evidencing a Restricted Security shall bear a legend in substantially the following form, unless such Restricted Security has been sold pursuant to a registration statement that has been declared effective under the Securities Act (and which continues to be effective at the time of such transfer) or sold pursuant to Rule 144 under the Securities Act or any similar provision then in force, or unless otherwise agreed by the Issuer in writing, with written notice thereof to the Trustee:

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.  BY ITS ACQUISITION HEREOF, THE HOLDER:

 

(1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IS AWARE THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT AND IS PURCHASING THIS SECURITY IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT;

 

(2) AGREES THAT IT SHALL NOT, WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH LEXINGTON REALTY TRUST OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY OR THE LEXINGTON COMMON SHARES ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO LEXINGTON REALTY TRUST OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (D) PURSUANT TO ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH RESALE OR TRANSFER; AND

 

(3) AGREES THAT IT SHALL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED PURSUANT TO CLAUSE 2(B) ABOVE A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND THE LAST DATE ON WHICH LEXINGTON REALTY TRUST OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE.  IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE LEXINGTON MASTER LIMITED PARTNERSHIP, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS LEXINGTON REALTY TRUST OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  THIS LEGEND SHALL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND THE LAST DATE ON WHICH LEXINGTON REALTY TRUST OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY.

 

Each share certificate representing Lexington Common Shares issued upon conversion of Notes bearing a legend will bear a comparable legend (except that the legend will indicate that the two-year period commenced on the original issuance of the Notes) until it is removed in conformity with applicable securities laws.

 

Any Notes that are Restricted Securities and as to which such restrictions on transfer shall have expired in accordance with their terms or as to conditions for removal of the foregoing legend set forth therein have been satisfied may, upon surrender of such Note for exchange to the Securities Registrar in accordance with the provisions of this Section 2.25, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by this Section 2.25(a).  If such Restricted Security surrendered for conversion is represented by a global Note bearing the legend set forth in this Section 2.25(a), the principal amount of the legended global Note shall be reduced by the appropriate principal amount and the principal amount of a global Note without the legend set forth in this Section 2.25(a) shall be increased by an equal principal amount.  If a global Note without the legend set forth in this Section 2.25(a) is not then outstanding, the Issuer shall execute and the Trustee shall authenticate and deliver an unlegended global Note to the Depositary.

 

In the event Rule 144(b)(1) under the Securities Act (or any successor provision) is amended to shorten the two year period under Rule 144(b)(1), then, the references in the restrictive legends set forth above to “ONE YEAR,” and in the corresponding transfer restrictions described above, and in the Notes and the Lexington Common Shares shall be deemed to refer to such shorter period, from and after receipt by the Trustee of an Officers’ Certificate and an Opinion of Counsel to that effect.  As soon as reasonably practicable after the public announcement of the effectiveness of any such amendment to shorten the one year period under Rule 144(b)(1), unless such changes would otherwise be prohibited by, or would cause a violation of, the federal securities laws applicable at the time, the Issuer shall provide the Trustee an Officers’ Certificate and an Opinion of Counsel as to the effectiveness of such amendment and the effectiveness of such change to the restrictive legends and transfer restrictions.

 

(a)         Any Restricted Securities, prior to the expiration of the holding period applicable to sales thereof under Rule 144(b)(1) under the Securities Act (or any successor provision), purchased or owned by the Issuer or any Affiliate thereof may not be resold by the Issuer or such Affiliate and shall be surrendered to the Trustee for cancellation.  Upon expiration of the holding period applicable Restricted Securities under Rule 144(b)(1) under the Securities Act (or any successor provision), the Notes may, to the extent permitted by applicable law, be reissued or sold or may be surrendered to the Trustee for cancellation.  Any Notes surrendered for cancellation may not be reissued or resold and shall be cancelled promptly by the Trustee.

 

(b)         The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this instrument or under applicable law with respect to any transfer of any interest in any Note other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this instrument, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

Section 2.26.     Rule 144A Information Requirement.  If at any time within the period prior to the expiration of the holding period applicable to sales thereof under Rule 144(b)(1) under the Securities Act (or any successor provision), the Issuer is not subject to Section 13 or 15(d) under the Exchange Act, the Issuer covenants and agrees that it will make available to any holder or beneficial holder of Notes or any Lexington Common Shares issued upon conversion thereof which continue to be Restricted Securities in connection with any sale thereof and any prospective purchaser of Notes or such Lexington Common Shares designated by such holder or beneficial holder, the information required pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any holder or beneficial holder of the Notes or such Lexington Common Shares, all to the extent required to enable such holder or beneficial holder to sell its Notes or Lexington Common Shares without registration under the Securities Act within the limitation of the exemption provided by Rule 144A unless a resale shelf registration statement in respect of the Notes and the Lexington Common Shares is available.

 

Section 2.27.     Provision of Financial Information.  (a) So long as the Notes are outstanding and whether or not required by the Commission, the Issuer will furnish to the Trustee within 15 days of the time periods specified in the Commission’s rules and regulations: (i) all annual and quarterly financial information that would be required to be contained in filings with the Commission on Forms 10-K and 10-Q if the Issuer were required to file those filings, including a related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the certified independent accountants of the Issuer; and (ii) all current reports that would be required to be filed with the Commission on Form 8-K if the Issuer were required to file such reports.

 

(b)           If the Issuer is not subject to Sections 13 and 15(d) of the Exchange Act, the Issuer will (A) furnish to the holders of the Notes, without cost to such holders, a copy of the information and reports referred to in clause (a) above within 15 days of the time periods specified in the Commission’s rules and regulations, and (B) upon written request and payment of the reasonable cost of duplication and delivery, promptly supply to any prospective holder of the debt securities a copy of the information and reports referred to in clause (a).

 

In addition, whether or not required by the Commission, the Issuer will file a copy of the information and reports referred to above with the Commission for public availability within the time periods specified in the Commission’s rules and regulations (unless the Commission will not accept such a filing).

 

The Issuer will be deemed to have satisfied the obligation to deliver the foregoing financial information if the information is filed on the Commission’s EDGAR system in the timeframes otherwise applicable for delivery to the Trustee, to Holders or prospective Holders, as the case may be; provided, however, the Trustee shall have no responsibility whatsoever to determine if such filings have taken place.

 

Delivery of such reports, information and documents to the Trustee shall be for information purposes only and the Trustee’s receipt of such shall not, in the absence of gross negligence, bad faith or willful misconduct on its part, constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

ARTICLE THREE

FORM OF NOTES

 

Section 3.01.     Form of Notes.  The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be substantially in the form set forth in Exhibit A hereto.  Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends, endorsements or changes as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of the Indenture, or as may be required by the Depositary or by the National Association of Securities Dealers, Inc. in order for the Notes to be tradable on The PORTALSM Market or as may be required for the Notes to be tradable on any other market developed for trading of securities pursuant to Rule 144A or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed, or to conform to usage, or to indicate any special limitations or restrictions to which any particular Notes are subject.

 

ARTICLE FOUR

MISCELLANEOUS

 

Section 4.01.     Relation to Original Indenture.  This Sixth Supplemental Indenture supplements the Original Indenture, as amended and supplemented, and shall be a part and subject to all the terms thereof.  Except as supplemented hereby, all of the terms, provisions and conditions of the Original Indenture, as amended and supplemented, and the Securities issued thereunder shall continue in full force and effect.

 

Section 4.02.     Concerning the Trustee.  The Trustee shall not be responsible for any recital herein (other than the second and fourth recitals as they appear and as they apply to the Trustee) as such recitals shall be taken as statements of the Issuer, or the validity of the execution by the Issuer of this Sixth Supplemental Indenture.  The Trustee makes no representations as to the validity or sufficiency of this instrument.

 

Section 4.03.     Effect of Headings.  The Article and Section headings herein are for convenience of reference only and shall not affect the construction hereof.

 

Section 4.04.     Counterparts.  This instrument may be executed in counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

 

Section 4.05.     Governing Law.  This instrument shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 4.06.     Account Opening Information.  (a) For accounts opened in the U.S.:  To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.  When an account is opened, the Trustee will request information that will allow it to identify relevant parties.

 

(b)           For non-U.S. accounts:  To help in the fight against the funding of terrorism and money laundering activities, the Trustee, along with all financial institutions, is required to obtain, verify, and record information that identifies each person who opens an account.  When an account is opened, the Trustee will request information that will allow it to identify relevant parties.

 

[signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Sixth Supplemental Indenture to be duly executed as of the day and year first above written.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[FORM OF NOTE]

 

[Include only for Global Notes]

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS CONVERTED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, CONVERSION OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

[Include only for Notes that are Restricted Securities]

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER:

 

(1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IS AWARE THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT AND IS PURCHASING THIS SECURITY IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT;

 

(2) AGREES THAT IT SHALL NOT, WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH LEXINGTON REALTY TRUST OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY OR THE LEXINGTON COMMON SHARES ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO LEXINGTON REALTY TRUST OR ANY OF THEIR RESPECTIVE SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (D) PURSUANT TO ANY OTHER EXEMPTION UNDER THE SECURITIES ACT, OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH RESALE OR TRANSFER; AND

 

 

(3) AGREES THAT IT SHALL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED PURSUANT TO CLAUSE 2(B) ABOVE A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND THE LAST DATE ON WHICH LEXINGTON REALTY TRUST OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE. IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND LEXINGTON REALTY TRUST, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS LEXINGTON REALTY TRUST OR THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND SHALL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS FROM THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND THE LAST DATE ON WHICH LEXINGTON REALTY TRUST OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY.

 

 

LEXINGTON REALTY TRUST

 

6.00 % Convertible Guaranteed Note due 2030

 

Lexington Realty Trust, a real estate investment trust duly organized and existing under the laws of the State of Maryland (the “Issuer,” which term shall include any successor under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [*] DOLLARS ($[*]) on January 15, 2030 unless redeemed, repurchased or converted prior to such date in accordance with the terms hereof and of the Indenture. The Subsidiary Guarantors (each as defined on the reverse hereof) have guaranteed the payment of principal of and interest on this Note.

 

This Note shall bear interest as specified on the reverse hereof. This Note is convertible for the consideration specified on the reverse hereof. This Note is subject to redemption by the Issuer at its option and to repurchase by the Issuer at the option of the Holder as specified on the reverse hereof.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

This Note shall not be entitled to the benefits of the Indenture or the Guarantee of the Subsidiary Guarantors or be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee.

 

IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by an authorized signatory.

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

Dated:

 

 

 

[REVERSE OF NOTE]

 

LEXINGTON REALTY TRUST

 

6.00% Convertible Guaranteed Note due 2030

 

This Note is one of a duly authorized issue of notes, debentures, bonds, or other evidences of indebtedness of the Issuer (hereinafter called the “Securities”) of the series hereinafter specified, all issued or to be issued under and pursuant to an Indenture, dated as of January 29, 2007 (as amended and supplemented by the Sixth Supplemental Indenture, dated as of January 26, 2010 (the “Sixth Supplemental Indenture”), and as further amended or supplemented from time to time, the “Indenture”), duly executed and delivered by the Issuer to U.S. Bank National Association, as trustee (the “Trustee,” which term includes any successor trustee under the Indenture with respect to the series of Securities of which this Notes is a part), and reference is hereby made to the Indenture, and all modifications and amendments and indentures supplemental thereto relating to the Notes, for a description of the rights, limitations of rights, obligations, duties, and immunities thereunder of the Trustee, the Issuer, the subsidiaries of the Issuer that are guarantors of the Notes pursuant to the terms of the Indenture (the “Subsidiary Guarantors”) and the Holders of the Notes and the terms upon which the Notes are authenticated and delivered. The Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, may mature at different times, may accrue interest (if any) at different rates or formulas and may otherwise vary as provided in the Indenture. This Note is one of a series of Securities designated as the “6.00% Convertible Guaranteed Notes due 2030” of the Issuer with respect to which the Subsidiary Guarantors have guaranteed the payment of principal of and interest on this Note, initially limited (except as permitted under the Indenture) in aggregate principal amount to $100,000,000 (or up to $115,000,000 if the Initial Purchasers’ option to purchase additional Notes described in the Purchase Agreement is exercised). Terms used herein without definition and which are defined in the Indenture have the meanings assigned to them in the Indenture.

 

1.           INTEREST

 

The Notes shall bear interest at the rate of 6.00% per annum from January 26, 2010 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, as the case may be, payable semi-annually in arrears on January 15 and July 15 of each year (each, an “Interest Payment Date”), commencing on July 15, 2010, until the principal hereof is paid or duly made available for payment. Interest payable on each Interest Payment Date shall equal the amount of interest accrued for the period commencing on and including the immediately preceding Interest Payment Date in respect of which interest has been paid or duly provided for (or commencing on and including January 26, 2010, if no interest has been paid or duly provided for) and ending on and including the day preceding such Interest Payment Date. Interest on the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months

 

2.           METHOD OF PAYMENT

 

Except as provided in the Indenture, the Issuer shall pay interest on the Notes to the Persons who are Holders of record of Notes at the close of business (whether or not a Business Day) on the January 1 and July 1 immediately preceding the applicable Interest Payment Date (each, a “Regular Record Date”). Holders must surrender Notes to a Paying Agent and comply with the other terms of the Indenture to collect the principal amount, Redemption Price, Optional Repurchase Price or Change of Control Purchase Price of the Notes, plus, if applicable, accrued and unpaid interest (including Additional Interest, if any) payable as herein provided at Maturity, upon redemption at the Issuer’s option or repurchase at the Holder’s option. The Issuer shall pay, in money of the United States that at the time of payment is legal tender for payment of public and private debts, all amounts due in cash with respect to the Notes on the dates and in the manner provided in this Note and the Indenture.

 

 

3.           PAYING AGENT, CONVERSION AGENT AND SECURITY REGISTRAR

 

Initially, the Trustee shall act as Paying Agent, Conversion Agent and Security Registrar. The Issuer hereby initially designates the Corporate Trust Office of the Trustee in New York, New York as the office to be maintained by it where this Note may be presented for payment, registration of transfer or exchange, where notices or demands to or upon the Issuer in respect of this Note or the Indenture may be served and where the Notes may be surrendered for exchange in accordance with the provisions of paragraph 6 hereof and the Indenture. The Issuer may appoint and change any Paying Agent, Conversion Agent, Security Registrar or co-registrar or approve a change in the office through which any Paying Agent acts without notice, other than notice to the Trustee.

 

4.           REDEMPTION BY THE ISSUER

 

The Issuer shall not have the right to redeem any Notes prior to January 15, 2017, except to preserve the status of the Issuer as a real estate investment trust.  If the Issuer determines it is necessary to redeem the Notes in order to preserve its status as a real estate investment trust, the Issuer may redeem the Notes then Outstanding, in whole or in part, at 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest (including Additional Interest, if any) to, but not including, the Redemption Date.

 

The Issuer shall have the right to redeem the Notes for cash, in whole or in part at any time or from time to time, on or after January 15, 2017 at 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest (including Additional Interest, if any) to, but not including, the Redemption Date (the “Redemption Price”).

 

Notice of redemption at the option of the Issuer shall be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed at the Holder’s registered address.  Notes in denominations larger than $1,000 principal amount may be redeemed in part but only in integral multiples of $1,000 principal amount.

 

 

(a)           Subject to the terms and conditions of the Indenture, a Holder shall have the right to require the Issuer to repurchase all of its Notes, or any portion of the principal amount thereof that is equal to $1,000 or an integral multiple thereof, on each of January 15, 2017, January 15, 2020 and January 15, 2025 (each, an “Optional Repurchase Date”) for cash equal to 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest (including Additional Interest, if any) to, but not including, such Optional Repurchase Date (the “Optional Repurchase Price”), upon delivery to the Paying Agent of an Optional Repurchase Notice containing the information set forth in the Indenture, from the opening of business on the date that is 20 Business Days prior to such Optional Repurchase Date until the close of business on the second Business Day prior to such Optional Repurchase Date and upon compliance with the other terms of the Indenture.

 

(b)           If a Change of Control occurs at any time prior to January 15, 2017, a Holder shall have the right, at such Holder’s option and subject to the terms and conditions of the Indenture, to require the Issuer to repurchase all or any of such Holder’s Notes having a principal amount equal to $1,000 or an integral multiple thereof on the date (the “Change of Control Purchase Date”) specified by the Issuer in the Issuer Notice (which date shall be no earlier than 15 days and no later than 30 days after the date of such Issuer Notice) for cash equal to the 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest (including Additional Interest, if any) to, but not including, the Change of Control Purchase Date (the “Change of Control Purchase Price”).

 

 

(c)           Holders have the right to withdraw any Optional Repurchase Notice or Change of Control Purchase Notice, as the case may be, by delivery to the Paying Agent of a written notice of withdrawal in accordance with the provisions of the Indenture.

 

(d)           If the Paying Agent holds, in accordance with the terms of the Indenture, money sufficient to pay the Optional Repurchase Price or Change of Control Purchase Price of such Notes on the Optional Repurchase Date or Change of Control Purchase Date, as the case may be, then, on and after such date, such Notes shall cease to be Outstanding and interest on such Notes shall cease to accrue, and all other rights of the Holder shall terminate (other than the right to receive the Optional Repurchase Price or Change of Control Purchase Price upon delivery or transfer of the Notes).

 

6.           CONVERSION

 

The Notes shall be convertible into the consideration specified in the Indenture at such times, upon compliance with such conditions and upon the terms set forth in the Indenture.

 

The initial Conversion Rate shall be 141.1383 Lexington Common Shares per $1,000 principal amount of Notes, subject to adjustment in certain circumstances as specified in the Indenture.  Notes tendered for conversion by a Holder after the close of business on any Regular Record Date for an interest payment and on or prior to the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest that such Holder is to receive on such Notes on such Interest Payment Date; provided, however, that no such payment shall be required (1) if such Notes have been called for redemption on a Redemption Date that is after such Regular Record Date and on or prior to the second Business Day following such Interest Payment Date or (2) with respect to overdue interest (including Additional Interest), if any overdue interest exists at the time of conversion with respect to such Notes.

 

To convert the Notes, a Holder must (a) (i) complete and manually sign the irrevocable conversion notice on the reverse of the Notes (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion Agent at the office maintained by the Conversion Agent for such purpose, (ii) surrender the Notes to the Conversion Agent and (iii) furnish appropriate endorsements and transfer documents if required by the Conversion Agent, the Issuer or the Trustee, with respect to Notes which are in certificated form, or, (b) if the Notes are in book-entry form, comply with the appropriate procedures of the Depositary and, in the case of certificated Notes and Notes in book-entry form, pay any transfer or similar tax, if required.  The date on which the Holder satisfies all such requirements shall be deemed to be the date on which the applicable Notes shall have been tendered for conversion.

 

If the Holder has delivered an Optional Repurchase Notice or a Change of Control Purchase Notice requiring the Issuer to repurchase all or a portion of this Note pursuant to paragraph 5 hereof, then this Note (or portion hereof subject to such Optional Repurchase Notice or Change of Control Purchase Notice) may be converted only if the Optional Repurchase Notice or Change of Control Purchase Notice is withdrawn in accordance with the terms of the Indenture.

 

 

7.           RANKING

 

The Notes are unsecured obligations of the Issuer and shall rank pari passu in right of payment with all other unsecured unsubordinated indebtedness of the Issuer from time to time outstanding.

 

8.           GUARANTEES

 

This Note is fully and unconditionally guaranteed as to the due and punctual payment of principal of and interest on this Note by the Subsidiary Guarantors, it being understood and agreed that such Guarantees are subject to the limitations set forth in the Indenture and that the Guarantees of Subsidiary Guarantors may be released in accordance with the terms of the Indenture.

 

9.           DEFAULTED INTEREST

 

Except as otherwise specified herein or in the Indenture, any Defaulted Interest on this Note shall forthwith cease to be payable to the Holder hereof on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Issuer as provided for in Section 307 of the Indenture.

 

10.         DENOMINATIONS; TRANSFER; EXCHANGE

 

This Note is issuable only in fully registered form, without coupons, in denominations of $1,000 and integral multiples thereof.  This Note may be exchanged for a like aggregate principal amount of Notes of other authorized denominations at the office or agency of the Issuer in The City of New York, in the manner and subject to the limitations provided herein and in the Indenture, but without the payment of any charge except for any tax or other governmental charge imposed in connection therewith.  Upon due presentment for registration of transfer of this Note at the office or agency of the Issuer in The City of New York, one or more new Notes of authorized denominations in an equal aggregate principal amount shall be issued to the transferee in exchange therefor, and bearing such restrictive legends as may be required by the Indenture, but without payment of any charge except for any tax or other governmental charge imposed in connection therewith.  In the event of any redemption in part, the Issuer shall not be required to: (i) issue or register the transfer or exchange of any Note during a period beginning at the opening of business 15 days before any selection of Notes for redemption and ending at the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all Holders of Notes to be so redeemed, or (ii) register the transfer or exchange of any Note so selected for redemption, in whole or in part, except the unredeemed portion of any Note being redeemed in part.

 

11.         PERSONS DEEMED OWNERS

 

The Holder of this Note may be treated as the owner of this Note for all purposes, and none of the Issuer or the Trustee nor any authorized agent of the Issuer or the Trustee shall be affected by any notice to the contrary, except as required by law.

 

 

12.         MODIFICATION AND AMENDMENT; WAIVER

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes affected thereby (voting together as a single class).  The Indenture also provides that certain amendments or modifications may not be made without the consent of each Holder to be affected thereby, while other amendments or modifications may be made without the consent of the Holders.  Furthermore, provisions in the Indenture permit the Holders of not less than a majority in principal amount of Notes, in certain instances, to waive, on behalf of all of the Holders of Securities of such series, certain past defaults under the Indenture and their consequences.  Any such waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and other Notes issued upon the registration of transfer hereof or in exchange hereof, or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

13.         DEFAULTS AND REMEDIES

 

If an Event of Default occurs and is continuing, the Trustee, or the Holders of not less than 25% in aggregate principal amount of the Notes at the time Outstanding, may declare the principal amount and any accrued and unpaid interest, of all the Notes to be due and payable in the manner and with the effect provided in the Indenture; provided that if certain events default relating to bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee of the Issuer, any Subsidiary Guarantor or any of the other Significant Subsidiaries of the Issuer or the Operating Partnerships or any of properties owned by these entities occurs and is continuing, the principal (or such portion thereof) of and accrued and unpaid interest on all of the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

 

Events of Default in respect of the Notes are set forth in Section 501 of the Indenture, as amended by the First Supplemental Indenture.  Holders may not enforce the Indenture or the Notes except as provided in the Indenture.

 

14.         CONSOLIDATION, MERGER, AND SALE OF ASSETS

 

Except as otherwise provided in the Indenture, in the event of a consolidation or merger of the Issuer or a Guarantor or a sale, lease or conveyance of all or substantially all of the assets of the Issuer or a Guarantor as described in Article Eight of the Indenture the successor entity to the Issuer or such Guarantor, as the case may be, shall succeed to and be substituted for the Issuer or such Guarantor, as the case may be, and may exercise the rights and powers of the Issuer or such Guarantor, as the case may be, under the Indenture, and thereafter, except in the case of a lease, the Issuer or such Guarantor, as the case may be, shall be relieved of all obligations and covenants under the Indenture and the Notes and the Guarantees, as the case may be.

 

15.         TRUSTEE AND AGENT DEALINGS WITH THE ISSUER

 

The Trustee, Paying Agent, Conversion Agent and Securities Registrar under the Indenture, each in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee, Paying Agent, Conversion Agent or Registrar.

 

16.         CALCULATIONS IN RESPECT OF THE NOTES

 

Except as otherwise specifically stated herein or in the Indenture, all calculations to be made in respect of the Notes shall be the obligation of the Issuer.  All calculations made by the Issuer or its agent as contemplated pursuant to the terms hereof and of the Indenture shall be final and binding on the Issuer and the Holders absent manifest error.  The Issuer shall provide a schedule of calculations to the Trustee, and the Trustee shall be entitled conclusively to rely upon the accuracy of the calculations by the Issuer without independent verification.  The Trustee shall forward calculations made by the Issuer to any Holder of Notes upon written request.

 

 

17.	IMMUNITY OF INCORPORATORS, LIMITED PARTNERS, MEMBERS SHAREHOLDERS, TRUSTEES, DIRECTORS AND OFFICERS.

 

No recourse shall be had for the payment of the principal of, or the interest, if any, on any Note, or for any claim based thereon, or upon any obligation, covenant or agreement of the Indenture, against any incorporator, limited partner, member, shareholder, trustee, director, officer or employee, as such, past, present or future, of the Issuer, any Subsidiary Guarantor or of any successor entity to any of them, either directly or indirectly through the Issuer, any Subsidiary Guarantor or any successor entity to any of them, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment of penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Notes are solely obligations of the Issuer and the Guarantees are solely the obligations of the Subsidiary Guarantors and that no personal liability whatever shall attach to, or is incurred by, any incorporator, limited partner, shareholder, trustee, director, officer or employee, past, present or future, of the Issuer, any Subsidiary Guarantor or of any successor entity to any of them, either directly or indirectly through the Issuer, any Subsidiary Guarantor or any successor corporation to any of them, because of the incurring of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants or agreements contained in the Indenture or in any of the Notes or any of the Guarantees, or to be implied herefrom or therefrom; and that all such personal liability is hereby expressly released and waived as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Notes and the Guarantees.

 

18.         GOVERNING LAW

 

The Indenture, this Note and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York.

 

 

 

FOR VALUE RECEIVED, the

undersigned hereby sell(s),

assign(s) and transfer(s) unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

(Please print or Typewrite Name and Address

Including Postal Zip Code of Assignee)

 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

 

to transfer said Note on the books of the Issuer, with full power of substitution in the premises.

 

In connection with any transfer of the Note prior to the expiration of the holding period applicable to sales thereof under Rule 144(b)(1) under the Securities Act (or any successor provision) (other than any transfer pursuant to a registration statement that has been declared effective under the Securities Act), the undersigned confirms that such Note is being transferred:

 

¨

To Lexington Realty Trust or any of their respective subsidiaries; or

 

¨

To a “qualified institutional buyer” in compliance with Rule 144A under the Securities Act of 1933, as amended; or

 

¨

Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended; or

 

¨

Pursuant to another exemption from registration under the Securities Act of 1933, as amended; or

 

¨

Pursuant to a Registration Statement which has been declared effective under the Securities Act of 1933, as amended, and which continues to be effective at the time of transfer.

 

 

Dated:

 

Signature Guaranteed

 

 

 

 

To convert this Note as provided in the Indenture, check the box: o

 

To convert only part of this Note, state the principal amount to be converted (must be $1,000 or an integral multiple of $1,000): $___.

 

If, in the event the Issuer delivers shares and you want the stock certificate made out in another person’s name, fill in the form below:

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

(Print or type assignee’s name, address and zip code)

 

(Insert DTC Participant no.)

 

Date:

1 Signature guaranteed by:

 

By:

 

1 Signature must be guaranteed by an eligible Guarantor Institution (banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15.