U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the fiscal year ended APRIL 30, 2005.

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the transition period from...............to .................

Commission file number 0-1684

GYRODYNE COMPANY OF AMERICA, INC.
(Name of small business issuer in its charter)

                NEW YORK                            11-1688021
                --------                            ----------
    (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)             Identification No.)

     102 FLOWERFIELD, ST. JAMES, NY                    11780
     ------------------------------                    ------
(Address of principal executive offices)             (Zip Code)

Issuer's telephone number (631) 584-5400

Securities registered under Section 12(b) of the Exchange Act: NONE

Securities registered under Section 12(g) of the Exchange Act: COMMON STOCK
$1.00 PAR VALUE

Check whether the issuer (1) Filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such a shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X]

The issuer's revenues for its most recent fiscal year were: $2,039,170

The aggregate market value of the 1,032,317 shares of voting stock held by non-affiliates of the issuer on June 10, 2005 was $43,099,235. The aggregate market value was computed by reference to the average bid and asked prices of the common stock, on such date, on the NASDAQ system.

The number of shares outstanding of the issuer's Common $1.00 Par Value stock as of June 10, 2005 was 1,213,678.

DOCUMENTS INCORPORATED BY REFERENCE
None

Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]

1

INDEX TO FORM 10-KSB
FISCAL YEAR 2005

ITEM #                                                                      PAGE
------                                                                      ----

PART I
         1 -Description of Business                                          3
         2 -Description of Property                                          4
         3 -Legal Proceedings                                                6
         4 -Submission of Matters to a Vote of Security Holders              6

PART II
         5 -Market for Common Equity, Related Stockholder Matters and
            Small Business Issuer Purchases of Equity Securities             6
         6 -Management's Discussion and Analysis or Plan of Operation        7
         7 -Financial Statements                                            11
         8 -Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure                             11
        8A -Controls and Procedures                                         11
        8B -Other Information                                               11

PART III
         9 -Directors, Executive Officers, Promoters and Control
            Persons; Compliance with Section 16(a) of the Exchange Act      11
        10 -Executive Compensation                                          14
        11 -Security Ownership of Certain Beneficial Owners and
            Management and Related Stockholder Matters                      15
        12 -Certain Relationships and Related Transactions                  17
        13 -Exhibits                                                        18
        14 -Principal Accountant Fees and Services                          19
            Signatures                                                      20

2

PART I

Item 1 Description of Business

(a) Business Development

Incorporated in New York in 1946, Gyrodyne Company of America, Inc. (the "Company") was, from its inception and for the next 25 years, engaged in design, testing, development, and production of coaxial helicopters primarily for the US Navy. Following a sharp reduction in the Company's helicopter manufacturing business and its elimination by 1975, the Company began converting its vacant manufacturing facilities and established its rental property operation.

The Company concentrates its efforts on the development of its real estate holdings in St. James and Stony Brook, New York. The converted buildings consist of approximately 178,890 rentable square feet housing 59 tenants in space suitable for office, engineering, manufacturing, and warehouse use. This rental property operation is the principal business of the Company and currently represents its sole source of revenue. The property, which is known as Flowerfield, consists of 314 acres. Approximately 30 acres are utilized for the rental property and the balance of 284 remain undeveloped. Flowerfield is currently the subject of a development plan to construct an upscale residential golf course community consisting of 336 home sites. Due to the announced intentions by Stony Brook University (the "University") to condemn a major portion of the Flowerfield property, the approval process to secure the appropriate development rights has been delayed in the local municipalities.

The University has indicated that it plans to acquire 246 acres of the Company's 314 acre Flowerfield property through either a negotiated purchase or eminent domain. A public hearing was held by the University on June 21, 2004 and the Company has since commenced certain litigation to challenge the authority of the University to acquire property by eminent domain and the amount of acreage as excessive for the University's intended purpose. In a decision dated April 25, 2005, the court rendered a decision that the University had complied with the applicable standards and issued a decision in favor of the University. On June 8, 2005, the Company appealed this decision. The Company cannot predict what the ultimate effect will be on the Company as a result of the University's actions. See, "Item 1(b) Business of Issuer, Real Estate," and "Item 3, Legal Proceedings."

Neither the Company nor any of its subsidiaries have ever been in any bankruptcy, receivership or similar proceeding.

References to the Company contained herein include its wholly owned subsidiaries, except where the context otherwise requires.

(b) Business of Issuer

The Company manages its real estate operation and is a passive investor as a limited partner in the Callery Judge Grove, L.P. which owns a large citrus grove in Palm Beach County, Florida. The Company currently has a total of 9 full time employees involved in support of the real estate operation and development plans. Competition among industrial and office rental properties on Long Island is intense. There are numerous commercial properties that compete with the Company in attracting tenants, many of which are substantially larger than the Company. See Item 2 below for a further discussion regarding dependence on major tenants.

Real Estate

Gyrodyne owns a 314 acre site, primarily zoned for light industry, and is located approximately 50 miles east of New York City on the north shore of Long Island. Flowerfield's location also places it in hydrological zone VIII, one of the most liberal with respect to effluent discharge rates.

The Flowerfield property is bisected by the town lines of Smithtown and Brookhaven Townships. The existing buildings and approximately 132 acres are located in the hamlet of St. James, Township of Smithtown, and the contiguous balance of approximately 182 acres is located in the hamlet of Stony Brook, Township of Brookhaven. The vacant property in St. James and Stony Brook is one of the largest undeveloped industrially zoned parcels on Long Island. During the latter part of fiscal 2002, the Company entered into a contract of sale in the amount of $5,370,000 for 12 acres and buildings related to an existing tenant's catering facility. That transaction was completed in August, 2002 and the total acres referred to above reflect that sale.

Environmental studies have been updated and numerous other studies including archeological, ecological, and traffic have been conducted in connection with development plans -- all with no significant adverse findings. The Company believes that it does not incur material costs in connection with compliance with environmental laws. During fiscal year 2005, the Company had no material expenses related to environmental issues.

3

During the past four years, several evaluations of highest and best use for the property have resulted in the adoption of the plan to develop an upscale residential golf course community at Flowerfield.

In that regard, Gyrodyne executed agreements with DPMG, Inc., dba Landmark National ("Landmark") to design and develop an 18 hole championship golf course community at Flowerfield. The contractual arrangements with Landmark were included as exhibits to the Company's 2002 10-KSB annual report. Having completed the design phase for both the golf course and the residential components of the development plan, the Company filed its applications for a change of zone to achieve the appropriate entitlements. Those applications were filed in the Towns of Brookhaven and Smithtown in October, 2002 and June, 2003, respectively.

As mentioned in Item 1(a) above, progress in obtaining the required approvals has been delayed due to the fact that, in April, 2003, the Board of Trustees of the State University of New York adopted a resolution which empowered the University to commence eminent domain proceedings to acquire part of the Company's Flowerfield property through condemnation. This action followed statements of interest by the University to purchase the property for a range of values that in management's opinion, were clearly below its market value. In a filing dated May 21, 2004, the University announced the completion of a Draft Generic Environmental Impact Study ( DGEIS ) which outlined its plan to acquire 246 acres of the Flowerfield property through either a negotiated transaction or eminent domain proceedings. Since no genuine attempt to negotiate a transaction has been forthcoming, the Company is not in a position to comment on any such proposal. On June 21, 2004, as required by law, the University held a public meeting to review the DGEIS and its plan to acquire the 246 acres of the Flowerfield property for the purpose of developing a Research and Development Campus. Immediately following that meeting, the Company filed a lawsuit in New York State Supreme Court challenging the University's proposed taking of the property. The Court concluded that the University's condemnation of part of the Flowerfield property could proceed. The Appellate Division of the New York State Supreme Court, 2nd Department, upheld the lower court decision. The Company is seeking an appeal of the Court's decision.

Limited Partnership Investment in Callery-Judge Grove, L.P. (the "Grove")

The Company's initial participation in the Grove through its wholly owned subsidiary, Flowerfield Properties, Inc., represented a 20% limited partner's interest in the Grove. Based on three subsequent capital infusions in which the Company did not participate, the Company's share is now approximately 10.93%. At the time of the capital infusions, Management had determined that funding the development of the Flowerfield property was a priority when compared with this alternative investment opportunity.

The original limited partner investment of $1.1 million, which was made in 1965, has since yielded distributions of approximately $5.5 million in the aggregate. Due to recurring losses of the Grove, the investment is carried on the books of the Company at $0 as a result of recording the Company's pro-rata share of losses under the equity method of accounting. In fiscal 2000, when the Company's share of losses equaled the carrying value of the investment, the equity method of accounting was suspended, and no additional losses have been charged to operations.

Major Customers

For the year ended April 30, 2005, rental income from the three largest tenants represented 14%, 13% and 10% of total rental income. For the year ended April 30, 2004, rental income from the three largest tenants represented 17%, 13% and 12% of total rental income.

Item 2 Description of Property

(b) Investment Policies

The Company's policy has been to primarily hold its commercially developed rental real estate for income and to hold its other real estate investments for future development and/or sale. The Company has not recently made any new real estate investments. Although the Company does not invest regularly in real estate mortgage loans, the Company holds a purchase money mortgage loan on the 12 acre parcel sold to a former tenant in 2002, as described above. As a result of prepayments by this tenant, the balance at April 30, 2005 was $1.3 million. The mortgage loan bears interest at 5% per annum with interest only payments due quarterly until August 2005, when the entire unpaid principal balance and accrued interest is due and payable. The mortgaged property includes industrial and residentially zoned property and includes a catering facility, a single family residence, an office building and vacant land.

4

(c) Description of Real Estate and Operating Data

The Company owns a 314 acre tract of land located on the north shore of Suffolk County, Long Island, New York. The Company currently has approximately 178,890 square feet of rental space and has 59 tenants.

The land is carried on the Company's balance sheet at cost in the amount of $796,451 while the buildings and improvements are carried at a depreciated cost of $651,651. Prior to May 29, 2003, the property and buildings were unencumbered, except for Building #7 and the surrounding 6 1/2 acres, which were encumbered by a 10 year collateral mortgage in the amount of $1,050,000. On May 29, 2003, the Company restructured its debt by securing a revolving line of credit in the amount of $1,750,000. The existing mortgage, as described above, was satisfied and the outstanding balance of $622,868 was incorporated into the newly established credit facility. This outstanding balance was reduced to zero as of April 30, 2005. Collateral for the credit line consists of the same 6 1/2 acres and Building #7.

The average age of all the buildings is approximately 45 years and the facilities continually undergo maintenance repair cycles for roofs, paved areas, and building exteriors. The general condition of internal infrastructure, HVAC, electrical, and plumbing is considered above average for facilities of this age. The grounds feature extensive landscaping, are neatly groomed and well maintained.

There are five main building groups with rental unit sizes ranging from 130 to 27,774 square feet. Given the location and size of rental units, the Flowerfield Industrial Park attracts many smaller companies that are not dependent on extensive material or product handling. The Port Jefferson Branch of the Long Island Railroad runs through, and benefits from an easement on, the property.

The Company currently maintains a $100 million dollar liability umbrella policy and has insured certain buildings and rent receipts predicated on an analysis of risk, exposure, and loss history. It is Management's opinion that the premises are adequately insured.

The following table sets forth certain information as of April 30, 2005 for the total Company property:

                                                           Annual                      Number Of
                                                            Base                      Tenants Who
                   Rentable                  Annual         Rent         Number        Occupy 10%
                    Square      Percent       Base       Per Leased        Of          Or More Of
    Property         Feet       Leased        Rent        SQ. FT.       Tenants     Rentable Sq. Ft.
    --------         ----       ------        ----        -------       -------     ----------------
St. James, N.Y.    178,890        84%      $1,944,032      $10.87          59              1

The Company has one tenant with over 10% of the rentable square footage. The principal nature of this tenant's business is doing background security checks on individuals as well as working with insurance companies by providing photo inspections of vehicles for collision insurance. The principal provisions of their lease include the rental of 27,774 square feet of space with an annual base rent of $293,604. This specific lease has been renewed on a short term basis over the past several years with the current lease expiring on November 30, 2005.

The following table sets forth the Company's lease expiration table as of April 30, 2005:

                    Number of       Square         Total      % of Gross Annual
                     Leases          Feet          Annual     Rental Represented
Fiscal Year End     Expiring       Expiring         Rent        By Such Leases
---------------     --------       --------         ----        --------------
      2006             56           135,941     $1,745,164             89.8%
      2007              1             1,042        $12,348              0.6%
      2008              1               420         $4,800              0.3%
      2020              1            12,980       $181,720              9.3%

The Company's property is zoned for light industrial use and is located in the hamlets of St. James and Stony Brook, New York. The federal tax basis depreciation approximates the GAAP basis. Depreciation for tax purposes is being recorded on a double declining balance method. The estimated useful lives for buildings and improvements range from 10 to 30 years.

5

Item 3 Legal Proceedings

As described earlier in this report, Stony Brook University has announced plans to acquire 246 acres of the Company's 314 acre Flowerfield property through either a negotiated purchase or eminent domain. A public hearing was held by the University on June 21, 2004 and the Company has since commenced certain litigation to challenge the University's authority to commence a condemnation proceeding and to claim that the acreage is excessive for the intended purpose. On April 25, 2005, the court rendered a decision in favor of the University, finding that the University had complied with applicable standards. On June 8, 2005, the Company appealed the decision. The Company cannot predict what the ultimate effect will be on the Company as a result of the University's actions.

In addition, in the normal course of business, the Company is a party to various legal proceedings. After reviewing all actions and proceedings pending against or involving the Company, Management considers the aggregate loss, if any, will not be material.

Item 4 Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth quarter of Fiscal Year 2005.

PART II

Item 5 Market for Common Equity, Related Stockholder Matters and Small Business

Issuer Purchases of Equity Securities

(a) Market information

The Company's Common Stock, $1 Par Value (symbol: "GYRO") is traded in the NASDAQ Small-Cap Market. Since June 10, 1948, the NASDAQ Small-Cap Market has been the principal market in which the Company's stock is publicly traded. Set forth below are the high and low sales prices for the Company's stock for each full quarter within the two most recent fiscal years:

---------------------------------------------------------------
                                   Sales Price      Sales Price
           Quarter Ended               Low              High
---------------------------------------------------------------
            Fiscal 2004
---------------------------------------------------------------
July 31, 2003                         $16.72           $24.50
---------------------------------------------------------------
October 31, 2003                      $21.00           $26.00
---------------------------------------------------------------
January 31, 2004                      $22.73           $28.10
---------------------------------------------------------------
April 30, 2004                        $26.40           $28.28
---------------------------------------------------------------
            Fiscal 2005
---------------------------------------------------------------
July 31, 2004                         $27.00           $35.15
---------------------------------------------------------------
October 31, 2004                      $30.00           $36.90
---------------------------------------------------------------
January 31, 2005                      $34.00           $39.75
---------------------------------------------------------------
April 30, 2005                        $34.00           $44.00
---------------------------------------------------------------

(b) Approximate Number of Equity Security Holders, including shares held in Street name by brokers.

                                     Number of Holders of Record
Title of Class                           as of June 10, 2005
----------------------------------------------------------------
Common Stock, $1.00 Par Value                      899

(c) There were no cash dividends declared on the Company's Common Stock in the fiscal years ended April 30, 2005 and April 30, 2004.

(d) Equity Compensation Plan Information. See Item 11 for information regarding the Company's equity compensation plans and footnote 6 to the financial statements for a description of the Company's stock option plans.

6

Item 6 Management's Discussion and Analysis or Plan of Operation

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The statements made in this Form 10-KSB that are not historical facts contain "forward-looking information" within the meaning of the Private Securities Litigation Reform Act of 1995, and Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, both as amended, which can be identified by the use of forward-looking terminology such as "may," "will," "anticipates," "expects," "projects," "estimates," "believes," "seeks," "could," "should," or "continue," the negative thereof, other variations or comparable terminology. Important factors, including certain risks and uncertainties, with respect to such forward-looking statements that could cause actual results to differ materially from those reflected in such forward-looking statements include, but are not limited to, the effect of economic and business conditions, including risks inherent in the Long Island, New York and Palm Beach County, Florida real estate markets, the ability to obtain additional capital in order to develop the existing real estate and other risks detailed from time to time in our SEC reports. We assume no obligation to update the information in this Form 10-KSB.

Critical Accounting Policies

The consolidated financial statements of the Company include accounts of the Company and all majority-owned and controlled subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the Company's consolidated financial statements and related notes. In preparing these financial statements, management has utilized information available including its past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments of certain amounts included in the consolidated financial statements, giving due consideration to materiality. It is possible that the ultimate outcome as anticipated by management in formulating its estimates inherent in these financial statements might not materialize. However, application of the critical accounting policies below involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In addition, other companies may utilize different estimates, which may impact comparability of the Company's results of operations to those of companies in similar businesses.

Revenue Recognition

Rental revenue is recognized on a straight-line basis, which averages minimum rents over the terms of the leases. The excess of rents recognized over amounts contractually due, if any, are included in deferred rents receivable on the Company's balance sheets. Certain leases also provide for tenant reimbursements of common area maintenance and other operating expenses and real estate taxes. Ancillary and other property related income is recognized in the period earned.

Real Estate

Rental real estate assets, including land, buildings and improvements, furniture, fixtures and equipment, are recorded at cost. Tenant improvements, which are included in buildings and improvements, are also stated at cost. Expenditures for ordinary maintenance and repairs are expensed to operations as they are incurred. Renovations and/or replacements, which improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives.

Depreciation is computed utilizing the straight-line method over the estimated useful lives of ten to thirty years for buildings and improvements and three to twenty years for machinery and equipment.

The Company is required to make subjective assessments as to the useful lives of its properties for purposes of determining the amount of depreciation to reflect on an annual basis with respect to those properties. These assessments have a direct impact on the Company's net income. Should the Company lengthen the expected useful life of a particular asset, it would be depreciated over more years, and result in less depreciation expense and higher annual net income.

Real estate held for development is stated at the lower of cost or net realizable value. In addition to land, land development and construction costs, real estate held for development includes interest, real estate taxes and related development and construction overhead costs which are capitalized during the development and construction period.

Net realizable value represents estimates, based on management's present plans and intentions, of sale price less development and disposition cost, assuming that disposition occurs in the normal course of business.

7

Long Lived Assets

On a periodic basis, management assesses whether there are any indicators that the value of the real estate properties may be impaired. A property's value is impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. Such cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. To the extent impairment occurs, the loss will be measured as the excess of the carrying amount of the property over the fair value of the property.

The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties and other investments. These assessments have a direct impact on the Company's net income, since an impairment charge results in an immediate negative adjustment to net income. In determining impairment, if any, the Company has adopted Financial Accounting Standards Board ("FASB") Statement No. 144, "Accounting for the Impairment or Disposal of Long Lived Assets."

Stock-Based Compensation

The Company applies the intrinsic value-based method of accounting prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, to account for stock-based employee compensation plans and reports pro forma disclosures in its Form 10-KSB filings by estimating the fair value of options issued and the related expense in accordance with SFAS No. 123. Under this method, compensation cost is recognized for awards of shares of common stock or stock options to directors, officers and employees of the Company only if the quoted market price of the stock at the grant date (or other measurement date, if later) is greater than the amount the grantee must pay to acquire the stock.

RESULTS OF OPERATIONS FOR THE YEAR ENDED APRIL 30, 2005
AS COMPARED TO THE YEAR ENDED APRIL 30, 2004

The Company is reporting a net loss of $137,648 for the year ended April 30, 2005 compared to a net loss of $113,466 for the prior year. Diluted per share losses amounted to ($0.12) and ($ 0.10) for fiscal 2005 and 2004, respectively.

Revenue from rental property amounted to $2,039,170, a 2% decline of $47,517 to the $2,086,687 posted during the prior year. Both periods were impacted by renegotiated terms with two major tenants. Those adjustments, which reduced the 2005 results by $125,684, were partially mitigated by new tenant leases and annual incremental adjustments totaling $78,167.

Rental property expenses increased by $223,015 or 29%, amounting to $996,784 in fiscal 2005. The prior year expenses amounted to $773,769. Of that total increase, $220,126 is attributable to operating and maintenance costs. Salaries and benefits, including nonrecurring expenses of $26,830 associated with an early retirement package, increased by $46,364. Real estate taxes and the cost of fuel oil increased by $11,863 and $22,910, respectively. In addition, the Company experienced a $93,030 increase in property and casualty insurance premiums and a $59,585 expense associated with remedial treatment of our septic and storm drainage systems. A number of other operating expenses, including utilities, building, grounds, and equipment maintenance, reflected decreases totaling $11,567; the largest contributing factor was a decrease in utility expense of $7,628 for the year.

As a result, income from rental property amounted to $1,042,386, representing a $270,532 or 21% decline when compared to the prior year total of $1,312,918. Based on the fact that some of the contributing factors to the decline this year were nonrecurring in nature, we anticipate that income from our rental property operation will be restored to the fiscal 2004 levels.

General and administrative expenses reflect an increase of 12% for the current reporting period, amounting to $1,823,847 compared to $1,628,344 for the prior year; an increase of $195,503. Corporate governance expenses, which totaled $330,374 for the year, increased by $208,833 for the reporting period. A major portion of this increase is attributable to the establishment of a Shareholders Rights Plan which accounted for $130,345. Other issues relating to shareholder filings and SEC requirements for publicly traded companies accounted for $34,666 and $43,822 of the increase, respectively. Other increases included Directors fees and bad debt expense which increased by $9,794 and $9,000, respectively. Finally, as activities surrounding the Company's investment in the Florida grove property increased, so too did our need to incur additional travel expense and make regular visits to the area. In an effort to keep abreast of developments in the industry, management also attended several corporate governance and real estate related seminars. The cost of all of these activities accounted for $21,927 of the increased expenses. Offsetting some of the increase in general and administrative expenses was an overall decrease in salaries and benefits and costs associated with the Company's pension plan. Salaries and benefits decreased by $40,947, reflecting the fact that there was no stock option expense in the current period; in fiscal 2004, that expense amounted to $76,606. The Company's pension expense, which amounted to $226,109 in fiscal 2005, decreased by $10,761 when compared to the prior year. We anticipate that the cost associated with the plan will be reduced by an additional $100,000 for the fiscal 2006 period.

8

Net of general and administrative expenses, the Company experienced an operating loss of $781,461 compared to a loss of $315,426 for the prior year.

Other income increased by $440,326, amounting to $552,047 and $111,721 for fiscal 2005 and 2004, respectively. The major contributing factor to this increase was the recognition of principal prepayments to a $1.8 million mortgage held by the Company which amounted to $437,194. The balance of the mortgage, $1.3 million as of April 30, 2005, matures in August 2005.

As a result of the foregoing, the Company experienced a loss before taxes of $229,414 for the period ending April 30, 2005, compared to a loss of $203,705 for the prior year.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $1,130,127 and $1,067,419 in fiscal 2005 and 2004, respectively. The principal use of cash in both periods was funds used in connection with planning and pre-construction costs associated with land development plans for the golf course community. The Company also incurred costs included in the capitalized land development costs pertaining to legal, and communication costs to shareholders and the community regarding the potential condemnation of the Company's real estate property by the University.

Net cash provided by (used in) investing activities was $449,042 and ($29,754) in fiscal 2005 and 2004, respectively. The cash provided by investing activities in the current period represents a prepayment of $500,000 to the Company's mortgage receivable as well as proceeds from the sale of heavy equipment for $12,000. The use of cash in both periods was for capital expenditures.

Net cash (used in) provided by financing activities was ($37,153) and $428,499 in fiscal 2005 and 2004, respectively. The net cash (used in) both periods were a result of the Company's repayment of loans payable. The net cash provided during the current and prior period was primarily the result of proceeds from the exercise of stock options. The prior period's results also reflect the refinancing of mortgage debt on the Flowerfield property. The Company has a $1,750,000 revolving credit line with a bank, bearing interest at a rate of prime plus one percent which was 6.75% at April 30, 2005. The unused portion of the credit line, which is the total line of $1,750,000, will enhance the Company's financial position and liquidity and is available, if needed, to fund any unforeseen expenses.

As of April 30, 2005, the Company had cash and cash equivalents of $844,405 as well as a mortgage receivable of $1,300,000 due on August 8, 2005 and anticipates having the capacity to fund normal operating and administrative expenses and its regular debt service requirements. To date, expenses associated with the development of the Flowerfield property, which have been capitalized, total $4,432,766. As of April 30, 2005, the portion of those expenses attributable to the residential golf course community amount to $2,219,128. Working capital, which is the total of current assets less current liabilities as shown in the accompanying chart, amounted to $1,871,701 at April 30, 2005.

The following table presents the Company's working capital for the fiscal years 2005 and 2004:

                                                       April 30,
                                               --------------------------
                                                    2005          2004
                                               --------------------------

Current assets:
   Cash and cash equivalents                       $844,405    $1,562,643
   Rent receivable, net                              62,309        93,082
   Mortgage receivable                            1,300,000             0
   Net prepaid expenses and other assets            106,464       125,170
                                               --------------------------
     Total current assets                         2,313,178     1,780,895
                                               --------------------------

Current liabilities:
   Accounts payable and accrued expenses            204,782       232,809
   Tenant security deposits payable                 229,284       194,976
   Current portion of loans payable                   7,411         9,808
   Income tax payable                                     0        28,306
                                               --------------------------
     Total current liabilities                      441,477       465,899
                                               --------------------------

Working capital                                  $1,871,701    $1,314,996
                                               ==========================

9

During fiscal 2004, the Company restructured an outstanding mortgage loan on the Flowerfield property. That loan was satisfied and incorporated into a newly established revolving credit line in the amount of $1,750,000 at prime plus one percent. At April 30, 2005, the Company had no outstanding indebtedness against this credit facility. Additionally, the Company holds a $1.8 million purchase money mortgage loan in connection with the sale of certain buildings and 12 acres during fiscal 2003. The mortgage loan bears an interest rate of 5% and matures in August, 2005.

The following table presents the Company's expected cash requirements for contractual obligations outstanding as of April 30, 2005:

                                                          Payments Due By Period

                                                    Less than       1-3         3-5      More than
Contractual Obligation                  Total         1 Year       Years       Years      5 Years
Long-term Debt                           $19,145        $7,411     $11,734           -           -
Operating Lease                           55,104        55,104           -           -           -
                                     --------------------------------------------------------------
Total Contractual Obligations            $74,249       $62,515     $11,734           -           -
                                     ==============================================================

LIMITED PARTNERSHIP INVESTMENT

The Company has a limited partnership investment in the Callery-Judge Grove located in Palm Beach County, Florida. The investment represents a 10.93% ownership in a limited partnership that owns a 3,500+ acre citrus grove. The property is the subject of a plan for a mixed use of residential, commercial, and industrial development which is under review by the local municipal authorities. The Company is accounting for the investment under the equity method. As of April 30, 2005 the carrying value of the Company's investment was $0. Based upon the most recent independent third party appraisal, which was conducted by Pinel Appraisal Services, Inc. in June 2004, the Company's investment has a current estimated fair value of approximately $8.3 million. In the latter part of 2003, the Scripps Research Institute headquartered in La Jolla, California, announced that it would be developing a major east coast center on property located 4.5 miles north of the Callery-Judge Grove. Although the Company believes, based on press reports, that this announcement has been the catalyst behind the sale of thousands of acres of land to national developers in the general vicinity of the Grove, we have no current forecast of the likelihood of, or the timing required to achieve approvals for, the development of the Grove.

DEVELOPMENT OF FLOWERFIELD PROPERTY

The Company is party to two contractual agreements with Landmark National to design and develop an 18 hole championship golf course community with 336 home sites on the Company's 314 acre Flowerfield property located in Stony Brook / Saint James, New York. Those contractual agreements were exhibited in our April 30, 2002 10-KSB filing. The golf course agreement calls for monthly payments of $5,000 with a maximum total of $150,000. At April 30, 2005, the Company has paid this obligation in full. Additionally, there is a one-time fee of $100,000 for a grading report on the course layout, which was completed and paid during fiscal 2003. The residential land planning and design contract includes monthly payments of $10,000 with a maximum payment totaling $300,000. At April 30, 2005, the Company has also paid this obligation in full. Landmark is also entitled to a construction management fee of 4.5% of construction costs. The balance of Landmark's compensation is incentive driven and based on a 10% participation in future profits from the residential golf course development. Additionally, in a separate agreement for the future, Landmark is under contract to manage the completed golf and clubhouse facilities under a long-term management agreement. The annual fee for such service is $100,000 commencing upon completion of the golf and clubhouse facilities. The contracts also provide for termination fees, currently amounting to $500,000, which are more clearly defined in Note 11 to the financial statements. Various required exhibits, including an archaeological report and economic and traffic impact studies have been completed and applications have been filed with the Towns of Brookhaven and Smithtown seeking the appropriate change of zone to accommodate the development plan. Those applications are being pursued and the Company had its first public hearing in the Town of Smithtown in February 2004. Due to the announced intentions by the University to condemn a major portion of the Flowerfield property, the approval process to secure the appropriate development rights has been delayed in the local municipalities.

10

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial conditions, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 7 Financial Statements

See Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements commencing on the Contents page followed by Page F-1.

Consolidated Financial Statements include:

(1) Report of Independent Registered Public Accounting Firm
(2) Consolidated Balance Sheets as of April 30, 2005 and April 30, 2004
(3) Consolidated Statements of Operations for the years ended April 30, 2005 and April 30, 2004
(4) Consolidated Statement of Stockholders' Equity for the years ended April 30, 2005 and April 30, 2004
(5) Consolidated Statements of Cash Flows for the years ended April 30, 2005 and April 30, 2004
(6) Notes to Consolidated Financial Statements
(7) Schedules
(a) The information required by the following schedules has been included in the financial statements, is not applicable, or not required:
Schedule I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII and XIII.

Item 8 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There have been no changes in, or disagreements on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedure, with the Company's principal independent accountant for the fiscal period ended April 30, 2005.

Item 8A Controls and Procedures

The Company's management, including the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer has concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

There have been no significant changes in the Company's internal control over financial reporting identified in connection with the evaluation that occurred during the Company's last fiscal quarter that have materially affected, or that are reasonably likely to materially affect, the Company's internal controls over financial reporting.

Item 8B Other Information

None.

PART III

Item 9 Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act.

(a) The following table lists the names, ages and positions of all executive officers and directors and all persons nominated or chosen to become such. Each director has been elected to the term indicated. Directors whose term of office ends in 2005 shall serve until the next Annual Meeting of Stockholders or until their successors are elected and qualified.

11

                 Name & Principal Occupation or Employment                          Age      First Became a   Current Board
                                                                                                Director       Term Expires
----------------------------------------------------------------------------------------------------------------------------
Stephen V. Maroney                                                                   63           1996             2007
President, CEO, CFO, Treasurer, and Director of the Company

Peter Pitsiokos                                                                      46           ---
COO, Secretary, Chief Compliance Officer & General Counsel of the Company

Frank D'Alessandro                                                                   59           ---
Controller of the Company

Paul L. Lamb                                                                         59           1997             2006
Partner of Lamb & Barnosky, LLP
Chairman of the Board of Directors
of the Company

Robert H. Beyer                                                                      72           1977             2005
Consultant
Director of the Company

Philip F. Palmedo                                                                    71           1996             2007
Chairman of International Resources Group
Director of the Company

Elliot H. Levine                                                                     52           2004             2005
CPA and Senior Member of Levine & Seltzer, LLP
Director of the Company

Richard B. Smith                                                                     50           2002             2006
Consultant
Director of the Company

Ronald J. Macklin                                                                    43           2003             2007
Assistant General Counsel for KeySpan Corporate Services
Director of the Company

(b) Business Experience

Stephen V. Maroney, age 63, was initially engaged by the Company as an outside consultant in June 1996 and elected to the Board of Directors in July of that same year. Mr. Maroney is the former President of Extebank, a Long Island based commercial bank with a presence in Nassau and Suffolk Counties and New York City. Prior to that appointment, he served as Extebank's Chief Financial Officer. Mr. Maroney was appointed to the position of President, CEO and Treasurer by the Gyrodyne Board of Directors on March 14, 1999. His career on Long Island spans a period of over 40 years and includes involvement in numerous civic, charitable and professional organizations.

Peter Pitsiokos, age 46, joined the Company in July 1992 as its Assistant Secretary and General Counsel and has been the Company's Chief Operating Officer and Chief Compliance Officer since 2004. He has also been Secretary and General Counsel of the Company for over five years. Mr. Pitsiokos was formerly the Executive Assistant District Attorney in Suffolk County, New York. He also served as the Assistant Director of Economic Development and the Director of Water Resources in the Town of Brookhaven. He holds a Law degree from Villanova University and a BA degree from the State University of New York at Stony Brook.

Frank D'Alessandro, age 59, joined the Company in March 1997 as its Controller. Prior to joining the Company, he was Controller of Cornucopia Pet Foods Inc., a distributor of all natural pet foods. Previous to that he spent many years in various financial positions. Mr. D'Alessandro holds an MBA degree in Finance as well as a BBA in Accounting, both from Hofstra University.

12

Paul L. Lamb, age 59, has been a Director since 1997 and became Chairman of the Board on March 14, 1999. He is a founding partner in the law firm of Lamb & Barnosky, LLP; a past President of the Suffolk County Bar Association; and a Dean of the Suffolk Academy of Law. He holds a B.A. from Tulane University, a J.D. from the University of Kentucky and an LL.M. from the University of London, England.

Robert Beyer, age 72, has been a Director of the company since November 1977. He is also a Director of the Company's subsidiaries. He retired from the United States Naval Reserve in 1993 with the rank of Captain. He retired from his position as Senior Inertial Systems Engineer with the Naval Air Systems Command in 1998. He has an electrical engineering degree from New York University and a graduate degree in International Business from Sophia University in Tokyo, Japan. Mr. Beyer was employed by Gyrodyne from 1962-1973. He was stationed in Japan as a Technical Representative for the Company's remotely piloted helicopters from 1963 to 1970.

Philip F. Palmedo, age 71, was appointed to the Board of Directors in July 1996. Mr. Palmedo is Chairman of International Resources Group and former President of the Long Island Research Institute. He has shepherded numerous fledgling businesses into the financial and technological markets completing several financing and joint venture technology agreements. He has M.S. and Ph.D. degrees from M.I.T.

Elliot H. Levine, age 52, was appointed to the Board of Directors in October 2004. Mr. Levine is a founding member of the accounting firm Levine & Seltzer, LLP Certified Public Accountants, a graduate (1975) of Queens College, City University of New York. He became a member of the American Institute of Certified Public Accountants in February, 1978. Mr. Levine's work experience includes five years at Arthur Young, ten and a half years as partner and director of taxes of Leslie Sufrin & Co. P.C., a one year tenure as senior tax manager at Margolin, Winer & Evans CPAs and 12 years as senior member of Levine & Seltzer.

Richard B. Smith, age 50, was appointed to the Board of Directors in November 2002. He served as Senior Vice President for Private Banking at Suffolk County National Bank until February, 2005. Previously, he worked for 10 years at Key Bank (Dime Savings Bank) and for 3 years at L.I. Trust/Apple Bank. He received an MBA in Finance from SUNY Albany in 1983. Mr. Smith serves as the Mayor of the Incorporated Village of Nissequogue and as a Trustee of the Smithtown Historical Society and also serves as a Trustee for St. Catherine's Medical Center in Smithtown, NY.

Ronald J. Macklin, age 43, was appointed to the Board of Directors in June 2003. Mr. Macklin currently serves as Assistant General Counsel for KeySpan Corporate Services where he has held various positions within the Office of General Counsel from 1991 to present. Previously, he was associated with the law firms of Roseman & Colin and Cullen & Dykman. He received a B.A. degree from Stony Brook University and his Juris Doctorate from Union University's Albany Law School.

(c) Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires that the Company directors, executive officers, and any person holding more than ten percent ("10% Holder") of Gyrodyne Common Stock, $1.00 par value per share, file with the SEC reports of ownership changes, and that such individuals furnish the Company with copies of the reports.

Based solely on our review of copies of Forms 3 and 4 received by us, during fiscal 2005 and Forms 5 and amendments there to received by us with respect to fiscal 2005 or written representations from certain reporting persons, that no Form 5 is required. Gyrodyne believes that none of the Company's executive officers, directors or 10% Holders failed to file on a timely basis reports required by section 16(a) of the Exchange Act during fiscal 2005 or prior fiscal years.

(d) Audit Committee Financial Expert

The Board of Directors has a standing Audit Committee established in accordance with section 3(a) (58)(a) of the Exchange Act, which currently consists of Messrs. Smith, Levine and Macklin. All members are "financially literate" and have been determined to be "independent" within the meaning of SEC regulations and NASDAQ rules. At least one member, Mr. Levine, a CPA, qualifies as an "audit committee financial expert" as a result of relevant experience as a partner in the accounting firm of Levine & Seltzer, LLP. In addition, Mr. Levine has 10.5 years of accounting experience as a partner and director of taxes at Leslie Sufrin & CO. P.C. as well as several other years of experience in the field of public accounting.

(e) Code of Ethics

The Company has adopted a written Code of Ethics that applies to all of its directors, officers and employees. It is available on the Company's website at www.gyrodyne.com and shareholders may obtain a paper copy by writing to the Secretary at the address set forth on page 1. Any amendments to the Code of Ethics, or waiver thereof, will be disclosed on the website promptly after this date.

13

Item 10 Executive Compensation

(a) Executive Compensation

During the fiscal years ended April 30, 2005, April 30, 2004, and April 30, 2003, two directors or officers received remuneration in excess of $100,000 in such capacity.

                                                    SUMMARY COMPENSATION TABLE


                                                                                   Long term Compensation
                                                                           --------------------------------------
                                              Annual Compensation                    Awards              Payouts
                                     -----------------------------------   ---------------------------  ---------
                                                                                          Securities
                                                           Other Annual     Restricted     Underlying      LTIP
         Name and                     Salary      Bonus    Compensation       Stock       Options/SARs    Payouts    All Other
    Principal Position       Year       ($)        ($)         ($)          Awards ($)         (#)          ($)     Compensation
---------------------------------------------------------------------------------------------------------------------------------
Stephen V. Maroney
President & CEO              2005     209,500       0        29,688 (A)          0                 0         0            0

                             2004     209,500       0        49,628 (A)          0            17,500         0            0

                             2003     209,500       0        22,422 (A)          0            20,355         0            0
Peter Pitsiokos
COO, and Secretary           2005     152,500    10,000           0              0                 0         0            0

                             2004     152,500       0        70,188 (B)          0            13,500         0            0

                             2003     148,990       0        17,797 (B)          0            13,945         0            0

(A) In FY 05, Mr. Maroney exercised 1,375 director options and received an equal number of shares with a value of $29,688. In FY 04, Mr. Maroney exercised 4,125 director options and received an equal number of shares with a value of $49,628. In FY 03, Mr. Maroney received 1,430 shares from stock awards granted with a value of $22,422. The Registrant has concluded that aggregate amounts of perquisites and other personal benefits, securities or property to any of the current executives does not exceed the lesser of $50,000 or 10% of the total of annual salary and bonuses reported above for such named executive officers, and that the information set forth in tabular form above is not rendered materially misleading by virtue of the omission of such personal benefits.

(B) In FY 04, Mr. Pitsiokos exercised 6,600 options with SAR's and received 2,922 shares with a value of $70,188. In FY 03, Mr. Pitsiokos received 1,135 shares from stock awards granted with a value of $17,797.

During the fiscal year ended April 30, 2005, there were no Option/SAR Grants issued to any directors or officers.

                                   AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                                   ---------------------------------------------------
                                              AND FY-END OPTION/SAR VALUES
                                              ----------------------------

                                                                  Number of Securities            Value of Unexercised
                                                                 Underlying Unexercised               In-the-Money
                                   Shares                           Options/SAR's at                Options/SAR's at
                                Acquired on       Value              April 30, 2005                April 30, 2005 ($)
          Name                    Exercise       Realized       Exercisable/Unexercisable      Exercisable/Unexercisable
          ----                    --------       --------       -------------------------      -------------------------
Stephen V. Maroney
President and CEO                   7,946        $178,971               64,530/0                     $1,609,322/$0

Peter Pitsiokos                    31,600        $814,859                  0/0                           $0/$0
COO and Secretary

(b) Compensation of Directors

Each Director is entitled to receive a fee of $12,000 a year, $1,000 per Board meeting attended and $500 for each Committee meeting attended and is reimbursed for travel and Company business related expenses. In addition, the Chairman of the Board is entitled to receive a Chairman's fee of $24,000 a year which commenced in September, 2004. The Company continued its policy which states that Directors who are also employees of the Company do not receive any additional compensation for their services as Directors.

14

(c) Employment Contracts

Effective January 23, 2003, the Company entered into an amended and restated employment agreement with Stephen V. Maroney as President, Chief Executive Officer, and Treasurer and Peter Pitsiokos as Executive Vice President, Secretary, and General Counsel. Their annual salaries are currently at $209,500 and $152,500, respectively. The terms of the agreements were extended from one to three years, contain evergreen provisions, and provide for a severance payment equivalent to three years salary in the event of a change in control. Both agreements were attached as Exhibit 10, Material Contracts, in the 10-QSB dated January 31, 2003.

Item 11 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

(a) The following table sets forth certain information as of June 10, 2005 regarding the beneficial ownership of our common shares by (i) each person who we believe to be beneficial owner of more than 5% of our outstanding common shares, (ii) each present director, (iii) each person listed in the Summary Compensation Table under "Executive Compensation," and (iv) all of our present executive officers and directors as a group.

                                                    Number of         Percent of
                                                    ---------         ----------
               Name and Address                Shares Beneficially    Class (12)
               ----------------                -------------------    ----------
             Of Beneficial Owner                     Owned
             -------------------                     -----

          More Than 5% Shareholders
--------------------------------------------

Gerard Scollan                                      103,741(1)           8.55
80 Browns River Road
Sayville, NY 11782

Gyrodyne Company of America, Inc.
St. James, NY  11780                                 67,580(2)           5.57

Private Capital Management, Inc.
8889 Pelican Bay Blvd., Suite 500                    74,935(3)           6.17
Naples, Florida 34108

Bruce Sherman
8889 Pelican Bay Blvd., Suite 500                   130,837(3)           10.78
Naples, Florida 34108

Kellogg/Everest
14 Wall Street, 27th Floor                           92,296(4)           7.60
New York, NY 10005

Goldstein/Dakos
60 Heritage Drive                                   135,569(5)           11.17
Pleasantville, NY 10570

        Directors and Executive Officers
--------------------------------------------

Stephen V. Maroney                                   92,894(6)           7.27
c/o Gyrodyne Company of America, Inc.
102 Flowerfield
St. James, NY 11780

15

Peter Pitsiokos                                      35,205(7)           2.70
c/o Gyrodyne Company of America, Inc.
102 Flowerfield
St. James, NY 11780

Paul L. Lamb                                         22,864(8)           1.88
c/o Lamb & Barnosky, LLP
534 Broadhollow Road
Melville, NY 11747

Robert H. Beyer                                      14,634(9)           1.20
10505 Indigo Lane
Fairfax, Virginia 22032

Philip F. Palmedo                                   12,749(10)           1.05
4 Piper Lane
St. James, NY 11780

Richard B. Smith                                       1,000             (11)
697 Short Beach Road
St. James, NY 11780

Ronald J. Macklin                                       200              (11)
c/o Keyspan
175 E. Old Country Road
Hicksville, NY 11801

Elliot H. Levine                                         0               (11)
c/o Levine & Seltzer, LLP
150 East 52nd Street
New York, NY 10022

All executive officers and                            179,546            13.96
directors as a group (8 persons)

(1) Includes 99,241 shares of Company stock held by Lovin Oven Catering of Suffolk, Inc., of which Mr. Scollan is the majority shareholder.

(2) As Gyrodyne has the authority to direct HSBC Bank, USA, the Trustee of the Gyrodyne Pension Plan, to vote the securities of the Company held by the Pension Fund, Gyrodyne Company of America, Inc. has been listed above as the beneficial owner of the 67,580 shares held by HSBC Bank, USA as Trustee for the Gyrodyne Pension Fund.

(3) Mr. Sherman is the CEO of Private Capital Management, LP, and in this capacity he exercises shared dispositive and shared voting power with regard to the shares held by Private Capital Management, LP's clients and managed by Private Capital Management, LP. Mr. Sherman disclaims beneficial ownership of the 74,935 shares held by Private Capital Management, LP's clients and disclaims the existence of a group.

(4) As of the close of business on May 20, 2005, Kellogg Capital Group, LLC and Everest Special Situations Fund, L.P. filed a joint Schedule 13D/A with the Securities and Exchange Commission in which both companies may be deemed to own beneficially in the aggregate 92,296 shares of Gyrodyne stock.

(5) On May 18, 2005, Phillip Goldstein and Andrew Dakos filed a joint Schedule 13D/A with the Securities and Exchange Commission stating that Mr. Phillip Goldstein is deemed to be the beneficial owner of 102,519 shares of Gyrodyne stock. Mr. Dakos is deemed to be the beneficial owner of 33,050 shares of Gyrodyne stock. Power to dispose of securities resides solely with Mr. Goldstein for 102,519 shares. Power to vote securities resides solely with Mr. Goldstein for 6,560 shares and jointly for 1,000 shares. Power to dispose and vote securities resides solely with Mr. Dakos for 33,050 shares.

16

(6) Includes 64,530 shares issuable upon the exercise of stock options to purchase Company Stock which are exercisable within 60 days of April 30, 2005.

(7) Does not include his wife's and minor children's ownership of 1,089 shares in which he denies any beneficial interest.

(8) Includes 13,747 shares held by Lamb & Barnosky, LLP Profit Sharing Trust. Mr. Lamb is a trustee of the Profit Sharing Trust. Includes 2,750 shares issuable upon the exercise of stock options to purchase Company Stock which are exercisable within 60 days of April 30, 2005.

(9) Does not include his wife's ownership of 1,801 shares in which he denies any beneficial interest. Includes 2,750 shares issuable upon the exercise of stock options to purchase Company Stock which are exercisable within 60 days of April 30, 2005.

(10) Does not include his wife's ownership of 4,125 shares in which he denies any beneficial interest. Includes 2,750 shares issuable upon the exercise of stock options to purchase Company Stock which are exercisable within 60 days of April 30, 2005.

(11) Less than 1%.

(12) The percent of class is calculated on the basis of the number of shares outstanding, which is 1,213,678 as of June 30, 2005 plus, for each person or group, any shares that person or group has the right to acquire within 60 days of April 30, 2005 pursuant to options, warrants, conversion privileges or other rights.

(c) Equity Compensation Plans

                                                                Number of
                                                                Securities
                                                                Remaining
                    Number of                                   Available for
                    Securities to be                            Future Issuance
                    Issued upon                                 Under Equity
                    Exercise of                                 Compensation
                    Outstanding        Weighted-average         Plans (excluding
                    Options,           exercise price of        Securities
Plan                Warrants and       outstanding options,     Reflected in
Category            Rights             warrants and rights      Column (a))
                         (a)                   (b)                   (c)
--------------------------------------------------------------------------------
Equity
Compensation
Plans Approved
by Security
Holders                 91,030                $15.87                   -
--------------------------------------------------------------------------------
Equity
Compensation
Plans not
Approved by
Security holders             -                     -                   -
--------------------------------------------------------------------------------
Total                   91,030                $15.87                   -
--------------------------------------------------------------------------------

Item 12 Certain Relationships and Related Transactions

The Company currently has a mortgage receivable in the principal amount of $1,300,000 due from Gerard Scollan. Mr. Scollan is considered a principal shareholder of the Company because he has beneficial ownership of 8.55% of the Company shares. The terms of the mortgage are described in greater detail in Note 2 of the Financial Statements. The Company believes that the terms of the mortgage are no less favorable to the Company than could have been obtained from an unaffiliated third party. The Company received

17

$86,361 in interest during fiscal 2005 and $90,000 in the prior fiscal year. Interest payments received in fiscal 2005 were lower than in fiscal 2004 as the result of the prepayment of part of the principal.

The Company had engaged the firm of Lamb & Barnosky, LLP as outside legal counsel until December 31, 2004. Director Lamb is a partner in the firm to which Gyrodyne incurred legal fees of $109,550 and $228,962 in FY 2005 and FY 2004, respectively. As of January 1, 2005 the relationship with the aforementioned law firm has ended and the Company has engaged a new outside legal counsel.

No loans were made to any officer, director, or any member of their immediate families during the fiscal year just ended, nor were any loan amounts due and owing the Company or its subsidiaries from those parties at fiscal year end.

Item 13 Exhibits

       Exhibits.    The following Exhibits are either filed as part of this
       --------     report or are incorporated herein by reference:

          3.1       Restated Certificate of Incorporation of Gyrodyne Company of
                    America, Inc. (1)

          3.2       Restated Bylaws of Gyrodyne Company of America, Inc. (4)

          4.1       Form of Stock Certificate of Gyrodyne Company of America,
                    Inc.(1)

          10.1      1993 Stock Incentive Plan. (1)

          10.2      1996 Non-Employee Directors' Stock Option Plan. (1)

          10.3      Carco Group, Inc. Lease Amendment, dated May 3, 1999. (1)

          10.4      Amendment No. 1 to Lease Agreement with Carin Perez and Luis
                    Perez, dated October 7, 1997. (1)

          10.5      Incentive Compensation Plan. (1)

          10.6      Amended and Restated Agreement of Limited Partnership of
                    Callery-Judge Grove, dated as of May 8, 1995, by and among
                    CJG Management, Ltd., as the general partner and those
                    persons and entities whose names and addresses appear on the
                    books and records of the Partnership as partners. (1)

          10.7      Amended and Restated Employment Agreement, with Stephen V.
                    Maroney, dated January 23, 2003. (2)

          10.8      Amended and Restated Employment Agreement, with Peter
                    Pitsiokos, dated January 23, 2003. (2)

          10.9      Asset Management Agreement with DPMG, Inc. dba Landmark
                    National, dated April 9, 2002. (3)

          10.10     Golf Operating Agreement with DPMG, INC., dated April 9,
                    2002. (3)

          10.11     Second Amended and Restated Agreement of Limited Partnership
                    of Callery-Judge Grove, dated as of February 9, 2005, by and
                    among CJG Management, Ltd., as the general partner and those
                    persons and entities whose names and addresses appear on the
                    books and records of the Partnership as partners. (4)

          21.1      List of all subsidiaries. (1)

          31.1      Rule 13a-15(e)/15d-15(e) Certifications. (4)

          32.1      CEO/CFO Certifications Pursuant to 18 U.S.C. Section 1350,
                    as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                    of 2002. (4)

(1) Incorporated herein by reference in the Annual Report on Form 10KSB/A, filed with the Securities and Exchange Commission on September 5, 2001.

18

(2) Incorporated herein by reference in the Quarterly Report on Form 10QSB, filed with the Securities and Exchange Commission on March 12, 2003.

(3) Incorporated herein by reference in the Annual Report on Form 10KSB, filed with the Securities and Exchange Commission on July 26, 2002.

(4) Filed as part of this report.

Item 14 Principal Accountant Fees and Services

The following is a summary of the fees billed to us by Holtz Rubenstein Reminick LLP, our independent auditors, for professional services rendered for the fiscal years ended April 30, 2005 and 2004:

----------------------------------------------------------------------------
       Fee Category                    Fiscal 2005 Fees   Fiscal 2004 Fees
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Audit Fees (1)                              $43,100            $40,000
----------------------------------------------------------------------------
Audit-Related Fees (2)                       17,444              8,800
----------------------------------------------------------------------------
Tax Fees (3)                                 22,900             13,100
----------------------------------------------------------------------------
All Other Fees (4)                                -                  -
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Total Fees                                  $83,444            $61,900
----------------------------------------------------------------------------

(1) Audit Fees consist of aggregate fees billed for professional services rendered for the audit of our annual financial statements and review of the interim financial statements included in quarterly reports for services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for the fiscal years ended April 30, 2005 and 2004, respectively.

(2) Audit-Related Fees consist of aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under "Audit Fees."

(3) Tax Fees consist of aggregate fees billed for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning. The amounts disclosed consist of fees paid for the preparation of federal and state income tax returns.

(4) All Other Fees consist of aggregate fees billed for products and services provided by Holtz Rubenstein Reminick LLP, our principal accountants, other than those disclosed above.

The Audit Committee is responsible for the appointment, compensation and oversight of the work of the independent auditors and approves in advance any services to be performed by the independent auditors, whether audit-related or not. The Audit Committee reviews each proposed engagement to determine whether the provision of services is compatible with maintaining the independence of the independent auditors. All of the fees shown above were pre-approved by the Audit Committee.

19

SIGNATURES

In accordance with the requirements of Section 13 or 15 (d) of the Exchange Act, the Registrant has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

GYRODYNE COMPANY OF AMERICA, INC.

/S/ Stephen V. Maroney
------------------------------------------------------------------------
Stephen V. Maroney, President, Treasurer and Principal Executive Officer
Date: June 30, 2005

/S/ Frank D'Alessandro
------------------------------------------------------------------------
Frank D'Alessandro, Controller
Date: June 30, 2005

********************

In accordance with the requirements of the Exchange Act, this report has been signed below by the following on behalf of the Registrant and in the capacities and on the dates indicated.

/S/ Richard B. Smith
------------------------------------------------------------------------
Richard B. Smith, Director
Date: June 30, 2005

/S/ Elliot H. Levine
------------------------------------------------------------------------
Elliot H. Levine, Director
Date: June 30, 2005

/S/ Ronald J. Macklin
------------------------------------------------------------------------
Ronald J. Macklin, Director
Date: June 30, 2005

/S/ Stephen V. Maroney
------------------------------------------------------------------------
Stephen V. Maroney, Director
Date: June 30, 2005

20

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Contents
--------------------------------------------------------------------------------
Years Ended April 30, 2005 and 2004                                     Pages
--------------------------------------------------------------------------------

Report of Independent Registered Public Accounting Firm                  F-1

Consolidated Balance Sheets                                              F-2

Consolidated Statements of Operations                                    F-3

Consolidated Statement of Stockholders' Equity                           F-4

Consolidated Statements of Cash Flows                                    F-5

Notes to Consolidated Financial Statements                            F-6 - F-18



Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders
Gyrodyne Company of America, Inc.
St. James, New York

We have audited the accompanying consolidated balance sheets of Gyrodyne Company of America, Inc. and Subsidiaries as of April 30, 2005 and 2004 and the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Gyrodyne Company of America, Inc. and Subsidiaries as of April 30, 2005 and 2004 and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

s/s Holtz Rubenstein Reminick LLP

Melville, New York
June 10, 2005


F-1

                                                        GYRODYNE COMPANY OF AMERICA, INC.
                                                                         AND SUBSIDIARIES

Consolidated Balance Sheets
-----------------------------------------------------------------------------------------
April 30,                                                        2005            2004
-----------------------------------------------------------------------------------------
Assets

Real Estate:
  Rental property:
    Land                                                    $      4,250    $      4,250
    Building and improvements                                  3,955,011       3,925,421
    Machinery and equipment                                      146,842         160,489
                                                          -------------------------------
                                                               4,106,103       4,090,160
    Less accumulated depreciation                              3,397,082       3,347,322
                                                          -------------------------------
                                                                 709,021         742,838
                                                          -------------------------------
  Land held for development:
    Land                                                         792,201         792,201
    Land development costs                                     4,432,766       3,634,313
                                                          -------------------------------
                                                               5,224,967       4,426,514
                                                          -------------------------------
Total Real Estate, net                                         5,933,988       5,169,352

Cash and Cash Equivalents                                        844,405       1,562,643
Rent Receivable, net of allowance for doubtful
  accounts of $37,000 and $71,000, respectively                   62,309          93,082
Mortgage Receivable                                            1,300,000       1,800,000
Prepaid Expenses and Other Assets                                183,121         220,658
Prepaid Pension Costs                                          1,199,526       1,425,635
                                                          -------------------------------
Total Assets                                                $  9,523,349    $ 10,271,370
                                                          ===============================

Liabilities and Stockholders' Equity

Liabilities:
  Accounts payable and accrued expenses                     $    204,782    $    232,809
  Deferred gain on sale of real estate                         1,136,705       1,573,900
  Tenant security deposits payable                               229,284         194,976
  Revolving credit line                                                -         696,287
  Loans payable                                                   19,145          28,953
  Income taxes payable                                                 -          28,306
  Deferred income taxes                                        1,605,000       1,719,000
                                                          -------------------------------
Total Liabilities                                              3,194,916       4,474,231
                                                          -------------------------------

Commitments

Stockholders' Equity:
  Common stock, $1 par value; authorized 4,000,000
    shares; 1,531,086 shares issued                            1,531,086       1,531,086
  Additional paid-in capital                                   7,841,066       7,505,313
  Deficit                                                     (1,067,872)       (930,224)
                                                          -------------------------------
Total Stockholders' Equity                                     8,304,280       8,106,175
Less Cost of Shares of Common Stock Held in Treasury;
    317,408 shares and 375,354 shares, respectively           (1,975,847)     (2,309,036)
                                                          -------------------------------
Total Stockholders' Equity                                     6,328,433       5,797,139
                                                          -------------------------------
Total Liabilities and Stockholders' Equity                  $  9,523,349    $ 10,271,370
                                                          ===============================


-----------------------------------------------------------------------------------------
See notes to consolidated financial statements.                                       F-2


GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Consolidated Statements of Operations
--------------------------------------------------------------------------------
Years Ended April 30,                                    2005           2004
--------------------------------------------------------------------------------

Revenue from Rental Property                         $ 2,039,170    $ 2,086,687
                                                    ----------------------------

Rental Property Expense:
  Real estate taxes                                      155,196        143,333
  Operating and maintenance                              733,536        513,410
  Interest expense                                        35,217         38,850
  Depreciation                                            72,835         78,176
                                                    ----------------------------
Total Rental Property Expense                            996,784        773,769
                                                    ----------------------------

Income from Rental Property                            1,042,386      1,312,918

General and Administrative Expenses                    1,823,847      1,628,344
                                                    ----------------------------

Loss from Operations                                    (781,461)      (315,426)

Other Income:
  Gain on sale of real estate                            437,195              -
  Gain on sale of equipment                               12,000              -
  Interest income                                        102,852        111,721
                                                    ----------------------------
Total Other Income                                       552,047        111,721
                                                    ----------------------------

Loss Before Income Tax Benefit                          (229,414)      (203,705)
Income Tax Benefit                                       (91,766)       (90,239)
                                                    ----------------------------
Net Loss                                             $  (137,648)   $  (113,466)
                                                    ============================

Net Loss Per Common Share:
  Basic                                              $     (0.12)   $     (0.10)
                                                    ============================

  Diluted                                            $     (0.12)   $     (0.10)
                                                    ============================

Weighted Average Number of Common Shares
 Outstanding:
  Basic                                                1,180,469      1,133,896
                                                    ============================

  Diluted                                              1,180,469      1,133,896
                                                    ============================


See notes to consolidated financial statements. F-3

                                                                                                  GYRODYNE COMPANY OF AMERICA, INC.
                                                                                                                   AND SUBSIDIARIES

Consolidated Statement of Stockholders' Equity
-----------------------------------------------------------------------------------------------------------------------------------
Years Ended April 30, 2005 and 2004
-----------------------------------------------------------------------------------------------------------------------------------

                                        $1 Par Value
                                        Common Stock                                            Treasury Stock
                                 -------------------------    Additional                  --------------------------
                                                   Par         Paid in                                                     Total
                                    Shares        Value        Capital       Deficit        Shares          Cost           Equity
                                 -----------   -----------   -----------   -----------    -----------    -----------    -----------
Balance at May 1, 2003             1,531,086   $ 1,531,086   $ 7,278,191   $  (816,758)       414,024    $(2,531,389)   $ 5,461,130
Exercise of stock options                  -             -       227,122             -        (38,670)       222,353        449,475
Net loss                                   -             -             -      (113,466)             -              -       (113,466)
                                 -----------   -----------   -----------   -----------    -----------    -----------    -----------
Balance at April 30, 2004          1,531,086     1,531,086     7,505,313      (930,224)       375,354     (2,309,036)     5,797,139
Exercise of stock options                  -             -       335,753             -        (57,946)       333,189        668,942
Net loss                                   -             -             -      (137,648)             -              -       (137,648)
                                 -----------   -----------   -----------   -----------    -----------    -----------    -----------
Balance at April 30, 2005          1,531,086   $ 1,531,086   $ 7,841,066   $(1,067,872)       317,408    $(1,975,847)   $ 6,328,433
                                 ===========   ===========   ===========   ===========    ===========    ===========    ===========


-----------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.                                                                                 F-4


                                               GYRODYNE COMPANY OF AMERICA, INC.
                                                                AND SUBSIDIARIES

Consolidated Statements of Cash Flows
--------------------------------------------------------------------------------
Years Ended April 30,                                    2005            2004
--------------------------------------------------------------------------------

Cash Flows from Operating Activities:
  Net loss                                           $  (137,648)   $  (113,466)
                                                    ----------------------------
  Adjustments to reconcile net loss to net cash
    used in operating activities:
     Depreciation and amortization                       115,607        119,945
     Bad debt expense                                     57,000         48,000
     Deferred income tax benefit                        (114,000)      (142,000)
     Stock based compensation                                  -         76,606
     Pension expense                                     226,109        236,870
     Gain on sale of equipment                           (12,000)             -
     Gain on sale of real estate                        (437,195)             -
     Changes in operating assets and liabilities:
      (Increase) decrease in assets:
        Land development costs                          (798,453)    (1,189,659)
        Accounts receivable                              (26,227)       (69,645)
        Prepaid expenses and other assets                 18,705         (2,333)
      Increase (decrease) in liabilities:
        Accounts payable and accrued expenses            (28,027)       (16,815)
        Income taxes payable                             (28,306)        28,306
        Tenant security deposits                          34,308        (43,228)
                                                    ----------------------------
  Total adjustments                                     (992,479)      (953,953)
                                                    ----------------------------
Net Cash Used in Operating Activities                 (1,130,127)    (1,067,419)
                                                    ----------------------------

Cash Flows from Investing Activities:
  Acquisition of property, plant and equipment           (62,958)       (29,754)
  Proceeds from sale of equipment                         12,000              -
  Proceeds from mortgage receivable                      500,000              -
                                                    ----------------------------
Net Cash Provided by (Used in) Investing Activities      449,042        (29,754)
                                                    ----------------------------

Cash Flows from Financing Activities:
  Repayment of loans payable                            (706,095)       (17,889)
  Loan origination fees                                        -         73,519
  Proceeds from exercise of stock options                668,942        372,869
                                                    ----------------------------
Net Cash (Used in) Provided by Financing Activities      (37,153)       428,499
                                                    ----------------------------

Net Decrease in Cash and Cash Equivalents               (718,238)      (668,674)
Cash and Cash Equivalents, beginning of year           1,562,643      2,231,317
                                                    ----------------------------
Cash and Cash Equivalents, end of year               $   844,405    $ 1,562,643
                                                    ============================


See notes to consolidated financial statements. F-5

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

1. Summary of Significant Accounting Policies

Organization and nature of operations - Gyrodyne Company of America, Inc. and Subsidiaries (the "Company") is primarily a lessor of industrial and commercial real estate to unrelated diversified entities located in Long Island, New York.

In April 2002, the Company announced redevelopment plans of a significant portion of real estate holdings, for the construction of an 18-hole championship golf course and 336 luxury residential units. In connection with this redevelopment plan, the Company executed agreements with Landmark National to design and develop the golf course community. See Note 15.

The State University of New York at Stony Brook has announced plans to acquire 246 acres of the Company's 314-acre parcel through either a negotiated purchase or eminent domain. See Note 15.

Principles of consolidation - The accompanying consolidated financial statements include the accounts of Gyrodyne Company of America, Inc. ("GCA") and all majority owned subsidiaries. Investments in affiliates in which the Company has the ability to exercise significant influence, but not control, would be accounted for under the equity method. Investment interests in excess of 5% in limited partnerships are accounted for under the equity method.

All consolidated subsidiaries are wholly owned. All significant inter-company transactions have been eliminated.

Rental real estate - Rental real estate assets are stated at cost, and reported net of accumulated depreciation and amortization. Tenant improvements, which are included in buildings and improvements, are also stated at cost. Expenditures for ordinary maintenance and repairs are expensed to operations as they are incurred. Renovations and or replacements, which improve or extend the life of the asset are capitalized and depreciated over their estimated useful lives.

Real estate held for development - Real estate held for development is stated at the lower of cost or net realizable value. In addition to land, land development and construction costs, real estate held for development includes interest, real estate taxes and related development and construction overhead costs which are capitalized during the development and construction period.

Net realizable value represents estimates, based on management's present plans and intentions, of sale price less development and disposition cost, assuming that disposition occurs in the normal course of business.

Long-lived assets - On a periodic basis, management assesses whether there are any indicators that the value of the real estate properties may be impaired. A property's value is impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. Such cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors. To the extent impairment occurs, the loss will be measured as the excess of the carrying amount of the property over the fair value of the property.

The Company is required to make subjective assessments as to whether there are impairments in the value of its real estate properties and other investments. These assessments have a direct impact on the Company's net income, since an impairment charge results in an immediate negative adjustment to net income.

Depreciation and amortization - Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the assets, as follows:

     Buildings and Improvements                                   10 to 30 years
     Machinery and Equipment                                       3 to 20 years


--------------------------------------------------------------------------------
                                                                             F-6

                                               GYRODYNE COMPANY OF AMERICA, INC.
                                                                AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

Expenditures for maintenance and repairs are charged to operations as incurred. Significant renovations are capitalized.

Revenue recognition - Minimum revenues from rental property are recognized on a straight-line basis over the terms of the related leases. The excess of rents recognized over amounts contractually due, if any, are included in deferred rents receivable on the Company's balance sheets. Certain leases also provide for tenant reimbursements of common area maintenance and other operating expenses and real estate taxes. Ancillary and other property related income is recognized in the period earned.

Allowance for doubtful accounts - Management must make estimates of the uncollectability of accounts receivable. Management specifically analyzes accounts receivable and analyzes historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the allowance for doubtful accounts.

Investments - The Company has a 10.93% limited partnership interest in Callery-Judge Grove, L.P. (the "Grove") that owns a 3500-acre citrus grove in Palm Beach County, Florida. The Company is accounting for this investment under the equity method in accordance with Emerging Issue Task Force ("EITF") Topic D-46 "Accounting for Limited Partnership Investments" and the guidance in paragraph 8 of AICPA Statement of Position ("SOP") 78-9, "Accounting for Investments in Real Estate Ventures."

Cash equivalents - The Company considers all highly liquid debt instruments purchased with maturities of three months or less to be cash equivalents.

Net loss per common share and per common equivalent share - The reconciliations for the years ended April 30, 2005 and 2004 are as follows:

Year Ended April 30, 2005                                       Loss         Shares      Per Share
---------------------------------------------------------------------------------------------------
Basic EPS                                                    $ (137,648)    1,180,469   $     (.12)
Effect of Dilutive Securities - common stock options                  -             -            -
                                                             --------------------------------------
Diluted EPS                                                  $ (137,648)    1,180,469   $     (.12)
                                                             ======================================

Year Ended April 30, 2004                                      Income        Shares      Per Share
---------------------------------------------------------------------------------------------------
Basic EPS                                                    $ (113,466)    1,133,896   $     (.10)
Effect of Dilutive Securities - common stock options                  -             -            -
                                                             --------------------------------------
Diluted EPS                                                  $ (113,466)    1,133,896   $     (.10)
                                                             ======================================

Income taxes - Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Stock-based compensation - The Company applies Accounting Principles Board ("APB") Opinion No. 25 and related interpretations in accounting for stock-based compensation to employees. Stock compensation to non-employees is accounted for at fair value in accordance with Statement of Financial Accounting Standard ("SFAS") No. 123, "Accounting for Stock-Based Compensation."


F-7

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

In accordance with APB Opinion No. 25, no compensation expense has been recognized for the employee stock option plans. Had the Company recorded compensation expense for the employee stock options based on the fair value at the grant date for awards in the years ended April 30, 2005 and 2004 consistent with the provisions of SFAS No. 123, the Company's net loss and net loss per share would have been adjusted to the following pro forma amounts:

                                                      2005          2004
---------------------------------------------------------------------------
Net Loss, as reported                             $ (137,648)   $ (113,466)
Net Loss, pro forma                                 (138,648)     (230,466)
Basic Loss Per Share, as reported                       (.12)         (.10)
Basic Loss Per Share, pro forma                         (.12)         (.20)
Diluted Loss Per Share, as reported                     (.12)         (.10)
Diluted Loss Per Share, pro forma                       (.12)         (.20)

For the purposes of the pro forma presentation, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following range of weighted-average assumptions were used for grants during the fiscal years ended April 30, 2004. There were no stock options granted during the fiscal year ended April 30, 2005.

Years Ended April 30,                                 2005          2004
---------------------------------------------------------------------------
Dividend Yield                                            -           0.0%
Volatility                                                -          32.0%
Risk-Free Interest Rate                                   -           2.0%
Expected Life                                             -        5 Years

Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant assumptions and estimates relate to depreciable lives and the valuation of real estate.

New accounting pronouncements - In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123(R), ("SFAS 123(R)") "Share-Based Payment". This statement replaces SFAS No. 123, "Accounting for Stock-Based Compensation", and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS 123(R) covers a wide range of share-based compensation, including stock options, and requires that the compensation cost relating to share-based transactions be measured at fair value and recognized in the financial statements. Public entities filing as small business issuers are required to apply SFAS No. 123(R) in their first annual reporting period beginning after December 15, 2005. Management is evaluating the impact that this Statement will have on the Company's consolidated financial statements.

In December 2004, the FASB issued SFAS No. 153, "Exchange of Non-monetary Assets", an amendment of APB Opinion No. 29, which differed from the International Accounting Standards Board's ("IASB") method of accounting for exchanges of similar productive assets. SFAS No. 153 replaces the exception from fair value measurement in APB No. 29, with a general exception from fair value measurement for exchanges of non-monetary assets that do not have commercial substance. The statement is to be applied prospectively


F-8

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

and is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Company does not believe that SFAS No. 153 will have a material impact on its results of operations or cash flows.

2. Mortgage Receivable

A mortgage receivable in the original principal amount of $1,800,000 is due from a former tenant in connection with sale of real estate (Note 8). The mortgage bears interest at 5% per annum with interest only payments due quarterly, commencing in November 2002. The principal and any unpaid interest are due and payable in August 2005. The mortgage is secured by the related real estate along with a third party guarantee of approximately $1,430,000.

During the year ended April 30, 2005, the mortgagor prepaid $500,000 of the principal amount.

3. Investment in Grove Partnership:

The Company has a 10.93% limited partnership interest in the Callery-Judge Grove, L.P. (the "Grove"). As of April 30, 2005 and 2004, the carrying value of the Company's investment was $0.

The Grove has reported to its limited partners that in June 2004 it received an independent appraisal report of the citrus grove property, which is now the subject of development applications. Based upon the appraised value of the citrus grove operations and property, at April 30, 2005, strictly on a pro-rata basis, the estimated fair value of the Company's interest in the Grove would be approximately $8,279,000. The Company cannot predict what, if any, value it will ultimately realize from this investment.

The fiscal year end of the Grove is June 30. Summarized financial information of the Grove as of June 30, 2004 and 2003 is as follows:

     Years Ended June 30,                              2004            2003
     ---------------------------------------------------------------------------
                                                  (in thousands)  (in thousands)

     Total Current Assets                           $    5,662      $   7,970
     Total Assets                                       20,917         23,048
     Total Current Liabilities                           3,071          2,495
     Total Liabilities                                  19,076         20,012
     Total Partners' Capital                             1,841          3,036
     Total Revenues                                      3,213          8,827
     Net Loss                                           (1,195)        (1,586)

4.   Income Taxes

The Company files a consolidated U.S. federal income tax return that includes all 100% owned subsidiaries. State tax returns are filed on a consolidated or separate basis, depending on the applicable laws.

The (benefit) provision for income taxes is comprised of the following:

     Years Ended April 30,                               2005           2004
     ---------------------------------------------------------------------------
     Current:
        Federal                                      $         -    $   101,203
        State                                             22,234        (49,442)
                                                     ---------------------------
                                                          22,234         51,761
                                                     ---------------------------


--------------------------------------------------------------------------------
                                                                             F-9


GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

Deferred:
   Federal                                          (96,000)      (103,000)
   State                                            (18,000)       (39,000)
                                                ---------------------------
                                                   (114,000)      (142,000)
                                                ---------------------------
                                                $   (91,766)   $   (90,239)
                                                ===========================

The components of the net deferred tax liabilities are as follows:

April 30,                                           2005           2004
---------------------------------------------------------------------------
Deferred Tax Assets:
   Stock compensation                           $     3,000    $    13,000
   Accrued sick and vacation                         14,000         13,000
   Provision for bad debt                            15,000         30,000
   Tax loss carryforwards                            27,000              -
   Contribution carryforwards                         3,000              -
                                                ---------------------------
Total Deferred Tax Assets                            62,000         56,000

Deferred Tax Liabilities:
   Prepared pension costs                          (490,000)      (599,000)
   Unrealized gain on investment in
     Citrus Grove                                  (569,000)      (569,000)
   Land development costs                          (600,000)      (600,000)
   Accumulated depreciation                          (8,000)        (7,000)
                                                ---------------------------
Total Deferred Tax Liabilities                   (1,667,000)    (1,775,000)
                                                ---------------------------
Net Deferred Income Taxes                       $(1,605,000)   $(1,719,000)
                                                ===========================

The Company has federal net operating loss carryforwards of approximately $78,000, which can be used to reduce future taxable income through 2025.

A reconciliation of the federal statutory rate to the Company's effective tax rate is as follows:

     Years Ended April 30,                               2005           2004
     ---------------------------------------------------------------------------
     U.S. Federal Statutory Income Rate                    34.0%           34.0%
     State Income Tax, net of federal tax benefits          7.5%            7.5%
     Other Differences, net                                (1.5)%           2.8%
                                                     ---------------------------
                                                           40.0%           44.3%
                                                     ===========================

5.   Retirement Plans

The Company has a noncontributory defined benefit pension plan covering substantially all of its employees. The benefits are based on annual average earnings for the highest sixty (60) months (whether or not continuous) immediately preceding the Participant's termination date. Annual contributions to the plan are at least equal to the minimum amount, if any, required by the Employee Retirement Income Security Act of 1974 but no greater than the maximum amount that can be deducted for federal income tax purposes. Contributions are intended to provide not only for benefits attributed to service to date but also those expected to be earned in the future. During the years ended April 30, 2005 and April 30, 2004, the Company made no contributions to the Plan. The Company has no minimum required contribution for the April 30, 2005 plan year.


F-10

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

The following tables provide a reconciliation of the changes in the plan's benefit obligations and fair value of assets over the two-year period ending April 30, 2005, and a statement of the funded status as of April 30 of both years:

April 30,                                           2005           2004
---------------------------------------------------------------------------
Pension Benefits
Reconciliation of Benefit Obligation:
   Obligation                                   $ 1,996,981    $ 1,763,513
   Service cost                                     129,967         86,717
   Interest cost                                    129,160        119,220
   Actuarial loss                                   269,299        197,779
   Benefit payments                                (163,040)      (170,248)
                                                ---------------------------
Obligation at April 30                          $ 2,362,367    $ 1,996,981
                                                ===========================

April 30,                                           2005           2004
---------------------------------------------------------------------------
Reconciliation at Fair Value of Plan Assets:
   Fair value of plan assets at May 1           $ 2,163,701    $ 1,572,364
   Actual return on plan assets                     937,964        761,585
   Benefit payments                                (163,040)      (170,248)
                                                ---------------------------
Fair Value of Plan Assets at April 30           $ 2,938,625    $ 2,163,701
                                                ---------------------------

Funded Status:
   Funded status at April 30                    $   576,258    $   166,720
   Unrecognized prior-service cost                  112,968        185,706
   Unrecognized loss                                510,300      1,073,209
                                                ---------------------------
Net Amount Recognized                           $ 1,199,526    $ 1,425,635
                                                ===========================

The accumulated benefit obligation was $1,993,167 and $1,779,282 as of April 30, 2005 and 2004, respectively.

The following table provides the components of net periodic benefit cost for the plans for fiscal years 2005 and 2004:

April 30,                                           2005           2004
---------------------------------------------------------------------------
Pension Benefits
Service Cost                                    $   129,967    $    86,717
Interest Cost                                       129,160        119,220
Expected Return on Plan Assets                     (165,830)      (126,166)
Amortization of Prior-Service Cost                   72,738         72,738
Amortization of Net Loss                             60,074         84,361
                                                ---------------------------
Net Periodic Benefit Cost After Curtailments
   and Settlements                              $   226,109    $   236,870
                                                ===========================

The prior-service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants.


F-11

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

The Plan's expected return on plan assets assumption is derived from a detailed periodic review conducted by the Plan's actuaries and the Plan's asset management group. The review includes an analysis of the asset allocation strategy, anticipated future long-term performance of individual asset classes, risks and correlations for each of the asset classes that comprise the funds' asset mix. While the review gives appropriate consideration to recent fund performance and historical returns, the assumption is primarily a long-term, prospective rate.

The assumptions used in the measurement of the Company's benefit obligation are shown in the following table:

April 30,                                           2005           2004
---------------------------------------------------------------------------
Pension Benefits
Weighted-Average Assumptions as of April 30:
   Discount rate                                       5.75%          6.50%
   Expected return on plan assets                      8.00%          8.00%
   Rate of compensation increase                       5.00%          4.00%

The Plan's investment objectives are expected to be achieved through a portfolio mix of U.S. stocks, international stocks, U.S. fixed income securities, and Company stock which reflect the Plan's desire for investment return while controlling total portfolio risk to an acceptable level.

The defined benefit plan had the following asset allocations as of their respective measurement dates:

April 30,                                           2005           2004
---------------------------------------------------------------------------
Common Stock - Gyrodyne Company of America, Inc.       93.7%          90.6%
United States Government Securities                     1.1%           1.5%
Corporate Equity Securities                             0.3%           0.7%
Other Funds                                             4.9%           7.2%
                                                ---------------------------
Total                                                 100.0%         100.0%
                                                ===========================

Securities of the Company included in plan assets are as follows:

April 30,                                           2005           2004
---------------------------------------------------------------------------
Number of Shares                                     67,580         72,580
Market Value                                    $ 2,753,885    $ 1,961,112

Expected approximate future benefit payments are as follows:

     Years Ending April 30,                                             Amount
     ---------------------------------------------------------------------------
     2006                                                           $    135,000
     2007                                                                127,000
     2008                                                                143,000
     2009                                                                141,000
     2010                                                                133,000
     2011 - 2015                                                         694,000


--------------------------------------------------------------------------------
                                                                            F-12

                                               GYRODYNE COMPANY OF AMERICA, INC.
                                                                AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

6. Stock Option Plans

Incentive Stock Option Plan - The Company had a stock option plan (the "Plan") which expired in October 2003, under which participants were granted Incentive Stock Options ("ISOs"), Non-Qualified Stock Options ("NQSOs") or Stock Grants. The purpose of the Plan was to promote the overall financial objectives of the Company and its shareholders by motivating those persons selected to participate in the Plan to achieve long-term growth in shareholder equity in the Company and by retaining the association of those individuals who were instrumental in achieving this growth. Such options or grants became exercisable at various intervals based upon vesting schedules as determined by the Compensation Committee. The options expire between August 2005 and May 2008.

The ISOs were granted to employees and consultants of the Company at a price not less than the fair market value on the date of grant. All such options were authorized and approved by the Board of Directors, based on recommendations of the Compensation Committee.

ISOs were granted along with Stock Appreciation Rights, which permitted the holder to tender the option to the Company in exchange for stock, at no cost to the optionee, that represented the difference between the option price and the fair market value on date of exercise. NQSOs were issued with Limited Stock Appreciation Rights, which were exercisable, for cash, in the event of a change of control. In addition, an incentive kicker was provided for Stock Grants, ISOs and NQSOs, which increased the number of grants or options based on the market price of the shares at exercise versus the option price.

Non-Employee Director Stock Option Plan - The Company adopted a non-qualified stock option plan for all non-employee Directors of the Company in October 1996. The plan expired in September 2000. Each non-employee Director was granted an initial 2,500 options on the date of adoption of the plan. These options are exercisable in three equal annual installments commencing on the first anniversary date subsequent to the grant. Additionally, each non-employee Director was granted 1,250 options on each January 1, 1997 through 2000, respectively. These additional options are exercisable in full on the first anniversary date subsequent to the date of grant. The options expire between November 2005 and January 2007.

A summary of the Company's various fixed stock option plans as of April 30, 2005 and 2004, and changes during the years then ended is presented below:

Years Ended April 30,                                     2005                     2004
----------------------------------------------------------------------------------------------------
                                                               Weighted                   Weighted
                                                               Average                    Average
                                                               Exercise                   Exercise
Fixed Stock Options                               Shares        Price       Shares         Price
----------------------------------------------------------------------------------------------------
Outstanding, beginning of year                    164,650    $    16.30      174,740    $    15.28
Granted                                                 -             -       38,500         16.87
Exercised options                                 (73,620)        16.83      (38,670)        12.62
Canceled                                                -             -       (9,920)        14.91
                                               ----------                 ----------
Outstanding, end of year                           91,030         15.87      164,650         16.30
                                               ==========                 ==========
Options Exercisable at year end                    91,030         15.87      164,650         16.30
                                               ==========                 ==========
Weighted-Average Fair Values of
    Options Granted During Year                              $        -                 $     5.31
                                                             ==========                 ==========


F-13

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

The following table summarizes information about stock options outstanding at April 30, 2005:

                            Options Outstanding                Options Exercisable
                 ----------------------------------------- --------------------------
                                   Weighted
                                   Average      Weighted                    Weighted
                                  Remaining     Average                     Average
  Range of            Number     Contractual    Exercise        Number      Exercise
Exercise Price     Outstanding      Life         Price       Outstanding     Price
---------------------------------------------------------- --------------------------
$13.46-14.23          19,800         .43       $   13.91        19,800     $   13.91
$15.46-16.87          64,355        2.47       $   16.20        64,355     $   16.20
   $18.44              6,875        1.67       $   18.44         6,875     $   18.44

Shares reserved for future issuance at April 30, 2005 are comprised of the following:

Shares issuable upon exercise of stock options under the Company's Non-Employee Director Stock Option Plan 17,875

Shares issuable upon exercise of stock options under the Company's stock incentive plan 73,155 91,030

Incentive compensation plan - The Company has an incentive compensation plan for all full-time employees and members of the Board in order to promote shareholder value. The benefits of the incentive compensation plan are realized only upon a change in control of the Company. Change in control is defined as the accumulation by any person, entity or group of 30% or more of the combined voting power of the Company's voting stock or the occurrence of certain other specified events. In the event of a change in control, the Company's plan provides for a cash payment equal to the difference between the plan's "establishment date" price of $15.39 per share and the per share price of the Company's common stock on the closing date, equivalent to 100,000 shares of Company common stock. The payment amount would be distributed to eligible participants based upon their respective weighted percentages (ranging from .5% to 18%).

7. Loans Payable

April 30,                                             2005          2004
---------------------------------------------------------------------------
Revolving Line of Credit                                    -       696,287
Installment Loans, other                               19,145        28,953
                                                  -------------------------
                                                  $    19,145   $   725,240
                                                  =========================

The line of credit has a maximum borrowing limit of $1,750,000, bears interest at the lending institution's prime-lending rate (5.75% at April 30, 2005) plus 1%, and is subject to certain financial covenants. The line is secured by certain real estate and expires on June 1, 2006. As of April 30, 2005, $1,750,000 was available under this agreement and the Company was in compliance with the financial covenants.


F-14

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

Annual maturities of loans payable is as follows:

     Years Ending April 30,                                             Amount
     ---------------------------------------------------------------------------
     2006                                                            $    7,411
     2007                                                                 7,411
     2008                                                                 4,323
                                                                     -----------
                                                                     $   19,145
                                                                     ===========

8.   Sale of Real Estate

On August 8, 2002, the Company sold approximately twelve acres of property and certain buildings with a carrying value of approximately $559,000 to an existing tenant. The contract of sale amounted to $5,370,000 under which the Company received a cash payment of approximately $3,600,000 and a three-year mortgage for $1,800,000 with interest at 5%. The profit on the sale of the land and buildings was $4,700,000 net of transaction costs of approximately $113,000. Pursuant to SFAS No. 66, approximately $1,570,000 of the gain on this sale was deferred. The deferred gain will be recognized upon collection of the related mortgage receivable.

During the fiscal year ended April 30, 2005, the Company received cash payments from its mortgage receivable totaling $500,000 and recognized a gain on the sale of real estate of approximately $437,000.

9. Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and long-term investments. The Company places its temporary cash investments with high credit quality financial institutions and, by policy, limits the amount of credit exposure in any one financial institution. At times the Company maintains bank account balances, which exceed FDIC limits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant credit risk on cash. Management does not believe significant credit risk exists at April 30, 2005 and 2004.

10. Supplemental Disclosures of Cash Flow Information

Cash paid during the year for:

     Years Ended April 30,                                 2005         2004
     ---------------------------------------------------------------------------

     Interest                                          $    35,217   $    38,850
                                                       =========================

     Income Taxes                                      $    30,000   $   204,768
                                                       =========================


--------------------------------------------------------------------------------
                                                                            F-15


GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

11. Commitments

Lease commitments - The future minimum revenues from rental property under the terms of all noncancellable tenant leases, assuming no new or renegotiated leases are executed for such premises, for future years are approximately as follows:

Years Ending April 30,                                            Amount
---------------------------------------------------------------------------

2006                                                          $     969,000
2007                                                                186,000
2008                                                                186,000
2009                                                                182,000
2010                                                                182,000
Thereafter                                                        1,802,000
                                                              -------------
                                                              $   3,507,000
                                                              =============

The Company is leasing office space in St. James, New York on a month-to-month basis. Rental expense approximated $54,000 and $57,000 for the years ended April 30, 2005 and 2004, respectively.

Employment agreements - Effective January 23, 2003, the Company amended the existing employment contracts with two officers, which provide for annual salaries aggregating $362,000. The terms of the agreements were extended from one to three years and provide for a severance payment equivalent to three years salary in the event of a change in control.

Land development contract - The Company has entered into a Golf Operating and Asset Management Agreement (the "Agreement") with Landmark National ("Landmark") for the design and development of an 18-hole championship golf course community. The Agreement provides for Landmark to design, construct and manage the golf course and related facilities, and to design and plan the proposed residential community. Fees for Landmark's services is as follows:

Golf Course Design and Operations -

o $5,000 per month, not to exceed $150,000, for the design of the golf course and related facilities. As of April 30, 2005, the Company has paid $150,000.

o A $100,000 golf course grading plan fee after completion of the grading plan, which was paid during the year ended April 30, 2003.

o If Landmark designs the golf course as a "Signature Landmark Course," a one time licensing fee not to exceed $250,000 is due.

o A monthly builders fee, upon commencement of construction of the golf course, equal to 4.5% of the total cost of the golf course and related facilities.

o Upon commencement of the operations of the golf course, a $100,000 annual management fee.

Residential Community Planning and Design -

o $10,000 per month, not to exceed $300,000, for the design and planning of the residential community. As of April 30, 2005, the Company has paid $300,000.

o $75,000 annual fee commencing upon the beginning of the operations, sales and marketing phase of the residential community, and terminating upon the sale of all building lots.


F-16

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

Total Project -

o A monthly builders fee, upon commencement of construction of the golf course and the residential community, equal to 4.5% of the total construction costs, as defined.

o An incentive fee equal to 10% of the pre-tax income of the Project, as defined.

Termination -

Should the Company terminate the Agreement prior to completion without cause, a termination fee is payable to Landmark as follows:

a. $500,000 prior to the completion of the design and master plan phase of the golf course and related facilities;

b. $1,000,000 after the completion of the design and master plan phase of the golf course and related facilities and prior to the opening of the golf course to third parties;

c. If termination occurs after the golf course and related facilities are open for use by third parties a sum equal to 50% of the entire amount of unearned fees that would have been earned by Landmark through the expiration date of the agreement.

The Agreement expires on April 9, 2017.

12. Fair Value of Financial Instruments

The methods and assumptions used to estimate the fair value of the following classes of financial instruments were:

The carrying amount of cash, receivables and payables and certain other short-term financial instruments approximate their fair value.

The estimated fair value of the Company's investment in the Citrus Grove Partnership at April 30, 2005, based upon an independent third party appraisal report, is approximately $8,279,000 based on the Company's ownership percentage.

The book value of the Company's loans payable approximates its fair value.

13. Related Party Transactions

A law firm related to a director provided legal services to the Company for which it was compensated approximately $110,000 and $229,000 for the years ended April 30, 2005 and 2004, respectively. As of January 1, 2005, the relationship with the aforementioned law firm has ended and the Company has engaged a new outside law firm.

14. Major Customers

For the year ended April 30, 2005 rental income from the three largest tenants represented 14%, 13% and 10% of total rental income.

For the year ended April 30, 2004 rental income from the three largest tenants represented 17%, 13% and 12% of total rental income.


F-17

GYRODYNE COMPANY OF AMERICA, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended April 30, 2005 and 2004

15. Contingencies

In December 2002, Stony Brook University (the "University") approached the Company with an interest in discussing the purchase of the Company's 314-acre Flowerfield property located in Stony Brook/St. James, New York. Those discussions were eventually discontinued, as the Company had concluded that the University's suggested range of the purchase price for the property was not reflective of its value.

In April 2003, the University announced that the Board of Trustees of the State University of New York had adopted a resolution, which empowered the University to commence eminent domain proceedings to acquire part of the property.

In a filing dated May 21, 2004, the University announced the completion of a Draft Generic Environmental Impact Study ("DGEIS"), which outlined its plan to acquire 246 acres of the Flowerfield property through either a negotiated purchase or eminent domain. The announcement also included a Notice of Public Hearing establishing a date of June 21, 2004 to review the DGEIS and to review the public purpose of an eminent domain condemnation.

In June 2004, the Company filed a lawsuit in New York State Supreme Court in an effort to require the University to comply with the requirements of the State Environmental Quality Review Act ("SEQRA").

On April 25, 2005, the Appellate Division Second Judicial Department of the Supreme Court of the State of New York issued its Decision and Judgment In the Matter of Gyrodyne Company of America, Inc., petitioner, v. State University of New York at Stony Brook. The Court rejected the Company's challenges to the University's proposed taking of the property concluding that the University had sufficient statutory jurisdiction and authority for this proposed public project and rejecting the Company's contention that the taking was excessive. Based upon these conclusions, the Court denied the Company's petition and dismissed the proceeding. The Company has appealed the Court's decision.

In the event the University moves forward with the eminent domain proceeding, management intends to take all appropriate steps to seek maximum value for the Property.

If the University is successful in condemning the Flowerfield property, the Company will be forced to cancel its land development contract with Landmark and a termination fee may be due as discussed in Note 11.


F-18

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

GYRODYNE COMPANY OF AMERICA, INC.

(Incorporated Under the Laws of the State of New York)

These By-laws are supplemental to the New York Business Corporation Law and other applicable provisions of law, as the same shall from time to time be in effect.

ARTICLE I. OFFICES. The principal office shall be in the Village of St. James, Town of Smithtown, County of Suffolk, State of New York. The Corporation may have offices and places of business at such other places, both within and without the State of New York, as may be determined by the Board of Directors.

ARTICLE II. MEETINGS OF STOCKHOLDERS.

Section 201. Place of Meetings. All meetings of the stockholders shall be held at such place or places, within or without the State of New York, as shall be determined by the Board of Directors from time to time.

Section 202. Annual Meetings. The annual meeting of the stockholders for the election of Directors and the transaction of such other business as may properly come before the meeting shall be held at such date or hour as may be fixed by the Board of Directors. Any business which is a proper subject for stockholder action may be transacted at the annual meeting, irrespective of whether the notice of said meeting contains any reference thereto, except as otherwise provided by applicable law or these By-Laws.

Section 203. Special Meetings. Special meetings of the stockholders may be called at any time by the President, the Chairman of the Board or by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies (the "Whole Board").

Section 204. Notice of the Meetings.

(a) Written or printed notice, stating the place, day and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given by the Corporation not less than ten (10) days nor more than sixty (60) days before the date of the meeting, either personally or by first class mail. Notice may be given by third class mail, in which event, the notice shall be given not fewer than twenty-four (24) nor more than sixty (60) days before the date of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at his address as it appears on the stock transfer books of the


Corporation or at such other address given by the stockholder in accordance with law.

(b) Any previously scheduled meeting of the stockholders may be postponed, and any special meeting of the stockholders may be cancelled, by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting of stockholders.

Section 205. Quorum. The holders of a majority of the votes of shares entitled to vote thereat shall constitute a quorum at any meeting of stockholders for the transaction of business except as otherwise provided by law.

Section 206. Conduct of Stockholders' Meetings; Adjournment.

(a) The Chairman of the Board shall preside at all stockholders' meetings. In the absence of the Chairman of the Board, the President shall preside. The Officer presiding over the stockholders' meeting may establish such rules and regulations for the conduct of the meeting as he/she may deem to be reasonably necessary or desirable for the orderly and expeditious conduct of the meeting, and shall fix and announce at the meeting the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at the stockholders' meeting. Subject to Section 302 of these By-Laws, unless the Officer presiding over the stockholders' meeting otherwise requires, stockholders need not vote by ballot on any question.

(b) The presiding Officer at a stockholders' meeting or a majority of the shares of the Corporation present thereat, represented in person or by proxy, may adjourn the meeting from time to time, whether or not there is a quorum. No notice of the time and place of adjourned meetings need be given except as required by law. The stockholders present at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

Section 207. Inspectors of Election. At least two inspectors of election shall be appointed by the Board of Directors to serve at each annual or special meeting of stockholders. Such inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives.

The inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes or consents, hear and

2

determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. If there are three or more inspectors, the act of a majority shall govern. On request of the presiding Officer or any stockholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, question or matter determined by them. Any report made by them shall be prima facie evidence of the facts therein stated, and such report shall be filed with the minutes of the meeting.

Section 208. Action of Stockholders. Except as otherwise provided by law, the Certificate of Incorporation, or these By-Laws, in all matters other than the election of directors (which is governed by Section 302 of these By-Laws), the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the matter shall be the act of the stockholders.

Section 208. Notice of Stockholder Business and Nominations.

(a) Annual Meetings of Stockholders.

(1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (A) pursuant to the Corporation's notice of meeting, (B) by or at the direction of the Board of Directors or (C) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this By-Law, who is entitled to vote at the meeting, who complies with the notice procedures set forth in this By-Law and who (in the case of nominations of persons for election to the Board of Directors of the Corporation) has continuously held at least $2000 in market value, or 1%, of the Corporation's outstanding capital stock entitled to vote for at least one year by such date of giving of notice or who is entitled to cast votes with respect to at least 5% percent of the outstanding capital stock of the Corporation, and who complies with the notice procedures set forth in this By-Law.

(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (C) of paragraph (a)(1) of this By-Law, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 120th day nor earlier than the

3

close of business on the 150th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reason for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (i) the name and address of such stockholder, as they appear on the books of the Corporation, and of such beneficial owner, and (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner and the length of time such shares were held.

(3) Notwithstanding anything in the second sentence of paragraph
(a)(2) of this By-Law to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least 70 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this By-Law shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

4

(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (a) by or at the direction of the Board of Directors or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this By-Law, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this By-Law. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by paragraph (a)(2) of this By-Law shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder's notice as described above.

(c) General.

(1) Only such persons who are nominated in accordance with the procedures set forth in this By-Law shall be eligible for serve as directors and only such business shall be conducted at a meeting of the stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this By-Law. Except as otherwise required by law, the Officer presiding over such stockholders' meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this By-Law and, if any proposed nomination or business is not in compliance with this By-Law, to declare that such defective proposal or nomination shall be disregarded.

(2) For purposes of this By-Law, "public announcement" shall mean disclosure in a press release reported by the Dow Jones New Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation

5

with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this By-Law, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this By-Law. Nothing in this By-Law shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under specified circumstances.

ARTICLE III. DIRECTORS AND BOARD MEETINGS.

Section 301. Management by Board of Directors. The business and affairs of the Corporation shall be managed by its Board of Directors. The Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute, regulation, the Articles of Incorporation or these Bylaws directed or required to be exercised or done by the stockholders.

Section 302. Procedure for Election of Directors; Required Vote. Election of directors at all meetings of the stockholders at which directors are to be elected shall be by ballot, and, subject to the rights of the holders of any series of preferred stock to elect directors under specified circumstances, a plurality of the votes cast thereat shall elect directors.

Section 303. Number of Directors. The Board of Directors shall consist of not less than three (3) nor more than nineteen (19) directors, who need not be stockholders. Within these limits, the number of directors of the Corporation shall be fixed from time to time by resolution of the Board of Directors.

Section 304. Classification of Directors. The directors in office shall be divided, with respect to the time for which they severally hold office, into three classes: Class I, Class II and Class III. The term of office of the Class I directors will expire at the 1997 annual meeting of stockholders, the term of office of the Class II directors will expire at the 1998 annual meeting of stockholders and the term of office of the Class III directors will expire at the 1999 annual meeting of stockholders following their election, and shall hold office until their successors have been duly elected and qualified. At each annual meeting of stockholders, commencing with the 1997 annual meeting, directors elected to succeed the directors whose terms then expire shall be elected for a term of office to expire

6

at the third succeeding annual meeting of stockholders following their election. Directors shall hold office until their successors have been duly elected and qualified, provided, however, that a director may resign. If the number of directors is not evenly divisible into thirds, the Board shall determine which Class or Classes shall have one extra director. Any additional director of any Class elected to the Board of Directors to fill a vacancy from an increase in such Class shall hold office for the term that expires as to that Class. The tenure of a director shall not be affected by any decrease in the number of directors so made by the Board.

Section 305. Removal and Vacancies. Any director or directors may be removed at any time, but only for "cause" by the affirmative vote of two-thirds (2/3) of the directors then in office or by vote of the stockholders at a special meeting called for that purpose. "Cause" for purposes hereof shall be defined as criminal acts, misfeasance of office or other similar acts. If the office of any director or directors becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, increase in the authorized number of directors, or otherwise, the remaining directors, though less than a quorum or by the sole remaining director shall choose a successor, successors or additional directors who shall hold office for the remainder of the term of the vacant office. In the event of a vacancy, the Board of Directors, may, in its discretion, reduce the number of directors by allowing the vacated office to remain vacant. In the event that the Board of Directors increases the number of directors, such new directors will be elected by the Board of Directors to a Class or Classes of directors so designated by the Board for the term(s) to expire at the annual meeting(s) of the Corporation next electing such Class or Classes, except as otherwise required by law.

Section 306. Quorum. A majority of the directors shall constitute a quorum at any meeting except as otherwise provided by law but a lesser number may adjourn any meeting from time to time and the meeting may be held as so adjourned without further notice.

Section 307. Regular Meetings. Regular meetings of the Board of Directors shall be held on such day, at such hour, and at such place, consistent with applicable law, as the Board shall from time to time designate or as may be designated in any notice from the Secretary calling the meeting. The Board of Directors shall meet for reorganization at the first regular meeting following the annual meeting of stockholders at which the Directors are elected. Notice need not be given of regular meetings of the Board of Directors which are held at the time and place designated by the Board of Directors. If a regular meeting is not to be held at the time and place designated by the Board of

7

Directors, notice of such meeting, which need not specify the business to be transacted thereat and shall be given (a) if by mail, at least five (5) days, or
(b) if by telecopy, facsimile, telegraph, cable or other recorded communications or delivered personally or by telephone, not less than two (2) days before the time of such meeting, excepting the Organization Meeting following the election of Directors. Notices shall be given to each director at the addresses that he/she has furnished to the Secretary as the address for such notices.

Except as otherwise provided by law or in these by-laws herein, a majority of those directors present and voting at any meeting of the Board of Directors, if a quorum is present at such time, shall decide each matter considered. A director cannot vote by proxy, or otherwise act by proxy, at a meeting of the Board of Directors.

Section 308. Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, or in his absence, by the President, or at the request of three or more members of the Board of Directors. A special meeting of the Board of Directors shall be deemed to be any meeting other than the regular meeting of the Board of Directors. Notice of the time and place of every special meeting, which need not specify the business to be transacted thereat and which may be either verbal or in writing, shall be given by the Secretary to each member of the Board (a) if by mail, at least seventy-two (72) hours or (b) if by telecopy, facsimile, telegraph, cable or other recorded communications or delivered personally or by telephone, not less than eighteen hours before the time of such meeting, excepting the Organization Meeting following the election of Directors. Notices shall be given to each director at the addresses that he has furnished to the Secretary as the address for such notices.

Waiver of Notice in writing by any director of any special meeting of the Board or of any committee thereof, whether prior or subsequent to such meeting, or attendance at such meeting by any director, shall be equivalent to notice to such directors of such meeting.

Section 309. Report and Records. The reports of Officer and Committees and the records of the proceedings of all Committees shall be filed with the Secretary of the Corporation and presented to the Board of Directors, if practicable, at its next regular meeting. The Board of Directors shall keep complete records of its proceedings in a minute book kept for that purpose. When a Director shall request it, the vote of each Director upon a particular question shall be recorded in the minutes.

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Section 310. Committees.

(a) Executive Committee. The Board of Directors shall appoint three or more of its directors to act as an Executive Committee. The Committee shall be comprised of the Chairman and other directors. Such Committee shall, when the Board of Directors is not meeting, assume such duties and perform such services as may be assigned to it by the Board of Directors, with the same force and effect as though the Board of Directors had performed the same. A quorum of the Executive Committee shall be constituted when a majority of the same are present.

The Executive Committee has all the authority of the Board of Directors, except with respect to certain matters that by statute may not be delegated by the Board of Directors. The Committee acts only in the intervals between meetings of the full Board of Directors. It acts usually in those cases where it is not feasible to convene a special meeting of the Board or where the agenda is the technical completion of undertakings already approved in principle by the Board.

All action by the Executive Committee shall be reported to the Board of Directors at its meeting next succeeding such action, and shall be subject to revision or alteration by the Board of Directors; provided that no rights or acts of third parties shall be affected by any such revision or alteration.

The Executive Committee shall fix its own rules of procedure and shall meet where and as provided by such rules, or by resolution of the Board of Directors, but in every case the presence of a majority of its members shall be necessary to constitute a quorum.

In every case, the affirmative vote of a majority of all members of the Committee present at the meeting shall be necessary to its adoption of any resolution.

(b) Other Committees of this Board. The Board of Directors may appoint directors to comprise one or more of the following Committees who shall serve at the pleasure of the Board.

(1) Audit Committee. The Committee shall be comprised of non-employee directors. The duties of the Committee include recommendation of the independent accountants to be appointed by the Board; approval of the scope of the accountants' examination and other services; review of financial statements, including auditors' opinions and management letters, and reporting to the Board the Committee's recommendation with respect thereto; review of financial and/or fiscal policies and policy decisions; determination of the duties and

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responsibilities of the officer with internal auditing responsibility; approval of the scope of such officer's work and review of the results thereof and, through review of the results of internal and external audits, monitoring of internal programs to ensure compliance with laws, regulations and the Company's responsibilities for financial reporting to the public.

(2) Executive Compensation Committee. The Committee shall be comprised of non-employee directors. The duties of the Committee include approval of salaries to be paid to senior executive officers; approval of or delegation to the President of the authority to approve the salaries of all other officers; and the annual review of all significant financial relationships which directors and officers have with the company, directly or indirectly. The duties also include investigation of any complaints concerning possible conflicts of interests involving directors or officers of the Company, recommendations to the Board of actions to be taken to remove any such conflicts and recommendation of policies or procedures designed to avoid any such conflicts of interest.

(3) Stock Option Committee. The Committee shall be comprised of non-employee directors not eligible to participate in the Company's 1993 Stock Incentive Plan or other stock option plans for the benefit of Company employees. The duties of the Committee involve the review and administration of employee stock option plans for the benefit of officers and employees maintained by the Company, including the granting of options and awards with respect thereto.

(4) Nominating Committee. The Committee shall be comprised of the Chairman of the Board and non-employee directors. The duties of the Committee include recommendation to the Board with respect to nominees for election as directors; and recommendation to the Board with respect to the composition of all Committees of the Board other than the Executive and Nominating Committees.

A majority of the number of members of any Committee shall constitute a quorum for the transaction of business. The action of a majority of members present at a Committee meeting at which a quorum is present shall constitute the act of the Committee.

ARTICLE IV. OFFICERS.

Section 401. Officers. The Officers of the Corporation shall be a Chairman, a President, a Secretary, a Treasurer, and such other Officers and Assistant Officers, as the Board of Directors may from time to time deem advisable. Except for the

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President and Secretary, the Board may refrain from filling any of the said offices at any time and from time to time. Except as otherwise required by applicable law, the same individual may hold any two (2) or more offices. The Officers shall be elected by the Board of Directors at the time, in the manner and for such terms as the Board of Directors from time to time shall determine. Any Officer may be removed at any time, with or without cause, and regardless of the term for which such Officer was elected, but without prejudice to any contract right of such Officer. Each Officer shall hold his office for the current year for which he was elected or appointed by the Board unless he shall resign, becomes disqualified, or be removed at the pleasure of the Board of Directors.

Section 402. Chairman of the Board. The Board of Directors shall elect a Chairman of the Board at the first regular meeting of the Board following each annual meeting of stockholders at which Directors are elected. The Chairman of the Board shall be a member of the Board of Directors and shall preside at the meetings of the Board and perform such other duties as may be prescribed by the Board of Directors.

Section 403. President. The President shall have general supervision of all of the departments and business of the Corporation and shall prescribe the duties of the other Officers and Employees and see to the proper performance thereof. The President shall be responsible for having all orders and resolutions of the Board of Directors carried into effect. The President shall execute on behalf of the Corporation and may affix or cause to be affixed a seal to authorized documents and instruments requiring such execution, except to the extent that signing and execution thereof shall have been delegated to some other Officer or Agent of the Corporation by the Board of Directors or by the President. The President shall be a member of the Board of Directors. In the absence or disability of the Chairman of the Board or his/her refusal to act, the President shall preside at meetings of the Board. In general, the President shall perform all the duties and exercise all of the powers and authorities incident to such office or as prescribed by the Board of Directors.

Section 404. Secretary. The Secretary shall act under the supervision of the President or such other Officers as the President may designate. Unless the Board has elected a Secretary to the Board of Directors, or unless a designation to the contrary is made at a meeting, the Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all of the proceedings of such meetings in a book to be kept for that purpose, and shall perform like duties for the standing Committees when required by these By-laws or otherwise. The Secretary shall give, or cause to be given, notice of all

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meetings of the stockholders and of the Board of Directors. The Secretary shall keep a seal of the Corporation, and, when authorized by the Board of Directors or the President, cause it to be affixed to any documents and instruments requiring it. The Secretary shall perform such other duties as may be prescribed by the Board of Directors, President, or such other Supervising Officer as the President may designate.

Section 405. Treasurer. The Treasurer shall act under the supervision of the President or such other Officer as the President may designate. The Treasurer shall have custody of the Corporation's funds and such other duties as may be prescribed by the Board of Directors, President or such other Supervising Officer as the President may designate.

Section 406. General Powers. The Officers are authorized to do and perform such corporate acts as are necessary in the carrying on of the business of the Corporation, subject always to the direction of the Board of Directors.

ARTICLE V. INDEMNIFICATION.

Section 501. Mandatory Indemnification.

(a) The Corporation shall, to the full extent permitted by the New York Business Corporation Law, as amended from time to time (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that he/she is or was a director, officer or employee of the Corporation or any of its subsidiaries or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation, against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in paragraph (c) of this Section 501, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part

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thereof) was authorized by the Board of Directors. Any right of indemnification so provided shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition, such advances to be paid by the Corporation within 20 days after receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however, that if the New York Business Corporation Law requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to any employee benefit plan) in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this By-Law or otherwise.

(b) To obtain indemnification under this By-Law, a claimant shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. Upon written request by a claimant for indemnification pursuant to the first sentence of this paragraph (b), a determination, if required by applicable law, with respect to the claimant's entitlement thereto shall be made as follows: (1) if requested by the claimant, by Independent Counsel (as hereinafter defined), or (2) if no request is made by the claimant for a determination by Independent Counsel, (i) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (ii) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to the claimant, or (iii) if a quorum of Disinterested Directors so directs, by the stockholders of the Corporation. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the claimant, the Independent Counsel shall be selected by the Board of Directors unless there shall have occurred within two years prior to the date of the commencement of the action, suit or proceedings for which indemnification is claimed a Change of Control (as hereinafter defined), in which case the Independent Counsel shall be selected by the claimant unless the claimant shall request that such selection be made by the Board of Directors. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within ten days after such determination.

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(c) If a claim under paragraph (a) of this Section 501 is not paid in full by the Corporation within thirty days after a written claim pursuant to paragraph (b) of this By-Law has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct which makes it permissible under the New York Business Corporation Law for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the New York Business Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, Independent Counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

(d) If a determination shall have been made pursuant to paragraph (b) of this Section 501 that the claimant is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding commenced pursuant to paragraph (c) of this Section 501.

(e) The Corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to paragraph (c) of this Section 501 that the procedures and presumptions of this Section 501 are not valid, binding and enforceable and shall stipulate in such proceeding that the Corporation is bound by all the provisions of this By-Law.

(f) The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this By-Law shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-Laws, agreement, vote of stockholders or Disinterested Directors or otherwise. No repeal or modification of this Section 501 shall in any way diminish or adversely affect the rights of any director, officer, employee or agent of the Corporation

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hereunder in respect of any occurrence or matter arising prior to any such repeal or modification.

(g) The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the New York Business Corporation Law. To the extent that the Corporation maintains any policy or policies providing such insurance, each such director or officer, and each such agent or employee to which rights to indemnification have been granted as provided in paragraph (h) of this Section 501, shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage thereunder for any such director, officer, employee or agent.

(h) The Corporation may, to the extent authorized from time to time by the Board of Directors or the stockholders of the Corporation by resolution thereof, grant rights to indemnification, and rights to be paid by the Corporation the expenses incurred in defending any proceeding in advance of its final disposition, to any employee or agent of the Corporation to the fullest extent of the provisions of this Section 501 with respect to the indemnification and advancement of expenses of directors and officers of the Corporation, or to any directors or officers of the Corporation to the extent such rights are permitted by law and not available under this Section 501.

(i) If any provision or provisions of this Section 501 shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (1) the validity, legality and enforceability of the remaining provisions of this Section 501 (including, without limitation, each portion of any paragraph of this Section 501 containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this Section 501 (including, without limitation, each such portion of any paragraph of this Section 501 containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

(j) For purposes of this By-Law:

(1) "Change of Control" means

(A) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of

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the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of the Corporation's Common Stock or (ii) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Corporation Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control; (i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or (iv) any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (C) of this Section 501(j)(1); or

(B) Individuals who, as of August 1, 2001, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to August 1, 2001 whose election, or nomination for election by the Corporation's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(C) Consummation by the Corporation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation or the acquisition of assets of another entity (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding common stock and outstanding voting securities of the Corporation immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Corporation's

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outstanding common stock and outstanding voting securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(D) Approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

(2) "Disinterested Director" means a director of the Corporation who is not and was not a party to the action or proceeding in respect of which indemnification is sought by the claimant.

(3) "Independent Counsel" means a law firm, a member of a law firm, or an independent practitioner, that is experienced in matters of corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Corporation or the claimant in an action to determine the claimant's rights under this By-Law.

(k) Any notice, request or other communication required or permitted to be given to the Corporation under this By-Law shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary of the Corporation and shall be effective only upon receipt by the Secretary.

ARTICLE VI. SHARES OF CAPITAL STOCK

Section 601. Authority to Sign Share Certificates. Every share certificate of the Corporation shall be signed by the President or Vice President and by the Secretary or one of the Assistant Secretaries. Certificates may be signed by a facsimile signature of the President and the Secretary or one of the Assistant Secretaries of the Corporation.

Section 602. Lost of Destroyed Certificates. Any person claiming a share certificate to be lost, destroyed or

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wrongfully taken shall receive a replacement certificate if such person shall have: (a) requested such replacement certificate before the Corporation has notice that the shares have been acquired by a bona fide purchaser; (b) provided the Corporation with an indemnity agreement satisfactory in form and substance to the Board of Directors, or the President or the Secretary; and (c) satisfied any other reasonable requirements (including providing an affidavit and a surety bond) fixed by the Board of Directors, or the President or the Secretary.

ARTICLE VII. GENERAL

Section 701. Corporate Seal. The seal of the corporation shall be circular in form and shall contain the name of the Corporation, the year "1946" and the words "Corporate Seal, New York."

Section 702. Fiscal Year. The fiscal year of the Corporation shall begin on the first (1st) day of May in each year and end on the thirtieth (30th) day of April in each year.

Section 703. Record Date. The Board of Directors may fix any time whatsoever not less than ten (10) nor more than sixty (60) days prior to the date of any meeting of stockholders, or the date for the payment of any dividend or distribution, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares will be made or will go into effect, as a record date for the determination of the stockholders entitled to notice of, or to vote at, any such meetings, or entitled to receive payment of any such dividend or distribution, or to receive any such allotment of rights, or to exercise the rights in respect to any such change, conversion or exchange of shares.

Section 704. Emergency By-Laws. In the event of any emergency resulting from a nuclear attack or similar disaster, and during the continuance of such emergency, the following By-Laws provisions shall be in effect, notwithstanding any other provisions of the By-Laws:

(a) A meeting of the Board of Directors or of any Committee thereof may be called by any Officer or director upon one (1) hour's notice to all persons entitled to notice whom, in the sole judgment of the notifier, it is feasible to notify;

(b) The director or directors in attendance at the meeting of the Board of Directors or of any Committee thereof shall constitute a quorum; and

(c) These By-Laws may be amended or repealed, in whole or in part, by a majority vote of the directors attending any

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meeting of the Board of Directors, provided such amendment or repeal shall only be effective for the duration of such emergency.

Section 705. Severability. If any provision of these By-Laws is illegal or unenforceable as such, such illegality or unenforceability shall not affect any other provision of these By-Laws and such other provisions shall continue in full force and effect.

ARTICLE VIII. AMENDMENT OR REPEAL.

Section 801. Amendments. These By-Laws may be altered or amended or repealed by the affirmative vote of a majority of the stock issued and outstanding and entitled to vote thereat, at any annual meeting of the stockholders or at any special meeting of the stockholders if notice of the proposed alteration or amendment or repeal be contained in the notice of such special meeting, or by the affirmative vote of a majority of the Board of Directors at any regular meeting of the Board of Directors, or at any special meeting of the Board of Directors if notice of the proposed alteration or amendment or repeal be contained in the notice of such special meeting.

ARTICLE IX. APPROVAL OF RESTATED AND AMENDED BY-LAWS

Section 901. Approval and Effective Date. These Amended and Restated By-laws have been approved as the By-laws of the Corporation this 6th day of August, 2001, and shall be effective as of said date.


Peter A. Pitsiokos, Secretary

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Exhibit 10.11


SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

CALLERY-JUDGE GROVE,

A NEW YORK LIMITED PARTNERSHIP

dated as of
February 9, 2005



SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

CALLERY-JUDGE GROVE,

A NEW YORK LIMITED PARTNERSHIP

This SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of February 9, 2005 is entered into by and among CJG Management, Ltd., a Florida limited partnership ("CJG Management"), as the general partner and those persons and entities whose names and addresses appear on the books and records of the Partnership as partners.

WITNESSETH:

WHEREAS, a limited partnership having the name "Callery-Judge Grove" was previously formed under the Laws of the State of New York (the "Partnership"); and

WHEREAS, CJG Management is the sole general partner of the Partnership; and

WHEREAS, the parties to this Second Amended and Restated Agreement of Limited Partnership currently constitute all of the partners in the Partnership; and

WHEREAS, the parties to this Second Amended and Restated Agreement of Limited Partnership intend to amend and restate the Agreement of Limited Partnership governing the Partnership upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, for valuable consideration, the parties do hereby agree that the Partnership shall continue under, and the actions of each of the parties to this Second Amended and Restated Agreement of Limited Partnership with respect to the Partnership shall, to the extent not inconsistent with the laws of the State of New York, be governed by, the terms and conditions of this Agreement set forth below.

ARTICLE I

Certain Definitions; General Provisions

Section 1.01 Continuation. The parties hereto hereby continue the Partnership under the name Callery-Judge Grove, L.P., in accordance with, and subject to the terms and conditions set forth in, this Agreement.


Section 1.02 Certain Definitions. As used herein:

"Adjusted Capital Account" shall mean, with respect to any Partner, the balance in the Partner's Capital Account (whether positive or negative) as of the end of the Fiscal Year, (i) increased by the sum of (A) any amount which such Partner is obligated to contribute to the Partnership, (B) such Partner's share of minimum gain attributable to partnership nonrecourse liabilities (within the meaning of Treasury Regulations Section 1.704-2) as of the end of the Fiscal Year, (C) such Partner's share of minimum gain attributable to partner nonrecourse liabilities (within the meaning of Treasury Regulations 1.704-2) as of the end of the Fiscal Year, and (D) any amount for which such Partner is personally liable with respect to liabilities of the Partnership (except to the extent that such amount would duplicate the amount of any items under clauses (A), (B) or
(C)), and (ii) decreased by such Partner's share of the reasonably expected net adjustments, allocations and distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

"Affiliate" means, with respect to a Partner, any Person (i) which directly or indirectly owns 50% or more of, or (ii) 50% or more of which is directly or indirectly owned by, or (iii) 50% or more of which directly or indirectly is owned by one or more other Persons directly or indirectly owning 50% or more of, such Partner. For purposes of the preceding sentence, a Person shall be deemed to own that portion of another Person equal to (x) if such other Person is a partnership, trust or any other unincorporated association or entity, the percentage interest in income or capital of such partnership, trust or unincorporated association or entity, or (y) if such other Person is a corporation, the percentage of total shares or voting shares of such corporation, whichever is greater, owned by such first Person.

"Capital Account" means the amount or value of the Capital Contributions made by a Partner and the allocations to such Partner of Partnership items of income, gains, losses and deductions (pursuant to
Section 2.03(b) and predecessor provisions of prior limited partnership agreements of the Partnership) and distributions (pursuant to Section 5.01 and Section 7.03 and predecessor provisions of prior limited partnership agreements of the Partnership), as adjusted by any and all adjustments required to be made in order to maintain Capital Account balances in compliance with Treasury Regulations Section 1.704-l(b).

The Capital Account for each Partner shall be adjusted at the time of, and to reflect, an adjustment of the Gross Asset Value of all Partnership assets pursuant to subparagraph (ii) of the definition of Gross Asset Value in this Section 1.02 in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv), including Treasury Regulations
Section 1.704-1(b)(2)(iv)(f).

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"Capital Contribution" means the cash or fair market value of other property previously contributed by a Partner (or its predecessor in interest and properly allocable to such Partner) to the Partnership, or that may in the future be contributed by a Partner pursuant to this Agreement.

"Code" means the Internal Revenue Code of 1986, as amended from time to time. A reference to a section of the Code shall be deemed to include any amendatory or successor provision thereto.

"Distributable Funds" means the amount of cash (including cash held in Partnership reserves and net refinancing proceeds) that the Managing Partner anticipates will be available to the Partnership during such period of time as the Managing Partner deems relevant to such determination, reduced by the sum of (i) the amount of cash that the Managing Partner, in its sole discretion, anticipates will be required to meet all of the obligations of the Partnership (including, but not limited to, capital expenditures and payments of principal and interest on any debts and other obligations of the Partnership) during such period, and (ii) the amount of cash that the Managing Partner, in its sole discretion, believes necessary or appropriate for the Partnership to retain.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. A reference to a Section of ERISA shall be deemed to include a reference to any amendatory or successor provision thereto.

"GAAP" means generally accepted accounting principles and practices in effect in the United States from time to time.

"GAAP Profits" means the profits of the Partnership for a fiscal year calculated using GAAP.

"General Partner" means CJG Management, in its capacity as a general partner in the Partnership, and any other Person which both
(a) acquires, pursuant to this Agreement, an Interest as a general partner in the Partnership and (b) is admitted to the Partnership as a general partner pursuant to this Agreement.

"Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows:

(i) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by the contributing Partner and the General Partner, provided that, if the contributing Partner is the General Partner, the determination of the fair market value of the contributed asset shall require the consent of a majority of the Limited Partners;

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(ii) The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, determined in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(h), as of the date of the following: (A) 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; (B) 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; and (C) the liquidation of the Partnership within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses (A) and (B) above shall be made only if the General Partner reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners;

(iii) The Gross Asset Value of any Partnership asset distributed to any Partner shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined by the distributee and the General Partner, provided that, if the distributee is the General Partner, the determination of the fair market value of the distributed asset shall require the consent of a majority of the Limited Partners; and

(iv) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Section
743(b), but only to the extent that such adjustments are taken into account in determining capital accounts pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m) and the following:

(A) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Section 743(b) is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining capital accounts as a result of a distribution other than in complete liquidation of a Partner's interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Profits or Net Losses;

(B) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Section 743(b) is required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining capital accounts as the result of a distribution to a Partner in complete liquidation of the Partner's interest in the Partnership, the amount of such adjustment to the capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall

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be specially allocated to the Partners in accordance with their interests in the Partnership in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to whom such distribution was made in the event Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the General Partner determines that an adjustment pursuant to subparagraph (ii) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraphs (i), (ii), or (iv), such Gross Asset Value shall thereafter be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Net Profits and Net Losses. For purposes of this definition of Gross Asset Value, a capital contribution or distribution shall be considered de minimis if its value is less than $1,000.

"Incentive Bonus" means an amount equal to five percent of the GAAP Profits of the Partnership for a Fiscal Year in excess of $500,000.

"Incentive Compensation Plan" means a deferred compensation plan pursuant to which appropriate financial incentives are provided to employees and consultants of the Partnership as determined by the Managing Partner.

"Interest" has the meaning specified in Section 2.03(a).

"IRS" means the United States Internal Revenue Service.

"Limited Partner" means each of the Persons the names of which appear on the books and records of the Partnership as partners in its capacity as a limited partner in the Partnership, and any other Person which both (a) acquires, pursuant to this Agreement, an Interest as a limited partner in the Partnership and (b) is admitted to the Partnership as a limited partner.

"Major Decision" has the meaning specified in Section 3.02.

"Majority-In-Interest" means one or more Partners which, in the aggregate, hold greater than 50% of the Percentage Interests held by all Partners.

"Managing Partner" means CJG Management for so long as it is a General Partner and has not been removed (pursuant to Section 3.02(a)(v)), dissolved or otherwise ceases to be the managing partner of the Partnership, and any other General Partner selected to be the managing partner of the Partnership pursuant to Section 3.02(a)(ii).

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"Net Losses" means, for each Fiscal Year or other period, an amount equal to the Partnership's loss, if any, for such Fiscal Year or period, as the case may be, determined in accordance with Section 703(a) of the Code (with all items of income, gain, loss and deduction required to be stated separately pursuant to Section 703(a)(1) of the Code to be included in computing such loss); provided, however, such loss shall be adjusted by any and all adjustments required to be made in order to determine Capital Account balances in compliance with Treasury Regulations Section 1.704-l(b).

"Net Profits" means, for each Fiscal Year or other period, an amount equal to the Partnership's taxable income, if any, for such Fiscal Year or period, as the case may be, determined in accordance with Section 703(a) of the Code (with all items of income, gain, loss and deduction required to be stated separately pursuant to Section 703(a)(1) of the Code to be included in computing such profit); provided, however, such income shall be adjusted by any and all adjustments required to be made in order to determine Capital Account balances in compliance with Treasury Regulations Section 1.704-l(b).

"Notices" has the meaning specified in Section 10.01(a).

"Partners" means, collectively, the General Partners (including the Managing Partner), and the Limited Partners, and any Person(s) admitted to the Partnership as General Partner(s) or Limited Partner(s) pursuant to this Agreement.

"Percentage Interest" means, for each Partner, its interest in the distributions by, and income, gains, losses, deductions and credits of, the Partnership, as set forth, as at the date hereof in the books and records of the Partnership and as changed, from time to time, pursuant to the terms of this Agreement.

"Person" means an individual, corporation, association, limited liability company, partnership, trust, unincorporated organization or a government or any agency or political subdivision thereof.

"Property" means the parcel or parcels of real property in Palm Beach County, Florida owned by the Partnership, together with all improvements thereon, the citrus and other trees planted and to be planted thereon, the easements, rights and privileges appurtenant thereto, and such other real property or interests therein, whether or not contiguous with the real property described above, that may be purchased or otherwise acquired by the Partnership from time to time.

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"Recognition and Retention Plan" means a deferred compensation plan pursuant to which the Managing Partner can provide appropriate financial incentives to employees, former employees and former general partners of the Partnership.

"State" means the State of New York.

"Transfer" means any sale, assignment, gift, hypothecation, pledge or other disposition, whether voluntary or by operation of law, of an Interest or any portion thereof, or any such sale or other disposition of an ownership or voting interest, directly or indirectly, in a Partner, other than to the Partnership.

"Withdrawing Partner" has the meaning specified in Section 7.01(d).

Section 1.03 Name. The name of the Partnership shall be "Callery-Judge Grove L.P."

Section 1.04 Principal Place of Business. The Partnership's principal place of business shall continue to be in Palm Beach County, Florida, or at such other place as the Managing Partner may designate from time to time.

Section 1.05 Purposes; Powers. The purposes of the Partnership shall continue to be to own the Property and all of the machinery, equipment, inventory and other property, real or personal, tangible or intangible, owned or acquired by the Partnership (or in which the Partnership owns or acquires any interest) from time to time used in those businesses in which it may engage pursuant to this Agreement; to engage in the business of citrus production and other businesses related to citrus production, processing and sales; and to engage in the business of holding real estate for investment and for development. The Partnership shall have the power to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of such purposes.

Section 1.06 Duration. The Partnership shall continue until dissolved pursuant to Section 7.01.

Section 1.07 General Partner. CJG Management is the sole General Partner of the Partnership on the date hereof. The management of the business and affairs of the Partnership shall be conducted as provided in ARTICLE III.

Section 1.08 Limited Partners. The persons and entities whose names appear as such on the books and records of the Partnership are the Limited Partners of the Partnership on the date hereof. The Limited Partners shall not participate in making the decisions of the Partnership, and in no event shall the Limited Partners have the power to manage or transact any Partnership business or act for or in the name of, or otherwise bind, the Partnership or take part in the control of the business of the Partnership, except that the Limited Partners shall have such rights and powers as are expressly granted to them in this Agreement. No Limited Partner shall take any action which would, if taken, cause
(i) a partition of the Property, or any other asset of

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the Partnership, or (ii) a dissolution of the Partnership. No Limited Partner in its capacity as such shall ever be personally liable for any part of debts or other obligations of the Partnership, or obligated to make further Capital Contributions to the Partnership.

Section 1.09 Statutory Compliance. The Partnership shall exist under, be governed by, and this Agreement shall be construed in accordance with, the New York Revised Uniform Limited Partnership Act. All real and personal property owned by the Partnership (including, if and to the extent owned by the Partnership, the Property) is and shall continue to be owned by the Partnership as an entity and held in its name, and no Partner has or shall have any ownership interest in any such property in its individual name. The Managing Partner shall cause to be executed and filed on behalf and at the expense of the Partnership (i) all certificates and other documents required by law to be filed in connection with the continuation of the Partnership and this amendment and restatement of the agreement of limited partnership of the Partnership, and (ii) such other documents, instruments and certificates as it may deem necessary, appropriate, helpful or convenient with respect to the continuation of, and the conduct of business by, the Partnership.

ARTICLE II

Capital Contributions, Other Financing;
Interests in the Partnership

Section 2.01 Capital Contributions.

(a) Each of the Partners (other those Limited Partners who formerly held Interests as General Partners or Special Limited Partners) or each Partner's predecessor-in-interest has made a Capital Contribution to the Partnership prior to the date hereof in the amount set forth in the books and records of the Partnership.

(b) The Managing Partner may, from time to time, make, and may cause the Partnership to accept from Persons (including Partners) offering to make, loans and additional Capital Contributions to the Partnership, on such terms as it may deem necessary, appropriate, helpful or convenient subject to the terms of this Agreement.

Section 2.02 Financing of the Partnership. The money required to finance the business of the Partnership shall be derived from the revenues of the Partnership and from loans and Capital Contributions to the Partnership.

Section 2.03 Interests in the Partnership; Allocation of Profits, Gains, Losses and Deductions.

(a) Each Partner has an ownership interest in the Partnership (an "Interest") measured by its respective Percentage Interest. Each Partner's Percentage Interest, as of the date hereof, is set forth in the books and records of the Partnership.

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(b) The income, gains, losses and deductions of the Partnership shall be determined for each Fiscal Year in accordance with the accounting methods followed by the Partnership for federal income tax purposes, and shall be allocated as follows:

(i) Subject to subsections (iii) and (iv) of this Section 2.03(b), the Net Losses of the Partnership shall be allocated to the Partners in the following order of priority:

(I) First, to the Partners in accordance with their Percentage Interests, to the extent that the amount of Net Profits previously allocated to the Partners under Section 2.03(b)(ii)(IV) exceed the sum of (i) distributions previously made to the Partners under Section 5.02(a) plus (ii) the Net Losses theretofore allocated to the Partners under this Section 2.03(b)(i)(I);

(II) Second, to each Partner in proportion to the amount the positive balance in its Adjusted Capital Account bears to the aggregate of positive balances in all Adjusted Capital Accounts, until the Adjusted Capital Accounts of the Partners are reduced to zero; and

(III) Third, to the General Partner.

(ii) Subject to subsections (iii) and (iv) of this Section 2.03(b), the Net Profits of the Partnership shall be allocated in the following order of priority:

(I) First, to the General Partner ratably (as described in
Section 2.03(b)(i)(III)) until the General Partner has been allocated Net Profits equal to the amount of Net Losses previously allocated to it under Section 2.03(b)(i)(III);

(II) Second, to each Partner in proportion to the amount of Net Losses previously allocated to each Partner under Section 2.03(b)
(i)(II) bears to the aggregate of all Net Losses so allocated to all Partners, until the Partners have been allocated Net Profits equal to the amount of Net Losses previously so allocated;

(III) Third, to each Partner in proportion to the amount of Net Losses previously allocated to each Partner under Section 2.03(b)(i)(I) bears to the aggregate of all Net Losses so allocated to all Partners until the Partners have been allocated Net Profits equal to the amount of Net Losses previously so allocated; and

(IV) Fourth, to the Partners in accordance with their Percentage Interests.

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(iii) Notwithstanding paragraphs (i) and (ii) of this Section 2.03(b):

(I) Minimum Gain Chargeback. Notwithstanding any other provision of this Agreement, if there is a net decrease in Partnership minimum gain (as defined in Treasury Regulations Section 1.704-2(g)(2)), items of income and gain shall be allocated to all Partners in accordance with Treasury Regulations Section 1.704-2(f), and such allocations are intended to comply with the minimum gain chargeback requirements of Treasury Regulations Section 1.704-2 and shall be interpreted consistently therewith.

(II) Section 704(c) Allocation. (1) Solely for federal, state and local income tax purposes and not for book or Capital Account purposes, depreciation, amortization, gain or loss with respect to the property that is properly reflected on the Partnership's books at a value (computed in accordance with subparagraph (i) of the definition of "Gross Asset Value" in Section 1.02) that differs from its adjusted basis for federal income tax purposes shall be allocated in accordance with the principles and requirements of Code Section 704(c) and the Treasury Regulations promulgated thereunder, and in accordance with the requirements of the relevant provisions of the Treasury Regulations issued under Code Section 704(b). For Capital Account purposes, depreciation, amortization, gain or loss with respect to property that is properly reflected on the Partnership's books at a value that differs from its adjusted basis for tax purposes shall be determined in accordance with the rules of Treasury Regulations
Section 1.704-1(b)(2)(iv)(g).

(2) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.02, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Treasury Regulations promulgated thereunder.

(3) In accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(2), unrealized income, gain, loss or deduction in Partnership assets as of the time of the adjustment of the capital accounts pursuant to the definition of "Capital Account" in Section
1.02 (that had not been reflected in the Capital Accounts previously) shall be allocated among the Partners on a taxable disposition of any Partnership asset, the Gross Asset Value of which has been adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.02, as if there were a taxable disposition of such Partnership assets at the time of the adjustment of the capital accounts.

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(4) In accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(3) and 1.704-1(b)(2)(iv)(g), capital accounts shall be adjusted for allocations to them of depreciation, depletion, amortization, and gain or loss, as computed for book purposes, with respect to any Partnership asset, the Gross Asset Value of which has been adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.02.

(5) In accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(4), Partners' distributive shares of depreciation, depletion, amortization, and gain or loss, as computed for tax purposes, with respect to any Partnership asset, the Gross Asset Value of which has been adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value" in Section 1.02, shall be determined so as to take account of the variation between the adjusted tax basis and the Gross Asset Value of such Partnership assets in the same manner as under Code Section 704(c).

(6) Any elections or other decisions relating to such allocations shall be made by the General Partner in any manner that reasonably reflects the purpose and intention of this Agreement, provided that the Partnership shall elect to apply the allocation method permitted by the Treasury Regulations under Code Section
704(c). Allocations pursuant to this Section 2.03 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of Net Profits, Net Losses, other items, or distributions pursuant to any provisions of this Agreement.

(III) Risk of Loss Allocation. Any item of Partner Nonrecourse Deduction (as hereinafter defined) with respect to a Partner Nonrecourse Debt (as hereinafter defined) shall be allocated to the Partner or Partners who bear the economic risk of loss for such Partner Nonrecourse Debt in accordance with Treasury Regulations
Section 1.704-2(i). The term "Partner Nonrecourse Deduction" means any item of loss that is attributable to a Partner Nonrecourse Debt pursuant to Treasury Regulations Section 1.704-2(i)(1) and (2). The term "Partner Nonrecourse Debt" means any nonrecourse debt of the Partnership (within the meaning of Treasury Regulations Section 1.704-2(b)(4)) for which any Partner bears the economic risk of loss (within the meaning of Treasury Regulations Section 1.704-2(b)(4)). Subject to subparagraph (I) hereof, but notwithstanding any other provision of this Agreement, in the event that there is a net decrease in minimum gain attributable to a Partner Nonrecourse Debt (such minimum gain being hereinafter referred to as "Partner Nonrecourse Minimum Gain") for a taxable year of the Partnership, then, after taking into account allocations pursuant to subparagraph (a) hereof, but before any other allocations are made for such taxable year, each Partner with a share of Partner Nonrecourse Gain attributable to such Partner Nonrecourse Debt at the beginning of such year shall be allocated items of income and gain for such year (and if necessary, for

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subsequent years) equal to such Partner's share of the net decrease in Partner Nonrecourse Minimum Gain as determined under Treasury Regulations Section 1.704-2(i)(4).

(IV) Allocation of Excess Nonrecourse Liabilities. For the purpose of determining each Partner's share of Partnership nonrecourse liabilities pursuant to Treasury Regulations Section 1.752-3(a), and solely for such purpose, each Partner's interest in Partnership profits is hereby specified to be such Partner's Percentage Interests.

(V) Other Allocation Rules.

(1) Net Profits, Net Losses, and any other items of income, gain, loss, or deduction shall be allocated to the Partners pursuant to this Section 2.03 as of the last day of each Fiscal Year, provided that Net Profits, Net Losses, and such other items shall also be allocated at such times as the Gross Asset Values of Partnership Property are adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value in Section 1.02.

(2) For purposes of determining the Net Profits, Net Losses, or any other items allocable to any period, Net Profits, Net Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the General Partner using any permissible method under Code Section 706 and the Treasury Regulations promulgated thereunder.

(3) All allocations to the Partners pursuant to this Section 2.03 shall, except as otherwise provided, be divided among them in proportion to the Interests held by each.

(VI) Unexpected Allocations and Distributions. No allocation may be made to a Limited Partner to the extent such allocation causes or increases a deficit balance in such Limited Partner's Capital Account in excess of any amount that such Limited Partner is obligated to restore (taking into account Treasury Regulations Sections 1.704-1(b)(2)(ii)(d), 1.704-2(i)(5) and 1.704-2(g)(1)(ii)) as of the end of the taxable year to which such allocation relates. Notwithstanding any other provision of this Agreement except subparagraphs (I) and (III) hereof, in the event that a Limited Partner unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which - results in such Limited Partner having a negative Capital Account balance (as determined above), then such Limited Partner shall be allocated items of income and gain (including items of gross income) in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, such negative balance in such Limited Partner's Capital Account as quickly as possible.

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(VII) The Partners are aware of the income tax consequences of the allocations made by this Section 2.03 and agree to be bound by the provisions of this Section 2.03 in reporting their shares of Partnership income and loss for income tax purposes, except to the extent otherwise required by law.

(iv) Adjustment of Capital Accounts. After all allocations for a taxable year are made, Capital Accounts shall be adjusted by the Partnership to the extent necessary to comply with all applicable laws, regulations and administrative pronouncements. Notwithstanding anything contained in this Agreement to the contrary, any and all distributions to the Partners to be made under Section 7.02 shall be made in the order of priority set forth in Section 5.02. The tax allocation provisions of this Agreement are intended to produce final Capital Account balances that are at levels ("Target Final Balances") which permit liquidating distributions that are made in accordance with such final Capital Accounts balances to be equal to the distributions that would occur under Section 5.02(a) if such liquidating proceeds were distributed pursuant to Section 5.02(a). To the extent that the tax allocation provisions of this Agreement would not produce the Target Final Balances, the Partners agree to take such actions as are necessary to amend such tax allocation provisions to produce such Target Final Balances. Notwithstanding the other provisions of this Agreement, allocations of income, gain, loss and deduction (including items of gross income, gain, loss and deduction) for the year in which distributions to the Partners are made under Section 7.02 shall be made as necessary to produce such Target Final Balances (and, to the extent such allocations would not effect such result, at the discretion of the Managing Partner, the prior tax returns of the Partnership shall be amended to reallocate items of gross income, gain, loss and deduction to produce such Target Final Balances).

Section 2.04 Withdrawal of Capital; Limitation on Distributions. No Partner shall be entitled to withdraw any part of its Capital Account in, or to receive any distributions from, the Partnership, except as provided in Section 5.01 and
Section 7.02. No Partner shall be entitled to demand or receive interest on its Capital Account or any property other than cash from the Partnership.

ARTICLE III

Management

Section 3.01 In General.

(a) The Managing Partner shall be responsible for the management of the business, activities and affairs of the Partnership. The Managing Partner shall have all the rights and powers which may by law be possessed by it and such rights and powers as are necessary, advisable or convenient to the discharge of its duties hereunder. Without limiting the generality of the foregoing, but subject to the requirements and provisions of Section 3.02, the Managing Partner shall have all of the following rights and powers which it may exercise on behalf of the

13

Partnership without the approval of any other Partner, at the cost, expense and risk of the Partnership:

(i) to expend the capital of the Partnership in a manner that it in good faith believes to be in furtherance of the Partnership's business, subject to the limitations, if any, on the rights and powers of the Managing Partner to do so set forth elsewhere in this Agreement;

(ii) to hold, level, clear, grade, develop, prepare, plant trees on, build buildings, roads, drainage and other facilities on, otherwise improve, maintain, subdivide, lease, sell and otherwise manage the Property; to purchase, plant and maintain citrus and other trees, a citrus and other tree nursery and citrus and other groves on the Property; to develop, maintain, manage, improve and attempt to enhance the value of the citrus and other agricultural product businesses (and the other businesses and assets) of the Partnership; and to enter into and fulfill its obligations under agreements of any and every nature and description with others with respect to such activities and businesses, which agreements may contain such terms, provisions and conditions as the Managing Partner in its sole and absolute discretion may approve;

(iii) to purchase such contracts of liability, casualty, frost, wind, flood and other insurance as the Managing Partner may deem advisable, appropriate, convenient or beneficial to the Partnership;

(iv) to purchase, plant, maintain, graft, and transplant seedling rootstock, citrus and other trees, and other crops; to clear, prepare, irrigate, fertilize, spray, care for and maintain, or cause to be cleared, prepared, irrigated, fertilized, sprayed, cared for and maintained, and to provide for the drainage of, the real property owned by the Partnership; to grow, produce, genetically engineer, store, manage, sell (by such means as the Managing Partner determines to be appropriate, convenient or beneficial to the Partnership, including, without limitation, by sales at retail, including at the Partnership's real property if the Managing Partner determines that to do so might be appropriate, convenient or beneficial), process, pack and otherwise deal with citrus and other fruits, vegetables, crops and other agricultural products, and products derived and to be derived therefrom, and to purchase or otherwise acquire from any Person any of such items for any of such purposes;

(v) to hold real property for investment and for development and to enter into financial arrangements, including all necessary financial commitments, for development of the Property;

(vi) to organize or acquire and own corporations and other entities to serve the actual and perceived needs and purposes of the Partnership;

(vii) to purchase stock in and advance funds to cooperatives through which citrus and other fruits, and other agricultural products of the Partnership, are or may be

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sold, or through which equipment and supplies for use by the Partnership are or may be purchased;

(viii) to invest and reinvest Partnership funds in government securities, certificates of deposit, banker's acceptances or other financial investments;

(ix) to borrow money on behalf of the Partnership, to assume obligations on behalf of the Partnership and to discharge the Partnership's obligations under any promissory note (or other document) evidencing the indebtedness of the Partnership or under any mortgage, deed of trust, trust to secure debt or other pledge, assignment or security instrument securing payment of such promissory note (or other document) or encumbering the Property and, in furtherance of the foregoing, to execute and deliver, in the name and on behalf of the Partnership, any notes, mortgages, deeds of trust, deeds to secure debt and other security instruments and other documents encumbering, reencumbering and/or relating to the Property and other assets of the Partnership, including, without limitation, any and all such notes, mortgages, deeds of trust, deeds to secure debt and other security instruments and other documents with respect to any financing or refinancing obtained for the purpose of acquiring any interest in real property and/or satisfying existing financing;

(x) to sell, dispose of, trade, exchange, convey, quitclaim, mortgage, encumber, hypothecate (including as cross-collateral if the Managing Partner in good faith believes that to do so would be in the best interests of the Partnership), subdivide, surrender, release or abandon, with or without consideration of any and every nature and description, upon such terms and conditions as the Managing Partner may deem advisable, appropriate or convenient, all or any portion of the Property, fruit and other agricultural crops and products, and any of the other assets of the Partnership, subject to the consent requirement of Section 3.02(a);

(xi) to execute leases, subleases, licenses, rental agreements, occupancy agreements, use agreements and concession agreements with respect to all or any portion of the Property or any of the other assets, products and businesses of the Partnership;

(xii) to enter into such agreements, contracts, guarantees, documents and instruments with such Persons (including, without limitation, governmental agencies and instrumentalities), and to give such receipts, releases and discharges with respect to all of the foregoing and any matters related or incident thereto, as the Managing Partner in good faith may deem advisable, appropriate, helpful or convenient for the Partnership from time to time;

(xiii) to delegate any and all of its duties hereunder, and in furtherance of any such delegation to appoint, employ or contract with any Persons that it in its sole discretion may deem necessary, advisable, helpful or convenient for the transaction of one or more of the businesses of the Partnership, including Persons that are Affiliates, officers, directors or employees of the Managing Partner or of any other Partner

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(including those in which it or Persons directly or indirectly controlling it may have a proprietary interest). Such Persons may, under the direct or indirect supervision of the Managing Partner, administer the day-to-day operations of the Partnership; may serve as the Partnership's advisors and consultants in connection with the policy decisions made and contemplated to be made by the Managing Partner; may act as grove managers, business managers, product managers, project managers, architects, engineers, consultants, builders, accountants, correspondents, attorneys, brokers, escrow agents or in any and all other capacities deemed by the Managing Partner to be necessary, desirable, appropriate or convenient; may investigate, select, and on behalf of the Partnership conduct relations with Persons acting in such capacities and, subject to Section 3.04, may pay compensation (including, without limitation, compensation that is dependent in whole or in part on one or more measurable variable factors relating to the profitability of, or cash flow, cost savings or other revenue enhancement generated by or from, the Partnership as a whole or one or more discrete products, groves or fields, ventures or undertakings of the Partnership) to, and enter into contracts with, or employ, or pay for services performed or to be performed by, any of them in connection with the Property, or any part of it, any of the other assets, investments, businesses, crops or products of the Partnership or ventures made, or undertakings entered into, by the Partnership; may perform or assist in the performance of such administrative or managerial functions necessary in the management of one or more of the Partnership, the Property, and the Partnership's businesses and assets, as determined by the Managing Partner; and may perform such other acts or services as the Managing Partner in its sole and absolute discretion may approve;

(xiv) to admit additional Persons to the Partnership as Partners, provided that, if (x) the new Partner will be a General Partner or (y) the new Partners would have rights, powers, liabilities and/or obligations that differ in material respects from those of some or all of the other Partners, the Managing Partner shall obtain the consent of the Limited Partners as required by Section 3.02(a) prior to admitting the new Partners;

(xv) to offer to purchase or redeem the Interests of one or more of the Partners selected by the Managing Partner from time to time, on such terms and conditions as the Managing Partner deems appropriate, to consummate such purchases and redemptions, and to obtain funds to enable it to consummate such purchases and redemptions on such terms as the Managing Partner may deem to be necessary, advisable, appropriate or convenient;

(xvi) to adopt and implement the Recognition and Retention Plan and Incentive Compensation Plan so as to provide additional financial incentives to key employees of the Partnership; provided, however, none of the remaining awards available for grant under the Recognition and Retention Plan shall be granted;

(xvii) to reinvest all or any portion of amounts received by the Partnership from the condemnation of all or any portion of the Property, or the sale of all or any portion of

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the Property under threat of condemnation, so as to defer the recognition of gain under Section 1033 of the Code; and

(xviii) to do and undertake to do any and all other things and to execute and deliver, in the name and on behalf of the Partnership, any and all certificates, documents, instruments and agreements necessary, advisable, appropriate, helpful or convenient in the discretion of the Managing Partner to effectuate any of the foregoing.

(b) The Managing Partner shall (or shall cause others to) diligently attempt to discharge (to the extent funds are available therefor) the following obligations on behalf and at the expense of the Partnership in a manner consistent with this Agreement:

(i) Protect and preserve the title to and the interest of the Partnership in its property and assets, real, personal and mixed, including, for so long as it is an asset of the Partnership, the Property.

(ii) Keep all books of account and other records of the Partnership and provide to the Partners reports and statements as required by ARTICLE IV.

(iii) Maintain all funds of the Partnership (other than petty cash and funds from time to time invested in financial products or other Partnership assets) in one or more bank accounts established pursuant to Section 4.03.

(iv) Make periodic distributions to the Partners as required by
Section 5.02.

(v) Perform all other obligations provided elsewhere in this Agreement to be performed by the Managing Partner.

(c) Third parties dealing with the Partnership shall be fully protected in relying, without further inquiry, upon any action taken or instrument executed on behalf of the Partnership by the Managing Partner, and on behalf of the Managing Partner by the President or any other officer of its general partner, or any other Person specifically empowered by the Managing Partner so to act.

(d) If the Managing Partner determines that it is in the best interest of the Partnership to sell additional Interests, each of the then Limited Partners shall have the right, but not the obligation, to purchase the additional Interests.

(i) The Managing Partner shall deliver notice (the "Offer Notice") to each Limited Partner of the Partnership's intent to sell additional Interests and the purchase price of the Interests. Each Limited Partner shall have 30 days (the "Offer Period") after the receipt of the Offer Notice to elect to purchase its pro rata share of the Interests being offered by delivering notice of its acceptance to the Managing Partner.

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(ii) If the existing Partners do not elect to purchase all of the additional Interests, the Managing Partner shall deliver notice to those Partners who elected to purchase Interests offering to those Partners the right to purchase the remainder of the Interests. A Partner shall have 15 days to elect to purchase the unsold Interests. A Partner electing to purchase pursuant to this Section 3.01(d)(iii) shall be obligated to purchase that portion of the unsold Interests equal to such Partners Percentage Interest over the aggregate Percentage Interests of those Partners electing to purchase pursuant to this Section 3.01(d)(iii).

(iii) Any Interests not subscribed to by the Limited Partners may be offered to other Persons by the Managing Partner, subject to the provisions of Section 3.01(a)(xiv).

Section 3.02 Major Decisions. Notwithstanding any other provision of this Agreement, each of the actions described below (a "Major Decision") must be approved by:

(a) all of the General Partners and the specified percentage of Percentage Interests of the Limited Partners:

(i) amendment of this Agreement -- two thirds;

(ii) selection of a new Managing Partner -- majority;

(iii) amendments to the Recognition and Retention Plan described in
Section 3.07(b) or to the Incentive Compensation Plan described in Section
3.08(b) -- two thirds; and

(iv) admission of a General Partner or of a Partner or Partners with rights, powers, liabilities and/or obligations different from other Partners -- two thirds; and

(v) a merger by the Partnership with or into another entity -- two thirds.

(b) two-thirds of the Percentage Interest of all Partners for removal of the Managing Partner.

Before a Major Decision may be made, the Managing Partner shall send to each Partner a written notice (the "Major Decision Notice") with such information as the Managing Partner deems appropriate. Each Partner that fails to give notice to the Managing Partner that the Partner disapproves of a proposed Major Decision within forty-five days following the date on which the Managing Partner sent the Major Decision Notice shall be deemed to have approved such proposed Major Decision. All votes pursuant to this Section 3.02 must be cast in writing (including by facsimile transmission and e-mail), unless a Partner is deemed to have approved a Major Decision in the manner described in the preceding sentence.

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Section 3.03 Tax Matters Partner; Tax Elections.

(a) The Managing Partner shall be the "tax matters partner" (as that term is used in the Code) of the Partnership. The tax matters partner shall

(i) cause to be prepared and shall sign all tax returns of the Partnership,

(ii) monitor any governmental tax authority in any audit that such authority may conduct of the Partnership's books and records or other documents of which the tax matters partner is aware,

(iii) give Notice to all Partners as follows:

(I) within 30 days after it receives notice from the IRS of any administrative proceeding with respect to an examination of, or a proposed adjustment to, any item of income, gain, loss, deduction or credit of the Partnership,

(II) from time to time, of the current status of such administrative proceeding,

(III) within 30 days of the final outcome of such administrative proceeding, as to such outcome, and

(IV) at least five days prior to submitting a request for administrative adjustment on behalf of the Partnership,

(iv) promptly send to each Partner a copy of all nonministerial notices or communications received by the Partnership from, or sent by the Partnership to, the IRS and

(v) take all other action to be taken by it as contemplated in Sections 6221 through 6232 of the Code.

The Partnership will reimburse the tax matters partner for all expenses reasonably incurred by it (including reasonable overhead expenses) in connection with any administrative or judicial proceeding with respect to the tax liabilities of the Partners which relate to the Partnership.

(b) At the request of any Partner, the Partnership shall make an election to adjust its basis in its assets pursuant to section 754 of the Code. The Partner making such request shall pay to the Partnership, within ten days after demand therefor by the Managing Partner, all costs and expenses paid or incurred by the Partnership as a result of the making of such election.

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(c) The Partnership shall make an election to amortize its organizational expenditures pursuant to section 709 of the Code, and to amortize any "start-up" expenditures pursuant to section 195 of the Code.

Section 3.04 Contracts with Partners and Affiliates. The Managing Partner may cause the Partnership to enter into contracts and agreements with Partners and Affiliates of Partners if it in good faith determines that to do so is necessary, appropriate or convenient for the Partnership; provided, however, that the Managing Partner shall not knowingly permit the Partnership to enter into such a contract or agreement unless the Managing Partner in good faith determines that the compensation to be paid to such Partner or Affiliate pursuant thereto (or the formula or other method by which such compensation is to be determined) is reasonable under the circumstances. The Managing Partner is specifically authorized to cause the Partnership to (i) engage Nathaniel Roberts as the chief operating officer of the Partnership, with compensation to be paid by the Partnership to him in such amount (or determined by such formula or other method) as the Managing Partner deems reasonable under the circumstances, and
(ii) reimburse each Partner for such of the actual expenses the Managing Partner shall determine were incurred and paid by the Managing Partner on behalf of the Partnership in good faith to promote the Partnership's best interests or the interests of all of its Partners.

Section 3.05 Resignation or other Termination of Managing Partner.

(a) The Managing Partner may resign from the performance of all of its functions and duties as such hereunder at any time upon giving 30 days' advance Notice of such resignation to each of the General Partners. Upon such resignation, or in the event of the death, disability, withdrawal or removal pursuant to Section 3.02(a)(v) of the Managing Partner, the Interest of the resigning or otherwise terminated Managing Partner shall remain that of a General Partner, and the Partners shall elect a new Managing Partner from among the General Partners in the manner set forth in Section 3.02(a). If there is no remaining General Partner, the Limited Partners shall admit one or more new General Partners pursuant to Section 3.02(a).

(b) If neither James Callery nor Nathaniel Roberts is the controlling shareholder (directly or indirectly) of the general partner of CJG Management, CJG Management shall remain the Managing Partner unless all of the General Partners except CJG Management and a majority of the Limited Partners determine pursuant to the procedures in Section 3.02 that CJG Management shall be removed as the Managing Partner and replaced by a new Managing Partner.

Section 3.06 Other Businesses. No Partner shall be prohibited from owning, operating or investing in, either directly or indirectly, any real property or any interest therein, either in the State of Florida or elsewhere, or from engaging or possessing an interest in any citrus or related or unrelated businesses of any nature or description, independently or with others, whether or not in competition with the Partnership in any of such cases, and the other Partners shall not have any rights by virtue of this Agreement in respect of such property or other businesses, or the

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income or profits derived therefrom. Each Partner shall be free to fully and aggressively pursue all of its other business interests.

Section 3.07 Recognition and Retention Plan.

(a) Not later than 120 days after the end of each Fiscal Year, the Partnership shall distribute the Incentive Bonus to those employees of the Partnership, former employees and former general partners (or any combination thereof) ("Distributees") as determined by the Managing Partner pursuant to the Recognition and Retention Plan. The aggregate distributions to the Distributees shall equal not less than 85% of the Incentive Bonus. That portion of the Incentive Bonus that is not distributed to the Distributees shall revert to the Partnership. If the Partnership does not have sufficient cash to pay the Incentive Bonus for a Fiscal Year, then the amount unpaid shall accrue and shall be paid in the next succeeding year.

(b) The Managing Partner shall have the right to make amendments to the Recognition and Retention Plan, provided, that the Managing Partner shall not amend the Recognition and Retention Plan with respect to the following matters, except with the consent of the Limited Partners, as defined in Section 3.02(a):

(i) an increase in the percentage of the profits of the Partnership constituting the Incentive Bonus to an amount in excess of 5%; or

(ii) an increase of the percentage of the Incentive Bonus payable to the Managing Partner and its Affiliates if as a result of the increase, more than 20% of the Incentive Bonus would be paid to the Managing Partner and its Affiliates.

Section 3.08 Incentive Compensation Plan.

(a) The General Partners shall determine the employees and consultants of the Partnership to whom awards under the Incentive Compensation Plan shall be made. Awards under the Incentive Compensation Plan shall vest in the employees and consultants to whom they are awarded only as long as the recipient continues in the employ of or to serve as a consultant to the Partnership in accordance with the terms of the Incentive Compensation Plan.

(b) The Managing Partner shall have the right to make amendments to the Incentive Compensation Plan, provided that the Managing Partner shall not amend the Incentive Compensation Plan with respect to the following matters, except with the consent of the Limited Partners, as defined in Section 3.02(a):

(i) an increase in the total amount of awards available for grant under the Incentive Compensation Plan;

(ii) acceleration of the rate of vesting of awards under the Incentive Compensation Plan; or

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(iii) a change in the formula pursuant to which the right to payment under the Incentive Compensation Plan is determined.

Section 3.09 Net Worth Maintenance. The Managing Partner shall at all times maintain a net worth of at least $10,000.

ARTICLE IV

Books; Budgets; Fiscal Year

Section 4.01 Administrative Services; Books; Records and Reports.

(a) The Managing Partner shall cause to be performed all general and administrative services on behalf of the Partnership in order to assure that complete and accurate books and records of the Partnership continue to be maintained at the Partnership's principal place of business showing the names, addresses and Interests of each of the Partners, all receipts and expenditures, assets and liabilities, profits and losses, and all other records necessary for recording the Partnership's business and affairs, including a Capital Account for each Partner. Notwithstanding the preceding sentence, the books of the Partnership shall continue to be kept on the accrual basis method of accounting in accordance with GAAP, consistently applied for financial accounting purposes, and the books and records shall be open to inspection and examination by each Partner and its representatives at all reasonable times. In the event of a Transfer of an Interest, the successor to the transferring Partner shall succeed to the transferring Partner's Capital Account as of the date of the Transfer. For purposes of the preceding sentence, all income, gain, loss and deductions allocable pursuant to this Agreement for a Fiscal Year with respect to any Interest that may have been the subject of a Transfer during such Fiscal Year shall be allocable between the transferor and transferee based upon the number of days that each was recognized by the Partnership as the owner of such Interest, without regard to the results of Partnership operations during the particular days of such Fiscal Year.

(b) The books of the Partnership shall be audited annually by a nationally recognized firm of Certified Public Accountants and the Managing Partner shall cause to be prepared, in accordance with sound accounting practice, and delivered to all Partners, at the expense of the Partnership:

(i) within a reasonable time after the end of each Fiscal Year, but in no event later than the 120th day after the end of each Fiscal Year, a copy of the Partnership's financial statements, tax returns and Schedule K-l for such Partner with respect to such Fiscal Year, together with such information with respect to the Partnership as may be required to enable each Partner properly to complete its Federal income tax return, any required income tax return of any state and any other reporting or filing requirement imposed by any governmental authority relating to the income or activities of the Partnership; and

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(ii) from time to time and with reasonable promptness, such further information available to the Managing Partner in respect of the business, affairs and financial condition of the Partnership as any Partner reasonably may request.

(c) The Managing Partner shall cause an independent appraiser to prepare, as of June 30 of each Fiscal Year prior to the termination of the Partnership and as of the date of such termination, an appraisal of all of the Partnership's real property, equipment and other assets. Such appraisal shall (i) set forth the appraiser's opinion of the aggregate value as of such date of all of such assets, and (ii) allocate such aggregate value among the real property, equipment, other tangible assets (other than fruit), fruit, intangible assets, and other asset categories from time to time required by the Managing Partner.

Section 4.02 Fiscal Year. The fiscal year of the Partnership shall be July 1 to June 30.

Section 4.03 Bank Accounts. The Managing Partner shall cause the Partnership to maintain one or more bank accounts in banks of recognized standing, which bank accounts shall include a checking account, and into which bank accounts shall be deposited all funds of the Partnership (other than petty cash) not otherwise applied.

ARTICLE V

Distributions

Section 5.01 Payment of Expenses. Prior to making any Distributions to the Partners, the Managing Partner shall pay or make provision for all expenses of the Partnership, including but not limited to (i) the payment of the salaries of all employees of the Partnership, and (ii) amounts to which employees are entitled under the Recognition and Retention Plan and the Incentive Compensation Plan.

Section 5.02 Distributions. Except as provided in Section 7.03, Distributable Funds shall be distributed to the Partners as follows:

(a) Except as provided in clause (b) below, after payment of all expenses as provided in Section 5.01, distributions of Distributable Funds shall be made to the Partners in proportion to their Percentage Interests.

(b) If the Partnership has been dissolved pursuant to ARTICLE VII, and if no election to continue the business of the Partnership has been made pursuant to Section 7.02, the Distributable Funds of the Partnership shall be distributed in accordance with Section 7.03.

Section 5.03 Restoration of Funds. Except as otherwise required by this Agreement or by law, no Partner shall be required to restore to the Partnership any funds distributed to it pursuant to Section 5.02.

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ARTICLE VI

Transfers of Partnership Interests

Section 6.01 Prohibition on Transfers. No Transfer of an Interest may be made without the consent, in writing and in the sole discretion, of the Managing Partner, and then only if in compliance with this ARTICLE VI.

Section 6.02 Sale to a Specific Person. If a Partner wishes to sell its Interest or any part thereof to a specific Person other than pursuant to Section
6.05 (provided, that the Partner may sell a portion of its Interest only if (i) the portion to be sold is equal to or exceeds a Percentage Interest of 1%, and
(ii) the Partner will hold after the sale a Percentage Interest equal to or more than .5%):

(a) the Partner desiring to make such sale (the "Seller") shall give the Managing Partner not less than 60 days' prior written Notice of its intention to make such sale, which Notice shall specify the Interest proposed to be conveyed, the identity of the Person to which such sale is proposed to be made (the "Buyer"), and the price and other terms of the proposed sale; and

(b) if the Managing Partner has not elected to acquire for the Partnership such Interest on the same terms and at the same price as specified in such notice, and which election is made in writing transmitted not more than 30 days after receipt of the Notice from Seller; and

(c) if the Managing Partner, in its sole discretion, shall have consented in writing, transmitted not more than 30 days after receipt of the Notice from Seller, to the contemplated Transfer; then

(d) Seller may sell such Interest to the Buyer at the specified price and upon the specified terms, but only if:

(i) the Buyer shall execute and deliver to the Managing Partner a document satisfactory to the Managing Partner in all respects pursuant to which the Buyer covenants to be bound by all of the terms and conditions of this Agreement; and

(ii) the Seller shall deliver to the Managing Partner, if requested by the Managing Partner so to do, an opinion of the Seller's counsel (reasonably satisfactory to counsel to the Partnership) or Seller shall reimburse the Partnership for an opinion of counsel to the Partnership to the effect that the contemplated sale, if consummated, will not:

(I) result in a violation of the Securities Act of 1933 or any other applicable federal or state law or the order of any court or other tribunal having jurisdiction over the Partnership or any of its assets; or

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(II) be a breach or violation of, or an event of default under, or give rise to a right to accelerate any indebtedness of the Partnership under, any contract, instrument or agreement to which the Partnership is a party or by which it or any of its property is or may be bound; or

(III) result in, or create a prohibited transaction under, or cause the Partnership to become a "party in interest" as defined in
Section 3(14) of ERISA, or otherwise result in the holder of an Interest or the assets of the Partnership being subject to the provisions of ERISA; or

(IV) result, directly or indirectly, in the termination of the Partnership under Section 708 of the Code; or

(V) cause the classification of the Partnership as a partnership for purposes of the Code to be lost, jeopardized or otherwise adversely affected;

and

(iii) the Seller and the Buyer shall deliver such additional documents, instruments and agreements as reasonably shall have been required by the Managing Partner in connection with the sale; and

(iv) the Seller or the Buyer shall pay to the Partnership all costs, expenses and liabilities incurred by the Partnership in connection with such sale, and each of them shall have indemnified the Partnership (in a manner reasonably satisfactory to the Managing Partner) for any such costs, expenses and liabilities that may be incurred by the Partnership as a result of or in connection with such sale.

Section 6.03 Violative Transfers. If a Partner attempts to make a Transfer in violation of this ARTICLE VI, the attempted transfer shall be void ab initio, and the Partner attempting to make such Transfer shall be liable to the Partnership for all damages that the Partnership sustains as a result of such attempted Transfer.

Section 6.04 Acquisitions of Interests by Partnership or Managing Partner. Notwithstanding anything to the contrary contained in this ARTICLE VI, the Partnership or the Managing Partner may offer to acquire or redeem, and may acquire or redeem, the Interests of one or more of the Partners upon mutually acceptable terms and conditions without first complying with any of the terms or conditions set forth in the foregoing provisions of this ARTICLE VI.

Section 6.05 Transfers to Related Parties.

(a) A Limited Partner's Interest may be transferred without the consent of the Managing Partner upon the following events, subject to the provisions of
Section 6.05(c) and the

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requirement that written verification of the applicable event and proper documentation is delivered to the Managing Partner prior to transfer:

(i) the death of an individual Limited Partner;

(ii) the termination of a trust that is a Limited Partner; or

(iii) the dissolution or reorganization of a partnership or corporation that is a Limited Partner.

(b) A transferee pursuant to this Section 6.05 shall comply with the provisions of Section 6.02(d) hereof.

(c) If a transfer pursuant to this Section 6.05 would result in a Limited Partner's holding a Percentage Interest of less than .21875%, the Partnership shall have the right, but not the obligation, to redeem the Limited Partner's Interest. A Limited Partner or his personal representative (if the Limited Partner is deceased) seeking to make a Transfer described in this Section 6.05(c) shall deliver Notice of the proposed Transfer to the Managing Partner. The Managing Partner shall have 30 days to elect to exercise the option granted in this Section 6.05(c) by delivering Notice of exercise to the Limited Partner. The closing of the purchase shall be 30 days after the delivery of the Notice of election. The purchase price for the Interest shall be an amount equal to (x) 80% of (i) the aggregate value of the Partnership 's assets determined pursuant to Section 4.01(c) minus (ii) the aggregate liabilities of the Partnership as of the appraisal date, (y) multiplied by the Percentage Interest.

ARTICLE VII

Dissolution and Liquidation

Section 7.01 Dissolution. Notwithstanding Section 9.01, the Partnership shall be dissolved upon the first to occur of the following:

(a) October 14, 2019;

(b) The sale, transfer or other disposition of all or substantially all of the assets of the Partnership;

(c) The acquisition by a Partner of all of the Interests of the other Partners;

(d) The death, legal disability, dissolution, bankruptcy or insolvency of a General Partner or an assignment by a General Partner for the benefit of its creditors (any such Partner is referred to herein as a "Withdrawing Partner"); or

(e) The agreement so to do by two-thirds in Interest of the Partners.

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Section 7.02 Election to Continue the Business. Upon dissolution of the Partnership pursuant to Section 7.01(d), the remaining Partners, by the affirmative vote of Partners holding more than the Majority-in-Interest of the Interests of all Partners (excluding for this purpose the Interest of the Withdrawing Partner) may elect to reconstitute the Partnership. If they so elect, the reconstituted Partnership shall continue the Partnership business, and either (i) the Partnership, or at their option the remaining Partners in such proportions as they shall agree, shall acquire the Interest of the Withdrawing Partner as provided in this Section 7.02, or (ii) if neither the Partnership nor the remaining Partners elects to acquire the Interest of the Withdrawing Partner, such Interest shall be converted to that of a Limited Partner under this Agreement. If the Partnership or the remaining Partners do elect to acquire the Interest of the Withdrawing Partner as provided in this
Section 7.02, then, within 30 days of the event described in Section 7.01(d), the Partnership shall, in good faith, appoint an appraiser to appraise the Interest of the Withdrawing Partner and advise such Withdrawing Partner of such appointment. The appraiser so selected shall be qualified in accordance with applicable M.A.I. standards by education, experience and training to appraise the assets and liabilities of the Partnership. The cost of the appraisal shall be borne by the Partnership as constituted before the dissolution. The appraiser, within 90 days after being so appointed, shall submit to all Partners a written report and appraisal stating therein its opinion as to the value of the Interest of the Withdrawing Partner as of the date of the event described in
Section 7.01(d) for the purposes of an all cash sale subject to existing liabilities and encumbrances. At a closing to be held within 90 days following receipt of the appraisal, the Partnership or the remaining Partners, as the case may be, shall purchase, and the Withdrawing Partner shall sell, the Interest of the Withdrawing Partner in exchange for payment of the cash price set forth in the appraisal.

Section 7.03 Winding up Affairs and Distribution of Assets. Upon dissolution of the Partnership (except dissolution pursuant to Section 7.01(c)), and in the absence of an election to continue the business of the Partnership pursuant to Section 7.02, the Managing Partner or, if none, a liquidating agent selected by vote of a Majority-In-Interest of the Partners (the "Liquidator") shall proceed to wind up the affairs of the Partnership, liquidate the remaining property and assets of the Partnership and terminate the Partnership. The proceeds of such liquidation (and the assets and property of the Partnership that the Managing Partner or Liquidator determines to be not readily susceptible to liquidation at a reasonable price) shall be applied in the following order of priority: (a) first, to the expenses of such liquidation; (b) second, to the debts and liabilities of the Partnership to third parties (including Partners and Affiliates of Partners), if any, in the order of priority provided by law;
(c) third, a reasonable reserve shall be set up to provide for any contingent or unforeseen liabilities or obligations of the Partnership to such third parties (to be held and disbursed, at the discretion of the Partners, by an escrow agent selected by them) and at the expiration of such period as the Partners may deem advisable, the balance shall be distributed as provided in clause (d) hereof; and (d) fourth, to each of the Partners in proportion to the positive balances in their Capital Accounts (as adjusted to reflect the allocation of gain and loss from the liquidation of Partnership assets and distributions to the Partners pursuant to Section 5.02(b), above), until the balances in each of such Capital Accounts have been reduced to zero.

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Section 7.04 Distribution in Kind. If any asset of the Partnership is to be distributed in kind, such asset shall be valued to determine the amount of Net Profits or Net Losses that would result if such asset were to be sold at its fair market value, and such Net Profits or Net Losses shall be allocated to the Capital Accounts in accordance with Section 7.023.

ARTICLE VIII

Indemnification; Exculpation

Section 8.01 Indemnification.

(a) The Partnership agrees to indemnify and advance expenses to each Person to the full extent permitted by New York law, including indemnification for, and advancement of expenses with regard to, derivative actions and actions to which such Person is made a party that are brought in the right of the Partnership to procure a judgment in its favor by reason of the fact that such Person or his testator or intestate (if the Person is a natural person) is or was a General Partner in the Partnership; provided, however, that the indemnity provided by this Section 8.01 shall not apply to such acts as to which a judgment or final adjudication adverse to the General Partner (or his testator or intestate if the General Partner is a natural person) establishes that such acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he (or his testator or intestate, if the Person is a natural person) personally gained in fact a financial profit or other advantage to which he was not legally entitled.

(b) Each of the General Partners of the Partnership is hereby authorized and empowered to (i) perform and do all other acts or things, (ii) execute and deliver or file all other documents, agreements and papers, (iii) pay all expenses, and (iv) take all further actions as in the General Partner's opinion may be necessary or desirable in order to carry out the purposes and intent of this Section 8.01.

Section 8.02 Exculpation. Except in the case of active and deliberate fraud, willful misconduct or bad faith on the part of a Partner, the doing of any act or the failure to do any act by a Partner, its constituent partners, its officers, directors or shareholders, or its or their Affiliates, the effect of which may be to cause or result in loss, cost, damage or expense to the Partnership or another Partner, if done or omitted pursuant to the advice of legal counsel or done or omitted in good faith in an attempt to promote the best interests of the Partnership, shall not subject such Partner or its heirs, administrators, executors, successors and assigns, nor its principals, officers, directors, trustees, constituent partners, shareholders, Affiliates or other owners or representatives to any liability, and such Partner is hereby exculpated from liability from any such act or failure to act.

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ARTICLE IX

Continuity

Section 9.01 Continuity. In the event of the withdrawal of a Partner or the admission of a new Partner pursuant hereto, and subject to Section 7.01, the business of the Partnership shall not be terminated, but the other Partners shall continue the business of the Partnership and this Agreement shall continue in full force and effect.

ARTICLE X

Miscellaneous

Section 10.01 Notices.

(a) All notices, consents, calls, approvals, designations, reports, requests, waivers, elections and other communications (collectively, "Notices") authorized or required to be given pursuant to this Agreement shall be given in writing and (i) personally served on the Partner (or a general partner or an officer of the Partner) to whom it is given, or (ii) mailed by registered or certified mail, postage prepaid, or (iii) sent by facsimile transmission, with electronic confirmation of complete transmission received by the sender, in each case addressed as follows:

If to the General Partner:

c/o Callery-Judge Grove L.P.

4001 Seminole Pratt-Whitney Road
Loxahatchee, Florida 33470

If to a Limited Partner, at the address set forth in the books and records of the Partnership.

(b) All Notices shall be deemed given when delivered or, if mailed as provided in Section 10.01(a), on the second day after the day of mailing or, if sent by facsimile transmission as provided in Section 10.01(a), at the time of confirmation of transmission. Any Partner may change his address for the receipt of Notices at any time by giving Notice thereof to the Managing Partner.

Section 10.02 Entire Agreement. This Agreement supersedes all prior agreements and understandings among the Partners with respect to the subject matter hereof.

Section 10.03 Modification. No change or modification of this Agreement shall be of any force unless such change or modification is in writing and has been signed by a sufficient number of Partners as required elsewhere by this Agreement.

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Section 10.04 Waivers. No waiver of any breach of any of the terms of this Agreement shall be effective unless such waiver is in writing and signed by the Partner against whom such waiver is claimed. No waiver of any breach shall be deemed a waiver of any other or subsequent breach.

Section 10.05 Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 10.06 Further Assurances. Each Partner shall execute such deeds, assignments, endorsements, and other instruments and documents and shall give such further assurances as shall be necessary to perform its obligations hereunder.

Section 10.07 Investment and ERISA Representations.

(a) Each Partner represents and warrants that its Interest has been acquired under this Agreement for its own account, for investment, and not with a view to, or for sale in connection with, any distribution thereof, nor with any present intention of distributing or selling such Interest, and that it will not Transfer, or attempt to Transfer, its Interest in violation of the Securities Act of 1933 or any other applicable federal or state law.

(b) Each Partner represents and warrants that (i) it is not acquiring its Interest with funds of a pension plan subject to ERISA, and (ii) its acquisition of its Interest does not and will not result in or create a prohibited transaction under, or result in the Partnership becoming a "party in interest" as defined in Section 3(14) of, ERISA, or otherwise result in any other holder of an Interest or the assets of the Partnership being subject to such statute.

Section 10.08 Amendment of Certificate of Limited Partnership. The Certificate of Limited Partnership of the Partnership may be amended or supplemented by the Managing Partner without the prior agreement of the other Partners whenever permitted by law.

Section 10.09 Governing Law. This Agreement shall be governed by and be construed in accordance with the internal laws of the State and without reference to any conflict of law or choice of law principles of the State that might apply the substantive law of another jurisdiction.

Section 10.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

Section 10.11 Limitation on Rights of Others. No Person other than a Partner is, nor is it intended that any such other Person be treated as, a direct, indirect, intended or incidental third party beneficiary of this Agreement for any purpose whatsoever, nor shall any other Person have any legal or equitable right, remedy or claim under or in respect of this Agreement.

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Section 10.12 Construction; Gender; Number. This Agreement has been fully negotiated by the parties hereto and shall be construed and interpreted as if prepared by all the parties jointly, rather than by one or more, but less than all, of them. Any rule of construction to the effect that any ambiguity shall be interpreted in the manner least favorable to the drafting party shall not apply to this Agreement. As used in this Agreement, the masculine, feminine or neuter gender, and the singular or plural number, shall be deemed to be or include the other genders or number, as the case may be, whenever the context so indicates or requires.

Section 10.13 Remedies Not Exclusive. Whenever the Partnership or any Partner exercises one or more of the remedies provided for herein, such exercise shall not preclude the exercise of any one or more remedies otherwise available to it hereunder (unless this Agreement expressly provides otherwise), under contract, at law, in equity or otherwise.

Section 10.14 Power of Attorney.

(a) Each Partner constitutes and appoints the Managing Partner its true and lawful attorney with full power of substitution and resubstitution to make, execute, sign, acknowledge and file amendments and modifications to the Certificate of Limited Partnership for the Partnership and/or other certificates related thereto, and upon the Partnership's termination, certificates of dissolution and termination of the Partnership, and also to make, execute, sign, acknowledge and file such other certificates and statements as may be required by law or as deemed by the Managing Partner to be in the best interests of the Partnership. The grant of a power of attorney hereunder is a special power of attorney coupled with an interest and shall survive a Partner's disability, incompetence, death or assignment by such Partner of its Interest pursuant to this Agreement.

(b) No document or amendment executed by the Managing Partner pursuant to
Section 10.14(a) shall, in the absence of the prior consent of all Partners, (i) reduce the obligations of the General Partners, (ii) affect the rights or restrictions regarding the assignability of Interests in the Partnership by Limited Partners, (iii) modify the term of the Partnership, (iv) amend this
Section 10.14(b), or (v) reduce the rights or interests or enlarge the obligations of the Partners other than the General Partners.

(c) In exercising the power of attorney granted pursuant to this Section 10.14, the Managing Partner may act on behalf of a Partner singly or on behalf of all or any group of Partners collectively to the extent permitted by law.

(d) The Managing Partner shall promptly notify all Partners of any documents or amendments executed pursuant to this Section 10.14.

Section 10.15 Attorneys and Other Consultants. Notwithstanding anything to the contrary contained herein, each of the Partners acknowledges that all attorneys and other consultants retained by the Partnership also may have been and may be engaged by one or more of the Partners as their attorneys and other consultants, respectively. Each of the Partners hereby waives any claim of conflict-of-interest that the Partner otherwise might have as a result of such

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engagement. In addition, each of the Partners hereby approves the engagement of such attorneys and consultants by one or more of the Partners individually, and cessation of representation and other business arrangements with the Partnership by such attorneys and other consultants if any circumstances arrives in which, in the opinion of any Partner for whom such attorneys or consultants has been engaged, it would be inappropriate for such attorneys or consultants, as the case may be, to represent or otherwise act for both the Partnership and such Partner.

Section 10.16 Costs of Litigation. If any litigation, arbitration, mediation, reference or other proceeding to resolve a dispute among two or more Partners arising out of this Agreement, the interpretation or enforcement hereof, or the transactions contemplated hereby, is commenced and a judgment therein is rendered by a court, an arbitrator, a mediator or any other Person having requisite jurisdiction, the prevailing parties in such dispute shall be entitled to reimbursement from the other parties thereto of all costs of such proceedings, and the tribunal shall award such costs (including, without limitation, attorneys' fees and disbursements, court costs and costs of the arbitrator or mediator, as applicable, at trial and on appeal) to the prevailing parties, which award shall not be computed in accordance with any schedule, but shall be in an amount necessary to fully reimburse the prevailing parties for all costs actually incurred by them in good faith, regardless of the size of the judgment or award.

Section 10.17 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Partners and their respective successors and permitted assigns.

IN WITNESS WHEREOF, the Partners have duly executed this Agreement as of the day and year first above written.

GENERAL PARTNER
CJG Management, Ltd.

By: Managed Citrus, Inc.
Its General Partner

By:____________________________
Nathaniel Roberts, President

LIMITED PARTNER

Dated:_______________        _____________________________________________
                             (Signature)
                             _____________________________________________
                             Printed Name. (If signing in a representative
                             capacity, please sign as such and show the
                             person/entity for whom you are signing.)

32

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Stephen V. Maroney, certify that:

1. I have reviewed this annual report on Form 10-KSB of Gyrodyne Company of America, Inc. (the "Company");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. As the Company's sole certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

c) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. As the Company's sole certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.

Date: June 30, 2005

                                          /S/ Stephen V. Maroney
                                          -----------------------------------
                                          Stephen V. Maroney,
                                          President, Chief Executive Officer
                                          and Chief Financial Officer


Exhibit 32.1

CEO/CFO CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Gyrodyne Company of America, Inc. (the "Company") on Form 10-KSB for the year ended April 30, 2005, as filed with the Securities and Exchange Commission (the "Report"), I, Stephen V. Maroney, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and consolidated results of operations of the Company for the periods presented.

Date: June 30, 2005

                                     /S/ Stephen V. Maroney
                                     ----------------------
                                     Stephen V. Maroney,
                                     President, Chief Executive Officer
                                     and Chief Financial Officer