<PAGE>

                                 LOAN AGREEMENT
                                 --------------

         THIS LOAN AGREEMENT is made this _____ day of ___________, 2003, to be
delivered on ______________, 2003, by and between HALIFAX PLAZA ASSOCIATES,
L.P., a Delaware limited partnership (the "Borrower"), and CITIZENS BANK OF
PENNSYLVANIA, a Pennsylvania state chartered savings bank (the "Lender").

                                   Background

         Borrower owns or is about to acquire certain real property consisting
of approximately 8.5 acres of land located at 3761-3777 Peter's Mountain Road in
Halifax Township, Dauphin County, Pennsylvania (the "Premises"), as more fully
described in Exhibit A attached hereto and made a part hereof, and the
improvements thereon including buildings containing a total of approximately
54,150 square feet (collectively, the "Improvements"), together comprising a
retail shopping center known as "Halifax Plaza". The Premises and the
Improvements are sometimes collectively referred to herein as the "Project."

         Borrower has requested that Lender make available a credit facility in
the principal amount of Four Million Two Hundred Sixty Five Thousand Dollars
($4,265,000) (the "Loan") in order to finance a portion of the cost of the
acquisition of the Project and to reimburse Borrower for certain costs and
expenses incurred in connection with the acquisition of the Project and the
Loan. Lender is willing to extend the Loan to Borrower upon the terms and
subject to the conditions hereinafter set forth.

                                    Agreement

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, Borrower
and Lender agree as follows:

                                   ARTICLE 1
                            DEFINITIONS; CONSTRUCTION

         1.1. Certain Definitions. As used in this Agreement, the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural), unless the context hereof
otherwise clearly requires:

         "Additional Security" has the meaning ascribed to such term in Section
2.4.

         "Adjusted LIBOR Rate" means (i) the LIBOR Lending Rate plus two hundred
ten (210) basis points at all times from and after the Closing Date unless and
until the first date after the Closing Date on which the Standard & Poor's
Credit Rating for the Giant Lease Guarantor is lower than BBB-, or (ii) the
LIBOR Lending Rate plus two hundred fifty (250) basis points at all times from
and after the first date following the Closing Date on which the Standard &
Poor's Credit Rating for the Giant Lease Guarantor is lower than BBB-.



<PAGE>

         "Adjusted Prime Rate" means (i) the Prime Rate minus seventy five (75)
basis points at all times from and after the Closing Date unless and until the
first date after the Closing Date on which the Standard & Poor's Credit Rating
for the Giant Lease Guarantor is lower than BBB-, or (ii) the Prime Rate minus
thirty five (35) basis points at all times from and after the first date
following the Closing Date on which the Standard & Poor's Credit Rating for the
Giant Lease Guarantor is lower than BBB-.

         "Advance" means the advance of the Loan by Lender to Borrower on the
Closing Date pursuant to this Agreement.

         "Affiliate" of a Person (the "Specified Person") shall mean (i) any
Person which directly or indirectly controls, or is controlled by, or is under
common control with, the Specified Person, (ii) any executive officer (or, in
the case of a Person which is not a corporation, any individual having analogous
powers) of the Specified Person, and (iii) in the case of a Specified Person who
is an individual, any lineal ancestor or lineal descendant of such Specified
Person. For purposes of the preceding sentence, "control" of a Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

         "Agreement" means this Loan Agreement as the same may be amended,
modified, restated or supplemented from time to time in accordance with its
terms.

         "Agreement of Sale" means the Agreement for the Sale of Real Estate
dated August 2002 between Cedar Operating Partnership, as purchaser, and Mark G.
Caldwell, t/d/b/a Caldwell Development Company, as seller, providing for the
sale of the Premises and Improvements for the sum of $5,240,000.

         "Approved Lease" has the meaning ascribed to such term in Section 6.8.

         "Assignee" has the meaning ascribed to such term in Section 9.9.

         "Assignments of Lease" has the meaning ascribed to such term in Section
2.3.

         "Borrower" has the meaning ascribed to such term in the preamble of
this Agreement.

         "Broker" means, collectively, Phillip Deeter and iCap Realty Advisors.

         "Business Day" means: (i) any day which is neither a Saturday or Sunday
nor a legal holiday on which commercial banks are authorized or required to be
closed in Philadelphia, Pennsylvania; (ii) when such term is used to describe a
day on which a borrowing, payment, prepaying, or repaying is to be made in
respect of any LIBOR Rate Loan, any day which is: (A) neither a Saturday or
Sunday nor a legal holiday on which commercial banks are authorized or required
to be closed in New York City and (B) a London Banking Day; and (iii) when such
term is used to describe a day on which an interest rate determination is to be
made in respect of any LIBOR Rate Loan, any day which is a London Banking Day.

                                      -2-

<PAGE>

         "Cedar Operating Partnership" means Cedar Income Fund Partnership,
L.P., a Delaware limited partnership.

         "Cedar REIT" means Cedar Income Fund, Ltd., a Maryland corporation, the
common stock of which is publicly traded on the NASDAQ securities market.

         "Cedar REIT's Financial Statements" means the Consolidated Balance
Sheets of Cedar Income Fund, Ltd., and the Related Consolidated Statements of
Operation, Shareholders' Equity and Cash Flows prepared in accordance with GAAP.

         "Closing Date" means the date of execution and delivery of this
Agreement as indicated on the first page hereof.

         "Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, and regulations thereunder, in each case as
in effect from time to time, and the Treasury regulations thereunder.

         "Default" means any event or condition which with notice, passage of
time or both, would constitute an Event of Default.

         "Default Rate" means, with respect to the principal amount of the Loan
or any other amounts payable under any of the other Loan Documents, an annual
rate equal to the sum of (i) five percent (5%) per annum plus (ii)(A) the
interest rate per annum otherwise in effect with respect to such amounts or (B)
if no such rate is otherwise in effect with respect to such amounts, the
Adjusted Prime Rate.

         "Dollar", "Dollars" and the symbol "$" means lawful money of the United
States of America.

         "Eligible Institution" means (i) Lender; (ii) an Affiliate of Lender:
(iii) a commercial bank organized under the laws of the United States, or any
State thereof, and having a combined capital and surplus of at least
$1,000,000,000; (iv) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $1,000,000,000; (v) a commercial bank organized
under the laws of any other country that is a member of the Organization for
Economic Cooperation and Development or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or under the laws of a political subdivision of any such
country, and having a combined capital and surplus of at least $1,000,000,000,
so long as such bank is acting through a branch or agency located in the United
States; and (vi) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other entity)
that is engaged in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its business and having a combined capital and surplus
or total assets of at least $500,000,000; provided, however, that neither
Borrower nor any Affiliate of Borrower shall qualify as an Eligible Institution
under this definition.

         "Environmental Agreement" has the meaning ascribed to such term in
Section 2.3.

                                      -3-

<PAGE>

         "Event of Default" means any of the Events of Default described in
Section 8.1.

         "Existing Leases" has the meaning ascribed to such term in Section 5.2.

         "Existing Management Agreement" has the meaning ascribed to such term
in Section 5.2.

         "Existing Manager" means Brentway Management, LLC, a New York limited
liability company.

         "Existing Tenants" has the meaning ascribed to such term in Section
5.2.

         "Financing Statements" has the meaning ascribed to such term in Section
2.3.

         "FIRREA" means the Financial Institution's Reform, Recovery and
Enforcement Act of 1989, as amended, and any successor statute of similar
import, and regulations thereunder, in each case as in effect from time to time.

         "GAAP" has the meaning ascribed to such term in Section 1.3.

         "General Collateral Assignment" has the meaning ascribed to such term
in Section 2.3.

         "Giant Lease" means the Ground Lease Agreement between Borrower, as
successor landlord, and Giant Food Stores, Inc., as tenant, dated July 27, 1993,
as amended November 1, 1994, covering approximately 32,000 square feet of
leasable space on the Premises, as guaranteed by a Lease Guaranty dated July 27,
1993 executed by Giant Lease Guarantor.

         "Giant Lease Guarantor" means Koninklijke Ahold NV, a Netherlands
company.

         "Governmental Approvals" has the meaning ascribed to such term in
Section 5.2.

         "Governmental Authority" means any government or political subdivision
or any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.

         "Guarantor" means Cedar REIT or Cedar Operating Partnership, and
"Guarantors" means both of them.

         "Hedging Contracts" means interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, or any other agreements or
arrangements entered into between Borrower and Lender and designed to protect
Borrower against fluctuations in interest rates or currency exchange rates,
including the Interest Rate Protection Agreements.

         "Hedging Obligations" means, with respect to Borrower, all liabilities
of Borrower to Lender under Hedging Contracts.

         "Improvements" has the meaning ascribed to such term in the Background
of this Agreement.

                                      -4-

<PAGE>

         "Indemnitees" has the meaning ascribed to such term in Section 9.11.

         "Interest Payment Date" means, (i) with respect to a LIBOR Rate Loan,
the last Business Day of a LIBOR Interest Period, and (ii) with respect to a
Prime Rate Loan, the last Business Day of each calendar month.

         "Interest Rate Protection Agreements" has the meaning ascribed to such
term in Section 2.3

         "Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, guideline, injunction, writ, decree
or award of, or any permit. approval or license granted by, any Governmental
Authority, including without limitation those relating to tax, zoning,
subdivision, building, safety, fire protection, accessibility to, usability by
or discrimination against disabled individuals or environmental matters.

         "Lender" has the meaning ascribed to such term in the preamble of this
Agreement.

         "LIBOR Interest Period" means:

         (i) initially, the period beginning on (and including) the Closing Date
and ending on (but excluding) the day which numerically corresponds to such date
one month thereafter (or, if such month has no numerically corresponding day, on
the last Business Day of such month), or

         (ii) if a Prime Rate Loan is converted into a LIBOR Rate Loan pursuant
to Section 3.3 or Section 3.4, initially the period beginning on (and including)
the conversion date and ending on (but excluding) the day which numerically
corresponds to such date one month thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month) and,
regardless of whether clause (i) above or this clause (ii) is applicable,

         (iii) thereafter, each period commencing on the last day of the next
preceding LIBOR Interest Period applicable to a LIBOR Rate Loan and ending one
month thereafter:

provided, however, that in any event

               (A) LIBOR Interest Periods for a LIBOR Rate Loan in connection
with which Borrower has or may incur Hedging Obligations with Lender shall be of
the same duration as the relevant periods set under the applicable Hedging
Contracts;

               (B) if such LIBOR Interest Period would otherwise end on a day
which is not a Business Day, such LIBOR Interest Period shall end on the next
following Business Day unless such day falls in the next calendar month, in
which case such LIBOR Interest Period shall end on the first preceding Business
Day; and

               (C) no LIBOR Interest Period may end later than the termination
of this Agreement.

                                      -5-

<PAGE>

         "LIBOR Lending Rate" means, relative to any LIBOR Rate Loan to be made,
continued or maintained as, or converted into, a LIBOR Rate Loan for any LIBOR
Interest Period, an annual interest rate determined pursuant to the following
formula:

                                                         LIBOR Rate
                  LIBOR Lending Rate      =              ----------
                                               (1.00 -LIBOR Reserve Percentage)

         "LIBOR Rate" means, relative to a LIBOR Interest Period for a LIBOR
Rate Loan, the offered rate for deposits of United States Dollars in an amount
approximately equal to the amount of the requested LIBOR Rate Loan for a term
coextensive with the designated LIBOR Interest Period which the British Bankers'
Association fixes as its LIBOR rate and which appears on the Telerate page 3750
as of 11:00 a.m. London time on the day which is two London Banking Days prior
to the beginning of such LIBOR Interest Period.

         "LIBOR Rate Loan" means the entire outstanding principal balance of the
Loan or any portion thereof with respect to which the applicable rate of
interest is based upon the LIBOR Rate.

         "LIBOR Rate Loan Prepayment Fee" has the meaning ascribed to such term
in Section 4.2.

         "LIBOR Reserve Percentage" means, relative to any day of a LIBOR
Interest Period for a LIBOR Rate Loan, the maximum aggregate (without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements (including all basic, emergency, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other scheduled
changes in reserve requirements) under any regulations of the Board of Governors
of the Federal Reserve System or other governmental authority having
jurisdiction with respect thereto as issued from time to time and then
applicable to assets or liabilities consisting of "Eurocurrency Liabilities", as
currently defined in Regulation D of the Board of Governors of the Federal
Reserve System, having a term approximately equal or comparable to such LIBOR
Interest Period.

         "Liquid Assets" has the meaning ascribed to such term in Section 6.2.

         "Loan" has the meaning ascribed to such term in the Background of this
Agreement.

         "Loan Documents" has the meaning ascribed to such term in Section 2.3.

         "Loan Fee" has the meaning ascribed to such term in Section 6.17.

         "London Banking Day" means a day on which dealings in United States
Dollar deposits are transacted in the London interbank market.

         "Maturity Date" has the meaning ascribed to such term in Section 4.1.

                                      -6-

<PAGE>

         "McDonald's Lease" means the Ground Lease Agreement between Borrower,
as successor landlord, and McDonald's Corporation d/b/a Delaware McDonald's
Corporation, as tenant, dated May 28, 1993, covering the McDonald's Premises.

         "McDonald's Premises" means a parcel of land containing approximately
27,500 square feet comprising a portion of the Premises.

         "McDonald's Tenant" means McDonald's Corporation d/b/a Delaware
McDonald's Corporation.

         "Mortgage" has the meaning ascribed to such term in Section 2.3.

         "Net Worth" has the meaning ascribed to such term in Section 6.2.

         "Note" means the Promissory Note of Borrower evidencing the Loan,
together with any allonges thereto, from time to time; and any promissory note
issued in substitution therefor pursuant to the terms hereof, together with all
extensions, renewals, refinancings or refundings thereof in whole or part, in
each case as the same may be amended, modified, restated or supplemented from
time to time.

         "Obligations" shall mean all indebtedness, obligations and liabilities
of Borrower to Lender from time to time arising under or in connection with or
related to or evidenced by or secured by this Agreement or any other Loan
Document, and all extensions, renewals or refinancings thereof, whether such
indebtedness, obligations or liabilities are direct or indirect, otherwise
secured or unsecured, joint or several, absolute or contingent, due or to become
due, whether for payment or performance, now existing or hereafter arising.
Without limitation of the foregoing, such indebtedness, obligations and
liabilities include the principal amount of the Advance (whether or not the
Advance was made in compliance with the terms and conditions of this Agreement
or in excess of the obligation of Lender to lend), any and all Hedging
Obligations, interest, fees, indemnities or expenses under or in connection with
this Agreement or any other Loan Document, and all extensions, renewals and
refinancings thereof. Obligations shall remain Obligations notwithstanding any
assignment or transfer or any subsequent assignment or transfer of any of the
Obligations or any interest therein.

         "Person" means an individual, corporation, partnership, trust,
unincorporated association, limited liability company, joint venture,
joint-stock company, Governmental Authority or any other entity.

         "Premises" has the meaning ascribed to such term in the Background of
this Agreement.

         "Prime Interest Period" means the period beginning on (and including)
the date on which a Prime Rate Loan is made or on which a LIBOR Rate Loan is
converted into a Prime Rate Loan pursuant to Article 3 and ending on (but
excluding) the date when such Prime Rate Loan is converted into a LIBOR Rate
Loan pursuant to Article 3.

                                      -7-

<PAGE>

         "Prime Rate" means the annual interest rate publicly announced by
Lender from time to time as its prime rate. The Prime Rate is determined from
time to time by Lender as a means of pricing some loans to its borrowers. The
Prime Rate is not tied to any external rate of interest or index, and does not
necessarily reflect the lowest rate of interest actually charged by Lender to
any particular class or category of customers. If and when the Prime Rate
changes, the rate of interest with respect to any amounts hereunder to which the
Prime Rate applies will change automatically without notice to Borrower,
effective on the date of any such change.

         "Prime Rate Loan" means the entire outstanding principal balance of the
Loan or any portion thereof with respect to which the applicable rate of
interest is based upon the Prime Rate.

         "Principal Payment Date" means the last Business Day of each calendar
month.

         "Project" has the meaning ascribed to such term in the Background of
this Agreement.

         "Surety Agreement" has the meaning ascribed to such term in Section
2.3.

         "Taxes" means any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any federal, state, local or foreign taxing authority.

         1.2. Construction. In this Agreement and each other Loan Document,
unless the context otherwise clearly requires,

               (a) references to the plural include the singular, the singular
the plural and the part the whole;

               (b) "or" has the inclusive meaning represented by the phrase
"and/or;"

               (c) the terms "property" and "assets" each include all properties
and assets of any kind or nature, tangible or intangible, real, personal or
mixed, now existing or hereafter acquired;

               (d) the words "hereof," "herein" and "hereunder" (and similar
terms) in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document, as the case may be, as a whole and not to any
particular provision of this Agreement or such other Loan Document;

               (e) the words "includes" and "including" (and similar terms) in
this Agreement or any other Loan Document mean "includes, without limitation"
and "including, without limitation," respectively whether or not stated; and

               (f) references to "determination" (and similar terms) by Lender
include good faith estimates by Lender (in the case of quantitative
determinations) and good faith beliefs by Lender (in the case of qualitative
determinations).

                                      -8-

<PAGE>

No doctrine of construction of ambiguities in agreements or instruments against
the interests of the party controlling the drafting thereof shall apply to this
Agreement or any other Loan Document. The section and other headings contained
in this Agreement and in each other Loan Document, and any tables of contents
contained herein or therein, are for reference purposes only and shall not
affect the construction or interpretation of this Agreement or such other Loan
Document in any respect.

         1.3. Accounting Principles.

               (a) As used herein, "GAAP" shall mean generally accepted
accounting principles (other than as set forth herein as to consolidation) in
the United States, applied on a consistent basis. When the word "consolidated"
is used in this Agreement. it shall be used in a manner consistent with
generally accepted accounting principles in the United States.

               (b) Except as otherwise provided in this Agreement (including
Section 6.2), all computations and determinations as to accounting or financial
matters shall be made, and all financial statements to be delivered pursuant to
this Agreement shall be prepared, in accordance with GAAP and all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP; provided
that if because of a change in GAAP after the Closing Date Borrower would be
required to alter a previously utilized accounting principle, method or policy
in order to remain in compliance with GAAP, such determination shall continue to
be made in accordance with Borrower's previous accounting principles, methods
and policies unless otherwise agreed by Lender.

                                   ARTICLE 2
                                   THE LOAN

         2.1. Commitment to Lend. Subject to the terms, provisions and
conditions contained in this Agreement, Lender agrees to make the Advance of the
Loan to Borrower on the Closing Date. The Advance shall not exceed the stated
principal amount of the Loan.

         2.2. Promissory Note. Borrower's obligation to repay the Loan with
interest in accordance with the terms of this Agreement shall be evidenced by
the Note payable to the order of Lender.

         2.3. Loan Documents. As security for the Note and the performance by
Borrower of all its obligations hereunder and thereunder, the following
documents are being executed and delivered to Lender simultaneously herewith:

               (a) An Open-end Mortgage and Security Agreement dated this date
(as amended, modified or supplemented from time to time, the "Mortgage")
executed by Borrower in favor of Lender, encumbering the Premises, the
improvements now or hereafter erected thereon, including the Improvements, and
all building materials, equipment. furniture and fixtures necessary or
incidental to the operation, use, and maintenance thereof, and all renewals and
replacements thereof or additions thereto, all as more specifically described in
the Mortgage;

               (b) An Assignment of Leases and Rents dated this date (as
amended, modified or supplemented from time to time, the "Assignment of Leases")
executed by Borrower in favor of Lender, assigning to Lender all of Borrower's
right, title and interest in and to all existing and future leases of all or any
part of the Project, including Approved Leases;

                                      -9-

<PAGE>

               (c) A General Collateral Assignment and Security Agreement dated
this date (as amended, modified or supplemented from time to time, the "General
Collateral Assignment") executed by Borrower in favor of Lender, pursuant to
which Borrower assigns to Lender all of Borrower's right, title and interest in
and to all contracts, management agreements, licenses, permits, approvals,
guarantees, and similar items with respect to the ownership, construction,
rehabilitation and operation of the Project;

               (d) An Environmental Indemnity Agreement dated this date (as
amended, modified or supplemented from time to time, the "Environmental
Agreement") executed by Borrower in favor of Lender, pursuant to which Borrower
provides certain assurances and indemnities to Lender with respect to
environmental matters;

               (e) One or more Agreements dated this date (as amended, modified
or supplemented from time to time, the "Interest Rate Protection Agreements")
executed by Borrower and Lender pursuant to which the interest rate applicable
to the Loan is effectively converted from being based upon the LIBOR Lending
Rate or Prime Rate under this Agreement to being based upon a fixed interest
rate between the Closing Date and the Maturity Date, subject to the provision
that if Borrower makes a prepayment on account of the Loan as a result of the
sale of the McDonald's Premises pursuant to Section 2.5, the effective interest
rate conversion with respect to an amount equal to the McDonald's Sale
Prepayment Amount of the Advance shall terminate on such sale.

               (f) Financing Statements (as amended, modified or supplemented
from time to time, the "Financing Statements") executed by Borrower in favor of
Lender, pursuant to which the personal property security interests granted to
Lender in the Loan Documents are to be perfected; and

               (g) A Guaranty and Suretyship Agreement dated this date (as
amended, modified or supplemented from time to time, the "Surety Agreement")
executed by Guarantors in favor of Lender, pursuant to which Guarantors
guarantee and become sureties to Lender for the payment and performance of
certain of Borrower's obligations under this Agreement and under the other Loan
Documents in accordance with the terms and conditions set forth therein.

Borrower shall execute and deliver such additional documents and instruments as
Lender shall reasonably require in order to perfect Lender's lien on or security
interest in the foregoing property. This Agreement, the Note, the Mortgage, the
Assignment of Leases, the General Collateral Assignment, the Environmental
Agreement, the Financing Statements, the Surety Agreement, any Hedging Contracts
(including the Interest Rate Protection Agreements), and all other agreements
and instruments evidencing or securing the Loan, in each case as the same may be
amended, modified or supplemented from time to time hereafter, are hereinafter
collectively referred to as the "Loan Documents". All of the Loan Documents
shall be in form and substance satisfactory to Lender, and all necessary filing
and recording fees with respect thereto shall be paid by Borrower.

                                      -10-

<PAGE>

         2.4. Additional Security.

               (a) As additional security for the Note and all of Borrower's
obligations thereunder and hereunder, Borrower hereby irrevocably pledges and
assigns to Lender and grants to Lender a first lien security interest in all of
its right, title and interest in and to (i) any Hedging Contracts, (ii) all Loan
funds held by Lender, whether or not disbursed, (iii) all funds deposited by
Borrower with Lender or its designee under this Agreement or otherwise, (iv) all
other bank accounts of Borrower maintained at Lender and all reserves
established by Borrower and maintained at Lender, deferred payments due to
Borrower, deposits by Borrower, refunds due to Borrower and payments to Borrower
of any kind relating to the Project (collectively, the "Additional Security").

               (b) Borrower shall execute and deliver such additional documents
and instruments as Lender reasonably shall require in order to perfect Lender's
lien on or security interest in any of the Additional Security, including a
photocopy or reproduction of this Agreement (which shall be deemed to be a
security agreement under the Uniform Commercial Code) or any Financing
Statement. Borrower hereby appoints Lender or its designee as attorney-in-fact
for Borrower for the purpose of carrying out the foregoing provisions and the
taking of any action and the execution of any instrument which Lender may
reasonably deem necessary or appropriate to accomplish the purposes thereof,
which appointment as attorney-in-fact is irrevocable and coupled with an
interest.

         2.5. Release of Security. Lender shall release the McDonald's Premises
from the lien of the Mortgage at the time of and in conjunction with the closing
for the sale of the McDonald's Premises by Borrower to the McDonald's Tenant
pursuant to the McDonald's Lease, subject to the satisfaction of the following
conditions:

               (a) Lender shall have received evidence satisfactory to it that
the McDonald's Premises is a legally subdivided parcel of land which can be
transferred and conveyed separately from and independently of the balance of the
Premises;

               (b) The McDonald's Lease is terminated at the time of the closing
for the sale of the McDonald's Premises and Borrower and Lender are released
from any and all liability in connection with the McDonald's Lease;

               (c) Borrower pays to Lender as a prepayment on account of the
Loan (which prepayment shall not require payment of any LIBOR Rate Loan
Prepayment Fee) an amount (the "McDonald's Sale Prepayment Amount") equal to the
greater of (i) $300,000 or (ii) the net proceeds from such sale ("net proceeds",
for this purpose, meaning the gross sales price, less and except only Borrower's
portion of applicable transfer taxes, Borrower's sales commission and normal pro
rations and adjustments);

               (d) Borrower pays all reasonable costs and expenses incurred by
Lender in connection with reviewing the conditions for such release, the
preparation of appropriate documentation and recording fees; and

                                      -11-

<PAGE>

               (e) No Event of Default, and no event or circumstance which with
the passage of time or the giving of notice or both would constitute an Event of
Default, has occurred prior to, or is in existence on, the date of such closing.

                                   ARTICLE 3
                            INTEREST RATE PROVISIONS

         3.1. Interest Rates.

               (a) Adjusted LIBOR Rates. Subject to the provisions of subsection
(b) hereof and Sections 3.3 and 3.4, the principal balance of the Loan
outstanding from time to time shall bear interest at the Adjusted LIBOR Rate. On
the Closing Date with respect to the initial LIBOR Interest Period and
thereafter not later than the first day of each successive LIBOR Interest
Period, Lender shall notify Borrower of the Adjusted LIBOR Rate applicable to
such LIBOR Interest Period.

               (b) Default Rate. The principal balance outstanding under the
Loan and any other amounts payable under any of the Loan Documents from time to
time shall bear interest at the Default Rate (i) following the occurrence and
during the continuance of an Event of Default (regardless of whether payment of
the Loan has been accelerated) and (ii) unless the term of the Loan is extended
pursuant to written agreement between Borrower and Lender, between the Maturity
Date and the date on which the Loan is paid in full.

               (c) Usurious Rate. All agreements between Borrower and Lender are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of maturity of the Loan or otherwise shall the amount
paid or agreed to be paid to Lender for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law" shall mean the law in effect as
of the Closing Date; provided, however, that in the event there is a change in
the law which results in a higher permissible rate of interest, then the Loan
Documents shall be governed by such new law as of its effective date. In this
regard, it is expressly agreed that it is the intent of Borrower and Lender in
the execution, delivery and acceptance of the Loan Documents to contract in
strict compliance with the applicable laws from time to time in effect. If,
under or from any circumstances whatsoever, fulfillment of any provision hereof
or of any of the Loan Documents at the time of performance of such provision
shall be due, shall involve transcending the limit of such validity prescribed
by applicable law, then the obligation to be fulfilled shall automatically be
reduced to the limits of such validity, and if under or from circumstances
whatsoever Lender should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. This provision shall control every other provision of
all agreements between Borrower and Lender.

         3.2. Computation of Interest. Interest shall be computed on the basis
of a year of three hundred sixty (360) days and paid for the actual number of
days elapsed. Interest for any period shall be calculated from and including the
first day thereof to but excluding the last day thereof.

                                      -12-

<PAGE>

         3.3. LIBOR Rate Lending Unlawful. If Lender shall determine (which
determination shall, upon notice thereof to Borrower, be conclusive and binding
on Borrower) that the introduction of or any change in or in the interpretation
of any law, rule, regulation or guideline (whether or not having the force of
law) makes it unlawful, or any central bank or other Governmental Authority
asserts that it is unlawful, for Lender to make, continue or maintain any LIBOR
Rate Loan as a LIBOR Rate Loan of a certain duration, the obligation of Lender
to make, continue or maintain any such LIBOR Rate Loan shall, upon such
determination, forthwith be suspended until Lender shall notify Borrower that
the circumstances causing such suspension no longer exist, and any LIBOR Rate
Loan of such type automatically shall convert into a Prime Rate Loan at the end
of the then current LIBOR Interest Period with respect thereto or sooner, if
required by such law or assertion.

         3.4. LIBOR Rate Lending Impractical. If Lender shall have determined
that

               (a) United States Dollar deposits in the relevant amount and for
the relevant LIBOR Interest Period are not available to Lender in the London
interbank market, or

               (b) by reason of circumstances affecting Lender in the London
interbank market, adequate means do not exist for ascertaining the LIBOR Rate
applicable hereunder to a LIBOR Rate Loan, or

               (c) LIBOR no longer adequately reflects Lender's cost of funding
loans,

then, upon notice from Lender to Borrower, the obligations of Lender under
Section 3.1(a) to make or continue the Loan as a LIBOR Rate Loan shall forthwith
be suspended until Lender shall notify Borrower that the circumstances causing
such suspension no longer exist, and such LIBOR Rate Loan automatically shall
convert into a Prime Rate Loan at the end of the then current LIBOR Interest
Period with respect thereto or sooner, if required by such circumstances.

         3.5. Increased Costs Due to Borrower. In addition to the LIBOR Rate
Loan Prepayment Fee, Borrower agrees to reimburse Lender (without duplication)
for any increase in the cost to Lender, or reduction in the amount of any sum
receivable by Lender, in respect, or as a result of

               (a) any conversion or repayment or prepayment of the principal
amount of a LIBOR Rate Loan on a date other than the scheduled last day of the
LIBOR Interest Period applicable thereto, whether pursuant to Sections 3.1(a) or
4.2 or otherwise, or

               (b) any cost associated with marking to market any Hedging
Obligations that (in the reasonable determination of Lender) are required to be
terminated as a result of any conversion, repayment or prepayment of the
principal amount of a LIBOR Rate Loan on a date other than the scheduled last
day of the LIBOR Interest Period applicable thereto, whether pursuant to
Sections 3.1(a) or 4.2 or otherwise.

                                      -13-

<PAGE>

Lender promptly shall notify Borrower in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate Lender for such increased cost or
reduced amount. Such additional amounts shall be payable by Borrower to Lender
within five (5) days of its receipt of such notice, and such notice shall, in
the absence of manifest error, be conclusive and binding on Borrower. Borrower
understands, agrees and acknowledges that (i) Lender does not have any
obligation to purchase, sell and/or match funds in connection with the use of
the LIBOR Rate as a basis for calculating the rate of interest on a LIBOR Rate
Loan, (ii) the LIBOR Rate may be used merely as a reference in determining such
rate, and (iii) Borrower has accepted the LIBOR Rate as a reasonable and fair
basis for calculating such rate, the LIBOR Rate Loan Prepayment Fee, and other
funding losses incurred by Lender. Borrower further agrees to pay the LIBOR Rate
Loan Prepayment Fee and other funding losses, if any, whether or not Lender
elects to purchase, sell and/or match funds.

         3.6. Increased Costs Due to Change in Law. If on or after the Closing
Date the adoption of any applicable Law (whether or not having the force of
law), or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Lender with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency

               (a) shall subject Lender to any Taxes, duty or other charge with
respect to a LIBOR Rate Loan or its obligation to make a LIBOR Rate Loan, or
shall change the basis of taxation of payments to Lender of the principal of or
interest on a LIBOR Rate Loan or any other amounts due under this Agreement in
respect of a LIBOR Rate Loan or its obligation to make a LIBOR Rate Loan (except
for the introduction of, or change in the rate of, tax on the overall net income
of Lender or franchise taxes, imposed by the jurisdiction (or any political
subdivision or taxing authority thereof) under the laws of which Lender is
organized or in which Lender's principal executive office is located), or

               (b) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System)
against assets of, deposits with or for the account of, or credit extended by,
Lender or shall impose on Lender or on the London interbank market any other
condition affecting a LIBOR Rate Loan or its obligation to make a LIBOR Rate
Loan,

and the result of any of the foregoing is to increase the cost to Lender of
making or maintaining any LIBOR Rate Loan, or to reduce the amount of any sum
received or receivable by Lender under this Agreement with respect thereto, by
an amount reasonably deemed by Lender to be material, then, within fifteen (15)
days after demand by Lender, Borrower shall pay to Lender such additional amount
or amounts as will compensate Lender for such increased cost or reduction. A
change in law which results in a change in the LIBOR Reserve Percentage shall
not result in a duplicate payment under this Section 3.6.

                                      -14-

<PAGE>

         3.7. Increased Capital Costs of Lender. If any change in, or the
adoption, effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive, guideline, decision or request (whether or not
having the force of law) of any court, central bank, regulator or other
governmental authority affects the amount of capital required to be maintained
by Lender or Person controlling Lender, and Lender determines (in its sole and
absolute discretion) that the rate of return on its or such controlling Person's
capital as a consequence of the Loan and other loans to Borrower and its
Affiliates is reduced to a level below that which Lender or such controlling
Person could have achieved but for the occurrence of any such circumstance,
then, in any such case upon notice from time to time by Lender to Borrower,
Borrower within thirty (30) days of such notice shall pay directly to Lender
additional amounts sufficient to compensate Lender or such controlling Person
for such reduction in rate of return. A statement of Lender as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
Borrower. In determining such amount, Lender may use any method of averaging and
attribution that it (in its sole and absolute discretion) shall deem applicable.

         3.8. Taxes.

               (a) All payments by Borrower of principal of, and interest on, a
LIBOR Rate Loan and all other amounts payable under this Agreement shall be made
free and clear of and without deduction for any Taxes (other than franchise
taxes and taxes imposed on or measured by Lender's net income or receipts). In
the event that any withholding or deduction from any payment to be made by
Borrower hereunder is required in respect of any such Taxes pursuant to any
applicable law, rule or regulation, then Borrower will

                   (i) pay directly to the relevant authority the full amount
required to be so withheld or deducted,

                   (ii) promptly forward to Lender an official receipt or other
documentation satisfactory to Lender evidencing such payment to such authority,
and

                   (iii) pay to Lender such additional amount or amounts as is
necessary to ensure that the net amount actually received by Lender will equal
the full amount Lender would have received had no such withholding or deduction
been required.

               (b) If any such Taxes are directly asserted against Lender with
respect to any payment received by Lender under this Agreement, Lender may pay
such Taxes and Borrower will promptly pay such additional amount (including any
penalties, interest or expenses) as is necessary in order that the net amount
received by Lender after the payment of such Taxes (including any such Taxes on
such additional amount) shall equal the amount Lender would have received had
not such Taxes been asserted.

               (c) If Borrower fails to pay any such Taxes when due to the
appropriate taxing authority or fails to remit to Lender the required receipts
or other required documentary evidence, Borrower shall indemnify Lender for any
incremental amount of such Taxes, interest or penalties that may become payment
by Lender as a result of any such failure.

                                      -15-

<PAGE>


                                   ARTICLE 4
                     LOAN PAYMENT PROVISIONS; MATURITY DATE

         4.1. Interest and Principal Payments; Maturity Date.

               (a) Interest on the unpaid principal balance of the Loan
outstanding from time to time at the applicable Adjusted LIBOR Rate and/or
Adjusted Prime Rate determined pursuant to Article 3 shall accrue for and during
the applicable LIBOR Interest Period and/or Prime Interest Period, as
applicable, and shall be payable on each applicable Interest Payment Date
beginning with the first Interest Payment Date following the Closing Date.

               (b) Installments on account of the unpaid principal balance of
the Loan outstanding from time to time shall be payable on each Principal
Payment Date beginning with the first Principal Payment Date following the
Closing Date. The amount of each such installment shall be Seven Thousand Five
Hundred Dollars ($7,500).

               (c) The unpaid principal balance of the Loan then outstanding
together with all accrued and unpaid interest shall become due and payable on
the date which is eighty-four (84) months after the Closing Date ("Maturity
Date").

         4.2. Prepayments.

               (a) Right of Prepayment; Notice. Borrower shall have the right to
prepay all or any portion of the unpaid principal balance of the Loan and
Borrower shall have the obligation to prepay a portion of the unpaid principal
balance of the Loan subject to and in accordance with Section 2.5, in either
case provided Borrower shall give Lender, no later than 10:00 a.m., New York
City time, at least ten (10) Business Days' notice of any proposed prepayment,
specifying the proposed date of payment and the principal amount to be paid.

               (b) Prepayment Penalty. A Prime Rate Loan may be prepaid without
penalty or premium. A LIBOR Rate Loan may be prepaid upon the terms and
conditions set forth herein. For a LIBOR Rate Loan in connection with which
Borrower has or may incur Hedging Obligations, additional obligations may be
associated with prepayment, in accordance with the terms and conditions of the
applicable Hedging Contracts. Each partial prepayment of the principal amount of
a LIBOR Rate Loan shall be in an integral multiple of $100,000 and accompanied
by the payment of all charges outstanding on such a LIBOR Rate Loan and of all
accrued interest on the principal repaid to the date of payment. Borrower
acknowledges that prepayment or acceleration of a LIBOR Rate Loan during a LIBOR
Interest Period shall result in Lender incurring additional costs, expenses
and/or liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities. Therefore, all
full or partial prepayments of a LIBOR Rate Loan shall be accompanied by, and
Borrower hereby promises to pay, on each date a LIBOR Rate Loan is prepaid or
the date all sums payable hereunder become due and payable, by acceleration or
otherwise, in addition to all sums then owing, an amount ("LIBOR Rate Loan
Prepayment Fee") determined by Lender pursuant to the following formula:

                                      -16-

<PAGE>

                   (i) the then current rate for United States Treasury
securities (bills on a discounted basis shall be converted to a bond equivalent)
with a maturity date closest to the end of the LIBOR Interest Period as to which
prepayment is made, subtracted from

                   (ii) the Adjusted LIBOR Rate applicable to the LIBOR Rate
Loan being prepaid.

If the result of this calculation is zero or a negative number, then there shall
be no LIBOR Rate Loan Prepayment Fee. If the result of this calculation is a
positive number, then the resulting percentage shall be multiplied by:

                   (iii) the amount of the LIBOR Rate Loan being prepaid.

The resulting amount shall be divided by:

                   (iv) three hundred sixty(360)

and multiplied by:

                   (v) the number of days remaining in the LIBOR Interest Period
as to which the prepayment is being made.

Said amount shall be reduced to present value calculated by using the referenced
United States Treasury securities rate and the number of days remaining on the
LIBOR Interest Period for the LIBOR Rate Loan being prepaid.

The resulting amount of these calculations shall be the LIBOR Rate Loan
Prepayment Fee.

               (c) Application of Payments. Any payment, whether voluntary or
involuntary, shall be applied (i) first to the payment of all fees, expenses and
other amounts which may be payable to Lender under the Loan Documents up to the
date of such payment (excluding principal and interest), (ii) then to accrued
and unpaid interest under the Loan up to the date of such payment, and (iii)
then to the outstanding principal balance of the Loan, which payments shall be
applied to principal installments in the inverse order of their maturity. The
acceptance of any prepayment (other than full payment) when there is an Event of
Default in existence under any of the Loan Documents shall not constitute a
waiver, release or accord and satisfaction thereof or of any rights with respect
thereto by Lender.

         4.3. Late Payment Charge. There shall be a late payment charge computed
at the rate of five cents ($.05) for each dollar (or part thereof) of any
principal or interest amount not paid within ten (10) days after its due date.

         4.4. Payments by Borrower in General.

               (a) Time, Place and Manner. All payments due to Lender under the
Loan Documents shall be made to Lender at the office designated for Lender in
Section 9.1 or to such other Person or at such other address as Lender may
designate by prior written notice to Borrower. Except as otherwise set forth in
this Agreement, a payment shall not be deemed to have been made on any day
unless such payment has been received by the required Person, at the required
place of payment, in Dollars in funds immediately available to such Person, no
later than 1:00 p.m. (Philadelphia, Pennsylvania time) on such day.

                                      -17-

<PAGE>

               (b) No Reductions. All payments due to Lender under this
Agreement and the other Loan Documents, shall be made by Borrower without any
reduction or deduction whatsoever, including any reduction or deduction for any
charge, set-off, hold back, recoupment or counterclaim (whether sounding in
tort, contract or otherwise).

               (c) Authorization to Charge Accounts. Borrower hereby authorizes
Lender to charge any amounts due under this Agreement against the operating
account of Borrower with Lender.

                                   ARTICLE 5
                         REPRESENTATIONS AND WARRANTIES

         5.1. Relating to Borrower and its Affiliates. Borrower represents and
warrants to Lender that:

               (a) (i) Borrower is a single purpose limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware, has the power and authority to own and operate the Project, and has
qualified to transact business in, and is validly subsisting under the laws of,
the Commonwealth of Pennsylvania. The sole general partner of Borrower is
CIF-Halifax Plaza Associates, LLC, a Delaware limited liability company, and the
sole limited partner of Borrower is Fairport Associates, L.P., a Delaware
limited partnership. True and correct copies of Borrower's Partnership Agreement
and Certificate of Limited Partnership, together with any and all amendments
thereto, have been furnished to Lender and the same are in full force and effect
as of the Closing Date. None of the ownership interests of Borrower has been
offered, issued, distributed or sold in violation of any state or federal
securities laws.

                   (ii) CIF-Halifax Plaza Associates, LLC is a single purpose
limited liability company duly formed, validly existing and in good standing
under the laws of the State of Delaware and has the power and authority to act
as the sole general partner of Borrower. The sole member of CIF-Halifax Plaza
Associates, LLC is Cedar Operating Partnership. True and correct copies of
CIF-Halifax Plaza Associates, LLC's Limited Liability Company Agreement and
Certificate of Formation, together with any and all amendments thereto, have
been furnished to Lender and the same are in full force and effect as of the
Closing Date. None of the ownership interests of CIF-Halifax Plaza Associates,
LLC has been offered, issued, distributed or sold in violation of any state or
federal securities laws.

                   (iii) Fairport Associates, L.P. is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware, and has the power and authority to act as the sole limited partner of
Borrower. CIF-Fairport Associates, LLC, a Delaware limited liability company, is
the sole general partner and the legal and beneficial owner of at least 17.6% of
the ownership interests of Fairport Associates, L.P. True and correct of
Fairport Associates, L.P.'s Partnership Agreement and Certificate of Limited
Partnership, together with any and all amendments thereto, have been furnished
to Lender and the same are in full force and effect as of the date of this
Agreement. None of the ownership interests of Fairport Associates, L.P. has been
offered, issued, distributed or sold in violation of any state or federal
securities laws.

                                      -18-

<PAGE>

                   (iv) CIF-Fairport Associates, LLC is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware and has the power and authority to act as the sole general
partner of Fairport Associates, L.P. The sole member of CIF-Fairport Associates,
LLC is Cedar Operating Partnership. True and correct copies of CIF-Fairport
Associates, LLC's Limited Liability Company Agreement and Certificate of
Formation, together with any and all amendments thereto, have been furnished to
Lender and the same are in full force and effect as of the Closing Date. None of
the ownership interests of CIF-Fairport Associates, LLC has been offered,
issued, distributed or sold in violation of any state or federal securities
laws.

                   (v) Cedar Operating Partnership is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware, and has the power and authority to act as the sole member of
CIF-Halifax Plaza Associates, LLC and CIF-Fairport Associates, LLC. Cedar REIT
is the sole general partner and the legal and beneficial owner of at least
twenty percent (20%) of the ownership interests of Cedar Operating Partnership.
True and correct copies of Cedar Operating Partnership's Partnership Agreement
and Certificate of Limited Partnership, together with any and all amendments
thereto, have been furnished to Lender and the same are in full force and effect
as of the date of this Agreement. None of the ownership interests of Cedar
Operating Partnership has been offered, issued, distributed or sold in violation
of any state or federal securities laws.

                   (vi) Cedar REIT is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland and has
the power and authority to act as the sole general partner of Cedar Operating
Partnership. The shares of common stock of Cedar REIT are publicly traded on the
NASDAQ securities market. Cedar REIT qualifies as a "real estate investment
trust" under the Code. True and correct copies of Cedar REIT's Certificate of
Incorporation and Bylaws, together with any and all amendments thereto, have
been furnished to Lender and the same are in full force and effect as of the
Closing Date. None of the shares of stock or other ownership interests of Cedar
REIT has been offered, issued, distributed or sold in violation of any state or
federal securities laws.

                   (vii) Existing Manager is a limited liability company duly
formed, validly existing and in good standing under the laws of the New York and
has the power and authority to manage the Project pursuant to the Existing
Management Agreement. Existing Manager has qualified to transact business in,
and is subsisting under the laws of, the Commonwealth of Pennsylvania. Leo S.
Ullman is the chief executive officer of Existing Manager and the legal and
beneficial owner of the majority of the ownership interests in Existing Manager.
True and correct copies of Existing Manager's Certificate of Formation and
Operating Agreement, together with any and all amendments thereto, have been
furnished to Lender and the same are in full force and effect as of the Closing
Date.

                                      -19-

<PAGE>

               (b) Borrower has all requisite power and authority to own and
operate its properties and to carry on its business as now conducted and as
presently planned to be conducted. Without limiting the generality of the
foregoing, Borrower: (i) has the power to engage in all the transactions
contemplated by this Agreement, and (ii) has full power, authority and legal
right to execute and deliver, and to comply with the provisions of this
Agreement and the other Loan Documents to be executed by Borrower and all other
documents relating hereto or thereto, which documents constitute the legally
binding obligations of Borrower, enforceable against Borrower in accordance with
their respective terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar Laws of general application affecting
the enforcement of creditor's rights.

               (c) There is no suit, action, proceeding or investigation pending
or, to the knowledge of Borrower, threatened against or affecting Borrower or,
to the best of Borrower's knowledge after diligent inquiry, the Project. There
is no suit, action, proceeding or investigation pending or to the knowledge of
Borrower threatened against Borrower or Guarantors which, if adversely resolved,
would: (i) adversely affect the Project, (ii) adversely affect the ability of
Borrower to perform its obligations under the Loan Documents or the ability of
Guarantors to perform any of their obligations under the Surety Agreement, as
applicable, or (iii) adversely affect the business, operations, condition
(financial or otherwise) or prospects of Borrower or Guarantors.

               (d) No consent, approval or other authorization of or by any
court, administrative agency or other governmental authority is required in
connection with the execution or delivery by Borrower of this Agreement or any
other Loan Document or compliance with the provisions hereof or thereof.

               (e) Neither the execution nor delivery of this Agreement or any
other Loan Document will conflict with or result in a breach of any applicable
Law of any court, administrative agency or other Governmental Authority, or of
any agreement or other instrument to which Borrower is a party or by which it is
bound, or constitute a default under any thereof, or except as expressly
contemplated herein, to the best of Borrower's knowledge after diligent inquiry,
result in the creation or imposition of any lien, charge or encumbrance upon
part of the Project.

               (f) The financial statements of Guarantors, copies of which have
been furnished to Lender, fairly and accurately reflect the respective financial
conditions of Guarantors as of the dates thereof, and there has been no material
adverse change in the financial condition of Guarantors since such dates.

               (g) Any and all federal, state and local income tax returns
required to have been filed by Guarantors have been filed, or extensions for the
filing thereof have been filed, and all taxes reflected upon any such tax
returns, all past due taxes, interest and penalties and all estimated payments
required to be paid to date have been paid.

                                      -20-

<PAGE>

               (h) Neither Borrower nor either Guarantor has applied for or
consented to the appointment of a receiver, trustee or liquidator of itself or
any of its property, admitted in writing its inability to pay debts as they
mature, made a general assignment for the benefit of creditors, been adjudicated
a bankrupt or insolvent or filed a voluntary petition in bankruptcy, or a
petition or an answer seeking reorganization or an arrangement with creditors or
to take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding under any
such law, and no action has been taken by it for the purpose of effecting any of
the foregoing. No order, judgment or decree has been entered by any court of
competent jurisdiction approving a petition seeking reorganization of Borrower
or either Guarantor or all or a substantial part of the assets of Borrower or
either Guarantor, or appointing a receiver, sequestrator, trustee or liquidator
of it or any of its property.

               (i) Borrower has not entered into the Loan with the intent to
hinder, delay, or defraud any creditor, and Borrower has received reasonably
equivalent value in exchange for its obligations under the Loan Documents.
Giving effect to the transactions contemplated by the Loan Documents, the fair
saleable value of Borrower's assets exceeds and, immediately following the
execution and delivery of the Loan Documents, will exceed Borrower's total
liabilities, including subordinated, unliquidated, disputed or contingent
liabilities. Borrower's assets do not and, immediately following the execution
and delivery of the Loan Documents, will not constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted.
Borrower does not intend to, and does not believe that it will, incur debts and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debts as they mature (taking into account the timing and
amounts to be payable on or in respect of obligations of Borrower).

               (j) Borrower is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Internal Revenue Code.

               (k) Borrower has not dealt with any broker, agent or other
intermediary in connection with the Loan other than Broker.

               (l) No Event of Default has occurred and is continuing or exists
under this Agreement or any other Loan Document and, to Borrower's knowledge, no
event has occurred and is continuing or exists that, with the passage of time or
giving of notice or both, will constitute an Event of Default hereunder or under
any other Loan Document.

         5.2. Relating to the Project. Borrower represents and warrants to
Lender that:

               (a) Borrower owns good and marketable fee simple title to the
Project, subject to no lien, charge or encumbrance except such as are listed as
exceptions to title or exclusions from coverage in the title insurance policy
being issued to Lender concurrently with the execution of the Mortgage and
pursuant to Section 7.2(d). The aggregate purchase price paid by Borrower for
the Project was $5,240,000. Borrower has delivered to Lender true, correct and
complete copies of the Agreement of Sale and Deed for the Project.

               (b) All personal property with respect to which Borrower has
granted to Lender a security interest pursuant to any of the Loan Documents is
otherwise owned by Borrower free and clear of all liens, encumbrances and
security interests.

                                      -21-

<PAGE>

               (c) (i) The Project is subject to the leases listed and described
on Exhibit B attached hereto and made a part hereof ("Existing Leases"),
including without limitation the Giant Lease and the McDonald's Lease. Except
for the Existing Leases, the Project is not subject to any other leases,
occupancy rights or similar arrangements. To the best of Borrower's knowledge
after diligent inquiry, except as may be set forth in Exhibit B, none of the
Existing Leases has been amended, modified or supplemented in any respect or
terminated or canceled. To the best of Borrower's knowledge after diligent
inquiry, the Existing Leases represent the entire agreements between Borrower
and the respective applicable tenants ("Existing Tenants") with respect to the
lease of the portions of the Project covered thereby. Each of the Existing
Leases is in full force and effect. Borrower knows of no material defaults under
Existing Leases in the aggregate which, in the judgment of Lender, could have a
material adverse effect on the financial condition of Borrower or the Project.
To the best of Borrower's knowledge after diligent inquiry, there are no
existing defenses or offsets against the obligation to pay the rents or other
charges due under any of the Existing Leases or against the enforcement of any
of the Existing Leases by Borrower. Except as may be set forth in Exhibit B,
there are no agreements covering free rent, partial rent, rebate of rental
payments or any other type of rental concessions with respect to any of the
Existing Leases. Except for the McDonalds Lease, none of the Existing Leases
contains any options or rights of first refusal to purchase any portion or all
of the Project in favor of a tenant. There have not been any prepayments of any
rent under any of the Existing Leases. Except as may be set forth in Exhibit B,
there is no provision for the payment of any security deposit under any of the
Existing Leases. Borrower has not mortgaged, assigned, pledged, granted a
security interest in or otherwise encumbered its interest in any of the Existing
Leases in favor of any person or entity other than Lender.

                   (ii) Borrower has delivered to Lender a rent roll for the
Project dated within thirty (30) days of the Closing Date, in form and substance
reasonably satisfactory to Lender and certified as true and correct by Cedar
Operating Partnership. To the best of Borrower's knowledge, after due inquiry
into and analysis of the historical operating expenses of the Project for the
twelve (12) month period immediately preceding the effective date of such rent
roll, the Net Operating Income (based upon such rent roll and such historical
operating expenses) is equal to or more than $490,000 and the Debt Service
Coverage Ratio is more than 1.25 to 1.

               (d) Borrower has delivered to Lender a true, correct and complete
copy of the Management Agreement dated the date of this Agreement between
Borrower and Existing Manager ("Existing Management Agreement"). There are no
other management agreements to which Borrower is a party relating to the
Project. The Existing Management Agreement has not been amended, modified or
supplemented in any respect or terminated or canceled. The Existing Management
Agreement represents the entire agreement between Borrower and Existing Manager
with respect to the management of the Project. The Existing Management Agreement
is in full force and effect, there are no defaults thereunder, and Borrower
knows of no events or conditions which, with passage of time or notice or both,
would constitute a default thereunder.

               (e) No notice of taking by eminent domain or condemnation of any
part of the Project has been received, and Borrower has no knowledge that any
such proceeding is contemplated. No part of the Project has been damaged or
injured as a result of any fire, explosion, accident, flood, or other casualty
which is not now fully restored.

                                      -22-

<PAGE>

                   (f) To the best of Borrower's knowledge after diligent
inquiry, the Premises abut and has direct access to a legally open public right
of way. All streets necessary for the full utilization of the Project for its
intended purposes have been completed. All costs of street improvements to be
completed by Borrower have been paid.

                   (g) To the best of Borrower's knowledge after diligent
inquiry, electricity, public potable water and public sanitary and storm
sewerage facilities and natural gas service are connected to the Premises and
are of sufficient capacity to service the Improvements, and all costs for
installing and connecting such utilities (including tap-in and connection fees)
have been paid.

                   (h) To the best of Borrower's knowledge after diligent
inquiry, all necessary approvals from the Governmental Authorities having
jurisdiction over the Project (the "Governmental Approvals") have been obtained
for the development, ownership and operation of the Project, are final and not
subject to approval and remain in full force and effect. Borrower has satisfied
all conditions imposed by any Governmental Authority on the grant of the
Governmental Approvals. To the best of Borrower's knowledge after diligent
investigation, the ownership and operation of the Project are in compliance with
all applicable Laws.

                   (i) No statement of fact made by Borrower in any Loan
Documents contains any untrue statement of a material fact or omits to state any
material fact necessary to make statements contained therein not misleading.
There is no material fact presently known to Borrower that has not been
disclosed to Lender which materially adversely affects, or, as far as Borrower
can foresee, might materially adversely affect, the Project or the business
operations or condition (financial or otherwise) of Borrower.

         5.3. Survival of Representations. All of the representations and
warranties of Borrower in this Agreement shall survive the making of this
Agreement and shall be continuing.

                                   ARTICLE 6
                                   COVENANTS

         6.1. Financial Statements; Tax Returns. Borrower shall deliver or cause
to be delivered to Lender:

               (a) Within ninety (90) days after the end of each fiscal year of
Borrower, annual financial statements for Borrower for and as of the end of such
year, including a balance sheet, a statement of income and expense, a cash flow
statement and a rent roll for the Project, which shall be prepared on a
compilation basis by the Controller of Cedar Operating Partnership and certified
as true and correct by Cedar Operating Partnership;

               (b) Within ten (10) days after filing with the Securities
Exchange Commission, any quarterly or annual report, or any interim Form 8-K, as
the case may be, financial statements for Cedar REIT and Cedar Operating
Partnership, on a consolidated basis, for and as of the end of such year,
including a balance sheet, a statement of income and expense and a cash flow
statement, prepared on a GAAP basis and audited by an independent certified
public accounting firm acceptable to Lender;

                                      -23-

<PAGE>

               (c) Within ten (10) days after each filing of it to the
Securities Exchange Commission, a copy of Cedar REIT's Form 10-K as so filed.

               (d) Within thirty (30) days after the end of each quarter-annual
fiscal period of Borrower, a statement of income and expense, a rent roll and a
security deposit inventory for the Project, which shall be prepared by
management of Borrower and certified as true and correct by Cedar Operating
Partnership, together with evidence of payment of all real estate taxes that
became due and payable during such period;

               (e) Within thirty (30) days after the filing thereof, copies of
federal and state income tax returns for Borrower and Guarantors, in each case
certified as true and correct copies of such returns as filed by the preparer
thereof.

               (f) Such other financial information regarding Borrower and
Guarantors as Lender may reasonably request from time to time.

All such financial information shall be in a form reasonably acceptable to
Lender.

         6.2. Financial Covenants.

               (a) (i) At all times during the term of the Loan, Guarantors,
collectively, shall maintain a Net Worth of at least Thirteen Million Dollars
($13,000,000) and Liquid Assets of at least One Million Dollars ($1,000,000).
The financial information provided with respect to Guarantors pursuant to
Section 6.1 shall include specific calculations of Net Worth and Liquid Assets
as required by this Section 6.2 on an annual basis. Compliance or
non-compliance, as the case may be, with the foregoing covenants regarding Net
Worth and Liquid Assets shall be certified by Guarantors on a semi-annual basis
within ninety (90) days after each June 30 and December 31.

                   (ii) For purposes hereof: (A) "Net Worth" shall mean, at any
particular time, an amount equal to the difference between all tangible assets
and all liabilities, as certified by Guarantors, on a fair market value basis
(which fair market value determination shall be reasonably acceptable to Lender)
with respect to income producing real estate assets, on a cost basis with
respect to non-income producing real estate assets and on the basis of tax
accounting principles with respect to assets other than real estate assets, as
shown (absent error) on the line captioned "Total Shareholders' Equity in the
Company and limited partner's (equity) interest in Operating Partnership and
minority interest" on Cedar REIT's Financial Statements; and (B) "Liquid Assets"
shall mean, at any particular time, an amount equal to the sum of all
unencumbered and unrestricted cash and equivalents and all unencumbered and
unrestricted marketable securities, as certified by Guarantors, as shown (absent
error) on the line captioned "[unrestricted] cash and cash equivalents" on Cedar
REIT's Financial Statements.

               (b) At all times during the term of the Loan, the Debt Service
Coverage Ratio shall be equal to or more than 1.25 to 1. The financial
information provided with respect to Borrower pursuant to Section 6.1 shall
include an annual Debt Service Coverage Determination. Compliance or
non-compliance, as the case may be, with the foregoing Debt Service Coverage
Ratio requirement shall be certified by Guarantors.

                                      -24-

<PAGE>

         6.3. Debt Service Coverage Determinations.

               (a) Borrower shall deliver to Lender, with respect to (i) the
verification of the representation and warranty set forth in Section 5.2(c)(ii),
and (ii) the financial covenant set forth in Section 6.2(b), financial
information setting forth the basis for and calculation of Borrower's Net
Operating Income and Debt Service Coverage Ratio, which information provided by
Borrower to Lender shall be subject to review and confirmation by Lender and
notice thereof from Lender to Borrower ("Debt Service Coverage Determination").

               (b) For purposes hereof:

                   (i) "Debt Service Coverage Ratio" shall mean, for a
particular twelve (12) month period, the ratio of Net Operating Income for such
twelve (12) month period to Debt Service for such twelve (12) month period;

                   (ii) "Net Operating Income" shall mean the lesser of (A) an
amount equal to the projected gross income (including any expense
reimbursements) determined on a cash basis with respect to the Project,
consisting of, without duplication, income from the Approved Leases (but only to
the extent the tenants thereunder are in occupancy, the rents thereunder are not
more than thirty (30) days past due and no notices of termination or intent to
vacate thereunder have been made, all as of the time such Debt Service Coverage
Determination is made) for the following twelve (12) month period determined on
an annualized basis based upon actual results for the immediately preceding
twelve (12) month period and any known variations applicable to the following
twelve (12) month period, or (B) an amount equal to ninety-five percent (95%) of
such gross income which would be received by Borrower if one hundred percent
(100%) of the leasable area of the Project was leased at the same relative
rental rates, in either case less projected operating expenses relating to the
Project for the following twelve month period determined on an annualized basis
based upon actual results for the immediately preceding twelve (12) month period
and any known variations applicable to the following twelve (12) month period,
which operating expenses shall be reasonable and customary for similar
properties in the same geographic area as the Project and shall include
management fees pursuant to the Existing Management Agreement or other
management agreement acceptable to Lender or management fees equal to five
percent (5%) of such projected gross income, whichever are greater, and reserves
for capital repairs and replacements in an amount equal to fifteen cents ($0.15)
per square foot of leasable area of the Project, but shall not include Debt
Service, any income taxes or non-cash items; and

                   (iii) "Debt Service" shall mean an amount equal to the
projected total principal and interest payments which would be made under the
Loan for the immediately following twelve (12) month period (in the case of the
interest payments, based upon and assuming an interest rate equal to the
interest rate applicable under the Interest Rate Protection Agreements plus the
Adjusted LIBOR Rate spread applicable to the Loan on the effective date of the
Debt Service Coverage Determination). For purposes of the Debt Service Coverage
Determination being made to verify the representation and warranty set forth in
Section 5.2(c)(ii), the effective date of such Debt Service Coverage
Determination shall be the Closing Date.

                                      -25-

<PAGE>

         6.4. Reports. Borrower shall deliver or cause to be delivered to
Lender:

               (a) As soon as possible after Borrower has knowledge of the
occurrence of any Default or Event of Default, a written statement by Borrower
setting forth details of such Default or Event of Default, stating whether or
not the same is continuing, and if so, the action that Borrower proposes to take
with respect thereto;

               (b) Immediately after receiving notice thereof, notice in writing
of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, if an adverse result thereof could impose uninsured liability in excess
of $25,000 on Borrower or Guarantors, or otherwise have a material adverse
effect on the financial condition, prospects, property or business of Borrower
or Guarantors; and

               (c) Such other information regarding the business, properties,
condition and operations (financial or otherwise) of Borrower and Guarantors as
Lender may at any time and from time to time reasonably request be furnished to
it.

         6.5. Maintenance of Existence; Composition; Business.

               (a) (i) Borrower shall maintain its existence as a single purpose
Delaware limited partnership, and shall maintain CIF-Halifax Plaza Associates,
LLC as its sole general partner and Fairport Associates, L.P., as its sole
limited partner. Borrower shall not permit CIF-Halifax Plaza Associates, LLC or
Fairport Associates, L.P. to pledge, assign or grant a security interest in or
otherwise transfer any ownership interest in Borrower except as may be otherwise
specifically permitted in Section 6.6.

                   (ii) Borrower shall cause Fairport Associates, L.P. to
maintain its existence as a Delaware limited partnership and to maintain
CIF-Fairport Associates, LLC as its sole general partner and the legal and
beneficial owner of at least 17.6% of the ownership interests of Fairport
Associates, L.P.

                   (iii) Borrower shall cause CIF-Halifax Plaza Associates, LLC
and CIF-Fairport Associates, LLC each to maintain its existence as a Delaware
limited partnership and to maintain Cedar Operating Partnership as its sole
member. Borrower shall not permit Cedar Operating Partnership to pledge, assign
or grant a security interest in or otherwise transfer any ownership interest in
CIF-Halifax Plaza Associates, LLC or CIF-Fairport Associates, LLC except as may
be otherwise specifically permitted in Section 6.6.

                   (iv) Borrower shall cause Cedar Operating Partnership (A) to
maintain its existence as a Delaware limited partnership and (B) to maintain
Cedar REIT as its sole general partner and the legal and beneficial owner of at
least twenty percent (20%) of the ownership interest of Cedar Operating
Partnership.

                                      -26-

<PAGE>

                   (v) Borrower shall cause Existing Manager to maintain its
existence as a New York limited liability company and to maintain Leo S. Ullman
as its chief executive officer and the legal and beneficial owner of the
majority of the ownership interests of Existing Manager.

               (b) Borrower shall advise Lender of the nature of any changes in
its Partnership Agreement or Certificate of Limited Partnership promptly after
any such changes, and Borrower shall not change such Partnership Agreement or
Certificate of Limited Partnership in any manner which would adversely affect
its ability to perform any of its obligations under any of the Loan Documents,
without in each case obtaining the prior written approval of Lender. Borrower
shall not engage in any other business, venture or undertaking except the
ownership, development, operation and maintenance of the Project. Borrower shall
not dissolve, merge or consolidate with any other Person or sell, transfer or
otherwise dispose of any of its assets except in the ordinary course of
business. Borrower shall not make any cash or other distributions or payments
(whether in the nature of a return of capital, a loan payment, an interest
payment, a return on capital, a distribution of profits or otherwise) to any of
its partners or Affiliates, unless in each case such distribution is otherwise
in compliance with the Loan Documents and there is no Event of Default or event
which, with the giving of notice or the passage of time, or both, could be an
Event of Default, then in existence under any of the Loan Documents. Borrower
shall not assume, guarantee, endorse or otherwise become contingently liable
upon, or responsible for, any obligations of others, except to endorse checks or
drafts in the ordinary course of business.

         6.6. Transfer of Project. Borrower shall not, without in each case
obtaining Lender's prior written consent, (a) except for Approved Leases, sell
or transfer, or further encumber, whether voluntarily, involuntarily or by
operation of law, or contract to sell or transfer, the Project or any part
thereof, directly or indirectly, including, but not limited to, by deed,
installment sale, long-term lease or assignment of lease, or (b) sell or
transfer or permit any Person to sell or transfer, whether voluntarily,
involuntarily or by operation of law, directly or indirectly, any ownership
interest in Borrower, provided that there may be transfers of limited partner
interests in Borrower and Fairport Associates, L.P. so long as Cedar Operating
Partnership (i) remains the owner, directly or indirectly, of at least 1% of the
ownership interests in Borrower and (ii) controls the management of Borrower.
Any consent given by Lender hereunder shall pertain only to the proposed
transfer for which the consent was requested and shall not obligate Lender to
approve any further transfers or relieve any Person of liability to pay thereon.

         6.7. Borrower Indebtedness. Borrower shall not at any time create,
incur, assume or suffer to exist any indebtedness of Borrower except (a)
indebtedness represented by the Loan, (b) other indebtedness of Borrower to
Lender, (c) unsecured indebtedness to its members, provided that there shall be
no repayment of any such indebtedness if there is an Event of Default then in
existence under any of the Loan Documents, and (d) accounts payable to trade
creditors arising out of purchases of goods or services in the ordinary course
of business, provided that (i) each such account payable is payable not later
than thirty (30) days after the original invoice date according to the original
terms of sale and (ii) each such account payable is not overdue by more than
thirty (30) days according to the original terms of sale, unless Borrower is
disputing the amount or validity of same in good faith.

                                      -27-

<PAGE>

         6.8. Leases.

               (a) After the Closing Date Borrower shall not enter into any
lease agreement affecting any portion of the Project other than an Approved
Lease. For purposes hereof, an "Approved Lease" shall mean (i) each Existing
Lease and all extensions and renewals thereof, (ii) any fully executed lease
agreement between Borrower and a particular tenant relating to any portion of
the Project which is on a form of lease which has been approved in writing by
Lender, provides for a term of no more than five (5) years and covers less than
5,000 square feet of leasable space, and (iii) any lease which has been approved
in writing by Lender. In any event, not more than five percent (5%) of the
leasable space in the Project shall be leased to any one or more Affiliates of
Borrower or either Guarantor or any Person which is indebted to Borrower or
either Guarantor or any Person in which Borrower or either Guarantor possesses
an ownership interest. Within ten (10) Business Days after receipt by Lender of
Borrower's written request for Lender's approval or rejection of a proposed
Approved Lease together with a copy of such proposed Approved Lease, Lender
shall notify Borrower whether it approves or rejects such proposed Approved
Lease; if Lender fails to so notify Borrower within such time period, Lender
shall be deemed to have approved such proposed Approved Lease. Borrower shall
deliver to Lender a copy of each Approved Lease within five (5) Business Days
after it is fully executed. If required by Lender, in conjunction with the
execution of an Approved Lease relating to any portion of the Project, the
tenant thereunder shall execute an Estoppel Certificate and Subordination,
Non-Disturbance and Attornment Agreement in form and substance satisfactory to
Lender.

               (b) Without in each case obtaining the prior written consent of
Lender, Borrower shall not (i) cancel or terminate or accept the surrender of
any Approved Lease other than by the terms of such Approved Lease or following a
default by the tenant thereunder, (ii) amend, modify or otherwise change any
Approved 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 more than thirty (30) days in advance of the due date under any
Approved Lease, 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 under any Approved Lease, (v) waive any material default under or
material breach of any Approved Lease, or (vi) take any other action in
connection with any Approved Lease which would materially impair the value of
the rights or interests of Borrower thereunder.

               (c) Borrower shall promptly (i) perform all of the provisions of
the Approved Leases on the part of the landlord thereunder to be performed, (ii)
enforce all of the material provisions of the Approved Leases on the part of the
tenants thereunder to be performed, (iii) appear in and defend any action
proceeding arising under, growing out of or in any manner connected with the
Approved Leases or the obligations of Borrower as landlord or of the tenants
thereunder, and (iv) deliver to Lender, within ten (10) days after request by
Lender, a written statement containing the name of all tenants, the terms of all
Approved Leases and the spaces occupied and rentals payable thereunder, and a
statement of all Approved Leases which are then in default, including the nature
and magnitude of the default.

                                      -28-

<PAGE>

         6.9. Management Agreements. Except for the Existing Management
Agreement, Borrower shall not enter into any management agreement affecting any
portion of the Project without in each case obtaining the prior written approval
of Lender with respect to the identity of the proposed manager and the terms and
conditions of the proposed management agreement, and Borrower shall not amend,
modify or terminate the Existing Management Agreement or any previously approved
management agreement without in each case obtaining the prior written approval
of Lender. Without limiting the generality of the foregoing, Borrower agrees,
and each management agreement including the Existing Management Agreement shall
provide by its terms or in a separate document, that such management agreement
shall be terminable without penalty or premium by Lender or its nominee
following the occurrence of an Event of Default or at Lender's discretion, as
set forth in the Mortgage, and that all payments under such management agreement
are under and subject and subordinate in lien and priority of payment to the
payment of all principal and interest under the Loan. Borrower will cause the
manager including the Existing Manager to promptly perform and observe all of
the covenants required to be performed and observed by such manager under such
management agreement, promptly notify Lender with respect to any default under
such management agreement and promptly deliver to Lender a copy of each notice,
report, plan or statement delivered by such manager to Borrower pursuant to such
management agreements.

         6.10. Property, Liability and Other Insurance. Borrower shall obtain
and maintain (or cause to be obtained and maintained) during the term of the
Loan, at its sole cost and expense and for the mutual benefit of Borrower and
Lender, the following policies of insurance with respect to the Project:

               (a) Insurance against loss or damage by fire, lightning,
windstorm. hail, explosion, vandalism, acts of terrorism, malicious mischief and
damage from aircraft and vehicles, and smoke damage from such other hazards as
are presently included in standard "all risk" property insurance in the same
geographic area in which the Project is located. The amount of such insurance
shall be as required by Lender from time to time, but not less than 100% of the
"full replacement cost" of the buildings, structures, improvements and fixtures
without deduction for depreciation (but excluding the value of roads,
foundations, parking areas and similar improvements). During any period while
the buildings and improvements on the Premises are being constructed or
reconstructed or rehabilitated, the fire insurance required pursuant to this
Section 6.10 shall be in the form of a builder's "all risk" policy on a
completed value, non-reporting basis, including collapse and transit coverage,
with deductibles not to exceed $10,000, a "soft cost" endorsement in an amount
satisfactory to Lender and such other endorsements as Lender may reasonably
require.

               (b) Business interruption or rent loss insurance each in an
amount as required by Lender from time to time but not for a period in excess of
twelve (12) months and based on gross rents payable under all leases.

               (c) Flood insurance if any part of the Project is located in an
area identified by the Federal Emergency Management Agency as an area having
special flood hazards and in which flood insurance has been made available under
the National Flood Insurance Program, in an amount equal to the lesser of the
stated principal amount of the Loan and the maximum limit of coverage available
with respect to the Project under such program.

                                      -29-

<PAGE>

               (d) Comprehensive general public liability insurance against
claims for bodily injury or death and property damage occurring upon, in or
about the Project to afford protection to the limit of not less than $1,000,000
per occurrence for bodily injury (including death) and property damage, with
umbrella coverage of not less than $5,000,000. Such insurance shall be written
on an "occurrence" basis rather than a "claims" basis to the extent obtainable
at commercially reasonable rates.

               (e) Worker's compensation insurance in an amount equal to
Borrower's full statutory liability and covering all of Borrower's or Existing
Manager's employees, if any, wherever located.

               (f) Such other insurance on the Project, or any replacements or
substitutions therefor, or additions thereto, and in such amounts as may from
time to time be reasonably required by Lender against other insurable hazards or
casualties which at the time are commonly insured against in the case of
premises similarly situated.

Borrower also shall comply with all requirements regarding insurance set forth
in the Mortgage and, in the event of any conflict between the insurance
provisions in this Agreement and such provisions in the Mortgage, such
provisions in the Mortgage shall control.

         6.11. Appraisals. In addition to the appraisals required pursuant to
Section 7.2(a), Lender shall be entitled to order and obtain an appraisal of the
Project at any time and from time to time during the term of the Loan. Such
appraisals shall be paid for by Lender; provided, however, that upon the
occurrence and during the continuance of an Event of Default, Borrower shall pay
for such appraisals to the extent they are requested and provided to Lender not
more than once during any six (6) month period.

         6.12. Environmental Reports. In addition to the Phase I environmental
report required pursuant to Section 7.2(a), Lender shall be entitled to order
and obtain an environmental report of the Project at any time and from time to
time during the term of the Loan. Such environmental reports shall be paid for
by Lender; provided, however, that upon the occurrence and during the
continuance of an Event of Default, Borrower shall pay for such environmental
reports to the extent they are requested and provided to Lender not more than
once during any six (6) month period.

         6.13. Bank Accounts. Borrower shall maintain with Lender all bank
accounts relating to the Project, including construction deposit accounts,
operating accounts and security deposit accounts. If Borrower fails to comply
with the covenant contained in this Section 6.13, Lender shall have the right,
in addition to such other rights and remedies as are available to it under this
Agreement or otherwise, to increase by fifty (50) basis points the Adjusted
LIBOR Rate or Adjusted Prime Rate otherwise applicable to the unpaid principal
balance of the Loan for and during such period of non-compliance.

                                      -30-

<PAGE>

         6.14. Regulation U. No portion of the proceeds of the Loan shall be
used, in whole or in part, for the purpose of purchasing or carrying any "margin
stock" as such term is defined in Regulation U of the Board of Governors of the
Federal Reserve System.

         6.15. Broker's Fees. Borrower agrees to pay any and all fees,
commissions and other compensation payable to any broker, finder or other
intermediary in connection with the Loan (including, without limitation, the
Broker) to the extent contracted by Borrower, and to indemnify, defend and hold
harmless Lender from and against any and all claims, demands, losses or
liabilities arising out of any claim for the payment of such charges.

         6.16. Lender's Costs. Borrower shall pay or reimburse Lender for all
reasonable out-of-pocket and all extraordinary costs and expenses (including but
not limited to reasonable attorneys' fees) incurred by Lender in connection with
the preparation, review, modification and enforcement of the Loan Documents and
the administration and collection of the Loan.

         6.17. Loan Fee. As compensation for the expenses of underwriting and
evaluating the Loan, Borrower shall pay to Lender on the date hereof the sum of
$44,000 ("Loan Fee"), less any portion thereof previously paid by Borrower to
Lender. The Loan Fee shall be in addition to the interest and any and all other
amounts which Borrower is required to pay under the Loan Documents.

                                    ARTICLE 7
                      CONDITIONS PRECEDENT TO LOAN ADVANCE

         The making of the Advance of the Loan by Lender to Borrower is subject
to the satisfaction of the following conditions precedent:

         7.1. Delivery of Loan Documents. The Loan Documents shall have been
properly executed by Borrower, Guarantors and the other parties thereto, as
applicable, and delivered to Lender. The Mortgage, Assignment of Leases,
Financing Statements and other documents intended to be placed of record shall
have been duly recorded or filed in the appropriate public offices.

         7.2. Delivery of Other Documents. The following shall have been
delivered to Lender at Borrower's expense, each of which must be in form and
substance satisfactory to Lender:

               (a) Appraisal. An MAI appraisal of the Project prepared at
Borrower's expense by an appraiser acceptable to Lender in accordance with the
requirements of Title 11 of FIRREA which shall indicate a fair market value for
the Project on an "as is" basis which is acceptable to Lender, and which
otherwise shall be satisfactory in form and substance to Lender.

               (b) Property Condition Report. An engineer's report regarding the
physical condition and structural integrity of the Improvements, which report
shall be satisfactory in form and substance to Lender and performed at
Borrower's expense by an independent engineer acceptable to Lender.

                                      -31-

<PAGE>

               (c) Environmental Report. A Phase I environmental report of the
Project satisfactory in form and substance to Lender and performed at Borrower's
expense by an independent environmental engineer acceptable to Lender.

               (d) Title Insurance. A marked-up title report of a reputable
title insurance company satisfactory to Lender and licensed to do business in
the Commonwealth of Pennsylvania, representing that company's commitment to
issue in favor of Lender, but at the expense of Borrower, a standard ALTA
mortgagee title insurance policy, insuring the lien of the Mortgage as a first
lien on Borrower's fee simple interest in the Project, free and clear of all
prior liens (including possible mechanics' liens) and encumbrances, subject only
to such objections and exceptions as Lender may approve and containing such
affirmative endorsements as Lender may require. It shall also be Borrower's
responsibility to comply with any reinsurance requirements stipulated by Lender
and to cause evidence of such reinsurance (with rights of direct access) to be
provided in a form acceptable to Lender.

               (e) Property, Liability and Other Insurance. Evidence of such
insurance as Lender may require pursuant to Section 6.10 and the Mortgage.

               (f) Survey. A plan of survey of the Premises prepared for and
certified to Lender, by a registered land surveyor approved by Lender. The
survey shall show the location and width of all easements and encroachments
affecting the Premises, the location of all Improvements, curb-cuts, flood
hazard areas and bodies of water abutting the Premises and all roads and utility
lines abutting the Premises and shall certify whether the roads are publicly
dedicated. The surveys shall comply with the minimum detail requirements for
land title surveys as adopted by the American Land Title Association and
American Congress on Surveying and Mapping, shall be dated currently and shall
be otherwise satisfactory to Lender.

               (g) Separate Tax Lot. Evidence satisfactory to Lender that the
Premises constitutes a separate lot for real estate tax and assessment purposes
(except to the extent the McDonald's Premises is currently also a separate lot
for such purposes), and that the enforcement of any of the rights or remedies of
Lender under the Loan Documents (including, without limitation, the right to
cause the Premises to be sold at judicial or non-judicial sale) shall not be
subject to or conditioned upon obtaining any Governmental Approvals.

               (h) Utility Services. Evidence that adequate utility services are
available at the Premises, including water, sewer, electric and gas.

               (i) Governmental Approvals; Compliance with Laws. Evidence
satisfactory to Lender that all Governmental Approvals have been obtained and
remain in full force and effect, and that the ownership and operation of the
Project is in compliance with all applicable Laws.

               (j) Existing Management Agreement. An executed copy of the
Existing Management Agreement which shall be subject to review and approval by
Lender. The Existing Management Agreement shall provide by its terms or in a
separate document that the Existing Management Agreement shall be terminable
without penalty or premium by Lender or its nominee following the occurrence of
an Event of Default and that all payments under the Existing Management
Agreement are under and subject and subordinate in lien and priority of payment
to the payment of all principal and interest under the Loan.

                                      -32-

<PAGE>

               (k) Organizational Documents of Borrower. Copies of Borrower's
Partnership Agreement and Certificate of Limited Partnership, together with any
amendments thereto, and resolutions or other evidence of authority of
CIF-Halifax Plaza Associates, LLC and Fairport Associates, L.P. authorizing the
transaction contemplated by this Agreement, certified to be true, correct, and
complete by Cedar Operating Partnership, together with a current good standing
certificate for Borrower issued by the State of Delaware and a subsistence
certificate issued by the Commonwealth of Pennsylvania.

               (l) Organizational Documents of CIF-Halifax Plaza Associates,
LLC. Copies of CIF-Halifax Plaza Associates, LLC's Limited Liability Company
Agreement and Certificate of Formation, together with any amendments thereto,
and resolutions or other evidence of authority of Cedar Operating Partnership
authorizing the transactions contemplated by this Agreement, certified to be
true, correct and complete by Cedar Operating Partnership, together with a
current good standing certificate for CIF-Halifax Plaza Associates, LLC issued
by the State of Delaware.

               (m) Organizational Documents of Fairport Associates, L.P. Copies
of Fairport Associates, L.P.'s Partnership Agreement and Certificate of Limited
Partnership, together with any amendments thereto and resolutions or other
evidence of authority of CIF-Fairport Associates, LLC and the limited partners
of Fairport Associates, L.P. authorizing the transactions contemplated by this
Agreement, certified to be true, correct and complete by Cedar Operating
Partnership, together with a current good standing certificate for Fairport
Associates, L.P. issued by the State of Delaware.

               (n) Organizational Documents of CIF-Fairport Associates, LLC.
Copies of CIF-Fairport Associates, LLC's Limited Liability Company Agreement and
Certificate of Formation, together with any amendments thereto, and resolutions
or other evidence of authority of Cedar Operating Partnership authorizing the
transactions contemplated by this Agreement, certified to be true, correct and
complete by Cedar Operating Partnership, together with a current good standing
certificate for CIF-Fairport Associates, LLC issued by the State of Delaware.

               (o) Organizational Documents of Cedar Operating Partnership.
Copies of Cedar Operating Partnership's Partnership Agreement and Certificate of
Limited Partnership, together with any amendments thereto, certified to be true,
correct and complete by Cedar REIT, together with a current good standing
certificate for Cedar Operating Partnership issued by the State of Delaware.

               (p) Organizational Documents of Existing Manager. Copies of
Existing Manager's Operating Agreement and Certificate of Formation, together
with any amendments thereto, and resolutions of the members of Existing Manager
authorizing the execution and performance of the Existing Management Agreement,
certified to be true, correct and complete by Leo S. Ullman or Brenda J. Walker,
together with a current good standing certificate for Existing Manager issued by
the State of New York and a current subsistence certificate for Existing Manager
issued by the Commonwealth of Pennsylvania.

                                      -33-

<PAGE>

               (q) Financial Statements. Financial statements and tax returns
for Guarantors for and as of the end of each of the last three (3) years
preceding the Closing Date.

               (r) Legal Opinion. The favorable opinion of counsel to Borrower
and Guarantors addressed to Lender, in form and substance satisfactory to
Lender, covering such matters as Lender may require.

         7.3. Leases. Lender shall have approved all Existing Leases and each
tenant thereunder shall have executed an Estoppel Certificate and Subordination,
Non-Disturbance and Attornment Agreement in form and substance satisfactory to
Lender (except in the case of the McDonald's Tenant, in which case Borrower
shall have provided information and assurances in form and substance
satisfactory to Lender). All other leases in the Project shall be Approved
Leases.

         7.4. Other Documentary Requirements. Borrower shall have furnished to
Lender such other instruments, documents and opinions as Lender shall require to
evidence and secure the Loan and to comply with the provisions of this Agreement
and the requirements of regulatory authorities to which Lender is subject.

         7.5. Borrower Equity. Borrower shall have furnished to Lender evidence
satisfactory to Lender that Borrower has expended from its own funds (a) at
least twenty percent (20%) of the aggregate purchase price of the Project and
(b) one hundred percent (100%) of all other amounts payable in connection with
the purchase of the Project and the closing of the Loan.

         7.6. Fees, Charges. and Premiums. Borrower shall have paid all premiums
on insurance policies required by the Mortgage, all conveyancing and recording
charges in connection with the closing of the Loan, the Loan Fee, all legal fees
and disbursements of Lender's attorneys in connection with this transaction, and
for any transfer or documentary stamp taxes due under any Federal, State or
municipal Law.

                                   ARTICLE 8
                                EVENTS OF DEFAULT

         8.1. Events of Default. The occurrence of any one or more of the
following shall, at the option of Lender, constitute an event of default (each,
an "Event of Default") hereunder (except for defaults under subsection 8.1(f) or
(g) below, each of which shall automatically and without any action by Lender
constitute an Event of Default hereunder):

               (a) Any representation or warranty or financial statement of
Borrower or Guarantors under this Agreement 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), as to subsections 5.1(c),
5.1(e), 5.2(f), 5.2(g) and 5.2(h) without giving effect to any qualifications
therein as to its or their knowledge;

                                      -34-

<PAGE>

               (b) Borrower 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 Agreement and, except for the events specified in the
following subsections of this Section 8.1 (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 Borrower; provided that, if such Default is curable but not
reasonably capable of cure within such thirty (30) day period, Borrower 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
Borrower commences such cure within the original thirty (30) day period and
thereafter diligently prosecutes such cure to completion;

               (c) Borrower shall have failed to make any payment of principal
or interest on the Loan when due, and such Default, other than with respect to
the final payment of principal on the Maturity Date (as to which no cure period
applies), shall not be cured within eight (8) days after such due date;

               (d) An Event of Default shall have occurred under any other Loan
Document;

               (e) Any event of default (after giving effect to any applicable
notice and cure periods) shall have occurred under any document, instrument or
agreement, evidencing, securing, governing or otherwise relating to the loan
dated this date, in the maximum principal amount of $5,440,000, from Lender to
Newport Plaza Associates, L.P., d/b/a Newport Plaza Shopping Center.

               (f) Any event of default (after giving effect to any applicable
notice and cure periods) shall have occurred under any Hedging Contract or other
documents creating Hedging Obligations;

               (g) A petition shall have been filed by Borrower or either
Guarantor under any of the provisions of the United States Bankruptcy Code, as
amended, or any other Federal or state insolvency or similar Law; or such
petition shall have been filed against Borrower or either Guarantor or a
receiver shall have been appointed in a debtor's proceeding for Borrower or
either Guarantor or any part of its property or assets, or for the Premises or
the Improvements, and such petition or receivership shall continue unstayed and
in effect for a period of ninety (90) days;

               (h) Borrower or either Guarantor shall have made an assignment
for the benefit of its creditors;

               (i) There shall have occurred a material adverse change in the
financial condition of Borrower or either Guarantor, as determined by Lender; or

               (j) Any execution shall have been levied against any part of the
Project or against any other property of Borrower and shall continue unstayed
and in effect for a period of sixty (60) days.


                                      -35-
<PAGE>

         8.2. Remedies. Upon the occurrence of any Event of Default beyond any
applicable cure periods, Lender may exercise any or all of the following rights
and remedies as Lender may deem necessary or appropriate:

               (a) Declare immediately due and payable all monies advanced
hereunder which are then unpaid, with all arrearages of interest, and
accordingly accelerate payment thereof;

               (b) Enter upon the Project and take possession thereof, together
with the Improvements (whether in the course of construction or completed), and
all materials, supplies, tools, equipment and construction facilities and
appliances located thereon, and proceed either in the name of Lender or in the
name of Borrower, as Lender shall elect. For this purpose, Borrower agrees that
Lender shall have the right, and hereby irrevocably constitutes and appoints
Lender its true and lawful attorney-in-fact coupled with an interest, with full
power of substitution, (i) to use any funds of Borrower (including any funds
which may be held in a cash collateral account and any funds which remain
unadvanced hereunder, which Borrower for such purpose hereby quitclaims to
Lender) for payment of the Loan, (ii) to pay, settle or compromise all existing
bills and claims which are or may be liens against the Project or may be
necessary or desirable for the clearance of title, (iii) to prosecute and defend
all actions or proceedings in connection with the Project and to take such
action and require such performance as Lender deems necessary, and (iv)
generally to do any and every act with respect to the construction, occupancy
and use of the Project as Borrower may do in its own behalf; and any sums
expended or incurred by Lender for any of the foregoing purposes shall be added
to the indebtedness evidenced by the Note, shall be secured by the Mortgage and
the other Loan Documents and shall be paid by Borrower to Lender on demand with
interest thereon at the Default Rate until paid;

               (c) Exercise all other remedies available to Lender under any of
the Loan Documents (subject to any applicable limitations on liability contained
in the Loan Documents), or available to Lender under applicable Law, it being
the intention of the parties that the remedies provided in this Agreement shall
be in addition to and not in substitution of the rights and remedies which would
otherwise be vested in Lender at law or in equity, all of which rights and
remedies are specifically reserved by Lender, and the failure of Lender to
exercise any remedy herein provided shall not constitute a waiver by Lender nor
preclude the resort to any other appropriate remedy or remedies herein provided
or prevent the subsequent or concurrent resort to any other remedy or remedies
which by law or equity shall be vested in Lender for the recovery of damages or
otherwise in the event of a breach of any of the undertakings of Borrower
hereunder, and any waiver by Lender of any rights or remedies hereunder must, to
be effective, be in writing, and such waiver shall be limited in its effect to
the condition or default specified therein, but no such waiver shall extend to
any subsequent condition or default or impair any right consequent thereon;

               (d) If an Event of Default specified in subsections (f) or (g) of
Section 8.1 shall occur or exist, then, in addition to all other rights and
remedies which Lender may have hereunder or under any other Loan Document, at
law, in equity or otherwise, the unpaid principal amount of the Loan, interest
accrued thereon and all other obligations of Borrower to Lender shall become
immediately due and payable without presentment, demand, protest or notice of
any kind, all of which are hereby waived, and an action therefor shall
immediately accrue, and in addition, Lender may exercise such other remedies as
may be available to Lender under applicable Law;

                                      -36-
<PAGE>

               (e) It is agreed that, in addition to all other rights hereunder
or under Law, Lender shall have the right to institute proceedings in equity or
other appropriate proceedings for the specific performance of any covenant or
agreement made in any of the Loan Documents or for an injunction against the
violation of any of the terms of any of the Loan Documents or in aid of the
exercise of any power granted in any of the Loan Documents or by Law or
otherwise;

               (f) Lender shall have and is hereby granted, as security for all
liabilities of Borrower to Lender, a right of set-off, a lien upon and a
security interest in all property of Borrower now or at any time hereafter in
Lender's possession in any capacity whatsoever, including, without limitation,
any balance or share of (i) any deposit, trust or agency account and (ii) any
proceeds, payments or other amounts which Borrower has received or will receive
with respect to or under any Hedging Contract.

               (g) During the continuance of any Event of Default beyond any
applicable cure periods and for so long as such Event of Default remains
uncured, Lender is appointed as attorney-in-fact of Borrower for the purposes of
carrying out the provisions of this Section 8.2 and taking any action and
executing any instruments which Lender may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest.

                                    ARTICLE 9
                                  MISCELLANEOUS

         9.1. 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:

                           If to Borrower:

                           Halifax Plaza Associates, L.P.
                           c/o Cedar Bay Realty Advisors, Inc.
                           44 South Bayles Avenue, Suite 304
                           Port Washington, NY  11050
                           Attention:  Mr. Leo Ullman


                                      -37-

<PAGE>


                           with a copy to:

                           Stuart H. Widowksi, 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:  Real Estate Department

                           with a copy to:

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

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 date delivery
is first attempted, and (c) if given by any other means (including by air
courier), when delivered.

         9.2. Prior Understandings; Entire Agreement. This Agreement and the
other Loan Documents supersede all prior and contemporaneous understandings and
agreements, whether written or oral, among the parties hereto relating to the
transactions provided for herein and therein except as expressly provided
otherwise. This Agreement and the other Loan Documents represent the entire
agreement between the parties to this Agreement with respect to the transactions
contemplated hereby or thereby and, except as expressly provided herein or in
the other Loan Documents, shall not be affected by reference to any other
documents.

         9.3. Severability. Every provision of this Agreement and each of the
other Loan Documents is intended to be severable, and if any term or provision
of this Agreement or any of the other Loan Documents shall be invalid, illegal
or unenforceable for any reason, the validity, legality and enforceability of
the remaining provisions shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction shall not affect
the validity, legality or enforceability of any such term or provision in any
other jurisdiction. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction. this Agreement shall, as
to such jurisdiction, be deemed amended to modify or delete, as necessary, the
offending provision or provisions and to alter the bounds thereof in order to
render it or them valid and enforceable to the maximum extent permitted by
applicable Law, without in any manner affecting the validity or enforceability
of such provision or provisions in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.

         9.4. Descriptive Headings; Governing Law. The descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not affect the meaning or construction of any of the provisions of this


                                      -38-
<PAGE>

Agreement. This Agreement and the rights and obligations of the parties under
this Agreement and under the other Loan Documents shall be construed in
accordance with and shall be governed by the laws of the Commonwealth of
Pennsylvania.

         9.5. Publicity. Lender shall have the right, from time to time
hereafter, after reasonable consultation with Borrower, to publicize and
advertise in any manner Lender's extension of the Loan for the benefit of the
Project.

         9.6. Non-Merger of Remedies. The covenants and obligations of Borrower
and the rights and remedies of Lender hereunder and under the other Loan
Documents shall not merge with or be extinguished by the entry of a judgment
hereunder or thereunder, and such covenants, obligations, rights and remedies
shall survive any entry of a judgment until payment in full of the Obligations.
All obligations under the Loan Documents shall continue to apply with respect to
and during the collection of amounts due under the Loan Documents or the proof
and allowability of any claim arising under this Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise, and in
any workout, restructuring or in connection with the protection, preservation,
exercise or enforcement of any of the terms of this Agreement or of any rights
under this Agreement or under any other Loan Document or in connection with any
foreclosure, collection or bankruptcy proceedings. Without limiting the
generality of the foregoing, the post-judgment interest rate shall be the
applicable Default Rate.

         9.7. No Implied Waiver; Cumulative Remedies. No course of dealing and
no delay or failure of Lender in exercising any right, power or privilege under
this Agreement or any other Loan Document shall affect any other or future
exercise thereof or exercise of any other right, power or privilege; nor shall
any single or partial exercise of any such right, power or privilege or any
abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right, power or
privilege. The rights and remedies of Lender under this Agreement and any other
Loan Document are cumulative and not exclusive of any rights or remedies which
Lender would otherwise have hereunder or thereunder, at law, in equity or
otherwise. Any waiver of a specific default shall be effective only as to such
specific default and shall not apply to any subsequent default.

         9.8. Amendments. Any term, covenant, agreement or condition of any Loan
Document to which Lender is party may be amended, and any right under the Loan
Documents may be waived, if, but only if, such amendment or waiver is in writing
and is signed by Lender.

         9.9. Successors and Assigns.

               (a) Assignments by Borrower. Without the prior written consent of
Lender, Borrower may not assign any of its rights or delegate any of its duties
or obligations under this Agreement or any other Loan Document.

               (b) Participations by Lender. Lender may sell participations to
one or more Eligible Institutions of all or a portion of its rights and
obligations under this Agreement; provided, however, that (i) Lender's
obligations under this Agreement shall remain unchanged, (ii) Lender shall
remain solely responsible to Borrower for the performance of its obligations


                                      -39-

<PAGE>

under this Agreement, (iii) all amounts payable by Borrower under this Agreement
shall be determined as if Lender had not sold such participation and no
participant shall be entitled to receive any greater amount pursuant to this
Agreement than Lender would have been entitled to receive in respect of the
amount of the participation transferred by Lender to such participant had no
such transfer occurred, (iv) such participant shall agree to be bound by the
provisions of this Agreement and the other Loan Documents, and (v) Borrower
shall continue to deal solely and directly with Lender in connection with
Lender's rights and obligations under this Agreement, and Lender shall retain
the sole rights and responsibility vis-a-vis Borrower to enforce the obligations
of Borrower relating to the Loan including the right to approve any amendment,
modification or waiver of any provision of this Agreement.

               (c) Assignments by Lender. Lender shall have the unrestricted
right at any time or from time to time, and without Borrower's or Guarantors'
consent, to assign all or any portion of its rights and obligations under the
Loan to one or more banks or other financial institutions (each, an "Assignee"),
and Borrower and Guarantors agree that they shall execute, or cause to be
executed, such documents, instruments and agreements executed in connection
herewith as Lender shall deem necessary to effect the foregoing. In addition, at
the request of Lender and any such Assignee, Borrower shall issue one or more
new promissory notes, as applicable, to any such Assignee and, if Lender has
retained any of its rights and obligations hereunder following such assignment,
to Lender which new promissory notes shall be issued in replacement of, but not
in discharge of, the liability evidenced by the promissory note held by Lender
prior to such assignment and shall reflect the amount of the respective
commitments and loans held by such Assignee and Lender after giving effect to
such assignment; provided, however, that only one set of notes shall be
outstanding at one time. Upon the execution and delivery of appropriate
assignment documentation, amendments and any other documentation required by
Lender in connection with such assignment, and the payment by Assignee of the
purchase price agreed to by Lender and such Assignee, such Assignee shall be a
party to this Agreement and shall have all of the rights and obligations of
Lender hereunder (and under any and all other guaranties, documents, instruments
and agreements executed in connection herewith) to the extent that such rights
and obligations have been assigned by Lender pursuant to the assignment
documentation between Lender and such Assignee, and Lender shall be released
from its obligation hereunder and thereunder to a corresponding extent. Borrower
shall furnish any information concerning Borrower in its possession from time to
time to prospective Assignees, provided that Lender shall require any such
prospective Assignees to agree in writing to maintain the confidentiality of
such information.

               (d) Confidential Information. Borrower acknowledges that
participations and assignments by Lender may require that certain confidential
information be released to third parties for the purpose of evaluation of the
Loan. Lender shall use reasonable efforts to limit the distribution of such
confidential information to such third parties and their respective employees
and agents. Borrower acknowledges that Lender will not responsible to Borrower
or Guarantors for the actions of third parties because of their disclosure or
misuse of the information given to them. Participants and assignees shall be
bound by this Section 9.9(d).

         9.10. Counterparts; Photocopied or Telecopied Signature Pages. Any Loan
Document (other than the Note) may be executed in one or more counterparts, each
of which shall constitute an original, but all of which together shall
constitute one and the same instrument. Delivery of a photocopy or telecopy of
an executed counterpart of a signature page to any Loan Document shall be as
effective as delivery of a manually executed counterpart of such Loan Document.


                                     -40-
<PAGE>


         9.11. Indemnification.

               (a) Borrower shall, upon demand, pay or reimburse Lender for, and
indemnify and save Lender and its respective Affiliates, officers, directors,
employees, agents, attorneys, shareholders and consultants (collectively,
"Indemnitees") harmless from and against, any and all losses, liabilities,
claims, damages (excluding consequential damages), expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any kind or
nature whatsoever (including the reasonable fees and disbursements of counsel
for such Indemnitee in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may at any time be imposed on,
asserted against or incurred by such Indemnitee as a result of, or arising out
of, or in any way related to or by any other Loan Document, or any transaction
actually or proposed to be financed in whole or in part or directly or
indirectly with the proceeds of the Loan, any transaction contemplated by the
Loan Documents but excluding any such losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements that Borrower proves were the result of the gross negligence or
willful misconduct of such Indemnitee(s) or arose solely out of disputes between
or among Indemnitee(s), as finally determined by a court of competent
jurisdiction. If and to the extent that the foregoing obligations of Borrower
under this subsection (a), or any other indemnification obligation of Borrower
hereunder or under any other Loan Document are unenforceable for any reason,
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable Law.

               (b) The indemnities contained herein shall survive repayment of
the Obligations and satisfaction, release, and discharge of the Loan Documents,
whether through full payment of the Loan, foreclosure, deed in lieu of
foreclosure or otherwise until the expiration of all applicable statutes of
limitation and repose.

               (c) The foregoing amounts are in addition to any other amounts
which may be due and payable to Lender under this Agreement.

         9.12. Expenses. Borrower agrees to pay promptly or cause to be paid
promptly and to hold harmless:

               (a) Lender against liability for the payment of all reasonable
out-of-pocket and all extraordinary costs and expenses (including but not
limited to reasonable fees and expenses of counsel, including local counsel,
auditors, consulting engineers, appraisers, and all other professional,
accounting, evaluation and consulting costs) incurred by it from time to time
arising from or relating to (i) the negotiation, preparation, execution and
delivery of this Agreement and the other Loan Documents, (ii) the administration
and performance of this Agreement and the other Loan Documents, and (iii) any
requested amendments, modifications, supplements, waivers or consents (whether
or not ultimately entered into or granted) to this Agreement or any other Loan
Document;

                                      -41-

<PAGE>

               (b) Lender against liability for the payment of all reasonable
out-of-pocket costs and expenses (including but not limited to reasonable fees
and expenses of counsel, including local counsel, auditors, consulting
engineers, appraisers, and all other professional, accounting, evaluation and
consulting costs) incurred by it from time to time arising from or relating to
the enforcement or preservation of rights under, or administration of, this
Agreement or any other Loan Document (including but not limited to any such
costs or expenses arising from or relating to (i) collection or enforcement of
the Loan or other Obligation, and (ii) any litigation, proceeding, dispute,
work-out, restructuring or rescheduling related in any way to this Agreement or
the other Loan Documents); and

               (c) Lender against liability for all stamp, document, transfer,
recording, filing, registration, search, sales and excise fees and taxes (other
than Lender's income taxes) and all similar impositions now or hereafter
determined by Lender to be payable in connection with this Agreement or any
other Loan Documents.

         9.13. Certain Waivers by Borrower. Borrower hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations (other than notices required to be given by Lender pursuant to the
terms of this Agreement or any other Loan Document) and any requirement that
Lender exhaust any right or take any action against any other Person or any
collateral or other direct or indirect security for any of the Obligations.
Without limiting the generality of the foregoing, Borrower acknowledges and
agrees that Lender may commence an action against Borrower whether or not any
action is brought against any collateral and it shall be no defense to any
action brought against Borrower that Lender has failed to bring an action
against any collateral.

         9.14. Set-Off. Borrower 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 and its successors and
assigns or in transit to any of them. At any time after an Event of Default,
without demand or notice (any such notice being expressly waived by Borrower),
Lender may setoff the same or any part thereof and apply the same to any
liability or obligation of Borrower 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 BORROWER, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

         9.15. Certain Borrower Acknowledgments. Borrower hereby acknowledges
that Lender has no fiduciary relationship with, or any fiduciary duty to
Borrower arising out of or in connection with this Agreement or any of the other
Loan Documents and the relationship between Lender, on the one hand, and
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor.


                                      -42-
<PAGE>

         9.16. Consent to Jurisdiction, Service and Venue; Waiver of Jury Trial.

               (a) Consent to Jurisdiction. For the purpose of enforcing payment
and performance of the Loan Documents, including, any payment under the Note and
performance of other obligations under the Loan Documents, or in any other
matter relating to, or arising out of the Loan Documents, Borrower hereby
consents to the jurisdiction and venue of the courts of the Commonwealth of
Pennsylvania or of any federal court located in such state. Borrower hereby
waives the right to contest the jurisdiction and venue of the courts located in
the Commonwealth of Pennsylvania on the ground of inconvenience or otherwise
and, further, waives any right to bring any action or proceeding against Lender
in any court outside the Commonwealth of Pennsylvania. For the purpose of
enforcing the performance of obligations by Lender under the Loan Documents, or
in any other matter relating to, or arising out of the Loan Documents, Lender
hereby consents to the jurisdiction and venue of the courts of the Commonwealth
of Pennsylvania or of any federal court located in such state, waives personal
service of any and all process upon it and consents that all such service of
process may be made by certified or registered mail directed to Lender at the
address provided for in Section 9.1 and service so made shall be deemed to be
completed upon actual receipt or execution of a receipt by any Person at such
address. The provisions of this Section 9.16 shall not limit or otherwise affect
the right of Lender to institute and conduct an action in any other appropriate
manner, jurisdiction or court.

               (b) WAIVER OF JURY TRIAL; DAMAGES. BORROWER 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
NEITHER 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, BORROWER HEREBY WAIVES ANY RIGHT IT 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. BORROWER CERTIFIES THAT
NO REPRESENTATIVE, AGENT 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. EACH PARTY TO THIS AGREEMENT (I)
CERTIFIES THAT NEITHER LENDER NOR ANY REPRESENTATIVE, OR ATTORNEY OF LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY,

                                      -43-

<PAGE>

AMONG OTHER THINGS. THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SUBSECTION (B)
OF SECTION 9.16. THE PROVISIONS OF THIS SECTION 9.16 HAVE BEEN FULLY DISCLOSED
TO THE PARTIES AND THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY
HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS
OF THIS SECTION 9.16 WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

         9.17. No Third Party Beneficiaries. The parties hereto do not intend
the benefits of this Agreement to inure to any third party. Notwithstanding
anything contained herein or in the Note, Mortgage, or any other document
executed in connection with this transaction, or any conduct or course of
conduct by any of the parties hereto, or their respective affiliated companies,
agents or employees, before or after signing this Agreement or any of the other
aforesaid documents, this Agreement shall not be construed as creating any
rights, claims, or causes of action against Lender, or any of its officers,
agents or employees, in favor of any Person other than Borrower.

         9.18. Replacement of Note. Upon receipt of an affidavit of an officer
of Lender as to the loss, theft, destruction or mutilation of the Note, or any
security document which is not of public record, and, in the case of any such
loss, theft, destruction or mutilation, upon cancellation of such Note or
security document in connection with such replacement, Borrower will issue, in
lieu thereof, a replacement Note or security document in the same principal
amount thereof and otherwise of like tenor.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




                                      -44-

<PAGE>


         IN WITNESS WHEREOF. the parties hereto, by their officers thereunto
duly authorized, have executed and delivered this Agreement as of the date first
above written.

                                     HALIFAX PLAZA ASSOCIATES, L.P., a Delaware
                                     limited partnership, by its sole general
                                     partner, as follows:

                                         CIF-Halifax 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


                                     CITIZENS BANK OF PENNSYLVANIA


                                     By:________________________________
                                        Robert L. Schopf
                                        Vice President


<PAGE>


                                    Exhibit A
                                    ---------

                          Legal Description of Premises
                          -----------------------------




<PAGE>



                                    Exhibit B
                                    ---------

                                 Existing Leases
                                 ---------------



<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                                                                                     <C>
Article 1 DEFINITIONS; CONSTRUCTION...............................................................................1

   1.1.  CERTAIN DEFINITIONS......................................................................................1
   1.2.  CONSTRUCTION.............................................................................................8
   1.3.  ACCOUNTING PRINCIPLES....................................................................................9

Article 2 THE LOAN................................................................................................9

   2.1.  COMMITMENT TO LEND.......................................................................................9
   2.2.  PROMISSORY NOTE..........................................................................................9
   2.3.  LOAN DOCUMENTS...........................................................................................9
   2.4.  ADDITIONAL SECURITY.....................................................................................11
   2.5.  RELEASE OF SECURITY.....................................................................................11

Article 3 INTEREST RATE PROVISIONS...............................................................................12

   3.1.  INTEREST RATES..........................................................................................12
   3.2.  COMPUTATION OF INTEREST.................................................................................12
   3.3.  LIBOR RATE LENDING UNLAWFUL.............................................................................13
   3.4.  LIBOR RATE LENDING IMPRACTICAL..........................................................................13
   3.5.  INCREASED COSTS DUE TO BORROWER.........................................................................13
   3.6.  INCREASED COSTS DUE TO CHANGE IN LAW....................................................................14
   3.7.  INCREASED CAPITAL COSTS OF LENDER.......................................................................14
   3.8.  TAXES...................................................................................................15

Article 4 LOAN PAYMENT PROVISIONS; MATURITY DATE.................................................................16

   4.1.  INTEREST AND PRINCIPAL PAYMENTS; MATURITY DATE..........................................................16
   4.2.  PREPAYMENTS.............................................................................................16
   4.3.  LATE PAYMENT CHARGE.....................................................................................17
   4.4.  PAYMENTS BY BORROWER IN GENERAL.........................................................................17

Article 5 REPRESENTATIONS AND WARRANTIES.........................................................................18

   5.1.  RELATING TO BORROWER AND ITS AFFILIATES.................................................................18
   5.2.  RELATING TO THE PROJECT.................................................................................21
   5.3.  SURVIVAL OF REPRESENTATIONS.............................................................................23

Article 6 COVENANTS..............................................................................................23

   6.1.  FINANCIAL STATEMENTS; TAX RETURNS.......................................................................23
   6.2.  FINANCIAL COVENANTS.....................................................................................24
   6.3.  DEBT SERVICE COVERAGE DETERMINATIONS....................................................................25
   6.4.  REPORTS.................................................................................................26
   6.5.  MAINTENANCE OF EXISTENCE; COMPOSITION; BUSINESS.........................................................26
   6.6.  TRANSFER OF PROJECT.....................................................................................27
   6.7.  BORROWER INDEBTEDNESS...................................................................................27
   6.8.  LEASES..................................................................................................28
   6.9.  MANAGEMENT AGREEMENTS...................................................................................29
   6.10. PROPERTY, LIABILITY AND OTHER INSURANCE.................................................................29
   6.11. APPRAISALS..............................................................................................30

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S>       <C>                                                                                                   <C>
   6.12.  ENVIRONMENTAL REPORTS..................................................................................30
   6.13.  BANK ACCOUNTS..........................................................................................30
   6.14.  REGULATION U...........................................................................................31
   6.15.  BROKER'S FEES..........................................................................................31
   6.16.  LENDER'S COSTS.........................................................................................31
   6.17.  LOAN FEE...............................................................................................31

Article 7 CONDITIONS PRECEDENT TO LOAN ADVANCE...................................................................31

   7.1.  DELIVERY OF LOAN DOCUMENTS..............................................................................31
   7.2.  DELIVERY OF OTHER DOCUMENTS.............................................................................31
   7.3.  LEASES..................................................................................................34
   7.4.  OTHER DOCUMENTARY REQUIREMENTS..........................................................................34
   7.5.  BORROWER EQUITY.........................................................................................34
   7.6.  FEES, CHARGES. AND PREMIUMS.............................................................................34

Article 8 EVENTS OF DEFAULT......................................................................................34

   8.1.  EVENTS OF DEFAULT.......................................................................................34
   8.2.  REMEDIES................................................................................................36

Article 9 MISCELLANEOUS..........................................................................................37

   9.1.  NOTICES.................................................................................................37
   9.2.  PRIOR UNDERSTANDINGS; ENTIRE AGREEMENT..................................................................38
   9.3.  SEVERABILITY............................................................................................38
   9.4.  DESCRIPTIVE HEADINGS; GOVERNING LAW.....................................................................38
   9.5.  PUBLICITY...............................................................................................39
   9.6.  NON-MERGER OF REMEDIES..................................................................................39
   9.7.  NO IMPLIED WAIVER; CUMULATIVE REMEDIES..................................................................39
   9.8.  AMENDMENTS..............................................................................................39
   9.9.  SUCCESSORS AND ASSIGNS..................................................................................39
   9.10. COUNTERPARTS; PHOTOCOPIED OR TELECOPIED SIGNATURE PAGES.................................................40
   9.11. INDEMNIFICATION.........................................................................................41
   9.12. EXPENSES................................................................................................41
   9.13. CERTAIN WAIVERS BY BORROWER.............................................................................42
   9.14. SET-OFF.................................................................................................42
   9.15. CERTAIN BORROWER ACKNOWLEDGMENTS........................................................................42
   9.16. CONSENT TO JURISDICTION, SERVICE AND VENUE; WAIVER OF JURY TRIAL........................................43
   9.17. NO THIRD PARTY BENEFICIARIES............................................................................44
   9.18. REPLACEMENT OF NOTE.....................................................................................44

</TABLE>





<PAGE>


================================================================================


                                 LOAN AGREEMENT

                          Dated ________________, 2003

                                 by and between

                   HALIFAX PLAZA ASSOCIATES, L.P., as Borrower

                                       and

                    CITIZENS BANK OF PENNSYLVANIA, as Lender


================================================================================

