CEDAR INCOME FUND LTD /MD/
EXHIBIT 10.3
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10-3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
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                            PARTNERSHIP AGREEMENT OF
                          LOYAL PLAZA ASSOCIATES, L.P.








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<PAGE>


                        LIMITED PARTNERSHIP AGREEMENT OF
                          lOYAL PLAZA ASSOCIATES, L.P.

         This Limited Partnership Agreement (this "Agreement") is entered into
as of June 28, 2002, between CIF-LOYAL PLAZA ASSOCIATES, L.P., a Delaware
limited partnership (the "Developer Partner"), and Kimco Preferred Investor IV
Trust, a Pennsylvania business trust (the "Preferred Partner").

                                    ARTICLE 1

                                   DEFINITIONS

         Section 1.1. Definitions. As used in this Agreement, the following
terms shall have the following meanings:

                  "Act" means the Delaware Revised Uniform Limited Partnership
Act, as it may be amended from time to time.

                  "Additional Capital Contribution" has the meaning assigned to
such term in Section 6.2.

                  "Additional Capital Contribution Balance" means, for each
Partner, the cumulative Additional Capital Contributions of that Partner less
the cumulative distributions to that Partner in return thereof pursuant to
Section 8.2(d).

                  "Additional Capital Contribution Preferred Return Balance"
means, for each Partner, the cumulative accrued Preferred Return of that Partner
on its Additional Capital Contribution Balance less all amounts distributed by
the Partnership to that Partner in payment thereof pursuant to Sections 8.1(b)
and 8.2(c).

                  "Adjusted Capital Account Deficit" means, with respect to any
Partner for any taxable year or other period, the deficit balance, if any, in
such Partner's Capital Account as of the end of such year or other period, after
giving effect to the following adjustments:

                  (a) Credit to such Capital Account any amounts that such
Partner is obligated to restore or is deemed obligated to restore as described
in the penultimate sentence of Regulation Section 1.704-2(g)(1) and in
Regulation Section 1.704-2(i)(5); and

                  (b) Debit to such Capital Account the items described in
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

                  "Affiliate" means, with respect to a Person, another Person,
directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with the Person in question. The term
"control" as used in the preceding sentence means, with respect to a Person that

<PAGE>

is a corporation, the right to exercise, directly or indirectly, more than 5% of
the voting rights attributable to the shares of the controlled corporation, and,
with respect to a Person that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled Person.

                  "Approved Loans" shall mean loans made to the Partnership
which are approved in writing by the Preferred Partner. The Mortgage Loan shall
be an Approved Loan.

                  "Bankruptcy" means, with respect to a Person, the occurrence
of (1) an assignment by the Person for the benefit of creditors; (2) the filing
by the Person of a voluntary petition in bankruptcy; (3) the entry of a judgment
by any court that the Person is bankrupt or insolvent, or the entry against the
Person of an order for relief in any bankruptcy or insolvency proceeding; (4)
the filing of a petition or answer by the Person seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation; (5) the filing by the
Person of an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it in any proceeding for
reorganization or of a similar nature; (6) the consent or acquiescence of the
Person to the appointment of a trustee, receiver or liquidator of the Person or
of all or any substantial part of its properties; or (7) any other event which
would cause the Person to cease to be a Partner of a limited liability
Partnership under Section 18-304 of the Act.

                  "Business Day" means any day other than Saturday, Sunday, or
other day on which commercial banks in New York are authorized or required to
close under the laws of the State of New York.

                  "Capital Account" shall have the meaning set forth in
Section 9.1.

                  "Capital Contribution" means, with respect to each Partner,
the amount of (a) cash and the initial Gross Asset Value of any property (net of
liabilities assumed by the Partnership resulting from such contribution and
liabilities to which the property is subject) contributed to the Partnership by
that Partner plus (b) with the Preferred Partner's written consent, the amount
of such Partner's payments made to creditors of the Property LLC after the date
hereof with respect to Property LLC obligations (until such amount is reimbursed
to such Partner).

                  "Capital Proceeds" means funds of the Partnership arising from
a Capital Transaction, less (a) the actual costs incurred by the Partnership
with third parties in consummating the Capital Transaction, (b) the amount of
any Approved Loan repaid from such funds, and (c) reserves approved by the
Partners in amounts reasonably estimated to be required to pay Partnership or
Property LLC expenses.


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<PAGE>


                  "Capital Sharing Ratios" means the percentages in which the
Partners participate in, and bear, certain Partnership items specified in this
Agreement. The initial Capital Sharing Ratios of the Partners are as follows:

                          Developer Partner     25%
                          Preferred Partner     75%

                  "Capital Transaction" means the sale, financing, refinancing
or similar transaction of or involving any part or all of the Project Interests
(including condemnation awards, payment of title insurance proceeds or casualty
loss insurance proceeds [other than business interruption or rental loss
insurance proceeds], to the extent such awards and proceeds are not applied to
mortgage indebtedness and not used to repair damage caused by a casualty or
taking or in alleviation of any title defect).

                  "Certificate" shall mean a certificate of limited partnership
dated June 21, 2002 filed pursuant to the Act forming the Partnership.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any corresponding provisions of succeeding law.

                  "Default Capital Contribution" has the meaning assigned to
such term in Section 6.3.

                  "Default Capital Contribution Balance" means, for each
Partner, the cumulative Default Capital Contributions of that Partner, less the
cumulative distributions to that Partner in return thereof pursuant to Section
8.2(b).

                  "Default Capital Contribution Preferred Return Balance" means,
for each Partner, the cumulative accrued Default Preferred Return of that
Partner less all amounts distributed by the Partnership to that Partner in
payment thereof pursuant to Sections 8.1(a) and 8.2(a).

                  "Default Loan" has the meaning assigned to such term in
Section 6.3(a).

                  "Default Preferred Return" means, for each Partner, the
cumulative amount that accrues on the balance of its Default Capital
Contribution Balance at a rate equal to the greater of (a) 14% per annum and (b)
the sum of the Prime Rate plus 5% per annum (in either case, compounded on the
last day of each calendar year).


                                      -4-
<PAGE>

                  "Delinquent Partner" has the meaning assigned to such term in
Section 6.3(a).

                  "Depreciation" means, for each taxable year or other period,
an amount equal to the federal income tax depreciation, amortization or other
cost recovery deduction allowable with respect to an asset for the year or other
period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of the year or
other period, Depreciation will be an amount which bears the same ratio to the
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction for the year or other period bears to the
beginning adjusted tax basis, provided that if the federal income tax
depreciation, amortization, or other cost recovery deduction for the year or
other period is zero, Depreciation will be determined with reference to the
beginning Gross Asset Value using any reasonable method selected by the
Developer Partner, subject to the Preferred Partner's approval. Notwithstanding
the foregoing of this definition, if the Company has adopted the "remedial
allocation method" described in Section 1.704-3(d) of the Regulations with
respect to any asset, Depreciation for such asset shall be determined in
accordance with Section 1.704-3(d)(2) of the Regulations, rather than in
accordance with the preceding sentence.

                  "First Mortgagee" has the meaning assigned to such term in
Article 14.

                  "14% IRR Threshold" means the amount which must have been
received by a Partner in order that the Partner will have (a) received the
return of all of its Capital Contributions and (b) achieved a 14% Internal Rate
of Return.

                  "14% Internal Rate of Return" means, with respect to a
Partner, a 14% cumulative rate of return on such Partner's investment in the
Partnership, which shall be satisfied as of a given date when the difference
between (a) the present value (defined hereinafter) of the Partner's Capital
Contributions to the Partnership, less (b) the present value of distributions to
such Partner from the Partnership pursuant to Sections 8.1 and 8.2, equals zero.
The present value of all such distributions and Capital Contributions shall be
calculated by discounting such amounts monthly (on the last day of each month)
from the date such distribution or Capital Contribution was made, back to the
date (the "Initial Date") the Partner made its Initial Capital Contribution,
using a monthly discount rate of 1.0979%. For example, a Partner shall have
received a 14% Internal Rate of Return upon its receipt of a cumulative amount
of distributions that cause (a) the present value as of the Initial Date of the
Partner's Capital Contributions, discounted monthly at a rate of 1.0979% from
the date of each such Capital Contribution (it being understood that the Capital
Contribution made by a Partner on the Initial Date shall have a present value
equal to the amount of such Capital Contribution), reduced by (b) the present


                                      -5-
<PAGE>

value (as of the Initial Date) of the aggregate of all distributions to such
Partner, discounted monthly (on the last day of each month) at a rate of 1.0979%
from the date of each such distribution, to equal zero. The Internal Rate of
Return shall be calculated on the basis of the actual number of days elapsed
over a 365 or 366-day year, as the case may be.

                  "GAAP" means generally accepted accounting principles,
consistently applied.

                  "Gross Asset Value" has the meaning assigned to it in
Section 9.2.

                  "Guaranty" shall mean that Guaranty and Suretyship Agreement
dated as of the date hereof from Pledgor to Preferred Partner, as the same may
hereafter be amended or restated.

                  "Imputed Closing Costs" means an amount that would normally be
incurred by the Partnership if the Project were sold for an amount specified in
Articles 12 or 13 (as applicable), for title insurance premiums, survey costs,
brokerage commissions (such commissions not to exceed 1.5% of the purchase
price) and other commercially reasonable closing costs.

                  "Initial Capital Contributions" mean the initial Capital
Contribution made by each Partner as set forth in Section 6.1.

                  "Initial Capital Contribution Balance" means, for each
Partner, the total Initial Capital Contributions of that Partner, less the
cumulative distributions to that Partner in return thereof pursuant to Sections
8.2(f).

                  "Initial Capital Contribution Preferred Return Balance" means,
for each Partner, the cumulative accrued Preferred Return of that Partner on the
balance of its Initial Capital Contribution Balance less all amounts distributed
by the Partnership to that Partner in payment thereof pursuant to Sections
8.1(c) and 8.2(e).

                  "Interest Rate" means the lesser of (a) the maximum lawful
rate or (b) the sum of the Prime Rate and 4% per annum.

                  "Lease Parameters" shall mean the lease parameters that the
Developer Partner and the Preferred Partner agree upon from time to time in
writing.

                  "Major Decision" has the meaning assigned to such term in
Section 4.1(b).

                  "Management Agreement" has the meaning assigned to such term
in Section 4.8.



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<PAGE>

                  "General Partner" means the Partner designated as a General
Partner in accordance with this Agreement, until such Person ceases to be the
General Partner.

                  "Mortgage Loan" shall mean the mortgage loan in the sum of
$14,000,000 originally made by Lehman Brothers Bank, FSB to Loyal Plaza Venture,
L.P., as evidenced by a Promissory Note made by Loyal Plaza Venture, L.P. to
Lehman Brothers Bank, FSB in the original principal face amount of $14,0000,000
currently held by the First Mortgagee and to be assumed by the Partnership by an
Assumption Agreement to be entered into by the Partnership with First Mortgagee
(the current holder of such loan).

                  "Net Cash Flow" for any period means Net Operating Income for
such period less debt service on Approved Loans actually paid during such
period.

                  "Net Operating Income" for any period means the amount by
which Operating Revenues for such period exceed Operating Expenses for such
period.

                  "Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a
given period equals the excess, if any, of the net increase, if any, in the
amount of Partnership Minimum Gain during such period, over the aggregate amount
of any distributions during such period of proceeds of a Nonrecourse Liability
that are allocable to an increase in Partnership Minimum Gain, determined
according to the provisions of Regulations Section 1.704-2(c).

                  "Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.704-2(b)(3).

                  "Operating Budget" means the annual budget, prepared by the
General Partner and approved in writing by the Preferred Partner, and setting
forth the estimated capital and operating expenses of the Partnership for the
then current or immediately succeeding calendar year and for each month and each
calendar quarter of such calendar year, in such detail as the Preferred Partner
shall reasonably require.

                  "Operating Expenses" means, for any period, amounts actually
paid by the Partnership for such period (calculated on a cash basis), for
operating expenses of the Project, for capital expenditures not paid from the
Partners' Capital Contributions, for indemnification obligations incurred under
Section 4.9 and for reserves actually funded and approved by the Preferred
Partner (or permitted under the current Operating Budget). Operating Expenses
shall not include debt service on Approved Loans, and any non-cash expenses such
as depreciation or amortization.



                                      -7-
<PAGE>

                  "Operating Revenues" means, for any period, the gross receipts
of the Partnership and the Property LLC (calculated on a cash basis) arising
from the ownership and operation of the Project during such period, including
proceeds of any business interruption insurance maintained by the Partnership or
Property LLC from time to time, but specifically excluding Capital Proceeds and
Capital Contributions.

                  "Partner Nonrecourse Debt" means "partner nonrecourse debt" as
defined in Regulations Sections 1.704-2(b)(4).

                  "Partner Nonrecourse Debt Minimum Gain" means an amount, with
respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain
that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse
Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

                  "Partner Nonrecourse Deductions" means "partnership
nonrecourse deductions" as defined in Regulations Sections 1.704-2(i)(1) and
1.704-2(i)(2).

                  "Partners" means the Preferred Partner, the Developer Partner,
and each Person hereafter admitted as a Partner in the Partnership in accordance
with this Agreement, until such Person ceases to be a Partner of the
Partnership.

                  "Partnership" means Loyal Plaza Associates, L.P., a Delaware
limited partnership, or any successor thereto.

                  "Partnership Interests" means all of the rights and interests
of whatsoever nature of the Partners in the Partnership, including without
limitation the right to participate in management to the extent herein expressly
provided, to receive distributions of funds, and to receive allocations of
income, gain, loss, deduction, and credit.

                  "Partnership Minimum Gain" means "partnership minimum gain" as
defined in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

                  "Person" means an individual or entity.

                  "Pledgor" shall mean Cedar-Point Limited Partner, LLC and its
permitted successors and assigns.

                  "Preferred Return" means, for each Partner, an amount that
accrues at the per annum rate (a) of 12% (in the case of the Preferred Partner)
and 10% (in the case of the Developer Partner) on Capital Contributions
(excluding Default Capital Contributions) and (b) equal to the Interest Rate on
all Default Capital Contributions. The Preferred Return shall accrue on all
Capital Contributions from the date such contributions are made until they are
returned to the contributing Partner. The Preferred Return of the Partners shall
be cumulative but shall not be compounded.



                                      -8-
<PAGE>

                  "Prime Rate" means, for each calendar month, the highest prime
rate reported in the Money Rates column or section of The Wall Street Journal
published on the second business day of that month, as having been the rate in
effect for corporate loans at large U.S. money center commercial banks (whether
or not such rate has actually been charged by any such bank) as of the first
calendar day of such month. If The Wall Street Journal ceases publication of the
Prime Rate, the "Prime Rate" shall mean the prime rate (or base rate) announced
by The Chase Manhattan Bank, N.A., New York, New York (whether or not such rate
has actually been charged by such bank). If such bank discontinues the practice
of announcing the Prime Rate, the "Prime Rate" shall mean the highest rate
charged by such bank on short-term, unsecured loans to its most creditworthy
large corporate borrowers.

                  "Profits" and "Losses" mean, for each taxable year or other
period, an amount equal to the taxable income or loss of the Partnership for the
year or other period, determined in accordance with Section 703(a) of the Code
(including all items of income, gain, loss or deduction required to be stated
separately under Section 703(a)(1) of the Code), with the following adjustments:

                  1. Any income that is exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses will be added to
taxable income or loss;

                  2. Any expenditures described in Code Section 705(a)(2)(B) or
treated as Section 705(a)(2)(B) expenditures under Regulations Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits
or Losses, will be subtracted from taxable income or loss;

                  3. Gain or loss resulting from any disposition of property
with respect to which gain or loss is recognized for federal income tax purposes
will be computed by reference to the Gross Asset Value of the property,
notwithstanding that the adjusted tax basis of the property differs from its
Gross Asset Value;

                  4. In lieu of depreciation, amortization and other cost
recovery deductions taken into account in computing taxable income or loss,
there will be taken into account Depreciation for the taxable year or other
period;

                  5. Any items which are specially allocated under Section
9.3(c), 9.3(d), or 9.3(e) will not affect calculations of Profits or Losses; and



                                      -9-
<PAGE>

                  6. If the Gross Asset Value of any Partnership asset is
adjusted under Section 9.2(b) or 9.2(c), the adjustment will be taken into
account as gain or loss from disposition of the asset for purposes of computing
Profits or Losses.

                  "Project" means the land and the improvements located thereon
known as Loyal Plaza, located in Williamsport, Pennsylvania, consisting of
approximately 29 acres with a shopping center constructed thereon.

                  "Regulations" means the regulations promulgated by the United
States Department of the Treasury pursuant to and in respect of provisions of
the Code. All references herein to sections of the Regulations shall include any
corresponding provisions of succeeding, similar, substitute proposed or final
Regulations.

                  "Regulatory Allocations" has the meaning assigned to it in
Section 9.4(d).

                  "Removal Event" has the meaning assigned to such term in
Section 4.4.

                  "Residual Sharing Ratios" means the percentages in which
Partners participate in distributions arising from Capital Proceeds after prior
distributions as more particularly set forth in Section 8.2. The initial
Residual Sharing Ratios of the Partners are as follows:

                        Developer Partner       50%
                        Preferred Partner       50%

                  The Residual Sharing Ratios are subject to change as set forth
in Section 4.4.

                  "Security Agreement" shall mean the Security Agreement dated
as of the date hereof between Pledgor and Preferred Partner, as the same may
hereafter be amended or restated.

                  "Sharing Ratios" means the percentages in which the Partners
participate in, and bear, certain Partnership items specified in this Agreement.
The initial Sharing Ratios of the Partners are as follows:

                        Developer Partner      30%
                        Preferred Partner      70%

                  The Sharing Ratios are subject to change as set forth in
Section 4.4.

                  "Transfer" means, with respect to a particular property, right
or interest, the assignment, sale, transfer, pledge, disposition, hypothecation,
mortgage, pledge or the grant of a lien or security interest in such right or
interest (or any part thereof), whether voluntarily, involuntarily or by
operation of law, and whether for consideration or no consideration.


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<PAGE>

                                    ARTICLE 2

                      ORGANIZATIONAL MATTERS; PURPOSE; TERM

         Section 2.1. Formation of Partnership. The Partnership has been
organized as a Delaware limited partnership by filing the Certificate under the
Act.

         Section 2.2. Name. The name of the Partnership shall be Loyal Plaza
Associates, L.P., and all Partnership business must be conducted in that name or
such other name as the General Partner and the Preferred Partner approve.

         Section 2.3. Registered Office; Registered Agent; Principal Office. The
registered office and the registered agent of the Partnership shall be as
specified in the Certificate or as designated by the General Partner with the
Preferred Partner's approval. The principal office of the Partnership shall be
at c/o SKR Brentway, 44 South Bayles Avenue, Suite 304, Port Washington, New
York 11050, or at such other location as the General Partner and the Preferred
Partner approve.

         Section 2.4. Foreign Qualification. Before the Partnership conducts
business in any jurisdiction other than Delaware, the General Partner shall
cause the Partnership to comply with all requirements necessary to qualify the
Partnership as a foreign limited partnership in that jurisdiction. At the
request of the General Partner, each Partner shall execute, acknowledge, swear
to, and deliver all certificates and other instruments conforming with this
Agreement that are necessary or appropriate to qualify, continue, or terminate
the Partnership as a foreign limited liability Partnership in all jurisdictions
in which the Partnership may conduct business.

         Section 2.5. Purpose and Scope; Actions Consistent with Certificate.
The purposes and scope of the Partnership's activities are strictly limited to
acquiring, maintaining, owning, leasing, and selling the Project; financing the
foregoing activities; and performing all other activities reasonably necessary
or incidental to the furtherance of such purposes. The Partnership shall not
take any action inconsistent with the Certificate and, to the extent of any
inconsistencies between this agreement and the provisions of the Certificate,
provisions of the Certificate shall control. The Partnership shall conduct its
business at all times so as to comply with the requirements of the Certificate.
The provisions of this Section 2.5 are subject in all respects to the "special
purpose entity" provisions of Article 14. In addition, the Partnership shall at


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<PAGE>

all times conduct its business so as to comply with the provisions of Article 14
of this Agreement, notwithstanding any other provision in this Agreement to the
contrary. The Partners acknowledge receipt of the documents evidencing and
securing the Mortgage Loan and are aware of provisions in such documents
providing for a default upon occurrence of, among other things, certain property
transfers and transfers of interests in the Partnership; the incurrence of
certain indebtedness; the creation of certain liens; and the liquidation or
dissolution of the Partnership or the General Partner, in each case as more
particularly set for in the documents evidencing or securing the Mortgage Loan.

         Section 2.6. Term. The Partnership shall commence on the effective date
of the Certificate and shall terminate on May 31, 2037, unless sooner dissolved
as herein provided.

                                    ARTICLE 3

                     PARTNERSHIP; DISPOSITIONS OF INTERESTS

         Section 3.1. Partners. The initial Partners of the Partnership are the
Preferred Partner and the Developer Partner, each of which is admitted to the
Partnership as a Partner as of the date hereof.

         Section 3.2. Dispositions of Partnership Interests.

                  (a) General Restriction. No Partner may Transfer all or any
portion of its Partnership Interest, except with the consent of the other
Partner or as permitted in Sections 3.2(b) or 3.2(c). Any attempted Transfer of
all or any portion of a Partnership Interest, other than in strict accordance
with this Section 3.2, shall be void. Except as permitted in Sections 3.2(b) or
3.2(c), a Person to whom a Partnership Interest is Transferred may be admitted
to the Partnership as a Partner only with the consent of the other Partner,
which may be given or withheld in the other Partner's sole and absolute
discretion. In connection with any Transfer of a Partnership Interest or any
portion thereof, and any admission of an assignee of a Partnership Interest as a
Partner, the Partner making such Transfer and the assignee shall furnish the
other Partner with such documents regarding the Transfer as the other Partner
may reasonably request (in form and substance reasonably satisfactory to the
other Partner), including a copy of the Transfer instrument, a ratification by
the assignee of this Agreement (if the assignee is to be admitted as a Partner),
a legal opinion that the Transfer complies with applicable federal and state
securities laws, and a legal opinion that the Transfer will not result in the
Partnership's termination under Section 708 of the Code. For purposes hereof, a
Transfer shall be deemed to have occurred with respect to a Partner's
Partnership Interest upon any Transfer of an interest in that Partner or in any
entity which directly or indirectly controls such Partner.



                                      -12-
<PAGE>

                  (b) Permitted Transfers of Developer Partner. The Developer
Partner may Transfer all or a portion of its Partnership Interest (direct or
indirect) with the consent of Preferred Partner, such consent not to be
unreasonably withheld, to any Affiliate of the Developer Partner (in which
Developer Partner owns at least a 51% interest) or to an Affiliate of Cedar
Income Fund Partnership, L.P. (in which Cedar Income Fund Partnership, L.P.,
directly or indirectly, owns at least a 51% interest) and, at the election of
the Developer Partner, upon any such Transfer that transferee shall be admitted
as a Partner. Transfers of interest in the Developer Partner may also be made
(without Preferred Partner's consent) to Affiliates of Developer Partner or
Cedar Income Fund Partnership, L.P. so long as not more than 49% of such
interests, in the aggregate, are Transferred and Preferred Partner receives
prior written notice thereof. Transfers of interests in Cedar Income Fund
Partnership, L.P. may be made at any time without Preferred Partner's consent.

                  (c) Permitted Transfers of Preferred Partner. The Preferred
Partner may Transfer all or a portion of its Partnership Interest (1) to any
Affiliate of Kimco Realty Corporation (in which Kimco Realty Corporation holds
directly or indirectly at least a 40% interest and Kimco Realty Corporation (or
an entity 100% controlled directly or indirectly by Kimco Realty Corporation)
retains management authority over the Partnership Interest and also retains the
right to give all required consents permitted to be given by the Preferred
Partner hereunder) and, at the election of the Preferred Partner, upon any such
Transfer that transferee shall be admitted as a Partner or (2) without ceasing
to be a Partner, to any other Person so long as the Preferred Partner retains
management authority over such Partnership Interest and the right to give all
required consents permitted to be given by the Preferred Partner hereunder.

         Section 3.3. Creation of Additional Partnership Interests. Additional
Partnership Interests may be created and issued to existing Partners or to other
Persons, and such other Persons may be admitted to the Partnership as Partners,
with the approval of the General Partner and the Preferred Partner, on such
terms and conditions as the General Partner and the Preferred Partner may
determine at the time of admission. The General Partner may reflect the
admission of any new Partners or the creation of any new class or group of
Partner in an amendment to this Agreement which shall be valid if executed by
the General Partner and Preferred Partner.

         Section 3.4. Resignation; Redemption. A Partner may not resign or
withdraw from the Partnership without the consent of the other Partners. A
Partnership Interest may not be redeemed or purchased by the Partnership without
the written consent of the Preferred Partner.



                                      -13-
<PAGE>

         Section 3.5. Information. In addition to the other rights specifically
set forth in this Agreement, each Partner is entitled to the following
information under the circumstances and conditions set forth in the Act: (a)
true and full information regarding the status of the business and financial
condition of the Partnership; (b) promptly after becoming available, a copy of
the Partnership's federal, state and local income tax returns for each year; (c)
a current list of the name and last known business, residence or mailing address
of each Partner and General Partner; (d) a copy of this Agreement, the
Partnership's certificate of formation, and all amendments to such documents;
(e) true and full information regarding the amount of cash and a description and
statement of the agreed value of any other property or services contributed by
each Partner and which each Partner has agreed to contribute in the future, and
the date on which each became a Partner; and (f) other information regarding the
affairs of the Partnership to which that Partner is entitled pursuant to Section
17-305 of the Act (including all Partnership books and records). Under no
circumstances shall any information regarding the Partnership or its business be
kept confidential from any Partner.

         Section 3.6. Liability to Third Parties. No Partner shall be liable for
the debts, obligations or liabilities of the Partnership.

                                    ARTICLE 4

                 MANAGEMENT OF PARTNERSHIP AND THE PROPERTY LLC

         Section 4.1. Management.

                  (a) General Partner. The Developer Partner shall initially be
the sole General Partner. The General Partner shall manage the affairs of the
Partnership and make all decisions with regard thereto, except where (1) the
Preferred Partner's approval is required under this Agreement or (2) the
approval of any of the Partners is expressly required by a non-waivable
provision of applicable law. The Preferred Partner shall have sole authority to
enforce any agreement between the Partnership and the Developer Partner (or its
Affiliates) and to make all determinations on behalf of the Partnership with
respect thereto, which determinations shall be reasonably made.

                  (b) Actions Requiring Approval of the Preferred Partner.
Neither the General Partner nor the Partnership may take any action described
below (the "Major Decisions") unless it has been approved in writing by the
Preferred Partner (and any such action taken without Preferred Partner's written
consent shall be null and void):



                                      -14-
<PAGE>

                           (1) Any sale, transfer, exchange, mortgage,
financing, hypothecation or encumbrance of all or any part of the Project, or
any lease of the entire Project; however, the General Partner may make
incidental sales, exchanges, conveyances, or transfers of Partnership personalty
or fixtures in the ordinary course of business if such transaction, together
with all other such transactions in the calendar year in question, involves
property having a value or sales price of less than $25,000 in the aggregate.
The Partners approve the assumption by the Partnership of the Mortgage Loan and
the Partners approve the execution by the Partnership of any document necessary
to evidence or secure the obligation of the Partnership to assume, repay and
secure the Mortgage Loan.

                           (2) Determination of major accounting policies of the
Partnership, including selection of accounting methods and making various
decisions regarding treatment and allocation of transactions for federal and
state income, franchise or other tax purposes.

                           (3) Determination of the terms and conditions of all
borrowings of the Partnership and the identity of the lender thereof; guaranty
the debt of any other Person, or permit the Partnership to incur any debt or
other obligations other than Approved Loans or trade payables with respect to
the Project. The Preferred Partner has approved the Mortgage Loan as a permitted
borrowing of the Partnership.

                           (4) Making any expenditure or incurring any
obligation by or for the Partnership in excess of the lesser of (i) 105% of the
amount set forth therefor on an Operating Budget or (ii) an aggregate sum of
$50,000 in any 12-month period for any transaction or group of similar or
related transactions, except for expenditures made and obligations incurred
pursuant to an Operating Budget; however, if emergency repairs to the Project
are necessary to avoid imminent danger of injury to the Project or to an
individual, the General Partner may cause the Partnership to make such
expenditures as may be necessary to alleviate such situation and shall promptly
notify the Preferred Partner in writing of the event giving rise to such repairs
and the actions taken with respect thereto.

                           (5) Requiring Additional Capital Contributions(other
than Additional Capital Contributions required to be made pursuant to Section
6.2).

                           (6) Approval of the execution of any lease of any
part or all of the Project, the form of lease agreements, guidelines for minimum
rental rates, minimum and maximum length of lease terms, brokerage commissions,
credit standing of tenants, and approval of any lease amendments which extend
the lease term by more than one year (unless the right to extend is set forth in
the lease), reduce the rent or give a tenant additional rights or options;


                                      -15-
<PAGE>

notwithstanding the foregoing, the Partnership shall be permitted (without the
consent of Preferred Partner) to execute leases and lease amendments that (i)
meet the Lease Parameters and (ii) are on a form of lease or lease amendment
that has been approved by the Preferred Partner. The Partnership may also
execute lease amendments without the written consent of the Preferred Partner if
the lease amendment does not extend the lease term by more than one year.

                           (7) Approval of property manager, leasing agents,
management agreements, construction contracts, and brokerage agreements for the
Project; insurance coverages, the underwriters thereof and claims related
thereto; zoning changes, reciprocal operating agreements, cross-easement
agreements and similar agreements; annual Operating Budgets, including the
amount of reserves for capital improvements, replacements and purchases, tenant
improvements, and leasing commissions included in such Operating Budget;
material modifications of any of the foregoing; and all matters relating to the
Project's compliance with environmental, health, access, and other laws.

                           (8) Using or referencing in any way the name of, or
any affiliation with, the Preferred Partner or any of its Affiliates in any
advertising.

                           (9) Taking of any legal action (including the filing
of any bankruptcy or insolvency proceeding by or an behalf of the Partnership),
except approval of the Partnership initiating action to collect rentals and
other amounts payable to the Partnership under leases and other occupancy
agreements affecting the Project and evicting tenants and terminating the leases
of tenants who are in default under their leases and defending against tenant
claims and liability claims for which the Partnership maintains insurance
(except that the Partnership may not terminate any lease of a tenant who is not
in default under its lease without the Preferred Partner's written consent).

                           (10) Filing of any petition or consenting to the
filing of any petition that would subject the Partnership to a Bankruptcy.

                           (11) Entering into, or permitting the Property LLC
to, enter into any agreement with the Developer Partner or an Affiliate of the
Developer Partner.

                           (12) Merging or consolidating the Partnership, with
or into any Person, or dissolving, terminating or liquidating the Partnership.

                           (13) Amend or terminate the Certificates.



                                      -16-
<PAGE>

                           (14) Permit the Partnership to enter into any leases
(or amendments of leases) of the Project or undertake any other activity if the
rent from Project leases would (assuming the Preferred Partner were the sole
owner of the Project) fail to qualify as "rents from real property" (as such
term is defined in ss. 856 of the Code) or would subject Preferred Partner or
Kimco Realty Corporation to taxes under sections 857 or 4981 of the Code. For
example, a "percentage rent" or other provision in a lease providing for payment
of a portion of rent based on the income or profits of a tenant, unless such
clause is based on a fixed percentage or percentages of gross receipts or gross
sales, would be prohibited unless consented to by the Preferred Partner. (Such a
percentage rent clause may be based upon gross receipts or sales in excess of a
fixed dollar amount, but only if (i) the fixed dollar amount does not depend in
whole or in part on the income or profits of the tenant, and (ii) the percentage
and the fixed amount must be fixed at the time the lease is executed and may not
be renegotiated during the term of the lease).

                           (15) Permit the Partnership to approve a sublease of
the Project having any percentage rent clauses, other than percentage rent
clauses complying with the immediately preceding subparagraph 14.

                           (16) Engage directly in construction activities
without using an independent contractor or independent subcontractors (for
example, construction of tenant improvements) without the written consent of the
Preferred Partner, unless the costs of such construction activities are within
the Approved Budget or are otherwise approved by the Preferred Partner.

                           (17) Permit the Partnership to increase, modify,
consolidate, prepay, or extend any Approved Loan.

                           (18) Make any loans to the Partnership, any Partner,
any Affiliate of a Partner, or any other party.

                           (19) Cause the Partnership to make any distribution
of property in kind to any Partner.

                           (20) Change the nature of the business conducted by
the Partnership.

                           (21) Take any action inconsistent with the
Certificate.

                  (c) Obligations of the General Partner. The General Partner
shall discharge its duties in a good and proper manner as provided for in this
Agreement. The General Partner, on behalf of the Partnership, shall in good
faith use all reasonable efforts to implement all Major Decisions approved by
the Preferred Partner, enforce agreements entered into by the Partnership, and
conduct the ordinary business and affairs of the Partnership in accordance with
good industry practice and this Agreement. The General Partner shall not
delegate any of its rights or powers to manage and control the business and
affairs of the Partnership without the prior written consent of the Preferred
Partner.


                                      -17-
<PAGE>

                  (d) Operating Budgets. The Partnership shall operate under an
annual Operating Budget, draft of which shall be prepared and submitted by the
General Partner to the Preferred Partner for approval. After a draft annual
Operating Budget has been approved, the General Partner shall use diligent good
faith efforts to implement the Operating Budget on behalf of the Partnership and
may cause the Partnership to incur the expenditures and obligations therein
provided. Within 45 days after the date hereof the General Partner shall prepare
and submit to the Preferred Partner for approval a proposed Operating Budget for
the period beginning with the anticipated acquisition date of the Project and
ending on December 31, 2002. If an Operating Budget is not approved by the
Preferred Partner by the acquisition date of the Project, the General Partner
may incur commercially reasonable expenses to operate the Project; however, no
expenditures shall be made for capital items, to Affiliates of the Developer
Partner (other than payment of the Management Fee in accordance with the
Property Management Agreement), or in excess of $10,000 without the approval of
the Preferred Partner. Thereafter, the General Partner shall deliver to the
Preferred Partner for approval a proposed Operating Budget for each calendar
year by November 1 of the preceding calendar year. Provided that the Preferred
Partner receives the proposed Operating Budget for each calendar year by
November 1 of the preceding calendar year, together with all supporting
information necessary for the Preferred Partner to review the Operating Budget,
the Preferred Partner will approve, reject, or provide changes to the Operating
Budget by December 15 of the year in which the proposed Operating Budget was
submitted to the Preferred Partner. If an Operating Budget for any calendar year
has not been approved by January 1 of that year, the Partnership shall continue
to operate under the Operating Budget for the previous year with such
adjustments as may be necessary to reflect deletion of non-recurring expense
items set forth on the previous Operating Budget and increased insurance costs,
taxes, utility costs, and debt service payments; however, no payments or
reimbursements to the Developer Partner or any of its Affiliates (other than
payment of the management fee in accordance with the previous Operating Budget
and reimbursements to the Property General Partner for out-of-pocket expenses
incurred in connection with the Project and in accordance with the previous
Operating Budget) nor capital expenditures (other than deposits into the Capital
Reserve) shall be made by the Partnership for that year until an Operating
Budget for such year is approved, unless the Preferred Partner specifically
consents thereto in writing.


                                      -18-
<PAGE>

         Section 4.2. Meetings of Partners.

                  (a) Regular Meetings. The Partners shall hold annual meetings
after the General Partner submits an Operating Budget to the Preferred Partner
for its review, to discuss the Project, and to discuss such other matters
regarding Partnership business as the Partners may elect. Any such meeting may
be held by phone with the written consent of the Preferred Partner.

                  (b) Special Meetings. Special meetings of the Partners may be
called by the General Partner or by the Preferred Partner at any time by
delivering at least two-business days' prior notice thereof to the other Partner
to discuss such matters regarding Partnership business as the Partners may
elect. Any such meeting may be held by phone with the written consent of the
Preferred Partner.

                  (c) Procedure. Each Partnership meeting shall be held at the
principal place of business of the Partnership, unless the Partners otherwise
agree. Attendance of a Person at a meeting shall constitute a waiver of notice
of such meeting, unless such Person attends the meeting for the purpose of
objecting to the transaction of any business on the ground that the meeting is
not lawfully called or convened. A Person may vote at such meeting by written
proxy executed by that Person and delivered to a General Partner or Partner. A
proxy shall be revocable unless it is stated to be irrevocable. Any action
required or permitted to be taken at such meeting may be taken without a
meeting, without prior notice, and without a vote if a consent or consents in
writing, setting forth the action so taken, is signed by the General Partner and
the Partners that would be necessary to take the action at a meeting at which
all Partners were present and voted. Any meeting may take place by means of
telephone conference, video conference, or similar communication equipment by
means of which all Persons participating therein can hear each other.

         Section 4.3. Intentionally Omitted.

         Section 4.4. Removal of General Partner. The General Partner may be
removed by the Preferred Partner as provided herein under the following
circumstances (each, which is not cured by the Developer Partner within the
period set forth herein, a "Removal Event"):

                  (a) A Transfer in violation of Section 3.2(a) occurs, or
Developer Partner (1) commits a criminal act (which has an adverse effect on the
Partnership or the Preferred Partner), (2) misapplies any funds derived from the
Project, including security deposits, insurance proceeds or condemnation awards,
which action has an adverse effect on the Partnership or the Preferred Partner;
(3) commits fraud, misrepresentation, gross negligence or willful misconduct
(which has an adverse effect on the Partnership or the Preferred Partner); (4)
fails to maintain insurance as required by this Agreement or to pay or provide


                                      -19-
<PAGE>

for payment of any taxes or assessments affecting the Project provided that
funds are available to the Partnership with which to do so (which has an adverse
effect on the Partnership or the Preferred Partner); or (5) intentionally
damages or destroys the Project, or any part thereof not covered by insurance.

                  (b) Failure of the Developer Partner to make Additional
Capital Contributions so that the outstanding aggregate amount of all unpaid
Additional Capital Contributions of the Developer Partner exceed $600,000 (for
purposes hereof any Additional Capital Contribution made by a Default Loan to
the Developer Partner shall constitute a failure to make such Additional Capital
Contribution by Developer Partner).

                  (c) Bankruptcy of the Partnership.

                  (d) The liquidation or dissolution of the General Partner.

                  (e) Bankruptcy of the General Partner (a "Bankruptcy Removal
Event").

                  (f) The occurrence of a material default by an Affiliate of
the Developer Partner under any management or other service contract between the
Partnership and an Affiliate of the Developer Partner and the General Partner's
failure within thirty (30) days of the giving of notice thereof by the Preferred
Partner to the Developer Partner to cause such contract to be terminated and
replaced with a contract with a non-affiliated third party.

                  (g) A Major Decision is made or taken without Preferred
Partner's written consent (and, in the case of Major Decisions specified in
clauses (2), (4), (6), (7), (9) or (16) taken without Preferred Partner's
written consent, there is an adverse effect to either the Partnership or
Preferred Partner as a result of the action so taken).

                  (h) The Partnership fails to make a distribution to Preferred
Partner as and when required pursuant to Sections 8.1 or 8.2.

                  (i) The material breach by Developer Partner of a covenant set
forth in this Agreement, the breach of which is not otherwise specified in this
Section 4.4.

                  (j) A default (beyond expiration of any applicable grace or
notice period) shall occur under either the Guaranty or the Security Agreement.


                                      -20-
<PAGE>

                  If Preferred Partner shall have reasonably determined that a
Removal Event has occurred, Preferred Partner shall give written notice thereof
to Developer Partner together with a detailed specification of the claimed
Removal Event and the circumstances thereof. If such Removal Event shall be
reasonably susceptible of cure, Developer Partner shall have the right to cure
such Removal Event within the thirty (30) day period following receipt of notice
thereof from the Preferred Partner. Notwithstanding anything in this paragraph
to the contrary, however, (i) no cure rights shall be available with respect to
Removal Events specified in Sections 4.4(a)(1), (2), (3) and (5) and Section
4.4(c) or (e) and (ii) if the notice is given by Preferred Member with respect
to a Removal Event specified in Section 4.4(a)(4) or 4.4(h) the cure period
shall be 5 business days. If Developer Partner shall fail to cure such Removal
Event within such thirty (30) day period, then, subject to the rights of
Developer Partner and Preferred Partner to cause such matter to be submitted to
arbitration, the Preferred Partner may remove Developer Partner as the General
Partner, in which event (i) the Preferred Partner may appoint itself or an
Affiliate of the Preferred Partner, or a third party, as General Partner. If the
Removal Event arises because of an event specified in Sections 4.4 (a)(1), (2),
(3) or (5), 4.4(g) (which has an adverse effect on the Partnership or Preferred
Partner), or 4.4(h), the Preferred Partner may at any time elect (by written
notice to the Developer Partner) to purchase the Partnership Interest of the
Developer Partner for a purchase price equal to the difference between (A) the
lesser of (i) an amount which the Developer Partner would receive if the Project
were sold for its fair market value (less Imputed Closing Costs), or (ii) the
unreturned Capital Contributions of the Developer Partner, less (B) all damages
and costs incurred by the Partnership in connection with such Removal Event.

                  The fair market value of the Project shall be determined by
the Preferred Partner and the Developer Partner (or its representative) within
30 days after the Preferred Partner elects to purchase such Partnership
Interest. If such Persons are unable to agree on the fair market value of the
Project, the Preferred Partner, by notice to the Developer Partner (or its
representative), may require the determination of the fair market value to be
made by an independent appraiser specified in that notice. If the Person
receiving that notice objects to the independent appraiser designated therein
within ten days after it receives such notice and the Preferred Partner and such
Person fail to agree on an independent appraiser, then either may request that
the New York City, New York office of the American Arbitration Association (the
"AAA") designate an independent appraiser, in which case the selection of the
appraiser by the AAA shall be binding on the parties. The determination of the
selected appraiser shall be final and binding on all parties. The Partnership
shall pay the cost of the appraisal. The closing of such transaction shall occur
within 30 days after the purchase price for the Partnership Interest in question
is finally determined.


                                      -21-
<PAGE>

                  If Preferred Partner desires to remove Developer Partner as
the General Partner because a Removal Event has occurred, then either the
Developer Partner or the Preferred Partner shall have the right to require (by
written notice to the other Partner) that the issue of whether or not a Removal
Event has occurred be submitted to binding arbitration. The sole parties to such
arbitration shall be the Developer Partner and Preferred Partner. The sole
issues to be submitted to and determined by such arbitration is whether or not a
Removal Event has occurred, or, if a Removal Event has occurred, whether
mitigating factors exist sufficient to allow Developer Partner to remain as the
General Partner notwithstanding the occurrence of such Removal Event (and in the
case of any election by the Preferred Partner to purchase the Developer
Partner's Partnership Interest (if applicable), whether mitigating factors exist
sufficient to deny the Preferred Partner the right to exercise such election).
The arbitration shall be handled in the following manner:

                           (i) The matter shall be submitted to binding
arbitration in New York City, New York in accordance with the rules of the AAA
then in effect, except as otherwise set forth in this Agreement. A single
arbitrator (not affiliated with any firm or organization providing services to
either party or their Affiliates) shall be selected.

                           (ii) Each party shall have the right to take limited
discovery, which shall in all event be completed within 60 days of the date
arbitration has been requested by either party, unless the other party shall
fail to cooperate in the taking of such discovery.

                           (iii) The matter shall be decided based on briefs and
affidavits submitted to the arbitrator, and without any testimony of live
witnesses, unless the arbitrator desires in its sole discretion to have a
hearing with witnesses.

                           (iv) The decision of the arbitrator shall be final
and non-appealable.

                           (v) Each party shall pay (x) its own attorneys' fees
and costs in submitting the matter to arbitration and (y) 50% of the fees of the
arbitrator. The losing party shall reimburse the prevailing party for any AAA
filing fees paid by the prevailing party and any arbitration order shall so
state the foregoing.

                           (vi) If the arbitrator decides that a Removal Event
has occurred without mitigating factors, the arbitrator shall enter an order (x)
declaring that a Removal Event has occurred, and (y) with the prevailing party's
consent, declaring that the Developer Partner shall cease to be the General
Partner of the Partnership and Preferred Partner (or its designee) shall be the
new managing Partner. The arbitrator shall have the power to order injunctive
relief consistent with the foregoing.


                                      -22-
<PAGE>

                           (vii) The arbitrator shall not have any power to
enter any damage award except as specified in subsection (e) above.

                           Even if the parties elect to proceed to arbitration
concerning whether or not a Removal Event has occurred, either Partner shall be
permitted to pursue other remedies (at law or equity) permitted by this
Agreement for breach by the other Partner of its obligations hereunder.

                           If the Developer Partner fails to make Additional
Capital Contributions in the aggregate amount of $300,000, then from and after
such date the Developer Partner's Residual Sharing Ratio shall be automatically
changed to 35% and the Preferred Partner's Residual Sharing Ratio shall be
automatically changed to 65%. For every $2,000 in Additional Capital
Contributions in excess of $300,000 which the Developer Partner fails to make,
the Developer Partner's Residual Sharing Ratio shall be decreased by .1% and the
Preferred Partner's Residual Sharing Ratio shall be increased by .1% (for
example, if the Developer Partner fails to make Additional Capital Contributions
aggregating $400,000, the Developer Partner's Residual Sharing Ratio shall
decrease to 30% and the Preferred Partner's Residual Sharing Ratio shall be
increased to 70%), except that the Developer Partner's Residual Sharing Ratio
shall never be reduced below 25%. At such time as the aggregate unpaid
Additional Capital Contributions of the Developer Partner equal or exceed
$600,000, the Preferred Partner may at any time elect (by written notice to the
Developer Partner) to purchase the Partnership Interest of the Developer Partner
for a purchase price equal to the difference between (A) the lesser of (i) an
amount which the Developer Partner would receive if the Project were sold for
its fair market value (less Imputed Closing Costs), or (ii) the unreturned
Capital Contributions of the Developer Partner, less (B) all damages and costs
incurred by the Partnership in connection with the Developer Partner's failure
to so make such Additional Capital Contributions. In such event fair market
value shall be determined as set forth in this section 4.4.

                           If the Developer Partner is ever removed as the
General Partner, the Developer Partner shall have all rights of a limited
partner specified in the Act.

         Section 4.5. Reimbursement of Expenses. Each Partner shall be
reimbursed for all out-of-pocket expenses actually incurred by it directly in
conjunction with the business and affairs of the Partnership (including travel
costs, telephone costs, and similar expenses, but excluding any salary expenses,
employee expenses, and administrative expenses even if such excluded expenses
are incurred in connection with (or allocable to) Partnership business), to the
extent set forth on an Operating Budget or as otherwise approved in writing by
the Preferred Partner. Upon request, the General Partner shall provide


                                      -23-
<PAGE>

reasonable supporting verification to the other Partners for all expenditures
for which any reimbursement is requested. The General Partner shall at all times
maintain insurance in amounts required by the Mortgage Loan provided that there
are funds available to the Partnership with which to do so and if there are no
such funds to do so General Partner shall give immediate written notice to
Preferred Partner (but if the cost thereof exceeds by more than 10% the budgeted
amount therefor in an Operating Budget, the Developer Partner shall notify
Preferred Partner in writing before paying the cost thereof).

         Section 4.6. Compensation of General Partner. Except for expense
reimbursements set forth in Section 4.5, no compensatory payment shall be made
by the Partnership to the General Partner or any Partner for the services to the
Partnership of such General Partner, Partner or any Partner or employee of such
Partner.

         Section 4.7. Transactions with Affiliates.

                  (a) General. When any service or activity to be performed on
behalf of the Partnership is performed by an Affiliate of a Partner, the fee
payable for such service or activity shall not exceed the fee which would be
payable by the Partnership to an unaffiliated third party of comparable standing
providing the same services.

                  (b) Termination of Agreements with Affiliates. If the
Developer Partner is removed as General Partner as a result of the occurrence of
a Removal Event, then the Partnership may terminate all agreements with
Developer Partner's Affiliates without penalty or fee, and all such agreements
must contain a provision that allows for the exercise of the right of
termination under this Section 4.7(b). The Preferred Partner may enforce this
provision on behalf of the Partnership.

         Section 4.8. Property Management Agreement. The Partnership is
contemporaneously entering into a Property Management Agreement ("Management
Agreement") with Brentway Management LLC ("Property Manager"), an Affiliate of
the Developer Partner, under which Property Manager shall manage and lease the
Project. The Management Agreement will provide that Property Manager shall be
paid fees more particularly set forth in the Management Agreement. The General
Partner or an Affiliate shall also be entitled to a fee on a sale or refinancing
equal to .75% of the sale price or refinance amount, as the case may be, subject
to a total cap on fees to third parties and the General Partner or its Affiliate
of 1.5% (for example, if an outside broker's fee is 1.5%, no fee shall be
payable to the General Partner or its Affiliate).


                                      -24-
<PAGE>

         Section 4.9. Indemnification; Reimbursement of Expenses; Insurance. To
the fullest extent permitted by the Act: the Partnership shall hold harmless,
indemnify and defend the General Partner from all losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature whatsoever, including the reasonable fees
and actual expenses of the General Partner's counsel, which arise, result from
or relate to any threatened, pending or completed action, suit or proceeding
("Proceeding"), relating to the ownership or operation of the Project or the
business of the Partnership (other than claims and liabilities excluded below),
including, without limitation, expenses incurred by the General Partner (1) in
advance of the final disposition of any Proceeding to which such General Partner
was, is or is threatened to be made a party, and (2) in connection with its as a
witness or other participation in any Proceeding. The foregoing indemnity shall
also extend to any Affiliate of the General Partner (including Cedar Income Fund
Partnership, L.P. and Cedar Income Fund Ltd.) which may execute an environmental
indemnity in favor of the holder of the Mortgage Loan such that such Affiliate
shall be reimbursed by the Partnership (prior to distributions to Partners) for
any amount paid on account of such environmental indemnity. The foregoing
indemnity shall also extend to any brokerage commissions or finder's fees
claimed by any broker or other party against the General Partner in connection
with the Project, or any of the transactions contemplated by this Agreement. The
Partnership shall indemnify and advance expenses to an Officer, employee or
agent of the Partnership to the same extent and subject to the same conditions
under which it may indemnify and advance expenses to General Partners under the
preceding sentence. The provisions of this Section 4.9 shall not be exclusive of
any other right under any law, provision of the Certificate or this Agreement,
or otherwise. Notwithstanding the foregoing, this indemnity shall not apply to
actions constituting gross negligence, willful misconduct or bad faith, or
involving a breach of this Agreement, but shall apply to actions constituting
simple negligence. The Partnership may purchase and maintain insurance to
protect itself and any General Partner, officer, employee or agent of the
Partnership, whether or not the Partnership would have the power to indemnify
such Person under this Section 4.9. This indemnification obligation shall be
limited to the assets of Partnership and no Partner shall be required to make a
Capital Contribution in respect thereof.

          Section 4.10. Other Business Activities. Subject to the other express
provisions of this Agreement, each Partner, General Partner, Officer or
Affiliate thereof may engage in and possess interests in other business ventures
of any and every type and description, independently or with others, including
ones in direct or indirect competition with the Partnership, with no obligation
to offer to the Partnership or any other Partner, General Partner or Officer the
right to participate therein or to account therefor. The Partnership may
transact business with any Partner, General Partner, Officer or Affiliate
thereof, subject to the approval rights of the Preferred Partner described
herein, provided the terms of those transactions are no less favorable than
those the Partnership could obtain from unrelated third parties. Each Partner
and its Affiliates has numerous ownership interests in other real estate
projects and neither Partner shall be required to offer any business opportunity
or interest to the Partnership.


                                      -25-
<PAGE>

         Section 4.11. Indemnification of Preferred Partner. The Partnership
shall indemnify, defend and hold Preferred Partner harmless from and against any
and all losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
whatsoever, including the reasonable fees and actual expenses of Preferred
Partner's counsel, arising in connection with (1) any investigative,
administrative, mediation, arbitration, or judicial proceeding, commenced or
threatened at any time against Preferred Partner (whether or not the Partnership
is a party thereto), in any way related to the execution, delivery or
performance of this Agreement or to the Project, and (2) any proceeding
instituted by the seller of the Project against Preferred Partner (whether or
not the Partnership is a party thereto), and (3) any brokerage commissions or
finder's fees claimed by any broker or other party against Partnership or
Preferred Partner in connection with the Project, or any of the transactions
contemplated by this Agreement. Preferred Partner shall not be entitled to
indemnification to the extent any of the foregoing are caused solely by the
Preferred Partner's gross negligence or willful misconduct. This indemnification
obligation shall be limited to the assets of Partnership and no Partner shall be
required to make a Capital Contribution in respect thereof.

                                    ARTICLE 5

                            ACCOUNTING AND REPORTING

         Section 5.1.  Fiscal Year, Accounts, Reports.

                  (a) The fiscal year of the Partnership shall be the calendar
year.

                  (b) The books of account of the Partnership shall be kept and
maintained (at Partnership expense) by the General Partner on an accrual basis
in accordance with GAAP. The Partnership shall report its operations for tax
purposes on an accrual basis. The General Partner shall prepare a reconciliation
of such books and records to cash receipts and disbursements. The books of
account shall be kept at the principal place of business of the Partnership, and
shall at all times be available for inspection by the Partners. All
distributions of Net Cash Flow and Capital Proceeds shall be accompanied by
income statements prepared by the General Partner setting forth in detail the
calculation of the amount of each such distribution.


                                      -26-
<PAGE>

                  (c) The General Partner shall, at Partnership expense, furnish
to the Partners (1) on or before the 30th day after the end of each calendar
quarter, an unaudited statement setting forth and describing in reasonable
detail the receipts and expenditures of the Partnership and the Property LLC
during the preceding month and comparing the results of operations of the
Partnership for such month and for the year to date to the appropriate Operating
Budget, (2) on or before 90 days after the end of each fiscal year, a balance
sheet of the Partnership dated as of the end of such fiscal year, a statement of
the Partners' Capital Accounts, Default Capital Contribution Balances, Default
Capital Contribution Preferred Return Balances, Additional Capital Contribution
Balances, Additional Capital Contribution Preferred Return Balances, Initial
Capital Contribution Balances, and Initial Capital Contribution Preferred Return
Balances, a statement of Net Cash Flow, and a statement setting forth the
Profits and Losses for such fiscal year, audited by an independent firm of
certified public accountants as selected by the General Partner and approved by
the Preferred Partner (the Preferred Partner hereby approves Ernst & Young, LLP
as the initial certified public accounting firm for the Partnership), and
unaudited statements of the foregoing for the prior calendar year shall be sent
to the Partners within 60 days following the end of each calendar year, and (3)
from time to time, all other information relating to the Partnership and the
business and affairs of each, reasonably requested by any Partner.

                  (d) Each Partner, at its expense, may at all reasonable times
during usual business hours audit, examine, and make copies of or extracts from
the books of account records, files, and bank statements of the Partnership.
Such right may be exercised by any Partner, or by its designated agents or
employees.

         Section 5.2. Bank Accounts. The General Partner shall open and maintain
(in the name of the Partnership) a special bank account or accounts in a bank or
savings and loan association, the deposits of which are insured, up to the
applicable limits, by an agency of the United States government, in which shall
be deposited all funds of the Partnership.

         Section 5.3. Financial Accounting Matters . The method by which the
financial statements of the Partnership and the Property LLC shall be prepared
(including the allocation of all revenues and expenses, including depreciation,
to the respective Partner's Capital Accounts) shall be such reasonable method as
is employed by the General Partner for other properties of which it shall be the
owner or the general partner or managing Partner thereof.


                                      -27-
<PAGE>

                                    ARTICLE 6

                              CAPITAL CONTRIBUTIONS

         Section 6.1. Initial Capital Contributions. (a) The Developer Partner
has contributed cash of $1,408,453.24 to the Partnership on the date hereof
which shall constitute the Developer Partner's Initial Capital Contribution.

         The Preferred Partner has contributed cash of $4,000,000.00 to the
Partnership on the date hereof which shall constitute the Preferred Partner's
Initial Capital Contribution.

         Section 6.2. Additional Capital Contributions. After the Initial
Capital Contributions have been made, each Member shall make Capital
Contributions to the Partnership in proportion to their respective Capital
Sharing Ratios as may be approved by the General Partner and the Preferred
Partner for the conduct of the Partnership's business, maintenance of its
assets, and discharge of its liabilities (except that costs to fit out the space
recently vacated by Family Toys in an amount up to $300,000 shall be funded
solely by Preferred Partner and not by Developer Partner upon approval by
Preferred Member of the new lease for such space and all construction contracts,
plans and budgets related to the improvements to be made to such space; such
Family Toy payment by the Preferred Member shall, when funded, be considered an
Initial Capital Contribution, rather than an Additional Capital Contribution
under this Agreement); however, the Partners shall be required to make (without
the approval of the Partners) additional Capital Contributions (in proportion to
their respective Capital Sharing Ratios) needed to permit the Partnership to pay
regularly scheduled payments on the Mortgage Loan or to pay costs set forth on
an Operating Budget (to the extent that Operating Revenues are insufficient to
pay debt service or such budgeted costs). From time to time as the Partnership
requires funds to conduct its business, General Partner (with the consent of the
Partners (if required)) or the Preferred Partner (to the extent that the
approval of the Partners is not required pursuant to the immediately preceding
sentence and the General Partner fails to notify the Partners of a required
Capital Contribution), shall notify the Partners of the amount of funds
required, the use and purpose of such funds, and each Partner's required
contribution amount. Those Partners obligated to contribute capital at that time
shall fund the amount called for within 30 days after notice is given. Each
additional contribution made under this Section 6.2 (excluding the $300,000
Capital Contribution to be made by Preferred Partner as aforesaid for the Family
Toys space which shall be considered an Initial Capital Contribution) is an
"Additional Capital Contribution". No Partner shall, however, be personally
obligated to make Additional Capital Contributions to the Partnership and the
recourse of one Partner against another for failure to so make an Additional
Capital Contribution are limited to those remedies set forth in this Agreement.


                                      -28-
<PAGE>

         Section 6.3. Failure to Make Contributions.

                  (a) Any Partner which fails to timely contribute all or any
portion of any required Additional Capital Contribution shall be considered a
"Delinquent Partner." The Partnership may, upon notice to a Delinquent Partner,
exercise either one of the following remedies:

                           (1) permit the non-Delinquent Partners which elect to
do so, in proportion to their respective Capital Sharing Ratios or in such other
percentages as they may agree (the "Lending Partners," whether one or more), to
advance that portion of the Capital Contribution that is in default, as a loan
(a "Default Loan") with the following results:

                                    (A) the sum thus advanced shall constitute a
loan to the Delinquent Partner,

                                    (B) such loan and all interest accruing
thereon under subsection (C) hereof shall be due 10 years after the date of the
loan;

                                    (C) the loan shall bear interest at the
Interest Rate from the date made until the date fully repaid;

                                    (D) all Partnership distributions and other
payments that otherwise would be made to the Delinquent Partner (whether before
or after dissolution of the Partnership) under this Agreement (including those
under Articles 12 and 13) shall be paid to the Lending Partners until the loan
and all interest accrued thereon is paid in full (with all such payments being
applied first to accrued and unpaid interest and then to principal);

                                    (E) payment of the loan shall be secured by
a security interest in the Delinquent Partner's Partnership Interest as set
forth in Section 6.3(b); and

                                    (F) the Lending Partners may, in addition to
the other rights granted herein, take such action as they may deem appropriate
to obtain payment of the loan at the expense of the Delinquent Partner; or

                           (2) permit the non-Delinquent Partner to elect (A)
not to make its share of the requested Capital Contribution, in which case any
portion of its share of such requested Capital Contribution already contributed
to the Partnership shall be returned to it or (B) to contribute its share of the
requested Capital Contribution and none or any portion of the Delinquent
Partner's Capital Contribution, in which case, all Capital Contributions made by
the non-Delinquent Partner in respect of the requested Capital Contribution
(including the non-Delinquent Partner Capital Contribution in respect thereof)
shall constitute "Default Capital Contributions" by the non-Delinquent Partner.


                                      -29-
<PAGE>

                  No Partner nor any of its Affiliates shall be personally
liable for making of any Additional Capital Contribution and recourse against a
Partner for failure to make an Additional Capital Contribution shall be limited
as set forth in this Section 6.3.

                  If the Developer Partner is a Delinquent Partner, then
exercise of the foregoing remedies by the Partnership shall be determined by the
Preferred Partner in its sole discretion and not by the General Partner.

                  (b) Each Partner hereby grants to the other Partner and the
Partnership, equally and ratably, a security interest in its Partnership
Interest to secure performance of its obligations to repay a Default Loan when
due and payable hereunder (collectively, the "Secured Obligations"). Upon any
default in the Secured Obligations, the Persons to whom such obligations are
owed (each, a "Secured Party") shall have all the rights and remedies of a
secured party under the Uniform Commercial Code with respect to the security
interest granted herein, and the proceeds arising from any foreclosure of the
security interest herein granted may be applied to attorneys' fees and expenses
incurred by the Secured Party in exercising such rights and remedies. Each
Partner authorizes the other Partner and/or the Partnership to file all such
financing statements and other instruments as may be required to evidence or
perfect the security interest provided for herein. This Agreement may serve as
the necessary financing statement, or the General Partner and/or the Lending
Partner may execute and file a financing statement naming the other Partner as
debtor and the other Partner hereby authorizes the General Partner and/or the
Lending Partner to file such financing statements and other instruments as may
be necessary to evidence or perfect (or continue the perfection of) the security
interest herein granted.

         Section 6.4. Return of Contributions. Except as expressly provided
herein, no Partner shall be entitled to (a) the return of any part of its
Capital Contributions, (b) any interest in respect of any Capital Contribution,
or (c) the fair market value of its Partnership Interest in connection with a
withdrawal from the Partnership or otherwise. Unrepaid Capital Contributions
shall not be a liability of the Partnership or of any Partner. No Partner shall
be required to contribute or lend any cash or property to the Partnership to
enable the Partnership to return any Partner's Capital Contributions to the
Partnership.


                                      -30-
<PAGE>

         Section 6.5. Partner Loans. If the Partnership shall have insufficient
cash to pay its obligations, any Partner, with the approval of the Preferred
Partner and the General Partner, may advance such funds for the Partnership on
such terms and conditions as the lending Partner, the Preferred Partner, and the
General Partner may determine. Each such advance shall constitute a loan from
such Partner to the Partnership and shall not constitute a Capital Contribution.

         Section 6.6. Balances. The Partnership's books and records shall
contain entries indicating the type and amount of Capital Contributions made to
the Partnership and the Preferred Return thereon.

                                    ARTICLE 7

                              THIRD PARTY FINANCING

         Section 7.1. Initial Financing. The Partnership approves borrowing
pursuant to the Mortgage Loan. The Mortgage Loan is secured by a first-priority
mortgage lien on the Project. General Partner shall deliver (or cause to be
delivered to Preferred Partner) to the Preferred Partner all notices,
correspondence, and information delivered by the holder (or servicer) of the
Mortgage Loan to the Property LLC and/or the Partnership.

                                    ARTICLE 8

                                  DISTRIBUTIONS

         Section 8.1. Distribution of Net Cash Flow. The Net Cash Flow for each
calendar quarter shall (subject to Section 6.3 which requires certain prior
distributions to a Lending Partner) be distributed to the Partners on or before
the 10th day following the end of each calendar quarter in the following order
of priority:

                  (a) first, to the Partners in proportion to and in payment of
their respective Default Capital Contribution Preferred Return Balances until
their respective Default Capital Contribution Preferred Return Balances have
been reduced to zero;

                  (b) next, to the Partners in proportion to and in payment of
their respective Additional Capital Contribution Preferred Return Balances until
their respective Additional Capital Contribution Preferred Return Balances have
been reduced to zero;

                  (c) next, to the Preferred Partner in payment of its Preferred
Return on its Initial Capital Contribution until its Initial Capital
Contribution Preferred Return Balance has been reduced to zero;

                  (d) next, to the Developer Partner in payment of its Preferred
Return on its Initial Capital Contribution until its Initial Capital
Contribution Preferred Return Balance has been reduced to zero; and


                                      -31-
<PAGE>

                  (e) next, to the Partners proportionally in accordance with
their respective Sharing Ratios.

         Section 8.2. Distribution of Capital Proceeds. Capital Proceeds of the
Partnership shall (subject to Section 6.3 which requires certain prior
distributions to a Lending Partner) be distributed to the Partners within 10
days following receipt by the Partnership of such Capital Proceeds, in the
following order of priority:

                  (a) first, to the Partners in proportion to and in payment of
their respective Default Capital Contribution Preferred Return Balances until
their respective Default Capital Contribution Preferred Return Balances have
been reduced to zero;

                  (b) next, to the Partners in proportion to and in return of
their respective Default Capital Contributions until their respective Default
Capital Contribution Balances have been reduced to zero;

                  (c) next, to the Partners in proportion to and in payment of
their respective Additional Capital Contribution Preferred Return Balances until
their respective Additional Capital Contribution Preferred Return Balances have
been reduced to zero;

                  (d) next, to the Partners in proportion to and in return of
their respective Additional Capital Contributions until their respective
Additional Capital Contribution Balances have been reduced to zero;

                  (e) next, to the Preferred Partner until its Initial Capital
Contribution Balance has been reduced to zero;

                  (f) next, to the Preferred Partner until all distributions to
the Preferred Partner pursuant to Sections 8.1 and 8.2 have satisfied the 14%
IRR Threshold with respect to the Preferred Partner;

                  (g) next, to the Developer Member until its Initial Capital
Contribution Balance has been reduced to zero;

                  (h) next, to the Developer Partner until all distributions to
the Developer Partner pursuant to Sections 8.1 and 8.2 have satisfied the 14%
IRR Threshold with respect to the Developer Member;

                  (i) next, to the Partners in accordance with their respective
Residual Sharing Ratios.


                                      -32-
<PAGE>

         Section 8.3. Statements. All distributions of Net Cash Flow and Capital
Proceeds shall be accompanied by income statements setting forth in detail the
calculation of the amount of each such distribution.

                                    ARTICLE 9

                 CAPITAL ACCOUNTS, ALLOCATIONS, AND TAX MATTERS

         Section 9.1.  Capital Accounts.

                  (a) Establishment and Maintenance. A separate capital account
("Capital Account") will be maintained for each Partner in accordance with
Regulations 1.704-1(b)(iv). The General Partner shall establish and maintain a
single Capital Account for each Partner which reflects each Partner's Capital
Contributions to the Partnership. Each Capital Account shall also reflect the
allocations and distributions made pursuant to Article 8 and otherwise be
adjusted in accordance with Code Section 704 and the principles set forth in
Treasury Regulations Sections 1.704-1(b) and 1.704-2. In applying such
principles, any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 704(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i) shall be allocated among the Partners
in proportion to their respective Capital Sharing Ratios. The Partners intend
that the Partnership be treated as a partnership for tax purposes.

         The Capital Accounts will be adjusted as follows:

                           (1) Each Partner's Capital Account will be credited
with the Partner's Capital Contributions, the Partner's distributive share of
Profits, any items in the nature of income or gain that are specially allocated
to the Partner under Sections 9.4(c), 9.4(d), or 9.4(e), and the amount of any
Partnership liabilities that are assumed by the Partner or secured by any
Partnership property distributed to the Partner.

                           (2) Each Partner's Capital Account will be debited
with the amount of cash and the Gross Asset Value of any Partnership property
distributed to the Partner under any provision of this Agreement, the Partner's
distributive share of Losses, any items in the nature of deduction or loss that
are specially allocated to the Partner under Sections 9.4(c), 9.4(d) or 9.4(e),
and the amount of any liabilities of the Partner assumed by the Partnership or
which are secured by any property contributed by the Partner to the Partnership.

                  (b) Initial Capital Accounts. The initial Capital Account
balance of each Partner equals the amount of cash contributed by each Partner as
its Initial Capital Contribution, which balances have been determined in
accordance with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(f).


                                      -33-
<PAGE>

                  (c) Transfer. If any interest in the Partnership is
transferred in accordance with the terms of this Agreement, the transferee will
succeed to the Capital Account of the transferor to the extent it relates to the
transferred interest.

                  (d) Modifications by General Partner. The provisions of this
Section 9.2 and the other provisions of this Agreement relating to the
maintenance of Capital Accounts have been included in this Agreement to comply
with Section 704(b) of the Code and the Regulations promulgated thereunder and
will be interpreted and applied in a manner consistent with those provisions and
the Regulations. The General Partner may, with the consent of the Preferred
Partner, modify the manner in which the Capital Accounts are maintained under
this Section 9.2 to comply with those provisions and the Regulations, as well as
upon the occurrence of events that might otherwise cause this Agreement not to
comply with those provisions and the Regulations; however, without the unanimous
consent of all Partners, the General Partner may not make any modification to
the way Capital Accounts are maintained if such modification would have the
effect of changing the amount of distributions to which any Partner would be
entitled during the operation, or upon the liquidation, of the Partnership.

         Section 9.2. Adjustment of Gross Asset Value. "Gross Asset Value", with
respect to any asset, is the adjusted basis of that asset for federal income tax
purposes, except as follows:

                  (a) The initial Gross Asset Value of any asset contributed (or
deemed contributed under Regulations Section 1-708-1(b)(1)(iv) by a Partner to
the Partnership will be the fair market value of the asset on the date of the
contribution, as determined by the General Partner and the Preferred Partner.

                  (b) The Gross Asset Values of all assets will be adjusted to
equal the respective fair market values of the assets, as determined by the
General Partner and the Preferred Partner, as of (1) the acquisition of an
additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis capital contribution, (2) the distribution
by the Partnership to a Partner of more than a de minimis amount of Partnership
property as consideration for an interest in the Partnership if an adjustment is
necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership, and (3) the liquidation of the Partnership within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g).

                  (c) The Gross Asset Value of any asset distributed to any
Partner will be the gross fair market value of the asset on the date of
distribution as approved by General Partner and Preferred Partner.


                                      -34-
<PAGE>

                  (d) The Gross Asset Values of assets will be increased or
decreased to reflect any adjustment to the adjusted basis of the assets under
Code Section 734(b) or 743(b), but only to the extent that the adjustment is
taken into account in determining Capital Accounts under Regulations Section
1.704-1(b)(2)(iv)(m), provided that Gross Asset Values will not be adjusted
under this Section 9.2 to the extent that the General Partner determines that an
adjustment under Section 9.2(b) is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment under this Section
9.2(d).

                  (e) After the Gross Asset Value of any asset has been
determined or adjusted under Section 9.2(a), 9.2(b) or 9.2(d), Gross Asset Value
will be adjusted by the Depreciation taken into account with respect to the
asset for purposes of computing Profits or Losses.

         Section 9.3. Profits, Losses and Distributive Shares of Tax Items.

                  (a) Profits (other than from Capital Transactions). Except as
otherwise provided in Sections 9.3(d), 9.3(e) and 9.3(f), and except as
otherwise provided in Article 10 (relating to allocation of Profits upon
dissolution), Profits for any taxable year (other than those arising from a
Capital Transaction) shall be allocated to the Partners in the following manner:

                           (1) first, to the Partners in proportion to
distributions of Default Preferred Returns made to the Partners during such
taxable year until the Partners have been allocated an amount under this Section
9.3(a)(1) equal to amounts distributed during such taxable year to the Partners
pursuant to Section 8.1(a);

                           (2) next, to the Partners in proportion to
distributions of Preferred Return on their Additional Capital Contributions made
to the Partners during such taxable year until the Partners have been allocated
a cumulative amount under this Section 9.3(a)(2) equal to amounts distributed
during such taxable year to the Partners pursuant to Section 8.1(b);

                           (3) next, to the Partners in proportion to
distributions made to the Partners during such taxable year of Preferred Return
on their Initial Capital Contributions, until the Partners have been allocated
an amount under this Section 9.3(a)(3) equal to amounts distributed to the
Partners pursuant to Sections 8.1(c) and 8.1(d); and

                           (4) next, to the Partners in accordance with their
respective Sharing Ratios.


                                      -35-
<PAGE>

                  (b) Profits (from Capital Transactions). Except as otherwise
provided in Sections 9.3(c), 9.3(d), 9.3(e) and 9.3(f), and except as otherwise
provided in Article 10 (relating to allocation of Profits upon dissolution),
Profits for any taxable year arising from a Capital Transaction shall be
allocated to the Partners in the following manner:

                           (1) first, to the Partners in proportion to their
respective Default Preferred Returns distributed to the Partners during such
taxable year until they have been allocated an amount under this Section
9.3(b)(1) equal to amounts distributed during such taxable year to the Partners
pursuant to Section 8.2(a);

                           (2) next, to the Partners in proportion to their
respective Preferred Return on their respective Additional Capital Contributions
distributed to the Partners during such taxable year until they have been
allocated an amount under this Section 9.3(b)(2) equal to amounts distributed
during such taxable year to the Partners pursuant to Section 8.2(c);

                           (3) next, to the Partners in proportion to
distributions made to the Partners during such taxable year pursuant to Sections
8.2(f) and 8.2(h) inclusive until the Partners have been allocated an amount
under this Section 9.3(b)(3) equal to the amounts distributed during such
taxable year to the Partners pursuant to Sections 8.2(f) and 8.2(h) inclusive;

                           (4) next, to the Partners proportionally in
accordance with their respective Residual Sharing Ratios.

                  (c) Losses. Except as otherwise provided in Sections 9.3(d),
9.3(e), and 9.3(f), Losses for any taxable year shall be allocated in the
following manner:

                           (1) First, to the Partners in proportion to their
respective adjusted Capital Account balances, but not in excess of the adjusted
Capital Account balance of each such Partner before the allocation provided for
in this Section 9.3(c)(1); and

                           (2) thereafter, to the Partners with positive Capital
Account balances (in proportion to such balances) to the extent further
allocations of Losses to a Partner under this Section 9.3(c) would cause such
Partner to have an Adjusted Capital Account Deficit.

                  (d) Special Allocations. The following special allocations
will be made in the following order and priority before allocations of Profits
and Losses:

                           (1) Partnership Minimum Gain Chargeback. If there is
a net decrease in Partnership Minimum Gain during any taxable year or other
period for which allocations are made, before any other allocation under this
Agreement, each Partner will be specially allocated items of Partnership income
and gain for that period (and, if necessary, subsequent periods) in proportion


                                      -36-
<PAGE>

to, and to the extent of, an amount equal to such Partner's share of the net
decrease in Partnership Minimum Gain during such year determined in accordance
with Regulations Section 1.704-2(g)(2). The items to be allocated will be
determined in accordance with Regulations Sections 1.704(2)(f)(6) and
1.704-2(j)(2). This Section 9.3(d)(1) is intended to comply with the Partnership
Minimum Gain chargeback requirements of the Regulations, will be interpreted
consistently with the Regulations and will be subject to all exceptions provided
therein.

                           (2) Partner Nonrecourse Debt Minimum Gain Chargeback.
Notwithstanding any other provision of this Section 9.3 (other than Section
9.3(d)(1) which shall be applied first), if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain with respect to a Partner Nonrecourse Debt during
any taxable year or other period for which allocations are made, any Partner
with a share of such Partner Nonrecourse Debt Minimum Gain (determined under
Regulations Section 1.704-2(i)(5)) as of the beginning of the year will be
specially allocated items of Partnership income and gain for that period (and,
if necessary, subsequent periods) in an amount equal to such Partner's share of
the net decrease in the Partner Nonrecourse Debt Minimum Gain during such year
determined in accordance with Regulations Section 1.704-2(i)(4). The items to be
so allocated will be determined in accordance with Regulations Sections
1.704-2(i)(4) and 1.704-2(j)(2). This Section 9.3(d)(2) is intended to comply
with the Partner Nonrecourse Debt Minimum Gain chargeback requirements of the
Regulations, will be interpreted consistently with the Regulations and will be
subject to all exceptions provided therein.

                           (3) Qualified Income Offset. A Partner who
unexpectedly receives any adjustment, allocation or distribution described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) will be specially
allocated items of Partnership income and gain in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account Deficit of the Partner as quickly as possible.

                           (4) Nonrecourse Deductions. Nonrecourse Deductions
for any taxable year or other period for which allocations are made will be
allocated among the Partners in proportion to their respective Capital Sharing
Ratios.

                           (5) Partner Nonrecourse Deductions. Notwithstanding
anything to the contrary in this Agreement, any Partner Nonrecourse Deductions
for any taxable year or other period for which allocations are made will be
allocated to the Partner who bears the economic risk of loss with respect to the
Partner Nonrecourse Debt to which the Partner Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i).


                                      -37-
<PAGE>

                           (6) Code Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Partnership asset under Code
Sections 734(b) or 743(b) is required to be taken into account in determining
Capital Accounts under Regulations Section 1.704-1(b)(2)(iv)(m), the amount of
the adjustment to the Capital Accounts will be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the adjustment
decreases the basis), and the gain or loss will be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted under Regulations Section 1.704-1(b)(2(iv)(m).

                  (e) Curative Allocations. The allocations set forth in Section
9.3(d) (the "Regulatory Allocations") are intended to comply with certain
requirements of the Regulations. The Regulatory Allocations may effect results
which would be inconsistent with the manner in which the Partners intend to
divide Partnership distributions. Accordingly, the General Partner is authorized
to divide other allocations of Profits, Losses, and other items among the
Partners, to the extent that they exist, so that the net amount of the
Regulatory Allocations and the special allocations to each Partner is zero. The
General Partner will have discretion to accomplish this result in any reasonable
manner that is consistent with Code Section 704 and the related Regulations.

                  (f) Tax Allocations--Code Section 704(c). For federal, state
and local income tax purposes, Partnership income, gain, loss, deduction or
expense (or any item thereof) for each fiscal year shall be allocated to and
among the Partners to reflect the allocations made pursuant to the provisions of
this Section 9.3 for such fiscal year. In accordance with Code Section 704(c)
and the related Regulations, income, gain, loss and deduction with respect to
any property contributed to the capital of the Partnership, solely for tax
purposes, will be allocated among the Partners so as to take account of any
variation between the adjusted basis to the Partnership of the property for
federal income tax purposes and the initial Gross Asset Value of the property
(computed in accordance with Section 9.2). If the Gross Asset Value of any
Partnership asset is adjusted under Section 9.2(b), subsequent allocations of
income, gain, loss and deduction with respect to that asset will take account of
any variation between the adjusted basis of the asset for federal income tax
purposes and its Gross Asset Value in the same manner as under Code Section
704(c) and the related Regulations. Any elections or other decisions relating to
allocations under this Section 9.3(f) will be made in any manner that the
General Partner determines reasonably reflects the purpose and intention of this
Agreement as consented to by the Members. Allocations under this Section 9.3(f)
are solely for purposes of federal, state and local taxes and will not affect,
or in any way be taken into account in computing, any Partner's Capital Account
or share of Profits, Losses or other items or distributions under any provision
of this Agreement.


                                      -38-
<PAGE>

                  (g) Reporting. Partners shall be bound by the provisions of
this Section 9.3(g) in reporting their shares of Partnership income and loss for
income tax purposes.

         Section 9.4. Tax Returns. The General Partner shall cause to be
prepared and filed (but no filing shall be made until the Preferred Partner has
approved in writing such tax returns) all necessary federal and state income tax
returns for the Partnership, including making the elections described in Section
9.5. Each Partner shall furnish to the General Partner all pertinent information
in its possession relating to Partnership operations that is necessary to enable
such income tax returns to be prepared and filed.

         Section 9.5. Tax Elections. The following elections shall be made on
the appropriate returns of the Partnership:

                  (a) to adopt the calendar year as the Partnership's fiscal
year;

                  (b) to adopt the accrual method of accounting and to keep the
Partnership's books and records on the accrual method;

                  (c) if there is a distribution of Partnership property as
described in section 734 of the Code or if there is a transfer of a Partnership
interest as described in section 743 of the Code, upon written request of any
Partner, to elect, pursuant to section 754 of the Code, to adjust the basis of
Partnership properties; and

                  (d) to elect to amortize the organizational expenses of the
Partnership ratably over a period of 60 months as permitted by section 709(b) of
the Code.

                  No election shall be made by the Partnership or any Partner to
be excluded from the application of the provisions of subchapter K of chapter 1
of subtitle A of the Code or any similar provisions of applicable state laws.

         Section 9.6. Tax Matters Partner. The Partner serving as General
Partner shall be the "tax matters partner" of the Partnership pursuant to
section 6231(a)(7) of the Code. As tax matters partner, such Partner shall take
such action as may be necessary to cause each other Partner to become a "notice
partner" within the meaning of section 6223 of the Code. Such Partner shall
inform each other Partner of all significant matters that may come to its
attention in its capacity as tax matters partner by giving notice thereof within
ten days after becoming aware thereof and, within such time, shall forward to
each other Partner copies of all significant written communications it may
receive in such capacity. Such Partner shall not take any action contemplated by
sections 6222 through 6232 of the Code without the consent of the Preferred
Partner. This provision is not intended to authorize such Partner to take any
action left to the determination of an individual Partner under sections 6222
through 6232 of the Code.


                                      -39-
<PAGE>

         Section 9.7. Allocations on Transfer of Interests. All items of income,
gain, loss, deduction, and credit allocable to any interest in the Partnership
that may have been transferred shall be allocated between the transferor and the
transferee based upon the closing of the books method, unless the transferor and
transferee otherwise agree.

         Section 9.8. Sharing of Company Nonrecourse Debt. Solely for purposes
of determining a Partner's proportionate share of the "excess nonrecourse
liabilities" of the Company within the meaning of Regulations Section
1.752-3(a), the Partners' interests in Company profits are in proportion to
their Residual Sharing Ratios.

         Section 9.9. Intent of Allocations. The parties intend that the
foregoing tax allocation provisions of this Article 9 shall produce final
Capital Account balances of the Partners such that distributions made in
accordance with Section 10.2(c)(2) (after unpaid loans and interest thereon,
including those owed to Partners have been paid) are made in accordance with
final Capital Account balances. To the extent that the tax allocation provisions
of this Article 9 would fail to produce such final Capital Account balances, (i)
such provisions shall be amended by the General Partner (with the Preferred
Partner's written consent) if and to the extent necessary to produce such result
and (ii) taxable income and taxable loss of the Partnership for prior open years
(or items of gross income and deduction of the Partnership for such years) shall
be reallocated by the General Partner among the Partners (with the Preferred
Partner's written consent) to the extent it is not possible to achieve such
result with allocations of items of income (including gross income) and
deduction for the current year and future years, as approved by the General
Partner and Preferred Partner. This Section 9.9 shall control notwithstanding
any reallocation or adjustment of taxable income, taxable loss, or items thereof
by the Internal Revenue Service or any other taxing authority.

                                   ARTICLE 10

              WITHDRAWAL, DISSOLUTION, LIQUIDATION, AND TERMINATION

         Section 10.1. Dissolution, Liquidation, and Termination Generally. The
Partnership shall be dissolved (but not prior to payment in full of the Mortgage
Loan) upon the first to occur of any of the following:


                                      -40-
<PAGE>

                  (a) the first day of the first taxable year of the Partnership
following the taxable year in which occurs the sale or disposition of all of the
assets of the Partnership and the receipt, in cash, of all consideration
therefor unless all the Partners elect not to dissolve the Partnership;

                  (b) the determination of the General Partner and the Preferred
Partner to dissolve the Partnership; or

                  (c) the occurrence of any event which, as a matter of law,
requires that the Partnership be dissolved (other than a Bankruptcy of a Partner
which shall not dissolve the Partnership).

         Section 10.2. Liquidation and Termination. Upon dissolution of the
Partnership, unless it is continued as provided above, the General Partner shall
act as liquidator or may appoint one or more other Persons as liquidator;
however, if the Partnership is dissolved because of an event occurring with
respect to the General Partner, the liquidator shall be one or more Persons
selected in writing by the other Partner. The liquidator shall proceed
diligently to wind up the affairs of the Partnership and make final
distributions as provided herein. The costs of liquidation shall be a
Partnership expense. Until final distribution, the liquidator shall continue to
operate the Partnership properties with all of the power and authority of the
General Partner hereunder. The steps to be accomplished by the liquidator are as
follows:

                  (a) as promptly as possible after dissolution and again after
final liquidation, the liquidator shall cause a proper accounting to be made by
Ernst & Young, LLC or such other firm of certified public accountants as is
acceptable to the Preferred Partner of the Partnership's assets, liabilities,
and operations through the last day of the calendar month in which the
dissolution shall occur or the final liquidation shall be completed, as
applicable;

                  (b) the liquidator shall pay all of the debts and liabilities
of the Partnership or otherwise make adequate provision therefor (including the
establishment of a cash escrow fund for contingent liabilities in such amount
and for such term as the liquidator may reasonably determine); and

                  (c) all remaining assets of the Partnership shall be
distributed to the Partners as follows:

                           (1) the liquidator may sell any or all Partnership
property and the sum of (A) any resulting gain or loss from each sale plus (B)
the fair market value of such property that has not been sold shall be
determined and (notwithstanding the provisions of Article 9) income, gain, loss,
and deduction inherent in such property (that has not been reflected in the
Capital Accounts previously) shall be allocated among the Partners to the extent
possible to cause the Capital Account balance of each Partner to equal the
amount distributable to such Partner under Article 8; and


                                      -41-
<PAGE>

                           (2) after Capital Accounts have been adjusted for all
distributions under Article 8 and all allocations of Profits and Losses under
Sections 9.3, 9.9 and Section 10.2(c)(1), Partnership property shall be
distributed in accordance with Section 8.2.

Notwithstanding anything to the contrary, in the event the Partnership is
"liquidated" within the meaning of Regulations ss. 1.704-1(b)(2)(ii)(g),
liquidating distributions shall be made pursuant to this Section 10.2 by the end
of the taxable year in which the Partnership is liquidated, or, if later, within
ninety (90) days after the date of such liquidation. Distributions pursuant to
the preceding sentence may be made to a trust for the purpose of an orderly
liquidation of the Partnership by the trust in accordance with the Act.

         Section 10.3. Deficit Capital Accounts. No Partner shall be required to
pay to the Partnership, to any other Partner or to any third party any deficit
balance which may exist from time to time in the Partner's capital account.

         Section 10.4. Cancellation of Certificate. On completion of the
distribution of Partnership assets, the Partner (or such other person as the Act
may require or permit) shall file a Certificate of Cancellation with the
Secretary of State of Delaware, cancel any other filings made pursuant to
Section 2.5, and take such other actions as may be necessary to terminate the
existence of the Partnership.

                                   ARTICLE 11

                            MISCELLANEOUS PROVISIONS

         Section 11.1. Notices. All notices provided for or permitted to be
given pursuant to this Agreement must be in writing and shall be given or served
by (a) depositing the same in the United States mail addressed to the party to
be notified, postpaid and certified with return receipt requested, (b) by
delivering such notice in person to such party, or (c) by prepaid telegram,
telex, or telecopy. By giving written notice thereof, each Partner shall have
the right from time to time to change its address pursuant hereto. Notices shall
be given to the parties at the following addresses:

If to Developer Partner:  Cedar Bay Income Fund Partnership, L.P.
                          c/o Cedar Bay Realty Advisors
                          44 South Bayles Avenue
                          Port Washington, New York 11050
                          Attention: Mr. Leo S. Ullman


                                      -42-
<PAGE>

with a copy to:           c/o Cedar Bay Realty Advisors
                          44 South Bayles Avenue
                          Port Washington, New York 11050
                          Attention: General Counsel

If to Preferred Partner:  c/o Kimco Realty Corporation
                          3333 New Hyde Park Road
                          New Hyde Park, NY 11042
                          Attention:  Mr. Michael Pappagallo

with a copy to:           Stephen M. Lyons III, Esq.
                          Reed Smith LLP
                          2500 One Liberty Place
                          Philadelphia, PA 19103

          Section 11.2. Governing Law. This Agreement and the obligations of the
Partners hereunder shall be construed and enforced in accordance with the laws
of the State of Delaware, excluding any conflicts of law rule or principle which
might refer such construction to the laws of another state or country. Each
Partner submits to the jurisdiction of the state and federal courts in the State
of Delaware.

         Section 11.3. Entireties; Amendments. This Agreement and its exhibits
constitute the entire agreement between the Partners relative to the formation
of the Partnership. Except as otherwise provided herein, no amendments to this
Agreement shall be binding upon any Partner unless set forth in a document duly
executed by such Partner.

         Section 11.4. Waiver. No consent or waiver, express or implied, by any
Partner of any breach or default by any other Partner in the performance by the
other Partner of its obligations hereunder shall be deemed or construed to be a
consent or waiver to or of any other breach or default in the performance by
such other Partner of the same or any other obligation hereunder. Failure on the
part of any Partner to complain of any act or to declare any other Partner in
default, irrespective of how long such failure continues, shall not constitute a
waiver of rights hereunder.

         Section 11.5. Severability. If any provision of this Agreement or the
application thereof to any Person or circumstances shall be invalid or
unenforceable to any extent, and such invalidity or unenforceability does not
destroy the basis of the bargain between the parties, then the remainder of this
Agreement and the application of such provisions to other Persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.


                                      -43-
<PAGE>

         Section 11.6. Ownership of Property and Right of Partition. A Partner's
interest in the Partnership shall be personal property for all purposes. No
Partner shall have any right to partition the property owned by the Partnership
or any Subsidiary.

         Section 11.7. Captions, References. Pronouns, wherever used herein, and
of whatever gender, shall include natural persons and corporations and
associations of every kind and character, and the singular shall include the
plural wherever and as often as may be appropriate. Article and section headings
are for convenience of reference and shall not affect the construction or
interpretation of this Agreement. Whenever the terms "hereof", "hereby",
"herein", or words of similar import are used in this Agreement they shall be
construed as referring to this Agreement in its entirety rather than to a
particular section or provision, unless the context specifically indicates to
the contrary. Whenever the word "including" is used herein, it shall be
construed to mean including without limitation. Any reference to a particular
"Article" or a "Section" shall be construed as referring to the indicated
article or section of this Agreement unless the context indicates to the
contrary.

         Section 11.8. Involvement of Partners in Certain Proceedings. Should
any Partner become involved in legal proceedings unrelated to the Partnership's
business in which the Partnership is required to provide books, records, an
accounting, or other information, then such Partner shall indemnify, defend and
hold harmless the Partnership from all liabilities and expenses (including
reasonable attorneys' fees and costs) incurred in conjunction therewith.

         Section 11.9. Interest. No amount charged as interest on loans
hereunder shall exceed the maximum rate from time to time allowed by applicable
law.

         Section 11.10. Counterparts. This Agreement may be executed in one or
more counterparts (and by different parties hereto on different counterparts),
each of which will constitute an original, but all of which when taken together
shall constitute a single contract.

         Section 11.11. Approvals and Consents of Preferred Partner. Whenever
under the terms of this Agreement the approval or consent of the Preferred
Partner shall be required, the Preferred Partner shall not unreasonably withhold
or condition such approval or consent and such approval or consent shall be
deemed given if the Preferred Partner shall not respond to any written request
for consent or approval within ten (10) days after the Preferred Partner's
receipt of such written request for consent or approval. If the Preferred
Partner shall give notice to the Developer within such ten (10) day period that
it does not believe the Developer Partner has provided the necessary information
or documentation on which Preferred Partner may reasonably make a decision on
the matter in question (and shall specify the additional information or
documentation required), then the foregoing ten (10) day period shall be
extended to the date which is ten (10) days after Developer Partner has provided
the Preferred Partner with such additional information or documentation as shall
be reasonably required by the Preferred Partner in order to make a decision on
the matter in question.


                                      -44-
<PAGE>

                                   ARTICLE 12

                                 BUY-SELL OPTION

         Section 12.1. Exercise. At any time (a) after June 30, 2007, or (b) the
Partners are unable to agree on a Major Decision (but only a Major Decision
involving the sale or financing of the Project or the filing of a bankruptcy
petition by the Partnership), any Partner may exercise its right to initiate the
provisions of this Article 12; however, the Developer Partner may not exercise
this right if a Removal Event has occurred and has not been timely cured in
accordance with the provisions of Section 4.4. Additionally, if a Removal Event
has occurred and is not timely cured in accordance with the provisions of
Section 4.4, then the Preferred Partner may initiate the provisions of this
Article 12 at any time (which rights are in addition to Preferred Partner's
rights under Section 4.4). The Partner desiring to exercise such right (the
"Offeror") shall do so by giving notice to the other Partner (the "Offeree")
setting forth a statement of intent to invoke the Offeror's rights under this
Article 12, stating therein the aggregate dollar amount (the "Valuation Amount")
which the Offeror would be willing to pay for the assets of the Partnership as
of the Closing Date (defined below) free and clear of all liabilities, and
setting forth all oral or written offers and inquiries received by the Offeror
during the previous 12-month period relating to the financing, disposition or
leasing of the Project (including proposals for the formation of a new entity
for the ownership and operation of the Project). After receipt of such notice
the Offeree shall elect to either (1) sell its entire Partnership Interest to
the Offeror for an amount equal to the amount the Offeree would have been
entitled to receive if the Partnership had sold its assets for the Valuation
Amount on the Closing Date and the Partnership had immediately paid all
Partnership liabilities and Imputed Closing Costs and distributed the net
proceeds of sale to the Partners in satisfaction of their interests in the
Partnership pursuant to Section 10.2, or (2) purchase the entire Partnership
Interest of the Offeror for an amount equal to the amount the Offeror would have
been entitled to receive if the Partnership had sold all of its assets for the
Valuation Amount on the Closing Date and the Partnership had immediately paid
all Partnership liabilities and Imputed Closing Costs and distributed the net
proceeds of the sale to the Partners in satisfaction of their interests in the
Partnership pursuant to Section 10.2. The Offeree shall have 30 days from the
giving of the Offeror's notice in which to exercise either of its options by


                                      -45-
<PAGE>

giving written notice to the Offeror. If the Offeree does not elect to acquire
the Offeror's Partnership Interest within such time period, the Offeree shall be
deemed to have elected to sell its interest to the Offeror. Within three
business days after an election has been made under this Section 12.1 (whether
deemed or otherwise), the acquiring Partner shall deposit with the selling
Partner a non-refundable earnest money deposit in the amount of 10% of the
amount the selling Partner is entitled to receive for its Partnership Interest
under this Section 12.1, which amount shall be applied to the purchase price at
closing; however, if the acquiring Partner should thereafter fail to consummate
the transaction, such amount shall be retained by the selling Partner, free of
all claims of the other Partner, but shall not constitute a waiver of any rights
and remedies otherwise available to the selling Partner because of a default by
the acquiring Partner. The acquiring Partner may, in its sole discretion, elect
to acquire the other Partner's Partnership Interest in the name of a designee of
the acquiring Partner but this shall not relieve the acquiring Partner of its
purchase obligations.

          Section 12.2. Closing. The closing of an acquisition pursuant to
Sections 12.1 through 12.3 shall be held at the principal place of business of
the Partnership on a mutually acceptable date (the "Closing Date") not later
than 150 days after Offeree's election. At the Closing of the disposition and
acquisition of such interests the following shall occur:

                  (a) The selling Partner shall assign to the acquiring Partner
or its designee the selling Partner's Partnership Interest in accordance with
the instructions of the acquiring Partner, and shall execute and deliver to the
acquiring Partner all documents which may be required to give effect to the
disposition and acquisition of such interests, in each case free and clear of
all liens, claims, and encumbrances, with covenants of general warranty; and

                  (b) The acquiring Partner shall pay to the selling Partner the
consideration therefor in cash.

         Section 12.3. Enforcement. It is expressly agreed that the remedy at
law for breach of the obligations of the Partners set forth in this Article 12
is inadequate in view of (a) the complexities and uncertainties in measuring the
actual damage to be sustained by reason of the failure of a Partner to comply
fully with such obligations, and (b) the uniqueness of the Partnership business
and the Partners' relationships. Accordingly, each of such obligations shall be,
and is hereby expressly made, enforceable by a specific performance.


                                      -46-
<PAGE>

                                   ARTICLE 13

                              RIGHT OF FIRST OFFER

         Section 13.1. Offers. If after June 30, 2007, either Partner desires to
offer the Project for sale on specified terms or receives from an unaffiliated
purchaser a bona fide written cash offer (i.e., not seller financed) for the
purchase of the Project on terms which such Partner desires for the Partnership
to accept (such specified terms or bona fide offer being herein called the
"Offer"), the Partner desiring to make or accept the Offer (the "Initiating
Partner") shall provide notice of the terms of such Offer (the "Sale Notice") to
the other Partner (the "Non-Initiating Partner"). The procedures set forth in
this Article 13 shall apply only if an Offer is in an amount at least equal to
the amount of any indebtedness secured by the Project plus the aggregate
then-existing unreturned Capital Contributions.

         Section 13.2. Response. The Non-Initiating Partner shall have 30 days
from the date of receipt of the Sale Notice (the "Response Period") to provide
written notice to the Initiating Partner of the Non-Initiating Partner's
willingness or unwillingness to accept the Offer or offer the Project for sale
on terms specified in the Offer, as the case may be. If the Non-Initiating
Partner fails to deliver such notice within said time period (or fails to
deliver any written notice to the Initiating Partner), the Non-Initiating
Partner shall be deemed to have consented to the sale of the Project on the
terms of the Offer, provided, however that it the Initiating Partner has
proposed the terms of sale (rather than having received a written offer to
purchase the Project from an unaffiliated third party), then the Non-Initiating
Partner shall have the right to cause the Partnership to obtain an appraisal of
the Project from a licensed appraiser (at the cost of the Partnership), and the
Project shall thereafter be marketed for sale by the Initiating Partner at a
price no less than the price determined by such appraisal.

         (a) Offer Unacceptable. If the Non-Initiating Partner does not desire
for the Partnership to accept the Offer or offer the Project for sale on terms
specified in the Offer (or, in the case of terms of sale proposed by the
Initiating Partner, for the sale price subsequently determined pursuant to the
appraisal requested by the Non-initiating Partner), as the case may be, the
Initiating Partner may elect to sell to the Non-Initiating Partner, in which
case the Non-Initiating Partner must purchase, the Initiating Partner's
Partnership Interest for an amount equal to the amount that would be
distributable to the Initiating Partner if the Partnership had sold the Project
pursuant to the terms of such Offer, immediately paid all Partnership and
Partnership liabilities and Imputed Closing Costs and distributed the net sales
proceeds to the Partners (without any recourse) pursuant to Section 8.2. The
Initiating Partner must exercise this option, if at all, by delivering written
notice thereof to the Non-Initiating Partner within 30 days after the end of the
Response Period (or, if the Non-Initiating Partner has requested an appraisal of
the Project, within thirty (30) days after the completion of the appraisal). The


                                      -47-
<PAGE>

Non-Initiating Partner shall pay the Initiating Partner cash for its Partnership
Interest. Closing shall take place on or before as specified in the Sale Notice,
but if the Non-Initiating Partner is purchasing the Initiating Partners'
Partnership Interest, the Non-Initiating Partner shall have until 150 days after
the Sale Notice in which to close. If the Initiating Partner or the
Non-Initiating Partner defaults at closing, the non-defaulting party shall have
the right to bring suit for damages, for specific performance, or exercise any
other remedy available at law or in equity. Upon payment at closing, the
Initiating Partner shall execute and deliver all documents reasonably required
to transfer the interest being sold. If the Non-Initiating Partner fails to
deliver such notice within said time period (or fails to deliver any written
notice to the Initiating Partner), the Non-Initiating Partner shall be deemed to
have consented to the sale of the Project on the terms of the Offer.

                  (b) Offer Acceptable. If the Non-Initiating Partner consents
to the Property LLC selling the Project on the terms of the Offer, then the
Initiating Partner shall have authority, on behalf of the Partnership, to cause
the Project to be sold for cash on the terms of the Offer (or better terms) for
a period of up to 90 days following the expiration of the Response Period. If
the Initiating Partner obtains a bona fide third party contract to sell the
Project on the terms of the Offer (or better terms) within such 90-day period,
the Initiating Partner shall have an additional period of 120 days after the
date of such contract (that is, within 210 days after the Sale Notice) in which
to cause the Project to be sold. If after having received the consent of the
Non-Initiating Partner to the sale of the Project on the terms of the Offer, the
Initiating Partner is unable to cause the Partnership to obtain a bona fide
contract within such 90-day period, or if after having obtained such bona fide
contract, Initiating Partner is unable to consummate such sale within 210 days
after the Sale Notice, then Initiating Partner must again submit an Offer to
Non-Initiating Partner pursuant to Section 13.1 before it may sell the Project.

                                   ARTICLE 14

                                 SPE PROVISIONS

                  Notwithstanding any provision hereof to the contrary, the
following shall govern:

                  1. The nature of the business and of the purposes to be
conducted and promoted by the Partnership is to engage solely in the following
activities:

                  (a) To acquire the Project.


                                      -48-
<PAGE>

                  (b) To own, hold, sell, assign, transfer, operate, lease,
mortgage, pledge and otherwise deal with the Project.

                  (c) To exercise all powers enumerated in the Revised Uniform
Limited Partnership Act of the State of Delaware necessary or convenient to the
conduct, promotion or attainment of the business or purposes otherwise set forth
herein.

                  2. The Partnership shall only incur indebtedness in an amount
necessary to acquire, operate and maintain the Project. For so long as any
mortgage lien in favor of LaSalle Bank, National Association, as Trustee for the
Registered Holders of LB-UBS Commercial Mortgage Trust 2001-C3, Commercial
Mortgage Pass-Through Certificates, 2001-C3 or its successors or assigns (the
"First Mortgagee") exists on any portion of the Project (the first mortgage
presently held by the First Mortgagee is referred to herein as the "First
Mortgage"), the Partnership shall not incur, assume, or guaranty any other
indebtedness. For so long as the First Mortgage exists on any portion of the
Project the Partnership shall not consolidate or merge with or into any other
entity or convey or transfer its properties and assets substantially as an
entirety to any entity. For so long as the First Mortgage exists on any portion
of the Project, the Partnership will not voluntarily commence a case with
respect to itself, as debtor, under the Federal Bankruptcy Code or any similar
federal or state statute without the unanimous consent of all of the partners of
the Partnership. For so long as the First Mortgage exists on any portion of the
Project, no material amendment to this partnership certificate may be made
without first obtaining approval of the holder of the First Mortgage.

                  3. Any indemnification shall be fully subordinated to any
obligations respecting the Project (including, without limitation, the First
Mortgage) and such indemnification shall not constitute a claim against the
Partnership in the event that cash flow is insufficient to pay such obligations.

                  4. For so long as the First Mortgage exists on any portion of
the Project, in order to preserve and ensure its separate and distinct identity,
the Partnership shall conduct its affairs in accordance with the following
provisions:

                           a. It shall establish and maintain an office through
         which its business shall be conducted separate and apart from that of
         any of its affiliate and shall allocate fairly and reasonably any
         overhead for shared office space;

                           b. It shall maintain separate partnership records and
         books of account from those of any affiliate;

                           c. It shall not commingle assets with those of any
         affiliate;


                                      -49-
<PAGE>

                           d. It shall conduct its own business in its own name;

                           e. It shall maintain financial statements separate
         from any affiliate;

                           f. It shall pay any liabilities out of its own funds,
         including salaries of any employees, not funds of any affiliate;

                           g. It shall maintain an arm's length relationship
         with any affiliate;

                           h. It shall not guarantee or become obligated for the
         debts of any other entity, including any affiliate or hold out its
         credit as being available to satisfy the obligations of others;

                           i. It shall use stationery, invoices and checks
         separate from any affiliate;

                           j. It shall not pledge its assets for the benefit of
         any other entity, including any affiliate;

                           k. It shall hold itself out as an entity separate
         from any affiliate;

                           l. It shall at all times have a special purpose
         limited partnership general partner as its general partner, which
         limited partnership general partner shall have a special purpose
         corporation as its general partner, and such general partner shall at
         all times be a special purpose corporation with an Independent
         Director; and

                  For purpose of this Article 14, the following terms shall have
         the following meanings:

         "affiliate" means any person controlling or controlled by or under
         common control with the Partnership including, without limitation (i)
         any person who has a familial relationship, by blood, marriage or
         otherwise with any partner or employee of the Partnership, or any
         affiliate thereof and (ii) any person which receives compensation for
         administrative, legal or accounting services from this Partnership, or
         any affiliate. For purposes of this definition, "control" when used
         with respect to any specified person, means the power to direct the
         management and policies of such person, directly or indirectly, whether
         through the ownership of voting securities, by contract or otherwise;
         and the terms "controlling" and "controlled" have meanings correlative
         to the foregoing.


                                      -50-
<PAGE>

         "Independent Director" shall be an individual who: (i) is not and has
         not been employed by the limited partnership general partner or any of
         its affiliates as a director, officer or employee within the five (5)
         years immediately prior to such individual's appointment as an
         Independent Director; (ii) is not (and is not affiliated with a company
         or firm that is) a significant advisor or consultant to the limited
         partnership general partner or any of its affiliates; (iii) is not
         affiliated with a significant customer or supplier of the limited
         partnership general partner or any of its affiliates; (iv) is not
         affiliated with a company of which the limited partnership general
         partner or any of its affiliates is a significant customer or supplier;
         (v) does not have significant personal service contract(s) with the
         limited partnership general partner or any of its affiliates; (vi) is
         not affiliated with a tax exempt entity that receives significant
         contributions from the limited partnership general partner or any of
         its affiliates; (vii) is not a beneficial owner at the time of such
         individual's appointment as an Independent Director, or at any time
         thereafter while serving as Independent Director, of more than five
         percent (5%) of the partnership interest of the limited partnership
         general partner; and (viii) is not a spouse, parent, sibling or child
         of any person described by (i) through (vii).

         "person" means any individual, corporation, partnership, limited
         liability company, joint venture, association, joint stock company,
         trust (including any beneficiary thereof), unincorporated organization,
         or government or any agency or political subdivision thereof.

                  5. For as long as the First Mortgage exists on any portion of
the Project, the Partnership shall not terminate solely as a consequence of the
bankruptcy of one or more of the general partners of the Partnership (or a
general partner of a general partner of the Partnership) so long as there
remains a solvent general partner of the Partnership

7.   For as long as the First Mortgage exists on any portion of the Project
     notwithstanding any provision hereof to the contrary, the following shall
     govern: Subject to applicable law, dissolution of the Partnership shall not
     occur so long as the Partnership remains mortgagor of the Project.









                       [signatures continued on next page]




                                      -51-
<PAGE>

                  Executed effective as of the date above written.

                                       GENERAL PARTNER/DEVELOPER

                                       PARTNER:

                                       CIF-LOYAL PLAZA ASSOCIATES, L.P.,
                                       a Delaware limited partnership

                                       By:  CIF-Loyal Plaza Associates, Corp.,
                                            general partner

                                            By:   /s/  Leo S. Ullman
                                                 -------------------------------
                                                  President









                       [signatures continued on next page]



                                      -52-
<PAGE>

                                       PREFERRED PARTNER:

                                       KIMCO PREFERRED INVESTOR IV TRUST

                                       By:   /s/  Gleen G. Cohen
                                             --------------------------------

                                       Name: Gleen G. Cohen
                                             --------------------------------
                                       Title: Trustee






















                                      -53-

</TEXT>
</DOCUMENT>
