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LXP > SEC Filings for LXP > Form 8-K on 6-Jan-2014All Recent SEC Filings

Show all filings for LEXINGTON REALTY TRUST

Form 8-K for LEXINGTON REALTY TRUST


6-Jan-2014

Entry into a Material Definitive Agreement, Regulation FD Disclosure, Othe


Item 1.01. Entry into a Material Definitive Agreement.

Amendment to Second Amended and Restated Credit Agreement

On December 30, 2013, Lexington Realty Trust, which we refer to as LXP or the Trust, entered into the Second Amendment to the Second Amended and Restated Credit Agreement, which we refer to as the Credit Agreement Amendment, among the Trust, Lepercq Corporate Income Fund L.P., or LCIF, and Lepercq Corporate Income Fund II L.P., or LCIF II, each of the lenders a party thereto, and KeyBank National Association, or KeyBank, as administrative agent. The Credit Agreement Amendment (1) modifies the restriction with respect to the amount of capital the Trust can invest in specific categories of assets and (2) reflects the merger of LCIF II with and into LCIF, which became effective later on December 30, 2013. The foregoing description of the Credit Agreement Amendment is qualified in its entirety by reference to the Credit Agreement Amendment attached as Exhibit 10.1 to this Current Report on Form 8-K, which we refer to as this Current Report.

Amendment to Term Loan Agreement

On December 30, 2013, the Trust entered into the Second Amendment to the Amended and Restated Term Loan Agreement, which we refer to as the Term Loan Agreement Amendment, among the Trust, LCIF and LCIF II, each of the lenders a party thereto, and Wells Fargo Bank, National Association, or Wells Fargo, as administrative agent. The Term Loan Agreement Amendment (1) modifies the restriction with respect to the amount of capital the Trust can invest in specific categories of assets and (2) reflects the merger of LCIF II with and into LCIF, which became effective later on December 30, 2013. The foregoing description of the Term Loan Agreement Amendment is qualified in its entirety by reference to the Term Loan Agreement Amendment attached as Exhibit 10.2 to this Current Report.



Item 7.01. Regulation FD Disclosure.

Pursuant to the Indenture, dated as of January 29, 2007, among the Trust, certain subsidiaries of the Trust and U.S. Bank National Association, as trustee, or the Trustee, as supplemented by the Fourth Supplemental Indenture, dated as of December 31, 2008, the Sixth Supplemental Indenture, dated as of January 26, 2010, the Seventh Supplemental Indenture, dated as of September 28, 2012, the Eighth Supplemental Indenture, dated as of February 13, 2013, the Ninth Supplemental Indenture, dated as of May 6, 2013, the Tenth Supplemental Indenture, dated as of June 13, 2013, and the Tenth Supplemental Indenture, dated as of September 30, 2013, the Trust gave notice to the Trustee that the conversion rate on the Trust's 6.00% Convertible Guaranteed Notes has adjusted, effective January 1, 2014, to a current conversion rate of 147.8206 common shares per $1,000 principal amount of the notes, representing a conversion price of $6.76 per common share.

The information furnished pursuant to this "Item 7.01 - Regulation FD Disclosure" shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing made by the Trust under the Exchange Act or Securities Act of 1933, as amended, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such a filing.



Item 8.01. Other Events.

As previously reported, on December 23, 2013, LCIF and LCIF II entered into an Agreement and Plan of Merger, which we refer to as the Merger Agreement. LCIF and LCIF II are operating partnership subsidiaries of the Trust. In accordance with the terms and conditions of the Merger Agreement, at 4:00 p.m. on December 30, 2013, which we refer to as the Effective Time, (i) LCIF II merged with and into LCIF, with LCIF as the surviving entity and (ii) the Fifth Amended and Restated Agreement of Limited Partnership of LCIF, as amended to date, or the Existing LCIF Agreement, was amended and restated to, among other things, reflect the merger and include provisions related to the admission of the partners in LCIF II as partners in LCIF and update, amend and consolidate the provisions of the Existing LCIF Agreement and the Second Amended and Restated Agreement of Limited Partnership of LCIF II, as amended to date, into the Sixth Amended and Restated Agreement of Limited Partnership of LCIF, which we refer to as the LCIF partnership agreement, as the partnership agreement of LCIF from and after the Effective Time.

The following summaries entitled "Description of OP Units" and "Redemption of OP Units" are as of December 31, 2013 and are included in this Current Report to update the Trust's Registration Statement on Form S-3/A (333-157860) filed under the Securities Act of 1933, as amended, with the Securities and Exchange Commission, or Commission, on September 1, 2009, which includes a prospectus, or the Prospectus, relating to the issuance of shares of beneficial interest, par value $0.0001 per share, of the Trust classified as common stock, or common shares, upon the redemption of limited partnership units of LCIF, or OP units. The terms "we," "us" and "our" refer to the Trust and all entities owned by the Trust, including non-consolidated entities, except where it is clear that the term means only the parent company and consolidated entities or only the parent company. Information with respect to OP units assumes that all limited partners in LCIF II received OP units as consideration in the merger pursuant to the Merger Agreement.

DESCRIPTION OF OP UNITS

The following is a summary of the material terms of the OP units and the provisions of the LCIF partnership agreement. This summary is not complete and is subject to change, and is qualified in its entirety by reference to the actual provisions and terms of, the LCIF partnership agreement, the form of which has previously been filed with the Commission as Exhibit A of the Merger Agreement, which was filed with the Commission on a Current Report on Form 8-K on December 24, 2013, and which is incorporated by reference herein.

General

We are the sole equity owner of Lex GP-1 Trust, or Lex GP, a Delaware statutory trust, which is the general partner of LCIF and holds approximately 0.4% interest in LCIF. We are also the sole equity owner of Lex LP-1 Trust, or Lex LP, a Delaware statutory trust, which holds approximately 94.3% of the outstanding OP units in LCIF.

Issuance of OP Units

Our operating partnership structure enables us to acquire property by issuing equity partnership units, including OP units, to a direct or indirect property owner as a form of consideration. Each of the OP units (other than OP units held directly or indirectly by us) which have been issued as of the date of this Current Report are generally redeemable, at the option of the holders thereof, on a one for approximately 1.13 common shares basis (subject to certain anti-dilution adjustments) at various times, or, at our option, for cash in certain instances. All OP units entitle the holder thereof to distributions. As a result, our cash available for distribution to common shareholders is reduced by the amount of the distributions payable by the terms of such OP units, and the number of common shares that will be outstanding in the future is expected to increase, from time to time, as such OP units are redeemed for common shares. Lex GP has the right to redeem the OP units held by all, but not less than all, of the holders of OP units, or OP unitholders, (other than those OP unitholders identified as the "Special Limited Partners" in the LCIF partnership agreement) under certain circumstances, including but not limited to a merger, sale of assets, consolidation, share issuance, share redemption or other similar transaction by us or LCIF, as applicable, which would result in a change of beneficial ownership in us or LCIF, as applicable, by 50% or more.

OP unitholders hold OP units and all OP unitholders are entitled to share in the profits and losses of LCIF.

Each OP unitholder has the rights to which a limited partner is entitled under the LCIF partnership agreement and the Delaware Revised Uniform Limited Partnership Act, which we refer to as the Delaware Act. The OP units have not been registered pursuant to the federal or state securities laws and are not listed on any exchange or quoted on any national market system.

There are approximately 3.6 million OP units outstanding that are not held by us, all of which are currently redeemable for up to approximately 4.1 million common shares. The average annualized distribution per OP unit is $0.54 - $0.74, excluding OP units owned directly or indirectly by us. Of the total OP units, approximately 1.5 million OP units are beneficially owned by E. Robert Roskind, our chairman.

Purposes, Business and Management

The purpose of LCIF includes the conduct of any business that may be conducted lawfully by a limited partnership organized under the Delaware Act, except that the LCIF partnership agreement requires the business of LCIF to be conducted in such a manner that will permit us to continue to be classified as a real estate investment trust, or a REIT, under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code, unless we cease to qualify as a REIT for reasons other than the conduct of the business of LCIF. Subject to the foregoing limitation, LCIF may enter into partnerships, joint ventures or similar arrangements and may own interests in any other entity.

The Trust, as sole equity owner of Lex GP, which is the sole general partner of LCIF, has exclusive power and authority to conduct the business of LCIF, subject to the consent of the limited partners in certain limited circumstances discussed below. No limited partner may take part in the operation, management or control of the business of LCIF by virtue of being an OP unitholder of LCIF.

Ability to Engage in Other Businesses; Conflicts of Interest

Lex GP may not, without the consent of the holders of a majority of the OP units held by the Special Limited Partners, engage in any business other than to act as general partner of LCIF and to hold and own OP units. The holders of a majority of the OP units held by the Special Limited Partners have consented to Lex GP's acting as general partner of one of our other subsidiaries. Neither the Trust nor other persons (including our officers, trustees, employees, agents and other affiliates) are prohibited under the LCIF partnership agreement from engaging in other business activities or are required to present any business opportunities to LCIF. Mr. Roskind, our chairman, beneficially owns a majority of the OP units held by the Special Limited Partners.

Distributions; Allocations of Income and Loss

Generally, OP unitholders are allocated and distributed amounts with respect to their OP units which approximate the amount of distributions made with respect to the same number of our common shares, as determined in the manner provided in the LCIF partnership agreement and subject to certain restrictions and exceptions for certain limited partners. Remaining amounts available for distribution are generally allocated to Lex GP and Lex LP.

Borrowing by LCIF

Lex GP has full power and authority to cause LCIF to borrow money and to assume and guarantee debt.

Reimbursement of Expenses; Transactions with the General Partner and its Affiliates

Neither us nor Lex GP receives any compensation for Lex GP's services as general partner of LCIF. Lex GP and Lex LP, however, as partners in LCIF, have the same right to allocations and distributions as other partners of LCIF. In addition, LCIF reimburses Lex GP and us for all expenses incurred related to the ownership and operation of, or for the benefit of LCIF. In the event that certain expenses are incurred for the benefit of LCIF and other entities (including us and our other subsidiaries), such expenses are allocated by us, as sole equity owner of Lex GP, the general partner of LCIF, in proportion to gross revenues. We have guaranteed the obligations of LCIF in connection with the redemption of OP units pursuant to the LCIF partnership agreement.

The Trust and its affiliates may engage in any transactions with LCIF subject to the fiduciary duties established under applicable law.

Funding Agreement

The Trust and LCIF entered into a funding agreement. Pursuant to the funding agreement, the parties agreed, jointly and severally, that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount equal to whichever is applicable of (i) a specified distribution set forth in its partnership agreement or (ii) the cash dividend payable with respect to whole or fractional common shares into which such partnership's OP units would be converted if they were redeemed for our common shares in accordance with its partnership agreement, we will fund the shortfall. Payments under the funding agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by us in our discretion but no less than the applicable federal rate.

Liability of General Partner and Limited Partners

Lex GP, as the general partner of LCIF, is ultimately liable for all general recourse obligations of LCIF, to the extent not paid by LCIF. Lex GP is not liable for the nonrecourse obligations of LCIF. The limited partners of LCIF are not required to make additional capital contributions to LCIF. Assuming that a limited partner does not take part in the control of the business of LCIF, in its capacity as a limited partner thereof and otherwise acts in conformity with the provisions of the LCIF partnership agreement, the liability of the limited partner for obligations of LCIF, under the LCIF partnership agreement and the Delaware Act is generally limited, subject to certain limited exceptions, to the loss of the limited partner's investment in LCIF. LCIF will operate in a manner the general partner deems reasonable, necessary and appropriate to preserve the limited liability of the limited partners.

Exculpation and Indemnification of the General Partner

Generally, Lex GP, as general partner of LCIF (and us as the sole equity owner of Lex GP) will incur no liability to LCIF or any limited partner for losses sustained or liabilities incurred as a result of errors in judgment or of any act or omission if we carried out our duties in good faith. In addition, neither Lex GP nor the Trust are responsible for any misconduct or negligence on the part of their agents, provided such agents were appointed in good faith. Lex GP and the Trust may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisors, and any action it takes or omits to take in reliance upon the opinion of such persons, as to matters that Lex GP and the Trust reasonably believe to be within their professional or expert competence, shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.

The LCIF partnership agreement also provides that LCIF will indemnify Lex GP and the Trust, their respective directors, trustees and officers, and such other persons as Lex GP and the Trust may from time to time designate to the fullest extent permitted under the Delaware Act.

Sales of Assets

Under the LCIF partnership agreement, Lex GP generally has the exclusive authority to determine whether, when and on what terms the assets of LCIF will be sold. LCIF, however, may be prohibited under the LCIF partnership agreement or certain contractual agreements from selling certain assets, except in certain limited circumstances. Lex GP may not consent to a sale of all or substantially . . .



Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

10.1 Second Amendment to Second Amended and Restated Credit Agreement, dated as of December 30, 2013, among the Trust, LCIF and LCIF II, jointly and severally as borrowers, KeyBank, as agent, and each of the financial institutions a signatory thereto together with their assignees.

10.2 Second Amendment to Amended and Restated Term Loan Agreement, dated as of December 30, 2013, among the Trust, LCIF and LCIF II, jointly and severally as borrowers, Wells Fargo, as agent, and each of the financial institutions a signatory thereto together with their assignees.

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