OWNERSHIP LIMIT WAIVER AGREEMENT (FIRST UNION)
THIS
OWNERSHIP LIMIT WAIVER AGREEMENT (this "Agreement"), dated as
of
November 7, 2005, is between Newkirk Realty
Trust, Inc., a Maryland corporation
(the "Company"), and First Union Real
Estate Equity and Mortgage Investments
("First Union"), an unincorporated
association in the form of an Ohio business
trust (together with any entity at least
99% of the voting stock of which is
owned by First Union, "Buyer"). Capitalized
terms used, but not otherwise
defined, in this Agreement shall have the
meanings given to them in the
hereinafter-mentioned Articles.
R E C I T A L S
A. Article
VII of the Company's Articles of Incorporation, as amended (the
"Articles") contains a restriction
prohibiting any Person other than an Excepted
Holder from acquiring any shares of Capital
Stock of the Company if, as a result
of such Transfer, such Person shall
Beneficially Own or Constructively Own more
than a specified percentage (currently set
at 9.8%) of the value of the total
outstanding Capital Stock of the Company
(the "Aggregate Stock Ownership Limit")
or more than a specified percentage
(currently set at 9.8%) of the value or
number of shares (whichever is more
restrictive) of the total outstanding Common
Stock of the Company (the "Common Stock
Ownership Limit").
B.
Pursuant to Section 7.2.7(a) of the Articles, the Company's Board
of
Directors has adopted resolutions approving
Buyer's exemption from the Aggregate
Stock Ownership Limit and the Common Stock
Ownership Limit on the terms and
conditions hereinafter set forth.
A G R E E M E N T
1. WAIVER OF STOCK OWNERSHIP LIMITS
1.1. The
Company, effective as of the date of this Agreement, exempts
Buyer from the Aggregate Stock Ownership
Limit and the Common Stock Ownership
Limit but only (A) with respect to its
ownership of up to 17.5% of the Common
Stock, as determined and subject to
reduction in the manner provided in Section
1.2 below, and (B) upon and subject to
Buyer's compliance with Section 2.2 below
and its continued compliance with the
covenants referred to therein. This
exemption shall not apply to any other
shares of Capital Stock of the Company
Beneficially Owned by Buyer.
1.2. The
percentage of Common Stock held by Buyer for purposes of
applying
the percentage limitation set forth in
Section 1.1 above (such percentage
limitation being hereinafter called the
"Excepted Holder Limit") shall be
determined in accordance with the
provisions of Paragraph 5e of that certain
letter agreement, dated August 5, 2005,
among the Company, Buyer and certain
other Persons with respect to the
transactions related to the Company's initial
public offering of Common Stock (said
provisions being deemed to be incorporated
in and made a part of this Agreement).
After any Transfer by Buyer, the Excepted
Holder Limit for Buyer shall be reduced by
the percentage of the outstanding
shares of Capital Stock so Transferred,
provided that the Excepted Holder Limit
shall not be reduced to a percentage or
amount that is less than the Common
Stock Ownership Limit.
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2. LIMITATIONS AND OTHER MATTERS
2.1. The
exemption set forth in Section 1.1 above (the "Ownership Limit
Waiver") shall not be effective if and to
the extent that, as a result of
Buyer's ownership of Capital Stock
permitted by reason of the Ownership Limit
Waiver, Buyer would be considered to have
Beneficial Ownership or Constructive
Ownership of Capital Stock that would
result in (A) the Company owning (actually
or Constructively, applying the provisions
of Section 856(d)(5) of the Code) an
interest described in Section 856(d)(2)(B)
in a "First Union Related Tenant" (as
defined in Section 2.5 herein), or (B)
Beneficial Ownership by any "individual"
(within the meaning of Section 542(a)(2) of
the Code) who Beneficially Owns or
will Beneficially Own any of the shares of
Common Stock covered by the Ownership
Limit Waiver, of more than 9.8% (by number
of shares or value, whichever is more
restrictive) of the total outstanding
shares of Common Stock of the Company
(whether or not such ownership causes the
Company to be "closely held" under the
REIT rules). In addition, if the Ownership
Limit Waiver is not effective as a
result of the operation of any clause(s) of
the preceding sentence, the Capital
Stock that otherwise would be "Excess
Stock" (as defined in Section 2.4 herein)
shall be automatically transferred to a
Trust in accordance with Sections
7.2.1(b) and 7.3 of the Articles.
2.2. For
the Ownership Limit Waiver to be effective, Buyer must execute
a
counterpart signature page to this
Agreement and complete and make the
representations and covenants set forth in
the Certificate of Representations
and Covenants, the form of which is
attached hereto as Exhibit A (the
"Certificate"), and must deliver such
Certificate to the Company prior to its
acquisition of Capital Stock. Except as
otherwise determined by the Board of
Directors, the Ownership Limit Waiver shall
cease to be effective upon any
breach of the representations or covenants
set forth herein or in the
Certificate. In addition, if the Ownership
Limit Waiver is not effective as a
result of the operation of the preceding
sentence, the Capital Stock that would
otherwise be "Excess Stock" (as defined in
Section 2.4 herein) shall be
automatically transferred to a Trust in
accordance with Sections 7.2.1(b) and
7.3 of the Articles.
2.3. Buyer
shall deliver to the Company, at such times as may reasonably
be requested by the Company (it being
acknowl
