Document:

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EXHIBIT 10.1

                      ADVANCED TECHNOLOGY INDUSTRIES, INC.
                           2005 EQUITY INCENTIVE PLAN

1.       DEFINED TERMS

         Exhibit A, which is incorporated by reference, defines the terms used
in the Plan and sets forth certain operational rules related to those terms.

2.       PURPOSE

         The Plan has been established to advance the interests of the Company
by providing for the grant to Participants of Stock-based Awards.

3.       ADMINISTRATION

         The Administrator has discretionary authority, subject only to the
express provisions of the Plan, to interpret the Plan; determine eligibility for
and grant Awards; determine, modify or waive the terms and conditions of any
Award; prescribe forms, rules and procedures; and otherwise do all things
necessary to carry out the purposes of the Plan. Determinations of the
Administrator made under the Plan will be conclusive and will bind all parties.

4.       LIMITS ON AWARDS UNDER THE PLAN

         (a) NUMBER OF SHARES. A maximum of 15,000,000 shares of Stock may be
delivered in satisfaction of Awards under the Plan. The number of shares of
Stock delivered in satisfaction of Awards shall, for purposes of the preceding
sentence, be determined net of shares of Stock withheld by the Company in
payment of the exercise price of the Award or in satisfaction of tax withholding
requirements with respect to the Award. The limit set forth in this Section 4(a)
shall be construed to comply with Section 422 of the Code and regulations
thereunder. To the extent consistent with the requirements of Section 422 of the
Code and regulations thereunder, and with other applicable legal requirements
(including applicable stock exchange requirements), Stock issued under awards of
an acquired company that are converted, replaced, or adjusted in connection with
the acquisition shall not reduce the number of shares available for Awards under
the Plan.

         (b) TYPE OF SHARES. Stock delivered by the Company under the Plan may
be authorized but unissued Stock or previously issued Stock acquired by the
Company. No fractional shares of Stock will be delivered under the Plan.

5.       ELIGIBILITY AND PARTICIPATION

         The Administrator will select participants from among those key
employees and directors of, and consultants and advisors to, the Company or its
Affiliates who, in the opinion of the Administrator, are in a position to make a
significant contribution to the success of the Company and its Affiliates.
Eligibility for ISOS is limited to employees of the Company or of a "parent
corporation" or "subsidiary corporation" of the Company as those terms are
defined in Section 424 of the Code.

<PAGE>

6.       RULES APPLICABLE TO AWARDS

         (a)      All Awards

                  (1) AWARD PROVISIONS. The Administrator will determine the
terms of all Awards, subject to the limitations provided herein. By accepting
any Award granted hereunder, the Participant agrees to the terms of the Award
and the Plan. Notwithstanding any provision of this Plan to the contrary, awards
of an acquired company that are converted, replaced or adjusted in connection
with the acquisition may contain terms and conditions that are inconsistent with
the terms and conditions specified herein, as determined by the Administrator.

                  (2) TERM OF PLAN. No Awards may be made after July 19, 2015
but previously granted Awards may continue beyond that date in accordance with
their terms.

                  (3) TRANSFERABILITY. Neither ISOs nor, except as the
Administrator otherwise expressly provides, other Awards may be transferred
other than by will or by the laws of descent and distribution, and during a
Participant's lifetime ISOs (and, except as the Administrator otherwise
expressly provides, other non-transferable Stock Options) may be exercised only
by the Participant.

                  (4) VESTING, ETC. The Administrator may determine the time or
times at which an Award will vest or become exercisable and the terms on which a
Stock Option will remain exercisable. Without limiting the foregoing, the
Administrator may at any time accelerate the vesting or exercisability of an
Award, regardless of any adverse or potentially adverse tax consequences
resulting from such acceleration. Unless the Administrator expressly provides
otherwise, however, the following rules will apply: immediately upon the
cessation of the Participant's Employment, each Stock Option that is then held
by the Participant or by the Participant's permitted transferees, if any, will
cease to be exercisable and will terminate, and all other Awards that are then
held by the Participant or by the Participant's permitted transferees, if any,
to the extent not already vested will be forfeited, except that:

                  (A) subject to (B) and (C) below, all Stock Options held by
         the Participant or the Participant's permitted transferees, if any,
         immediately prior to the cessation of the Participant's Employment, to
         the extent then exercisable, will remain exercisable for the lesser of
         (i) a period of three months or (ii) the period ending on the latest
         date on which such Stock Option could have been exercised without
         regard to this Section 6(a)(4), and will thereupon terminate;

                  (B) all Stock Options held by a Participant or the
         Participant's permitted transferees, if any, immediately prior to the
         Participant's death, to the extent then exercisable, will remain
         exercisable for the lesser of (i) the one year period ending with the
         first anniversary of the Participant's death or (ii) the period ending
         on the latest date on which such Stock Option could have been exercised
         without regard to this Section 6(a)(4), and will thereupon terminate;
         and

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                  (C) all Stock Options held by a Participant or the
         Participant's permitted transferees, if any, immediately prior to the
         cessation of the Participant's Employment will immediately terminate
         upon such cessation if the Administrator in its sole discretion
         determines that such cessation of Employment has resulted for reasons
         which cast such discredit on the Participant as to justify immediate
         termination of the Award.

                  (5) TAXES. The Administrator will make such provision for the
withholding of taxes as it deems necessary. The Administrator may, but need not,
hold back shares of Stock from an Award or permit a Participant to tender
previously owned shares of Stock in satisfaction of tax withholding requirements
(but not in excess of the minimum withholding required by law).

                  (6) DIVIDEND EQUIVALENTS, ETC. The Administrator may provide
for the payment of amounts in lieu of cash dividends or other cash distributions
with respect to Stock subject to an Award.

                  (7) RIGHTS LIMITED. Nothing in the Plan will be construed as
giving any person the right to continued employment or service with the Company
or its Affiliates, or any rights as a stockholder except as to shares of Stock
actually issued under the Plan. The loss of existing or potential profit in
Awards will not constitute an element of damages in the event of termination of
Employment for any reason, even if the termination is in violation of an
obligation of the Company or Affiliate to the Participant.

         (b)      STOCK OPTIONS

                  (1) TIME AND MANNER OF EXERCISE. Unless the Administrator
expressly provides otherwise, a Stock Option will not be deemed to have been
exercised until the Administrator receives a notice of exercise (in form
acceptable to the Administrator) signed by the appropriate person and
accompanied by any payment required under the Stock Option. If the Stock Option
is exercised by any person other than the Participant, the Administrator may
require satisfactory evidence that the person exercising the Stock Option has
the right to do so.

                  (2) EXERCISE PRICE. Unless the Administrator determines
otherwise, and in all respects in the case of Stock Options intended to qualify
as an ISO, the exercise price of each Stock Option shall be 100% (in the case of
an ISO granted to a ten-percent shareholder within the meaning of Section
422(b)(6) of the Code, 110%) of the fair market value of the Stock subject to
the Stock Option, determined as of the date of grant, or such higher amount as
the Administrator may determine in connection with the grant.

                  (3) PAYMENT OF EXERCISE PRICE. Where the exercise of a Stock
Option is to be accompanied by payment, the Administrator may determine the
required or permitted forms of payment, subject to the following: all payments
will be by cash or check acceptable to the Administrator, or, if so permitted by
the Administrator and if legally permissible, (i) through the delivery of shares
of Stock that have been outstanding for at least six months (unless the
Administrator approves a shorter period) and that have a fair market value equal
to the exercise price, (ii) by delivery to the Company of a promissory note of
the person exercising the Stock Option, payable on such terms as are specified
by the Administrator, (iii) through a broker-assisted exercise program
acceptable to the Administrator, (iv) by other means acceptable to the
Administrator, or (v) by any combination of the foregoing permissible forms of
payment. The delivery of shares in payment of the exercise price under clause
(i) above may be accomplished either by actual delivery or by constructive
delivery through attestation of ownership, subject to such rules as the
Administrator may prescribe.

<PAGE>

         (c)      RESTRICTED STOCK AND UNRESTRICTED STOCK

         Restricted Stock and Unrestricted Stock may be made in exchange for
such lawful consideration, including services, as the Administrator determines.

7.       EFFECT OF CERTAIN TRANSACTIONS

         (a) MERGERS, ETC. Except as otherwise provided in an Award, the
following provisions shall apply in the event of a Covered Transaction:

                  (1) ASSUMPTION OR SUBSTITUTION. If the Covered Transaction is
one in which there is an acquiring or surviving entity, the Administrator may
provide for the assumption of some or all outstanding Awards or for the grant of
new awards in substitution therefor by the acquiror or survivor or an affiliate
of the acquiror or survivor.

                  (2) CASH-OUT OF AWARDS. If the Covered Transaction is one in
which holders of Stock will receive upon consummation a payment (whether cash,
non-cash or a combination of the foregoing), the Administrator may provide for
payment (a "cash-out"), with respect to some or all Awards, equal in the case of
each affected Award to the excess, if any, of (A) the fair market value of one
share of Stock (as determined by the Administrator in its reasonable discretion)
times the number of shares of Stock subject to the Award, over (B) the aggregate
exercise or purchase price, if any, under the Award, in each case on such
payment terms (which need not be the same as the terms of payment to holders of
Stock) and other terms, and subject to such conditions, as the Administrator
determines.

                  (3) ACCELERATION OF CERTAIN AWARDS. If the Covered Transaction
(whether or not there is an acquiring or surviving entity) is one in which there
is no assumption, substitution or cash-out, each Stock Option will become fully
exercisable on a basis that gives the holder of the Stock Option a reasonable
opportunity, as determined by the Administrator, following exercise of the Stock
Option to participate as a stockholder in the Covered Transaction.

                  (4) TERMINATION OF STOCK OPTIONS UPON CONSUMMATION OF COVERED
TRANSACTION. Each Stock Option (unless assumed pursuant to Section 7(a)(1)
above) will terminate upon consummation of the Covered Transaction.

                  (5) ADDITIONAL LIMITATIONS. Any share of Stock delivered
pursuant to Section 7(a) above with respect to an Award may, in the discretion
of the Administrator, contain such restrictions, if any, as the Administrator
deems appropriate to reflect any performance or other vesting conditions to
which the Award was subject. In the case of Restricted Stock, the Administrator
may require that any amounts delivered, exchanged or otherwise paid in respect
of such Stock in connection with the Covered Transaction be placed in escrow or
otherwise made subject to such restrictions as the Administrator deems
appropriate to carry out the intent of the Plan.

<PAGE>

         (b)      CHANGE IN AND DISTRIBUTIONS WITH RESPECT TO STOCK

                  (1) BASIC ADJUSTMENT PROVISIONS. In the event of a stock
dividend, stock split or combination of shares (including a reverse stock
split), recapitalization or other change in the Company's capital structure, the
Administrator will make appropriate adjustments to the maximum number of shares
specified in Section 4(a) that may be delivered under the Plan, and will also
make appropriate adjustments to the number and kind of shares of stock or
securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Stock Options and any other provision of Awards
affected by such change.

                  (2) CERTAIN OTHER ADJUSTMENTS. The Administrator may also make
adjustments of the type described in Section 7(b)(1) above to take into account
distributions to stockholders other than those provided for in Section 7(a) and
7(b)(1), or any other event, if the Administrator determines that adjustments
are appropriate to avoid distortion in the operation of the Plan and to preserve
the value of Awards made hereunder, having due regard for the qualification of
ISOs under Section 422 of the Code.

                  (3) CONTINUING APPLICATION OF PLAN TERMS. References in the
Plan to shares of Stock will be construed to include any stock or securities
resulting from an adjustment pursuant to this Section 7.

8.       LEGAL CONDITIONS ON DELIVERY OF STOCK

         The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan or to remove any restriction from shares of Stock
previously delivered under the Plan until: (i) the Company is satisfied that all
legal matters in connection with the issuance and delivery of such shares have
been addressed and resolved; (ii) if the outstanding Stock is at the time of
delivery listed on any stock exchange or national market system, the shares to
be delivered have been listed or authorized to be listed on such exchange or
system upon official notice of issuance; and (iii) all conditions of the Award
have been satisfied or waived. If the sale of Stock has not been registered
under the Securities Act of 1933, as amended, the Company may require, as a
condition to the exercise of the Award, such representations or agreements as
counsel for the Company may consider appropriate to avoid violation of such Act.
The Company may require that certificates evidencing Stock issued under the Plan
bear an appropriate legend reflecting any restriction on transfer applicable to
such Stock, and the Company may hold the certificates pending lapse of the
applicable restrictions.

9.       AMENDMENT AND TERMINATION

         The Administrator may at any time or times amend the Plan or any
outstanding Award for any purpose which may at the time be permitted by law, and
may at any time terminate the Plan as to any future grants of Awards; PROVIDED,
that except as otherwise expressly provided in the Plan the Administrator may
not, without the Participant's consent, alter the terms of an Award so as to
affect adversely the Participant's rights under the Award, unless the
Administrator expressly reserved the right to do so at the time of the Award.

<PAGE>

10.      OTHER COMPENSATION ARRANGEMENTS

         The existence of the Plan or the grant of any Award will not in any way
affect the Company's right to Award a person bonuses or other compensation in
addition to Awards under the Plan.

11.      WAIVER OF JURY TRIAL

         By accepting an Award under the Plan, each Participant waives any right
to a trial by jury in any action, proceeding or counterclaim concerning any
rights under the Plan and any Award, or under any amendment, waiver, consent,
instrument, document or other agreement delivered or which in the future may be
delivered in connection therewith, and agrees that any such action, proceedings
or counterclaim shall be tried before a court and not before a jury. By
accepting an Award under the Plan, each Participant certifies that no officer,
representative, or attorney of the Company has represented, expressly or
otherwise, that the Company would not, in the event of any action, proceeding or
counterclaim, seek to enforce the foregoing waivers.

<PAGE>

                                    EXHIBIT A

                               DEFINITION OF TERMS
                               -------------------

         The following terms, when used in the Plan, will have the meanings and
be subject to the provisions set forth below:

         "ADMINISTRATOR": The Board, except that the Board may delegate (i) to
one or more of its members such of its duties, powers and responsibilities as it
may determine; (ii) to one or more officers of the Company the power to grant
options to the extent permitted by Section 157(c) of the Delaware General
Corporation Law; (iii) to one or more officers of the Company the authority to
allocate other Awards among such persons (other than officers of the Company)
eligible to receive Awards under the Plan as such delegated officer or officers
determine consistent with such delegation; PROVIDED, that with respect to any
delegation described in this clause (iii) the Board (or a properly delegated
member or members of the Board) shall have authorized the issuance of a
specified number of shares of Stock under such Awards and shall have specified
the consideration, if any, to be paid therefor; and (iv) to such Employees or
other persons as it determines such ministerial tasks as it deems appropriate.
In the event of any delegation described in the preceding sentence, the term
"Administrator" shall include the person or persons so delegated to the extent
of such delegation.

         "AFFILIATE": Any corporation or other entity owning, directly or
indirectly, 50% or more of the outstanding Stock, or in which the Company or any
such corporation or other entity owns, directly or indirectly, 50% of the
outstanding capital stock (determined by aggregate voting rights) or other
voting interests.

         "AWARD":  Any or a combination of the following:

                  (i) Stock Options.

                  (ii) Restricted Stock.

                  (iii) Unrestricted Stock.

         "BOARD":  The Board of Directors of the Company.

         "CODE": The U.S. Internal Revenue Code of 1986 as from time to time
amended and in effect, or any successor statute as from time to time in effect.

         "COMPANY":  Advanced Technology Industries, Inc.

<PAGE>

         "COVERED TRANSACTION": Any of (i) a consolidation, merger, or similar
transaction or series of related transactions, including a sale or other
disposition of Stock, in which the Company is not the surviving corporation or
which results in the acquisition of all or substantially all of the Company's
then outstanding Stock by a single person or entity or by a group of persons
and/or entities acting in concert, (ii) a sale or transfer of all or
substantially all the Company's assets, or (iii) a dissolution or liquidation of
the Company. Where a Covered Transaction involves a tender offer that is
reasonably expected to be followed by a merger described in clause (i) (as
determined by the Administrator), the Covered Transaction shall be deemed to
have occurred upon consummation of the tender offer.

         "EMPLOYEE": Any person who is employed by the Company or an Affiliate.

         "EMPLOYMENT": A Participant's employment or other service relationship
with the Company and its Affiliates. Employment will be deemed to continue,
unless the Administrator expressly provides otherwise, so long as the
Participant is employed by, or otherwise is providing services in a capacity
described in Section 5 to the Company or its Affiliates. If a Participant's
employment or other service relationship is with an Affiliate and that entity
ceases to be an Affiliate, the Participant's Employment will be deemed to have
terminated when the entity ceases to be an Affiliate unless the Participant
transfers Employment to the Company or its remaining Affiliates.

         "ISO": A Stock Option intended to be an "incentive stock option" within
the meaning of Section 422 of the Code. Each option granted pursuant to the Plan
will be treated as providing by its terms that it is to be a non-incentive stock
option unless, as of the date of grant, it is expressly designated as an ISO.

         "PARTICIPANT":  A person who is granted an Award under the Plan.

         "PLAN": The Advanced Technology Industries, Inc. 2005 Equity Incentive
Plan as from time to time amended and in effect.

         "RESTRICTED STOCK": Stock subject to restrictions requiring that it be
redelivered or offered for sale to the Company if specified conditions are not
satisfied.

         "STOCK": Common Stock of the Company, par value $0.0001 per share.

         "STOCK OPTION": An option entitling the holder to acquire shares of
Stock upon payment of the exercise price.

         "UNRESTRICTED STOCK": Stock not subject to any restrictions under the
terms of the Award.Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

ADVISORY
AGREEMENT

 

BETWEEN

 

NEWKIRK
REALTY TRUST, INC.,

 

THE
NEWKIRK MASTER LIMITED PARTNERSHIP

 

AND

 

NKT
ADVISORS LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dated as of
__________ ___, 2005

 

 

ADVISORY
AGREEMENT

 

THIS AGREEMENT, made as of __________  ___, 2005, among NEWKIRK
REALTY TRUST, INC., a Maryland corporation (“Newkirk”), THE NEWKIRK MASTER LIMITED PARTNERSHIP, a Delaware limited
partnership (the “Operating Partnership” and together with Newkirk, the “Company”),
and NKT ADVISORS LLC (the “Advisor”).

WHEREAS, Newkirk, through the Operating Partnership, owns,
manages and operates real estate assets;

WHEREAS, Newkirk intends to be qualified as a
real estate investment trust under the Internal Revenue Code of 1986, as
amended; and

WHEREAS, the Company desires to retain the Advisor for the
purpose of providing day-to-day management and administrative services to the
Company as described herein on the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and of the mutual agreements
herein set forth, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

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

“Adjusted
Funds From Operations” — Funds From Operations of the Operating Partnership,
adjusted to add back any asset impairment charges and non-cash restricted stock
issuances.

“Advisor” - NKT Advisors LLC, a Delaware limited
liability company.

 

“Advisor Affiliate”
- means any entity Controlling, Controlled by or under common Control with the
Advisor whose day to day business and operations are managed and supervised by
Michael Ashner.

 

“Advisor Change in Control” - a change in the
direct or indirect (i) beneficial ownership of more than fifty percent
(50%) of the combined voting power (of any Person together with any affiliates
of such Person or Persons otherwise associated or acting in concert with such
Person) of the Advisor’s then outstanding equity interests, or (ii) power
to direct or control the management policies of the Advisor whether through the
ownership of beneficial equity interests, common directors or officers, by
contract or otherwise.  Advisor Change of
Control shall not include public offerings of the membership or other equity
interests of Advisor or any assignment of this Agreement by the Advisor as
permitted hereby and in accordance with the terms hereof.

 

 

 

“Applicable
Annualized Return” — with respect to any quarter, the greater of
(i)  the Yield on 10-Year U.S. Treasuries as of the last business day
of such quarter plus two hundred fifty basis points (2.5%) per annum and (ii)
for any quarter ending during the years listed below, the rate set forth
opposite such year in the table below:

	
  Year

  	
   

  	
  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2005

  	
   

  	
  25

  	
  %

  
	
  2006

  	
   

  	
  25

  	
  %

  
	
  2007

  	
   

  	
  22

  	
  %

  
	
  2008

  	
   

  	
  20

  	
  %

  
	
  2009

  	
   

  	
  15

  	
  %

  
	
  2010

  	
   

  	
  12

  	
  %

  
	
  Thereafter

  	
   

  	
  10

  	
  %

  

 

“Apollo Amount” — means at such time as Apollo Real
Estate Investment Fund III, L.P. or its subsidiary, either (i) has
Partnership Units redeemed for Common Stock, (ii) sells Partnership Units
(other than in exchange for proceeds from the exercise of the over-allotment
option in the IPO), or (iii) distributes Partnership Units, an amount
equal to the number of such Partnership Units redeemed, sold or distributed,
but in no event more than 5,125,000, multiplied by the lesser of (x) $20
or (y)(1) if such Partnership Units are sold or, if converted into Common
Stock and then promptly sold, the price per share at which such shares of
Common Stock are sold (net of underwriting discounts), or (2) if
distributed, the number of shares of Common Stock that would be issued in
redemption of each such Partnership Unit if such Partnership Units were
redeemed for shares of Common Stock multiplied by the closing price of the Common
Stock on the date of distribution.

 

“Base Amount” — as of any
date, means the greater of (i) $650,000,000 or (ii) an amount equal
to (1) the gross proceeds to Newkirk in the IPO and the sale of
Common Stock to First Union pursuant to the Securities Purchase Agreement dated
of even date herewith between Newkirk and First Union plus (2) $______ [the
book value of partners equity in the Operating Partnership at June 30, 2005]
plus (3) the gross proceeds of any subsequent issuance of Common Equity
Securities minus (4) all cash amounts paid by the Company to repurchase any Common
Equity Securities (other than the amounts used from the proceeds of the IPO to
purchase Partnership Units from existing limited partners).

“Board” — the Board of Directors of Newkirk.

 

“Cause” — means:  (i) the Advisor’s continuous and intentional
failure to perform its duties under this Agreement after written notice from
the Company to the Advisor of such non-performance; (ii) the Advisor commits
any act of gross negligence in the performance of its duties under this Agreement;
(iii) the Advisor commits any act of fraud, misappropriation of funds, or
embezzlement against the Company; (iv) the Advisor commits any other willful
and intentional misconduct which is materially injurious to the Company,
monetarily or otherwise; (v) the Advisor defaults in the performance or
observance of any material term, condition or covenant contained in this
Agreement to be performed or observed on its part, and such default continues
for a period of thirty (30) days after written notice thereof from the
Company specifying such default and requesting that the same be remedied within
such thirty (30) day period; provided, however, the Advisor shall have an
additional sixty (60) days to cure such default if (A) such default
cannot reasonably be cured with in thirty (30) days but can be cured
within ninety (90) days, and (B) the Advisor shall have commenced to
cure such default within the initial thirty (30) day period and thereafter
diligently proceeds to cure the same within ninety (90) days of the date
of the Company’s original notice of the default; (vi) an Advisor Change in
Control; or (vii) Michael
L. Ashner is no longer Chief Executive Officer of the Advisor (provided such
condition is not a result of Michael Ashner’s death or disability).

“Code” - Internal Revenue Code of 1986, as amended.

 

“Common Stock” — means
shares of common stock of Newkirk.

 

 

2

 

 

“Common Equity Securities” — means Common Stock and
Partnership Units which may be redeemed for Common Stock pursuant to the terms
of the Partnership Agreement.

 

“Control” - means the direct or
indirect ownership of at least 51% of the beneficial equity interests and
voting power of an entity.

 

“Equity Securities” —
REIT Equity Securities and Operating Partnership Equity Securities.

“Exchange Act” - Securities Exchange Act of 1934, as
amended.

 

“First Union” - First Union Real Estate Equity and
Mortgage Investments.

 

“Funds
From Operations” — has the meaning assigned thereto by the National Association
of Real Estate Investment Trusts, namely, net income (computed in accordance
with GAAP), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization on real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures.

“GAAP” — means generally accepted accounting
principles in the United States of America as of the date applicable.

 

“IPO” — the initial public offering of Common Stock.

 

“Issuance Price” — means,
(i) with respect to REIT Equity Securities, the issuance price of such
securities after deducting any underwriting discounts, commissions, and
placement fees and other expenses and costs relating to the issuance thereof
exclusive of REIT Equity Securities issued in connection with the redemption of
Operating Partnership Equity Securities, and (ii) with respect to Operating
Partnership Equity Securities, either the cash price paid for such securities,
or if such securities are issued in exchange for something other than cash, the
per share Cash Amount (as defined in the Partnership Agreement) on the date of
issuance of the applicable Operating Partnership Equity Security (assuming such
Operating Partnership Equity Securities were then redeemable).  The Issuance Price will be modified
accordingly in the event of stock splits.

“Net Lease Asset” means (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 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.

 

 

3

 

“Newkirk” — Newkirk Realty Trust, Inc., a Maryland
corporation.

 

“Operating Partnership” — The Newkirk Master Limited
Partnership, a Delaware limited partnership.

 

“Operating Partnership Equity
Securities” — all Partnership Units issued after the closing date of the IPO
other than those issued to Newkirk.

“Partnership Agreement” — the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership, as hereinafter
amended, supplemented and modified.

 

“Partnership Units” — shall have the meaning ascribed
thereto in the Partnership Agreement.

 

“Person” - any individual, corporation,
partnership, joint venture, limited liability company, estate, trust,
unincorporated association, any federal, state, county or municipal government
or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.

 

“Quarterly Threshold Amount”
— the Adjusted Funds
From Operations required to produce an annualized return on the Base Amount
equal to the Applicable Annualized Return.

 

“REIT Equity Securities” — Common Stock, convertible
preferred shares, convertible debt and perpetual preferred shares that do not
require dividend payments, in each case, that are issued by Newkirk.

 

“Repurchase Amount” — means
an amount equal to the aggregate Issuance Price for all Equity Securities
repurchased by Newkirk or the Operating Partnership from and after the IPO
other than those Partnership Units acquired from proceeds of the IPO and
Operating Partnership Equity Securities redeemed in exchange for REIT Equity
Securities.  For purposes hereof, if
Newkirk or the Operating Partnership is unable to determine the actual Issuance
Price for an Equity Security that is repurchased, the Repurchase Amount shall
be the weighted average Issuance Price of all Equity Securities for which a
Base Management Fee is payable hereunder.

 

“SOX” - The Sarbanes-Oxley Act of 2002.

 

“Special Voting Preferred Stock” - means shares of
Special Voting Preferred Stock, $0.01 par value per share, of Newkirk issued to
the Advisor.

 

“Winthrop”- collectively, Winthrop Financial
Associates, A Limited Partnership and First Winthrop Corporation.

 

“Yield on 10-Year U.S. Treasuries” — the arithmetic
average of the weekly average yield to maturity for actively traded current
coupon U.S. Treasury fixed interest rate securities (adjusted to constant
maturities of 10 years) published by the Federal Reserve Board during a
quarter, or, if such rate is not published by the Federal Reserve Board, any
Federal Reserve Bank or agency or department of the federal government selected
by Newkirk.  If Newkirk determines in

 

 

4

 

good faith that the 10-year U.S. Treasury rate
cannot be calculated as provided above, then the rate shall be the arithmetic
average of the per annum average yields to maturities, based upon closing ask
prices on each business day during a quarter, for each actively traded
marketable U.S. Treasury fixed interest rate security with a final maturity
date not less than eight nor more than 12 years from the date of the closing
asked prices as chosen and quoted for each business day in each such quarter in
New York City by at least three recognized dealers in U.S. government
securities selected by Newkirk

 

ARTICLE
II

RETENTION OF ADVISOR

Subject to the terms and conditions hereinafter set
forth, the Company hereby retains the Advisor as its agent to manage, operate
and administer the assets, liabilities and business of the Company and the
Advisor hereby agrees to perform each of the duties set forth herein in
accordance with the provision of this Agreement.  By its execution and delivery of this
Agreement, the Advisor represents and warrants that (i) it is duly organized,
validly existing, in good standing under the laws of the state of Delaware and
has all requisite power and authority to enter into and perform its obligations
under this Agreement, (ii) the person signing this Agreement for the Advisor is
duly authorized to execute this Agreement on the Advisor’s behalf,
(iii) the execution and delivery of this Agreement by the Advisor and the
performance by the Advisor of its obligations hereunder do not violate any
provisions of the Advisor’s constituent documents, constitute a breach or
default by the Advisor under any material agreement to which the Advisor is a
party or cause the Advisor to violate any Federal or New York law, regulation
or rule applicable to the Advisor.

ARTICLE
III

RESPONSIBILITIES OF ADVISOR

3.1          General
Responsibility.  Subject to the supervision of the Board, the
Advisor shall:

(a)           Except
as provided in Section 7.2(m), provide executive and administrative personnel,
office space and office services required in rendering services to the Company;

(b)           Manage,
operate and administer the Company’s day to day operations, business and
affairs, as may be agreed upon by the Advisor and the Company, and shall have
such authority as the Company may delegate to it, including, without limitation,
the authority to oversee and conduct the Company’s investment activities in
accordance with guidelines and policies adopted and implemented by the Board,
monitor leases, mortgages and debt obligations, make payment of the Company’s
debt and obligations, make payment of dividends or distributions to Newkirk’s
stockholders and maintain the appropriate back office infrastructure to perform
such administrative functions;

 

 

5

 

(c)           Serve
as the Company’s consultant with respect to the periodic review of the
investment criteria and parameters for the investments, borrowings and
operations of the Company for the approval of the Board;

(d)           Counsel
the Company in connection with policy decisions to be made by the Board;

(e)           Use
commercially reasonable efforts to cause expenses incurred by the Company or on
its behalf to be reasonable and customary and within any budgeted parameters or
expense guidelines set by the Board from time to time;

(f)            Advise
the Board as to the Company’s capital structure and capital raising activities;

(g)           Coordinate
and manage operations of any joint venture or co-investment interests held by
the Company and conduct all matters with the joint venture or co-investment
partners;

(h)           Communicate
on the Company’s behalf with the holders of any of the Company’s equity or debt
securities as required to satisfy the reporting and other requirements of any
governmental bodies or agencies or trading markets and to maintain effective
relations with such holders;

(i)            Handle
and resolve all claims, disputes or controversies (including all litigation,
arbitration, settlement or other proceedings or negotiations) in which the
Company may be involved or to which the Company may be subject arising out of
the Company’s day to day operations, subject to such limitations or parameters
as may be imposed from time to time by the Board;

(j)            Evaluate
and recommend to the Board, and engage in potential hedging activities on the
Company’s behalf, consistent with Newkirk’s status as a real estate investment
trust and with the Company’s investment guidelines;

(k)           Investigate,
analyze and select possible investment opportunities and originate, acquire,
finance, retain, sell, negotiate for prepayment, restructure or dispose Company
investments consistent with the guidelines adopted and implemented by the
Board;

(l)            Assist
the Company in developing criteria for asset purchase commitments that are
specifically tailored to the Company’s investment objectives and making
available to the Company its knowledge and experience with respect to real
estate and other real estate related assets;

(m)          Engage
and supervise, on the Company’s behalf and at the Company’s expense,
independent contractors who provide investment banking, mortgage brokerage,
securities brokerage and other financial services and such other services as
may be required relating to the investments;

 

6

 

(n)           Invest
or reinvest any of the Company’s money or securities, including investing in
short term investments pending investment in other investments, payment of
fees, costs and expenses, or payments of dividends or distributions to the
Company’s stockholders, and advising the Board as to the Company’s capital
structure and capital raising;

(o)           Obtain
appropriate credit facilities or other financings for the investments
consistent with the guidelines adopted and implemented by the Board;

(p)           Assist
the Company in complying with all regulatory requirements applicable to it in respect
of the Company’s business activities, including preparing or causing to be
prepared all consolidated financial statements required under applicable
regulations and contractual undertakings and all reports and documents, if any,
required under the Exchange Act;

(q)           Take
all necessary actions to enable the Company to make required tax filings and
reports, including soliciting stockholders for required information to the
extent provided by the real estate investment trust provisions of the Code and
the regulations promulgated thereunder;

(r)            Counsel
the Company regarding the maintenance of the Company’s qualification for
taxation as a real estate investment trust and monitor compliance with the
various real estate investment trust qualification tests and other rules set
out in the Code and the Treasury Regulations promulgated thereunder and use
commercially reasonable efforts to cause the Company to qualify for taxation as
a REIT;

(s)           Counsel
the Company regarding the maintenance of the Company’s exclusion from status as
an investment company under the Investment Company Act and monitor compliance
with the requirements for maintaining such exclusion and using commercially
reasonable efforts to cause the Company to maintain such exclusion from status
as an investment company under the Investment Company Act;

(t)            Monitor
the operating performance of the investments and provide periodic reports with
respect thereto to the Board;

(u)           Cause
the Company to retain qualified accountants and legal counsel, as applicable,
to assist in developing appropriate accounting procedures, compliance
procedures and testing systems with respect to financial reporting obligations
and compliance with the real estate investment trust provisions of the Code and
the regulations promulgated thereunder and to conduct quarterly compliance
reviews with respect thereto;

(v)           Cause
the Company to qualify to do business in all applicable jurisdictions and to
obtain and maintain all appropriate licenses;

(w)          Cause
the Company to obtain insurance covering such risks, with such insurers and on
such terms as the Company may reasonably determine;

(x)            Perform
such other services as may be required from time to time for management and
other activities relating to the Company’s assets as the Board shall reasonably
request or the Advisor shall deem appropriate under the particular
circumstances; and

 

7

 

(y)           Use
commercially reasonable efforts to cause the Company to comply with all other
applicable laws.

3.2          Authority. 
The Advisor shall have full discretion and authority pursuant to this
Agreement to perform the duties and services specified in Section 3.1 hereof in
such manner as the Advisor reasonably considers appropriate subject to the
terms and restrictions contained in Newkirk’s Articles of Incorporation and
By-laws, as the same may be amended from time to time, and the Operating
Partnership’s Certificate of Limited Partnership and the Partnership Agreement.  In furtherance of the foregoing, Newkirk and
the Operating Partnership hereby designate and appoint the Advisor or its
designee as the agent and attorney-in-fact of Newkirk and the Operating
Partnership, with full power and authority and without further approval of Newkirk
and the Operating Partnership, for purposes of accomplishing on its behalf any
of the foregoing matters or any matters which are properly the subject matter
of this Agreement.  The Advisor may
execute, in the name and on behalf of Newkirk and the Operating Partnership and
their affiliates all such documents and take all such other actions which the
Advisor reasonably considers necessary or advisable to carry out its duties
hereunder.

3.3          Subcontract
of Services.  The Company acknowledges and agrees that the Services
will be provided by employees of Winthrop, pursuant to a written agreement
between the Advisor and Winthrop pursuant to which Winthrop will make available
to the Advisor its employees and facilities. 
The Advisor agrees not to terminate or amend any such agreement with Winthrop
without the consent of a majority of the independent directors of the Board.

3.4          Reporting
Requirements.  As frequently as the Advisor may deem
necessary or advisable, or at the direction of the Board, the Advisor shall
prepare, or cause to be prepared, with respect to any investment (i) reports
and information on the Company’s operations and asset performance and (ii) other
information reasonably requested by the Company.

3.5          Devotion of Time; Exclusivity.  The
Advisor will provide a management team to deliver the management services to
the Company hereunder, with the members of such management team devoting such
of their time to the management of the Company as the Advisor deems reasonably
necessary and appropriate for the proper performance of all of the Advisor’s
duties hereunder, commensurate with the level of activity of the Company from
time to time. The Company shall have the benefit of the Advisor’s reasonable
judgment and effort in rendering services and, in furtherance of the foregoing,
the Advisor shall not undertake activities which, in its reasonable judgment,
will substantially adversely affect the performance of its obligations under
this Agreement.  The Advisor shall take
all reasonable steps to ensure that all of its officers, directors and managers
and any persons or entities to which it subcontracts any of its services
hereunder shall agree, as a condition to their acting in such capacities, to
offer to Newkirk any business opportunities related to Net Lease Assets that
are offered to or generated by such person or entity during the term of this
Agreement.

3.6          Bank Accounts.  At
the direction of the Board, the Advisor may establish and maintain as an agent
on behalf of the Company one or more bank accounts in the name of the Company or
any other Subsidiary (any such account, a “Company Account”), collect and

 

8

 

deposit
funds into any such Company Account and disburse funds from any such Company
Account, under such terms and conditions as the Board may approve. The Advisor shall
from time-to-time render appropriate accountings of such collections and
payments to the Board and, upon request, to the auditors of Company.

3.7          Book and Records; Confidentiality.

(a)           Records.  The Advisor shall maintain appropriate books of
account, records data and files (including without limitation, computerized
material) (collectively, “Records”) relating to the Company and the investments
generated or obtained by the Advisor in performing its obligations under this
Agreement, and such Records shall be accessible for inspection by
representatives of the Company at any time during normal business hours.  The Advisor shall have full responsibility
for the maintenance, care and safekeeping of all Records.

(b)           Confidentiality  The
Advisor shall keep
confidential any nonpublic information obtained in connection with the services
rendered under this Agreement and shall not disclose any such information (or
use the same except in furtherance of its duties under this Agreement), except with
(i) the prior written consent of the Board; (ii) to legal counsel,
accountants and other professional advisors; (iii) to appraisers,
financing sources and others in the ordinary course of the Company’s business;
(iv) to governmental officials having jurisdiction over the Company;
(v) in connection with any governmental or regulatory filings of the
Company or disclosure or presentations to Company investors; or (vi) as
required by law or legal process to which the Advisor or any Person to whom
disclosure is permitted hereunder is a party. The foregoing shall not apply to
information which has previously become available through the actions of a
Person other than the Advisor
not resulting from Advisor’s violation of this Section 3.7(b). The
provisions of this Section 3.7(b) shall survive the expiration or earlier
termination of this Agreement for a period of one year.

3.8          Obligations of Advisor; Restrictions.

(a)           Internal Control.  The
Advisor shall (i) establish and maintain (and require property managers and
other contractors to establish and maintain) a system of internal accounting
and financial controls (including, without limitation, internal controls to
safeguard records and to permit the Company to comply with the Exchange Act and
SOX designed to provide reasonable assurance of the reliability of financial
reporting, the effectiveness and efficiency of operations and compliance with
applicable laws, (ii) maintain records for each Company investment on a GAAP
basis, (iii) develop accounting entries and reports required by the Company to
meet its reporting requirements under applicable laws, (iv) consult with the
Company with respect to proposed or new accounting/reporting rules identified
by the Advisor or the Company and (v) prepare quarterly and annual financial
statements as soon after the end of each such period as may be reasonably
requested and general ledger journal entries and other information necessary
for the Company’s compliance with applicable laws, including the Exchange Act,
Regulation S-X and SOX, in accordance with GAAP and cooperate with the Company’s
independent accounting firm in connection with the auditing or review of such
financial statements, the cost of any such audit or review to be paid by the
Company.

 

9

 

(b)           Management Letters. 
The Advisor shall provide to the Company as soon after the end of each
quarter or year as may be reasonably requested (within deadlines required for
the Company to comply with applicable legal requirements) by the Company, a
completed management questionnaire letter to the Board, in such form as the
Company may reasonably request in response to applicable legal requirements, on
accounting, reporting, internal controls and disclosure issues in support of
any management representation letter to be issued by the Company to its
independent accounting firm.

(c)           Restrictions.  The Advisor
shall refrain from any action that, in its sole judgment made in good faith,
(i) is not in compliance with the investment guidelines and policies
approved by the Board, (ii) would adversely affect the status of the
Company as a REIT or its exclusion from status as an investment company under
the Investment Company Act, or (iii) would violate any law, rule or regulation
of any governmental body or agency having jurisdiction over the Company or that
would otherwise not be permitted by the Company’s Governing Instruments. If the
Advisor is ordered to take any such action by the Board, the Advisor shall
promptly notify the Board of the Advisor’s judgment that such action would
adversely affect such status or violate any such law, rule or regulation or
Governing Instruments. Notwithstanding the foregoing, the Advisor, its
directors, managers, officers, members and employees shall not be liable to the
Company, the Board or the Company’s stockholders for any act or omission by the
Advisor, its directors, managers, officers, members or employees taken in good
faith or except as provided in Section 5.1.

ARTICLE IV

SPECIAL VOTING STOCK

4.1          Voting. 
Pursuant to the requirements of Section 7.1.A(6) of the Partnership
Agreement, the Advisor shall cast all votes with respect to shares of Special
Voting Preferred Stock in proportion to the votes (the “LP Direction Votes”)
that the Advisor receives from the holders of Partnership Units (other than Newkirk) that are
outstanding as of the effective date of the IPO, subject to the Advisor Voting Direction Exclusions
(as defined in the Partnership Agreement). 
To the extent Vornado Realty Trust is not granted LP Direction Votes in
respect of any of its Partnership Units by virtue of the Advisor Voting
Direction Exclusions, the Advisor shall be entitled to vote such Special Voting
Preferred Stock in its sole discretion.

4.2          Voting
Procedure.  In order to give effect to the provisions of
Section 4.1, the Advisor agrees to (i) prepare and file with the Securities and
Exchange Commission preliminary proxy material in accordance with the
provisions of Regulation 14A under the Exchange Act as to any matter as to
which votes or consents are sought by Newkirk from the holders of Special
voting Stock and (ii) deliver definitive proxy materials with respect to the
matters referred to in the foregoing clause (i).

 

10

 

ARTICLE V

INDEMNIFICATION

5.1          Indemnity.

(a)           The
Company shall indemnify and hold harmless the Advisor, and its members,
officers, affiliates, agents and employees, from and against any and all
liability, claims, demands, expenses and fees, fines, suits, losses and causes
of action of any and every kind or nature arising from or in any way connected
with the performance by the Advisor of its obligations under this Agreement,
other than any liability, claim, demand, expense, fee, suit, loss or cause of
action arising from or in any way connected with (i) any acts of the Advisor,
or its members, officers, affiliates, agents or employees, outside the scope of
the authority of the Advisor under this Agreement unless such person acted in
good faith and reasonably believed that his conduct was within the scope of
authority of the Advisor under this Agreement except for claims by the Advisors’
employees relating to terms and conditions of their employment, or (ii) the
gross negligence, willful misconduct or material breach of this Agreement or
the violation of applicable laws by the Advisor, its members, officers,
affiliates, agents or employees.  In
addition, Advisor shall be named as an additional insured on all policies of
insurance maintained by the Company including, without limitation, the
Commercial General Liability, Comprehensive Automobile Liability, Umbrella and
Excess Liability Insurance policy. 
Certificates of Insurance evidencing compliance with the provisions of
the immediately preceding sentence shall be furnished to the Advisor on
request.

(b)           The Advisor shall indemnify and hold harmless the Company and its
directors, officers, affiliates, agents and employees, from and against any and
all liability, claims, demands, expenses and fees, fines, suits, losses and
causes of action of any and every kind or nature arising from third party
actions and connected with the performance by the Advisor of its obligations
under this Agreement to the extent caused by (i) any acts of the
Advisor, or its members, officers, affiliates, agents or employees, outside the
scope of the authority of the Advisor under this Agreement unless such person
acted in good faith and reasonably believed that his conduct was within the
scope of authority of the Advisor under this Agreement, (ii) the gross
negligence, willful misconduct or material breach of this Agreement or the
violation of applicable laws by the Advisor, its members, officers, affiliates,
agents or employees or (iii) claims by the Advisors’ employees relating to
terms and conditions of their employment.

5.2          Additional
Costs; Survival.  The obligation to indemnify set forth in
Section 5.1 above shall include the payment of reasonable attorneys’ fees and
investigation costs, as well as other reasonable costs and expenses incurred by
the indemnified party in connection with any such claim.  At the option of, and upon receipt of notice
from, the indemnified party, the indemnifying party shall promptly and
diligently defend any such claim, demand, action or proceeding.  The provisions of Sections 5.1 and 5.2 hereof
shall survive the expiration or earlier termination of this Agreement.

 

11

 

ARTICLE
VI

COMPENSATION

The Advisor agrees to accept from the Company the compensation
set forth in this Article V as full and complete consideration for all services
to be rendered by the Advisor pursuant to this Agreement.  Except as hereinafter provided, neither the
Advisor nor any of its affiliates shall be entitled to receive any other fees
or compensation relating to the Company or its properties, including but not
limited to leasing commissions, acquisition fees, disposition fees or loan
fees.

6.1          Base Management Fee.  The Advisor
shall be entitled to receive a base management fee (the “Base Management Fee”),
which shall be payable in arrears on a quarterly basis. The Base Management Fee
shall be equal to the greater of (i) $4,800,000 or (ii) 1.5% per annum
of an amount equal to (1) the gross proceeds to Newkirk from the IPO and
from the sale of Common Stock to First Union less underwriting discounts and
placement fees (excluding Common Stock issued to First Union in respect of the
assignment of certain exclusivity rights), plus (2) the Issuance Price of
Equity Securities of the Company issued following the completion of the IPO,
plus (3) the Apollo Amount, minus (4) the Repurchase Amount (other than
amounts used to purchase Partnership Units that were outstanding immediately
following completion of the IPO).

6.2          Property Management Fees.

(a)           Subject
to Section 6.2(b) hereof, the Company may enter into separate property
management agreements (the “Property Management Agreements”) with third
parties, the Advisor or an affiliate of the Advisor for each Company property,
pursuant to which the Advisor or its affiliate shall be entitled to receive
fees for property management services at a rate for each property equal to 3%
of gross revenues of such property with respect to office properties and 1% of
gross revenues of such property with respect to industrial properties.  Such Property Management Agreements may be
terminated in the same manner as proscribed in Section 8.2 of this Agreement
and shall contain commercially reasonable and customary terms for such
arrangements.

(b)           Notwithstanding
the provisions of Section 6.2(a) hereof, the Company may only enter into a
Property Management Agreement with respect to a property that is not net leased
following expiration of the primary term of the lease or the date that a tenant
terminates the lease.

6.3          Incentive Management Fee. As additional compensation for its
services hereunder, the Advisor shall be paid a fee (the “Incentive Management
Fee”), which shall be payable in arrears on a quarterly basis.  The Incentive Management Fee shall be
determined on a quarterly basis and shall be equal to (i) twenty percent (20%)
multiplied by (ii) the positive difference if any, between (1) the
Adjusted Funds From Operations for such quarter (before deducting the Incentive
Management Fee but after providing for dividends on any preferred equity of
Newkirk) and (2) the Quarterly Threshold Amount:

6.4          Construction
Management Fee.  The
Advisor shall be entitled to receive construction management fees for
performing construction management services for the Company.

 

12

 

All construction management fees payable to the Advisor
shall be market-rate compensation based on the prevailing market rates for
similar services provided on an arms-length basis in the area in which the
subject property is located and shall require the prior written approval of a majority of independent directors of
the Board.

6.5          Other
Services.  Other than as specifically provided in this
Agreement, or as approved in writing by a majority of independent directors of
the Board, the Advisor shall not be compensated by the Company for services
rendered to the Company.  The Advisor
shall disclose to the Board the terms of any sub-contracting arrangement
entered into by the Advisor with third parties with respect to the services to
be provided by the Advisor hereunder.

ARTICLE
VII

EXPENSES

7.1          Expenses
Paid by Advisor.  Without regard to the amount of compensation
received hereunder by the Advisor, the Advisor shall bear the following
expenses of the Company:

(a)           Except
as provided in Section 7.2(m), all direct and indirect remuneration and all
other employment expenses of employees of the Advisor, including but not
limited to, salaries, wages, payroll taxes and the costs of employee benefit
plans, and fees, if any, paid to members of the Board who are employed by the
Advisor;

(b)           rent,
telephone, utilities, office furniture, equipment and machinery and other
office expenses of the Advisor and the Company; and

(c)           administrative
expenses relating to performance by the Advisor of its duties hereunder other
than payments to third parties as provided in Section 7.2.

7.2          Expenses
paid by the Company.  The following expenses
relating to the operation and management of the Company shall be paid by the Company:

(a)           Underwriting,
brokerage, listing, reporting, registration and other fees, and printing,
engraving and other expenses and taxes incurred in connection with the
issuance, distribution, transfer, trading, registration and securities exchange
or quotation system listing of the Company’s securities;

(b)           Fees,
other compensation and expenses paid to members of the Board who are not
affiliated with the Advisor, independent advisors, consultants and other agents
employed by or on behalf of the Company ;

(c)           The
costs associated with the establishment and maintenance of any credit
facilities and other indebtedness of the Company (including commitment fees,
accounting fee, legal fees, closing costs, etc.);

(d)           Third
party expenses directly connected with the acquisition, disposition, ownership
and operation of real estate interests or other property (including the costs
of

 

13

 

foreclosure,
insurance premiums, legal services, brokerage and sales commissions, taxes and
assessments on real property and all other taxes, utilities, maintenance,
repair and improvement of property and expenses for which reimbursement or
payment by the Company is provided for under the Property Management
Agreements);

(e)           Issuance
and transaction costs incident to the acquisition, disposition and financing of
investments;

(f)            Third
party expenses connected with payments of dividends or interest or
distributions in cash or any other form made to beneficiaries of the Company;

(g)           All
third party expenses connected with SOX compliance and communications to the equity
holders of the Company including with the proxy solicitation materials and
reports to holders of Newkirk’s stock and the Partnership Units;

(h)           Transfer
agent’s, registrar’s and indenture trustee’s fees and charges;

(i)            Legal,
investment banking, and external accounting, auditing and tax return
preparation fees and expenses;

(j)            The
cost of the liability insurance to indemnify the Company’s directors and officers;

(k)           All expenses in connection with communication to holders
of the Company’s securities and in complying with the continuous reporting and
other requirements of the Securities and Exchange Commission and other
governmental bodies and in connection with meetings of equity holders;

(l)            All expenses relating to membership of the Company in any
trade or similar association; and

(m)          Unless
retained directly by the Company, expenses relating to the employment of
full-time employees, to be chosen at the discretion of the Advisor, which
employees will be dedicated solely to property acquisition, disposition and
investment functions on behalf of the Company.

ARTICLE VIII

TERM OF AGREEMENT; TERMINATION

8.1          Term.  This Agreement shall become effective on the
date hereof and shall continue in force for a period expiring on December 31,
2008, and thereafter shall be automatically renewed for successive one-year
periods unless terminated in accordance with the provisions of this Agreement.

 

14

 

8.2          Right of Termination.

(a)           The
Company shall have the right to elect not to renew this Agreement at the
expiration of the initial term or any renewal term thereafter as set forth in
Section 8.1, or terminate this Agreement other than for Cause during any
renewal term, provided such election not to renew or to terminate shall require
the affirmative vote of at least two-thirds of the independent directors of Newkirk
and Newkirk shall deliver to the Advisor at least six (6) months’ prior written
notice thereof.  In such notice, Newkirk
shall specify the date, not less than six (6) months from the date of such
notice, on which this Agreement shall terminate.

(b)           The Company shall have the right to
terminate this Agreement for Cause at any time upon thirty (30) days’
prior written notice to the Advisor by the vote of a majority of the
independent directors.

(c)           In
the event that this Agreement shall have been terminated by the Company for Cause,
the Company shall have the right to offset any direct damages to the Company caused
by the actions giving rise to such termination for cause against the fee
otherwise payable under Section 8.3.

(d)           The
Advisor may terminate this Agreement effective upon 30 days prior written
notice of termination to the Company in the event that the Company shall
default in the performance or observance of any material term, condition or
covenant in this Agreement and such default shall continue for a period of
30 days after written notice thereof specifying such default and requesting
that the same be remedied in such 30 day period.

8.3          Termination Fee.  Upon termination of or failure to renew this
Agreement in accordance with Section 8.2(a) or (d) above, the Company will be
obligated to pay the Advisor a termination fee equal to two times the average
of the sum of the Base Management Fees and Incentive Management Fee earned by the
Advisor during the period of twenty four (24) full calendar months most
recently ended prior to such termination. 
If this Agreement is terminated or not renewed for any reason other than
pursuant to Section 8.2(a) or 8.2(d), the Advisor shall be entitled only to
payment of all earned and unpaid Base Management Fees and Incentive Management
Fees through the date of termination.

8.4          Continued Responsibility.  Notwithstanding termination of this Agreement
as provided above, the Advisor agrees to use its best efforts in the
performance of its duties under this Agreement until the effective date of the
termination of this Agreement.

8.5          Responsibilities upon Termination.  Upon termination of this Agreement, the
Advisor shall forthwith deliver the following to the Company, as applicable, on
the effective date of termination:

(a)           A final accounting reflecting the balance of funds held on
behalf of the Company as of the date of termination;

(b)           All
files, records, documents and other property of any kind relating to the Company,
including, but not limited to, computer records, contracts, leases, warranties,
bank statements, rent rolls, employment records, plans and specifications,
inventories,

 

15

 

correspondence,
tenant records, receipts, paid and unpaid bills or invoices, maintenance
records; and

(c)           Agreements
to terminate all property management, construction management and other
agreements with affiliates of the Advisor and third parties retained on a
subcontracting basis by the Advisor, in each case, with respect to the services
to be provided by the Advisor hereunder.

ARTICLE IX

MISCELLANEOUS PROVISIONS

9.1          Notice.  Any notice required or permitted under this
Agreement shall be in writing and shall be given by being delivered to the
following addresses or fax numbers of the parties hereto:

	
  To the Company:

  	
   

  	
  Newkirk Realty Trust, Inc.

  
	
   

  	
   

  	
  7 Bulfinch Place

  
	
   

  	
   

  	
  Suite 500, P.O. Box 9507

  
	
   

  	
   

  	
  Boston, Massachusetts
  02114

  
	
   

  	
   

  	
  Telephone
  No.:  (617) 570-4600

  
	
   

  	
   

  	
  Telecopier No.:  (617) 742-4643

  
	
   

  	
   

  	
  Attention:  Carolyn Tiffany

  
	
   

  	
   

  	
   

  
	
  To the Advisor:

  	
   

  	
  NKT Advisors LLC

  
	
   

  	
   

  	
  7 Bulfinch Place

  
	
   

  	
   

  	
  Suite 500, P.O. Box 9507

  
	
   

  	
   

  	
  Boston, Massachusetts 02114

  
	
   

  	
   

  	
  Telephone No.:  (617) 570-4600

  
	
   

  	
   

  	
  Telecopier No.:  (617) 742-4643

  
	
   

  	
   

  	
  Attention:  Carolyn Tiffany

  

 

or to such other address
or fax number as may be specified from time to time by such party in writing.

9.2          No
Joint Venture.  Nothing in this Agreement shall be
construed to make the Company and the Advisor partners or joint venturers or
impose any liability as such on either of them.

9.3          Release
of Money or Other Property upon Written Request.  The Advisor agrees that any money or other property of
the Company held by the Advisor under this Agreement shall be held by the
Advisor as custodian for the Company, and the Advisor’s records shall be
clearly and appropriately marked to reflect the ownership of such money or
other property by the Company. Upon the receipt by the Advisor of a written
request signed by a duly authorized officer of the Company requesting the
Advisor to release to the Company any money or other property then held by the
Advisor for the account of the Company under this Agreement, the Advisor shall
release such money or other property to the Company within a reasonable period
of time, but in no event later than thirty (30) days following such
request. The

 

16

 

Advisor,
its directors, officers, managers and employees will not be liable to the
Company, any Subsidiary, the Advisor any of their directors, officers,
stockholders, managers, owners or partners for any acts or omissions by the
Company in connection with the money or other property released to the Company
in accordance with the terms hereof. The Company shall indemnify the Advisor
and its Affiliates, officers, directors, members, employees, agents and
successors and assigns against any and all expenses, losses, damages, liabilities,
demands, charges and claims of any nature whatsoever which arise in connection
with the Advisor’s release of such money or other property to the Company in
accordance with the terms of this Section 9.3.

9.4          Entire
Agreement; Amendment.  This Agreement contains the
entire agreement of the parties hereto with respect to the subject matter
hereof.  This Agreement shall not be
amended or modified in any respect unless agreed to in writing by the Company
and the Advisor.

9.5          Governing
Law.  This Agreement shall be construed,
interpreted and applied in accordance with, and shall be governed by, the laws
of the State of New York without reference to principles of conflicts of law.

9.6          Arbitration. 
Any dispute or controversy between the Advisor or any of its employees
and the Company or any of its affiliates arising in connection with this
Agreement, any amendment thereof, or the breach thereof shall be determined and
settled by arbitration in New York, New York, by a panel of three arbitrators
in accordance with the rules of the American Arbitration Association.  Any award rendered therein shall be final and
binding upon the Company, its affiliates and the Advisor and their respective
legal representatives and judgment may be entered in any court having jurisdiction
thereof. The expenses of such arbitration shall be paid by the party against
whom the award shall be entered, unless otherwise directed by the arbitrators.

9.7          Assignment. 
This Agreement may not be assigned by any party hereto without the prior
written consent of the other parties hereto; provided, however, that the
Advisor shall be permitted to assign this Agreement or any of its rights
hereunder, and delegate any and all of its responsibilities and obligations
hereunder, to an Advisor Affiliate, provided
that the Advisor shall be fully responsible to us for all errors or omissions
of such assignee.

9.8          Binding
Nature of Agreement; Successor and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and permitted assigns as
provided in this Agreement.

9.9          Indulgences, Not Waivers.  Neither
the failure nor any delay on the part of a 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. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

 

17

 

9.10        Titles Not to Affect
Interpretation.  The titles of sections, paragraphs and
subparagraphs contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation of this Agreement.

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

9.12        Provisions Separable.  The
provisions of this Agreement are independent of and separable from each other,
and no provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.

9.13        Principles of
Construction.  Words used herein regardless of the number
and gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context requires. All references to recitals, sections,
paragraphs and schedules are to the recitals, sections, paragraphs and
schedules in or to this Agreement unless otherwise specified.

[Remainder of page
intentionally left blank]

 

18

 

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

	
  NEWKIRK REALTY TRUST INC.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  THE NEWKIRK MASTER LIMITED PARTNERSHIP

  
	
   

  
	
   

  
	
  By:

  	
  Newkirk Realty Trust
  Inc.,

  
	
   

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  NKT ADVISORS LLC

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
						

 

19

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