lexandmlp8k-122407.htm
 
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549

FORM 8-K

Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 18, 2007

LEXINGTON REALTY TRUST
(Exact Name of Registrant as Specified in Its Charter)
     
Maryland
1-12386
13-3717318
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification
Number)
THE LEXINGTON MASTER LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
     
     
Delaware
0-50268
11-3636084
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification Number)

One Penn Plaza, Suite 4015, New York, New York
10119-4015
(Address of Principal Executive Offices)
(Zip Code)

(212) 692-7200
(Registrant's Telephone Number, Including Area Code)
 

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions

___            Written communications pursuant to Rule 425 under the Securities Act (17 CFT|R 230.425)
 
___            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
___    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
___    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This Current Report on Form 8-K contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements reflect the current views of Lexington Realty Trust and The Lexington Master Limited Partnership with respect to the future events or financial performance discussed in this report, based on management's beliefs and assumptions and information currently available. When used, the words "believe", "anticipate", "estimate", "project", "should", "expect", "plan", "assume" and similar expressions that do not relate solely to historical matters identify forward-looking statements. Forward-looking statements in this report include, without limitation, statements relating to the Trust’s operating partnerships' ability to make distributions sufficient for the Trust to pay dividends under its current dividend policy.
 
Forward-looking statements are subject to risks, uncertainties and assumptions and are not guarantees of future events or performance, which may be affected by known and unknown risks, trends and uncertainties. Should one or more of these risks or uncertainties materialize, or should the Trust’s or the Partnership’s assumptions prove incorrect, actual results may vary materially from those anticipated, projected or implied. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in The Trust’s and the Partnership’s most recent annual reports on Form 10-K filed with the SEC on March 1, 2007 and March 30, 2007, respectively and other periodic reports filed with the SEC, including risks related to, (i) the failure to successfully complete the strategic restructuring plan, (ii) the failure to complete the sale of any of the 53 assets to the newly formed co-investment program, (iii) the failure to complete the previously announced expected fourth quarter disposition activity, (iv) the failure to obtain board approval of any special distribution related to the estimated taxable gain to shareholders for 2007, (v) the failure to integrate our operations and properties with those of Newkirk Realty Trust, (vi) the failure to continue to qualify as a real estate investment trust, (vii) changes in general business and economic conditions, (viii) competition, (ix) increases in real estate construction costs, (x) changes in interest rates, or (xi) changes in accessibility of debt and equity capital markets. Copies of the Form 10-K and the other periodic reports Lexington files with the SEC are available on Lexington's website at http://www.lxp.com. The Trust and the Partnership expressly disclaim any responsibility to update forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or otherwise.
 
Item 1.01. Entry into a Material Definitive Agreement.
 
Amendment to Credit Agreement
 
On December 18, 2007, Lexington Realty Trust (the “Trust”) entered into the Third Amendment to Credit Agreement, which we refer to as the Credit Facility, among the Trust, Lepercq Corporate Income Fund L.P., Lepercq Corporate Income Fund II L.P., and Net 3 Acquisition L.P., collectively as borrowers, each of Lenders party thereto, and Wachovia Bank, National Association, as agent, as amended by the First Amendment to Credit Agreement, dated as of June 1, 2006 and by the Second Amendment to the Credit Agreement, dated as of December 27, 2006.  The Third Amendment amends the definition of Minimum Net Worth by clarifying that net proceeds from equity issuances that are used to repurchase equity interests of the Trust within 12 months are excluded from the calculation of Minimum Net Worth.
 
The foregoing description of the Third Amendment is qualified in its entirety by reference to the Third Amendment attached as Exhibit 10.1 to this Current Report on Form 8-K.
 
Amendment to Partnership Agreement
 
On December 20, 2007, Lexington Realty Trust (the “Trust”), through The Lexington Master Limited Partnership (the “Partnership”) and LMLP GP LLC, a wholly-owned subsidiary of the Partnership (“LMLP GP”), entered into an amendment (the “Amendment”) to the Amended and Restated Limited Partnership Agreement of Net Lease Strategic Assets Fund L.P. (the “Co-Investment Program”), dated as of November 5, 2007 (as amended, the “Partnership Agreement”), among LMLP GP, as the general partner, the Partnership, as a limited partner, and Inland American (Net Lease) Sub, LLC (“Inland”), a wholly-owned subsidiary of Inland American Real Estate Trust, Inc, as a limited partner.  The amendment (1) clarifies the distributions to be made by the Co-Investment Program upon a sale or refinancing of an asset owned by the Co-Investment Program and (2) sets March 31, 2008 as the outside closing date for 18 of the assets, and June 30, 2008 as the outside closing date for 5 of the assets, that the Co-Investment Program is under contract to by from the Trust and its subsidiaries.
 
The acquisition of each of the additional 23 assets by the Co-Investment Program is subject to satisfaction of conditions precedent to closing, including obtaining lender consents, obtaining certain consents and waivers, the continuing financial solvency of the tenants, and certain other customary conditions.  Accordingly, neither the Trust nor the Partnership can provide any assurance that the acquisition by the Co-Investment Program will be completed.
 
The foregoing description is qualified in its entirety by reference to the Amendment, which is attached as Exhibit 10.2 to this Current Report on Form 8-K.
 
Amendments to Contribution Agreement and Purchase Agreement
 
On December 20, 2007, the Partnership and the Co-Investment Program entered into amendments (the “Amendments to the Contribution and Purchase Agreements”) to the Contribution Agreement and the Purchase Agreement, both dated August 10, 2007, which
 
 
 
govern the acquisition of 30 assets, which closed on December 20, 2007, and up to an additional 23 assets, which are expected to close during the first and second quarter of 2008, by the Co-Investment Program from the Trust and its subsidiaries.  The Amendments to the Purchase and Contribution Agreements reflect a modification to the structure whereby certain assets that were previously to be sold under the Purchase Agreement, were contributed under the Contribution Agreement.
 
The foregoing description is qualified in its entirety by reference to the Amendments to the Contribution and Purchase Agreements, which are attached as Exhibits 10.3 and 10.4 to this Current Report on Form 8-K.
 
Contribution Agreement
 
On December 20, 2007, Lex LP-1 Trust, a subsidiary of the Trust entered into contribution agreement (the “MLP Contribution Agreement”) whereby Lex LP-1 Trust contributed to the Partnership its interest in certain assets, which were ultimately contributed by the Partnership to the Co-Investment Program, in exchange for approximately 5,078,080 units of limited partnership in the Partnership. The number of units was determined in accordance with the Second Amended and Restated Agreement of Limited Partnership of the Partnership. The contribution agreements contained limited representations and warranties and closing conditions.
 
The foregoing description of the MLP Contribution Agreement is qualified in its entirety by reference to the form of contribution agreement attached as Exhibit 10.5 to this Current Report on Form 8-K.
 
Amendment to Outperformance Program
 
On December 20, 2007 , the Compensation Committee (the “Committee”) of the Trust’s Board of Trustees, approved a clarifying modification (the “OPP Amendment”) to the Lexington Realty Trust 2007 Outperformance Program (the “Program”), a long-term incentive program. The modification consisted of revising the definition of Market Price Return, which is used to calculate the Total Shareholder Return under the Program.
 
The foregoing description of the OPP Amendment is qualified in its entirety by reference to the OPP Amendment attached as Exhibit 10.6 to this Current Report on Form 8-K.
 
Item 2.01 Completion of Acquisition or Disposition of Assets.
 
On December 20, 2007, the Trust and the Partnership completed the disposition of 30 assets to the Co-Investment Program pursuant to the Purchase Agreement and Contribution Agreement.  The aggregate purchase price of the 30 assets was approximately $408.5 million, including the assumption of approximately $177.5 million of non-recourse first mortgage financing secured by certain of the assets and a preferred equity investment by the Partnership of approximately $87.6 million. The Partnership made an additional equity investment of $21.5 million, with Inland funding an equity investment of $121.9 million.  The table below contains selected information about the 30 assets.
 
 
 

 
Property Location
Tenant/(Guarantor)
Net
Rentable
Square
Feet
Current
Term Lease
Expiration
Estimated
2008 Base
Cash Rent
$(000's)
    
Mortgage
Balance at
Acquisition
 $(000's)
5201 W. Barraque Street
Pine Bluff, Arkansas
Entergy Services, Inc.
 27,189
10/31/2010
 $ 192  
 $ 
 --
                 
265 Lehigh Street
Allentown, Pennsylvania
Wachovia
 71,230
10/31/2010
   249     --
                 
101 Creger Drive
Ft. Collins, Colorado
Lithia Motors
 10,000
05/31/2012
   275     --
                 
420 Riverport Road
Kingsport, Tennessee
American Electric Power
 42,770
06/30/2013
   390     --
                 
324 Industrial Park Road
Franklin, North Carolina
SKF USA, Inc.
 72,868
12/31/2014
   395     1,473
                 
1440 East 15th Street
Tucson, Arizona
Cox Communications, Inc.
 28,591
09/30/2016
   465     2,258
                 
11411 N. Kelly Avenue
Oklahoma City, Oklahoma
American Golf Corporation
 13,924
12/31/2017
   475     --
                 
1901 49th Avenue
Minneapolis, Minnesota
Owens Corning Roofing and
Asphalt, LLC
 18,620
06/30/2015
   583     --
                 
109 Stevens Street
Jacksonville, Florida
Unisource Worldwide, Inc.
 168,800
09/30/2009
   624     --
                 
3943 Denny Avenue
Pascagoula, Mississippi
Northrop Grumman Systems
Corporation
 94,841
10/31/2013
   681     --
                 
3201 Quail Springs Pkwy.
Oklahoma City, Oklahoma (1)
AT&T Wireless Services, Inc./
Jordan Associates
 103,500/
25,000
11/30/2010/
12/31/2008
   549/
133		     5,900
                 
26410 McDonald Road
The Woodlands, Texas
Montgomery County
Management Company LLC
 41,000
10/31/2019
   718     7,500
                 
2935 Van Vactor Drive
Plymouth, Indiana
Bay Valley Foods, LLC
 300,500
06/30/2015
   777     6,585
                 
2401 Cherahala Boulevard
Knoxville, Tennessee
Advance PCS, Inc.
 59,748
05/31/2013
   900     5,023
                 
3711 San Gabirel
Mission, Texas
Voicestream PCS II Corporation
(T-Mobile USA, Inc.)
 75,016
06/30/2015
   900     6,251
                 
2424 Alpine Road
Eau Claire, Wisconsin
Silver Spring Gardens, Inc.
(Huntsinger Farms, Inc.)
 159,000
04/30/2027
   930     --
                 
6455 State Hwy 303 NE
Bremerton, Washington
Nextel West Corporation
 60,200
05/14/2016
   1,085     6,473
 
 
 
 
736 Addison Road
Erwin, New York
Corning, Inc.
 408,000
11/30/2016
   1,122     9,299
                 
Westbridge Business Park
McDonough, Georgia
Litton Loan Servicing LP
(Credit—Based Asset Servicing
and Securitization LLC)
 62,000
08/31/2017
   1,100     --
                 
359 Gateway Drive
Lavonia, Georgia
TI Group Automotive Systems,
LLC
 133,221
05/31/2020
   1,200     9,715
                 
3265 East Goldstone Drive
Meridian, Idaho
Voicestream PCS II Corporation
(T-Mobile USA, Inc.)
 77,484
06/28/2019
   1,227     10,033
                 
First Park Drive
Oakland, Maine
Omnipoint Holdings, Inc.
(T-Mobile USA, Inc.)
 78,610
08/31/2020
   1,240     10,227
                 
9601 Renner Boulevard
Lenexa, Kansas
Voicestream PCS II Corporation
(T-Mobile USA, Inc.)
 77,484
10/31/2019
   1,248     10,099
                 
25500 State Hwy 249
Tomball, Texas
Parkway Chevrolet, Inc.
 77,076
08/31/2026
   1,258     9,309
                 
2999 SW 6th Street
Redmond, Oregon
Voicestream PCS I LLC
 (T-Mobile USA, Inc.)
 77,484
01/31/2019
   1,435     9,605
                 
2500 Patrick Henry Parkway
McDonough, Georgia
Georgia Power Company
 111,911
06/30/2015
   1,464     12,675
                 
1600 Eberhardt Road
Temple, Texas
Nextel of Texas
 108,800
01/31/2016
   1,523     8,758
                 
12000 & 12025 Tech Center Dr.
Livonia, Michigan
TRW Automotive Inc.
(Kelsey-Hayes Company)
 180,230
04/30/2014
   1,957     10,467
                 
590 Ecology Lane
Chester, South Carolina
Owens Corning
 420,597
07/14/2025
   2,185     13,056
                 
3600 Army Post Rd.
Des Moines, Iowa
EDS Information Services LLC
(Electronic Data Systems
Corporation)
 405,000
04/30/2012
   2,825     22,761
 
Total
 3,590,694   $ 30,105   $                         177,467
 
_________________
(1) 40% tenancy-in-common interest.  Estimated 2008 rent and mortgage balance representproportionate share.
 
Item 3.02.            Unregistered Sales of Equity Securities.
 
As disclosed under Item 1.01 of this Current Report on Form 8-K under the heading “Contribution Agreement,” the Partnership issued approximately 5,078,080 units of limited partnership in the Partnership to certain subsidiaries of the Trust at a price per unit of $17.054. The units were issued in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended.
 
 
 
Item 5.02.  Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
The information set forth in Item 1.01 of this Current Report on Form 8-K under the heading “Amendment to Outperformance Program” above is incorporated herein by reference.
 
Item 8.01.            Other Events.
 
On December 20, 2007, the Trust issued a press release announcing the acquisition of 30 assets by the Co-Investment Program.  A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01.             Financial Statements and Exhibits.

(a)              The Trust or the Partnership will file any financial statements required by this item by amendment not later than 71 calendar days after the date that this Current Report on Form 8-K must be filed.

(b)              The Trust or the Partnership will file any pro forma financial information required by this item by amendment not later than 71 calendar days after the date that this Current Report on Form 8-K must be filed.

(d)              Exhibits

10.1
Third Amendment to Credit Agreement, dated as of December 18, 2007
   
10.2
Amendment No. 1 to Amended and Restated Limited Partnership Agreement, dated as of December 20, 2007, among LMLP GP LLC, The Lexington Master Limited Partnership and Inland American (Net Lease) Sub, LLC
   
10.3
Amendment No. 1 to Contribution Agreement, dated as of December 20, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P.
   
10.4
Amendment No. 1 to Purchase and Sale Agreement, dated as of December 20, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P.
   
10.5
Form of Contribution Agreement, dated as of December 20, 2007, between The Lexington Master Limited Partnership and each of Lexington Realty Trust and certain of its subsidiaries
   
10.6
Amendment to Lexington Realty Trust 2007 Outperformance Program
   
99.1
Press Release issued December 20, 2007
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  Lexington Realty Trust
   
   
Date: December 26, 2007 
By:
 /s/ Patrick Carroll
   
Patrick Carroll
   
Chief Financial Officer
 
  The Lexington Master Limited Partnership

  By: Lex GP-1 Trust, its general partner
   
   
Date: December 26, 2007 
By:
/s/ Patrick Carroll
   
Patrick Carroll
   
Chief Financial Officer

 
 
 
Exhibit Index

10.1 
Third Amendment to Credit Agreement, dated as of December 18, 2007
   
10.2
Amendment No. 1 to Amended and Restated Limited Partnership Agreement, dated as of December 20, 2007, among LMLP GP LLC, The Lexington Master Limited Partnership and Inland American (Net Lease) Sub, LLC
   
10.3
Amendment No. 1 to Contribution Agreement, dated as of December 20, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P.
   
10.4
Amendment No. 1 to Purchase and Sale Agreement, dated as of December 20, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P.
   
10.5
Form of Contribution Agreement, dated as of December 20, 2007, between The Lexington Master Limited Partnership and each of Lexington Realty Trust and certain of its subsidiaries
   
10.6
Amendment to Lexington Realty Trust 2007 Outperformance Program
   
99.1
Press Release issued December 20, 2007