As filed with the Securities and Exchange Commission on January 30, 2014November 1, 2023.

Registration Statement No. 333-192283333-

UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549

Amendment No. 2

to

FORM S-4


REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

LEXINGTON REALTY

LXP INDUSTRIAL TRUST

(Exact name of registrant as specified in its charter)

Maryland678413-37131813-3717318

(State or Other Jurisdictionother jurisdiction of Incorporation


incorporation or Organization)

organization)

(Primary Standard Industrial


Classification Code Number)

(I.R.S. Employer


Identification No.)

Number)

See Table of Additional Registrant Guarantor

One Penn Plaza

Suite 4015


New York, NY 10019

New York 10119-4015
(212) 692-7200


(Address, including zip code, and telephone number, including area code, of registrant'sregistrant’s principal executive offices)

T. Wilson Eglin

President and
Chief Executive Officer

and President
LXP Industrial Trust
One Penn Plaza
Suite 4015


New York, NYNew York 10119-4015


(212) 692-7200


(Name, address, including zip code, and telephone number, including area code, of agent for service):

Copies of all communications, including communications sent to agent for service, should be sent to:

Michael McTiernan
Hogan Lovells US LLP
555 13th Street NW
Washington, D.C. 20004
(212) 318-6000

Scott R. Saks, Esq.

Paul Hastings LLP

75 East 55th Street

New York, NY 10022

(212) 318-6000

(Name, address, including zip code, and telephone number, including area code, of agent for service):

Approximate date of commencement of proposed exchange offer:

sale of the securities to the public: As soon as practicable after this Registration Statement is declared effective.becomes effective and upon completion of the merger described in the enclosed proxy statement/prospectus.

If the securities being registered on this formForm are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.¨

If this formForm is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.¨

If this formForm is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or emerging growth company. See the definitions of "large“large accelerated filer," "accelerated filer"” “accelerated filer,” “smaller reporting company,” and "smaller reporting company"“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerxAccelerated Filer
Accelerated filer¨

Non-accelerated filer¨

(Do not check if smaller reporting company)

Smaller reporting company¨
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

If applicable, place an “X”X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)¨

Exchange Act Rule 14d-1(d)14d-l(d) (Cross-Border Third-Party Tender Offer)¨

  

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be
registered
 Amount to be
registered
  Proposed maximum
offering price per
unit(1)
  Proposed maximum
aggregate offering
price
  Amount of
registration fee
 
4.25% Senior Notes due 2023 $250,000,000   100% $250,000,000(1) $32,200(2)
Guarantees of 4.25% Senior Notes due 2023  (3)  (3)  (3)  (3)
(1)Estimated solely for the purposes of calculating the registration fee in accordance with Rule 457(f)(2) under the Securities Act of 1933, as amended.
(2)Calculated based on the book value of the securities to be received by the Registrant in exchange in accordance with Rule 457(f)(2).
(3)In accordance with Rule 457(n), no separate fee is payable with respect to the guarantees of the securities being registered. Fee previously paid.

_____________

The Registrantsregistrant hereby amendamends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrantsregistrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until thethis registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANT GUARANTOR

Exact Name of Registrant Guarantor
as Specified in its Charter

State or Other

Jurisdiction of

Incorporation
or
Organization

Primary
Standard
Industrial
Classification
Code Number

I.R.S.
Employer
Identification
Number

Address, including Zip Code
and Telephone Number,
including Area Code,
of Registrant's Principal
Executive Offices

Lepercq Corporate Income Fund L.P.Delaware678413-3779859

One Penn Plaza, Suite 4015,
New York, NY 10119
(212) 692-7200

 

Explanatory Note

This Amendment No. 2 to Form S-4 has been filed by Lexington Realty Trust and Lepercq Corporate Income Fund L.P to reflect Lepercq Corporate Income Fund L.P. as an additional registrant on the EDGAR filing.

The information in this prospectusdocument is not complete and may be changed. WeThe registrant may not sell thesethe securities offered by this document until the registration statement filed with the Securities and Exchange Commission, of which this document is a part, is declared effective. This prospectus preliminary isdocument shall not constitute an offer to sell these securities and it is not solicitingor the solicitation of an offer to buy nor shall there be an sale of these securities in any statejurisdiction where thesuch offer, solicitation or sale is not permitted.

PRELIMINARY — SUBJECT TO COMPLETION, DATED January 30, 2014November 1, 2023.

PROSPECTUS

LEXINGTON REALTY TRUST

OFFER TO EXCHANGE

$250,000,000 aggregate principal amount of its

4.25% Senior Notes dueOn October 24, 2023,

which have been registered under the Securities Act of 1933, as amended,

for any LXP Industrial Trust, a Maryland real estate investment trust (“LXP”), and all of its outstanding 4.25% Senior Notes due 2023

Guaranteed by

Lepercq Corporate Income Fund L.P.

The exchange offer expires at 5:00 p.m., New York City time, on    , 2014, unless extended.
We will exchange all outstanding 4.25% Senior Notes due 2023, or private notes, that are validly tendered and not validly withdrawn for an equal principal amount of a new series of notes which are registered under the Securities Act of 1933, as amended, or the Securities Act. We refer to this new series of notes as the “exchange notes.”
The exchange offer is not subject to any conditions other than that it does not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission, which we refer to as the Commission.
You may withdraw tenders of outstanding private notes at any time before the exchange offer expires.
The exchange of notes will not be a taxable event for U.S. federal income tax purposes.
We will not receive any proceeds from the exchange offer.
The terms of the exchange notes are substantially identical to the outstanding private notes, except for transfer restrictions and registration rights relating to the outstanding private notes.
The outstanding private notes are, and the exchange notes will be, fully and unconditionally guaranteed by Lepercq Corporate Income Fund L.P., which is a borrower under our principal credit agreement.
Each guaranteeDelaware limited partnership (“LCIF”), entered into an Amended and Restated Agreement and Plan of the exchange notes will be an unsecured and unsubordinated obligation of such guarantor.
You may tender outstanding private notes only in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Our affiliates may not participate in the exchange offer.
No public market exists for the outstanding private notes. We do not intend to list the exchange notes on any securities exchange and, therefore, no active public market is anticipated for the exchange notes.
Each broker-dealer that receives exchange notes for its own accountMerger (the “Merger Agreement”), pursuant to which LCIF will merge with and into LXP, with LXP as the exchange offer must acknowledge that it will deliver a prospectussurviving entity (the “Merger”). As of September 30, 2023, LXP had an approximate 99% ownership interest in connection with any resale of such exchange notes. The letter of transmittal delivered with this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act of 1933, as amended. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding private notes where such outstanding private notes were acquired by such broker-dealer as a result of market-making activities or other trading activities.

INVESTING IN THESE SECURITIES INVOLVES CERTAIN RISKS. SEE THE “RISK FACTORS” SECTION BEGINNING ON PAGE 9 OF THIS PROSPECTUS.LCIF.

BEFORE BUYING OUR SECURITIES, YOU SHOULD READ AND CONSIDER THE RISK FACTORS INCLUDED IN OUR PERIODIC REPORTS, IN THE PROSPECTUS SUPPLEMENTS OR ANY OFFERING MATERIAL RELATING TO ANY SPECIFIC OFFERING, AND IN OTHER INFORMATION THAT WE FILE WITHPursuant to the terms of the Merger Agreement, upon consummation of the Merger (the “Effective Time”), LCIF will be merged with and into LXP and the separate existence of LCIF will thereupon cease and LXP will be the surviving entity. At such time, each common unit of partnership interest in LCIF (each, an “LCIF Partnership Unit”) you hold will automatically be converted into the right to receive a number of registered shares of beneficial interest of LXP, par value $0.0001 per share, classified as common stock (“Common Shares”) equal to the number of LCIF Partnership Units you hold multiplied by the “Redemption Factor” (as defined in the Sixth Amended and Restated Agreement of Limited Partnership of LCIF (the “Partnership Agreement”), and which is currently equal to 1.126) (the “Merger Consideration”), except that to the extent you would be entitled to any fractional Common Shares upon such conversion, no fractional Common Shares will be issued and instead you will be entitled to receive the Cash Equivalent (as defined in the Merger Agreement) of such fractional shares. Subject to the satisfaction of the closing conditions set forth in the Merger Agreement, the Merger is expected to be consummated on or around December 31, 2023. The Common Shares are listed on the New York Stock Exchange and trade under the symbol “LXP”. As of September 30, 2023, there were 730,623.5 LCIF Partnership Units outstanding other than LCIF Partnership Units held, directly or indirectly, by LXP, which, if all were converted, would result in approximately 822,682 Common Shares being issued by LXP. LXP currently accounts for these LCIF Partnership Units as “noncontrolling interests.”

The Board of Trustees of LXP (the “LXP Board”) and the general partner of LCIF (the “General Partner”) have approved the Merger Agreement and the Merger. No further approvals are required to consummate the Merger.

This information statement/prospectus provides you with detailed information about the Merger and related matters. LXP and LCIF both encourage you to read the entire document carefully. In particular, see the section titled “Risk Factors” beginning on page 11 for a discussion of risks related to the Merger, the tax consequences of the Merger and ownership of the Common Shares received in the Merger.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION WHICH IS INCORPORATED BY REFERENCE IN THIS PROSPECTUS. SEE “WHERE YOU CAN FIND MORE INFORMATION.”

NEITHER THE SECURITIES AND EXCHANGE COMMISSION(“SEC”) NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE EXCHANGE NOTES ORSECURITIES TO BE ISSUED IN CONNECTION WITH THE GUARANTEES THEREONMERGER OR DETERMINED IFTHAT THIS INFORMATION STATEMENT/PROSPECTUS IS TRUTHFULACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This information statement/prospectus is dated November 20, 2023, and is first being disseminated to LCIF limited partners on or about November 20, 2023

INFORMATION STATEMENT

NOTICE OF APPROVAL OF MERGER BY GENERAL PARTNER – WE ARE NOT ASKING YOU FOR
A PROXY AND YOU ARE REQUESTED NOT TO SEND

US A PROXY

To the limited partners of LCIF:

On October 24, 2023, LXP and LCIF entered into the Merger Agreement pursuant to which LCIF will merge with and into LXP, with LXP as the surviving entity.

Pursuant to the terms of the Merger Agreement, at the Effective Time, LCIF will be merged with and into LXP and the separate existence of LCIF will thereupon cease and LXP will be the surviving entity. At such time, each LCIF Partnership Unit you hold will automatically be converted into the right to receive a number of registered Common Shares equal to the number of LCIF Partnership Units you hold multiplied by the “Redemption Factor” (as defined in the Partnership Agreement, and which is currently equal to 1.126), except that to the extent you would be entitled to any fractional Common Shares upon such conversion, no fractional Common Shares will be issued and instead you will be entitled to receive the Cash Equivalent (as defined in the Merger Agreement) of such fractional shares. Subject to the satisfaction of the closing conditions set forth in the Merger Agreement, the Merger is expected to be consummated on or around December 31, 2023. The Common Shares are listed on the New York Stock Exchange and trade under the symbol “LXP”.

The LXP Board has (i) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of LXP and its shareholders, and (ii) has unanimously approved and adopted the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and authorized the issuance of the Common Shares as payment of the Merger Consideration. Approval of the Merger does require approval of LXP shareholders.

The General Partner has determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of LCIF and its partners and has approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Approval of the Merger does not require the approval of other LCIF partners. For this reason, this information statement/prospectus is being provided to you for informational purposes only. The General Partner has not solicited and is not soliciting your adoption and approval of the Merger Agreement.

The accompanying information statement/prospectus describes the Merger Agreement, the Merger, and the actions to be taken in connection with the Merger, as well as provides additional information about the parties involved. Please give this information your careful attention. A copy of the Merger Agreement is attached as Annex A to this information statement/prospectus.

Sincerely,

 

The dateT. Wilson Eglin

President of this prospectus is                     , 2014.Lex GP-1 Trust, the sole general partner of LCIF

November 20, 2023

 
Table of Contents

IMPORTANT NOTE ABOUT THIS INFORMATION STATEMENT/PROSPECTUS

This information statement/prospectus incorporates by reference important business and financial information about LXP and LCIF and their respective subsidiaries from documents filed with the Securities and Exchange Commission (“SEC”) that have not been included in or delivered with this information statement/prospectus. This information is available without charge at the SEC’s website at www.sec.gov. You may also obtain certain of these documents at LXP’s website, www.lxp.com. Information contained on the LXP website does not constitute part of this information statement/prospectus. See “Where You Can Find More Information.”

You may also request copies of publicly filed documents from LXP without charge by requesting them in writing or by telephone at the following address and telephone number:

LXP Industrial Trust

One Penn Plaza

Suite 4015
New York, New York 10119-4015

Attention: LCIF Investor Relations

(212) 692-7200

If you request any such documents, LXP will mail them to you by first class mail, or another equally prompt means, after receipt of your request. To receive timely delivery of the documents, your request must be received no later than December 21, 2023.

The sections entitled “Questions and Answers” and “Summary” below highlight selected information from this information statement/prospectus, but they do not include all of the information that may be important to you. To better understand the Merger Agreement and the Merger, and for a more complete description of legal terms thereof, you should carefully read this entire information statement/prospectus, including the section entitled “Risk Factors” and the Merger Agreement, a copy of which is attached as Annex A hereto, as well as the documents that are incorporated by reference into this information statement/prospectus. See “Where You Can Find More Information.”

i

TABLE OF CONTENTS

CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKINGIMPORTANT NOTE ABOUT THIS INFORMATION STATEMENT/PROSPECTUSiii
PROSPECTUS SUMMARYQUESTIONS AND ANSWERS1
SUMMARY4
COMPARATIVE MARKET PRICES AND CASH DIVIDEND/DISTRIBUTION INFORMATION10
RISK FACTORS911
THE EXCHANGE OFFERCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS1312
USECOMPARISON OF PROCEEDSRIGHTS OF LXP SHAREHOLDERS AND LCIF PARTNERSHIP UNITHOLDERS20
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS1320
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS21
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK29
BUSINESS AND PROPERTIES30
MANAGEMENT AND EXECUTIVE COMPENSATION34
DESCRIPTION OF THE PARTNERSHIP AGREEMENT OF LEPERCQ CORPORATE INCOME FUND L.P.COMMON SHARES3519
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE38
DESCRIPTION OF NOTES39
CERTAINMATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONSCONSEQUENCES5325
PLAN OF DISTRIBUTION58
LEGAL MATTERS5843
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEXPERTS5843
WHERE YOU CAN FIND MORE INFORMATION5943
INDEX TO FINANCIAL STATEMENTSANNEX A – THE AMENDED AND RESTATED MERGER AGREEMENTF-1

You should only rely on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide information different from that contained or incorporated by reference in this prospectus. When you make a decision about whether to participate in the exchange offer, you should not rely upon any information other than the information contained or incorporated by reference in this prospectus. The delivery of this prospectus does not mean that information contained or incorporated by reference in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or solicitation of an offer to buy exchange notes in any circumstances under which the offer or solicitation is unlawful.

This prospectus incorporates important business and financial information about us that is not included in or delivered with this prospectus, and such information is available without charge to holders of the exchange notes upon written or oral request to Investor Relations, Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, New York 10119-4015 (telephone: (212) 692-7200). To obtain timely delivery, holders of exchange notes must request the information no later than five business days prior to the expiration of the exchange offer contemplated by this prospectus, or       , 2014.

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer will acknowledge by participating in this exchange offer, as a condition to participating in this exchange offer, that it will deliver a prospectus in connection with any resale of such exchange notes. By so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act of 1933, as amended. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for outstanding private notes where such outstanding private notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, starting on the expiration date of the exchange offer and ending on the close of business one year after such expiration date, subject to extension in limited circumstances, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

All references to the “Company,” “we,” “our” and “us” in this prospectus means Lexington Realty Trust, and its consolidated subsidiaries, including Lepercq Corporate Income Fund L.P. and its consolidated subsidiaries, except as otherwise provided or where it is made clear that the term means only Lexington Realty Trust. All references to “the operating partnerships” in this prospectus mean Lepercq Corporate Income Fund L.P. and Lepercq Corporate Income Fund II L.P. All references to “LCIF” in this prospectus mean Lepercq Corporate Income Fund L.P. All references to “LCIF II” in this prospectus mean Lepercq Corporate Income Fund II L.P. On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity. As a result, all references to LCIF with respect to periods after the merger include LCIF II as a predecessor entity. When we use the term “LXP,” we are referring to Lexington Realty Trust by itself and not including any of its subsidiaries. References to “common shares” or similar references refer to the shares of beneficial interest classified as common stock, par value $0.0001 per share, of LXP and references to “OP units” or similar references refer to the limited partnership units of LCIF and/or LCIF II, as applicable. The terms “you” or “your” refer to a prospective investor.

-i-
Table of Contents

CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING INFORMATION

This prospectus and the information and documents incorporated herein by reference include “forward-looking statements”, and as such may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from expected future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects,” “may,” “plans,” “predicts,” “will,” “will likely result,” or the negative of these words or other similar words or terms. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:

changes in economic conditions generally and the real estate market specifically;
adverse developments with respect to our tenants;
impairments in the value of our real estate investments;

failure to consummate the transactions described in this prospectus or the failure of any transactions to perform to our expectations;

legislative/regulatory/accounting changes, including changes to laws governing and policies and guidelines applicable to the taxation of real estate investment trusts, or REITs;
any material legal proceedings;
availability of debt and equity capital;
increases in real estate construction costs;
competition;
changes in interest rates;
supply and demand for properties in our current and proposed market areas;
a downgrade in our credit ratings; and

the other factors described and referenced under the heading “Risk factors” beginning on page 9of this prospectus and other risk factors described in our other reports filed with the Commission from time to time.

These risks and uncertainties should be considered in evaluating any forward-looking statements contained or incorporated by reference in this prospectus. We caution you that any forward-looking statement reflects only our belief at the time the statement is made. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee our future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update any of the forward-looking statements to reflect events or developments after the date of this prospectus. 

-ii-
Table of Contents

 

PROSPECTUS SUMMARY

 

QUESTIONS AND ANSWERS

The following questions and answers are intended to briefly address some of the questions that you may have regarding the Merger and the Merger Agreement. We urge you to carefully read the remainder of this information statement/prospectus because these questions and answers may not address all questions or provide all information that might be important to you with respect to the Merger and the Merger Agreement. Additional important information is also contained in Annex A and the documents incorporated by reference into this information statement/prospectus. You may obtain the information incorporated by reference into this information statement/prospectus without charge by following the instructions under “Where You Can Find More Information.”

Q:Why am I receiving these materials?
A:On October 24, 2023, LXP and LCIF entered into the Merger Agreement, pursuant to which LCIF will merge with and into LXP, with LXP as the surviving entity. The Merger Agreement is described in this information statement/prospectus and attached as Annex A hereto. You are receiving this document in connection with the issuance of Common Shares as the Merger Consideration. The General Partner has already approved the Merger Agreement and the Merger on behalf of LCIF and its partners.  You are not being asked for a proxy or written consent, and you are requested not to send a proxy or written consent.

Q:What will LCIF partners be entitled to receive in the Merger?
A:If the Merger is successfully completed, each LCIF Partnership Unit you hold will automatically be converted into the right to receive 1.126 Common Shares, except that to the extent you would be entitled to any fractional Common Shares upon such conversion, no fractional Common Shares will be issued and instead you will be entitled to receive the Cash Equivalent (as defined in the Amended and Restated Merger Agreement) of such fractional shares. As of the Effective Time, all LCIF Partnership Units shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of LCIF Partnership Units shall cease to have any rights with respect thereto.

Q:What will happen to LCIF as a result of the Merger?
A:If the Merger is successfully completed, LCIF will be merged with and into LXP, with LXP as the surviving entity, and LCIF will cease to exist.

Q:When will the Merger be completed?
A:The Merger is expected to close on December 31, 2023.

Q:Should LCIF partners deliver their LCIF Partnership Units now?
A:No. After the Merger is completed, any LCIF Partnership Units you hold as of the Effective Time automatically will be converted into the right to receive the Merger Consideration.  

Q:What happens to future distributions with respect to LCIF Partnership Units?
A:If the Merger closes, as expected, on December 31, 2023, LCIF will have the obligation (which will be assumed by LXP) to pay a final quarterly distribution in accordance with the Partnership Agreement.  LXP expects to make the distribution on January 16, 2024 to holders of LCIF Partnership Units as of the close of business on December 29, 2023. Following payment of this final quarterly distribution, LCIF limited partners will be entitled to receive any dividends paid by LXP with respect to the Common Shares received in the Merger, to the extent they continue to own such Common Shares on the applicable record date for any dividend.

Q:What approval by LCIF partners is required to approve the Merger Agreement and the transactions contemplated thereby, including the Merger?

1

A:None.  Pursuant to the Partnership Agreement, the General Partner has the authority to approve the Merger Agreement and the Merger and has already done so.  There are no remaining LCIF approvals required.  

Q:What are the expected U.S. federal income tax consequences for U.S. holders of LCIF Partnership Units as a result of the Merger?
A:The receipt of Common Shares in exchange for LCIF Partnership Units pursuant to the Merger Agreement will be a taxable transaction to U.S. holders (as defined in “Material U.S. Federal Income Tax Consequences”) for U.S. federal income tax purposes. A U.S. holder will generally recognize capital gain or loss on the receipt of Common Shares in exchange for LCIF Partnership Units. However, a portion of this gain or loss will be separately computed and taxed as ordinary income or loss to the extent attributable to “unrealized receivables,” including depreciation recapture, or to “inventory items” owned by LCIF and its subsidiaries. Passive losses that were not deductible by a U.S. holder in prior taxable periods because they exceeded the U.S. holder’s share of LCIF’s income (i.e., suspended passive losses) may become deductible in full as a result of the Merger and offset all or a portion of the gain recognized by such U.S. holder. A U.S. holder’s tax basis in the Common Shares received in the Merger will equal the fair market value of such shares.  The holding period of the Common Shares received by a U.S. holder will generally begin the day after the Merger effective date. The U.S. federal income tax consequences of the Merger to U.S. holders of LCIF Partnership Units and of the ownership and disposition of any Common Shares received pursuant thereto will depend on each holder’s particular tax situation. Accordingly, you are strongly urged to consult your tax advisor for a full understanding of the particular tax consequences to you of the Merger and of the ownership and disposition of any Common Shares received by you in the Merger. See “Material U.S. Federal Income Tax Consequences-Tax Consequences of the Merger to U.S. Holders of LCIF Partnership Units.”

Q:What are the expected U.S. federal income tax consequences for a U.S. holder of LCIF Partnership Units of the ownership of Common Shares after the Merger is completed?
A:LXP is classified as a real estate investment trust (a “REIT”) for U.S. federal income tax purposes and intends to conduct its operations so as to continue to qualify for taxation as a REIT. No assurance, however, can be given that LXP has operated in a manner so as to qualify or will be able to operate in such a manner so as to remain qualified as a REIT. Qualification and taxation as a REIT depend upon LXP’s ability to meet on a continuing basis, through actual annual operating results, the required distribution levels, diversity of share ownership and the various qualification tests imposed under the Internal Revenue Code of 1986, as amended, (the “Code”) as discussed below, the results of which will not be reviewed by counsel. Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in LXP’s circumstances, no assurance can be given that the actual results of LXP’s operations for any one taxable year have satisfied or will continue to satisfy such requirements. See “Material U.S. Federal Income Tax Consequences.”

Q:Are holders of LCIF Partnership Units entitled to dissenters’ or appraisal rights in connection with the Merger?
A:No. Holders of LCIF Partnership Units do not have dissenters’ or appraisal rights under applicable law or contractual appraisal rights under the Partnership Agreement or the Merger Agreement.

Q:What happens if the Merger is not consummated?
A:If the Merger is not completed for any reason, you will not receive the Merger Consideration for any LCIF Partnership Units that you hold. In such case, the LCIF Partnership Units will remain outstanding, and LCIF will remain a Delaware limited partnership.

Q:Who do I call if I have further questions about the Merger or the Merger Agreement?
2

A:Holders of LCIF Units who have questions about the Merger or the Merger Agreement or who desire additional copies of this information statement/prospectus or other additional materials should contact:

Lepercq Corporate Income Fund L.P.

One Penn Plaza

Suite 4015

New York, NY 10119-4015

Attention: LCIF Investor Relations

(212) 692-7200

3

SUMMARY 

This summary highlights selectedcertain information contained elsewhere or incorporated by reference in this prospectus. Because this is a summary, it doesabout the Merger but may not contain all of the information that is important to you. ForWe urge you to carefully read the remainder of the information statement/prospectus, including Annex A and the other documents to which we have referred you for a more complete understanding of the exchange offerMerger and the exchange notes, you should read carefully this entire prospectus and the documents incorporated by reference in this prospectus, as provided in “Where you can find more information” beginning on page 59 of this prospectus, especially the risk factors set forth in (i) LXP’s most recent Annual Report on Form 10-K, filed with the Commission, on February 25, 2013, which we refer to as LXP’s Annual Report, (ii) the information in any documents we filed with the Commission subsequent to LXP’s Annual Report or that we file in the future that are incorporated by reference herein as provided in “Where you can find more information” and (iii) the information under the caption “Risk factors” beginning on page 9 of this prospectus. Unless otherwise indicated, all financial and property information in this prospectus is presented as of and for the nine months ended September 30, 2013.

Explanatory Note

This prospectus includes combined disclosure for Lexington Realty Trust and Lepercq Corporate Income Fund L.P. Information with respect to LXP is incorporated by reference in this prospectus.LXP. See “Where you can find more information” beginning on page 59 of this prospectus.You Can Find More Information.”

On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity.  The merger was done to streamline the reporting obligations of LCIF and LCIF II into one entity on a going-forward basis.  Except as otherwise indicated, all information with respect to LCIF and LCIF II in this prospectus is presented as of September 30, 2013, which is prior to the merger.  Information subsequent to the merger assumes that all limited partners in LCIF II received OP units in LCIF as consideration in the merger.

Our Company

LXP Industrial Trust 

LXP is a Maryland real estate investment trust, which has elected to qualify to be taxed as a REIT that owns a diversified portfolio of equity and debt investments infor federal income tax purposes, focused on single-tenant commercial properties and land.warehouse/distribution real estate investments. A majority of theseits properties and all land interests are subject to net or similar leases, where the tenant bears all or substantially all of the costs, including cost increases, for real estate taxes, utilities, insurance and ordinary repairs. We alsoHowever, certain leases provide investment advisory and asset management services to investors inthat the single-tenant area.

landlord is responsible for certain operating expenses. As of September 30, 2013, we2023, LXP had equity ownership interests in approximately 215115 consolidated real estate properties, located in 4119 states and encompassing 40.6containing an aggregate of approximately 53.9 million square feet 98.1%of space, approximately 99.0% of which was leased. IncludedAs of September 30, 2023, LXP’s portfolio consisted of 110 warehouse/distribution facilities and five other properties. LXP’s warehouse/distribution portfolio is primarily focused in LXP’s target markets within the Sunbelt and Midwest. LXP expects to grow these markets by executing on its development pipeline and opportunistically acquiring facilities in these properties are (1) 31 properties in which LCIF had an equity ownership interest in, located in 22 states and encompassing 4.9 million square feet, 96.1% of which was leased, and (2) nine properties in which LCIF II had an equity ownership interest in, located in seven states and encompassing 2.9 million square feet, 100.0% of which was leased. The properties in which we have an equity interest are leased to tenants in various industries, including finance/insurance, technology, service, automotive and energy.markets.

LCIF was formed as a limited partnership on March 14, 1986 under the laws of the state of Delaware to invest in existing real estate properties net leased to corporations or other entities. LCIF II was formed as a limited partnership on January 27, 1987 under the laws of the state of Delaware to invest in existing real estate properties net leased to corporations or other entities. On December 30, 2013, LCIF II was merged with and into LCIF, with LCIF as the surviving entity.

The purpose of each of LCIF and LCIF II includes the conduct of any business that may be conducted lawfully by a limited partnership organized under the Delaware Revised Uniform Limited Partnership Act, or the Delaware Act, except that the partnership agreement of each of LCIF and LCIF II requires business to be conducted in such a manner that will permit LXP to continue to be classified as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code, unless LXP ceases to qualify as a REIT for reasons other than the conduct of the business of LCIF or LCIF II, as applicable.

LXP is 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, as of December 31, 2013, approximately 0.4% of the outstanding OP units in LCIF. LXP is also the sole equity owner of Lex LP-1 Trust, or Lex LP, a Delaware statutory trust, which holds, as of December 31, 2013, approximately, 94.3% of the outstanding OP units in LCIF. The remaining OP units in LCIF are beneficially owned by E. Robert Roskind, Chairman of LXP, and certain non-affiliated investors. As the sole equity owner of the general partner of LCIF, LXP has the ability to control all of the day-to-day operations of LCIF subject to the terms of the LCIF partnership agreement.

The business of LCIF is substantially the same as the business of LXP and includes investment in single-tenant assets; except that LCIF is dependent on LXP for management of its operations and future investments. LCIF does not have any employees, executive officers or a board of directors. LXP also invests in assets and conducts business directly and through other subsidiaries. LXP allocates investments to itself and its other subsidiaries or to LCIF as it deems appropriate and in accordance with certain obligations under the LCIF partnership agreement, with respect to allocations of nonrecourse liabilities.

Neither LXP 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 LXP for all expenses incurred by them 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 LXP and its other subsidiaries), such expenses are allocated to LCIF in proportion to gross revenues. LXP has guaranteed the obligations of LCIF in connection with the redemption of OP units pursuant to the LCIF partnership agreement.

Further information with respect to LCIF and LCIF II is set forth in this prospectus.

TheLXP’s principal executive offices for LCIF are located at One Penn Plaza, Suite 4015, New York, New York 10119-4015;10119-4015 and our telephone number is (212) 692-7200.

-1-

THE EXCHANGE OFFER

The exchange offerWe are offering to exchange the 4.25% Senior Notes due 2023 offered by this prospectus, referred to as the exchange notes, for the outstanding 4.25% Senior Notes due 2023, referred to as the private notes, that are properly tendered and accepted. You may tender outstanding private notes only in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  We will issue the exchange notes on or promptly after the exchange offer expires. As of the date of this prospectus, $250,000,000 aggregate principal amount of private notes is outstanding.
Expiration dateThe exchange offer will expire at 5:00 p.m., New York City time, on                    , 2014 (the 21st business day following commencement of the exchange offer), unless extended, in which case the expiration date will mean the latest date and time to which we extend the exchange offer.
Conditions to the exchange offer

The exchange offer is not subject to any condition other than that it not violate applicable law or any applicable interpretation of the staff of the Commission. The exchange offer is not conditioned upon any minimum principal amount of private notes being tendered for exchange.

We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement with respect to the private notes, which we refer to as the registration rights agreement, and the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations of the Commission.

Procedures for tendering private notes

If you wish to tender your private notes for the exchange notes pursuant to the exchange offer, you must complete and sign a letter of transmittal in accordance with the instructions contained in the letter and forward it by mail, facsimile or hand delivery, together with any other documents required by the letter of transmittal, to the exchange agent (as defined below), either with the private notes to be tendered or in compliance with the specified procedures for guaranteed delivery of notes. Certain brokers, dealers, commercial banks, trust companies and other nominees may also effect tenders by book-entry transfer. Holders of private notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee are urged to contact such person promptly if they wish to tender private notes pursuant to the exchange offer. See "The Exchange Offer-Procedures for Tendering."

Letters of transmittal and certificates representing private notes should not be sent to us. Such documents should only be sent to the exchange agent. Questions regarding how to tender private notes and requests for information should be directed to the exchange agent. See "The Exchange Offer-Exchange Agent." You do not have any appraisal or dissenters' rights under the indenture in connection with the exchange offer.

Acceptance of the private notes and delivery of the exchange notesSubject to the satisfaction or waiver of the conditions to the exchange offer, we will accept for exchange any and all private notes which are validly tendered in the exchange offer and not withdrawn before 5:00 p.m., New York City time, on the expiration date.
Withdrawal rightsYou may withdraw the tender of your private notes at any time before 5:00 p.m., New York City time, on the expiration date, by complying with the procedures for withdrawal described in this prospectus under the heading "The Exchange Offer-Withdrawal of Tenders."
U.S. federal tax considerationsThe exchange of notes will not be a taxable event for U.S. federal income tax purposes. For a discussion of material federal tax considerations relating to the exchange notes and the exchange offer, see "U.S. federal income tax considerations."
Exchange agentU.S. Bank National Association, the registrar and paying agent for the notes under the indenture governing the notes, is serving as the exchange agent for the exchange offer.
Consequences of failure to exchangeIf you do not exchange your private notes for the exchange notes, you will continue to be subject to the restrictions on transfer provided in the private notes and in the indenture governing the private notes. In general, the private notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently plan to register the resale of the private notes under the Securities Act.
Registration rights agreementYou are entitled to exchange your private notes for the exchange notes with substantially identical terms. This exchange offer satisfies this right. After the exchange offer is completed, you will no longer be entitled to any exchange or registration rights with respect to your private notes.

For a more detailed description of the exchange offer, see “The Exchange Offer.”

-2-

THE EXCHANGE NOTES

The following summary contains basicAdditional information about the exchange notes and is not intended to be complete. It does not contain all the information that may be important to you. For a more complete understanding of the exchange notes, please refer to the section entitled "Description of notes."

The form and terms of the exchange notes are the same as the form and terms of the private notes, except that the exchange notes will be registered under the Securities Act and, therefore, the exchange notes will not be subject to the transfer restrictions, registration rights and provisions providing for an increase in the interest rate applicable to the private notes. The exchange notes will evidence the same debt as the private notes, and both the private notes and the exchange notes are governed by the same indenture and will vote as a single class on all matters. We refer to the private notes and the exchange notes together in this prospectus as the "notes." Unless the context otherwise requires, when we refer to the private notes, we also refer to the guarantees associated with the private notes, and when we refer to the exchange notes, we also refer to the guarantees associated with the exchange notes.

The following summary of the exchange notes is provided solely for your convenience. This summary is not intended to be complete. You should read the full text and more specific details contained elsewhere in this prospectus. For a more detailed description of the exchange notes, see "Description of notes."

Issuer of exchange notesLexington Realty Trust
GuarantorsLepercq Corporate Income Fund L.P. In addition, any future subsidiaries of LXP that are borrowers or guarantors under its then principal credit agreement are required to guarantee the exchange notes.  We refer to these subsidiaries as the subsidiary guarantors. Each guarantee of the exchange notes will be an unsecured and unsubordinated obligation of such subsidiary guarantor.
Amount offeredUp to $250,000,000 aggregate principal amount.
Ranking of exchange notes

The exchange notes and the guarantees will be LXP’s and the subsidiary guarantors’ general unsecured and unsubordinated obligations and will:

●     rank equally in right of payment with all of LXP’s and the subsidiary guarantors’ existing and future unsecured and unsubordinated indebtedness;

●     be effectively subordinated in right of payment to all of LXP’s and the subsidiary guarantors’ existing and future secured indebtedness (to the extent of the value of the collateral securing such indebtedness); and

●     be structurally subordinated in right of payment to all existing and future liabilities and other indebtedness, whether secured or unsecured, and preferred stock of our subsidiaries that are not subsidiary guarantors, or the non-guarantor subsidiaries.

As of September 30, 2013, LXP and the subsidiary guarantors had no secured indebtedness and $0.8 billion of unsecured and unsubordinated indebtedness outstanding, and the non-guarantor subsidiaries had approximately $1.0 billion of secured indebtedness outstanding and no unsecured indebtedness.

InterestThe exchange notes will bear interest at a rate of 4.25% per year. Interest will be payable semi-annually in arrears on June 15 and December 15 of each year, beginning June 15, 2014. 
MaturityThe exchange notes will mature on June 15, 2023 unless previously redeemed by LXP at its option prior to such date.
LXP's redemption rightsLXP may redeem the exchange notes at its option and in its sole discretion, at any time in whole or from time to time in part, at the applicable redemption price specified herein. If the exchange notes are redeemed on or after March 15, 2023, the redemption price will be equal to 100% of the principal amount of the exchange notes being redeemed plus accrued and unpaid interest thereon to, but not including, the redemption date. See “Description of notes-LXP’s redemption rights.”
Sinking fundNone.
Certain covenants

The indenture governing the exchange notes contains certain covenants that, among other things, limit LXP’s and each subsidiary guarantor’s ability to:

● consummate a merger, consolidation or sale of all or substantially all of its assets; and

● incur secured and unsecured indebtedness.

These covenants are subject to a number of important exceptions and qualifications. See “Description of notes.”

-3-

Use of ProceedsThe exchange offer satisfies an obligation under the registration rights agreement. We will not receive any cash proceeds from the exchange offer. The net proceeds from the sale of the private notes after deducting discounts and offering expenses, were approximately $244.9 million. We used the net proceeds from the sale of the private notes to pay amounts outstanding under our unsecured revolving credit facility, and the remainder for general corporate purposes, including, without limitation, unspecified acquisitions.
TradingThe exchange notes are a new issue of securities with no established trading market. LXP does not intend to apply for listing of the exchange notes on any securities exchange or for quotation of the exchange notes on any automated dealer quotation system.
Book-entry formThe exchange notes will be issued in the form of one or more fully-registered global notes in book-entry form, which will be deposited with, or on behalf of, The Depository Trust Company, commonly known as DTC, in New York, New York. Beneficial interests in the global certificate representing the exchange notes will be shown on, and transfers will be effected only through, records maintained by DTC and its direct and indirect participants and such interests may not be exchanged for certificated notes, except in limited circumstances.
Additional notesLXP may, without the consent of holders of the exchange notes, increase the principal amount of the exchange notes by issuing additional exchange notes in the future on the same terms and conditions, except for any difference in the issue date, the issue price, the date from which interest accrues on such exchange notes, and, if applicable, the first interest payment date, with the same CUSIP number as the exchange notes offered hereby.
Risk factorsSee “Risk factors” included in this prospectus and in LXP’s Annual Report, as updated by LXP’s subsequent filings under the Exchange Act, as well as other information included in this prospectus, for a discussion of factors you should carefully consider before deciding to invest in the exchange notes.
Trustee and paying agentU.S. Bank National Association is the trustee and paying agent under the indenture relating to the exchange notes.
Governing lawThe indenture is, and the exchange notes and the guarantees endorsed on the exchange notes will be, governed by the laws of the State of New York.

-4-

SUMMARY HISTORICAL FINANCIAL DATA

The following tables set forth summary historical consolidated summary financial data for LCIF and LCIF II and their respective subsidiaries as of, and for each of the years ended December 31, 2012, 2011, 2010, 2009 and 2008 and for the nine months ended September 30, 2013 and 2012. The results of operations for the nine month periods are not necessarily indicative of the results that may be expected for a full year. The summary historical financial data is qualified in its entirety by reference to, and should be read in conjunction with, the “Risk factors” section included elsewhere in this prospectus, each of LCIF’s and LCIF II’s consolidated financial statements and notes thereto included elsewhere in this prospectus, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section included elsewhere in this prospectus for additional information. Summary historical consolidated financial data for LXP is availableincluded in the documents incorporated by reference into this information statement/prospectus. See “Where You Can Find More Information.”

LCIF

LCIF is a Delaware limited partnership that as of September 30, 2023, owned 21 properties. Lex GP-1 Trust, the General Partner of LCIF, is wholly-owned by LXP. LXP owns approximately 99% of the partnership interest in LCIF. LXP controls LCIF through its ownership of the General Partner, and certain of the executive officers and trustees of the General Partner are also officers and/or trustees of LXP.

The consolidated ratioMerger

Pursuant to and in accordance with the terms and conditions of earningsthe Merger Agreement, at the Effective Time, LCIF will merge with and into LXP, with LXP as the surviving entity, and the LCIF Partnership Units will be automatically converted, without any action of the holders thereof, into Common Shares at the applicable conversion rate. As of the Effective Time, all such LCIF Partnership Units shall no longer be outstanding and shall automatically be canceled and shall cease to combined fixed chargesexist, and preferred dividends for LXP was less than 1.0,each holder of LCIF Partnership Units shall cease to have any rights with respect thereto, except to receive a deficit of $25.5 million, $64.9 million, $49.3 million, $12.0 million and $1.6 million,quarterly distribution for the years ended December 31, 2012, 2011, 2010, 2009 and 2008, respectively, and $10.1 million and $14.0 million, for the nine months ended September 30, 2013 and 2012, respectively.

The consolidated balance sheet information as of December 31, 2012 and 2011 and the consolidated statement of operations information and the consolidated statement of cash flows information for the years ended 2012, 2011 and 2010 has been derived from LCIF and LCIF II's historical consolidated financial statements which have been audited by KPMG LLP, an independent registered public accounting firm. The consolidated balance sheet information as of December 31, 2010, 2009 and 2008 and the consolidated statement of operations information and the consolidated statements of cash flows information for the years ended December 31, 2009 and 2008 have been derived from unaudited historical consolidated financial statements not included in this prospectus. The consolidated balance sheet information, the consolidated statement of operations information and the consolidated statement of cash flows information for the nine months ended September 30, 2013 and 2012 have been derived from the unaudited historical consolidated financial statements of LCIF and LCIF II, which are included elsewhere in this prospectus and include all adjustments of a normal and recurring nature that management considers necessary for a fair presentation of such information. LCIF's and LCIF II's consolidated results of operations and financial condition as of and for the nine months ended September 30, 2013 do not purport to be indicative of its financial condition or results of operations as of or for the yearquarter ending December 31, 2013.2023 in accordance with the Partnership Agreement.

The composition of the LXP Board will remain the same after the closing of the Merger. LXP’s current executive officers are expected to continue to hold office after the closing of the Merger.

Merger Consideration

At the Effective Time, each LCIF Partnership Unit you hold will automatically be converted into the right to receive a number of registered Common Shares equal to the number of LCIF Partnership Units you hold multiplied by the “Redemption Factor” (as defined in the Partnership Agreement, and which is currently equal to 1.126), except that to the extent you would be entitled to any fractional Common Shares upon such conversion, no fractional Common Shares will be issued and instead you will be entitled to receive the Cash Equivalent (as defined in the Merger Agreement) of such fractional shares. Subject to the satisfaction of the closing conditions set forth in the Merger

-5-
4 

 

Agreement, the Merger is expected to be consummated on or around December 31, 2023. The Common Shares are listed on the New York Stock Exchange and trade under the symbol “LXP”.

Rationale for the Transaction

Lepercq Corporate Income Fund L.P.In deciding to approve the Merger and the Merger Agreement, the General Partner and LXP considered a number of factors, both potentially positive and potentially negative, including:

Administrative Cost Savings: LXP currently owns approximately 99% of the equity interest in LCIF. The Merger is expected to result in administrative cost savings by eliminating the costs of maintaining LCIF as a separate entity, which savings will benefit holders of LCIF Partnership Units and holders of Common Shares.
Tax Consequences: The Merger will be a taxable transaction for the holders of LCIF Partnership Units. Section 7.1.D of the Partnership Agreement provides that the General Partner is under no obligation to take into account the tax consequences of an LCIF partner in deciding whether to cause LCIF to take (or decline to take) any actions.
Liquidity for Limited Partners: With limited exceptions, holders of LCIF Partnership Units are subject to restrictions on transfer and these is no trading market for such units. Common Shares issued as Merger Consideration will generally not be subject to restriction on transfer, except as specified in the LXP Declaration of Trust, and are listed on the NYSE under the symbol “LXP”. Therefore, holders of LCIF Partnership Unit will achieve better liquidity as a result of the Merger.
Avoidance of Conflicts of Interest: LXP conducts businesses similar to that of LCIF. The conduct of these businesses and the allocation of business opportunities and investments between LCIF and LXP may give rise to conflicts of interests. LXP has no obligation to allocate business opportunities or investments to LCIF. In addition, there are complexities in allocating resources and costs for overhead, personnel and other matters between LCIF and LXP. These conflict situations will be eliminated through the Merger.
Enhanced Asset Diversification: LXP has significantly more assets than LCIF. As a result of the Merger, holders of LCIF Partnership Units will benefit from increased asset diversification.
Greater Capital Resources and Opportunities for Growth: While the General Partner believes that cash flows from operations will continue to provide adequate capital to fund LCIF’s expenses, LXP has significantly greater access to short- and long-term capital resources. These resources better position LXP to take advantage of investment opportunities, which will further enhance asset diversification.
Elimination of dependency on LXP and its personnel: LCIF is not self-administered or self-managed and is dependent upon LXP and its personnel whose continued service is not guaranteed. Loss of these services could adversely impact LCIF’s operations. The Merger would ensure the continued service of LXP and its personnel because LXP is a self-administered and self-managed REIT.

In view of the wide variety of factors considered by LCIF and LXP, neither LCIF nor LXP found it practicable to quantify or otherwise attempt to assign relative weights to the specific factors considered.

Interests of LXP in the Merger

LXP, which owns approximately 99% of the partnership interest in LCIF and wholly-owns the General Partner, may have interests in the Merger that may be different from, or in addition to, the interests of other limited partners generally. The General Partner and the LXP Board were aware of these interests and considered them, among other matters, in approving the Merger. These interests include:

  Nine Months ended
September 30,
(unaudited)
  Years ended December 31, 
(in thousands, except per
unit data and ratios)
 2013  2012  2012  2011  2010  2009  2008 
                (unaudited)  (unaudited) 
Total gross revenues  $40,862  $38,908  $51,371  $51,452  $54,078  $53,670  $52,398 
Expenses applicable to revenues  (23,842  (22,886)  (30,342)  (30,842)  (31,359)  (30,991)  (30,046)
Interest and amortization expense  (6,299  (8,965)  (11,598)  (13,143)  (15,499)  (16,960)  (16,611)
Income from continuing operations  8,076   5,480   7,535   6,332   6,176   3,583   3,017 
Total discontinued operations  5,639   119   212   (2,791)  10,864   (22,479)  32,192 
Net income (loss)  13,715   5,599   7,747   3,541   17,040   (18,896)  35,209 
Income from continuing operations per unit  0.22   0.18   0.24   0.21   0.21   0.12   0.10 
Income (loss) from discontinued operations  per unit  0.16   0.01   0.01   (0.09)  0.36   (0.75)  1.07 
Net income (loss) per unit  0.38   0.19   0.25   0.12   0.57   (0.63)  1.17 
Cash distributions per weighted-average unit (rounded)  0.69   0.67   0.90   0.81   0.77   0.54   1.37 
Net cash provided by operating activities  23,739   22,209   30,427   29,983   30,877   34,198   34,364 
Net cash provided by (used in) investing activities  20,143   (2,501  (58,732)  16,594   (653)  25,790   34,585 
Net cash provided by (used in) financing activities  (40,900  (21,886  27,180   (45,957)  (31,688)  (58,650)  (80,963)
Ratio of earnings to fixed charges  2.29   1.61   1.65   1.48   1.40   1.21   1.18 

  As of
September 30,
(unaudited)
  As of December 31, 
(in thousands) 2013  2012  2012  2011  2010  2009  2008 
              (unaudited)  (unaudited)  (unaudited) 
Real estate assets, net, including real estate - intangible assets 402,186   N/A  448,953  412,579  453,318  504,708  562,603 
Loans receivable, net  33,439   N/A   34,266   38,234   36,253   36,972   41,039 
Total assets  472,369   N/A   511,465   478,511   520,361   569,475   643,867 
Mortgages and notes payable, including discontinued operations  94,644   N/A   155,675   202,884   243,301   270,931   288,369 
Co-borrower debt  53,453   N/A   39,385   10,013   10,687   41,770   41,756 
Partners' capital  303,524   N/A   138,895   166,188   186,385   161,326   196,341 

Stepped up basis: Upon consummation of the Merger, LXP will receive a stepped-up tax basis on its additional investment in LCIF’s assets through the Merger.
Reimbursement of Expenses: LXP pays for certain general, administrative and other costs on LCIF’s behalf from time to time, which are reimbursable by LCIF in accordance with the Partnership Agreement. The reimbursement obligation will be extinguished upon the consummation of the Merger.
-6-
5 

 

Lepercq Corporate Income Fund II L.P.

 Nine Months ended
September 30,
(unaudited)
  Years ended December 31, 
(in thousands, except per
unit data and ratios)
 2013  2012  2012  2011  2010  2009  2008 
                (unaudited)  (unaudited) 
Total gross revenues 10,506  $10,673  $14,246  $11,392  $7,885  $8,185  $11,251 
Expenses applicable to revenues  (4,842  (4,840)  (6,446)  (5,406)  (4,257)  (4,172)  (5,810)
Interest and amortization expense  (1,656  (2,726)  (3,286)  (2,970)  (3,259)  (3,496)  (5,531)
Income (loss) from continuing operations  3,940   3,741   5,106   8,149   6,539   (284)  (1,372)
Total discontinued operations  125   (1,764)  (2,111)  (6,894)  1,393   2,082   7,898 
Net income (loss)  4,065   1,977   2,995   1,255   7,932   1,798   6,526 
Income from continuing operations per unit  0.32   0.62   0.68   1.35   1.09   (0.05)  (0.23)
Income (loss) from discontinued operations  per unit  0.01   (0.29)  (0.28)  (1.14)  0.23   0.35   1.31 
Net income per unit  0.33   0.33   0.40   0.21   1.32   0.30   1.08 
Cash distributions per weighted-average unit (rounded)  0.61   0.72   0.90   0.89   0.84   0.60   1.42 
Net cash provided by operating activities   6,961    4,849   7,293   13,693   17,468   5,575   5,554 
Net cash provided by (used in) investing activities  1,094  1,667   2,202   (23,110)  (53,720)  34,582   8,872 
Net cash provided by (used in) financing activities  (6,263  (17,460  (20,196)  10,325   41,855   (25,867)  (28,350)
Ratio of earnings to fixed charges (1)  3.39   2.38   2.56   3.07   3.01   N/A   N/A 

(1) N/A - Ratio is below 1.0, deficit of $282 and $1,316 exists at December 31, 2009 and 2008, respectively.

 As of
September 30,
(unaudited)
  As of December 31, 
(in thousands) 2013  2012  2012  2011  2010  2009  2008 
              (unaudited)  (unaudited)  (unaudited) 
Real estate assets, net, including real estate - intangible assets 103,339   N/A  118,200  129,518  108,378  103,863  142,356 
Loans receivable, net  21,636   N/A   21,942   21,515   36,743       
Total assets  143,917   N/A   164,232   186,603   174,421   123,837   160,751 
Mortgages and notes  31,350   N/A   48,989   87,300   73,517   71,272   117,037 
Co-borrower debt  15,336   N/A   11,601   3,438   2,194   8,092   8,733 
Partners' capital  92,964   N/A   77,649   33,859   39,189   30,435   31,617 

-7-

SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL AND OTHER DATA

The following table shows pro forma information about LCIF’s financial condition and results of operations, including per unit data, after giving effect to the consummation of the merger of LCIF II with and into LCIF on December 30, 2013, with LCIF as the surviving entity. The table sets forth the information as if the merger had become effective on September 30, 2013, with respect to the balance sheet information, and as of January 1, 2012, with respect to the income statement information. The merger will be accounted for as a business combination between entities under common control using LCIF II’s historical cost basis.

The information is based on, and should be read together with, the historical financial statements, including the notes thereto, of each of LCIF and LCIF II and the more detailed unaudited pro forma financial information, including the notes thereto, appearing elsewhere in this prospectus. See “Index To Financial Statements.”

The unaudited pro forma information does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the operating partnerships been combined during these periods.

  Pro Forma Combined 
  (Unaudited, dollars in thousands) 
  Year ended  Nine months ended 
  December 31, 2012  September 30, 2013 
Total gross revenues $65,617  $51,368 
Expenses applicable to revenue  (36,788)  (28,684)
Interest and amortization expense  (14,884)  (7,955)
Income from continuing operations  12,641   12,016 
Income from continuing operations per unit  0.33   0.25 
Real estate assets, net, including real estate intangible assets  N/A   505,525 
Loans receivable, net  N/A   55,075 
Total assets  N/A   616,286 
Mortgages and notes payable  N/A   125,994 
Co-borrower debt  N/A   68,789 
Partners’ capital  N/A   396,488 

-8-

RISK FACTORS

You should carefully consider the risks described below and the risk factors set forth in the documents incorporated by reference herein before making a decision to exchange your private notes for the exchange notes in the exchange offer. If any of the events described in the risk factors below or in the documents incorporated by reference herein occur, our business, financial condition, operating results and prospects could be materially adversely affected, which in turn could adversely affect our ability to repay the notes. The risk factors set forth below and in the documents incorporated by reference herein are generally applicable to the private notes as well as the exchange notes. These risks are not the only ones we face. Additional risks not presently known to us or that are currently deemed immaterial could also materially and adversely affect our financial condition, results of operations, business and prospects. The trading price of the notes, if any, could decline due to any of these risks, and you may lose all or part of your investment. This prospectus and the documents incorporated herein by reference herein also contain forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us and described below and in the documents incorporated herein by reference.

Risks related to this exchange offer and the exchange notes

Our substantial indebtedness could adversely affect our financial condition and LXP’s and the subsidiary guarantors’ ability to fulfill their obligations under the notes and otherwise adversely impact our business and growth prospects.

We have a substantial amount of debt. As of September 30, 2013, our total consolidated indebtedness was approximately $1.8 billion, consisting of $1.0 billion of mortgages and notes payable, $67.0 million outstanding on our unsecured revolving credit facility, $250.0 million of private notes, $319.0 million of term loans, $29.0 million of the 6.00% Convertible Notes due 2030, and $129.1 million of the Trust Preferred Securities. In addition, as of September 30, 2013, $511.4 million were available for us to borrow under our principal credit agreement, subject to covenant compliance.

Our substantial indebtedness could have important consequences to you. For example, it could:

make it more difficult for LXP and the subsidiary guarantors to satisfy their obligations with respect to the exchange notes and other indebtedness;
increase our vulnerability to adverse economic and industry conditions;
require us to dedicate a substantial portion of our cash flow from operations to the payment of interest on and principal of our indebtedness, thereby reducing the availability of cash to fund working capital, capital expenditures and other general corporate purposes;
limit our ability to borrow money or sell stock to fund our development projects, working capital, capital expenditures, general corporate purposes or acquisitions;
restrict us from making strategic acquisitions or exploiting business opportunities;
place us at a disadvantage compared to competitors that have less debt; and
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate.

In addition, the agreements that govern our current indebtedness contain, and the agreements that may govern any future indebtedness that we may incur may contain, financial and other restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default that, if not cured or waived, could result in the acceleration of our debt.

The effective subordination of the exchange notes and the guarantees may reduce amounts available for payment of the exchange notes and the guarantees.

Both the exchange notes and the guarantees are unsecured. The holders of any secured debt of LXP and its subsidiary guarantors may foreclose on the assets securing such debt, reducing the cash flow from the foreclosed property available for payment of unsecured debt, including the exchange notes and the guarantees. The holders of any secured debt of LXP and its subsidiary guarantors also would have priority over unsecured creditors in the event of their bankruptcy, liquidation or similar proceeding. As of September 30, 2013, LXP and the subsidiary guarantors had no secured indebtedness and $0.8 billion of unsecured and unsubordinated indebtedness outstanding.

Not all of LXP’s subsidiaries are guarantors, assets of non-guarantor subsidiaries may not be available to make payments on the exchange notes and the subsidiary guarantees may be released in the future if certain events occur.

On September 30, 2013, all of the subsidiary guarantors that initially guaranteed the private notes, except for LCIF and LCIF II, were released from their obligations under our principal credit agreement, which, in turn, allowed for the release of such subsidiary guarantors from their obligations under the guaranty of the private notes. As a result of this and the merger of LCIF II with and into LCIF on December 30, 2013, only LCIF remains as a subsidiary guarantor of the private notes and will become a guarantor of the exchange notes.

In addition to LCIF, any other existing or future subsidiaries of LXP that are borrowers or guarantors under our then principal credit agreement will provide guarantees of the exchange notes. Accordingly, LXP’s existing and future subsidiaries that do not guarantee the obligations under our principal credit agreement will similarly not be guarantors of the exchange notes. Payments on the exchange notes are only required to be made by LXP and the subsidiary guarantors. As a result, no payments are required to be made from assets of the non-guarantor subsidiaries unless those assets are transferred, by dividend or otherwise, to LXP or any of the subsidiary guarantors.

-9-

In the event of a bankruptcy, liquidation or reorganization of any of the non-guarantor subsidiaries, holders of non-guarantor subsidiary debt, including trade creditors, will generally be entitled to payment of their claims from the assets of non-guarantor subsidiaries before any assets are made available for distribution to LXP or any of the subsidiary guarantors.

In addition, any subsidiary guarantor, including LCIF, will be deemed released if such subsidiary guarantor’s obligations as a borrower or guarantor under our principal credit agreement terminate pursuant to the terms of our principal credit agreement or if our principal credit agreement is amended to remove certain or all of the subsidiary guarantors as borrowers or guarantors. To the extent the exchange notes are no longer guaranteed by any of our subsidiaries in the future, the exchange notes will be LXP’s obligations exclusively. All of our assets are held through our operating partnerships and our other subsidiaries. Consequently, our cash flow and our ability to meet our debt service obligations depends in large part upon the cash flow of our subsidiaries and the payment of funds by our subsidiaries to us in the form of distributions or otherwise.

As of September 30, 2013, LXP and its subsidiaries had approximately $2.5 billion of unpledged assets, which consisted of undepreciated real estate and loans receivable.

We may not be able to generate sufficient cash flow to meet our debt service obligations.

Our ability to make payments on and to refinance our indebtedness, including the ability of LXP and the subsidiary guarantors to make payments on and refinance the exchange notes, and to fund our operations, working capital and capital expenditures, depends on our ability to generate cash in the future. To a certain extent, our cash flow is subject to general economic, industry, financial, competitive, operating, legislative, regulatory and other factors, many of which are beyond our control.

We cannot assure you that our business will generate sufficient cash flow from operations or that future sources of cash will be available to us in an amount sufficient to enable us to pay amounts due on our indebtedness, including the exchange notes, or to fund our other liquidity needs.

Additionally, if we incur additional indebtedness in connection with future acquisitions or development projects or for any other purpose, our debt service obligations could increase.

We may need to refinance all or a portion of our indebtedness, including the exchange notes, on or before maturity. Our ability to refinance our indebtedness or obtain additional financing will depend on, among other things:

our financial condition and market conditions at the time; and
restrictions in the agreements governing our indebtedness.

As a result, we may not be able to refinance any of our indebtedness, including the exchange notes, on commercially reasonable terms, or at all. If we do not generate sufficient cash flow from operations, and additional borrowings or refinancings or proceeds of asset sales or other sources of cash are not available to us, we may not have sufficient cash to enable us to meet all of our obligations, including payments on the exchange notes. Accordingly, if we cannot service our indebtedness, we may have to take actions such as seeking additional equity, or delaying strategic acquisitions and alliances or capital expenditures, any of which could have a material adverse effect on our operations. We cannot assure you that we will be able to effect any of these actions on commercially reasonable terms, or at all.

Despite our substantial indebtedness, we may still incur significantly more debt, which could exacerbate any or all of the risks related to our indebtedness, including LXP’s and the subsidiary guarantors’ inability to pay the principal of or interest on the exchange notes.

Although the agreements governing our unsecured indebtedness and the indenture governing the notes limit our ability to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and, under certain circumstances, debt incurred in compliance with these restrictions could be substantial. To the extent that we incur additional indebtedness or other such obligations, we may face additional risks associated with our indebtedness, including LXP’s and the subsidiary guarantors’ possible inability to pay the principal of or interest on the exchange notes.

There is currently no trading market for the exchange notes, and an active public trading market for the exchange notes may not develop or, if it develops, may not be maintained or be public. The failure of an active liquid trading market for the exchange notes to develop or be maintained is likely to adversely affect the market price and liquidity of the exchange notes.

The exchange notes are a new issue of securities with no established trading market. LXP does not intend to apply for listing of the exchange notes on any securities exchange or for quotation of the exchange notes on any automated dealer quotation system.

Accordingly, an active trading market may not develop for the exchange notes and, even if one develops, may not be maintained. If an active trading market for the exchange notes does not develop or is not maintained, the market price and liquidity of the exchange notes is likely to be adversely affected, and holders may not be able to sell their exchange notes at desired times and prices or at all. If any of the exchange notes are traded after their purchase, they may trade at a discount from their purchase price.

-10-

The liquidity of the trading market, if any, and future trading prices of the exchange notes will depend on many factors, including, among other things, prevailing interest rates, the financial condition, results of operations, business, prospects and credit quality of us, and other comparable entities, the market for similar securities and the overall securities market, and may be adversely affected by unfavorable changes in any of these factors, some of which are beyond our control. In addition, market volatility or events or developments in the credit markets could materially and adversely affect the market value of the exchange notes, regardless of our financial condition, results of operations, business, prospects or credit quality.

The indenture governing the exchange notes, the principal credit agreement governing our $400.0 million unsecured revolving credit facility and our $250.0 million unsecured term loan and the term loan agreement governing our $255.0 million unsecured term loan contain restrictive covenants that limit our operating flexibility.

The indenture governing the exchange notes contains financial and operating covenants that, among other things, restrict our ability to take specific actions, even if we believe them to be in our best interest, including restrictions on our ability to:

consummate a merger, consolidation or sale of all or substantially all of our assets; and
incur additional secured and unsecured indebtedness.

In addition, the principal credit agreement and term loan agreement require us to meet specified financial and operating covenants. These covenants may restrict our ability to expand or fully pursue our business strategies. Our ability to comply with these and other provisions of the indenture governing the exchange notes, the principal credit agreement and the term loan agreement may be affected by changes in our operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events adversely impacting us. The breach of any of these covenants could result in a default under our indebtedness, which could cause those and other obligations to become due and payable. If any of our indebtedness is accelerated, we may not be able to repay it.

Federal and state statutes allow courts, under specific circumstances, to void guarantees and require holders of the exchange notes to return payments received from LXP or the subsidiary guarantors.

Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to all other debts of that guarantor if, among other things, the guarantor, at the time it incurred the debt evidenced by its guarantee:

issued the guarantee to delay, hinder or defraud present or future creditors; or
received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee, and:
Intercompany advances: LXP has an intercompany loan with LCIF that is based on the rate of LXP’s revolving credit facility. As of September 30, 2023, the balance of the loan was insolvent or rendered insolvent by reasonapproximately $101.3 million, with an interest rate range of such incurrence;Adjusted Term SOFR (as defined in LXP's credit agreement) plus 0.725% to 1.40%.
was engaged or aboutManagement responsibilities: LXP, through a wholly-owned subsidiary, manages certain consolidated properties that are owned by LCIF pursuant to engage in a business or transaction for which the guarantor’s remaining unencumbered assets constituted unreasonably small capital to carry on its business; or
intended to incur, or believed that it would incur, debts beyond its ability to pay the debts as they mature.property management agreements.

 

In addition, any payment by that guarantor pursuant to its guarantee could be voided and required to be returned to the guarantor, or toThe Merger Agreement

The following is a fund for the benefitsummary of the creditors of the guarantor.

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if, at the time it incurred the debt:

the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets;
the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
it could not pay its debts as they become due.

We cannot be sure as to the standards that a court would use to determine whether or not the subsidiary guarantors were solvent at the relevant time, or, regardless of the standard that the court uses, that the issuance of the guarantees of the exchange notes would not be voided or any guarantee of the exchange notes would not be subordinated to that subsidiary guarantor’s other debt.

If a case were to occur, any guarantee of the exchange notes incurred by one or more of the subsidiary guarantors could also be subject to the claim that, since the guarantee was incurred for LXP’s benefit, and only indirectly for the benefit of the subsidiary guarantor, the obligations of the applicable subsidiary guarantor were incurred for less than fair consideration.

A court could thus void the obligations under the guarantees or subordinate the guarantees to the applicable guarantor’s other debt or take other action detrimental to holders of the exchange notes.

-11-

An increase in interest rates could result in a decrease in the relative value of the exchange notes.

In general, as market interest rates rise, notes bearing interest at a fixed rate generally decline in value because the premium, if any, over market interest rates will decline. Consequently, if you acquire exchange notes and market interest rates increase, the market value of your exchange notes may decline. We cannot predict the future level of market interest rates.

A downgrade in LXP’s credit ratings could materially adversely affect our business and financial condition.

In June 2013, we received a senior unsecured debt rating of Baa2 with a stable outlook from Moody’s Investor Services, Inc. and a senior unsecured debt rating of BBB- with a stable outlook from Standard & Poor’s Rating Services. We plan to manage our operations to maintain these credit ratings with a capital structure consistent with or better than our current profile, but there can be no assurance that we will be able to maintain the current credit ratings. Any downgrades in terms of ratings or outlook by any of the noted rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our financial condition, results of operations and liquidity and the trading price of the exchange notes.

LXP may choose to redeem the exchange notes when prevailing interest rates are relatively low.

The exchange notes are redeemable at LXP’s option and LXP may choose to redeem some or all of the exchange notes from time to time, especially when prevailing interest rates are lower than the rate borne by the exchange notes. If prevailing rates are lower at the time of redemption, you would not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the interest rate on the exchange notes being redeemed. See “Description of notes-LXP’s redemption rights.”

If you fail to exchange your private notes, they will continue to be restricted securities and may become less liquid.

Because we anticipate that most holders of private notes will elect to exchange their private notes, we expect that the liquidity of the market for any private notes remaining after the completion of the exchange offer may be substantially limited. Any private note tendered and exchanged in the exchange offer will reduce the aggregate principal amount of the private notes outstanding. Following the exchange offer, if you did not validly tender your private notes you generally will not have any further registration rights and your private notes will continue to be subject to transfer restrictions. Private notes which you do not tender or we do not accept will, following the exchange offer, continue to be restricted securities. You may not offer or sell any private notes you own following the exchange offer except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the liquidity of the market for any private notes could be adversely affected.

You may not receive exchange notes in the exchange offer if the procedures for the exchange offer are not followed.

We will issue the exchange notes in exchange for your private notes only if you tender the private notes and deliver a properly completed and duly executed letter of transmittal or, in the case of book-entry delivery, an agent’s message, which binds holders of the private notes to the terms of the letter of transmittal and consent, and other required documents before expiration of the exchange offer. You should allow sufficient time to ensure timely delivery of the necessary documents. Neither the exchange agent nor we are under any duty to give notification of defects or irregularities with respect to the tenders of private notes for exchange. If you are the beneficial owner of private notes that are registered in the name of your broker, dealer, commercial bank, trust company or other nominee, and you wish to tender in the exchange offer, you should promptly contact the person in whose name your private notes are registered and instruct that person to tender on your behalf.

Merger Agreement. We may repurchase any private notes that are not tendered in the exchange offer on terms that are more favorable to the holders of the private notes than the terms of the exchange offer.

Although we do not currently intend to do so, we may, to the extent permitted by applicable law, purchase private notes in the open market, in privately negotiated transactions, through subsequent tender or exchange offers or otherwise. Any other purchases may be made on the same terms or on terms that are more or less favorable to holders than the terms of this exchange offer. We reserve the right to repurchase any private notes not tendered. If we decide to repurchase private notes on terms that are more favorable than the terms of the exchange offer, those holders who decide not to participate in the exchange offer could be better off than those that participated in the exchange offer.

-12-

THE EXCHANGE OFFER

Purpose of the Exchange Offer

On June 10, 2013, LXP issued $250.0 million of the private notes to Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, BB&T Capital Markets, a division of BB&T Securities, LLC, KeyBanc Capital Markets Inc., Capital One Southcoast, Inc., Fifth Third Securities, Inc., PNC Capital Markets LLC, RBS Securities Inc., Regions Securities LLC, TD Securities (USA) LLC and U.S. Bancorp Investments, Inc., the initial purchasers, pursuant to a purchase agreement. The initial purchasers subsequently sold the private notes to “qualified institutional buyers,” as defined in Rule 144A under the Securities Act, in reliance on Rule 144A, and to certain non-U.S. persons located outside the United States, in reliance on Regulation S under the Securities Act. As a condition to the sale of the private notes, we entered into a registration rights agreement with the initial purchasers on June 10, 2013. The registration rights agreement provides that:

(1)LXP and the subsidiary guarantors must use their commercially reasonable efforts to cause an exchange offer registration statement relating to an offer to exchange the private notes for an issue of Commission-registered exchange notes with terms identical to the private notes (except that the exchange notes will not be subject to restrictions on transfer or to an increase in annual interest exchange rate as described below or be entitled to registration rights under the registration rights agreement) to become effective within 240 days after the closing date of the offering of the private notes; and

(2)unless the exchange offer would not be permitted by applicable law or Commission policy or applicable interpretations of the staff of the Commission, LXP will:

(a)commence the exchange offer promptly after the exchange offer registration statement is declared effective by the Commission and keep the exchange offer open for at least 20 business days (or longer, if required by applicable securities laws); and

(b)use all commercially reasonable efforts to complete the exchange offer on or prior to 60 days (or longer, if required by applicable securities laws) after the date on which the exchange offer registration statement is declared effective by the Commission; and

(3)if obligated to file the shelf registration statement, LXP and the subsidiary guarantors will use all commercially reasonable efforts to file a shelf registration statement with the Commission on or prior to 30 days after such filing obligation arises, to cause the shelf registration statement to be declared effective by the Commission on or prior to 90 days after such filing obligation arises and to keep the shelf registration statement continuously effective for a period of one year after the effective date of the shelf registration statement.

Upon the effectiveness of the exchange offer registration statement, we will offer the exchange notes in exchange for the private notes. The registration rights agreement is listed as an exhibit to the registration statement of which this prospectus is part. The description of the registration rights agreement does not purport to be complete andThis summary is subject to, and is qualified in its entirety by reference to, the actual provisionsMerger Agreement, a complete copy of which is attached as Annex A to this information statement/prospectus. The rights and termsobligations of the registration rights agreement, whichparties are incorporated hereingoverned by reference.

Resalethe express terms and conditions of the Exchange NotesMerger Agreement and not by this summary or any other information contained in this information statement/prospectus. We encourage you to carefully read the Merger Agreement in its entirety, as it is the principal document that governs the Merger.

Under existing interpretations by the staffStructure of the Commission contained in no-action letters to third parties,Merger. The Merger Agreement provides for the exchange notes will generally be freely transferable by holders (other than by any holder that is an affiliate (as defined in Rule 405merger of LCIF with and into LXP, with LXP as the Securities Act) of us) after the exchange offer without further registration under the Securities Act, except that participating broker-dealers (as defined below)surviving company.

Governing Documents. There will be requiredno change to deliver a prospectus in connection with any resalethe declaration of trust (the “LXP Declaration of Trust”) or other transferby-laws of the exchange notes as described below.

If you wish to exchange your private notes for exchange notes in the exchange offer, you will be required to make certain representations. If you are not able to make these representations, you will not be entitled to participate in the exchange offer or to exchange your private notes for exchange notes.

Any broker-dealer who holds private notes acquired for its own accountLXP as a result of market-making activitiesthe Merger.

Trustees and Officers. There will be no change to the trustees or other trading activities (a participating broker-dealer) who exchanges those private notes for exchange notes in the exchange offer must deliverofficers of LXP as a prospectus meeting the requirementsresult of the Securities Act in connection withMerger.

Merger Consideration. At the Effective Time, each issued and outstanding LCIF Partnership Unit (other than units held by the General Partner) will automatically be converted into the right to receive 1.126 registered Common Shares, except that to the extent a holder of LCIF Partnership Units would be entitled to any resale of those exchange notes. We understand that the staff of the Commission has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to exchange notes, other than a resale of an unsold allotment from the initial offering of the private notes, with the prospectus contained in the exchange offer registration statement. Under the registration rights agreement, for a period of one year following the expiration date of the exchange offer, participating broker-dealersfractional Common Shares upon such conversion, no fractional Common Shares will be issued and instead such holder will be entitled to usereceive the prospectus containedCash Equivalent (as defined in the exchange offer registration statement in connectionMerger Agreement) of such fractional Common Shares (without interest and less any applicable withholding taxes).

Closing of the Merger. The closing of the Merger will take place at such time and on a date to be specified by the parties, subject to satisfaction of the conditions to the Merger. The Merger is currently expected to occur on or around December 31, 2023. At the closing, LCIF and LXP will file articles of merger with the resaleState Department of Assessments and Taxation of Maryland and a certificate of merger with the Secretary of State of the exchange notes (and weState of Delaware. The Merger will agree to keepbecome effective at such time as the exchange offer registration statement continuously effectivearticles of merger are accepted for record by the State Department of Assessments and Taxation of Maryland and the related prospectus current during such period).

Termscertificate of merger is accepted for filing by the Secretary of State of the Exchange Offer

UponState of Delaware, or at such later time as the termsparties have agreed and subject to the conditions described in this prospectus anddesignated in the accompanying letterarticles of transmittal, which together constitutemerger and certificate of merger (the “Effective Time”).

Withholding Rights. LXP will be entitled to deduct and withhold from the exchange offer, we will accept any and all private notes validly tendered and not withdrawn before the expiration date. We will issue $2,000 principal amount of exchange notes in exchange for each $2,000 principal amount of outstanding private notes surrenderedconsideration otherwise payable pursuant to the exchange offer. You may tender private notes only in integral multiplesMerger Agreement to any holder of $1,000 in excess thereof.

The formLCIF Partnership Units such amounts as they are required to deduct and termswithhold with respect to the making of the exchange notes are the same as the form and terms of the private notes except that:

-13-

the exchange notes will be registered with the Commission and thus will not be subject to restrictions on transfer or bear legends restricting their transfer; and

the exchange notes will not provide for thesuch payment of additional interest as described below or be entitled to registration rights under the registration rights agreement.

The exchange notes will evidence the same debt as the private notes and will be issued under the same indenture, so the exchange notes and the private notes will be treated as a single class of debt securities under the indenture.

As of the date of this prospectus, $250.0 million in aggregate principal amount of the private notes are outstanding and registered in the name of Cede & Co., as nominee for DTC. Only registered holders of the private notes, or their legal representative or attorney-in-fact, as reflected on the records of the trustee under the indenture, may participate in the exchange offer. We will not set a fixed record date for determining registered holders of the private notes entitled to participate in the exchange offer.

You do not have any appraisal or dissenters' rights under the indenture in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement and the applicable requirements of the Securities Act, the Exchange ActCode and the rules and regulations promulgated thereunder, or any provision of applicable law.

Surrender and Payment. The Merger Agreement provides that, promptly following the Effective Time, LXP will cause the transfer agent to pay and deliver to each holder of LCIF Partnership Units the Merger Consideration, together with any amounts payable in respect of cash in lieu of fractional shares.

Distributions. The Merger Agreement provides that LXP assumes any obligation of LCIF to pay to holders of LCIF Partnership Units as of immediately prior to the Effective Time the Distributions of Operating Cash Flow (as defined in the Partnership Agreement) that have a Partnership Record Date (as defined in the Partnership Agreement) prior to the Effective Time and which have not been paid as of the Commission.Effective Time.

 

6

We

Representations and Warranties. The Merger Agreement contains limited customary representations and warranties made by LXP to LCIF and LCIF to LXP. The representations and warranties in the Merger Agreement do not survive the Effective Time.

Conditions to the Merger. The completion of the Merger is subject to customary closing conditions, including that (i) the registration statement on Form S-4 of which this information statement/prospectus forms a part is effective and the subject of any stop order or proceedings seeking a stop order, (ii) the Common Shares to be issued in the Merger have been approved for listing on the NYSE, and (iii) no Governmental Authority (as defined in the Merger Agreement) in the United States has enacted, issued, promulgated, enforced or entered any Law (as defined in the Merger Agreement ) (whether temporary, preliminary or permanent) which is then in effect and has the effect of making the Merger illegal or otherwise restricting, preventing or prohibiting consummation of the Merger.

Termination of the Merger Agreement. The Merger Agreement may be terminated at any time prior to the Effective Time (i) by the mutual written consent of LCIF and LXP or (ii) by either party if a Governmental Authority permanently restrains, enjoins or otherwise prohibits the Merger.

Effect of Termination. If the Merger Agreement is terminated, then the Merger Agreement will be deemedvoid and of no further force or effect, and there will be no liability on the part of LCIF or LXP, or their respective officers, directors, trustees, subsidiaries or partners, as applicable, except that such termination shall not relieve any party of any liability or damages resulting from or arising out of any fraud or willful and material breaches of the Merger Agreement.

Amendment. Subject to have accepted validly tendered private notes when, ascompliance with applicable law and if we have given written noticethe Partnership Agreement, the Merger Agreement may not be amended except by an instrument signed by each of acceptancethe parties prior to the exchange agent.Effective Time.

Governing Law. The exchange agentMerger Agreement and all related transactions or actions are governed by the Laws of the State of New York, except to the extent required by the laws of the State of Maryland or the State of Delaware, the Merger will actbe governed by such laws.

The foregoing summary of the Merger Agreement is qualified in its entirety by the Merger Agreement, a copy of which is attached as your agent forAnnex A to this information statement/prospectus and incorporated into this information statement/prospectus.

No Dissenters’ or Appraisal Rights

No LCIF Partnership Unitholders will have dissenters’ or appraisal rights under applicable law or contractual appraisal rights under the purposesPartnership Agreement or the Merger Agreement.

Listing of receiving the exchange notes from us.

If you tender private notesCommon Shares to be Issued in the exchange offer you will notMerger

LXP expects to obtain approval to list the Common Shares to be required to pay brokerage commissions or fees with respect to the exchange of private notesissued pursuant to the exchange offer. We will pay all charges and expenses, other thanMerger Agreement on the applicable taxes described below, in connection withNYSE, subject to official notice of issuance, which approval is a condition to the exchange offer.

Expiration Date; Extensions; Amendments

The term "expiration date" will mean 5:00 p.m., New York City time on   , 2014 (the 21st business day following commencementclosing of the exchange offer), unless we extendMerger.

Distributions

If the exchange offer, in which caseMerger closes, as expected, on or around December 31, 2023, LCIF will have the term expiration date will mean the latest date and time to which we extend the exchange offer.

To extend the exchange offer, we will notify the exchange agent and each registered holder of any extension in writing by a press release or other public announcement before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. The notice of extension will disclose the aggregate principal amount of the private notes that have been tendered as of the date of such notice.

We reserve the right, in our discretion:

to delay accepting any private notes due to an extension of the exchange offer; or

if any conditions listed below under "-Conditions" are not satisfied, to terminate the exchange offer,

in each case by written notice of the delay, extension or termination to the exchange agent and by press release or other public announcement.

We will follow any delay in acceptance, extension or termination as promptly as practicable by written notice to the registered holders by a press release or other public announcement. If we amend the exchange offer in a manner we determine constitutes a material change, we will promptly disclose the amendment in a prospectus supplement that we will distribute to the registered holders. We will also extend the exchange offer for a period of five to ten business days, depending upon the significance of the amendment and the manner of disclosure, if the exchange offer would otherwise expire during the five to ten business day period.

Interest on the Exchange notes

The exchange notes will bear interest at the same rate and on the same terms as the private notes. Consequently, the exchange notes will bear interest at a rate equal to 4.25% per year (calculated using a 360-day year). Interestobligation (which will be payable on the exchange notes semi-annually on each June 15 and December 15, beginning June 15, 2014.

Interest on the exchange notes will accrue from the last interest payment date on which interest was paid on the private notes or, if no interest has been paid on the private notes, from the date of initial issuance of the private notes. We will deem the rightassumed by LXP) to receive any interest accrued but unpaid on the private notes waived by you if we accept your private notes for exchange.

Procedures for Tendering

Valid Tender

Except as described below,pay a tendering holder must, prior to the expiration date, transmit to the exchange agent, at the address listed under the heading"–Exchange Agent":

a properly completed and duly executed letter of transmittal, including all other documents required by the letter of transmittal; or
if the private notes are tenderedquarterly distribution in accordance with the book-entry procedures listed below, an agent's message.

-14-

In addition, a tendering holder must:

deliver certificates, if any, forPartnership Agreement. LXP expects to make the private notesdistribution on January 16, 2024 to the exchange agent at or before the expiration date; or
deliver a timely confirmationholders of book-entry transferLCIF Partnership Units as of the private notes into the exchange agent's account at DTC, the book-entry transfer facility, along with the letterclose of transmittal or an agent's message; or
comply with the guaranteed delivery procedures described below.

business on December 29, 2023.

The term "agent's message" means a message, transmitted by DTC to and received by the exchange agent and forming a partRestrictions on Resale of a book-entry confirmation, that states that DTC has received an express acknowledgment that the tendering holder agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against this holder.

If the letter of transmittal is signed by a person other than the registered holder of private notes, the letter of transmittal must be accompanied by a written instrument of transfer or exchange in satisfactory form duly executed by the registered holder with the signature guaranteed by an eligible institution. The private notes must be endorsed or accompanied by appropriate powers of attorney. In either case, the private notes must be signed exactly as the name of any registered holder appears on the private notes.

If the letter of transmittal or any private notes or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless waived by us, proper evidence satisfactory to us of their authority to so act must be submitted.

By tendering private notes pursuant to the exchange offer, each holder will represent to us that, among other things:

the exchange notes to be acquired in connection with the exchange offer are being acquiredCommon Shares Issued in the ordinary course of business of the holder and any beneficial owner;

the holder does not have an arrangement or understanding with any person to participate in the distribution of such exchange notes;

the holder is not an affiliate of the issuer of the exchange notes; and

the holder is not engaged in and does not intend to engage in a distribution of the exchange notes.

Merger

The method of delivery of private notes, letters of transmittal and all other required documents is at your election and risk. If the delivery is by mail, we recommend that you use registered mail, properly insured, with return receipt requested. In all cases, you should allow sufficient time to assure timely delivery. You should not send letters of transmittal or private notes to us.

If you are a beneficial owner whose private notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and wish to tender, you should promptly instruct the registered holder to tender on your behalf. Any registered holder that is a participant in DTC's book-entry transfer facility system may make book-entry delivery of the private notes by causing DTC to transfer the private notes into the exchange agent's account, including by means of DTC's Automated Tender Offer Program.

Signature Guarantees

Signatures on a letter of transmittal or a notice of withdrawal must be guaranteed, unless the private notes surrendered for exchange are tendered:

by a registered holder of the private notes who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal; or

for the account of an "eligible institution."

If signatures on a letter of transmittal or a notice of withdrawal are required to be guaranteed, the guarantees must be by an "eligible institution." An "eligible institution" is an "eligible guarantor institution" meeting the requirements of the registrar for the notes, which requirements include membership or participation in the Security Transfer Agent Medallion Program, or STAMP, or such other "signature guarantee program" as may be determined by the registrar for the notes in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.

Book-Entry Transfer

The exchange agent will make a request to establish an account for the private notes at DTC for purposes of the exchange offer within two business days after the date of this prospectus. Any financial institution that is a participant in DTC's systems must make book-entry delivery of private notes by causing DTC to transfer those private notes into the exchange agent's account at DTC in accordance with DTC's procedure for transfer. The participant should transmit its acceptance to DTC at or prior to the expiration date or comply with the guaranteed delivery procedures described below. DTC will verify this acceptance, execute a book-entry transfer of the tendered private notes into the exchange agent's account at DTC and then send to the exchange agent confirmation of this book-entry transfer. The confirmation of this book-entry transfer will include an agent's message confirming that DTC has received an express acknowledgment from this participant that this participant has received and agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against this participant.

Delivery of exchange notesCommon Shares issued in the exchange offer may be effected through book-entry transfer at DTC. However, the letter of transmittal or facsimile of it or an agent's message, with any required signature guarantees and any other required documents, must:

-15-

be transmitted to and received by the exchange agent at the address listed under "–Exchange Agent" at or prior to the expiration date; or
comply with the guaranteed delivery procedures described below.

Delivery of documents to DTC in accordance with DTC's procedures does not constitute delivery to the exchange agent.

Guaranteed Delivery

If a registered holder of private notes desires to tender the private notes, and the private notes are not immediately available, or time will not permit the holder's private notes or other required documents to reach the exchange agent before the expiration date, or the procedure for book-entry transfer described above cannot be completed on a timely basis, a tender may nonetheless be made if:

the tender is made through an eligible institution;
prior to the expiration date, the exchange agent received from an eligible institution a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by us, by facsimile transmission, mail or hand delivery:
1.stating the name and address of the holder of private notes and the amount of private notes tendered;
2.stating that the tender is being made; and
3.guaranteeing that within three New York Stock Exchange, or NYSE, trading days after the expiration date, the certificates for all physically tendered private notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and a properly completed and duly executed letter of transmittal, or an agent's message, and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and

the certificates for all physically tendered private notes, in proper form for transfer, or a book-entry confirmation, as the case may be, and a properly completed and duly executed letter of transmittal, or any agent's message, and all other documents required by the letter of transmittal, are received by the exchange agent within three NYSE trading days after the expiration date.

Determination of Validity

We will determine in our sole discretion all questions as to the validity, form and eligibility of private notes tendered for exchange. This discretion extends to the determination of all questions concerning the time of receipt, acceptance and withdrawal of tendered private notes. These determinationsMerger will be final and binding. We reserve the absolute right to reject any and all private notes not properly tendered or any private notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to any particular private note either before or after the expiration date, including the right to waive the ineligibility of any tendering holder. Our interpretation of the terms and conditions of the exchange offer as to any particular private note either before or after the expiration date, including the letter of transmittal and the instructions to the letter of transmittal, shall be final and binding on all parties. Unless waived, you must cure any defects or irregularities with respect to tenders of private notes prior to the expiration date or within the time we determine. Although we intend to notify you of defects or irregularities with respect to tenders of private notes, neither we, the exchange agent nor any other person will incur any liability for failure to give you that notification. Unless waived, we will not deem tenders of private notes to have been made until and unless you cure the defects or irregularities prior to the expiration date or within the time we determine.

Other Rights

While we have no present plan to acquire any private notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any private notes that are not tendered in the exchange offer, we reserve the right in our sole discretion to purchase or make offers for any private notes that remain outstanding after the expiration date.

Acceptance of Private Notes for Exchange; Issuance of Exchange Notes

Upon the terms and subject to the conditions of the exchange offer, we will accept, promptly after the expiration date, all private notes properly tendered. We will issue the exchange notes promptly after acceptance of the private notes. For purposes of the exchange offer, we will be deemed to have accepted properly tendered private notes for exchange when, as and if we have given oral or written notice to the exchange agent, with prompt written confirmation of any oral notice.

In all cases, issuance of exchange notes for private notes will be made only after timely receipt by the exchange agent of:

certificates for the private notes, or a timely book-entry confirmation of the private notes, into the exchange agent's account at the book-entry transfer facility;
a properly completed and duly executed letter of transmittal or an agent's message; and

all other required documents.

For each private note accepted for exchange, the holder of the private note will receive an exchange note having a principal amount equal to that of the surrendered private note.

Return of Notes

Unaccepted or non-exchanged private notes will be returned without expense to the tendering holder of the private notes. In the case of private notes tendered by book-entry transfer in accordance with the book-entry procedures described above, the non-exchanged private notes will be credited to an account maintained with DTC as promptly as practicable after the expiration or termination of the exchange offer.

-16-

Withdrawal of Tenders

Except as otherwise provided in this prospectus, you may withdraw tenders of private notes at any time before 5:00 p.m., New York City time, on the expiration date.

For a withdrawal to be effective, the exchange agent must receive a written notice of withdrawal at the address or, in the case of eligible institutions, at the facsimile number, indicated under "–Exchange Agent" before the expiration date. Any notice of withdrawal must:

specify the name of the person, referred to as the depositor, having tendered the private notes to be withdrawn;
identify the private notes to be withdrawn, including the certificate number or numbers and principal amount of the private notes;
contain a statement that the holder is withdrawing its election to have the private notes exchanged;
be signed by the holder in the same manner as the original signature on the letter of transmittal by which the private notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the private notes register the transfer of the private notes in the name of the person withdrawing the tender; and
specify the name in which the private notes are registered, if different from that of the depositor.

If certificates for private notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of these certificates the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible institution, unless this holder is an eligible institution. If private notes have been tendered in accordance with the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn private notes.

We will determine in our sole discretion all questions as to the validity, form and eligibility of the notices, and our determination will be final and binding on all parties. We will not deem any properly withdrawn private notes to have been validly tendered for purposes of the exchange offer, and we will not issue exchange notes with respect to those private notes, unless you validly retender the withdrawn private notes. You may retender properly withdrawn private notes by following the procedures described above under "-Procedures for Tendering" at any time before 5:00 p.m., New York City time, on the expiration date.

Conditions

Notwithstanding any other term of the exchange offer, we will not be required to accept for exchange, or exchange the exchange notes for, any private notes, and may terminate the exchange offer as provided in this prospectus before the expiration of the exchange offer, if the exchange offer violates applicable law or an applicable interpretation of the staff of the Commission.

Termination of Rights

All of your rights under the registration rights agreement will terminate upon consummation of the exchange offer, except with respect to our continuing obligations:

to indemnify you and parties related to you against liabilities, including liabilities under the Securities Act; and

to provide, upon your request, the information required by Rule 144A(d)(4)freely transferable under the Securities Act of 1933, as amended, referred to permit resales of the notes pursuant to Rule 144A.

Shelf Registration

If:

(1)LXP determines that an exchange offer is not available or may not be completed because it would violate any applicable law or applicable interpretations of the Commission;
(2)an exchange offer is not for any other reason completed within 300 days after the closing of the offering of the private notes; or
(3)any initial purchaser notifies LXP that the notes held by it are not eligible to be exchanged for the exchange notes in the exchange offer;

then LXP and the subsidiary guarantors will use their commercially reasonable efforts to cause to be filed with the Commissionherein as soon as reasonably practicable but in no event more than 30 days after such determination, date or notice, as the case may be, a shelf registration statement, and will use commercially reasonable efforts to have such shelf registration statement declared effective by the Commission no later than 90 days after such determination date or notice.

If:

(1)the exchange offer registration statement is not declared effective within 240 days after the closing of the offering of the private notes;

-17-

(2)the exchange offer is not consummated within 300 days after the closing of the offering of the private notes;

(3)LXP is obligated to file a shelf registration statement and the shelf registration statement is not filed with the Commission within 30 days of the triggering of such obligation or is not declared effective within 90 days after the triggering of such obligation; or

(4)the shelf registration statement, if required, is declared effective but thereafter (and before the expiration of the period referred to in Rule 144) ceases to be effective or useable in connection with resales of the notes for more than 60 days within any 12-month period or if LXP, through its omission, fails to name as a selling securityholder any holder that had complied timely with its obligations to be named in the shelf registration statement (each such event referred to in clauses (1) through (4) above, a registration default).

then LXP will pay additional interest to each holder of notes from and including the date on which any such registration default shall occur to but excluding the date on which all registration defaults have been cured or cease to exist.

With respect to the first 90-day period during which a registration default is continuing, additional interest will be paid at a rate equal to 0.25% per annum of the principal amount of notes outstanding. If all registration defaults are not cured or cease to exist prior to the end of such 90-day period, then, from and including the first day after such 90-day period, the rate at which additional interest is payable will increase by an additional 0.25% per annum. However, the maximum rate of additional interest will in no event exceed 0.50% per annum. Additional interest will accrue and be payable to but excluding the date on which all registration defaults have been cured or cease to exist.

Additional interest will be computed on the basis of a 360-day year comprised of twelve 30-day months and will be paid to the holders of the notes in the same manner and times as interest is otherwise payable on the notes. From and including the date on which all registration defaults have been cured or otherwise ceased to exist, additional interest will cease to accrue unless and until a subsequent registration default occurs. Additional interest will not be payable on any private notes or exchange notes other than notes.

Holders of the notes will be required to make certain representations to LXP (as described in the registration rights agreement) in order to participate in the exchange offer. In order to include notes in the shelf registration statement, if filed, and receive additional interest relating to a registration default with respect to the shelf registration statement, a holder will be required to provide certain information to LXP and to be named as a selling security holder in the shelf registration statement and the related prospectus, and will be subject to certain civil liability provisions under the Securities Act, in connection with sales under the shelf registration statement. By including notes in the shelf registration statement, ifexcept for shares issued to any a holder willperson who may be deemed to have agreed to indemnify us against certain losses arising outbe an “affiliate” of information furnished by such holder in writing for inclusion in any shelf registration statement.

If a shelf registration statement becomes effective underLXP within the Securities Act then, during any 365-day period thereafter LXP may, by notice to holders of notes registered pursuant to the shelf registration statement, suspend the availability of the shelf registration statement and the use of the related prospectus for up to two periods not to exceed a total of 60 days during any such 365-day period if:

such action is required by applicable law; or

the happening of any event or the discovery of any fact makes any statement made in the shelf registration statement or the related prospectus untrue in any material respect or constitutes an omission to state a material fact in the shelf registration statement or related prospectus.

Each holder of notes will be required to discontinue disposition of those notes pursuant to the shelf registration statement upon receipt from us of notice of any events described in the preceding sentence but will not be entitled to receive additional interest unless such suspension exceeds the number of days or periods specified above. If we effect the exchange offer, we will also be permitted to require any broker-dealers to discontinue disposition of exchange notes pursuant to this prospectus on the same terms and conditions described in this paragraph. If we suspend the use of the shelf registration statement or this prospectus during the period we are otherwise required to keep such registration statement effective, then the period that LXP and the subsidiary guarantors are required to keep the shelf registration statement effective or during which the exchange offer registration statement must remain effective and participating broker-dealers are entitled to use such prospectus, as the case may be, will be extended by a number of days equal to the period of any such suspension.

-18-

Exchange Agent

We have appointed U.S. Bank National Association as exchange agent for the exchange offer. All executed letters of transmittal and any other required documents should be directed to the exchange agent at the address or facsimile number set forth below. You should direct questions and requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery to the exchange agent addressed as follows:

U.S. Bank National Association

100 Wall Street, 16th Floor

New York, NY 10005

Facsimile: (212) 514-6841

Attention: William G. Keenan, Vice President

Reference: Lexington Realty Trust

4.25% Senior Notes due 2023

Fees and Expenses

We will bear the expenses of soliciting tenders. We have not retained any dealer manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses.

We will pay the cash expenses incurred in connection with the exchange offer. These expenses include registration fees, fees and expenses of the exchange agent and the trustee, accounting and legal fees and printing costs, among others.

We will pay all transfer taxes, if any, applicable to the exchange of notes pursuant to the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of the private notes pursuant to the exchange offer, including the registration of any tendered private notes that may be transferred in connection with the exchange offer, then you must pay the amount of the transfer taxes. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to you.

Consequence of Failures to Exchange

Participation in the exchange offer is voluntary. We urge you to consult your financial and tax advisors in making your decisions on what action to take. Private notes that are not exchanged for exchange notes pursuant to the exchange offer will remain restricted securities. Accordingly, those private notes may be resold only:

to a person whom the seller reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A;
in a transaction meeting the requirementsmeaning of Rule 144 under the Securities Act;
outsideAct after the United StatesMerger. Common Shares received by persons who are deemed to a foreign personbe affiliates may be resold by these persons only in a transaction meetingtransactions permitted by the requirementslimited resale provisions of Rule 903145 or 904 of Regulation Sas otherwise permitted under the Securities Act;
in accordance with another exemption from the registration requirements of the Securities Act and based upon an opinion of counsel if we so request;
to us; or

pursuant to an effective registration statement.

In each case, the private notesAct. Persons who may be resold only in accordancedeemed to be

7

affiliates generally include individuals or entities that, directly or indirectly through one or more intermediaries, control, are controlled by or are under common control with any applicable securities laws of any state of the United States or any other applicable jurisdiction.LXP.

Accounting Treatment

The exchange notesMerger will be recorded at the same carrying valueaccounted for as the private notes, as reflectedan equity transaction.

Comparison of Rights of LXP Shareholders and LCIF Partnership Unitholders

LXP is a Maryland real estate investment trust and LCIF is a Delaware limited partnership. Ownership interests in our accounting records on the datea limited partnership are fundamentally different from ownership interests in a real estate investment trust. For more information concerning these differences, see “Comparison of Rights of LXP Shareholders and LCIF Partnership Unitholders.”

Background of the exchange offer. Accordingly, no gain or loss for accounting purposes will be recognized.Merger

-19-

USE OF PROCEEDS

The exchange offer satisfies an obligation under the registration rights agreement. We will not receive any cash proceeds from the exchange offer.

The net proceeds from the saleOn November 29, 2017, at a meeting of the private notes, after deducting discounts and offering expenses, were approximately $244.9 million. We used the net proceeds from the sale of the private notes to pay amounts outstanding under our unsecured revolving credit facility, and the remainder for general corporate purposes, including, without limitation, unspecified acquisitions.

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS

The following table sets forth the ratios of earnings to combined fixed charges and preferred dividendsLXP Board, E. Robert Roskind, then Chairman of LXP, LCIF and LCIF II for each of the last five fiscal years and for the nine months ended September 30, 2013 and 2012. The ratios of earnings to combined fixed charges and preferred dividends were computed by dividing earnings by fixed charges and preferred dividends. For these purposes, “earnings” consist of income (loss) before provision for income taxes, noncontrolling interest, equity in earnings (losses) of non-consolidated entities, gain on acquisition and discontinued operations, plus fixed charges (excluding capitalized interest) and cash received from joint ventures. “Fixed charges” consist of interest expense, including capitalized interest and the amortization expense on debt issuance costs. This information is given on a historical basis.

Lexington Realty Trust:

  Nine months ended
September 30,
(unaudited)
  For the years ended
December 31,
 
  2013  2012  2012  2011  2010  2009  2008 
Ratio of earnings to combined fixed charges and preferred dividends (1)  N/A   N/A   N/A   N/A   N/A   N/A   N/A 
Deficiency (dollars in thousands) $10,076  $13,982  $25,454  $64,877  $49,287  $12,049  $1,562 

LCIF:

  Nine months ended
September 30,
(unaudited)
  For the years ended
December 31,
 
  2013  2012  2012  2011  2010  2009  2008 
                (unaudited)  (unaudited) 
Ratio of earnings to combined fixed charges and preferred dividends  2.29   1.61   1.65   1.48   1.40   1.21   1.18 

LCIF II:

  Nine months ended
September 30,
(unaudited)
  For the years ended
December 31,
 
  2013  2012  2012  2011  2010  2009  2008 
                (unaudited)  (unaudited) 
Ratio of earnings to combined fixed charges and preferred dividends (1)  3.39   2.38   2.56   3.07   3.01   N/A   N/A 
Deficiency (dollars in thousands)  N/A   N/A   N/A   N/A   N/A  282  1,316 

(1) N/A - Ratio is below 1.0.

-20-

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion relates to the consolidated financial statements of each of LCIF and LCIF II and their respective subsidiaries, and should be read in conjunction with such financial statements and notes thereto appearing elsewhere in this prospectus. Management’s Discussion and Analysis of Financial Condition and Results of Operations for LXP is available in the documents incorporated by reference into this prospectus.

In this discussion, we have included statements that may constitute “forward-looking statements.” Forward-looking statements are not historical facts but instead represent only our beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside our control. These statements may relate to future plans and objectives, among other things. By identifying these statements for you in this manner, we are alerting you toproposed the possibility that actual results may differ, possibly materially, from the anticipated results indicated in these forward-looking statements. Important factors that could cause actual results to differ, possibly materially, from those indicated in the forward-looking statements include, among others, those discussed in “Risk factors” and “Cautionary statements concerning forward-looking statements” sections included elsewhere in this prospectus.

Explanatory Note

On December 30, 2013,of merging LCIF II mergedinto LXP, with and into LCIF, with LCIF asLXP being the surviving entity. The proposed transaction would require Mr. Roskind's consent as the beneficial owner of The LCP Group, L.P., which was the majority holder of LCIF Partnership Units held by LCIF’s special limited partners.  Mr. Roskind informed the LXP Board that he would require a cash payment for his consent equal to the estimated tax liability he would incur in the event the proposed transaction was consummated.  After considering the benefits and costs of the proposed transaction, the LXP Board determined not to proceed.  

Following this LXP Board meeting, employees and counsel of LXP (the "LXP representatives") had periodic discussions with representatives of The LCP Group, L.P. (the "LCP representatives") regarding alternative transaction structures. The LXP Board continued to discuss a potential merger of LCIF into LXP at meetings on March 27, 2018, May 15, 2018 and September 13, 2018.   

In September 2018, the LCP representatives proposed to the LXP representatives a two-step transaction pursuant to which an LCIF merger would be preceded by an exchange offer that would permit certain holders of LCIF Partnership Units to exchange such units, in a non-taxable transaction, for interests in a different LXP subsidiary that would hold a commercial real estate asset. The parties continued to explore the proposed transaction.  

In January 2019, pursuant to a retirement agreement entered into in January 2018, Mr. Roskind retired as an employee and executive officer of LXP, but continued as a trustee of LXP and the non-executive Chairman of the LXP Board. 

In March 2019, at a meeting of the LXP Board, Mr. Roskind formally proposed that The LCP Group, L.P. would consent to a merger of LCIF into LXP if the merger was donepreceded by a non-taxable exchange offer for interests in a different LXP subsidiary that would acquire a hotel development asset. After making the proposal, Mr. Roskind recused himself from further discussions and votes related to streamline the reporting obligationsproposed transaction.  Following extensive deliberations and after conferring with its outside advisors, the LXP Board determined that the proposed transaction was not in the best interests of LXP, in part because acquiring the hotel development asset was not aligned with LXP's investment strategy.  

On March 31, 2019, Mr. Roskind resigned his position as a trustee and non-executive Chairman of the LXP Board.  

On June 6, 2019, the LCP representatives contacted the LXP representatives to recommence discussions regarding the proposed merger preceded by an exchange offer, but with the exchange offer involving a different commercial real estate asset from the transaction previously proposed. Subsequently, the LXP representatives and the LCP representatives had periodic discussions regarding this and other potential transaction structures and the LXP Board continued to be briefed on these discussions. 

8

On October 15, 2019, LCIF and The LCP Group, L.P. sent a letter to holders of LCIF and LCIF II into one entity on a going-forward basis.  Except as otherwise indicated, all information with respect to LCIF and LCIF II in this prospectus is presented as of September 30, 2013, which is prior to the merger.  Information subsequent to the merger assumes that all limited partners in LCIF II received OP units in LCIF as consideration in the merger.

Overview

General. LCIF was formed as a limited partnership on March 14, 1986 under the lawsPartnership Units informing them of the state of Delawarepotential two-step transaction structure in an effort to invest in existing real estate properties net-leased to corporations or other entities. LCIF II was formed as a limited partnership on January 27, 1987 under the laws of the state of Delaware to invest in existing real estate properties net-leased to corporations or other entities. On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity.

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 of LCIF requires business to be conductedgauge such holders' interest in such a manner that will permittransaction.  The LXP to continue to be classified as a REIT under Sections 856 through 860 of the Code, unless LXP ceases to qualify as a REIT for reasons other than the conduct of the business of LCIF.

LXP is the sole equity owner of Lex GP-1 Trust, a Delaware statutory trust, which is the general partner of LCIF and holds, as of December 31, 2013, approximately 0.4% of the outstanding OP units in LCIF. LXP is also the sole equity owner of Lex LP-1 Trust, a Delaware statutory trust, which holds, as of December 31, 2013, approximately 94.3% of the outstanding OP units in LCIF. The remaining OP units in LCIF are beneficially owned by E. Robert Roskind, Chairman of LXP, and certain non-affiliated investors. As the sole equity owner of the general partner of LCIF, LXP has the ability to control all of the day-to-day operations of LCIF, subject to the terms of the LCIF partnership agreement.

The business of LCIF is substantially the same as the business of LXP and includes investment in single-tenant assets; except that LCIF is dependent on LXP for management of its operations and future investments. LCIF does not have any employees, executive officers or a board of directors. LXP also invests in assets and conducts business directly and through other subsidiaries. LXP allocates investments to itself and its other subsidiaries or to LCIF as it deems appropriate and in accordance with certain obligations under the LCIF partnership agreement, with respect to allocations of nonrecourse liabilities.

LCIF’s revenues and cash flows are generated predominantly from property rent receipts. As a result, growth in revenues and cash flows is directly correlated to LCIF’s ability to (1) acquire income producing real estate assets and (2) re-lease properties that are vacant, or may become vacant, at favorable rental rates.

The business and management structure of LCIF II was substantially similar to the business and management structure of LCIF.

Critical Accounting Policies. The accompanying consolidated financial statements of each of LCIF and LCIF II have been prepared in accordance with United States generally accepted accounting principles, or GAAP, which require management of each of LCIF and LCIF II to make estimates that affect the amounts of revenues, expenses, assets and liabilities reported and related disclosures of contingent assets and liabilities. A summary of each of LCIF’s and LCIF II’s significant accounting policies, as applicable, which are important to the portrayal of its financial condition and results of operations, is set forth in note 2 to the 2012 Consolidated Financial Statements of each of LCIF and LCIF II, which are exhibits hereto and incorporated herein.

The following is a summary of the critical accounting policies of LCIF and LCIF II, which require some of the most difficult, subjective and complex judgments.

Basis of Presentation and Consolidation. The consolidated financial statements of each of LCIF and LCIF II are prepared on the accrual basis of accounting. The financial statements reflect the accounts of each of LCIF and LCIF IIrepresentatives and the accounts of their respective consolidated subsidiaries. Each of LCIF and LCIF II consolidate its wholly-owned subsidiaries, partnerships and joint ventures, if any, which it controls through (1) voting rights or similar rights or (2) by means other than voting rights if it is the primary beneficiary of a variable interest entity, which we referLCP representatives coordinated an outreach effort to as a VIE. Entities which it does not control and entities which are VIEs in which it is not the primary beneficiary are generally accounted for by the equity method. Significant judgments and assumptions are made by Lex GP, as the general partner, to determine whether an entity is a VIE such as those regarding an entity's equity at risk, the entity's equity holders' obligations to absorb anticipated losses and other factors. In addition, the determination of the primary beneficiary of a VIE requires judgment to determine the party that has (1) power over the significant activities of the VIE and (2) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.

-21-

Judgments and Estimates. The management of each of LCIF and LCIF II has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare the consolidated financial statements of each of LCIF and LCIF II in conformityfollow up with GAAP. These estimates and assumptions are based on our management's best estimates and judgment. Our management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. The management of each of LCIF and LCIF II adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and entities that should be consolidated, the determination of impairment of long-lived assets and loans receivable and the valuation and the useful lives of long-lived assets.

Purchase Accounting and Acquisition of Real Estate. The fair value of the real estate acquired, which includes the impact of fair value adjustments for assumed mortgage debt related to property acquisitions, is allocated to the acquired tangible assets, consisting of land, building and improvements and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and value of tenant relationships, based in each case on their fair values.

The fair value of the tangible assets of an acquired property (which includes land, building and improvements and fixtures and equipment) is determined by valuing the property as if it were vacant. The “as-if-vacant” value is then allocated to land and building and improvements based on our management's determination of relative fair values of these assets. Factors considered by our management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, the management of each of LCIF and LCIF II includes real estate taxes, insurance and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. The management of each of LCIF and LCIF II also estimates costs to execute similar leases including leasing commissions.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market lease values are recorded based on the difference between the current in-place lease rent and management's estimate of current market rents. Below-market lease intangibles are recorded as part of deferred revenue and amortized into rental revenue over the non-cancelable periods and bargain renewal periods of the respective leases. Above-market leases are recorded as part of intangible assets and amortized as a direct charge against rental revenue over the non-cancelable portion of the respective leases.

The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationship values, is measured by the excess of (1) the purchase price paid for a property over (2) the estimated fair value of the property as if vacant, determined as set forth above. This aggregate value is allocated between in-place lease values and tenant relationship values based on management's evaluation of the specific characteristics of each tenant's lease. The value of in-place leases is amortized to expense over the remaining non-cancelable periods and any bargain renewal periods of the respective leases. The value of tenant relationships is amortized to expense over the applicable lease term plus expected renewal periods.

Revenue Recognition. Each of LCIF and LCIF II recognizes lease revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are lower than those in the primary term are excluded from the calculation of straight line rent if the renewals are not reasonably assured. In those instances in which either LCIF or LCIF II funds tenant improvements and the improvements are deemed to be owned by LCIF or LCIF II, as applicable, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. When the management of each of LCIF and LCIF II determines that the tenant allowances are lease incentives, LCIF or LCIF II, as applicable, commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. Determining if a tenant allowance is a lease incentive requires significant judgment. Each of LCIF and LCIF II recognizes lease termination payments as a component of rental revenue in the period received, provided that there are no further obligations under the lease; otherwise the lease termination payment is amortized on a straight-line basis over the remaining obligation period. All above-market lease assets, below-market lease liabilities and deferred rent assets or liabilities for terminated leases are charged against or credited to rental revenue in the period the lease is terminated. All other capitalized lease costs and lease intangibles are accelerated via amortization expense to the date of termination.

Gains on sales of real estate are recognized based on the specific timing of the sale as measured against various criteria related to the terms of the transactions and any continuing involvement associated with the properties. If the sales criteria are not met, the gain is deferred and the finance, installment or cost recovery method, as appropriate, is applied until the sales criteria are met. To the extent either LCIF or LCIF II sells a property and retains a partial ownership interest in the property, LCIF or LCIF II, as applicable, recognizes gain to the extent of the third-party ownership interest.

-22-

Accounts Receivable. The management of each of LCIF and LCIF II continuously monitors collections from the tenants of LCIF and LCIF II and would make a provision for estimated losses based upon historical experience and any specific tenant collection issues that it has identified.

Impairment of Real Estate. The management of LCIF and LCIF II evaluates the carrying value of all tangible and intangible real estate assets for possible impairment when an event or change in circumstance has occurred that indicates its carrying value may not be recoverable. The evaluation includes estimating and reviewing anticipated future undiscounted cash flows to be derived from the asset. If such cash flows are less than the asset's carrying value, an impairment charge is recognized to the extent by which the asset's carrying value exceeds the estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results.

Loans Receivable. The management of LCIF and LCIF II evaluates the collectability of both interest and principal of any loans receivable and, if circumstances warrant, to determine whether the loan is impaired. A loan is considered to be impaired, when based on current information and events, it is probable that the holder will be unable to collect all amounts due according to the existing contractual terms. Significant judgments are required in determining whether impairment has occurred. When a loan is considered to be impaired, the amount of the loss accrual is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the loan's effective interest rate, the loan's observable current market price or the fair value of the underlying collateral. Interest on impaired loans is recognized on a cash basis.

Acquisition, Development and Construction ArrangementsThe management of LCIF and LCIF II evaluates loans receivable where LCIF or LCIF II participates in residual profits through loan provisions or other contracts to ascertain whether LCIF or LCIF II has the same risks and rewards as an owner or a joint venture partner. Where management concludes that such arrangements are more appropriately treated as an investment in real estate, such loan receivable is reflected as an equity investment in real estate under construction in the Consolidated Balance Sheets. In these cases, no interest income is recorded on the loan receivable and capitalized interest is recorded during the construction period. In arrangements where LCIF or LCIF II engages a developer to construct a property or provide funds to a tenant to develop a property, the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, are capitalized during the construction period.

The accounting for these critical accounting policies and implementation of accounting guidance issued in the future involves the making of estimates based on current facts, circumstances and assumptions which could change in a manner that would materially affect management's future estimates with respect to such matters. Accordingly, future reported financial conditions and results could differ materially from financial conditions and results reported based on management's current estimates.

Liquidity

General. As controlled subsidiaries of LXP, each of LCIF and LCIF II relies on LXP’s principal sources of liquidity, which historically have been (1) undistributed cash flows generated from our investments, (2) the public and private equity and debt markets, including issuances of OP units to LXP, (3) property specific debt, (4) corporate level borrowings, (5) commitments from co-investment partners and (6) proceeds from the sales of investments.

Cash Flows. We believe that cash flows from operations of each of LCIF and LCIF II will continue to provide adequate capital to fund its operating and administrative expenses, regular debt service obligations and all distribution payments in accordance with partnership agreement requirements in both the short-term and long-term. However, without a capital event, which would most likely involve LXP, neither LCIF nor LCIF II has the ability to fund balloon payments on maturing mortgages or acquire new investments.

Cash flows from operations as reported in the Consolidated Statements of Cash Flows totaled (1) $23.7 million and $22.2 million for the nine months ended September 30, 2013 and 2012, respectively, and $30.4 million, $30.0 million and $30.9 million for 2012, 2011 and 2010, respectively, for LCIF and (2) $7.0 million and $4.8 million for the nine months ended September 30, 2013 and 2012, respectively, and $7.3 million, $13.7 million and $17.5 million for 2012, 2011 and 2010, respectively, for LCIF II. The underlying drivers that impact working capital and therefore cash flows from operations are the timing of (1) the collection of rents and tenant reimbursements and loan interest payments from borrowers, and (2) the payment of interest on mortgage debt and operating and general and administrative costs. We believe the net-lease structure of the leases encumbering a majority of the properties in which LCIF and LCIF II have an interest mitigates the risks of the timing of cash flows from operations since the payment and timing of operating costs related to the properties are generally borne directly by the tenant. Collection and timing of tenant rents is closely monitored by management as part of our cash management program. Cash flows from operations are also impacted by the level of acquisition volume and sales of properties.

Net cash provided by (used in) investing activities totaled (1) $20.1 million and $(2.5) million for the nine months ended September 30, 2013 and 2012, respectively, and $(58.7) million, $16.6 million and ($0.7) million in 2012, 2011 and 2010, respectively, for LCIF and (2) $1.1 million and $1.7 million for the nine months ended September 30, 2013 and 2012, respectively, and $2.2 million, $(23.1) million and ($53.7) million for 2012, 2011 and 2010, respectively, for LCIF II. Cash provided by investing activities related primarily to proceeds from the sale of properties, collection of loans receivable, distributions from non-consolidated entities in excess of accumulated earnings and changes in escrow deposits and restricted cash. Cash used in investing activities related primarily to investments in real estate properties, co-investment programs and loans receivable, and an increase in deferred leasing costs, deposits and restricted cash. Therefore, the fluctuation in investing activities relates primarily to the timing of investments and dispositions.

Net cash provided by (used in) financing activities totaled (1) $(40.9) million and $(21.9) million for the nine months ended September 30, 2013 and 2012, respectively, and $27.2 million, $(46.0) million and $(31.7) million in 2012, 2011 and 2010, respectively, for LCIF and (2) $(6.3) million and $(17.5) million for the nine months ended September 30, 2013 and 2012, respectively, and $(20.2) million, $10.3 million and $41.9 million in 2012, 2011 and 2010, respectively, for LCIF II. Cash provided by financing activities was primarily attributable to net proceeds from non-recourse mortgages and related party advances, net, offset by distribution payments, related party payments, net and debt payments and repurchases.

-23-

OP units. Substantially all outstanding OP units are redeemable by the holder of the OP unit at certain times unit for approximately 1.13 common shares of LXP per one OP unit or, at Lex GP’s election, with respect to certain OP units, cash. Substantially all outstanding OP units require the applicable operating partnership to pay quarterly distributions to the holders of such OP units equal to the dividends paid to LXP common shareholders on an as redeemed basis and the remaining OP units have stated distributions in accordance with their respective partnership agreement. To the extent that LXP’s dividend per share is less than a stated distribution per unit per the applicable partnership agreement, the stated distributions per unit are reduced by the percentage reduction in our dividend. LXP, LCIF and LCIF II are parties to funding agreements under which each party may be required to fund distributions made on account of OP units or dividends made on account of LXP common shares. No OP units have a liquidation preference.

As of December 31, 2012 and September 30, 2013, (1) LCIF had a total of approximately 2.6 million and 2.4 million OP units respectively outstanding other than OP units held by us (approximately 0.8 million are held by related parties), and (2) LCIF II had a total of approximately 1.2 million OP units outstanding other than OP units held by us (approximately 0.7 million are held by related parties).

As a result of the general deterioration in real estate values which commenced in 2008, few sellers of real estate have been seeking OP units as a form of consideration. Therefore, the number of OP units not owned, directly or indirectly, by LXP that will be outstanding in the future may decrease as such OP units are redeemed for our common shares.

Property Specific Debt. As of December 31, 2012 and September 30, 2013, (1) LCIF had $155.7 million and $94.6 million, respectively, of consolidated property specific debt outstanding and (2) LCIF II had $49.0 million and $31.4 million, respectively, of consolidated property specific debt outstanding. As of December 31, 2012, (1) LCIF had $28.7 million and $24.7 million of related balloon payments maturing in 2013 and 2014, respectively, and (2) LCIF II had no balloon payments maturing in 2013 and 2014. As of September 30, 2013, neither LCIF nor LCIF II had any balloon payments due on debt maturing in 2013 and 2014. If a mortgage is unable to be refinanced upon maturity, LCIF and LCIF II will be dependent on LXP’s liquidity resources to satisfy such mortgage to avoid transferring the underlying property to the lender or selling the underlying property to a third party.

The mortgages encumbering the properties in which LCIF and LCIF II have an interest are generally non-recourse to LCIF or LCIF II, as applicable, such that the title of the property may be transferred in satisfaction of the mortgage obligation. During 2012, LCIF II conveyed its interest in a vacant office property in Clive, Iowa in satisfaction of a $5.3 million non-recourse secured mortgage loan. During the nine months ended September 30, 2013, LCIF and LCIF II each conveyed properties in Southington, Connecticut and Farmington Hills, Michigan, respectively, in satisfaction of the respective $12.3 million and $17.5 million non-recourse secured mortgage loans. There are significant risks associated with conveying properties to lenders through foreclosure which are described in "Risk Factors" included elsewhere or incorporated by reference in this prospectus.

The current economic environment has impacted each of LCIF’s and LCIF II’s ability to obtain property specific debt on favorable terms in many cases. In 2008, property specific mortgage lending nearly ceased. Since then, the number of lenders and available loan proceeds have diminished significantly. In addition, the required loan to value ratios have decreased and the covenants, including required reserve amounts, have increased. Accordingly, LCIF and LCIF II may not be able to find favorable financing to refinance existing mortgages upon maturity.

For the year ending December 31, 2011, LCIF II obtained a $15.0 million non-recourse mortgage loan with an interest rate of 4.71% and a maturity date of June 2016.

Corporate Borrowings. LCIF and LCIF II, together with LXP, are borrowers under LXP’s corporate borrowing facilities. Outstanding indebtedness is recorded on the books of the applicable borrower requesting and receiving the proceeds of such indebtedness. However, LCIF and LCIF II do not have the independent ability without LXP to obtain funds from such borrowing facilities.

Co-investment Programs and Joint Ventures. LXP believes that entering into co-investment programs and joint ventures with institutional investors and other real estate companies is a good way to access private capital while mitigating its risks in certain assets and increasing its return on equity to the extent it earns management or other fees. However, due to LXP’s REIT status, LCIF and LCIF II are prohibited from earning management fees because they are not taxable REIT subsidiaries. As a result, LXP’s investments in co-investment programs and joint ventures are generally outside of LCIF and LCIF II.

Capital Recycling. Part of LXP’s strategy to effectively manage its balance sheet involves pursuing and executing well on property dispositions and recycling of capital. LCIF disposed of its interests in two properties and a retail store and parking garage during the nine months ended September 30, 2013, one via conveyance to its lender, and four properties in 2011, for a gross disposition price of $43.3 million and $31.2 million, respectively. LCIF II disposed of its interests in one property during the nine months ended September 30, 2013 and one property during 2012 to their respective lenders in satisfaction of the $17.5 million and $5.3 million, respective non-recourse mortgage loans. The net proceeds received from dispositions were primarily used to retire indebtedness encumbering such properties and make new investments.

Liquidity Needs. Each of LCIF’s and LCIF II’s principal liquidity needs are the contractual obligations set forth below under “–Contractual Obligations” and the payment of distributions to the holders of OP units, each as applicable.

-24-

If either LCIF or LCIF II is unable to satisfy its liquidity needs with cash flow from operations, it intends to use borrowings and, with respect to distributions to the holders of OP units, the funding agreements described above. If such borrowings are unavailable, it or one of its subsidiaries may default on its obligations or lose its assets in foreclosure or through bankruptcy proceedings.

Capital Resources

General. Due to the net-lease structure of a majority of LCIF’s and LCIF II’s investments, each of LCIF and LCIF II historically have not incurred significant expenditures in the ordinary course of business to maintain the properties in which it has an interest. However, particularly since 2008, as leases have expired, each of LCIF and LCIF II have incurred costs in extending the existing tenant leases, re-tenanting the properties with a single-tenant, or converting the property to multi-tenant use. The amounts of these expenditures can vary significantly depending on tenant negotiations, market conditions and rental rates.

Single-Tenant Properties. We do not anticipate significant capital expenditures at the single-tenant properties in which LCIF or LCIF II have an interest since these properties are generally subject to net or similar leases where the tenants at these properties bear all or substantially all of the cost of property operations, maintenance and repairs. However, at certain properties subject to net-leases, LCIF or LCIF II is responsible for replacement and/or repair of certain capital items, which may or may not be reimbursed. At certain single-tenant properties that are not subject to a net-lease, LCIF or LCIF II has a level of property operating expense responsibility, which may or may not be reimbursed.

Multi-Tenant Properties. Primarily as a result of non-renewals at single-tenant net-lease properties, LCIF or LCIF II may have interests in multi-tenant properties. While tenants are generally responsible for increases over base year expenses, the landlord would be generally responsible for the base-year expenses and capital expenditures at these properties.

Vacant Properties. To the extent there is a vacancy in a property, LCIF or LCIF II would be obligated for all operating expenses, including real estate taxes and insurance. If a property is vacant for an extended period of time, LCIF or LCIF II may incur substantial capital expenditure costs to re-tenant the property.

Property Expansions. Under certain leases, tenants have the right to expand the facility located on a property in which LCIF or LCIF II has an interest. In the past, these expansions have generally been funded, and in the future we expect these expansions to generally be funded, with, either additional secured borrowings, the repayment of which was, and will be, funded out of rental increases under the leases covering the expanded properties, borrowings under LXP's unsecured revolving credit facility or capital contributions from LXP.

Ground Leases. The tenants of properties in which LCIF or LCIF II has an interest generally pay the rental obligations on ground leases either directly to the fee holder or to the landlord as increased rent. However, LCIF or LCIF II is responsible for these payments under certain leases and at vacant properties.

Environmental Matters.Based upon management's ongoing review of the properties in which LCIF and LCIF II have an interest, management is not aware of any environmental condition with respect to any of these properties, which would be reasonably likely to have a material adverse effect on LCIF or LCIF II. There can be no assurance, however, that (1) the discovery of environmental conditions, which were previously unknown, (2) changes in law, (3) the conduct of tenants or (4) activities relating to properties in the vicinity of the properties in which LCIF or LCIF II has an interest, will not expose LCIF or LCIF II to material liability in the future. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of the tenants of properties in which LCIF or LCIF II has an interest.

Results of Operations

LCIF

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012.The increase in total gross revenues in 2013 of $2.0 million is primarily attributable to an increase in rental revenue. The increase in rental revenue was primarily due to new property acquisition revenue of $3.6 million, offset by a reduction of $0.6 million due to lease extensions entered into at rents below previous rental amounts and $0.9 million related to an increase in vacancy at one property.

Depreciation and amortization increased $1.0 million primarily due to the acquisition of the Phoenix, Arizona property in December 2012.

The decrease in interest and amortization expense of $2.7 million was primarily due to retirement of debt.

-25-

Non-operating income decreased $0.4 million primarily due to the satisfaction of notes receivable resulting in less interest earned.

The decrease in litigation reserve of $0.9 million relates to our litigation with Deutsche Bank Securities, Inc., which was settled in 2012.

The increase in debt satisfaction charges, net, of $1.6 million was primarily due to defeasance costs and write-off of deferred financing costs relating to the satisfaction of secured nonrecourse mortgage debt in 2013.

Discontinued operations represent properties sold or held for sale. The increase in total income from discontinued operations of $5.5 million is primarily due to an increase in debt satisfaction gains, net, of $4.4 million, a $0.7 million increase in income from discontinued operations and an increase in gains on sales of properties of $7.2 million, offset in part by an increase in impairment charges of $6.8 million.

The increase in net income of $8.1 million was primarily due to the items discussed above.

Year ended December 31, 2012 compared with December 31,2011. Total gross revenues remained relatively flat in 2012 compared to 2011. LCIF acquired one property in December 2012 which did not have a significant impact on 2012 gross revenues.

The decrease in interest and amortization expense of $1.5 million was primarily due to the retirement of debt.

Depreciation and amortization decreased $1.2 million primarily due to assets becoming fully amortized in 2012.

The increase in property operating expense of $0.7 million was primarily due to an increase in ground rent expense at certain properties.

The litigation reserve of $0.9 million in 2012 relates to a litigation that has been settled with a payment by us of $0.9 million.

Discontinued operations represent properties sold or held for sale. The increase in net income from discontinued operations of $3.0 million was primarily due to a decrease in impairment charges of $4.1 million, offset by a decrease in gains on sales of properties of $1.2 million.

The increase in net income of $4.2 million was primarily due to the items discussed above.

Year ended December 31, 2011 compared with December 31, 2010. Of the decrease in total gross revenues in 2011 of $2.6 million, $2.2 million is attributable to a decrease in rental revenue and $0.4 million is due to a decrease in tenant reimbursements. The decrease in rental revenue was primarily due to lease rollover and new leases entered into at lease rates lower than the previous amounts.

The decrease in interest and amortization expense of $2.4 million is primarily due to the decrease in indebtedness.

The decrease in property operating expense of $0.7 million is primarily due to a decrease in the operating expenses at certain properties and certain tenants taking direct responsibility for payments of operating costs in which our property owner subsidiaries have an interest.

Discontinued operations represents properties sold or held for sale. The total discontinued operations loss increased $13.7 million due to an increase in impairment charges of $3.4 million and a decrease in gains on sales of properties of $10.7 million, offset by a decrease in debt satisfaction charges, net, of $0.4 million.

Net income decreased $13.5 million primarily due to the items discussed above.

LCIF II

Nine months ended September 30, 2013 compared with nine months ended September 30, 2012.Total gross revenues remained relatively flat in 2013 primarily due to limited portfolio activity.

Depreciation and amortization decreased $0.3 million primarily due to assets being fully depreciated in prior periods.

-26-

The increase in property operating expenses of $0.3 million was primarily due to an increase in real estate taxes at one property.

The decrease in interest and amortization expense of $1.1 million was primarily due to retirement of debt.

Non-operating income decreased $0.8 million primarily due to less interest earned and reduced interest income earned on a note receivable secured by an office property in Schaumburg, Illinois, which was in default and LCIF II ceased recognizing interest income commencing April 1, 2012. LCIF II foreclosed on the property subsequent to September 30, 2013.

Discontinued operations represent properties sold or held for sale. The increase in total income from discontinued operations of $1.9 million is primarily due to an increase in gains on sales of properties of $3.2 million plus a $1.4 million reduction in loss from discontinued operations, offset in part by an increase in debt satisfaction charges of $2.7 million.

The increase in net income of $2.1 million was primarily due to the items discussed above.

Year ended December 31, 2012 compared with December 31,2011. The increase in total gross revenues in 2012 of $2.9 million was primarily attributable to an increase in rental revenue of $2.6 million and an increase in tenant reimbursements of $0.3 million. The increase in rental revenue was primarily due to (1) 2011 property acquisitions of $2.2 million and (2) $0.3 million from a decrease in vacancy at our Hebron, Ohio property.

The increase in interest and amortization expense of $0.3 million was primarily due to the financing of a property, offset by the retirement of debt.

Depreciation and amortization increased $0.8 million primarily due to the acquisition of real estate properties in 2011, offset by assets becoming fully amortized.

Non-operating income decreased $4.5 million primarily due to the satisfaction of notes receivable resulting in less interest earned and reduced interest income earned on a note receivable, which was in default, secured by an office property in Schaumburg, Illinois.

Discontinued operations represent properties sold or held for sale. The decrease in net loss from discontinued operations of $4.8 million was primarily due to a decrease in impairment charges of $9.8 million, an increase in gains on sales of properties of $1.1 million, offset in part by an increase in debt satisfaction charges of $1.4 million and a $4.8 million increase in loss from discontinued operations.

The increase in net income of $1.7 million was primarily due to the items discussed above.

Year ended December 31, 2011 compared with December 31, 2010. The increase in total gross revenues in 2011 of $3.5 million is attributable to an increase in rental revenue of $3.5 million primarily due to the acquisition of properties in 2011.

The decrease in interest and amortization expense of $0.3 million is primarily due to the decrease in indebtedness.

Depreciation and amortization increased by $1.0 million primarily due to the acquisition of real estate properties.

The increase in general and administrative expense of $0.4 million is primarily due to an increase in the allocation of professional fees and payroll costs by LXP.

Non-operating income decreased $0.7 million which is primarily due to the satisfaction of loans receivable.

Discontinued operations represents properties sold or held for sale. The total discontinued operations loss increased $8.3 million due to an increase in impairment charges of $9.8 million, offset by an increase in the income from discontinued operations of $1.6 million.

Net income decreased $6.7 million primarily due to the items discussed above.

-27-

The increase in net income in future periods will be closely tied to the level of acquisitions made by us and leasing activity. Without acquisitions and favorable leasing activity, the sources of growth in net income are limited to index-adjusted rents (such as the consumer price index), reduced interest expense on amortizing mortgages and debt refinancings and by controlling other variable overhead costs. However, there are many factors beyond management's control that could offset these items including, without limitation, increased interest rates, decreased occupancy rates, tenant monetary defaults, delayed acquisitions and the other risks described in our periodic reports filed with the Commission.

Off-Balance Sheet Arrangements

LCIF and LCIF II are borrowers or guarantors of corporate borrowing facilities and debt securities of LXP. In addition, each of LCIF and LCIF II, from time to time, guarantee certain tenant improvement allowances and lease commissions on behalf of subsidiaries when required by the related tenant or lender. However, neither LCIF nor LCIF II believes these guarantees, as applicable, are material to it as the obligations under and risks associated with such guarantees are priced into the rent under the lease or the value of the property.

Contractual Obligations

The following summarizes LCIF’s and LCIF II’s principal contractual obligations as of December 31, 2012 ($000's):

  2013  2014  2015  2016  2017  2018 and
Thereafter
  Total 
LCIF(1):                            
Notes payable(2) $34,075  $29,000  $29,762  $1,136  $9,785  $51,917  $155,675 
Interest payable - fixed rate  8,173   6,062   4,707   3,797   3,487   5,463   31,689 
Operating lease obligations(3)  672   672   672   672   664   8,353   11,705 
Co-borrower debt(4)  -   -   -   -   -   39,385   39,385 
  $42,920  $35,734  $35,141  $5,605  $13,936  $105,118  $238,454 
                             
LCIF II(1):                            
Notes payable(2) $198  $286  $9,321  $15,342  $368  $23,474  $48,989 
Interest payable - fixed rate  2,940   2,923   2,448   2,031   1,652   14,948   26,942 
Co-borrower debt(4)  -   -   -   -   -   11,601   11,601 
  $3,138  $3,209  $11,769  $17,373  $2,020  $50,023  $87,532 

(1)Excludes related party advances, which are due upon demand.
(2)Includes balloon payments.
(3)Includes ground lease payments. Amounts disclosed do not include rents that adjust to fair market value. In addition certain ground lease payments due under bond leases allow for a right of offset between the lease obligation and the debt service and accordingly are not included.
(4)LCIF and LCIF II are co-borrowers with Lexington under a revolving credit facility and term loans.

-28-

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Explanatory Note

Partnership Units.

On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity.  The merger was done to streamline the reporting obligations of LCIF and LCIF II into one entity on11, 2019, at a going-forward basis.  Except as otherwise indicated, all information with respect to LCIF and LCIF II in this prospectus is presented as of September 30, 2013, which is prior to the merger.  Information subsequent to the merger assumes that all limited partners in LCIF II received OP units in LCIF as consideration in the merger.

General

Quantitative and qualitative disclosures about market risk for LXP are contained in the documents incorporated by reference into this prospectus. Each of LCIF’s and LCIF II’s exposure to market risk relates primarily to its fixed rate debt and, to the extent it relies on LXP for liquidity, LXP’s variable rate debt.

As of December 31, 2012, December 31, 2011 and September 30, 2013, (1) LCIF’s consolidated fixed-rate debt was $195.1 million, $212.9 million, and $148.1 million, respectively, which represented 100.0% of total long-term indebtedness, and (2) LCIF II’s consolidated fixed-rate debt was $60.6 million, $90.7 million, and $46.7 million, respectively, which represented 100.0% of total long-term indebtedness. LCIF and LCIF II had no consolidated variable rate indebtedness as of December 31, 2012, December 31, 2011 and September 30, 2013.

For certain of LCIF and LCIF II’s financial instruments, fair values are not readily available since there are no active trading markets as characterized by current exchanges between willing parties. Accordingly, we derive or estimate fair values using various valuation techniques, such as computing the present value of estimated future cash flows using discount rates commensurate with the risks involved. However, the determination of estimated cash flows may be subjective and imprecise. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. The following fair value was determined using the interest rates that we believe LCIF and LCIF II’s outstanding fixed-rate debt would warrant as of September 30, 2013 and are indicativemeeting of the interest rate environment as of September 30, 2013, and do not take into considerationLXP Board, Mr. Joseph Bonventre, LXP's General Counsel, updated the effects of subsequent interest rate fluctuations. Accordingly, we estimate that the fair value of LCIF’s and LCIF II’s fixed-rate debt was $149.0 million and $46.6 million, respectively, as of September 30, 2013.

LCIF’s interest rate risk objectives are to limit the impact of interest rate fluctuations on cash flows and to lower overall borrowing costs. To achieve these objectives, LCIF manages exposure to fluctuations in market interest rates through the use of fixed rate debt instruments.

-29-

BUSINESS AND PROPERTIES

Explanatory Note

On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity.  The merger was done to streamline the reporting obligations of LCIF and LCIF II into one entity on a going-forward basis.  Except as otherwise indicated, all information with respect to LCIF and LCIF II in this prospectus is presented as of September 30, 2013, which is prior to the merger.  Information subsequent to the merger assumes that all limited partners in LCIF II received OP units in LCIF as consideration in the merger.

General

Disclosure of the business and properties of LXP is set forth in the documents incorporated by reference in this prospectus. Together, LCIF and LCIF II are the entities through which LXP, a self-managed and self-administered REIT formed under the laws of the state of Maryland, and the sole equity owner of their sole general partner, Lex GP, conducts a significant portion of its operations.

History

LCIF was formed as a limited partnership on March 14, 1986 under the laws of the state of Delaware to invest in existing real estate properties net leased to corporations or other entities. LCIF commenced an offering to the public of OP units in July 1986, which was completed in March 1987. As of September 30, 2013, 2,446,948 OP units remain outstanding (not including 45,025,524 OP units issued by LCIF and held by us).

LCIF II was formed as a limited partnership on January 27, 1987 under the laws of the state of Delaware to invest in existing real estate properties net leased to corporations or other entities. LCIF II commenced an offering to the public of OP units in December 1987, which was completed in November 1988. As of September 30, 2013, 1,199,824.5 OP units remain outstanding (not including 12,376,393.5 OP units issued by LCIF II and held by us).

In October 1993, Lexington Corporate Properties Trust, Inc. (the predecessor to Lexington Realty Trust) was formed upon the roll-up of LCIF and LCIF II. In the roll-up transaction, LCIF and LCIF II became the operating partnership subsidiaries for Lexington Corporate Properties Trust, Inc. Lexington Corporate Properties Trust, Inc. changed its name to Lexington Corporate Properties Trust and ultimately to Lexington Realty Trust.

On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity. Unaudited pro forma condensed consolidated financial information for LCIF reflecting the merger of LCIF II with and into LCIF are included in this prospectus beginning on page F-60. The Fifth Amended and Restated Limited Partnership Agreement of LCIF was amended and restated with the Sixth Amended and Restated Limited Partnership Agreement.

Current Economic Uncertainty and Capital Market Volatility

The business of LCIF continues to be impacted in a number of ways by the continued uncertainty in the overall economy and volatility in the capital markets. We encourage you to read “Risk Factors” included elsewhere in this prospectus for a discussion of certain risks LCIF is facing and “Management's Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus for a detailed discussion of the trends we believe are impacting LCIF’s business.

Objectives and Strategy

Under and subject to the terms of the LCIF partnership agreement, LXP has the ability to control all of the day-to-day operations of LCIF. The business of LCIF is substantially the same as the business of LXP and includes investment in single-tenant assets; except that LCIF is dependent on LXP for management of its operations and future investments. LCIF has no employees, executive officers or a board of directors. LXP also invests in assets and conducts business directly and through other subsidiaries. LXP allocates investments to itself and its other subsidiaries or to LCIF as it deems appropriate and in accordance with certain obligations under the LCIF partnership agreement, with respect to allocations of nonrecourse liabilities.

LCIF generally acquires assets (1) that will be leveraged at or following acquisition, which supports the obligation of LCIF to allocate nonrecourse liabilities to its limited partners, and (2) as part of a tax-deferred exchange with the seller of the asset who is issued OP units as a form of consideration, although such tax deferred exchanges have not been utilized in recent years.

The assets which LCIF seeks are generally subject to net or similar leases, which allow LCIF, to distribute cash to holders of OP units without requiring cash contributions for operating expenses. However, cash distributions are reduced to the extent LCIF is obligated for operating and capital expenses, without reimbursement. To avoid such reductions, LCIF may borrow funds from LXP.

Competition

As an operating partnership subsidiary of LXP, LCIF competes with numerous commercial developers, real estate companies, financial institutions, such as banks and insurance companies, and other investors with greater financial or other resources when seeking properties for acquisition and tenants.

Environmental Matters

Under various federal, state and local environmental laws, statutes, ordinances, rules and regulations, an owner of real property may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under such property as well as certain other potential costs relating to hazardous or toxic substances. These liabilities may include government fines and penalties and damages for injuries to persons and adjacent property. Such laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence or disposal of such substances. Although generally the tenants of the properties in which we have an interest are primarily responsible for any environmental damage and claims related to the leased premises, in the event of the bankruptcy or inability of a tenant of such premises to satisfy any obligations with respect to such environmental liability, a property owner subsidiary may be required to satisfy such obligations. In addition, as the owner of such properties, a property owner subsidiary may be held directly liable for any such damages or claims irrespective of the provisions of any lease.

-30-

From time to time, in connection with the conduct of our business and generally upon acquisition of a property and prior to surrender by a tenant, the property owner subsidiary authorizes the preparation of a Phase I and, when recommended, a Phase II environmental report with respect to its properties. Based upon management's ongoing review of the properties in which LCIF has an interest, management is not aware of any environmental condition with respect to any of these properties, which would be reasonably likely to have a material adverse effect on LCIF. There can be no assurance, however, that (1) the discovery of environmental conditions, which were previously unknown, (2) changes in law, (3) the conduct of tenants or (4) activities relating to properties in the vicinity of the properties in which LCIF has an interest, will not expose LCIF to material liability in the future. Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations of the tenants of properties in which LCIF has an interest.

Other

Employees. LCIF does not have any employees. All necessary personnel are provided by LXP through Lex GP.

Industry Segments. LCIF operates in primarily one industry segment, single-tenant real estate assets.

Web Site. LCIF does not have a web site.

LCIF can be contacted through LXP’s Investor Relations Department at Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, New York 10119-4015, Attn: Investor Relations, by telephone: (212) 692-7200, or by e-mail: ir@lxp.com.

Principal Executive Offices. The principal executive offices for LCIF are located at One Penn Plaza, Suite 4015, New York, New York 10119-4015; our telephone number is (212) 692-7200.

Properties

General.  As of September 30, 2013, we had equity ownership interests in approximately 215 consolidated real estate properties, located in 41 states and encompassing 40.6 million square feet, 98.1% of which was leased. Included in these properties are 31 properties in which LCIF had an equity ownership interest in, located in 22 states and encompassing 4.9 million square feet, 96.1% of which was leased, and nine properties in which LCIF II had an equity ownership interest in, located in seven states and encompassing 2.9 million square feet, 100.0% of which was leased. The properties in which we have an equity interest are leased to tenants in various industries, including finance/insurance, technology, service, automotive and energy.

Due to the net-lease structure of a majority of LCIF’s investments, each of LCIF and LCIF II historically have not incurred significant expenditures in the ordinary course of business to maintain the properties in which it has an interest. However, particularly since 2008, as leases have expired, each of LCIF and LCIF II have incurred costs in extending the existing tenant leases, re-tenanting the properties with a single-tenant, or converting the property to multi-tenant use. The amounts of these expenditures can vary significantly depending on tenant negotiations, market conditions and rental rates.

Single-Tenant Properties. We do not anticipate significant capital expenditures at the single-tenant properties in which LCIF has an interest since these properties are generally subject to net or similar leases where the tenants at these properties bear all or substantially all of the cost of property operations, maintenance and repairs. However, at certain properties subject to net-leases, LCIF is responsible for replacement and/or repair of certain capital items, which may or may not be reimbursed. At certain single-tenant properties that are not subject to a net-lease, LCIF has a level of property operating expense responsibility, which may or may not be reimbursed.

Multi-Tenant Properties. Primarily as a result of non-renewals at single-tenant net-lease properties, LCIF may have interests in multi-tenant properties. While tenants are generally responsible for increases over base year expenses, the landlord would be generally responsible for the base-year expenses and capital expenditures at these properties.

Vacant Properties. To the extent there is a vacancy in a property, LCIF would be obligated for all operating expenses, including real estate taxes and insurance. If a property is vacant for an extended period of time, LCIF may incur substantial capital expenditure costs to re-tenant the property.

Property Expansions. Under certain leases, tenants have the right to expand the facility located on a property in which LCIF has an interest. In the past, these expansions have generally been funded, and in the future we expect these expansions to generally be funded, with, either additional secured borrowings, the repayment of which was, and will be, funded out of rental increases under the leases covering the expanded properties, borrowings under LXP's unsecured revolving credit facility or capital contributions from LXP.

Ground Leases. The tenants of properties in which LCIF has an interest generally pay the rental obligations on ground leases either directly to the fee holder or to the landlord as increased rent. However, LCIF is responsible for these payments under certain leases and at vacant properties.

Leverage. As of December 31, 2012 and September 30, 2013, (1) LCIF had $195.1 million and $148.1 million, respectively, of consolidated debt outstanding, including co-borrower debt and (2) LCIF II had $60.6 million and $46.7 million, respectively, of consolidated debt outstanding, including co-borrower debt. As of December 31, 2012, (1) LCIF had $28.7 million and $24.7 million of related balloon payments maturing in 2013 and 2014, respectively, and (2) LCIF II had no balloon payments maturing in 2013 and 2014. As of September 30, 2013, neither LCIF nor LCIF II had any balloon payments maturing in 2013 or 2014.

Property Charts. The following tables list LCIF’s and LCIF II’s properties by type, their locations, the primary tenant/guarantor, the net rentable square feet, the expiration of the primary lease term and percent leased, as applicable, as of September 30, 2013.

-31-

LCIF CONSOLIDATED PORTFOLIO

PROPERTY CHART

As of September 30, 2013

Property Location City  State  Primary Tenant (Guarantor) Property
Type
 Net Rentable
Square Feet
  Current Lease
Term
Expiration
 Percent
Leased
 
2415 U.S. Hwy 78 East Moody  AL  CEVA Logistics U.S., Inc. (CEVA Holdings, B.V. / PostNL N.V.) Industrial  595,346  12/31/2017  100%
2211 South 47th St. Phoenix  AZ  Avnet, Inc. Office  176,402  2/28/2023  100%
3030 North 3rd Street Phoenix  AZ  CopperPoint Mutual Insurance Company Office  252,400  12/31/2029  100%
26210 & 26220 Enterprise Court Lake Forest  CA  Apria Healthcare, Inc. (Apria Healthcare Group, Inc.) Office  100,012  1/31/2022  100%
2706 Media Center Dr. Los Angeles  CA  Sony Electronics Inc. Office  83,252  8/31/2015  24%
9201 E. Dry Creek Rd Centennial  CO  The Shaw Group, Inc. Office  128,500  9/30/2017  100%
1315 West Century Dr. Louisville  CO  Global Healthcare Exchange, Inc. (Global Healthcare Exchange, LLC) Office  106,877  4/30/2017  100%
100 Barnes Rd. Wallingford  CT  3M Company Office  44,400  6/30/2018  100%
5600 Broken Sound Blvd. Boca Raton  FL  Canon Solutions America, Inc. (Océ -USA Holding, Inc.) Office  143,290  2/14/2020  100%
4200 Northcorp Pkwy. Palm Beach Gardens  FL  Multi-tenanted Office  95,065  Various  36%
4400 Northcorp Pkwy. Palm Beach Gardens  FL  Office Suites Plus Properties, Inc. Office  18,400  4/30/2014  100%
1042 Fort St. Mall/King St. Honolulu  HI  Multi-tenanted Office  77,459  Various  77%
7500 Chavenelle Rd. Dubuque  IA  The McGraw-Hill Companies, Inc. Industrial  330,988  6/30/2017  100%
5200 Metcalf Ave. Overland Park  KS  Swiss Re American Holding Corporation / Westport Insurance Corporation Office  320,198  12/22/2018  100%
2300 Litton Ln. Hebron  KY  Multi-tenanted Office  80,440  Various  100%
33 Commercial St. Foxboro  MA  Invensys Systems, Inc. (Siebe, Inc.) Office  164,689  6/30/2015  100%
1601 Pratt Ave. Marshall  MI  Autocam Corporation Industrial  58,707  12/31/2023  100%
26555 Northwestern Hwy. Southfield  MI  Federal-Mogul Corporation Office  187,163  1/31/2015  100%
7670 Hacks Cross Rd. Olive Branch  MS  MAHLE Clevite, Inc. (MAHLE Industries, Incorporated) Industrial  268,104  2/28/2016  100%
250 Swathmore Ave. High Point  NC  Steelcase Inc. Industrial  244,851  9/30/2017  100%
6910 South Memorial Hwy. Tulsa  OK  Toys "R" Us, Inc. / Toys “R” Us-Delaware, Inc. Retail  43,123  5/31/2016  100%
12535 Southeast 82nd Ave. Clackamas  OR  Toys "R" Us-Delaware, Inc. / Toys "R" Us, Inc. / TRU 2005 RE I, LLC Retail  42,842  5/31/2016  100%
250 Rittenhouse Cir. Bristol  PA  Northtec LLC (The Estée Lauder Companies Inc.) Industrial  241,977  11/30/2026  100%
2210 Enterprise Dr. Florence  SC  Multi-tenanted Office  176,557  Various  70%
3476 Stateview Blvd. Fort Mill  SC  Wells Fargo Bank, N.A. Office  169,083  5/31/2024  100%
3480 Stateview Blvd. Fort Mill  SC  Wells Fargo Bank, N.A. Office  169,218  5/31/2024  100%
477 Distribution Pkwy. Collierville  TN  Federal Express Corporation / FedEx Techconnect, Inc. Industrial  126,213  5/31/2021  100%
4001 International Pkwy. Carrollton  TX  Motel 6 Operating, LP (Accor S.A.) Office  138,443  7/31/2015  100%
2050 Roanoke Rd. Westlake  TX  TD Auto Finance LLC Office  130,290  12/31/2016  100%
13651 McLearen Rd. Herndon  VA  United States of America Office  159,644  5/30/2018  100%
18601 Alderwood Mall Blvd. Lynnwood  WA  Toys "R" Us-Delaware, Inc. / Toys "R" Us, Inc. /TRU 2005 RE I, LLC Retail  43,105  5/31/2016  100%
        Consolidated Portfolio Total    4,917,038     96.1

-32-

LCIF II CONSOLIDATED PORTFOLIO

PROPERTY CHART

As of September 30, 2013

Property Location City State  Primary Tenant (Guarantor) Property
Type
 Net Rentable
Square Feet
  Current Lease
Term
Expiration
 Percent
Leased
 
3102 Queen Palm Dr. Tampa  FL  Time Customer Service, Inc. (Time Incorporated) Industrial  229,605  6/30/2020  100%
4455 American Way Baton Rouge  LA  New Cingular Wireless PCS, LLC Office  70,100  10/31/2017  100%
459 Wingo Rd. Byhalia  MS  Asics America Corporation (Asics Corporation) Industrial  513,734  3/31/2026  100%
671 Washburn Switch Rd. Shelby  NC  Clearwater Paper Corporation Industrial  673,518  5/31/2031  100%
191 Arrowhead Dr. Hebron  OH  Owens Corning Insulating Systems, LLC Industrial  250,410  5/31/2014  100%
200 Arrowhead Dr. Hebron  OH  Owens Corning Insulating Systems, LLC Industrial  400,522  5/31/2014  100%
1460 Tobias Gadsen Blvd. Charleston  SC  Hagemeyer North America, Inc. Office  50,076  7/8/2020  100%
400 East Stone Ave. Greenville  SC  Canal Insurance Company Office  128,041  12/31/2029  100%
19500 Bulverde Rd. San Antonio  TX  Elsevier STM Inc. (Reed Elsevier Inc.) Industrial  559,258  3/31/2016  100%
        Consolidated Portfolio Total    2,875,264     100

-33-

MANAGEMENT AND EXECUTIVE COMPENSATION

Explanatory Note

On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity.  The merger was done to streamline the reporting obligations of LCIF and LCIF II into one entity on a going-forward basis.  Except as otherwise indicated, all information with respect to LCIF and LCIF II in this prospectus is presented as of September 30, 2013, which is prior to the merger.  Information subsequent to the merger assumes that all limited partners in LCIF II received OP units in LCIF as consideration in the merger.

General

Information with respect to management and executive compensation for LXP is contained in the documents incorporated by reference into this prospectus. LCIF does not have any employees, executive officers or a board of directors.

Neither LXP 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 LXP for all expenses incurred by them 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 LXP and its other subsidiaries), such expenses are allocated by LXP, as sole equity owner of Lex GP, the general partner of LCIF, to LCIF in proportion to gross revenues. LXP has guaranteed the obligations of LCIF in connection with the redemption of OP units pursuant to the LCIF partnership agreement.

During the year ended December 31, 2012, (1) cash distributions of $26.0 million and reimbursements of $3.5 million were earned by us or made to us by LCIF and (2) cash distributions of $5.9 and reimbursements of $1.1 million were earned by us or made to us by LCIF II.

-34-

DESCRIPTION OF THE PARTNERSHIP AGREEMENT

OF LEPERCQ CORPORATE INCOME FUND L.P.

We have summarized the material terms and provisions of the Sixth Amended and Restated Agreement of Limited Partnership of LCIF, which we refer to as 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 itself, a form of which has previously been filed with the Commission by LXP, which we incorporate herein by reference.

Explanatory Note

On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity.  The merger was done to streamline the reporting obligations of LCIF and LCIF II into one entity on a going-forward basis.  Except as otherwise indicated, all information with respect to LCIF and LCIF II in this prospectus is presented as of September 30, 2013, which is prior to the merger.  Information subsequent to the merger assumes that all limited partners in LCIF II received OP units in LCIF as consideration in the merger.

General

LXP is the sole equity owner of Lex GP-1 Trust, a Delaware statutory trust, which is the general partner of LCIF and holds, as of December 31, 2013, approximately 0.4% of the outstanding OP units in LCIF. LXP is also the sole equity owner of Lex LP-1 Trust, a Delaware statutory trust, which holds, as of December 31, 2013, approximately 94.3% of the outstanding OP units in LCIF.

Issuance of OP Units

LXP’s operating partnership structure enables LXP 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 LXP) which have been issued as of the date of this prospectus are generally redeemable, at the option of the holders thereof, on a one for approximately 1.13 common share basis (subject to certain anti-dilution adjustments) at various times, or, at LXP’s 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 LCIF unitholders (other than those LCIF 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 LXP or LCIF, which would result in a change of beneficial ownership in LXP or LCIF, by 50% or more.

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

Each LCIF unitholder has the right to which a limited partner is entitled under the LCIF partnership agreement and 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.

As of December 31, 2013, there are approximately 3.6 million OP units outstanding that are not held by us, all which are currently redeemable for an aggregate of 4.1 million common shares. As of December 31, 2013, of the total OP units, 1.5 million OP units are beneficially owned by E. Robert Roskind, the chairman of LXP’s Board of Trustees.

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 LXP to continue to be classified as a REIT under Sections 856 through 860 of the Code, unless LXP ceases 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.

LXP, 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 a 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 LXP nor other persons (including LXP’s 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, the chairman of LXP, beneficially owns a majority of the OP units held by the Special Limited Partners.

-35-

Distributions; Allocations of Income and Loss

Generally, LCIF 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 applicable 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 LXP 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 LXP for all expenses incurred by them relatedoutreach effort to the ownership and operation of, or for the benefit of, LCIF. In the event that certain expenses are incurred for the benefitthen 304 holders of LCIF and other entities (including LXP and its other subsidiaries), such expenses are allocated by LXP, as sole equity owner of Lex GP, the general partner of LCIF, to LCIFPartnership Units, which resulted in proportion to gross revenues. LXP has guaranteed the obligations of LCIF in connection with the redemption of OP24 holders redeeming their units pursuant to the LCIF partnership agreement.

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

Funding Agreement

LXP and LCIF entered into a funding agreement. Pursuant to the funding agreement, the parties agreed, 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 the LCIF partnership agreement or (ii) the cash dividend payable with respect to whole or fractional common shares into which LCIF’s OP units would be converted if they were redeemed for our common sharesCommon Shares in accordance with the LCIF partnership agreement, LXP will fund the shortfall. Payments under the funding agreement will be madePartnership Agreement, 71 holders confirming interest in the formtransaction and 10 holders confirming no interest in the transaction.  Mr. Bonventre presented proposed terms for the transaction.  The LXP Board did not approve the proposed transaction due to concerns related to financing obligations LXP would have to undertake as part of loansthe transaction and uncertainty on the level of participation by holders of LCIF Partnership Units.  

Following this LXP Board meeting, discussions between the LXP representatives and the LCP representatives continued. In March 2020, the parties began to explore using one or more of LXP’s non-industrial properties as the properties to be held by the new LXP subsidiary that would execute the exchange offer portion of the two-step transaction.  

The LXP Board discussed the potential merger and exchange offer at meetings on April 1, 2020, May 19, 2020, September 23, 2020 and December 10, 2020.

In March 2021, the parties explored an alternative transaction structure pursuant to which LCIF Partnership Units held by the special limited partners and will bear interest at prevailing rates as determined by ustheir affiliates would be redeemed for interests in our discretion but no less thancertain non-core LXP assets and related financing arrangements. As part of the applicable federal rate.

Liability oftransaction, the special limited partners would consent to an amendment to the Partnership Agreement giving the General Partner and Limited Partners

Lex GP, as the general partner of LCIF, is ultimately liable for all general recourse obligations of LCIF,right 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 LXP 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 LXP carried out our duties in good faith. In addition, neither Lex GP nor LXP are responsible for any misconduct or negligence on the part of their agents, provided such agents were appointed in good faith. Lex GP and LXP 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 LXP 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 LXP, their respective directors, trustees and officers, and such other persons as Lex GP and LXP may from time to time designate to the fullest extent permitted under the Delaware Act.

-36-

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 and certain contractual agreements from selling certain assets, except in certain limited circumstances. Lex GP may not consent to a sale of all or substantially all of the assets of LCIF, orconsummate a merger of LCIF with another entity, without the consent of a majority in interest of the Special Limited Partners. The consent of a majority in interest of the Special Limited Partners was obtained for the merger of LCIF II with and into LCIF on December 30, 2013.

Lex GP has the right to redeem the OP units held by all, but not less than all, of the LCIF unitholders (other than the Special Limited Partners) under certain circumstances, including but not limited to a merger, sale of assets, consolidation, share issuance, share redemption or other similar transaction by LXP or LCIF which would result in a change of beneficial ownership in us or LCIF, by 50% or more.

Removal of the General Partner; Restrictions on Transfer by the General Partner or LXP

The LCIF partnership agreement provides that the limited partners may not remove Lex GP as general partner of LCIF. Lex GP may not transfer any of its interests as the general partner of LCIF, and Lex LP may not transfer any of its interests as a limited partner in LCIF, except to each other, as applicable, or to LXP or another one of LXP’s wholly-owned subsidiaries.

Restrictions on Transfer of OP Units by LCIF Unitholders

LCIF unitholders may not transfer their OP units without the consent of Lex GP, which may be withheld in its sole and absolute discretion, provided that LCIF unitholders may transfer all or a portion of their OP units to (i) immediate family members, (ii) certain 501(c)(3) organizations, (iii) a partner in such LCIF unitholder, as applicable, in a distribution to all of its partners or (iv) a lender as security for a loan to be made or guaranteed by such LCIF unitholder, as applicable. However, a LCIF unitholder may assign the economic rights associated with its OP units, without the consent of Lex GP, but such assignee will not be (i) admitted to LCIF as a substituted limited partner or (ii) entitled to the same rights as a substituted limited partner. In addition, LCIF unitholders may dispose of their OP units by exercising their rights to have their OP units redeemed for common shares. See “– Issuance of OP Units” above.

Issuance of Additional Limited Partnership Interests

Lex GP is authorized, in its sole and absolute discretion and without the consent of the limited partners, to cause LCIF to issue additional OP units to any limited partners or any other persons for such consideration and on such terms and conditions as Lex GP deems appropriate. In addition, Lex GP may cause LCIF to issue additional partnership interests in different series or classes, which may be senior to the OP units.

Meetings; Voting

The LCIF partnership agreement provides that limited partners may not take part in the operation, management or control of LCIF’s business. The LCIF partnership agreement does not provide for annual meetings of the limited partners, and LCIF does not anticipate calling such meetings.

Amendment of the Partnership Agreement

The LCIF partnership agreement may be amended with the consent of Lex GP, Lex LP and a majority in interest of the applicable Special Limited Partners. Notwithstanding the foregoing, Lex GP has the power, without the consent of limited partners, to amend the LCIF partnership agreement in certain limited circumstances.

Dissolution, Winding Up and Termination

LCIF will continue indefinitely, unless sooner dissolved and terminated. LCIF will be dissolved, and its affairs wound up upon the occurrence of the earliest of: (1) the withdrawal of Lex GP as general partner (except in certain limited circumstances); (2) the sale of all or substantially all of its assets and properties; or (3) the entry of a decree of judicial dissolution of it pursuant to the provisions of the Delaware Act. Upon dissolution, Lex GP, as general partner, or any person elected as liquidator by a majority in interest of the limited partners, will proceed to liquidate the assets of LCIF and apply the proceeds therefrom in the order of priority set forth in the LCIF partnership agreement.

-37-

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Explanatory Note

On December 30, 2013, LCIF II merged with and into LCIF, with LCIF as the surviving entity.  The merger was done to streamline the reporting obligations of LCIF and LCIF II into one entity on a going-forward basis.  Except as otherwise indicated, all information with respect to LCIF and LCIF II in this prospectus is presented as of September 30, 2013, which is prior to the merger.  Information subsequent to the merger assumes that all limited partners in LCIF II received OP units in LCIF as consideration in the merger.

Certain Relationships and Related Transactions

LXP is the sole equity owner of Lex GP which is the general partner of LCIF and holds, as of December 31, 2013, approximately 0.4% of the outstanding OP units in LCIF. LXP is also the sole equity owner of Lex LP which holds, as of December 31, 2013, approximately 94.3% of the outstanding OP units in LCIF. The remaining OP units in LCIF are beneficially owned by E. Robert Roskind, Chairman of LXP, and certain non-affiliated investors. As the sole equity owner of the general partner of LCIF and pursuant to the LCIF partnership agreement, LXP has the ability to control all of the day-to-day operations of LCIF, subject to the terms of the LCIF partnership agreement. LCIF is dependent on LXP for management of its operations and future investments. LCIF does not have any employees, executive officers or a board of directors. LXP allocates investments to itself and its other subsidiaries or to LCIF as it deems appropriate and in accordance with certain obligations under the LCIF partnership agreement with respect to allocations of nonrecourse liabilities.

Neither LXP 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 LXP for all expenses incurred by them 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 LXP and its other subsidiaries), such expenses are allocated by LXP, as sole equity owner of Lex GP, the general partner of LCIF, to LCIF in proportion to gross revenues. LXP has guaranteed the obligations of LCIF in connection with the redemption of OP units pursuant to the LCIF partnership agreement.

LXP and its affiliates may engage in any transactions with LCIF subject to applicable law and the LCIF partnership agreement.

Mr. Roskind, the chairman of LXP, beneficially owns a majority of the OP units held by the Special Limited Partners.

Lexington MKP Management L.P., in which we hold a 50% interest, earned $1.1 million from LCIF and $0.1 million from LCIF II during the year ended December 31, 2012 for property management services and reimbursements.

See the financial statements included and incorporated by reference in this prospectus for additional relationships and related party transactions.

Charitable and Political Contributions

During 2012, we did not make any charitable contribution to any tax-exempt organization in which any independent trustee serves as an executive officer. As a general policy, we do not make a charitable contribution unless there is an express business purpose. We did not make any direct political contributions during 2012, nor do we intend to make any direct political contributions during 2013.

-38-

DESCRIPTION OF NOTES

We issued the private notes and will issue the exchange notes pursuant to an indenture, dated as of June 10, 2013, among LXP, certain of its Subsidiaries (as defined in “–Definitions” below) named therein, as guarantors (the “Subsidiary Guarantors”), and U.S. Bank National Association, as trustee, as supplemented by the First Supplemental Indenture, dated as of September 30, 2013, among LXP, LCIF, LCIF II and U.S. Bank National Association. The indenture, as amended and supplemented from time to time, including by the First Supplemental Indenture, is referred to herein as the indenture. The terms of the notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended. You may request copies of the indenture and the form of the exchange notes from LXP.

The following description summarizes key terms and provisions of the notes and the indenture, does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the actual terms and provisions of the notes and the indenture, which are filed as exhibits to the registration statement to which this prospectus forms a part and are incorporated herein by reference. We will provide copies of these documents to you upon request. Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the notes, the indenture or the registration rights agreement, as applicable. Unless the context requires otherwise, the term “interest” includes additional interest, as described below and references to dollars mean U.S. dollars.

General

The form and terms of the exchange notes are the same as the form and terms of the private notes, except that the exchange notes will be registered under the Securities Act and, therefore, the exchange notes will not be subject to the transfer restrictions, registration rights and provisions providing for an increase in the interest rate applicable to the private notes. The exchange notes will evidence the same debt as the private notes, and both the private notes and the exchange notes are governed by the same indenture and will vote as a single class on all matters. We refer to the private notes and the exchange notes together in this prospectus as the "notes." Unless the context otherwise requires, when we refer to the private notes, we also refer to the guarantees associated with the private notes, and when we refer to the exchange notes, we also refer to the guarantees associated with the exchange notes.

The exchange notes will be issued only in fully registered, book-entry form, in denominations of $2,000 and integral multiples of $1,000 in excess thereof, except under the limited circumstances described below under “-Book-Entry System.” The registered holder of a note will be treated as its owner for all purposes.

If any interest payment date, stated maturity date or redemption date is not a business day, the payment otherwise required to be made on such date will be made on the next business day without any additional payment as a result of such delay. The term “business day” means, with respect to any note, any day, other than a Saturday, Sunday or any other day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close. All payments will be made in U.S. dollars.

The private notes are, and the exchange notes will be, fully and unconditionally guaranteed by the Subsidiary Guarantors on an unsecured and unsubordinated basis. LCIF and any future domestic subsidiaries of LXP that are borrowers or guarantors under the Principal Credit Agreement (as defined in “–Definitions” below), will become Subsidiary Guarantors with respect to the notes. Additional domestic Subsidiaries that become guarantors or borrowers under the Principal Credit Agreement will be required to guarantee the notes, and the guarantees of the Subsidiary Guarantors with respect to the exchange notes will terminate or be released, in each case in the circumstances set forth under “-Guarantees.”

The terms of the notes provide that LXP is permitted to reduce interest payments and payments upon a redemption of notes otherwise payable to a holder for any amounts LXP is required to withhold by law. For example, non-United States holders of the notes may, under some circumstances, be subject to U.S. federal withholding tax with respect to payments of interest on the notes. LXP will set-off any such withholding tax that it is required to pay against payments of interest payable on the notes and payments upon a redemption of notes.

Ranking

The notes and the guarantees will be LXP’s and the Subsidiary Guarantors’ general unsecured and unsubordinated obligations and will rank equally in right of payment with all of LXP’s and the Subsidiary Guarantors’ existing and future unsecured and unsubordinated indebtedness. However, the exchange notes and the guarantees will be effectively subordinated in right of payment to all of LXP’s and the Subsidiary Guarantors’ existing and future secured indebtedness (to the extent of the value of the collateral securing such indebtedness). The notes and the guarantees will be structurally subordinated in right of payment to all existing and future liabilities and other indebtedness, whether secured or unsecured, and preferred stock of LXP’s Subsidiaries that are not Subsidiary Guarantors (the “Non-Guarantor Subsidiaries”). As of September 30, 2013, LXP and the Subsidiary Guarantors had no secured indebtedness and $0.8 billion of unsecured and unsubordinated indebtedness outstanding, and the Non-Guarantor Subsidiaries had approximately $1.0 billion of secured indebtedness outstanding and no unsecured indebtedness. In addition, as of September 30, 2013, $511.4 million was available for LXP to borrow under the Principal Credit Agreement subject to covenant compliance.

Except as described under “-Covenants” and “-Merger, consolidation or sale,” the indenture governing the notes does not prohibit LXP or any of its Subsidiaries from incurring additional indebtedness or issuing preferred equity in the future, nor does the indenture afford holders of the notes protection in the event of (1) a recapitalization transaction or other highly leveraged or similar transaction involving LXP or any of its Subsidiaries, (2) a change of control of LXP or any of its Subsidiaries or (3) a merger, consolidation, reorganization, restructuring or transfer or lease of substantially all of LXP’s or any of its Subsidiaries’ assets or similar transaction that may adversely affect the holders of the notes. LXP may, in the future, enter into certain transactions such as the sale of all or substantially all of LXP’s or its Subsidiary’s assets or a merger or consolidation that may increase the amount of LXP’s or its Subsidiary’s indebtedness or substantially change LXP’s or its Subsidiary assets, which may have an adverse effect on LXP’s and its Subsidiaries’ ability to service their indebtedness, including LXP’s and the Subsidiary Guarantors’ ability to service the exchange notes. See “Risk factors-Risks related to the exchange notes- Despite our substantial indebtedness, we may still incur significantly more debt, which could exacerbate any or all of the risks related to our indebtedness, including LXP’s and the subsidiary guarantors’ inability to pay the principal of or interest on the exchange notes.”

-39-

Guarantees

The Subsidiary Guarantors have unconditionally guaranteed, jointly and severally, the due and punctual payment of principal of and interest on the notes, when and as the same become due and payable, whether on the maturity date, by declaration of acceleration, upon redemption, repurchase or otherwise, and all of LXP’s other obligations under the indenture.

Each guarantee of the notes is:

a general unsecured obligation of the Subsidiary Guarantor;
equal in right of payment with all other existing and future senior indebtedness of that Subsidiary Guarantor, including its obligations with respect to the Principal Credit Agreement, $255.0 million term loan and 6.00% Convertible Notes;
senior in right of payment to any existing and future subordinated indebtedness of the Subsidiary Guarantor;
effectively subordinated to any existing and future secured indebtedness of the Subsidiary Guarantor to the extent of the value of the collateral securing such indebtedness; and

structurally subordinated to the liabilities and preferred stock of the Non-Guarantor Subsidiaries.

See “–Risk factors-Risks related to the notes-Federal and state statutes allow courts, under specific circumstances, to void guarantees and require holders of the notes to return payments received from LXP or the Subsidiary Guarantors.”

All of LXP’s Subsidiaries that are guarantors or borrowers under the Principal Credit Agreement are required to become Subsidiary Guarantors with respect to the notes. As of the date hereof, LCIF is the only Subsidiary Guarantor. None of the Subsidiary Guarantors will be foreign subsidiaries.

In the event that, at any time, any of LXP’s domestic Subsidiaries which is not, or has previously been released as, a Subsidiary Guarantor becomes a guarantor or borrower under the Principal Credit Agreement, that Subsidiary will be required to become a Subsidiary Guarantor and guarantee the notes not later than 60 days following the date on which it becomes a guarantor or borrower under the Principal Credit Agreement.

In the event that, for any reason, the obligations of any Subsidiary Guarantor that has been a guarantor or borrower under the Principal Credit Agreement terminate as a guarantor or borrower thereunder (including, without limitation, pursuant to the terms of the Principal Credit Agreement, upon agreement of the requisite lenders under the Principal Credit Agreement or upon the termination of the Principal Credit Agreement or upon the replacement thereof with a credit facility not requiring such guarantees), that Subsidiary Guarantor will be deemed released from all of its obligations under the indenture and its guarantee of the notes will terminate. A Subsidiary Guarantor’s guarantee will also terminate and such Subsidiary Guarantor will be deemed released from all of its obligations under the indenture with respect to the notes in connection with any sale or other disposition by LXP of all of the capital stock of that Subsidiary Guarantor (including by way of merger or consolidation) or other transaction such that after giving effect to such transaction such Subsidiary Guarantor is no longer one of LXP’s domestic Subsidiaries. Any release described in this paragraph may be evidenced by a supplemental indenture or other instrument which may be entered into without the consent of any holders of LCIF Partnership Units. The parties continued to discuss and negotiate the notes.

proposed redemption transaction from March-July 2021 and the LXP Board was regularly updated.

As described in the LXP Form 8-K filed on July 16, 2021 and in LXP’s subsequent SEC periodic reports, in July 2021 the parties agreed upon the in-kind redemption transaction and amendment of the Partnership Agreement. On July 12, 2021, the Partnership Agreement was amended to give the General Partner the right to consummate a merger of LCIF into LXP without the consent of any holders of LCIF Partnership Units and LCIF redeemed 1,598,906 LCIF Partnership Units in exchange for the distribution of LXP entities that owned three non-core properties and the assumption of indebtedness secured by such properties.  

On September 30, 2013,13, 2023, LCIF and LXP entered in the Merger Agreement, which the parties amended on September 15, 2023 and its Subsidiaries had approximately $2.5 billionSeptember 16, 2023. The Merger Agreement provided that the issuance of unpledged assets.Common Shares in the Merger would be effectuated as a private placement of shares based on an exemption from the registration requirement of the Securities Act. In order to permit LXP to satisfy the requirements of the Securities Act exemption, holders of LCIF Partnership Units were required to provide LXP a written questionnaire in order to receive the consideration.

Pursuant to a funding agreement, amongAfter experiencing difficulties in collecting properly completed written questionnaires, LXP senior management determined that it was in the best interests of LXP and LCIF to register the Common Shares to be issued in the Merger. On October 24, 2023, the parties amended and restated the Merger Agreement to reflect the registration of the issuance of the Common Shares in the Merger. The LXP Board and the General Partner approved the execution of the amended Merger Agreement, the Merger and the related transactions.

Regulatory Approvals Required for the Merger

LXP and LCIF are not aware of any material federal or state regulatory requirements (including any mandatory waiting period) that must be complied with, or regulatory approvals that must be obtained, in connection with the Merger, other than filings of applicable certificates or articles of merger with respect to the Merger with the Delaware Secretary of State and the State Department of Assessments and Taxation of Maryland.

9

COMPARATIVE MARKET PRICES AND CASH DIVIDEND/DISTRIBUTION INFORMATION

Common Shares are listed on the NYSE under the symbol “LXP.” There is no trading market for LCIF Partnership Units. The following table presents the closing prices of Common Shares on (i) September 13, 2023, the date the Merger Agreement was initially executed, and (ii) October 31, 2023, the most recent practicable trading day before the date of this information statement/prospectus. The table also shows the equivalent per unit value of the Common Shares included in the Merger Consideration for each party agreed, that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount equal to whicheverPartnership Unit, which per unit value is applicablecalculated as the product of (i) a specified distributionthe applicable Common Share per share value, and (ii) 1.126, the redemption factor set forth in the LCIF partnership agreement or (ii)Partnership Agreement, rounded to the cash dividend payable with respect to a whole or fractional common shares into which LCIF’s OP units would be converted if they were redeemed for LXP’s common shares in accordance with the LCIF partnership agreement, LXP 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 LXP in its discretion but no less than the applicable federal rate.nearest cent.

DateCommon
Share Closing Price
Equivalent Per Unit
Value
September 13, 2023$9.45$10.64
October 31, 2023$7.91$8.91

Dividend Policy

The indenture provides thatLXP Board determines the obligationstime and amount of each Subsidiary Guarantor under its guaranteedividends to holders of Common Shares. Generally, distributions to holders of LCIF Partnership Units are made at the same time and in the same amount as distributions to holders of Common Shares. Future LXP dividends will be limitedauthorized at the discretion of the LXP Board and will depend on LXP’s actual cash flow, its financial condition, its capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the LXP Board may deem relevant.

Because the exchange ratio in the Merger is fixed and because the market price of Common Shares will fluctuate prior to the maximum amount that, after giving effect to all other contingent and fixed liabilitiescompletion of such Subsidiary Guarantor, would cause the obligationsMerger, holders of such Subsidiary Guarantor not to constitute a fraudulent conveyance or fraudulent transfer under any applicable law.LCIF Partnership Units cannot be sure of the market value of the Common Shares they will receive as Merger Consideration. See “Risk Factors.”

 

-40-
10 

 

Additional notes

The exchange notes will initially be limited to an aggregate principal amount of $250 million. LXP may, without the consent of holders of the exchange notes, increase the principal amount of the exchange notes by issuing additional exchange notes in the future on the same terms and conditions, except for any difference in the issue date, issue price, the date from which interest accrues on such exchange notes, and, if applicable, the first interest payment date, with the same CUSIP number as the exchange notes offered hereby. The exchange notes offered by this prospectus and any additional exchange notes would rank equally and ratably in right of payment and would be treated as a single series of debt securities for all purposes under the indenture.

Interest

Interest on the exchange notes will accrue at the rate of 4.25% per year from and including December 15, 2013 or the most recent interest payment date to which interest has been paid or provided for with respect to the private notes, and will be payable semi-annually in arrears on June 15 and December 15 of each year, beginning June 15, 2014. The interest so payable will be paid to each holder in whose name an exchange note is registered at the close of business on the June 1 or December 1 (whether or not a business day) immediately preceding the applicable interest payment date. Interest on the exchange notes will be computed on the basis of a 360-day year consisting of twelve 30-day months.

If any interest payment date or maturity or redemption date falls on a day that is not a business day, the required payment shall be made on the next business day as if it were made on the date such payment was due and no interest shall accrue on the amount so payable from and after such interest payment date or maturity or redemption date, as the case may be, to such next business day.

If LXP redeems the notes in accordance with the terms of such notes, LXP will pay accrued and unpaid interest and premium, if any, to the holders that surrender notes for redemption. However, if a redemption falls after a record date and on or prior to the corresponding interest payment date, LXP will pay the full amount of accrued and unpaid interest and premium, if any, due on such interest payment date to the holder of record at the close of business on the corresponding record date (instead of the holder surrendering such notes for redemption).

Maturity

The notes will mature on June 15, 2023 and will be paid against presentation and surrender thereof at the corporate trust office of the trustee unless earlier redeemed by LXP at its option as described under “-LXP’s redemption rights” below. The notes are not entitled to the benefits of, or be subject to, any sinking fund.

LXP’s redemption rights

LXP may redeem the notes at its option and in its sole discretion, at any time or from time to time prior to March 15, 2023 in whole or in part, at a redemption price equal to the greater of:

100% of the principal amount of the notes being redeemed; or

as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including any portion of such payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as defined below) plus 35 basis points (0.35%),

plus,RISK FACTORS

The Merger involves certain risks and other adverse factors. You are urged to read this information statement/prospectus carefully in each case, accruedits entirety, including the matters addressed in “Warning About Forward-Looking Statements,” and unpaid interest thereonshould carefully consider the following risk factors in considering the Merger.

The risks below relate to the applicable redemption date; provided, however, that if the redemption date falls after a record date and on or priorMerger. This section does not review risks relating to the corresponding interest payment date,existing business of LXP, which risks will payimpact holders of LCIF Partnership Units upon receipt of Common Shares upon closing of the full amountMerger. These risks are described in Part I, Item 1A of accruedLXP’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is filed with the SEC and unpaid interest, if any (plus additional interest, if applicable), on such interest payment dateincorporated by reference into this information statement/prospectus. See “Where You Can Find More Information.”

Risks Related to the holder of record at the close of business on the corresponding record date (instead of the holder surrendering its notes for redemption).Merger

Notwithstanding the foregoing, if the notes are redeemed on or after March 15, 2023, the redemption priceThe exchange ratio is fixed and will not be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date.

As used herein:

Adjusted Treasury Rate” means, with respect to any redemption date, the rate per year equal to the semi-annual equivalent yield to maturity (computed on the third business day immediately preceding the redemption date) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection andadjusted in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes.

Comparable Treasury Price” means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, (2) if the trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations, or (3) if only one Reference Treasury Dealer Quotation is received, such quotation.

-41-

Quotation Agent” means the Reference Treasury Dealer appointed by LXP.

Reference Treasury Dealer”means (1) a Primary Treasury Dealer (as defined below) selected by Wells Fargo Securities LLC or its successor, (2) J.P. Morgan Securities LLC or its successor and (3) any one other Primary Treasury Dealer selected by LXP; provided, however, that if any of the Reference Treasury Dealers referred to in clause (1), (2) or (3) above ceases to be a primary U.S. Government securities dealer (“Primary Treasury Dealer”), LXP will substitute therefor another Primary Treasury Dealer.

Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by LXP, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date.

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of the notes to be redeemed. Unless LXP defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the notes or portions thereof called for redemption.

If LXP decides to redeem the notes in part, the trustee will select the notes to be redeemed (in principal amounts of $2,000 and integral multiples of $1,000 in excess thereof) on a pro rata basis or such other method it deems fair and appropriate or is required by the depository for the notes.

In the event of any redemptionchange in the share price of notesCommon Shares, so holders of LCIF Partnership Units cannot be sure of the market value of Common Shares that they will receive as Merger Consideration.

The market value of the consideration that LCIF Partnership Unitholders will receive in part, LXPthe Merger will not be required to:

issue or registerdepend on the transfer or exchangetrading price of any note during a period beginningthe Common Shares at the openingClosing. Subject to any applicable withholding tax, the exchange ratio that determines the number of business 15 days beforeCommon Shares that holders of LCIF Partnership Units will receive in the mailingMerger is fixed at 1.126 Common Shares for each LCIF Partnership Unit they own. This means that there is no mechanism contained in the Merger Agreement that would adjust the number of a noticeCommon Shares that holders of redemptionLCIF Partnership Units will receive based on any decreases or increases in the trading price of the notes selected for redemption and ending at the close of business on the day of such mailing; or

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.

Common Shares.

If the paying agent holds funds sufficient to pay the redemptionper share price of Common Shares at the notes onClosing is less than the redemption date, then on and after such date:

such notes will cease to be outstanding;
interest on such notes will cease to accrue; and

all rights of holders of such notes will terminate except the right to receive the redemption price.

Such will 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.

LXP will not redeem the notes on any date if the principal amount of the notes has been accelerated, and such an acceleration has not been rescinded or cured on or prior to such date.

Certain covenants

Limitation on total outstanding debt.The indenture provides that LXP will not, and will not permit any of its Subsidiaries to, incur any Debt (as defined in “–Definitions” below) (including, without limitation, Acquired Debt (as defined in “–Definitions” below)) if, immediately after giving effect to the incurrence of such Debt and the application of the proceeds from such Debt on a pro forma basis, the aggregate principal amount of all of LXP’s and its Subsidiaries’ outstanding Debt (determined on a consolidated basis in accordance with GAAP) is greater than 60% of the sum of the following (without duplication): (1) LXP’s and its Subsidiaries’ Total Assets (as defined in “–Definitions” below) as of the last day of the then most recently ended fiscal quarter and (2) the aggregate purchaseper share price of any real estate assets or mortgages receivable acquired, and the aggregate amount of any securities offering proceeds received (to the extent such proceeds were not used to acquire real estate assets or mortgages receivable or used to reduce Debt) by LXP or any of its Subsidiaries since the end of such fiscal quarter, including the proceeds obtained from the incurrence of such additional Debt.

Secured debt test.The indenture provides that LXP will not, and will not permit any of its Subsidiaries to, incur any Debt (including, without limitation, Acquired Debt) secured by any Lien (as defined in “–Definitions” below) on any of LXP’s or any of its Subsidiaries’ property or assets, whether ownedCommon Shares on the date that the Merger Agreement was signed, then the market value of the indenture or subsequently acquired, if, immediately after giving effect to the incurrence of such Debt and the application of the proceeds from such Debt on a pro forma basis, the aggregate principal amount of all of LXP’s and its Subsidiaries’ outstanding Debt (determined on a consolidated basis in accordance with GAAP) which is secured by a Lien on any of LXP’s or its Subsidiaries’ property or assets is greater than 40% of the sum of (without duplication): (1) LXP’s and its Subsidiaries’ Total Assets as of the last day of the then most recently ended fiscal quarter; and (2) the aggregate purchase price of any real estate assets or mortgages receivable acquired, and the aggregate amount of any securities offering proceeds received (to the extent such proceeds were not used to acquire real estate assets or mortgages receivable or used to reduce Debt) by LXP or any of its Subsidiaries since the end of such fiscal quarter, including the proceeds obtained from the incurrence of such additional Debt.

-42-

Debt service test.The indenture provides that LXPMerger Consideration will not, and will not permit any of its Subsidiaries to, incur any Debt (including without limitation Acquired Debt) if the ratio of Consolidated Income Available for Debt Service (as defined in “–Definitions” below) to Annual Debt Service Charge (as defined in “–Definitions” below) for the period consisting of the four consecutive fiscal quarters most recently ended prior to the date on which such additional Debt is to be incurred shall have been less than 1.5:1 on a pro forma basis after giving effect to the incurrence of such Debt and the application of the proceeds from such Debt (determined on a consolidated basis in accordance with GAAP), and calculated on the following assumptions: (1) such Debt and any other Debt (including, without limitation, Acquired Debt) incurred by LXP or any of its Subsidiaries since the first day of such four-quarter period had been incurred, and the application of the proceeds from such Debt (including to repay or retire other Debt) had occurred, on the first day of such period; (2) the repayment or retirement of any other Debt of LXP or any of its Subsidiaries since the first day of such four-quarter period had occurred on the first day of such period (except that, in making this computation, the amount of Debt under any revolving credit facility, line of credit or similar facility will be computed based upon the average daily balance of such Debt during such period); and (3) in the case of any acquisition or disposition by LXP or any of its Subsidiaries of any asset or group of assets with a fair market value in excess of $1.0 million since the first day of such four-quarter period, whether by merger, stock purchase or sale or asset purchase or sale or otherwise, such acquisition or disposition had occurred as of the first day of such period with the appropriate adjustments with respect to such acquisition or disposition being included in such pro forma calculation.

If the Debt giving rise to the need to make the calculation described above or any other Debt incurred after the first day of the relevant four-quarter period bears interest at a floating rate, then, for purposes of calculating the Annual Debt Service Charge, the interest rate on such Debt will be computed on a pro forma basis by applying the average daily rate which would have been in effect during the entire four-quarter period to the greater of the amount of such Debt outstandingcontemplated at the end of such period ortime the average amount of such Debt outstanding during such period. For purposes of the foregoing, DebtMerger Agreement was signed.

You generally will be deemed to be incurred by LXP or any of its Subsidiaries whenever LXP or any of its Subsidiaries shall create, assume, guarantee or otherwise become liable in respect thereof.

Maintenance of total unencumbered assets.The indenture provides that LXP and its Subsidiaries will not have at any time Total Unencumbered Assets (as defined in “–Definitions” below) of less than 150% of the aggregate principal amount of all of LXP’s and its Subsidiaries’ outstanding Unsecured Debt (as defined in “–Definitions” below) determined on a consolidated basis in accordance with GAAP.

Existence.Except as permitted under “-Merger, consolidation or sale,” LXP will do or cause to be done all things necessary to preserve and keep in full force and effect LXP’s existence, rights (charter and statutory) and franchises, and LXP will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises. However, LXP will not be required to preserve any right or franchise if LXP’s Board of Trustees (or any duly authorized committee of that Board of Trustees), as the case may be, determines that the preservation of the right or franchise is no longer desirable in the conduct of LXP’s business.

Maintenance of properties.The indenture provides that LXP will cause all of LXP’s and its Subsidiaries’ properties used or useful in the conduct of LXP’s business or any of its Subsidiaries’ businesses to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and cause all necessary repairs, renewals, replacements, betterments and improvements to be made, all as in LXP’s judgment may be necessary in order for LXP to at all times properly and advantageously conduct LXP’s business carried on in connection with such properties.

Insurance.The indenture provides that LXP will, and will cause each of its Subsidiaries to, keep in force upon all of LXP’s and each of its Subsidiaries’ properties and operations insurance policies carried with responsible companies in such amounts and covering all such risks as is customary in the industry in which LXP and its Subsidiaries do business in accordance with prevailing market conditions and availability.

Payment of taxes and other claims.The indenture provides that LXP will pay or discharge or cause to be paid or discharged before it becomes delinquent:

all taxes, assessments and governmental charges levied or imposed on LXP or any of its Subsidiaries or on LXP’s or any such Subsidiary’s income, profits or property; and

all lawful claims for labor, materials and supplies that, if unpaid, might by law become a Lien upon LXP’s property or the property of any of LXP’s Subsidiaries.

However, LXP will not be required to pay or discharge or cause to be paid or discharged any tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith.

-43-

Provision of financial information.The indenture provides that:

Whether or not LXP is subject to Section 13 or 15(d) of the Exchange Act and for so long as any notes are outstanding, LXP will furnish to the trustee (1) all quarterly and annual reports that would be required to be filed with the Commission on Forms 10-Q and 10-K if LXP were required to file such reports and (2) all current reports that would be required to be filed with the Commission on Form 8-K if LXP were required to file such reports, in each case within 15 days after LXP files such reports with the Commission or would be required to file such reports with the Commission pursuant to the applicable rules and regulations of the Commission, whichever is earlier. Reports, information and documents filed with the Commission via the EDGAR system will be deemed to be delivered to the trustee as of the time of such filing via EDGAR for purposes of this covenant; provided, however, that the trustee shall have no obligation whatsoever to determine whether or not such information, documents or reports have been filed via EDGAR. Delivery of such reports, information and documents to the trustee is for informational purposes only and the trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including LXP’s compliance with any of LXP’s covenants relating to the exchange notes (as to which the trustee is entitled to rely exclusively on an officers’ certificate).
If so required by Rule 144A, LXP will promptly furnish to the holders, beneficial owners and prospective purchasers of the exchange notes, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) to facilitate the resale of the exchange notes pursuant to Rule 144A.

Calculations in respect of the notes

Except as explicitly specified otherwise herein, LXP will be responsible for making all calculations required under the notes. LXP will make all these calculations in good faith and, absent manifest error, its calculations will be final and binding on holders of the notes. LXP will provide a schedule of its calculations to the trustee, and the trustee is entitled to rely upon the accuracy of LXP’s calculations without independent verification. The trustee will forward LXP’s calculations to any holder of notes upon request.

Merger, consolidation or sale

The indenture provides that LXP may consolidate with, or sell, lease or convey all or substantially all of its assets to, or merge with or into, any other entity, provided that the following conditions are met:

(1) LXP shall be the continuing entity, or (2) the successor entity (if other than LXP) formed by or resulting from any consolidation or merger or which shall have received the transfer of assets shall be domiciled in the United States, any state thereof or the District of Columbia and shall expressly assume payment of the principal of and interest on all of the exchange notes and the due and punctual performance and observance of all of the covenants and conditions in the indenture;
immediately after giving effect on a pro forma basis to the transaction, no Event of Default under the indenture, and no event which, after notice or the lapse of time, or both, would become an Event of Default, shall have occurred and be continuing; and
an officers’ certificate and legal opinion covering these conditions shall be delivered to the trustee.

In the event of any transaction described in and complying with the conditions listed in the immediately preceding paragraph in which LXP is not the continuing entity, the successor person formed or remaining shall succeed, and be substituted for, and may exercise every right and power of LXP’s, and LXP shall be discharged from its obligations under the notes, the indenture and the registration rights agreement.

LXP will not permit any Subsidiary Guarantor to consolidate with, or sell, lease or convey all or substantially all of its assets to, or merge with or into, any other entity unless the following conditions are met:

(1) such Subsidiary Guarantor shall be the continuing entity, or (2) the successor entity (if not such Subsidiary Guarantor) formed by or resulting from any consolidation or merger or which shall have received the transfer of assets shall be domiciled in the United States, any state thereof or the District of Columbia and shall expressly assume, by a supplemental indenture, all the obligations of such Subsidiary Guarantor, if any, under the exchange notes or its guarantee, as applicable; provided, however, that the foregoing requirement will not apply in the case of a Subsidiary Guarantor (x) that has been disposed of in its entirety to another person (other than to LXP or an affiliate of LXP), whether through a merger, consolidation or sale of capital stock or has sold, leased or converted all or substantially all of its assets or (y) that, as a result of the disposition of all or a portion of its capital stock, ceases to be LXP’s Subsidiary;
immediately after giving effect on a pro forma basis to the transaction, no Event of Default under the indenture, and no event which, after notice or the lapse of time, or both, would become an Event of Default, shall have occurred and be continuing; and
an officers’ certificate and legal opinion covering these conditions shall be delivered to the trustee.

In the event of any transaction described in and complying with the conditions listed in the immediately preceding paragraph in which such Subsidiary Guarantor is not the continuing entity, the successor person formed or remaining shall succeed, and be substituted for, and may exercise every right and power of such Subsidiary Guarantor, and such Subsidiary Guarantor shall be discharged from its obligations under the exchange notes, the indenture and the registration rights agreement.

-44-

Events of default

The indenture provides that the following events are “Events of Default” with respect to the notes:

default for 30 days in the payment of any installment of interest under the notes;
default in the payment of the principal amount or redemption price due with respect to the notes, when the same becomes due and payable;
LXP’s or any Subsidiary Guarantor’s failure to comply with any of its other agreements in the notes or the indenture upon receipt by LXP of notice of such default from the trustee or from holders of not less than 25% in aggregate principal amount of the notes then outstanding and LXP’s or such Subsidiary Guarantor’s failure to cure (or obtain a waiver of) such default within 60 days after LXP receives such notice;
the guarantee of any Subsidiary Guarantor required to guarantee the notes ceases to be in full force and effect or such Subsidiary Guarantor denies or disaffirms in writing its obligations under the indenture or its guarantee;
failure to pay any recourse indebtedness for money borrowed by LXP or any Subsidiary in an outstanding principal amount in excess of $35.0 million at final maturity or upon acceleration after the expiration of any applicable grace period, which recourse indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, within 30 days after written notice to LXP from the trustee (or to LXP and the trustee from holders of at least 25% in principal amount of the outstanding notes); or
certain events of bankruptcy, insolvency or reorganization, court appointment of a receiver, liquidator or trustee of LXP or any of its Material Subsidiaries (as defined in “–Definitions��� below) or any substantial part of LXP’s or such Material Subsidiary’s respective property, or commencement of an involuntary case or other proceeding against LXP or any of its Material Subsidiaries seeking liquidation, reorganization or other relief with respect to LXP or such Material Subsidiary or LXP’s or such Material Subsidiary’s debts under any bankruptcy, insolvency or other similar law (which involuntary case or other proceeding remains undismissed and unstayed for 30 days).

If an Event of Default under the indenture with respect to the notes occurs and is continuing (other than an Event of Default specified in the last bullet above with respect to LXP, which shall result in an automatic acceleration), then in every case the trustee or the holders of not less than 25% in principal amount of the outstanding notes may declare the principal amount of all of the notes to be due and payable immediately by written notice thereof to LXP (and to the trustee if given by the holders). However, at any time after the declaration of acceleration with respect to the notes has been made, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders of not less than a majority in principal amount of outstanding notes may waive all defaults or Events of Default and rescind and annul such declaration and its consequences if all Events of Default, other than the non-payment of accelerated principal of (or specified portion thereof) or interest on the notes have been cured or waived as provided in the indenture.

The indenture also provides that the holders of not less than a majority in principal amount of the outstanding notes may waive any past default with respect to the notes and its consequences, except a default:

in the payment of the principal of or interest on the notes, unless such default has been cured and LXP shall have deposited with the trustee all required payments of the principal of and interest on the notes; or
in respect of a covenant or provision contained in the indenture that cannot be modified or amended without the consent of the holder of each outstanding note affected thereby.

The trustee will be required to give notice to the holders of the notes of a default under the indenture unless the default has been cured or waived within 90 days; provided, however, that the trustee may withhold notice to the holders of the notes of any default with respect to the notes (except a default in the payment of the principal of or interest on the notes) if specified responsible officers of the trustee consider the withholding to be in the interest of the holders.

The indenture provides that no holders of the notes may institute any proceedings, judicial or otherwise, with respect to the indenture or for any remedy thereunder, except in the case of failure of the trustee, for 90 days, to act after it has received a written request to institute proceedings in respect of an Event of Default from the holders of not less than 25% in principal amount of the outstanding notes, as well as an offer of reasonable indemnity. This provision will not prevent, however, any holder of the notes from instituting suit for the enforcement of payment of the principal of and interest on the notes at the respective due dates thereof.

Subject to provisions in the indenture relating to its duties in case of default, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any holders of the notes then outstanding under the indenture, unless the holders shall have offered to the trustee reasonable security or indemnity. The holders of not less than a majority in principal amount of the outstanding notes (or of all notes then outstanding under the indenture, as the case may be) shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or of exercising any trust or power conferred upon the trustee. However, the trustee may refuse to follow any direction which is in conflict with any law or the indenture, or which may be unduly prejudicial to the holders of the notes not joining therein.

-45-

Within 120 days after the close of each fiscal year, LXP must deliver a certificate of an officer certifying to the trustee whether or not the officer has knowledge of any default under the indenture and, if so, specifying each default and the nature and status thereof.

Defeasance

LXP may, at its option and at any time, elect to have its obligations and the obligations of the Subsidiary Guarantors discharged with respect to the outstanding notes and guarantees (“Legal Defeasance”).

Legal Defeasance means that LXP and the Subsidiary Guarantors shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding notes and guarantees, and to have satisfied all other obligations under such exchange notes, the guarantees and the indenture, except as to:

the rights of holders of outstanding notes to receive payments in respect of the principal of, or interest or premium and additional interest, if any, on, such notes when such payments are due from the trust funds referred to below;
LXP’s and the Subsidiary Guarantors’ obligations with respect to such notes concerning and registration of transfer of notes, mutilated, destroyed, lost or stolen notes, issuing temporary exchange notes, and the maintenance of an office or agency for payment and money for security payments held in trust;
the rights, powers, trust, duties, and immunities of the trustee, and LXP’s and the Subsidiary Guarantors’ obligations in connection therewith; and
the Legal Defeasance provisions of the indenture.

In addition, LXP may, at its option and at any time, elect to have its obligations and the obligations of the Subsidiary Guarantors released with respect to certain covenants under the indenture, including the covenants listed under “-Certain Covenants” above, as described in the indenture (“Covenant Defeasance”), and thereafter any omission to comply with such obligations shall not constitute a default or an Event of Default. In the event Covenant Defeasance occurs, certain Events of Default (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) will no longer apply. Except as specified in the indenture, however, the remainder of the indenture and such notes and guarantees will be unaffected by the occurrence of Covenant Defeasance, and the notes will continue to be deemed “outstanding” for all other purposes under the indenture other than for the purposes of any direction, waiver, consent or declaration or act of holders (and the consequences of any thereof) in connection with any of the defeased covenants.

In order to exercise either Legal Defeasance or Covenant Defeasance:

LXP must irrevocably deposit with the trustee, in trust, for the benefit of the holders, cash in U.S. dollars, non-callable government securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm, or firm of independent public accountants, to pay the principal of, premium and additional interest, if any, and interest on, the outstanding notes on the stated date for payment thereof or on the redemption date of the notes, as the case may be, and LXP must specify whether the notes are being defeased to such stated date for payment or to a particular redemption date;
in the case of Legal Defeasance, LXP must deliver to the trustee an opinion of counsel confirming that:
LXP has received from, or there has been published by the Internal Revenue Service (the “IRS”) a ruling, or
since the date of the indenture, there has been a change in the applicable U.S. federal income tax law,

in either case to the effect that, and based thereon, such opinion of counsel shall confirm that, the holders of the outstanding notes will not recognize income,taxable gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject tothe Merger.

In general, under applicable U.S. federal income tax on the same amounts, in the same mannerlaws and at the same times as would have been the case if such Legal Defeasance had not occurred;

in the case of Covenant Defeasance, LXP must deliver to the trustee an opinion of counsel confirming that the holders of the outstanding notesregulations, you will not recognize income,a gain or loss for U.S. federal income tax purposes upon exchange of your LCIF Partnership Units for Common Shares in the Merger. You are urged to read “Material U.S. Federal Income Tax Consequences” for a more complete discussion of the expected U.S. federal income tax consequences of the Merger. We also urge you to consult your own tax advisor for a full understanding of the tax consequences of the Merger to you.

Holders of LCIF Partnership Units will be entitled to different rights as holders of Common Shares than those to which they are entitled as holders of LCIF Partnership Units.

Following completion of the Merger, holders of LCIF Partnership Units will no longer hold LCIF Partnership Units, but will instead hold Common Shares. LXP is a Maryland real estate investment trust, and LCIF is a Delaware limited partnership. There are important differences between the rights of holders of LCIF Partnership Units and the rights of holders of Common Shares. See “Comparison of Rights of LXP Shareholders and LCIF Partnership Unitholders.”

11

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This information statement/prospectus and the information incorporated by reference in this information statement/prospectus includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are subject to risks and uncertainties, and actual results might differ materially from those discussed in, or implied by, the forward-looking statements. Forward-looking statements are based on the current beliefs and assumptions of the management of LXP and LCIF and can often be identified by terms and phrases that include “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “would,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook,” or other similar terminology. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements. Accordingly, there is no assurance that results will be realized.

In light of these risks, uncertainties and assumptions, the events described in forward-looking statements included or incorporated by reference in this information statement/prospectus might not occur or might occur to a different extent or at a different time than described. Actual results may differ materially from the current expectations of LXP and LCIF depending on a number of factors affecting their businesses and risks associated with the successful execution of the Merger. In evaluating these forward-looking statements, you should carefully consider the risks described herein and in the reports that LXP files with the SEC. See “Risk Factors” and “Where You Can Find More Information.” Factors that could have a material adverse effect on operations and future prospects or that could cause events or circumstances to differ from the forward-looking statements include, but are not limited to:

the uncertainty of the value of the Merger Consideration due to the fixed exchange ratio and potential fluctuation in the market price of Common Shares;
the different rights associated with owning Common Shares as opposed to LCIF Partnership Units;
the risk that the market value of Common Shares will decline; and
other business, financial, operational and legal risks and uncertainties detailed from time to time in LXP’s SEC filings, including, but not limited to those discussed under Part I, Item 1A of LXP’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is filed with the SEC and incorporated by reference into this information statement/prospectus.

Except as otherwise required by law, neither LXP nor LCIF is under any obligation, and each expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of such Covenant Defeasance and will be subjectnew information, future events or otherwise. Persons reading this information statement/prospectus are cautioned not to U.S. federal income taxplace undue reliance on the same amounts, in the same manner and at the same timesany forward-looking statements, which speak only as would have been the case if such Covenant Defeasance had not occurred;

no default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a default or Event of Default resulting from the borrowing of funds to be applied to such deposit (and any similar concurrent deposit relating to other indebtedness being defeased, discharged or replaced), and the granting of liens to secure such borrowings);
such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the indenture and the agreements governing any other indebtedness being defeased, discharged or replaced) to which LXP or any Subsidiary Guarantorstatement is a party or by which LXP or any Subsidiary Guarantor is bound;
LXP must deliver to the trustee an officers’ certificate stating that the deposit was not made by LXP with the intent of preferring the holders of the notes over LXP’s other creditors with the intent of defeating, hindering, delaying or defrauding any of LXP’s creditors or others; and
LXP must deliver to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.
made.

-46-12

COMPARISON OF RIGHTS OF LXP SHAREHOLDERS AND LCIF PARTNERSHIP UNITHOLDERS

Form Of Organization and Assets Owned

LXPLCIF

LXP is a Maryland statutory real estate investment trust within the meaning of Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland (the “Maryland REIT Law”). The rights of LXP’s shareholders are governed by the Maryland REIT Law, certain provisions of the Maryland General Corporation Law (the “MGCL”), the LXP Declaration of Trust and the LXP bylaws.

LXP owns, directly and indirectly, commercial real estate properties and is focused on single-tenant warehouse/distribution real estate investments. A majority of LXP’s properties are subject to net or similar leases, where the tenant bears all or substantially all of the costs, including cost increases, for real estate taxes, utilities, insurance and ordinary repairs. However, certain leases provide that the landlord is responsible for certain operating expenses.

LCIF is organized as a Delaware limited partnership. LCIF owns interests (directly and indirectly through subsidiaries) in properties and assets similar to LXP’s investment focus.

The rights of partners are governed by Delaware law and the Partnership Agreement.

Length of Investment

LXPLCIF
LXP has a perpetual term and intends to continue its operations for an indefinite time period.LCIF has a perpetual term, unless sooner dissolved and terminated.

Purpose and Permitted Investments

LXPLCIF
LXP’s purposes are to engage in the real estate business and any lawful activities incidental thereto, and to engage in any lawful act or activity for which real estate investment trusts may be organized under the applicable laws of the State of Maryland.LCIF’s purpose is to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Delaware Revised Uniform Limited Partnership Act, provided that such business is to be conducted in such a manner that permits LXP to be qualified as a REIT unless LXP ceases to qualify as a REIT for reasons other than the conduct of LCIF’s business.

Additional Equity

LXPLCIF
Under the LXP Declaration of Trust, the LXP Board may cause LXP to issue up to 1,400,000,000 shares of beneficial interest, par value $0.0001 per share, of which 600,000,000 shares are classified as Common Shares, 700,000,000 shares are classified as excess stock, or excess shares, and 100,000,000 shares are classified as preferred stock, or preferred shares. The LXP Board may cause LXP to issue, in its discretion, equity securities consisting of Common Shares and/or preferred shares. However, the total number of shares issued may not exceed the authorized number of shares of beneficial interest set forth in the LXP Declaration of Trust. The proceeds of equity capital raised by LXP are not required to be contributed to LCIF.

LCIF is authorized to issue partnership interests as determined by the General Partner in its sole discretion.

Borrowing Policies

LXPLCIF
Neither the LXP Declaration of Trust nor the LXP bylaws impose any restrictions on its ability to borrow money. LXP is not required to incur its indebtedness through LCIF.

LCIF has no restrictions on borrowings, and the General Partner has full power and authority to borrow money on LCIF’s behalf.

 13

Satisfaction and dischargeOther Investment Restrictions

LXPLCIF
Neither the LXP Declaration of Trust nor the LXP bylaws impose any restrictions upon the types of investments made by LXP. However, contractual obligations or REIT qualification requirements may inhibit LXP’s ability to invest in certain asset types

Other than restrictions precluding investments by LCIF that would adversely affect LXP’s qualification as a REIT, there are generally no restrictions upon LCIF’s authority to enter into investment transactions.

The indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the notes, as expressly provided for in the indenture) as to all outstanding notes when:

Management Control

LXPLCIF
The LXP Board has exclusive control over LXP’s business and affairs subject only to the restrictions in the LXP Declaration of Trust and the LXP bylaws. The LXP Board consists of eight trustees, which number may be increased or decreased by vote of at least a majority of the entire LXP Board pursuant to the LXP bylaws. The trustees are elected at each annual meeting of LXP’s shareholders. The policies adopted by the LXP Board may be altered or eliminated without a vote of the shareholders. Accordingly, except for their vote in the elections of trustees, shareholders have no control over LXP’s ordinary business policies

All management powers over LCIF’s business and affairs are vested in the General Partner, and no limited partner has any right to participate in or exercise control or management power over LCIF’s business and affairs, subject to the limited voting rights discussed below. The General Partner may not be removed by the limited partners with or without cause.

Duties

LXPLCIF
Under Maryland law, LXP’s trustees must perform their duties in good faith, in a manner that they reasonably believe to be in LXP’s best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Trustees who act in such a manner generally will not be liable to LXP for monetary damages arising from their activities.

Under Delaware law, except as provided in the Partnership Agreement, the General Partner is accountable to LCIF as a fiduciary and, consequently, is required to exercise good faith and integrity in all of its dealings with respect to LCIF’s affairs.

either:
14all

Management Liability and Indemnification

LXPLCIF
Under the notes theretofore authenticatedLXP Declaration of Trust, LXP’s trustees and delivered (except lost, stolen or destroyed notes which have been replaced or paidofficers will not be personally liable to LXP and notesits shareholders for whose payment money has theretofore been deposited in trust and thereafter repaid to LXP) have been delivereddamages to the trustee for cancellation;fullest extent permitted under Maryland law. Under the LXP Declaration of Trust, LXP is required to (i) indemnify its trustees and officers, whether serving LXP or
all notes not theretofore delivered at its request any other entity, to the fullest extent permitted under Maryland law, including the advancement of expenses under the procedures and to the full extent permitted by law, and (ii) to indemnify its other employees and agents, whether serving LXP or at its request any other entity, to such extent as authorized by the LXP Board or the LXP bylaws, but only to the extent permitted under applicable law.Under Delaware law, the General Partner has liability for the payment of LCIF’s obligations and debts unless limitations upon such liability are stated in the document or instrument evidencing the obligation. Under the Partnership Agreement, LCIF agreed to indemnify the General Partner and LXP, and any director, trustee or officer of LCIF, LXP or the initial limited partner, to the fullest extent permitted under the Delaware Revised Uniform Limited Partnership Act. The reasonable expenses incurred by an indemnitee may be reimbursed by LCIF in advance of the final disposition of the proceeding upon receipt by LCIF of a written affirmation by such indemnitee of his, her or its good faith belief that the standard of conduct necessary for cancellation (1)indemnification has been met and a written undertaking by such indemnitee to repay the amount if it is ultimately determined that such standard was not met.

Board of Trustees or Partners

LXPLCIF
LXP is managed and controlled by the LXP Board presently consisting of eight members. Each trustee is elected by the shareholders at annual meetings of LXP’s shareholders. The LXP Declaration of Trust permits the LXP Board to classify any reclassify any unissued shares of beneficial interest into one or more series having voting power which may differ from that of the Common Shares. See “Description of Common Shares” elsewhere in this information statement/prospectus.The General Partner may not be removed by the limited partners.

Removal: Subject to the rights of holders of any class separately entitled to elect one or more trustees, trustees may be removed only for cause and then only by the affirmative vote of the holders of at least 80% of the combined voting power of all classes of shares of beneficial interest entitled to vote in the election of trustees.

Vacancies: The shareholders shall elect a successor to fill a vacancy on the LXP Board which results from the removal of a trustee. A trustee elected by the shareholders to fill a vacancy which results from the removal of a trustee serves for the balance of the term of the removed trustee. A majority of the remaining trustees on the LXP Board, whether or not sufficient to constitute a quorum, may fill a vacancy on the LXP Board which results from any increase in the authorized number of trustees, or death, resignation, retirement or other cause. A trustee elected by the LXP Board to fill a vacancy serves until the next annual meeting of shareholders and until their successor is elected and qualifies.

Anti-Takeover Provisions

LXPLCIF

Maryland law provides that holders of “control shares” of a Maryland REIT acquired in a “control share acquisition” have become due and payable or (2) areno voting rights unless approved by a vote of two-thirds of the votes entitled to be called for redemption under arrangements reasonably satisfactorycast on the matter. Shares owned by the acquirer, or by officers or trustees who are also employees of LXP are excluded from the shares entitled to vote on the matter.

Control shares are voting shares which, if aggregated with all other shares owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing trustees within one of the following ranges of voting power: (i) one-tenth or more but less than one-third; (ii) one-third or more but less than a majority; or (iii) a majority or more of all voting power.

Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained shareholder approval or shares acquired directly from the corporation. A control share acquisition means the acquisition of issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition may compel the board of trustees of the trust to call a special meeting of shareholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the trusteesatisfaction of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the trust may itself present the question at any shareholders’ meeting.

Except in limited circumstances (see “—Voting Rights” below), the General Partner has exclusive management power over LCIF’s business and affairs. The General Partner may not be removed by the limited partners. Without the consent of the General Partner, a transferee will not be (i) admitted to LCIF as a substituted limited partner or (ii) entitled to the same rights as a substituted limited partner.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the trust may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the trust to redeem control shares is subject to certain conditions and limitations. Fair value is determined, without regard to the absence of voting rights for the givingcontrol shares, as of noticethe date of redemptionthe last control share acquisition by the trustee inacquiror or if any meeting of shareholders at which the name,voting rights of the shares are considered and at the expense, of LXP, and LXP, in the case of clause (1) or (2) above, has irrevocably deposited or caused to be irrevocably deposited with the trustee or the paying agent (other than LXP or any of its affiliates), as applicable, as trust funds in trust cash in an amount sufficient to pay and discharge the entire indebtedness on such notes not theretofore delivered to the trustee for cancellation, for principal and interest toapproved, the date of such deposit (inmeeting. If voting rights for control shares are approved at a shareholders’ meeting and the caseacquirer becomes entitled to vote a majority of notesthe shares entitled to vote, all other shareholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.

The control share acquisition statute does not apply (a) to shares acquired in a merger, consolidation or share exchange if the trust is a party to the transaction or (b) to acquisitions approved or exempted by the declaration of trust or bylaws of the trust.

The LXP bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of LXP’s shares. There can be no assurance that this provision will not be amended or eliminated at any time in the future.

Under Maryland law, certain “business combinations” between a Maryland real estate investment trust and an “interested shareholder” or an affiliate of an interested shareholder are prohibited for five years after the most recent date on which the interested shareholder became an interested shareholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested shareholder is defined as:(i) any person who beneficially owns, directly or indirectly, ten percent or more of the voting power of LXP’s shares; or (ii) an affiliate or associate of LXP who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of LXP’s shares.

A person is not an interested shareholder under the statute if the board of trustees approved in advance the transaction by which the person otherwise would have become duean interested shareholder. However, in approving a transaction, the board of trustees may provide that its approval is subject to compliance, at or after the time of approval, with any terms or conditions determined by the board of trustees.

After the five-year prohibition, any such business combination between the Maryland real estate investment trust and payable)an interested shareholder generally must be recommended by the board of trustees of the trust and approved by the affirmative vote of at least (i) eighty percent of the votes entitled to be cast by holders of outstanding voting shares of the trust; and (ii) two-thirds of the votes entitled to be cast by holders of voting shares of the trust other than shares held by the interested shareholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested shareholder.

These super-majority vote requirements do not apply if the trust’s common shareholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested shareholder for its shares.

The statute permits various exemptions from its provisions, including business combinations that are exempted by the board of trustees prior to the maturity datetime that the interested shareholder becomes an interested shareholder.

Maryland law provides that a Maryland REIT with a class of equity securities registered under the Exchange Act and that has at least three independent trustees, may elect by provision of its declaration of trust or redemption date,bylaws or by resolution adopted by its board of trustees to be subject to all or any of the following provisions, notwithstanding any contrary provisions contained in its existing declaration of trust or bylaws and without shareholder approval: (i) a classified board; (ii) a two-thirds vote of outstanding shares to remove a trustee; (iii) a requirement that the number of trustees be fixed only by vote of the board of trustees; (iv) a requirement that a vacancy on the board of trustees be filled only by the affirmative vote of a majority of the remaining trustees and that such trustee filling the vacancy serve for the remainder of the full term of the class of trustees in which the vacancy occurred and until a successor is duly elected and qualifies; and (v) a majority requirement for the calling of shareholder-requested special meetings of shareholders.

LXP has not elected to be governed by any of these specific provisions. However, the LXP Declaration of Trust and/or the LXP bylaws, as applicable, already provide for an 80% shareholder vote to remove trustees and then only for cause, and that the casenumber of trustees may be; provided, however, that there shall not exist, onbe determined by a majority of the LXP Board, subject to a minimum number. In addition, LXP can elect to be governed by any or all of the foregoing provisions of Maryland law at any time in the future. See “Description of Common Shares” elsewhere in this information statement/prospectus.

15

Voting Rights

LXPLCIF

Election of Trustees: All Common Shares have one vote. In uncontested elections of trustees at a meeting duly called at which a quorum is present, the affirmative vote of a majority of the total votes cast by shareholders entitled to vote is sufficient to elect a trustee nominee. In contested elections at a meeting duly called at which a quorum is present, a plurality of votes cast by shareholders entitled to vote is required for the election of a trustee.

All decisions relating to LCIF’s operation and management are made by the General Partner. As of the date of this information statement/prospectus, LXP held, indirectly, approximately 99% of the partnership interest in LCIF.

Amendment of Declaration of Trust and Bylaws: Amendments to the LXP Declaration of Trust must be authorized by the LXP Board and approved generally by at least a majority of the votes entitled to be cast on that matter at a meeting of shareholders. Amendments to provisions relating to the termination of LXP requires the affirmative vote of two-thirds of the outstanding Common Shares. In addition, the LXP Declaration of Trust may be amended by a two-thirds majority of its trustees, without shareholder approval, in order to preserve its qualification as a REIT under the Code. Subject to the special provisions of the LXP bylaws relating to the power of the LXP Board to establish, increase or decrease the number of trustees, in accordance with the LXP Declaration of Trust, the LXP bylaws may be repealed, altered, amended or rescinded (a) by the shareholders of LXP only by vote of not less than 80% of the outstanding shares of beneficial interest LXP entitled to vote generally in the election of trustees (considered for this purpose as one class) cast at any meeting of the shareholders called for that purpose (provided that notice of such deposit,proposed repeal, alteration, amendment or rescission is included in the notice of such meeting) or (b) by vote of two-thirds of the LXP Board at a defaultmeeting.

Amendment of Partnership Agreement: Generally, the General Partner may not amend the Partnership Agreement without the consent of the holders of the majority of LCIF Partnership Units, except the General Partner may, without the consent of the limited partners, amend the Partnership Agreement to reflect the admission, substitution, termination, or Eventwithdrawal of Default;partners, set forth the designation, rights, powers, duties, and preferences of the holders of any additional partnership interests, to address certain ministerial matters and to cure ambiguities.

Vote Required to Terminate: LXP may be terminated only if declared advisable by the LXP Board and upon the affirmative vote of the holders of two-thirds of the outstanding shares entitled to vote thereon.

Vote Required to Dissolve: LCIF may be dissolved upon the occurrence of certain events, none of which require the consent of the limited partners.

Vote Required in Extraordinary Transactions: Under the Maryland REIT Law, a Maryland real estate investment trust generally cannot merge with, or convert into, another entity unless advised by its board of trustees and approved by the affirmative vote of shareholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter unless a different percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is set forth in its declaration of trust. The LXP Declaration of Trust provides that those actions will be valid and effective if advised by the LXP Board and authorized by holders of a majority of the total number of shares of all classes outstanding and entitled to vote thereon.

Vote Required to Sell Assets or Merge: The General Partner may cause LCIF to participate in any merger, consolidation or other combination with or into another person or sale of all or substantially all of its assets without any further act, vote or approval of any limited partner or other person.

Compensation, Fees and Distributions

LXPLCIF
LXP’s non-employee trustees and officers receive compensation for their services.The General Partner does not receive any compensation for its services as the general partner of LCIF. The General Partner and LXP, in their capacity as partners, have the right to allocations and distributions as provided further, thatin the Partnership Agreement. In addition, LCIF is required to reimburse the General Partner (and LXP) for certain expenses incurred relating to the management of LCIF.

16

Liability of Investors

LXPLCIF
Under Maryland law, LXP’s shareholders are generally not personally liable for LXP’s debts or obligations solely as a result of their status as shareholders.Under the Partnership Agreement and applicable state law, the liability of limited partners for LCIF’s debts and obligations is generally limited to the amount of their investment in LCIF.

Nature of Investment

LXPLCIF
Common Shares constitute equity interests in LXP. Each holder of Common Shares will be entitled to its pro rata share of any dividends or distributions paid with respect to the Common Shares. The dividends payable to holders of Common Shares are not fixed in amount and are only paid if, when and as authorized by the LXP Board and declared by LXP. In order to continue to qualify as a REIT, LXP generally must distribute at least 90% of its net taxable income (excluding capital gains), and any taxable income (including capital gains) not distributed will be subject to corporate income tax.

The LCIF Partnership Units constitute equity interests in LCIF. Generally, unitholders are allocated and distributed amounts in accordance with their respective percentage interest in LCIF, from time to time, but not less than semi-annually, as determined in the manner provided in the Partnership Agreement and subject to certain restrictions and exceptions for certain limited partners.

Potential Dilution of Rights

LXPLCIF
The LXP Board may authorize LXP to issue, in its discretion, additional Common Shares, and has the authority to cause LXP to issue from authorized capital a variety of other equity securities with such deposit shall notpowers, preferences and rights as it may designate at the time. The issuance of either additional Common Shares or other similar equity securities may result in a breachthe dilution of the interests of the shareholders.

The General Partner is authorized, in its sole discretion and without limited partner approval, to cause LCIF to issue additional LCIF Partnership Units and other equity securities for any partnership purpose at any time to the limited partners or violation of,to other persons (including the General Partner or constitute a defaultLXP under certain circumstances set forth in the Partnership Agreement).

Liquidity

LXPLCIF

The Common Shares are generally freely transferable as registered securities under the indentureSecurities Act. Common Shares are listed on the New York Stock Exchange.

To assist LXP in continuing to remain a qualified REIT, among other purposes, the LXP Declaration of Trust, subject to certain exceptions, provides that no holder may own, or anybe deemed to own by virtue of the attribution provisions of the Code, more than 9.8% in value of its equity shares, defined as Common Shares or preferred shares, among other agreementrestrictions. Please see “Description of Common Shares - Restrictions Relating to REIT Shares” below. 

Holders of LCIF Partnership Units may not transfer their LCIF Partnership Units without the General Partner’s consent. Without the consent of the General Partner, a transferee will not be (i) admitted to LCIF as a substituted limited partner or instrument(ii) entitled to which LXP isthe same rights as a party orsubstituted limited partner. Limited partners have the right to which LXP is bound;tender their LCIF Partnership Units for redemption by LCIF at certain times, as specified in the Partnership Agreement.

LXP has paid or caused
17

U.S. Federal Income Taxation

LXPLCIF

LXP has elected to be taxed as a REIT for U.S. federal income tax purposes. So long as LXP qualifies as a REIT, it will be permitted to deduct distributions paid to its shareholders, which effectively will reduce the “double taxation” that typically results when a corporation earns income and distributes that income to its shareholders in the form of dividends. A qualified REIT, however, is subject to federal income tax on income that is not distributed and also may be subject to federal income and excise taxes in certain circumstances.

Each year, shareholders will receive an IRS Form 1099 used by corporations to report dividends paid to their shareholders.

Shareholders who are individuals generally will not be required to file state income tax returns and/or pay state income taxes outside of their state of residence with respect to LXP’s operations and distributions. LXP may be required to pay state income taxes in certain states.

Please see “Material U.S. Federal Income Tax Consequences,” below.

LCIF is generally not subject to U.S. federal income taxes. Instead, each unitholder includes its allocable share of LCIF’s taxable income or loss in determining its individual federal income tax liability.

A unitholder’s share of income and loss generated by LCIF generally is subject to the “passive activity” limitations. Under the “passive activity” rules, income and loss from LCIF that are considered “passive income” generally can be offset against income and loss from other investments that constitute “passive activities.” Cash distributions from LCIF are not taxable to a unitholder except to the extent such distributions exceed such unitholder’s basis in its interest in LCIF (which will include such holder’s allocable share of LCIF’s taxable income and nonrecourse debt).

Shareholders who are individuals may be required to file state income tax returns and/or pay state income taxes outside of their state of residence with respect to LCIF’s operations and distributions. LCIF may also be required to pay state income taxes in certain states.

Each year, unitholders will receive a Schedule K-1 containing detailed tax information for inclusion in preparing their federal income tax returns.

18

DESCRIPTION OF COMMON SHARES

The following summary of the material terms and provisions of LXP’s Common Shares does not purport to be paid all other sums payable under the indenture by LXP;complete and

LXP has delivered is subject to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent provided for in the indenture relating to the satisfaction and dischargedetailed provisions of the indenture have been complied with.

Modification, waiverLXP Declaration of Trust and meetings

Modifications and amendments of, and supplementsthe LXP bylaws, each as supplemented, amended or restated, which are incorporated by reference as exhibits to the indenture (other than certain modifications, supplements and amendments for administrative purposes orLXP’s Quarterly Report on Form 10-Q for the benefitquarter ended September 30, 2023. You should carefully read each of note holders,these documents in each case as further described below) will be permittedorder to be made only with the consent of the holders of not less than a majority in principal amount of all outstanding notes; provided, however, that no modification or amendment may, without the consent of the holder of each note affected thereby:

change the stated maturity of the principal of or any installment of interest on the notes issued under such indenture, reduce the principal amount of, or the rate or amount of interest on, or any premium payable on redemption of, the exchange notes, or adversely affect any right of repayment of the holder of the notes, change the place of payment, or the coin or currency, for payment of principal of or interest on any note or impair the right to institute suit for the enforcement of any payment on or with respect to the notes;
reduce the above-stated percentage of outstanding notes necessary to modify or amend the indenture, to waive compliance with certain provisions thereof or certain defaults and consequences thereunder or to reduce the quorum or change voting requirements set forth in the indenture;
modify or affect in any manner adverse to the holdersfully understand the terms and conditionsprovisions of LXP’s Common shares. For information on incorporation by reference, and how to obtain copies of these documents, see the section entitled “Where You Can Find More Information,” below. References to "our, "we" and "us" mean LXP and not its subsidiaries or affiliates.

General

Under the LXP Declaration of Trust, we have the authority to issue up to 1,400,000,000 shares of beneficial interest, par value $0.0001 per share, of which 600,000,000 shares are classified as Common Shares, 700,000,000 are classified as excess stock, or excess shares, and 100,000,000 shares are classified as preferred stock, or preferred shares, including 3,100,000 preferred shares classified as 6.50% Series C Cumulative Convertible Preferred Stock, $0.0001 per value per share.

Terms

Subject to the preferential rights of any other shares or class or series of our obligations in respect of the payment of principalequity securities and interest; or

modify any of the foregoing provisions or any of the provisions relating to the waiver of certain past defaults or certain covenants, except to increase the required percentage to effect the action or to provide that certain other provisions may not be modified or waived without the consent of the holders of the notes.

Notwithstanding the foregoing, modifications and amendments of the indenture will be permitted to be made by LXP, the Subsidiary Guarantors and the trustee without the consent of any holder of the notes for any of the following purposes:

to evidence a successor to LXP as obligor or a Subsidiary Guarantor as guarantor under the indenture;
to add to LXP’s covenants or those of the Subsidiary Guarantors for the benefit of the holders of the notes or to surrender any right or power conferred upon LXP or any Subsidiary Guarantor in the indenture;
to add Events of Default for the benefit of the holders of the notes;
to amend or supplement any provisions of the indenture; provided, that no amendment or supplement shall materially adversely affect the interests of the holders of any notes then outstanding;
to secure the notes;
to provide for the acceptance of appointment by a successor trustee or facilitate the administration of the trusts under the indenture by more than one trustee;
to provide for rights of holders of the notes if any consolidation, merger or sale of all or substantially all of LXP’s or the Subsidiary Guarantors’ property or assets occurs;
to cure any ambiguity, defect or inconsistency in the indenture; provided, that the action shall not adversely affect the interests of holders of the notes in any material respect;
to provide for the issuance of additional notes in accordance with the limitations set forth in the indenture;

-47-

to supplement any of the provisions of the indentureLXP Declaration of Trust regarding excess shares, holders of Common Shares are entitled to receive dividends on such Common Shares if, as and when authorized by the LXP Board and declared by us out of assets legally available therefor and to share ratably in those of our assets legally available for distribution to our shareholders in the event that we liquidate, dissolve or wind up, after payment of, or adequate provision for, all of our known debts and liabilities and the amount to which holders of any class of shares having a preference on distributions in liquidation, dissolution or winding up of us will be entitled.

Subject to the extent necessaryprovisions of the LXP Declaration of Trust regarding excess shares, each outstanding Common Share entitles the holder to permitone vote on all matters submitted to a vote of shareholders, including the election of trustees and, except as otherwise required by law or facilitate defeasance and dischargeexcept as otherwise provided in the LXP Declaration of Trust with respect to any other class or series of the notes; provided, that the action shall not adversely affect the interests ofshares, the holders of the notes in any material respect; or

to conform the textCommon Shares will possess exclusive voting power. In uncontested elections of the indenture, any guarantee or the notes to any provision of this “Description of notes” to the extent that such provision in this “Description of notes” was intended to be a verbatim recitation of a provision of the indenture, such guarantee or the notes.

In determining whether the holders of the requisite principal amount of outstanding notes have given any request, demand, authorization, direction, notice, consent or waiver thereunder or whether a quorum is presenttrustees at a meeting of holders of the notes, the indenture will provide that notes owned by LXP or any other obligor upon the notes or any of LXP’s affiliates or affiliates of the other obligors shall be disregarded.

The indenture contains provisions for convening meetings of the holders of the notes. A meeting will be permitted to beduly called at any time by the trustee, and also, upon request, by LXP or the holders of at least 10% in principal amount of the outstanding notes, in any case upon notice given as provided in the indenture. Except for any consent that must be given by the holder of each note affected by certain modifications and amendments of the indenture, any resolution presented at a meeting or adjourned meeting duly reconvened at which a quorum is present, will be permitted to be adopted by the affirmative vote of the holders of a majority in principal amount of the outstanding notes; provided, however, that, except as referredtotal votes cast by shareholders entitled to above, any resolution with respectvote is sufficient to any request, demand, authorization, direction, notice, consent, waiver or other action that may be made, given or taken by the holders ofelect a specified percentage, which is less than a majority, in principal amount of the outstanding notes may be adoptedtrustee nominee. In contested elections at a meeting or adjourned meeting duly reconvenedcalled at which a quorum is present, a plurality of votes cast by shareholders entitled to vote is required for the election of a trustee. A majority of the votes cast means that the number of shares voted “for” a trustee nominee must exceed the number of votes cast “against” or “withheld” with respect to such trustee nominee. Votes “against” or “withheld” with respect to a nominee will count as votes cast with respect to that nominee, but “abstentions” and broker non-votes with respect to that nominee will not count as votes cast with respect to that nominee. There is no cumulative voting in the election of trustees, which means that the holders of a majority of our outstanding Common Shares can elect all of the trustees then standing for election, and the holders of the remaining Common Shares will not be able to elect any trustees.

Subject to the provisions of the LXP Declaration of Trust regarding excess shares, holders of Common Shares have no conversion, sinking fund or redemption rights or preemptive rights to subscribe for any of our securities.

We furnish our shareholders with annual reports containing audited consolidated financial statements and an opinion thereon expressed by an independent registered public accounting firm.

Subject to the provisions of the LXP Declaration of Trust regarding excess shares, all of the Common Shares have equal dividend, distribution, liquidation and other rights and generally have no preference, appraisal or exchange rights.

Transfer Agent

The transfer agent and registrar for the Common Shares is Computershare Shareowner Services.

19

Restrictions Relating to REIT Status

For us to qualify as a REIT under the Code, among other things, not more than 50% in value of our outstanding shares of beneficial interest may be owned, directly or indirectly, by five or fewer individuals (defined in the Code to include certain entities) during the last half of a taxable year, and such shares of beneficial interest must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year (in each case, other than the first such year). To assist us in continuing to remain a qualified REIT, among other purposes, the LXP Declaration of Trust, subject to certain exceptions, provides that no holder may own, or be deemed to own by virtue of the attribution provisions of the Code, more than 9.8% in value of our equity shares, defined as Common Shares or preferred shares. We refer to this restriction as the Ownership Limit. The LXP Board may exempt a person from the Ownership Limit if upon receipt of a ruling from the Internal Revenue Service or an opinion of counsel or other evidence satisfactory to the LXP Board is presented that the exemption will not result in us having fewer than 100 beneficial owners or in us being “closely held.” Any transfer of equity shares or any security convertible into equity shares that would create a direct or indirect ownership of equity shares in excess of the Ownership Limit or that would result in the equity shares being owned by fewer than 100 persons or result in us being “closely held” within the meaning of Section 856(h) of the Code, will be null and void, and the intended transferee will acquire no rights to such equity shares. The foregoing restrictions on transferability and ownership will not apply if the LXP Board determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT.

In addition, equity shares owned, or deemed to be owned, or transferred to a shareholder in excess of the Ownership Limit or that would cause us to become “closely held” within the meaning of the Code, will automatically be converted into an equal number of excess shares that will be transferred, to us as trustee of a trust for the exclusive benefit of the transferees to whom such shares of beneficial interest in us may be ultimately transferred without violating the Ownership Limit. While the excess shares are held in trust, they will not be entitled to vote (except as required by Maryland law), they will not be considered for purposes of any shareholder vote or the determination of a quorum for such vote and, except upon liquidation, they will not be entitled to participate in dividends or other distributions. Any dividend or distribution paid on excess shares prior to our discovery that equity shares have converted for excess shares will be repaid to us upon demand. The excess shares are not treasury shares, but rather constitute a separate class of our issued and outstanding shares. The original transferee-shareholder may, at any time the excess shares are held by us in trust, designate a beneficiary of its interest in the trust (representing the excess shares held by the charitable trust attributable to a purported transfer that resulted in the excess shares) if the excess shares would not be excess shares in the hands of the beneficiary and, such transferee-shareholder does not receive a price for such designation that exceeds the price paid by the original transferee-shareholder for the equity shares that were exchanged into excess shares, or, if the transferee-shareholder did not give value for such shares, a price not in excess of the market price (as determined in the manner set forth in the LXP Declaration of Trust) on the date of the purported transfer. Immediately upon the transfer to the permitted transferee, the excess shares will automatically be converted into equity shares of the class from which they were converted. If the foregoing transfer restrictions are determined to be void or invalid by virtue of any legal decision, statute, rule or regulation, then the intended transferee of any excess shares may be deemed, at our option, to have acted as an agent on our behalf in acquiring the excess shares and to hold the excess shares on our behalf.

In addition to the foregoing transfer restrictions, we will have the right, for a period of 90 days during the time any excess shares are held by us in trust, to purchase all or any portion of the excess shares from the original transferee-shareholder for the lesser of the price paid for the equity shares by the original transferee-shareholder or the market price (as determined in the manner set forth in the LXP Declaration of Trust) on the date we exercise our option to purchase. The 90-day period begins on the later of the date of the transfer that resulted in excess stock or the date on which the LXP Board determines in good faith that a transfer resulting in excess shares has occurred, if we do not receive written notice of the transfer or other event resulting in the exchange of equity shares for excess shares.

Any person who acquires or attempts to acquire equity shares in violation of the foregoing restrictions, or any person who is a transferee such that excess shares resulted from such transfer, will be required to give written notice immediately to us of such event and provide us with such other information as we may request in order to determine the effect, if any, of such transfer, or attempted transfer, on our status as a REIT.

20

All persons who own, directly or indirectly, (i) more than 5% of the outstanding equity shares during any periods in which the number of such beneficial or constructive owners exceeds 1,999, (ii) more than 1% of the outstanding equity shares during any period in which the number of beneficial or constructive owners is fewer than 2,000 or (iii) such lower percentages as required pursuant to regulations under the Code must, within 30 days after January 1 of each year, provide to us a written statement or affidavit stating the name and address of such direct or indirect owner, the number of equity shares owned directly or indirectly, and a description of how such shares are held. In addition, each direct or indirect shareholder shall provide to us such additional information as we may request in order to determine the effect, if any, of such ownership on our status as a REIT and to ensure compliance with the ownership limitation.

This Ownership Limit may have the effect of precluding an acquisition of control unless the LXP Board determines that maintenance of REIT status is no longer in our best interests.

Authorized Capital

We may issue such shares from time to time in the discretion of the LXP Board to raise additional capital, acquire assets, including additional real properties, redeem or retire debt or for any other business purpose. In addition, the undesignated preferred shares may be issued in one or more additional classes or series with such designations, preferences and relative, participating, optional or other special rights including, without limitation, preferential dividend or voting rights, and rights upon liquidation, as will be fixed by the LXP Board. The LXP Board is authorized to classify and reclassify any of our unissued shares of beneficial interest by setting or changing, in any one or more respects, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such shares. This authority includes, without limitation, subject to the provisions of the LXP Declaration of Trust, authority to classify or reclassify any unissued shares into a class or classes of preferred shares, preference shares, special shares or other shares, and to divide and reclassify shares of any class into one or more series of that class.

In some circumstances, the issuance of preferred shares, or the exercise by the LXP Board of its right to classify or reclassify shares, could have the effect of deterring individuals or entities from making tender offers for our Common Shares or seeking to change incumbent management.

Maryland Law

Our Board of Trustees. The LXP Declaration of Trust and bylaws provide that the number of our trustees may be established, increased or decreased only by a majority of the entire LXP Board. The LXP Board currently consists of eight trustees.

The shareholders shall elect a successor to fill a vacancy on the LXP Board which results from the removal of a trustee. A trustee elected by the shareholders to fill a vacancy which results from the removal of a trustee serves for the balance of the term of the removed trustee. A majority of the remaining trustees, whether or not sufficient to constitute a quorum, may fill a vacancy on the LXP Board which results from any increase in the authorized number of trustees, or death, resignation, retirement or other cause. A trustee elected by the LXP Board to fill a vacancy serves until the next annual meeting of shareholders and until their successor is elected and qualifies.

Removal of Trustees. The LXP Declaration of Trust provides that, subject to the rights of the holders of any class separately entitled to elect one or more trustees, a trustee may be removed, but only for cause and then only by the affirmative vote of the holdersat least 80% of the specified percentage in principal amount of the outstanding notes. Any resolution passed or decision taken at any meeting of holders of the notes duly held in accordance with the indenture will be binding on all holders of the notes. The quorum at any meeting called to adopt a resolution, and at any adjourned meeting duly reconvened, will be holders holding or representing a majority in principal amount of the outstanding notes; provided, however, that if any action isvotes entitled to be taken atcast in the meeting with respect to a consent or waiver which may be given by the holderselection of not less than a specified percentage in principal amount of the outstanding notes, holders holding or representing the specified percentage in principal amount of the outstanding notes will constitute a quorum.trustees.

NotwithstandingExtraordinary Actions, Amendment of Declaration of Trust. Under the foregoing provisions, any action takenMaryland REIT Law, a Maryland real estate investment trust generally cannot amend its declaration of trust or to be taken at a meetingmerge with, or convert into, another entity unless advised by its board of holders of the notes with respect to any request, demand, authorization, direction, notice, consent, waiver or other action that the indenture expressly provides may be made, given or taken by the holders of a specified percentage which is less than a majority in principal amount of the outstanding notes may be taken at a meeting at which a quorum is presenttrustees and approved by the affirmative vote of shareholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter unless a different percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is set forth in its declaration of trust. The LXP Declaration of Trust provides that those actions, with the exception of certain amendments to the LXP Declaration of Trust for which a higher vote requirement has been set, will be valid and effective if authorized by holders of the specified percentage in principal amounta majority of the total number of shares of all classes outstanding notes.and entitled to vote thereon. Under the LXP Declaration of Trust, our dissolution and termination requires the affirmation of shareholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter.

Trustee

U.S. Bank National Association currently acts asAmendment to Our Bylaws. Subject to the trustee, registrar, exchange agent and paying agent forspecial provisions of the notes, subjectLXP bylaws relating to replacementthe power of the LXP Board to establish, increase or decrease the number of trustees, in accordance with the LXP Declaration of Trust, the LXP bylaws may be repealed, altered, amended or rescinded (a) by our shareholders only by the affirmative vote of at LXP’s option as providedleast 80% of the votes entitled to be cast in the indenture.

If an Eventelection of Default occurs and is continuing, the trustee will be required to use the degreetrustees or (b) by vote of care and skill of a prudent person in the conduct of its own affairs. The trustee will become obligated to exercise any of its powers under the indenture at the request of anytwo-thirds of the holders of the required percentage under the indenture of holders of the notes only after those holders have offered the trustee indemnity reasonably satisfactory to it.LXP Board.

If the trustee becomes one of our creditors, it will be subject to limitations on its rights to obtain payment of claims or to realize on some property received for any such claim, as security or otherwise. The trustee is permitted to engage in other transactions with us. If, however, it acquires any conflicting interest, it must eliminate that conflict or resign.

No conversion or exchange rights

The notes are not convertible into or exchangeable for any shares of beneficial interest in LXP.

No personal liability of trustees, officers, employees and shareholders

None of LXP’s trustees, officers, employees, incorporators or shareholders will have any liability for any of LXP’s obligations under the notes, the indenture, any guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Book-entry, delivery and form

Except as set forth below, the notes will be issued in registered, global form in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

-48-
21 

 

Except asMeetings of Shareholders. Under our bylaws, annual meetings of shareholders are held on a date and at a time and place, or by means of remote communication, set by the LXP Board. Special meetings of shareholders may be called only by the Chairman of the LXP Board, our President or a majority of the LXP Board. Subject to the provisions of our bylaws, a special meeting of our shareholders to act on any matter that may properly be considered by our shareholders will also be called by our secretary upon the written request of the shareholders entitled to cast not less than 25% of all the votes entitled to be cast at such meeting. Only matters set forth below,in the notes issued in global form (“Global Notes”)notice of the special meeting may be transferred, in wholeconsidered and not in part, only to another nominee of DTC or toacted upon at such a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for definitive notes in registered certificated form (“Certificated Notes”) except in the limited circumstances described below. See “-Exchange of Global Notes for Certificated Notes.” Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of notes in certificated form.meeting.

 

Depository proceduresAdvance Notice of Trustee Nominations and New Business. Our bylaws provide that in order to make nominations of individuals for election as trustees or proposals of business to be considered by shareholders at any annual meeting, shareholders generally must provide notice to our Secretary not earlier than the 150th day not later than the close of business on the 120th day prior to the first anniversary of the release date of our proxy statement to shareholders in connection with the preceding year’s annual meeting. A shareholder’s notice must contain certain information specified by our bylaws about the shareholder and any proposed business or nominee for election as a trustee, including information about the economic interest of the shareholder and any proposed nominee, and otherwise comply with the terms of the bylaws.

The following descriptionProxy Access Procedures for Qualifying Shareholders. Our bylaws permit a shareholder, or a group of up to 20 shareholders, that owns 3% or more of our Common Shares continuously for at least three years to nominate and include in our proxy materials candidates for election as trustees, subject to certain terms and conditions. Such shareholder(s) or group(s) of shareholders may nominate trustee candidates constituting up to the greater of two persons or 20% of the operationsLXP Board up for election, provided that the shareholder(s) and procedures of DTC, Euroclearthe trustee nominee(s) satisfy the eligibility, notice and Clearstream are provided solely as a matter of convenience. These operations and procedures are solely withinother requirements specified in the control of the respective settlement systems and are subject to changes by them. LXP takes no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.bylaws.

DTC has advised LXP that DTCBusiness Combinations. Under Maryland law, certain “business combinations” between a Maryland real estate investment trust and an “interested shareholder” or an affiliate of an interested shareholder are prohibited for five years after the most recent date on which the interested shareholder became an interested shareholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested shareholder is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the “Participants”) and to facilitate the clearance and settlement of transactions in those securities between the Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the “Indirect Participants”). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.

DTC has also advised LXP that, pursuant to procedures established by it:defined as:

(1)upon depositany person who beneficially owns, directly or indirectly, ten percent or more of the Global Notes, DTC will credit the accountsvoting power of the Participants with portionstrust’s outstanding voting shares; or

an affiliate or associate of the principal amounttrust who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of ten percent or more of the Global Notes;voting power of the then outstanding shares of the trust.

A person is not an interested shareholder under the statute if the board of trustees approved in advance the transaction by which the person otherwise would have become an interested shareholder. However, in approving a transaction, the board of trustees may provide that its approval is subject to compliance, at or after the time of approval, with any terms or conditions determined by the board of trustees.

After the five-year prohibition, any such business combination between the Maryland real estate investment trust and an interested shareholder generally must be recommended by the board of trustees of the trust and approved by the affirmative vote of at least:

eighty percent of the votes entitled to be cast by holders of outstanding voting shares of the trust; and

(2)ownershiptwo-thirds of these interests in the Global Notes willvotes entitled to be shown on, andcast by holders of voting shares of the transfer of ownership of these interests willtrust other than shares held by the interested shareholder with whom or with whose affiliate the business combination is to be effected only through, records maintainedor held by DTC (with respect toan affiliate or associate of the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes).interested shareholder.

Investors

22

These super-majority vote requirements do not apply if the trust’s common shareholders receive a minimum price, as defined under Maryland law, for their shares in the Global Notesform of cash or other consideration in the same form as previously paid by the interested shareholder for its shares.

The statute permits various exemptions from its provisions, including business combinations that are exempted by the board of trustees prior to the time that the interested shareholder becomes an interested shareholder.

The business combination statute may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Control Share Acquisitions. Maryland law provides that holders of “control shares” of a Maryland real estate investment trust acquired in a “control share acquisition” have no voting rights with respect to the control shares except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by employees who are Participantstrustees of the trust are excluded from shares entitled to vote on the matter. Control shares are voting shares which, if aggregated with all other shares owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing trustees within one of the following ranges of voting power: 

one-tenth or more but less than one-third;
one-third or more but less than a majority; or
a majority or more of all voting power.

Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained shareholder approval or shares acquired directly from the corporation. A control share acquisition means the acquisition of issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition may hold their interests therein directly through DTC. Investors incompel the Global Notes who are not Participants may hold their interests therein indirectly through organizations (including Euroclear and Clearstream) which are Participants. All interests inboard of trustees of the trust to call a Global note, including thosespecial meeting of shareholders to be held through Euroclear or Clearstream, may bewithin 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the procedures and requirementssatisfaction of DTC. Those interests held through Euroclearcertain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the trust may itself present the question at any shareholders’ meeting.

If voting rights are not approved at the meeting or Clearstreamif the acquiring person does not deliver an acquiring person statement as required by the statute, then the trust may also beredeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the trust to redeem control shares is subject to certain conditions and limitations. Fair value is determined, without regard to the proceduresabsence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or if any meeting of shareholders at which the voting rights of the shares are considered and requirementsnot approved, the date of such systems.meeting. If voting rights for control shares are approved at a shareholders’ meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. The lawsfair value of some states require that certain persons take physical deliverythe shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in definitive form of securities that they own. Consequently, the abilitycontrol share acquisition.

The control share acquisition statute does not apply (a) to transfer beneficial interestsshares acquired in a Global Notemerger, consolidation or share exchange if the trust is a party to such persons will be limitedthe transaction or (b) to that extent. Because DTC can act only on behalfacquisitions approved or exempted by the declaration of trust or bylaws of the Participants, which in turn act on behalftrust.

Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of the Indirect Participants, the ability of a person having beneficial interests in a Global Note to pledge such interests to personsour shares. There can be no assurance that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

Except as described below, owners of interests in the Global Notes will not have notes registered in their names, will not receive physical delivery of notes in certificated form andthis provision will not be consideredamended or eliminated at any time in the future.

Certain Elective Provisions of Maryland Law. Maryland law provides that a Maryland real estate investment trust with a class of equity securities registered owners or “holders” thereof under the indenture governing the notes for any purpose.Exchange Act, and that has at least three independent trustees, may elect by provision of its declaration of trust or bylaws or by resolution adopted by its board of trustees to be

23

 

Payments in respect of the principal of, and interest and premium, if any, on, a Global Note registered in the name of DTC or its nominee will be payablesubject to DTC in its capacity as the registered holder under the indenture governing the notes. Under the terms of the indenture, LXP and the trustee will treat the persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither LXP, the trustee nor any agent of LXP or the trustee has or will have any responsibility or liability for:

(1)any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or

(2)any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

DTC has advised LXP that its current practice, upon receipt of any payment in respect of securities such as the notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe that it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or LXP. Neither LXP nor the trustee will be liable for any delay by DTC or any of the Participantsfollowing provisions, notwithstanding any contrary provisions contained in its existing declaration of trust or bylaws and without shareholder approval:

a classified board;
a two-thirds vote of outstanding shares to remove a trustee;
a requirement that the number of trustees be fixed only by vote of the board of trustees;
a requirement that a vacancy on the board of trustees be filled only by the affirmative vote of a majority of the remaining trustees and that such trustee filling the vacancy serve for the remainder of the full term of the class of trustees in which the vacancy occurred and until a successor is duly elected and qualifies; and
a majority requirement for the calling of shareholder-requested special meetings of shareholders.

We have not elected to be governed by any of these specific provisions. However, the Indirect Participants in identifyingLXP Declaration of Trust and/or bylaws, as applicable, already provide for an 80% shareholder vote to remove trustees and then only for cause, and that the beneficial ownersnumber of trustees may be determined by a majority of the notes, and LXP andBoard, subject to a minimum number. In addition, we can elect to be governed by any or all of the trustee may conclusively rely on and will be protectedforegoing provisions of Maryland law at any time in relying on instructions from DTC or its nominee for all purposes.the future.

-49-
24 

 

DTC has advised LXP that it will take any action permitted to be taken by a holder of notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount at maturity of the notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute such notes to its Participants.

Exchange of Global Notes for Certificated Notes

A Global Note is exchangeable for Certificated Notes if:

(1)DTC (a) notifies LXP that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act and, in either case, LXP fails to appoint a successor depositary;

(2)LXP, at its option, notify the trustee in writing that LXP elects to cause the issuance of the Certificated Notes; or

(3)upon request from DTC if there has occurred and is continuing a default or Event of Default with respect to the notes.

In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).

Exchange of Certificated Notes for Global Notes

Certificated Notes may be exchanged for beneficial interests in any Global note.

Same day settlement and payment

LXP will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, and interest) by wire transfer of immediately available funds to the accounts specified by DTC or its nominee. LXP will make all payments of principal, interest and premium, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the holders of the Certificated Notes or, if no such account is specified, by mailing a check to each such holder’s registered address. The notes represented by the Global Notes are expected to trade in DTC’s Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. LXP expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.

Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global note from a Participant will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised LXP that cash received in Euroclear or Clearstream as a result of sales of interests in a Global note by or through a Euroclear or Clearstream participant to a Participant will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

Notices

Except as otherwise provided in the indenture, notices to holders of the notes will be given by mail to the addresses of holders of the notes as they appear in the note register; provided that notices given to holders holding notes in book-entry form may be given through the facilities of DTC or any successor depository.

Governing law

The indenture, the notes and the guarantees are governed by, and construed in accordance with, the law of the State of New York.

Definitions

As used in the indenture, the following terms have the respective meanings specified below:

“Acquired Debt”means Debt of a person:

existing at the time such person is merged or consolidated with or into LXP or any of its Subsidiaries or becomes a Subsidiary of LXP; or
assumed by LXP or any of its Subsidiaries in connection with the acquisition of assets from such person.

-50-

Acquired Debt shall be deemed to be incurred on the date the acquired person is merged or consolidated with or into LXP or any of its Subsidiaries or becomes a Subsidiary of LXP or the date of the related acquisition, as the case may be.

“Annual Debt Service Charge”means, for any period, the interest expense of LXP and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated Income Available for Debt Service”for any period means Consolidated Net Income (as defined below) of LXP and its Subsidiaries for such period, plus amounts which have been deducted and minus amounts which have been added for, without duplication:

interest expense on Debt;
provision for taxes based on income;
amortization of debt discount, premium and deferred financing costs;
impairment losses and gains on sales or other dispositions of properties and other investments;
real estate related depreciation and amortization;
the effect of any non-recurring, non-cash items;
amortization of deferred charges;
gains or losses on early extinguishment of debt; and
acquisition expenses,

all determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Income”for any period means the amount of net income (or loss) of LXP and its Subsidiaries for such period, excluding, without duplication:

extraordinary items; and
the portion of net income (but not losses) of LXP and its Subsidiaries allocable to minority interests in unconsolidated persons to the extent that cash dividends or distributions have not actually been received by LXP or one of its Subsidiaries,

all determined on a consolidated basis in accordance with GAAP.

“Debt”means, with respect to any person, any indebtedness of such person in respect of (without duplication):

such person’s borrowed money or such person’s indebtedness evidenced by bonds, notes, debentures or similar instruments, in each case, whether or not such Debt is secured by any Lien existing on any property or assets owned by such person;
any other indebtedness secured by any Lien on any property or asset owned by such person, but only to the extent of the lesser of (a) the amount of indebtedness so secured and (b) the fair market value (determined in good faith by the Board of Trustees of such person or, in the case of a Subsidiary Guarantor, by LXP’s Board of Trustees or a duly authorized committee thereof) of the property subject to such Lien;
reimbursement obligations, contingent or otherwise, in connection with any letters of credit actually issued or amounts representing the balance deferred and unpaid of the purchase price of any property except any such balance that constitutes an accrued expense or trade payable; or
any lease of property by such person as lessee which is required to be reflected on such person’s balance sheet as a capitalized lease in accordance with GAAP, other than any operating lease that is re-characterized as an indebtedness or a liability due to a change in accounting treatment pursuant to GAAP,

and also includes, to the extent not otherwise included, any non-contingent obligation of such person to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business), Debt of the types referred to above of another person (it being understood that Debt shall be deemed to be incurred by such person whenever such person shall create, assume, guarantee (on a non-contingent basis) or otherwise become liable in respect thereof).

“Lien”means any mortgage, deed of trust, lien, charge, pledge, security interest, security agreement, or other encumbrance of any kind.

“Material Subsidiary” means any Subsidiary that meets either of the following conditions: (1) LXP’s and its Subsidiaries’ investments in and advances to such Subsidiary exceed 10% of LXP’s and its Subsidiaries’ total assets consolidated (determined in accordance with GAAP) as of the end of the most recent fiscal quarter for which a periodic report has been filed under the Exchange Act; or (2) LXP’s and its Subsidiaries’ proportionate share of the total assets (after intercompany eliminations) of such Subsidiary exceeds 10% of LXP’s and its Subsidiaries’ total assets consolidated (determined in accordance with GAAP) as of the end of the most recent fiscal quarter for which a periodic report has been filed under the Exchange Act.

Principal Credit Agreement” means the Second Amended and Restated Credit Agreement, dated as of February 12, 2013, among LXP and the operating partnerships, collectively as borrowers, each of the lenders party thereto, and KeyBank 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 LXP in good faith designate to be LXP’s 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 LXP 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.

-51-

“Subsidiary”means, with respect to LXP, any person (as defined in the indenture but excluding an individual) a majority of the outstanding voting stock, partnership interests, membership interests or other equity interest, as the case may be, of which is owned or controlled, directly or indirectly, by LXP or by one or more other Subsidiaries of LXP. For the purposes of this definition, “voting stock” means stock having voting power for the election of directors, trustees or managers, as the case may be, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

“Total Assets”means the sum of, without duplication:

Undepreciated Real Estate Assets (as defined below); and
all other assets (excluding accounts receivable and non-real estate intangibles) of LXP and its Subsidiaries,

all determined on a consolidated basis in accordance with GAAP.

“Total Unencumbered Assets”means, as of any date, the Total Assets of LXP and its Subsidiaries, which are not subject to a Lien securing Debt, all determined on a consolidated basis in accordance with GAAP; provided, however, that, in determining Total Unencumbered Assets as a percentage of outstanding Unsecured Debt for purposes of the covenant set forth above in “Certain Covenants-Maintenance of Total Unencumbered Assets,” all investments in unconsolidated limited partnerships, unconsolidated limited liability companies and other unconsolidated entities shall be excluded from Total Unencumbered Assets.

“Undepreciated Real Estate Assets”means, as of any date, the cost (original cost plus capital improvements) of real estate assets and related intangibles of LXP and its Subsidiaries on such date, before depreciation and amortization, all determined on a consolidated basis in accordance with GAAP.

“Unsecured Debt”means Debt of LXP or any of its Subsidiaries which is not secured by a Lien on any property or assets of LXP or any of its Subsidiaries.

-52-

CERTAINMATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONSCONSEQUENCES

TO ENSURE COMPLIANCE WITH U.S. TREASURY DEPARTMENT CIRCULAR 230, THE ISSUER HEREBY NOTIFIES YOU THAT:

(A)ANY DISCUSSION OF U.S. FEDERAL INCOME TAX ISSUES IN THIS PROSPECTUS IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY YOU FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON HOLDERS UNDER THE U.S. INTERNAL REVENUE CODE;

(B)SUCH DISCUSSION IS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING WITHIN THE MEANING OF CIRCULAR 230 OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THIS PROSPECTUS; AND

(C)YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

The followingThis discussion is provided for general information only and is not a general discussioncomplete analysis or description of certain U.S.all potential U.S.. federal income tax considerations relating toconsequences of the purchase,Merger or the receipt, ownership and disposition of shares of Common Shares received in the exchange notes by aMerger. Each holder who acquiredof LCIF Partnership Units is strongly urged to consult with and rely upon its own tax advisor as to the exchange notes pursuantspecific federal, state, local and non-U.S.. tax consequences to this prospectus. Thissuch holder of the Merger and the receipt, ownership and disposition of Common Shares received in the Merger, taking into account its own particular circumstances.

The following discussion is based upon the Internal Revenue Code, of 1986, as amended, existingfinal and proposedtemporary Treasury Regulations promulgated under the Code, referred to as the Treasury Regulations, rulings and other administrative interpretations and practices of the IRS (including administrative interpretations and practices expressed in private letter rulings which are binding on the IRS only with respect to the particular taxpayers who requested and received those rulings), and judicial decisions, and administrative interpretations thereunder,all as of the date hereof,currently in effect, and all of which are subject to differing interpretations or to change, possibly with retroactive effect, or differing interpretations. We cannot assure you that the IRS willeffect. This discussion does not challenge one or more of the tax considerations described below. We have not obtained, and do not intend to obtain, a ruling from the IRS or an opinion of counsel with respect to theaddress any U.S. federal tax considerations resulting from acquiring, holdingtaxes (other than income taxes) or disposing ofstate, local or non-U.S. taxes. This discussion is limited to U.S. holders (as defined below) that hold their LCIF Partnership Units or, after the exchange notes.

In this discussion, we do not purport to address all of the tax considerations that may be relevant to a particular holder of the exchange notes in light of that holder’s circumstances or to certain categories of investors (suchEffective Time, Common Shares as financial institutions, insurance companies, tax-exempt organizations, dealers in securities, persons who hold the exchange notes through partnerships or other pass-through entities, U.S. expatriates, persons subject to alternative minimum tax or persons who hold the exchange notes as part of a hedge, a straddle or a conversion transaction“capital assets” within the meaning of Section 12581221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a constructive sale transaction withinU.S. holder’s particular circumstances, including the meaning of Section 1259impact of the Code, an integrated transactionalternative minimum tax or other risk reduction transactions,the tax on net investment income, and all references to non-corporate tax rates (including maximum non-corporate tax rates) are exclusive of any tax on net investment income, if applicable. In addition, this discussion does not address U.S. federal income tax considerations applicable to holders whose “functional currency” is not the U.S. dollar) that may beare subject to special rules. This discussion is limited to initial holders who exchange the private notes for exchange notes pursuant to this prospectus and who hold the exchange notes as capital assets. This discussion also does not address the tax considerations arisingtreatment under the laws of any foreign, state or local jurisdiction, or any U.S. federal tax law other than income tax law, (such as estate and gift tax law).including, without limitation, for example:

financial institutions;

S corporations, partnerships or other entities treated as partnerships for U.S. federal income tax purposes, or other pass-through entities (and investors therein);

persons acting as nominees or otherwise not as beneficial owners;

insurance companies;

broker-dealers;

tax-exempt organizations;

dealers in securities;

traders in securities that elect to use a mark to market method of accounting;

persons that hold Common Shares or LCIF Partnership Units as part of a straddle, hedge, constructive sale, conversion transaction, or other integrated transaction for U.S. federal income tax purposes;

regulated investment companies;

REITs;

U.S. expatriates, former citizens or long-term residents of the United States;

governmental organizations;

holders who actually or constructively own or have owned more than 5% of LCIF Partnership Units or Common Shares;

non-U.S. persons;

U.S. holders or U.S. shareholders (as defined below) whose “functional currency” is not the U.S. dollar;

“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax; and
25

 

persons who acquired their Common Shares or LCIF Partnership Units through the exercise of options or otherwise in connection with compensation.

For purposes of this discussion, the terma “U.S. holder” means a beneficial owner of LCIF Partnership Units or, after the Effective Time, a note“U.S. shareholder” means a beneficial owner of Common Shares that for U.S. federal income tax purposes, is:

(A)an individual who is a citizen or resident of the United States;States for U.S. federal income tax purposes;

(B)a corporation which is(or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereinthereof, or the District of Columbia;

(C)an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

(D)a trust ifthat (A) is subject to the primary supervision of a court within the U.S. is able to exercise primary supervision over such trust’s administrationUnited States and the authority of one or more U.S. persons have“United States persons” (within the authoritymeaning of Section 7701(a)(30) of the Code) to control all substantial decisions of suchthe trust or if the trust(B) has made a valid election in place under the Treasury Regulations to be treated as a U.S.United States person.

As used herein, the term “non-U.S. holder” meansIf a beneficial owner ofpartnership (or other entity or arrangement treated as a note that,partnership for U.S. federal income tax purposes, is an individual, corporation, estate or trust that is not a U.S. holder.

If an entity or arrangement taxable as a partnershippurposes) holds LCIF Partnership Units (or, following the private notes,Merger, Common Shares), the tax treatment of a partner in the partnership generally will generally depend on the status of the partner, and on the activities of the partnership. If you are a partner inpartnership and certain determinations made at the partnership level. Any such partnership or other entity or arrangement treated as a partnership consideringfor U.S. federal income tax purposes, and the partners in such partnership (as determined for U.S. federal income tax purposes), should consult their tax advisors regarding the U.S. federal income tax consequences to them of the Merger and the ownership and disposition of Common Shares received pursuant to the Merger.

This discussion of material U.S. federal income tax considerations is not binding on the IRS. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any described herein.

THE U.S. FEDERAL INCOME TAX RULES APPLICABLE TO THE MERGER, TO HOLDING AND DISPOSING OF COMMON SHARES, AND TO REITS GENERALLY ARE HIGHLY TECHNICAL AND COMPLEX. HOLDERS OF LCIF PARTNERSHIP UNITS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, THE OWNERSHIP OF COMMON SHARES RECEIVED PURSUANT TO THE MERGER, AND LXP’S QUALIFICATION AS A REIT, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX LAWS, AND POTENTIAL CHANGES IN APPLICABLE TAX LAWS, IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.

Tax Consequences of the Merger to U.S. Holders of LCIF Partnership Units

The receipt of Common Shares in exchange for LCIF Partnership Units pursuant to the Merger Agreement will be a taxable transaction to U.S. holders for U.S. federal income tax purposes. A U.S. holder will generally recognize capital gain or loss on the receipt of Common Shares in exchange for LCIF Partnership Units. The amount of gain or loss from the sale will be based on the difference between a U.S. holder’s amount realized for tax purposes and its adjusted tax basis in such LCIF Partnership Units. The amount realized will be measured by the fair market value of property received (i.e., the Common Shares and cash, if any) plus the portion of LCIF’s liabilities allocable to the LCIF Partnership Units sold. The amount of LCIF liabilities considered in this calculation will include LCIF’s share of the liabilities of some entities in which LCIF owns an investment ininterest. In general, a U.S. holder’s tax basis will be the exchange notes, youcost of the LCIF Partnership Units, adjusted for the U.S. holder’s allocable share of LCIF’s income, loss, distributions and liabilities, as applicable. To the extent that the amount realized exceeds the U.S. holder’s basis for the LCIF Partnership Units disposed of, such U.S. holder will recognize gain; to the extent that the U.S. holder’s basis for the LCIF Partnership Units disposed of exceeds the amount realized, such U.S. holder will recognize loss. It is possible that the amount of gain recognized or even the tax liability resulting from such gain could exceed the fair market value of Common Shares received upon such disposition.

26

You should consult your own tax advisors.

THIS DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTENDED AS TAX ADVICE. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSIDERATIONS TO YOU OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE EXCHANGE NOTES, INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL, FOREIGN OR OTHER FEDERAL TAX LAWS OR ANY TAX TREATY.

Effects of Certain Contingencies

We may be obligatedadvisor regarding the tax consequences to pay holders amounts in excessyou of the stated interestexchange of your LCIF Partnership Units, including the U.S. federal, state, local and principal payable onnon-U.S. tax consequences of the exchange notes, as described under “Description of notes-LXP’s redemption rights,” “Description of notes-Events of default”units in your particular circumstances and “Description of notes-Shelf Registration.” The obligation to make such contingent payments may implicate the provisions of Treasury Regulations governing “contingent payment debt instruments.” If the exchange notes were treated as contingent payment debt instruments, holders subject to U.S. federal income taxation generally would be required to treatpotential changes in applicable laws.

Generally, any gain recognized on theupon a sale or other disposition of LCIF Partnership Units will be treated as gain attributable to the sale or disposition of a notecapital asset. To the extent, however, that the amount realized upon the sale of LCIF Partnership Units attributable to a U.S. holder’s share of LCIF’s “unrealized receivables” (as defined in Section 751 of the Code) exceeds the basis attributable to those assets, such excess will be treated as interestordinary income. Unrealized receivables include, to the extent not previously included in LCIF’s income, rather thanany rights to payment for services rendered or to be rendered. Unrealized receivables also include amounts that would be subject to recapture as ordinary income if LCIF had sold its assets at their fair market value at the time of the transfer of LCIF Partnership Units.

Generally, any loss recognized upon a sale or other disposition of LCIF Partnership Units will be treated as loss attributable to the sale or disposition of a capital asset. Capital losses in any year are generally deductible only to the extent of capital gains plus, in the case of a non-corporate taxpayer, $3,000 of ordinary income ($1,500 for married individuals filing separately).

The passive activity loss rules of the Code limit the use of losses by individuals, estates, trusts and certain closely held corporations and personal service corporations derived from certain passive activities, which generally include investments in limited partnership interests such as the LCIF Partnership Units. Previously-suspended and unused passive losses of a holder of LCIF Partnership Units generally may be deducted in full in the taxable year when such holder completely disposes of its LCIF Partnership Units. Each U.S. holder of LCIF Partnership Units subject to the passive activity loss rules should consult its own tax advisor concerning whether, and the extent to which, it has available suspended passive activity losses that may be used to offset the gain, if any, resulting from the exchange of LCIF Partnership Units in the Merger.

For noncorporate U.S. holders, the maximum rate of tax on the net capital gain (i.e., long-term capital gain less short-term capital loss) from a sale or exchange of a long-term capital asset (i.e., a capital asset held for more than 12 months) is 20%, provided that the LCIF Partnership Units are held as a long-term capital asset and subject to the timing and amount751 ordinary income treatment described above. However, such holders may be required to treat a portion of income inclusions onsuch net capital gain as “unrecaptured Section 1250 gain,” taxable at 25% to the note may also be affected.extent of their allocable share of unrecaptured Section 1250 gain.

-53-

Under applicable Treasury Regulations, one or more contingencies will notIt is possible that the exchange by LCIF in the Merger of LCIF Partnership Units issued in connection with a contribution of property to LCIF could cause a debt instrumentthe original transfer of property to LCIF to be treated as a contingent payment debt instrument“disguised sale” of property. Section 707 of the Code and the Treasury Regulations thereunder (the “Disguised Sale Regulations”) generally provide that, unless one of the prescribed exceptions is applicable, a partner’s contribution of property to a partnership and a simultaneous or subsequent transfer of money or other consideration (which may include the assumption of or taking subject to a liability) from the partnership to the partner will be presumed to be a sale, in whole or in part, of such property by the partner to the partnership. Further, the Disguised Sale Regulations provide generally that, in the absence of an applicable exception, if based on allmoney or other consideration is transferred by a partnership to a partner within two years of the partner’s contribution of property, the transactions are presumed to be a sale of the contributed property unless the facts and circumstances as of the issue date, such contingency or contingencies, in the aggregate, are “remote” or “incidental.” We intend to take the position, and assume in this discussion,clearly establish that the likelihoodtransfers do not constitute a sale. The Disguised Sale Regulations also provide that contingent paymentsif two years have passed between the transfer of money or other consideration and the contribution of property, the transactions will be made onpresumed not to be a sale unless the exchange notesfacts and circumstances clearly establish that the transfers constitute a sale. Given the amount of time that has passed since the original transfers of properties to LCIF by current holders of LCIF Partnership Units other than LXP, it is remote and/or that such payments are incidental, and, therefore,unlikely, though still possible, that the exchange notesof LCIF Partnership Units in connection with the Merger would cause such original transfers to be treated as disguised sales of property under the Disguised Sale Regulations.

Each U.S. holder of LCIF Partnership Units should consult with its own tax advisor to determine whether the exchange of LCIF Partnership Units could be subject to the Disguised Sale Regulations.

27

Taxation of LXP as a REIT

For purposes of the following discussion, references to “our,” “we” and “us” mean only LXP and not its subsidiaries or affiliates.

We elected to be taxed as a REIT under Sections 856 through 860 of the Code commencing with our taxable year ended December 31, 1993, upon the filing of our U.S. federal income tax return for such period. We believe that we are organized and operate in such a manner, and will continue to be organized and operate in such a manner, as to qualify for taxation as a REIT under the applicable provisions of the Code.

Our qualification and taxation as a REIT depends on our ability to meet on a continuing basis, through actual operating results, distribution levels, and diversity of share ownership, various qualification requirements imposed upon REITs by the Code. Our ability to qualify to be taxed as a REIT also requires that we satisfy certain asset tests, some of which depend upon the fair market values of assets that we own directly or indirectly. Such fair market values may not contingent payment debt instruments withinbe susceptible to a precise determination. Accordingly, no assurance can be given that the meaningactual results of our operations for any taxable year will satisfy such requirements for qualification and taxation as a REIT.

Taxation of REITs in General

As indicated above, our qualification and taxation as a REIT depends upon our ability to meet, on a continuing basis, various qualification requirements imposed upon REITs by the Code. The material qualification requirements are summarized below under “—Requirements for Qualification—General.” While we intend to operate so that we qualify and continue to qualify to be taxed as a REIT, no assurance can be given that the IRS will not challenge our qualification, or that we will be able to operate in accordance with the REIT requirements in the future. See “—Failure to Qualify,” below.

Provided that we qualify to be taxed as a REIT, generally we will be entitled to a deduction for distributions that we pay and therefore will not be subject to U.S. federal corporate income tax on our REIT taxable income that is currently distributed to our shareholders. This treatment substantially eliminates the “double taxation” at the corporate and shareholder levels that generally results from an investment in a “C corporation.” A C corporation is a corporation that generally is required to pay tax at the corporate level. Double taxation means taxation once at the corporate level when income is earned and once again at the shareholder level when the income is distributed. In general, the income that we generate (other than at any taxable REIT subsidiary (“TRS”) of ours) is taxed only at the shareholder level upon a distribution to our shareholders.

Most U.S. shareholders that are individuals, trusts or estates are taxed on corporate dividends at a maximum U.S. federal income tax rate of 20% (the same as long-term capital gains). With limited exceptions, however, distributions from us or from other entities that are taxed as REITs are generally not eligible for this rate and will continue to be taxed at rates applicable Treasury Regulations. Under such position, if we become obligated to redeem exchange notes as described under “Description of notes-LXP’s redemption rights” any amounts received (less an amountordinary income, but non-corporate shareholders will generally be eligible for a deduction equal to any accrued20% of such distributions. Currently, the highest marginal non-corporate U.S. federal income tax rate applicable to ordinary income is 37% (before application of the 20% deduction which results in an effective 29.6% tax rate). See “—Taxation of Shareholders—Taxation of Taxable U.S. Shareholders—Distributions” below.

Any of our net operating losses, foreign tax credits and other tax attributes generated or incurred by us generally do not pass through to LXP shareholders, subject to special rules for certain items such as the undistributed but designated capital gain that we recognize. See “—Taxation of Shareholders—Taxation of Taxable U.S. Shareholders—Distributions” below.

If we qualify to be taxed as a REIT, we will nonetheless be subject to U.S. federal tax in the following circumstances:

We will be taxed at regular corporate rates on any undistributed taxable income, including undistributed net capital gains.

If we have net income from prohibited transactions, which are, in general, sales or other dispositions of inventory or property held primarily for sale to customers in the ordinary course of business, other than foreclosure property, such income will be subject to a 100% tax. See “—Prohibited Transactions” and “—Foreclosure Property” below.

28

If we elect to treat property that we acquire in connection with certain leasehold terminations as “foreclosure property,” we may thereby avoid the 100% tax on gain from a resale of that property (if the sale would otherwise constitute a prohibited transaction), but the income from the sale or operation of the property may be subject to corporate income tax at the highest applicable rate (currently 21%).

If we fail to satisfy the 75% gross income test and/or the 95% gross income test, as discussed below, but nonetheless maintain our qualification as a REIT because we satisfy other requirements, we will be subject to a 100% tax on an amount based on the magnitude of the failure, as adjusted to reflect the profit margin associated with our gross income.

If we violate the asset tests (other than certain de minimis violations) or certain other requirements applicable to REITs, as described below, and yet maintain qualification as a REIT because there is reasonable cause for the failure and other applicable requirements are met, we may be subject to a penalty tax. In that case, the amount of the penalty tax will be at least $50,000 per failure, and, in the case of certain asset test failures, will be determined as the amount of net income generated by the nonqualifying assets in question multiplied by the highest corporate tax rate (currently 21%) if that amount exceeds $50,000 per failure.

If we fail to distribute during each calendar year at least the sum of (i) 85% of our ordinary income for such year, (ii) 95% of our capital gain net income for such year and (iii) any undistributed net taxable income from prior periods, we will be subject to a nondeductible 4% excise tax on the excess of the required distribution over the sum of (a) the amounts that we actually distributed and (b) the amounts we retained and upon which we paid income tax at the corporate level.

We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record-keeping requirements intended to monitor our compliance with rules relating to the composition of a REIT’s shareholders, as described below in “—Requirements for Qualification—General” below.

A 100% tax may be imposed on certain transactions between us and a TRS that do not reflect arm’s-length terms.

If we acquire appreciated assets from a corporation that is not a REIT (i.e., a “C” corporation) in a transaction in which the adjusted tax basis of the assets in our hands is determined by reference to the adjusted tax basis of the assets in the hands of the C corporation, we may be subject to tax on such appreciation at the highest corporate income tax rate then applicable if we subsequently recognize gain on a disposition of any such assets during the five-year period following our acquisition from the C corporation. Treasury Regulations exclude from the application of this built-in gains tax any gain from the sale of property we acquire in an exchange under Section 1031 (a like-kind exchange) or 1033 (an involuntary conversion) of the Code.

The taxable income of our TRSs will be subject to U.S. federal corporate income tax.

We may elect to retain and pay income tax on our net capital gain. In that case, a shareholder would include its proportionate share of our undistributed net capital gain (to the extent we make a timely designation of such gain to the shareholder) in its income, would be deemed to have paid the tax that we paid on such gain, and would be allowed a credit for the shareholder’s proportionate share of the tax deemed to have been paid, and an adjustment would be made to increase the shareholder’s basis in our shares.

In addition, we and our subsidiaries may be subject to a variety of taxes, including payroll taxes and state, local, and foreign income, property, gross receipts and other taxes on our assets and operations. We could also be subject to tax in situations and on transactions not presently contemplated.

29

Requirements for Qualification—General

The Code defines a REIT as a corporation, trust or association:

that is managed by one or more trustees or directors;

the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;

that would be taxable as a domestic corporation but for its election to be subject to tax as a REIT;

that is neither a financial institution nor an insurance company subject to specific provisions of the Code;

the beneficial ownership of which is held by 100 or more persons;

in which, during the last half of each taxable year, not more than 50% in value of the outstanding shares or other beneficial interest is owned, directly or indirectly, by five or fewer “individuals” (as defined in the Code to include certain entities such as private foundations);

that makes an election to be taxed as a REIT, or has made such an election for a previous taxable year which has not been revoked or terminated;

that has no earnings and profits from any non-REIT taxable year at the close of any taxable year; and

that meets other tests described below, including with respect to the nature of its income and assets and the amounts of its distributions.

The Code provides that the first through fourth conditions above must be met during the entire taxable year, and that the fifth condition above must be met during at least 335 days of a taxable year of 12 months, or during a proportionate part of a shorter taxable year. Our declaration of trust provides restrictions regarding the ownership and transfer of our shares of beneficial interest, which are intended to assist us in satisfying the share ownership requirements described in the fifth and sixth conditions above. These restrictions, however, may not previously includedensure that we, in income, whichall cases, will be able to satisfy the share ownership requirements described in the fifth and sixth conditions above. If we fail to satisfy these share ownership requirements, except as provided in the next two sentences, our status as a REIT will terminate. To monitor our compliance with the sixth condition above, we are generally required to maintain records regarding the actual ownership of our shares. If we comply with the record-keeping requirement and we do not know or, exercising reasonable diligence, would not have known of our failure to meet the sixth condition above, then we will be treated as interest incomehaving met the sixth condition above.

To monitor compliance with the share ownership requirements, we generally are required to maintain records regarding the actual ownership of our shares of beneficial interest. To do so, we must demand written statements each year from the record holders of significant percentages of our shares pursuant to which the record holders must disclose the actual owners of the shares (i.e., the persons required to include our distributions in their gross income). We must maintain a list of those persons failing or refusing to comply with this demand as part of our records. We could be subject to monetary penalties if we fail to comply with these record-keeping requirements. If you fail or refuse to comply with the demands, you will be required by Treasury Regulations to submit a statement with your tax return disclosing your actual ownership of our shares and other information.

In addition, a REIT must have a taxable year that is the calendar year. We have adopted December 31 as our taxable year-end to satisfy this requirement.

Effect of Subsidiary Entities

Ownership of Partnership Interests

We have been and currently are a partner in entities that are treated as partnerships for U.S. federal income tax purposes. In the future, we may be a partner in additional entities treated as partnerships. For such partnerships, Treasury Regulations provide that we are deemed to own our proportionate share of the partnership’s assets, and withholding tax purposes) should be includedto earn our proportionate share of the partnership’s income, for purposes of the asset and gross income tests applicable to REITs. Our proportionate share of a partnership’s assets and income is based on our capital interest in the holder’s amount realized upon such redemption.partnership (except that for purposes of the 10% value test, as described below, our proportionate share of the partnership’s assets is based on our proportionate interest in the equity and certain debt securities issued by the

30

partnership). We calculate our capital interest in any partnership based on either our percentage ownership of the capital of the partnership or based on the allocations provided in the applicable partnership’s operating agreement, using the more conservative calculation. In addition, if we become obligatedthe assets and gross income of the partnership are deemed to make additional interest payments as described under “Descriptionretain the same character in our hands. Thus, our proportionate share of notes-Shelf Registration,” a holder should be required to include inthe assets and items of income the amount of any such payments atof our subsidiary partnerships will be treated as our assets and items of income for purposes of applying the time such payments are received or accruedREIT requirements.

In the event that any partnership in accordance with such holder’s method of accounting. Our position is binding onwhich we hold an interest were treated as an association, the entity would be taxable as a holdercorporation and therefore would be subject to an entity level tax on its income. In such a situation, the character of our assets and items of gross income would change and might preclude us from qualifying as a REIT. We believe that each partnership in which we hold a material interest (either directly or indirectly) is properly treated as a partnership for tax purposes (and not as an association taxable as a corporation).

Disregarded Subsidiaries

We own corporate subsidiaries that are classified as “qualified REIT subsidiaries.” In the future, we may form or acquire additional qualified REIT subsidiaries. Each such subsidiary is generally disregarded as a separate entity for U.S. federal income taxation unless such holder disclosestax purposes, and all of the subsidiary’s assets, liabilities and items of income, deduction and credit are treated as our assets, liabilities and items of income, deduction and credit, including for purposes of the gross income and asset tests applicable to REITs. A qualified REIT subsidiary is any corporation, other than a contrary positionTRS (as described below), that is directly or indirectly (through disregarded subsidiaries) wholly-owned by a REIT. Other entities that are wholly-owned by us or our subsidiaries, including single member limited liability companies that have not elected to be taxed as corporations for U.S. federal income tax purposes, are also generally disregarded as separate entities for U.S. federal income tax purposes, including for purposes of the REIT income and asset tests. Disregarded subsidiaries, along with any partnerships in which we hold an equity interest, are sometimes referred to herein as “pass-through subsidiaries.”

In the event that a disregarded subsidiary of ours ceases to be wholly-owned—for example, if any equity interest in the manner thatsubsidiary is requiredacquired by applicable Treasury Regulations. Holders should consult their owna person other than us or another disregarded subsidiary of ours—the subsidiary’s separate existence would no longer be disregarded for U.S. federal income tax advisors regardingpurposes. Instead, the possible application of the contingent payment debt instrument rules to the exchange notes.

U.S. Holders

Exchange pursuant to the exchange offer

The exchange of private notes for exchange notes in the exchange offer will notsubsidiary would have multiple owners and would generally be treated as a either a partnership or a taxable corporation. Such an event could, depending on the circumstances, adversely affect our ability to satisfy the various asset and gross income requirements applicable to REITs, including the requirements that REITs generally may not own, directly or indirectly, more than 10% of the securities of another corporation. See “—Asset Tests” and “—Income Tests” below.

Taxable REIT Subsidiaries

In general, we may jointly elect with a subsidiary corporation, whether or not wholly-owned, to treat such subsidiary corporation as a TRS. We generally may not own more than 10% of the securities of a taxable corporation, as measured by voting power or value, and no more than 5% of the value of our assets can be represented by the securities of any single taxable corporation, in each case unless we and such corporation elect to treat such corporation as a TRS, provided that not more than 20% of the value of our total assets is represented by securities of one or more TRSs. The separate existence of a TRS or other taxable corporation is not ignored for U.S. federal income tax purposes. Accordingly, (1) a U.S. Holder willTRS or other taxable subsidiary corporation generally is subject to corporate income tax on its earnings, which may reduce the cash flow that we and our subsidiaries generate in the aggregate and may reduce our ability to make distributions to LXP shareholders.

We are not recognizetreated as holding the assets of a TRS or other taxable gainsubsidiary corporation or loss as receiving any income that the subsidiary earns. Rather, the stock issued by a result of exchangingtaxable subsidiary corporation to us is an asset in our hands, and we generally treat the distributions paid to us from such holder’s notes; (2) the holding period of the exchange notes wouldtaxable subsidiary corporation, if any, as income. This treatment can affect our income and asset test calculations, as described below. Because we do not include the holding periodassets and income of TRSs or other taxable subsidiary corporations on a look-through basis in determining our compliance with the private notes exchanged therefor; and (3)REIT requirements, we may use such entities to undertake indirectly activities that the adjusted tax basisREIT rules might otherwise preclude us from doing directly or through pass-through subsidiaries. For example, we may use TRSs or other taxable subsidiary corporations to perform services or conduct activities that give rise to certain

31

categories of the exchange notes receivedincome or to conduct activities that, if conducted by us directly, would be the sametreated in our hands as the adjusted tax basis of the private notes.prohibited transactions.

Stated interest

Stated interest on the exchange notes generally will be taxable to a U.S. holder as ordinary interest income at the time it is paid or accrued in accordance with such holder’s regular method of accounting for U.S. federal income tax purposes.law limits the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. Further, the rules impose a 100% excise tax on certain transactions between a TRS and its parent REIT or the REIT’s tenants that are not conducted on an arm’s-length basis. We intend that all of our transactions with our TRSs will be conducted on an arm’s-length basis.

-54-

SaleIn the future, we may form or other taxable dispositionacquire additional TRSs, or elect to treat certain existing subsidiaries that are qualified REIT subsidiaries or disregarded entities as TRSs. TRSs might be used to hold all or a portion of the exchange notes

Upon the disposition of a note by sale, exchange, redemption or other taxable disposition, a U.S. holder generally will recognize gain or loss in an amount equal to the difference, if any, between: (i) the amount realized on the sale, exchange, redemption or other taxable disposition (other than amounts attributable to accrued but unpaid stated interest which, if not previously included in income, willinvestment that, for example, would be treated as interest paida non-real estate security for purposes of the REIT asset tests or excess personal property when testing rents from real property.

Income Tests

In order to qualify to be taxed as a REIT, we must satisfy two gross income requirements on an annual basis. First, at least 75% of our gross income for each taxable year, excluding gross income from sales of inventory or dealer property in “prohibited transactions,” discharge of indebtedness, certain hedging transactions and certain foreign currency gains, generally must be derived from “rents from real property,” gains from the exchange notes) and (ii) a U.S. holder’s adjusted U.S. federal income tax basis in the note. A U.S. holder’s adjusted U.S. federal income tax basis in a note generally will equal the amount paidsale of real estate assets (other than certain publicly offered REIT debt instruments that would not be real estate assets but for the note, increased by any OID previously included in income and reduced by the amountinclusion of any payments other than qualified stated interest received by the U.S. holder.

Any gain or loss recognized will be capital gain or loss and will be long-term capital gain or loss if, on the date of the sale, exchange, redemption or other taxable disposition, the U.S. holder has held the note for more than one year. Long-term capital gain realized by a non-corporate U.S. holder generally will be subject to a maximum tax rate of 20 percent. Corporate U.S. holders generally are taxed on their net capital gains at regular corporate income tax rates. The deductibility of capital losses is subject to certain limitations.

Medicare contribution tax on unearned income

Certain U.S. holders who are individuals, estates or certain trusts will generally be subject to an additional 3.8% tax on, among other things,publicly offered REIT debt instruments), interest and accrued OID ongain derived from mortgage loans secured by real property or an interest in real property (including certain types of mortgage-backed securities and certain mortgage loans secured by both real and personal property), dividends received from other REITs, and specified income from temporary investments. Second, at least 95% of our gross income in each taxable year, excluding gross income from “prohibited transactions,” discharge of indebtedness, certain hedging transactions and certain foreign currency gains, must be derived from some combination of income that qualifies under the exchange notes75% gross income test described above, as well as other dividends, interest, and capital gain from the sale or other taxable disposition of stock or securities, which need not have any relation to real property. Income and gain from certain hedging transactions will be excluded from both the exchange notes, unless certain exceptions apply. U.S. holders should consult their tax advisors regardingnumerator and the effect,denominator for purposes of both the 75% and 95% gross income tests.

Rents from Real Property

Rents we receive from a tenant generally will qualify as “rents from real property” for the purpose of satisfying the gross income requirements for a REIT described above only if any,all of the Medicare contribution tax on their ownership and disposition of the exchange notes.conditions described below are met:

The amount of rent is not based in whole or in part on the income or profits of any person from the property. However, an amount we receive or accrue generally will not be excluded from the term “rents from real property” solely because it is based on a fixed-percentage or percentages of gross receipts or sales;

Non-U.S. Holders

Exchange offer

The exchange of the private notes for exchange notes would not constitute a taxable exchange
Neither we nor an actual or constructive owner of 10% or more of LXP shares actually or constructively owns 10% or more of the interests in the assets or net profits of a non-corporate tenant, or, if the tenant is a corporation for U.S. federal income tax purposes, for a non-U.S. Holder.

Interest

Generally, interest income (including any OID) of a non-U.S. holder that is not effectively connected with a U.S. trade or business will be subject to withholding at a rate of 30% or, if applicable, a lower rate specified by a treaty, although special rules apply to non-U.S. holders that are pass-through entities rather than corporations or individuals. However, the 30% U.S. federal tax withholding will not apply to any payment to a non-U.S. holder of interest on the exchange notes under the “portfolio interest exemption” provided that such interest is not effectively connected with a U.S. trade or business and provided that the non-U.S. holder:

(A)does not actually (or constructively) own 10% or more of the total combined voting power of all classes of stock entitled to vote or 10% or more of the total value of all classes of stock of the tenant, taking into account applicable complex attribution rules. To ensure that our voting stock;rental income will not be treated as nonqualifying income under the rule described in the preceding sentence, and thus to ensure that we will not inadvertently lose our REIT status as a result of the ownership of shares by a tenant, or a person that holds an interest in a tenant, our declaration of trust provides restrictions on ownership and transfer of our shares, including restrictions on such ownership or transfer that would cause the rents received or accrued by us from tenants to be treated as nonqualifying rent for purposes of the REIT gross income requirements. Shareholders should be aware that events unknown to us (i.e., events other than a purchase or other transfer of shares) may result in ownership, under the applicable attribution rules, of shares in excess of our declaration of trust ownership limits.

(B)32is not a controlled foreign corporation that is related to LXP within the meaning of section 864(d)(4) of the Code;

(C)Rents we receive from such a tenant that is a TRS of ours, however, will not be excluded from the definition of “rents from real property” as a result of this condition if at least 90% of the space at the property to which the rents relate is leased to third parties, and the rents paid by the TRS are substantially comparable to rents paid by our other tenants for comparable space. Whether rents paid by a TRS are substantially comparable to rents paid by other tenants is determined at the time the lease with the TRS is entered into, extended, and modified, if such modification increases the rents due under such lease. Notwithstanding the foregoing, however, if a lease with a “controlled taxable REIT subsidiary” is modified and such modification results in an increase in the rents payable by such TRS, any such increase will not qualify as “rents from real property.” For purposes of this rule, a “controlled taxable REIT subsidiary” is a TRS in which the parent REIT owns stock possessing more than 50% of the voting power or more than 50% of the total value of the outstanding stock of such TRS;

Rent attributable to personal property that is leased in connection with a lease of real property is not a bank whose receiptgreater than 15% of interest on the exchange notestotal rent received under the lease. If this condition is pursuantnot met, then the portion of the rent attributable to a loan agreement entered into in the ordinary course of business;personal property will not qualify as “rents from real property”; and

(D)has fulfilledWe generally are not permitted to operate or manage our properties or to furnish or render services to our tenants, subject to a 1% de minimis exception and except as further provided below. We are permitted, however, to perform directly certain services that are “usually or customarily rendered” in connection with the certification requirements set forth in section 871(h) or section 881(c)rental of space for occupancy only and are not otherwise considered “rendered to the occupant” of the Code,property. Examples of these permitted services include the provision of light, heat, or other utilities, trash removal and general maintenance of common areas. In addition, we are permitted to employ an independent contractor from whom we derive no revenue, or a TRS that is wholly or partially owned by us, to provide both customary and non-customary property management or services to our tenants without causing the rent that we receive from those tenants to fail to qualify as discussed below.“rents from real property.” Any dividends that we receive from a TRS with respect to the TRS’s provision of non-customary services will, however, be nonqualifying income under the 75% gross income test. We believe that all of our leases meet the above requirements so that rents we receive are “rents from real property.” We intend to structure future leases such that we are in compliance with the 75% and 95% gross income tests.

The certification requirements referredIn addition, in order for the rent payable under the leases of our properties to above willconstitute “rents from real property,” the leases must be fulfilled if the non-U.S. holder certifies on IRS Form W-8BEN or other successor form, under penalties of perjury, that it is not a U.S. personrespected as true leases for U.S. federal income tax purposes and not treated as service contracts, joint ventures, financing arrangements, or another type of arrangement. We have structured, and generally expect to continue to structure, our leases to qualify as true leases for U.S. federal income tax purposes. Specifically, with respect to each lease:

The intention of the parties when entering into each lease has been and will continue to be for the relationship to be that of a lessor and a lessee and for the lessor and lessee to act in accordance with that intent throughout the term of the lease, and such relationship has been and will be documented by a lease agreement.
Each of the leases has been and will be enforced in accordance with its terms, and each of the lessors and lessees have acted and will continue to act at all times in accordance with the terms thereof.
Each lessee has been and will be obligated to pay, at a minimum, substantial base rent for the period of use of the leases under the lease.
Each lessee has had and will have a right to exclusive possession and use and quiet enjoyment of the property covered by the lease, as applicable, during the term of such lease.
Each lessee generally has borne and will bear the cost of, and responsibilities, day-to-day maintenance and repair of the property, as applicable, other than the cost of certain capital expenditures, and has dictated and will dictate through the managers, who work for the lessee during the terms of the leases, how the property is operated and maintained.
Each lessee has benefited and will benefit from any savings and has borne and will bear the burdens of any increases in the costs of operating the property, as applicable, during the term of the lease, as applicable; provided, however, in certain circumstances the expenses to be borne by the lessee may be capped based on terms that are negotiated by the parties at arm’s length and are consistent with market terms and practices.

33

In the event of damage or destruction to a property, a lessee has been and will be at economic risk because it has borne and will bear the economic burden of loss in income from operation of the property, subject to the right, in certain circumstances, to terminate a lease if the lessor does not restore the property to its prior condition.
Each lessee has indemnified and will indemnify lessor against all liabilities imposed on the lessor during the term of the lease by reason of (A) injury to persons or damage to property occurring at the property, as applicable, or (B) lessee’s use, management, maintenance or repair of the property, as applicable.

Interest Income

Interest income constitutes qualifying mortgage interest for purposes of the 75% gross income test (as described above) to the extent that the obligation upon which such interest is paid is secured by a mortgage on (i) real property or an interest in real property or (ii) property described in (i) and other property if such other property constitutes 15% or less of the total fair market value of the secured property. If we receive interest income with respect to a mortgage loan that is described in the preceding clause (ii), such interest income may need to be apportioned between the real property and the other collateral for purposes of the 75% gross income test. Even if a loan is not secured by real property, or is not fully secured by real property, the income that it generates may nonetheless qualify for purposes of the 95% gross income test. The term “interest” generally does not include any amount received or accrued, directly or indirectly, if the determination of all or some of the amount depends in any way on the income or profits of any person. However, an amount received or accrued generally will not be excluded from the term “interest” solely by reason of being based on a fixed percentage or percentages of receipts or sales.

We may originate or acquire mezzanine loans or investments treated as subordinated debt for U.S. federal income tax purposes. Mezzanine loans include loans secured by equity interests in an entity that directly or indirectly owns real property, rather than by a direct mortgage of the real property. Revenue Procedure 2003-65 provides its namea safe harbor under which loans secured by a first priority security interest in ownership interests in a partnership or limited liability company owning real property will be treated as real estate assets for purposes of the REIT asset tests described below, and address,interest derived from those loans will be treated as qualifying income for both the 75% and (i)95% gross income tests, provided several requirements are satisfied.

Although Revenue Procedure 2003-65 provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. Moreover, it is possible that some mezzanine loans may not meet all of the non-U.S. holder files IRS Form W-8BENrequirements for reliance on the safe harbor. We intend to invest in mezzanine loans in a manner that will enable us to satisfy the REIT gross income and asset tests.

Dividend Income

We may directly or indirectly receive distributions from TRSs or other successor form withcorporations that are not REITs or qualified REIT subsidiaries. These distributions generally are treated as dividend income to the withholding agentextent of the earnings and profits of the distributing corporation. Such distributions will generally constitute qualifying income for purposes of the 95% gross income test, but not for purposes of the 75% gross income test. Any dividends that we receive from another REIT, however, will be qualifying income for purposes of both the 95% and 75% gross income tests.

Fee Income

Any fee income that we earn will generally not be qualifying income for purposes of either gross income test. Any fees earned by a TRS, however, will not be included for purposes of our gross income tests.

Forward Sale Agreements

We may enter into forward sale agreements from time to time and, subject to certain conditions, we have the right to elect physical, cash or (ii)net share settlement under these agreements at any time and from time to time, in part or in full. In the event that we elect to settle the forward sale agreements for cash and the settlement price is below the forward sale price, we would be entitled to receive a cash payment from the forward purchasers. Under Section 1032 of the Code, generally, no gains and losses are recognized by a corporation in dealing in its own

34

shares, including pursuant to a “securities futures contract,” as defined in the caseCode by reference to the Exchange Act. Although we believe that any amount received by us in exchange for our Common Shares would qualify for the exemption under Section 1032 of the Code, because it is not entirely clear whether the forward sale agreements qualify as “securities futures contracts,” the U.S. federal income tax treatment of any cash settlement payment we receive is uncertain. In the event that we recognize a note held on the non-U.S. holder’s behalf by a securities clearing organization, bank or other financial institution holding customers’ securities in the ordinary course of its trade or business, the financial institution files with the withholding agent a statement that it has received the IRS Form W-8BEN or other successor formsignificant gain from the holdercash settlement of the forward sale agreements, we might not be able to satisfy the gross income requirements applicable to REITs under the Code.

Failure to Satisfy the Gross Income Tests

If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may still qualify to be taxed as a REIT for such year if we are entitled to relief under applicable provisions of the Code. These relief provisions will be generally available if (i) our failure to meet these tests was due to reasonable cause and furnishesnot due to willful neglect and (ii) following our identification of the withholding agent withfailure to meet the 75% or 95% gross income test for any taxable year, we file a copy thereof; provided that a foreign financial institution will fulfill the certification requirement by filing IRS Form W-8IMY or other successor form if it has entered into an agreementschedule with the IRS setting forth each item of our gross income for purposes of the 75% or 95% gross income test for such taxable year in accordance with Treasury Regulations. It is not possible to state whether we would be entitled to the benefit of these relief provisions in all circumstances. If these relief provisions are inapplicable to a particular set of circumstances, we will not qualify to be treatedtaxed as a qualified intermediary. A non-U.S. holder should consult its ownREIT. Even if these relief provisions apply, and we retain our status as a REIT, we will be required to pay a tax advisor regarding possible additional reporting requirements.equal to (1) the greater of (A) the amount by which we fail to satisfy the 75% gross income test and (B) the amount by which we fail to satisfy the 95% gross income test, multiplied by (2) a fraction intended to reflect our profitability (i.e., generally our net income divided by our gross income). We may not always be able to comply with the gross income tests for REIT qualification despite periodic monitoring of our income.

Asset Tests

At the close of each calendar quarter, we must also satisfy certain tests relating to the nature of our assets. Specifically:

At least 75% of the value of our total assets must be represented by some combination of “real estate assets,” cash, cash items, U.S. government securities, and, under some circumstances, stock or debt instruments purchased with new capital. For this purpose, real estate assets include interests in real property and stock of other REITs, as well as some kinds of mortgage-backed securities and mortgage loans. The term “real estate assets” also includes debt instruments of publicly offered REITs, personal property securing a mortgage secured by both real property and personal property if the fair market value of such personal property does not exceed 15% of the total fair market value of all such property, and personal property leased in connection with a lease of real property generating qualifying rents from real property for which the rent attributable to personal property is not greater than 15% of the total rent received under the lease. Assets that do not qualify for purposes of the 75% asset test are subject to the additional asset tests described below;

The value of any one issuer’s securities that we own may not exceed 5% of the value of our total assets;

We may not own more than 10% of any one issuer’s outstanding securities, as measured by either voting power or value. The 5% and 10% asset tests do not apply to securities of TRSs or qualified REIT subsidiaries and the 10% asset test does not apply to “straight debt” having specified characteristics or to certain other securities described below. Solely for purposes of the 10% asset test, the determination of our interest in the assets of a partnership or limited liability company in which we own an interest will be based on our proportionate interest in any securities issued by the partnership or limited liability company, excluding for this purpose certain securities described in the Code;

The aggregate value of all securities of TRSs that we hold may not exceed 20% of the value of our total assets; and

Not more than 25% of the value of our total assets may be represented by debt instruments of publicly offered REITs to the extent those debt instruments would not be real estate assets but for the inclusion of debt instruments of publicly offered REITs in the meaning of real estate assets.

 

-55-
35 

 

IfNotwithstanding the general rule, as noted above, that for purposes of the REIT income and asset tests we are treated as owning our proportionate share of the underlying assets of a non-U.S. holder cannot satisfysubsidiary partnership, if we hold indebtedness issued by a partnership, the requirements described above, payments of interest (including any OID) made to itindebtedness will be subject to, and may cause a violation of, the 30% U.S. federal withholding tax,asset tests unless the non-U.S. holder provides LXP withindebtedness is a properly executed (i) IRS Form W-8BEN (or successor form) claiming an exemption from (or a reduction of) withholding under the benefit of a tax treaty and stating its taxpayer identification number or (ii) IRS Form W-8ECI (or successor form) stating that payments on the exchange notes are not subject to such withholding because such payments are effectively connected with its conduct of a trade or business in the United States, as discussed below.

Salequalifying mortgage asset or other taxable dispositionconditions are met.

Similarly, although stock of another REIT is a qualifying asset for purposes of the exchange notes

Any gain realized on the sale, exchange, redemption or other taxable disposition of the exchange notes generallyREIT asset tests, any non-mortgage debt that is issued by another REIT may not so qualify (although such debt will not be treated as “securities” for purposes of the 10% asset test, as explained below).

Certain securities will not cause a violation of the 10% asset test (for purposes of value) described above. Such securities include instruments that constitute “straight debt,” which term generally excludes, among other things, securities having contingency features. A security does not qualify as “straight debt” where a REIT (or a controlled TRS of the REIT) owns other securities of the same issuer which do not qualify as straight debt, unless the value of those other securities constitute, in the aggregate, 1% or less of the total value of that issuer’s outstanding securities. In addition to straight debt, the Code provides that certain other securities will not violate the 10% value limitation. Such securities include (i) any loan made to an individual or an estate, (ii) certain rental agreements pursuant to which one or more payments are to be made in subsequent years (other than agreements between a REIT and certain persons related to the REIT under attribution rules), (iii) any obligation to pay rents from real property, (iv) securities issued by governmental entities that are not dependent in whole or in part on the profits of (or payments made by) a non-governmental entity, (v) any security (including debt securities) issued by another REIT and (vi) any debt instrument issued by a partnership if the partnership’s income is of a nature that it would satisfy the 75% gross income test described above under “—Income Tests.” In applying the 10% value limitation, a debt security issued by a partnership is not taken into account to the extent, if any, of the REIT’s proportionate interest in the equity and certain debt securities issued by that partnership.

No independent appraisals have been obtained to support our conclusions as to the value of our total assets or the value of any particular security or securities. Moreover, the values of some assets may not be susceptible to a precise determination, and values are subject to U.S. federal income tax unless:

that gain is effectively connected with the conduct of a trade or businesschange in the United States byfuture. Furthermore, the non-U.S. holder, (and, if a tax treaty applies, such gain is attributable to a permanent establishment in the United States);proper classification of an instrument as debt or
the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met.

To the extent that the amount realized on any sale, exchange, redemption or other taxable disposition of the exchange notes is attributable to accrued but unpaid interest (including any OID), such amount would be treated as interest.

Income effectively connected with a trade or business within the United States

If a non-U.S. holder is engaged in a trade or business in the United States and interest (including any OID) on the exchange notes or gain from a sale, redemption or other disposition of the exchange notes is effectively connected with the conduct of that trade or business (and, if an applicable tax treaty so provides, is attributable to a permanent establishment in the United States) the non-U.S. holder will be subject to U.S. federal income tax on the interest (including any OID) or gain on a net income basis in generally the same manner as if it were a U.S. holder. See “U.S. Holders,” above. In that case, the non-U.S. holder would not be subject to the 30% U.S. federal tax withholding and would be required to provide to the withholding agent a properly executed IRS Form W-8ECI or other successor form. In addition, a non-U.S. holder that is a corporation equity for U.S. federal income tax purposes may be uncertain in some circumstances, which could affect the application of the REIT asset requirements. Accordingly, there can be no assurance that the IRS will not contend that our interests in our subsidiaries or in the securities of other issuers will cause a violation of the REIT asset tests.

Certain relief provisions are available to allow REITs to satisfy the asset requirements or to maintain REIT qualification, notwithstanding certain violations of the asset and other requirements. For example, if we should fail to satisfy the asset tests at the end of a calendar quarter, such a failure would not cause us to lose our REIT qualification if (i) we satisfied the asset tests at the close of the preceding calendar quarter and (ii) the discrepancy between the value of its assets and the asset requirements was not wholly or partly caused by an acquisition of nonqualifying assets, but instead arose from changes in the relative market values of our assets. If the condition described in (ii) were not satisfied, we still could avoid disqualification by eliminating any discrepancy within 30 days after the close of the calendar quarter in which it arose or by making use of the relief provisions described below.

In the case of de minimis violations of the 10% and 5% asset tests, a REIT may maintain its qualification despite a violation of such requirements if (i) the value of the assets causing the violation does not exceed the lesser of 1% of the REIT’s total assets and $10,000,000 and (ii) the REIT either disposes of the assets causing the failure within six months after the last day of the quarter in which it identifies the failure or the period of time prescribed by Treasury Regulations to be issued, or the relevant tests are otherwise satisfied within that time frame.

Even if we did not qualify for the foregoing relief provisions, one additional provision allows a REIT that fails one or more of the asset requirements to nevertheless maintain its REIT qualification if (i) the REIT provides the IRS with a description of each asset causing the failure, (ii) the failure is due to reasonable cause and not willful neglect, (iii) the REIT pays a tax equal to the greater of (a) $50,000 per failure and (b) the product of the net income generated by the assets that caused the failure multiplied by the highest applicable corporate tax rate and (iv) the REIT either disposes of the assets causing the failure within six months after the last day of the quarter in which it

36

identifies the failure or the period of time prescribed by Treasury Regulations to be issued, or otherwise satisfies the relevant asset tests within that time frame.

Annual Distribution Requirements

In order to qualify to be taxed as a REIT, we are required to make distributions, other than capital gain dividends, to our shareholders in an amount at least equal to the sum of:

90% of our REIT taxable income (with certain adjustments), computed without regard to our net capital gains and the deduction for dividends paid; and

90% of our after-tax net income, if any, from foreclosure property (as described below); minus the excess of the sum of specified items of non-cash income over 5% of our REIT taxable income, computed without regard to our net capital gain and the deduction for dividends paid.

We generally must make these distributions in the taxable year to which they relate, or in the following taxable year if declared before we timely file our tax return for the year and if paid with or before the first regular distribution payment after such declaration. These distributions will be treated as received by LXP shareholders in the year in which paid, except that any distribution that we declare in October, November or December of any year and that is payable to a shareholder of record on a specified date in any such month will be treated as both paid by us and received by the shareholder on December 31 of such year, provided that we actually pay the distribution before the end of January of the following calendar year.

If we fail to distribute, with respect to each calendar year, at least the sum of (i) 85% of our ordinary income for such year, (ii) 95% of our capital gain net income for such year and (iii) any undistributed net taxable income from prior periods, we will be subject to a branch profitsnon-deductible 4% excise tax on the excess of such required distribution over the sum of (a) the amounts actually distributed, plus (b) the amounts of income we retained and on which we have paid corporate income tax.

To the extent that we distribute at least 90%, but less than 100%, of our REIT taxable income, as adjusted, we will be subject to tax at ordinary corporate tax rates on the retained portion. We have the ability to elect to retain, rather than distribute, some or all of our net long-term capital gains and pay tax on such gains. If we were to make this election, LXP shareholders would include their proportionate shares of such undistributed long-term capital gains in income and receive a corresponding credit for their share of the tax that we paid. LXP shareholders would then increase the adjusted basis of their shares by the difference between (i) the amounts of capital gain dividends that we designated and that they included in their taxable income, minus (ii) the tax that we paid on their behalf with respect to that income.

To the extent that we may have available net operating losses carried forward from prior tax years, such holder’s effectively connectedlosses, subject to applicable limitations, may reduce the amount of distributions that we must make in order to comply with the REIT distribution requirements. Such losses, however, will generally not affect the tax treatment to LXP shareholders of any distributions that are actually made. See “—Taxation of Shareholders—Taxation of Taxable U.S. Shareholders—Distributions,” below.

From time to time, we may not have sufficient cash or other liquid assets to meet the distribution requirements described above, including due to timing differences between the actual receipt of income and actual payment of deductible expenses, and the inclusion of income and deduction of expenses in determining our taxable income. In addition, we may decide to retain our cash, rather than distribute it, in order to repay debt, acquire assets, or for other reasons. If these timing differences occur, we may borrow funds to pay distributions or we may pay distributions through the distribution of other property (including our shares) in order to meet the distribution requirements, while preserving our cash.

If our taxable income for a particular year is subsequently determined to have been understated, we may be able to rectify a resultant failure to meet the distribution requirements for a year by paying “deficiency dividends” to shareholders in a later year, which may be included in our deduction for distributions paid for the earlier year but treated as an additional distribution to our shareholders in the year such dividends are paid. In this case, we may be

37

able to avoid losing REIT qualification or being taxed on amounts distributed as deficiency dividends. We will be required to pay interest based on the amount of any deduction taken for deficiency dividends.

Prohibited Transactions

Net income that we derive from a prohibited transaction is subject to a 100% tax. The term “prohibited transaction” generally includes a sale or other disposition of property (other than foreclosure property, as discussed below) that is held as inventory or primarily for sale to customers in the ordinary course of a trade or business. We intend to conduct our operations so that no asset that we own (or are treated as owning) will be treated as, or having been, held as inventory or for sale to customers, and that a sale of any such asset will not be treated as having been in the ordinary course of our business. Whether property is held as inventory or “primarily for sale to customers in the ordinary course of a trade or business” depends on the particular facts and circumstances. No assurance can be given that any property that we sell will not be treated as inventory or property held for sale to customers, or that we can comply with certain safe-harbor provisions of the Code that would prevent such treatment. The 100% tax does not apply to gains from the sale of property that is held through a TRS or other taxable corporation, although such income will be subject to tax in the hands of the corporation at regular corporate rates. We intend to structure our activities to avoid prohibited transaction characterization.

Derivatives and Hedging Transactions

We have entered, and may in the future enter, into hedging transactions with respect to interest rate exposure on one or more of our assets or liabilities. Any such hedging transactions could take a variety of forms, including the use of derivative instruments such as interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, and options. Except to the extent provided by Treasury Regulations, (i) income from a hedging transaction we enter into (A) in the normal course of our business primarily to manage risk of interest rate changes or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred, to acquire or carry real estate assets, including gain from the sale or disposition of a position in such a transaction or (B) primarily to manage risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the 75% or 95% income tests will not constitute gross income for purposes of the 75% or 95% gross income test; and (ii) if we enter into a position described in clause (i)(A) above with respect to indebtedness described therein or clause (i)(B) above with respect to property generating income described therein, and in connection with the extinguishment or disposition of such indebtedness or property we enter into a transaction that would be a hedging transaction within the meaning of clause (i) above as to any position referred to in this clause (ii) if such position were ordinary property, then any income from such a position or transaction described in this clause (ii) will not constitute gross income for purposes of the 75% or 95% gross income test so long as, in each of the foregoing clauses (i) and (ii), the transaction or position is clearly identified, as specified in Treasury Regulations, before the close of the day on which it was acquired, originated, or entered into. To the extent that we enter into hedging transactions that are not described in the preceding clause (i) or (ii), the income from these transactions is likely to be treated as nonqualifying income for purposes of both the 75% and 95% gross income tests. We intend to structure and have structured any hedging transactions in a manner that does not jeopardize our qualification as a REIT. We may conduct some or all of our hedging activities (including hedging activities relating to currency risk) through a TRS or other corporate entity, the income from which may be subject to U.S. federal income tax, rather than by participating in the arrangements directly or through pass-through subsidiaries. No assurance can be given, however, that our hedging activities will not give rise to income or assets that do not qualify for purposes of the REIT tests, or that our hedging activities will not adversely affect our ability to satisfy the REIT qualification requirements.

Foreclosure Property

Foreclosure property is real property and any personal property incident to such real property (i) that we acquire as the result of having bid in the property at foreclosure, or having otherwise reduced the property to ownership or possession by agreement or process of law, after a default (or upon imminent default) on a lease of the property or a mortgage loan held by us and secured by the property, (ii) for which we acquired the related loan or lease at a time when default was not imminent or anticipated and (iii) with respect to which we made a proper election to treat the property as foreclosure property. We generally will be subject to tax at the maximum corporate rate (currently 21%) on any net income from foreclosure property, including any gain from the disposition of the

38

foreclosure property, other than income that would otherwise be qualifying income for purposes of the 75% gross income test. Any gain from the sale of property for which a foreclosure property election has been made will not be subject to the 100% tax on gains from prohibited transactions described above, even if the property would otherwise constitute inventory or dealer property. We do not anticipate receiving any income from foreclosure property that does not qualify for purposes of the 75% gross income test.

Penalty Tax

Any redetermined rents, redetermined deductions, excess interest or redetermined TRS service income we generate will be subject to a 100% penalty tax. In general, redetermined rents are rents from real property that are overstated as a result of any services furnished to any of our tenants by a TRS, and redetermined deductions and excess interest represent any amounts that are deducted by a TRS for amounts paid to us that are in excess of the amounts that would have been deducted based on arm’s-length negotiations or if the interest payments were at a commercially reasonable rate. Rents that we receive will not constitute redetermined rents if they qualify for certain safe harbor provisions contained in the Code. Redetermined TRS service income generally represents income of a TRS that is understated as a result of services provided to us or on our behalf.

Record Keeping Requirements

We are required to comply with applicable record keeping requirements. Failure to comply could result in monetary penalties. For example, we must request on an annual basis information from our shareholders designed to disclose the actual ownership of our outstanding Common Shares.

Built-In Gains Tax

If we dispose of any asset we acquired from a corporation which is or has been a C corporation in a transaction in which our basis in the asset is determined by reference to the basis of the asset in the hands of that C corporation, during the five-year period beginning on the date we acquire the asset, we could be required to pay tax at the highest corporate rate on the gain, if any, we recognize on the disposition of the asset, to the extent that gain does not exceed the excess of (1) the fair market value of the asset over (2) our adjusted basis in the asset, in each case on the date we acquired the asset. Such gain is taken into account in determining our taxable income and capital gains, and the amount of tax paid is taken into account as a loss for purposes of the distribution requirements.

Failure to Qualify

If we fail to satisfy one or more requirements for REIT qualification other than the income or asset tests, we could avoid disqualification as a REIT if our failure is due to reasonable cause and not to willful neglect and we pay a penalty of $50,000 for each such failure. Relief provisions are also available for failures of the income tests and asset tests, as described above in “—Income Tests” and “—Asset Tests.”

If we fail to qualify for taxation as a REIT in any taxable year, and the relief provisions described above do not apply, we would be subject to tax on our taxable income at regular corporate rates. We cannot deduct distributions to shareholders in any year in which we are not a REIT, nor would we be required to make distributions in such a year. In this situation, to the extent of current and accumulated earnings and profits (subject(as determined for U.S. federal income tax purposes), distributions to adjustments)shareholders would be taxable as regular corporate dividends. Such dividends paid to U.S. shareholders that are individuals, trusts and estates may be taxable at the preferential income tax rates(i.e., currently at a 20% maximum U.S. federal rate) for qualified dividends. In addition, subject to the limitations of the Code, corporate distributees may be eligible for the dividends received deduction. Unless we are entitled to relief under specific statutory provisions, we would also be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year during which we lost our qualification. It is not possible to state whether, in all circumstances, we would be entitled to this statutory relief.

39

Taxation of Taxable U.S. Shareholders

Distributions

So long as we qualify to be taxed as a REIT, the distributions that we make to our taxable U.S. shareholders out of current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) that we do not designate as capital gain dividends will generally be taken into account by such shareholders as ordinary income and will not be eligible for the dividends received deduction for corporations. With limited exceptions, our distributions are not eligible for taxation at the preferential income tax rates (i.e., currently at a 20% maximum U.S. federal income tax rate) for qualified dividends received by most U.S. shareholders that are individuals, trusts and estates from taxable C corporations but are generally eligible for a deduction equal to 20% of such distributions. This deduction is scheduled to expire after 2025. Such U.S. shareholders, however, are taxed at the preferential rates on distributions designated by and received from REITs to the extent that the distributions are attributable to:

income retained by the REIT in the prior taxable year on which the REIT was subject to corporate-level income tax (less the amount of corporate tax on such income);

dividends received by the REIT from TRSs or other taxable C corporations; or

income in the prior taxable year from the sales of “built-in gain” property acquired by the REIT from C corporations in carryover basis transactions (less the amount of corporate tax on such income).

Dividends that we designate as capital gain dividends will generally be taxed to our U.S. shareholders as long-term capital gains to the extent that such dividends do not exceed our actual net capital gain for the taxable year or our dividends paid for the taxable year, without regard to the period for which the U.S. shareholder that receives such dividend has held its shares. We may elect to retain and pay taxes on some or all of our net long-term capital gains, in which case we may elect to apply provisions of the Code that treat our U.S. shareholders as having received, solely for tax purposes, our undistributed capital gains, and the shareholders as receiving a corresponding credit for taxes that we paid on such undistributed capital gains and an increase in the adjusted basis of their shares equal to the difference between (i) the amount of such undistributed capital gains, minus (ii) the amount of such taxes that we paid on their behalf. See “—Taxation of LXP” and “—Annual Distribution Requirements.” U.S. shareholders that are corporations may be required to treat up to 20% of some capital gain dividends as ordinary income. Long-term capital gains are generally taxable at maximum U.S. federal rates of 20% in the case of U.S. shareholders that are individuals, trusts and estates (although depending on the characteristics of the assets that produced these gains and on designations that we may make, certain capital gain dividends may be taxed at a 25% rate), and 21% in the case of U.S. shareholders that are corporations.

Distributions in excess of our current and accumulated earnings and profits (as determined for U.S. federal income tax purposes) will generally represent a return of capital and will not be taxable to a U.S. shareholder to the extent that the amount of such distributions does not exceed the adjusted basis of the U.S. shareholder’s shares in respect of which the distributions were made. Rather, the distribution will reduce the adjusted basis of the U.S. shareholder’s shares. To the extent that such distributions exceed the adjusted basis of a U.S. shareholder’s shares, the shareholder generally must include such distributions in income as long-term capital gain if the shares have been held for more than one year, or short-term capital gain if the shares have been held for one year or less. In addition, any distribution that we declare in October, November or December of any year and that is payable to a U.S. shareholder of record on a specified date in any such month will be treated as both paid by us and received by the U.S. shareholder on December 31 of such year, provided that we actually pay the distribution before the end of January of the following calendar year.

To the extent that we have available net operating losses and capital losses carried forward from prior tax years, such losses may reduce the amount of distributions that we must make in order to comply with the REIT distribution requirements. See “—Taxation of LXP” and “—Annual Distribution Requirements.”

Such losses, however, are not passed through to U.S. shareholders and do not offset income of U.S. shareholders from other sources, nor would such losses affect the character of any distributions that we make, which are generally subject to tax in the hands of U.S. shareholders to the extent that we have current or accumulated earnings and profits (as determined for U.S. federal income tax purposes).

40

Dispositions of Our Common Shares

If a U.S. shareholder sells or disposes of our Common Shares, it will generally recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount of cash and the fair market value of any property received on the sale or other disposition, and the shareholder’s adjusted tax basis in the shares (generally the amount paid for such shares). In general, capital gains recognized by individuals, trusts and estates upon the sale or disposition of shares of our Common Shares will be subject to a maximum U.S. federal income tax rate of 20% if the shares are held for more than one year, and will be taxed at ordinary income rates (of up to 37%) if the shares are held for one year or less. Gains recognized by U.S. shareholders that are corporations are subject to U.S. federal income tax at a maximum rate of 21%, whether or not such gains are classified as long-term capital gains. Capital losses recognized by a U.S. shareholder upon the disposition of our Common Shares that were held for more than one year at the time of disposition will be considered long-term capital losses, and are generally available only to offset capital gain income of the U.S. shareholder but not ordinary income (except in the case of individuals, trusts and estates who may also offset up to $3,000 of ordinary income each year). In addition, any loss upon a sale or exchange of shares of our Common Shares by a U.S. shareholder who has held the shares for six months or less, after applying holding period rules, will be treated as a long-term capital loss to the extent of actual or deemed distributions that we make that are required to be treated by the shareholder as long-term capital gain.

If an investor recognizes a loss upon a subsequent disposition of shares of our shares in an amount that exceeds a prescribed threshold, it is possible that the provisions of Treasury Regulations involving “reportable transactions” could apply, with a resulting requirement to separately disclose the loss-generating transaction to the IRS. These regulations, though directed towards “tax shelters,” are broadly written and apply to transactions that would not typically be considered tax shelters. The Code imposes significant penalties for failure to comply with these requirements. You should consult your tax advisor concerning any possible disclosure obligation with respect to the receipt or disposition of shares of our shares or transactions that we might undertake directly or indirectly. Moreover, you should be aware that we and other participants in the transactions in which we are involved (including their advisors) might be subject to disclosure or other requirements pursuant to these Treasury Regulations.

Passive Activity Losses and Investment Interest Limitations

Distributions that we make and gains arising from the sale or exchange by a U.S. shareholder of our Common Shares will not be treated as passive activity income. As a result, shareholder will not be able to apply any “passive losses” against income or gain relating to our Common Shares. A U.S. shareholder may elect to treat capital gain dividends, capital gains from the disposition of our capital shares and income designated as qualified dividend income, as described above, as investment income for purposes of computing the investment interest limitation, but in such case, the shareholder will be taxed at ordinary income rates on such amount. To the extent that other distributions we make do not constitute a return of capital, they will generally be treated as investment income for purposes of computing the investment interest limitation.

Other Tax Considerations

Legislative or Other Actions Affecting REITs

The present U.S. federal income tax treatment of REITs may be modified, possibly with retroactive effect, by legislative, judicial or administrative action at any time. The REIT rules are regularly reviewed by persons involved in the legislative process, the IRS and the U.S. Treasury, which may result in statutory changes as well as revisions to regulations and administrative interpretations. Recently enacted changes to the U.S. federal income tax laws could have an adverse impact on an investment in our shares. For example, certain changes in law pursuant to the Tax Cuts and Jobs Act made significant changes to the U.S. federal income tax laws that affect REITs and their shareholders. We cannot predict the effect of any future law changes on REITs or their shareholders.

Backup Withholding and Information Reporting

In general, LXP is required to report to U.S. shareholders of our Common Shares and to the IRS the amount of dividends paid during each calendar year and the amount of any tax withheld. Backup withholding, at a rate of 30% (or at a reduced rate under an applicable income tax treaty).

Information reporting24% through 2025 and backup withholding

U.S. holders

Generally,28% thereafter, may apply to dividends paid to a U.S. holder may be subject, under certain circumstances, to information reporting and/shareholder unless such shareholder (1) is a corporation or backup withholding with respect to certain interest paymentscomes within other exempt categories and, accruals of OID made onwhen required, demonstrates this fact or with respect to the exchange notes and proceeds from(2) provides a sale, retirement or other disposition of the exchange notes. This withholding applies only if a U.S. holder (i) fails to furnish the U.S. holder’s

41

taxpayer identification number (“TIN”) (which for an individual is aor social security number) within a reasonable time after a request therefor, (ii) furnishes an incorrect TIN, (iii)number, certifies under penalties of perjury that such number is notified by the IRScorrect and that the U.S. holdersuch shareholder is not subject to backup withholding dueand otherwise complies with applicable requirements of the backup withholding rules. A U.S. shareholder that does not provide its correct taxpayer identification number or social security number may also be subject to a prior failure to report interest (including any OID) or dividends properly, or (iv) fails, under certain circumstances, to provide a certified statement, signed under penalty of perjury, that the TIN provided is correct and that the U.S. holder has not been notifiedpenalties imposed by the IRS that the U.S. holder is subject to backup withholding. To prevent backup withholding, the U.S. holder or other payee is required to properly complete IRS Form W-9. These requirements generally do not apply with respect to certain holders, including tax-exempt organizations and certain financial institutions.IRS.

The backup withholding rate is currently 28%. Backup withholding is not an additional federal income tax. Any amountamounts withheld from a payment under the backup withholding rules is allowablemay be allowed as a refund or a credit against yourthe applicable shareholder’s U.S. federal income tax liability, (and may entitle you to a refund), provided that the required information is timely furnished to the IRS. A U.S. holder should consult the U.S. holder’s own tax advisor as to the U.S. holder’s qualification for exemption from backup withholding and the procedure for obtaining such exemption.

Foreign Account Tax Compliance Act

Non-U.S. holders

If a non-U.S. holder provides the applicable IRS Form W-8BEN, IRS Form W-8IMY or other applicable form, together with all appropriate attachments, signed under penalties of perjury, identifying the non-U.S. holder and stating that the non-U.S. holder is not a U.S. person, the non-U.S. holder will not be subject to IRS reporting requirements and U.S. backup withholding with respect to interest payments (including any OID) on the exchange notes.

-56-

Under current Treasury Regulations, payments on the sale, exchange, redemption or other taxable disposition of a note made to or through a U.S. office of a broker generally will be subject to information reporting and backup withholding unless the holder either certifies its status as a non-U.S. holder under penalties of perjury on the applicable IRS Form W-8BEN, IRS Form W-8IMY or other applicable form (as described above) or otherwise establishes an exemption. The payment of the proceeds of the disposition of a note by a non-U.S. holder to or through a non-U.S. office of a non-U.S. broker will not be subject to backup withholding or information reporting unless the non-U.S. broker is a “U.S. Related Person” (as defined below). The payment of proceeds of the disposition of a note by a non-U.S. holder to or through a non-U.S. office of a U.S. broker or a U.S. Related Person generally will not be subject to backup withholding but will be subject to information reporting unless the holder certifies its status as a non-U.S. holder under penalties of perjury or the broker has certain documentary evidence in its files as to the non-U.S. holder’s foreign status and has no actual knowledge or reason to know that such holder is a U.S. person.

For this purpose, a “U.S. Related Person” is: (i) a “controlled foreign corporation” for U.S. federal income tax purposes, (ii) a foreign person 50% or more of whose gross income from all sources for a specified three-year period is derived from activities that are effectively connected with the conduct of a U.S. trade or business or (iii) a foreign partnership with certain connections to the United States.

Backup withholding is not an additional tax and may be refunded (or credited against the holder’s U.S. federal income tax liability, if any), provided that certain required information is timely furnished to the IRS. The information reporting requirements may apply regardless of whether withholding is required. Copies of the information returns reporting such interest (including any OID) or gain and any withholding also may be made available to the tax authorities in the country in which a non-U.S. holder is a resident under the provisions of an applicable income tax treaty or agreement.

Legislation affecting taxation of exchange notes held by or through foreign entities

Sections 1471-1474 of the Code (known as FATCA) imposes certain due diligence and information reporting requirements, particularly with respect to accounts held through foreign financial institutions. Effective for payments made after June 30, 2014, a 30%A U.S. federal withholding tax of 30% generally will apply to interest income from debt obligations of U.S. issuers and effective forbe imposed on certain payments made after December 31, 2016, a 30% U.S. withholding tax will apply on the gross proceeds from a disposition of such obligations paid to a foreign“foreign financial institution (including in certain instances where such institution is acting as an intermediary),institution” (as specifically defined under the Foreign Account Tax Compliance Act rules) unless such institution enters into an agreement with the U.S. Treasury Departmenttax authorities to withhold certain payments and to collect and provide to the Treasury DepartmentU.S. tax authorities substantial information regarding U.S. account holders includingof such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners,owners) or otherwise qualifies for an exemption from these rules. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with such institution. The 30%the United States governing these withholding and reporting requirements may be subject to different rules. Under the Foreign Account Tax Compliance Act and administrative guidance, a U.S. federal withholding tax of 30% generally also will also apply to interest income from such obligations andbe imposed on the gross proceeds from the disposition of such obligations paidcertain payments made to a non-financial foreign entity (including in certain instances where such entity is acting as an intermediary) unless such entity provides the withholding agent with a certification that it does not have any substantial U.S. owners or a certification identifying thecertain of its direct and indirect substantial U.S. owners of the entity. We will not pay any additional amounts to non-U.S. holders in respect of any amounts withheld under FATCA.owners. Under certain circumstances, a holdershareholder may be eligible for refunds or credits of such taxes. Obligations outstanding on June 30, 2014These withholding taxes are generally exempt from the reporting and withholding requirements described in this paragraph. Absent any modification that causes the exchange notes to be treated as having been reissued after June 30, 2014, the exchange notes are not expected to be subject to the above mentioned reporting and withholding requirements.

Application of this withholding tax does not depend on whether the payment otherwise would be exempt from U.S. federal withholding tax under an exemption described under “Non-U.S. Holders” above. In the event that this withholding tax shall be imposed on any paymentdistributions paid with respect to our shares. While withholding under the Foreign Account Tax Compliance Act would have applied also to payments of interest on, or gross proceeds from the sale or other disposition of our shares on or redemptionafter January 1, 2019, proposed Treasury Regulations eliminate withholding on payments of a note, we have no obligation to pay additional amounts as a consequence thereof or to redeem the exchange notes before their stated maturity. Investorsgross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are urged toissued. Shareholders should consult with their own tax advisors regarding the possible implications of this recently enacted legislation on their ownership and disposition of shares of our shares.

State, Local and Foreign Taxes

We and our subsidiaries and shareholders may be subject to state, local or foreign taxation in various jurisdictions, including those in which we or they transact business, own property or reside. Our state, local or foreign tax treatment and that of our shareholders may not conform to the U.S. federal income tax treatment discussed above. Any foreign taxes that we or our subsidiaries may incur do not pass through to our shareholders as a credit against their U.S. federal income tax liability. Prospective investors should consult their tax advisors regarding the application and effect of state, local and foreign income and other tax laws applicable to an investment in the exchange notes.our shares.

-57-
42 

PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. Broker-dealers may use this prospectus, as it may be amended or supplemented from time to time, in connection with the resale of exchange notes received in exchange for private notes where the broker-dealer acquired the private notes as a result of market-making activities or other trading activities. We have agreed that for a period of up to one year after the date that this registration statement is declared effective by the Commission, we will make this prospectus, as amended or supplemented, available to any broker-dealer that requests it for use in connection with any such resale.

We will not receive any proceeds from any sale of exchange notes by broker-dealers or any other persons. Broker-dealers may sell exchange notes received by broker-dealers for their own account pursuant to the exchange offer from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or negotiated prices. Broker-dealers may resell exchange notes directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer and/or the purchasers of the exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be "underwriters" within the meaning of the Securities Act and any profit on any resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. By acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

We have agreed to pay all expenses incident to our performance of, or compliance with, the registration rights agreement and will indemnify the holders of the notes (including any broker-dealers) against liabilities under the Securities Act.

By its acceptance of the exchange offer, any broker-dealer that receives exchange notes pursuant to the exchange offer agrees to notify us before using the prospectus in connection with the sale or transfer of exchange notes. The broker-dealer further acknowledges and agrees that, upon receipt of notice from us of the happening of any event which makes any statement in the prospectus untrue in any material respect or which requires the making of any changes in the prospectus to make the statements in the prospectus not misleading or which may impose upon us disclosure obligations that may have a material adverse effect on us, which notice we agree to deliver promptly to the broker-dealer, the broker-dealer will suspend use of the prospectus until we have notified the broker-dealer that delivery of the prospectus may resume and have furnished copies of any amendment or supplement to the prospectus to the broker-dealer.

LEGAL MATTERS

Certain legal matters of Maryland law, including the validity of the Common Shares to be issued in connection with the exchange notes and related guarantees offered herebyMerger, will be passed upon for usLXP by Paul Hastings LLP, New York, New York and Venable LLP, Baltimore, Maryland. Certain U.S. federal income tax consequences relating to the Merger and certain other tax matters will be passed upon for LXP by Hogan Lovells US LLP, Washington, D.C.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEXPERTS

The consolidated financial statements and the related financial statement schedule of Lexington RealtyLXP Industrial Trust and subsidiaries as of December 31, 20122022 and 2011,2021, and for each of the three years in the three-year period ended December 31, 2012, and Management’s Annual Report on Internal Control over Financial Reporting as of December 31, 2012, have been2022, incorporated by reference hereinin this registration statement by reference to LXP Industrial Trust’s annual report on Form 10-K for the year ended December 31, 2022, and the effectiveness of LXP Industrial Trust’s internal control over financial reporting have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports. Such financial statements are incorporated by reference in reliance upon the reports of KPMG LLP, independent registered public accountingsuch firm incorporated by reference herein, and upon thegiven their authority of said firm as experts in accounting and auditing.

The consolidated financial statements and the related financial statement schedule of Lepercq Corporate Income Fund L.P. and subsidiaries as of December 31, 2012 and 2011, and for each of the years in the three-year period ended December 31, 2012, have been included in this prospectus in reliance upon the report of KPMG LLP, independent registered public accounting firm, included herein, and upon the authority of said firm as experts in accounting and auditing.

The consolidated financial statements and the related financial statement schedule of Lepercq Corporate Income Fund II L.P. and subsidiaries as of December 31, 2012 and 2011, and for each of the years in the three-year period ended December 31, 2012, have been included in this prospectus in reliance upon the report of KPMG LLP, independent registered public accounting firm, included herein, and upon the authority of said firm as experts in accounting and auditing.

-58-

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a Registration Statement on Form S-4 that we have filed with the Commission under the Securities Act. This prospectus does not contain all of the information set forth in the Registration Statement. For further information about us and the notes, you should refer to the Registration Statement. This prospectus summarizes material provisions of contracts and other documents to which we refer you. Since this prospectus may not contain all of the information that you may find important, you should review the full text of these documents. We have filed or incorporated herein by reference these documents as exhibits to our Registration Statement.

LXP files and LCIF will file and furnish annual, quarterly and current reports, proxy statements and other information with the Commission. Our filings and furnishingsSEC. Filings made with the CommissionSEC by LXP are available to the public onover the Internet at the Commission’sSEC’s web site atwww.sec.gov. You may also read and copy any document that The information contained on the SEC’s website is expressly not incorporated by reference into this information statement/prospectus.

LXP files or LCIF will filehas filed with the Commission at its Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549. Please callSEC a registration statement on Form S-4 of which this information statement/prospectus forms a part. The registration statement registers the Commission at 1-800-Commission-0330 for furtherCommon Shares to be issued to holders of LCIF Partnership Units in connection with the Merger. The registration statement, including the attached exhibits and schedules, contain additional relevant information onabout Common Shares. The rules and regulations of the Public Reference Room and its copy charges.SEC allow LXP to omit certain information included in the registration statement from this information statement/prospectus.

 

The CommissionSEC allows LXP to “incorporate by reference” the information LXP filesthey file with the Commission,it, which means thethat LXP can disclose important information to you by referring you to those documents. The information incorporated by reference herein is an important part of this prospectus. Any statement contained herein or in any document incorporated by reference herein shall be deemed to be amended, modified or superseded for the purpose of this prospectus to the extent that a statement contained in this prospectus or a later document that has been or is considered to be incorporated by reference herein and therein amends, modifies or supersedes such statement. Any statements so amended, modified or superseded shall not be deemed to constitute a part of this information statement/prospectus, except as so amended, modifiedand information that LXP will file later with the SEC will update or superseded.supersede this information automatically.

 

LXP incorporatesincorporated by reference in this prospectus the documents listed below (other than any portions of the documents not deemed to be filed) and any future filings thatmade by LXP may make with the CommissionSEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this information statement/prospectus and prior to the terminationconsummation of the exchange offer under this prospectus; provided, however, that we are not incorporating, in each case, any documents or information deemed to have been furnished and not filed in accordance with Commission rules:Merger.

Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 16, 2023.

Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, filed with the SEC on May 3, 2023, August 2, 2023 and October 31, 2023, respectively.

Current Reports on Form 8-K, filed with the SEC on January 17, 2023, May 19, 2023 and May 30, 2023 (as amended on September 22, 2023);

Definitive Proxy Statement on Schedule 14A for the 2023 Annual Meeting of LXP Shareholders, filed with the SEC on April 10, 2023; and

The description of Common Shares contained in Exhibit 4.11 to LXP’s Annual Report on Form 10-K filed February 16, 2023, including any amendment or report filed with the SEC for the purpose of updating this description.

 

our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on February 25, 2013;

our Quarterly Reports on Form 10-Q for the quarterly period ended March 30, 2013, filed with the Commission on May 7, 2013, for the quarterly period ended June 30, 2013, filed with the Commission on August 8, 2013, and for the quarterly period ended September 30, 2013, filed with the Commission on November 7, 2013;

our Current Reports on Form 8-K filed with the Commission on January 11, 2013, January 14, 2013, February 13, 2013, February 28, 2013, March 15, 2013, March 20, 2013, March 28, 2013, April 19, 2013, May 8, 2013, May 15, 2013, May 22, 2013, May 31, 2013, June 4, 2013, June 13, 2013, July 24, 2013, September 13, 2013, October 3, 2013, October 15, 2013, November 21, 2013, December 24, 2013 and January 6, 2014;
43 
the information specifically incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2012 from our Definitive Proxy Statement on Schedule 14A filed with the Commission on March 25, 2013 and definitive additional materials filed with the Commission on March 25, 2013.

To receiveYou may request a free copy of any of the documents incorporated by reference by LXP at no cost by requesting them in writing or by telephone at the following address and telephone number:

LXP Industrial Trust

One Penn Plaza

Suite 4015
New York, New York 10119-4015
Attention: LCIF Investor Relations
(212) 692-7200 

If you request any such documents, LXP will mail them to you by first class mail, or another equally prompt means, after receipt of your request. To obtain timely delivery of these documents, you must request the information no later than December 21, 2023.

You may also obtain more information regarding LXP by consulting its website, at www.lxp.com. The information of LXP’s website (other than the documents expressly incorporated by reference as set forth above) is not incorporated by reference in this prospectus(information statement/prospectus, and you should not consider it part of this information statement/prospectus.

LXP has not authorized anyone to provide you with different information. If anyone provides with different or inconsistent information, you should not rely on it. The information that appears in this information statement/prospectus and that is incorporated by reference in this information statement/prospectus may only be accurate as of the date of this information statement/prospectus or the date of the document in which incorporated information appears. The business, financial condition, results of operations and prospects may have changed for LXP since such date.

44

Annex A

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

by and between

LXP INDUSTRIAL TRUST

and

LEPERCQ CORPORATE INCOME FUND L.P.

Dated as of October 24, 2023

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS2
SECTION 1.01. Specific Definitions2
SECTION 1.02. Other Definitions3
ARTICLE II THE MERGER4
SECTION 2.01. LCIF Merger4
SECTION 2.02. Declaration of Trust4
SECTION 2.03. By-Laws4
SECTION 2.04. Trustees and Officers of the Surviving Entity4
SECTION 2.05. Effective Time5
SECTION 2.06. Closing5
ARTICLE III EFFECT OF THE MERGER5
SECTION 3.01. Conversion of LCIF Partnership Units5
SECTION 3.02. Surrender and Payment6
SECTION 3.03. Withholding Rights7
SECTION 3.04. Appraisal Rights8
SECTION 3.05. Allocations Upon Conversion of LCIF Partnership Units8
SECTION 3.06. Adjustments8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY8
SECTION 4.01. Existence; Good Standing; Authority8
SECTION 4.02. Authority Relative to this Agreement9
SECTION 4.03. No Conflict; Required Filings and Consents9
SECTION 4.04. Compliance10
SECTION 4.05. Brokers10
SECTION 4.06. Compliance with Laws10
SECTION 4.07. Information Supplied11
SECTION 4.08. No Other Representations or Warranties11
ARTICLE V REPRESENTATIONS AND WARRANTIES OF LCIF11
SECTION 5.01. Existence; Good Standing; Authority11
SECTION 5.02. Authority Relative to this Agreement12
SECTION 5.03. Capitalization12
SECTION 5.04. No Conflict; Required Filings and Consents12
i

SECTION 5.05. Compliance13
SECTION 5.06. Brokers13
SECTION 5.07. Compliance with Laws13
SECTION 5.08. Information Supplied13
SECTION 5.09. No Other Representations or Warranties14
ARTICLE VI ADDITIONAL AGREEMENTS14
SECTION 6.01. Form S-4 and Other Filings14
SECTION 6.02. Reasonable Best Efforts15
SECTION 6.03. Transfer Taxes15
SECTION 6.04. Agreed Tax Treatment16
ARTICLE VII CONDITIONS16
SECTION 7.01. Conditions to the Obligations of Each Party16
SECTION 7.02. Conditions to the Obligations of LCIF16
SECTION 7.03. Conditions to the Obligations of the Company17
ARTICLE VIII TERMINATION18
SECTION 8.01. Termination18
SECTION 8.02. Effect of Termination18
SECTION 8.03. Fees and Expenses19
ARTICLE IX GENERAL PROVISIONS19
SECTION 9.01. Non-Survival of Representations and Warranties19
SECTION 9.02. Notices19
SECTION 9.03. Severability20
SECTION 9.04. Amendment20
SECTION 9.05. Entire Agreement; Assignment20
SECTION 9.06. Parties in Interest20
SECTION 9.07. Extension; Waiver20
SECTION 9.08. Specific Performance21
SECTION 9.09. Governing Law; Consent to Jurisdiction21
SECTION 9.10. Waiver of Jury Trial22
SECTION 9.11. Headings22
SECTION 9.12. Counterparts22
SECTION 9.13. Mutual Drafting22
SECTION 9.14. No Recourse22
ii

AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER

THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of October 24, 2023, is made by and between LXP Industrial Trust, a Maryland real estate investment trust (the “Company”), and Lepercq Corporate Income Fund L.P., a Delaware limited partnership (“LCIF”).

RECITALS

WHEREAS, the Company and LCIF previously entered into an Agreement and Plan of Merger, dated as of September 13, 2023 (as amended on September 15, 2023 and as further amended on September 16, 2023, the “Original Agreement”);

WHEREAS, the parties now wish to effect a business combination through a merger of LCIF with and into the Company (the “LCIF Merger”) on the terms and subject to the conditions set forth in this Agreement and in accordance with Section 17-211 of the Delaware Revised Uniform Limited Partnership Act, as amended (the “DRULPA”), and Section 8-501.1 of the Corporations and Associations Articles of the Annotated Code of Maryland, as amended (the “Maryland REIT Law”), in which each LCIF Partnership Unit (other than LCIF Partnership Units held by the Company or any of its wholly owned subsidiaries) shall be converted into the right to receive the Merger Consideration (defined herein);

WHEREAS, this Agreement and the LCIF Merger must be approved by each of (i) the Board of Trustees of the Company (the “Company Board”), and (ii) the general partner of LCIF (the “General Partner”);

WHEREAS, the General Partner is a wholly-owned subsidiary of the Company;

WHEREAS, in accordance with Section 8-501.1(c)(3) of the Maryland REIT Law, the Company Board (including all of the independent trustees) has (i) determined that this Agreement, the LCIF Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of the Company and its shareholders, and (ii) has unanimously approved and adopted this Agreement, the LCIF Merger and the other transactions contemplated by this Agreement and authorized the issuance of Common Shares (defined herein) as payment of the Merger Consideration (defined herein);

WHEREAS, the General Partner has determined that this Agreement, the LCIF Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of LCIF and its partners and has approved this Agreement, the LCIF Merger and the other transactions contemplated by this Agreement;

WHEREAS, the parties hereto desire to make certain representations, warranties, covenants and agreements in connection with the LCIF Merger and also to prescribe various conditions to the LCIF Merger; and

WHEREAS, in furtherance of the foregoing, and in accordance with the Original Agreement, the Company and LCIF desire to enter into this Agreement for the purpose of setting forth their mutual understandings and agreements with respect to the foregoing and amending and restating the Original Agreement.

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

ARTICLE I
DEFINITIONS

SECTION 1.01. Specific Definitions.

For purposes of this Agreement:

Additional Limited Partners” has the meaning given to such term in the LCIF Partnership Agreement.

By-Laws” means the Third Amended and Restated By-Laws of the Company.

Cash Equivalent” shall mean the average of the closing price of a Common Share on the New York Stock Exchange, as reported in The Wall Street Journal, for the 20 consecutive trading days ending on and including the second (2nd) trading day immediately preceding the Closing Date.

Code” means the Internal Revenue Code of 1986, as amended.

Common Shares” means the shares of beneficial interest classified as “Common Stock,” par value $0.0001 per share, of the Company.

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

LCIF Partnership Agreement” means the Sixth Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund L.P., dated and effective as of December 30, 2013, as amended by the First Amendment to Sixth Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund L.P., dated and effective as of July 12, 2021.

LCIF Partnership Units” mean units of partnership interests in LCIF, denominated as “Partnership Units” in the LCIF Partnership Agreement.

Liens” means, with respect to any asset (including any security), any mortgage, claim, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset.

2

Material Adverse Effect” means any event, circumstance, change or effect that is materially adverse to the financial condition or results of operations of the Company or LCIF, as applicable in the context.

NYSE” means the New York Stock Exchange.

Person” means an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including, without limitation, a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association, entity, government, political subdivision, agency or instrumentality of a government.

Redemption Factor” shall have the meaning set forth in the LCIF Partnership Agreement.

Securities Act” means the U.S. Securities Act of 1933, as amended.

Taxes” means any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Authority (defined herein) or taxing authority, including, without limitation: taxes or other charges on or with respect to income, franchise, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes; license, registration and documentation fees; and customers’ duties, tariffs and similar charges.

SECTION 1.02. Other Definitions.

The following terms are defined in the sections indicated below:

AgreementPreamble
Articles of MergerSection 2.05
Blue Sky LawsSection 4.03(b)
Book Entry UnitSection 5.03
Certificate of MergerSection 2.05
ClosingSection 2.06
Closing DateSection 2.06
CompanyPreamble
Company BoardRecitals
Company Declaration of TrustSection 4.01
Delaware Secretary of StateSection 2.05
DRULPARecitals
Effective TimeSection 2.05
Exchange FundSection 3.02(a)
Form S-4Section 6.01
Fractional Share ConsiderationSection 3.01(a)
General PartnerRecitals
Governmental AuthoritySection 4.03(b)
3

LawSection 4.03(a)
LCIFPreamble
LCIF Certificate of Limited PartnershipSection 5.01
LCIF MergerRecitals
Maryland REIT LawRecitals
Merger ConsiderationSection 3.01(a)
SDATSection 2.05
Surviving EntitySection 2.01
Termination DateSection 8.01
Transfer AgentSection 3.02(a)
Transfer TaxesSection 6.03

ARTICLE II
THE MERGER

SECTION 2.01. LCIF Merger.

Subject to the terms and conditions of this Agreement, and in accordance with the DRULPA and the Maryland REIT Law, at the Effective Time, LCIF and the Company shall consummate the LCIF Merger pursuant to which (a) LCIF shall be merged with and into the Company, and the separate existence of LCIF shall thereupon cease and (b) the Company shall be the surviving entity in the LCIF Merger (the “Surviving Entity”). The LCIF Merger shall have the effects specified in the DRULPA and the Maryland REIT Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all of the property, rights, privileges, powers and franchises of LCIF shall vest in the Surviving Entity, and all debts, liabilities and duties of LCIF shall become the debts, liabilities and duties of the Surviving Entity.

SECTION 2.02. Declaration of Trust.

Upon the Effective Time, the Company Declaration of Trust in effect immediately prior to the Effective Time shall be the declaration of trust of the Surviving Entity, until such declaration of trust is thereafter amended as provided by applicable Law and the applicable provisions of such declaration of trust.

SECTION 2.03. By-Laws.

Upon the Effective Time, the By-Laws of the Company in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Entity, until such bylaws are thereafter amended or repealed as provided by applicable Law and the applicable provisions of such bylaws.

SECTION 2.04. Trustees and Officers of the Surviving Entity.

Upon the Effective Time, (a) the trustees of the Company immediately prior to the Effective Time shall, from and after the Effective Time, be the trustees of the Surviving Entity and shall continue to hold office in accordance with the declaration of trust and bylaws of the Surviving Entity, or as otherwise provided by applicable Law, and (b) the officers of the Company immediately prior to the Effective Time shall, from and after the Effective Time, be the officers of

4

the Surviving Entity and shall continue to hold office in accordance with the declaration of trust and bylaws of the Surviving Entity.

SECTION 2.05. Effective Time.

At the Closing, LCIF and the Company shall duly execute and file (i) articles of merger (the “Articles of Merger”) with the State Department of Assessments and Taxation of Maryland (the “SDAT”) in accordance with the Maryland REIT Law, and (ii) a certificate of merger (the “Certificate of Merger”) with the Secretary of State of the State of Delaware (the “Delaware Secretary of State”) in accordance with the DRULPA. The LCIF Merger shall become effective at such time as the Articles of Merger have been accepted for record by the SDAT and the Certificate of Merger has been accepted for filing by the Delaware Secretary of State, or at such later time to which the parties hereto shall have agreed and designated in the Articles of Merger in accordance with the Maryland REIT Law and the Certificate of Merger in accordance with the DRULPA as the effective time of the LCIF Merger (the “Effective Time”).

SECTION 2.06. Closing.

The closing of the LCIF Merger (the “Closing”) shall occur as promptly as practicable after all of the conditions set forth in Article VII (other than conditions which are waived or by their terms are required to be satisfied at the Closing) shall have been satisfied or waived by the party entitled to the benefit of the same, and, subject to the foregoing, shall take place at such time and on a date to be specified by the parties (the “Closing Date”). The Closing shall take place at the offices of the Company, One Penn Plaza, Suite 4015, New York, New York, or at such other place as agreed to by the parties hereto.

ARTICLE III
EFFECT OF THE MERGER

SECTION 3.01. Conversion of LCIF Partnership Units.

At the Effective Time, by virtue of the LCIF Merger and without any action on the part of any party hereto or the holders of LCIF Partnership Units:

(a)                            Each LCIF Partnership Unit issued and outstanding immediately prior to the Effective Time, other than exhibits, unlessLCIF Partnership Units held by the Company or any of its wholly owned subsidiaries, shall automatically be converted into the right to receive a number of Common Shares equal to the Redemption Factor, subject to any adjustment pursuant to Section 3.06, without interest (the “Merger Consideration”); provided that no fractional Common Shares shall be issued upon the conversion of any LCIF Partnership Units, and in lieu thereof, each holder of LCIF Partnership Units as of immediately prior to the Effective Time otherwise entitled to receive fractional Common Shares shall receive the Cash Equivalent of such fractional share, without interest (the “Fractional Share Consideration”). As of the Effective Time, all such LCIF Partnership Units shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of LCIF Partnership Units shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration, without interest, in accordance with this Section 3.01(a), including the right, if

5

any, to receive the Fractional Share Consideration, together with the amounts, if any, payable pursuant to Section 3.02(c).

(b)                           Each LCIF Partnership Unit held by the Company or any of its wholly owned subsidiaries as of immediately prior to the Effective Time shall automatically be cancelled and shall cease to exist, and no consideration shall be delivered in exchange therefor.

(c)                            Each Common Share and any other share of beneficial interest of the Company issued and outstanding immediately prior to the Effective Time shall remain unchanged and continue to remain outstanding as a Common Share or other share of beneficial interest of the Company, as applicable.

SECTION 3.02. Surrender and Payment.

(a)                            Prior to the Effective Time, the Company shall authorize one or more transfer agent(s) to act as exchange agent hereunder (the “Transfer Agent”) with respect to the LCIF Merger for the payment and delivery of the Merger Consideration and the Fractional Share Consideration. Prior to the Effective Time, the Company will enter into an exchange agent agreement with the Transfer Agent in a form reasonably acceptable to the Company, setting forth the procedures to be used in accomplishing the deliveries and other actions contemplated by this Section 3.02. At or prior to the Effective Time, the Company shall deposit (or cause to be deposited) with the Transfer Agent (i) an amount of Common Shares in book entry form equal to the aggregate Merger Consideration issuable pursuant to Section 3.01(a) and (ii) cash in immediately available funds in an amount sufficient to pay the aggregate Fractional Share Consideration (clauses (i) and (ii), together with any dividends, distributions and cash deposited with the Transfer Agent, the “Exchange Fund”). The Exchange Fund shall be for the sole benefit of the holders of LCIF Partnership Units that were outstanding as of immediately prior to the Effective Time. The Company shall cause the Transfer Agent to make, and the Transfer Agent shall make, delivery of the Merger Consideration, payment of the Fractional Share Consideration and any amounts payable in respect of dividends or other distributions on Common Shares in accordance with Section 3.02(c) out of the Exchange Fund in accordance with this Agreement. The Exchange Fund shall not be used for any other purpose.

(b)                           At the Effective Time, each registered holder of one or more Book Entry Units (as defined herein) that immediately prior to the Effective Time represented outstanding LCIF Partnership Units whose units were converted into the right to receive the Merger Consideration pursuant to Section 3.01(a) shall automatically upon the Effective Time be entitled to receive, and the Company shall cause the Transfer Agent to pay and deliver to such holder, promptly following the Effective Time, the Merger Consideration in accordance with Section 3.01(a), together with any amounts payable in respect of the Fractional Share Consideration and any distribution to which such holder is entitled pursuant to Section 3.02(c) for each Book Entry Unit. Payment of the Merger Consideration, Fractional Share Consideration and distributions with respect to Book Entry Units shall only be made to the Person in whose name such Book Entry Units are registered. No interest shall be paid or accrue on any cash payable upon the conversion of any Book Entry Unit.

6

(c)                            Dividends with Respect to Common Shares. No dividends or other distributions with respect to Common Shares with a record date after the Effective Time shall be paid to the holder of any unsurrendered Book Entry Unit with respect to the Common Shares issuable hereunder, and all such dividends and other distributions shall be paid by the Company to the Transfer Agent and shall be included in the Exchange Fund, in each case until the surrender of such Book Entry Unit with respect to the Common Shares issuable hereunder in accordance with this Agreement. Subject to applicable Laws, following the surrender of each Book Entry Unit, there shall be paid to the holder thereof, without interest, (i) the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such Common Shares to which such holder is entitled pursuant to this Agreement, and (ii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to such surrender and with a payment date subsequent to such surrender payable with respect to such Common Shares.

(d)                           Termination of Exchange Fund. Any portion of the Exchange Fund (including any cash in lieu of fractional shares and any applicable dividends or other distributions with respect to Common Shares) which remains undistributed to the holders of unsurrendered Book Entry Units as of December 31, 2024 shall be delivered to the Surviving Entity, upon demand, and any former holders of LCIF Partnership Units prior to the LCIF Merger who have not theretofore complied with this Section 3.02 shall thereafter look only to the Company and only as general creditors thereof for payment of the Merger Consideration subject to the terms and conditions of this Article III.

(e)                            No Liability. None of LCIF, the Company, the Transfer Agent, or any employee, officer, trustee, director, agent or affiliate thereof, shall be liable to any Person if any portion of the Exchange Fund has been delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law. Any amounts remaining unclaimed by former holders of any LCIF Partnership Units immediately prior to the time at which such amounts would otherwise escheat to, or become property of, any Governmental Authority shall, to the extent permitted by applicable Law, become the property of the Company, free and clear of any claims or interest of such holders or their successors, assigns or personal representatives previously entitled thereto.

(f)                              Distributions. The Company shall assume any obligation of LCIF to pay to holders of LCIF Partnership Units as of immediately prior to the Effective Time the Distributions of Operating Cash Flow (as defined in the LCIF Partnership Agreement) that have a Partnership Record Date (as defined in the LCIF Partnership Agreement) prior to the Effective Time and which Distributions of Operating Cash Flow have not been paid as of the Effective Time. Any such amounts will be paid on or about the date of the associated Common Share dividend payment date in accordance with past practices.

SECTION 3.03. Withholding Rights.

The Surviving Entity or the Transfer Agent, as applicable, shall be entitled to deduct and withhold from the Merger Consideration and the Fractional Share Consideration (and any other amounts otherwise payable pursuant to this Agreement) to any holder of LCIF Partnership Units such amounts as it is required to deduct and withhold with respect to the making of such

7

payment under the Code, and the rules and regulations promulgated thereunder, or any provision of applicable Law (it being understood and agreed that failure to return to the Company a duly completed IRS Form W-9 prior to the Effective Time will result in withholding). To the extent that amounts are so withheld by the Surviving Entity or the Transfer Agent, as applicable, such withheld amounts shall be paid over to the applicable Governmental Authority in accordance with applicable Law and shall be treated for all purposes of this Agreement as having been paid to the holder of LCIF Partnership Units in respect of which such deduction and withholding was made by the Surviving Entity or the Transfer Agent, as applicable.

SECTION 3.04. Appraisal Rights.

No objectors’ or appraisal rights shall be available to the holders of LCIF Partnership Units in connection with the LCIF Merger or the other transactions contemplated hereby.

SECTION 3.05. Allocations Upon Conversion of LCIF Partnership Units.

Any amounts required to be allocated to the LCIF Partnership Units for the taxable year during which the conversion contemplated by Section 3.01(a) of this Agreement is completed shall be allocated to each Person who was the holder of such LCIF Partnership Unit during such taxable year using the interim closing of the books method.

SECTION 3.06. Adjustments.

If between the date hereof and the Effective Time the outstanding LCIF Partnership Units shall have been changed into a different number of LCIF Partnership Units by reason of the occurrence or record date of any split, distribution of LCIF Partnership Units to the holders of LCIF Partnership Units (including any distribution of securities convertible into LCIF Partnership Units), reorganization, recapitalization, reclassification, combination, exchange or other like change, the Merger Consideration and any other amounts payable pursuant to this Article III shall be appropriately adjusted to reflect such split, distribution, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to LCIF as follows:

SECTION 4.01. Existence; Good Standing; Authority.

The Company is a real estate investment trust duly formed, validly existing and in good standing under the laws of the State of Maryland. The declaration of trust of the Company (the “Company Declaration of Trust”) is in effect, and no dissolution, revocation or forfeiture proceedings regarding the Company have been commenced. The Company is duly qualified or licensed to do business as a foreign entity and is in good standing under the Laws of any other jurisdiction in which the character of the properties owned, leased or operated by it therein or in which the transaction of its business makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed would not have a Material

8

Adverse Effect. The Company has all requisite trust power and authority to own, lease and operate its properties and to carry on its businesses as now conducted and proposed by the Company to be conducted.

SECTION 4.02. Authority Relative to this Agreement.

(a)                            The Company has all necessary trust power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. No other trust proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than the acceptance for record by the SDAT of the Articles of Merger). This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by LCIF, constitutes a valid, legal and binding agreement of the Company, enforceable against the Company in accordance with and subject to its terms and conditions, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles.

(b)                           The Company Board, by consent and in accordance with Section 8-501.1(c)(3) of the Maryland REIT Law, has (i) declared that this Agreement, the LCIF Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of the Company and its shareholders, and (ii) approved and adopted this Agreement, the LCIF Merger and the other transactions contemplated by this Agreement and authorized the issuance of Common Shares as payment of the Merger Consideration.

(c)                            The Company has reserved a sufficient number of Common Shares in order to fulfill its obligations hereunder. All Common Shares that may be issued pursuant to this Agreement will, when issued in accordance with the terms of this Agreement for the consideration expressed herein, be duly authorized, validly issued, fully paid and nonassessable, and no Person will have any preemptive right of subscription or purchase in respect thereof. All such Common Shares will be issued pursuant to the Form S-4 and will, when issued, be listed on the NYSE, subject to official notice of issuance. The Company has available sufficient cash or lines of credit to pay the aggregate Fractional Share Consideration pursuant to Section 3.01(a).

SECTION 4.03. No Conflict; Required Filings and Consents.

(a)                            The execution and delivery by the Company of this Agreement do not, and the performance of its obligations hereunder will not, (i) conflict with or violate the organizational documents of the Company, (ii) assuming that all consents, approvals, authorizations and other actions described in subsection (b) have been obtained and all filings and obligations described in subsection (b) have been made, conflict with or violate any foreign or domestic statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other order (“Law”) applicable to the Company or by which any property or asset of the Company is bound or affected, or (iii) result in any breach of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result

9

in the creation of a Lien or other encumbrance on any property or asset of the Company, or result in any increase in any cost or obligation of the Company or the loss of any benefit of the Company, pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company is a party or by which the Company or any of its properties or assets is bound or affected, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not have a Material Adverse Effect.

(b)                           The execution and delivery by the Company of this Agreement do not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any United States federal, state, county or local or any foreign government, governmental, regulatory or administrative authority, agency, instrumentality or commission or any court, tribunal, or judicial or arbitral body (a “Governmental Authority”), except (i) for (A) applicable requirements, if any, of the Securities Act, the Exchange Act, state securities or “blue sky” laws (“Blue Sky Laws”) and state takeover Laws, (B)  any filings required under the rules and regulations of the NYSE, (C) the filing with the SEC of a registration statement on Form S-4 pursuant to which the offer and sale of Common Shares in the LCIF Merger will be registered pursuant to the Securities Act and (D) the filing of the Articles of Merger with, and the acceptance for record thereof by, the SDAT, and the filing of the Certificate of Merger with, and the acceptance for filing thereof by, the Delaware Secretary of State, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have a Material Adverse Effect.

SECTION 4.04. Compliance.

The Company is not in conflict with, or in default, breach or violation of, (a) any Law applicable to the Company or by which any of its properties or assets is bound or affected, or (b) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company is a party or by which the Company or any of its properties or assets is bound, except for any such conflicts, defaults, breaches or violations that would not have a Material Adverse Effect.

SECTION 4.05. Brokers.

No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of the Company.

SECTION 4.06. Compliance with Laws.

The Company has not violated or failed to comply with any statute, Law, ordinance, regulation, rule, judgment, decree or order of any Governmental Authority applicable to its business, properties or operations, except in each case to the extent that such violation or failure would not reasonably be expected to have a Material Adverse Effect.

10

SECTION 4.07. Information Supplied.

None of the information supplied or to be supplied by or on behalf of the Company for inclusion or incorporation by reference in the Form S-4 will, at the time such document is filed with the SEC, at any time such document is amended or supplemented or at the time it is declared effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are specificallymade, not misleading. At the time described in the preceding sentence, the Form S-4 will (with respect to the Company, its directors and officers and its subsidiaries) comply as to form in all material respects with the applicable requirements of any Securities Laws. No representation or warranty is made hereunder as to statements made or incorporated by reference in the documents)Form S-4 that were not supplied by or on behalf of the Company.

SECTION 4.08. No Other Representations or Warranties.

Except for the representations and warranties of the Company contained in this Article IV, write usLCIF acknowledges that neither the Company nor any other Person on behalf of the Company has made, and LCIF has not relied upon any representation or warranty, whether express or implied, with respect to the Company or its business, affairs, assets, liabilities, financial condition, results of operations or prospects or with respect to the accuracy or completeness of any other information provided or made available to LCIF by or on behalf of the Company, and LCIF hereby expressly disclaims any reliance on any of the foregoing. Neither the Company nor any other Person will have or be subject to any liability or indemnification obligation to LCIF or any other Person resulting from the distribution in written or verbal communications to LCIF, or use by LCIF of any such information, including any information, documents, projections, forecasts or other material made available to LCIF, confidential information memoranda or management interviews and presentations in expectation of the transactions contemplated by this Agreement, and LCIF hereby acknowledges that it has not relied upon any of the foregoing (except for the representations and warranties of the Company contained in this Article IV).

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF LCIF

LCIF hereby represents and warrants to the Company as follows:

SECTION 5.01. Existence; Good Standing; Authority.

LCIF is a limited partnership duly formed, validly existing and in good standing under the laws of the State of Delaware. The certificate of limited partnership of LCIF (the “LCIF Certificate of Limited Partnership”) is in effect, and no dissolution, revocation or forfeiture proceedings regarding LCIF have been commenced. LCIF is duly qualified or licensed to do business as a foreign entity and is in good standing under the Laws of any other jurisdiction in which the character of the properties owned, leased or operated by it therein or in which the transaction of its business makes such qualification or licensing necessary, other than in such jurisdictions where the failure to be so qualified or licensed would not have a Material Adverse Effect. LCIF has all requisite partnership power and authority to own, lease and operate its properties and to carry on its businesses as now conducted and proposed by LCIF to be conducted.

11

SECTION 5.02. Authority Relative to this Agreement.

(a)                            LCIF has all necessary partnership power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. No other partnership proceedings on the part of LCIF are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than the acceptance for record by the Delaware Secretary of State of the Certificate of Merger). This Agreement has been duly and validly executed and delivered by LCIF and, assuming due authorization, execution and delivery hereof by the Company, constitutes a valid, legal and binding agreement of LCIF, enforceable against LCIF in accordance with and subject to its terms and conditions, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’ rights or by general equity principles.

(b)                           The General Partner, by written consent, has determined that this Agreement, the LCIF Merger and the other transactions contemplated by this Agreement are advisable and in the best interests of LCIF and its partners and has approved this Agreement, the LCIF Merger and the other transactions contemplated by this Agreement.

SECTION 5.03. Capitalization.

The Company owns all of the equity interests in the General Partner. The General Partner is the sole general partner of LCIF. As of the date hereof, the General Partner owned 252,798 LCIF Partnership Units and the Additional Limited Partners owned 78,713,907 LCIF Partnership Units (including 77,983,283.50 LCIF Partnership Units held by Lex LP-1 Trust, a wholly owned subsidiary of the Company). Other than LCIF Partnership Units held by the General Partner and the Additional Limited Partners, there are no other issued or outstanding equity or voting interests of LCIF. As of the date hereof, no LCIF Partnership Units or other equity or voting interests of LCIF have been issued, authorized or reserved for issuance. Except as set forth in this Section 5.03, there are no existing options, warrants, calls, subscriptions, convertible securities or other rights, agreements or commitments which obligate LCIF to issue, transfer or sell any partnership interests of LCIF. Except as set forth in the LCIF Partnership Agreement, there are no outstanding contractual obligations of LCIF to repurchase, redeem or otherwise acquire any partnership interests of LCIF. The partnership interests owned by the Company and, to the Company’s knowledge, the partnership interests owned by the Additional Limited Partners, are subject only to the restrictions on transfer set forth in the LCIF Partnership Agreement and those imposed by applicable securities Laws. All issued and outstanding LCIF Partnership Units are duly authorized, validly issued, fully paid and free of preemptive rights. All issued and outstanding LCIF Partnership Units are uncertificated and held in book entry form (a “Book Entry Unit”).

SECTION 5.04. No Conflict; Required Filings and Consents.

(a)                            The execution and delivery by LCIF of this Agreement do not, and the performance of its obligations hereunder will not, (i) conflict with or violate the organizational documents of LCIF, (ii) assuming that all consents, approvals, authorizations and other actions described in subsection (b) have been obtained and all filings and obligations described in subsection (b) have been made, conflict with or violate any Law applicable to LCIF or by

12

which any property or asset of LCIF is bound or affected, or (iii) result in any breach of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien or other encumbrance on any property or asset of LCIF, or result in any increase in any cost or obligation of LCIF or the loss of any benefit of LCIF, pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which LCIF is a party or by which LCIF or any of its properties or assets is bound or affected, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not have a Material Adverse Effect.

(b)                           The execution and delivery by LCIF of this Agreement do not, and the performance of its obligations hereunder will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except (i) for (A) applicable requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws and state takeover Laws, (B) any filings required under the rules and regulations of the NYSE, and (C) the filing of the Articles of Merger with, and the acceptance for record thereof by, the SDAT, and the filing of the Certificate of Merger with, and the acceptance for filing thereof by, the Delaware Secretary of State, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have a Material Adverse Effect.

SECTION 5.05. Compliance.

LCIF is not in conflict with, or in default, breach or violation of, (a) any Law applicable to LCIF or by which any of its properties or assets is bound or affected, or (b) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which LCIF is a party or by which LCIF or assets is bound, except for any such conflicts, defaults, breaches or violations that would not have a Material Adverse Effect.

SECTION 5.06. Brokers.

No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of LCIF.

SECTION 5.07. Compliance with Laws.

LCIF has not violated or failed to comply with any statute, Law, ordinance, regulation, rule, judgment, decree or order of any Governmental Authority applicable to its business, properties or operations, except in each case to the extent that such violation or failure would not reasonably be expected to have a Material Adverse Effect.

SECTION 5.08. Information Supplied.

None of the information supplied or to be supplied by or on behalf of LCIF for inclusion or incorporation by reference in the Form S-4 will, at the time such document is filed with the SEC, at any time such document is amended or supplemented or at the time it is declared

13

effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. At the time described in the preceding sentence, the Form S-4 will (with respect to LCIF, its general partner and its subsidiaries) comply as to form in all material respects with the applicable requirements of any Securities Laws. No representation or warranty is made hereunder as to statements made or incorporated by reference in the Form S-4 that were not supplied by or on behalf of LCIF.

SECTION 5.09. No Other Representations or Warranties.

Except for the representations and warranties of LCIF contained in this Article V, the Company acknowledges that neither LCIF nor any other Person on behalf of LCIF has made, and the Company has not relied upon any representation or warranty, whether express or implied, with respect to LCIF or its business, affairs, assets, liabilities, financial condition, results of operations or prospects or with respect to the accuracy or completeness of any other information provided or made available to the Company by or on behalf of LCIF, and the Company hereby expressly disclaims any reliance on any of the foregoing. Neither LCIF nor any other Person will have or be subject to any liability or indemnification obligation to the Company or any other Person resulting from the distribution in written or verbal communications to the Company, or use by the Company of any such information, including any information, documents, projections, forecasts or other material made available to the Company, confidential information memoranda or management interviews and presentations in expectation of the transactions contemplated by this Agreement, and the Company hereby acknowledges that it has not relied upon any of the foregoing (except for the representations and warranties of LCIF contained in this Article V).

ARTICLE VI
ADDITIONAL AGREEMENTS

SECTION 6.01. Form S-4 and Other Filings.

As promptly as reasonably practicable following the date of this Agreement, the Company shall prepare and, once reasonably acceptable to the Company and LCIF, file with the SEC the Form S-4 in connection with the registration under the Securities Act of the Common Shares to be issued in connection with the LCIF Merger in accordance with Section 3.01(a) (together with any amendments or supplements thereto, the “Form S-4”). The Company shall cause the Form S-4 to comply as to form in all material respects with the applicable provisions of the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder. The Company shall promptly notify LCIF upon the receipt of any comments from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Form S-4 and shall promptly provide LCIF with copies of all correspondence between the Company and its representatives, on the one hand, and the SEC and its staff, on the other hand, relating to the Form S-4. If at any time prior to the completion of the LCIF Merger, any information relating to the Company or any of its affiliates, officers or directors, should be discovered by the Company or LCIF which should be set forth in an amendment or supplement to the Form S-4, so that the Form S-4 shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the party that discovers such

14

information shall promptly notify the other party, and an appropriate amendment or supplement describing such information shall be filed with the SEC and, to the extent required by applicable Law, disseminated to the holders of the Common Shares. Notwithstanding anything to the contrary stated above, prior to filing the Form S-4 (or any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, the Company shall provide LCIF a reasonable opportunity to review and comment on such document or response and will include in such documents or responses all comments reasonably proposed by LCIF, and to the extent practicable, the Company will provide LCIF with the opportunity to participate in any substantive calls between the Company, or any of its representatives, and the SEC concerning the S-4. The Company shall use its commercially reasonable efforts, and LCIF shall cooperate with the Company, to have the Form S-4 declared effective by the SEC as promptly as practicable and kept effective as long as is necessary to complete the LCIF Merger. The Company shall promptly notify LCIF, if applicable, of (i) the time when the Form S-4 has become effective, (ii) the filing of any supplement or amendment thereto, (iii) the issuance of any stop order, and (iv) the suspension of the qualification and registration of the Common Shares. The Company also shall use commercially reasonable efforts (including by provision of customary representations and certifications) to cause Hogan Lovells US LLP or other counsel reasonably satisfactory to LCIF to have delivered an opinion, which opinion shall be filed as an exhibit to the Form S-4, as to federal income tax matters as are required to be addressed in the Form S-4. Such opinion shall contain customary exceptions, assumptions and qualifications and be based upon customary representations.

SECTION 6.02. Reasonable Best Efforts.

Subject to the terms and conditions of this Agreement, the Company and LCIF shall use their respective reasonable best efforts to promptly take, or cause to be taken, all actions, and do, or cause to be done, all things, necessary, proper or advisable under applicable Law to consummate the LCIF Merger and the other transactions contemplated hereby, including (i) preparing and filing as promptly as practicable with any Governmental Authority all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents, (ii) obtaining and maintaining all consents, registrations, permits, and other confirmations required to be obtained from any Governmental Authority or third party that are necessary, proper or advisable to consummate the LCIF Merger and the transactions contemplated hereby, and (iii) cooperating to defend through litigation on the merits any action, including administrative or judicial action, asserted by any Person in order to avoid the entry of, or to have vacated, lifted, reversed, terminated or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent) that in whole or in part restricts, delays, prevents or prohibits consummation of the LCIF Merger or the transactions contemplated hereby, including, without limitation, by vigorously pursuing all available avenues of administrative and judicial appeal.

SECTION 6.03. Transfer Taxes.

LCIF and the Company shall cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added, stock transfer or stamp taxes, any transfer, recording, registration and other fees and any similar Taxes that become payable in connection with the

15

transactions contemplated by this Agreement (together with any related interests, penalties or additions to Tax, “Transfer Taxes”), and shall cooperate in attempting to minimize the amount of Transfer Taxes. From and after the Effective Time, the Surviving Entity shall pay or cause to be paid, without deduction or withholding from any consideration or amounts payable to the holders of LCIF Partnership Units as Merger Consideration, all Transfer Taxes.

SECTION 6.04. Agreed Tax Treatment.

The parties hereto intend that the exchange of LCIF Partnership Units for Common Shares contemplated by Section 3.01(a) of this Agreement shall be treated, in accordance with Situation 1 of Revenue Ruling 99-6, 1999-1 CB 432 (1999), as the purchase by the Company of an undivided interest in the assets of LCIF, and the sale of the LCIF Partnership Units held by all unitholders other than the Company.

ARTICLE VII
CONDITIONS

SECTION 7.01. Conditions to the Obligations of Each Party.

The obligations of each of the Company and LCIF to effect the LCIF Merger and consummate the other transactions contemplated by this Agreement are subject to the satisfaction, or, to the extent permitted by Law, waiver by each of the parties hereto, at or prior to the Closing, of the following conditions:

(a)                            No Order. No Governmental Authority in the United States shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) which is then in effect and has the effect of making the LCIF Merger illegal or otherwise restricting, preventing or prohibiting consummation of the LCIF Merger.

(b)                           Form S-4. The Form S-4 shall have become effective under the Securities Act and shall not be the subject of any stop order suspending its effectiveness issued by the SEC, and no proceedings seeking such stop order shall have been initiated or, to the knowledge of the Company, threatened by the SEC.

(c)                            Listing. The Common Shares to be issued in the LCIF Merger shall have been approved for listing on the NYSE, subject to official notice of issuance.

SECTION 7.02. Conditions to the Obligations of LCIF.

The obligations of LCIF to effect the LCIF Merger and consummate the other transactions contemplated by this Agreement are subject to the satisfaction or waiver (to the extent permitted by Law) by LCIF, at or prior to the Closing, of the following additional conditions:

(a)                            Representations and Warranties. (i) The representations and warranties of the Company contained in Section 4.01 and Section 4.05 shall be true and correct in all material respects as of the date hereof and as of the Closing as if made at and as of such time (except to the extent a representation or warranty is made as of a specified time, in which case

16

such representation or warranty shall be true and correct in all material respects at and as of such time), (ii) the representations and warranties of the Company contained in Section 4.02 shall be true and correct in all respects as of the date hereof and as of the Closing as if made at and as of such time (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty shall be true and correct in all respects at and as of such time), and (iii) each of the other representations and warranties of the Company contained in this Agreement shall be true and correct as of the date hereof and as of the Closing as if made at and as of such time (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty shall be true and correct at and as of such time), with only such exceptions, in the case of this clause (iii), as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; provided, however, that, with respect to the foregoing clauses (i) and (iii), any exceptions and qualifications with regard to materiality or Material Adverse Effect contained therein shall be disregarded for purposes of this Section 7.02(a).;

(b)                           Agreements and Covenants. The Company shall have performed, in all material respects, all obligations and complied with, in all material respects, all agreements and covenants to be performed and complied with by it under this Agreement at or prior to the Closing; and

(c)                            No Material Adverse Effect. There shall not have occurred any event, circumstance, change or effect that individually or in the aggregate has had or is reasonably likely to have a Material Adverse Effect with respect to the Company.

(d)                           Delivery of Certificate. The Company shall have delivered to LCIF a certificate, dated as of the Closing Date and signed on behalf of the Company certifying to the effect that the conditions set forth in Sections 7.02(a), 7.02(b) and 7.02(c) have been satisfied.

SECTION 7.03. Conditions to the Obligations of the Company.

The obligations of the Company to effect the LCIF Merger and consummate the other transactions contemplated by this Agreement are subject to the satisfaction or waiver (to the extent permitted by Law) by the Company, at or prior to the Closing, of the following additional conditions:

(a)                            Representations and Warranties. (i) The representations and warranties of LCIF contained in Section 5.01 and Section 5.06 shall be true and correct in all material respects as of the date hereof and as of the Closing as if made at and as of such time (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty shall be true and correct in all material respects at and as of such time), (ii) the representations and warranties of LCIF contained in Section 5.02 shall be true and correct in all respects as of the date hereof and as of the Closing as if made at and as of such time (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty shall be true and correct in all respects at and as of such time), (iii) the representations and warranties of LCIF contained in Section 5.03 shall be true and correct in all but de minimis respects as of the date hereof and as of the Closing as if made at and as of such time (except to the extent a representation or warranty is made as of a

17

specified time, in which case such representation or warranty shall be true and correct in all but de minimis respects at and as of such time), and (iv) each of the other representations and warranties of LCIF contained in this Agreement shall be true and correct as of the date hereof and as of the Closing as if made at and as of such time (except to the extent a representation or warranty is made as of a specified time, in which case such representation or warranty shall be true and correct at and as of such time), with only such exceptions, in the case of this clause (iv), as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; provided, however, that, with respect to the foregoing clauses (i) and (iv), any exceptions and qualifications with regard to materiality or Material Adverse Effect contained therein shall be disregarded for purposes of this Section 7.03(a).

(b)                           Agreements and Covenants. LCIF shall have performed, in all material respects, all obligations and complied with, in all material respects, all agreements and covenants to be performed and complied with by it under this Agreement at or prior to the Closing;

(c)                            No Material Adverse Effect. There shall not have occurred any event, circumstance, change or effect that individually or in the aggregate has had or is reasonably likely to have a Material Adverse Effect with respect to LCIF; and

(d)                           Delivery of Certificate. LCIF shall have delivered to the Company a certificate, dated as of the Closing Date and signed on behalf of LCIF certifying to the effect that the conditions set forth in Sections 7.03(a), 7.03(b) and 7.03(c) have been satisfied.

ARTICLE VIII
TERMINATION

SECTION 8.01. Termination.

This Agreement may be terminated in writing, and the LCIF Merger may be abandoned, at any time prior to the Effective Time (the date of any such termination, the “Termination Date”):

(a)                            by the mutual written consent of LCIF and the Company; or

(b)                           by either the Company or LCIF by written notice to the other party if any Governmental Authority with jurisdiction over such matters shall have issued a governmental order permanently restraining, enjoining or otherwise prohibiting the LCIF Merger, and such governmental order shall have become final and unappealable; provided, however, that the terms of this Section 8.01(b) shall not be available to any party unless such party shall have used its reasonable best efforts to oppose any such governmental order or to have such governmental order vacated or made inapplicable to the LCIF Merger.

SECTION 8.02. Effect of Termination.

In the event of termination of this Agreement and abandonment of the LCIF Merger and the other transactions contemplated by this Agreement pursuant to and in accordance with Section 8.01, this Agreement shall forthwith become void and of no further force or effect

18

whatsoever (except that this Section 8.02, Section 8.03, Article IX, and the definitions of all defined terms appearing in such sections, shall survive the termination hereof), and there shall be no liability on the part of any party hereto, or their respective officers, directors, trustees, subsidiaries or partners, as applicable, to this Agreement; provided, however, that nothing contained in this Agreement shall relieve any party to this Agreement from any liability or damages resulting from or arising out of any fraud in connection with this Agreement or any willful and material breach of any agreement or covenant hereunder prior to such termination of this Agreement. For purposes of the foregoing, “willful and material breach” shall mean an intentional and willful act, or an intentional and willful failure to act, in each case that is the consequence of an act or omission by a Person with the actual knowledge that the taking of such act or failure to take such act would or would reasonably be expected to cause a material breach of this Agreement. If this Agreement is terminated as provided herein, all filings, applications and other submissions made pursuant to this Agreement, to the extent practicable, shall be withdrawn from the Person to which they were made.

SECTION 8.03. Fees and Expenses.

All costs and expenses incurred in connection with this Agreement, the LCIF Merger and the other transactions contemplated hereby shall be paid by the party hereto incurring such expenses, whether or not the LCIF Merger and the other transactions contemplated by this Agreement are consummated.

ARTICLE IX
GENERAL PROVISIONS

SECTION 9.01. Non-Survival of Representations and Warranties.

The representations and warranties in this Agreement and in any instrument delivered pursuant to this Agreement, including any rights arising out of any breach of such representations and warranties, and the covenants to be performed prior to or at the Closing, shall terminate upon the earlier of (a) the Closing and (b) the termination of this Agreement. This Section 9.01 shall not limit any covenant or agreement of the parties hereto that by its terms contemplates performance in whole or in part after the Effective Time.

SECTION 9.02. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person or by a recognized overnight courier service to the respective parties at the following addresses (or at such other address or call us at the telephone number listed below:for a party as shall be specified in a notice given in accordance with this Section 9.02):

if to LCIF:

Lexington Realty TrustLepercq Corporate Income Fund L.P.

One Penn Plaza

Suite 4015

New York, New YorkNY 10119-4015

Attention: Investor Relations 

(212) 692-7200

LXP maintains a web site atwww.lxp.com, which contains information about LXP and its subsidiaries.We have not incorporated by reference into this prospectus the information included or referred to in, or that can be accessed through, our web site, and you should not consider it to be a part of this prospectus.Attn: General Partner

-59-19

if to the Company:

LXP Industrial Trust

One Penn Plaza

Suite 4015
New York, NY 10119-4015
Attn: General Counsel

SECTION 9.03. Severability.

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

SECTION 9.04. Amendment.

This Agreement may not be amended except by an instrument in writing signed by each of the parties hereto prior to the Effective Time, subject to compliance with applicable Law and the LCIF Partnership Agreement.

SECTION 9.05. Entire Agreement; Assignment.

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and thereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof and thereof. This Agreement shall not be assigned by operation of law or otherwise (except to the Surviving Entity).

SECTION 9.06. Parties in Interest.

This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and, subject to Section 9.05, their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement other than the parties hereto and, subject to Section 9.05, their respective successors and permitted assigns, except following the Effective Time, the rights of holders of LCIF Partnership Units to receive the Merger Consideration.

SECTION 9.07. Extension; Waiver.

At any time prior to the Effective Time, the parties hereto may (a) extend the time for the performance of any of the obligations or other acts of the other party hereto, (b) waive any

INDEX TO FINANCIAL STATEMENTS

LEPERCQ CORPORATE INCOME FUND L.P. CONSOLIDATED INTERIM FINANCIAL STATEMENTS
20
Consolidated Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012F-2
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012 (unaudited)F-3
Consolidated Statements of Changes in Partners' Capital for the Nine Months Ended September 30, 2013 and 2012 (unaudited)F-4
Consolidated Statements of Cash Flows for Nine Months Ended September 30, 2013 and 2012 (unaudited)F-5
Notes to Consolidated Financial StatementsF-6

LEPERCQ CORPORATE INCOME FUND II L.P. CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Consolidated Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012F-31
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and 2012 (unaudited)F-32
Consolidated Statements of Changes in Partners' Capital for the Nine Months Ended September 30, 2013 and 2012 (unaudited)F-33
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012 (unaudited)F-34
Notes to Consolidated Financial StatementsF-35

LEPERCQ CORPORATE INCOME FUND II L.P. CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting FirmF-42
Consolidated Balance Sheets as of December 31, 2012, 2011 and 2010F-43
Consolidated Statements of Operations for the Years Ended December 31, 2012, 2011 and 2010F-44
Consolidated Statements of Changes in Partners' Capital for the Years Ended December 31, 2012, 2011 and 2010F-45
Consolidated Statements of Cash Flows for the Years Ended December 31, 2012, 2011 and 2010F-46
Notes to Consolidated Financial StatementsF-47
Schedule III-Real Estate and Accumulated Depreciation and AmortizationF-59

inaccuracies in the representations and warranties of the other party hereto contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to the requirements of applicable Law, waive compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party (provided that any waiver must be signed by the party or parties hereto to whose benefit the relevant provision inures). The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.

LEPERCQ CORPORATE INCOME FUND L.P. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

IntroductionF-60
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2013F-61
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2013F-62
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2012F-63

Notes to Unaudited Pro Forma Condensed Consolidated Financial Information

F-64

F-1

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

  September 30,
2013 (unaudited)
  December 31,
2012
 
Assets:        
Real estate, at cost $518,061  $582,844 
Real estate - intangible assets  60,979   61,231 
Investment in real estate under construction  3,972    
   583,012   644,075 
Less: accumulated depreciation and amortization  180,826   195,122 
   402,186   448,953 
Cash and cash equivalents  8,763   5,781 
Restricted cash  7,536   3,171 
Investment in and advances to non-consolidated entity  5,213   3,596 
Deferred expenses, net  4,946   5,239 
Loans receivable, net  33,439   34,266 
Rent receivable – current  516   482 
Rent receivable – deferred  8,478   8,714 
Other assets  1,292   1,263 
Total assets $472,369  $511,465 
         
Liabilities and Partners' Capital:        
Liabilities:        
Mortgages and notes payable $94,644  $155,675 
Co-borrower debt  53,453   39,385 
Related party advances, net  304   157,825 
Accounts payable and other liabilities  5,674   7,903 
Accrued interest payable  805   803 
Deferred revenue - including below market leases, net  688   920 
Distributions payable  9,726   7,495 
Prepaid rent  3,551   2,564 
Total liabilities  168,845   372,570 
         
Commitments and contingencies        
Partners' capital  303,524   138,895 
Total liabilities and partners' capital $472,369  $511,465 

SECTION 9.08. Specific Performance.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except unit and per unit data)

  Three months ended September 30,  Nine months ended September  30, 
  2013  2012  2013  2012 
Gross revenues:                
Rental $12,041  $11,640  $36,789  $34,867 
Tenant reimbursements  1,504   1,507   4,073   4,041 
Total gross revenues  13,545   13,147   40,862   38,908 
Expense applicable to revenues:                
Depreciation and amortization  (5,219)  (4,842)  (15,565)  (14,599)
Property operating  (2,885)  (2,917)  (8,277)  (8,287)
General and administrative  (849)  (870)  (2,789)  (2,795)
Non-operating income  679   644   1,816   2,178 
Interest and amortization expense  (1,399)  (2,952)  (6,299)  (8,965)
Debt satisfaction gains (charges), net  (2)  23   (1,560)  14 
Litigation reserve     968      (912)
Income before provision for income taxes, equity in earnings (losses) of non-consolidated entity and discontinued operations  3,870   3,201   8,188   5,542 
Provision for income taxes  (1)  (37)  (45)  (53)
Equity in earnings (losses) of non-consolidated entity  4   (9)  (67)  (9)
Income from continuing operations  3,873   3,155   8,076   5,480 
Discontinued operations:                
Income (loss) from discontinued operations  (37)  112   804   119 
Debt satisfaction gains, net        4,398    
Gains on sales of properties        7,218    
Impairment charges  (802)     (6,781)   
Total discontinued operations  (839)  112   5,639   119 
Net income $3,034  $3,267  $13,715  $5,599 
Income (loss) per unit:                
Income from continuing operations $0.09  $0.10  $0.22  $0.18 
Income (loss) from discontinued operations  (0.02)  0.01   0.16   0.01 
Net income $0.07  $0.11  $0.38  $0.19 
Weighted-average units outstanding  42,429,803   30,217,909   35,706,244   30,116,306 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-3

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

(Unaudited and in thousands)

Nine Months ended September 30, 2013   
  Units  Partners' Capital 
Balance December 31, 2012  32,344,464  $138,895 
Issuance of units  15,128,008   189,705 
Changes in co-borrower debt     (14,068)
Distributions     (24,723)
Net income     13,715 
Balance September 30, 2013  47,472,472  $303,524 

Nine Months ended September 30, 2012   
  Units  Partners' Capital 
Balance December 31, 2011  30,065,505  $166,188 
Issuance of units  457,211   4,289 
Changes in co-borrower debt     (39,414)
Distributions     (20,060)
Net income     5,599 
Balance September 30, 2012  30,522,716  $116,602 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-4

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

  Nine months ended September 30, 
  2013  2012 
Net cash provided by operating activities: $23,739  $22,209 
Cash flows from investing activities:        
Investment in real estate under construction  (3,972)   
Capital expenditures  (1,130)  (3,062)
Net proceeds from sale of properties  30,023    
Principal payments received on loans receivable  967   922 
Investments in and advances to non-consolidated entity     (189)
Distributions from non-consolidated entity in excess of accumulated earning  265   86 
Increase in deferred leasing costs  (755)  (119)
Change in escrow deposits and restricted cash  (5,255)  (139)
Net cash provided by (used in) investing activities  20,143   (2,501)
Cash flows from financing activities:        
Distributions to unitholders  (1,168)  (1,060)
Principal amortization payments  (4,246)  (5,037)
Principal payments on debt, excluding normal amortization  (44,396)  (31,586)
Related party advances (payments), net  8,910   15,797 
Net cash used in financing activities  (40,900)  (21,886)
Change in cash and cash equivalents  2,982   (2,178)
Cash and cash equivalents, at beginning of period  5,781   6,906 
Cash and cash equivalents, at end of period $8,763  $4,728 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-5

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data)

(1)The Partnership and Financial Statement Presentation

Lepercq Corporate Income Fund L.P. (the “Partnership”) was organized in 1986 as a limited partnership under the Delaware Revised Uniform Limited Partnership Act. The Partnership's sole general partner, Lex GP-1 Trust (the “General Partner”), is a wholly owned subsidiary of Lexington Realty Trust (“Lexington”). The Partnership serves as an operating partnership subsidiary for Lexington. As of September 30, 2013, Lexington, through Lex LP-1 Trust, a wholly-owned subsidiary, and the General Partner, owned approximately 94.8% of the outstanding units of the Partnership.

The Partnership invests in and acquires, owns and finances a geographically diversified portfolio of predominately single-tenant office, industrial and retail properties. As of September 30, 2013, the Partnership had equity ownership interests in approximately 30 consolidated properties in 22 states. A majority of the real properties in which the Partnership has an equity ownership interest are generally subject to net or similar leases where the tenant bears all or substantially all of the cost, including cost increases, for real estate taxes, insurance, utilities and ordinary maintenance of the property. However, certain leases provideparties hereto agree that the landlord is responsible for certain or all operating expenses. In addition, the Partnership acquires, originates and holds investments in loan assets related to single-tenant real estate.

Basis of Presentation and Consolidation. The Partnership's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). The financial statements reflect the accounts of the Partnership and its consolidated subsidiaries. The Partnership consolidates its wholly-owned subsidiaries and its partnerships and joint ventures which it controls (1) through voting rights or similar rights or (2) by means other than voting rights if the Partnership is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Partnership does not control and entities which are VIEs in which the Partnership is not the primary beneficiary are accounted for under appropriate GAAP.

The financial statements contained herein have been prepared by the Partnership in accordance with GAAP for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However,irreparable damage would occur in the opinionevent any provision of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. The results of operations for the three and nine months ended September 30, 2013 and 2012, arethis Agreement were not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Partnership's audited consolidated financial statements and notes thereto included in this prospectus.

Use of Estimates. The Partnership has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. The Partnership evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. The Partnership adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets, loans receivable and the useful lives of long-lived assets. Actual results could differ materially from those estimates.

F-6

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data)

Fair Value Measurements.The Partnership follows the guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, as amended (“Topic 820”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Partnership utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk.

Acquisition, Development and Construction Arrangements.The Partnership evaluates loans receivable where the Partnership participates in residual profits through loan provisions or other contracts to ascertain whether the Partnership has the same risks and rewards as an owner or a joint venture partner. Where the Partnership concludes that such arrangements are more appropriately treated as an investment in real estate, the Partnership reflects such loan receivable as an equity investment in real estate under construction in the Condensed Consolidated Balance Sheets. In these cases, no interest income is recorded on the loan receivable and the Partnership records capitalized interest during the construction period. In arrangements where the Partnership engages a developer to construct a property or provide funds to a tenant to develop a property, the Partnership will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period.

Unit Redemptions. The Partnership's limited partner units that are issued and outstanding, other than those held by Lexington, are currently redeemable at certain times, only at the option of the holders, for Lexington shares of beneficial interests, par value $0.0001 per share classified as common stock (“common shares”) on a one to approximately 1.13 basis, subject to future adjustments. These units are not otherwise mandatory redeemable by the Partnership. As of September 30, 2013, Lexington's common shares had a closing price of $11.23 per share. Assuming all outstanding limited partner units not held by Lexington were redeemed on such date, the estimated fair value of the units was $30,942.

Earnings Per Unit. Net income (loss) per unit is computed by dividing net income (loss) by the weighted-average number of units outstanding during the period.

Allocation of Overhead Expenses. The Partnership does not pay a fee to the General Partner for the day-to-day management of the Partnership. Certain expenses incurred by the General Partner and its affiliates, including Lexington, such as corporate-level interest, amortization of deferred loan costs, payroll and general and administrative expenses are allocated to the Partnership and reimbursed to the General Partnerperformed in accordance with the Partnership agreement. The allocation is based upon gross rental revenues.

Distributions; Allocations of Incometerms hereof and Loss. As provided inthat the Partnership's partnership agreement, distributions and income and loss for financial reporting purposes are allocated to the partners based on their ownership of units. Special allocation rules included in the partnership agreement affect the allocation of taxable income and loss. The Partnership paid or accrued gross distributions of $24,723 ($0.69 per weighted-average unit) and $20,060 ($0.67 per weighted-average unit) to its partners during the nine months ended September 30, 2013 and 2012, respectively. Certain units owned indirectly by Lexington areparties shall be entitled to distributions of $2.0125 to $3.25 per unit.

Recently Issued Accounting Guidance.In February 2013, the FASB issued Accounting Standards Update 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amountspecific performance of the Obligation is Fixedterms hereof, in addition to any other remedy at the Reporting Date, (“ASU 2013-04”), requiring recognition of such obligations as the sum of (a) the amount the reporting entity agreedlaw or equity.

SECTION 9.09. Governing Law; Consent to pay on the basis of its arrangement among its co-obligorsJurisdiction.

This Agreement and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The Partnership early adopted this new guidance retrospectively (see note 6).

(2)Discontinued Operations and Real Estate Impairment

During the nine months ended September 30, 2013, the Partnership disposed of its interests in certain properties to unrelated third parties for an aggregate gross disposition price of $30,945. In addition, the Partnership conveyed one property along with the respective escrow deposits in satisfaction of a $12,317 non-recourse secured mortgage loan and recognized a net gain on debt satisfaction of $4,398. These dispositions resulted in an aggregate gain on sales of properties of $7,218. As of September 30, 2013all transactions or actions related hereto shall be governed by, and 2012, the Partnership had no properties classified as held for sale.

F-7

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data)

The following presents the operating results for the properties sold for the applicable periods: 

  Three months ended
September 30,
  Nine months ended
September 30,
 
  2013  2012  2013  2012 
Total gross revenues $62  $1,007  $950  $2,795 
Pre-tax income (loss), including gains on sales $(839) $112  $5,639  $119 

The Partnership assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant reduction in utilization of a property, tenant financial instability and the potential sale of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value. During the nine months ended September 30, 2013, the Partnership recognized $6,781 of impairment charges in discontinued operations, relating to real estate assets that were disposed of below their carrying value.

(3)Loans Receivable

As of September 30, 2013 and December 31, 2012, the Partnership's loans receivable were comprised of first and second mortgage loans on real estate.

The following is a summary of the Partnership's loans receivable as of September 30, 2013 and December 31, 2012:

  Loan carrying-value(1)      
Loan 9/30/2013  12/31/2012  Interest Rate  Maturity Date
Westmont, IL $26,636  $26,902   6.45% 10/2015
Southfield, MI  6,803   7,364   4.55% 02/2015
  $33,439  $34,266       

(1)Loan carrying value includes accrued interest and is net of origination costs, if any.

The Partnership has one type of financing receivable: loans receivable. The Partnership determined that its financing receivables operate within one portfolio segment as they are within the same industry and use the same impairment methodology. The Partnership's loans receivable are secured by commercial real estate assets. In addition, the Partnership assesses all financing receivables for impairment, when warranted, based on an individual analysis of each receivable.

The Partnership's financing receivables operate within one class of financing receivables as these assets are collateralized by commercial real estate and similar metrics are used to monitor the risk and performance of these assets. The Partnership uses credit quality indicators to monitor financing receivables such as quality of collateral, the underlying tenant's credit rating and collection experience. As of September 30, 2013, the financing receivables were performing as anticipated and there were no significant delinquent amounts outstanding.

(4)Fair Value Measurements

The table below sets forth the carrying amounts and estimated fair values of the Partnership's financial instruments as of September 30, 2013 and December 31, 2012.

  As of September 30, 2013  As of December 31, 2012 
  Carrying
Amount
  Fair Value  Carrying
Amount
  Fair Value 
Assets                
Loans Receivable $33,439  $24,141  $34,266  $24,717 
                 
Liabilities                
Debt $148,097  $149,032  $195,060  $183,735 

F-8

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data)

The Partnership estimates the fair value of its real estate assets by using income and market valuation techniques. The Partnership may estimate fair values using market information such as broker opinions of value, recent sales data for similar assets or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Partnership has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations. To the extent the Partnership under estimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or over estimates forecasted cash inflows (rental revenue rates), the estimated fair value of its real estate assets could be overstated.

The Partnership estimates the fair values of its loans receivable by using an estimated discounted cash flow analysis using Level 3 inputs consisting of scheduled cash flows and discount rate estimates to approximate those that a willing buyer and seller might use and/or the estimated value of the underlying collateral. The fair value of the Partnership's debt is estimated by using a discounted cash flow analysis using Level 3 inputs, based upon estimates of market interest rates. 

Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.

Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Partnership estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

(5)Investment in and Advances to Non-Consolidated Entity

In September 2012, the Partnership acquired a 2% equity interest in Net Lease Strategic Assets Fund L.P. (“NLS”) for cash of $189 and the issuance of 457,211 limited partner units to Lexington.   At the date of acquisition, NLS owned 41 properties totaling 5.8 million square feet in 23 states, plus a 40% tenant-in-common interest in an office property. 

The Partnership's carrying value in NLS at September 30, 2013 and December 31, 2012 was $5,213 and $3,596, respectively.  The Partnership recognized net losses from NLS of $67 and $9  in equity in earnings (losses) from non-consolidated entity during the nine months ended September 30, 2013 and 2012, respectively.  In addition, the Partnership received aggregate distributions from NLS of $265 and $86  during the nine months ended September 30, 2013 and 2012, respectively. The Partnership's share of contributions to NLS during the nine months ended September 30, 2013 was $1,949.

(6)Debt

The Partnership had outstanding non-recourse secured mortgages and notes payable of $94,644 and $155,675 as of September 30, 2013 and December 31, 2012, respectively. Interest rates, including imputed rates on mortgages and notes payable, ranged from 5.1% to 6.5% at September 30, 2013 and 5.0% to 6.5% at December 31, 2012 and the mortgages and notes payables mature between 2013 and 2020 as of September 30, 2013. The weighted-average interest rate at September 30, 2013 and December 31, 2012 was 5.8% and 5.7%, respectively.

During the nine months ended September 30, 2013 and 2012, in connection with the satisfaction of mortgage notes other than those disclosed elsewhere in these financial statements, the Partnership incurred debt satisfaction gains (charges), net of $(1,560) and $14, respectively.

F-9

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data)

On February 12, 2013, the Partnership, as co-borrower with Lexington, refinanced the January 2012 $300,000 revolving credit facility with a $300,000 unsecured revolving credit facility with KeyBank National Association (“KeyBank”), as agent. The unsecured revolving credit facility matures in February 2017 but can be extended until February 2018 at the Lexington’s option. In addition, the availability under the unsecured revolving credit facility was increased from $300,000 to $400,000. At September 30, 2013, Lexington had $67,000 outstanding under the unsecured revolving credit facility, outstanding letters of credit of $7,644 and availability of $325,356, subject to covenant compliance.

In connection with the refinancing discussed above, the Partnership, as co-borrower with Lexington, procured a five-year $250,000 unsecured term loan facility from KeyBank, as agent. The unsecured term loan matures in February 2018 and requires regular payments of interest only. As of September 30, 2013, Lexington had $64,000 outstanding on the unsecured term loan.

The Partnership is a co-borrower on a $255,000 term loan issued to Lexington in January 2012 from Wells Fargo Bank, National Association (“Wells Fargo”), as agent. The term loan matures in January 2019. The term loan required regular payments of interest only. The term loan was initially secured by ownership interest pledges by certain subsidiaries that collectively owned a borrowing base of properties. In February 2013, the term loan was amended to release the collateral as security. As of September 30, 2013, Lexington had $255,000 outstanding under the term loan.

The unsecured revolving credit facility and the unsecured term loans are subject to financial covenants, which Lexington was in compliance with at June 30, 2013.

In accordance with the guidance of ASU 2013-04, the Partnership recognizes a proportion of the outstanding amounts of the above mentioned term loans and revolving credit facility as it is a co-borrower with Lexington, as co-borrower debt in the accompanying balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion of these debts based on gross rental revenues, which represents its agreed to obligation. Changes in co-borrower debt are recognized in partners’ capital in the accompanying condensed consolidated statements of changes in partners’ capital. The Partnership is also allocated interest expense by Lexington,construed in accordance with, the Partnership agreement relating to these lending facilities of $1,200 and $1,183 for the nine months ended September 30, 2013 and 2012, respectively.

(7)Concentration of Risk

The Partnership seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2013 and 2012, the following tenants represented greater than 10% of rental revenues:

  Nine months ended September 30, 
  2013  2012 
Swiss RE America Holdings Corporation  10.0%  10.3%
Wells Fargo Bank, N.A.  10.4%  12.9%

Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Partnership believes it mitigates this risk by investing in or through major financial institutions.

(8)Related Party Transactions

The Partnership had the following related party transactions in addition to related party transactions discussed elsewhere in this report.

The Partnership had outstanding net advances owed to Lexington of $304 and $157,825 as of September 30, 2013 and December 31, 2012, respectively. The advances are payable on demand and the Partnership was allocated a portion of interest charged on Lexington's revolving credit facility and term loans. Lexington earned distributions of $23,569 and $18,952 for the nine months ended September 30, 2013 and 2012, respectively. During August 2013 and October 2012, the Partnership issued 15,128,008 and 1,821,748 units, respectively, to Lexington to satisfy outstanding distributions and advances.

Lexington, on behalf of the General Partner, pays for certain general, administrative and other costs on behalf of the Partnership from time to time. These costs are reimbursable by the Partnership. These costs were approximately $2,741 and $2,648 for the nine months ended September 30, 2013 and 2012, respectively.

A Lexington affiliate provides property management services for certain Partnership properties. The Partnership recognized property operating expenses of $829 and $839 during the nine months ended September 30, 2013 and 2012, respectively, for aggregate fees and reimbursements charged by the affiliate.

F-10

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data) 

(9)Commitments and Contingencies

In addition to the commitments and contingencies disclosed elsewhere and previously disclosed, the Partnership has the following commitments and contingencies.

From time to time, the Partnership is directly and indirectly involved in legal proceedings arising in the ordinary course of business. The Partnership believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Partnership's business, financial condition and results of operations.

On December 31, 2006, the Partnership, Lexington and, Lexington's other operating partnership, Lepercq Corporate Income Fund II L.P. (“LCIF II”), entered into a funding agreement. All references to "Operating Partnerships" in this paragraph refer to the Partnership and LCIF II. Pursuant to the funding agreement, the parties agreed, jointly and severally, that, if any of the Operating Partnerships does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount equal to whichever is applicable of (1) a specified distribution set forth in its partnership agreement or (2) the cash dividend payable with respect to a whole or fractional Lexington common share into which such partnership's common units would be converted if they were redeemed for Lexington common shares in accordance with its partnership agreement, Lexington and the other Operating Partnerships, each a “funding partnership,” will fund their pro rata share of the shortfall. The pro rata share of each funding partnership and Lexington, respectively, will be determined based on the number of units in each funding partnership and, for Lexington, by the amount by which its total outstanding common shares exceeds the number of units in each funding partnership not owned by Lexington, with appropriate adjustments being made if units are not redeemable on a one-for-one basis. Payments under the agreement will be made in the form of loans to the partnership experiencing a shortfall and will bear interest at prevailing rates as determined by Lexington in its discretion but no less than the applicable federal rate. The Partnership's right to receive these loans will expire if Lexington contributes to the Partnership all of its economic interests in the other Operating Partnerships and all of its other subsidiaries that are partnerships, joint ventures or limited liability companies. However, thereafter the Partnership will remain obligated to continue to make these loans until there are no remaining units outstanding in the other Operating Partnerships and all loans have been repaid. No amounts have been advanced under this agreement.

In June 2013, the Partnership guaranteed $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 (“Senior Notes”) issued by Lexington at an issuance price of 99.026% of the principal amount. The Senior Notes are unsecured, pay interest semi-annually in arrears and mature in June 2023. Lexington may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium.

During 2010, the Partnership guaranteed $115,000 aggregate principal amount of 6.00% Convertible Guaranteed Notes due 2030 issued by Lexington. The notes pay interest semi-annually in arrears and mature in January 2030. The holders of the notes may require Lexington to repurchase their notes in January 2017, January 2020 and January 2025 for cash equal to 100% of the notes to be repurchased, plus any accrued and unpaid interest. The notes are convertible by the holders under certain circumstances for cash, Lexington common shares or a combination of cash and common shares at Lexington's election. As of September 30, 2013, $28,991 original principal amount of 6.00% Convertible Guaranteed Notes due 2030 were outstanding.

(10)Supplemental Disclosure of Statement of Cash Flow Information

In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2013 and 2012, the Partnership paid or received, net, $6,023 and $9,364, respectively, for interest and $34 and $(68), respectively, for income taxes.

F-11

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data) 

(11)Unaudited Quarterly Financial Data

  3/31/2013  6/30/2013  9/30/2013 
Total gross revenues(1) $13,713  $13,604  $13,545 
Net income $1,923  $8,758  $3,034 
Net income per unit $0.06  $0.27  $0.07 

(1)All periods have been adjusted to reflect the impact of properties in discontinued operations in the Condensed Consolidated Statements of Operations.

The sum of the quarterly per unit amounts may not equal the full nine month amounts primarily because the computations of the weighted-average number of units of the Partnership outstanding for each quarter and the nine months are made independently.

(12)Subsequent Events

Subsequent to September 30, 2013 and in addition to disclosures elsewhere in the financial statements, the Partnership:

acquired a portfolio of three parcels of land in New York, New York consisting of an aggregate of 0.6 acres, which are net leased to tenants under non-cancellable 99-year leases. The aggregate purchase price was $302,000. The improvements on these parcels are owned by the tenants under the Partnership leases and currently consist of three high-rise hotels built in 2010, which contain an aggregate of approximately 480,000 square feet, 103 floors and 1,179 guest rooms. The hotels are known as the DoubleTree by Hilton Hotel New York City - Financial District, the Sheraton Tribeca New York Hotel and the Element New York Times Square West. The aggregate initial annual rent under the leases is $14,883, which represents approximately 4.93% of the aggregate purchase price. The rent under each lease increases by a minimum of 2.0% each year with further annual increases, not to exceed 3.0% per annum in the aggregate, at specified intervals based on the increase in the Consumer Price Index, or CPI. The total aggregate minimum rent (excluding any additional CPI increases) under the leases over the 99-year lease terms is approximately $4,541,141. Each tenant has a purchase option that can be exercised at the end of the 25th, 50th and 75th lease year at a price that is equal to the greater of (1) the original purchase price plus a 7.5% return (inclusive of rent payments) for the holding period (compounded monthly) and (2) a specified floor price, which in each case is in excess of the allocated purchase price, and is $305,000 in aggregate. The Partnership financed the acquisition via a $100,000 loan from Lexington, $187,000 borrowings under the unsecured revolving credit facility and cash on hand;

entered into a nonbinding term sheet with a life insurance company and locked rate for a $213,500 non-recourse secured financing, which is expected to bear interest at a fixed-rate of 4.66% and mature in 13 years. This financing is subject to documentation and certain conditions, including lender due diligence and approval and the Partnership gives no assurance that it will be consummated or expectations of the final terms;

received $95,014 from Lexington in exchange for 8,653,374 units;

redeemed 2,105,838 units held by Lexington at the original net issuance price of $50,988 in the aggregate; and

repaid $26,000 under the unsecured revolving credit facility.

F-12

Report of Independent Registered Public Accounting Firm

The Partners

Lepercq Corporate Income Fund L.P.:

We have audited the accompanying consolidated balance sheets of Lepercq Corporate Income Fund L.P. and subsidiaries (the “Partnership”) as of December 31, 2012 and 2011, and the related consolidated statements of operations, changes in partners’ capital, and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we have also audited the accompanying financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lepercq Corporate Income Fund L.P. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

(signed) KPMG LLP

New York, New York
November 12, 2013

F-13

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($000, except unit data)

As of December 31,

  2012  2011 
Assets:        
Real estate, at cost $582,844  $537,400 
Real estate - intangible assets  61,231   49,715 
   644,075   587,115 
Less: accumulated depreciation and amortization  195,122   174,536 
Real estate, net  448,953   412,579 
Cash and cash equivalents  5,781   6,906 
Restricted cash  3,171   3,435 
Investment in and advances to non-consolidated entity  3,596    
Deferred expenses (net of accumulated amortization of $3,038 in 2012 and $3,071 in 2011)  5,239   5,388 
Loans receivable, net  34,266   38,234 
Rent receivable - current  482   706 
Rent receivable - deferred  8,714   9,001 
Other assets  1,263   2,262 
Total assets $511,465  $478,511 
         
Liabilities and Partners' Capital:        
Liabilities:        
Mortgages and notes payable $155,675  $202,884 
Co-borrower debt  39,385   10,013 
Related party advances, net  157,825   74,571 
Accounts payable and other liabilities  7,903   13,522 
Accrued interest payable  803   847 
Deferred revenue - including below market leases (net of accretion of $2,413 in 2012 and $2,121 in 2011)  920   1,238 
Distributions payable  7,495   6,418 
Prepaid rent  2,564   2,830 
Total liabilities  372,570   312,323 
         
Commitments and contingencies        
Partners' capital  138,895   166,188 
Total liabilities and partners' capital $511,465  $478,511 

The accompanying notes are an integral part of these consolidated financial statements.

F-14

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

($000, except unit and per unit data)

Years ended December 31,

  2012  2011  2010 
Gross revenues:            
Rental $46,102  $46,120  $48,364 
Tenant reimbursements  5,269   5,332   5,714 
Total gross revenues  51,371   51,452   54,078 
Expense applicable to revenues:            
Depreciation and amortization  (19,361)  (20,540)  (20,358)
Property operating  (10,981)  (10,302)  (11,001)
General and administrative  (3,689)  (3,793)  (3,810)
Non-operating income  2,793   2,791   2,782 
Interest and amortization expense  (11,598)  (13,143)  (15,499)
Debt satisfaction gains (charges), net  13   (8)  (7)
Litigation reserve  (912)      
Income before provision for income taxes, equity in losses of non-consolidated entity and discontinued operations  7,636   6,457   6,185 
Provision for income taxes  (68)  (125)  (9)
Equity in losses of non-consolidated entity  (33)      
Income from continuing operations  7,535   6,332   6,176 
Discontinued operations:            
Income from discontinued operations  212   223   170 
Debt satisfaction charges, net     (79)  (459)
Gains on sales of properties     1,181   11,906 
Impairment charges     (4,116)  (753)
Total discontinued operations  212   (2,791)  10,864 
Net income $7,747  $3,541  $17,040 
Income (loss) per unit:            
Income from continuing operations $0.24  $0.21  $0.21 
Income (loss) from discontinued operations  0.01   (0.09)  0.36 
Net income $0.25  $0.12  $0.57 
Weighted-average units outstanding  30,673,346   30,065,505   30,065,505 

The accompanying notes are an integral part of these consolidated financial statements.

F-15

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

($000 except unit amounts)

Year ended December 31,

  Units  Partners' Capital 
Balance December 31, 2009  30,065,505  $161,326 
Changes in co-borrower debt     31,083 
Distributions     (23,064)
Net Income     17,040 
Balance December 31, 2010  30,065,505   186,385 
Changes in co-borrower debt     674 
Distributions     (24,412)
Net Income     3,541 
Balance December 31, 2011  30,065,505   166,188 
Changes in co-borrower debt     (29,372)
Issuance of units  2,278,959   21,887 
Distributions     (27,555)
Net Income     7,747 
Balance December 31, 2012  32,344,464  $138,895 

The accompanying notes are an integral part of the consolidated financial statements.

F-16

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($000)

Years ended December 31,

  2012  2011  2010 
Cash flows from operating activities:            
Net income $7,747  $3,541  $17,040 
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation and amortization  21,070   22,478   24,772 
Gains on sales of properties     (1,181)  (11,906)
Debt satisfaction (gains) charges, net  (14)  80   464 
Impairment charges     4,116   753 
Straight-line rents  277   (380)  (306)
Other non-cash income, net  207   933   373 
Equity in losses of non-consolidated entity  33       
Increase in accounts payable and other liabilities  318   220   2,265 
Change in rent receivable and prepaid rent, net  (42)  (19)  7 
Decrease in accrued interest payable  (44)  (156)  (293)
Other adjustments, net  875   351   (2,292)
Net cash provided by operating activities:  30,427   29,983   30,877 
Cash flows from investing activities:            
Investment in real estate, including intangible assets  (59,225)      
Capital expenditures  (3,715)  (9,650)  (1,843)
Net proceeds from sale of properties     27,140  ��225 
Principal payments received on loans receivable  4,151   1,256   1,096 
Investments in and advances to non-consolidated entity  (189)      
Distributions from non-consolidated entity in excess of accumulated earnings  725       
Increase in deferred leasing costs  (744)  (3,409)  (698)
Change in escrow deposits and restricted cash  265   1,257   567 
Net cash provided by (used in) investing activities  (58,732)  16,594   (653)
Cash flows from financing activities:            
Distributions to partners  (1,463)  (1,396)  (1,368)
Principal amortization payments  (5,666)  (6,154)  (6,702)
Principal payments on debt, excluding normal amortization  (41,529)  (34,321)  (21,526)
Proceeds of mortgages and notes payable        37,000 
Increase in deferred financing costs        (473)
Related party advances (payments), net  75,838   (4,086)  (38,619)
Net cash provided by (used) in financing activities  27,180   (45,957)  (31,688)
Change in cash and cash equivalents  (1,125)  620   (1,464)
Cash and cash equivalents, at beginning of year  6,906   6,286   7,750 
Cash and cash equivalents, at end of year $5,781  $6,906  $6,286 

The accompanying notes are an integral part of these consolidated financial statements.

F-17

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(1)The Partnership

Lepercq Corporate Income Fund L.P. (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Partnership”) was organized in 1986 as a limited partnership under the Delaware Revised Uniform Limited Partnership Act. The Partnership's sole general partner, Lex GP-1 Trust (the “General Partner”), is a wholly-owned subsidiary of Lexington Realty Trust (“Lexington”). The Partnership serves as an operating partnership subsidiary for Lexington. As of December 31, 2012 and 2011, Lexington, through Lex LP-1 Trust, a wholly-owned subsidiary, and the General Partner, owned 92.1% and 90.8%, respectively, of the outstanding units of the Partnership.

The Partnership invests in and acquires, owns, finances and manages a geographically diversified portfolio of predominately single-tenant office, industrial and retail properties. As of December 31, 2012 and 2011, the Partnership had equity ownership interests in approximately 30 consolidated properties located in 22 states. A majority of the real properties in which the Partnership had an interest are generally subject to net leases or similar leases where the tenant pays all or substantially all of the cost, including cost increases, for real estate taxes, insurance, utilities and ordinary maintenance of the property. However, certain leases provide that the landlord is responsible for certain operating expenses. In addition, the Partnership acquires, originates and holds investments in loan assets related to single-tenant real estate.

(2)Summary of Significant Accounting Policies

Basis of Presentation and Consolidation. The Partnership's consolidated financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). The financial statements reflect the accounts of the Partnership and its consolidated subsidiaries. The Partnership consolidates its wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Partnership is the primary beneficiary of a variable interest entity (“VIE”). Entities which the Partnership does not control and entities which are VIEs in which the Partnership is not the primary beneficiary are accounted for under appropriate GAAP.

If an investment is determined to be a VIE, the Partnership performs an analysis to determine if the Partnership is the primary beneficiary of the VIE. GAAP requires a VIE to be consolidated by its primary beneficiary. The primary beneficiary is the party that has a controlling financial interest in an entity. In order for a party to have a controlling financial interest in an entity, it must have (1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (2) the obligation to absorb losses or the right to receive benefits of an entity that could potentially be significant to the VIE.

Earnings Per Unit. Net income (loss) per unit is computed by dividing net income (loss) by the weighted-average number of units outstanding during the period.

Unit Redemptions. The Partnership's limited partner units that are issued and outstanding, other than those held by Lexington, are currently redeemable at certain times, only at the option of the holders, for Lexington shares of beneficial interests, par value $0.0001 per share classified as common stock (“common shares”), on a one to approximately 1.13 basis, subject to future adjustments. These units are not otherwise mandatory redeemable by the Partnership. As of December 31, 2012, Lexington's common shares had a closing price of $10.45 per share. Assuming all outstanding limited partner units not held by Lexington were redeemed on such date the estimated fair value of the units was $30,088.

Allocation of Overhead Expenses. The Partnership does not pay a fee to the General Partner for the day-to-day management of the Partnership. Certain expenses incurred by the General Partner and its affiliates, including Lexington, such as corporate-level interest, amortization of deferred loan costs, payroll and general and administrative expenses are allocated to the Partnership and reimbursed to the General Partner in accordance with the Partnership agreement. The allocation is based upon gross rental revenues.

F-18

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Distributions; Allocations of Income and Loss. As provided in the Partnership's partnership agreement, distributions and income and loss for financial reporting purposes are allocated to the partners based on their ownership of units. Special allocation rules included in the partnership agreement affect the allocation of taxable income and loss. The Partnership paid or accrued gross distributions of $27,555 ($0.90 per weighted-average unit); $24.412 ($0.81 per weighted-average unit) and $23,064 ($0.77 per weighted-average unit) to its partners during the years ended December 31, 2012, 2011 and 2010, respectively. Certain units owned indirectly by Lexington are entitled to distributions of $2.0125 to $3.25 per unit.

Use of Estimates. The Partnership has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. The Partnership evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. The Partnership adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets, loans receivable and equity method investments and the useful lives of long-lived assets. Actual results could differ materially from those estimates.

Fair Value Measurements.The Partnership follows the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Partnership utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk.

Revenue Recognition.The Partnership recognizes lease revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are lower than those in the primary term are excluded from the calculation of straight-line rent if the renewals are not reasonably assured. If the Partnership funds tenant improvements and the improvements are deemed to be owned by the Partnership, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. If the Partnership determines that the tenant allowances are lease incentives, the Partnership commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Partnership recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Partnership obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred or deferred revenue on the Consolidated Balance Sheets.

Gains on sales of real estate are recognized based upon the specific timing of the sale as measured against various criteria related to the terms of the transactions and any continuing involvement associated with the properties. If the sales criteria are not met, the gain is deferred and the finance, installment or cost recovery method, as appropriate, is applied until the sales criteria are met. To the extent the Partnership sells a property and retains a partial ownership interest in the property, the Partnership recognizes gain to the extent of the third-party ownership interest.

Accounts Receivable. The Partnership continuously monitors collections from tenants and makes a provision for estimated losses based upon historical experience and any specific tenant collection issues that the Partnership has identified. As ofDecember 31, 2012 and2011, the Partnership's allowance for doubtful accounts was not significant.

F-19

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Purchase Accounting and Acquisition of Real Estate. The fair value of the real estate acquired, which includes the impact of fair value adjustments for assumed mortgage debt related to property acquisitions, is allocated to the acquired tangible assets, consisting of land, building and improvements and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and value of tenant relationships, based in each case on their fair values. Acquisition costs are expensed as incurred and are included in property operating expense in the accompanying Consolidated Statement of Operations. Also, noncontrolling interests acquired are recorded at estimated fair market value.

The fair value of the tangible assets of an acquired property (which includes land, building and improvements and fixtures and equipment) is determined by valuing the property as if it were vacant. The “as-if-vacant” value is then allocated to land and building and improvements based on management's determination of relative fair values of these assets. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. The Partnership also estimates costs to execute similar leases including leasing commissions.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market lease values are recorded based on the difference between the current in-place lease rent and the Partnership's estimate of current market rents. Below-market lease intangibles are recorded as part of deferred revenue and amortized into rental revenue over the non-cancelable periods and bargain renewal periods of the respective leases. Above-market leases are recorded as part of intangible assets and amortized as a direct charge against rental revenue over the non-cancelable portion of the respective leases.

The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationship values, is measured by the excess of (1) the purchase price paid for a property over (2) the estimated fair value of the property as if vacant, determined as set forth above. This aggregate value is allocated between in-place lease values and tenant relationship values based on management's evaluation of the specific characteristics of each tenant's lease. The value of in-place leases is amortized to expense over the remaining non-cancelable periods and any bargain renewal periods of the respective leases. The value of tenant relationships are amortized to expense over the applicable lease term plus expected renewal periods.

Depreciation is determined by the straight-line method over the remaining estimated economic useful lives of the properties. The Partnership generally depreciates its real estate assets over periods ranging up to40 years.

Impairment of Real Estate.The Partnership evaluates the carrying value of all tangible and intangible real estate assets held for investment for possible impairment when an event or change in circumstance has occurred that indicates its carrying value may not be recoverable. The evaluation includes estimating and reviewing anticipated future undiscounted cash flows to be derived from the asset. If such cash flows are less than the asset's carrying value, an impairment charge is recognized to the extent by which the asset's carrying value exceeds the estimated fair value, which may be below the balance of any non-recourse financing. Estimating future cash flows and fair values is highly subjective and such estimates could differ materially from actual results.

Investments in Non-Consolidated Entities. The Partnership accounts for its investments in50% or less owned entities under the equity method, unless consolidation is required. If the Partnership's investment in the entity is insignificant and the Partnership has no influence over the control of the entity then the entity is accounted for under the cost method.

Impairment of Equity Method Investments. The Partnership assesses whether there are indicators that the value of its equity method investments may be impaired. An impairment charge is recognized only if the Partnership determines that a decline in the value of the investment below its carrying value is other-than-temporary. The assessment of impairment is highly subjective and involves the application of significant assumptions and judgments about the Partnership's intent and ability to recover its investment given the nature and operations of the underlying investment, among other factors. To the extent an impairment is deemed to be other-than-temporary, the loss is measured as the excess of the carrying amount of the investment over the estimated fair value of the investment.

F-20

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Loans Receivable.Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and net of an allowance for loan losses when such loan is deemed to be impaired. Loan origination costs and fees and loan purchase discounts are amortized over the term of the loan. The Partnership considers a loan impaired when, based upon current information and events, it is probable that it will be unable to collect all amounts due for both principal and interest according to the contractual terms of the loan agreement. Significant judgments are required in determining whether impairment has occurred. The Partnership performs an impairment analysis by comparing (i) the present value of expected future cash flows discounted at the loan's effective interest rate, (ii) the loan's observable current market price or (iii) the fair value of the underlying collateral to the net carrying value of the loan, which may result in an allowance and corresponding loan loss charge. Interest income is recorded on a cash basis for impaired loans.

Properties Held For Sale.Assets and liabilities of properties that meet various held for sale criteria, including whether it is probable that a sale will occur within 12 months, are presented separately in the Consolidated Balance Sheets, with assets and liabilities being separately stated. The operating results of these properties are reflected as discontinued operations in the Consolidated Statements of Operations. Properties classified as held for sale are carried at the lower of net carrying value or estimated fair value less costs to sell and depreciation and amortization are no longer recognized. Properties that do not meet the held for sale criteria are accounted for as operating properties.

Acquisition, Development and Construction Arrangements.The Partnership evaluates loans receivable where the Partnership participates in residual profits through loan provisions or other contracts to ascertain whether the Partnership has the same risks and rewards as an owner or a joint venture partner. Where the Partnership concludes that such arrangements are more appropriately treated as an investment in real estate, the Partnership reflects such loan receivable as an equity investment in real estate under construction in the Consolidated Balance Sheets. In these cases, no interest income is recorded on the loan receivable and the Partnership records capitalized interest during the construction period. In arrangements where the Partnership engages a developer to construct a property or provide funds to a tenant to develop a property, the Partnership will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period.

Deferred Expenses. Deferred expenses consist primarily of debt and leasing costs. Debt costs are amortized using the straight-line method, which approximates the interest method, over the terms of the debt instruments and leasing costs are amortized over the term of the related lease.

Income Taxes. Because the Partnership is a limited partnership, taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the Consolidated Financial Statements of the Partnership. However, the Partnership is required to pay certain state and local entity level taxes which are expensed as incurred. The Partnership does not have any unrecognized tax benefits or any additional tax liabilities as of December 31, 2012 and 2011.

Cash and Cash Equivalents.The Partnership considers all highly liquid instruments with original maturities of three months or less from the date of purchase to be cash equivalents.

Restricted Cash. Restricted cash is comprised primarily of cash balances held in escrow with lenders.

F-21

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Environmental Matters.Under various federal, state and local environmental laws, statutes, ordinances, rules and regulations, an owner of real property may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under such property as well as certain other potential costs relating to hazardous or toxic substances. These liabilities may include government fines, penalties and damages for injuries to persons and adjacent property. Such laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence or disposal of such substances. Although most of the tenants of properties in which the Partnership has an interest are primarily responsible for any environmental damage and claims related to the leased premises, in the event of the bankruptcy or inability of the tenant of such premises to satisfy any obligations with respect to such environmental liability, or if the tenant is not responsible, the Partnership's property owner subsidiary may be required to satisfy any such obligations, should they exist. In addition, the property owner subsidiary, as the owner of such a property, may be held directly liable for any such damages or claims irrespective of the provisions of any lease. As of December 31, 2012, the Partnership was not aware of any environmental matter relating to any of its investments that would have a material impact on the consolidated financial statements.

Segment Reporting. The Partnership operates generally in one industry segment, single-tenant real estate assets.

Recently Issued Accounting Guidance.In February 2013, the FASB issued Accounting Standards Update 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date, (“ASU 2013-04”), requiring recognition of such obligations as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The Partnership early adopted this new guidance retrospectively (see note 8).

(3)Investments in Real Estate

The Partnership's real estate, net, consists of the following at December 31, 2012 and 2011:

  2012  2011 
Real estate, at cost:        
Buildings and building improvements $480,124  $440,041 
Land, land estates and land improvements  100,309   93,448 
Fixtures and equipment  1,927   1,927 
Construction in progress  484   1,984 
Real estate intangibles:        
In-place lease values  39,384   30,428 
Tenant relationships  17,816   15,256 
Above-market leases  4,031   4,031 
   644,075   587,115 
Accumulated depreciation and amortization(1)  (195,122)  (174,536)
Real estate, net $448,953  $412,579 

(1)Includes accumulated amortization of real estate intangible assets of $35,961 and $31,920 in 2012 and 2011, respectively. The estimated amortization of the above real estate intangible assets for the next five years is $4,209 in 2013, $3,800 in 2014, $3,178 in 2015, $2,619 in 2016 and $2,187 in 2017.

In addition, the Partnership had below-market leases, net of accretion, which are included in deferred revenue, of $831 and $1,123, respectively as of December 31, 2012 and 2011. The estimated accretion for the next five years is $292 in 2013, $292 in 2014, $151 in 2015, $32 in 2016 and $32 in 2017.

F-22

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

The Partnership, through property owner subsidiaries, completed the following acquisition during 2012:

                  Real Estate Intangibles 
Property
Type
 Location Acquisition/ 
Completion Date
 Initial Cost 
Basis
  Lease
Expiration
  Land and
Land
Estate
  Building and
Improvements
  Lease in-
place
Value
  Tenant
Relationships
Value
 
Office Phoenix, AZ December 2012 $53,200   12/2029  $5,585  $36,099  $8,956  $2,560 
      $53,200      $5,585  $36,099  $8,956  $2,560 
                             
Life of intangible assets (years)              17.0   17.0 

During 2012, the Partnership also acquired the fee interest in the land under its Palm Beach Gardens, Florida office property for $6,025, which was previously subject to a ground lease.

The Partnership did not make any acquisitions in 2011.

(4)Sales of Real Estate and Discontinued Operations

The Partnership disposed of its interests in four properties in 2011 and one property in 2010 for a gross disposition price of $31,150 and $36,627, respectively. For the years ended December 31, 2011 and 2010, these sales resulted in gains on sales of $1,181 and $11,906, respectively. For the years ended December 31, 2011 and 2010, the Partnership recognized net debt satisfaction charges relating to these properties of $79 and $459, respectively. These charges are included in discontinued operations.

At December 31, 2012 and 2011, the Partnership had no properties classified as held for sale. Subsequent to December 31, 2012, the Partnership disposed of its interests in two properties and a retail store and parking garage for an aggregate gross disposition price of $43,263. These properties are included in discontinued operations in the Consolidated Statements of Operations.

The following presents the operating results for the disposed properties discussed above during the years ended December 31, 2012, 2011 and 2010:

  Year Ending December 31, 
  2012  2011  2010 
Total gross revenues $3,791  $5,123  $9,969 
Pre-tax net income (loss), including gains on sales $212  $(2,791) $10,864 

The Partnership assesses on a regular basis whether there are any indicators that the carrying value of real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant reduction in utilization of a property, tenant financial instability and the potential sale of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value.

During 2011 and 2010, the Partnership recognized $4,116 and $753, respectively, of impairment charges in discontinued operations, relating to real estate assets that were ultimately disposed of below their carrying value.

F-23

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(5)Loans Receivable

As of December 31, 2012 and 2011, the Partnership's loans receivable are comprised primarily of first and second mortgage loans on real estate.

The following is a summary of the Partnership's loans receivable as of December 31, 2012 and 2011:

  Loan carrying-value(1)       
Loan 12/31/2012  12/31/2011  Interest Rate  Maturity Date 
Westmont, IL $26,902  $27,228   6.45%  10/2015 
Southfield, MI  7,364   8,065   4.55%  02/2015 
New Kingstown, PA     2,941   7.78%  01/2013 
  $34,266  $38,234         

(1)Loan carrying value includes accrued interest and is net of origination costs, if any.

The Partnership has one type of financing receivable: loans receivable. The Partnership determined that its financing receivables operate within one portfolio segment as they are within the same industry and use the same impairment methodology. The Partnership's loans receivable are secured by commercial real estate assets. In addition, the Partnership assesses all financing receivables for impairment, when warranted, based on an individual analysis of each receivable.

The Partnership's financing receivables operate within one class of financing receivables as these assets are collateralized by commercial real estate and similar metrics are used to monitor the risk and performance of these assets. The Partnership uses credit quality indicators to monitor financing receivables such as quality of collateral, the underlying tenant's credit rating and collection experience. As of December 31, 2012, the financing receivables were performing as anticipated and there were no significant delinquent amounts outstanding.

(6)Investments in and Advances to Non-Consolidated Entity

On September 1, 2012, the Partnership acquired a 2% equity interest in Net Lease Strategic Assets Fund L.P. (“NLS”) for cash of $189 and the issuance of 457,211 limited partner units to Lexington. At the date of acquisition, NLS owned 41 properties totaling 5.8 million square feet in 23 states, plus a 40% tenant-in-common interest in an office property.

The Partnership's carrying value in NLS at December 31, 2012 was $3,596. The Partnership recognized a net loss from NLS of $33 in equity in losses from non-consolidated entity during 2012. In addition, the Partnership received distributions of $725 from NLS in 2012.

(7)Fair Value Measurements

The table below sets forth the carrying amounts and estimated fair values of the Partnership's financial instruments as of December 31, 2012 and 2011:

  As of December 31, 2012  As of December 31, 2011 
  Carrying
Amount
  Fair Value  Carrying
Amount
  Fair Value 
Assets                
Loans Receivable (Level 3) $34,266  $24,717  $38,234  $29,298 
                 
Liabilities                
Debt (Level 3) $195,060  $183,735  $212,897  $191,690 

The Partnership estimates the fair values of its loans receivable by using an estimated discounted cash flow analysis consisting of scheduled cash flows and discount rate estimates to approximate those that a willing buyer and seller might use and/or the estimated value of the underlying collateral. The fair value of the Partnership's debt is estimated by using a discounted cash flow analysis, based upon estimates of market interest rates.

F-24

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.

Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Partnership estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

(8)Mortgages and Notes Payable

The Partnership had outstanding mortgages and notes payable of $155,675 and $202,884 as of December 31, 2012 and 2011, respectively. Interest rates, including imputed rates, ranged from 5.0% to 6.5% at December 31, 2012 and the mortgages and notes payable mature between 2013 and 2020. Interest rates, including imputed rates, ranged from 5.0% to 6.5% at December 31, 2011. The weighted-average interest rate at December 31, 2012 and 2011 was approximately 5.7%.

The Partnership is a co-borrower on a term loan issued to Lexington in January 2012 from Wells Fargo Bank, National Association ("Wells Fargo"), as agent. The term loan matures in January 2019. The term loan requires regular payments of interest only. At December 31, 2012, Lexington had $255,000 outstanding under the term loan. The term loan was subject to financial covenants which Lexington was in compliance with at December 31, 2012. The term loan agreement was amended in February 2013 (see note 15).

In addition, the Partnership is a co-borrower under Lexington's revolving credit facility. In January 2012, Lexington refinanced its revolving credit facility with a $300,000 revolving credit facility with KeyBank N.A. (“KeyBank”), as agent. The revolving credit facility was scheduled to mature in January 2015 but could be extended to January 2016, at Lexington's option subject to the satisfaction of certain conditions. As of December 31, 2012, no amounts were outstanding under the revolving credit facility. The revolving credit facility was subject to financial covenants which Lexington was in compliance with at December 31, 2012. The revolving credit facility was refinanced in February 2013 (see note 15).

In accordance with the guidance of ASU 2013-04, the Partnership recognizes a proportion of the outstanding amounts of the above mentioned term loan and revolving credit facility as it is a co-borrower with Lexington, as co-borrower debt in the accompanying balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion of these debts based on gross rental revenues, which represents its agreed to obligation. Changes in co-borrower debt are recognized in partners’ capital in the accompanying consolidated statements of changes in partners’ capital. The Partnership is also allocated interest expense by Lexington, in accordance with the Partnership agreement relating to these lending facilities of $1,586, $455 and $1,162 for the years ended 2012, 2011, and 2010, respectively.

Included in the Consolidated Statements of Operations, the Partnership recognized debt satisfaction gains (charges), net, excluding discontinued operations, of $13, $(8) and $(7) for the years ended December 31, 2012, 2011 and 2010, respectively, due to the satisfaction of mortgages and notes payable other than those disclosed elsewhere in these financial statements. In addition, the Partnership capitalized $49, $88 and $5 in interest for the years ended 2012, 2011 and 2010, respectively.

Mortgages payable and secured loans are generally collateralized by real estate and the related leases. Certain mortgages payable have yield maintenance or defeasance requirements relating to any prepayments. In addition, certain mortgages are cross-collateralized and cross-defaulted.

Scheduled principal and balloon payments for mortgages and notes payable for the nextfive years and thereafter are as follows:

Year ending 

December 31,

 Total 
2013 $34,075 
2014  29,000 
2015  29,762 
2016  1,136 
2017  9,785 
Thereafter  51,917 
  $155,675 

F-25

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(9)Leases

Lessor:

Minimum future rental receipts under the non-cancelable portion of tenant leases, assuming no new or re-negotiated leases, for the next five years and thereafter are as follows:

Year ending

December 31,

 Total 
2013 $50,073 
2014  45,108 
2015  37,501 
2016  28,239 
2017  25,886 
Thereafter  108,694 
  $295,501 

The above minimum lease payments do not include reimbursements to be received from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases.

Certain leases allow for the tenant to terminate the lease if the property is deemed obsolete, as defined, and upon payment of a termination fee to the landlord, as stipulated in the lease. In addition, certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price.

Lessee:

The Partnership holds, through property owner subsidiaries, leasehold interests in various properties. Generally, the ground rents on these properties are either paid directly by the tenants to the fee holder or reimbursed to the Partnership as additional rent. For certain of these properties, the Partnership has an option to purchase the fee interest.

Minimum future rental payments under non-cancelable leasehold interests, excluding leases held through industrial revenue bonds and lease payments in the future that are based upon fair market value, for the next five years and thereafter are as follows:

Year ending

December 31,

 Total 
2013 $672 
2014  672 
2015  672 
2016  672 
2017  664 
Thereafter  8,353 
  $11,705 

Rent expense for the leasehold interests, including discontinued operations, was $725, $310 and $381 in 2012, 2011 and 2010, respectively.

(10)Concentration of Risk

The Partnership seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the years ended December 31, 2012, 2011 and 2010, the following tenants represented greater than 10% of rental revenues:

F-26

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

  2012  2011  2010 
Swiss Re America Holdings Corporation  10.4%  10.0%   
Wells Fargo Bank, N.A.  13.0%  13.0%  12.4%

Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Partnership believes it mitigates this risk by investing in or through major financial institutions.

(11)Related Party Transactions

The Partnership had the following related party transactions in addition to related party transactions discussed elsewhere in this report.

The Partnership had outstanding net advances owed to Lexington of $157,825 and $74,571 as of December 31, 2012 and 2011, respectively. The advances are payable on demand and the Partnership was allocated a portion of the interest charged on Lexington's revolving credit facility and term loan. During 2012, the Partnership issued 1,821,748 units to Lexington to satisfy $17,598 of outstanding advances. Lexington earned distributions of $26,050, $23,022 and $21,688 during 2012, 2011 and 2010, respectively.

During 2010, the Partnership advanced $7,614 to an NLS entity in the form of an interest bearing, non-recourse mortgage note to satisfy a maturing non-recourse mortgage. The advance was satisfied in full in 2011.

Lexington, on behalf of the General Partner, pays for certain general administrative and other costs on behalf of the Partnership from time to time. These costs are reimbursable by the Partnership. These costs were approximately $3,544, $3,695 and $3,764 for 2012, 2011 and 2010, respectively.

A Lexington affiliate provides property management services for certain Partnership properties. The Partnership recognized property operating expenses, including from discontinued operations, of $1,138, $1,322 and $1,120 for the years ended 2012, 2011 and 2010, respectively, for aggregate fees and reimbursements charged by the affiliate.

The Partnership leases certain properties to entities in which Vornado Realty Trust, a significant Lexington shareholder, has an interest. During 2012, 2011 and 2010, the Partnership recognized $842, $864 and $905, respectively, in rental revenue from these properties.

(12)Commitments and Contingencies

In addition to the commitments and contingencies disclosed elsewhere, the Partnership has the following commitments and contingencies.

The Partnership is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Partnership, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries.

From time to time, the Partnership is directly or indirectly involved in legal proceedings arising in the ordinary course of the Partnership's business. The Partnership believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Partnership's business, financial condition and results of operations. During the year ended December 31, 2012, the following legal proceeding was resolved:

F-27

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Deutsche Bank Securities, Inc. and SPCP Group LLC v. Lexington Drake, L.P., et al. (Supreme Court of the State of New York-Index No. 603051/08). On June 30, 2006, the Partnership sold to Deutsche Bank Securities, Inc. (“Deutsche Bank”), a $7,680 bankruptcy damage claim against Dana Corporation for $5,376 (“Farmington Hills claim”). Under the terms of the agreement covering the sale of the claim, the property owner subsidiaries were obligated to reimburse Deutsche Bank should the claim ever be disallowed, subordinated or otherwise impaired, to the extent of such disallowance, subordination or impairment, plus interest at the rate of 10% per annum from the date of payment of the purchase price by Deutsche Bank. On October 12, 2007, Dana Corporation filed an objection to the claim. The Partnership assisted Deutsche Bank and the then holder of the claim in the preparation and filing of a response to the objection. Despite a belief by the Partnership that the objections were without merit, the holder of the claim, without the Partnership's consent, settled the allowed amount of the claim at $6,500 in order to participate in a special settlement pool for allowed intangible unsecured claims and a preferred share rights offering having a value thought to be equal to, or greater than, the reduction of the claims. Deutsche Bank made a formal demand with respect to the claim in the amount of $826 plus interest. Following a rejection of the demand by the Partnership, on December 11, 2009, Deutsche Bank and the then holder of the claim and the holder of another claim sold by Lexington filed a summons and complaint with the Supreme CourtLaws of the State of New York, Countywithout regard to conflict of law principles; provided, however, that to the extent required by the Laws of the State of Maryland or the Laws of the State of Delaware, the LCIF Merger shall be governed by, and construed in accordance with such Laws, as applicable, regardless of the Laws that might otherwise govern under applicable principles of conflict of Laws thereof. All actions and proceedings (whether based on contract, tort or otherwise) directly or indirectly arising out of or relating to this Agreement or the transactions contemplated hereby or the actions of the parties hereto in the negotiation, administration, performance and enforcement of this Agreement, shall be heard and determined exclusively in any New York state or federal court. Each party hereto hereby irrevocably (a) submits to the exclusive jurisdiction of any New York state or federal court, for the purpose of any action arising out of or relating to this Agreement or the transactions contemplated hereby or the actions of the parties hereto in the negotiation, administration, performance and enforcement of this Agreement brought by any party hereto, (b) agrees that it will not bring any action arising out of or relating to this Agreement or the transactions contemplated by this Agreement or the actions of the parties hereto in the negotiation, administration, performance and enforcement of this Agreement in any court other than the above-named courts, (c)  waives, and agrees not to assert by way of motion, defense, or otherwise, in any such action, any claim and Lexington's other claim, and claimed damagesthat it is not subject personally to the jurisdiction of $826 plus interest from the date of assignment at the rate of 10% per year and expenses for the claim and additional amounts for Lexington's other claim.

Together withabove-named courts, that its property owner subsidiary,is exempt or immune from attachment or execution, that the Partnership and Lexington answeredaction is brought in an inconvenient forum, that the complaint on November 26, 2008 and served numerous discovery requests. After almost a year of inactivity, on March 18, 2010, the defendants and the plaintiffs filed motions for summary judgment and related opposing and supporting motions. On November 22, 2010, the court ruled in favorvenue of the plaintiffsaction is improper, or that this Agreement or the transactions contemplated hereby or the actions of the parties hereto in the negotiation, administration, performance and enforcement of this Agreement may not be enforced in or by any of the above-named courts, and (d) agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on their motion for summary judgment. The court referred the issuejudgment or in any other manner provided by Law. Each of damagesthe parties hereto hereby agrees that notice given in accordance with Section 9.02 hereof shall constitute effective service of process in any such action or proceeding.

21

SECTION 9.10. Waiver of Jury Trial.

Each of the parties hereto hereby IRREVOCABLY waives to the fullest extent permitted by applicable Law any right it may have to a special referee to determine the value of plaintiffs' participation in the preferred share rights offering and a settlement pool for allowed intangible unsecured claims so as to be taken into considerationtrial by jury with respect to computationany litigation directly or indirectly arising out of, damages, if any.

After motions before the special referee and discovery on July 11, 2012, the special referee recommended damages in favor of the plaintiffs, which included the following amounts applicable to the Partnership: (1) $826 for the claim as well as 10% interest as of April 27, 2012 in the sum of $482 and additional prejudgment interest from April 28, 2012 to entry of judgment and thereafter statutory interest of 9% and (2) attorneys' fee and disbursements of $538 together with statutory interest of 9% as to fees and disbursements to be calculated from July 11, 2012. The Partnership and Lexington settled the litigation in the third quarter of 2012 for a payment of $912 by the Partnership and a payment by Lexington.

On December 31, 2006, the Partnership, Lexington and, Lexington's other operating partnership, Lepercq Corporate Income Fund II L.P. (“LCIF II”), entered into a funding agreement. All references to "Operating Partnerships" in this paragraph refer to the Partnership and LCIF II. Pursuant to the funding agreement, the parties agreed, jointly and severally, that, if any of the Operating Partnerships does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount equal to whichever is applicable of (1) a specified distribution set forth in its partnership agreementunder or (2) the cash dividend payable with respect to a whole or fractional Lexington common share into which such partnership's common units would be converted if they were redeemed for Lexington common shares in accordance with its partnership agreement, Lexington and the other Operating Partnerships, each a “funding partnership,” will fund their pro rata share of the shortfall. The pro rata share of each funding partnership and Lexington, respectively, will be determined based on the number of units in each funding partnership and, for Lexington, by the amount by which its total outstanding common shares exceeds the number of units in each funding partnership not owned by Lexington, with appropriate adjustments being made if units are not redeemable on a one-for-one basis. Payments under the agreement will be made in the form of loans to the partnership experiencing a shortfall and will bear interest at prevailing rates as determined by Lexington in its discretion but no less than the applicable federal rate. The Partnership's right to receive these loans will expire if Lexington contributes to the Partnership all of its economic interests in the other Operating Partnerships and all of its other subsidiaries that are partnerships, joint ventures or limited liability companies. However, thereafter the Partnership will remain obligated to continue to make these loans until there are no remaining units outstanding in the other Operating Partnerships and all loans have been repaid. No amounts have been advanced under this agreement.

During 2010, the Partnership guaranteed $115,000 aggregate principal amount of 6.00% Convertible Guaranteed Notes due 2030 issued by Lexington. The notes pay interest semi-annually in arrears and mature in January 2030. The holders of the notes may require Lexington to repurchase their notes in January 2017, January 2020 and January 2025 for cash equal to 100% of the notes to be repurchased, plus any accrued and unpaid interest. The notes are convertible by the holders under certain circumstances for cash, Lexington common shares or a combination of cash and common shares at Lexington's election. As of December 31, 2012, $83,896 original principal amount of 6.00% Convertible Guaranteed Notes due 2030 were outstanding.

(13)Supplemental Disclosure of Statement of Cash Flow Information

In addition to disclosures discussed elsewhere, during 2012, 2011 and 2010, the Partnership paid (received) $11,926, $13,886 and $17,272, respectively, for interest and $(77), $426 and $26, respectively, for income taxes.

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

During 2011, the Partnership sold interests in a property, which included a $3,003 in seller financing.

During 2010, the Partnership sold an interest in a property, which included the assumption of the related non-recourse mortgage debt of $36,402.

(14)Unaudited Quarterly Financial Data

�� 2012 
  3/31/2012  6/30/2012  9/30/2012  12/31/2012 
Total gross revenues1 $12,760  $13,001  $13,147  $12,463 
Net income $1,983  $349  $3,267  $2,148 
Net income per unit $0.07  $0.01  $0.11  $0.07 

  2011 
  3/31/2011  6/30/2011  9/30/2011  12/31/2011 
Total gross revenues1 $13,485  $12,614  $13,126  $12,227 
Net income (loss) $2,595  $(15) $1,481  $(520)
Net income (loss) per unit $0.09  $0.00  $0.05  $(0.02)

_____________

(1)All periods have been adjusted to reflect the impact of properties in discontinued operations in the Consolidated Statements of Operations.

The sum of the quarterly per units amounts may not equal the full year amounts primarily because the computations of the weighted-average number of units of the Partnership outstanding for each quarter and the full year are made independently.

(15)Subsequent Events

Subsequent to December 31, 2012 and in addition to disclosures elsewhere in the financial statements:

the Partnership conveyed to the lender its property in Southington, Connecticut for full satisfaction of the related $12,317 non-recourse mortgage;

the Partnership disposed of its interests in one office property and a retail store and parking garage for an aggregate disposition price of $30,945;

Lexington amended its $255,000 secured term loan agreement to release the collateral securing the term loan;

Lexington refinanced its January 2012 $300,000 secured revolving credit facility with a $300,000 unsecured revolving credit facility with KeyBank, as agent. The unsecured revolving credit facility matures in February 2017 but can be extended until February 2018 at Lexington's option. In addition, the availability under the unsecured revolving credit facility was increased to $400,000;

in connection with this Agreement or the refinancing discussed above,transactions contemplated hereby.

SECTION 9.11. Headings.

The descriptive headings contained in this Agreement are included for convenience of reference only and shall not affect in any way the Partnership also becamemeaning or interpretation of this Agreement.

SECTION 9.12. Counterparts.

This Agreement may be executed in counterparts with the co-borrower undersame effect as if both parties hereto had executed the same document. All counterparts shall be construed together and shall constitute a five-year $250,000 unsecured term loan facility from KeyBank,single Agreement. The parties hereto consent and agree that this Agreement may be signed and/or transmitted by e-mail of a .pdf, .tif or .jpeg document or using electronic signature technology (e.g., via DocuSign or similar electronic signature technology), and that such signed record shall be valid and as agent procuredeffective to bind the party so signing as a paper copy bearing such party’s handwritten signature. The parties hereto further consent and agree that (i) to the extent a party signs this Agreement using electronic signature technology, by Lexington. The unsecured term loan matures in February 2018clicking “SIGN”, such party is signing this Agreement electronically, and requires regular payments(ii) the electronic signatures appearing on this Agreement shall be treated, for purposes of interest only;

in June 2013,validity, enforceability and admissibility, the Partnership guaranteed $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 issued by Lexington;

the Partnership issued 15,128,008 units to Lexington in August 2013 to satisfy $189,705 of outstanding advances;

the Partnership acquired a portfolio of three parcels of land in New York, New York in October 2013 consisting of an aggregate of 0.6 acres, which are net leased to tenants under non-cancellable 99-year leases. The aggregate purchase price was $302,000. The improvements on these parcels are owned by the tenants under the Partnership leases and currently consist of three high-rise hotels built in 2010, which contain an aggregate of approximately 480,000 square feet, 103 floors and 1,179 guest rooms. The hotels are knownsame as the DoubleTree by Hilton Hotel New York City - Financial District, the Sheraton Tribeca New York Hotel and the Element New York Times Square West. The aggregate initial annual rent under the leases is approximately $14,883, which represents approximately 4.93% of the aggregate purchase price. The rent under each lease increases by a minimum of 2.0% each year with further annual increases, not to exceed 3.0% per annumhandwritten signatures.

SECTION 9.13. Mutual Drafting.

Each party hereto has participated in the aggregate, at specified intervals based on the increase in the Consumer Price Index, or CPI. The total aggregate minimum rent (excluding any additional CPI increases) under the leases over the 99-year lease terms is approximately $4,541,141. Each tenant has a purchase option that can be exercised at the enddrafting of the 25th, 50th and 75th lease year at a price that is equal to the greater of (1) the original purchase price plus a 7.5% return (inclusive of rent payments) for the holding period (compounded monthly) and (2) a specified floor price,this Agreement, which in each case is in excess of the allocated purchase price, and is $305,000 in aggregate. The Partnership financed the acquisition via a $100,000 loan from Lexington, $187,000 borrowings under the unsecured revolving credit facility and cash on hand;

the Partnership entered into a nonbinding term sheet with a life insurance company and locked rate for a $213,500 non-recourse secured financing, which is expected to bear interest at a fixed-rate of 4.66% and mature in 13 years. This financing is subject to documentation and certain conditions, including lender due diligence and approval and the Partnership gives no assurance that it will be consummated or expectations of the final terms;

the Partnership received $95,014 from Lexington in exchange for 8,653,374 units in October 2013 and redeemed 2,105,838 units held by Lexington at the original net issuance price of $50,988 in the aggregate; and

in October 2013, the Partnership repaid $26,000 under the unsecured revolving credit facility.

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

Real Estate and Accumulated Depreciation and Amortization

Schedule III ($000)

Description Location  Encumbrances   Land and Land Estates   Buildings and Improvements   Total   Accumulated Depreciation and Amortization   Date Acquired   Date Constructed   Useful life computing depreciation in latest income statements (years) 
Office Lake Forest, CA $  $3,442  $13,769  $17,211  $3,715   Mar-02   2001   40 
Office Centennial, CO     4,851   15,187   20,038   4,094   May-07   2001   10 & 40 
Office Louisville, CO     3,658   9,606   13,264   1,752   Sep-08   1987   8, 9 & 40 
Office Wallingford, CT     1,049   4,773   5,822   1,112   Dec-03   1978/1985   8 & 40 
Office Boca Raton, FL  20,317   4,290   17,160   21,450   4,236   Feb-03   1983/2002   40 
Office Palm Beach Gardens, FL      787   2,895   3,682   1,050   May-98   1996   8 & 40 
Office Overland Park, KS  35,829   4,769   41,956   46,725   8,792   Jun-07   1980   12 & 40 
Office Foxboro, MA  5,719   2,231   25,653   27,884   10,452   Dec-04   1982   16 & 40 
Office Southfield, MI        12,124   12,124   6,166   Jul-04   1963/1965   7, 16 & 40 
Office Florence, SC     3,235   12,941   16,176   3,540   May-04   1998   40 
Office Fort Mill, SC  18,746   1,798   25,192   26,990   11,152   Nov-04   2004   15 & 40 
Office Fort Mill, SC     3,601   14,494   18,095   3,670   Dec-02   2002   5, 20 & 40 
Office Carrollton, TX  19,393   3,427   22,050   25,477   5,363   Jun-07   2003   8 & 40 
Office Westlake, TX     2,361   22,742   25,103   6,337   May-07   2007   4, 5 & 40 
Office Hampton, VA     1,353   6,006   7,359   1,896   Nov-01   2000   10 & 40 
Office Herndon, VA     5,127   24,640   29,767   7,120   Dec-99   1987   9 & 40 
Long Term Lease - Office Phoenix, AZ     5,585   36,099   41,684      Dec-12   1986/2007   10, 17, & 40 
Long Term Lease - Office Phoenix, AZ  16,811   4,666   19,966   24,632   7,183   May-00   1997   6 & 40 
Long Term Lease - Industrial Bristol, PA     2,508   15,815   18,323   4,346   Mar-98   1982   10, 16, 30 & 40 
Industrial Moody, AL  6,518   654   9,943   10,597   4,637   Feb-04   2004   15 & 40 
Industrial Dubuque, IA  9,726   2,052   8,443   10,495   2,080   Jul-03   2002   11, 12 & 40 
Industrial Marshall, MI     40   900   940   628   Aug-87   1979   12, 20 & 40 
Industrial Olive Branch, MS     198   10,276   10,474   6,004   Dec-04   1989   8, 15 & 40 
Industrial High Point, NC     1,330   11,183   12,513   4,200   Jul-04   2002   18 & 40 
Industrial Collierville, TN     714   4,816   5,530   862   Dec-05   2005/2012   20 & 40 
Multi-tenanted Los Angeles, CA  10,299   5,110   10,911   16,021   5,197   Dec-04   2000   13 & 40 
Multi-tenanted Southington, CT  12,317   3,240   25,339   28,579   15,295   Nov-05   1983   10, 12, 28 & 40 
Multi-tenanted Palm Beach Gardens, FL     4,066   16,566   20,632   4,769   May-98   1996   8 & 40 
Multi-tenanted Honolulu, HI     21,094   24,495   45,589   13,134   Dec-06   

1917/1955/

1960/1980

   5 & 40 
Multi-tenanted Hebron, KY     1,615   8,173   9,788   3,543   Mar-98   1987   6, 12 & 40 
Retail Tulsa, OK     447   2,432   2,879   2,095   Dec-96   1981   14 & 24 
Retail Clackamas, OR     523   2,848   3,371   2,452   Dec-96   1981   14 & 24 
Retail Lynnwood, WA     488   2,658   3,146   2,289   Dec-96   1981   14 & 24 
Construction in progress              484                 
    $155,675  $100,309  $482,051  $582,844  $159,161             

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

  September 30,
2013 (unaudited)
  December 31,
2012
 
Assets:        
Real estate, at cost $130,116  $141,975 
Real estate - intangible assets  12,024   12,962 
   142,140   154,937 
Less: accumulated depreciation and amortization  38,801   36,737 
   103,339   118,200 
Cash and cash equivalents  3,358   1,566 
Restricted cash     5,256 
Deferred expenses, net  703   1,724 
Loan receivable, net  21,636   21,942 
Rent receivable – current  38   286 
Rent receivable – deferred  3,617   4,087 
Other assets  11,226   11,171 
Total assets $143,917  $164,232 
         
Liabilities and Partners' Capital:        
Liabilities:        
Mortgages and notes payable $31,350  $48,989 
Co-borrower debt  15,336   11,601 
Related party advances, net  249   21,667 
Accounts payable and other liabilities  626   1,309 
Accrued interest payable  107   218 
Distributions payable  2,665   2,396 
Prepaid rent  620   403 
Total liabilities  50,953   86,583 
         
Commitments and contingencies        
Partners' capital  92,964   77,649 
Total liabilities and partners' capital $143,917  $164,232 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except unit and per unit data)

  Three months ended September 30,  Nine months ended September  30, 
  2013  2012  2013  2012 
Gross revenues:                
Rental $3,354  $3,409  $10,044  $10,217 
Tenant reimbursements  155   185   462   456 
Total gross revenues  3,509   3,594   10,506   10,673 
Expense applicable to revenues:                
Depreciation and amortization  (1,293)  (1,413)  (3,931)  (4,226)
Property operating  (237)  (228)  (911)  (614)
General and administrative  (252)  (263)  (794)  (904)
Non-operating income  249   248   746   1,572 
Interest and amortization expense  (436)  (656)  (1,656)  (2,726)
Debt satisfaction charges, net     (15)     (15)
Income before provision for income taxes and discontinued operations  1,540   1,267   3,960   3,760 
Provision for income taxes  (7)  (7)  (20)  (19)
Income from continuing operations  1,533   1,260   3,940   3,741 
Discontinued operations:                
Loss from discontinued operations     (357)  (362)  (1,764)
Debt satisfaction charges, net  (2)     (2,689)   
Gains on sales of properties        3,176    
Total discontinued operations  (2)  (357)  125   (1,764)
Net income $1,531  $903  $4,065  $1,977 
Income (loss) per unit:                
Income from continuing operations $0.12  $0.21  $0.32  $0.62 
Income (loss) from discontinued operations     (0.06)  0.01   (0.29)
Net income $0.12  $0.15  $0.33  $0.33 
Weighted-average units outstanding  12,979,668   6,023,503   12,184,268   6,023,503 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

(Unaudited and in thousands)

Nine Months ended September 30, 2013      
  Units  Partners' Capital 
Balance December 31, 2012  11,786,568  $77,649 
Issuance of units  1,789,650   22,442 
Changes in co-borrower debt     (3,735)
Distributions     (7,457)
Net income     4,065 
Balance September 30, 2013  13,576,218  $92,964 

Nine Months ended September 30, 2012      
  Units  Partners' Capital 
Balance December 31, 2011  6,023,503  $33,859 
Changes in co-borrower debt     (10,832)
Distributions     (4,317)
Net income     1,977 
Balance September 30, 2012  6,023,503  $20,687 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

  Nine months ended September 30, 
  2013  2012 
Net cash provided by operating activities: $6,961  $4,849 
Cash flows from investing activities:        
Capital expenditures  (171)  (363)
Principal payments received on loans receivable  306    
Increase in deferred leasing costs     (833)
Change in escrow deposits and restricted cash  959  2,863 
Net cash provided by investing activities  1,094  1,667 
Cash flows from financing activities:        
Distributions to unitholders  (621)  (529)
Principal amortization payments  (97)  (887)
Principal payments on debt, excluding normal amortization     (26,128)
Increase in deferred financing costs  (2)  (31)
Related party advances (payments), net  (5,543)  10,115 
Net cash used in financing activities  (6,263)  (17,460)
Change in cash and cash equivalents  1,792   (10,944)
Cash and cash equivalents, at beginning of period  1,566   12,267 
Cash and cash equivalents, at end of period $3,358  $1,323 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data) 

(1)The Partnership and Financial Statement Presentation

Lepercq Corporate Income Fund II L.P. (the “Partnership”) was organized in 1987 as a limited partnership under the Delaware Revised Uniform Limited Partnership Act. The Partnership's sole general partner, Lex GP-1 Trust (the “General Partner”), is a wholly owned subsidiary of Lexington Realty Trust (“Lexington”). The Partnership serves as an operating partnership subsidiary for Lexington. As of September 30, 2013, Lexington, through Lex LP-1 Trust, a wholly-owned subsidiary, and the General Partner, owned approximately 91.2% of the outstanding units of the Partnership.

The Partnership invests in and acquires, owns and finances a geographically diversified portfolio of predominately single-tenant office, industrial and retail properties. As of September 30, 2013, the Partnership had equity ownership interests in nine consolidated properties in seven states. A majority of the real properties in which the Partnership has an equity ownership interest are generally subject to net or similar leases where the tenant bears all or substantially all of the cost, including cost increases, for real estate taxes, insurance, utilities and ordinary maintenance of the property. However, certain leases provide that the landlord is responsible for certain or all operating expenses. In addition, the Partnership acquires, originates and holds investments in loan assets related to single-tenant real estate.

Basis of Presentation and Consolidation. The Partnership's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). The financial statements reflect the accounts of the Partnership and its consolidated subsidiaries. The Partnership consolidates its wholly-owned subsidiaries and its partnerships and joint ventures which it controls (1) through voting rights or similar rights or (2) by means other than voting rights if the Partnershipparty hereto acknowledges is the primary beneficiaryresult of a variable interest entity ("VIE")extensive negotiations between such parties.

SECTION 9.14. No Recourse. Entities which the Partnership does not control

This Agreement may only be enforced against, and entities which are VIEs in which the Partnership is not the primary beneficiary are accounted for under appropriate GAAP.

The financial statements contained herein have been prepared by the Partnership in accordance with GAAP for interim financial information and the applicable rules and regulationsany claims or causes of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. The results of operations for the three and nine months ended September 30, 2013 and 2012, are not necessarily indicative of the resultsaction that may be expectedbased upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto and no past, present or future affiliate, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any party hereto has any liability for any obligations or liabilities of the full year. These unaudited condensed consolidated financial statements should be readparties or for any claim based on, in conjunction withrespect of, or by reason of, the Partnership's audited consolidated financial statements and notes thereto included in this prospectus.transactions contemplated hereby.

[remainder of page intentionally left blank]

 

Use of Estimates. The Partnership has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. The Partnership evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. The Partnership adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets, loans receivable and the useful lives of long-lived assets. Actual results could differ materially from those estimates.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data) 

Fair Value Measurements.The Partnership follows the guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, as amended (“Topic 820”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Partnership utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk.

Unit Redemptions. The Partnership's limited partner units that are issued and outstanding, other than those held by Lexington, are currently redeemable at certain times, only at the option of the holders, for Lexington shares of beneficial interests, par value $0.0001 per share classified as common stock (“common shares”) on a one to approximately 1.13 basis, subject to future adjustments. These units are not otherwise mandatory redeemable by the Partnership. As of September 30, 2013, Lexington's common shares had a closing price of $11.23 per share. Assuming all outstanding limited partner units not held by Lexington were redeemed on such date, the estimated fair value of the units was $15,172.

Earnings Per Unit. Net income (loss) per unit is computed by dividing net income (loss) by the weighted-average number of units outstanding during the period.

Allocation of Overhead Expenses. The Partnership does not pay a fee to the General Partner for the day-to-day management of the Partnership. Certain expenses incurred by the General Partner and its affiliates, including Lexington, such as corporate-level interest, amortization of deferred loan costs, payroll and general and administrative expenses are allocated to the Partnership and reimbursed to the General Partner in accordance with the Partnership agreement. The allocation is based upon gross rental revenues.

Distributions; Allocations of Income and Loss. As provided in the Partnership's partnership agreement, distributions and income and loss for financial reporting purposes are allocated to the partners based on their ownership of units. Special allocation rules included in the partnership agreement affect the allocation of taxable income and loss. The Partnership paid or accrued gross distributions of $7,457 ($0.61 per weighted-average unit) and $4,317 ($0.72 per weighted-average unit) to its partners during the nine months ended September 30, 2013 and 2012, respectively. Certain units owned indirectly by Lexington are entitled to distributions of $2.0125 to $3.25 per unit.

Recently Issued Accounting Guidance.In February 2013, the FASB issued Accounting Standards Update 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date, (“ASU 2013-04”), requiring recognition of such obligations as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The Partnership early adopted this new guidance retrospectively (see note 5).

(2)Discontinued Operations and Real Estate Impairment

During the nine months ended September 30, 2013, the Partnership conveyed its interest in an office property in Farmington Hills, Michigan along with the respective escrow deposits in satisfaction of $17,542 non-recourse secured mortgage loans and recognized a net debt satisfaction charge of $2,689. The disposition resulted in a gain on sales of properties of $3,176. As of September 30, 2013 and 2012, the Partnership had no properties classified as held for sale.

The following presents the operating results for the properties sold for the applicable periods:

  Three months ended September 30,  Nine months ended September 30, 
  2013  2012  2013  2012 
Total gross revenues $  $458  $749  $821 
Pre-tax income (loss) $(2) $(357) $125  $(1,764)

The Partnership assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant reduction in utilization of a property, tenant financial instability and the potential sale of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value. No impairment charges relating to real estate assets were recognized during the nine months ended September 30, 2013 and 2012.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data)

(3)Loan Receivable

As of September 30, 2013 and December 31, 2012, the Partnership's loan receivable is a first mortgage loan on real estate.

The following is a summary of the Partnership's loan receivable as of September 30, 2013 and December 31, 2012:

  Loan carrying-value(1)      
Loan 9/30/2013  12/31/2012  Interest Rate  Maturity Date
Schaumburg, IL(2) $21,636  $21,942  20.00% 01/2012
  $21,636  $21,942      

(1)Loan carrying value includes accrued interest and is net of origination costs and loan loss reserves, if any.
(2)Loan was in default. The Partnership has obtained a foreclosure judgment but had not foreclosed as of September 30, 2013. The Partnership did not record interest income of $2,939 and $2,647 during the nine months ended September 30, 2013 and the year ended December 31, 2012, respectively. The Partnership believes the office property collateral has an estimated fair value in excess of the Partnership's investment. Subsequent to September 30, 2013, the Partnership foreclosed and acquired the office property collateral (see note 11).

The Partnership has two types of financing receivables: a loan receivable and a capitalized financing lease. The Partnership determined that its financing receivables operate within one portfolio segment as they are within the same industry and use the same impairment methodology. The Partnership's loan receivable is secured by a commercial real estate asset and the capitalized financing lease is for a commercial office property located in Greenville, South Carolina. In addition, the Partnership assesses all financing receivables for impairment, when warranted, based on an individual analysis of each receivable.

The Partnership's financing receivables operate within one class of financing receivables as these assets are collateralized by commercial real estate and similar metrics are used to monitor the risk and performance of these assets. The Partnership uses credit quality indicators to monitor financing receivables such as quality of collateral, the underlying tenant's credit rating and collection experience. As of September 30, 2013, the financing receivables were performing as anticipated and there were no significant delinquent amounts outstanding, other than the Schaumburg, Illinois loan as disclosed above.

(4)Fair Value Measurements

The table below sets forth the carrying amounts and estimated fair values of the Partnership's financial instruments as of September 30, 2013 and December 31, 2012.

  As of September 30, 2013  As of December 31, 2012 
  Carrying
Amount
  Fair Value  Carrying
Amount
  Fair Value 
Assets                
Loans Receivable $21,636  $21,636  $21,942  $21,942 
                 
Liabilities                
Debt $46,686  $46,599  $60,590  $58,865 

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data) 

The Partnership estimates the fair value of its real estate assets by using income and market valuation techniques. The Partnership may estimate fair values using market information such as broker opinions of value, recent sales data for similar assets or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Partnership has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations. To the extent the Partnership under estimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or over estimates forecasted cash inflows (rental revenue rates), the estimated fair value of its real estate assets could be overstated.

The Partnership estimates the fair values of its loans receivable by using an estimated discounted cash flow analysis using Level 3 inputs consisting of scheduled cash flows and discount rate estimates to approximate those that a willing buyer and seller might use and/or the estimated value of the underlying collateral. The fair value of the Partnership's debt is estimated by using a discounted cash flow analysis using Level 3 inputs, based upon estimates of market interest rates.

Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.

Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Partnership estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

(5)Debt

The Partnership had outstanding non-recourse secured mortgages and notes payable of $31,350 and $48,989 as of September 30, 2013 and December 31, 2012, respectively. Interest rates, including imputed rates on mortgages and notes payable, ranged from 4.7% to 5.9% at September 30, 2013 and 4.7% to 7.4% at December 31, 2012 and the mortgages and notes payables mature between 2013 and 2020 as of September 30, 2013. The weighted-average interest rate at September 30, 2013 and December 31, 2012 was approximately 5.2% and 6.0%, respectively.

During the nine months ended September 30, 2012, in connection with the satisfaction of mortgage notes other than those disclosed elsewhere in these financial statements, the Partnership incurred debt satisfaction charges, net of $15.

On February 12, 2013, the Partnership, as co-borrower with Lexington, refinanced the January 2012 $300,000 secured revolving credit facility with a $300,000 unsecured revolving credit facility with KeyBank National Association (“KeyBank”), as agent. The unsecured revolving credit facility matures in February 2017 but can be extended until February 2018 at the Lexington’s option. In addition, the availability under the unsecured revolving credit facility was increased from $300,000 to $400,000. At September 30, 2013, Lexington had $67,000 outstanding under the unsecured revolving credit facility, outstanding letters of credit of $7,644 and availability of $325,356, subject to covenant compliance.

In connection with the refinancing discussed above, the Partnership, as co-borrower with Lexington, procured a five-year $250,000 unsecured term loan facility from KeyBank, as agent. The unsecured term loan matures in February 2018 and requires regular payments of interest only. As of September 30, 2013, Lexington had $64,000 outstanding on the unsecured term loan.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data) 

The Partnership is a co-borrower on a $255,000 term loan issued to Lexington in 2012 from Wells Fargo Bank, National Association (“Wells Fargo”), as agent. The term loan matures in January 2019. The term loan required regular payments of interest only. The term loan was initially secured by ownership interest pledges by certain subsidiaries that collectively owned a borrowing base of properties. In February 2013, the term loan was amended to release the collateral as security. As of September 30, 2013, Lexington had $255,000 outstanding under the term loan.

The unsecured revolving credit facility and the unsecured term loans are subject to financial covenants, which Lexington was in compliance with at June 30, 2013.

In accordance with the guidance of ASU 2013-04, the Partnership recognizes a proportion of the outstanding amounts of the above mentioned term loans and revolving credit facility as it is a co-borrower with Lexington, as co-borrower debt in the accompanying balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion of these debts based on gross rental revenues, which represents its agreed to obligation. Changes in co-borrower debt are recognized in partners’ capital in the accompanying condensed consolidated statements of changes in partners’ capital. The Partnership is also allocated interest expense by Lexington, in accordance with the Partnership agreement relating to these lending facilities of $350 and $343 for the nine months ended September 30, 2013 and 2012, respectively.

(6)Concentration of Risk

The Partnership seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2013 and 2012, the following tenants represented greater than 10% of rental revenues:

  Nine months ended September 31, 
  2013  2012 
Asics America Corporation  21.9%  21.6%
Clearwater Paper Corporation  19.4%  19.1%
Elsevier STM Inc.  25.6%  25.2%
Owens Corning Insulating Systems LLC  %  10.5%

Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Partnership believes it mitigates this risk by investing in or through major financial institutions.

(7)Related Party Transactions

The Partnership had the following related party transactions in addition to related party transactions discussed elsewhere in this report.

The Partnership had outstanding net advances owed to Lexington of $249 and $21,667 as of September 30, 2013 and December 31, 2012, respectively. The advances are payable on demand and the Partnership was allocated a portion of interest charged on Lexington's revolving credit facility and term loans. Lexington earned distributions of $6,843 and $3,755 for the nine months ended September 30, 2013 and 2012, respectively. During August 2013 and October 2012, the Partnership issued 1,789,650 and 5,763,065 units, respectively, to Lexington to satisfy outstanding distributions and advances.

Lexington, on behalf of the General Partner, pays for certain general, administrative and other costs on behalf of the Partnership from time to time. These costs are reimbursable by the Partnership. These costs were approximately $781 and $874 for the nine months ended September 30, 2013 and 2013, respectively.

A Lexington affiliate provides property management services for certain Partnership properties. The Partnership recognized property operating expenses of $63 and $77 for the nine months ended September 30, 2013 and 2012, respectively, for aggregate fees and reimbursements charged by the affiliate.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data)

(8)Commitments and Contingencies

In addition to the commitments and contingencies disclosed elsewhere and previously disclosed, the Partnership has the following commitments and contingencies.

From time to time, the Partnership is directly and indirectly involved in legal proceedings arising in the ordinary course of business. The Partnership believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Partnership's business, financial condition and results of operations.

On December 31, 2006, the Partnership, Lexington and, Lexington's other operating partnership, Lepercq Corporate Income Fund L.P. (“LCIF”), entered into a funding agreement. All references to "Operating Partnerships" in this paragraph refer to the Partnership and LCIF. Pursuant to the funding agreement, the parties agreed, jointly and severally, that, if any of the Operating Partnerships does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount equal to whichever is applicable of (1) a specified distribution set forth in its partnership agreement or (2) the cash dividend payable with respect to a whole or fractional Lexington common share into which such partnership's common units would be converted if they were redeemed for Lexington common shares in accordance with its partnership agreement, Lexington and the other Operating Partnerships, each a “funding partnership,” will fund their pro rata share of the shortfall. The pro rata share of each funding partnership and Lexington, respectively, will be determined based on the number of units in each funding partnership and, for Lexington, by the amount by which its total outstanding common shares exceeds the number of units in each funding partnership not owned by Lexington, with appropriate adjustments being made if units are not redeemable on a one-for-one basis. Payments under the agreement will be made in the form of loans to the partnership experiencing a shortfall and will bear interest at prevailing rates as determined by Lexington in its discretion but no less than the applicable federal rate. The Partnership's right to receive these loans will expire if Lexington contributes to the Partnership all of its economic interests in the other Operating Partnerships and all of its other subsidiaries that are partnerships, joint ventures or limited liability companies. However, thereafter the Partnership will remain obligated to continue to make these loans until there are no remaining units outstanding in the other Operating Partnerships and all loans have been repaid. No amounts have been advanced under this agreement.

In June 2013, the Partnership guaranteed $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 (“Senior Notes”) issued by Lexington at an issuance price of 99.026% of the principal amount. The Senior Notes are unsecured, pay interest semi-annually in arrears and mature in June 2023. Lexington may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium.

During 2010, the Partnership guaranteed $115,000 aggregate principal amount of 6.00% Convertible Guaranteed Notes due 2030 issued by Lexington. The notes pay interest semi-annually in arrears and mature in January 2030. The holders of the notes may require Lexington to repurchase their notes in January 2017, January 2020 and January 2025 for cash equal to 100% of the notes to be repurchased, plus any accrued and unpaid interest. The notes are convertible by the holders under certain circumstances for cash, Lexington common shares or a combination of cash and common shares at Lexington's election. As of September 30, 2013, $28,991 original principal amount of 6.00% Convertible Guaranteed Notes due 2030 were outstanding.

(9)Supplemental Disclosure of Statement of Cash Flow Information

In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2013 and 2012, the Partnership paid $2,251 and $3,468, respectively, for interest and $28 and $24, respectively, for income taxes.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013 and 2012

(Unaudited and dollars in thousands, except unit and per unit data) 

(10)Unaudited Quarterly Financial Data

  3/31/2013  6/30/2013  9/30/2013 
Total gross revenues(1) $3,508  $3,489  $3,509 
Net income $928  $1,606  $1,531 
Net income per unit $0.08  $0.14  $0.12 

(1)All periods have been adjusted to reflect the impact of properties in discontinued operations in the Condensed Consolidated Statements of Operations.

The sum of the quarterly per unit amounts may not equal the full nine month amounts primarily because the computations of the weighted-average number of units of the Partnership outstanding for each quarter and the nine months are made independently.

(11)Subsequent Events

Subsequent to September 30, 2013 and in addition to disclosures elsewhere in the financial statements, the Partnership:

completed a foreclosure and acquired the office building in Schaumburg, Illinois. The Partnership is obligated to fund an outstanding tenant improvement allowance of approximately $9,000;

received $13,752 from Lexington in exchange for 1,252,437 units; and

redeemed 567,961 units held by Lexington at the original net issuance price of $13,752 in the aggregate.

Report of Independent Registered Public Accounting Firm

The Partners

Lepercq Corporate Income Fund II L.P.:

We have audited the accompanying consolidated balance sheets of Lepercq Corporate Income Fund II L.P. and subsidiaries (the “Partnership”) as of December 31, 2012 and 2011, and the related consolidated statements of operations, changes in partners’ capital, and cash flows for each of the years in the three-year period ended December 31, 2012. In connection with our audits of the consolidated financial statements, we have also audited the accompanying financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Lepercq Corporate Income Fund II L.P. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

(signed) KPMG LLP

New York, New York
November 12, 2013

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($000, except unit data)

As of December 31,

  2012  2011 
Assets:        
Real estate, at cost $141,975  $150,893 
Real estate - intangible assets  12,962   13,347 
   154,937   164,240 
Less: accumulated depreciation and amortization  36,737   34,722 
Real estate, net  118,200   129,518 
Cash and cash equivalents  1,566   12,267 
Restricted cash  5,256   8,906 
Deferred expenses (net of accumulated amortization of $1,184 in 2012 and $1,305 in 2011)  1,724   932 
Loan receivable, net  21,942   21,515 
Rent receivable - current  286    
Rent receivable - deferred  4,087   2,745 
Other assets  11,171   10,720 
Total assets $164,232  $186,603 
         
Liabilities and Partners' Capital:        
Liabilities:        
Mortgages and notes payable $48,989  $87,300 
Co-borrower debt  11,601   3,438 
Related party advances, net  21,667   58,388 
Accounts payable and other liabilities  1,309   1,264 
Accrued interest payable  218   299 
Distributions payable  2,396   1,393 
Prepaid rent  403   662 
Total liabilities  86,583   152,744 
         
Commitments and contingencies        
Partners' capital  77,649   33,859 
Total liabilities and partners' capital $164,232  $186,603 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-43
22

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

($000, except unit and per unit data)

Years ended December 31,

  2012  2011  2010 
Gross revenues:            
Rental $13,609  $11,047  $7,556 
Tenant reimbursements  637   345   329 
Total gross revenues  14,246   11,392   7,885 
Expense applicable to revenues:            
Depreciation and amortization  (5,594)  (4,752)  (3,731)
Property operating  (852)  (654)  (526)
General and administrative  (1,189)  (1,115)  (732)
Non-operating income  1,820   6,273   6,927 
Interest and amortization expense  (3,286)  (2,970)  (3,259)
Debt satisfaction charges, net  (13)      
Income before provision for income taxes and discontinued operations  5,132   8,174   6,564 
Provision for income taxes  (26)  (25)  (25)
Income from continuing operations  5,106   8,149   6,539 
Discontinued operations:            
Income (loss) from discontinued operations  (1,789)  2,990   1,393 
Provision for income taxes     (36)   
Debt satisfaction charges, net  (1,411)      
Gains on sales of properties  1,089       
Impairment charges     (9,848)   
Total discontinued operations  (2,111)  (6,894)  1,393 
Net income $2,995  $1,255  $7,932 
Income (loss) per unit:            
Income from continuing operations $0.68  $1.35  $1.09 
Income (loss) from discontinued operations  (0.28)  (1.14)  0.23 
Net income $0.40  $0.21  $1.32 
             
Weighted-average units outstanding  7,464,269   6,023,503   6,023,503 

The accompanying notes are an integral partIN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of these consolidated financial statements.the date first written above by their respective officers thereunto duly authorized.

F-44
 

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

($000 except unit amounts)

Year ended December 31,

  Units  Partners' Capital 
Balance December 31, 2009  6,023,503  $30,435 
Changes in co-borrower debt     5,898 
Distributions     (5,076)
Net Income     7,932 
Balance December 31, 2010  6,023,503   39,189 
Changes in co-borrower debt     (1,244)
Distributions     (5,341)
Net Income     1,255 
Balance December 31, 2011  6,023,503   33,859 
Issuance of units  5,763,065   55,671 
Changes in co-borrower debt     (8,163)
Distributions     (6,713)
Net Income     2,995 
Balance December 31, 2012  11,786,568  $77,649 

The accompanying notes are an integral part of the consolidated financial statements.

F-45

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($000)

Years ended December 31,

  2012  2011  2010 
Cash flows from operating activities:            
Net income $2,995  $1,255  $7,932 
Adjustments to reconcile net income to net cash provided by operating activities:            
Depreciation and amortization  6,547   6,902   5,411 
Gains on sales of properties  (1,089)      
Debt satisfaction (gains) charges, net  1,418       
Impairment charges     9,848    
Straight-line rents  (1,342)  (371)  (226)
Other non-cash income, net  (985)  (4,452)  (1,818)
Increase in accounts payable and other liabilities  268   267   504 
Change in rent receivable and prepaid rent, net  (545)  (340)  6,936 
Increase (decrease) in accrued interest payable  (81)  189   (13)
Other adjustments, net  107   395   (1,258)
Net cash provided by operating activities:  7,293   13,693   17,468 
Cash flows from investing activities:            
Investment in real estate under construction     (39,015)  (11,286)
Capital expenditures  (363)  (14)   
Principal payments received on loans receivable     18,201   6,412 
Investment in loans receivable     (2,190)  (40,632)
Increase in deferred leasing costs  (1,085)  (75)  (32)
Change in escrow deposits and restricted cash  3,650   (1,222)  (6,977)
Real estate deposits     1,205   (1,205)
Net cash provided by (used in) investing activities  2,202   (23,110)  (53,720)
Cash flows from financing activities:            
Distributions to partners  (739)  (653)  (571)
Principal amortization payments  (935)  (1,217)  (1,244)
Principal payments on debt, excluding normal amortization  (32,471)     (5,512)
Increase in deferred financing costs  (31)  (265)  (209)
Proceeds of mortgages and notes payable     15,000   9,000 
Related party advances (payments), net  13,980   (2,540)  40,391 
Net cash provided by (used in) financing activities  (20,196)  10,325   41,855 
Change in cash and cash equivalents  (10,701)  908   5,603 
Cash and cash equivalents, at beginning of year  12,267   11,359   5,756 
Cash and cash equivalents, at end of year $1,566  $12,267  $11,359 

The accompanying notes are an integral part of these consolidated financial statements.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(1)The Partnership

Lepercq Corporate Income Fund II L.P. (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Partnership”) was organized in 1987 as a limited partnership under the Delaware Revised Uniform Limited Partnership Act. The Partnership's sole general partner, Lex GP-1 Trust (the “General Partner”), is a wholly-owned subsidiary of Lexington Realty Trust (“Lexington”). The Partnership serves as an operating partnership subsidiary for Lexington. As of December 31, 2012 and 2011, Lexington, through Lex LP-1 Trust, a wholly-owned subsidiary, and the General Partner, owned 89.5% and 79.2%, respectively, of the outstanding units of the Partnership.

The Partnership invests in and acquires, owns, finances and manages a geographically diversified portfolio of predominately single-tenant office, industrial and retail properties. As of December 31, 2012, the Partnership had equity ownership interests in 10 consolidated properties located in eight states. As of December 31, 2011, the Partnership had equity ownership interests in 11 properties located in nine states. A majority of the real properties in which the Partnership had an interest are generally subject to net leases or similar leases where the tenant pays all or substantially all of the cost, including cost increases, for real estate taxes, insurance, utilities and ordinary maintenance of the property. However, certain leases provide that the landlord is responsible for certain operating expenses. In addition, the Partnership acquires, originates and holds loan assets related to single-tenant real estate.

(2)Summary of Significant Accounting Policies

Basis of Presentation and Consolidation. The Partnership's consolidated financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). The financial statements reflect the accounts of the Partnership and its consolidated subsidiaries. The Partnership consolidates its wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Partnership is the primary beneficiary of a variable interest entity (“VIE”). Entities which the Partnership does not control and entities which are VIEs in which the Partnership is not the primary beneficiary are accounted for under appropriate GAAP.

If an investment is determined to be a VIE, the Partnership performs an analysis to determine if the Partnership is the primary beneficiary of the VIE. GAAP requires a VIE to be consolidated by its primary beneficiary. The primary beneficiary is the party that has a controlling financial interest in an entity. In order for a party to have a controlling financial interest in an entity, it must have (1) the power to direct the activities of a VIE that most significantly impact the entity's economic performance and (2) the obligation to absorb losses or the right to receive benefits of an entity that could potentially be significant to the VIE.

Consolidated Variable Interest Entity.The Partnership's consolidated VIE was determined to be a VIE primarily because the entity's equity holders' obligation to absorb losses is protected. The Partnership determined that it was the primary beneficiary of the VIE because it has a controlling financial interest in the entity.

The Partnership's wholly-owned entity which owns an office building in Greenville, South Carolina is a VIE and is consolidated by the Partnership. The tenant has an option to purchase the property on December 31, 2014 at fair market value, but not for less than $10,710 and not for greater than $11,550. If the tenant does not exercise the purchase option, the Partnership has the right to require the tenant to purchase the property for $10,710.

Earnings Per Unit. Net income (loss) per unit is computed by dividing net income (loss) by the weighted-average number of units outstanding during the period.

Unit Redemptions. The Partnership's limited partnership units that are issued and outstanding, other than those held by Lexington, are currently redeemable at certain times, only at the option of the holders, for Lexington shares of beneficial interests, par value $0.0001 per share, classified as common stock (“common shares”), on a one to approximately 1.13 basis, subject to future adjustments. These units are not otherwise mandatory redeemable by the Partnership. As of December 31, 2012, Lexington's common shares had a closing price of $10.45 per share. Assuming all outstanding limited partner units not held by Lexington were redeemed on such date the estimated fair value of the units was $14,596.

F-47

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Allocation of Overhead Expenses. The Partnership does not pay a fee to the General Partner for the day-to-day management of the Partnership. Certain expenses incurred by the General Partner and its affiliates, including Lexington, such as corporate-level interest, amortization of deferred loan costs, payroll and general and administrative expenses are allocated to the Partnership and reimbursed to the General Partner in accordance with the Partnership agreement. The allocation is based upon gross rental revenues.

Distributions; Allocations of Income and Loss. As provided in the Partnership's partnership agreement, distributions and income and loss for financial reporting purposes are allocated to the partners based on their ownership of units. Special allocation rules included in the partnership agreements affect the allocation of taxable income and loss. The Partnership paid or accrued gross distributions of $6,713 ($0.90 per weighted-average unit); $5,341 ($0.89 per weighted-average unit) and $5,076 ($0.84 per weighted-average unit) to its partners during the years ended December 31, 2012, 2011 and 2010, respectively. Certain units owned indirectly by Lexington are entitled to distributions of $2.0125 to $3.25 per unit.

Use of Estimates. The Partnership has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. The Partnership evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. The Partnership adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and loans receivable and the useful lives of long-lived assets. Actual results could differ materially from those estimates.

Fair Value Measurements.The Partnership follows the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Partnership utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk.

Revenue Recognition.The Partnership recognizes lease revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are lower than those in the primary term are excluded from the calculation of straight-line rent if the renewals are not reasonably assured. If the Partnership funds tenant improvements and the improvements are deemed to be owned by the Partnership, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. If the Partnership determines that the tenant allowances are lease incentives, the Partnership commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Partnership recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Partnership obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred or deferred revenue on the Consolidated Balance Sheets.

Gains on sales of real estate are recognized based upon the specific timing of the sale as measured against various criteria related to the terms of the transactions and any continuing involvement associated with the properties. If the sales criteria are not met, the gain is deferred and the finance, installment or cost recovery method, as appropriate, is applied until the sales criteria are met. To the extent the Partnership sells a property and retains a partial ownership interest in the property, the Partnership recognizes gain to the extent of the third-party ownership interest.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Accounts Receivable. The Partnership continuously monitors collections from tenants and makes a provision for estimated losses based upon historical experience and any specific tenant collection issues that the Partnership has identified. As of December 31, 2012 and 2011, the Partnership's allowance for doubtful accounts was not significant.

Purchase Accounting and Acquisition of Real Estate. The fair value of the real estate acquired, which includes the impact of fair value adjustments for assumed mortgage debt related to property acquisitions, is allocated to the acquired tangible assets, consisting of land, building and improvements and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, other value of in-place leases and value of tenant relationships, based in each case on their fair values. Acquisition costs are expensed as incurred and are included in property operating expense in the accompanying Consolidated Statement of Operations. Also, noncontrolling interests acquired are recorded at estimated fair market value.

The fair value of the tangible assets of an acquired property (which includes land, building and improvements and fixtures and equipment) is determined by valuing the property as if it were vacant. The “as-if-vacant” value is then allocated to land and building and improvements based on management's determination of relative fair values of these assets. Factors considered by management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current market demand. The Partnership also estimates costs to execute similar leases including leasing commissions.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-market lease values are recorded based on the difference between the current in-place lease rent and the Partnership's estimate of current market rents. Below-market lease intangibles are recorded as part of deferred revenue and amortized into rental revenue over the non-cancelable periods and bargain renewal periods of the respective leases. Above-market leases are recorded as part of intangible assets and amortized as a direct charge against rental revenue over the non-cancelable portion of the respective leases.

The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationship values, is measured by the excess of (1) the purchase price paid for a property over (2) the estimated fair value of the property as if vacant, determined as set forth above. This aggregate value is allocated between in-place lease values and tenant relationship values based on management's evaluation of the specific characteristics of each tenant's lease. The value of in-place leases is amortized to expense over the remaining non-cancelable periods and any bargain renewal periods of the respective leases. The value of tenant relationships are amortized to expense over the applicable lease term plus expected renewal periods.

Depreciation is determined by the straight-line method over the remaining estimated economic useful lives of the properties. The Partnership generally depreciates its real estate assets over periods ranging up to 40 years.

Impairment of Real Estate.The Partnership evaluates the carrying value of all tangible and intangible real estate assets held for investment for possible impairment when an event or change in circumstance has occurred that indicates its carrying value may not be recoverable. The evaluation includes estimating and reviewing anticipated future undiscounted cash flows to be derived from the asset. If such cash flows are less than the asset's carrying value, an impairment charge is recognized to the extent by which the asset's carrying value exceeds the estimated fair value, which may be below the balance of any non-recourse financing. Estimating future cash flows and fair values is highly subjective and such estimates could differ materially from actual results.

Loans Receivable.Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees, loan purchase discounts, and net of an allowance for loan losses when such loan is deemed to be impaired. Loan origination costs and fees and loan purchase discounts are amortized over the term of the loan. The Partnership considers a loan impaired when, based upon current information and events, it is probable that it will be unable to collect all amounts due for both principal and interest according to the contractual terms of the loan agreement. Significant judgments are required in determining whether impairment has occurred. The Partnership performs an impairment analysis by comparing (i) the present value of expected future cash flows discounted at the loan's effective interest rate, (ii) the loan's observable current market price or (iii) the fair value of the underlying collateral to the net carrying value of the loan, which may result in an allowance and corresponding loan loss charge. Interest income is recorded on a cash basis for impaired loans.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Acquisition, Development and Construction Arrangements.The Partnership evaluates loans receivable where the Partnership participates in residual profits through loan provisions or other contracts to ascertain whether the Partnership has the same risks and rewards as an owner or a joint venture partner. Where the Partnership concludes that such arrangements are more appropriately treated as an investment in real estate, the Partnership reflects such loan receivable as an equity investment in real estate under construction in the Consolidated Balance Sheets. In these cases, no interest income is recorded on the loan receivable and the Partnership records capitalized interest during the construction period. In arrangements where the Partnership engages a developer to construct a property or provide funds to a tenant to develop a property, the Partnership will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period.

Properties Held For Sale.Assets and liabilities of properties that meet various held for sale criteria, including whether it is probable that a sale will occur within 12 months, are presented separately in the Consolidated Balance Sheets, with assets and liabilities being separately stated. The operating results of these properties are reflected as discontinued operations in the Consolidated Statements of Operations. Properties classified as held for sale are carried at the lower of net carrying value or estimated fair value less costs to sell and depreciation and amortization are no longer recognized. Properties that do not meet the held for sale criteria are accounted for as operating properties.

Deferred Expenses. Deferred expenses consist primarily of debt and leasing costs. Debt costs are amortized using the straight-line method, which approximates the interest method, over the terms of the debt instruments and leasing costs are amortized over the term of the related lease.

Income Taxes. Because the Partnership is a limited partnership, taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the Consolidated Financial Statements of the Partnership. However, the Partnership is required to pay certain state and local entity level taxes which are expensed as incurred. The Partnership does not have any unrecognized tax benefits or any additional tax liabilities as of December 31, 2012 and 2011.

Cash and Cash Equivalents.The Partnership considers all highly liquid instruments with original maturities of three months or less from the date of purchase to be cash equivalents.

Restricted Cash. Restricted cash is comprised primarily of cash balances held in escrow with lenders.

F-50

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Environmental Matters.Under various federal, state and local environmental laws, statutes, ordinances, rules and regulations, an owner of real property may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under such property as well as certain other potential costs relating to hazardous or toxic substances. These liabilities may include government fines, penalties and damages for injuries to persons and adjacent property. Such laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence or disposal of such substances. Although most of the tenants of properties in which the Partnership has an interest are primarily responsible for any environmental damage and claims related to the leased premises, in the event of the bankruptcy or inability of the tenant of such premises to satisfy any obligations with respect to such environmental liability, or if the tenant is not responsible, the Partnership's property owner subsidiary may be required to satisfy any such obligations, should they exist. In addition, the property owner subsidiary, as the owner of such a property, may be held directly liable for any such damages or claims irrespective of the provisions of any lease. As of December 31, 2012, the Partnership was not aware of any environmental matter relating to any of its investments that would have a material impact on the consolidated financial statements.

Segment Reporting. The Partnership operates generally in one industry segment, single-tenant real estate assets.

Recently Issued Accounting Guidance.In February 2013, the FASB issued Accounting Standards Update 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date, (“ASU 2013-04”), requiring recognition of such obligations as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The Partnership early adopted this new guidance retrospectively (see note 7).

(3)Investments in Real Estate

The Partnership's real estate, net, consists of the following at December 31, 2012 and 2011:

  2012  2011 
Real estate, at cost:        
Buildings and building improvements $125,800  $133,115 
Land, land estates and land improvements  16,175   17,778 
Real estate intangibles:        
In-place lease values  9,497   9,816 
Tenant relationships  2,644   2,710 
Above-market leases  821   821 
   154,937   164,240 
Accumulated depreciation and amortization(1)  (36,737)  (34,722)
Real estate, net $118,200  $129,518 

(1)Includes accumulated amortization of real estate intangible assets of $5,024 and $4,444 in 2012 and 2011, respectively. The estimated amortization of the above real estate intangible assets for the next five years is $614 in 2013, 2014 and 2015, $556 in 2016 and $540 in 2017.

The Partnership, through property owner subsidiaries, completed the following build-to-suit transactions during 2011:

                 Real Estate Intangibles 
Property
Type
 Location Acquisition
Date
 Initial Cost
Basis
  Lease
Expiration
 Land  Building and
Improvements
  Lease in-place
Value
  Tenant
Relationships
Value
 
Industrial Byhalia, MS May 2011 $27,492  03/2026 $1,005  $21,483  $4,097  $907 
Industrial Shelby, NC June 2011 $23,470  05/2031 $1,421  $18,917  $2,712  $420 
      $50,962    $2,426  $40,400  $6,809  $1,327 
                           
Weighted-average life of intangible assets (years)          16.9   16.5 

The Partnership did not make any acquisitions in 2012.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(4)Sales of Real Estate and Discontinued Operations

During 2012, the Partnership conveyed its interests in a vacant office property in Clive, Iowa along with its escrow deposit in satisfaction of a $5,290 non-recourse secured mortgage loan. The Partnership recognized a debt satisfaction charge of $1,411 and a $1,089 gain on sale of property relating to the transaction. These amounts are included in discontinued operations. The Partnership did not dispose of any interests in properties in 2011 and 2010.

At December 31, 2012 and 2011, the Partnership had no properties classified as held for sale. Subsequent to December 31, 2012, the Partnership conveyed its interest in an office property in Farmington Hills, Michigan along with its escrow deposit in satisfaction of a $17,542 non-recourse mortgage loan. The results of operations of the Farmington Hills, Michigan property are included in discontinued operations in the Consolidated Statement of Operations.

The following presents the operating results for the disposed properties discussed above during the years ended December 31, 2012, 2011 and 2010:

  Year Ending December 31, 
  2012  2011  2010 
Total gross revenues $1,063  $6,961  $4,982 
Pre-tax net income (loss), including gains on sales $(2,111) $(6,858) $1,393 

The Partnership assesses on a regular basis whether there are any indicators that the carrying value of real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant reduction in utilization of a property, tenant financial instability and the potential sale of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value.

During 2011, the Partnership recognized a $9,848 impairment charge in discontinued operations, relating to a real estate asset that was ultimately disposed of below its carrying value.

(5)Loan Receivable

As of December 31, 2012 and 2011, the Partnership’s loan receivable is a first mortgage loan on real estate.

The following is a summary of the Partnership's loan receivable as of December 31, 2012 and 2011:

  Loan carrying-value(1)      
Loan 12/31/2012  12/31/2011  Interest Rate  Maturity Date
Schaumburg, IL(2) $21,942  $21,515   20.00% 01/2012
  $21,942  $21,515       

(1)Loan carrying value includes accrued interest and is net of origination costs and loan loss reserves, if any.
(2)Loan was in default. The Partnership did not record interest of $2,647 in 2012 representing the interest earned since April 1, 2012. The Partnership believes the office property collateral has an estimated fair value in excess of the Partnership's investment and the Partnership initiated foreclosure proceedings. Subsequent to December 31, 2012, the Partnership foreclosed and acquired the office property (see note 14).

The Partnership has two types of financing receivables: a loan receivable and a capitalized financing lease. The Partnership determined that its financing receivables operate within one portfolio segment as they are both within the same industry and use the same impairment methodology. The Partnership's loan receivable is secured by a commercial real estate asset and the capitalized financing lease is for a commercial office property located in Greenville, South Carolina. In addition, the Partnership assesses all financing receivables for impairment, when warranted, based on an individual analysis of each receivable.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

The Partnership's financing receivables operate within one class of financing receivables as these assets are collateralized by commercial real estate and similar metrics are used to monitor the risk and performance of these assets. The Partnership uses credit quality indicators to monitor financing receivables such as quality of collateral, the underlying tenant's credit rating and collection experience. As of December 31, 2012, the financing receivables were performing as anticipated, other than the Schaumburg, Illinois loan, and there were no other significant delinquent amounts outstanding.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(6)Fair Value Measurements

The following tables present the Partnership's assets and liabilities from continuing operations measured at fair value on a non-recurring basis during the year ended December 31, 2011, aggregated by the level in the fair value hierarchy within which those measurements fall:

     Fair Value Measurements Using 
Description 2011  (Level 1)  (Level 2)  (Level 3) 
Impaired real estate assets* $10,500  $  $  $10,500 

*Represents a non-recurring fair value measurement.

The table below sets forth the carrying amounts and estimated fair values of the Partnership's financial instruments as of December 31, 2012 and 2011:

  As of December 31, 2012  As of December 31, 2011 
  Carrying
Amount
  Fair Value  Carrying
Amount
  Fair Value 
Assets                
Loans Receivable (Level 3) $21,942  $21,942  $21,515  $21,515 
                 
Liabilities                
Debt (Level 3) $60,590  $58,865  $90,738  $86,791 

The Partnership estimates the fair value of its real estate assets by using income and market valuation techniques. The Partnership may estimate fair values using market information such as broker opinions of value, recent sales data for similar assets or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Partnership has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations. To the extent the Partnership under estimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or over estimates forecasted cash inflows (rental revenue rates), the estimated fair value of its real estate assets could be overstated.

The Partnership estimates the fair value of its loan receivable by using an estimated discounted cash flow analysis consisting of scheduled cash flows and discount rate estimates to approximate those that a willing buyer and seller might use and/or the estimated value of the underlying collateral. The fair value of the Partnership's debt is estimated by using a discounted cash flow analysis, based upon estimates of market interest rates.

Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.

Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Partnership estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(7)Mortgages and Notes Payable

The Partnership had outstanding mortgages and notes payable of $48,989 and $87,300 as of December 31, 2012 and 2011, respectively. Interest rates, including imputed rates, ranged from 4.7% to 7.4% at December 31, 2012 and the mortgages and notes payable mature between 2015 and 2031. Interest rates, including imputed rates, ranged from 4.7% to 6.1% at December 31, 2011. The weighted-average interest rate at December 31, 2012 and 2011 was approximately 6.0% and 5.6%, respectively.

The Partnership is a co-borrower on a term loan issued to Lexington in January 2012 from Wells Fargo Bank, National Association ("Wells Fargo"), as agent. The term loan matures in January 2019. The term loan requires regular payments of interest only. At December 31, 2012, Lexington had $255,000 outstanding under the term loan. The term loan was subject to financial covenants which Lexington was in compliance with at December 31, 2012. The term loan agreement was amended in February 2013 (see note 14).

In addition, the Partnership is a co-borrower under Lexington's revolving credit facility. In January 2012, Lexington refinanced its revolving credit facility with a $300,000 revolving credit facility with KeyBank N.A. (“KeyBank”), as agent. The revolving credit facility was scheduled to mature in January 2015 but could be extended to January 2016, at Lexington's option subject to the satisfaction of certain conditions. As of December 31, 2012, no amounts were outstanding under the revolving credit facility. The revolving credit facility was subject to financial covenants which Lexington was in compliance with at December 31, 2012. The revolving credit facility was refinanced in February 2013 (see note 14).

In accordance with the guidance of ASU 2013-04, the Partnership recognizes a proportion of the outstanding amounts of the above mentioned term loan and revolving credit facility as it is a co-borrower with Lexington, as co-borrower debt in the accompanying balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion of these debts based on gross rental revenues, which represents its agreed to obligation. Changes in co-borrower debt are recognized in partners’ capital in the accompanying consolidated statements of changes in partners’ capital. The Partnership is also allocated interest expense by Lexington, in accordance with the Partnership agreement relating to these lending facilities of $469, $156 and $239 for the years ended 2012, 2011, and 2010, respectively.

Included in the Consolidated Statements of Operations, the Partnership recognized debt satisfaction charges, net, excluding discontinued operations, of $13 for the year ended December 31, 2012, due to the satisfaction of mortgages and notes payable other than those disclosed elsewhere in these financial statements. In addition, the Partnership capitalized $661 in interest for the year ended 2011.

Mortgages payable and secured loans are generally collateralized by real estate and the related leases. Certain mortgages payable have yield maintenance or defeasance requirements relating to any prepayments. In addition, certain mortgages are cross-collateralized and cross-defaulted.

Scheduled principal and balloon payments for mortgages and notes payable for the next five years and thereafter are as follows:

Year ending
December 31,
 Total 
2013 $198 
2014  286 
2015  9,321 
2016  15,342 
2017  368 
Thereafter  23,474 
  $48,989 

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(8)Leases

Lessor:

Minimum future rental receipts under the non-cancelable portion of tenant leases, assuming no new or re-negotiated leases, for the next five years and thereafter are as follows:

Year ending

December 31,

 Total 
2013 $14,314 
2014  14,823 
2015  14,664 
2016  11,729 
2017  9,638 
Thereafter  84,404 
  $149,572 

The above minimum lease payments do not include reimbursements to be received from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases.

Certain leases allow for the tenant to terminate the lease if the property is deemed obsolete, as defined, and upon payment of a termination fee to the landlord, as stipulated in the lease. In addition, certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price.

(9)Concentration of Risk

The Partnership seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the years ended December 31, 2012, 2011 and 2010, the following tenants represented greater than 10% of rental revenues:

  2012  2011  2010 
Asics America Corporation  21.6%  17.5%   
Bell South Mobility     10.1%  14.7%
Clearwater Paper Corporation  19.1%  12.8%   
Elsevier STM Inc.  25.2%  31.0%  45.4%
Hagemeyer North America Inc.        11.1%
Owens Corning Insulating Systems LLC  10.5%     11.9%
Time Customer Services, Inc.     11.6%  16.9%

Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Partnership believes it mitigates this risk by investing in or through major financial institutions.

(10)Related Party Transactions

The Partnership had the following related party transactions in addition to related party transactions discussed elsewhere in this report.

The Partnership had outstanding net advances owed to Lexington of $21,667 and $58,388 as of December 31, 2012 and 2011, respectively. The advances are payable on demand and the Partnership was allocated a portion of the interest charged on Lexington's revolving credit facility and term loan. During 2012, the Partnership issued 5,763,065 units to Lexington to satisfy $55,671 of outstanding advances. Lexington earned distributions of $5,941, $4,675 and $4,484 during 2012, 2011 and 2010, respectively.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

Lexington, on behalf of the General Partner, pays for certain general administrative and other costs on behalf of the Partnership from time to time. These costs are reimbursable by the Partnership. These costs were approximately $1,149, $1,119 and $690 for 2012, 2011 and 2010, respectively.

A Lexington affiliate provides property management services for certain Partnership properties. The Partnership recognized property operating expenses, including from discontinued operations, of $101, $230 and $168 for the years ended December 31, 2012, 2011 and 2010, respectively, for aggregate fees and reimbursements charged by the affiliate.

(11)Commitments and Contingencies

In addition to the commitments and contingencies disclosed elsewhere, the Partnership has the following commitments and contingencies.

The Partnership is obligated under certain tenant leases to fund the expansion of the underlying leased properties. The Partnership, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries.

From time to time, the Partnership is directly or indirectly involved in legal proceedings arising in the ordinary course of the Partnership's business. The Partnership believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Partnership's business, financial condition and results of operations.

On December 31, 2006, the Partnership, Lexington and, Lexington's other operating partnership, Lepercq Corporate Income Fund L.P. (“LCIF”), entered into a funding agreement. All references to "Operating Partnerships" in this paragraph refer to the Partnership and LCIF. Pursuant to the funding agreement, the parties agreed, jointly and severally, that, if any of the Operating Partnerships does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount equal to whichever is applicable of (1) a specified distribution set forth in its partnership agreement or (2) the cash dividend payable with respect to a whole or fractional Lexington common share into which such partnership's common units would be converted if they were redeemed for Lexington common shares in accordance with its partnership agreement, Lexington and the other Operating Partnerships, each a “funding partnership,” will fund their pro rata share of the shortfall. The pro rata share of each funding partnership and Lexington, respectively, will be determined based on the number of units in each funding partnership and, for Lexington, by the amount by which its total outstanding common shares exceeds the number of units in each funding partnership not owned by Lexington, with appropriate adjustments being made if units are not redeemable on a one-for-one basis. Payments under the agreement will be made in the form of loans to the partnership experiencing a shortfall and will bear interest at prevailing rates as determined by Lexington in its discretion but no less than the applicable federal rate. The Partnership's right to receive these loans will expire if Lexington contributes to the Partnership all of its economic interests in the other Operating Partnerships and all of its other subsidiaries that are partnerships, joint ventures or limited liability companies. However, thereafter the Partnership will remain obligated to continue to make these loans until there are no remaining units outstanding in the other Operating Partnerships and all loans have been repaid. No amounts have been advanced under this agreement.

During 2010, the Partnership guaranteed $115,000 aggregate principal amount of 6.00% Convertible Guaranteed Notes due 2030 issued by Lexington. The notes pay interest semi-annually in arrears and mature in January 2030. The holders of the notes may require Lexington to repurchase their notes in January 2017, January 2020 and January 2025 for cash equal to 100% of the notes to be repurchased, plus any accrued and unpaid interest. The notes are convertible by the holders under certain circumstances for cash, Lexington common shares or a combination of cash and common shares at Lexington's election. As of December 31, 2012, $83,896 original principal amount of 6.00% Convertible Guaranteed Notes due 2030 were outstanding.

(12)Supplemental Disclosure of Statement of Cash Flow Information

In addition to disclosures discussed elsewhere, during 2012, 2011 and 2010, the Partnership paid (received) $4,335, $4,570 and $4,443, respectively, for interest and $26, $64 and $(35), respectively, for income taxes.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($000, except share/unit data)

(13)Unaudited Quarterly Financial Data

  2012 
  3/31/2012  6/30/2012  9/30/2012  12/31/2012 
Total gross revenues(1) $3,531  $3,548  $3,594  $3,573 
Net income $850  $224  $903  $1,018 
Net income per unit $0.14  $0.04  $0.15  $0.09 

  2011 
  3/31/2011  6/30/2011  9/30/2011  12/31/2011 
Total gross revenues(1) $1,973  $2,627  $3,383  $3,409 
Net income (loss) $2,388  $(7,303) $3,106  $3,064 
Net income (loss) per unit $0.40  $(1.21) $0.52  $0.51 

(1)All periods have been adjusted to reflect the impact of properties in discontinued operations in the Consolidated Statements of Operations.

The sum of the quarterly per units amounts may not equal the full year amounts primarily because the computations of the weighted-average number of units of the Partnership outstanding for each quarter and the full year are made independently.

(14)Subsequent Events

Subsequent to December 31, 2012 and in addition to disclosures elsewhere in the financial statements:

the Partnership conveyed to the lender its property in Farmington Hills, Michigan for full satisfaction of the related $17,542 non-recourse mortgage;

Lexington amended its $255,000 secured term loan agreement to release the collateral securing the term loan;

Lexington refinanced its January 2012 $300,000 secured revolving credit facility with a $300,000 unsecured revolving credit facility with KeyBank, as agent. The unsecured revolving credit facility matures in February 2017 but can be extended until February 2018 at Lexington's option. In addition, the availability under the unsecured revolving credit facility was increased to $400,000;

in connection with the refinancing discussed above, the Partnership also became the co-borrower under a five-year $250,000 unsecured term loan facility from KeyBank, as agent procured by Lexington. The unsecured term loan matures in February 2018 and requires regular payments of interest only;

in June 2013, the Partnership guaranteed the $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 issued by Lexington;

the Partnership issued 1,789,650 units to Lexington in August 2013 to satisfy a $22,442 outstanding advance balance;

the Partnership completed a foreclosure and acquired the office building in Schaumburg, Illinois. The Partnership is obligated to fund an outstanding tenant improvement allowance of approximately $9,000;

the Partnership received $13,752 from Lexington in exchange for 1,252,437 units; and

the Partnership redeemed 567,961 units held by Lexington at the original net issuance price of $13,752 in the aggregate.

LEPERCQ CORPORATE INCOME FUND II L.P. AND CONSOLIDATED SUBSIDIARIES

Real Estate and Accumulated Depreciation and Amortization

Schedule III ($000)

Description Location Encumbrances  Land and Land Estates  Buildings and Improvements  Total  Accumulated Depreciation and Amortization  Date Acquired Date Constructed  Useful life computing depreciation in latest income statements (years) 
Land Clive, IA $  $1,156  $  $1,156  $  Jun-04  2003   N/A 
Office Baton Rouge, LA     1,252   10,244   11,496   2,454  May-07  1997   6 & 40 
Office Charleston, SC  7,350   1,189   8,724   9,913   2,327  Nov-06  2006   40 
Long Term Lease - Office Farmington Hills, MI  17,639   2,765   9,265   12,030   785  Jun-07  1999   1, 13 & 40 
Long Term Lease - Industrial Byhalia, MS  15,000   1,006   21,483   22,489   896  May-11  2011   40 
Long Term Lease - Industrial Shelby, NC     1,421   18,917   20,338   1,060  Jun-11  2011   11, 20 & 40 
Industrial Tampa, FL     2,160   7,328   9,488   5,247  Jul-88  1986   9 - 40 
Industrial Hebron, OH     1,063   4,271   5,334   1,179  Dec-97  2000   40 
Industrial Hebron, OH     1,681   7,033   8,714   2,069  Dec-01  1999   2, 5 & 40 
Industrial San Antonio, TX     2,482   38,535   41,017   15,696  Jul-04  2001   17 & 40 
                                 
  Subtotal  39,989   16,175   125,800   141,975   31,713           
                                 
  (1)  9,000                           
                                 
    $48,989  $16,175  $125,800  $141,975  $31,713           

(1) - Property is classified as a capital lease

LEPERCQ CORPORATE INCOME FUND L.P.

Introduction to Unaudited Pro Forma Condensed Consolidated Financial Information

The following unaudited pro forma condensed consolidated balance sheet information as of September 30, 2013 reflects the financial position of Lepercq Corporate Income Fund L.P. (“LCIF”) as if the merger with Lepercq Corporate Income Fund II L.P. (“LCIF II”) had occurred on September 30, 2013. The unaudited pro forma condensed consolidated statements of operations information for the year ended December 31, 2012 and the nine months ended September 30, 2013 present the results of operations of LCIF as if the merger with LCIF II had occurred on January 1, 2012.

As LCIF will be accounting for the transaction as a business combination between entities under common control, the LCIF II assets acquired and liabilities assumed will be accounted for at their historical basis.

This unaudited pro forma condensed consolidated financial information should be read in connection with the financial statements of LCIF and LCIF II for the nine months ended September 30, 2013 and the year ended December 31, 2012.

This unaudited pro forma financial information is not necessarily indicative of the expected results of operations of LCIF for any future period. It also does not necessarily reflect what the historical results of the combined company would have been had the operating partnerships been combined during the periods. Differences could result from, among other considerations, future changes in LCIF’s portfolio of investments, changes in interest rates, changes in the capital structure of LCIF, changes in property level operating expenses and changes in property level revenues.

LEPERCQ CORPORATE INCOME FUND L.P.
Unaudited Pro Forma Condensed Consolidated Balance Sheet Information
As of September 30, 2013
(In thousands)By: Lex GP-1 Trust, its sole general partner
By: /s/ Joseph S. Bonventre
Name: Joseph S. Bonventre
Title: Vice President
LXP INDUSTRIAL TRUST
By: /s/ Joseph S. Bonventre
Name: Joseph S. Bonventre
Title: Executive Vice President

  Historical  LCIF II    
  (A)  (B)   Pro Forma 
Assets:             
Real estate, at cost $518,061  $130,116   $648,177 
Real estate-intangible assets  60,979   12,024    73,003 
Investments in real estate and under construction  3,972       3,972 
   583,012   142,140    725,152 
Less: accumulated depreciation and amortization  180,826   38,801    219,627 
   402,186   103,339    505,525 
Cash and cash equivalents  8,763   3,358    12,121 
Restricted cash  7,536       7,536 
Investment in and advances to non-consolidated entity  5,213       5,213 
Deferred expenses, net  4,946   703    5,649 
Loans receivable, net  33,439   21,636    55,075 
Rent receivable – current  516   38    554 
Rent receivable – deferred  8,478   3,617    12,095 
Other assets, net  1,292   11,226    12,518 
Total assets $472,369  $143,917   $616,286 
              
Liabilities and Partners’ Capital:             
Liabilities:             
Mortgages and notes payable $94,644  $31,350   $125,994 
Co-borrower debt  53,453   15,336    68,789 
Related party advances, net  304   249    553 
Accounts payable and other liabilities  5,674   626    6,300 
Accrued interest payable  805   107    912 
Deferred revenue - including below market leases, net  688       688 
Distributions payable  9,726   2,665    12,391 
Prepaid rent  3,551   620    4,171 
Total liabilities  168,845   50,953    219,798 
Partners’ capital  303,524   92,964    396,488 
Total liabilities and partners’ capital $472,369  $143,917   $616,286 

See accompanying noted to unaudited pro forma condensed consolidated financial information.

LEPERCQ CORPORATE INCOME FUND L.P.
Unaudited Pro Forma Condensed Consolidated Statement of Operations Information
For the nine months ended September 30, 2013
(In thousands, except share and per unit data)

  Historical (AA)  LCIF II (BB)  Pro Forma 
Gross revenues:            
Rental $36,789  $10,044  $46,833 
Tenant reimbursements  4,073   462   4,535 
Total gross revenues  40,862   10,506   51,368 
Expense applicable to revenues:            
Depreciation and amortization  (15,565)  (3,931)  (19,496)
Property operating  (8,277)  (911)  (9,188)
General and administrative  (2,789)  (794)  (3,583)
Non-operating income  1,816   746   2,562 
Interest and amortization expense  (6,299)  (1,656)  (7,955)
Debt satisfaction charges, net  (1,560)     (1,560)
Income before provision for income taxes, equity in losses of non-consolidated entity and discontinued operations  8,188   3,960   12,148 
Provision for income taxes  (45)  (20)  (65)
Equity in losses of non-consolidated entity  (67)     (67)
Income from continuing operations $8,076 $3,940 $12,016
             
Income from continuing operations per unit $0.22  $0.32  $0.25 
Weighted average units outstanding  35,706,244   12,184,268   47,890,512 

See accompanying notes to unaudited pro forma condensed consolidated financial information.

 

LEPERCQ CORPORATE INCOME FUND L.P.
Unaudited Pro Forma Condensed Consolidated Statement of Operations Information
For the year ended December 31, 2012
(In thousands, except share and per unit data)

 

  Historical (AA)  LCIF II (BB)  Pro Forma 
Gross revenues:            
Rental $46,102  $13,609  $59,711 
Tenant reimbursements  5,269   637   5,906 
Total gross revenues  51,371   14,246   65,617 
Expense applicable to revenues:            
Depreciation and amortization  (19,361)  (5,594)  (24,955)
Property operating  (10,981)  (852)  (11,833)
General and administrative  (3,689)  (1,189)  (4,878)
Non-operating income  2,793   1,820   4,613 
Interest and amortization expense  (11,598)  (3,286)  (14,884)
Debt satisfaction gains (charges), net  13   (13)   
Litigation reserve  (912)     (912)
Income before provision for income taxes, equity in losses of non-consolidated entity and discontinued operations  7,636   5,132   12,768 
Provision for income taxes  (68)  (26)  (94)
Equity in losses of non-consolidated entity  (33)     (33)
Income from continuing operations $7,535  $5,106  $12,641 
             
Income from continuing operations per unit $0.24  $0.68  $0.33 
Weighted average units outstanding  30,673,346   7,464,269   38,137,615 

See accompanying notes to unaudited pro forma condensed consolidated financial information.

LEPERCQ CORPORATE INCOME FUND L.P.

Notes to Pro Forma Condensed Consolidated Financial Information (Unaudited)

(Dollars in thousands)

(1) Adjustments to Unaudited Pro Forma Condensed Consolidated Balance Sheet Information

The adjustments to the unaudited pro forma condensed consolidated balance sheet as of September 30, 2013 are as follows:

(A)Reflects LCIF’s historical unaudited condensed consolidated balance sheet as of September 30, 2013.

(B)Reflects LCIF II’s historical unaudited condensed consolidated balance sheet as of September 30, 2013.

(2) Adjustments to Unaudited Pro Forma Condensed Consolidated Statements of Operations Information

The adjustments to the unaudited pro forma condensed consolidated statements of operations information for the year ended December 31, 2012 and nine months ended September 30, 2013 are as follows:

(AA)Reflects LCIF’s historical condensed consolidated statements of operations for the year ended December 31, 2012 (audited) and nine months ended September 30, 2013 (unaudited).

(BB)Reflects LCIF II’s historical condensed consolidated statements of operations for the year ended December 31, 2012 (audited) and the nine months ended September 30, 2013 (unaudited).

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20.          Indemnification of Directors and Officers.Officers

The Maryland REIT lawLaw and Section 2-418 of the Maryland General Corporation Law generally permits indemnification of any trustee or officer made a party to any proceedings by reason of service as a trustee or officer unless it is established that (i) the act or omission of such person was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; or (ii) such person actually received an improper personal benefit in money, property or services; or (iii) in the case of any criminal proceeding, such person had reasonable cause to believe that the act or omission was unlawful. The indemnity may include judgments, penalties, fines, settlements and reasonable expenses actually incurred by the trustee or officer in connection with the proceeding; but, if the proceeding is one by or in the right of the company, indemnification is not permitted with respect to any proceeding in which the trustee or officer has been adjudged to be liable to the company, or if the proceeding is one charging improper personal benefit to the trustee or officer, whether or not involving action in the trustee's or officer's official capacity, indemnification of the trustee or officer is not permitted if the trustee or officer was adjudged to be liable on the basis that personal benefit was improperly received. The termination of any proceeding by conviction or upon a plea of nolo contendere or its equivalent, or any entry of an order of probation prior to judgment creates a rebuttable presumption that the trustee or officer did not meet the requisite standard of conduct required for permitted indemnification. The termination of any proceeding by judgment, order or settlement, however, does not create a presumption that the trustee or officer failed to meet the requisite standard of conduct for permitted indemnification.

Section 17-108 In addition, the Maryland REIT Law and the MGCL permits a trust to advance reasonable expenses to a trustee or officer upon the trust’s receipt of (a) a written affirmation by the Delaware Act providestrustee or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the trust and (b) a limited partnership may indemnify any partnerwritten undertaking by him or other person from and against any and all claims and demandsher or on his or her behalf to repay the amount paid or reimbursed by reasonthe trust if it is ultimately determined that the standard of such person being or having been a partner, employee or agent to the partnership. The Delaware Act provides that Section 17-108 isconduct was not exclusive of other rights to which those seeking indemnification may be entitled under any partnership agreement.

The LCIF partnership agreement provides that LCIF will indemnify Lex GP, as general partner LCIF, and LXP, as the sole equity owner of Lex GP, their respective directors, trustees and officers, and such other persons as Lex GP and LXP may from time to time designate to the fullest extent permitted under the Delaware Act.met. 

 

Pursuant to LXP’sthe LXP Declaration of Trust, LXP’s trustees and officers are and will be indemnified against certain liabilities. LXP’sThe LXP Declaration of Trust requires LXP to indemnify its trustees and officers, whether serving LXP or at its request any other entity, to the fullest extent permitted from time to time by the laws of Maryland. LXP’sMaryland, including the advance of expenses under the procedures and to the fullest extent permitted by Maryland law. The LXP Declaration of Trust also provides that LXP will indemnify other employees and agents, whether serving LXP or at its request any other entity, to such extent as shall be authorized by the LXP Board or the LXP bylaws and be permitted by law. The Maryland REIT law also permits a REIT formed under Maryland law to include in its declaration of trust a provision limiting the liability of its trustees and officers to the trust and its shareholders for money damages except for liability resulting from (1) actual receipt of an improper benefit or profit in money, property or services or (2) active and deliberate dishonesty by the trustee or officer that was established by a final judgment as being material to the cause of action adjudicated. The LXP Declaration of Trust contains such a provision that eliminates such liability to the fullest extent permitted underby the Maryland law, LXP’s trustees and officers will not be liable to LXP or its shareholders for money damages.REIT Law.

 

The foregoing reference is necessarily subject to the complete text of LXP’sthe LXP Declaration of Trust, and partnership agreements and the statutes referred to above and is qualified in its entirety by reference thereto.

 

We have also purchased liability insurance for our trustees and officers, which also covers our subsidiaries, including LCIF and LCIF II.subsidiaries. LXP has also entered into indemnification agreements with certain officers and trustees for the purpose of indemnifying such persons from certain claims and actions in their capacities as such.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to trustees, directors, officers or persons controlling the registrants pursuant to the foregoing provisions, the registrants have been informed that in the opinion of the CommissionSEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

II-1

ITEMItem 21.Exhibits and Financial Statement Schedules.

Schedules

Exhibit
No.

Description of Document

2.1DescriptionAmended and Restated Agreement and Plan of Merger, by and between LXP Industrial Trust and Lepercq Corporate Income Fund L.P., dated as of October 24, 2023 (included as Annex A to this information statement/prospectus included in this registration statement)
3.1Articles of Merger and Amended and Restated Declaration of Trust of the Company,LXP, dated December 31, 2006 (filed as Exhibit 3.1 to the Company’sLXP's Current Report on Form 8-K filed January 8, 2007 (the “01/08/07 8-K”))2007)(1)
3.2Articles Supplementary Relating to the Reclassification of 8.05% Series B Cumulative Redeemable Preferred Stock, par value $0.0001 per share, and 7.55% Series D Cumulative Redeemable Preferred Stock, par value $.0001$0.0001 per share (filed as Exhibit 3.33.4 to the Company’s Registration Statement on Form 8A filed February 14, 2007 (the “02/14/07 Registration Statement”))(1)
3.3Amended and Restated By-laws of the Company (filed as Exhibit 3.2 to the 01/08/07 8-K)(1)
3.4First Amendment to Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Company’sLXP's Current Report on Form 8-K filed November 20, 2009)21, 2013)(1)

3.5II-1 

Fifth3.3Articles of Amendment to the Amended and Restated AgreementDeclaration of Limited Partnership of Lepercq Corporate Income Fund L.P. (“LCIF”),Trust, dated as of December 31, 1996, as supplemented (the “LCIF Partnership Agreement”)14, 2021 (filed as Exhibit 3.33.1 to the Company’s Registration Statement on Form S-3/A filed September 10, 1999 (the “09/10/99 Registration Statement”))(1)
3.6Amendment No. 1 to the LCIF Partnership Agreement dated as of December 31, 2000 (filed as Exhibit 3.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, filed February 26, 2004 (the “2003 10-K”))(1)
3.7First Amendment to the LCIF Partnership Agreement effective as of June 19, 2003 (filed as Exhibit 3.12 to the 2003 10-K)(1)
3.8Second Amendment to the LCIF Partnership Agreement effective as of June 30, 2003 (filed as Exhibit 3.13 to the 2003 10-K)(1)
3.9Third Amendment to the LCIF Partnership Agreement effective as of December 31, 2003 (filed as Exhibit 3.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 (the “2004 10-K”))(1)
3.10Fourth Amendment to the LCIF Partnership Agreement effective as of October 28, 2004 (filed as Exhibit 10.1 to the Company’sLXP's Current Report on Form 8-K filed November 4, 2004)on December 16, 2021)(1)
3.113.4FifthArticles of Amendment to the LCIF Partnership Agreement effectiveAmended and Restated Declaration of Trust, dated as of December 8, 2004May 26, 2022 (filed as Exhibit 10.13.1 to the Company’sLXP's Current Report on Form 8-K filed December 14, 2004 (the “12/14/04 8-K”))on May 27, 2022)(1)
3.123.5Sixth Amendment to the LCIF Partnership Agreement effective asThird Amended and Restated By-laws of June 30, 2003LXP (filed as Exhibit 10.13.1 to the Company’sLXP's Current Report on Form 8-K filed January 3, 2005 (the “01/03/05 8-K”))May 19, 2023)(1)
3.133.6Seventh Amendment to the LCIF Partnership Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 3, 2005)(1)
3.14Eighth Amendment to the LCIF Partnership Agreement effective as of March 26, 2009 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 27, 2009 (the “4/27/09 8-K”)(1)
3.15Second Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund II L.P. (“LCIF II”), dated as of August 27, 1998 the (“LCIF II Partnership Agreement”) (filed as Exhibit 3.4 to the 09/10/99 Registration Statement)(1)
3.16First Amendment to the LCIF II Partnership Agreement effective as of June 19, 2003 (filed as Exhibit 3.14 to the 2003 10-K)(1)
3.17Second Amendment to the LCIF II Partnership Agreement effective as of June 30, 2003 (filed as Exhibit 3.15 to the 2003 10-K)(1)
3.18Third Amendment to the LCIF II Partnership Agreement effective as of December 8, 2004 (filed as Exhibit 10.2 to 12/14/04 8-K)(1)
3.19Fourth Amendment to the LCIF II Partnership Agreement effective as of January 3, 2005 (filed as Exhibit 10.2 to 01/03/05 8-K)(1)
3.20Fifth Amendment to the LCIF II Partnership Agreement effective as of July 23, 2006 (filed as Exhibit 99.5 to the Company’s Current Report on Form 8-K filed July 24, 2006)(1)
3.21Sixth Amendment to the LCIF II Partnership Agreement effective as of December 20, 2006 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 22, 2006)(1)
3.22Seventh Amendment to the LCIF II Partnership Agreement effective as of March 26, 2009 (filed as Exhibit 10.2 to the 4/27/09 8-K)(1)
3.23Agreement and Plan of Merger, dated as of December 23, 2013, by and among LCIF and LCIF II, which includes as Exhibit A the form of Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of December 30, 2013 (filed as Exhibit 3.25 to the Company’sLXP's Annual Report on Form 10-K filed February 26, 2014)(1)
3.7First Amendment to Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of July 12, 2021 (filed as Exhibit 3.1 to LXP's Current Report on Form 8-K filed December  , 2013)July 16, 2021)(1)
4.1Specimen of Common Shares Certificate of the CompanyLXP (filed as Exhibit 4.1 to the Company’sLXP's Annual Report on Form 10-K for the year ended December 31, 2006)2021)(1)
4.2Form of 6.50% Series C Cumulative Convertible Preferred Stock certificate (filed as Exhibit 4.1 to the Company’sLXP's Registration Statement on Form 8A filed December 8, 2004)(1)

II-2

4.3Form of 7.55% Series D Cumulative Redeemable Preferred Stock certificate (filed as Exhibit 4.1 to the 02/14/07 Registration Statement)(1)
4.4Indenture, dated as of January 29, 2007, among the Company (as successor by merger), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 29, 2007 (the “01/29/07 8-K”))(1)
4.5Amended and Restated Trust Agreement, dated March 21, 2007, among the Company,LXP, The Bank of New York Trust Company, National Association, The Bank of New York (Delaware), the Administrative Trustees (as named therein) and the several holders of the Preferred Securities from time to time (filed as Exhibit 4.1 to the Company’sLXP's Current Report on Form 8-K filed on March 27, 2007 (the “03/27/2007 8-K”))(1)
4.64.4Junior Subordinated Indenture, dated as of March 21, 2007, between Lexington Realty Trust and The Bank of New York Trust Company, National Association (filed as Exhibit 4.2 to the 03/27/07 8-K)(1)
4.74.5Indenture, dated as of June 10, 2013, among LXP, certain subsidiaries of LXP signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to LXP's Current Report on Form 8-K filed on June 13, 2013)(1)
4.6FourthFirst Supplemental Indenture, dated as of December 31, 2008,September 30, 2013, between LXP and U.S. Bank, as trustee (filed as Exhibit 4.2 to LXP's Current Report on Form 8-K filed on October 3, 2013)(1)
4.7Indenture, dated as of May 9, 2014, among the Company, the other guarantors named thereinLXP and U.S. Bank, as trustee (filed as Exhibit 4.1 to LXP's Current Report on Form 8-K filed May 13, 2014)(1)
4.8First Supplemental Indenture, dated as of May 20, 2014, among LXP, LCIF and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’sLXP's Current Report on Form 8-K filed on January 2, 2009)May 20, 2014)(1)
4.84.9FifthSecond Supplemental Indenture, dated as of June 9, 2009,August 28, 2020, among the Company (as successor to the MLP), the other guarantors named thereinLXP and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company'sLXP's Current Report on Form 8-K filed on June 15, 2009)August 28, 2020)(1)
4.94.10SixthThird Supplemental Indenture, dated as of January 26, 2010August 30, 2021, among the Company, the guarantors named therein and U.S. Bank National Association, as trustee, including the Form of 6.00% Convertible Guaranteed Notes due 2030 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 26, 2010)(1)
4.10Seventh Supplemental Indenture, dated as of September 28, 2012, among the Company, certain subsidiaries of the Company signatories thereto,LXP and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company'sLXP's Current Report on Form 8-K filed on October 3, 2012)August 30, 2021)(1)
4.115.1Opinion of Venable LLP
8.1Eighth Supplemental Indenture, dated asOpinion of February 13, 2013, among the Company,Hogan Lovells US LLP regarding certain subsidiariestax matters
21List of the Company signatories thereto, and U.S. Bank National Association, as trusteesubsidiaries (filed as Exhibit 4.121 to the Company's CurrentLXP’s Annual Report on Form 8-K10-K filed on February 13, 2013 (“02/13/13 8-K”))16, 2023)(1)
4.1223.1Ninth Supplemental Indenture, dated asConsent of May 6, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on May 8, 2013)(1)Deloitte & Touche LLP
4.1323.2Tenth Supplemental Indenture, dated as of June 13, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K filed on June 13, 2013 (“06/13/13 8-K”))(1)
4.14Tenth Supplemental Indenture, dated as of September 30, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 3, 2013 (“10/03/13 8-K”))(1)
4.15Indenture, dated as of June 10, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the 06/13/13 8-K)(1)
4.16First Supplemental Indenture, dated as of September 30, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to the 10/03/13 8-K)(1)
4.17Registration Rights Agreement, dated as of June 10, 2013, among the Company, certain subsidiaries of the Company thereto, on the one hand, and Wells Fargo Securities, LLC and J.P. Morgan Securities LLC, as representatives of the several initial purchasers, on the other hand (filed as Exhibit 4.2 to the 06/13/13 8-K)(1)
5.1Opinion of Paul Hastings LLP (3)
5.2OpinionConsent of Venable LLP (3)(included as part of its opinion filed as Exhibit 5.1 hereto and incorporated herein by reference)
10.123.31994 Employee Stock Purchase Plan (filedConsent of Hogan Lovells US LLP (included as part of its opinion filed as Exhibit D to the Company’s Definitive Proxy Statement dated April 12, 1994)(1, 4)8.1 hereto and incorporated herein by reference)
10.224The Company’s 2011 Equity-Based Award Plan (filed as Exhibit 10.1 toPowers of Attorney (contained on the Company's Current Report on Form 8-K/A filed June 22, 2011)(1, 4)
10.3Formsignature pages of Compensation Agreement (Long-Term Compensation) between the Company and each of the following officers: Richard J. Rouse and Patrick Carroll (filed as Exhibit 10.15 to the 2004 10-K)(1, 4)
10.4Form of Compensation Agreement (Bonus and Long-Term Compensation) between the Company and each of the following officers: E. Robert Roskind and T. Wilson Eglin (filed as Exhibit 10.16 to the 2004 10-K)(1, 4)
10.5Form of Share Option Award Agreement (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K/A filed on November 24, 2010)(1, 4)
10.6Form of 2010 Share Option Award Agreement (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K/A filed November 24, 2010)(1, 4)this registration statement)

 

II-3II-2

10.7107Form of December 2010 Share Option Award Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 6, 2011(1, 4)
10.8Amended and Restated Rabbi Trust Agreement, originally dated January 26, 1999 (filed as Exhibit 10.2 to the 01/02/09 8-K)(1, 4)
10.9Form of 2011 Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 6, 2012 (the "01/06/12 8-K")(1, 4)
10.10Form of Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 26, 2012)(1, 4)
10.11Employment Agreement, dated as of January 15, 2012, between the Company and E. Robert Roskind (filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2011 (the "2011 10-K"))(1, 4)
10.12Employment Agreement, dated as of January 15, 2012, between the Company and T. Wilson Eglin (filed as Exhibit 10.11 to the 2011 10-K)(1, 4)
10.13Employment Agreement, dated as of January 15, 2012, between the Company and Richard J. Rouse (filed as Exhibit 10.12 to the 2011 10-K)(1, 4)
10.14Employment Agreement, dated as of January 15, 2012, between the Company and Patrick Carroll (filed as Exhibit 10.13 to the 2011 10-K)(1, 4)
10.15Long-Term Nonvested Share Agreement dated as of January 12, 2012, between the Company and T. Wilson Eglin (filed as Exhibit 10.14 to the 2011 10-K)(1, 4)
10.16Form of Long-Term Retention Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 11, 2013)(1, 4))
10.17Form of Amended and Restated Indemnification Agreement between the Company and certain officers and trustees (filed as Exhibit 10.20 to the Company’s Quarterly Report Form 10-Q for the quarter ended September 30, 2008)(1)
10.18Second Amended and Restated Credit Agreement, dated as of February 12, 2013 among the Company, LCIF and LCIF II as borrowers, KeyBank National Association, as agent, and each of the financial institutions initially a signatory thereto (filed as Exhibit 10.1 to the 02/13/13 8-K)(1)
10.19First Amendment to Second Amended and Restated Credit Agreement, dated as of September 30, 2013, among the Company, LCIF and LCIF II, jointly and severally as borrowers, KeyBank National Association, as agent, and each of the financial institutions a signatory thereto together with their assignees (filed as Exhibit 10.1 to the 10/03/13 8-K)(1)
10.20

Second Amendment to Second Amended and Restated Credit Agreement, dated as of December 30, 2013, among the Company, LCIF and LCIF II, jointly and severally as borrowers, KeyBank National Association, as agent, and each of the financial institutions a signatory thereto together with their assignees (filed as Exhibit 10.1 to the Company’s Current Report filed on January 6, 2014 (the “01/06/14 8-K”)) (1)

10.21Amended and Restated Term Loan Agreement, dated as of February 12, 2013 among the Company, LCIF and LCIF II, as borrowers, Wells Fargo Bank, National Association, as agent, and each of the financial institutions initially a signatory thereto (filed as Exhibit 10.2 to the 02/13/13 8-K)(1)
10.22First Amendment to Amended and Restated Term Loan Agreement, dated as of September 30, 2013, among the Company, LCIF and LCIF II, jointly and severally as borrowers, Wells Fargo Bank, National Association, as agent, and each of the financial institutions a signatory thereto together with their assignees (filed as Exhibit 10.2 to the 10/03/13 8-K)(1)
10.23

Second Amendment to Amended and Restated Term Loan Agreement, dated as of December 30, 2013, among the Company, LCIF and LCIF II, jointly and severally as borrowers, Wells Fargo Bank, National Association, as agent, and each of the financial institutions a signatory thereto together with their assignees (filed as Exhibit 10.2 to the 01/06/14 8-K)(1)

10.24Funding Agreement, dated as of July 23, 2006, by and among LCIF, LCIF II and the Company (filed as Exhibit 99.4 to the Company's Current Report on Form 8-K filed on July 24, 2006)(1)
10.25Letter Agreement among the Company (as successor by merger), Apollo Real Estate Investment Fund III, L.P., NKT Advisors LLC, Vornado Realty Trust, VNK Corp., Vornado Newkirk LLC, Vornado MLP GP LLC and WEM-Brynmawr Associates LLC (filed as Exhibit 10.15 to Amendment No. 5 to Newkirk Registration Statement on Form S-11/A filed October 28, 2005 (“Amendment No. 5 to NKT’s S-11”))(1)
10.26Amendment to the Letter Agreement among the Company (as successor by merger), Apollo Real Estate Investment Fund III, L.P., NKT Advisors LLC, Vornado Realty Trust, Vornado Realty L.P., VNK Corp., Vornado Newkirk LLC, Vornado MLP GP LLC, and WEM-Brynmawr Associates LLC (filed as Exhibit 10.25 to Amendment No. 5 to NKT’s S-11)(1)
10.27Second Amended and Restated Ownership Limit Waiver Agreement (Vornado), dated as of December 6, 2010, between the Company and Vornado Realty, L.P. (together with certain affiliates) (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 6, 2010)(1)
10.28Ownership Limitation Waiver Agreement (BlackRock), dated as of November 18, 2010 (filed as of Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 24, 2010 (the “11/24/10 8-K”)(1)
10.29Ownership Limitation Waiver Agreement (Cohen & Steers), dated as of November 18, 2010 (filed as Exhibit 10.2 to the 11/24/10 8-K)(1)
10.30First Amendment to Ownership Limitation Waiver Agreement (Cohen & Steers), dated as of April 19, 2011 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 25, 2011)(1)
10.31Amended and Restated Registration Rights Agreement, dated as of November 3, 2008, between the Company and Vornado Realty, L.P. and Vornado LXP LLC (filed as Exhibit 10.3 to the 11/06/08 8-K)(1)

II-4

10.32Equity Distribution Agreement, dated as of January 11, 2013, among the Company, LCIF and LCIF II, on the one hand, and Jefferies & Company, Inc., on the other hand (filed as Exhibit 1.1 to the Company's Current Report on Form 8-K filed on January 14, 2013 (the “01/14/13 8-K”))(1)
10.33Equity Distribution Agreement, dated as of January 11, 2013, among the Company, LCIF and LCIF II, on the one hand, and KeyBanc Capital Markets Inc., on the other hand (filed as Exhibit 1.2 to the 01/14/13 8-K)(1)
12Statement of Computation of Ratio of Earnings  to Combined Fixed Charges and Preferred Dividends (3)
23.1Consent of Paul Hastings LLP (included in Exhibit 5.1) (3)
23.2Consent of Venable LLP (included in Exhibit 5.2) (3)
23.3Consent of KPMG LLP re: Lexington Realty Trust (3)
23.4Consent of KPMG LLP re: Lepercq Corporate Income Fund L.P. (3)
23.5Consent of KPMG LLP re: Lepercq Corporate Income Fund II L.P. (3)
24.1Power of Attorney (included in signature page to this registration statement) (3)
25.1Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association (Form T-1) (3)
99.1Form of Letter of Transmittal (3)
99.2Form of Notice of Guaranteed Delivery (3)Fee Table

(1)Incorporated by reference.
(2)Filed herewith.
(3)Previously filed as an exhibit to this registration statement.
(4)Management contract or compensatory plan or arrangement.

(b) Financial Statements and Financial Statement SchedulesItem 22. Undertakings

See Index to Financial Statements on page F-1.

ITEM 22.Undertakings.

The undersigned registrant hereby undertakes:

(a) The undersigned registrants hereby undertake:

(1) Toto file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To(1) to include any prospectus required by Sectionsection 10(a)(3) of the Securities Act of 1933;Act;

(ii) To(2) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent20% change in the maximum aggregate offering price set forth in the "Calculation“Calculation of Filing Fee Tables” or “Calculation of Registration Fee"Fee” table, as applicable, in the effective registration statement; and

(iii) To(3) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.statement;

(2) That,(b) that, for the purpose of determining any liability under the Securities Act of 1933, each such posteffectivepost-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.thereof;

(3) To(c) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.offering;

(4) That,(d) that, for the purpose of determining liability under the Securities Act of 1933 to any purchaser,purchaser:

(1) each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

(2) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering other than registration statements relying onmade pursuant to Rule 430B415(a)(1)(i), (vii), or other than prospectuses filed in reliance on Rule 430A,(x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date itsuch form of prospectus is first used after effectiveness.effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however,that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use,effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.effective date.

 

II-5
II-3 

 

(5) That,(e) that, for the purpose of determining liability of the registrantsregistrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: Thesecurities, the undersigned registrants undertakeregistrant undertakes that in a primary offering of securities of the undersigned registrantsregistrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrantsregistrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any(1) any preliminary prospectus or prospectus of the undersigned registrantsregistrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any(2) any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrantsregistrant or used or referred to by the undersigned registrants;registrant;

(iii) The(3) the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrantsregistrant or theirits securities provided by or on behalf of the undersigned registrants;registrant; and

(iv) Any(4) any other communication that is an offer in the offering made by the undersigned registrantsregistrant to the purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by a controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(c) The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this registration statement on Form S-4, within one business day of receipt of such request and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

(d) The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

(d) The undersigned registrants hereby undertake(f) that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants'registrant’s annual report pursuant to sectionSection 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan'splan’s annual report pursuant to sectionSection 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.thereof;

(g) that, prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form;

(h) that every prospectus that (i) is filed pursuant to paragraph (g) immediately preceding, or (ii) purports to meet the requirements of section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to this registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(i) insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue;

(j) to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request; and

 

II-6II-4

(k) to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective.

 II-5

SIGNATURES

Pursuant to the requirements of the Securities Act, of 1933, as amended, eachthe registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, the State of New York, on January 30, 2014.

November 1, 2023.

 LEXINGTON REALTY
LXP INDUSTRIAL TRUST
  
 By:/s/ T. Wilson Eglin
  T. Wilson Eglin
  President and Chief Executive Officer and President

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature appears below constitutes and appoints T. Wilson Eglin, Beth Boulerice and Joseph S. Bonventre, and each or either of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments or any abbreviated registration statement and any amendments thereto filed pursuant to Rule 462(b) increasing the number of securities for which registration is sought) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the SEC, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their, his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, of 1933, this registration statement has been signed by the following persons in the capacities indicated and on the dates indicated:

November 1, 2023.

Signature

Title

Date

*
E. Robert RoskindChairman of Lexington Realty TrustJanuary 30, 2014
*
Richard J. RouseVice Chairman and Chief Investment Officer of Lexington Realty TrustJanuary 30, 2014
/s/ T. Wilson EglinChairman, Chief Executive Officer and President
(Principal Executive Officer)
T. Wilson EglinChief Executive Officer, President and Trustee of Lexington Realty TrustJanuary 30, 2014
(principal executive officer)
*
Patrick Carroll/s/ Beth BoulericeChief Financial Officer, Executive Vice President and Treasurer of Lexington Realty Trust
(Principal Financial Officer)
January 30, 2014Beth Boulerice
(principal financial officer/s/ Mark Cherone Senior Vice President and principal accounting officer)Chief Accounting Officer
(Principal Accounting Officer)
Mark Cherone
*/s/ Lawrence L. GrayTrustee
Paul R. WoodVice President, Chief Tax Compliance Officer and Secretary of Lexington Realty TrustJanuary 30, 2014
*
Harold FirstTrustee of Lexington Realty TrustJanuary 30, 2014
*
Richard S. FraryTrustee of Lexington Realty TrustJanuary 30, 2014
*
James GrosfeldTrustee of Lexington Realty TrustJanuary 30, 2014
*
Kevin W. LynchTrustee of Lexington Realty TrustJanuary 30, 2014

* By:/s/ T. Wilson Eglin
T. Wilson Eglin
Attorney-in-factLawrence L. Gray 
  

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, each registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, the State of New York, on January 30, 2014.

/s/ Arun GuptaLEPERCQ CORPORATE INCOME FUND L.P.Trustee
By:  Lex GP-1 Trust, its General Partner
Arun Gupta
By:/s/ T. Wilson Eglin
T. Wilson Eglin
President

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

SignatureTitleDate
*
Richard J. RouseTrustee of Lex GP-1 TrustJanuary 30, 2014
  
/s/ T. Wilson EglinJamie Handwerker
T. Wilson EglinPresident and Trustee of Lex GP-1 TrustJanuary 30, 2014
(principal executive officer)Jamie Handwerker
   

*

Signature

Title

/s/ Derrick L. JohnsonTrustee
Derrick L. Johnson
 /s/ Claire A. KoenemanTrustee 
Claire A. Koeneman
/s/ Nancy Elizabeth NoeTrustee
Nancy Elizabeth Noe
/s/ Howard RothTrustee
Howard Roth

   
Patrick CarrollChief Financial Officer and Trustee of Lex GP-1 TrustJanuary 30, 2014
(principal financial officer and principal accounting officer)

* By:/s/ T. Wilson Eglin
T. Wilson Eglin
Attorney-in-fact

EXHIBIT INDEX

Exhibit
No.
Exhibit
3.1Articles of Merger and Amended and Restated Declaration of Trust of the Company, dated December 31, 2006 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed January 8, 2007 (the “01/08/07 8-K”))(1)
3.2Articles Supplementary Relating to the 7.55% Series D Cumulative Redeemable Preferred Stock, par value $.0001 per share (filed as Exhibit 3.3 to the Company’s Registration Statement on Form 8A filed February 14, 2007 (the “02/14/07 Registration Statement”))(1)
3.3Amended and Restated By-laws of the Company (filed as Exhibit 3.2 to the 01/08/07 8-K)(1)
3.4First Amendment to Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 20, 2009)(1)
3.5Fifth Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund L.P. (“LCIF”), dated as of December 31, 1996, as supplemented (the “LCIF Partnership Agreement”) (filed as Exhibit 3.3 to the Company’s Registration Statement on Form S-3/A filed September 10, 1999 (the “09/10/99 Registration Statement”))(1)
3.6Amendment No. 1 to the LCIF Partnership Agreement dated as of December 31, 2000 (filed as Exhibit 3.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, filed February 26, 2004 (the “2003 10-K”))(1)
3.7First Amendment to the LCIF Partnership Agreement effective as of June 19, 2003 (filed as Exhibit 3.12 to the 2003 10-K)(1)
3.8Second Amendment to the LCIF Partnership Agreement effective as of June 30, 2003 (filed as Exhibit 3.13 to the 2003 10-K)(1)
3.9Third Amendment to the LCIF Partnership Agreement effective as of December 31, 2003 (filed as Exhibit 3.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 (the “2004 10-K”))(1)
3.10Fourth Amendment to the LCIF Partnership Agreement effective as of October 28, 2004 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 4, 2004)(1)
3.11Fifth Amendment to the LCIF Partnership Agreement effective as of December 8, 2004 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 14, 2004 (the “12/14/04 8-K”))(1)
3.12Sixth Amendment to the LCIF Partnership Agreement effective as of June 30, 2003 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 3, 2005 (the “01/03/05 8-K”))(1)
3.13Seventh Amendment to the LCIF Partnership Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 3, 2005)(1)
3.14Eighth Amendment to the LCIF Partnership Agreement effective as of March 26, 2009 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 27, 2009 (the “4/27/09 8-K”)(1)
3.15Second Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund II L.P. (“LCIF II”), dated as of August 27, 1998 the (“LCIF II Partnership Agreement”) (filed as Exhibit 3.4 to the 09/10/99 Registration Statement)(1)
3.16First Amendment to the LCIF II Partnership Agreement effective as of June 19, 2003 (filed as Exhibit 3.14 to the 2003 10-K)(1)
3.17Second Amendment to the LCIF II Partnership Agreement effective as of June 30, 2003 (filed as Exhibit 3.15 to the 2003 10-K)(1)
3.18Third Amendment to the LCIF II Partnership Agreement effective as of December 8, 2004 (filed as Exhibit 10.2 to 12/14/04 8-K)(1)
3.19Fourth Amendment to the LCIF II Partnership Agreement effective as of January 3, 2005 (filed as Exhibit 10.2 to 01/03/05 8-K)(1)
3.20Fifth Amendment to the LCIF II Partnership Agreement effective as of July 23, 2006 (filed as Exhibit 99.5 to the Company’s Current Report on Form 8-K filed July 24, 2006)(1)
3.21Sixth Amendment to the LCIF II Partnership Agreement effective as of December 20, 2006 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 22, 2006)(1)
3.22Seventh Amendment to the LCIF II Partnership Agreement effective as of March 26, 2009 (filed as Exhibit 10.2 to the 4/27/09 8-K)(1)
3.23Agreement and Plan of Merger, dated as of December 23, 2013, by and among LCIF and LCIF II, which includes as Exhibit A the form of Sixth Amended and Restated Agreement of Limited Partnership of LCIF dated as of December 30, 2013 (filed as Exhibit to the Company’s Current Report on Form 8-K filed December  , 2013)(1)
4.1Specimen of Common Shares Certificate of the Company (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006)(1)
4.2Form of 6.50% Series C Cumulative Convertible Preferred Stock certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form 8A filed December 8, 2004)(1)

4.3Form of 7.55% Series D Cumulative Redeemable Preferred Stock certificate (filed as Exhibit 4.1 to the 02/14/07 Registration Statement)(1)
4.4Indenture, dated as of January 29, 2007, among the Company (as successor by merger), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 29, 2007 (the “01/29/07 8-K”))(1)
4.5Amended and Restated Trust Agreement, dated March 21, 2007, among the Company, The Bank of New York Trust Company, National Association, The Bank of New York (Delaware), the Administrative Trustees (as named therein) and the several holders of the Preferred Securities from time to time (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 27, 2007 (the “03/27/2007 8-K”))(1)
4.6Junior Subordinated Indenture, dated as of March 21, 2007, between Lexington Realty Trust and The Bank of New York Trust Company, National Association (filed as Exhibit 4.2 to the 03/27/07 8-K)(1)
4.7Fourth Supplemental Indenture, dated as of December 31, 2008, among the Company, the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 2, 2009)(1)
4.8Fifth Supplemental Indenture, dated as of June 9, 2009, among the Company (as successor to the MLP), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 15, 2009)(1)
4.9Sixth Supplemental Indenture, dated as of January 26, 2010 among the Company, the guarantors named therein and U.S. Bank National Association, as trustee, including the Form of 6.00% Convertible Guaranteed Notes due 2030 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 26, 2010)(1)
4.10Seventh Supplemental Indenture, dated as of September 28, 2012, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 3, 2012)(1)
4.11Eighth Supplemental Indenture, dated as of February 13, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on February 13, 2013 (“02/13/13 8-K”))(1)
4.12Ninth Supplemental Indenture, dated as of May 6, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on May 8, 2013)(1)
4.13Tenth Supplemental Indenture, dated as of June 13, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K filed on June 13, 2013 (“06/13/13 8-K”))(1)
4.14Tenth Supplemental Indenture, dated as of September 30, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 3, 2013 (“10/03/13 8-K”))(1)
4.15Indenture, dated as of June 10, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the 06/13/13 8-K)(1)
4.16First Supplemental Indenture, dated as of September 30, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.2 to the 10/03/13 8-K)(1)
4.17Registration Rights Agreement, dated as of June 10, 2013, among the Company, certain subsidiaries of the Company thereto, on the one hand, and Wells Fargo Securities, LLC and J.P. Morgan Securities LLC, as representatives of the several initial purchasers, on the other hand (filed as Exhibit 4.2 to the 06/13/13 8-K)(1)
5.1Opinion of Paul Hastings LLP (3)
5.2Opinion of Venable LLP (3)
10.11994 Employee Stock Purchase Plan (filed as Exhibit D to the Company’s Definitive Proxy Statement dated April 12, 1994)(1, 4)
10.2The Company’s 2011 Equity-Based Award Plan (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K/A filed June 22, 2011)(1, 4)
10.3Form of Compensation Agreement (Long-Term Compensation) between the Company and each of the following officers: Richard J. Rouse and Patrick Carroll (filed as Exhibit 10.15 to the 2004 10-K)(1, 4)
10.4Form of Compensation Agreement (Bonus and Long-Term Compensation) between the Company and each of the following officers: E. Robert Roskind and T. Wilson Eglin (filed as Exhibit 10.16 to the 2004 10-K)(1, 4)
10.5Form of Share Option Award Agreement (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K/A filed on November 24, 2010)(1, 4)
10.6Form of 2010 Share Option Award Agreement (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K/A filed November 24, 2010)(1, 4)

10.7Form of December 2010 Share Option Award Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 6, 2011(1, 4)
10.8Amended and Restated Rabbi Trust Agreement, originally dated January 26, 1999 (filed as Exhibit 10.2 to the 01/02/09 8-K)(1, 4)
10.9Form of 2011 Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 6, 2012 (the "01/06/12 8-K")(1, 4)
10.10Form of Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 26, 2012)(1, 4)
10.11Employment Agreement, dated as of January 15, 2012, between the Company and E. Robert Roskind (filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2011 (the "2011 10-K"))(1, 4)
10.12Employment Agreement, dated as of January 15, 2012, between the Company and T. Wilson Eglin (filed as Exhibit 10.11 to the 2011 10-K)(1, 4)
10.13Employment Agreement, dated as of January 15, 2012, between the Company and Richard J. Rouse (filed as Exhibit 10.12 to the 2011 10-K)(1, 4)
10.14Employment Agreement, dated as of January 15, 2012, between the Company and Patrick Carroll (filed as Exhibit 10.13 to the 2011 10-K)(1, 4)
10.15Long-Term Nonvested Share Agreement dated as of January 12, 2012, between the Company and T. Wilson Eglin (filed as Exhibit 10.14 to the 2011 10-K)(1, 4)
10.16Form of Long-Term Retention Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on January 11, 2013)(1, 4))
10.17Form of Amended and Restated Indemnification Agreement between the Company and certain officers and trustees (filed as Exhibit 10.20 to the Company’s Quarterly Report Form 10-Q for the quarter ended September 30, 2008)(1)
10.18Second Amended and Restated Credit Agreement, dated as of February 12, 2013 among the Company, LCIF and LCIF II as borrowers, KeyBank National Association, as agent, and each of the financial institutions initially a signatory thereto (filed as Exhibit 10.1 to the 02/13/13 8-K)(1)
10.19First Amendment to Second Amended and Restated Credit Agreement, dated as of September 30, 2013, among the Company, LCIF and LCIF II, jointly and severally as borrowers, KeyBank National Association, as agent, and each of the financial institutions a signatory thereto together with their assignees (filed as Exhibit 10.1 to the 10/03/13 8-K)(1)
10.20Second Amendment to Second Amended and Restated Credit Agreement, dated as of December 30, 2013, among the Company, LCIF and LCIF II, jointly and severally as borrowers, KeyBank National Association, as agent, and each of the financial institutions a signatory thereto together with their assignees (filed as Exhibit 10.1 to the Company’s Current Report filed on January 6, 2014 (the “01/06/14 8-K”)) (1) 
10.21Amended and Restated Term Loan Agreement, dated as of February 12, 2013 among the Company, LCIF and LCIF II, as borrowers, Wells Fargo Bank, National Association, as agent, and each of the financial institutions initially a signatory thereto (filed as Exhibit 10.2 to the 02/13/13 8-K)(1)
10.22First Amendment to Amended and Restated Term Loan Agreement, dated as of September 30, 2013, among the Company, LCIF and LCIF II, jointly and severally as borrowers, Wells Fargo Bank, National Association, as agent, and each of the financial institutions a signatory thereto together with their assignees (filed as Exhibit 10.2 to the 10/03/13 8-K)(1)
10.23Second Amendment to Amended and Restated Term Loan Agreement, dated as of December 30, 2013, among the Company, LCIF and LCIF II, jointly and severally as borrowers, Wells Fargo Bank, National Association, as agent, and each of the financial institutions a signatory thereto together with their assignees (filed as Exhibit 10.2 to the 01/06/14 8-K)(1) 
10.24Funding Agreement, dated as of July 23, 2006, by and among LCIF, LCIF II and the Company (filed as Exhibit 99.4 to the Company's Current Report on Form 8-K filed on July 24, 2006)(1)
10.25Letter Agreement among the Company (as successor by merger), Apollo Real Estate Investment Fund III, L.P., NKT Advisors LLC, Vornado Realty Trust, VNK Corp., Vornado Newkirk LLC, Vornado MLP GP LLC and WEM-Brynmawr Associates LLC (filed as Exhibit 10.15 to Amendment No. 5 to Newkirk Registration Statement on Form S-11/A filed October 28, 2005 (“Amendment No. 5 to NKT’s S-11”))(1)
10.26Amendment to the Letter Agreement among the Company (as successor by merger), Apollo Real Estate Investment Fund III, L.P., NKT Advisors LLC, Vornado Realty Trust, Vornado Realty L.P., VNK Corp., Vornado Newkirk LLC, Vornado MLP GP LLC, and WEM-Brynmawr Associates LLC (filed as Exhibit 10.25 to Amendment No. 5 to NKT’s S-11)(1)
10.27Second Amended and Restated Ownership Limit Waiver Agreement (Vornado), dated as of December 6, 2010, between the Company and Vornado Realty, L.P. (together with certain affiliates) (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 6, 2010)(1)
10.28Ownership Limitation Waiver Agreement (BlackRock), dated as of November 18, 2010 (filed as of Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 24, 2010 (the “11/24/10 8-K”)(1)
10.29Ownership Limitation Waiver Agreement (Cohen & Steers), dated as of November 18, 2010 (filed as Exhibit 10.2 to the 11/24/10 8-K)(1)
10.30First Amendment to Ownership Limitation Waiver Agreement (Cohen & Steers), dated as of April 19, 2011 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 25, 2011)(1)
10.31Amended and Restated Registration Rights Agreement, dated as of November 3, 2008, between the Company and Vornado Realty, L.P. and Vornado LXP LLC (filed as Exhibit 10.3 to the 11/06/08 8-K)(1)

10.32Equity Distribution Agreement, dated as of January 11, 2013, among the Company, LCIF and LCIF II, on the one hand, and Jefferies & Company, Inc., on the other hand (filed as Exhibit 1.1 to the Company's Current Report on Form 8-K filed on January 14, 2013 (the “01/14/13 8-K”))(1)
10.33Equity Distribution Agreement, dated as of January 11, 2013, among the Company, LCIF and LCIF II, on the one hand, and KeyBanc Capital Markets Inc., on the other hand (filed as Exhibit 1.2 to the 01/14/13 8-K)(1)
12Statement of Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends (3)
23.1Consent of Paul Hastings LLP (included in Exhibit 5.1) (3)
23.2Consent of Venable LLP (included in Exhibit 5.2) (3)
23.3Consent of KPMG LLP re: Lexington Realty Trust (3)
23.4Consent of KPMG LLP re: Lepercq Corporate Income Fund L.P. (3)
23.5Consent of KPMG LLP re: Lepercq Corporate Income Fund II L.P. (3)
24.1Power of Attorney (included in signature page to this registration statement) (3)
25.1Statement of Eligibility under the Trust Indenture Act of 1939 of U.S. Bank National Association (Form T-1) (3)
99.1Form of Letter of Transmittal (3)
99.2Form of Notice of Guaranteed Delivery (3)

(1)Incorporated by reference.
(2)Filed herewith.
(3)Previously filed as an exhibit to this registration statement.
(4)Management contract or compensatory plan or arrangement.