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                             W.P. CAREY & CO., INC.
                              EMPLOYMENT AGREEMENT

            THIS AGREEMENT, made the 7th day of April, 1997 between W.P. Carey &
Co., Inc. (the "Company"), a New York corporation at 50 Rockefeller Plaza, New
York, NY 10020, and Gordon S. DuGan ("Executive").

                              W I T N E S S E T H:

            WHEREAS, Executive has been an officer of the Company in which
capacity his services have contributed materially to the successful operation of
the Company's business;

            WHEREAS, the Company wishes to assure itself of the continued
availability of Executive's services, and Executive is willing to give such
assurance in return for the benefits described herein;

            NOW, THEREFORE, intending to be legally bound hereby, the Company
hereby agrees to employ Executive, and Executive hereby agrees to be employed by
the Company upon the following terms and conditions:

            1. Office and Duties. Executive shall service the Company full time
in such positions and have such titles, duties and power with the Company and
its subsidiaries consistent with Executive's experience and abilities as may
from time to time be determined by the board of directors of the Company (the
"Board"), the Chairman of the Board or the Chief Executive Officer of the
Company. Executive will use his reasonable best energies and abilities and will
devote his full business time, except for vacation time and reasonable periods
of absence due to sickness, personal injury or other disability, to the duties
assigned to him and shall use his best efforts, judgment, skill and energy to
perform such services faithfully and diligently to further the business
interests of the Company, to improve and advance the business and interests of
the Company, to increase shareholder value and otherwise promote the best
interests of the Company's shareholders; provided that nothing contained herein
shall preclude Executive from (i) serving on the board of directors of any
business corporation with the consent of the Board (ii) serving on the board of,
or working for, any charitable or community organization or (iii) pursuing his
personal financial and legal affairs, so long as such activities, individually
or collectively, do not interfere with the performance of executive's duties
hereunder.

<PAGE>

            2. Term. This Agreement shall be for a term commencing as of the
date hereof (the "Commencement Date") and ending on December 31, 2001 unless
sooner terminated as hereinafter provided. Unless either party elects to
terminate this Agreement at the end of the original or any renewal term by
giving the other party notice of such election at least 90 days before the
expiration of the then current term, this Agreement shall be deemed to have been
renewed for an additional one year period commencing on the day after the
expiration of the then current term. The period during which Executive is
employed pursuant to this Agreement, including any extension thereof in
accordance with the preceding sentence, shall be referred to as the "Employment
Period."

            3. Compensation.

            (a) Base Salary. During the Employment Period, Executive shall
receive an annual base salary ("Base Salary") at the same rate as in effect on
the date hereof, which shall be payable in accordance with the Company's
generally applicable payroll practices and policies. The Executive Committee
shall periodically review Executive's Base Salary in light of the salaries paid
to other officers of the Company, the performance of Executive, and Executive's
total compensation from the Company and the Company may, in its discretion,
increase such Base Salary by an amount it determines to be appropriate. Any
such increase shall not reduce or limit any other obligation of the Company
hereunder.

            (b) Incentive Compensation. During the term of the Employment
Period, Executive shall be eligible to participate in the Company's incentive
compensation programs (including, without limitation, any program for the
payment of commission income, disposition fees, and bonuses), as the same may be
amended by the Company from time to time, at a level determined by the Company's
Executive Committee. Without limiting the generality of the foregoing, Executive
shall be entitled to draw, in approximately equal monthly installments, against
such incentive compensation in an annual amount determined in accordance with
the practices and policies of the Company.

            (c) 1997 Guarantees. Notwithstanding the foregoing, nothing herein
is intended to supersede the compensation guarantees applicable to the Executive
for 1997, contained in the letter agreement between the Company and Executive
relating to the Executive's recommencement of employment with the Company.

            4. Stock Option Grant. Effective as of January 1, 1997, Executive
will receive the grant of an option pursuant to the Company's Stock Appreciation
Rights Plan in respect of 5,000 shares of the Common Stock of the notional
corporation described in such Stock Appreciation Rights Plan, subject to the
terms and conditions of

                                       2

<PAGE>

such grant. Executive agrees and acknowledges that his rights and obligations in
respect of such option shall be governed by the terms and conditions of the
Stock Appreciation Rights Plan, including, without limitation, the provisions
thereof relating to the proportionate dilution of his interest by the grant,
after the effective date of his award, of awards to other employees under the
Stock Appreciation Rights Plan or the Company's Partnership Equity Plan.

            5. Partnership Equity Plan. Effective as of January 1, 1997,
Executive has received an award pursuant to the Company's Partnership Equity
Plan of 2,500 shares of the Common Stock of the notional corporation described
therein. Executive agrees and acknowledges that his rights and obligations in
respect of the Equivalent Shares, as defined in the Partnership Equity Plan,
shall be governed by the terms and conditions of the Partnership Equity Plan,
including, without limitation, the provisions thereof relating to the
proportionate dilution of his interest by the grant, after the effective date of
his award, of awards to other employees under the Stock Appreciation Rights Plan
or the Partnership Equity Plan.

            6. Benefits, Perquisites and Expenses.

            (a) Benefits. During the Employment Period, Executive shall be
eligible to participate in each employee benefit plan sponsored or maintained by
the Company, subject to the generally applicable provisions thereof. Nothing in
this Agreement shall in any way limit the Company's right to amend or terminate
any such plan in its discretion, so long as any such amendment does not impair
the rights of Executive without treating similarly situated executives in a
similar fashion.

            (b) Business Expenses. During the Employment Period, the Company
shall pay or reimburse Executive for all reasonable expenses incurred or paid by
Executive in the performance of Executive's duties hereunder, upon presentation
of expense statements or vouchers and such other information as the Company may
require and in accordance with the generally applicable policies and procedures
of the Company.

            (c) Indemnification. The Company shall indemnify Executive and hold
Executive harmless from and against any claim, loss or cause of action arising
from or out of Executive's performance of services as an officer, director or
Executive of the Company or any of its subsidiaries or in any other capacity in
which Executive serves at the request of the Company on the same basis as it
indemnifies its other officers. If, at any time, the Company has in effect any
policy providing any indemnity to the Company or third parties with respect to
the errors and omissions or other actions of officers or directors, the Company
shall cause Executive's errors, omissions or other actions to be

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covered under such policy on the same terms and conditions as apply generally to
all other officers of the Company.

            7. Termination of Employment.

            (a) Early Termination of the Employment Period. Notwithstanding
Paragraph 2, the Employment Period shall end upon the earliest to occur of (i) a
termination of Executive's employment on account of Executive's death, (ii) a
Termination due to Disability, (iii) a Termination for Cause, (iv) a Termination
Without Cause, (v) a Termination for Good Reason or (vi) a Termination due to a
Change of Control.

            (b) Benefits Payable Upon Termination. Following the end of the
Employment Period pursuant to Paragraph 7(a), Executive (or, in the event of his
death, his surviving spouse, if any, or his estate) shall be paid the type or
types of compensation determined to be payable in accordance with the following
table at the times established pursuant to Paragraph 7(c):

<TABLE>
<CAPTION>
                                                 Accrued
                         Earned Basic            Employee                 Severance
                         Compensation            Benefits                  Benefit
                         ------------            --------                 ---------
<S>                      <C>                     <C>                      <C>
Termination                 Payable               Payable                    Not
due to Death                                                               Payable

Termination due to          Payable               Payable                    Not
Disability                                                                 Payable

Termination                 Payable               Payable                    Not
for Cause                                                                  Payable

Termination                 Payable               Payable                  Payable
Without Cause

Termination                 Payable               Payable                  Payable
with Good
Reason

Termination due             Payable               Payable                  Payable
to a Change of
Control
</TABLE>

                                       4

<PAGE>

            (c) Timing of Payments. Earned Basic Compensation shall be paid in a
single lump sum as soon as practicable, but in no event more than 30 days
following the end of the Employment Period. Accrued Employee Benefits shall be
payable in accordance with the terms of the plan, policy, practice, program,
contract or agreement under which such benefits have accrued. Severance Benefits
shall be paid at the same time as Executive would have received his base salary
had he continued to be employed and for the period ending on the first to occur
of (i) the first anniversary of Executive's termination of and (ii) the date on
which Executive breaches any of the provisions of Paragraph 8. Notwithstanding
the foregoing, the Company may elect, at any time and in its discretion, to pay
Executive the present value of the remaining Severance Benefits payable
hereunder in a single lump sum amount with such present value to be calculated
using a discount rate equal to the one year Treasury bill rate as quoted in The
Wall Street Journal (or in such other reliable publication as the Independent
Committee, in its reasonable discretion, may determine to rely upon) on the
first business day of such year on which such publication is published.

            (d) Definitions. For purposes of Paragraphs 7 and 8, capitalized
terms have the following meanings;

            "Accrued Employee Benefits" means amounts which are vested or which
Executive is otherwise entitled to receive under the terms of or in accordance
with any plan, policy, practice or program of, or any contract or agreement
with, the Company or any of its subsidiaries, at or subsequent to the date of
his termination without regard to the performance by Executive of further
services or the resolution of a contingency.

            "Carey Affiliated Entities" means (i) the Carey Family, (ii) the
employees of the Company and its affiliates, (iii) any Controlled Entity and
(iv) we Carey Foundation.

            "Carey Family" means William P. Carey, his spouse and lineal
descendants and his brothers and brothers-in-law, sisters and sisters-in-law and
each of their lineal descendants.

            "Change of Control" shall mean a transaction as a result of which
the Carey Affiliated Entities (i) cease to be the beneficial owners of at least
50 percent of the combined voting power of all the outstanding voting securities
of the Company and (ii) are not otherwise in Effective Control of the Company,

            "Controlled Entity" means an entity (other than the Company) in
which William P. Carey, the Company or any other Controlled Entity, directly of
indirectly, owns a substantial equity interest and that is

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<PAGE>

      (i)   a corporation more than 50 percent of the value of the outstanding
            stock of which is owned directly or indirectly by the Carey Family
            and/or employees of the Company;

      (ii)  a partnership more than 50 percent of the capital interest or
            profits interest in which is owned directly or indirectly by the
            Carey Family and/or employees of the Company;

      (iii) a limited liability company more than 50 percent of the ownership
            interests in which are owned directly or indirectly by the Carey
            Family and/or employees of the Company; or

      (iv)  a trust in which the Carey Family and/or employees of the Company
            together have 50 percent or more of the voting power or beneficial
            ownership interest.

The Controlled Entities as of September 30, 1996 are listed on Exhibit A
attached hereto, Notwithstanding the foregoing, in no event shall the Carey
Foundation be considered a Controlled Entity.

            "Controlling Shareholder(s)" means the person(s) who, at the
relevant time, hold of record a majority of the shares of the common stock of
the Company.

            "Earned Basic Compensation" means any salary or other compensation
(including without limitation disposition fees) due and payable, but unpaid, for
services rendered to the Company on or prior to the date on which the Employment
Period ends.

            "Effective Control" means the power to elect a majority of the
members of the Board, whether (i) by reason of the ownership of securities
representing more than 50% of the securities entitled to vote for the election
of directors (the "Voting Shares"), or (ii) pursuant to a shareholders
agreement, irrevocable proxy or otherwise controlling the right to vote a
majority of the Voting Shares. Notwithstanding the foregoing, if the company is
merged with, into or otherwise combined with a Public Corporation or more than
50% of the assets of the Company are transferred to a Public Corporation, the
Carey affiliated Entities shall be deemed to be in Effective Control of such
Public Corporation a majority of the directors on the board of directors of such
Public Corporation:

      (x)   at the time of the merger, combination, sale or other transaction,
            were either

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<PAGE>

            (1)   officers of the Company or members of the Board or the board
                  of directors of an affiliate of the Company immediately prior
                  thereto or

            (2)   nominated for election to the board of the Public Corporation
                  by the members of the Board, the board of directors of a Carey
                  Affiliated Entity or the persons who were the Controlling
                  Shareholder(s) immediately prior to such transaction with the
                  Public Corporation, or

      (y)   at any time following any such transaction, were nominated for
            election or elected by any of the Board, the board of directors of a
            Carey Affiliated Entity or the persons who were the Controlling
            Shareholder(s) immediately prior to such transaction with the Public
            Corporation.

            "Independent Committee" shall mean the committee initially comprised
of George Stoddard, Charles Townsend and Warren Wintrub and as it may thereafter
be constituted from time to time in accordance with this provision. If any
member of the initial Independent Committee (or any successor thereto appointed
in accordance with this provision) ceases to a member of the Independent
Committee for whatever reason, the successor to such person on the Independent
Committee shall be appointed by the Controlling Shareholders from the members of
the Board or the boards of directors of the Company's affiliates, subject to the
approval of such appointment by the then remaining members of the Independent
Committee, provided, however, that no member of the Independent Committee shall
be a member of the Carey Family. The Controlling Shareholders shall have the
right to remove any member of the Independent Committee from office at any time
such person is no longer a member of the Board or of the board of directors of
any of the Carey Affiliated Entities.

            "Public Corporation" means a company with at least one series of
securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended.

            "Severance Benefits" means monthly payments until the earliest of
the following dates:

      (i)   the first anniversary of Executive's termination of employment and

      (ii)  the date the Company's obligation to pay Severance Benefits ceases
            as a result of Executive's breach any of the provisions of Paragraph
            8;

                                       7

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in an amount equal to the sum of (x) the Executive's monthly base salary as in
effect immediately prior to his termination of employment and (y) an amount
equal to one-twelfth of any commissions, disposition fees, and other incentive
payments (including bonuses) paid to, the Executive during the 12 month period
ended as of the last calendar month ended immediately prior to such termination
of employment; provided that with respect to any termination of employment
occurring prior to the first anniversary of Executive's date of rehire by the
Company, the amount described in subclause (y) shall be at least $250,000. The
amount payable as Severance Benefits, however, shall be reduced by an amount
equal to 75 percent of each dollar paid to the Executive for services, whether
as an employee, consultant or otherwise, during the period Severance Benefits
are payable.

            "Termination for Cause" means a termination of Executive's
employment by the Company as a result of Executive's

      (i)   dishonesty or disloyalty;

      (ii)  refusal to perform his duties in good faith or otherwise fail to
            carry out the express and lawful instructions of the Chairman, Chief
            Executive Officer or the Board;

      (iii) gross negligence or wilful and intentional misconduct;

      (iv)  engaging in conduct constituting a felony or other crime involving
            moral turpitude;

      (v)   alcohol or drug addiction, provided that to the extent required
            thereunder, any termination as a result of such addiction may only
            occur after the Company shall have attempted to make reasonable
            accommodations (or shall have determined that no such reasonable
            accommodation is possible under the circumstances) pursuant to the
            Americans with Disabilities Act of 1990, as amended;

      (vi)  breach of his fiduciary duties to the Company or its shareholders,
            including, without limitation, the Controlling Shareholder(s); or

      (vii) any other material violation by Executive of the terms and
            conditions of this Agreement or any agreement between the Company
            and such Executive.

                                       8

<PAGE>

Notwithstanding the foregoing, (x) in the case of subclause (i), (ii) or (vi)
any determination as to whether an Executive has been disloyal or dishonest,
refused to perform his duties or breached his fiduciary duties shall be made by
the Independent Committee and (y) in the case of subcauses (iii) and (vii), the
Company shall not have the right to terminate an Executive's employment in a
Termination for Cause if the alleged action or omission by the Executive either
(A) has not resulted and is not reasonably expected to result in material harm
to the business, operations or reputation of the Company or (B) was undertaken
or omitted by Executive in good faith after consultation with his supervisor and
in a manner which was understood to be consistent with the course of action
determined following such consultation, which in either case shall be determined
by the Independent Committee prior to a Change of Control and (z) following any
Change of Control, subclauses (i), (ii), and (vi) shall automatically be deleted
from the definition of a Termination for Cause, without any further action by
the Company or the Executive. In making any determination hereunder, the
Independent Committee shall take into consideration the materiality and
relevance to the Company of Executive's action or conduct, and such
determination shall be final and binding on Executive and the Company.

            "Termination due to a Change of Control" means the Executive's
voluntary termination of employment prior to the first anniversary of a Change
of Control of the Company upon written notice delivered not less than ten
business days prior to the effective date of Participant's termination of
employment.

            "Termination due to Disability" means a termination of Executive's
employment by the Company because Executive has been incapable of substantially
fulfilling the positions, duties, responsibilities and obligations set forth in
this Agreement because of physical, mental or emotional incapacity resulting
from injury, sickness or disease for a period of (i) at least four consecutive
months or (ii) more than six months in any twelve month period. Any question as
to the existence, extent or potentiality of Executive's disability upon which
Executive and the Company cannot agree shall be determined by a qualified,
independent physician selected by the Independent Committee. The determination
of any such physician shall be final and conclusive for all purposes of this
Agreement.

            "Termination with Good Reason" means, prior to a Change of Control,
any termination of Executive's employment on account of a material breach by the
Company of any of its material obligations to Executive hereunder. Following a
Change of Control, "Termination with Good Reason" shall mean a termination of
employment by Executive within 90 days following (i) a material adverse change
in Executive's duties and responsibilities as an Executive; (ii) a reduction in
Executive's base salary (other than a proportionate adjustment applicable
generally to similarly situated Company

                                       9

<PAGE>

Executives); or (iii) the relocation of Executive's principal place of business
to a location more than thirty-five miles outside of Manhattan; provided that a
termination following a Change of Control shall not be treated as a Termination
with Good Reason if Executive shall have consented in writing to the occurrence
of the event giving rise to the claim of Termination with Good Reason. A
Termination for Good Reason must be effected by a written notice from Executive
setting forth in detail the conduct alleged to be the basis for such
termination, provided that, prior to the occurrence of a Change of Control,
Executive shall not have the right to terminate his employment hereunder
pursuant to a Termination with Good Reason (i) if, within the ten-business day
period following receipt of Executive's written, notice, the Company shall have
cured the conduct alleged to have caused the material breach and (ii) unless
Executive actually terminates employment within 30 days following the end of the
Company's cure period. Notwithstanding the foregoing, if the Company disputes
whether a breach has occurred, or whether any breach is material, the
Independent Committee shall decide, in good faith, whether the alleged conduct
by the Company entitles Executive to quit pursuant to a Termination with Good
Reason and the time period referred to in subclause (ii) in the immediately
preceding sentence shall not end earlier than 10 days following the date on
which the Independent Committee notifies Executive of its decision. Prior to the
occurrence of a Change of Control, the determination by the Independent
Committee as to Executive's eligibility for a "Termination with Good Reason"
shall be final and binding on Executive and the Company.

            "Termination Without Cause" means any termination by the Company of
Executive's employment with the Company other than (i) a Termination due to
Disability, (ii) a Termination due to death or (iii) a Termination for Cause.

            (e) Full Discharge of Company Obligation. The amounts payable to
Executive pursuant to this Paragraph 7 following termination of his employment
(including amounts payable with respect to Accrued Employee Benefits) shall be
in full and complete satisfaction of Executive's rights under this Agreement and
any other claims he may have in respect of his employment by the Company or any
of its subsidiaries. Such amounts shall constitute liquidated damages with
respect to any and all such rights and claims and, upon Executive's receipt of
such amounts, the Company shall be released and discharged from any and all
liability to Executive in connection with this Agreement or otherwise in
connection with Executive's employment with the Company and its subsidiaries.
Nothing contained in this paragraph shall be construed as limiting Executive's
claims against the Company or any of its subsidiaries with respect to
non-employment related torts.

                                       10
<PAGE>

            8.    Non-Competition, Confidential Information, Etc.

            (a) Noncompetition. During the term of this Agreement, as the same
may be renewed and extended, and for a period of

      (i)  18 months following the termination of Executive's employment for any
      reason other than a Termination with Good Reason, a Termination Without
      Cause or a Termination due to Disability, or

      (ii) 12 months following the termination of Executive's employment due to
      the expiration of the term of this Agreement due to Executive's election
      not to renew the term hereof, a Termination with Good Reason or a
      Termination Without Cause,

Executive shall not, without the written consent of the Company, directly or
indirectly, as a stockholder owning beneficially or of record more than 5% of
the outstanding shares of any class of stock of any issuer, or as an officer,
director, employee, partner, consultant, joint venturer, proprietor, or
otherwise, engage in or become interested in any Competing Business in the
United States or in any other jurisdiction in which the Company is actively
engaged in business or with respect to which, at the time of Executive's action
(or, if Executive is not an employee of the Company at such time, the date his
employment with the Company terminated), the Company had taken material steps
toward becoming actively engaged in such business. For purpose of this
Agreement, the term "Competing Business" shall mean any business which is
engaged in (i) the business of structuring, obtaining the financing for, or
otherwise implementing or facilitating long-term financing of corporate property
using leasing arrangements ("Leasing Transactions") or (ii) any other business
activity of a type and kind that, at the relevant time, is conducted by the
Company and which accounts for ten percent (10%) or more of either the Company's
gross revenues or net after tax income ("Other Material Activities"); provided
that nothing in this Agreement shall preclude Executive from providing services
to any Competing Business so long as such services do not relate, directly or
indirectly, to Leasing Transactions or Other Material Activities. Without
limiting the generality of the foregoing, Executive acknowledges and agrees that
the Company is engaged in business in each state of the United States, and each
possession of the United States. Notwithstanding the foregoing, following a
Change of Control, (i) if Executive terminates his employment in a Termination
for Good Reason or is terminated by his employer other than in a Termination for
Cause, all restrictions imposed on Executive pursuant to this paragraph shall
cease to be effective at the date of his termination of employment and (ii) the
only activities that will be treated as Other Material Activities shall be those
business activities, if any, that, immediately prior to the Change of Control
were Other Material Activities, and at the time of the alleged

                                       11

<PAGE>

competitive activity, are Other Material Activities for the Company. The Company
and Executive acknowledge and agree that the provisions of this Paragraph 8(a)
are intended to protect the legitimate business interests of the Company and not
to restrain the ability of Executive to obtain gainful employment. The Company
agrees that this Paragraph 8(a) should not be interpreted to preclude Executive
from raising capital or seeking to structure financial transactions in respect
of investments of a type or nature not undertaken by the Company and its
affiliates, even if such other investments compete for investment funds from the
same sources of funds as the Company looks to for its transactions (e.g., this
Paragraph 8(a) will not preclude Executive from participating in the structure,
financing or implementation of a venture capital fund or mezzanine debt fund,
even if the potential investors in such funds include some or all of the same
persons or entities as would generally invest in a transaction sponsored or
promoted by the Company).

            (b) Confidential Information. During the term of this Agreement and
at all times thereafter, Executive shall not, without the written consent of the
Company, use for his personal benefit, or disclose, communicate or divulge to,
or use for any company other than the Company or its subsidiaries or affiliates,
any Confidential Information (as defined below) that had been made known to
Executive or learned or acquired by Executive while in the employ of Company or
its subsidiaries or affiliates, unless such information has become public other
than by reason of Executive's breach of this covenant. Confidential Information
shall mean

      (i)   information not in the public domain (or in the public domain as a
            result of a breach by Executive or another executive of the Company
            who is also bound by a similar confidentiality clause) regarding the
            business methods, business policies, procedures, techniques,
            research or developments projects or results, trade secrets, or
            other processes of or developed by the Company;

      (ii)  any names and addresses of customers or clients or any data on or
            relating to past, present or prospective customers or clients not in
            the public domain (or in the public domain as a result of a breach
            by Executive or another executive of the Company who is also bound
            by a similar confidentiality clause); and

      (iii) any other material information not in the public domain (or in the
            public domain as a result of a breach by Executive or another
            executive of the Company who is also bound by a similar
            confidentiality clause) relating to or dealing with the business
            operations or activities of the Company which has been designated by
            the Company as confidential or which, if disclosed

                                       12

<PAGE>

            to any third party, would result in a material adverse effect to the
            Company.

            (c) Company Property, Promptly following Executive's termination of
employment, Executive shall return to the Company all property of the Company,
and all copies thereof in Executive's possession or under his control.

            (d) Nonsolicitation of Employees. Executive agrees that for a period
of two years after the termination of his employment with the Company, he will
not and will not assist or encourage any other person to (i) employ, hire,
engage or be associated (as a shareholder, partner, employee, consultant or in a
similar capacity) with any employee or other person connected with the Company
who rendered services as a professional, including, without limitation, all
persons who provide direct and substantial services with respect to Leasing
Transactions or Other Material Activities (the "Restricted Employees"), at the
time of such termination or during any part of the six months (three months, in
the case of any employee who was not also an officer of the Company) preceding
such termination of employment, (ii) induce any Restricted Employees to leave
the employ of the Company or any of its affiliates, or (iii) solicit the
employment of any Restricted Employees on his own behalf or on behalf of any
other business enterprise.

            (e) Injunctive Relief. Executive agrees and acknowledges that the
remedies at law for any breach by him of the provisions of this Paragraph 8 will
be inadequate and that the Company shall be entitled to obtain injunctive relief
against him from a court of competent jurisdiction in the event of any such
breach. If any such court of competent jurisdiction shall determine that the
restrictions contained in this Paragraph 8 are unreasonable as to time or
geographical area, such court shall reform said restrictions to the extent
necessary in the opinion of such court to make them reasonable and enforceable.

            9.    Miscellaneous.

            (a) Indulgences, Etc. Neither the failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.

                                       13
<PAGE>


            (b) Controlling Law. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement shall be governed by
and construed in accordance with the laws of the State of New York
notwithstanding any conflicting choice-of-law provisions.

            (c) Notices. All notices, requests, demands and other communications
required or permitted under this Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been given, when
delivered in person or when deposited in the United States mail in a postpaid
envelope by registered or certified mail, return receipt requested or by 24-hour
courier Service.

            (d) Binding Effect. This Agreement shall be binding on, and shall
inure to the benefit of, the Company and any person or entity that succeeds to
the interest of the Company (regardless of whether such succession does or does
not occur by operation of law) by reason of the sale of all or a portion of the
Company's stock, a merger, consolidation or reorganization involving the Company
or a sale of the assets of the business of the Company in which Executive
performs a majority of his services, unless the Company otherwise elects in
writing to retain responsibility for the duties and obligations of the Company
(and the benefits conveyed to the Company) under this Agreement. This Agreement
shall also inure to the benefit of Executive's heirs, executors, administrators
and legal representatives.

            (e) Assignment. Except as provided under Paragraph (d), neither this
Agreement nor any of the rights of obligations hereunder shall be assigned or
delegated by any party hereto without the prior written consent of the other
party.

            (f) Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original as against the
party whose signature appears thereon, and both of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.

            (g) Severability; Reformation. In the event that one or more of the
provisions of this Agreement shall become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby. In the event any of
Paragraph 8(a), (b), (c) or (d) is not enforceable in accordance with its terms,
Executive and the Company agree that such Paragraph shall be reformed to make
such Paragraph enforceable in a manner which provides the Company the maximum
rights permitted at law.

                                       14
<PAGE>

            (h) Entire Agreement. Except to the extent that the letter agreement
between the Company and Executive relating to his recommencement of employment
is expressly incorporated herein, this Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.

            (i) Shareholder Rights. Whenever in this Agreement reference is made
to the interests of the Company's shareholders and there exists or may exist a
conflict in the interests of such shareholders, the Independent Committee shall
determine the action or conduct that is in the interests of shareholders.

            (j) Paragraph Headings. The paragraph headings in this Agreement are
for convenience only; they form no part of this Agreement and shall not affect
its interpretation.

            (k) Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

            (l) Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or holiday, then the final day shall be deemed to be the next
day which is not a Saturday, Sunday or holiday.

            (m) Prevailing Parties. Following a Change of Control, any party
which prevails in a lawsuit pertaining to the enforcement or interpretation of
any provision of this Plan shall be entitled to recover all reasonable
attorney's fees incurred by such party with respect to the lawsuit, in addition
to any other remedies to which the party is entitled under the law, from the
opposing party to such lawsuit.

            (n) Independent Committee. The terms of this Agreement shall be
interpreted by the Independent Committee. The Independent Committee shall keep
records of actions taken at its meetings. Two members of the Independent
Committee shall constitute a quorum at any meeting, and the acts of a majority
of the members present at any meeting at which a quorum is present, or acts
approved in writing by a majority of the Independent Committee, shall be the
acts of the Independent Committee.

                                       15
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When determining whether an Executive's employment may be terminated by the
Company in a Termination for Cause or by the Executive in a Termination with
Good Reason, the Independent Committee shall provide the Executive an
opportunity to be heard on such issue, and shall render its decision in writing
within 60 days of being presented with the question. Prior to the occurrence of
a Change of Control, any action taken by the Independent Committee with respect
to the interpretation of this Agreement shall be final, conclusive and binding.

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered on the date first above written.

                                      W.P. CAREY & CO., INC.

                                      By /s/ W.P. Carey

                                      /s/ Gordon F. DuGan
                                      ----------------------
                                      Executive

                                       16
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                                   Exhibit A

CONTROLLED ENTITIES

Carey Corporate Property, Inc.

Seventh Carey Corporate Property, Inc.

Eighth Carey Corporate Property, Inc.

Ninth Carey Corporate Property, Inc.

Carey Fiduciary Advisors, Inc.

Carey Property Advisors, L.P.

Carey Financial Corporation

W.P. Carey Advisors, Inc.

Carey Fairview Corporation

W.P. Carey Advisors, L.P.