AMENDED AND RESTATED

                               ADVISORY AGREEMENT

                                     BETWEEN

             FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS

                                       AND

                                FUR ADVISORS LLC

                          Dated as of November 7, 2005

<PAGE>

                     AMENDED AND RESTATED ADVISORY AGREEMENT

            THIS AGREEMENT, made as of November 7, 2005, between FIRST UNION
REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, an Ohio business trust corporation
(the "Trust") and FUR ADVISORS LLC (the "Advisor").

            WHEREAS, pursuant to that certain Advisory , dated December 31,
2003, between the Trust and the Advisor, as amended by that certain Amendment
No. 1 to Advisory Agreement, dated as of January 8, 2004, as further amended by
that certain Amendment No. 2 to Advisory Agreement, dated as of January 1, 2005
(as amended, the "Original Agreement") the Advisor has been retained to provide,
among other things, certain asset management, investor relations and accounting
services to the Trust;

            WHEREAS, simultaneously herewith NKT Advisors LLC ("NKT"), an
affiliate of the Advisor is entering into that certain Advisory Agreement among
NKT, Newkirk Realty Trust, Inc. and The Newkirk Master Limited Partnership (the
"Newkirk Advisory Agreement");

            WHEREAS, in connection with the Newkirk Advisory Agreement and the
other agreements being entered into between the Trust and Newkirk simultaneously
herewith, the Trust and the Advisor desire to amend and restate the Original
Agreement.

            NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, it is agreed as follows:

                                    ARTICLE I

                              RETENTION OF ADVISOR

            Subject to the terms and conditions hereinafter set forth, the Trust
hereby retains the Advisor to undertake the duties and responsibilities
hereinafter set forth. 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 and (ii) the person signing this Agreement for the Advisor is duly
authorized to execute this Agreement on the Advisor's behalf.

                                   ARTICLE II

                           RESPONSIBILITIES OF ADVISOR

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

                  (i) serve as the Trust's investment and financial advisor and
      recommend changes in the Trust's investment policies, when appropriate;

<PAGE>

                  (ii) investigate and evaluate investment opportunities and
      recommend them to the Board;

                  (iii) administer the day-to-day operations of the Trust;

                  (iv) investigate, select and conduct relations and enter into
      appropriate contracts on behalf of the Trust with other individuals,
      corporations and entities in furtherance of the investment activities of
      the Trust;

                  (v) acquire and dispose of investments and funds of the Trust,
      handle, prosecute and settle any claims of the Trust and handle, defend
      and settle claims against the Trust;

                  (vi) invest and reinvest any money of the Trust;

                  (vii) negotiate, as appropriate, on behalf of the Trust with
      investment banking firms, banks and other institutions or investors for
      public or private sales of securities of the Trust or for other financing
      on behalf of the Trust;

                  (viii) conduct relations on behalf of the Trust with the
      Trust's beneficiaries and with securities exchanges and dealers making
      markets in the Trust's securities;

                  (ix) establish one or more bank accounts in the name of the
      Trust and deposit into and disburse from such accounts any moneys on
      behalf of the Trust, provided that no funds in any such account shall be
      commingled with funds of the Advisor, and the Advisor shall as requested
      by the Board render appropriate accountings of such deposits and payments
      to the Board;

                  (x) administer such day-to-day bookkeeping and accounting
      functions as are required for the proper management of the assets of the
      Trust and prepare or cause to be prepared such reports (other than the
      preparation and filing of tax returns) as may be required by any
      governmental authority in connection with the ordinary conduct of the
      Trust's business, including without limitation, periodic reports, returns
      or statements required under the Securities Exchange Act of 1934, as
      amended, the Internal Revenue Code of 1986, as amended (the "Code"), the
      securities and tax statutes of any jurisdiction in which the Trust is
      obligated to file reports or the rules and regulations promulgated under
      any of the foregoing;

                  (xi) from time to time, enter into Property Management
      Agreements and Construction Management Agreements (each as defined below),
      upon terms set forth in Article 4.2 of this Agreement, in consultation
      with the Board;

                  (xii) from time to time, or at any time requested by the
      Board, make reports to the Board of its performance of the foregoing
      services; and

                  (xiii) cause the Trust to obtain insurance covering such
      risks, with such insurers and on such terms as the Trust may reasonably
      determine.


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<PAGE>

            2.2 Authority. The Advisor shall have full discretion and authority
pursuant to this Agreement to perform the duties and services specified in
Section 2.1 hereof in such manner as the Advisor reasonably considers
appropriate subject to the terms and restrictions contained in the Trust's Trust
Agreement, as amended from time to time. In furtherance of the foregoing, the
Trust hereby designates and appoints the Advisor or its designee as the agent
and attorney-in-fact of the Trust, with full power and authority and without
further approval of the Trust, 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 the Trust
and its affiliates all such documents and take all such other actions which the
Advisor reasonably considers necessary or advisable to carry out its duties
hereunder.

                                   ARTICLE III

                                 INDEMNIFICATION

            3.1 Indemnity. (a) The Trust 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, 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 Trust 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 Trust
and its Trustees, 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, 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.

            3.2 Additional Costs; Survival. The obligation to indemnify set
forth in Section 3.1 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 3.1 and 3.2 hereof shall
survive the expiration or earlier termination of this Agreement.


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<PAGE>

                                   ARTICLE IV

                                  COMPENSATION

            The Advisor agrees to accept from the Trust, the compensation set
forth in this Article IV 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 Trust or its properties,
including but not limited to leasing commissions, acquisition fees, disposition
fees or loan fees.

            4.1 Annual Asset Management Fee. (a) The Advisor shall be entitled
to receive an asset management fee, which shall be payable quarterly basis,
equal to the amount by which (i) the lesser of the Asset Based Fee and the
Equity Based Fee, exceeds (ii) 80% of all amounts paid to NKT pursuant to the
Newkirk Advisory Agreement as an Incentive Management Fee (as defined in the
Newkirk Advisory Agreement). If the amount determined for a calendar quarter
pursuant to clause (ii) of the foregoing sentence exceeds the amount determined
for such calendar quarter pursuant to clause (i) of the foregoing sentence, such
excess amount shall be paid by the Advisor to FUR within 30 days of such
determination. For purposes of this Section 4.1, the following terms have the
following meanings:

                  "Asset Based Fee" - means an amount equal to: 1.00% of the
      Gross Asset Value up to $100 million, .75% of the Gross Asset Value
      between $100 million and $250 million, .625% of the Gross Asset Value
      between $250 million and $500 million and .50% of the Gross Asset Value in
      excess of $500 million; provided, however, with respect to the properties
      acquired from Finova Capital Corporation, the fee amount with respect to
      such assets shall be equal to .25% of Gross Asset Value of such properties
      that is subject to leverage.

                  "Equity Based Fee" - means an amount equal to (i) 1.5% of the
      Issuance Price of the issued and outstanding Equity Securities of the
      Trust plus (ii) .25% of any equity contribution by a third party to a
      joint venture managed by the Trust, in each case pro rated to the extent
      that an equity security was not issued for the entire quarterly period.

                  "Equity Securities" - means common shares, convertible
      preferred shares, convertible debt and perpetual preferred shares which do
      not require dividend payments.

                  "Gross Asset Value" - means, as of a particular date, the
      gross asset value of all assets owned, directly or indirectly, by the
      Trust on that date, as determined, in the case of assets whose values are
      not readily ascertainable, by the most recent appraisal of such assets by
      an independent appraiser of national reputation selected by the Trust. The
      Gross Asset Value shall be calculated as of the last day of the period in
      respect of which the annual asset management fee is payable.


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<PAGE>

                  "Issuance Price" - means, with respect to future issuances,
      the issuance price of the Equity Security after deducting any underwriting
      discounts and commissions and other expenses and costs relating to the
      issuance, and with respect to the Trust's existing Equity Securities, as
      follows:

                        Common Shares - 26,058,913 Common Shares (the "$2.30
                  Common Shares") are to be based on an issuance price of $2.30,
                  the FUR Investors LLC tender price, and 5,000,000 Common
                  Shares (the "$2.60 Common Shares") are to be based on an
                  issuance price of $2.60, the price paid by FUR Investors LLC.

                        Series A Cumulative Convertible Redeemable Preferred
                  Shares - $25 per share.

The Issuance Price will be modified accordingly in the event of stock splits
and, in the event of a Common Share repurchase, the shares repurchased will be
allocated proportionally among the $2.30 Common Shares, the $2.60 Common Shares
and all future issuances of Common Shares.

            (b) The Advisor shall provide the Trust with such information as it
shall reasonably request from time to time to evidence the calculation of the
Incentive Management Fee NKT pursuant to the Newkirk Advisory Agreement.

            4.2 Property and Construction Management Fees. (a) The Trust may,
from time to time, enter into separate property management agreements (the
"Property Management Agreements") with third parties, the Advisor or an
affiliate of the Advisor for each Trust 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 that does not exceed a commercially
reasonable rate for performing such services for comparable properties in the
same geographic location taking into account that the Advisor will not be
performing leasing services or receiving leasing commissions. The proposed rates
shall be submitted for approval by a majority of the independent trustees on the
Board. Such Property Management Agreements may be terminated in the same manner
as proscribed in Section 6.2 of this Agreement and shall contain commercially
reasonable and customary terms for such arrangements.

            (b) The Trust may, from time to time, enter into construction
management agreements (the "Construction Management Agreements") with third
parties, the Advisor or an affiliate of the Advisor with respect to Trust
properties, pursuant to which the Advisor or its affiliate shall be entitled to
receive fees for construction management services at a rate that does not exceed
a commercially reasonable rate for performing such services for comparable
properties in the same geographic location. The proposed rates shall be
submitted for approval by a majority of the independent trustees on the Board.
Such Construction Management Agreements may be terminated in the same manner as
proscribed in Section 6.2 of this Agreement and shall contain commercially
reasonable and customary terms for such arrangements.


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<PAGE>

            4.3 [intentionally omitted]

            4.4 Incentive Fee. (a) As additional compensation for its services
hereunder, the Advisor shall be paid a fee (the "Incentive Fee"), at the times
and pursuant to the procedures set forth below, equal to twenty percent (20%) of
Excess Share Distributions.

            (b) Definitions as used herein:

                  (i) "Excess Share Distributions" means the aggregate of all
      Distributions after the date hereof in respect of all common shares of
      beneficial interest of the Trust which exceed the Hurdle as of the date of
      calculation. The "Hurdle" means (x) $71,300,000, increased by the net
      issuance price of all common shares of beneficial interests issued after
      the date hereof (including the conversion price of any securities actually
      converted into Common Shares) and decreased by the redemption price of all
      common shares of beneficial interest redeemed after the date hereof, plus
      (y) a return on the amount set forth in (x) above, as adjusted, equal to
      7% per annum compounded annually taking into account the timing of any
      such adjustments; provided, however, the amount set forth in (x) above
      shall be subject to increase, BUT NOT REDUCTION, as of the date that the
      Trust receives amounts awarded to it as a result of the entry of a final
      non-appealable order in the case entitled Paterno et al. v. State of
      California, by the amount so received by the Trust reduced by (i) all
      costs and expenses, including but not limited to attorneys' fees and
      expenses, paid by the Trust subsequent to November 26, 2003 in connection
      with the action, (ii) the amount of any subrogation claim due to the
      Trust's insurance carrier in connection with the action and (iii)
      $2,000,000.

                  (ii) "Distributions" means all distributions made after the
      date hereof in respect of common shares of beneficial interest of the
      Trust, including distributions of cash, debt obligations and the fair
      market value of other property and the fair market value of any
      consideration received in exchange for common shares of beneficial
      interest by reason of a merger or consolidation with a third party entity
      or other similar transaction. In the event of a merger, consolidation or
      other similar business combination transaction, the Advisor will receive a
      credit toward the Distribution amount equal to the fair market value of
      the consideration received by holders of common shares of beneficial
      interest of the Trust received in exchange for their common shares of
      beneficial interest of the Trust, including, but not limited to, the fair
      market value ascribed in the transaction to stock, preferred stock, debt
      instruments, cash, warrants, options, etc., received by the holders of
      common shares of beneficial interest of the Trust. Except as otherwise
      provided herein, "fair market value" shall be determined by the Board in
      good faith; provided, however, that if the Advisor disagrees in good faith
      with such determination, then the Advisor shall be entitled to seek
      arbitration in accordance with Section 7.4 herein with respect to this
      issue.

            (c) Time of Payment. The Incentive Fee shall be paid to the Advisor
from time to time, as, when and if Excess Share Distributions are made to
shareholders of the Trust. The Incentive Fee shall be deemed earned on the first
date that Excess Share Distributions are made and shall not be subject to any
claw-back, refund or offset for any reason, including as a result of an increase
in the amount of the Hurdle from time to time. The amount of each payment of the
Incentive Fee shall equal the entire Incentive Fee computed pursuant to Section
4.4(a), less the amount thereof which has theretofore been paid to the Advisor.


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<PAGE>

            4.5 Joint Investment Fees. In the event that the Trust and the
Advisor or an affiliate of the Advisor make a joint investment as permitted by
the Stock Purchase Agreement, then the Advisor agrees to share with the Trust,
in proportion to their respective investments, the amount of any fee or promoted
interest payable to the Advisor or its affiliate by a third party in connection
with entering into or structuring the transaction.

            4.6 Other Services. Other than as specifically provided in this
Agreement, or as approved in writing by a majority of independent Trustees of
the Board, the Advisor shall not be compensated by the Trust for services
rendered to the Trust. 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 V

                                 TRUST EXPENSES

            5.1 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 Trust:

            (a) 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 Trust; and

            (c) administrative expenses relating to performance by the Advisor
of its duties hereunder other than payments to third parties as provided in
Section 5.2.

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

            (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 Trust's securities;

            (b) Fees 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 Trust;

            (c) The cost of borrowed money;


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<PAGE>

            (d) Third party expenses directly connected with the acquisition,
disposition, ownership and operation of real estate interests or other property
(including the costs of 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 Trust is provided for under
the Property Management Agreements);

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

            (f) All third party expenses connected with communications to the
beneficiaries of the Trust including with the proxy solicitation materials and
reports to holders of the Trust's beneficial interests;

            (g) Transfer agent's, registrar's and indenture trustee's fees and
charges;

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

            (i) Directors and officers liability insurance costs;

            (j) All expenses in connection with the beneficiaries' meetings;

            (k) All expenses relating to membership of the Trust in any trade or
similar association.

                                   ARTICLE VI

                         TERM OF AGREEMENT; TERMINATION

            6.1 Term. This Agreement shall become effective on the date hereof
and shall continue in force for a period expiring June 30, 2006 and thereafter
shall be automatically renewed for successive one-year periods unless terminated
in accordance with the provisions of this Agreement.

            6.2 Right of Termination. (a) Notwithstanding anything to the
contrary contained in this Agreement, (i) the Trust may terminate this Agreement
with or without cause upon sixty (60) days' prior written notice to the Advisor
and (ii) the Advisor may terminate this Agreement with or without cause upon one
hundred and twenty (120) days' prior written notice to the Trust. In addition,
this Agreement may be terminated by the Trust at any time for "cause", defined
as (i) the Advisor's continuous and intentional failure to perform its duties
under this Agreement after written notice from the Trust to the Advisor of such
non-performance; (ii) intentional misconduct by the Advisor which is materially
injurious to the Trust, monetarily or otherwise; or (iii) the material breach by
the Advisor of any of the material terms or conditions of this Agreement.

            (b) The Advisor shall have the continuing right, but not the
obligation, to immediately terminate this Agreement from and after the date that
the Exclusivity Agreement (as defined in the Stock Purchase Agreement) or the
Covenant Agreement (as defined in the Stock Purchase Agreement) is, without the
prior written consent of FUR, terminated by the Company or voided, in each case
in whole or material part.


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<PAGE>

            6.3 Termination Fee. (a) Upon termination of this Agreement in
accordance with Section 6.1 or 6.2 above, the Trust will be obligated to pay the
Advisor a termination fee equal to 20% of the difference between (x) the Deemed
Excess Share Distributions less (y) the amount of Incentive Fees which have
theretofore been paid to the Advisor in accordance with Section 4.4(a) hereto.

            (b) Definitions as used herein:

                  (i) "Deemed Excess Share Distributions" means the difference
      between (A) the aggregate of all Distributions in respect of all common
      shares of beneficial interest plus the Net Asset Amount (as defined below)
      and (B) the Hurdle, as of the date of termination..

                  (ii) "Net Asset Amount" means the difference between (x) the
      gross assets of the Trust as of the date of termination less (y) the total
      liabilities of the Trust as of the date of termination (including any
      amounts necessary to satisfy obligations due to holders of preferred
      shares of the Trust as liabilities), as determined by an appraisal to be
      conducted by a nationally recognized appraisal firm mutually agreed upon
      by the Trust and the Advisor. If the Trust and the Advisor are unable to
      agree upon an appraisal firm, then each of the Trust and the Advisor is to
      choose an independent appraisal firm to conduct an appraisal. In such
      event, (i) if the appraisals prepared by the two appraisers so selected
      are the same or differ by an amount that does not exceed 20% of the higher
      of the two appraisals, the Net Asset Amount is to be deemed to be the
      average of the appraisals, as prepared by each party's chosen appraiser,
      and (ii) if these two appraisals differ by more than 20% of such higher
      amount, the two appraisers together are to select a third appraisal firm
      to conduct an appraisal. If the two appraisers are unable to agree on the
      identity of such third appraiser, either of the Advisor and the Trust may
      request that the American Arbitration Association ("AAA") select the third
      appraiser. The Net Asset Amount then is to be the amount determined by
      such third appraiser, but in no event less then the lower of the two
      initial appraisals or more than the higher of such two initial appraisals.
      Each party shall pay the costs of the appraisals chosen by it, and each
      party shall pay one half of the costs of the third appraiser. Any
      appraisal hereunder shall be performed no later than 45 days following
      selection of the appraiser or appraisers.

            (c) In the event that this Agreement shall have been terminated by
the Trust for cause, the Trust shall have the right to offset any direct damages
to the Trust caused by the actions giving rise to such termination for cause
against the fee otherwise payable under this Section 6.3.

            6.4 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.


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<PAGE>

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

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

            (b) All files, records, documents and other property of any kind
relating to the Trust, including, but not limited to, computer records,
contracts, leases, warranties, bank statements, rent rolls, employment records,
plans and specifications, inventories, correspondence, tenant records, receipts,
paid and unpaid bills or invoices, maintenance records.

            (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 VII

                            MISCELLANEOUS PROVISIONS

            7.1 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 Trust:   First Union Real Estate Equity and Mortgage
                            Investments
                            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: FUR Advisors LLC
                            Two Jericho Plaza
                            Wing A, Suite 111
                            Jericho, New York  11753
                            Telephone No.: (516) 822-0022
                            Telecopier No.: (516) 433-2777
                            Attention: Michael L. Ashner

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


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<PAGE>

            7.2 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 Trust and the Advisor.

            7.3 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.

            7.4 Arbitration. Any dispute or controversy between the Advisor or
any of its employees and the Trust 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
Trust, 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.

            7.5 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 any of its affiliates without the consent of the other
parties hereto.


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<PAGE>

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

                                        FIRST UNION REAL ESTATE EQUITY AND
                                        MORTGAGE INVESTMENTS

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


                                        FUR ADVISORS LLC

                                        By: FUR Holdings LLC
                                            Member

                                            By: WEM-FUR Investors LLC
                                                Managing Member

                                                By:
                                                    ----------------------------
                                                    Michael L. Ashner
                                                    Managing Member


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