CEDAR INCOME FUND LTD /MD/
EX10-3.TXT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10-3.txt
<DESCRIPTION>EX10-3.TXT
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                          LIMITED PARTNERSHIP AGREEMENT
                                       OF
                          FAIRVIEW PLAZA ASSOCIATES, LP




             Property: Fairview Plaza, New Cumberland, Pennsylvania





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<PAGE>


                        LIMITED PARTNERSHIP AGREEMENT OF
                          FAIRVIEW PLAZA ASSOCIATES, LP

         This Limited Partnership Agreement (this "Agreement") is entered into
as of ______, 2003, between CIF-FAIRVIEW ASSOCIATES, LLC, a Delaware limited
liability company (the "Developer Partner"), and FAIRPORT ASSOCIATES, LP, a
Delaware limited partnership (the "Limited 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.

         "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 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 Limited Partner. The Mortgage Loan shall be an
Approved Loan.


                                      -2-

<PAGE>


         "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 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 Limited Partner's written consent, the amount of
such Partner's payments made to creditors of the Partnership after the date
hereof with respect to Partnership 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 expenses.

         "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).

                                      -3-

<PAGE>

         "Certificate" shall mean a certificate of limited partnership dated
December __, 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.

         "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 General
Partner, subject to the Limited 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.

         "Fairport Partnership Agreement" shall mean the Partnership Agreement
of Fairport Associates, LP dated as of January__,2003 between Kimco Preferred
Investor III, Inc. and CIF-Fairport Associates, LLC, as the same may hereafter
be amended or restated.

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

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

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

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

                                      -4-

<PAGE>



         "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.

         "Mortgage" has the meaning assigned to such term in Section 14.2.

         "Mortgage Loan" shall mean the mortgage loan in the sum of
$6,080,000.00 to be made by General Electric Capital Corporation to the
Partnership pursuant to a Loan Agreement to be entered into between the
Partnership and General Electric Capital Corporation.

         "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 submitted in writing to, and approved by, the Limited 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 Limited
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 Limited 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.

                                      -5-
<PAGE>

         "Operating Revenues" means, for any period, the gross receipts of the
Partnership (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 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 Limited 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 Fairview Plaza Associates, LP, 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.

         "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;


                                      -6-
<PAGE>

         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

         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
Fairview Plaza, located in New Cumberland, Pennsylvania, consisting of
approximately 6.768 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.

         "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    1%
                               Limited Partner     99%


                                      -7-
<PAGE>

         "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.

                                    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 Fairview Plaza
Associates, LP, and all Partnership business must be conducted in that name or
such other name as the General Partner and the Limited 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
Limited 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 Limited 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


                                      -8-

<PAGE>

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 12. In addition, the Partnership shall at
all times conduct its business so as to comply with the provisions of Article 12
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 forth 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
Limited 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


                                      -9-

<PAGE>

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.

                  (b) Permitted Transfers. The Developer Partner may assign all
or a portion of its Partnership Interest (direct or indirect) with the consent
of Limited 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
assignment that transferee shall be admitted as a Partner. Transfers of
interests in the Developer Partner may also be made (without Limited 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 Limited Partner receives prior written notice thereof. Transfers
of interests in Cedar Income Fund Partnership, L.P. may be made at any time
without Limited Partner's consent. The Limited Partner may Transfer its
interests only with the written consent of Kimco Preferred Investor III, Inc.,
its successors and assigns.

         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 Limited Partner, on such terms
and conditions as the General Partner and the Limited 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
Limited 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 Limited Partner.

         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


                                      -10-
<PAGE>

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

         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
Limited 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 Limited 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 Limited 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 Limited Partner
(and any such action taken without Limited Partner's written consent shall be
null and void):

                       (1) Any sale, transfer, exchange, mortgage, financing,
hypothecation or encumbrance (except as otherwise provided in this Agreement) 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


                                      -11-

<PAGE>

assume, repay and secure the Mortgage Loan. Notwithstanding the foregoing, if
the Developer Partner is the General Partner, no sale, transfer or exchange of
the Project shall be permitted prior to and including December 31, 2007.

                       (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 Limited Partner has approved the Mortgage Loan as a permitted
borrowing of the Partnership. Notwithstanding the provisions of Sections
4.1(b)(1), 4.1(b)(3) and 4.1(b)(7), the General Partner may at any time, without
the consent of the Limited Partner, cause the Partnership to refinance the
Mortgage Loan or any other Approved Loan with an institutional lender on terms
no less favorable than those in effect at the time of the refinance, so long as
(a) Limited Partner receives notice of such refinancing at least thirty (30)
days prior to closing and also receives copies of all loan document drafts prior
to closing and (b) such refinancing does not require payment of any prepayment
premium, yield maintenance fee or similar fee to the existing lender (which,
when considered together with all other terms of such refinancing, would result
in overall terms less favorable than those in effect at the time of such
refinance).

                       (4) Making any expenditure or incurring any obligation by
or for the Partnership in excess of 120% of the amount set forth therefor on 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 Limited Partner in
writing of the event giving rise to such repairs and the actions taken with
respect thereto.

                       (5) Requiring Additional Capital Contributions.

                       (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;
notwithstanding the foregoing, the Partnership shall be permitted (without the
consent of Limited Partner) to execute leases and lease amendments that (i) meet


                                      -12-
<PAGE>

the Lease Parameters and (ii) are on a form of lease or lease amendment that has
been approved by the Limited Partner. The Partnership may also execute lease
amendments without the written consent of the Limited 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, if and
to the extent that any of the foregoing agreements or actions to be entered into
or taken by the Partnership shall be outside the ordinary course of business of
the Partnership (unless approval of a particular matter is required by another
express term of this Agreement), although General Partner shall provide Limited
Partner with copies of any of the foregoing items before finalizing such items
whether or not Limited Partner's approval is required; and provided further that
all insurance coverages shall comply with insurance required by any Mortgage
Loan and all liability policies shall name Limited Partner as an additional
insured.

                       (8) Using or referencing in any way the name of, or any
affiliation with, the Kimco Realty Corporation 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 Limited 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 any agreement with the Developer
Partner or an Affiliate of the Developer Partner.


                                      -13-

<PAGE>

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

                       (13) Amend or terminate the Certificates.

                       (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 Limited 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 Limited 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 Limited 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 Limited
Partner, unless the costs of such construction activities are within the
Approved Budget or are otherwise approved by the Limited Partner.

                       (17) Permit the Partnership to increase, modify,
consolidate, prepay, or extend any Approved Loan. Notwithstanding the provisions
of Sections 4.1(b)(1), 4.1(b)(3) and 4.1(b)(7), the General Partner may at any
time, without the consent of the Limited Partner, cause the Partnership to
refinance the Mortgage Loan or any other Approved Loan with an institutional
lender on terms no less favorable than those in effect at the time of the
refinance, so long as (a) Limited Partner receives notice of such refinancing at
least thirty (30) days prior to closing and also receives copies of all loan
document drafts prior to closing and (b) such refinancing does not require
payment of any prepayment premium, yield maintenance fee or similar fee to the
existing lender (which, when considered together with all other terms of such
refinancing, would result in overall terms less favorable than those in effect
at the time of such refinance).


                                      -14-


<PAGE>

                       (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 Limited 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 Limited
Partner.

                  (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 Limited 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 Limited 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
Limited 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 Limited Partner. Thereafter, the General Partner shall deliver to the
Limited Partner for approval a proposed Operating Budget for each calendar year
by November 1 of the preceding calendar year. Provided that the Limited 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 Limited Partner to review the Operating Budget, the Limited 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 Limited


                                      -15-

<PAGE>

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 Limited Partner specifically consents thereto in writing.
Notwithstanding anything to the contrary set forth in Section 4.1(d), although
the General Partner shall be required to submit an annual Operating Budget to
the Limited Partner, the General Partner shall only be required to obtain the
Limited Partner's consent to or approval of such Operating Budget if required
under the definition of "Operating Budget".

                  (e) Limited Partner. Whenever this Agreement requires the
consent or approval of the Limited Partner or the Partners to a certain matter,
the consent or approval of the Limited Partner shall not be effective without
the consent of the then general partner of the Limited Partner and of Kimco
Preferred Investor III, Inc. (a limited partner of the Limited Partner), its
successors and assigns. Whenever the Limited Partner is given the right to take
any action pursuant to this Agreement, such action must be approved by Kimco
Preferred Investor III, Inc., its successors and assigns.

         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 Limited 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 Limited Partner.

                  (b) Special Meetings. Special meetings of the Partners may be
called by the General Partner or by the Limited 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
Limited Partner.

                  (c) Procedure. Each Partnership meeting shall be held at the
principal place of business of the Partnership, unless the Partners otherwise


                                      -16-

<PAGE>

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 Limited 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 Limited 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 Limited Partner;
(3) commits fraud, misrepresentation, gross negligence or willful misconduct
(which has an adverse effect on the Partnership or the Limited Partner); (4)
fails to maintain insurance as required by this Agreement or to pay or provide
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 Limited 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 $50,000.

                  (c) Bankruptcy of the Partnership.

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

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



                                      -17-

<PAGE>

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

                  (h) The Partnership fails to make a distribution to Limited
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.

                  (k) A Removal Event (as defined in the Fairport Partnership
Agreement) shall occur and be continuing.

                  If Limited Partner shall have reasonably determined that a
Removal Event has occurred, Limited 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 Limited 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 Sections 4.4(c), (e) or
(k) 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 Limited Partner to cause such matter to be submitted to arbitration,
the Limited Partner may remove Developer Partner as the General Partner, in
which event (i) the Limited Partner may appoint itself or an Affiliate of the
Limited 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),



                                     -18-

<PAGE>

4.4(g) (which has an adverse effect on the Partnership or Limited Partner), or
4.4(h) of this Agreement or the Fairport Partnership Agreement, the Limited
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 Limited Partner and the Developer Partner (or its representative) within 30
days after the Limited Partner elects to purchase such Partnership Interest. If
such Persons are unable to agree on the fair market value of the Project, the
Limited 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 Limited 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.

                  If Limited Partner desires to remove Developer Partner as the
General Partner because a Removal Event (other than a Removal Event specified in
Section 4.4(k)) has occurred, then either the Developer Partner or the Limited
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 Limited 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 Limited
Partner to purchase the Developer Partner's Partnership Interest (if
applicable), whether mitigating factors exist sufficient to deny the Limited
Partner the right to exercise such election). The arbitration shall be handled
in the following manner:

                                      -19-

<PAGE>

                           (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 Limited Partner (or its designee) shall be the
new managing Partner. The arbitrator shall have the power to order injunctive
relief consistent with the foregoing.

                           (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 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


                                     -20-

<PAGE>


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 Limited Partner. Upon request, the General Partner shall provide 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 Limited Partner
(but if the cost thereof exceeds by more than 10% the budgeted amount therefor
in an Operating Budget, the Developer Partner shall notify Limited 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 Limited 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

                                      -21-

<PAGE>

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).

         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


                                      -22-

<PAGE>

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 Limited 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.

         Section 4.11. Indemnification of Limited Partner. The Partnership shall
indemnify, defend and hold Limited 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 Limited Partner's counsel,
arising in connection with (1) any investigative, administrative, mediation,
arbitration, or judicial proceeding, commenced or threatened at any time against
Limited 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
Limited 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 Limited Partner in connection with the Project, or any of
the transactions contemplated by this Agreement. Limited Partner shall not be
entitled to indemnification to the extent any of the foregoing are caused solely
by the Limited 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


                                      -23-
<PAGE>

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.

                  (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 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, 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 Limited Partner (the Limited 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 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.


                                      -24-

<PAGE>

                                    ARTICLE 6

                              CAPITAL CONTRIBUTIONS

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

         The Limited Partner has contributed cash of $_______ to the Partnership
on the date hereof which shall constitute the Limited 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 Limited Partner
for the conduct of the Partnership's business, maintenance of its assets, and
discharge of its liabilities. Each additional contribution made under this
Section 6.2 is an "Additional Capital Contribution".

         Section 6.3. 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.

         Section 6.4. Partner Loans. If the Partnership shall have insufficient
cash to pay its obligations, any Partner, with the approval of the Limited
Partner and the General Partner, may advance such funds for the Partnership on
such terms and conditions as the lending Partner, the Limited 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 6.5. Balances. The Partnership's books and records shall
contain entries indicating the type and amount of Capital Contributions made to
the Partnership.

                                    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


                                      -25-

<PAGE>


delivered to Limited Partner) to the Limited Partner all notices,
correspondence, and information delivered by the holder (or servicer) of the
Mortgage Loan to the Partnership.

                                    ARTICLE 8

                                  DISTRIBUTIONS

         Section 8.1. Distribution of Net Cash Flow. The Net Cash Flow for each
calendar quarter shall be distributed to the Partners on or before the 10th day
following the end of each calendar quarter as follows: 1% to the Developer
Partner and 99% to the Limited Partner.

         Section 8.2. Distribution of Capital Proceeds. Capital Proceeds of the
Partnership shall be distributed to the Partners within 10 days following
receipt by the Partnership of such Capital Proceeds as follows: 1% to the
Developer Partner and 99% to the Limited Partner.

         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 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


                                      -26-

<PAGE>


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).

                  (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 Limited
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 Limited Partner.


                                      -27-

<PAGE>

                  (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 Limited 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 Limited Partner.

                  (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 accordance with their
respective Sharing Ratios.

             (1) (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),


                                      -28-

<PAGE>


Profits for any taxable year arising from a Capital Transaction shall be
allocated to the Partners in accordance with their respective 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
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


                                      -29-
<PAGE>

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 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).

                       (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.


                                      -30-

<PAGE>
                  (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 Partners. 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.

                  (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 Limited 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;


                                      -31-

<PAGE>

                  (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 Limited
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.

         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 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



                                      -32-

<PAGE>


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 Limited
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 Limited
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 Limited 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:

                  (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 Limited
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


                                      -33-

<PAGE>

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 Limited 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

                           (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.


                                      -34-
<PAGE>

         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

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

If to Limited 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



                                      -35-
<PAGE>


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.

         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


                                      -36-

<PAGE>

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

         Section 11.12. Buyout Rights. Reference is hereby made to Articles 4,
12 and 13 of the Fairport Partnership Agreement. Whenever the interest of the
Developer Partner (as defined in the Fairport Partnership Agreement) is to be
sold pursuant to said Articles 4, 12 or 13, then the interest of the Developer
Partner (as defined in this Agreement) under this Agreement shall be transferred
to, or as directed by, the Preferred Partner (as defined in such Property
Partnership Agreement) subject to the terms and conditions of each of said
Articles 4, 12 and 13 as if such partnership interest were an interest of the
Developer Partner (as defined in the Fairport Partnership Agreement) in the
Fairport Partnership.

                                   ARTICLE 12

                                 SPE PROVISIONS

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

                                      -37-

<PAGE>

                  12.1. Purpose. The Partnership's business and purpose shall
consist solely of the acquisition, ownership, operation and management of the
Project and such activities as are necessary, incidental or appropriate in
connection therewith.

                  12.2. Powers and Duties. (a) Notwithstanding any other
provision of this Agreement and so long as any obligation secured by that
certain Mortgage and Security Agreement from the Partnership to General Electric
Capital Corporation (the "Mortgage") remains outstanding and not discharged in
full, without the prior written consent of the holder of the Mortgage, the
General Partner and the Partnership shall have no authority to:

                  (i) borrow money or incur indebtedness on behalf of the
Partnership other than normal trade accounts payable and lease obligations in
the normal course of business, or grant consensual liens on the Partnership's
property; except, however, that the General Partner is hereby authorized to
secure financing for the Partnership pursuant to the terms of the Mortgage and
other indebtedness expressly permitted therein or in the documents related to
the Mortgage, and to grant a mortgage, lien or liens on the Partnership's
property (including the Project) to secure such Mortgage;

                  (ii) dissolve or liquidate the Partnership;

                  (iii) sell or lease, or otherwise dispose of all or
substantially all of the assets of the Partnership;

                  (iv) amend, modify or alter any provision of Article 14 of
this Agreement;

                  (v) merge or consolidate with any other entity.

                  (b) So long as any obligations secured by the Mortgage remain
outstanding and not discharged in full, the General Partner and the Partnership
shall have no authority, unless such action has been approved by the unanimous
vote of the Board of Directors of the managing member of the General Partner and
the unanimous vote of all other Partners, to file a voluntary petition or
otherwise initiate proceedings to have the Partnership adjudicated bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against the Partnership, or file a petition seeking or consenting to
reorganization or relief of the Partnership as debtor under any applicable
federal or state law relating to bankruptcy, insolvency, or other relief for
debtors with respect to the Partnership; or seek or consent to the appointment
of any trustee, receiver, conservator, assignee, sequestrator, custodian,
liquidator (or other similar official) of the Partnership or of all or any
substantial part of the properties and assets of the Partnership, or make any


                                      -38-

<PAGE>

general assignment for the benefit of creditors of the Partnership, or admit in
writing the inability of the Partnership to pay its debts generally as they
become due or declare or effect a moratorium on the Partnership debt or take any
action in furtherance of any action.

                  (c) So long as any obligation secured by the Mortgage remains
outstanding and not discharged in full, the Partnership shall have either (a) a
limited liability company as its general partner or (b) a corporation as general
partner, having a certificate of formation (or articles of incorporation, as the
case may be) containing the restrictions and terms set forth in Articles _____
of the Certificate of Formation in effect as of the date hereof of the General
Partner, and the Partnership shall have no other general partners.

                  12.3. Title to Partnership Property. All property owned by the
Partnership shall be owned by the Partnership as an entity and, insofar as
permitted by applicable law, no Partner shall have any ownership interest in any
Partnership property in its individual name or right, and each Partner's
Partnership interest shall be personal property for all purposes.

                  12.4. Separateness/Operations Matters. The Partnership shall:

            (a)   maintain books and records and bank accounts separate from
                  those of any other person;

            (b)   maintain its assets in such a manner that it is not costly or
                  difficult to segregate, identify or ascertain such assets;

            (c)   hold regular Partnership meetings, as appropriate, to conduct
                  the business of the Partnership, and observe all other
                  Partnership formalities;

            (d)   hold itself out to creditors and the public as a legal entity
                  separate and distinct from any other entity;

            (e)   prepare separate tax returns and financial statements, or if
                  part of a consolidated group, then it will be shown as a
                  separate member of such group;

            (f)   allocate and charge fairly and reasonably any common employee
                  or overhead shared with affiliates;

            (g)   transact all business with affiliates on an arm's-length basis
                  and pursuant to enforceable agreements;

            (h)   conduct business in its own name, and use separate stationery,
                  invoices and checks;

                                      -39-

<PAGE>

            (i)   not commingle its assets or funds with those of any other
                  person;

            (j)   not assume, guarantee or pay the debts or obligations of any
                  other person;

            (k)   correct any known misunderstanding as to its separate
                  identity;

            (l)   not permit any affiliate to guarantee or pay its obligations
                  (other than limited guarantees set forth in the Mortgage or
                  related documents); and

            (m)   not make loans or advances to any other person.

                  12.5. Effect of Bankruptcy, Death or Incompetency of a Limited
Partner. The bankruptcy, death, dissolution, liquidation, termination or
adjudication of incompetency of a Limited Partner shall not cause the
termination or dissolution of the Partnership and the business of the
Partnership shall continue. Upon any such occurrence, the trustee, receiver,
executor, administrator, committee, guardian or conservator of such Limited
Partner shall have all the rights of such Limited Partner for the purpose of
settling or managing its estate or property, subject to satisfying conditions
precedent to the admission of such assignee as a substitute Limited Partner. The
transfer by such trustee, receiver, executor, administrator, committee, guardian
or conservator of any Partnership Interest shall be subject to all of the
restrictions, hereunder to which such transfer would have been subject if such
transfer had been made by such bankrupt, deceased, dissolved, liquidated,
terminated or incompetent Limited Partner.

                       [signatures continued on next page]

                                      -40-
<PAGE>


         Executed effective as of the date above written.

                                      GENERAL PARTNER/DEVELOPER

                                      PARTNER:

                                      CIF-FAIRVIEW PLAZA ASSOCIATES, LLC,
                                      a Delaware limited liability company

                                      By: Cedar Income Fund
                                          Partnership, L.P., a Delaware
                                          limited partnership, its sole member

                                          By: Cedar Income Fund, Ltd.,
                                              a Maryland Corporation,
                                              its general partner

                                              By:_______________________________
                                                 Brenda J. Walker,
                                                 Vice President









                       [signatures continued on next page]



                                      -41-
<PAGE>



                                      LIMITED PARTNER:

                                      FAIRPORT ASSOCIATES, LP

                                      By: CIF-Fairport Associates, LLC,
                                          a Delaware limited liability
                                          company, its general partner

                                      By: Cedar Income Fund
                                          Partnership, L.P., a limited
                                          partnership, its sole member

                                      By: Cedar Income Fund, Ltd., a
                                          Maryland corporation, its
                                          general partner

                                          By:___________________________________
                                             Brenda J. Walker,
                                             Vice President



                                      -42-

</TEXT>
</DOCUMENT>
