<PAGE>

                        GUARANTY AND SURETYSHIP AGREEMENT
                        ---------------------------------

         THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Agreement") is made this
___ day of _______________, 2003, to be delivered on _______________, 2003, by
CEDAR INCOME FUND, LTD., a Maryland corporation ("Cedar REIT"), and CEDAR INCOME
FUND PARTNERSHIP, L.P., a Delaware limited partnership ("Cedar Operating
Partnership") (individually, a "Guarantor" and, collectively, the "Guarantors"),
in favor of CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania state chartered
savings bank ("Lender").

                                   Background
                                   ----------

         Halifax Plaza Associates, L.P., a Delaware limited partnership
("Borrower"), and Lender have entered into a certain Loan Agreement dated this
date (as the same may be amended, modified or supplemented, from time to time,
the "Loan Agreement") pursuant to which Lender has agreed to extend a certain
credit facility to Borrower in the principal amount of up to Four Million Two
Hundred Sixty Five Thousand Dollars ($4,265,000) ("Loan"), which Loan is
evidenced by a certain Promissory Note dated this date ("Note") executed by
Borrower and made payable to the order of Lender in the stated principal amount
of the Loan. The Note is secured, inter alia, by an Open-end Mortgage and
Security Agreement dated this date ("Mortgage") given by Borrower to Lender
covering certain land and the buildings and improvements thereon known as
Halifax Plaza located at 3761-3777 Peter's Mountain Road in Halifax Township,
Dauphin County, Pennsylvania (collectively, the "Project").

         The Loan Agreement, Note, Mortgage and all other documents evidencing
or securing the Loan are hereinafter sometimes referred to individually as a
"Loan Document" and collectively as the "Loan Documents", and the Loan Documents
are hereby incorporated herein by reference. Capitalized terms used in this
Agreement without definition shall have the same meanings ascribed to those
terms in the Loan Agreement.

         Each Guarantor is an Affiliate of Borrower, and in such capacity each
Guarantor will be directly and materially benefitted by the making of the Loan
by Lender to Borrower.

         Lender, as a condition to its agreement to make the Loan to Borrower,
and as a material inducement thereto, has required that Guarantors execute this
Agreement for all of the purposes hereinafter set forth.

                                    Agreement
                                    ---------

         NOW THEREFORE, Guarantors, for and in consideration of the Loan being
made to Borrower, and intending to be legally bound, hereby covenant and agree
as follows:

         1. The Guaranteed Obligations. Guarantors, each for itself and its
successors and assigns, hereby irrevocably, unconditionally, absolutely, and
jointly and severally, guarantee to Lender, and its successors, endorsees and
assigns, and become sureties for the prompt payment, compliance and performance
by Borrower of each of the following obligations of Borrower under the Loan
Documents (the payment, compliance and performance obligations hereunder
guaranteed by Guarantors are hereinafter collectively referred to as the
"Guaranteed Obligations"):


<PAGE>



            (a) The payment of the principal amount of the Note to the extent
of, in the aggregate, Eight Hundred Eighty Three Thousand Dollars ($883,000)
("Specified Principal Guaranty Amount"), which Specified Principal Guaranty
Amount shall not be reduced by payments on account of the Note through regularly
scheduled payments of principal and/or interest, enforcement of remedies
following an Event of Default or from any other source until and then only to
the extent that either (i) the total principal balance of the Note is reduced to
less than the Specified Principal Guaranty Amount or (ii) Guarantors pay to
Lender the Specified Principal Guaranty Amount;

            (b) The payment of all interest on the Loan;

            (c) The payment of all Hedging Obligations; and

            (d) The payment of all damages and/or losses suffered or incurred by
Lender in any way arising out of, resulting from or relating to any one or more
of the following: (i) any fraud or willful misrepresentation committed by
Borrower; (ii) any retention by Borrower of rental income, security deposits, or
similar income of the Project after an Event of Default has occurred, to the
extent of such retention (except to the extent applied to the payment of
principal and interest then due under the Loan); (iii) any real property taxes
or assessments accrued prior to Lender's acquisition of ownership of the Project
following an Event of Default; (iv) removal and failure to replace any personal
property securing the Loan, other than in the ordinary course of Borrower's
business; (v) misapplication of insurance or condemnation proceeds relating to
the Project; (vi) failure to maintain hazard or liability insurance relating to
the Project in accordance with the Loan Documents until Lender acquires title to
the Project by foreclosure or deed in lieu of foreclosure; (vii) the presence of
any Hazardous Substances (as that term is defined in the Environmental
Agreement) which may affect the Project or any misrepresentation or breach of
any covenants or indemnities by Borrower set forth in any of the Loan Documents
with respect to Hazardous Substances, including without limitation those set
forth in the Environmental Agreement; (viii) any transfer of the Project or any
portion thereof without prior written consent of Lender; (ix) any indebtedness
secured by a mortgage covering the Project other than the Loan; (x) the
commencement of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution, liquidation or receivership proceedings instituted by or
against Borrower or either Guarantor unless such proceedings are withdrawn,
dismissed or discharged within sixty (60) days; (xi) any defense, counterclaim
or other effort by or on behalf of Borrower to contest, defend or delay mortgage
foreclosure proceedings or acquisition of a deed in lieu of foreclosure by
Lender following the occurrence of an Event of Default, provided that, if such
Event of Default is not the result of the failure to make a payment of principal
or interest under the Loan when due, there shall be no personal liability if any
such defense or counterclaim succeeds on its merits as a result of which there
is no recovery by Lender; and (xii) all fees and costs, including reasonable
attorneys fees, incurred in enforcing and collecting under this Agreement.

The Guaranteed Obligations set forth in this Section 1 are separate and
independent of each other, and the payment, compliance and performance of one or
more of such Guaranteed Obligations shall not constitute the payment, compliance
or performance on account of or with respect to any other of such Guaranteed
Obligations.


                                      -2-
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         2. Guaranteed Obligations Absolute and Unconditional. This Agreement
shall constitute an agreement of suretyship as well as of guaranty and shall
constitute an absolute and unconditional undertaking by each Guarantor with
respect to the payment and performance of the Guaranteed Obligations by
Borrower. The liability of Guarantors hereunder shall be joint and several and
direct and may be enforced without Lender being required to resort to any other
right, remedy or security, and this Agreement shall be enforceable against each
Guarantor, its successors and assigns, without the necessity of any notice of
acceptance of this Agreement or of Lender's intention to act in reliance hereon,
or of any loan to or other transaction between any Lender and Borrower, or of
any default by Borrower, all of which Guarantors hereby expressly waive. If any
portion of the Guaranteed Obligations is paid by one Guarantor (and so long as
such payment or the benefit thereof to Lender is not recovered, revoked or
otherwise eliminated or reduced), then the amount of Guaranteed Obligations
collectible from both Guarantors, jointly and severally, shall be reduced by the
amount of such payment.

         3. Further Undertakings.

            (a) Each Guarantor hereby expressly:

                  (i) Agrees that the validity of this Agreement shall in no way
be terminated, affected or impaired by reason of the assertion or the failure to
assert by Lender against Borrower, or its successors or assigns, of any of the
rights or remedies reserved pursuant to the Note, the Mortgage or any other Loan
Document or otherwise available to Lender at law or in equity, including,
without limitation, the remedy of foreclosure available under the Mortgage;

                  (ii) Waives any right which such Guarantor might otherwise
have under any statute, rule of law or practice or custom to require Lender to
take any action against Borrower or to proceed against or exhaust any security
held by Lender before proceeding against such Guarantor;

                  (iii) Except as may be otherwise specifically provided in this
Agreement or any other Loan Documents, waives any notice of (A) any presentment,
demand, protest, notice of protest and of dishonor, notices of default and all
other notices with respect to any of the Guaranteed Obligations, and (B) the
commencement or prosecution of any enforcement proceeding, including any
proceeding in any court, against Borrower or any other person or entity with
respect to any of the Guaranteed Obligations;

                  (iv) Agrees that any failure by Lender to exercise any right
hereunder shall not be construed as a waiver of the right to exercise the same
or any other right at any other time and from time to time thereafter; and



                                       -3-
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                  (v) Agrees that Lender shall have and may exercise all rights,
privileges and remedies available to it hereunder and at law or in equity with
respect to this Agreement, all at the cost of Guarantors.

            (b) Until all of the Guaranteed Obligations are completely fulfilled
and each and every one of the terms, covenants, and conditions of this Agreement
are fully performed, the liability of Guarantors under this Agreement shall not
be released, discharged or in any way impaired by:

                  (i) Any amendment or modification of or supplement to or
extension or renewal of the Loan Agreement, Note or any other Loan Document, or
any agreements made or to be made between Lender and Borrower with respect to
any of the Guaranteed Obligations;

                  (ii) Any exercise or non-exercise by Lender of any right,
power, remedy or privilege under or with respect to the Loan Agreement, Note or
any other Loan Document or this Agreement or any waiver, consent or approval by
Lender with respect to any of the covenants, terms, conditions or agreements
contained in the Note or any other Loan Document, or any indulgence, forbearance
or extension of time for performance or observance allowed to Borrower by Lender
from time to time and for any length of time;

                  (iii) Any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding relating to
Borrower or its successors or assigns, or any of its properties;

                  (iv) Any transfer by Borrower of any of Borrower's interest in
the Project; or

                  (v) Any act or circumstances which might, but for the terms
and provisions of this Section 3, be deemed a legal or equitable discharge of
either Guarantor.

            (c) Each Guarantor hereby expressly waives, to the fullest extent
permitted by law, and surrenders any defenses to such Guarantor's liability
hereunder based upon any of the foregoing acts, omissions, agreements, or
waivers by Lender, it being the purpose and intent of this Agreement that the
obligations of Guarantors hereunder are absolute and unconditional.

            (d) Each Guarantor hereby further agrees and consents that Lender
may, without affecting the liability of such Guarantor hereunder:

                  (i) Exchange or surrender any property pledged by Borrower or
any other surety or accept additional security for the Guaranteed Obligations or
any of them;

                  (ii) Renew and change the terms of any of Borrower's
liabilities;


                                       -4-
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                  (iii) Waive any of Lender's rights or remedies against
Borrower or any other surety for the above liabilities;

                  (iv) Release, substitute or add any one or more sureties; or

                  (v) Proceed against either or both Guarantors without first
resorting to, utilizing or invoking the remedies available against Borrower
under the Loan Documents whether at law or in equity. No enforcement of rights
and remedies under this Agreement or any of the Loan Documents shall constitute
an irrevocable election of remedies by Lender. Lender shall not be obligated to
marshall remedies or assets as a condition to enforcing the liabilities incurred
hereunder against either or both Guarantors. The liability of Guarantors
hereunder shall be joint and several and in addition to that stated in any other
guaranty or suretyship agreement, if any, heretofore or hereafter delivered to
Lender.

            (e) Each Guarantor hereby grants to Lender a continuing lien,
security interest and right of setoff as security for all liabilities and
obligations to Lender whether now existing or hereafter arising, upon and
against all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of Lender. At any time after an
Event of Default, without demand or notice (any such notice being expressly
waived by such Guarantor), Lender may setoff the same or any part thereof and
apply the same to any liability or obligation of such Guarantor even though
unmatured and regardless of the adequacy of any other collateral securing the
Loan. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING
ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
SUCH GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

         4. Liabilities Not Affected.

            (a) This Agreement shall be a continuing, absolute, and
unconditional guaranty regardless of the validity, regularity, enforceability,
or legality of (i) any of the Guaranteed Obligations, (ii) any collateral
securing the Guaranteed Obligations, or (iii) any term of any document
evidencing or relating to any of the Guaranteed Obligations, including, but not
limited to, the Loan Documents. In the event that for any reason one or more of
the provisions of this Agreement or their application to any person or
circumstance shall be held to be invalid, illegal, or unenforceable in any
respect or to any extent, such provisions shall nevertheless remain valid,
legal, and enforceable in all other respects and to such extent as may be
permissible, and such invalidity, illegality, or unenforceability shall not
affect any other provision hereof.

            (b) No exercise or non-exercise by Lender of any rights given to
Lender under the Loan Documents, no dealing by Lender with Guarantors or either
of them or any other surety, Borrower or any other person, and no change,
impairment, release or suspension of any right or remedy of Lender against any
person or entity, including Borrower and any other surety, shall in any way
affect any of the obligations of either Guarantor hereunder or any security
furnished by either Guarantor, give either Guarantor any recourse or offset
against Lender or be construed as a waiver of the right to exercise the same or
any other right at any time and from time to time thereafter.


                                      -5-
<PAGE>


            (c) If Lender has exculpated Borrower from personal liability in
whole or in part and/or agreed to look solely to the Project for the
satisfaction of Borrower's obligations under the Loan Documents, said
exculpation and agreement shall not affect the obligations of either Guarantor
hereunder, it being understood that each Guarantor's obligations hereunder are
independent of the obligations of Borrower and are to be construed as if no such
exculpation or agreement had been given to Borrower by Lender. It is further
understood and agreed that if any such exculpation or agreement has been or at
any time hereafter is given to Borrower, Lender has done or will do so in
reliance upon the agreements of Guarantors expressed herein.

            (d) This Agreement and Guarantors' payment obligations hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time payment of any of the Guaranteed Obligations is rescinded or must otherwise
be restored or returned by Lender, all as though such payments had not been
made. Lender's good faith determination as to whether a payment must be restored
or returned shall be binding on Guarantors.

         5. Subordination. All existing and future obligations or indebtedness
of Borrower to either Guarantor and the right of such Guarantor to withdraw any
capital invested by such Guarantor in Borrower is hereby subordinated to the
Guaranteed Obligations. Such subordinated indebtedness and capital shall not be
paid or withdrawn in whole or in part nor will such Guarantor accept any payment
of or on account of any such indebtedness or as a withdrawal of capital, without
the prior written consent of Lender at any time during the continuance of an
Event of Default, and at Lender's request at any time after the occurrence and
during the continuance of an Event of Default such Guarantor shall cause
Borrower to pay to Lender all or any part of such subordinated indebtedness and
any capital which such Guarantor is entitled to withdraw to the extent such
subordinated indebtedness or capital has not already been paid or distributed to
Guarantors in compliance with the Loan Agreement. Subject to the terms and
provisions of the Loan Agreement, so long as no Event of Default has occurred
and is continuing, each Guarantor shall have the right to receive payments of
any such subordinated indebtedness and shall have the right to receive
dividends, distributions, payments, capital withdrawals and the like. Any
payment by Borrower in violation of this Agreement shall be received by
Guarantors in trust for Lender, and Guarantors shall cause the same to be paid
to Lender immediately on account of the indebtedness of Borrower to Lender.

         6. Claims in Bankruptcy. Each Guarantor shall file in any bankruptcy or
other proceeding in which the filing of claims is required by law all claims
which such Guarantor may have against Borrower relating to any indebtedness of
Borrower to such Guarantor and hereby assigns to Lender all rights of such
Guarantor thereunder. If such Guarantor does not file any such claim, Lender, as
attorney-in-fact for each Guarantor, is hereby authorized to do so in the name
of such Guarantor or, in Lender's discretion, to assign the claim to a nominee
and to cause proof of claim to be filed in the name of Lender's nominee. The
foregoing power of attorney is coupled with an interest and cannot be revoked.
Lender or its nominee shall have the sole right to accept or reject any plan
proposed in such proceeding and to take any other action which a party filing a


                                      -6-
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claim is entitled to do. In all such cases, whether in administration,
bankruptcy or otherwise, the person or persons authorized to pay such claim
shall pay to Lender the amount payable on such claim and, to the full extent
necessary for that purpose, each Guarantor hereby assigns to Lender all rights
to any such payments or distributions to which such Guarantor would otherwise be
entitled; provided, however, that such Guarantor's obligations hereunder shall
not be satisfied except to the extent that Lender receive cash or property
acceptable to Lender by reason of any such payment or distribution. If Lender
receives anything hereunder other than cash or property acceptable to Lender,
the same shall be held as collateral for amounts due under this Agreement.

         7. No Subrogation.

            (a) Nothing herein contained is intended or shall be construed to
give either Guarantor any right of subrogation in or under the Note or any other
Loan Document or any right to participate in any way therein, notwithstanding
any payments made or obligations performed by such Guarantor pursuant to this
Agreement, until all of the Guaranteed Obligations have been paid and performed
and all preference and other periods (collectively, the "Recapture Periods")
during which any bankruptcy or other court, Governmental Authority or Person
could have any right to recover, revoke or otherwise eliminate or reduce the
benefit to Lender of the payment and performance of the Guaranteed Obligations
(collectively, the "Recapture Rights") have expired with no Recapture Rights
having been asserted.

            (b) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES AND RELEASES ANY AND
ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING DIRECTLY OR INDIRECTLY, BY
OPERATION OF LAW, CONTRACT OR OTHERWISE) (i) TO ASSERT ANY CLAIM AGAINST
BORROWER OR ANY OTHER PERSON, OR AGAINST ANY DIRECT OR INDIRECT SECURITY FOR THE
LOAN, ON ACCOUNT OF PAYMENTS MADE OR OBLIGATIONS PERFORMED UNDER OR PURSUANT TO
THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY AND ALL RIGHTS OF SUBROGATION,
REIMBURSEMENT, EXONERATION, CONTRIBUTION OR INDEMNITY, UNTIL ALL OF THE
GUARANTEED OBLIGATIONS HAVE BEEN PAID AND PERFORMED AND THE RECAPTURE PERIODS
HAVE EXPIRED WITH NO RECAPTURE RIGHTS HAVING BEEN ASSERTED, (ii) TO REQUIRE THE
MARSHALLING OF ANY ASSETS OF BORROWER, WHICH RIGHT OF MARSHALLING MIGHT
OTHERWISE ARISE FROM PAYMENTS MADE OR OBLIGATIONS PERFORMED UNDER OR PURSUANT TO
THIS AGREEMENT, AND (iii) SUBJECT TO SUBSECTION (a) HEREOF, THAT WOULD RESULT IN
SUCH GUARANTOR BEING DEEMED A "CREDITOR" OF BORROWER OR ANY OTHER PERSON UNDER
THE UNITED STATES BANKRUPTCY CODE BY REASON OF ANY PAYMENT MADE OR DEBT OWED
UNDER THIS GUARANTY OR OTHERWISE IN CONNECTION WITH THE LOAN.

         8. Default and Remedies.

            (a) Each of the following, at the option of Lender, shall constitute
an "Event of Default" hereunder: (i) If an Event of Default occurs under and as
defined in any Loan Document, or (ii) if either Guarantor fails to perform in


                                      -7-
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any material respect any of the terms, conditions or covenants contained herein
within eight (8) days following written demand as to any obligation relating to
the payment of money (provided, however, that such demand shall not be required
in more than two (2) consecutive months, or three (3) months in the aggregate,
in any calendar year) or thirty (30) days following written demand as to any
other obligation (provided that, if such default cannot reasonably be cured
within such thirty (30) day period but Guarantors undertake to cure such default
within such thirty (30) day period, such thirty (30) day period shall be
extended to sixty (60) days), or (iii) if any representation or warranty made by
either Guarantor herein or in writing in connection herewith is false or
misleading in any material adverse respect when made, or (iv) if by decree of a
court of competent jurisdiction, either Guarantor shall be adjudicated bankrupt
or insolvent, or either Guarantor's property shall have been sequestered, and
such decree shall have continued undischarged and unstayed for ninety (90) days
after the entry thereof, or if any proceedings under the Federal Bankruptcy Code
or any similar statute applicable to either Guarantor, as now or hereafter in
effect, shall be instituted against either Guarantor and be consented to by the
respondent or any order for relief shall be entered in such proceeding or such
proceeding shall not be dismissed within ninety (90) days after such filing, or
if either Guarantor shall institute any such proceeding against either Guarantor
under any such law, or if either Guarantor shall make an assignment for the
benefit of creditors or shall admit in writing an inability to pay debts
generally as they become due or shall consent to the appointment of a receiver
or liquidator or trustee of either Guarantor or of all or any part of its
property.

            (b) If any Event of Default occurs hereunder, Lender, without any
further demand or proceeding against Borrower, (A) may forthwith recover from
either or both Guarantors in the aggregate the full amount of any liability
hereunder; and (B) may sell all or any part of any property held as security
hereunder on any exchange or at public or private sale at its option at any time
or times without advertisement or demand upon or notice to either Guarantor (all
of which are hereby waived), except such notice as is required by applicable
statute and cannot be waived, with the right on the part of Lender or its
nominee, to become the purchaser thereof at such sale (unless prohibited by
statute), free from any equity of redemption and from all other claims.

            (c) If an Event of Default occurs hereunder, each Guarantor shall,
in addition to all other liabilities hereunder, be liable to Lender for all
costs and expenses, including reasonable attorney's fees and court costs,
incurred by Lender in enforcing this Agreement, and any judgment entered against
either Guarantor pursuant to this Agreement shall bear interest until paid at
the Default Rate and not at the statutory rate of interest after judgment and
shall be collectible as part of any judgment hereunder.

            (d) THE FOLLOWING PARAGRAPH SETS FORTH A WARRANT OF ATTORNEY TO
CONFESS JUDGMENT AGAINST GUARANTORS. IN GRANTING THIS WARRANT OF ATTORNEY, EACH
GUARANTOR HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, AND ON THE ADVICE OF
HIS SEPARATE COUNSEL, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS WITH RESPECT TO
SUCH WARRANT AND ANY EXECUTION THEREON THAT SUCH GUARANTOR MAY HAVE TO PRIOR
NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE CONSTITUTION AND LAWS OF THE
UNITED STATES AND THE COMMONWEALTH OF PENNSYLVANIA.



                                      -8-
<PAGE>


EACH GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF
RECORD, OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE COMMONWEALTH OF
PENNSYLVANIA OR ELSEWHERE, TO APPEAR FOR SUCH GUARANTOR AT ANY TIME OR TIMES
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT HEREUNDER, IN ANY SUCH COURT IN
ANY ACTION BROUGHT AGAINST SUCH GUARANTOR BY LENDER WITH RESPECT TO THE
AGGREGATE AMOUNT PAYABLE HEREUNDER, WITH OR WITHOUT DECLARATION FILED, AS OF ANY
TERM, AND THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST SUCH GUARANTOR FOR ALL
SUMS PAYABLE BY SUCH GUARANTOR TO LENDER HEREUNDER, AS EVIDENCED BY AN AFFIDAVIT
SIGNED BY A DULY AUTHORIZED DESIGNEE OF LENDER SETTING FORTH SUCH AMOUNT THEN
DUE FROM SUCH GUARANTOR TO LENDER, TOGETHER WITH REASONABLE ATTORNEY'S FEES,
WITH COSTS OF SUIT, RELEASE OF PROCEDURAL ERRORS. IF A COPY OF THIS AGREEMENT,
VERIFIED BY AFFIDAVIT, SHALL HAVE BEEN FILED IN SUCH ACTION, IT SHALL NOT BE
NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY. EACH GUARANTOR WAIVES
THE RIGHT TO ANY STAY OF EXECUTION AND THE BENEFIT OF ALL EXEMPTION LAWS NOW OR
HEREAFTER IN EFFECT. NO SINGLE EXERCISE OF THE FOREGOING WARRANT AND POWER TO
BRING ANY ACTION OR CONFESS JUDGMENT THEREIN SHALL BE DEEMED TO EXHAUST THE
POWER, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND MAY BE EXERCISED FROM TIME
TO TIME AS OFTEN AS LENDER SHALL ELECT UNTIL ALL AMOUNTS PAYABLE TO LENDER
HEREUNDER SHALL HAVE BEEN PAID IN FULL.

         9. WAIVER OF JURY TRIAL. EACH GUARANTOR AND LENDER (BY ACCEPTANCE OF
THIS AGREEMENT) MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH GUARANTOR HEREBY
WAIVES ANY RIGHT HE MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. EACH GUARANTOR CERTIFIES THAT NO REPRESENTATIVE,
LENDER OR ATTORNEY OF LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT THIS
AGREEMENT AND MAKE THE LOAN.


                                      -9-

<PAGE>

         10. Cumulative Remedies. The rights, powers and remedies of Lender
hereunder and under any other agreement now or at any time hereafter in force
between Lender and Guarantors shall be cumulative and not alternative and shall
be in addition to all rights, powers and remedies given to Lender by law. Each
and every default in the performance of this Agreement shall give rise to a
separate cause of action and separate suits may be brought as each such cause of
action arises and matures.

         11. Jurisdiction. etc. Each Guarantor hereby unconditionally and
irrevocably (a) subjects itself to the jurisdiction of the courts of the
Commonwealth of Pennsylvania and any federal courts sitting in either such State
in connection with any action, suit or proceeding under or relating to, or to
enforce any of the provisions of, this Agreement, (b) waives, to the extent
permitted by law, any right (i) to obtain a change in venue from any such court
in any such action, suit or proceeding, and (ii) to trial by jury in any such
action, suit or proceeding, and (c) agrees to service of process by certified
mail, return receipt requested, postage prepaid to his address set forth in
Section 14 of this Agreement. Each Guarantor irrevocably agrees that service of
process in accordance with the foregoing sentence shall be deemed in every
respect effective and valid personal service of process upon such Guarantor. The
provisions of this Section 11 shall not limit or otherwise affect the right of
Lender to institute and conduct an action in any other appropriate manner,
jurisdiction or court.

         12. Advice of Counsel. Each Guarantor hereby confirms actual and full
knowledge and acceptance of the terms and provisions of the Loan Documents and
this Agreement, as to all of which such Guarantor further acknowledges that such
Guarantor has received the advice of counsel. Each Guarantor hereby confirms to
Lender that the Loan is and will be of direct interest, benefit and advantage to
such Guarantor.

         13. Representations. Warranties and Covenants. Each Guarantor
represents, warrants and covenants to and with Lender that:

            (a) This Agreement has been duly authorized, executed and delivered
by such Guarantor, and such execution and delivery will not conflict with or
result in a breach of or constitute a default under any instrument to which such
Guarantor is a party or by which such Guarantor, or such Guarantor's property,
is bound, or violate any applicable provision of law or any judgment, order,
writ, injunction, decree, rule or regulation of any court, administrative agency
or other governmental agency or authority, and this Agreement constitutes the
valid and binding obligation of such Guarantor and is enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws of general application affecting the
enforcement of creditors' rights generally.

            (b) There is no suit, action, proceeding or investigation pending
or, to the actual knowledge of such Guarantor, threatened against or affecting
such Guarantor, before or by any court, administrative agency or other
governmental authority the result of which would materially adversely affect
such Guarantor's ability to perform his obligations under this Guaranty.


                                      -10-
<PAGE>


            (c) The financial statements of such Guarantor heretofore delivered
to Lender are true and correct in all material respects and fairly represent the
financial condition of such Guarantor as of the date thereof and for the period
shown thereon; no material adverse change has thereafter occurred in the
financial condition reflected thereon; and the assets shown on the financial
statements are wholly owned by such Guarantor as shown, and are not jointly
owned with any other person or entity except as otherwise stated in the
financial statements.

            (d) Such Guarantor will deliver to Lender or cause Borrower to
deliver to Lender, as and when due, the financial statements and copies of tax
returns of such Guarantor required by Section 7.1 the Loan Agreement.

            (e) Guarantors, collectively, possess a Net Worth of at least
Thirteen Million Dollars ($13,000,000) and Liquid Assets of at least One Million
Dollars ($1,000,000), each on a consolidated basis.

            (f) Such Guarantor will notify Lender promptly of any material
adverse change in such Guarantor's financial condition as shown on the financial
statement most recently delivered to Lender such that any covenant contained in
Section 7.2 of the Loan Agreement is no longer true and correct.

            (g) Such Guarantor agrees that he shall not take any action which
would cause a violation of the financial covenants in Section 7.2 of the Loan
Agreement.

            (h) Except as may be otherwise permitted in the Loan Agreement, such
Guarantor will not sell, lease, transfer, pledge, encumber, or otherwise dispose
of any substantial part or amount of such Guarantor's assets, real or personal,
or any interest therein, without the prior written consent of Lender, unless for
reasonably fair value.

            (i) Promptly upon becoming aware thereof, such Guarantor shall give
Lender notice of (i) the commencement, existence or threat of any proceeding or
investigation by or before any governmental authority against or affecting such
Guarantor or any of its Affiliates which, if adversely decided, would have a
material adverse affect on the business operations, condition (financial or
otherwise) or prospects of such Guarantor or on his ability to perform its
obligations hereunder or (ii) any material adverse change in the business
operations, condition (financial or otherwise) or prospects of such Guarantor.

         14. Notices. Unless otherwise expressly provided under this Agreement
all notices, requests, demands, directions and other communications
(collectively "notices") given to or made upon any party under the provisions of
this Agreement (and unless otherwise specified, in each other Loan Document)
shall be in writing and shall be delivered by hand, nationally recognized
overnight courier or U.S. mail (certified, return receipt requested) to the
respective parties at the following addresses or in accordance with any
subsequent unrevoked written direction from any party to the others:


                                      -11-
<PAGE>


                           If to Guarantors:

                           Cedar Income Fund, Ltd.
                           c/o Cedar Bay Realty Advisors, Inc.
                           44 South Bayles Avenue, Suite 304
                           Port Washington, NY  11050
                           Attention: Leo S. Ullman

                           with a copy to

                           Stuart H. Widowski, Esquire
                           c/o Cedar Bay Realty Advisors, Inc.
                           44 South Bayles Avenue, Suite 304
                           Port Washington, NY  11050

                           Cedar Income Fund Partnership, L.P.,
                           c/o Cedar Bay Realty Advisors, Inc.
                           44 South Bayles Avenue, Suite 304
                           Port Washington, NY  11050
                           Attention: Leo S. Ullman

                           with a copy to:

                           Stuart H. Widowski, Esquire
                           c/o Cedar Bay Realty Advisors, Inc.
                           44 South Bayles Avenue, Suite 304
                           Port Washington, NY  11050

                           If to Lender:

                           Citizens Bank Of Pennsylvania
                           2001 Market Street, 6th Floor
                           Philadelphia, Pennsylvania  19103-7053
                           Attention:  Mr. Robert L. Schopf
                                       Vice President

                           with a copy to:

                           Pepper Hamilton LLP
                           400 Berwyn Park
                           899 Cassatt Road
                           Berwyn, Pennsylvania  19312
                           Attention:  David H. Huggler, Esq.

                                      -12-
<PAGE>


All notices shall, except as otherwise expressly provided in this Agreement, be
effective (a) in the case of hand-delivered notice, when hand delivered, (b) if
given by U.S. mail, upon delivery or, if delivery is refused, on the date
delivery is first attempted, and (c) if given by any other means (including by
air courier), when delivered.

         15. Miscellaneous.

            (a) All understandings, representations. and agreements heretofore
made or exchanged between Guarantors and Lender with respect to the subject
matter hereof are merged into this Agreement, which alone, fully, completely,
and integrally, expresses the understanding of Guarantors and Lender concerning
the subject matter hereof.

            (b) No modification of this Agreement shall be effective unless in
writing and signed by an authorized officer of Lender.

            (c) This Agreement shall be binding upon each Guarantor, its
successors and assigns, and shall inure to the benefit of Lender, its successors
and assigns, including, but not limited to, any assignee to which any Lender
shall assign any of its interests in the Loan Documents.

            (d) For purposes of this Agreement, the neuter gender shall be
deemed to include the masculine and feminine genders and the singular shall be
deemed to include the plural, as the context may require.

            (e) This Agreement shall be construed in accordance with and
governed in all respects by the laws of the Commonwealth of Pennsylvania.

            (f) This Agreement may be executed in any number of counterparts,
each of which shall be an original, and such counterparts together shall
constitute one and the same instrument.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



                                      -13-
<PAGE>


                  IN WITNESS WHEREOF, Guarantors have duly executed this
Agreement, under seal, on the date first written above.
<TABLE>
<CAPTION>
<S>                                           <C>
                                            CEDAR INCOME FUND, LTD., a Maryland corporation

Attest:  ______________________             By:__________________________________
         Stuart H. Widowski                    Brenda J. Walker
         Secretary                             Vice President


                                            CEDAR INCOME FUND PARTNERSHIP, L.P., a Delaware limited
                                            partnership, by its sole general partner, as follows:


                                                    Cedar Income Fund, Ltd.

                                                    By:____________________________
                                                       Brenda J. Walker
                                                       Vice President
</TABLE>


<PAGE>


STATE OF                                    )

                                            ) SS

COUNTY OF __________________                )

         On this, the ___ day of _____________, 2003, before me a Notary Public
in and for the State and County aforesaid, personally appeared Brenda J. Walker
and Stuart H. Widowski, who acknowledged themselves to be the Vice President and
Secretary, respectively, of CEDAR INCOME FUND, LTD., a Maryland corporation, and
that as such officers being authorized to do so, executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation.

                  IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.

                                                     ________________________
                                                     Notary Public
                                                     My Commission Expires:

STATE OF                                    )

                                            ) SS

COUNTY OF __________________                )

         On this, the ___ day of _____________, 2003, before me a Notary Public
in and for the State and County aforesaid, personally appeared Brenda J. Walker,
who acknowledged herself to be the Vice President of Cedar Income Fund, Ltd., a
Maryland corporation, the sole general partner of CEDAR INCOME FUND PARTNERSHIP,
L.P., a Delaware limited partnership, and that as such officer being authorized
to do so, executed the foregoing instrument for the purposes therein contained,
by signing the name of the corporation, as sole general partner of the
partnership.

                  IN WITNESS WHEREOF, I have hereunto set my hand and official
seal.

                                                     ________________________
                                                     Notary Public
                                                     My Commission Expires:
                                      -15-

