ACQUISITION AGREEMENT

      THIS ACQUISITION AGREEMENT, dated as of November 7, 2005 (this
"Agreement"), is by and between Newkirk Realty Trust, Inc., a Maryland
corporation (the "Newkirk"), and First Union Real Estate Equity and Mortgage
Investments, an Ohio business trust ("First Union").

                                    RECITALS:

      WHEREAS, pursuant to that certain Exclusivity Services Agreement (the
"Exclusivity Agreement"), dated as of December 31, 2003, between First Union and
Michael L. Ashner ("Ashner"), Ashner is required to offer to First Union any
Business Opportunity (as defined in the Exclusivity Agreement) offered to him
during the period that he is serving as either an executive officer First Union
or as a member of the Board of Trustees of First Union;

      WHEREAS, Ashner is a director and executive officer of Newkirk;

      WHEREAS, Newkirk is simultaneously herewith making an initial public
offering of its shares of common stock, par value $.01 (the "Common Stock")
pursuant to a registration statement on Form S-11 filed by Newkirk (the
"Registration Statement") with the Securities and Exchange Commission and, in
connection therewith, desires to acquire from First Union certain rights
presently held by First Union pursuant to the Exclusivity Agreement in exchange
for shares of Common Stock;

      NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and undertakings hereunder and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
intending to be legally bound, the parties hereto do hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

      Section 1.01. Definitions. As used in this Agreement, the following terms
have the meanings set forth below.

      "Advisor" shall mean NKT Advisors LLC, a Delaware limited liability
company.

      "Advisory Agreement" shall mean that certain Advisory Agreement dated
November 7, 2005, between Newkirk, the Operating Partnership and the Advisor.

      "Affiliate" shall mean (a) with respect to an individual, any member of
such individual's family residing in the same household; (b) with respect to an
entity: (i) any executive officer, director, partner or Person that owns ten
percent (10%) or more of the outstanding beneficial interest of or in such
entity, or (ii) any brother, sister, brother-in-law, sister-in-law, lineal
descendant or ancestor of any executive officer, director, partner or Person
that owns ten percent (10%) or more of the outstanding beneficial interest of or
in such entity; and (c) with respect to a Person, any Person which directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with such Person or entity; provided, however, that for
purposes of the definition of "Affiliate," First Union shall not be deemed an
"Affiliate" of Newkirk.

<PAGE>

      "Agreement" shall have the meaning set forth in the preamble.

      "Basket" shall have the meaning set forth in Section 11.03.

      "Business Day" shall mean any day other than (i) a Saturday, (ii) a Sunday
or (iii) any other day on which banks in the City of New York are authorized or
required to close.

      "By-Laws" shall mean, when used with respect to a specified Person, the
by-laws of a Person, as the same may be amended from time to time.

      "Capital Stock" shall mean, with respect to any Person, any and all
shares, shares of beneficial interest, interests, participations, rights in or
other equivalents (however designated and whether voting or non-voting) of such
Person's capital stock or any form of membership, ownership or participation
interests, as applicable, including partnership interests, whether now
outstanding or hereafter issued and any and all securities, debt instruments,
rights, warrants or options exercisable or exchangeable for or convertible into
such capital stock.

      "Closing" shall have the meaning set forth in Section 2.03(a).

      "Closing Date" shall have the meaning set forth in Section 2.03(a).

      "Commission Filings" shall have the meaning set forth in Section 3.08.

      "Common Stock" shall have the meaning set forth in the Recitals.

      "Company Subsidiaries" and "Company Subsidiary" shall mean all of the
subsidiaries of the Company as set forth on Exhibit 21 of the Registration
Statement.

      "Consents" shall mean all governmental and third party consents,
approvals, authorizations, qualifications and waivers necessary to be received
by a Person for the consummation of the transaction contemplated by the
Agreement.

      "Contract" shall mean any legally binding contract, agreement, mortgage,
deed of trust, bond, loan, indenture, lease, license, note, option, warrant,
right, instrument, commitment or other similar document, arrangement or
agreement, whether written or oral.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

      "Forfeiture Event" shall mean (i) the termination of the Advisory
Agreement by Newkirk for Cause (as defined in the Advisory Agreement), (ii)
Michael L. Ashner's resignation as the Chief Executive Officer and director of
Newkirk and the Advisor, or (iii) the death or disability of Michael L. Ashner
unless the other members of the Advisor's senior management at such time remain
in such positions.


                                       2
<PAGE>

      "GAAP" shall mean generally accepted accounting principles applied on a
consistent basis as used in the United States of America.

      "Governmental Body" shall mean any government or governmental or
quasi-governmental authority including, without limitation, any federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body (public or
private), department or other instrumentality or political unit or subdivision,
whether located in the United States or abroad, the National Association of
Securities Dealers, Inc., the New York Stock Exchange, the Nasdaq National
Market, the Nasdaq SmallCap Market or the American Stock Exchange.

      "Indemnitee" shall have the meaning set forth in Section 10.01.

      "Indemnitor" shall have the meaning set forth in Section 10.01.

      "Law" shall mean any treaty, statute, ordinance, code, rule, regulation,
Order or other legal requirement enacted, adopted, promulgated, applied or
followed by any Governmental Body.

      "Legal Proceeding" shall mean any judicial, administrative or arbitral
actions, suits, proceedings (public or private) or governmental proceedings.

      "Legend" shall mean the Legend set forth in Section 4.02(e).

      "Lien" shall mean any mortgage, pledge, lien (statutory or otherwise),
security interest, hypothecation, conditional sale agreement, encumbrance or
similar restriction or agreement.

      "Lock-up Agreement" shall have the meaning ascribed thereto in the
Securities Purchase Agreement.

      "Loss" shall have the meaning set forth in Section 10.01.

      "Material Adverse Effect" shall mean any event, condition or contingency
that has had, or is reasonably likely to have, a material adverse effect on (i)
the assets, business, condition (financial or otherwise), results of operations,
stockholders' equity, properties or prospects of Newkirk, the Operating
Partnership, Newkirk REIT Advisor LLC, a Delaware limited liability company (the
"Manager") and the Company Subsidiaries, taken as a whole; (ii) the long-term
debt or capital stock of Newkirk, the Operating Partnership, the Manager or any
Company Subsidiary; or (iii) the offering contemplated by the Registration
Statement or consummation of any of the other transactions contemplated by this
Agreement, the Registration Statement or the Prospectus.

      "Net Lease Assets" shall mean (i) a property that is either (a) triple net
leased or (b) where a tenant leases at least 85% of the rentable square footage
of the property and, in addition to base rent, the tenant is required to pay
some or all of the operating expenses for the property, and, in both (a) and (b)
the lease has a remaining term, exclusive of all unexercised renewal terms, of
more than 18 months, (ii) management agreements and master leases with terms of
greater than three years where a manager or master lessee bears all operating
expenses of the property and pays the owner a fixed return, (iii) securities of


                                       3
<PAGE>

companies including, without limitation, corporations, partnerships and limited
liability companies, whether or not publicly traded, that are primarily invested
in assets that meet the requirements of clauses (i) and (ii), and (iv) all
retenanting and redevelopment associated with such properties, agreements and
leases, and all activities incidental thereto.

      "Notice" shall have the meaning set forth in Section 10.02(a).

      "NYSE" shall mean the New York Stock Exchange.

      "Offering" shall mean the offering and sale of the Shares contemplated by
the Registration Statement and Prospectus.

      "Operating Partnership" shall mean The Newkirk Master Limited Partnership,
a Delaware limited partnership.

      "Order" shall mean any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award.

      "Person" shall mean any individual, corporation, partnership, firm,
limited liability company, joint venture, trust, association, unincorporated
organization, group, joint-stock company, Governmental Body or other entity.

      "Prospectus" shall mean the prospectus, in the form in which it is to be
filed with the SEC pursuant to Rule 424(b), or, if the prospectus is not to be
filed with the SEC pursuant to Rule 424(b), the prospectus in the form included
as part of the Registration Statement at the time the Registration Statement
becomes effective.

      "Purchase Price" shall have the meaning set forth in Section 2.02.

      "Qualified Institutional Buyer" shall mean a Person that is a "qualified
institutional buyer" within the definition contained in Rule 144A under the
Securities Act.

      "Registration Rights Agreement" shall mean that certain Registration
Rights Agreement, dated of even date herewith, between Newkirk and First Union.

      "Registration Statement" shall have the meaning set forth on the Recitals.

      "Reversion Event" shall mean (i) the termination or non-renewal of the
Advisory Agreement or (ii) Michael L. Ashner's resignation as the Chief
Executive Officer and director of Newkirk and the Advisor.

      "SEC" shall mean the U.S. Securities and Exchange Commission.

      "Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.


                                       4
<PAGE>

      "Securities Purchase Agreement" shall mean that certain Securities
Purchase Agreement, dated of even date herewith, among Newkirk and First Union.

      "Shares" shall mean the shares of Common Stock issued to First Union
pursuant to the terms hereof.

      "Subsidiary" shall mean, as to any Person, any other Person more than 50%
of the shares of the voting stock, voting interests, membership interests or
partnership interests of which are owned or controlled, or the ability to select
or elect more than 50% of the directors or similar managers is held, directly or
indirectly, by such first Person or one or more of its Subsidiaries or by such
first Person and one or more of its Subsidiaries.

      "Vesting Event" shall mean (i) the termination of the Advisory Agreement
by the Advisor following a breach by Newkirk of the Advisory Agreement that
remains uncured by Newkirk, (ii) the non-renewal of the Advisory Agreement, or
(iii) termination of the Advisory Agreement by Newkirk other than for Cause (as
defined in the Advisory Agreement).

      Section 1.02. Rules of Construction. Unless the context otherwise
requires:

            (a) an accounting term defined by GAAP that is not otherwise defined
herein has the meaning assigned to it in accordance with GAAP;

            (b) "or" is not exclusive;

            (c) words in the singular include the plural, and words in the
plural include the singular;

            (d) the words "include" and "including" shall be deemed to mean
"include, without limitation," and "including, without limitation";

            (e) "herein," "hereof," "hereto," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
article, section, paragraph or clause where such terms may appear;

            (f) references to sections mean references to such section in this
Agreement, unless stated otherwise; and

            (g) the use of any gender shall be applicable to all genders.

                                   ARTICLE II
                    ASSIGNMENT OF RIGHTS; ISSUANCE OF SHARES

      Section 2.01. Assignment of Rights. Upon the terms and subject to the
conditions of this Agreement, First Union shall sell, assign, convey and
transfer to Newkirk all of First Union's right, title and interest under the
Exclusivity Agreement solely with respect to Net Lease Assets (the "Exclusivity
Assignment"), free and clear of any lien or other encumbrance.


                                       5
<PAGE>

      Section 2.02. Purchase Price. In consideration of the assignment provided
for in Section 2.01 hereof, Newkirk shall issue to First Union shares of Common
Stock having a value of $20,000,000 (the "Purchase Price"), based on a purchase
price per share equal to the initial public offering price of the Common Stock
sold to the public pursuant to the Registration Statement.

      Section 2.03. Closing.

            (a) Subject to the satisfaction or waiver of the conditions set
forth in this Agreement, the closing of the transaction contemplated by Sections
2.01 and 2.02 (the "Closing") shall take place simultaneously with the closing
of Newkirk's initial public offering, or at such other time as may be mutually
agreed upon by First Union and Newkirk (the "Closing Date"). The Closing shall
occur on the Closing Date at the offices of Katten Muchin Rosenman, 575 Madison
Avenue, New York, New York.

            (b) At the Closing: (i) Newkirk will deliver to First Union (x) a
certificate for the Shares registered in the name of First Union and (y) legal
opinions of counsel to Newkirk addressed to First Union, satisfactory to counsel
to First Union (the "Newkirk Counsel Opinions"); (ii) First Union, in full
payment for the Shares, will execute and deliver to Newkirk an assignment in
form and substance reasonably satisfactory to Newkirk to evidence the
Exclusivity Assignment ; and (iii) each party shall take or cause to happen such
other actions, and shall execute and deliver such other instruments or
documents, as shall be required under Article VIII.

                                   ARTICLE III
                    REPRESENTATIONS AND WARRANTIES OF NEWKIRK

           Newkirk represents and warrants to First Union as follows:

      Section 3.01. Organization and Good Standing. Each of Newkirk, the
Operating Partnership and the Subsidiaries has been duly organized and validly
exists as a corporation, partnership, limited partnership or limited liability
company in good standing under the laws of its jurisdiction of organization.
Each of Newkirk, the Operating Partnership and Newkirk Subsidiaries has all
requisite power and authority to carry on its business as it is currently being
conducted and as described in the Prospectus, and to own, lease and operate its
respective properties. Each of Newkirk, the Operating Partnership and the
Company Subsidiaries is duly qualified to do business and is in good standing as
a foreign corporation, partnership, limited partnership or limited liability
company in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so qualified
or in good standing which (individually and in the aggregate) could not
reasonably be expected to have a Material Adverse Effect. Newkirk has heretofore
delivered or made available to First Union complete and correct copies of the
Articles of Incorporation of Newkirk, as amended to date (the "Articles of
Incorporation").

      Section 3.02. Authority; Binding Effect. Newkirk has the full right, power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement, the
Registration Statement and the Prospectus. This Agreement and the transactions


                                       6
<PAGE>

contemplated by this Agreement, the Registration Statement and the Prospectus
have been duly and validly authorized by Newkirk. This Agreement has been duly
and validly executed and delivered by Newkirk. This Agreement constitutes the
legal, valid and binding obligation of Newkirk, enforceable in accordance with
its terms, except as such enforceability may be subject to the effects of any
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar Laws affecting creditors' rights generally and subject to
the effects of general equitable principles

      Section 3.03. Organization and Good Standing of Company Subsidiaries.
Newkirk Subsidiaries constitute all of the Subsidiaries of Newkirk and the
Operating Partnership. Each of Newkirk, the Operating Partnership and the
Company Subsidiaries has all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses, filings and permits of, with
and from all judicial, regulatory and other legal or governmental agencies and
bodies and all third parties, foreign and domestic (collectively, the
"Consents"), to own, lease and operate its properties and conduct its business
as it is now being conducted and as disclosed in the Registration Statement and
the Prospectus except where the failure to obtain such consents would not have a
Material Adverse Effect, and each such Consent is valid and in full force and
effect, and none of Newkirk, the Operating Partnership nor any Company
Subsidiary has received notice of any investigation or proceedings which results
in or, if decided adversely to Newkirk, the Operating Partnership or any Company
Subsidiary, could reasonably be expected to result in, the revocation of, or
imposition of a materially burdensome restriction on, any Consent. Each of
Newkirk, the Operating Partnership and the Company Subsidiaries is in compliance
with all applicable laws, rules, regulations, ordinances, directives, judgments,
decrees and orders, foreign and domestic, except where failure to be in
compliance could not reasonably be expected to have a Material Adverse Effect.
No Consent contains a materially burdensome restriction not adequately disclosed
in the Registration Statement and the Prospectus.

      Section 3.04. Capitalization. The capitalization table set forth in the
Registration Statement and Prospectus accurately sets forth as of the date
indicated therein, (i) the authorized capitalization of Newkirk, the number of
shares of each class issued and outstanding and the number of shares reserved
for issuance in connection with Newkirk's stock option plans, and (ii) all
options, warrants, convertible securities, rights to subscribe to, calls,
contracts, undertakings, arrangements and commitments to issue which may result
in the issuance of stock of Newkirk. All of the issued and outstanding shares of
Newkirk's Capital Stock have been duly and validly authorized and issued and are
fully paid and non-assessable and are not subject to any preemptive rights. No
securities of Newkirk are entitled to preemptive or similar rights, and no
person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transaction contemplated by this
Agreement. All of the issued partnership interests, shares of capital stock of
or other ownership interests in the Operating Partnership and in each Company
Subsidiary have been duly and validly authorized and issued and are fully paid
and non-assessable and (except as otherwise set forth in the Prospectus) at the
Closing will be owned directly or indirectly by Newkirk (in the case of the
Operating Partnership) or by the Operating Partnership or a Company Subsidiary,
free and clear of any Lien, charge, mortgage, pledge, security interest, claim,
equity, trust or other encumbrance, preferential arrangement, defect or
restriction of any kind whatsoever.


                                       7
<PAGE>

      Section 3.05. No Violations; Consents. Neither the execution, delivery or
performance by Newkirk of this Agreement nor the consummation of the transaction
contemplated hereby, will (a) conflict with, or result in the breach of, any
provision of the organizational documents of Newkirk, the Operating Partnership
or any Company Subsidiary, (b) conflict with, violate, result in the breach or
termination of, or constitute a default or give rise to any right of
termination, amendment, cancellation or acceleration or right to increase the
obligations or otherwise modify the terms thereof under any Contract or Order to
which Newkirk, the Operating Partnership or any Company Subsidiary is a party or
by which Newkirk or any Company Subsidiary or any of the properties or assets of
Newkirk, the Operating Partnership or any Company Subsidiary is bound, (c)
constitute a violation of any Law applicable to Newkirk, the Operating
Partnership or any Company Subsidiary; or (d) result in the creation of any Lien
upon the properties or assets of Newkirk, the Operating Partnership or any
Company Subsidiary. Except for the approval of the NYSE referred to in Section
6.01(c) and the declaration by the SEC of the effectiveness of the Registration
Statement, no Consent is required on the part of Newkirk, the Operating
Partnership or the Company Subsidiaries in connection with the execution and
delivery of this Agreement and the consummation of the transaction contemplated
hereby, including the issuance, sale and deliver of the Shares to be issued,
sold and delivered hereunder.

      Section 3.06. Listing. Newkirk has applied to have its shares of Common
Stock listed on the NYSE.

      Section 3.07. Financial Statements. The pro forma financial statements,
financial statement schedules and pro forma data set forth in the Registration
Statement and Prospectus accurately reflect the books and records of Newkirk and
the Operating Partnership and present fairly, in all material respects, the
financial position of Newkirk and the Operating Partnership and the Company
Subsidiaries and the results of their operations and their cash flows for the
period and date covered thereby, in conformity with GAAP, except for changes
resulting from year-end adjustments (none of which will be material in amount).
The assumptions used in preparing the pro forma and financial information
included in the Registration Statement and the Prospectus provide a reasonable
basis for presenting the significant effects directly attributable to the
transactions or events described therein.

      Section 3.08. Commission Filings. The Operating Partnership has filed all
reports, registration statements, proxy statements and other materials, together
with any amendments required to be made with respect thereto, that were required
to be filed with the SEC under the Securities Act or the Exchange Act from and
after January 1, 2002 (all such reports and statements are collectively referred
to herein as the "Commission Filings"). As of their respective dates, the
Commission Filings, including the financial statements contained therein,
complied in all material respects with all of the statutes and published rules
and regulations enforced or promulgated by the regulatory authority with which
the Commission Filings were filed, and, except to the extent the information in
any Commission Filing has been revised or superseded by a later filed Commission
Filing, did not and do not as of the date hereof 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 the light of the
circumstances under which they were made, not misleading. The financial
statements of the Operating Partnership included in the Commission Filings
comply in all material respects with applicable accounting requirements and the
rules and regulations of the SEC with respect thereto as in effect at the time
of filing.


                                       8
<PAGE>

      Section 3.09. Absence of Certain Developments. Except as specifically
disclosed in the Commission Filings, since December 31, 2004 and as of the date
hereof no event or series of events has occurred which could reasonably have a
Material Adverse Effect.

      Section 3.10. Litigation. There are no Legal Proceedings pending or, to
the knowledge of Newkirk, threatened, that question the validity of this
Agreement or the transaction contemplated hereby or any action taken or to be
taken by Newkirk, the Operating Partnership or any Company Subsidiary in
connection with the consummation of the transaction contemplated hereby. There
are no material Legal Proceedings pending or, to the knowledge of Newkirk,
threatened, against or involving Newkirk, the Operating Partnership or any
Company Subsidiary or any of their respective properties or assets, at Law or in
equity which in the aggregate could reasonably have a Material Adverse Effect.
There is no outstanding or, to the knowledge of Newkirk, threatened, Order of
any Governmental Body against Newkirk, the Operating Partnership or any Company
Subsidiary or any of their respective properties or assets, which Order could
reasonably have a Material Adverse Effect.

      Section 3.11. Compliance with Laws. Newkirk, the Operating Partnership and
the Company Subsidiaries are in compliance in all material respects with all
Laws and Orders promulgated by any Governmental Body applicable to Newkirk, the
Operating Partnership and the Company Subsidiaries or to the conduct of the
business or operations of Newkirk, the Operating Partnership and the Company
Subsidiaries or the use of their properties (including any leased properties)
and assets, except where failure to comply would not have a Material Adverse
Effect. Since July 1, 2005 neither Newkirk, the Operating Partnership nor any
Company Subsidiary has received any written notice of violation or alleged
material violation of any such Law or Order by any Governmental Body in any
material respect that has not been resolved. Since July 1, 2005 neither Newkirk,
the Operating Partnership nor any Company Subsidiary has received written notice
that it is the subject of an investigation by any Governmental Body which has
not been resolved or which could reasonably have a Material Adverse Effect.

      Section 3.12. Financial Advisors. No agent, broker, investment banker,
finder, financial advisor or other Person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee from Newkirk, directly or
indirectly, in connection with the transaction contemplated hereby.

      Section 3.13. Registration Statement. At the time of the effectiveness of
the Registration Statement, the Registration Statement and Prospectus and any
amendments thereof and supplements thereto will comply in all material respects
with the applicable provisions of the Securities Act and the rules and
regulations promulgated thereunder ("Rules and Regulations"), and will not
contain an untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein (i) in the case of the Registration Statement, not misleading
and (ii) in the case of the Prospectus or any related preliminary prospectus in
light of the circumstances under which they were made, not misleading. The
statistical, industry-related and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
which Newkirk reasonably and in good faith believes are reliable and accurate,
and such data agree with the sources from which they are derived.


                                       9
<PAGE>

      Section 3.14. No Default. Newkirk is not in default in the payment or
performance of any of its Contracts, except where such default would not have a
Material Adverse Effect.

      Section 3.15. Other Registration Rights. Except as provided in the
Registration Statement, Newkirk has not entered into any agreement to register
its debt or equity securities under the Securities Act.

      Section 3.16. Disclosure Controls. Newkirk has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
Newkirk and designed such disclosure controls and procedures to ensure that
material information relating to Newkirk, including its subsidiaries, is timely
made known to the certifying officers by others within those entities,
particularly during the period in which Newkirk's Form 10-K or 10-Q, as the case
may be, is being prepared. The Operating Partnership's certifying officers have
evaluated the effectiveness of the Operating Partnership's controls and
procedures as of June 30, 2005 (such date, the "Evaluation Date"). The Operating
Partnership presented in its Form 10-Q for the quarter ended June 30, 2005 the
conclusions of the certifying officers about the effectiveness of the disclosure
controls and procedures based on their evaluations as of the Evaluation Date.
Since the Evaluation Date, there have been no significant changes in the
Operating Partnership's internal controls (as such term is defined in Item
307(b) of Regulation S-K under the Exchange Act) or, to the knowledge of
Newkirk, in any factors that could significantly affect Newkirk's or the
Operating Partnership's internal controls.

      Section 3.17 Taxes. Since January 1, 2002, the Operating Partnership and
each Company Subsidiary has timely filed or caused to be filed any and all
material tax returns required to be filed by it under applicable federal, state,
local and foreign Law, except where the failure to failure to do so could not
reasonably be expected to have a Material Adverse Effect. The reserves for taxes
contained in the financial statements of the Operating Partnership or carried on
the books and records of the Operating Partnership are in the aggregate adequate
to cover all tax liabilities and deferred taxes of the Operating Partnership and
the Company Subsidiaries as of the date of this Agreement, except to the extent
that any inadequacy could not in the aggregate reasonably have a Material
Adverse Effect. Commencing with its initial taxable year beginning on the
business day prior to the Closing Date and ending December 31, 2005, Newkirk
will be organized in conformity with the requirements for qualification as a
real estate investment trust (a "REIT") pursuant to Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended (the "Code"); Newkirk's proposed
method of operation as described in the Registration Statement and in the
Prospectus will enable it to meet the requirements for qualification and
taxation as a REIT under the Code; and all statements in the Registration
Statement and the Prospectus regarding Newkirk's qualification and taxation as a
REIT are true, complete and correct in all material respects.

      Section 3.18 Non-Integration. None of Newkirk, the Operating Partnership
nor any of their respective affiliates has, prior to the date hereof, made any
offer or sale of any securities which could be "integrated" for purposes of the
Securities Act and the Rules and Regulations with the offer and sale of the
Shares pursuant to the Registration Statement. Except as disclosed in the
Registration Statement and the Prospectus, none of Newkirk, the Operating
Partnership nor any of their respective affiliates has sold or issued any Common
Stock or other security of Newkirk, the Operating Partnership or any Subsidiary
or any security convertible into, or exercisable or exchangeable for, Common
Stock or any other such security during the six-month period preceding the date
of the Prospectus, including but not limited to any sales pursuant to Rule 144A
or Regulation D or S under the Securities Act or the Rules and Regulations.


                                       10
<PAGE>

      Section 3.19 Affiliations. No relationship, direct or indirect, exists
between or among any of Newkirk, the Operating Partnership, the Manager or any
of their respective affiliates, on the one hand, and any director, officer,
stockholder, tenant or supplier of Newkirk, the Operating Partnership, the
Manager or any of their respective affiliates, on the other hand, which is
required by the Securities Act or the Rules and Regulations to be described in
the Registration Statement or the Prospectus which is not so described and
described as required. There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by Newkirk or the Operating Partnership to or for the benefit of
any of the officers or directors of Newkirk or the Operating Partnership or any
of their respective family members, except as disclosed in the Registration
Statement and the Prospectus.

      Section 3.20 Investment Company. Neither Newkirk nor the Operating
Partnership is and, at all times up to and including consummation of the
transactions contemplated by this Agreement, the Registration Statement and the
Prospectus, and after giving effect to application of the net proceeds of the
Offering, will not be, subject to registration as an "investment company" under
the Investment Company Act of 1940, as amended, and is not and will not be an
entity "controlled" by an "investment company" within the meaning of such act.

                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF FIRST UNION

           First Union represents and warrants to Newkirk as follows:

      Section 4.01. Authorization. First Union is a trust organized and validly
existing under the Laws of the State of Ohio. First Union has the full power and
authority to enter into this Agreement and to consummate the transaction
contemplated hereby. The execution and delivery of this Agreement and the
consummation by First Union of the transaction contemplated hereby have been
duly authorized by all necessary action on the part of First Union. This
Agreement has been duly executed and delivered by First Union and constitutes
the legal, valid and binding obligations of First Union, enforceable in
accordance with its respective terms, except as such enforceability may be
subject to the effects of any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar Laws affecting creditors'
rights generally and subject to the effects of general equitable principles.

      Section 4.02. No Violations; Consents. Neither the execution, delivery or
performance by First Union of this Agreement nor the consummation of the
transaction contemplated hereby, will (a) conflict with, or result in the breach
of, any provision of the organizational documents of First Union, (b) conflict
with, violate, result in the breach or termination of, or constitute a default
or give rise to any right of termination, amendment, cancellation or
acceleration or right to increase the obligations or otherwise modify the terms
thereof under any Contract or Order to which First Union is a party or by which
First Union or any of the properties or assets of First Union is bound, (c)
constitute a violation of any Law applicable to First Union; or (d) result in
the creation of any Lien upon the properties or assets of First Union. No
Consent of any third party or governmental entity is required or necessary in
connection with the execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby by First Union.


                                       11
<PAGE>

      Section 4.03. Litigation. There are no Legal Proceedings pending or, to
the knowledge of First Union, threatened, that question the validity of this
Agreement or the transaction contemplated hereby or any action taken or to be
taken by First Union in connection with the consummation of the transaction
contemplated hereby. There are no Legal Proceedings pending or, to the knowledge
of First Union, threatened, against or involving First Union or any of its
respective properties or assets, at Law or in equity. There is no outstanding
or, to the knowledge of First Union, threatened, Order of any Governmental Body
against First Union or any of its properties or assets, which Order could
reasonably have a Material Adverse Effect.

      Section 4.04. Compliance with Laws. First Union is in compliance in all
respects with all Laws and Orders promulgated by any Governmental Body
applicable to First Union or to the conduct of the business or operations of
First Union or the use of their properties (including any leased properties) and
assets, except where failure to comply would not have a Material Adverse Effect.
First Union has not received any written notice of violation or alleged material
violation of any such Law or Order by any Governmental Body in any material
respect that has not been resolved. First Union has not received written notice
that it is the subject of an investigation by any Governmental Body which has
not been resolved or which could reasonably have a Material Adverse Effect.

      Section 4.05. Investment Representations. First Union is a Qualified
Institutional Buyer and is acquiring the Shares for First Union's own account,
for investment, and not with a view to, or for sale in connection with, the
distribution thereof or of any interest therein. First Union understands that
the Shares have not been registered under the Securities Act by reason of its
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to the exemption provided in Section 4(2) and/or
Regulation D promulgated under the Securities Act, and that the Shares may not
be sold or otherwise disposed of unless registered under the Securities Act or
exempted from such registration.

      Section 4.06. First Union's Acknowledgment. First Union has had the
opportunity, directly or through its representatives, to ask questions of and
receive answers from Persons acting on behalf of Newkirk concerning the Shares.

      Section 4.07. Financial Advisors. No agent, broker, investment banker,
finder, financial advisor or other Person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee from First Union,
directly or indirectly, in connection with the transaction contemplated by this
Agreement.

      Section 4.08. Legend.

                  (i) The certificate evidencing the Shares will bear a legend
(the "Legend") substantially similar to the following:

            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
            FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
            OF 1933, AS AMENDED.


                                       12
<PAGE>

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            RESTRICTIONS ON TRANSFER AS PROVIDED FOR IN THAT CERTAIN LOCK-UP
            AGREEMENT, DATED NOVEMBER 7, 2005, BETWEEN NEWKIRK REALTY TRUST,
            INC. AND FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS.

            THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
            RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER
            FOR THE PURPOSE OF NEWKIRK REALTY TRUST, INC.'S MAINTENANCE OF ITS
            STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE
            CODE OF 1986, AS AMENDED. SUCH RESTRICTIONS ARE SET FORTH IN NEWKIRK
            REALTY TRUST, INC.'S ARTICLES OF ORGANIZATION, AS THE SAME MAY BE
            AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE
            RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO THE
            HOLDER OF THE SHARES REPRESENTED BY THIS CERTIFICATE ON REQUEST AND
            WITHOUT CHARGE."

                  (ii) The first paragraph of the legend endorsed on the
certificate pursuant to Section 4.08(e) hereof shall be removed and Newkirk
shall issue a certificate without such portion of the legend to the holder
thereof at such time as the securities evidenced thereby cease to be restricted
securities upon the earliest to occur of (i) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) the securities shall have been sold to
the public pursuant to Rule 144 (or any successor provision) under the
Securities Act, and (iii) the expiration of the restrictions on transfers under
the Lock-up Agreement provided that such securities may then be sold by the
holder without restriction or registration under Rule 144(k) under the
Securities Act (or any successor provision).

      Section 4.09. Ownership and Transfer Limitations. First Union has received
a copy of the Articles of Incorporation of Newkirk, and understands, and will be
in compliance with, the restrictions on transfer and ownership of Newkirk's
Capital Stock included therein at the Closing and at all times thereafter.

      Section 4.10. Interests in Newkirk. Except for Shares being issued to
First Union pursuant to that certain Stock Purchase Agreement of even date
herewith, at or simultaneously with the Closing, First Union does not own,
directly or indirectly, any Capital Stock of Newkirk.

      Section 4.11. Exclusivity Agreement. First Union had the full power and
authority to enter into the Exclusivity Agreement and to consummate the
transaction contemplated thereby. The execution and delivery of the Exclusivity
Agreement and the consummation by First Union of the transaction contemplated


                                       13
<PAGE>

thereby was duly authorized by all necessary action on the part of First Union.
The Exclusivity Agreement was duly executed and delivered by First Union and
constitutes the legal, valid and binding obligation of First Union, enforceable
in accordance with its terms, except as such enforceability may be subject to
the effects of any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar Laws affecting creditors' rights generally
and subject to the effects of general equitable principles. The rights granted
to First Union pursuant to the Exclusivity Agreement were granted free and clear
of any lien or other encumbrance.

                                    ARTICLE V
          RIGHTS AND RESTRICTIONS ON SHARES; TERMINATION OF ASSIGNMENT

      Section 5.01. Vesting. The Shares shall be deemed fully vested and not
subject to forfeiture as contemplated by Section 5.02 as follows: 50% of the
Shares shall be fully vested upon issuance and the balance shall vest ratably
over 36 months on each monthly anniversary of the date of Closing commencing on
the first monthly anniversary of Closing; provided, however, all of the Shares
shall immediately vest upon a Vesting Event.

      Section 5.02. Forfeiture of Shares. At such time, if at all, that a
Forfeiture Event shall occur, the Shares not then vested shall be deemed
forfeited and First Union shall have no further interest in such Shares. Upon
the termination of the Exclusivity Assignment, Newkirk shall deliver written
notice thereof to First Union and First Union shall promptly deliver to Newkirk
for cancellation the certificate or certificates evidencing the Shares and
Newkirk shall deliver to First Union a replacement certificate evidencing the
total amount of Shares then vested.

      Section 5.03. Voting Rights. Notwithstanding whether the Shares have
vested, unless forfeited pursuant to Section 5.02 all Shares shall be entitled
to be voted without restriction at any meeting or written consent of
shareholders of Newkirk.

      Section 5.04. Dividends. Notwithstanding whether the Shares have vested,
unless forfeited pursuant to Section 5.02 all Shares shall be entitled to be
paid a dividend at such time or times, if any, as dividends are paid on the
Common Stock.

      Section 5.05. Termination of Exclusivity Assignment. Upon the occurrence
of a Reversion Event, the Exclusivity Assignment shall immediately terminate
without any further action on the part of either party and all rights assigned
to Newkirk pursuant to this Agreement and any assignment delivered in connection
therewith shall revert to First Union.

                                   ARTICLE VI
                              COVENANTS OF NEWKIRK

      Newkirk covenants and agrees as follows:

      Section 6.01. Maintain Listing. Newkirk will use commercially reasonable
efforts to (x) maintain the listing and trading of its Common Stock on the NYSE,
for so long as Newkirk qualifies for such listing under the rules and
regulations of the NYSE and (y) comply in all material respects with Newkirk's
reporting, filing, and other obligations, under the rules and regulations of the
NYSE. In the event that the Common Stock is no longer eligible for listing and


                                       14
<PAGE>

trading on the NYSE, Newkirk will use commercially reasonable efforts to secure
the listing or quotation of the Common Stock on the Nasdaq National Market, the
Nasdaq SmallCap Market or the American Stock Exchange (if such listing is
permitted by the bylaws, rules or regulations of any of the foregoing) and to
comply in all material respects with Newkirk's reporting, filing and other
obligations under the bylaws or rules of such exchanges or the National
Association of Securities Dealers, Inc., as applicable. Newkirk will promptly
provide to First Union copies of any notices it receives from the NYSE and any
other exchange or quotation system on which the Common Stock is then listed
regarding the continued eligibility of the Common Stock for listing on such
exchanges or quotation systems.

      Section 6.02. Secure Listing. Following the execution of this Agreement,
Newkirk shall promptly file with the NYSE an application to list the Shares on
the NYSE.

                                   ARTICLE VII
                            ACTIONS PRIOR TO CLOSING

      Section 7.01. Consent. Each of Newkirk and First Union will use its
reasonable best efforts and shall fully cooperate with each other to make
promptly all registrations, filings and applications, give all notices and
obtain all Consents in connection with the transaction contemplated hereby.

      Section 7.02. Publicity. The parties agree not to issue any announcement,
press release, public statement or other information to the press or any third
party with respect to this Agreement or the transaction contemplated hereby
without obtaining the prior written approval of the other party hereto (which
approval shall not be unreasonably withheld); provided, however, that nothing
contained herein shall prevent either party, at any time, from furnishing any
required information to any Governmental Body or from issuing any announcement,
press release, public statement or other information to the press or any third
party with respect to this Agreement or the transaction contemplated hereby if
required by Law, although, the parties agree to consult with each other as to
the content of any release so required and consider in good faith the comments
of the other thereon.

                                  ARTICLE VIII
                              CONDITIONS TO CLOSING

      Section 8.01. Conditions to Obligations of First Union. The obligation of
First Union to consummate the transaction contemplated hereby shall be subject
to the fulfillment on or prior to the Closing Date of the following conditions:

            (a) No Governmental Order or Other Proceeding or Litigation. No
Order of any Governmental Body shall be in effect that restrains or prohibits
the issuance of the Shares.

            (b) Stock Certificates. Newkirk shall have delivered to First Union
(i) a certificate representing the Shares, duly registered in the name of First
Union and (ii) Newkirk Counsel Opinions.


                                       15
<PAGE>

            (c) NYSE Listing. The Shares have been duly listed on the NYSE,
pending notice of issuance.

            (d) Representations and Warranties. The representations and
warranties of Newkirk contained herein shall be true and correct in all material
respects as of the date when made and as of the Closing Date as though made on
and as of such date (except for representations and warranties that speak of a
specific date, which need only be true and correct as of such date).

            (e) Absence of Material Developments. Since June 30, 2005, no event
or series of events shall have occurred that reasonably would be expected to
have a Material Adverse Effect.

            (f) Performance. Newkirk shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by it at
or prior to the Closing Date.

            (g) No New Information. First Union shall not have become aware of
any information or other matter with respect to legal matters affecting Newkirk
that is inconsistent with the financial and other information disclosed to First
Union prior to the date hereof including the disclosures in the Registration
Statement as filed with the SEC on the date hereof, in a manner that constitutes
or would reasonably be expected to have a Material Adverse Effect.

            (h) Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective by the Commission and the Offering
shall have been consummated and the Registration Statement and all amendments
thereto, or modifications thereof, if any, shall not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Prospectus and all amendments or supplements thereto, or modifications thereof,
if any, shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.

            (i) Officer's Certificate. The Investor shall have received a
certificate of an officer of the Company, dated the Closing Date, certifying on
behalf of the Company as to the fulfillment of the conditions specified in this
Section 8.01.

            (j) Consummation of Securities Purchase Agreement. The transaction
contemplated by the Securities Purchase Agreement shall be consummated
simultaneously with the Closing.

            (k) Registration Rights Agreement. The Registration Rights Agreement
shall have been executed and delivered by Newkirk.

      Section 8.02. Conditions to Obligations of Newkirk. The obligation of
Newkirk to consummate the transaction contemplated hereby shall be subject to
the fulfillment on or prior to the Closing Date of the following conditions:


                                       16
<PAGE>

            (a) No Governmental Order or Other Proceeding or Litigation. No
Order of any Governmental Body shall be in effect that restrains or prohibits
the issuance of the Shares.

            (b) Assignment. First Union shall have delivered to Newkirk an
assignment in form and substance reasonably acceptable to Newkirk to assign to
Newkirk all of First Union's right, title and interest under the Exclusivity
Agreement to Net Lease Assets.

            (c) Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective by the Commission.

            (d) Consummation of Securities Purchase Agreement. The transaction
contemplated by the Securities Purchase Agreement shall be consummated
simultaneously with the Closing.

                                   ARTICLE IX
                                    SURVIVAL

      Section 9.01. Survival. The representations and warranties and covenants
to be performed at or prior to Closing of the parties set forth in this
Agreement shall survive for a period of 12 months following the execution and
delivery of this Agreement and thereafter shall be of no further force or
effect, provided that the representations and warranties set forth in (i)
Sections 3.01 (Organization), 3.02 (Authorization), and 3.04 (Capitalization)
shall survive indefinitely (or if indefinite survival is not permitted by Law,
then for the maximum period permitted by applicable Law) and (ii) 3.17 (Taxes)
shall survive for the applicable statute of limitations. Except as set forth
herein, all of the covenants, agreements and obligations of the parties hereto
shall survive the Closing indefinitely (or if indefinite survival is not
permitted by Law, then for the maximum period permitted by applicable Law).
Anything herein to the contrary notwithstanding, any claim for indemnification
that is asserted by written notice which notice specifies in reasonable detail
the facts upon which such claim is made within the survival period as provided
in this Section 9.01 shall survive until resolved pursuant to a final
non-appealable judicial determination or otherwise.

                                    ARTICLE X
                                 INDEMNIFICATION

      Section 10.01. Generally. Subject to the limitations and other provisions
of this Article X, Newkirk covenants and agrees to indemnify, defend and hold
harmless First Union and its directors, officers, shareholders, employees and
agents (each, an "First Union Party") from and against any and all Losses
resulting from, incurred in connection with or arising out of (a) any breach of
any representation, warranty or covenant of Newkirk contained herein, or (b) the
failure of Newkirk to perform any of the agreements, covenants or obligations
contained herein (other than if any such claim was a result of a breach by First
Union under this Agreement). Subject to the limitations and other provisions of
this Article X, First Union covenants and agrees to indemnify, defend and hold
harmless Newkirk from and against (but only to the extent of) any and all Losses
resulting from, incurred in connection with or arising out of (but only to the
extent of) (a) any breach of any representation, warranty, covenant or agreement
of First Union contained herein, or (b) the failure of First Union to perform
any of the agreements, covenants or obligations of First Union contained herein.
The term "Loss" or any similar term shall mean any and all damages, reduction in


                                       17
<PAGE>

value of the original investment in the Shares, deficiencies, costs, claims,
fines, judgments, amounts paid in settlement, expenses of investigation,
interest, penalties, assessments, out-of-pocket expenses (including reasonable
attorneys' and auditors' fees and disbursements, witness fees and court costs).
The party or parties being indemnified are referred to herein as the
"Indemnitee" and the indemnifying party is referred to herein as the
"Indemnitor."

      Section 10.02. Indemnification Procedure.

            (a) Any party who receives notice of a potential claim that may, in
the judgment of such party, result in a Loss shall use all reasonable efforts to
provide the parties hereto notice thereof, provided that failure or delay or
alleged delay in providing such notice shall not adversely affect such party's
right to indemnification hereunder, unless and then only to the extent that such
failure or delay or alleged delay has resulted in actual prejudice to the
Indemnitor, including, without limitation, by the expiration of a statute of
limitations. In the event that any party shall incur or suffer any Losses in
respect of which indemnification may be sought by such party hereunder, the
Indemnitee shall assert a claim for indemnification by written notice (a
"Notice") to the Indemnitor stating the nature and basis of such claim. In the
case of Losses arising by reason of any third party claim, the Notice shall be
given within thirty (30) days of the filing or other written assertion of any
such claim against the Indemnitee, but the failure of the Indemnitee to give the
Notice within such time period shall not relieve the Indemnitor of any liability
that the Indemnitor may have to the Indemnitee, except to the extent that the
Indemnitor demonstrates that the defense of such action has been materially
prejudiced by the Indemnitee's failure to timely give such Notice.

            (b) In the case of third party claims for which indemnification is
sought, the Indemnitor shall, if necessary, retain counsel reasonably
satisfactory to the Indemnitee, and have the option (i) to conduct any
proceedings or negotiations in connection therewith, (ii) to take all other
steps to settle or defend any such claim (provided that the Indemnitor shall not
settle any such claim without the consent of the Indemnitee which consent shall
not be unreasonably withheld) and (iii) to employ counsel to contest any such
claim or liability in the name of the Indemnitee or otherwise. In any event, the
Indemnitee shall be entitled to participate at its own expense and by its own
counsel in any proceedings relating to any third party claim. The Indemnitor
shall, within 15 Business Days of receipt of the Notice, notify the Indemnitee
of its intention to assume the defense of such claim. If (i) the Indemnitor
shall decline to assume the defense of any such claim, (ii) the Indemnitor shall
fail to notify the Indemnitee within 15 Business Days after receipt of the
Notice of the Indemnitor's election to defend such claim, (iii) the Indemnitee
shall have reasonably concluded that there may be defenses available to it which
are different from or in addition to those available to the Indemnitor (in which
case the Indemnitor shall not have the right to direct the defense of such
action on behalf of the Indemnitee), or (iv) a conflict exists between the
Indemnitor and the Indemnitee which the Indemnitee has reasonably concluded
would prejudice the Indemnitor's defense of such action, then in each such case
the Indemnitor shall not have the right to direct the defense of such action on
behalf of the Indemnitee and the Indemnitee shall, at the sole expense of the
Indemnitor, defend against such claim and (x) in the event of a circumstance
described in clause (i) and (ii), the Indemnitee may settle such claim without
the consent of the Indemnitor (and the Indemnitor may not challenge the


                                       18
<PAGE>

reasonableness of any such settlement) and (y) in the event of a circumstance
described in clause (iii) and (iv), the Indemnitee may not settle such claim
without the consent of the Indemnitor (which consent will not be unreasonably
withheld or delayed). The reasonable expenses of all proceedings, contests or
lawsuits in respect of such claims shall be borne and paid by the Indemnitor if
the Indemnitee is entitled to indemnification hereunder and the Indemnitor shall
pay the Indemnitee, in immediately available funds, the amount of any Losses,
within a reasonable time of the incurrence of such Losses. Regardless of which
party shall assume the defense or negotiation of the settlement of the claim,
the parties agree to cooperate fully with one another in connection therewith.
In the event that any Losses incurred by the Indemnitee do not involve payment
by the Indemnitee of a third party claim, then, the Indemnitor shall, within 20
days after written notice from the Indemnitee specifying the amount of Losses,
pay to the Indemnitee, in immediately available funds, the amount of such
Losses. Anything in this Article X to the contrary notwithstanding, the
Indemnitor shall not, without the Indemnitee's prior written consent, settle or
compromise any claim or consent to entry of any judgment in respect thereof
which imposes any future obligation on the Indemnitee or which does not include,
as an unconditional term thereof, the giving by the claimant or plaintiff to the
Indemnitee, a release from all liability in respect of such claim.

      Section 10.03. Limitations on Indemnification.

      Neither party shall be entitled to be indemnified hereunder unless and
until the aggregate of all Losses incurred by such party shall exceed $50,000
(the "Basket"); provided, however, that the Basket shall not apply to any Losses
incurred by such party with respect to any third party claim against such party
for which such party is entitled to indemnity pursuant to Section 10.01.
Notwithstanding anything to the contrary contained herein, the liability of (i)
Newkirk under this Article X shall be limited to an amount equal to the Purchase
Price; and (ii) First Union under this Article X shall be limited to an amount
equal to the Purchase Price.

                                   ARTICLE XI
                                   TERMINATION

      Section 11.01. Termination. This Agreement may be terminated on or any
time prior to the Closing by the mutual written consent of each of First Union
and Newkirk.

      Section 11.02. Effect Of Termination. In the event of the termination of
this Agreement as provided in Section 11.01, all obligations and agreements of
the parties set forth in this Agreement shall forthwith become void except for
the obligations set forth in: (i) Section 7.02 (Publicity) and (ii) Article X
(Indemnification), and there shall be no liability or obligation on the part of
the parties hereto except as otherwise provided in this Agreement.
Notwithstanding the foregoing, the termination of this Agreement under Section
11.01 shall not relieve either party of any liability for breach of this
Agreement prior to the date of termination.

                                   ARTICLE XII
                                  MISCELLANEOUS

      Section 12.01 Notices and Addresses. Any notice, demand, request, waiver,
or other communication under this Agreement shall be in writing and shall be
deemed to have been duly given on the date of service, if personally served or
sent by facsimile; on the Business Day after notice is delivered to a courier or
mailed by express mail, if sent by courier delivery service or express mail for
next day delivery; and on the third day after mailing, if mailed to the party to
whom notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:


                                       19
<PAGE>

      If to Newkirk:

            Newkirk Realty Trust, Inc.
            Two Jericho Plaza
            Wing A, Suite 111
            Jericho, New York 11753
            Attention: Peter Braverman
            Facsimile: (516) 433-2777
            Telephone: (516) 822-0022

      If to First Union:

            First Union Real Estate Equity and Mortgage Investments
            7 Bulfinch Place, Suite 500,
            P.O. Box 9507,
            Boston, Massachusetts  02114
            Attention: Carolyn Tiffany
            Facsimile: (617) 742-4643
            Telephone: (617) 570-4606

      Section 12.02 Captions. The captions in this Agreement are for convenience
of reference only and shall not be given any effect in the interpretation of
this Agreement.

      Section 12.03 No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing. Any of the covenants or agreements contained in this Agreement may
be waived only by the written consent of First Union.

      Section 12.04 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable Law, such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms so long as the economic or legal substance of the
transactions contemplated by this Agreement are not affected in any manner
materially adverse to any party.

      Section 12.05 Exclusive Agreement; Amendment. This Agreement supersedes
all prior agreements among the parties with respect to its subject matter, is
intended (with the documents referred to herein) as a complete and exclusive
statement of the terms of the agreement among the parties with respect thereto
and cannot be changed or terminated except by a written instrument executed by
the party or parties against whom enforcement thereof is sought, except that,
with respect to First Union, this Agreement may be amended by a written
instrument executed by First Union.


                                       20
<PAGE>

      Section 12.06 Limitation on Assignment; Parties in Interest.

            (a) No assignment of this Agreement or of any rights or obligations
hereunder may be made by Newkirk without the prior written consent of First
Union and any attempted assignment without the required consent shall be void.
No assignment of this Agreement or of any rights or obligations hereunder may be
made by First Union (by operation of Law or otherwise) except as permitted by
the Lock-up Agreement.

            (b) This Agreement shall be binding upon, and shall inure to the
benefit of, and be enforceable by, the parties and their respective successors,
transferees and assigns.

      Section 12.07 Governing Law. This Agreement and (unless otherwise
provided) all amendments hereof and waivers and consents hereunder shall be
governed by the internal Laws of the State of New York, without regard to the
conflicts of Law principles thereof which would specify the application of the
Law of another jurisdiction.

      Section 12.08 Jurisdiction. Each of First Union and Newkirk (a) hereby
irrevocably and unconditionally submits to the exclusive jurisdiction of any
state or federal court sitting in New York County, New York for the purposes of
any suit, action or other proceeding arising out of this Agreement or the
subject matter hereof brought by Newkirk, or First Union and (b) hereby waives
and agrees not to assert, by way of motion, as a defense, or otherwise, in any
such suit, action or proceeding, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter hereof may
not be enforced in or by such court.

      Section 12.09 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article X.

      Section 12.10 Injunctive Relief. In the event that any party threatens to
take any action prohibited by this Agreement, the parties agree that there may
not be an adequate remedy at law. Accordingly, in such an event, a party may
seek and obtain preliminary and permanent injunctive relief (without the
necessity of posting any bond or undertaking). Such remedies shall, however, be
cumulative and not exclusive and shall be in addition to any other remedies
which any party may have under this Agreement or otherwise.

      Section 12.11 Counterparts. This Agreement may be executed via facsimile
and in any number of counterparts, each of which shall be deemed to be an
original instrument and all of which together shall constitute one and the same
instrument.


                                       21
<PAGE>

      Section 12.12 Actions Simultaneous. All actions to be taken and all
documents to be executed and delivered by all parties at the Closing shall be
deemed to have been taken and executed and delivered simultaneously and no
actions shall be deemed to have been taken nor shall any documents be deemed to
have been executed and delivered until all actions have been taken and all
documents have been executed and delivered.

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                        NEWKIRK REALTY TRUST, INC.

                                        By:
                                            ------------------------------------
                                            Peter Braverman
                                            President


                                        FIRST UNION REAL ESTATE EQUITY AND
                                        MORTGAGE INVESTMENTS

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

THE UNDERSIGNED, BY HIS EXECUTION OF THIS AGREEMENT, ACKNOWLEDGES AND AGREES TO
BE BOUND THE TERMS OF THIS AGREEMENT.


--------------------------------
Michael L. Ashner

                    [signature page to acquisition agreement]


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