<PAGE>

                         ASSIGNMENT OF LEASES AND RENTS
                         ------------------------------

                  THIS ASSIGNMENT OF LEASES AND RENTS (this "Assignment") is
made this __ day of ____________, 2003, to be delivered on _______________,
2003, by NEWPORT PLAZA ASSOCIATES, L.P., a Delaware limited partnership, d/b/a
Newport Plaza Shopping Center ("Assignor"), with an office in care of Cedar Bay
Realty Advisors, Inc., 44 South Bayles Avenue, Suite 304, Port Washington, New
York 11050, and CITIZENS BANK OF PENNSYLVANIA, a Pennsylvania state chartered
savings bank ("Assignee"), with an office at 2001 Market Street, 6th Floor,
Philadelphia, Pennsylvania 19103-7053.

                                   Background
                                   ----------

                  Assignor and Assignee 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 Assignee has agreed
to extend a credit facility to Assignor in the principal amount of up to Five
Million Five Hundred Thirty Five Thousand Dollars ($5,535,000) (the "Loan"),
which is evidenced by a certain Promissory Note dated this date (the "Note")
executed by Assignor and made payable to the order of Assignee 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 (the "Mortgage") given by
Assignor to Assignee encumbering Assignor's interest in certain land and the
buildings and improvements thereon known as Newport Plaza located at U.S. Route
322 and Route 34 in Howe Township, Perry County, Pennsylvania (such land and
improvements, collectively, the "Project"), all as more particularly described
in Exhibit A attached hereto and made a part hereof.

                  Assignee is willing to make the Loan to Assignor pursuant to
the Loan Agreement on certain conditions. One such condition is that payment
shall be secured by, in addition to the Mortgage and other things, an assignment
of Assignor's interest in the Leases and Rents more particularly described
below.

                  Assignor has agreed to assign to Assignee, on the terms and
subject to the conditions hereinafter set forth, all of Assignor's rights under
all leases in which Assignor is the landlord now or hereafter affecting the
Project or any portion thereof, together with all extensions, renewals and
modifications thereof and subleases thereunder, and together with all guaranties
of any tenant's or subtenant's performance thereunder (any such lease, as so
extended, modified, and renewed and with such subleases and guaranties thereof,
individually, a "Lease," and all such Leases, as so extended, modified and
renewed and with such subleases and guaranties thereof, collectively, the
"Leases"), all credits, cash, deposits (whether for the security or otherwise),
rents, advance rentals, issues, profits, revenues, royalties, accounts, rights,
benefits and income of every nature of and from the Project, including, without
limitation, minimum rents, additional rents, termination payments, forfeited
security deposits, liquidated damages following a default under a Lease by the
tenant thereunder and all proceeds payable under any policy of insurance
covering loss of rents resulting from untenantability due to destruction or
damage to the Project, together with the immediate and continuing right to
collect and receive the same, whether now due or hereafter becoming due, and
together with all rights and claims of any kind that Assignor may have against
any tenant, lessee or licensee under the Leases or against any other occupant of
the Project, any award or other payment which Assignor may hereafter become
entitled to receive with respect to any of the Leases as a result of or pursuant







<PAGE>

to any bankruptcy, insolvency or reorganization or similar proceedings involving
the tenants under such Leases, and any and all payments made by or on behalf of
any tenant of any part of the Project in lieu of rent, and all rents, oil and
gas or other mineral royalties, revenues and bonuses, issues and profits from
the Project, and the building improvements, the fixtures and the equipment
located thereon, including, without limitation, all revenues, receipts, income,
accounts, accounts receivable and other receivables including, without
limitation, revenues receipts, income, receivables and accounts relating to or
arising from rentals, rent equivalent income, income and profits from the
operation of the retail center on the Project, the provision or sale of goods
and services, and any other items of revenue, receipts or other income
(collectively, the "Rents") and all proceeds from the sale or other disposition
of the Leases and the right to receive and apply the Rents to the payment of the
Obligations Secured (as defined in the Mortgage), all on the terms and subject
to the conditions hereinafter set forth.

                  Capitalized terms used in this Assignment without definition
shall have the same meanings ascribed to those terms in the Loan Agreement.

                                   Assignment
                                   ----------

                  NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to secure repayment of the Loan with interest and all
other sums due or to become due under the Loan Documents, Assignor, intending to
be legally bound, hereby agrees as follows:

                  1. Assignment of Leases and Rents.

                     (a) Assignor hereby conveys, transfers, assigns and sets
over unto Assignee all of Assignor's right, title, interest and privilege in, to
and under the Leases and the Rents. This Assignment includes, without
limitation:

                         (i) All Rents (whether denoted as minimum rent,
percentage rent, additional rent or otherwise), income, profits and other sums
due or to become due under the Leases, or any of them;

                         (ii) All security deposits made by any tenant or
subtenant under any Lease (any such tenant or subtenant, together with any other
person or entity succeeding to all or any part of such tenant's or subtenant's
interest under said Lease, whether by assignment, sublease, operation of law or
otherwise, and any guarantor of all or any portion of such tenant's performance
under such Lease, are hereinafter referred to individually as a "Tenant" and
collectively, as the "Tenants"), to the extent they may be lawfully assigned.

                         (iii) Any payments made by any Tenant in lieu of Rent;

                         (iv) Any guaranties of payment or performance of any
Tenant's obligations under any Lease to the extent that they can lawfully be
assigned;

                         (v) All claims, rights, privileges and remedies on the
part of Assignor, whether arising under the Leases or by statute or at law or in
equity or otherwise, arising out of or in connection with any failure by any
Tenant to pay the Rents or to perform any of its other obligations under its
Lease;






                                       -2-
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                         (vi) All rights, powers and privileges of Assignor to
exercise any election or option or to give or receive any notice, consent,
waiver or approval under or with respect to the Leases or the Rents; and

                         (vii) All other claims, rights, powers, privileges and
remedies of Assignor under or with respect to the Leases and the Rents,
including without limitation the right, power and privilege (but not the
obligation) to do any and all acts, matters and other things that Assignor is
entitled to do thereunder or with respect thereto.

                     (b) Assignor covenants and agrees with Assignee that any
subsequent Leases of all or any portion of the Project shall be subject to all
of the terms and conditions of this Assignment (including, without limitation,
Section 3(b) hereof) and the other Loan Documents, and Assignor further
covenants and agrees with Assignee that any such subsequent Lease of all or any
portion of the Project shall automatically and without the necessity of any
further action by Assignor or Assignee be subject to the terms and conditions of
this Assignment, with the intent and effect that all Rents and other sums due
and becoming due under any such subsequent Lease shall automatically be assigned
hereby as security for the Loan and the performance of all of Assignor's
obligations under the Loan Documents.

                     (c) Assignor agrees that it will, promptly upon receipt of
written request from Assignee, execute, acknowledge and deliver specific and
separate assignments of any or all of the Leases, including, without limitation,
assignments requested in connection with any sublease under any of the Leases or
any assignment, directly or indirectly, voluntarily or by operation of law,
thereof, or in connection with the entrance by Assignor into any subsequent
Lease.

                  2. Limitations on Assignment.

                     (a) This Assignment is given for the purpose of securing
the Loan and the performance by Assignor of all of its obligations under the
Loan Documents, and, accordingly, upon full and indefeasible repayment of the
Loan (including, without limitation, all principal, interest, fees and
collection costs) and the discharge of all of Assignor's other obligations under
the Loan Documents, this Assignment shall automatically become null and void.

                     (b) Notwithstanding any provision herein to the contrary,
this Assignment is intended to be an absolute assignment from Assignor to
Assignee and not merely the granting of a security interest. The Leases and the
Rents and profits hereby assigned to Assignee are assigned subject only to the
right of Assignor to receive and use the Rents during any period for which rent
payments are to be paid to Assignor pursuant to the provisions of Section 9
hereof (provided that Assignor shall have no right to receive and use Rents
during the existence of an Event of Default beyond any applicable cure periods).








                                       -3-
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                  3. Assignor's Covenants.

                     (a) Assignor hereby covenants that Assignor will not,
without in each case obtaining the prior written consent of Assignee: (i) cancel
or terminate or accept a surrender of any Lease other than by its terms or
following a default by the tenant thereunder; (ii) amend, modify or otherwise
change any Lease so as to decrease the term or reduce the rental due, or
discount, compromise or forgive any amounts due, or diminish any Tenant's
obligation with regard to the payment of taxes, insurance and other sums; (iii)
permit the payment of rent under any Lease more than thirty (30) days in advance
of the due date thereof, or anticipate, encumber or assign the Rents or any part
thereof or any interest therein; (iv) release any guarantor or surety of any
Tenant's obligations; (v) waive any material default under or material breach of
any Lease; or (vi) take any other action in connection with any Lease or any
Rent which would materially impair the value of the rights or interests of
Assignor or Assignee under or in such Lease.

                     (b) Assignor covenants that Assignor will perform and
observe all of the covenants and requirements contained in the Mortgage and the
Loan Agreement with respect to the leasing of the Project or any portion
thereof, and Assignor further agrees upon request by Assignee from time to time
to deliver promptly to Assignee true, complete and correct copies of all Leases
(and all modifications, amendments, riders and addenda to any of the Leases)
executed after the date hereof. Assignor shall use all reasonable efforts to
cause the Tenants to execute and deliver to Assignee (such delivery to be within
ten (10) Business Days after requested by Assignor or such longer period
provided in such Lease) such certificates as to the status of the Leases, the
rent, additional rent and other charges payable thereunder, and the Tenants' and
Assignor's compliance with the terms thereof as Assignee may from time to time
request (but not more frequently than once per year so long as no Event of
Default exists), such certificates to be in form and substance reasonably
satisfactory to Assignee. Assignor shall use its good faith efforts to include
in each Lease executed after the date hereof a clause obligating the Tenant
thereunder to execute and deliver such certificates to Assignor and its
mortgagees.

                  4. Assignor's Obligations as Landlord. Assignor agrees that it
will perform all of its obligations as landlord under the Leases when due in all
material respects, use commercially reasonable efforts to enforce the
performance by the Tenants of all of their respective obligations under the
Leases and appear in and defend any action or proceeding arising out of or in
connection with any of the Leases. Assignor further agrees to send to Assignee
duplicate copies of any notice of default from any Tenant and any material
notice sent or received by Assignor.

                  5. Assignee Not Bound To Perform Under Leases.

                     (a) Notwithstanding any legal presumption to the contrary,
Assignee shall not be obligated by reason of their acceptance of this Assignment
to perform any obligation of Assignor as landlord under the Leases, or any of
them. Assignor shall at all times remain solely liable under the Leases for the
performance of the obligations of Assignor thereunder. However, Assignee may, at
its sole option, and without releasing Assignor from any obligation hereunder or
under the Leases, discharge any obligation which Assignor fails, after
reasonable notice from Assignee, to discharge, including, without limitation,
defending any legal action, and Assignor agrees to pay upon demand all sums
expended by Assignee in connection therewith, including reasonable counsel fees
and court costs, together with interest thereon at the Default Rate provided for
under the Loan Agreement, and the same shall be added to the indebtedness
evidenced by the Note and secured by the Mortgage and this Assignment.






                                       -4-
<PAGE>

                     (b) Assignee shall not have any obligation to make any
inquiry as to the nature or sufficiency of any payment received by Assignee, or
to present or file any claim, or to take any action to collect or enforce the
payment of any amounts which have been assigned to Assignee or to which Assignee
may be entitled at any time or times. Assignor hereby agrees to indemnify
Assignee and save Assignee harmless from and against any and all loss,
liability, damage (excluding consequential damages) or expense (including,
without limitation, reasonable attorney's fees) arising from or as a result of
any claim by any Tenant or any other party arising under or in connection with
the Leases, or any of them, or this Assignment, whether by reason of any alleged
obligation or undertaking on Assignee's part to perform or discharge any of the
covenants contained in the Leases or otherwise unless resulting from the gross
negligence or willful misconduct of Assignee.

                     (c) Neither the acceptance of this Assignment nor the
collection of Rent or other sums due or becoming due under the Leases assigned
hereby shall constitute a waiver of any rights of Assignee under the Loan
Documents or any other collateral now or hereafter mortgaged, pledged or
assigned as collateral for the Note and the performance of Assignor's
obligations thereunder and under the other Loan Documents. Assignor agrees that
the procedures required by Assignee hereunder are for the benefit of Assignee,
their successors and assigns only, and not for the benefit of Assignor, any
Tenant or any other party.

                  6. Representations and Warranties of Assignor. Assignor hereby
represents and warrants to Assignee, as a material inducement to Assignee to
accept this Assignment and to make the Loan, that:

                     (a) Based on Assignor's best knowledge after diligent
investigation, Assignor has delivered to Assignee a true correct and complete
list and description of all Leases currently in existence with respect to the
use and occupancy of all or any portion of the Project;

                     (b) Assignor has not executed any prior assignment of any
of its rights under any Leases except in favor of Assignee; and

                     (c) Assignor has not done anything which would prevent
Assignee from or limit Assignee in operating under any of the provisions hereof.

                  7. Bankruptcy and Other Proceeds. In furtherance and not in
limitation of the assignment set forth in Section 1 hereof:

                     (a) Assignor hereby assigns to Assignee any award hereafter
made to Assignor in any court proceeding involving any of the Tenants in any
bankruptcy, insolvency, or reorganization in any state or Federal court.

                     (b) Assignor assigns to Assignee any purchase proceeds
receivable by reason of any Tenant's exercising any right of first refusal or
any option to purchase the Project or any portion thereof as may be provided in
any of the Leases or any additions, amendments or supplements thereto.






                                       -5-
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                  8. Events of Default.

                     (a) The occurrence of any one or more of the following
shall, at the option of Assignee, constitute an event of default (each, an
"Event of Default") hereunder:

                         (i) Any representation or warranty or financial
statement of Assignor or Guarantor under this Assignment or under any of the
other Loan Documents shall be untrue in any material adverse respect when made
(including by omission of material information necessary to make such
representation or warranty or financial statement not misleading);

                         (ii) Assignor shall have failed to observe and perform
any of the terms, covenants, promises and agreements on its part to be observed
and performed under this Assignment and, except for the events specified in the
following subsections of this Section 8(a) (which shall be subject to the grace
or cure periods, if any, provided therein), such Default shall not have been
cured within thirty (30) days after written notice of such default shall have
been given to Assignor; provided that, if such Default is curable but not
reasonably capable of cure within such thirty (30) day period, Assignor shall
have such further period, not to exceed a period of sixty (60) days in the
aggregate, as may be required to cure such Default, on the condition that
Assignor commences such cure within the original thirty (30) day period and
thereafter diligently prosecutes such cure to completion;

                         (iii) An Event of Default shall have occurred under any
other Loan Document beyond any applicable cure periods; or

                         (iv) The occurrence of any material default by Assignor
under any Lease or number of Leases which individually or in the aggregate, in
the reasonable judgment of Assignee, has a material adverse effect on the
financial condition of Assignor or the Project.

                     (b) Upon the occurrence of any Event of Default, Assignee
shall be entitled to exercise all or any of their rights and remedies under the
Loan Agreement, Note, Mortgage and this Assignment, or as may otherwise be
available to Assignee at law or in equity, in such order as Assignee may elect.

                  9. Right of Assignee to Direct Payment of Rents. The
assignment set forth above includes the full and complete assignment by Assignor
to Assignee of all right, power and privilege of Assignor to direct the party to
whom Rents are to be paid. Such assignment of the right to direct payment of
Rents is unconditional and unrestricted, except that, so long as no Event of
Default has occurred, Assignor shall have a license to collect Rents which
license may be terminated and revoked by Assignee upon the occurrence of an
Event of Default. The Tenants shall be, and hereby are, irrevocably authorized
to rely upon and act in accordance with (and shall be fully protected in so
doing) any notice or demand by Assignee for the payment to Assignee or their
nominee of any Rents which may then be or thereafter become due under the
Leases, and shall have no duty to inquire whether any such notice or demand by
Assignee conflicts with any provision of this Assignment.

                  10. Benefits and Burdens. This Assignment shall be binding
upon Assignor and its successors and assigns, including any subsequent owner of
the Project, and shall inure to the benefit of Assignee and its successors and
assigns. In furtherance and not in limitation of the foregoing, Assignee, as
holder of the Mortgage, shall have the right to assign all or a portion of
Assignee's rights, title, interest and privilege in and to the Leases and/or the
Rents to any subsequent holder of the Mortgage, and to assign the same to any
person acquiring title to the Project through foreclosure or otherwise.






                                       -6-
<PAGE>

                  11. Notices. All notices required to be given to any of the
parties hereunder shall be in writing and shall be deemed to have been
sufficiently given for all purposes when sent in accordance with the notice
provisions contained in the Loan Agreement.

                  12. Governing Law; Amendment. This Assignment is delivered and
intended to be performed in the Commonwealth of Pennsylvania and shall be
governed and construed in accordance with the laws of said Commonwealth. This
Assignment may only be amended by an instrument in writing executed by Assignor
and Assignee.

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                  IN WITNESS WHEREOF, Assignor has duly executed this
Assignment, under seal, as of the day and year first above written.

                                     NEWPORT PLAZA ASSOCIATES, L.P., a
                                     Delaware limited partnership, d/b/a Newport
                                     Plaza Shopping Center, by its sole general
                                     partner, as follows:

                                                CIF-Newport Plaza Associates,
                                                LLC, a Delaware limited
                                                liability company, by its sole
                                                member, as follows:

                                                  Cedar Income Fund Partnership,
                                                  L.P., a Delaware limited
                                                  partnership, by its sole
                                                  general partner, as follows:

                                                      Cedar Income Fund, Ltd., a
                                                      Maryland corporation

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










<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, the sole general partner of Cedar Income Fund Partnership,
L.P., a Delaware limited partnership, the sole member of CIF-Newport Plaza
Associates, LLC, a Delaware limited liability company, the sole general partner
of NEWPORT PLAZA ASSOCIATES, L.P., a Delaware limited partnership, d/b/a Newport
Plaza Shopping Center, 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, as sole general partner of the partnership.

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

                                                     ________________________
                                                     Notary Public
                                                     My Commission Expires:















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                                    Exhibit A
                                    ---------

                                Legal Description
                                -----------------
































