Document:

NATIONAL PENN BANCSHARES, INC.

                            EXECUTIVE INCENTIVE PLAN

                          Adopted by Board of Directors

                                December 26, 1984

                                 PLAN YEAR 2000

As Amended By Board Dec. 16, 1998
Replaces previous Plan of Feb. 20, 1991

Amended Schedule B as approved by
 Board on May 10, 1999

<PAGE>
                                   SCHEDULE A

     Participants for the 2000 Plan Year consist of Types A, B, and C as defined
in the Plan document.

     It  is  anticipated   that  the  following  named  persons  will  meet  the
eligibility  requirements  for  participation  as of December  31,  2000.  It is
expected that there could be additional  individuals  whose eligibility could be
determined  later in the year,  who would be named a participant  as of December
31, 2000.

     Named participants are classified accordingly:

     CLASS A (2 persons) (name and grade level)

          Lawrence T. Jilk, Jr. 999

          Wayne R. Weidner      999

     CLASS B (27 persons) (name and grade level)

     Bruce G. Kilroy            999    Todd Alderfer        111
     Garry D. Koch              999    Brian Appleton       111
     Frederick C. Peters II     999    Nancy R. Corson      111
     Glenn Moyer                999    Lloyd Reichenbach    111
     Kathy B. Schauer           999    Michael L. Wummer    111
     Algot F. Thorell, Jr.      999
     Joseph C. Walter, Jr.      999    Carol Franklin       110
     Sharon L. Weaver           999    Sandra Hoffman       110
                                       Tarrie Miller        110
     Ronald L. Bashore          113    Larry A. Rush        110
     Timothy A. Day             113    Sandra L. Spayd      110
     Scott Gruber               113
     Michael R. Reinhard        113    Dennis Moyer         109
     Bruce L. Ressler           113
     Gary L. Rhoads             113
     Joseph C. Walker           113

     Jack Mikus                 112

<PAGE>
     CLASS C (27 persons) (name and grade level)

     Earl Houseknecht           110    Michelle Debkowski       107
     P. Robert Keeley           110    Rich Gentile             107
     Ed Shin                    110    Eugene Guinther          107
     Linda S. Stark             110    Dick Haddock             107
                                       Robert Latshaw           107
     Lew Freeman                109    John Tucker              107
     Robin Hitchcock            109    Donna Wentzel            107
     Hugh (Skip) Marshall       109
     Clarence Martindell        109    Marcia (Borowski) Stark  106
     Cindy Rankin               109    Frank Gehringer          106
     Dan Tempesco               109    Steve Kunkel             106
                                       Sandra Massaro           106
     Richard Sutton             108    Janice McCracken         106
                                       Teresa Steuer            106

                                       Mary Lou Dietz           105
                                       Sharon McMichael         105

                                       Patricia Angstadt        104

<PAGE>

OLD PAGE - was amended 5/10/99 see next page for correct Schedule B SCHEDULE B

                         NATIONAL PENN BANCSHARES, INC.
                            EXECUTIVE INCENTIVE PLAN
                             1999 PERFORMANCE GOALS

     Awards  pursuant  to the Plan  will not be made  unless  the  internal  and
external performance goals set forth below are met.

INTERNAL  PERFORMANCE  GOALS FOR THE 1999 PLAN YEAR

The net operating  income of NPB before  securities  transactions  for 1999 must
exceed the net operating income of NPB before securities transactions for 1998.

EXTERNAL  PERFORMANCE  GOALS FOR THE 1999 PLAN YEAR

The net  operating  income of NPB before  securities  transactions  on  realized
return on  average  common  equity for 1999 must  exceed the  average of the net
operating  income before  securities  transactions on realized return on average
common equity for 1999 for the banks or bank holding companies in the peer group
set forth on Schedule B-2 A.

<PAGE>
                                   SCHEDULE B

                         NATIONAL PENN BANCSHARES, INC.
                            EXECUTIVE INCENTIVE PLAN
                             2000 PERFORMANCE GOALS

     Awards  pursuant  to the Plan  will not be made  unless  the  internal  and
external performance goals set forth below are met.

INTERNAL  PERFORMANCE  GOALS  FOR THE 2000  PLAN  YEAR

The diluted per share operating  income of NPBC for 2000 must exceed the diluted
per share operating income for 1999.

EXTERNAL  PERFORMANCE  GOALS FOR THE 2000 PLAN YEAR

The net  operating  income of NPB before  securities  transactions  on  realized
return on  average  common  equity for 2000 must  exceed the  average of the net
operating  income before  securities  transactions on realized return on average
common equity for 2000 for the banks or bank holding companies in the peer group
set forth on Schedule B-2 A.

Internal Peformance Goals amended 5/10/99

<PAGE>
                                  SCHEDULE B-1
                                 PAY OUT FORMULA

         1.       Obtaining an operating return on average equity

                  triggers an incentive pay out as follows:

                  100% of peer group           $0

                  100.1% of peer group         .031% of average assets

                  130% of peer group           .11% of average assets

                  Interpolation is required between 100.1% and 130%.

         2.       Obtaining #1 in return on equity triggers an added

                  pay out of $25,000.

<PAGE>
                                  SCHEDULE B-2

     There is a change in the peer  group  from last  year.  The list of the ten
banking companies which form the peer group are:

                             Univest (Souderton)
                             Fulton Financial Corp.
                             Susquehanna Bancshares
                             Harleysville National Corp.
                             Keystone Financial
                             S & T Bancorp
                             BT Financial Corporation
                             Omega Financial Corp.
                             F.N.B. Corporation (Hermitage, PA)
                             First Commonwealth Financial Corp. (Indiana, PA)

                             National Penn Bancshares, Inc.

Plan Year 2000, as of December 1999

<PAGE>
                                   SCHEDULE C

                         NATIONAL PENN BANCSHARES, INC.
                            EXECUTIVE INCENTIVE PLAN
                            DEFERRAL ELECTION LETTER

TO THE COMMITTEE:

     In accordance  with National Penn  Bancshares,  Inc.,  Executive  Incentive
Plan,  effective  January 1,  1984,  I hereby  request to defer  receipt of that
portion of any award earned by me (to the extent  provided in Paragraph 2 below)
for services rendered as an eligible Participant in the Plan during the calendar
year specified below and eligible to be received in cash. This election shall be
governed by all of the provisions of the Plan.

     1.   This request shall be effective beginning with calendar year 2000.

     2.   This voluntary  deferral  request shall apply to  ____________%  of my
          award.

     3.   My deferred award and the interest thereon shall become payable on the
          January 1 next  following  the date I retire or otherwise  cease to be
          employed by NPB or an Affiliate of NPB.

<PAGE>
     4.   I  irrevocably  elect that,  when payable,  my deferred  award and the
          interest thereon shall be paid to me as indicated below:

               ( ) In one lump sum.

               ( ) In a series of five annual installments.

               ( ) In a series of ten annual installments.

     I  agree  that  such  terms  and  conditions   shall  be  binding  upon  my
beneficiaries,  distributees, and personal representatives.  Unless noted below,
my beneficiaries shall be the same as designated for my group life insurance.

-------------------------  --------------------------------
Date                       Signature of Participant

                           Approved By:

-------------------------  --------------------------------
Date                       Signature of the Chairman of the Committee

-------------------------
Name of ParticipantAMENDED AND RESTATED
                                    AGREEMENT
                                     BETWEEN
                                 NAF ASSOCIATES
                                       AND
                         HMG/COURTLAND PROPERTIES, INC.

     AMENDED AND RESTATED AGREEMENT dated as of the 31st day of August, 1999,
between NAF Associates, a Connecticut general partnership ("Fieber"), and
HMG/Courtland Properties, Inc., a Delaware Corporation ("HMG"), formerly HMG
Property Investors, Inc.

     WHEREAS, HMG-Fieber Realty Trust (the "Trust") is the owner of those
present or former Grossman's stores listed on Schedule A attached hereto (the
"Real Estate"); and

     WHEREAS, on or about June 30, 1986, HMG Property Investors Inc., acquired
100% of the beneficial ownership of the Trust from HMO Property Investors, Inc.
and Transco Realty Trust, as tenants in common; and

     WHEREAS, on or about June 30, 1986, Fieber purchased 35% of the beneficial
interest of the Trust from HMG Property Investors, Inc.; and

     WHEREAS, on or about June 30, 1986, HMG and Fieber entered into an
agreement (the "1986 Agreement") to provide, as between themselves, the terms
and conditions upon which they will operate and be responsible for the assets,
liabilities and obligations relating to the Real Estate, and any other property
or assets which may be acquired under this Venture;

<PAGE>

     WHEREAS, HMG and Fieber desire to amend and restate the 1986 Agreement (as
amended and restated, the "Agreement"); and

     WHEREAS, by this Amended and Restated Agreement, Fieber is transferring to
HMG an additional 4.557% interest in this Venture (as hereinafter defined);

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

                                   ARTICLE I

                           Relationship of the Parties

     1.1 Participation of the Parties. Except as specifically provided otherwise
herein, Fieber and HMG shall participate in the transactions contemplated by
this Agreement on the basis of 69.557% HMG and 30.443% Fieber (said transactions
and operations related thereto being referred to herein as the "Venture"). The
Venture shall be known as HMG-Fieber Associates or such other name as the
Representatives (as hereinafter defined) shall mutually determine.

     1.2 Qualification. Each of the parties from time to time shall execute and
shall cause to be filed or recorded such certificates and other documents and
shall take such other action, as may be required for conducting the business of
the Venture in such jurisdiction as may be necessary or advisable.

     1.3 Responsibility for Commitments of Another. Neither party shall be
responsible or liable for any indebtedness or obligation of the other party
incurred either before or after the execution of this Agreement except as to
those joint responsibilities, liabilities, indebtedness or

                                       2

<PAGE>

obligations incurred pursuant to the terms of the 1986 Agreement and this
Agreement, nor shall the Venture be so responsible or liable.

     1.4 No General Partnership. The relationship between the parties hereto
shall be limited to the holding, acquisition, development, exploitation and
disposition of the Real Estate and the liabilities and obligations incurred in
connection therewith and the future assets, liabilities and obligations of the
Venture. Nothing herein contained shall be construed to create a general
partnership between the parties or to authorize either party to act as an agent
for the other party in any respect except as expressly set forth herein.

     1.5 Contracts and Commitments. No party hereto shall enter into any
contract, agreement, commitment or undertaking of any kind on behalf of the
other party or otherwise obligate the other party in any way, directly or
indirectly, except in accordance with the provisions of this Agreement.

                                   ARTICLE II
                                   Management

     2.1 Appointment of Representatives. To facilitate the management of the
affairs of the Venture, the parties shall appoint representatives (individually
a "Representative" and collectively the "Representatives"). HMG shall appoint
two (2) Representatives and Fieber shall appoint one (1) Representative. Each of
the parties hereby appoints the individual(s) set forth opposite its name below
(one of the HMG Representatives (to be designated in writing from time to time
by HMG) shall be referred to herein as the "Managing Representative") to serve
as its representative in matters pertaining to the affairs of the Venture;
provided however, that in the

                                       3

<PAGE>

event of the death, removal, resignation or incapacity of the Managing
Representative, HMG shall thereafter designate all future Managing
Representatives:

                            Fieber - James A. Fieber

                 HMG - Maurice Wiener and Lawrence I. Rothstein

A party may change its Representative(s) by written notice to the other party;
provided, however, that (a) at no time shall Norman A. Fieber be eligible for
appointment as a Representative, nor shall he be appointed a Representative, and
(b) any successor to James A. Fieber as Representative (i) shall have an
economic interest in the Venture and (ii) shall be a person succeeding (or
surviving) James A. Fieber on the Management Committee (or successor committee
or board functioning as the senior management body) of Fieber.

     Each party agrees that it shall make its Representative(s) reasonably
available during business hours for executing documents and for taking such
other action as may be necessary or advisable. The compensation, if any, of a
Representative shall be borne by the party nominating the Representative, but
expenses of such Representatives relating to venture business shall be borne by
the Venture.

     In addition, HMG shall have the sole power to appoint two (2) trustees of
the Trust and their successors (the "HMG Trustees") and Fieber shall have the
sole power to appoint one (1) trustee of the Trust and his or her successors
(the "Fieber Trustee").

     2.2 Management. Except as expressly provided in Section 2.1 hereof, the
business and affairs of the Venture shall be managed by HMG through the Managing
Representative. In its management, HMG agrees to protect the interests of Fieber
to the same degree and extent as it would if such interests were solely its own
and shall keep Fieber informed regarding its

                                       4

<PAGE>

management by, inter alia, providing the Fieber Representative with all
information provided to the other HMO Representative; provided, however, that
neither HMG nor the Managing Representative nor HMG's other Representative shall
be responsible to Fieber for any action taken or omitted by HMG or the Managing
Representative or the other HMG Representative in good faith in connection with
their management, and HMO and the Managing Representative and the other HMG
Representative shall be liable to Fieber only for their willful default or
willful misconduct.

     2.3 Authority of Representatives. Each party agrees that its Representative
is and shall be empowered and authorized to act on behalf of, and bind that
party and that, in accordance with the terms of this Agreement, the Managing
Representative shall be authorized to act on behalf of and bind the Venture. In
all cases in which approval by the General Partners of Fieber or Board of
Directors of HMG, or other partnership or corporate action, is required in
accordance with any Partnership Agreement, Articles of Incorporation, By-Law, or
other such controlling regulations of each party, or otherwise as required by
law, each representative shall have responsibility for obtaining such approvals
or consents. Each party shall be entitled to rely on the representations and
actions of the other's Representative and, unless notified by a party in writing
to the contrary, on his having obtained such proper approvals and consents,
provided, however, that either Representative shall have the right to require
evidence of such approvals and consents. In all cases in which action by the
Trust is required, any two Trustees, acting together, shall have full power and
authority (subject to the directions and approval of the Beneficiaries) to
execute, acknowledge and deliver all contracts, deeds and other instruments
necessary or proper to put such transactions into effect; provided, however,
that the Fieber Trustee shall be provided

                                       5
<PAGE>

with the opportunity to so act within the time period to be determined by the
Managing Representative.

     2.4 Major Decisions. The following matters ("Major Decisions") shall be
undertaken by the Managing Representative on behalf of or in connection with the
Venture only after consultation and discussions with all Representatives and in
accordance with a majority vote of the Representatives:

     (a) The mortgaging or encumbrance of any portion of the Real Estate or
Property (defined hereinafter), the giving of any guaranty, or the borrowing of
funds exceeding $25,000, including, but not limited to, the financing,
refinancing, whether short or long term, of any Real Estate or Property;
provided, however, that any mortgaging or encumbrance which provides recourse to
the Venture or the proceeds of which are not to be used for improving the
encumbered property, shall require the affirmative vote of the Fieber
Representative.

     (b) The employment of any person;

     (c) The development, material renovation or improvement, or disposition of
any Real Estate or Property except as provided pursuant to Section 3.4;

     (d) The lease of any Real Estate or Property for a term of more than one
year and at an annual minimum rental of more than $10,000;

     (e) The acquisition of any capital asset costing in excess of $25,000 or
with respect to a parcel of land in excess of $ 100,000;

     (f) The entering into an contract with a term of more than one year or
requiring payments exceeding $25,000 in the aggregate (except contracts
retaining services of managing agents for Real Estate);

                                       6
<PAGE>

     (g) The loaning of funds of the Venture, except for loans not exceeding the
sum of $10,000 and loans required or permitted pursuant to agreements of the
Venture entered into by Representatives of each of Fieber and HMG or with their
consent;

     (h) The reduction of the level of insurance coverages.

     2.5 Management of Real Estate. The parties contemplate that each or all
parcels of the Real Estate will be operated by a Managing Contractor in
substantially the same manner as it was operated prior to its acquisition by the
parties hereto, without material renovation or improvement. If the
Representatives agree, by majority vote, that such parcel of Real Estate is to
be operated in such a manner, without material renovation or improvement, the
Representatives shall agree, by majority vote, on a Managing Contractor for such
parcel of Real Estate.

     2.6   Compliance with REIT Provisions.

     (a) Each of the parties acknowledges and agrees that HMG is an entity
qualifying as a real estate investment trust as defined in Section 856 of the
Internal Revenue Code and the regulations thereunder. In order to maintain such
qualifications HMG is limited as to the manner in which it may operate and
conduct its business.

     (b) So long as HMG shall continue to qualify as a real estate investment
trust as defined in Section 856 of the Internal Revenue code and the regulations
thereunder, the parties hereto, in the conduct and management of the business
affairs contemplated hereunder shall not, without the consent of HMG perform any
act which will result in a violation of the provisions of the Code or the
regulations thereunder relating to real estate investment trusts.

     2.7 Consent and Approval. In any instance under this Agreement in which the
consent or approval of a majority of Representatives is required, the Managing
Representative

                                       7
<PAGE>

shall submit the matter in writing to the other Representatives together with
all relevant information relating thereto, and shall request the consent or
approval of a majority of the Representatives. The Managing Representative shall
be deemed to have given his consent or approval by having submitted the matter
to the other party. The other Representatives shall not unreasonably withhold or
delay or condition any consent or approval or denial so requested. Each of the
other Representatives shall be deemed to have given his respective consent or
approval unless within thirty (30) days after the receipt of such request he
shall have given written notice to the Managing Representative that he refuses
to give such consent or approval. Any such written notice of refusal shall
describe specifically and in detail the items to which the other Representative
specifically objects and shall specify the reason for such objections. If a
majority of the Representatives fail to approve the action requested by the
Managing Representative, the Managing Representative shall have the opportunity,
if he so desires, to make such modifications as shall be appropriate to remedy
any such objections and shall resubmit the matter, as so modified, to the other
Representatives for consent or approval in the manner prescribed in this
section. Following the consent to or approval of any matter by a majority of the
Representatives, no material change shall be made therein without the written
consent or approval of a majority of the Representatives.

     2.8 Indemnity. Each of the parties shall indemnify and hold harmless the
other party, its partners or directors, officers and employees against any
claim, loss, (including reasonable attorney's fees), damage or liability which
the other party, its partners or directors, officers or employees may incur or
to which it or they may be subject by reason of a party, its partners or
directors, officers or employees having made a misrepresentation, except as
otherwise provided

                                       8

<PAGE>

in section 2.2 hereof, having acted beyond the scope of its power or authority
under this Agreement or in violation of its obligations under this Agreement

     2.9 Good Standing; Liens. Each party shall:

     (a) at all times preserve and maintain in good standing its corporate or
other legal status in the jurisdiction under whose laws it is organized;

     (b) pay all federal, state, and local taxes, assessments and governmental
charges imposed on it or its interest in the Real Estate or Property before any
such taxes, assessments or charges become a lien on its interest in the Real
Estate or Property, except to the extent said party is contesting such tax,
assessment or charge in good faith by appropriate action but only so long as
levy and execution thereon have been stayed and they do not, in the aggregate
materially detract from the value of the interest of the party, or materially
impair the use of the asset; and

     (c) not suffer any other liens of any nature to be imposed or levied
against its interest in the Venture or any asset operated pursuant to the terms
of this Agreement except to the extent said party is contesting such lien in
good faith by appropriate action but only so long as levy and execution thereon
have been stayed and they do not, in the aggregate, materially detract from the
value of the interest of the party, or materially impair the use of the assets
and except for the pledge by HMO to Transco Realty Trust of its interest in the
Venture to secure its promissory note to Transco dated June 30, 1986.

     If any unpermitted lien shall be imposed or levied, or if any execution,
attachment or other process shall be issued, against a party's interest in the
Venture or any asset operated pursuant to the terms of this Agreement and shall
not be discharged, dismissed, stayed or vacated within thirty (30) days after
the imposition, levy or issuance thereof, or if such levy, execution,

                                       9
<PAGE>

attachment or other such process shall materially detract from the value of the
interest or asset or shall materially impair the use of the asset, the other
party shall have the right (but not the obligation) to pay and discharge the
same. All amounts so paid by such other party, together with costs and
reasonable attorneys' fees, shall be deemed to be a loan by such other party to
the defaulting party. Said loan shall bear interest at an annual rate of two
percent (2%) over the prime lending rate as published from time to time in The
Wall Street Journal from the date of such loan through the date to which payment
is made by the defaulting party to the lending party. Said loan shall be subject
to the provisions hereof regarding payment of distributions upon default and
shall be payable in full on ten (10) days notice by the lending party to the
defaulting party.

                                  ARTICLE III

                                    Property

     3.1 Real Estate. Except as provided in this Article, the Real Estate shall
continue be held of record by the Trust and the beneficial ownership of the
Trust shall be held by the Venture.

     3.2. Cash. After paying all expenses as hereinafter provided and
established such reserves as the Managing Representative deems necessary or
advisable, remaining cash shall (subject to Section 5.7) be forthwith disbursed
in relation to each party's interest in the Venture.

     3.3 Other Property. Except as provided in this Article, all other property
("Property") acquired jointly by HMG and Fieber shall be held in accordance with
this Agreement.

                                       10
<PAGE>

     3.4 Development and Disposition of Assets.

     (a) The parties, by majority vote of the Representatives, may hereafter
decide to develop or materially renovate or improve or dispose of any Real
Estate. If Fieber at any time disagrees with the proposal to dispose of a parcel
of Real Estate, as agreed upon by a majority vote of the Representatives, Fieber
may offer to purchase such parcel of real estate in accordance with the
provisions of the subsection (b) of this Section 3.4.

     (b) Right of First Offer.

          (i) If the parties, by majority vote of the Representatives, decide to
     dispose of any parcel of Real Estate, the Managing Representative shall
     give to Fieber a written notice (the "First Offer") offering to sell the
     parcel of Real Estate to Fieber upon terms and conditions set forth in the
     First Offer. The First Offer shall be irrevocable for a period (the "Offer
     Period") ending at 11:59 p.m., Boston, Massachusetts time, on the fifteenth
     (15th) day following the date of the First Offer.

          (ii) At any time during the Offer Period, Fieber may accept the First
     Offer by giving written notice ("Acceptance Notice") of such acceptance to
     the Managing Representative at the office of HMG. If the Managing
     Representative does not receive the Acceptance Notice within the Offer
     Period, the First Offer shall be deemed to have been rejected.

          (iii) In the event that the First Offer is accepted, the closing of
     the sale of the parcel of Real Estate shall take place within thirty (30)
     days after the First Offer is accepted. Fieber and the Representatives
     shall execute such documents and instruments

                                       11
<PAGE>

     as may be necessary to effect the sale of such parcel of Real Estate
     pursuant to the terms of the First Offer.

          (iv) If the First Offer is not accepted in the manner hereinabove
     provided, such parcel of Real Estate may be sold to another purchaser
     within one hundred and eighty (180) days of the last day of the Offer
     Period on substantially the same terms and at a price not less than ninety
     (90%) percent of the price set forth in the First Offer (prior to deduction
     of expenses relating to such Sale). In the event that such parcel of Real
     Estate is not sold in accordance with the terms of the preceding sentence,
     the disposition of such parcel of Real Estate shall again become subject to
     all of the conditions and restrictions of this subsection (b).

          (v) If the First Offer is accepted and if Fieber fails to perform its
     obligations in accordance with the First Offer or subpart (iii) hereof, HMG
     shall be entitled, at its election from time to time, to specific
     performance of such obligations or to liquidated damages in an amount equal
     to twenty (20%) percent of the purchase price set forth in the First Offer,
     which sum the parties acknowledge is not a penalty but a reasonable
     approximation of damages incurred by HMG due to the failure of Fieber to
     perform its obligations. (c) If pursuant to (b) above, Fieber acquires the
     interest of the Venture in a parcel of Real Estate or asset, such parcel or
     asset shall not thereafter be subject to the terms of this Agreement.

                                       12
<PAGE>

                                   ARTICLE IV
                                     Funding

     4.1 General.

     Except as provided in 4. 1 (b) below, all funds required to be paid by HMG
and Fieber pursuant to this Agreement or otherwise for the transaction therein
or herein contemplated shall be supplied 69.557% by HMG and 30.443% by Fieber.
All expenses in connection with the preparation of this Agreement and all
transactions contemplated by this Agreement shall be borne 69.557% by HMG and
30.443% by Fieber.

     4.2 Failure to Contribute. In the event that a party hereto fails to supply
part or all of funds it is required to supply pursuant to the terms of this
Agreement at the time such funds are due to a third party, the other party
hereto, after ten (10) days' prior notice, may, but shall not be required to,
pay the deficiency, which payment shall be deemed a loan by the contributing
party to the defaulting party. Said loan shall bear interest at an annual rate
of two percent (2%) over the prime lending rate as from time to time published
in The Wall Street Journal from the date of such loan through the date to which
payment is made by the defaulting party to the lending party.

     Said loan shall be subject to the provisions hereof regarding payment of
distributions upon default and shall be payable in fall on ten (10) days' notice
by the lending party to the defaulting party.

                                    ARTICLE V

                                   Accounting

     5.1 Books and Records. The Managing Contractor shall keep complete and
accurate books of accounts for the Venture at its offices or at such offices as
it shall designate. Such

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<PAGE>

books of account shall be kept in accordance with generally accepted accounting
principles and practices and shall include separate accounts to reflect each
party's contributions to funding, income, losses and distributions. Each party
and its authorized representatives at all reasonable times shall have access to,
and may inspect and make copies of, such books of account and any other records
of Venture.

     5.2 Reports. Within thirty (30) days after the end of each calendar
quarter, the Managing Contractor shall cause to be prepared and shall furnish to
HMG and Fieber an unaudited financial statement, certified by the Managing
Contractor to be true and correct to the best of his knowledge and belief,
showing the operations of the Venture for such quarter. The Managing Contractor
shall exercise its best efforts to cause the independent certified public
accountants described in Section 5.1 to prepare and furnish to each party within
sixty (60) days after the end of each calendar year a balance sheet of the
Venture as of the end of the calendar year and a related statement of income or
loss for the Venture for such year, which shall be certified in the customary
manner by such accountants, and a statement setting forth in reasonable detail
each party's share of the income or loss of the Venture for such year and such
other information as may be reasonably necessary in order to prepare the tax
returns and Securities and Exchange Commission filings of each of the parties.

     5.3 Taxes. The Managing Contractor shall cause to be prepared all tax
returns and reports, if any, which are required to be filed on behalf of the
Venture with any taxing authority and shall submit such returns and reports to
the Managing Representative for approval and, after such approval, shall make
timely filing thereof. Said tax returns and reports shall be signed as may be
required.

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<PAGE>

     5.4 Expenses. Out-of-pocket expenses incurred by the Managing Contractor in
connection with the preparation of books, records and reports pursuant to
Section 5.1, 5.2, 5.3 of the Agreement shall be expenses of the Venture.

     5.5 Allocations and Determinations. For accounting and tax purposes, all
income, deductions, credits, gains and losses for the Venture shall be
allocated to the parties in the proportions of 69.557% to HMG and 30.443% to
Fieber. The Managing Representative (after consulting with the other
Representatives) shall make all determinations with respect to the depreciation
and accounting methods to be used and the treatment of the transactions with
respect to the Venture for all tax purposes.

     5.6 Bank Accounts. All funds arising from the Venture shall be deposited in
the name of both of the parties in a joint account or accounts as the Managing
Representative may designate from time to time. Any withdrawals therefrom shall
be effected only by the signature of the Managing Representative or Managing
Contractor, which shall constitute sufficient authority on behalf of the
Venture.

     5.7 Distributions. Except as otherwise provided herein, all receipts from
Real Estate and Property and any other receipts of the Venture shall be paid and
distributed as follows so long as there had been no default by a party with
respect to its payment obligations hereunder:

     (a) First, all obligations for borrowed money shall be paid;

     (b) Second, all expenses incurred in operating, developing and holding the
Real Estate shall be paid;

     (c) Third, all other expenses of the Venture shall be paid;

                                       15

<PAGE>
     (d) Fourth, all remaining funds which are not, in the opinion of a majority
of the Representatives, required for working capital, reserves or other purposes
of the Venture shall be distributed 69.557% to HMG and 30.443% to Fieber not
less frequently than semi-annually.

     If a party has failed to pay its proportional share of any obligations,
liabilities or expenses as set forth in Article IV, or to make any other payment
which it is required to make hereunder, or shall be indebted to the other party
under Sections 2.9 or 4.2, all distributions to which said defaulting party
would otherwise be entitled under, subparagraph (d) above shall first be made to
the extent and in repayment of any outstanding loans made by the other party
plus interest then accrued and owing on such loans.

                                   ARTICLE VI

                                  Termination

     6.1 Term. This Agreement shall be deemed to have become effective June 30,
1986. Unless earlier terminated by an agreement of both parties or pursuant to
Section 6.3, this Agreement shall remain in full force and effect until one of
the parties has sold or disposed of by deed, assignment or conveyance all of its
Interest in the Real Estate and Property and all of the other net assets of
the Venture have been distributed to the parties as herein provided.
Notwithstanding anything herein to the contrary, the obligation of each of the
parties for its proportionate share of the obligations and liabilities of the
Venture and the indemnification obligation set forth in Section 2.8 hereof shall
survive the termination of this Agreement.

     6.2 Covenant Not to Dissolve or Partition. Each party agrees that it will
not, without the prior written consent of the other, terminate this Agreement
prior to the time set forth in Section 6.1, or take any action to dissolve the
Venture except as provided in section 6.3. Each

                                       16
<PAGE>

party expressly waives all rights which it may have by statute or otherwise to
bring an action or suit for the partition or division of any of the Real Estate
or Property except upon a termination of this Agreement pursuant to Section 6.3.

     6.3 Optional Termination. Upon the occurrence of any of the following
events with respect to either party:

     (a) The failure of a party to repay in full a loan made by the other party
pursuant to Section 2.9 or Section 4.2 within ten (10) days after demand
therefor by the lending party to the defaulting party, or

     (b) The imposition or levy of any lien for federal, state or local taxes,
assessments or other governmental charges on, or the issuance of any execution,
attachment or process against, its interest in the Venture or any assets
operated pursuant to the terms of this Agreement and the failure of the same to
be discharged, dismissed or vacated within sixty (60) days after the imposition,
levy or issuance thereof, or

     (c) The change of control of a party, the other party may elect to
terminate this Agreement by giving notice to such effect to the party with
respect to which such event occurred (or to the legal representative of such
party) within one hundred fifty (150) days after the occurrence of such event.
Effective as of the date of the occurrence of any such event (whether or not the
other party shall elect to terminate this Agreement), the party with respect to
which such event occurred (the "Inactive Party") and its Representative shall no
longer have any night or authority to participate in the business and affairs of
the Venture and its consent or approval shall not be required with respect to
Major Decisions or any other matter relating to the Venture, and the other party
(the "Active Party") thereafter shall have the sole right and authority to give
all

                                       17
<PAGE>

consents and approvals and to make all other determinations and decisions on
behalf of the parties hereto with respect to the Venture. Unless this Agreement
is terminated, the Inactive Party shall, nevertheless, be entitled to receive
its share of any cash and/or profits due it pursuant to this Agreement and shall
continue to be obligated to make all contributions of funds required to be made
under this Agreement and to perform under this Agreement at the time and in the
manner provided in this Agreement.

     6.4 Bankruptcy. In the event of the filing by a party of a voluntary
petition in bankruptcy, the filing of an involuntary petition in bankruptcy
against a party, or the appointment of any receiver or trustee in any
bankruptcy or reorganization proceedings against a party, unless any such
involuntary proceedings are dismissed in within ninety (90) days, an
adjudication of a party as bankrupt or insolvent, the filing by a party, of any
petition or answer seeking relief under the present or any future bankruptcy act
or any other present or future law for the relief of debtors., or in the event a
party requests, consents to or acquiesces in, the appointment of any trustee,
receiver, conservator or liquidator of all or any substantial portion of its
property or its interest in the Venture, or in the event a party shall become
insolvent or generally fail to pay or admit its inability to pay its debts as
they become due or shall made an assignment for the benefit of its or any of its
creditors, the party with respect to which such event occurred shall be treated
as an Inactive Party and the other party shall, have all of the rights of an
Active Party, in accordance with Paragraph 6.3 herein, until the termination of
the Venture.

                                       18
<PAGE>

                                   ARTICLE VII
                                  Miscellaneous

     7.1 Further Covenants. Each of the parties hereto agrees to execute and
deliver all such other additional instruments and documents and take all such
other action and do such other things as may be necessary or advisable more
fully to effectuate this Agreement and the transactions contemplated hereby.

     7.2 Notices. All notices hereunder shall be in writing and shall be deemed
to have been given or received if by hand, when delivered, and if by mail, when
mailed, by first class registered or certified mail, postage prepaid, addressed
as follows:

         If to Fieber                    James A. Fieber
                                         175 Drum Hill Road
                                         Wilton, CT 06897

         If to HMG:                      Mr. Maurice Wiener
                                         HMG/Courtland Properties, Inc.
                                         1870 South Bayshore Drive
                                         Coconut Grove, Florida 33133

         with a copy to:                 Posternak, Blankstein & Lund, L.L.P.
                                         100 Charles River Plaza
                                         Boston, MA 02114
                                         Attn: Richard K. Blankstein, P.C.

     7.3 Equitable Remedies. In the event of a breach or threatened breach of
this Agreement by either party, the remedy at law in favor of the other party
may be inadequate. Consequently, either party, in addition to all other rights
which may be available, shall have the right of specific performance in the
event of any breach or injunction in the event of any threatened breach of this
Agreement by the other party.

                                       19
<PAGE>

     7.4 Assignment. Except as specifically provided herein, neither this
Agreement not any interest of either of the parties hereto in the Venture or any
assets operated pursuant to the terms of this Agreement may be sold, assigned,
transferred, pledged, mortgaged or hypothecated, directly or indirectly, without
the prior written consent of the other party hereto, which consent may be
withheld for any reason or for no reason at all.

     7.5 Successors. All the provisions of this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties hereto.

     7.6 Entire Agreement. This Agreement constitutes the entire agreement of
the parties. All prior agreements between the parties, including, without
limitation, the 1986 Agreement, whether written or oral, are merged herein and
shall be of no force and effect. This Agreement may not be amended, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of such amendment, waiver, discharge or
termination is sought.

     7.7 Applicable Law. This Agreement shall be governed by the construed and
enforced in accordance with the substantive laws of the State of Connecticut.

     7.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which for all purposes shall be deemed an original, and
all of such counterparts shall together constitute but one and the same
agreement.

                                       20

<PAGE>

     IN WITNESS WHEREOF, the parties here hereunto caused this Agreement to be
executed under seal by their duly authorized representatives as of the day and
year first above written.

                                        NAF ASSOCIATES

                                        By: /s/ James A. Fieber
                                            James A. Fieber, General Partner

                                        HMG/COURTLAND PROPERTIES, INC.

                                        By: /s/ Lawrence Rothstein
                                            Lawrence Rothstein
                                            President

                                       21

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