<PAGE>

                                                             Loan No. 76-0026287

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


                      GENERAL ELECTRIC CAPITAL CORPORATION

                                    (Lender)

                                       to

                         FAIRVIEW PLAZA ASSOCIATES, L.P.

                                   (Borrower)


                             ----------------------

                                 LOAN AGREEMENT

                             ----------------------


                         Dated as of: January ____, 2003

                 Property Location: New Cumberland, Pennsylvania

                              DOCUMENT PREPARED BY:

                             Andrews & Kurth L.L.P.

                          1717 Main Street, Suite 3700

                               Dallas, Texas 75201

                      Attention: Charles T. Marshall, Esq.



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


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                                TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS.............................................................................................1

   Section 1.1       Certain Definitions..........................................................................1

ARTICLE 2 LOAN TERMS..............................................................................................4

   Section 2.1       The Loan.....................................................................................4
   Section 2.2       Interest Rate; Late Charge...................................................................4
   Section 2.3       Terms of Payment.............................................................................5
   Section 2.4       Security; Establishment of Funds.............................................................6

ARTICLE 3 INSURANCE, CONDEMNATION, AND IMPOUNDS...................................................................7

   Section 3.1       Insurance....................................................................................7
   Section 3.2       Use and Application of Insurance Proceeds....................................................8
   Section 3.3       Condemnation Awards..........................................................................9
   Section 3.4       Impounds....................................................................................10

ARTICLE 4 ENVIRONMENTAL MATTERS..................................................................................11

   Section 4.1       Certain Definitions.........................................................................11
   Section 4.2       Representations and Warranties on Environmental Matters.....................................11
   Section 4.3       Covenants on Environmental Matters..........................................................11
   Section 4.4       Allocation of Risks and Indemnity...........................................................12
   Section 4.5       No Waiver...................................................................................13
   Section 4.6       Lender Cure Rights..........................................................................13

ARTICLE 5 LEASING MATTERS........................................................................................14

   Section 5.1       Representations and Warranties on Leases....................................................14
   Section 5.2       Standard Lease Form; Approval Rights........................................................14
   Section 5.3       Covenants...................................................................................15
   Section 5.4       Tenant Estoppels............................................................................15

ARTICLE 6 REPRESENTATIONS AND WARRANTIES.........................................................................15

   Section 6.1       Organization, Power and Authority...........................................................15
   Section 6.2       Validity of Loan Documents..................................................................15
   Section 6.3       Liabilities; Litigation.....................................................................16
   Section 6.4       Taxes and Assessments.......................................................................16
   Section 6.5       Other Agreements; Defaults..................................................................16
   Section 6.6       Compliance with Law.........................................................................16

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   Section 6.7        Location of  Borrower......................................................................17
   Section 6.8        ERISA......................................................................................17
   Section 6.9        Forfeiture.................................................................................17
   Section 6.10       Tax Filings................................................................................17
   Section 6.11       Solvency...................................................................................18
   Section 6.12       Full and Accurate Disclosure...............................................................18
   Section 6.13       Flood Zone.................................................................................18
   Section 6.14       Single Purpose Entity/Separateness.........................................................18
   Section 6.15       Compliance with Anti-Terrorism Orders......................................................20
   Section 6.16       Property Specific Representations..........................................................21

ARTICLE 7 FINANCIAL REPORTING....................................................................................21

   Section 7.1       Financial Statements........................................................................21
   Section 7.2       Accounting Principles.......................................................................22
   Section 7.3       Other Information; Access...................................................................22
   Section 7.4       Annual Budget...............................................................................22

ARTICLE 8 COVENANTS..............................................................................................22

   Section 8.1       Due On Sale and Encumbrance; Transfers of Interests.........................................22
   Section 8.2       Taxes; Utility Charges......................................................................23
   Section 8.3       Control; Management.........................................................................23
   Section 8.4       Operation; Maintenance; Inspection..........................................................23
   Section 8.5       Taxes on Security...........................................................................23
   Section 8.6       Legal Existence; Name, Etc..................................................................24
   Section 8.7       Further Assurances..........................................................................24
   Section 8.8       Estoppel Certificates.......................................................................24
   Section 8.9       Notice of Certain Events....................................................................24
   Section 8.10       Indemnification............................................................................25
   Section 8.11       Cooperation................................................................................25
   Section 8.12       Payment For Labor and Materials............................................................26
   Section 8.13       Financial Covenants........................................................................26

ARTICLE 9 EVENTS OF DEFAULT......................................................................................26

   Section 9.1       Payments....................................................................................26
   Section 9.2       Insurance...................................................................................26
   Section 9.3       Sale, Encumbrance, Etc......................................................................26
   Section 9.4       Covenants...................................................................................26
   Section 9.5       Representations and Warranties..............................................................27
   Section 9.6       Other Encumbrances..........................................................................27
   Section 9.7       Involuntary Bankruptcy or Other Proceeding..................................................27
   Section 9.8       Voluntary Petitions, etc....................................................................27
   Section 9.9       Anti-Terrorism..............................................................................27

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ARTICLE 10 REMEDIES..............................................................................................27

   Section 10.1       Remedies - Insolvency Events...............................................................27
   Section 10.2       Remedies - Other Events....................................................................27
   Section 10.3       Lender's Right to Perform the Obligations..................................................28

ARTICLE 11 MISCELLANEOUS.........................................................................................28

   Section 11.1       Notices....................................................................................28
   Section 11.2       Amendments and Waivers.....................................................................29
   Section 11.3       Limitation on Interest.....................................................................29
   Section 11.4       Invalid Provisions.........................................................................30
   Section 11.5       Reimbursement of Expenses..................................................................30
   Section 11.6       Approvals; Third Parties; Conditions.......................................................31
   Section 11.7       Lender Not in Control; No Partnership......................................................31
   Section 11.8       Contest of Certain Claims..................................................................31
   Section 11.9       Time of the Essence........................................................................32
   Section 11.10      Successors and Assigns.....................................................................32
   Section 11.11      Renewal, Extension or Rearrangement........................................................32
   Section 11.12      Waivers....................................................................................32
   Section 11.13      Cumulative Rights; Joint and Several Liability.............................................32
   Section 11.14      Singular and Plural........................................................................32
   Section 11.15      Phrases....................................................................................33
   Section 11.16      Exhibits and Schedules.....................................................................33
   Section 11.17      Titles of Articles, Sections and Subsections...............................................33
   Section 11.18      Promotional Material.......................................................................33
   Section 11.19      Survival...................................................................................33
   Section 11.20      Waiver of Jury Trial.......................................................................33
   Section 11.21      Waiver of Punitive or Consequential Damages................................................34
   Section 11.22      Governing Law..............................................................................34
   Section 11.23      Entire Agreement...........................................................................34
   Section 11.24      Counterparts...............................................................................34

ARTICLE 12 LIMITATIONS ON LIABILITY..............................................................................34

   Section 12.1       Limitation on Liability....................................................................34
   Section 12.2       Limitation on Liability of Lender's Officers, Employees, etc...............................35

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LIST OF EXHIBITS AND SCHEDULES
------------------------------

EXHIBIT A          LEGAL DESCRIPTION OF PROJECT
SCHEDULE I         DEFEASANCE


                                                                        Page iii

<PAGE>


                                 LOAN AGREEMENT

         This Loan Agreement (this "Agreement") is entered into as of January
____, 2003 between GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
("Lender"), and FAIRVIEW PLAZA ASSOCIATES, LP, a Delaware limited partnership,
whose organization number is 3582949 ("Borrower").

                                   ARTICLE 1
                                   DEFINITIONS

         Section 1.1 Certain Definitions. As used herein, the following terms
have the meanings indicated:

         "Affiliate" means (a) any corporation in which Borrower or any partner,
shareholder, director, officer, member, or manager of Borrower directly or
indirectly owns or controls more than ten percent (10%) of the beneficial
interest, (b) any partnership, joint venture or limited liability company in
which Borrower or any partner, shareholder, director, officer, member, or
manager of Borrower is a partner, joint venturer or member, (c) any trust in
which Borrower or any partner, shareholder, director, officer, member or manager
of Borrower is a trustee or beneficiary, (d) any entity of any type which is
directly or indirectly owned or controlled by Borrower or any partner,
shareholder, director, officer, member or manager of Borrower, (e) any partner,
shareholder, director, officer, member, manager or employee of Borrower, (f) any
Person related by birth, adoption or marriage to any partner, shareholder,
director, officer, member, manager, or employee of Borrower, or (g) any Borrower
Party.

         "Agreement" means this Loan Agreement, as amended from time to time.

         "Assignment of Leases and Rents" means the Assignment of Leases and
Rents, executed by Borrower for the benefit of Lender, and pertaining to leases
of space in the Project.

         "Award" has the meaning assigned in Section 3.3.

         "Bankruptcy Party" has the meaning assigned in Section 9.7.

         "Borrower Party" means any Joinder Party, any general partner of
Borrower, and any general partner in any partnership that is a general partner
of Borrower, any managing member of Borrower, and any managing member in any
limited liability company that is a managing member of Borrower, at any level.

         "Business Day" means a day other than a Saturday, a Sunday, or a legal
holiday on which national banks located in the State of New York are not open
for general banking business.

         "Casualty" has the meaning assigned in Section 3.2.

         "Closing Date" means the date the Loan is funded by Lender.

                                                                          Page 1
<PAGE>

         "Commitment" means the commitment letter, dated December 10, 2002,
issued by Lender and accepted by Borrower on January __, 2003.

         "Condemnation" has the meaning assigned in Section 3.3.

         "Contract Rate" has the meaning assigned in Section 2.2.

         "Debt" means, for any Person, without duplication: (a) all indebtedness
of such Person for borrowed money, for amounts drawn under a letter of credit,
or for the deferred purchase price of property for which such Person or its
assets is liable, (b) all unfunded amounts under a loan agreement, letter of
credit, or other credit facility for which such Person would be liable, if such
amounts were advanced under the credit facility, (c) all amounts required to be
paid by such Person as a guaranteed payment to partners or a preferred or
special dividend, including any mandatory redemption of shares or interests, (d)
all indebtedness guaranteed by such Person, directly or indirectly, (e) all
obligations under leases that constitute capital leases for which such Person is
liable, and (f) all obligations of such Person under swaps, caps, floors,
collars and other hedge agreements, in each case whether such Person is liable
contingently or otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person otherwise assures a creditor against loss.

         "Debt Service" means the aggregate interest, fixed principal, and other
payments due under the Loan, and on any other outstanding permitted Debt
relating to the Project approved by Lender for the period of time for which
calculated.

         "Default Rate" means the lesser of (a) the maximum rate of interest
allowed by applicable law, and (b) five percent (5%) per annum in excess of the
Contract Rate.

         "Defeasance Option" has the meaning assigned in Section 2.3(c).

         "Environmental Laws" has the meaning assigned in Section 4.1(a).

         "ERISA" has the meaning assigned in Section 6.8.

         "Event of Default" has the meaning assigned in Article 9.

         "Funds" means the Replacement Escrow Fund and the Rollover Escrow Fund.

         "Hazardous Materials" has the meaning assigned in Section 4.1(b).

         "Insurance Premiums" has the meaning assigned in Section 3.1(c).

         "Joinder Party" means the Persons, if any, executing the Joinder
hereto.

         "Lien" means any interest, or claim thereof, in the Project securing an
obligation owed to, or a claim by, any Person other than the owner of the
Project, whether such interest is based on common law, statute or contract,
including the lien or security interest arising from a deed of trust, mortgage,
assignment, encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. The term
"Lien" shall include reservations, exceptions, encroachments, easements, rights
of way, covenants, conditions, restrictions, leases and other title exceptions
and encumbrances affecting the Project.

                                                                          Page 2
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         "Loan" means the loan made by Lender to Borrower under this Agreement
and all other amounts secured by the Loan Documents.

         "Loan Documents" means: (a) this Agreement, (b) the Note, (c) the
Mortgage, (d) the Assignment of Leases and Rents, (e) Uniform Commercial Code
financing statements, (f) such assignments of management agreements, contracts
and other rights as may be required under the Commitment or otherwise requested
by Lender, (g) all other documents evidencing, securing, governing or otherwise
pertaining to the Loan, and (h) all amendments, modifications, renewals,
substitutions and replacements of any of the foregoing; provided however, in no
event shall the term "Loan Documents" include that certain Hazardous Materials
Indemnity Agreement (the "Environmental Indemnity Agreement") dated the date
hereof in favor of Lender.

         "Loan Year" means (a) for the first Loan Year, the period between the
date hereof and one calendar year from the last day of the month in which the
Closing Date occurs (unless the Closing Date is on the first day of a month, in
which case the first Loan Year shall commence on such Closing Date and end one
calendar year from the last day of the month immediately preceding the Closing
Date) and (b) each consecutive twelve month calendar period after the first Loan
Year until the Maturity Date.

         "Maturity Date" means, as applicable, the earlier of (a) February 1,
2013, or (b) any earlier date on which the entire Loan is required to be paid in
full, by acceleration or otherwise, under this Agreement or any of the other
Loan Documents.

         "Mortgage" means the Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, executed by Borrower in favor of Lender, covering
the Project.

         "Note" means the Promissory Note of even date, in the stated principal
amount of $6,080,000.00, executed by Borrower, and payable to the order of
Lender in evidence of the Loan.

         "Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee, estate, limited liability
company, unincorporated organization, real estate investment trust, government
or any agency or political subdivision thereof, or any other form of entity.

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

         "Project" means Fairview Plaza, New Cumberland, Pennsylvania, and all
related facilities, amenities, fixtures, and personal property owned by Borrower
and any improvements now or hereafter located on the real property described in
Exhibit A.


                                                                          Page 3
<PAGE>

         "Rating Agencies" means each of Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc., Moody's Investors Service, Inc., and Fitch, Inc.,
or any other nationally-recognized statistical rating agency which has been
approved by Lender.

         "Replacement Escrow Fund" has the meaning assigned in Section 2.4.

         "Rollover Escrow Fund" has the meaning assigned in Section 2.4.

         "Secondary Market Transaction" has the meaning assigned in Section
8.11.

         "Single Purpose Entity" shall mean a Person (other than an individual,
a government or any agency or political subdivision thereof), which exists
solely for the purpose of owning the Project, observes corporate, company or
partnership formalities, as applicable, independent of any other entity, and
which otherwise complies with the covenants set forth in Section 6.14 hereof.

         "Site Assessment" means an environmental engineering report for the
Project prepared at Borrower's expense by an engineer engaged by Borrower, or
Lender on behalf of Borrower, and approved by Lender, and in a manner reasonably
satisfactory to Lender, based upon an investigation relating to and making
appropriate inquiries concerning the existence of Hazardous Materials on or
about the Project, and the past or present discharge, disposal, release or
escape of any such substances, all consistent with ASTM Standard E1527-93 (or
any successor thereto published by ASTM) and good customary and commercial
practice.

         "SPC Party" has the meaning assigned in Section 6.14(o).

         "State" means the Commonwealth of Pennsylvania.

         "Tax and Insurance Escrow Fund" has the meaning assigned in Section
3.4.

         "Taxes" has the meaning assigned in Section 8.2.

         "Yield Maintenance Amount" has the meaning assigned in Schedule 1.

                                   ARTICLE 2
                                   LOAN TERMS

         Section 2.1 The Loan. Upon satisfaction of all the terms and conditions
set forth in the Commitment, Lender agrees to make a Loan of SIX MILLION EIGHTY
THOUSAND AND NO/100 DOLLARS ($6,080,000.00) to the Borrower, which shall be
funded in one advance and repaid in accordance with the terms of this Agreement
and the Note. Borrower hereby agrees to accept the Loan on the Closing Date,
subject to and upon the terms and conditions set forth herein.

         Section 2.2 Interest Rate; Late Charge. The outstanding principal
balance of the Loan shall bear interest at a rate of interest equal to
___________________________ percent (___%) per annum (the "Contract Rate").
Interest at the Contract Rate shall be computed on the basis of a fraction, the


                                                                          Page 4
<PAGE>

denominator of which is three hundred sixty (360) days and the numerator of
which is the actual number of days elapsed from the date of the initial
disbursement under the Loan or the date of the preceding interest installment
due date, as the case may be, to the date of the next interest installment due
date or the Maturity Date. If Borrower fails to pay any installment of interest
or principal within five (5) days of (and including) the date on which the same
is due, Borrower shall pay to Lender a late charge on such past-due amount, as
liquidated damages and not as a penalty, equal to five percent (5%) of such
amount, but not in excess of the maximum amount of interest allowed by
applicable law. While any Event of Default exists, the Loan shall bear interest
at the Default Rate.

         Section 2.3 Terms of Payment. The Loan shall be payable as follows:

         (a) Interest and Principal. A payment of interest only on the date
hereof for the period from the date hereof through the last day of the current
month. Thereafter, a constant payment of $_____________, on the first day of
March, 2003 and on the first day of each calendar month thereafter; each of such
payments, to be applied (i) to the payment of interest computed at the Contract
Rate and (ii) the balance applied toward reduction of the principal sum. The
constant payment required hereunder is based on a thirty (30)-year amortization
schedule.

         (b) Maturity. On the Maturity Date, Borrower shall pay to Lender all
outstanding principal, accrued and unpaid interest, default interest, late
charges and any and all other amounts due under the Loan Documents.

         (c) Prepayment. Except as set forth herein, the Loan is closed to
prepayment in whole or in part. Notwithstanding the foregoing, (i) the Loan may
be prepaid in whole, but not in part, on or after the scheduled monthly payment
date for the one hundred eighteenth (118th) payment of principal and interest
and (ii) from the earlier to occur of (x) two (2) years after the sale of the
Loan in a Secondary Market Transaction or (y) the fourth (4th) anniversary of
the Closing Date, provided no Event of Default exists, Borrower may obtain the
release of the Project from the lien of the Mortgage in accordance with the
terms and provisions of Schedule I attached hereto (the "Defeasance Option").

         If the Loan is accelerated for any reason other than casualty or
condemnation, and the Loan is otherwise closed to prepayment, Borrower shall
pay, in addition to all other amounts outstanding under the Loan Documents, a
prepayment premium equal to the sum of (i) the Yield Maintenance Amount, if any,
that would be required under the Defeasance Option and (ii) five percent (5%) of
the outstanding balance of the Loan. If for any reason the Loan is prepaid on a
day other than a scheduled monthly payment date, the Borrower shall pay, in
addition to the principal, interest and premium, if any, required under this
Section, an amount equal to the interest that would have accrued on the Loan
from the date of prepayment to the next scheduled monthly payment date. In the
event of a prepayment resulting from Lender's application of insurance or
condemnation proceeds pursuant to Article 3 hereof, no prepayment penalty or
premium shall be imposed.


                                                                          Page 5
<PAGE>

         Section 2.4 Security; Establishment of Funds.

         (a) The Loan shall be secured by the Mortgage creating a first lien on
the Project, the Assignment of Leases and Rents and the other Loan Documents.
Borrower agrees to establish the following reserves with Lender, to be held by
Lender as further security for the Loan:

             (i)  Borrower shall deposit with Lender on the first day of each
                  calendar month a scheduled payment is due the amount of
                  $2,030.00 which shall be held by Lender for replacements and
                  repairs required to be made to the Project during the calendar
                  year (the "Replacement Escrow Fund"); and

             (ii) Borrower shall deposit with Lender on the first day of each
                  calendar month a scheduled payment is due the amount of
                  $910.00 which shall be held by Lender for tenant improvement
                  and leasing commission obligations incurred following the date
                  hereof (the "Rollover Escrow Fund"). Disbursements of the
                  Rollover Escrow Fund for tenant improvement and leasing
                  commission costs (i) for designated spaces for which more than
                  one lease is executed may be made on a pro-rata basis for each
                  lease upon satisfaction of conditions to disbursement to each
                  such lease and (ii) for designated tenants may be disbursed
                  with respect to a replacement or substitute tenant approved by
                  Lender.

         (b) Pledge and Disbursement of Funds. Borrower hereby pledges to
Lender, and grants a security interest in, any and all monies now or hereafter
deposited in the Funds as additional security for the payment of the Loan.
Lender may reasonably reassess its estimate of the amount necessary for the
Funds from time to time and may adjust the monthly amounts required to be
deposited into the Funds upon thirty (30) days notice to Borrower. Lender shall
make disbursements from the Funds as requested by Borrower, and approved by
Lender in its reasonable discretion, on a quarterly basis in increments of no
less than $5,000.00 upon delivery by Borrower of Lender's standard form of draw
request accompanied by copies of paid invoices for the amounts requested and, if
required by Lender, lien waivers and releases from all parties furnishing
materials and/or services in connection with the requested payment. Lender may
require an inspection of the Project at Borrower's expense prior to making a
quarterly disbursement in order to verify completion of replacements and repairs
for which reimbursement is sought. The Funds shall be held without interest in
Lender's name and may be commingled with Lender's own funds at financial
institutions selected by Lender in its reasonable discretion. Upon the
occurrence of an Event of Default, Lender may apply any sums then present in the
Funds to the payment of the Loan in any order in its reasonable discretion.
Until expended or applied as above provided, the Funds shall constitute
additional security for the Loan. Lender shall have no obligation to release any
of the Funds while any Event of Default or Potential Default exists or any
material adverse change has occurred in Borrower or any Joinder Party, the
Project, or any major or anchor tenant. All reasonable costs and expenses
incurred by Lender in the disbursement of any of the Funds shall be paid by
Borrower promptly upon demand or, at Lender's sole discretion, deducted from the
Funds.


                                                                          Page 6
<PAGE>

                                    ARTICLE 3

                      INSURANCE, CONDEMNATION, AND IMPOUNDS

         Section 3.1 Insurance. Borrower shall maintain insurance as follows:

         (a) Casualty; Business Interruption.

             (i)   Subject to the provisions of subsection (e) below, Borrower
                   shall keep the Project insured against damage by fire and the
                   other hazards covered by a standard extended coverage and
                   all-risk insurance policy for the full insurable value
                   thereof on a replacement cost claim recovery basis (without
                   reduction for depreciation or co- insurance), and shall
                   maintain such other casualty insurance as reasonably required
                   by Lender. Such insurance shall include coverage against acts
                   of terrorism. Lender reserves the right to require from time
                   to time the following additional insurance: boiler and
                   machinery; flood; earthquake/sinkhole; worker's compensation;
                   and/or building law or ordina nce. Borrower shall keep the
                   Project insured against loss by flood if the Project is
                   located currently or at any time in the future 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 Act of 1968, the Flood Disaster Protection Act of
                   1973 or the National Flood Insurance Reform Act of 1994 (as
                   such acts may from time to time be amended) in an amount at
                   least equal to the lesser of (i) the maximum amount of the
                   Loan or (ii) the maximum limit of coverage available under
                   said acts. Any such flood insurance policy shall be issued in
                   accordance with the requirements and current guidelines of
                   the Federal Insurance Administration.

             (ii)  Borrower shall maintain use and occupancy insurance covering,
                   as applicable, rental income or business interruption, with
                   coverage in an amount not less than twelve (12) months
                   anticipated gross rental income or gross business earnings,
                   as applicable in each case, attributable to the Project.

             (iii) Borrower shall not maintain any separate or additional
                   insurance which is contributing in the event of loss unless
                   it is properly endorsed and otherwise reasonably satisfactory
                   to Lender in all respects. The proceeds of insurance paid on
                   account of any damage or destruction to the Project shall be
                   paid to Lender to be applied as provided in Section 3.2.

         (b) Liability. Borrower shall maintain (i) commercial general liability
insurance with respect to the Project providing for limits of liability of not
less than $5,000,000 for both injury to or death of a person and for property
damage per occurrence, and (ii) other liability insurance as reasonably required
by Lender.





                                                                          Page 7



<PAGE>



         (c) Form and Quality. All insurance policies shall be endorsed in form
and substance acceptable to Lender to name Lender as an additional insured, loss
payee or mortgagee thereunder, as its interest may appear, with loss payable to
Lender, without contribution, under a standard New York (or local equivalent)
mortgagee clause. All such insurance policies and endorsements shall be fully
paid for and contain such provisions and expiration dates and be in such form
and issued by such insurance companies licensed to do business in the State,
with a general company and financial size rating of "A-IX" or better as
established by Best's Rating Guide and "AA" or better by Standard & Poor's
Ratings Group. Each policy shall provide that such policy may not be canceled or
materially changed except upon thirty (30) days' prior written notice of
intention of non-renewal, cancellation or material change to Lender and that no
act or thing done by Borrower shall invalidate any policy as against Lender.
Blanket policies shall be permitted only if Lender receives appropriate
endorsements and/or duplicate policies containing Lender's right to continue
coverage on a pro rata pass-through basis and that coverage will not be affected
by any loss on other properties covered by the policies. Borrower authorizes
Lender to pay the premiums for such policies (the "Insurance Premiums ") from
the Tax and Insurance Escrow Fund as the same become due and payable annually in
advance. If Borrower fails to deposit funds into the Tax and Insurance Escrow
Fund sufficient to permit Lender to pay the premiums when due, Lender may obtain
such insurance and pay the premium therefor and Borrower shall, on demand,
reimburse Lender for all expenses incurred in connection therewith. Borrower
shall assign the policies or proofs of insurance to Lender, in such manner and
form that Lender and its successors and assigns shall at all times have and hold
the same as security for the payment of the Loan. Borrower shall deliver copies
of certificate evidencing all policies of insurance, together with the
endorsements required hereunder. The proceeds of insurance policies coming into
the possession of Lender shall not be deemed trust funds, and Lender shall be
entitled to apply such proceeds as herein provided.

         (d) Adjustments. Borrower shall give immediate written notice of any
loss to the insurance carrier and to Lender. Borrower hereby irrevocably
authorizes and empowers Lender, as attorney- in- fact for Borrower coupled with
an interest, to make proof of loss, to adjust and compromise any claim under
insurance policies, to appear in and prosecute any action arising from such
insurance policies, to collect and receive insurance proceeds, and to deduct
therefrom Lender's reasonable expenses incurred in the collection of such
proceeds. Notwithstanding the foregoing, Lender shall give reasonable prior
notice to Borrower of such actions and of the amount of any insurance
settlement, and shall not adjust or settle any loss without Borrower's prior
written consent (which shall not be unreasonably withheld) unless an Event of
Default or Potential Default then exists. Nothing contained in this Section
3.1(d), however, shall require Lender to incur any expense or take any action
hereunder.

         (e) Tenant Insurance. Borrower's obligation to carry and maintain the
insurance required under Sections 3.1(a)(i) above shall be suspended so long as:
(1) all insurance requirements set forth in those Leases (collectively, the
"Tenant Lease") with Fulton Bank and Giant Foods (collectively, " Tenant"),
shall, at all times, be satisfied; (2) Tenant carries and maintains, at all
times, all of the insurance required to be carried by the insurance requirements
under the Tenant Lease; and (3) Tenant remains the tenant under the Tenant
Lease. In the event that (i) the insurance requirements set forth in the Tenant
Lease are not being satisfied; (ii) Tenant fails to carry and maintain all of
the insurance required to be carried by the insurance requirements under the
Tenant Lease for any period of time; or (iii) Tenant is not the tenant under the
Tenant Lease, then Borrower shall be required to immediately maintain all of the
insurance required under Sections 3.1(a)(i) above in accordance with the terms
of this Agreement.





                                                                          Page 8





<PAGE>


         Section 3.2 Use and Application of Insurance Proceeds.

         (a) If the Project shall be damaged or destroyed, in whole or in part,
by fire or other casualty (a "Casualty"), Borrower shall give prompt notice
thereof to Lender. Following the occurrence of a Casualty, Borrower, regardless
of whether insurance proceeds are available, shall promptly proceed to restore,
repair, replace or rebuild the same to be of at least equal value and of
substantially the same character as prior to such damage or destruction, all to
be effected in accordance with applicable law.

         (b) Lender shall apply insurance proceeds to costs of restoring the
Project or to the payment of the Loan as follows:

             (i)   if the loss is less than or equal to $200,000, Lender shall
                   apply the insurance proceeds to restoration provided (A) no
                   Event of Default or Potential Default exists, and (B)
                   Borrower promptly commences and is diligently pursuing
                   restoration of the Project;

             (ii)  if the loss exceeds $200,000 but is not more than 25% of the
                   replacement value of the improvements, Lender shall apply the
                   insurance proceeds to restoration provided that (A) at all
                   times during such restoration no Event of Default or
                   Potential Default exists; (B) Lender determines throughout
                   the restoration that there are sufficient funds available to
                   restore and repair the Project to a condition approved by
                   Lender; (C) Lender determines that the net operating income
                   of the Project during restoration, taking into account rent
                   loss or business interruption insurance, will be sufficient
                   to pay Debt Service; (D) Lender determines (based on leases
                   which will remain in effect after restoration is complete if
                   the Project is not a multi-family project) that after
                   restoration the ratio of net operating income to Debt Service
                   will equal at least the ratio that existed on the Closing
                   Date; (E) Lender determines that the ratio of the outstanding
                   principal balance of the Loan to appraised value of the
                   project after restoration will not exceed the loan-to-value
                   ratio that existed on the Closing Date; (F) Lender determines
                   that restoration and repair of the Project to a condition
                   approved by Lender will be completed within six months after
                   the date of loss or casualty and in any event ninety (90)
                   days prior to the Maturity Date; (G) Borrower promptly
                   commences and is diligently pursuing restoration of the
                   Project promptly upon adjustment of the loss with the
                   casualty insurer; and (H) the Project, due to its legal
                   non-conforming status, after the restoration will be in
                   compliance with and permitted under all applicable zoning,
                   building and land use laws, rules, regulations and ordinances
                   governing legally non-conforming properties;

             (iii) if the conditions set forth in (i) and (ii) above are not
                   satisfied in Lender's reasonable discretion, Lender may apply
                   any insurance proceeds it may receive to the payment of the
                   Loan or allow all or a portion of such proceeds to be used
                   for the restoration of the Project; and












                                                                          Page 9



<PAGE>


             (iv)  notwithstanding anything to the contrary set forth in this
                   section, Lender shall apply the insurance proceeds to
                   restoration if and to the extent that Borrower as landlord
                   under any of the anchor tenant leases would be required to
                   restore the improvements damaged, provided no Event of
                   Default or Potential Default then exists.

         (c) Insurance proceeds applied to restoration will be disbursed on
receipt of reasonably satisfactory plans and specifications, contracts and
subcontracts, schedules, budgets, lien waivers and architects' certificates, and
otherwise in accordance with prudent commercial construction lending practices
for construction loan advances (including appropriate retainages to ensure that
all work is completed in a workmanlike manner).

         Section 3.3 Condemnation Awards . Borrower shall promptly give Lender
written notice of the actual or threatened commencement of any condemnation or
eminent domain proceeding (a "Condemnation") and shall deliver to Lender copies
of any and all papers served in connection with such Condemnation. Following the
occurrence of a Condemnation, Borrower, to the extent that any award or
compensation (an "Award") is available, shall promptly proceed to restore,
repair, replace or rebuild the same to the extent practicable to be of at least
equal value and of substantially the same character as prior to such
Condemnation, all to be effected in accordance with applicable law. Lender may
participate in any such proceeding and Borrower will deliver to Lender all
instruments necessary or required by Lender to permit such participation.
Without Lender's prior consent (which shall not be unreasonably withheld),
Borrower (a) shall not agree to any Award, and shall not take any action or (b)
fail to take any action which would cause the Award to be determined. All Awards
for the taking or purchase in lieu of condemnation of the Project or any part
thereof are hereby assigned to and shall be paid to Lender. Borrower authorizes
Lender to collect and receive such Awards, to give proper receipts and
acquittances therefor, and in Lender's sole discretion to apply the same toward
the payment of the Loan, notwithstanding that the Loan may not then be due and
payable, or to the restoration of the Project; provided, however, if the Award
is less than or equal to $100,000 and Borrower requests that such proceeds be
used for non-structural site improvements (such as landscape, driveway, walkway
and parking area repairs) required to be made as a result of such condemnation,
Lender will apply the Award to such restoration in accordance with disbursement
procedures applicable to insurance proceeds provided there exists no Potential
Default or Event of Default, and provided further that Lender will make such
Award available for restoration to the extent required by any of the anchor
tenant leases and provided there shall not then exist an Event of Default or
Potential Default hereunder. Borrower, upon request by Lender, shall execute all
instruments requested to confirm the assignment of the Awards to Lender, free
and clear of all liens, charges or encumbrances.


                                                                         Page 10





<PAGE>


         Section 3.4 Impounds.

         (a) Subject to subsection (b) below, Borrower shall deposit with
Lender, monthly, (a) one-twelfth (1/12th) of the Taxes that Lender estimates
will be payable during the next ensuing twelve (12) months in order to
accumulate with Lender sufficient funds to pay all such Taxes at least thirty
(30) days prior to their respective due dates, and (b) one-twelfth (1/12th) of
the Insurance Premiums that Lender estimates will be payable for the renewal of
the coverage afforded by the insurance policies required by Lender upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay
all such Insurance Premiums at least thirty (30) days prior to expiration (said
amounts in (a) and (b) above hereinafter called the " Tax and Insurance Escrow
Fund"). At or before the advance of the Loan, Borrower shall deposit with Lender
a sum of money which together with the monthly installments will be sufficient
to make each of such payments thirty (30) days prior to the date any delinquency
or penalty becomes due with respect to such payments. Deposits shall be made on
the basis of Lender's estimate from time to time of the charges for the current
year (after giving effect to any reassessment or, at Lender's election, on the
basis of the charges for the prior year, with adjustments when the charges are
fixed for the then current year). All funds so deposited shall be held by
Lender, without interest, and may be commingled with Lender's general funds.
Borrower hereby grants to Lender a security interest in all funds so deposited
with Lender for the purpose of securing the Loan. While an Event of Default
exists, the funds deposited may be applied in payment of the charges for which
such funds have been deposited, or to the payment of the Loan or any other
charges affecting the security of Lender, as Lender may elect, but no such
application shall be deemed to have been made by operation of law or otherwise
until actually made by Lender. Borrower shall furnish Lender with bills for the
charges for which such deposits are required at least thirty (30) days prior to
the date on which the charges first become payable. If at any time the amount on
deposit with Lender, together with amounts to be deposited by Borrower before
such charges are payable, is insufficient to pay such charges, Borrower shall
deposit any deficiency with Lender immediately upon demand. Lender shall pay
such charges when the amount on deposit with Lender is sufficient to pay such
charges and Lender has received a bill for such charges.

         (b) Borrower's obligation to make monthly deposits into the Tax and
Insurance Escrow Fund for the insurance required under Section 3.1(a)(i) shall
be suspended so long as Tenant pays the Insurance Premiums for the Project
required under the Leases as they become due and payable annually in advance and
furnishes to Lender evidence of the renewal of each policy with receipts for the
payment of Insurance Premiums or other evidence of such payment reasonably
satisfactory to Lender. In the event that Tenant fails to maintain insurance in
compliance with this Section 3.4, Lender may obtain such insurance and pay the
premium therefor and Borrower shall, on dema nd, reimburse Lender for all
expenses incurred in connection therewith and thereafter, Borrower shall be
required to make monthly deposits into the Tax and Insurance Escrow Fund in
accordance with subsection (a) above.











                                                                        Page 10A

<PAGE>




                                   ARTICLE 4
                              ENVIRONMENTAL MATTERS

         Section 4.1 Certain Definitions. As used herein, the following terms
have the meanings indicated:

         (a) "Environmental Laws" means any federal, state or local law (whether
imposed by statute, ordinance, rule, regulation, administrative or judicial
order, or common law), now or hereafter enacted, governing health, safety,
industrial hygiene, the environment or natural resources, or Hazardous
Materials, including, without limitation, such laws governing or regulating (i)
the use, generation, storage, removal, recovery, treatment, handling, transport,
disposal, control, release, discharge of, or exposure to, Hazardous Materials,
(ii) the transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of such property, or (iii)
requiring notification or disclosure of releases of Hazardous Materials or other
environmental conditions whether or not in connection with a transfer of title
to or interest in property.

         (b) "Hazardous Materials" means (i) petroleum or chemical products,
whether in liquid, solid, or gaseous form, or any fraction or by-product
thereof, (ii) asbestos or asbestos-containing materials, (iii) polychlorinated
biphenyls (pcbs), (iv) radon gas, (v) underground storage tanks, (vi) any
explosive or radioactive substances, (vii) lead or lead-based paint, or (viii)
any other substance, material, waste or mixture which is or shall be listed,
defined, or otherwise determined by any governmental authority to be hazardous,
toxic, dangerous or otherwise regulated, controlled or giving rise to liability
under any Environmental Laws.

         Section 4.2 Representations and Warranties on Environmental Matters. To
Borrower's knowledge, except as set forth in the Site Assessment, (a) no
Hazardous Material is now or was formerly used, stored, generated, manufactured,
installed, treated, discharged, disposed of or otherwise present at or about the
Project or any property adjacent to the Project (except for cleaning and other
products currently used in connection with the routine maintenance or repair of
the Project in full compliance with Environmental Laws) and no Hazardous
Material was removed or transported from the Project, (b) all permits, licenses,
approvals and filings required by Environmental Laws have been obtained, and the
use, operation and condition of the Project does not, and did not previously,
violate any Environmental Laws, (c) no civil, criminal or administrative action,
suit, claim, hearing, investigation or proceeding has been brought or been
threatened, nor have any settlements been reached by or with any parties or any
liens imposed in connection with the Project concerning Hazardous Materials or
Environmental Laws; and (d) no underground storage tanks exist on any part of
the Project.

         Section 4.3 Covenants on Environmental Matters.

         (a) Borrower shall (i) comply strictly and in all material respects
with applicable Environmental Laws; (ii) notify Lender immediately upon
Borrower's discovery of any spill, discharge, release or presence of any
Hazardous Material at, upon, under, within, contiguous to or otherwise affecting
the Project; (iii) promptly remove such Hazardous Materials and remediate the


                                                                         Page 11
<PAGE>

Project in full compliance with Environmental Laws or as reasonably required by
Lender based upon the recommendations and specifications of an independent
environmental consultant approved by Lender; and (iv) promptly forward to Lender
copies of all orders, notices, permits, applications or other communications and
reports in connection with any spill, discharge, release or the presence of any
Hazardous Material or any other matters relating to the Environmental Laws or
any similar laws or regulations, as they may affect the Project or Borrower.

         (b) Borrower shall not cause, shall prohibit any other Person within
the control of Borrower from causing, and shall use prudent, commercially
reasonable efforts to prohibit other Persons (including tenants) from (i)
causing any spill, discharge or release, or the use, storage, generation,
manufacture, installation, or disposal, of any Hazardous Materials at, upon,
under, within or about the Project or the transportation of any Hazardous
Materials to or from the Project (except for cleaning and other products used in
connection with routine maintenance or repair of the Project in full compliance
with Environmental Laws), (ii) installing any underground storage tanks at the
Project, or (iii) conducting any activity that requires a permit or other
authorization under Environmental Laws.

         (c) Borrower shall provide to Lender, at Borrower's expense promptly
upon the written request of Lender from time to time (provided that Lender has a
reasonable basis for requesting same), a Site Assessment or, if required by
Lender (provided that Lender has a reasonable basis for requiring same), an
update to any existing Site Assessment, to assess the presence or absence of any
Hazardous Materials and the potential costs in connection with abatement,
cleanup or removal of any Hazardous Materials found on, under, at or within the
Project. Borrower shall pay the cost of no more than one such Site Assessment or
update in any thirty-six (36)-month period, unless Lender's request for a Site
Assessment is based on information provided under Section 4.3(a), a reasonable
suspicion of Hazardous Materials at or near the Project, a breach of
representations under Section 4.2, or an Event of Default, in which case any
such Site Assessment or update shall be at Borrower's expense. Borrower shall
provide to Lender, at Lender's expense, an updated Site Assessment in the event
Lender requests same solely to satisfy the requirements of a securitization of
the Loan.

         Section 4.4 Allocation of Risks and Indemnity. As between Borrower and
Lender, all risk of loss associated with non-compliance with Environmental Laws,
or with the presence of any Hazardous Material at, upon, within, contiguous to
or otherwise affecting the Project, shall lie solely with Borrower. Accordingly,
Borrower shall bear all risks and costs associated with any loss (including any
loss in value attributable to Hazardous Materials), damage or liability
therefrom, including all costs of removal of Hazardous Materials or other
remediation required by Lender or by law. Borrower shall indemnify, defend and
hold Lender and its shareholders, directors, officers, employees and agents
harmless from and against all loss, liabilities, damages, claims, costs and
expenses (including reasonable costs of defense and consultant fees,
investigation and laboratory fees, court costs, and other litigation expenses)
arising out of or associated, in any way, with (a) the non-compliance with
Environmental Laws, or (b) the existence of Hazardous Materials in, on, or about
the Project, (c) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to Hazardous Materials; (d)
any lawsuit brought or threatened, settlement reached, or government order


                                                                         Page 12
<PAGE>

relating to such Hazardous Materials, (e) a breach of any representation,
warranty or covenant contained in this Article 4, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute
or common law, or (f) the imposition of any environmental lien encumbering the
Project; provided, however, Borrower shall not be liable under such
indemnification to the extent such loss, liability, damage, claim, cost or
expense results solely from Lender's gross negligence or willful misconduct.
Borrower's obligations under this Section 4.4 shall arise whether or not any
governmental authority has taken or threatened any action in connection with the
presence of any Hazardous Material, and whether or not the existence of any such
Hazardous Material or potential liability on account thereof is disclosed in the
Site Assessment and shall continue notwithstanding the repayment of the Loan or
any transfer or sale of any right, title and interest in the Project (by
foreclosure, deed in lieu of foreclosure or otherwise). Additionally, if any
Hazardous Materials affect or threaten to affect the Project, Lender may (but
shall not be obligated to) give such notices and take such actions as it deems
necessary or advisable at the expense of the Borrower in order to abate the
discharge of any Hazardous Materials or remove the Hazardous Materials. Any
amounts payable to Lender by reason of the application of this Section 4.4 shall
become immediately due and payable and shall bear interest at the Default Rate
from the date loss or damage is sustained by Lender until paid. The obligations
and liabilities of Borrower under this Section 4.4 shall survive any
termination, satisfaction, assignment, entry of a judgment of foreclosure or
delivery of a deed in lieu of foreclosure.

         Section 4.5 No Waiver. Notwithstanding any provision in this Article 4
or elsewhere in the Loan Documents, or any rights or remedies granted by the
Environmental Indemnity Agreement or the Loan Documents, Lender does not waive
and expressly reserves all rights and benefits now or hereafter accruing to
Lender under the "security interest" or "secured creditor" exception under
applicable Environmental Laws, as the same may be amended. No action taken by
Lender pursuant to the Environmental Indemnity Agreement or the Loan Documents
shall be deemed or construed to be a waiver or relinquishment of any such rights
or benefits under the "security interest exception."

         Section 4.6 Lender Cure Rights. If there is a release of Hazardous
Materials affecting the Project, whether or not the release originates or
emanates from the Project or any contiguous real estate, or if Borrower shall
fail to comply with any Environmental Laws, Lender may at its election, but
without the obligation to do so, upon three (3) Business Days' notice to
Borrower (provided the delay caused by the giving of notice shall not, in
Lender's sole opinion, cause substantial damage to the Project), take any and
all actions as Lender shall deem necessary or advisable in order to remedy the
release of Hazardous Materials or cure said failure of compliance, and any
amounts paid by Lender as a result thereof, together with interest thereon at
the Default Rate from the date of payment by Lender, shall be immediately due
and payable by Borrower to Lender and until paid shall be added to and become
part of the Loan and shall have the benefit of the lien created by the Loan
Documents.



                                                                         Page 13
<PAGE>


                                   ARTICLE 5
                                 LEASING MATTERS

         Section 5.1 Representations and Warranties on Leases. Borrower
represents and warrants to Lender with respect to leases of the Project that to
the best of Borrower's knowledge: (a) the rent roll delivered to Lender is true
and correct, and the leases are valid and in and full force and effect; (b) the
leases (including amendments) are in writing, and there are no oral agreements
with respect thereto; (c) the copies of the leases delivered to Lender are true
and complete; (d) neither the landlord nor any tenant is in default under any of
the leases; (e) Borrower has no knowledge of any notice of termination or
default with respect to any lease; (f) Borrower has not assigned or pledged any
of the leases, the rents or any interests therein except to Lender; (g) no
tenant or other party has an option to purchase all or any portion of the
Project; (h) no tenant has the right to terminate its lease prior to expiration
of the stated term of such lease; (i) no tenant has prepaid more than one
month's rent in advance (except for bona fide security deposits not in excess of
an amount equal to two month's rent); and (j) all existing leases are
subordinate to the Mortgage either pursuant to their terms or a recorded
subordination agreement.

         Section 5.2 Standard Lease Form; Approval Rights. All leases and other
rental arrangements in effect on the date hereof have in all respects been
approved by Lender. Any lease entered into subsequent to the date hereof shall
be on a standard lease form approved by Lender with no modifications (except as
approved by Lender, which approval will not be unreasonably withheld or delayed)
and which approval shall be deemed given if Lender shall not respond in writing
to any executed lease delivered to Lender within ten (10) Business Days of its
receipt of all required submittals. Such lease form shall provide that (a) the
lease is subordinate to the Mortgage, (b) the tenant shall attorn to Lender, and
(c) that any cancellation, surrender, or amendment of such lease without the
prior written consent of Lender shall be voidable by Lender. Borrower shall
hold, in trust, all tenant security deposits in a segregated account, and, to
the extent required by applicable law, shall not commingle any such funds with
any other funds of Borrower. Within ten (10) days after Lender's request,
Borrower shall furnish to Lender a statement of all tenant security deposits,
and copies of all leases not previously delivered to Lender, certified by
Borrower as being true and correct. Notwithstanding anything contained in the
Loan Documents, Lender's approval shall not be required for future leases or
lease extensions if the following conditions are satisfied: (i) there exists no
Potential Default or Event of Default; (ii) the lease or lease extension is on
the standard lease form approved by Lender with no modifications; (iii) the
lease does not conflict with any restrictive covenant affecting the Project or
any other lease for space in the Project; and (iv) the lease is in accordance
with leasing parameters approved by Lender regarding rent, term, size, and
credit rating of tenants. Lender may evaluate potential leases with respect to,
among other factors, overall tenant mix, compatibility of intended use with the
Project's market niche, cost of tenant improvements, and/or contingency, go dark
and lease termination rights. Leases that require the approval of Lender shall
be submitted to Lender at least ten (10) Business Days prior to the proposed
execution date. All reasonable costs and expenses incurred by Lender in its
review and approval of any lease shall be paid by Borrower promptly upon
request.


                                                                         Page 14
<PAGE>


         Section 5.3 Covenants. Borrower (a) shall perform all material
obligations which Borrower is required to perform under the leases; (b) shall
enforce the obligations to be performed by the tenants; (c) shall promptly
furnish to Lender any notice of default or termination received by Borrower from
any tenant, and any notice of default or termination given by Borrower to any
tenant; (d) shall not collect any rents for more than thirty (30) days in
advance of the time when the same shall become due, except for bona fide
security deposits not in excess of an amount equal to two month's rent; (e)
shall not enter into any ground lease or master lease of any part of the
Project; (f) shall not further assign or encumber any lease; (g) shall not,
except with Lender's prior written consent, cancel or accept surrender or
termination of any lease except in accordance with the express terms of such
lease; (h) shall not, except with Lender's prior written consent, modify or
amend any lease (except for minor modifications and amendments entered into in
the ordinary course of business, consistent with prudent property management
practices, not reducing the rental payable thereunder or otherwise adversely
affecting the economic terms of the lease); (i) shall assign to Lender any
letter of credit evidencing a security deposit on such terms as may be required
by Lender and shall deliver the original of such letter(s) of credit to Lender;
(j) with respect to commercial property, shall deposit with Lender any lease
termination or cancellation fees which shall be held in the Rollover Escrow
Fund; and (k) shall not lease, or permit the use of, any space in the Project as
a dry cleaner with an on-site plant. Any action in violation of clauses (e),
(f), (g), and (h) of this Section 5.3 shall be void at the election of Lender.

         Section 5.4 Tenant Estoppels. At Lender's request, Borrower shall
obtain and furnish to Lender, written estoppels in form and substance reasonably
satisfactory to Lender, executed by tenants under leases in the Project and
confirming the term, rent, and other provisions and matters relating to the
leases.

                                   ARTICLE 6
                         REPRESENTATIONS AND WARRANTIES

         Borrower represents, warrants and covenants to Lender that:

         Section 6.1 Organization, Power and Authority. Borrower and each
Borrower Party (a) is duly organized, validly existing and in good standing
under the laws of the state of its formation or existence, (b) is in compliance
with all legal requirements applicable to doing business in the State, and (c)
has the necessary governmental approvals to own and operate the Project and
conduct the business now conducted or to be conducted thereon. Borrower has the
full power, authority and right to execute, deliver and perform its obligations
pursuant to this Loan Agreement and the other Loan Documents, and to mortgage
the Project pursuant to the terms of the Mortgage and to keep and observe all of
the terms of this Loan Agreement and the other Loan Documents on Borrower's part
to be performed. Borrower is not a "foreign person" within the meaning of ss.
1445(f)(3) of the Internal Revenue Code.

         Section 6.2 Validity of Loan Documents. The execution, delivery and
performance by Borrower and each Borrower Party of the Loan Documents: (a) are
duly authorized and do not require the consent or approval of any other party or
governmental authority which has not been obtained; and (b) will not violate any
law or result in the imposition of any lien, charge or encumbrance upon the
assets of any such party, except as contemplated by the Loan Documents. The Loan


                                                                         Page 15
<PAGE>


Documents constitute the legal, valid and binding obligations of Borrower and
each Borrower Party, enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, or similar laws generally
affecting the enforcement of creditors' rights.

         Section 6.3 Liabilities; Litigation.

         (a) The financial statements delivered by Borrower and each Borrower
Party are true and correct with no significant change since the date of
preparation. Except as disclosed in such financial statements, there are no
liabilities (fixed or contingent) affecting the Project, Borrower or any
Borrower Party. Except as disclosed in such financial statements, there is no
litigation, administrative proceeding, investigation or other legal action
(including any proceeding under any state or federal bankruptcy or insolvency
law) pending or, to the knowledge of Borrower, threatened, against the Project,
Borrower or any Borrower Party which if adversely determined could have a
material adverse effect on such party, the Project or the Loan.

         (b) Neither Borrower nor any Borrower Party is contemplating either the
filing of a petition by it under state or federal bankruptcy or insolvency laws
or the liquidation of all or a major portion of its assets or property, and
neither Borrower nor any Borrower Party has knowledge of any Person
contemplating the filing of any such petition against it.

         Section 6.4 Taxes and Assessments. The Project is comprised of one or
more parcels, each of which constitutes a separate tax lot and none of which
constitutes a portion of any other tax lot. There are no pending or, to
Borrower's best knowledge, proposed, special or other assessments for public
improvements or otherwise affecting the Project, nor are there any contemplated
improvements to the Project that may result in such special or other
assessments.

         Section 6.5 Other Agreements; Defaults. Neither Borrower nor any
Borrower Party is a party to any agreement or instrument or subject to any court
order, injunction, permit, or restriction which might adversely affect the
Project or the business, operations, or condition (financial or otherwise) of
Borrower or any Borrower Party. Neither Borrower nor any Borrower Party is in
violation of any agreement which violation would have an adverse effect on the
Project, Borrower, or any Borrower Party or Borrower's or any Borrower Party's
business, properties, or assets, operations or condition, financial or
otherwise.

         Section 6.6 Compliance with Law.

         (a) Borrower and each Borrower Party have all requisite licenses,
permits, franchises, qualifications, certificates of occupancy or other
governmental authorizations to own, lease and operate the Project and carry on
its business, and to Borrower's knowledge the Project is in compliance with all
applicable legal requirements and except as set forth in the property condition
report provided to Lender, is free of structural defects, and all building
systems contained therein are in good working order, subject to ordinary wear
and tear. To Borrower's knowledge, the Project may constitute, in whole, a
legally non-conforming use under applicable legal requirements;


                                                                         Page 16
<PAGE>


         (b) No condemnation has been commenced or, to Borrower's knowledge, is
contemplated with respect to all or any portion of the Project or for the
relocation of roadways providing access to the Project; and

         (c) The Project has adequate rights of access to public ways and is
served by adequate water, sewer, sanitary sewer and storm drain facilities. All
public utilities necessary or convenient to the full use and enjoyment of the
Project are located in the public right-of-way abutting the Project, and all
such utilities are connected so as to serve the Project without passing over
other property, except to the extent such other property is subject to a
perpetual easement for such utility benefiting the Project. All roads necessary
for the full utilization of the Project for its current purpose have been
completed and dedicated to public use and accepted by all governmental
authorities.

         Section 6.7 Location of Borrower. Borrower's principal place of
business and chief executive offices are located at the address stated in
Section 11.1.

         Section 6.8 ERISA.

         (a) As of the date hereof and throughout the term of the Loan, (i)
Borrower is not and will not be an "employee benefit plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is subject to Title I of ERISA, and (ii) the assets of Borrower
do not and will not constitute "plan assets" of one or more such plans for
purposes of Title I of ERISA; and

         (b) As of the date hereof and throughout the term of the Loan (i)
Borrower is not and will not be a "governmental plan" within the meaning of
Section 3(3) of ERISA and (ii) transactions by or with Borrower are not and will
not be subject to state statutes applicable to Borrower regulating investments
of and fiduciary obligations with respect to governmental plans.

         Section 6.9 Forfeiture. There has not been and shall never be committed
by Borrower or any other person in occupancy of or involved with the operation
or use of the Project any act or omission affording the federal government or
any state or local government the right of forfeiture as against the Project or
any part thereof or any monies paid in performance of Borrower's obligations
under any of the Loan Documents. Borrower hereby covenants and agrees not to
commit, permit or suffer to exist any act or omission affording such right of
forfeiture.

         Section 6.10 Tax Filings. Borrower and each Borrower Party have filed
(or have obtained effective extensions for filing) all federal, state and local
tax returns required to be filed and have paid or made adequate provision for
the payment of all federal, state and local taxes, charges and assessments
payable by Borrower and each Borrower Party, respectively. Borrower and each
Borrower Party believe that their respective tax returns properly reflect the
income and taxes of Borrower and each Borrower Party, respectively, for the
periods covered thereby, subject only to reasonable adjustments required by the
Internal Revenue Service or other applicable tax authority upon audit.


                                                                         Page 17
<PAGE>

         Section 6.11 Solvency. Giving effect to the Loan, the fair saleable
value of Borrower's assets exceeds and will, immediately following the making of
the Loan, exceed Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower's assets is and will, immediately following the
making of the Loan, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its Debts as such Debts
become absolute and matured, Borrower's assets do not and, immediately following
the making of the Loan 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 of
cash to be received by Borrower and the amounts to be payable on or in respect
of obligations of Borrower). Except as expressly disclosed to Lender in writing,
no petition in bankruptcy has been filed against Borrower or any Borrower Party
in the last seven (7) years, and neither Borrower or any Borrower Party in the
last seven (7) years has ever made an assignment for the benefit of creditors or
taken advantage of any insolvency act for the benefit of debtors.

         Section 6.12 Full and Accurate Disclosure. No statement of fact made by
or on behalf of Borrower or any Borrower Party in this Agreement or in any of
the other Loan Documents contains any untrue statement of a material fact or
omits to state any material fact necessary to make statements contained herein
or therein not misleading. There is no fact presently known to Borrower which
has not been disclosed to Lender which adversely affects, nor as far as Borrower
can foresee, might adversely affect, the Project or the business, operations or
condition (financial or otherwise) of Borrower or any Borrower Party.

         Section 6.13 Flood Zone. No portion of the improvements comprising the
Project is located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood hazards
pursuant to the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Act of 1994, as amended,
or any successor law, or, if located within any such area, Borrower has obtained
and will maintain the insurance prescribed in Section 3.1 hereof.

         Section 6.14 Single Purpose Entity/Separateness. Borrower represents,
warrants and covenants as follows:

         (a) Borrower has not owned, does not own, and will not own any asset or
property other than (i) the Project, and (ii) incidental personal property
necessary for the ownership or operation of the Project.

         (b) Borrower will not engage in any business other than the ownership,
management and operation of the Project and Borrower will conduct and operate
its business as presently conducted and operated.

         (c) Borrower will not enter into any contract or agreement with any
Affiliate of the Borrower, any constituent party of Borrower, or any Affiliate
of any constituent party, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available on
an arms-length basis with third parties other than any such party.


                                                                         Page 18
<PAGE>


         (d) Borrower has not incurred and will not incur any Debt other than
(i) the Loan, (ii) trade and operational debt incurred in the ordinary course of
business with trade creditors and in amounts as are normal and reasonable under
the circumstances, provided such debt is not evidenced by a note and is paid
when due, and (iii) Debt incurred in the financing of equipment and other
personal property used on the Project. No indebtedness other than the Loan may
be secured (subordinate or pari passu) by the Project.

         (e) Borrower has not made and will not make any loans or advances to
any third party (including any affiliate or constituent party or any affiliate
of any constituent party), and shall not acquire obligations or securities of
its affiliates or any constituent party.

         (f) Borrower is and will remain solvent and Borrower will pay its debts
and liabilities (including, as applicable, shared personnel and overhead
expenses) from its own funds and assets as the same shall become due.

         (g) Borrower has done or caused to be done and will do all things
necessary to observe organizational formalities and preserve its existence, and
Borrower will not, nor will Borrower permit any constituent party to materially
amend, modify or otherwise change the partnership certificate, partnership
agreement, articles of incorporation and bylaws, operating agreement, trust or
other organizational documents of Borrower or such constituent party without the
prior written consent of Lender.

         (h) Borrower will maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates and any
constituent party and Borrower will file its own tax returns, provided Borrower
may file its tax returns on a consolidated basis. Borrower shall maintain its
books, records, resolutions and agreements as official records.

         (i) Borrower will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity (including
any Affiliate of Borrower, any constituent party of Borrower, or any Affiliate
of any constituent party), shall correct any known misunderstanding regarding
its status as a separate entity, shall conduct business in its own name, shall
not identify itself or any of its Affiliates as a division or part of the other
and shall maintain and utilize a separate telephone number, if any, and separate
stationery, invoices and checks.

         (j) Borrower will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations.

         (k) Neither Borrower nor any constituent party will seek the
dissolution, winding up, liquidation, consolidation or merger in whole or in
part, of the Borrower.

         (l) Borrower will not commingle the funds and other assets of Borrower
with those of any Affiliate or constituent party, or any Affiliate of any
constituent party, or any other person.


                                                                         Page 19
<PAGE>


         (m) Borrower has and will maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any Affiliate or constituent party, or any
Affiliate of any constituent party, or any other person.

         (n) Borrower does not and will not hold itself out to be responsible
for the debts or obligations of any other person.

         (o) If Borrower is a limited partnership or a limited liability
company, each general partner or managing member (each, an "SPC Party") shall be
a limited liability company whose sole asset is its interest in Borrower and
each such SPC Party will at all times comply, and will cause Borrower to comply,
with each of the representations, warranties, and covenants contained in this
Section 6.14 as if such representation, warranty or covenant was made directly
by such SPC Party.

         Section 6.15 Compliance with Anti-Terrorism Orders.

         (a) Borrower and each partner, member or stockholder in Borrower, and
all beneficial owners of Borrower and any such partner, member or stockholder,
are, to Borrower's actual knowledge, in compliance with the requirements of
Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the "Order") and
other similar requirements contained in the rules and regulations of the Office
of Foreign Asset Control, Department of the Treasury ("OFAC") and in any
enabling legislation or other Executive Orders in respect thereof (the Order and
such other rules, regulations, legislation, or orders are collectively called
the "Orders"). Borrower agrees to make its policies, procedures and practices
regarding compliance with the Orders of any Persons who, pursuant to transfers
permitted by the Mortgage, become stockholders, members, partners or other
investors of Borrower available to Lender for its review and inspection during
normal business hours and upon reasonable prior notice.

         (b) Neither Borrower, any partner, member or stockholder in Borrower
nor the beneficial owner of Borrower or any such partner, member or stockholder:

             (i)   is listed on the Specially Designated Nationals and Blocked
                   Persons List maintained by OFAC pursuant to the Order and/or
                   on any other list of terrorists or terrorist organizations
                   maintained pursuant to any of the rules and regulations of
                   OFAC or pursuant to any other applicable Orders (such lists
                   are collectively referred to as the "Lists");

             (ii)  is a Person who has been determined by competent authority to
                   be subject to the prohibitions contained in the Orders;

             (iii) is owned or controlled by, nor acts for or on behalf of, any
                   Person on the Lists or any other Person who has been
                   determined by competent authority to be subject to the
                   prohibitions contained in the Orders;

             (iv)  shall transfer or permit the transfer of any interest in
                   Borrower or any Borrower Party to any Person who is or whose
                   beneficial owners are listed on the Lists; or

                                                                         Page 20


<PAGE>
             (v)   shall knowingly lease space in the Project to any Person who
                   is listed on the Lists or who is engaged in illegal
                   activities.

         (c) If Borrower obtains knowledge that Borrower or any of its partners,
members or stockholders or their beneficial owners become listed on the Lists or
are indicted, arraigned, or custodially detained on charges involving money
laundering or predicate crimes to money laundering, Borrower shall immediately
notify Lender.

         (d) If Borrower obtains knowledge that any tenant in the Project has
become listed on the Lists or is convicted, pleads nolo contendere, indicted,
arraigned, or custodially detained on charges involving money laundering or
predicate crimes to money laundering, Borrower shall immediately notify Lender.

         (e) If a tenant at the Project is listed on the Lists or is convicted
or pleads nolo contendere to charges related to activity prohibited in the
Orders, then proceeds from the rents of such tenant shall not be used to pay
Debt Service and Borrower shall provide Lender such representations and
verifications as Lender shall reasonably request that such rents are not being
so used.

         (f) If a tenant at the Project is arrested on such charges, and such
charge is not dismissed within thirty (30) days thereafter, Lender may at its
option notify Borrower to exclude such rents from the Debt Service payments.

         (g) If Borrower or any Borrower Party is listed on the Lists, no
earn-out disbursements, escrow disbursements, or other disbursements under the
Loan Documents shall be made and all of such funds shall be paid in accordance
with the direction of a court of competent jurisdiction.

         Section 6.16 Property Specific Representations. The management
agreement for the Project is in full force and effect and there is no default or
violation by any party thereunder.

                                   ARTICLE 7
                               FINANCIAL REPORTING

         Section 7.1 Financial Statements.

         (a) Monthly Reports. Until the Loan is sold in a Secondary Market
Transaction, Borrower shall furnish to Lender within fifteen (15) days after the
end of each calendar month, a current rent roll and a detailed operating
statement (showing monthly activity and year-to-date) stating operating
revenues, operating expenses, operating income and net cash flow for the
calendar month just ended.

         (b) Quarterly Reports. Within forty-five (45) days after the end of
each calendar quarter, Borrower shall furnish to Lender a current rent roll and
a detailed operating statement (showing quarterly activity and year-to-date)
stating operating revenues, operating expenses, operating income and net cash
flow for the calendar quarter just ended.

                                                                         Page 21
<PAGE>


         (c) Annual Reports. Within ninety (90) days after the end of each
fiscal year of Borrower's operation of the Project, Borrower shall furnish to
Lender a current (as of the end of such fiscal year) balance sheet, a detailed
operating statement stating operating revenues, operating expenses, operating
income and net cash flow for each of Borrower and the Project, and, if required
by Lender, prepared on a review basis and certified by an independent public
accountant reasonably satisfactory to Lender. Borrower's annual financial
statements shall include (i) a list of the tenants, if any, occupying more than
twenty percent (20%) of the total floor area of the Project, (ii) a breakdown
showing the year in which each lease then in effect expires, and (iii) a
breakdown of the percentage of total floor area of the Project and the
percentage of base rent with respect to which leases shall expire in each year,
each such percentage to be expressed on both a per year and a cumulative basis.

         (d) Certification; Supporting Documentation. Each such financial
statement shall be in scope and detail reasonably satisfactory to Lender and
certified by the chief financial representative of Borrower. With respect to the
required annual statements, Lender shall accept such statements with respect to
Borrower and the Project as Cedar Income Fund, Ltd. is required to submit to the
Securities and Exchange Commission as part of its annual 10-K filings with
respect to Borrower and the Project.

         Section 7.2 Accounting Principles. All financial statements shall be
prepared in accordance with generally accepted accounting principles in the
United States of America in effect on the date so indicated and consistently
applied (or such other accounting basis reasonably acceptable for Lender).

         Section 7.3 Other Information; Access. Borrower shall deliver to Lender
such additional information as may be reasonably requested by Lender regarding
Borrower, its subsidiaries, its business, any Borrower Party, and the Project
within 30 days after Lender's request therefor. Borrower shall permit Lender to
examine such records, books and papers of Borrower which reflect upon its
financial condition and the income and expenses of the Project. In the event
that Borrower fails to forward the financial statements required in this Article
7 within thirty (30) days after written request, Lender shall have the right to
audit such records, books and papers at Borrower's expense.

         Section 7.4 Annual Budget. At least thirty (30) days prior to the
commencement of each fiscal year, Borrower will provide to Lender its proposed
annual operating and capital improvements budget for such fiscal year for review
and approval by Lender, which approval shall not be unreasonably withheld or
delayed and which shall be deemed granted if Lender shall not respond in writing
to such items within thirty (30) days of its receipt thereof.

                                   ARTICLE 8
                                   COVENANTS

         Borrower covenants and agrees with Lender as follows:

         Section 8.1 Due On Sale and Encumbrance; Transfers of Interests.
Without the prior written consent of Lender, neither Borrower nor any other
Person having an ownership or beneficial interest in Borrower shall sell,
transfer, convey, mortgage, pledge, or assign any interest in the Project or any


                                                                         Page 22
<PAGE>

part thereof or further encumber, alienate, grant a Lien or grant any other
interest in the Project or any part thereof, whether voluntarily or
involuntarily, in violation of the covenants and conditions set forth in the
Mortgage.

         Section 8.2 Taxes; Utility Charges. Except to the extent sums
sufficient to pay all Taxes (defined herein) have been previously deposited with
Lender as part of the Tax and Insurance Escrow Fund and subject to Borrower's
right to contest in accordance with Section 11.8 hereof, Borrower shall pay
before any fine, penalty, interest or cost may be added thereto, and shall not
enter into any agreement to defer, any real estate taxes and assessments,
franchise taxes and charges, and other governmental charges (the "Taxes") that
may become a Lien upon the Project or become payable during the term of the
Loan. Borrower's compliance with Section 3.4 of this Agreement relating to
impounds for Taxes shall, with respect to payment of such Taxes, be deemed
compliance with this Section 8.2. Borrower shall not suffer or permit the joint
assessment of the Project with any other real property constituting a separate
tax lot or with any other real or personal property. Borrower shall promptly
pay, or cause to be paid, for all utility services provided to the Project.

         Section 8.3 Control; Management. There shall be no change in the
day-to-day control and management of Borrower or Borrower's general partner or
managing member other than to an entity owned or controlled by Cedar Income
Fund, Ltd. or KIMCO Preferred Investor III, Inc. without the prior written
consent of Lender. Borrower shall not terminate, replace or appoint any manager
or terminate or amend the management agreement for the Project without Lender's
prior written approval, which approval shall not be unreasonably withheld. Any
change in ownership or control of the manager shall be cause for Lender to
re-approve such manager and management agreement. Each manager shall hold and
maintain all necessary licenses, certifications and permits required by law.
Borrower shall fully perform all of its covenants, agreements and obligations
under the management agreement. The management fee payable under the management
agreement shall not exceed four percent (4%) of rental collections.

         Section 8.4 Operation; Maintenance; Inspection. Borrower shall observe
and comply with all legal requirements applicable to the ownership, use and
operation of the Project. Borrower shall maintain the Project in good condition
and promptly repair any damage or casualty. Borrower shall permit Lender and its
agents, representatives and employees, upon reasonable prior notice to Borrower,
to inspect the Project and conduct such environmental and engineering studies as
Lender may require, provided such inspections and studies do not materially
interfere with the use and operation of the Project.

         Section 8.5 Taxes on Security. Borrower shall pay all taxes, charges,
filing, registration and recording fees, excises and levies payable with respect
to the Note or the Liens created or secured by the Loan Documents, other than
income, franchise and doing business taxes imposed on Lender. If there shall be
enacted any law (a) deducting the Loan from the value of the Project for the
purpose of taxation, (b) affecting any Lien on the Project, or (c) changing
existing laws of taxation of mortgages, deeds of trust, security deeds, or debts
secured by real property, or changing the manner of collecting any such taxes,
Borrower shall promptly pay to Lender, on demand, all taxes, costs and charges
for which Lender is or may be liable as a result thereof; however, if such
payment would be prohibited by law or would render the Loan usurious, then
instead of collecting such payment, Lender may declare all amounts owing under
the Loan Documents to be immediately due and payable.

                                                                         Page 23
<PAGE>


         Section 8.6 Legal Existence; Name, Etc. Borrower and each SPC Party
shall preserve and keep in full force and effect its entity status, franchises,
rights and privileges under the laws of the state of its formation, and all
qualifications, licenses and permits applicable to the ownership, use and
operation of the Project. Neither Borrower nor any general partner or managing
member of Borrower shall wind up, liquidate, dissolve, reorganize, merge, or
consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise
dispose of all or substantially all of its assets, or acquire all or
substantially all of the assets of the business of any Person, or permit any
subsidiary or Affiliate of Borrower to do so. Borrower shall not change its
name, identity, state of formation, or organizational structure, or the location
of its chief executive office or principal place of business unless Borrower (a)
shall have obtained the prior written consent of Lender to such change, and (b)
shall have taken all actions necessary or requested by Lender to file or amend
any financing statement or continuation statement to assure perfection and
continuation of perfection of security interests under the Loan Documents. The
name of Borrower, type of entity, organization number, and state of formation
set forth in this Agreement accurately reflect such information as shown on the
public record of Borrower's jurisdiction of organization.

         Section 8.7 Further Assurances. Borrower shall promptly (a) cure any
defects in the execution and delivery of the Loan Documents and the
Environmental Indemnity Agreement, and (b) execute and deliver, or cause to be
executed and delivered, all such other documents, agreements and instruments as
Lender may reasonably request to further evidence and more fully describe the
collateral for the Loan, to correct any omissions in the Loan Documents, to
perfect, protect or preserve any liens created under any of the Loan Documents
and the Environmental Indemnity Agreement, or to make any recordings, file any
notices, or obtain any consents, as may be necessary or appropriate in
connection therewith. Borrower grants Lender an irrevocable power of attorney
coupled with an interest for the purpose of exercising and perfecting any and
all rights and remedies available to Lender under the Loan Documents and the
Environmental Indemnity Agreement, at law and in equity, including without
limitation such rights and remedies available to Lender pursuant to this Section
8.7.

         Section 8.8 Estoppel Certificates. Borrower, within ten (10) days after
request, shall furnish to Lender a written statement, duly acknowledged, setting
forth the amount due on the Loan, the terms of payment of the Loan, the date to
which interest has been paid, whether any offsets or defenses exist against the
Loan and, if any are alleged to exist, the nature thereof in detail, and such
other matters as Lender reasonably may request.

         Section 8.9 Notice of Certain Events. Borrower shall promptly notify
Lender of (a) any Potential Default or Event of Default, together with a
detailed statement of the steps being taken to cure such Potential Default or
Event of Default; (b) any notice of default received by Borrower under other
obligations relating to the Project or otherwise material to Borrower's
business; and (c) any threatened or pending legal, judicial or regulatory
proceedings, including any dispute between Borrower and any governmental
authority, affecting Borrower or the Project.

                                                                         Page 24
<PAGE>

         Section 8.10 Indemnification. Unless caused by the gross negligence or
willful misconduct of Lender, Borrower shall protect, defend, indemnify and save
harmless Lender its shareholders, directors, officers, employees and agents from
and against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including without limitation reasonable attorneys'
fees and expenses), imposed upon or incurred by or asserted against Lender by
reason of (a) ownership of the Mortgage, the Project or any interest therein or
receipt of any rents; (b) any accident, injury to or death of persons or loss of
or damage to property occurring in, on or about the Project or any part thereof
or on the adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (c) any use, nonuse or condition in, on or about the
Project or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (d) performance of any
labor or services or the furnishing of any materials or other property in
respect of the Project or any part thereof; and (e) the failure of any Person to
file timely with the Internal Revenue Service an accurate Form 1099-B, Statement
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange
Transactions, which may be required in connection with this Agreement, or to
supply a copy thereof in a timely fashion to the recipient of the proceeds of
the transaction in connection with which this Agreement is made. Any amounts
payable to Lender by reason of the application of this section shall become
immediately due and payable and shall bear interest at the Default Rate from the
date loss or damage is sustained by Lender until paid.

         Section 8.11 Cooperation. Borrower acknowledges that Lender and its
successors and assigns may (a) sell this Agreement, the Mortgage, the Note, the
other Loan Documents, and the Environmental Indemnity Agreement, and any and all
servicing rights thereto to one or more investors as a whole loan, (b)
participate the Loan to one or more investors, (c) deposit this Agreement, the
Note, other Loan Documents, and the Environmental Indemnity Agreement with a
trust, which trust may sell certificates to investors evidencing an ownership
interest in the trust assets, or (d) otherwise sell the Loan or interest therein
to investors (the transactions referred to in clauses (a) through (d) are
hereinafter each referred to as "Secondary Market Transaction"). Borrower shall
cooperate with Lender in effecting any such Secondary Market Transaction and
shall cooperate to implement all requirements imposed by any Rating Agency
involved in any Secondary Market Transaction. Borrower shall provide such
information, legal opinions and documents relating to the Borrower, the Project
and any tenants of the Project as Lender may reasonably request in connection
with such Secondary Market Transaction at no third-party professional expense
unless otherwise required by the Loan Documents. In addition, Borrower shall
make available to Lender all information concerning its business and operations
that Lender may reasonably request. Lender shall be permitted to share all such
information with the investment banking firms, Rating Agencies, accounting
firms, law firms and other third-party advisory firms involved with the Loan and
the Loan Documents or the applicable Secondary Market Transaction. It is
understood that the information provided by Borrower to Lender may ultimately be
incorporated into the offering documents for the Secondary Market Transaction
and thus various investors may also see some or all of the information. Lender
and all of the aforesaid third-party advisors and professional firms shall be
entitled to rely on the information supplied by, or on behalf of, Borrower and
Borrower indemnifies Lender as to any losses, claims, damages or liabilities
that arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such information or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated in such information or necessary in order to make the
statements in such information, or in light of the circumstances under which
they were made, not misleading.


                                                                         Page 25
<PAGE>

         Section 8.12 Payment For Labor and Materials. Subject to Borrower's
right to contest in accordance with Section 11.8 hereof, Borrower will promptly
pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Project and never permit to
exist beyond the due date thereof in respect of the Project or any part thereof
any Lien, even though inferior to the Liens hereof, and in any event never
permit to be created or exist in respect of the Project or any part thereof any
other or additional Lien other than the Liens hereof, except for the Permitted
Encumbrances (defined in the Mortgage).

         Section 8.13 Financial Covenants. Borrower acknowledges that (a) the
Joinder attached hereto contains the covenants of Joinder Party (i) to maintain
a minimum net worth of $5,000,000.00 at all times during the term of the Loan,
and (ii) to maintain a minimum liquidity of $1,000,000.00 during the term of the
Loan, and (b) a default under such covenants shall be a default under this
Agreement.

                                   ARTICLE 9
                                EVENTS OF DEFAULT

         Each of the following shall constitute an Event of Default under the
Loan:

         Section 9.1 Payments. Borrower's failure to pay any regularly scheduled
installment of principal, interest or other amount due under the Loan Documents
within five (5) days of (and including) the date when due, or Borrower's failure
to pay the Loan at the Maturity Date, whether by acceleration or otherwise.

         Section 9.2 Insurance. Borrower's failure to maintain insurance as
required under Section 3.1 of this Agreement which failure is not cured within
three (3) Business Days of receipt of notice from Lender of such failure.

         Section 9.3 Sale, Encumbrance, Etc. The sale, transfer, conveyance,
pledge, mortgage or assignment of any part or all of the Project, or any
interest therein, or of any interest in Borrower, in violation of the Mortgage.

         Section 9.4 Covenants. Borrower's failure to perform or observe any of
the agreements and covenants contained in this Agreement or in any of the other
Loan Documents (other than payments under Section 9.1, insurance requirements
under Section 9.2, transfers and encumbrances under Section 9.3, and the Events
of Default described in Sections 9.7 and 9.8 below), and the continuance of such
failure for twenty (20) days after notice by Lender to Borrower; however,
subject to any shorter period for curing any failure by Borrower as specified in
any of the other Loan Documents, Borrower shall have an additional sixty (60)
days to cure such failure if (a) such failure does not involve the failure to
make payments on a monetary obligation; (b) such failure cannot reasonably be
cured within twenty (20) days; (c) Borrower is diligently undertaking to cure
such default; and (d) Borrower has provided Lender with security reasonably
satisfactory to Lender against any interruption of payment or impairment of
collateral as a result of such continuing failure.


                                                                         Page 26
<PAGE>

         Section 9.5 Representations and Warranties. Any representation or
warranty made in any Loan Document proves to be untrue in any material respect
when made or deemed made.

         Section 9.6 Other Encumbrances. Any default under any document or
instrument, other than the Loan Documents, evidencing or creating a Lien on the
Project or any part thereof, not cured within any applicable grace or cure
period therein.

         Section 9.7 Involuntary Bankruptcy or Other Proceeding. Commencement of
an involuntary case or other proceeding against Borrower, any Borrower Party or
any other Person having an ownership or security interest in the Project (each,
a "Bankruptcy Party") which seeks liquidation, reorganization or other relief
with respect to it or its debts or other liabilities under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeks the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any of its property, and such involuntary case or other
proceeding shall remain undismissed or unstayed for a period of 60 days; or an
order for relief against a Bankruptcy Party shall be entered in any such case
under the Federal Bankruptcy Code.

         Section 9.8 Voluntary Petitions, etc. Commencement by a Bankruptcy
Party of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its Debts or other
liabilities under any bankruptcy, insolvency or other similar law or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official for it or any of its property, or consent by a Bankruptcy Party to any
such relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or the making
by a Bankruptcy Party of a general assignment for the benefit of creditors, or
the failure by a Bankruptcy Party, or the admission by a Bankruptcy Party in
writing of its inability, to pay its debts generally as they become due, or any
action by a Bankruptcy Party to authorize or effect any of the foregoing.

         Section 9.9 Anti-Terrorism. If Borrower or any Borrower Party is listed
on the Lists or is convicted or pleads nolo contendere to charges related to
activity prohibited in the Orders, or if Borrower or any Borrower Party is
arrested on charges related to activity prohibited in the Orders and such charge
is not dismissed within thirty (30) days thereafter.

                                   ARTICLE 10
                                    REMEDIES

         Section 10.1 Remedies - Insolvency Events. Upon the occurrence of any
Event of Default described in Section 9.7 or 9.8, all amounts due under the Loan
Documents immediately shall become due and payable, all without written notice
and without presentment, demand, protest, notice of protest or dishonor, notice
of intent to accelerate the maturity thereof, notice of acceleration of the
maturity thereof, or any other notice of default of any kind, all of which are
hereby expressly waived by Borrower; however, if the Bankruptcy Party under
Section 9.7 or 9.8 is other than Borrower, then all amounts due under the Loan
Documents shall become immediately due and payable at Lender's election, in
Lender's sole discretion.

                                                                         Page 27
<PAGE>

         Section 10.2 Remedies - Other Events. Except as set forth in Section
10.1 above, while any Event of Default exists, Lender may (a) declare the entire
Loan to be immediately due and payable without presentment, demand, protest,
notice of protest or dishonor, notice of intent to accelerate the maturity
thereof, notice of acceleration of the maturity thereof, or other notice of
default of any kind, all of which are hereby expressly waived by Borrower, and
(b) exercise all rights and remedies therefor under the Loan Documents and at
law or in equity.

         Section 10.3 Lender's Right to Perform the Obligations. If Borrower
shall fail, refuse or neglect to make any payment or perform any act required by
the Loan Documents, then while any Event of Default exists, and without notice
to or demand upon Borrower and without waiving or releasing any other right,
remedy or recourse Lender may have because of such Event of Default, Lender may
(but shall not be obligated to) make such payment or perform such act for the
account of and at the expense of Borrower, and shall have the right to enter
upon the Project for such purpose and to take all such action thereon and with
respect to the Project as it may deem necessary or appropriate. If Lender shall
elect to pay any sum due with reference to the Project, Lender may do so in
reliance on any bill, statement or assessment procured from the appropriate
governmental authority or other issuer thereof without inquiring into the
accuracy or validity thereof. Similarly, in making any payments to protect the
security intended to be created by the Loan Documents, Lender shall not be bound
to inquire into the validity of any apparent or threatened adverse title, lien,
encumbrance, claim or charge before making an advance for the purpose of
preventing or removing the same. Borrower shall indemnify Lender for all losses,
expenses, damages, claims and causes of action, including reasonable attorneys'
fees, incurred or accruing by reason of any acts performed by Lender pursuant to
the provisions of this Section 10.3. All sums paid by Lender pursuant to this
Section 10.3, and all other sums expended by Lender to which it shall be
entitled to be indemnified, together with interest thereon at the Default Rate
from the date of such payment or expenditure until paid, shall constitute
additions to the Loan, shall be secured by the Loan Documents and shall be paid
by Borrower to Lender upon demand.

                                   ARTICLE 11
                                  MISCELLANEOUS

         Section 11.1 Notices. Any notice required or permitted to be given
under this Agreement shall be in writing and either shall be mailed by certified
mail, postage prepaid, return receipt requested, or sent by overnight air
courier service, or personally delivered to a representative of the receiving
party, or sent by telecopy (provided an identical notice is also sent
simultaneously by mail, overnight courier, or personal delivery as otherwise
provided in this Section 11.1). All such communications shall be mailed, sent or
delivered, addressed to the party for whom it is intended at its address set
forth below.

                If to Borrower:      Fairview Plaza Associates, LP
                                     c/o Cedar Income Fund Partnership, L.P.
                                     44 South Bayles Avenue, Suite 304
                                     Port Washington, New York  11050
                                     Attention:  Leo S. Ullman
                                     Telecopy:  (516) 767-6497

                                                                         Page 28
<PAGE>

                with a copy to:      Cedar Income Fund Partnership, L.P.
                                     44 South Bayles Avenue, Suite 304
                                     Port Washington, New York 11050
                                     Attention: General Counsel
                                     Telecopy: (516) 757-6497

                If to Lender:        General Electric Capital Corporation
                                     c/o GEMSA Loan Services, L.P.
                                     1500 City West Blvd., Suite 200
                                     Houston, Texas 77042-2300
                                     Attention: Portfolio Manager/Access Program
                                     Telecopy:  (713) 458-7500

                with a copy to:      General Electric Capital Corporation
                                     16479 Dallas Parkway, Suite 500
                                     Two Bent Tree Tower
                                     Addison, Texas  75001-2512
                                     Attention:    David R. Martindale
                                     Telecopy:     (972) 728-7650

Any communication so addressed and mailed shall be deemed to be given on the
earliest of (a) when actually delivered, (b) on the first Business Day after
deposit with an overnight air courier service, or (c) on the third Business Day
after deposit in the United States mail, certified mail, return receipt
requested, postage prepaid, in each case to the address of the intended
addressee, and any communication so delivered in person shall be deemed to be
given when receipted for by, or actually received by Lender or Borrower, as the
case may be. If given by telecopy, a notice shall be deemed given and received
when the telecopy is transmitted to the party's telecopy number specified above
and confirmation of complete receipt is received by the transmitting party
during normal business hours (provided an identical notice is also sent
simultaneously by certified mail, overnight courier, or personal delivery as
otherwise provided in this Section 11.1) or on the next Business Day if not
confirmed during normal business hours. Either party may designate a change of
address by written notice to the other by giving at least ten (10) days prior
written notice of such change of address. Notwithstanding the foregoing,
Borrower agrees that any notice given by Borrower to Lender purportedly pursuant
to 42 Pa. C.S.A. ss. 8143 shall be given by registered or certified mail, return
receipt requested, to the address of Lender specified above, and only to that
address, and that such notice shall be deemed to have been received no earlier
than the date actually and physically received at such address.

         Section 11.2 Amendments and Waivers. No amendment or waiver of any
provision of the Environmental Indemnity Agreement and the Loan Documents shall
be effective unless in writing and signed by the party against whom enforcement
is sought.

         Section 11.3 Limitation on Interest. It is the intention of the parties
hereto to conform strictly to applicable usury laws. Accordingly, all agreements
between Borrower and Lender with respect to the Loan are hereby expressly
limited so that in no event, whether by reason of acceleration of maturity or
otherwise, shall the amount paid or agreed to be paid to Lender or charged by
Lender for the use, forbearance or detention of the money to be lent hereunder


                                                                         Page 29
<PAGE>

or otherwise, exceed the maximum amount allowed by law. If the Loan would be
usurious under applicable law (including the laws of the State and the laws of
the United States of America), then, notwithstanding anything to the contrary in
the Loan Documents: (a) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, taken, reserved, charged
or received under the Loan Documents shall under no circumstances exceed the
maximum amount of interest allowed by applicable law, and any excess shall be
credited on the Note by the holder thereof; and (b) if maturity is accelerated
by reason of an election by Lender, or in the event of any prepayment, then any
consideration which constitutes interest may never include more than the maximum
amount allowed by applicable law. In such case, excess interest, if any,
provided for in the Loan Documents or otherwise, to the extent permitted by
applicable law, shall be amortized, prorated, allocated and spread from the date
of advance until payment in full so that the actual rate of interest is uniform
through the term hereof. If such amortization, proration, allocation and
spreading is not permitted under applicable law, then such excess interest shall
be canceled automatically as of the date of such acceleration or prepayment and,
if theretofore paid, shall be credited on the Note. The terms and provisions of
this Section 11.3 shall control and supersede every other provision of the Loan
Documents. The Loan Documents are contracts made under and shall be construed in
accordance with and governed by the laws of the State, except that if at any
time the laws of the United States of America permit Lender to contract for,
take, reserve, charge or receive a higher rate of interest than is allowed by
the laws of the State (whether such federal laws directly so provide or refer to
the law of any state), then such federal laws shall to such extent govern as to
the rate of interest which Lender may contract for, take, reserve, charge or
receive under the Loan Documents.

         Section 11.4 Invalid Provisions. If any provision of any Loan Document
or the Environmental Indemnity Agreement is held to be illegal, invalid or
unenforceable, such provision shall be fully severable; the Environmental
Indemnity Agreement and the Loan Documents shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part
thereof; the remaining provisions thereof shall remain in full effect and shall
not be affected by the illegal, invalid, or unenforceable provision or by its
severance therefrom; and in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as a part of such Environmental
Indemnity Agreement and such Loan Document a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible to be legal,
valid and enforceable.

         Section 11.5 Reimbursement of Expenses. Borrower shall pay all
reasonable expenses incurred by Lender in connection with the Loan, including
reasonable fees and expenses of Lender's attorneys, environmental, engineering
and other consultants, and fees, charges or taxes for the recording or filing of
Loan Documents. Borrower shall pay all expenses of Lender in connection with the
administration of the Loan, including audit costs, inspection fees, settlement
of condemnation and casualty awards, premiums for title insurance and
endorsements thereto, and Rating Agency fees and expenses in connection with
confirmation letters, if required. Borrower shall, upon request, promptly
reimburse Lender for all amounts expended, advanced or incurred by Lender to
collect the Note, or to enforce the rights of Lender under this Agreement, the
Environmental Indemnity Agreement, or any Loan Document, or to defend or assert
the rights and claims of Lender under the Environmental Indemnity Agreement or
the Loan Documents or with respect to the Project (by litigation or other
proceedings), which amounts will include all court costs, reasonable attorneys'


                                                                         Page 30
<PAGE>


fees and expenses, fees of auditors and accountants, and investigation expenses
as may be incurred by Lender in connection with any such matters (whether or not
litigation is instituted), together with interest at the Default Rate on each
such amount from the date of disbursement until the date of reimbursement to
Lender, all of which shall constitute part of the Loan and shall be secured by
the Loan Documents.

         Section 11.6 Approvals; Third Parties; Conditions. All approval rights
retained or exercised by Lender with respect to leases, contracts, plans,
studies and other matters are solely to facilitate Lender's credit underwriting,
and shall not be deemed or construed as a determination that Lender has passed
on the adequacy thereof for any other purpose and may not be relied upon by
Borrower or any other Person. This Agreement is for the sole and exclusive use
of Lender and Borrower and may not be enforced, nor relied upon, by any Person
other than Lender and Borrower. All conditions of the obligations of Lender
hereunder, including the obligation to make advances, are imposed solely and
exclusively for the benefit of Lender, its successors and assigns, and no other
Person shall have standing to require satisfaction of such conditions or be
entitled to assume that Lender will refuse to make advances in the absence of
strict compliance with any or all of such conditions, and no other Person shall,
under any circumstances, be deemed to be a beneficiary of such conditions, any
and all of which may be freely waived in whole or in part by Lender at any time
in Lender's sole discretion.

         Section 11.7 Lender Not in Control; No Partnership. None of the
covenants or other provisions contained in this Agreement shall, or shall be
deemed to, give Lender the right or power to exercise control over the affairs
or management of Borrower, the power of Lender being limited to the rights to
exercise the remedies referred to in the Environmental Indemnity Agreement or
the Loan Documents. The relationship between Borrower and Lender is, and at all
times shall remain, solely that of debtor and creditor. No covenant or provision
of the Environmental Indemnity Agreement or the Loan Documents is intended, nor
shall it be deemed or construed, to create a partnership, joint venture, agency
or common interest in profits or income between Lender and Borrower or to create
an equity in the Project in Lender. Lender neither undertakes nor assumes any
responsibility or duty to Borrower or to any other person with respect to the
Project or the Loan, except as expressly provided in the Environmental Indemnity
Agreement and the Loan Documents; and notwithstanding any other provision of the
Environmental Indemnity Agreement or the Loan Documents: (a) Lender is not, and
shall not be construed as, a partner, joint venturer, alter ego, manager,
controlling person or other business associate or participant of any kind of
Borrower or its stockholders, members, or partners and Lender does not intend to
ever assume such status; (b) Lender shall in no event be liable for any Debts,
expenses or losses incurred or sustained by Borrower; and (c) Lender shall not
be deemed responsible for or a participant in any acts, omissions or decisions
of Borrower or its stockholders, members, or partners. Lender and Borrower
disclaim any intention to create any partnership, joint venture, agency or
common interest in profits or income between Lender and Borrower, or to create
an equity in the Project in Lender, or any sharing of liabilities, losses, costs
or expenses.

         Section 11.8 Contest of Certain Claims. Borrower may contest the
validity of Taxes or any mechanic's or materialman's lien asserted against the
Project so long as (a) Borrower notifies Lender that it intends to contest such
Taxes or liens, as applicable, (b) Borrower provides Lender with an indemnity,



                                                                         Page 31
<PAGE>


bond or other security reasonably satisfactory to Lender assuring the discharge
of Borrower's obligations for such Taxes or liens, as applicable, including
interest and penalties, (c) Borrower is diligently contesting the same by
appropriate legal proceedings in good faith and at its own expense and concludes
such contest prior to the tenth (10th) day preceding the earlier to occur of the
Maturity Date or the date on which the Project is scheduled to be sold for
non-payment, (d) Borrower promptly upon final determination thereof pays the
amount of any such Taxes or liens, as applicable, together with all costs,
interest and penalties which may be payable in connection therewith, and (e)
notwithstanding the foregoing, Borrower shall immediately upon request of Lender
pay any such Taxes or liens, as applicable, notwithstanding such contest if, in
the opinion of Lender, the Project or any part thereof or interest therein may
be in danger of being sold, forfeited, foreclosed, terminated, canceled or lost.
Lender may pay over any cash deposit or part thereof to the claimant entitled
thereto at any time when, in the reasonable judgment of Lender, the entitlement
of such claimant is established.

         Section 11.9 Time of the Essence. Time is of the essence with respect
to this Agreement.

         Section 11.10 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Lender and Borrower and their respective
successors and assigns, provided that neither Borrower nor any other Borrower
Party shall, without the prior written consent of Lender, assign any rights,
duties or obligations hereunder.

         Section 11.11 Renewal, Extension or Rearrangement. All provisions of
the Environmental Indemnity Agreement and the Loan Documents shall apply with
equal effect to each and all promissory notes and amendments thereof hereinafter
executed which in whole or in part represent a renewal, extension, increase or
rearrangement of the Loan.

         Section 11.12 Waivers. No course of dealing on the part of Lender, its
officers, employees, consultants or agents, nor any failure or delay by Lender
with respect to exercising any right, power or privilege of Lender under the
Environmental Indemnity Agreement and any of the Loan Documents, shall operate
as a waiver thereof.

         Section 11.13 Cumulative Rights; Joint and Several Liability. Rights
and remedies of Lender under the Environmental Indemnity Agreement and the Loan
Documents shall be cumulative, and the exercise or partial exercise of any such
right or remedy shall not preclude the exercise of any other right or remedy. If
more than one person or entity has executed this Agreement as "Borrower," the
obligations of all such persons or entities hereunder shall be joint and
several.

         Section 11.14 Singular and Plural. Words used in this Agreement, the
other Loan Documents, and the Environmental Indemnity Agreement in the singular,
where the context so permits, shall be deemed to include the plural and vice
versa. The definitions of words in the singular in this Agreement, the other
Loan Documents, and the Environmental Indemnity Agreement shall apply to such
words when used in the plural where the context so permits and vice versa.



                                                                         Page 32
<PAGE>

         Section 11.15 Phrases. Except as otherwise expressly provided herein,
when used in this Agreement, the other Loan Documents, and the Environmental
Indemnity Agreement, the phrase "including" shall mean "including, but not
limited to," the phrase "satisfactory to Lender" shall mean "in form and
substance satisfactory to Lender in all respects," the phrase "with Lender's
consent" or "with Lender's approval" shall mean such consent or approval at
Lender's sole discretion, and the phrase "acceptable to Lender" shall mean
"acceptable to Lender at Lender's sole discretion."

         Section 11.16 Exhibits and Schedules. The exhibits and schedules
attached to this Agreement are incorporated herein and shall be considered a
part of this Agreement for the purposes stated herein.

         Section 11.17 Titles of Articles, Sections and Subsections. All titles
or headings to articles, sections, subsections or other divisions of this
Agreement, the other Loan Documents, and the Environmental Indemnity Agreement
or the exhibits hereto and thereto are only for the convenience of the parties
and shall not be construed to have any effect or meaning with respect to the
other content of such articles, sections, subsections or other divisions, such
other content being controlling as to the agreement between the parties hereto.

         Section 11.18 Promotional Material. Borrower authorizes Lender to issue
press releases, advertisements and other promotional materials in connection
with Lender's own promotional and marketing activities, including in connection
with a Secondary Market Transaction, and such materials may describe the Loan in
general terms or in detail and Lender's participation therein in the Loan. All
references to Lender contained in any press release, advertisement or
promotional material issued by Borrower shall be approved in writing by Lender
in advance of issuance.

         Section 11.19 Survival. All of the representations, warranties,
covenants, and indemnities hereunder (including environmental matters under
Article 4), under the indemnification provisions of the other Loan Documents and
under the Environmental Indemnity Agreement, shall survive the repayment in full
of the Loan and the release of the liens evidencing or securing the Loan, and
shall survive the transfer (by sale, foreclosure, conveyance in lieu of
foreclosure or otherwise) of any or all right, title and interest in and to the
Project to any party, whether or not an Affiliate of Borrower.

         Section 11.20 Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR
THE ENVIRONMENTAL INDEMNITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY
EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS AND
THE ENVIRONMENTAL INDEMNITY AGREEMENT OR IN ANY WAY RELATING TO THE LOAN OR THE
PROJECT (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS
AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS
FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A
MATERIAL INDUCEMENT FOR LENDER TO ENTER THIS AGREEMENT.


                                                                         Page 33
<PAGE>

         Section 11.21 Waiver of Punitive or Consequential Damages. Neither
Lender nor Borrower shall be responsible or liable to the other or to any other
Person for any punitive, exemplary or consequential damages which may be alleged
as a result of the Loan or the transaction contemplated hereby, including any
breach or other default by any party hereto.

         Section 11.22 Governing Law. The Loan Documents and the Environmental
Indemnity Agreement shall be governed by and construed in accordance with the
laws of the State and the applicable laws of the United States of America.

         Section 11.23 Entire Agreement. This Agreement, the other Loan
Documents and the Environmental Indemnity Agreement embody the entire agreement
and understanding between Lender and Borrower and supersede all prior agreements
and understandings between such parties relating to the subject matter hereof
and thereof. Accordingly, the Loan Documents and the Environmental Indemnity
Agreement may not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties. If any conflict or inconsistency exists between
the Commitment and this Agreement, any of the other Loan Documents, or the
Environmental Indemnity Agreement, the terms of this Agreement, the other Loan
Documents, and the Environmental Indemnity Agreement shall control.

         Section 11.24 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which shall
constitute one document.

                                   ARTICLE 12
                            LIMITATIONS ON LIABILITY

         Section 12.1 Limitation on Liability. Except as provided below,
Borrower shall not be personally liable for amounts due under the Loan
Documents. Borrower shall be personally liable to Lender for any deficiency,
loss or damage suffered by Lender because of: (a) Borrower's commission of a
criminal act; (b) the failure to comply with provisions of the Loan Documents
prohibiting the sale, transfer or encumbrance of the Project, any other
collateral, or any direct or indirect ownership interest in Borrower; (c) the
misapplication by Borrower or any Borrower Party of any funds derived from the
Project, including security deposits, insurance proceeds and condemnation awards
in violation of this Agreement or any of the other Loan Documents; (d) the fraud
or intentional misrepresentation by Borrower or any Borrower Party made in or in
connection with the Loan Documents or the Loan; (e) Borrower's collection of
rents more than one month in advance or entering into or modifying leases, or
receipt of monies by Borrower or any Borrower Party in connection with the
modification of any leases, in violation of this Agreement or any of the other
Loan Documents; (f) Borrower's failure to apply proceeds of rents or any other
payments in respect of the leases and other income of the Project or any other
collateral when received to the costs, then due, of maintenance and operation of
the Project and to the payment of taxes, lien claims, insurance premiums, Debt
Service, the Funds, and other amounts due under the Loan Documents to the extent


                                                                         Page 34
<PAGE>

the Loan Documents require such proceeds to be then so applied; (g) Borrower's
wrongful interference with Lender's exercise of rights under the Assignment of
Leases and Rents; (h) Borrower's failure to maintain insurance as required by
this Agreement; (i) waste to the Project caused by the acts or omissions of
Borrower, its agents, employees, or contractors; (j) Borrower's obligations with
respect to environmental matters under Article 4; (k) Borrower's failure to pay
for any loss, liability or expense (including attorneys' fees) incurred by
Lender arising out of any claim or allegation made by Borrower, its successors
or assigns, or any creditor of Borrower, that this Agreement or the transactions
contemplated by the Loan Documents and the Environmental Indemnity Agreement
establishes a joint venture, partnership or other similar arrangement between
Borrower and Lender; (l) any brokerage commission or finder's fees claimed in
connection with the transactions contemplated by the Loan Documents; (m)
uninsured damage to the Project resulting from acts of terrorism; or (n) the
filing by Borrower or any Borrower Party, or the filing against Borrower, of a
petition under the United States Bankruptcy Code or similar state insolvency
laws. Nothing herein shall be deemed to be a waiver of any right which Lender
may have under Sections 506(a), 506(b), 1111(b) or any other provision of the
United States Bankruptcy Code, to file a claim for the full amount due to Lender
under the Loan Documents or to require that all collateral shall continue to
secure the amounts due under the Loan Documents.

         Section 12.2 Limitation on Liability of Lender's Officers, Employees,
etc. Any obligation or liability whatsoever of Lender which may arise at any
time under this Agreement, any other Loan Document, or the Environmental
Indemnity Agreement shall be satisfied, if at all, out of the Lender's assets
only. No such obligation or liability shall be personally binding upon, nor
shall resort for the enforcement thereof be had to, the property of any of
Lender's shareholders, directors, officers, employees or agents, regardless of
whether such obligation or liability is in the nature of contract, tort or
otherwise.

                                                                         Page 35
<PAGE>


         EXECUTED under seal as of the date first written above.

LENDER:                      GENERAL ELECTRIC CAPITAL CORPORATION,
                             a Delaware corporation

                             By:
                                ------------------------------------------
                                David R. Martindale, Managing Director

                                             [SEAL]

BORROWER:                    FAIRVIEW PLAZA ASSOCIATES, L.P,
                             a Delaware limited partnership

                             By:   CIF-FAIRVIEW PLAZA ASSOCIATES, LLC,
                                   a Delaware limited liability company,
                                   its General Partner

                                   By:  CEDAR INCOME FUND PARTNERSHIP,
                                        L.P., a Delaware limited partnership,
                                        Sole and Managing Member

                                        By: CEDAR INCOME FUND, LTD.,
                                            a Maryland Real Estate Investment
                                            Trust, its General Partner

                                            By:
                                               -------------------------------
                                               Leo S. Ullman, President

                                                        [SEAL]


                                                                         Page 36

<PAGE>

                                     JOINDER
                                     -------

         By executing this Joinder (the "Joinder"), the undersigned ("Joinder
Parties") jointly and severally guaranty the performance by Borrower of all
obligations and liabilities for which Borrower is personally liable under
Section 12.1 of this Agreement. This Joinder is a guaranty of full and complete
payment and performance and not of collectability.

         1. Waivers. To the fullest extent permitted by applicable law, each
Joinder Party waives all rights and defenses of sureties, guarantors,
accommodation parties and/or co-makers and agrees that its obligations under
this Joinder shall be primary, absolute and unconditional, and that its
obligations under this Joinder shall be unaffected by any of such rights or
defenses, including:

                  a. the unenforceability of any Loan Document against Borrower
and/or any other Joinder Party;

                  b. any release or other action or inaction taken by Lender
with respect to the collateral, the Loan, Borrower and/or other Joinder Party,
whether or not the same may impair or destroy any subrogation rights of any
Joinder Party, or constitute a legal or equitable discharge of any surety or
indemnitor;

                  c. the existence of any collateral or other security for the
Loan, and any requirement that Lender pursue any of such collateral or other
security, or pursue any remedies it may have against Borrower and/or any other
Joinder Party;

                  d. any requirement that Lender provide notice to or obtain a
Joinder Party's consent to any modification, increase, extension or other
amendment of the Loan, including the guaranteed obligations;

                  e. any right of subrogation (until payment in full of the
Loan, including the guaranteed obligations, and the expiration of any applicable
preference period and statute of limitations for fraudulent conveyance claims);

                  f. any defense based on any statute of limitations;

                  g. any payment by Borrower to Lender if such payment is held
to be a preference or fraudulent conveyance under bankruptcy laws or Lender is
otherwise required to refund such payment to Borrower or any other party; and

                  h. any voluntary or involuntary bankruptcy, receivership,
insolvency, reorganization or similar proceeding affecting Borrower or any of
its assets.

         2. Agreements. Each Joinder Party further represents, warrants and
agrees that:

                  a. The obligations under this Joinder are enforceable against
each such party and are not subject to any defenses, offsets or counterclaims;



                                                                         Page 37
<PAGE>
                  b. The provisions of this Joinder are for the benefit of
Lender and its successors and assigns;

                  c. Lender shall have the right to (i) renew, modify, extend or
accelerate the Loan, (ii) pursue some or all of its remedies against Borrower or
any Joinder Party, (iii) add, release or substitute any collateral for the Loan
or party obligated thereunder, and (iv) release Borrower or any Joinder Party
from liability, all without notice to or consent of any Joinder Party (or other
Joinder Party) and without affecting the obligations of any Joinder Party (or
other Joinder Party) hereunder;

                  d. Each Joinder Party covenants and agrees to furnish to
Lender, within ninety (90) days after the end of each fiscal year of such
Joinder Party, a current (as of the end of such fiscal year) balance sheet of
such Joinder Party, in scope and detail reasonably satisfactory to Lender,
certified by the chief financial representative of such Joinder Party and, if
required by Lender, prepared on a review basis and certified by an independent
public accountant reasonably satisfactory to Lender, provided, however, that
Lender hereby agrees that the financial statements required to be included by
such Joinder Party in its annual 10-K filing required to be submitted to the
Securities and Exchange Commission shall be accepted by the Lender; and

                  e. To the maximum extent permitted by law, each Joinder Party
hereby knowingly, voluntarily and intentionally waives the right to a trial by
jury in respect of any litigation based hereon. This waiver is a material
inducement to Lender to enter into this Agreement.

         3. Financial Covenants. Joinder Party shall (i) maintain a minimum net
worth of $5,000,000.00 at all times during the term of the Loan and (ii)
maintain a minimum liquidity of $1,000,000.00 during the term of the Loan. A
default under such covenants shall be a default under this Agreement.

         This Joinder shall be governed by the laws of the State.

         Executed as of January ___, 2003.

JOINDER PARTY:                       CEDAR INCOME FUND, LTD.,
                                     a Maryland real estate investment trust



                                     By:
                                        -------------------------------------
                                            Leo S. Ullman, President

                                                    [SEAL]



                                                                         Page 38
<PAGE>

                                    EXHIBIT A
                                    ---------

                                Legal Description

         ALL THAT CERTAIN lot of land situate in the Township of Fairview,
County of York and Commonwealth of Pennsylvania, bounded and described according
to an ALTA/ACSM Survey by J. Michael Brill Associates, Inc., James C.
Hockenberry, PLS, Job No. 926-C dated October 25, 2002, as follows:

         BEGINNING AT A POINT at lands now or formerly Susquehanna Area Regional
Airport Authority; said point being the southeastern corner of herein described
parcel; thence by said lands North 74 degrees 26 minutes 00 seconds West a
distance of 618.88 feet to a point on the eastern right-of-way line of New York
Road (SR 1003); thence by said right-of-way line by a curve to the left having a
radius of 1356.91 feet and an arc distance of 329.61 feet the chord of said
curve being North 17 degrees 49 minutes 40 seconds East a distance of 328.80
feet (Deed 329.46 feet) to a point at lands now or formerly Venture Quest
Development Inc.; thence by said lands South 84 degrees 49 minutes 57 seconds
East a distance of 198.83 feet (Deed 198.84 feet) to a point; thence by same
North 57 degrees 40 minutes 03 seconds East a distance of 347.78 feet to an iron
pipe; thence by same South 53 degrees 40 minutes 00 seconds East a distance of
214.38 feet to an iron pin at lands nor or formerly Housing Authority of City of
York; thence by said lands South 18 degrees 00 minutes 18 seconds West a
distance of 546.96 feet to a point, the ping of BEGINNING.

         CONTAINING 6.7391 Acres.

         TOGETHER WITH the rights for installation, maintenance and repair of a
30 inch storm drain pipe as set forth in Agreement dated October 2, 1990
recorded in Deed Book 107-U, Page 977.

         TOGETHER WITH AND UNDER AND SUBJECT TO rights of joint access over
shared driveway as contained in Agreement Venture Quest Development, Inc.,
____________, 2002, and recorded ________, 2002.



                                                                         Page 39
<PAGE>
                                   SCHEDULE I

                                   DEFEASANCE
                                   ----------

         1. In accordance with Section 2.3 of the Loan Agreement, Borrower may
obtain the release of the Project from the lien of the Mortgage upon the
satisfaction of the following conditions precedent:

                  (a) not less than thirty (30) days prior written notice to
Lender specifying a regularly scheduled payment date (the "Release Date") on
which the Defeasance Deposit (hereinafter defined) is to be made;

                  (b) the payment to Lender of interest accrued and unpaid on
the principal balance of the Note to and including the Release Date;

                  (c) the payment to Lender of all other sums, not including
scheduled interest or principal payments, due under the Note, the Mortgage, the
Assignment of Leases and Rents, and the other Loan Documents;

                  (d) the payment to Lender of the Defeasance Deposit and a
$5,000 non-refundable processing fee;

                  (e) the delivery by Borrower to Lender of:

                           i)       a security agreement in form and substance
                                    satisfactory to Lender, creating a first
                                    priority lien on the Defeasance Deposit and
                                    the U.S. Obligations (hereinafter defined)
                                    purchased on behalf of Borrower with the
                                    Defeasance Deposit in accordance with this
                                    Schedule I (the "Security Agreement");

                           ii)      a release of the Project from the lien of
                                    the Mortgage (for execution by Lender) in a
                                    form appropriate for the jurisdiction in
                                    which the Project is located;

                           iii)     an officer's certificate of Borrower
                                    certifying that the requirements set forth
                                    in this paragraph (e) have been satisfied;

                           iv)      an opinion of counsel for Borrower in form
                                    satisfactory to Lender stating, among other
                                    things, that Lender has a perfected first
                                    priority security interest in the Defeasance
                                    Deposit and the U.S. Obligations purchased
                                    by or on behalf of Borrower and pledged to
                                    Lender;



                                                                         Page 40
<PAGE>

                           v)       evidence in writing from the applicable
                                    Rating Agencies to the effect that such
                                    release will not result in a qualification,
                                    downgrade or withdrawal of any rating in
                                    effect immediately prior to such defeasance
                                    for any securities issued in connection with
                                    a Secondary Market Transaction; and

                           vi)      such other certificates, documents or
                                    instruments as Lender may reasonably
                                    request.

                  (f) if the Loan has been sold in a Secondary Market
Transaction, Lender shall have received an opinion of counsel acceptable to
Lender in form satisfactory to Lender stating, among other things, that the
substitution of collateral shall not cause the holder of the Loan to fail to
maintain its status as a real estate mortgage investment conduit (REMIC); and

                  (g) Lender shall have received a certificate from a nationally
recognized independent certified public accountant acceptable to Lender, in form
and substance satisfactory to Lender, certifying that the U.S. Obligations
purchased with the Defeasance Deposit are expected to generate sufficient sums
to satisfy the obligations of Borrower under the Note and this Schedule I as and
when such obligations become due.

         In connection with the conditions set forth above, Borrower hereby
appoints Lender as its agent and attorney-in-fact for the purpose of using the
Defeasance Deposit to purchase or cause to be purchased U.S. Obligations which
provide payments on or prior to, but as close as possible to, all successive
scheduled payment dates after the Release Date upon which interest and principal
payments are required under the Note (including the amounts due on the Maturity
Date) and in amounts equal to the scheduled payments due on such dates under the
Note plus Lender's estimate of administrative expenses and applicable federal
income taxes associated with or to be incurred by the Successor Borrower during
the remaining term of, and applicable to, the Loan (the "Scheduled Defeasance
Payments"). Borrower, pursuant to the Security Agreement or other appropriate
document, shall authorize and direct that the payments received from the U.S.
Obligations may be made directly to Lender and applied to satisfy the
obligations of Borrower under the Note and this Schedule I.

         2. Upon compliance with the requirements of this Schedule I, the
Project shall be released from the lien of the Mortgage and the pledged U.S.
Obligations shall be the sole source of collateral securing the Note. Any
portion of the Defeasance Deposit in excess of the amount necessary to purchase
the U.S. Obligations required by the preceding paragraph and to otherwise
satisfy the Borrower's obligations under this Schedule I shall be remitted to
Borrower with the release of the Project from the lien of the Mortgage. In
connection with such release, a successor entity meeting Lender's Single Purpose
Entity criteria, adjusted, as applicable, for the Defeasance contemplated by
this Schedule (the "Successor Borrower"), shall be established by Borrower
subject to Lender's approval (or at Lender's option, by Lender) and Borrower
shall transfer and assign all obligations, rights and duties under and to the
Note together with the pledged U.S. Obligations to such Successor Borrower
pursuant to an assignment and assumption agreement in form and substance


                                                                         Page 41
<PAGE>

satisfactory to Lender (the "Assignment Agreement"). Such Successor Borrower
shall assume the obligations under the Note and the Security Agreement and
Borrower shall be relieved of its obligations thereunder, except that Borrower
shall be required to perform its obligations pursuant to this Schedule I,
including maintenance of the Successor Borrower, if applicable. Borrower shall
pay $1,000.00 to any such Successor Borrower as consideration for assuming the
obligations under the Note and the Security Agreement pursuant to the Assignment
Agreement. Notwithstanding anything in the Mortgage to the contrary, no other
assumption fee shall be payable upon a transfer of the Note in accordance with
this paragraph, but Borrower shall pay all costs and expenses incurred by Lender
in connection with this Schedule, including Lender's reasonable attorneys' fees
and expenses, cost and expenses in obtaining review and confirmation by the
applicable Rating Agencies as required herein, and any administrative and tax
expenses associated with or incurred by the Successor Borrower.

         3. For purposes of this Schedule I, the following terms shall have the
following meanings:

                  (a) The term "Defeasance Deposit" shall mean an amount equal
to the remaining principal amount of the Note, the Yield Maintenance Amount, any
costs and expenses incurred or to be incurred in the purchase of U.S.
Obligations necessary to meet the Scheduled Defeasance Payments (including
Lender's estimate of administrative expenses and applicable federal income taxes
associated with or to be incurred by the Successor Borrower during the remaining
term of, and applicable to, the Loan) and any revenue, documentary stamp or
intangible taxes or any other tax or charge due in connection with the transfer
of the Note or otherwise required to accomplish the agreements of this Schedule
I.

                  (b) The term "Yield Maintenance Amount" shall mean the amount
(if any) which, when added to the remaining principal amount of the Note, will
be sufficient to purchase U.S. Obligations providing the required Scheduled
Defeasance Payments; and

                  (c) The term "U.S. Obligations" shall be as defined in the
REMIC regulations, specifically, Treasury Regulation ss. 1.860G-2(a)(8)(i).

                                                                         Page 42






