CEDAR SHOPPING CENTERS INC
EX10-09A.TXT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>30
<FILENAME>ex10-09a.txt
<DESCRIPTION>EX10-09A.TXT
<TEXT>
<PAGE>

                           RECAPITALIZATION AGREEMENT

        AGREEMENT (this "Agreement") made as of this 2nd day of October, 2003 by
and among DELAWARE 1851 ASSOCIATES, LP, a Pennsylvania limited partnership (the
"Partnership"), INDENTURE OF TRUST OF BART BLATSTEIN DATED AS OF JUNE 9, 1998, a
Pennsylvania trust ("1998 Trust"), IRREVOCABLE INDENTURE OF TRUST OF BARTON
BLATSTEIN DATED JULY 13, 1999, a Pennsylvania trust ("1999 Trust"; and together
with 1998 Trust, "Original LPs"), WELSH-SQUARE, INC., a Pennsylvania corporation
("Original GP"; Original LPs and Original GP are sometimes collectively referred
to herein as the "Owners", or each individually, an "Owner") and CSC-COLUMBUS
LLC ("Cedar").

                               W I T N E S S E T H

        WHEREAS, pursuant to that certain Limited Partners Agreement of the
Partnership, dated April 21, 1999, by and between Original GP and The Blatstein
Family Trust II; as amended and corrected by that certain Amendment to Limited
Partners Agreement of the Partnership dated as of December 19, 2000 and that
certain Limited Partners Agreement of the Partnership executed on December 19,
2000 to be effective as of April 21, 1999; as further amended by that certain
Assignment, Assumption and Modification Agreement dated as of December 19, 2000;
and as further amended by that certain Amendment to Limited Partnership of the
Partnership, dated June 24, 2002 (as so amended, the "Partnership Agreement");
Original GP is the general partner and Original LPs are limited partners in the
Partnership which owns the Property (as hereinafter defined);

        WHEREAS, the Owners desire to recapitalize their interests in and to the
Partnership; and

        WHEREAS, Cedar desires that the Partnership issue to Cedar interests in
and to the Partnership in exchange for the payments by Cedar (in the form of
capital contributions and loans, as more particularly set forth herein) of an
initial funding amount as determined and governed by the terms and provisions of
this Agreement (such recapitalization and issuance being herein referred to as
the "Recapitalization").

        NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, the parties hereto covenant and agree
as follows:

                                   ARTICLE I
                              Issuance of Interests

        1.1     Interests. The Owners hereby agree to cause the Partnership to
recapitalize the existing Partnership interests of the Owners and to issue
interests in and to the Partnership to Cedar (and to an affiliate of Cedar) so
that said recapitalization and issuance will result in:

                A.      Said affiliate of Cedar becoming the general partner of
the Partnership, owning one percent (1%) of the common interests in and to the
Partnership ("Cedar GP Interests");

<PAGE>

                B.      Cedar becoming a limited partner of the Partnership,
owning ninety-nine percent (99%) of the common interests in and to the
Partnership ("Cedar LP Interests" and, together with Cedar GP Interests, the
"Interests"); and

                C.      All of the Owners' interests in the Partnership being
recapitalized into a preferred interest (the "Preferred Interest").

        1.2     Permitted Exceptions. Upon the issuance of the Interests, the
Property shall be subject only to those matters set forth on EXHIBIT A annexed
hereto (collectively, the "Permitted Exceptions").

        1.3     Other Agreement.

        The parties acknowledge that, pursuant to the terms of that certain
Contribution Agreement (the "Other Agreement"), among Firehouse Realty Corp.
("Firehouse"), Reed Development Associates, Inc. ("Reed"), South River View
Plaza, Inc. ("South"), Riverview Development Corp. ("Development"), Riverview
Commons, Inc. ("Commons"; and together with Firehouse, Reed, South and
Development, the "Other Agreement Owners"), and CSC-Riverview LLC (the "Other
Agreement Buyer"), the Other Agreement Owners have agreed to consummate the
transaction more particularly described in the Other Agreement (the closing of
such other transaction, the "Other Agreement Closing"). Notwithstanding anything
to the contrary contained herein or in the Other Agreement, the Closing under
this Agreement is specifically contingent, as set forth in Sections 7.2.1(H) and
7.2.2(C) hereof, upon the Other Agreement Closing (which shall include, without
limitation, the making of the loan contemplated by the Other Agreement (the
"Other Agreement Owners Loan")). It is expressly understood and agreed that the
Closing and the Other Agreement Closing shall occur simultaneously and that, if
the Other Agreement is terminated in accordance with its terms, then this
Agreement shall similarly terminate and, in connection with any such
termination, if (i) the Other Agreement Owners are entitled to the downpayment
under the Other Agreement in connection with such termination, then, in such
case, the Owners shall be entitled to the Downpayment in connection with such a
termination under this Agreement, and (ii) the Other Agreement Buyer is entitled
to a refund of the downpayment under the Other Agreement in connection with such
termination, then, in such case, Cedar shall be entitled to a refund of the
Downpayment. A default by the Other Agreement Owners under the Other Agreement
shall be deemed to be a default by Owners under this Agreement and a default by
the Other Agreement Buyer under the Other Agreement shall be deemed to be a
default by Cedar under this Agreement.

                                   ARTICLE II
                             Initial Funding Amount

        2.1     Initial Funding Amount. In consideration for the issuance of the
Interests to Cedar, Cedar shall (i) loan to Owners an amount equal to Six
Million Three Hundred Sixty Seven Thousand ($6,367,000) Dollars (the "Owners
Loan"), on a nonrecourse basis, secured by the Preferred Interest, and (ii)
contribute to the Partnership an initial capital amount equal to the sum of all
legal fees, title insurance premiums and other closing costs to be paid by Cedar
in connection with the Closing (as hereinafter defined), as the same may be
adjusted pursuant to the

                                       -2-
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terms of this Agreement (the "Initial Capital Amount"). The Owners Loan and the
Initial Capital Amount are sometimes collectively referred to herein as the
"Initial Funding Amount".

        2.2     Method of Payment. The Initial Funding Amount shall be disbursed
as follows: (a) simultaneously with the execution and delivery of this
Agreement, Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the
"Downpayment") by wire transfer of immediately available federal funds to the
account of Escrow Agent (as hereinafter defined) in accordance with the wire
instructions set forth on EXHIBIT B annexed hereto to be held in escrow pursuant
to the provisions of Article IX hereof; and (b) at the closing of the
transactions contemplated hereby (the "Closing"), the balance of the Owners Loan
in the sum of Five Million Eight Hundred Sixty Seven Thousand ($5,867,000)
Dollars, subject to a credit to Cedar for the interest earned on the Downpayment
and subject to other apportionments and other adjustments required to be made
pursuant to this Agreement (the "Balance of the Initial Funding Amount") by wire
transfer of immediately available federal funds to the bank account designated
in writing by the Owners prior to the Closing. Except as otherwise expressly
provided in this Agreement, the Downpayment is fully non-refundable.

        2.3     Downpayment. The party or parties hereunder that shall be
entitled to receive the Downpayment shall receive all interest that shall have
accrued thereon; provided, however, that if the Closing shall occur, the amount
of any interest earned on the Downpayment shall be credited in favor of Cedar
against the Balance of the Initial Funding Amount. The Downpayment, together
with all interest thereon, shall be held by Escrow Agent in accordance with
Article IX hereof.

                                   ARTICLE III
                                   Disclaimer

        3.1     Disclaimer of Warranties. Cedar is acquiring the Interests with
the Property being "AS IS" with all faults and defects. Except as specifically
stated in this Agreement, the Owners hereby specifically disclaim any
representation or warranty, oral or written, including, but not limited to,
those concerning (i) the nature and condition of the Property, (ii) the manner,
construction, condition and state of repair or lack of repair of any
improvements located on the Property, (iii) the compliance of the Property or
its operation with any laws, rules, ordinances, or regulations of any government
or other body, it being specifically understood that Cedar has had the full
opportunity to determine for itself the condition of the Property, and (iv) the
income and expenses of the Property. The issuance of the Interests as provided
for herein is made with the understanding that Cedar has inspected the Property,
is aware of the condition thereof, and has apprised itself of all information
with respect to the Property and that, except as otherwise provided herein, the
issuance is made with the Property in an "as is" condition. Cedar expressly
acknowledges that in consideration of the agreements of the Owners herein,
except as otherwise specified herein, THE OWNERS MAKE NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY DECLARATION OF LAW, INCLUDING,
BUT IN NO WAY LIMITED TO, ANY WARRANTY OF QUANTITY, QUALITY, CONDITION,
HABITABILITY, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OF THE PROPERTY, THE INTERESTS, ANY IMPROVEMENTS, THE PERSONALTY OR SOIL
CONDITIONS. The Owners are not liable

                                       -3-
<PAGE>

or bound in any manner by expressed or implied warranties, guarantees, promises,
statements, representations or information pertaining to the Interests or the
Property made or furnished by any real estate broker, agent, employee, servant
or other Person (as hereinafter defined) representing or purporting to represent
the Owners unless such representations are expressly and specifically set forth
herein. For purposes of this Agreement, the term "Person" shall mean any
individual, partnership, corporation, limited liability company, trust or other
entity.

                                   ARTICLE IV
                    The Owners' Representations and Covenants

        4.1     The Owners jointly and severally represent as follows:

                A.      Original GP is a corporation duly organized and validly
existing under and by virtue of the laws of the Commonwealth of Pennsylvania and
is in good standing in the Commonwealth of Pennsylvania. Original GP has all
requisite power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. Annexed hereto as EXHIBIT C
is a true, correct and complete copy of the Certificate of Incorporation of
Original GP, which Certificate of Incorporation has not been amended or
modified, except as set forth on EXHIBIT C. True, correct and complete copies of
all minute books, stock books and stock transfer records of Original GP have
been delivered to Cedar. The sole asset of Original GP is Original GP's
partnership interest in the Partnership.

                B.      1998 Trust is a trust validly existing under and by
virtue of the laws of the Commonwealth of Pennsylvania. 1998 Trust has all
requisite power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. Annexed hereto as EXHIBIT D
is a true, correct and complete copy of the Indenture of Trust of 1998 Trust,
which Indenture of Trust has not been amended or modified. The trustees
presently serving are Jil Blatstein, Brian K. Friedman and Joseph W. Seidle. Jil
Blatstein, Brian K. Friedman and Joseph W. Seidle are duly authorized to execute
and deliver this Agreement on behalf of 1998 Trust.

                C.      1999 Trust is a trust validly existing under and by
virtue of the laws of the Commonwealth of Pennsylvania. 1999 Trust has all
requisite power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. Annexed hereto as EXHIBIT E
is a true, correct and complete copy of the Irrevocable Indenture of Trust of
1999 Trust, which Irrevocable Indenture of Trust has not been amended or
modified. The trustees presently serving are Brian K. Friedman and Joseph W.
Seidle. Brian K. Friedman and Joseph W. Seidle are duly authorized to execute
and deliver this Agreement on behalf of 1999 Trust.

                D.      The Partnership has been and continues to be treated as
a "partnership" for all federal, state and local income tax purposes.

                E.      The Partnership is the owner in fee of certain real
property located at 1851 South Christopher Columbus Boulevard, Philadelphia,
Pennsylvania 19148 (also known as Columbus Crossing Shopping Center) together
with all improvements located thereon (the "Fee Property"), more particularly
described in EXHIBIT F annexed hereto, subject only to the

                                       -4-
<PAGE>

Permitted Exceptions. The Fee Property, together with (a) the Personal Property
(as that term is hereinafter defined), (b) the Leases (as that term is
hereinafter defined), (c) all easements and rights appurtenant to the Fee
Property, if any, (d) to the extent assignable, the Permits, and (e) all Records
and Plans in the possession or control of the Owners or the Partnership, are
collectively referred to as the "Property").

                F.      The Partnership is duly organized and validly existing
under and by virtue of the laws of the Commonwealth of Pennsylvania and is in
good standing in the Commonwealth of Pennsylvania. A true, correct and complete
copy of the Certificate of Limited Partnership of the Partnership, which
Certificate of Limited Partnership has not been amended or modified, is annexed
hereto as EXHIBIT G. A true, correct and complete copy of the Partnership
Agreement, which Partnership Agreement has not been further amended or modified,
is annexed hereto as EXHIBIT G. The Owners are the legal and beneficial owners
of 100% of the partnership interests in the Partnership, Original GP is the sole
general partner of the Partnership, and Original LPs are the sole limited
partners of the Partnership. The Owners own their interests in the Partnership
free and clear of any liens other than as created pursuant to the Mortgage Loan.
No portion of such partnership interests is subject to any warrant to acquire,
option, call, put or other right issued or outstanding pursuant to which such
partnership interests may be purchased or additional partnership interests may
be issued, and no Person other than the Owners has any voting rights in respect
of the Partnership. The Partnership has the full power and authority to own the
Property. The sole assets of the Partnership are the Property and any cash,
certificates of deposit and other assets customarily held in connection with the
Partnership, or the use or management of the Property.

                G.      This Agreement (i) has been duly authorized, executed
and delivered by the Owners and no other proceedings on the part of the Owners
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, and (ii) is the legal, valid and binding obligation of the
Owners enforceable against the Owners in accordance with its terms (subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally).

                H.      The execution, delivery, observance and performance by
the Owners of this Agreement and the transactions contemplated hereby will not
(i) result in any violation of the organizational documents of any of the Owners
or the Partnership, (ii) violate any material contractual provision, law,
statute, ordinance, rule, regulation, judgment, decree or order applicable to
any of the Owners or the Partnership, (iii) conflict with, or cause a breach of,
or a default under, or result in a termination, modification, or acceleration
of, any material obligation of any of the Owners or the Partnership.

                I.      The Property is encumbered by a first mortgage (the
"Mortgage") securing a loan in the original principal amount of Seventeen
Million Five Hundred Thousand and 00/100 Dollars ($17,500,000.00) (the "Mortgage
Loan"), made by General Electric Capital Corporation ("Mortgagee") to the
Partnership on June 27, 2002. A true, correct and complete schedule of the
documents evidencing the Mortgage Loan (the "Mortgage Loan Documents") is
annexed hereto as EXHIBIT H. True, accurate and complete copies of the Mortgage
Loan Documents in all material respects have been delivered to Cedar. The
Mortgage Loan Documents are in full force

                                       -5-
<PAGE>

and effect and have not been amended. As of the date hereof, no default exists
under any of the Mortgage Loan Documents. The outstanding principal balance of
the Mortgage Loan as of the date of this Agreement is Seventeen Million Five
Hundred Thousand and 00/100 Dollars ($17,500,000.00). There is no prepayment
penalty or other fee payable in connection with a voluntary prepayment of the
Mortgage Loan other than an exit fee equal to 1% of the outstanding principal
balance of the Mortgage Loan.

                J.      The Property is not subject to any mortgages, liens or
encumbrances other than the Mortgage Loan and the other Permitted Exceptions
(upon Closing).

                K.      No consent, approval, waiver, license, authorization or
declaration of, or filing or registration with, any Person is or will be
required in connection with the execution, delivery and performance of this
Agreement by the Owners.

                L.      There are no material contracts or agreements, written
or oral, which affect any of the Owners, the Partnership or the Property, except
those described either in this Agreement or set forth in Exhibits to this
Agreement.

                M.      There are no takings, condemnations, betterments,
assessments, actions, suits, arbitrations, claims, attachments, assignments for
the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings, actual or proposed, pending or, to the best of the Owners'
knowledge, threatened against the Property, the Owners or the Partnership except
for claims covered under applicable insurance policies.

                N.      No tax certiorari proceeds with respect to the Property
are presently pending or remain outstanding other than that certain Real Estate
Market Value Appeal for Tax Year 2004, dated September 24, 2003, filed on
September 24, 2003 based upon failure of tax abatement with respect to the
Property to be properly reflected in Board of Revision of Taxes Notice of
Proposed Changes in Market Value for Real Estate Taxes in 2004, dated August 1,
2003.

                O.      True, correct and complete copies (in all material
respects) of the leases, licenses or other occupancy agreements affecting the
Property (collectively, the "Leases") and subleases affecting the Property
(collectively, the "Subleases") have been delivered to Cedar. The information
set forth on EXHIBIT I annexed hereto (the "Schedule of Leases") is true,
complete and correct in all material respects, and the Leases and the Subleases
are in full force and effect and have not been amended, except as set forth in
the Schedule of Leases. None of the Leases require any security deposits to have
been made by any of the respective tenants under said Leases (the "Tenants").
The rent roll (the "Rent Roll") annexed hereto as EXHIBIT J is true, correct and
complete in all material respects based upon the current operation of the
Property and the rents set forth on the Rent Roll are the rents currently being
collected. All of the landlord's obligations under the Leases which the landlord
is obligated to perform in all material respects prior to the Closing have or
will have been performed.

                P.      Except as set forth on the Schedule of Leases:

                                       -6-
<PAGE>

                        (a)     there are no Leases or Subleases and no Person,
                                other than the Partnership and the Tenants and
                                subtenants under the Subleases (the
                                "Subtenants"), has any right of possession of
                                the Property;

                        (b)     there are no unsatisfied "Take-Over" space
                                obligations or "Take-Back" space obligations
                                ("Take-Over" space obligations mean rent
                                obligations of the Tenant in other buildings
                                assumed by the landlord, and "Take-Back" space
                                obligations mean obligations imposed upon the
                                landlord to sublet or otherwise be responsible
                                for the obligations of a Tenant under a Lease);

                        (c)     to the Owners' knowledge there are no disputes
                                with Tenants as to the amount of their rental
                                obligations;

                        (d)     the rents set forth on the Rent Roll were
                                actually collected for the month of September,
                                2003;

                        (e)     there are no arrearages under any of the Leases;

                        (f)     no Tenant or Subtenant has any option to
                                purchase the Property;

                        (g)     neither the Owners nor the Partnership have
                                received from any Tenant any written notice
                                claiming any material default by the landlord
                                under its Lease which has not been complied
                                with, and neither the Owners nor the Partnership
                                has delivered to Tenant any written notice
                                claiming a default by Tenant under a Lease which
                                has not been complied with, and, to the best
                                knowledge of the Owners, there are no
                                circumstances which, after notice and the
                                expiration of any applicable grace period, would
                                constitute a default by either the landlord or
                                any Tenant under the Leases in any material
                                respects;

                        (h)     no Tenant has any right of first offer, right of
                                first refusal, option or other preferential
                                right to expand its premises; and

                        (i)     no Tenant has asserted offsets or claims
                                against, or has any defense to, rental payable
                                or obligations under the Leases.

                Q.      No guarantor of any of the Leases has been released or
discharged voluntarily (or, to the best of the Owners' knowledge either
involuntarily or by operation of law) from any obligation related to the Lease.
All of the improvements to be constructed by the landlord, if any, contemplated
under the Leases or as required therein and in all collateral agreements and
plans and specifications respecting same have been completed as so required in
all material respects, and any fees, costs, allowances, advances or other
expenses to be paid by the landlord for tenant improvements or tenant finish
work have been paid in full. Neither the Partnership's interest in the Leases
nor any of the rentals due or to become due under the Leases

                                       -7-
<PAGE>

has been or will be, at the closing, assigned, encumbered or subject to any
liens, except pursuant to the Mortgage Loan Documents.

                R.      There are no management, service, supply, equipment
rental, and similar agreements affecting the Property, and there are no
month-to-month service arrangements on expired or automatic renewable contracts
(collectively, the "Service Contracts") which will bind the Property, the
Partnership, Cedar or the Owners after the Closing.

                S.      All federal, state and local tax returns required to be
filed by the Owners and the Partnership have been timely, duly and accurately
completed and filed, and all federal, state and local taxes required to be paid
by the Owners and the Partnership have been paid in full in connection with all
filed returns.

                T.      The Owners and the Partnership have no material
liabilities or obligations of any nature (whether known or unknown and whether
absolute, accrued, contingent or otherwise) except for the Mortgage Loan, and,
in the case of the Partnership only, current liabilities incurred in the
ordinary course of business in an amount not greater than Twenty Five Thousand
($25,000.00) Dollars. Except in connection with the Mortgage Loan, the interests
of the Owners in the Partnership and the Property have not been pledged or
transferred.

                U.      Other than as contemplated by this Agreement, there are
no outstanding options to purchase, rights of first offer, rights of first
refusal, warrants, calls, commitments, conversion rights, rights of exchange,
plans or other agreements of any character, absolute or contingent, to acquire
all, or any portion of, the Property or the Interests.

                V.      As of the date hereof, neither the Owners nor the
Partnership have entered into any brokerage agreements or lease commission
agreements. No leasing commission is now or will hereafter become due or owing
in connection with any of the Leases, including, without limitation, in
connection with any renewals or extensions of the term thereof.

                W.      The Personal Property has not been assigned or conveyed
to any other party (other than as security for the Mortgage Loan). For purposes
of this Agreement, the term "Personal Property" shall mean all equipment,
appliances, tools, machinery, supplies, building materials and other personal
property of every kind and character owned by the Owners or the Partnership and
attached to, appurtenant to, located in or used in connection with the operation
of the Property.

                X.      Neither the Owners, nor the Partnership, have received
any written notice of any violation or any alleged violation of any
Environmental Laws has been issued or given by any Governmental Authority (as
hereinafter defined) which remains uncured. For purposes of this Agreement, the
term "Hazardous Materials" shall mean (a) any toxic substance, hazardous waste,
hazardous substance or related hazardous material; (b) asbestos in any form
which is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment which contain dielectric fluid containing levels
of polychlorinated biphenyls in excess of presently existing federal, state or
local safety guidelines, whichever are more stringent; and (c) any substance,
material or chemical which is defined as or included in the definition of
"hazardous substances", "toxic substances", "hazardous materials", "hazardous
wastes" or words

                                      -8-
<PAGE>

of similar import under any federal, state or local statute, law, code, or
ordinance or under the regulations adopted or guidelines promulgated pursuant
thereto, including, but not limited to, the Environmental Laws. For purposes of
this Agreement, the term "Environmental Laws" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9061, et seq.; the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. Section 6901, et seq.; and the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251, et seq., as any of
the foregoing may be amended from time to time, and any other federal, state and
local laws and regulations, codes, statutes, orders, decrees, guidance
documents, judgments or injunctions, now or hereafter issued, promulgated,
approved or entered thereunder, relating to pollution, contamination or
protection of the environment, including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or wastes
into the environment or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials. For purposes of this Agreement, the term "Governmental
Authority" shall mean the United States government, any state, regional, local
or any other political subdivision of any of the foregoing, and any agency,
department, commission, board, court bureau or instrumentality of any of them
having jurisdiction over the Property, any of the Owners or the Partnership.

                Y.      The Owners have delivered to Cedar a true, correct and
complete copy of that certain Phase I Environmental Site Assessment Report,
dated December 7, 2001, prepared by U.S. Inspect Commercial Real Estate
Services, as updated by that certain Phase I Environmental Site Assessment,
dated August 8, 2003, prepared by ConTech Services, Inc. directly for Cedar.

                Z.      [intentionally omitted]

                AA.     There are, and at the Closing there will be, no
employees and no employment contracts, operating agreements, management
contracts, listing agreements, consulting agreements, union contracts, labor
agreements, pension plans, profit sharing plans or employee benefit plans which
relate to any of the Owners, the Partnership or the Property (collectively,
"Operating Agreements").

                BB.     The Partnership maintains insurance with respect to the
Property as set forth on EXHIBIT K annexed hereto. True, correct, and complete
copies of these policies have been delivered to Cedar and are in full force and
effect. True, correct, and complete copies of all policies of liability
insurance held in connection with the Property during the Partnership's tenure
of ownership of the Property have been delivered by the Owners to Cedar. Neither
the Owners nor the Partnership has received any written notice from any
insurance company which has issued a policy with respect to the Property or from
Mortgagee requesting or requiring performance of any structural or other major
repair or alteration to the Property which has not been complied with.

                CC.     Neither the Partnership nor any of the Owners is a
"foreign person" defined pursuant to Section 1445 of the Internal Revenue Code
of 1986, as amended.

                                       -9-
<PAGE>

                DD.     All Records and Plans in the possession or control of
the Owners or the Partnership have been made available to Cedar. For purposes of
this Agreement the term "Records and Plans" shall mean all of the following
items which are in the possession of or under the control of the Owners or the
Partnership: (A) all accounting, tax, financial, and other books and records
(including tax returns) maintained in connection with the renovation,
construction, use, maintenance, repair, leasing and operation of the Property
and the formation, existence and operation of the Partnership, (B) all building
plans and specifications (including "as-built" drawings) with respect to the
improvements and (C) all structural reviews, architectural drawings and
engineering, soil, seismic, geologic and architectural reports, studies and
certificates and other documents pertaining to the Property. Records and Plans
also means such additional books, records, plans, specifications, reports,
studies and other documents maintained or prepared after the date of this
Agreement. Except as expressly provided herein, no representations are given
regarding the accuracy or completeness of the Records and Plans.

        The representations and warranties made in this Section 4.1 shall
survive the Closing shall survive the Closing and remain in full force and
effect for a period of four (4) months after the date of the Closing. The Owners
shall have no liability to Cedar in respect of said representations and
warranties unless Cedar shall have delivered to the Owners, within such four (4)
month period, a claim specifying the alleged breach of any one or more of such
representations, in which case the Owner's liability shall survive with respect
to the matters alleged in such claim until resolution thereof. For purposes of
this Agreement the term "material" shall mean (unless the context clearly
indicates otherwise) any fact or condition, the presence or absence of which,
has or could have a significant adverse effect on the financial condition or
value of the Property or the continued use and enjoyment thereof.

        4.2     Cedar represents as follows:

                A.      Cedar is a limited liability company duly organized and
validly existing under and by virtue of the laws of the State of Delaware and is
in good standing in the State of Delaware. Cedar has all requisite power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.

                B.      This Agreement (i) has been duly authorized, executed
and delivered by Cedar and no other proceedings on the part of Cedar are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, and (ii) is the legal, valid and binding obligation of
Cedar enforceable against Cedar in accordance with its terms (subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally).

                C.      The execution, delivery, observance and performance by
Cedar of this Agreement and the transactions contemplated hereby will not (i)
result in any violation of the organizational documents of Cedar, (ii) violate
any contractual provision, law, statute, ordinance, rule, regulation, judgment,
decree or order applicable to Cedar, (iii) conflict with, or cause a breach of,
or a default under, or result in a termination, modification, or acceleration
of, any obligation of Cedar, or (iv) permit any other party to terminate or
modify any agreement or instrument to which Cedar is a party or by which any of
them is bound.

                                      -10-
<PAGE>

        4.3     The Owners hereby covenant and agree with Cedar as follows:

                A.      At all times up to the Closing Date, the Owners shall
maintain or cause to be maintained insurance upon the Property in the same
coverages and amounts as the insurance policies on the Property on the date
hereof.

                B.      At all times up to the Closing Date, the Owners shall,
and shall cause the Partnership to, operate and maintain the Property in
substantially the same manner as it is now operated and maintained, and the
Owners shall, and shall cause the Partnership to, use reasonable efforts to
maintain the physical condition of the Property in its current condition,
reasonable and ordinary wear and tear and damage by fire and casualty excepted.

                C.      The Owners shall neither transfer nor remove, and shall
not permit the Partnership to transfer or remove, any Personal Property or
fixtures from the Property subsequent to the date hereof, unless the same are no
longer needed for the maintenance and operation of the Property or except for
purposes of replacement thereof, in which case such replacements shall be
promptly installed prior to Closing and shall be comparable in quality to the
items being replaced.

                D.      The Owners shall not, and shall not permit the
Partnership, without the prior written consent of Cedar, which consent may be
granted or withheld in Cedar's sole discretion, to (i) enter into any Lease nor
modify, renew, extend, replace, terminate or otherwise change any of the terms,
conditions or covenants of any existing Lease, or (ii) consent to any Sublease
or any modification, renewal, replacement, termination or other change of any of
the terms, conditions or covenants of any existing Sublease.

                E.      The Owners shall not, and shall not permit the
Partnership to, enter into any new Service Contract after the date hereof
without the prior written consent of Cedar, which consent may be granted or
withheld in Cedar's sole discretion.

                F.      The Owners shall not enter into any Operating Agreement
after the date hereof without the prior written consent of Cedar, which consent
may be granted or withheld in Cedar's sole discretion.

                G.      The Owners shall not, and shall not permit the
Partnership to, amend or modify any Permits with respect to the Property, and
shall cause the Partnership to, keep in full force and effect and/or renew all
Permits. For purposes of this Agreement, the term "Permits" shall mean all
approvals, consents, registrations, franchises, permits, licenses, variances,
certificates of occupancy and other authorizations with regard to zoning,
landmark, ecological, environmental, air quality, subdivision, planning,
building or land use required by any Governmental Authority for the
construction, lawful occupancy and operation of the Improvements and the actual
use thereof.

                H.      The Owners shall, and shall cause the Partnership to,
timely comply with all Legal Requirements in all material respects. For purposes
of this Agreement, the term "Legal Requirements" shall mean any law, statute,
ordinance, order, rule, regulation, decree or other requirement of a
Governmental Authority, and all conditions of any Permit.

                                      -11-
<PAGE>

                I.      The Owners shall, and shall cause the Partnership to,
pay all obligations and trade creditors in the normal course of business and not
defer any expenses or costs which would be paid or incurred in the normal course
of business.

                J.      The Owners shall not, and shall not permit the
Partnership to, without the written consent of Cedar, convey any interest,
directly or indirectly, in the Interests or the Property.

                K.      The Owners shall not, and shall not permit the
Partnership to, withdraw, settle or otherwise compromise any protest or
reduction proceeding affecting real estate taxes assessed against the Property
for any fiscal period in which the Closing is to occur or any subsequent fiscal
period without the consent of Cedar, which consent may be granted or withheld in
Cedar's sole discretion.

                L.      The Owners shall not, and shall not permit the
Partnership to, create, assume, incur or suffer to exist any lien (other than
the Permitted Exceptions).

                M.      The Owners shall, and shall cause the Partnership to,
use good faith efforts to obtain the Tenant Estoppel Certificates. Additionally,
if Cedar shall elect not to prepay the Mortgage Loan in connection with the
Closing, the Owners shall, and shall cause the Partnership to, use good faith
efforts to obtain (provided the Owners shall not be obligated to obtain as a
condition of Closing): (i) an estoppel certificate ("Mortgagee Estoppel") duly
executed by Mortgagee to be dated not more than thirty (30) days prior to the
Closing Date, certifying as to the outstanding principal balance of the loan,
the date through which interest on the loan has been paid and that the Mortgagee
(A) has not delivered any notice of default under the Mortgage Loan Documents
that remains uncured, and (B) does not have knowledge of any default under the
Mortgage Loan Documents, and (ii) a consent duly executed by Mortgagee (the
"Mortgagee Consent"), to be dated not more than thirty (30) days prior to the
Closing Date, authorizing the issuance by the Partnership of the Interests to
Cedar and all other action required to be taken by the Owners and the
Partnership at the Closing. The Owners shall deliver the original executed
Mortgagee Estoppel and the Mortgagee Consent to Cedar if and when the same is
received by the Owners. Cedar shall, at its own cost and expense, cooperate with
the Owners by providing Mortgagee information and documents required by
Mortgagee in connection with the Mortgagee Consent and Mortgagee Estoppel.

                N.      The Owners shall not, and shall not permit the
Partnership to, bring (or permit to be brought) any Hazardous Materials in,
upon, under, over or from the Property in violation of Environmental Laws.

                O.      The Owners shall not, and shall not permit the
Partnership to, remove or dispose of (or permit to be removed or disposed of)
any Hazardous Materials in, upon, under, over or from the Property in violation
of Environmental Laws.

                P.      The Owners shall not, and shall not permit the
Partnership to, hereafter engage any new employees for any of the Owners, the
Partnership or the Property.

                                      -12-
<PAGE>

                Q.      The Owners shall, and shall cause the Partnership to,
make all interest payments as required by the Mortgage Loan, but, shall not,
without Purchaser's prior written consent, cause any prepayments of principal to
occur prior to the Closing Date.

                R.      The Owners shall, at Cedar's sole cost and expense,
cooperate with Cedar with regard to any financing that is arranged for by Cedar
in connection with the transactions contemplated by this Agreement, and the
Owners will execute all documents reasonably required pursuant to such
financing, provided same do not impose cost or liability on the Owners.

                S.      The Owners shall not, and shall not permit the
Partnership to, collect any rent under any Lease more than one (1) month in
advance.

                T.      The Owners shall not, and shall not permit the
Partnership to, make any material alterations to the Property.

                                    ARTICLE V
                                    Brokerage

        5.1     The parties agree that Michael Salove Company (the "Broker") is
the broker in connection with this transaction. The Owners agree to pay any
commission payable to the Broker in connection with this transaction by separate
agreement. Provided the Closing occurs, Cedar shall, at the Closing, reimburse
the Owners for a portion of the fee paid to the Broker in the amount of Two
Hundred Fifty Thousand ($250,000.00) Dollars.

        5.2     Cedar hereby agrees to indemnify, defend and hold the Owners
harmless from and against any and all claims, losses, liability, costs and
expenses (including reasonable attorneys' fees) resulting from any claim that
may be made against the Owners by any broker (other than the Broker), or any
other person claiming a commission fee or other compensation by reason of this
transaction, if the same shall arise by, through or on account of any alleged
act of Cedar or Cedar's representatives.

        5.3     The Owners hereby agree to jointly and severally indemnify,
defend and hold Cedar harmless from and against any and all claims, losses,
liability, costs and expenses (including reasonable attorneys' fees) resulting
from any claim that may be made against Cedar by any broker (including the
Broker), or any other person, claiming a commission fee or other compensation by
reason of this transaction, if the same shall arise by, through or on account of
any alleged act of the Owners or the Owners' representatives.

        5.4     The obligations under this Article V shall survive the Closing
or a termination of this Agreement.

                                      -13-
<PAGE>

                                   ARTICLE VI
                             Title and Due Diligence

        6.1     Title.

                6.1.1.  Title Commitment; Title Objections. The Owners have
ordered and have caused to be delivered to Cedar, a title insurance report and
commitment (the "Commitment") for the Title Policy (as hereinafter defined) from
Legal Abstract Co., 2200 Walnut Street, Philadelphia, Pennsylvania 19103 (the
"Title Company"). Upon receipt of any updates or revisions to the Commitment,
Cedar shall furnish copies thereof to the Owners' attorneys. The parties
acknowledge and agree that the Commitment contains certain objections to title
which are not Permitted Exceptions (the "Title Objections"). If any supplement,
amendment or modification of the Commitment contains any additional Title
Objections not contained in the original Commitment, Cedar shall give notice to
the Owners, within ten (10) days of its receipt of such supplement, amendment or
modification, setting forth such additional Title Objections contained therein.
In the event Cedar fails to give notice within such ten (10) days following its
receipt of such supplement, amendment or modification, Cedar shall be deemed to
have waived its right to object thereto.

                6.1.2.  Encumbrances to Eliminate. The Owners shall be required
to eliminate (a) all mortgages (other than the Mortgage, in the event Cedar
shall elect to assume the Mortgage Loan in connection with the Closing), (b)
unpaid water charges and assessments, (c) any other Title Objections which are
in a liquidated amount and which may be satisfied by the payment of money, and
(d) any other Title Objections that were contained in the original Commitment.

                6.1.3.  Other Exceptions. Except as set forth in Section 6.1.2
above, the Owners shall not be required to bring any action or institute any
proceeding, or to otherwise incur any costs or expenses in order to attempt to
eliminate any Title Objections. If the Owners fail to eliminate any and all
Title Objections (other than those encumbrances set forth in Section 6.1.2 above
which the Owners shall be obligated to remove), then, Cedar may elect, as its
sole right and remedy, to either (i) proceed with the transactions contemplated
hereby subject to such exceptions, and Cedar shall close hereunder, without
reduction of the Initial Capital Amount, notwithstanding the existence of same,
and the Owners shall have no obligations whatsoever after the Closing Date with
respect to the Owners' failure to eliminate such exceptions, or (ii) terminate
this Agreement by notice given to Owners, in which event Cedar shall be entitled
to a return of, and Escrow Agent shall promptly deliver, the Downpayment to
Cedar. Upon such return and delivery, this Agreement shall terminate and neither
party hereto shall have any further obligations hereunder other than pursuant to
those provisions that expressly survive a termination of this Agreement.

        6.2     Liens, Judgments and Encumbrances. If, at the Closing, the
Property is subject to any mortgage or mortgages (other than the Mortgage),
unpaid taxes, water charges and assessments, or any other liens, judgments and
monetary encumbrances, the existence thereof shall not constitute a Title
Objection provided that such mortgage(s), unpaid taxes, water charges and
assessments, or any other liens, judgments and encumbrances are paid by the
Owners to the Title Company and the Title Company shall omit the same from the
Title Policy.

                                      -14-
<PAGE>

        6.3     Affidavits. If the Commitment, or any supplement, amendment or
modification thereof, discloses judgments, bankruptcies or other returns against
other persons having names the same as, or similar to, that of any of the Owners
or the Partnership, the Owners shall, or shall cause the Partnership to, deliver
to the Title Company affidavits showing that such judgments, bankruptcies or
other returns are not against the Owners or the Partnership in order to induce
the Title Company to omit exceptions with respect to such judgments,
bankruptcies or other returns. In addition, the Owners shall deliver to the
Title Company an affidavit required to cause the Title Company to issue a
non-imputation endorsement to the Title Policy and all other affidavits
customarily required of sellers of property similar to the Property.

        6.4     Violations. Notwithstanding anything to the contrary contained
herein, Owners shall cure and eliminate (and pay all related fines and penalties
and any accrued interest thereon), at Owners' cost and expense, any violations
assessed against the Property as of the Closing Date.

        6.5     [intentionally omitted]

        6.6     [intentionally omitted]

        6.7     Ongoing Site Visits. Cedar and its employees, agents,
contractors, consultants and representatives ("Consultants") shall have
reasonable access to the Property on at least one (1) Business Day's (as that
term is hereinafter defined) prior notice to Owners (which notice may be
delivered by telephone to Brian Friedman of Tower Investments, Inc. at (215)
467-4600), during reasonable times as mutually agreed upon by Owners and Cedar
solely for the purpose of (i) inspecting the physical and structural condition
of the Property and conducting non-intrusive physical inspections and tests
(non-intrusive physical inspections and tests shall include, for example, taking
de minimis samples of building materials), and (ii) monitoring the ongoing
operations of the Property (including, without limitation, the performance by
Tenants of their respective obligations under the Leases). If Cedar desires to
conduct any intrusive physical inspections and tests, including a Phase II
environmental inspection of the Property, Cedar shall identify in writing the
procedures Cedar desires to perform and request Owner's consent. If Owners
object to the inspections and tests requested by Cedar, Owners shall describe
the basis for their objection to Cedar and propose to Cedar a reasonable
alternative for resolving the issue giving rise to Cedar's request for intrusive
physical inspections or tests. If Owners consent to the inspections and tests
requested by Cedar, Cedar and Consultants shall, in performing intrusive
physical inspections or tests, (a) comply with any and all statutes, laws,
ordinances, rules and regulations applicable to the Property, and (b) restore
the Property to the condition, in all material respects, in which the same was
found before inspection or testing was undertaken, but in no event later than
two (2) Business Days after such inspection or testing occurs.

        6.8     Interviews. Cedar may communicate or conduct interviews with any
Tenant without the requirement of having received the prior consent of Owners;
provided, however, that with respect to any interview to be conducted at the
Property, Cedar shall notify Owners (which notice may be delivered by telephone
to Brian Friedman of Tower Investments, Inc. at (215) 467-4600) at least one (1)
Business Day in advance of any such interview. With respect to interviews
conducted at the Property, any such interview shall not unreasonably disrupt or
disturb (i) the on-going operation of the Property, or (ii) the quiet possession
of Tenants.

                                      -15-
<PAGE>

        6.9     Access to Books and Records. Cedar and the Consultants shall, on
at least one (1) Business Day's prior notice to Owners (which notice may be
delivered by telephone to Brian Friedman of Tower Investments, Inc. at (215)
467-4600), during reasonable times as mutually agreed upon by Owners and Cedar,
have access to all books and records of the Partnership as Cedar reasonably
requires, and Owners shall lend their reasonable assistance to Cedar and the
Consultants in connection with any such examination or audit.

                                   ARTICLE VII
                                   The Closing

        7.1     Closing Date.

                7.1.1.  The transaction contemplated herein shall be consummated
at the Closing which shall take place at the offices of the Title Company or at
such other place as shall be mutually agreed upon by the Owners and Cedar on the
earlier of (i) five (5) Business Days after the receipt by Cedar Income Fund
Partnership, L.P. or any related entity of the proceeds of a new public offering
of common stock or shares of beneficial interest (the "Offering Receipt Date"),
and (ii) October 31, 2003 (the actual date of the Closing being herein referred
to as the "Closing Date").

                7.1.2.  The parties acknowledge and agree that, it is a
condition precedent to Cedar's obligations to consummate the transactions
contemplated by this Agreement that Cedar (i) shall have received certain Tenant
Estoppel Certificates, as more particularly set forth in Section 7.2.1 (B) (such
condition, the "Tenant Estoppel Condition"), and (ii) shall receive at Closing
either the Good Standing Certificates or the Service Company Affidavits (as
those terms are hereinafter defined). If the day which is five (5) Business Days
after the Scheduled Receipts Date occurs prior to October 31, 2003, and, as of
such date, the Tenant Estoppel Condition has not yet been fully satisfied and/or
either the Good Standing Certificates or the Service Company Affidavits shall
not have yet been obtained by the Owners, then, in such event, the Closing shall
be adjourned until October 31, 2003 (or such earlier date upon which the Tenant
Estoppel Condition shall have been fully satisfied and either the Good Standing
Certificates or the Service Company Affidavits obtained by the Owners).

        7.2     Conditions to the Closing.

                7.2.1.  Conditions Precedent to Cedar's Obligations. The Closing
and Cedar's obligations with respect to the transaction contemplated by this
Agreement are subject to the satisfaction of the following conditions and the
obligations of the parties with respect to such conditions are as follows:

                A.      Title.

                        (a)     Cedar shall not have exercised its rights,
                                pursuant to Section 6.1.3 hereof, to terminate
                                this Agreement.

                        (b)     Upon payment of all premiums by the party
                                responsible for such cost pursuant to the terms
                                of Section 8.6 hereof, the Title Company

                                      -16-
<PAGE>

                                shall be willing to issue a title insurance
                                policy insuring in the Partnership good and
                                marketable fee title to the Property (subject
                                only to the Permitted Exceptions), which policy
                                shall include a non-imputation endorsement, and
                                otherwise be in accordance with the provisions
                                of Article VI hereof (the "Title Policy").

                B.      Tenant Estoppel Certificates. The Owners shall request,
or shall cause the Partnership to request, and Cedar shall have received
estoppel certificates certified to the Partnership and dated not more than
thirty (30) days prior to the Closing Date ("Tenant Estoppel Certificates") duly
executed by (i) each Major Tenant and (ii) such other Tenants so that Tenant
Estoppel Certificates shall have been received from Tenants occupying, in the
aggregate (including the space demised to Major Tenants), at least 80% of the
rentable square footage of the Property (the foregoing condition, the "Estoppel
Condition"). "Major Tenants" mean those Tenants set forth on EXHIBIT L annexed
hereto. The Tenant Estoppel Certificates shall be substantially in the form of
and substantially upon the terms set forth on EXHIBIT M annexed hereto. The
Owners shall deliver the original executed Tenant Estoppel Certificates to Cedar
as and when the same shall be delivered to the Owners, but in no event later
than ten (10) Business Days prior to the Closing Date. If any Tenant Estoppel
Certificate shall have been modified or qualified in any fashion that,
individually or in connection with other Tenant Estoppel Certificates, reveals
facts, conditions or circumstances which result or may result in a material
adverse change in the financial condition of the Property, or are inconsistent
in any material respect with the representations of the Owners set forth in
Section 4.1 above, then Cedar may disapprove the same (such disapproved Tenant
Estoppel Certificates, the "Unacceptable Certificates") by notice delivered to
the Owners promptly following Cedar's receipt of such Unacceptable Certificate,
and, for purposes of establishing whether the Estoppel Condition has been
satisfied, any Unacceptable Certificates shall be deemed not to have been
received.

                C.      Casualty or Condemnation Event. No Material Loss shall
have occurred pursuant to which Cedar shall have exercised its rights, pursuant
to the provisions of Section 7.5 hereof, to termination this Agreement.

                D.      Termination of Affiliate Loans. The Owners shall have
caused any and all sums owed by the Partnership to any affiliate of each of the
Owners to be repaid in full such that no balance is outstanding with respect to
such sums as of the Closing Date.

                E.      Representations, Warranties and Covenants of the Owners.
The Owners shall have duly performed in all material respects each and every
agreement to be performed by the Owners under this Agreement and the Owners'
representations, warranties and covenants set forth in this Agreement shall be
true and correct as of the Closing Date.

                F.      No Material Changes. On the Closing Date, there shall
have been no material adverse changes in the physical condition of the Property
and there shall have been no material adverse change in the financial condition
of any of the Owners or the Partnership.

                G.      The Owners' Deliveries. The Owners shall have delivered
the items described in Section 7.3 below.

                                      -17-
<PAGE>

                H.      The Other Agreement. Without modifying the provisions of
Section 1.3, the transactions contemplated by the Other Agreement shall occur
simultaneously with the Closing and the proceeds of the Other Agreement Owners
Loan shall have been fully disbursed in accordance with the terms of the Other
Agreement.

        The conditions set forth in this Section 7.2.1 are solely for the
benefit of Cedar and may be waived only by Cedar. Cedar shall at all times have
the right to waive any condition. Such waiver or waivers shall be in writing.
The waiver by Cedar of any condition shall not relieve the Owners of any
liability or obligation as respects any representation, warranty or covenant of
the Owners unless Cedar shall so agree in writing. Neither the Owners nor Cedar
shall act or fail to act for the purpose of permitting or causing any condition
to fail (except to the extent Cedar, in its own discretion, exercises its right
to disapprove or not to waive any such items or matters). The occurrence of the
Closing shall constitute approval by Cedar of all matters to which Cedar has a
right of approval under this Agreement and a waiver of all conditions precedent
under this Agreement.

                7.2.2.  Conditions Precedent to the Owners' Obligations. The
Closing and the Owners' obligations with respect to the transaction contemplated
by this Agreement are subject to the satisfaction of the following conditions
and the obligations of the parties with respect to such conditions are as
follows:

                A.      Cedar's Deliveries. Cedar shall have delivered the items
described in Section 7.4 below.

                B.      Covenants of Cedar. Cedar shall have duly performed each
and every agreement to be performed by Cedar under this Agreement.

                C.      The Other Agreement. Without modifying the provisions of
Section 1.3, the transactions contemplated by the Other Agreement shall occur
simultaneously with the Closing and the proceeds of the Other Agreement Owners
Loan shall have been disbursed in accordance with the terms thereof.

        The conditions set forth in this Section 7.2.2 are solely for the
benefit of the Owners and may be waived only by the Owners. The Owners shall at
all times have the right to waive any condition. Such waiver or waivers shall be
in writing. The waiver by the Owners of any condition shall not relieve Cedar of
any liability or obligation as respects any covenant of Cedar unless the Owners
shall so agree in writing. Neither the Owners nor Cedar shall act or fail to act
for the purpose of permitting or causing any condition under this Section 7.2.2
to fail (except to the extent the Owners, in its own discretion, exercise its
right not to waive any such items or matters). The occurrence of the Closing
shall constitute approval by the Owners of all matters to which the Owners has a
right of approval under this Agreement and a waiver of all conditions precedent
under this Agreement.

        7.3     At the Closing, the Owners shall deliver or cause to be
delivered each of the following items to Cedar:

                                      -18-
<PAGE>

                A.      A counterpart of the Amended and Restated Agreement of
Limited Partnership (the "Amended Partnership Agreement"), in the form annexed
hereto as EXHIBIT N duly executed by the Owners, it being understood that any
remaining blanks and bracketed provisions in the Amended Partnership Agreement
shall be accurately completed, together with evidence satisfactory to Cedar that
the books of the Partnership have been amended to reflect the Interests.

                B.      Affidavits executed by each of the Owners in accordance
with the provisions of Section 1445 of the Internal Revenue Code of 1986, as
amended, if required.

                C.      A Certificate of Good Standing of each of the Owners
issued by the Secretary of State of the state of organization for each such
entity, dated not more than thirty (30) days prior to the Closing, and
Certificates of Good Standing of the Partnership issued by the Secretaries of
State of the state in which the Property is located and of the state that the
Partnership is organized, dated not more than thirty (30) days prior to the
Closing ("Good Standing Certificates"). Notwithstanding the foregoing, provided
the Owners shall have diligently attempted to obtain Good Standing Certificates,
if same shall not have been timely issued by the Secretary of State, in lieu of
the Good Standing Certificates, Owners shall deliver affidavits or
certifications with respect to each entity (collectively "Service Company
Affidavits") from a reputable legal information services company (i) stating
that it has received oral confirmation from the Secretary of State that such
entities are in good standing, and (ii) agreeing to promptly forward to Cedar
the Good Standing Certificates when same are received.

                D.      Requisite affidavits and consents that each of the
Owners and the Partnership is authorized to complete the transaction
contemplated by this Agreement and to issue the Interests and take all other
action contemplated by this Agreement, including, without limitation, an
incumbency certificate for each of the individuals executing a document on
behalf of the Partnership and each of the Owners, and resolutions of the board
of directors or of the members, as applicable, for the Partnership and each of
the Owners.

                E.      The Tenant Estoppel Certificates.

                F.      The Title Policy in the form required by Section 7.2.1
(A) hereof, together with all customary affidavits required by the Title Company
in connection with the issuance of the policy.

                G.      The Owners shall execute and deliver to Cedar the
documents evidencing and securing the Owners Loan, including, without
limitation, a note, a pledge agreement and UCC-1 financing statements (the
"Owners Loan Documents") in accordance with the documents attached hereto as
EXHIBIT O.

                H.      The shareholders of Original GP shall deliver a consent
to the Owners Loan Documents.

                I.      The trustees of each Original LP shall deliver a consent
to the Owners Loan Documents.

                                      -19-
<PAGE>

                J.      Bart Blatstein shall deliver a "bad boy" guaranty to
Cedar in the form of EXHIBIT P annexed hereto.

                K.      A fee agreement (the "Administrative Services
Agreement"), in form reasonably satisfactory to the Owners and Cedar, which
shall provide for an annual fee, in the amount of Eight Thousand Seven Hundred
Fifty and 00/100 Dollars ($8,750.00) per year, to be made by the Owners to the
Cedar GP, on account of administrative services rendered by the Cedar GP, duly
executed by the Owners.

                L.      A certificate of the Owners, dated as of the Closing
Date, certifying that all of the representations and warranties of the Owners
set forth in Section 4.1 hereof are true and correct in all material respects as
of the Closing Date.

                M.      All applicable transfer tax forms, if any, duly executed
by the Owners.

                N.      Notices to each of the Tenants (the "Tenant Notices"),
in form reasonably satisfactory to the Owners and Cedar, duly executed by the
Owners, directing the Tenants to make all payments under the Leases to Cedar, or
as Cedar may direct.

                O.      The Records and Plans, in the possession or control of
the Owners or the Partnership.

                P.      Original counterparts of the Leases, any Service
Contract or Operating Agreement entered into after the date hereof (and approved
by Cedar pursuant to Section 4.3 hereof), the Permits that shall be in the
Owners' possession or control (other than those Permits that must remain at the
Premises), and original counterparts of all other documents and materials in the
Owners' possession or control relating to the Property, including, without
limitation, all leasing and property files and keys.

                Q.      A certificate from the City of Philadelphia confirming
that there are no outstanding violations and that the present uses of the
Property are in conformity with applicable zoning requirements.

                R.      An Right of First Refusal Agreement (the "Right of First
Refusal", is substantially the form of EXHIBIT Q annexed hereto, between the
Owners and the Partnership, duly executed by the Owners and in form suitable for
recording.

                S.      All documents and moneys required pursuant to the terms
of the Other Agreement to be delivered by the Other Agreement Owners at the
Other Agreement Closing.

                T.      All sums required to be paid by the Owners under this
Agreement.

        7.4     At the Closing, Cedar shall deliver or cause to be delivered
each of the following items:

                A.      The Balance of the Owners Loan Amount and all other sums
required to be paid by Cedar under this Agreement.

                                      -20-
<PAGE>

                B.      Requisite affidavits and consents that Cedar is
authorized to complete the transaction, become a member of the Partnership
owning the Interests and take all other action contemplated by this Agreement.

                C.      A counterpart of the Amended Partnership Agreement, it
being understood that any remaining blanks and bracketed provisions in the
Amended Partnership Agreement shall be accurately completed.

                D.      The management agreement with respect to the management
of the Property, substantially in the form annexed hereto as EXHIBIT R, duly
executed by Cedar, or its affiliate, on behalf of the Partnership and on behalf
of the property manager.

                E.      The Administrative Services Agreement, duly executed by
Cedar GP.

                F.      In the event Bart Blatstein is not released by Mortgagee
from liability from and after the Closing under that certain Hazardous Materials
Indemnity Agreement, dated as of June 27, 2002 made by the Partnership and Bart
Blatstein to the Mortgagee (the "Environmental Indemnity"), and, unless Cedar
shall elect that the Mortgage Loan is repaid in connection with the Closing,
Cedar shall deliver an agreement pursuant to which it agrees to indemnify,
defend and hold Bart Blatstein harmless from and against any and all claims,
losses, liability, costs and expenses (including reasonable attorneys' fees)
resulting from any claim that may be made against him, pursuant to the
Environmental Indemnity, if any such claim shall arise by, through or on account
of hazardous substances first disposed of or released in, on or under the
Property after the Closing Date.

                G.      A certificate of Cedar, dated as of the Closing Date,
certifying that all of the representations and warranties of Cedar set forth in
Section 4.2 hereof are true and correct in all material respects as of the
Closing Date.

                H.      The Tenant Notices, duly executed by Cedar.

                I.      A counterpart of the Right of first Refusal, duly
executed by the Partnership.

                J.      All applicable transfer tax forms, if any, duly executed
by Cedar.

                K.      All documents and moneys required pursuant to the terms
of the Other Agreement to be delivered by Other Agreement Buyer at the Other
Agreement Closing.

        7.5     Casualty and Condemnation. If, prior to the Closing, either any
portion of the Property is taken pursuant to eminent domain proceedings or
condemnation or any of the improvements on the Property are damaged or destroyed
by fire or other casualty, such that the casualty or taking affects in excess of
ten (10%) percent of the rentable square feet of the Property or materially
adversely affects ingress to or egress from the Property (if either of such
events occurs, the affect or result is a "Material Loss"), Cedar may elect in
its sole discretion to (x) terminate this Agreement by notice to the Owners, or
(y) proceed with the Closing. In the event of a termination of this Agreement
pursuant to clause (x) of this Section 7.5, the Owners

                                      -21-
<PAGE>

and Cedar shall promptly so notify the Escrow Agent and make written request
that the Downpayment be returned to Cedar, and this Agreement, upon such return,
shall be of no further force and effect, except for those provisions which
expressly survive the termination of this Agreement. If (i) Cedar does not elect
to terminate this Agreement pursuant to clause (x) of this Section 7.5 or (ii) a
casualty or condemnation occurs which does not result in a Material Loss, any
net awards or net proceeds received by the Owners or the Partnership in
connection with a condemnation, or the net proceeds of any insurance collected
by the Owners or the Partnership in connection with a casualty and not
previously applied to restoration, shall be paid at the Closing by the Owners to
the Partnership (and the Owners shall not receive any capital account credit on
account thereof) or retained by the Partnership, as the case may be, and shall
be applied only towards the cost or repairs or rebuilding required by such
condemnation or casualty.

                                  ARTICLE VIII
                           Prorations and Adjustments

        8.1     Prior to Closing, the Owners and Cedar shall prepare a schedule
of (i) those expenses that shall have been paid by the Partnership prior to the
Closing Date but are attributable to a period from and after the Closing Date
(the "Prepaid Expenses"), and (ii) those revenues that shall have been received
by the Partnership prior to the Closing Date but are attributable to a period
from and after the Closing Date (the "Prepaid Revenues").

        8.2     To the extent that the Prepaid Expenses shall exceed the Prepaid
Revenues (such excess, the "Prepaid Expense Excess"), (i) at Closing Cedar shall
pay to the Owners an amount equal to the Prepaid Expense Excess, and (ii) Cedar
shall be deemed to have made a capital contribution to the Partnership (the
"Closing Adjustment Capital Contribution") equal to the amount of the Prepaid
Expense Excess.

        8.3     To the extent that the Prepaid Revenues shall exceed the Prepaid
Expenses, such excess shall be contributed by the Owners to the Partnership, and
the Owners shall not receive capital account credit on account thereof.

        8.4     The following prorations and adjustments shall be made between
the parties as of 11:59 p.m. on the day preceding the Closing Date (the
"Proration Date") on the basis of the actual number of days elapsed over the
applicable period:

                A.      (i)     All fixed rents under Leases which are
collected on or prior to the Proration Date in respect of the month (or other
applicable collection period) in which the Closing occurs (the "Current Month"),
shall be adjusted on a per diem basis based upon the number of days in the
Current Month prior to the Proration Date and the number of days in the Current
Month on and after the Proration Date. Any such rents that are allocable to the
period from and after the Proration Date shall be deemed to be Prepaid Revenues.

                        (ii)    If, on the Proration Date, any fixed rents are
past due by any Tenant, and provided the Owners have delivered to Cedar, in
reasonable detail, a breakdown of all such past due amounts as of the Proration
Date, Cedar agrees that the first moneys received by the Partnership from each
such Tenant shall be disbursed as follows:

                                      -22-
<PAGE>

                                (1)     first, such moneys shall be applied to
fixed rents in respect of the Current Month, it being agreed that one hundred
percent (100%) of the fixed rent that is attributable to the portion of the
Current Month prior to the Proration Date shall be paid to the Owners and the
balance shall be retained by the Partnership;

                                (2)     second, to the Partnership until all
fixed rents owing by all such Tenants for any period after the Current Month
through the month in which payment is received have been paid in full;

                                (3)     third, to the Owners until all fixed
rents owing by all such Tenants for periods prior to the Current Month have been
paid in full; and

                                (4)     fourth, the balance, if any, shall be
paid to the Partnership.

        Each party agrees to remit reasonably promptly to the other the amount
of such rents to which such party is so entitled and to account to the other
party monthly in respect of same. The fixed rents received by the Partnership
after the Proration Date shall be apportioned and remitted, if applicable, as
hereinabove provided.

                        (iii)   If the Proration Date shall occur prior to the
time when any rental payments for fuel pass-alongs, so-called escalation rent or
charges based upon real estate taxes, operating expenses, labor costs, cost of
living increases, electrical charges, water and sewer charges or like items
(collectively, "Overage Rent") are payable, then such Overage Rent for the
applicable accounting period in which the Proration Date occurs shall be
apportioned subsequent to the Closing, based upon the portion of such accounting
period which occurs prior to the Proration Date (to the extent not theretofore
collected by the Partnership, on account of such Overage Rent prior to the
Proration Date), it being agreed that one hundred percent (100%) of the Overage
Rent that is attributable to the portion of such accounting period that shall
occur prior to the Proration Date shall be paid to the Owners and the balance
shall be retained by the Partnership. In addition, the Partnership shall pay to
the Owners one hundred percent (100%) of all Overage Rent that is paid
subsequent to the Proration Date with respect to an accounting period which
expired prior to the Proration Date, within thirty (30) days after receipt
thereof by the Partnership. If, prior to the Closing, the Partnership shall
collect any sums on account of Overage Rent or fixed rent for a year or other
period, or any portion of such year or other period, beginning prior to but
ending on or after the Proration Date, the portion of such sum allocable to the
period from and after the Proration Date shall be deemed to be a Prepaid
Revenue.

                        (iv)    Overage Rent payable by Tenants based on an
estimated amount and subject to adjustment or reconciliation pursuant to the
related Leases subsequent to the Proration Date shall be apportioned as provided
in subsection (iii) above and shall be reapportioned as and when the applicable
Tenant's actual obligation for such Overage Rent is reconciled pursuant to the
applicable Lease.

                        (v)     Without duplication of any adjustment made
pursuant to Section 8.4(A)(i) above, all prepaid fixed rent and Overage Rent
that shall be received by the Partnership as of the Proration Date for periods
on and after the Proration Date shall be deemed to be Prepaid Revenues.

                                      -23-
<PAGE>

                B.      All real estate taxes, BID taxes, unmetered water and
sewer charges, elevator inspection fees, pest control charges and vault charges,
if any, and any and all other municipal or governmental assessments of any and
every nature levied or imposed upon the Property (collectively, "Taxes") in
respect of the current fiscal year of the applicable taxing authority in which
the Closing occurs (the "Current Tax Year") (other than real estate taxes, water
and sewer charges and any other municipal or governmental assessments payable by
any Tenant directly to the taxing authority under any Lease), shall be allocated
on a per diem basis based upon the number of days in the Current Tax Year prior
to the Proration Date and the number of days in the Current Tax Year on and
after the Proration Date. If, as of the Proration Date, Taxes for the Current
Tax Year shall not have been paid with respect to the period prior to the
Proration Date, the amount equal to the unpaid Taxes for the period prior to the
Proration Date shall be paid by the Owners to the Partnership at the Closing,
but the Owners shall not receive any capital account credit on account thereof.
If, as of the Proration Date, Taxes with respect to any period from and after
the Proration Date shall have been paid, the amount equal to the prepaid Taxes
shall be deemed to be a Prepaid Expense. If the Closing shall occur before the
tax rate for the Current Tax Year is fixed, the apportionment of Taxes shall be
upon the basis of the tax rate for the next preceding fiscal period applied to
the latest assessed valuation. Promptly after the new tax rate is fixed for the
fiscal period in which the Closing takes place, the apportionment of Taxes shall
be recomputed. In the event that any assessments levied or imposed upon the
Property are payable in installments, the installment for the Current Tax Year
shall be prorated in the manner set forth above.

                C.      All charges and fees due under contracts for the supply
to the Property of heat, steam, electric power, gas and light and telephone
(collectively, "Charges"), if any, in respect of the billing period of the
related service provider in which the Closing occurs (the "Current Billing
Period") shall be allocated on a per diem basis based upon the number of days in
the Current Billing Period prior to the Proration Date and the number of days in
the Current Billing Period on and after the Proration Date and assuming that all
charges are incurred uniformly during the Current Billing Period. If, as of the
Proration Date, Charges for the Current Billing Period shall not have been paid
with respect to the period prior to the Proration Date, the amount equal to the
unpaid Charges for the period prior to the Proration Date shall be paid by the
Owners to the Partnership at the Closing, but the Owners shall not receive any
capital account credit on account thereof. If, as of the Proration Date, Charges
with respect to any period from and after the Proration Date shall have been
paid, the amount of such prepaid Charges shall be deemed to be a Prepaid
Expense.

                D.      Any charges or fees for transferable licenses and
permits relating to the Property (but without duplication of items apportioned
pursuant to any other provision of this Article VIII) (collectively, "Permit
Charges") in respect of the Current Billing Period shall be allocated on a per
diem basis based upon the number of days in the Current Billing Period prior to
the Proration Date and the number of days in the Current Billing Period on and
after the Proration Date and assuming that all charges are incurred uniformly
during the Current Billing Period. If, as of the Proration Date, Permit Charges
for the Current Billing Period shall not have been paid with respect to the
period prior to the Proration Date, the unpaid Permit Charges for the period
prior to the Proration Date shall be paid by the Owners to the Partnership at
the Closing, but the Owners shall not receive any capital account credit on
account thereof. If on the

                                      -24-
<PAGE>

Proration Date, Permit Charges with respect to any period from and after the
Proration Date shall have been paid, the amount equal to such prepaid Permit
Charges shall be deemed to be a Prepaid Expense.

                E.      To the extent same are executed after the date hereof
and approved by Cedar pursuant to Section 4.3 hereof, any charges payable under
Service Contracts, Operating Agreements and other contracts relating to the
Property (but without duplication of items apportioned pursuant to any other
provision of this Article VIII), including, without limitation, charges in
connection with any employees of the Partnership (collectively, "Service
Contract Charges"), as applicable (including, without limitation, salary,
bonuses, vacation and sick day allowances and pension or other benefit fund
contributions), in respect of the Current Billing Period shall be allocated on a
per diem basis based upon the number of days in the Current Billing Period prior
to the Proration Date and the number of days in the Current Billing Period on
and after the Proration Date and assuming that all charges are incurred
uniformly during the Current Billing Period. If, as of the Proration Date,
Service Contract Charges for the Current Billing Period shall not have been paid
with respect to the period prior to the Proration Date, an amount equal to the
unpaid Service Contract Charges for the period prior to the Proration Date shall
be paid by the Owners to the Partnership at the Closing, but the Owners shall
not receive any capital account credit on account thereof. If, as of the
Proration Date, Service Contract Charges with respect to any period from and
after the Proration Date shall have been paid, the amount equal to such prepaid
Service Contract Charges shall be deemed to be a Prepaid Expense.

                F.      If there is a fuel meter or meters on the Property
(other than meters measuring consumption costs which are the obligation of any
Tenants), the Owners shall endeavor to furnish a reading to a date not more than
thirty (30) days prior to the Proration Date, and the unfixed meter charges, if
any, based thereon for the intervening time shall be apportioned on the basis of
such last reading. If the Owners fail or are unable to obtain such reading, the
amount equal to the value of all fuel, if any, then stored at the Property shall
be calculated on the basis of the Partnership's last costs therefor, including
sales tax, as evidenced by written statements of the fuel oil supplier(s) for
the Property, which statements shall be conclusive as to quantity and cost,
absent fraud. Any unpaid fuel charges attributable to the period prior to the
Proration Date shall be paid by the Owners to the Partnership at the Closing,
but the Owners shall not receive any capital account credit on account thereof,
and the value of any prepaid fuel stored on the property shall be deemed to be a
Prepaid Expense.

                G.      If there is a water meter or meters on the Property
(other than meters measuring consumption costs which are the obligation of any
Tenants), the Owners shall endeavor to furnish a reading to a date not more than
thirty (30) days prior to the Proration Date, and the unfixed meter charges and
the unfixed sewer rents, if any, based thereon for the intervening time shall be
apportioned on the basis of such last reading. If the Owners fail or are unable
to obtain such reading, the amount of the meter charges and sewer rents shall be
determined on the basis of the last readings and bills received by the
Partnership, and the same shall be appropriately readjusted after the Closing on
the basis of the next subsequent bills. Any unpaid water or sewer charges
attributable to the period prior to the Proration Date shall be paid

                                      -25-
<PAGE>

by the Owners to the Partnership at the Closing, but the Owners shall not
receive any capital account credit on account thereof.

                H.      Any premiums payable under any policy of insurance
maintained in connection with the Property (but without duplication of items
apportioned pursuant to any other provision of this Article VIII) (collectively,
"Insurance Charges") in respect of the Current Billing Period shall be allocated
on a per diem basis based upon the number of days in the Current Billing Period
prior to the Proration Date and the number of days in the Current Billing Period
on and after the Proration Date and assuming that all charges are incurred
uniformly during the Current Billing Period. If, as of the Proration Date,
Insurance Charges for the Current Billing Period shall not have been paid with
respect to the period prior to the Proration Date, an amount equal to the unpaid
Insurance Charges for the period prior to the Proration Date shall be paid by
the Owners to the Partnership at the Closing, but the Owners shall not receive
any capital account credit on account thereof. If, as of the Proration Date,
Insurance Charges with respect to any period from and after the Proration Date
shall have been paid, an amount equal to such prepaid Insurance Charges shall be
deemed to be a Prepaid Expense.

                I.      All brokerage commissions and expenses for work to be
done for tenant improvements in connection with any leases entered into on or
prior to the Proration Date which commissions and expenses were not paid prior
to the Proration Date shall be paid, by the Owners to the Partnership at the
Closing, but the Owners shall not receive any capital account credit on account
thereof.

                J.      To the extent that the Partnership shall have any unpaid
liabilities on the Proration Date other than the Mortgage Loan, such unpaid
liabilities shall be paid by the Owners to the Partnership at the Closing, but
the Owners shall not receive any capital account credit on account thereof.

                K.      Any principal and interest payable under the Mortgage
Loan (but without duplication of items apportioned pursuant to any other
provision of this Article VIII) (collectively, "Loan Charges"), as applicable,
in respect of the Current Billing Period shall be allocated on a per diem basis
based upon the number of days in the Current Billing Period prior to the
Proration Date and the number of days in the Current Billing Period on and after
the Proration Date and assuming that all charges are incurred uniformly during
the Current Billing Period. If, as of the Proration Date, Loan Charges for the
Current Billing Period shall not have been paid with respect to the period prior
to the Proration Date, an amount equal to the unpaid Loan Charges for the period
prior to the Proration Date shall be paid by the Owners to the Partnership at
the Closing, but the Owners shall not receive any capital account credit on
account thereof. If on the Proration Date, Loan Charges with respect to any
period from and after the Proration Date shall have been paid, the amount equal
to such prepaid Loan Charges shall be deemed to be a Prepaid Expense.

                L.      All accrued fees pursuant to the Existing Property
Management Agreement shall be paid by the Owners at or prior to Closing, but the
Owners shall not receive any capital account credit on account thereof.

                                      -26-
<PAGE>

                M.      All fees payable to the Mortgagee in connection with its
granting of its consent to the transactions contemplated by this Agreement,
including, without limitation, any application or assumption fees contemplated
by the Mortgage Loan Documents, shall be paid by Cedar. In the event the
Mortgagee fails to issue the Mortgagee Consent (notwithstanding that Cedar shall
have diligently cooperated with the Owners in providing Mortgagee information
and documents required by Mortgagee in connection with issuing such consent),
the Owners shall, at the Closing, pay any and all termination or other fees
payable to the Mortgagee in connection with the repayment of the Mortgage Loan.
In the event the Mortgagee issues the Mortgagee Consent, but Cedar, nevertheless
elects to cause the Mortgage Loan to be repaid in connection with the Closing,
Cedar shall pay any and all termination or other fees payable to the Mortgagee
in connection with such repayment.

                N.      All security deposits under the Leases held by the
Owners (rather than by the Partnership), shall be paid by the Owners to the
Partnership, but the Owners shall not receive any capital account credit on
account thereof.

                O.      The amount of deposits held at the time of the Closing
by the Mortgagee in connection with the Mortgage Loan, including reserves for
capital improvements, tenant improvements or otherwise, and/or impounds for
taxes and insurance (with respect to periods after the Closing), shall be deemed
to be a Prepaid Expense.

                P.      Any other items customarily apportioned in connection
with sales of similar property in the Commonwealth of Pennsylvania shall be so
apportioned.

        8.5     Post Closing Prorations.

                8.5.1.  If any of the items described in this Article VIII
cannot be apportioned at the Closing because of the unavailability of
information as to the amounts which are to be apportioned or otherwise, or are
incorrectly apportioned at Closing or subsequent thereto, such items shall be
apportioned or reapportioned, as the case may be, as soon as practicable after
the Proration Date or the date such error is discovered, as applicable. The
parties shall make the appropriate adjusting payment between them within thirty
(30) days after presentment of the calculation. All books and records of the
Partnership which relate to the Property, and particularly to any items to be
prorated or allocated under this Agreement in connection with the Closing, shall
be made available to both the Owners and Cedar and their respective Consultants.
Any such inspection shall be at reasonable intervals, during business hours,
upon reasonable notice, and at the inspecting party's sole cost and expense.

                8.5.2.  In the event that Owners shall owe money to Cedar on
account of postclosing adjustments, the Owners shall within thirty (30) days
after Cedar shall have delivered to the Owners a written demand indicating the
amount of money owed on account of such postclosing adjustments and containing
reasonable back-up documentation with respect thereto (an "Adjustment Demand"),
subject to the rights of the Owners to contest such obligation, as hereinafter
set forth, make such payments to Cedar. The Owners shall not receive capital
account credit on account of any payment by the Owners pursuant to this Section
8.5.2. Notwithstanding the foregoing, in the event that, within ten (10)
Business Days after receipt of an Adjustment Demand, the Owners shall deliver
written notice to Cedar disputing the accuracy of the

                                      -27-
<PAGE>

Adjustment Demand (which notice shall contain a reasonably detailed basis for
such dispute), then the Owners and Cedar shall, in good faith, attempt to
promptly resolve any such dispute and, if such attempt is unsuccessful, each of
the Owners and Cedar shall have the right to submit such dispute to binding
arbitration in accordance with Section 10.3.3 hereof.

                8.5.3.  In the event that Cedar shall owe money to the Owners on
account of postclosing adjustments, Cedar shall, within thirty days after the
Owners shall have delivered to Cedar an Adjustment Demand, make such payments to
the Owners. Cedar shall be entitled to capital account credit on account of any
payment made by Cedar pursuant to this Section 8.5.3 hereof. Notwithstanding the
foregoing, in the event that, within ten (10) Business Days after receipt of an
Adjustment Demand, Cedar shall deliver written notice to the Owners disputing
the accuracy of the Adjustment Demand (which notice shall contain a reasonably
detailed basis for such dispute), then the Owners and Cedar shall, in good
faith, attempt to promptly resolve any such dispute and, if such attempt is
unsuccessful, each of the Owners and Cedar shall have the right to submit such
dispute to binding arbitration in accordance with Section 10.3.3 hereof.

                8.5.4.  The provisions of this Section 8.5 shall survive the
Closing and shall remain in full force and effect for a period of twelve (12)
months after the date of the Closing, unless, within such twelve (12) month
period, an Adjustment Demand shall have been delivered, in which case, liability
with respect to the matters addressed in the Adjustment Demand shall survive
until resolution thereof.

        8.6    Closing Costs. Cedar shall pay the title insurance premium for
the Title Policy and the cost of all endorsements to the Title Policy including,
without limitation, the nonimputation endorsement. The Owners and Cedar shall
pay their respective legal, consulting and professional fees and expenses
incurred in connection with this Agreement and the transaction contemplated
hereby.

        8.7     Tax Certiorari Proceedings. The Owners shall not hereafter
institute any proceedings for the reduction of the assessed valuation of the
Property without the prior written consent of Cedar. The net refund of taxes
received in connection with any tax certiorari proceedings shall be apportioned
to provide that the net refund (as hereinafter defined) of taxes for a period
prior to the Proration Date shall be the property of the Owners and that any
refund for any period after the Proration Date shall be the property of the
Partnership. The "net refund" is the amount of the tax refund after deducting
therefrom any refunds due to tenants pursuant to their leases, a pro rata share
of all expenses, including counsel fees necessarily incurred in obtaining such
refund, the allocation of such expenses to be based upon the total refund
obtained in the proceeding and in any other proceeding simultaneously involved
in the trial or settlement. All of same shall be apportioned as of the Proration
Date and the apportionment made as herein set forth.

        8.8     Transfer Tax. All transfer, stamp or other similar taxes
attributable to the Recapitalization shall be shared equally between the Owners
and Cedar and shall be paid contemporaneously with the Closing.

                                      -28-
<PAGE>

                                   ARTICLE IX
                                  Escrow Terms

        9.1     Depository. The Downpayment shall be held in escrow by Legal
Abstract Co. ("Escrow Agent"), in a special interest bearing commercial bank
account, designated as a "trust account" or an "escrow account", at Royal Bank
of Pennsylvania (or its successor) located at 732 Montgomery Avenue, Narberth,
PA 19072.

        9.2     Escrow Instructions. If the Closing takes place, then Escrow
Agent shall deliver the Downpayment to, or upon the instructions of, the Owners
at the Closing. If this Agreement is terminated in accordance with the terms
hereof, then, subject to Section 9.4 hereof, Escrow Agent shall pay the
Downpayment to, or upon the instructions of, the party entitled thereto in
accordance with the provisions of this Agreement. If the Closing does not occur
by reason of the failure of either party to comply with such party's obligations
hereunder, then, subject to Section 9.4 hereof, Escrow Agent shall pay the
Downpayment to, or upon the instructions of, the party entitled thereto in
accordance with the provisions of this Agreement.

        9.3     Scope of Duties. The duties of Escrow Agent shall be only as
herein specifically provided, and are purely ministerial in nature. Escrow Agent
shall incur no liability whatever except for willful misconduct or gross
negligence, as long as Escrow Agent has acted in good faith. The Owners and
Cedar acknowledge that Escrow Agent is serving without compensation and solely
as an accommodation to the parties hereto. Escrow Agent shall not be liable or
responsible for the funds being held in escrow or for the collection of the
proceeds of the check for the Downpayment or for the interest earned thereon. In
the performance of its duties hereunder, Escrow Agent shall be entitled to rely
upon the authenticity of any signature and the genuineness and validity of any
writing received by Escrow Agent pursuant to or otherwise relating to this
Agreement. Escrow Agent may assume that any Person purporting to give any notice
or instructions in accordance with the provisions hereof has been duly
authorized to do so. Escrow Agent shall not be bound by any modification,
cancellation or rescission of this Agreement unless (i) such modification,
cancellation or rescission is in writing and signed by the Owners and Cedar, and
(ii) a copy of such modification, cancellation or rescission is delivered to
Escrow Agent. Escrow Agent shall not be bound in any way by any other contract
or understanding between the parties hereto, whether or not Escrow Agent has
knowledge thereof or consents thereto, unless such consent is given in writing.

        9.4     Dispute. Escrow Agent is acting as a stakeholder only with
respect to the Downpayment and the interest earned thereon. If a party requests
disbursement of the Downpayment for any reason other than the Closing having
occurred, then Escrow Agent shall give written notice to the other party of such
request. Such other party shall have the right to dispute the disbursement of
the Downpayment to the requesting party only by delivering notice thereof to
Escrow Agent (a "Dispute Notice") on or prior to the fifth (5th) day after the
date when Escrow Agent gives such notice. Cedar acknowledges and agrees that
Cedar shall not deliver a Dispute Notice unless (i) any of the conditions
precedent to Cedar's obligation to consummate the transactions contemplated by
this Agreement (as set forth in Section 7.2.1) or (ii) any of the conditions
precedent to the Other Agreement Buyer's obligation to consummate the
transactions contemplated by the Other Agreement (as set forth in Section 7.2.1
thereof),

                                      -29-
<PAGE>

shall not have occurred or been satisfied. Notwithstanding anything to the
contrary contained herein, Escrow Agent shall not disburse the Downpayment until
the day immediately following the last day of such five (5) day period. If there
is any dispute as to whether Escrow Agent is obligated to deliver the
Downpayment or as to whom said Downpayment is to be delivered, then Escrow Agent
shall not make any delivery, but in such event Escrow Agent shall hold the same
until Escrow Agent receives (a) notice from the objecting party withdrawing the
objection, or (b) a notice signed by both parties directing disposition of the
Downpayment, or (c) a nonappealable judgment or order of a court of competent
jurisdiction. If such notice is not received, or proceedings for such
determination are not begun, within thirty (30) calendar days after the date set
forth herein for the Closing (as the same may have been changed by agreement of
the parties) and diligently continued, then Escrow Agent shall have the right to
(w) hold and retain all or any part of the Downpayment until such dispute is
settled or finally determined by litigation, arbitration or otherwise, or (x)
deposit the Downpayment, together with the interest earned thereon, in an
appropriate court of law, following which Escrow Agent shall thereby and
thereafter be relieved and released from any liability or obligation under this
Agreement, or (y) institute an action in interpleader or other similar action
permitted by stakeholders in the Commonwealth of Pennsylvania, or (z) interplead
any of the parties in any action or proceeding which may be brought to determine
the rights of the parties to all or any part of the Downpayment.

        9.5     Indemnity. The Owners and Cedar hereby agree to, jointly and
severally, indemnify, defend and hold Escrow Agent harmless from and against any
liabilities, damages, losses, costs or expenses incurred by, or claims or
charges made against, Escrow Agent (including reasonable counsel fees and court
costs) by reason of Escrow Agent's acting or failing to act in connection with
any of the matters contemplated by this Agreement or in carrying out the terms
of this Agreement, except as a result of Escrow Agent's bad faith, gross
negligence or willful misconduct. This Section 9.5 shall not limit the right of
Cedar and the Owners to assert claims against each other with respect to said
indemnity.

        9.6     Release from Liability. Upon the disbursement of the
Downpayment, together with the interest earned thereon, in accordance with this
Agreement, Escrow Agent shall be relieved and released from any liability
hereunder.

        9.7     Resignation. Escrow Agent may resign at any time upon at least
ten (10) days prior written notice to the parties hereto. If, prior to the
effective date of such resignation, the parties hereto shall all have approved,
in writing, a successor escrow agent, then upon the resignation of Escrow Agent,
Escrow Agent shall deliver the Downpayment, together with the interest earned
thereon, to such successor escrow agent. From and after such resignation and the
delivery of the Downpayment, together with the interest earned thereon, to such
successor escrow agent, Escrow Agent shall be fully relieved of all of its
duties, responsibilities and obligations under this Agreement, all of which
duties, responsibilities and obligations shall be performed by the appointed
successor escrow agent. If for any reason the parties hereto shall not approve a
successor escrow agent within such period, Escrow Agent may bring any
appropriate action or proceeding for leave to deposit the Downpayment, together
with the interest earned thereon, with a court of competent jurisdiction,
pending the approval of a successor escrow

                                      -30-
<PAGE>

agent, and upon such deposit Escrow Agent shall be fully relieved of all of its
duties, responsibilities and obligations under this Agreement.

        9.8     Execution of Agreement by Escrow Agent. Escrow Agent has
executed this Agreement solely to confirm that Escrow Agent has received a check
(subject to collection) or a wire transfer for the Downpayment and shall hold
the Downpayment in escrow, pursuant to the provisions of this Agreement.

        9.9     Loss of Downpayment. Escrow Agent shall not have any liability
or obligation for loss of all or any portion of the Downpayment by reason of the
insolvency or failure of the institution of depository with whom the escrow
account is maintained.

        9.10    Taxpayer Identification Numbers. Each the Owners and Cedar
represents that its respective taxpayer identification number is as set forth on
EXHIBIT S annexed hereto.

                                    ARTICLE X
                                    Remedies

        10.1    If Cedar shall default in the payment of the Balance of the
Initial Funding Amount, the Owners may terminate this Agreement and retain the
Downpayment. Cedar acknowledges that, if Cedar shall default under this
Agreement as aforesaid, the Owners will suffer substantial adverse financial
consequences as a result thereof. Accordingly, the Owners' sole and exclusive
remedy against Cedar shall be the right to retain the Downpayment, as and for
its sole and full and complete liquidated damages, it being agreed that the
Owners' damages are difficult, if not impossible, to ascertain, and Cedar and
the Owners shall have no further rights or obligations under this Agreement,
except those expressly provided herein to survive the termination of this
Agreement.

        10.2    If the Owners shall fail to satisfy one or more of the
conditions precedent to Cedar's obligation to consummate the transactions
contemplated by this Agreement (as set forth in Section 7.2.1) or if the Other
Agreement Owners shall fail to satisfy one of the conditions precedent to the
Other Agreement Buyer's obligations to consummate the transactions contemplated
by the other Agreement (as set forth in Section 7.2.1 thereof), Cedar may elect,
as its sole and exclusive remedy, to either (x) prosecute an action for specific
performance of this Agreement, or (y) terminate this Agreement, in which event,
Cedar shall be entitled to receive from the Escrow Agent, a return of the
Downpayment, and thereupon neither party shall have any further rights or
obligations under this Agreement, except with respect to those provisions
provided herein to survive the termination of this Agreement. It is acknowledged
and agreed that each of Cedar and the Other Agreement Buyer shall both be
obligated to elect the same option as its remedy.

        10.3    Surviving Representations.

                10.3.1. In the event after the Closing, Cedar (subject to the
survival periods provided in Article IV), alleges that the Owners breached a
representation made in Article IV hereof that survives the Closing (a "Surviving
Representation"), as indicated in a written notice delivered by Cedar to the
Owners, which notice shall indicate the amount of loss, cost, expense

                                      -31-
<PAGE>

or damage suffered by Cedar, Owners shall, subject to their rights pursuant to
Section 10.3.3, promptly pay to Cedar (without any capital account credit on
account thereof), the amount of the loss, cost, expense or damage (other than
consequential, incidental, exemplary, or punitive damage) suffered as a result
of such breach by the Owners.

                10.3.2. In the event after the Closing, the Owners (subject to
the survival periods provided in Article IV) allege that Cedar shall have
breached a Surviving Representation, as indicated in a written notice delivered
by the Owners to Cedar, which notice shall indicate the amount of loss, cost,
expense or damage suffered by the Owners as a result thereof, then, in such
case, Cedar shall, subject to its rights pursuant to Section 10.3.3, promptly
pay to the Owners (without any capital account credit to Cedar on account
thereof), the amount of the loss, cost, expense or damage (other than
consequential, incidental, exemplary, or punitive damage) suffered as a result
of such breach by Cedar.

                10.3.3. In the event that, within ten (10) Business Days after
receipt of notice pursuant to Sections 10.3.1 or 10.3.2 hereof, the party in
receipt of such notice (the "Recipient Party") shall dispute whether such
Recipient Party shall have breached a Surviving Representation, or the amount of
the damage suffered by the party delivering such notice (the "Delivering Party")
as a result thereof, then either the Recipient Party or the Delivering Party
shall have the right to submit such dispute to binding arbitration under the
Expedited Procedures provisions (Rules E-1 through E-10 in the current edition)
of the Commercial Arbitration Rules of the American Arbitration Association
("AAA"). In cases where the parties utilize such arbitration: (i) the dispute
shall be heard by three (rather than one) arbitrators in Philadelphia,
Pennsylvania, (ii) all of the arbitrators on the list submitted by the AAA shall
have reasonable expertise and experience with respect to the commercial real
estate market in the Philadelphia, Pennsylvania area, (iii) the parties will
have no right to object if the appointed arbitrators were on the list submitted
by the AAA and were not objected to in accordance with Rule E-5, (iv) the
arbitrators shall be selected within three (3) Business Days following
submission of such dispute to arbitration, (v) the arbitrators shall render
their final decision not later than three (3) Business Days after the last
hearing, (vi) the first hearing shall be held within five (5) Business Days
after the completion of discovery, and the last hearing shall be held within
fifteen (15) Business Days after the appointment of the arbitrators, (v) any
finding or determination of the arbitrators shall be deemed final and binding
(except that the arbitrators shall not have the power to add to, modify or
change any of the provisions of this Agreement), and (vi) the losing party in
such arbitration shall pay the arbitration costs charged by AAA and/or the
arbitrators.

                10.3.4. The provisions of this Section 10.3 shall survive the
Closing and remain in full force and effect for a period of four (4) months
after the date of the Closing, unless, within such four (4) month period, Cedar
shall have delivered notice to the Owners of the existence of a mechanics' lien
of the nature contemplated by this Section 10.3, in which case, the Owner's
liability with respect to such lien shall survive with respect to the matters
alleged in such claim until resolution thereof.

                                      -32-
<PAGE>

                                   ARTICLE XI
                                  Miscellaneous

        11.1    Survival. Except as expressly provided herein, all
representations, warranties, covenants and agreements of Cedar and the Owners
contained in this Agreement shall merge into the documents executed at Closing
and shall not, survive the Closing.

        11.2    Notices. Any notice required or permitted to be delivered herein
shall be deemed to be delivered (a) when received by the addressee if delivered
by courier service, (b) if mailed, two days after deposit in the United States
Mail, postage prepaid, certified mail, return receipt requested, (c) if sent by
recognized overnight service (such as US Express Mail, Federal Express, UPS,
Airborne, etc.), then one day after delivery of same to an authorized
representative or agency of the said overnight service or (d) if sent by a
telecopier, when transmission is received by the addressee with electronic or
telephonic confirmation, in each such case addressed or telecopied to the Owners
or Cedar, as the case may be, at the address or telecopy number set forth
opposite the signature of such party hereto. Notifications are as follows:

TO OWNERS:                           Welsh-Square, Inc.
                                     Indenture of Trust of Bart Blatstein dated
                                     as of June 9, 1998 Irrevocable Indenture of
                                     Trust of Barton Blatstein dated July 13,
                                     1999 c/o Tower Investments, Inc.
                                     One Reed Street
                                     Philadelphia, Pennsylvania 19147
                                     Attention: Mr. Bart Blatstein and
                                                 Brian K. Friedman, Esq.
                                     Telecopier: (215) 755-8666

with a copy to:                      Mr. Robert C. Jacobs
                                     1700 Walnut Street, Suite 200
                                     Philadelphia, Pennsylvania 19103
                                     Telecopier: (215) 545-1559

TO CEDAR:                            CSC-Columbus LLC
                                     44 South Bayles Avenue
                                     Port Washington, New York 11050
                                     Attention: Leo S. Ullman
                                     Telecopier: (516) 767-6497

with a copy to:                      Stroock & Stroock & Lavan LLP
                                     180 Maiden Lane
                                     New York, New York 10038
                                     Attention: Mark A. Levy, Esq.
                                     Telecopier: (212) 806-6006

                                      -33-
<PAGE>

TO ESCROW AGENT:                     Legal Abstract Co.
                                     2200 Walnut Street
                                     Philadelphia, Pennsylvania 19103
                                     Attention: Mr. Ellis Cook
                                     Telecopier: (215) 985-1926

        11.3    Gender: Numbers. Words of any gender used in this Agreement
shall be held and construed to include any other gender, and words in the
singular number shall be held to include the plural and vice versa unless the
context requires otherwise.

        11.4    Headings. The captions used in connection with the articles and
sections of this Agreement are for convenience only and shall not be deemed to
construe or limit the meaning of the language of this Agreement.

        11.5    Days. Except where business days are expressly referred to,
references in this Agreement to days are to calendar days, not business days.
"Business Day" means any calendar day except a Saturday, Sunday or banking
holiday.

        11.6    Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.

        11.7    Waiver of Trial by Jury. THE PARTIES HERETO HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT OR
CONTRACT) BROUGHT BY ANY PARTY AGAINST ANOTHER ON ANY MATTER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS AGREEMENT.

        11.8    Holidays. If the final date of any period provided for herein
for the performance of an obligation or for the taking of any action falls on a
Saturday, Sunday or banking holiday, then the time of such period shall be
deemed extended to the next day which is not a Saturday, Sunday or banking
holiday.

        11.9    Interpretation. The parties acknowledge that each party and its
counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments
or exhibits hereto.

        11.10   Severability. If any provisions of this Agreement are held to be
illegal, invalid or unenforceable under present or future laws, such provision
shall be fully severable, and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision had never comprised a part
of this Agreement, and the remaining provisions of this Agreement shall remain
in full force and effect and not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement, provided that
both parties may still effectively realize the complete benefit of the
transaction contemplated hereby.

                                      -34-
<PAGE>

        11.11   Amendments. No modification or amendment of this Agreement shall
be effective unless made in writing and executed by both the Owners and Cedar.
In the event any approval or consent is required pursuant to any provision of
this Agreement, such approval or consent shall be deemed given only if it is in
writing, executed by the party whose approval or consent is required.

        11.12   Confidentiality. Neither the Owners nor Cedar shall, without the
prior consent of the other party, take out any advertisement to publicize the
transaction contemplated by this Agreement. Both prior to and following the
Closing, each party shall keep the terms and conditions of this Agreement
confidential. The foregoing shall not be interpreted as intending to prevent
Cedar from disclosing the terms and conditions of this Agreement to its
attorneys, prospective lenders, or accountants or from making such other
disclosures as may be required by law or by the rules and regulations of any
regulatory body having jurisdiction with respect to Cedar, the Partnership, or
the Property or from describing the transactions contemplated by this Agreement
in any registration statement submitted by any affiliate of Cedar or from filing
this Agreement as an exhibit to such registration statement. The provisions of
this Section shall survive the Closing or earlier termination of this Agreement.

        11.13   Entire Agreement. This Agreement embodies the entire agreement
between the parties and cannot be varied except by the written agreement of the
parties. The Owners make no representations, warranties or agreements with
respect to Property, the Partnership or the Interests, except as set forth in
this Agreement.

        11.14   Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by the Owners
to Cedar at Closing, the Owners agree to perform, execute and/or deliver or
cause to be delivered, executed and/or delivered, but without any obligation to
incur any additional liability or expense, on or after the Closing any and all
further acts, deeds and assurances as may be reasonably necessary to consummate
the transactions contemplated hereby.

        11.15   Joint and Several. The liability of the Owners under this
Agreement shall be joint and several.

                                  ARTICLE XII
                             Assignment of Contract

        12.1    Assignment. Cedar may assign Cedar's rights or delegate Cedar's
duties under this Agreement but only to one or more entities which are majority
owned and controlled by Cedar Shopping Centers, Inc. The said assignee shall
assume all obligations of Cedar under this Agreement by a written instrument
approved in form and substance by the Owners which approval shall not be
unreasonably withheld or delayed. Except as hereinbefore set forth, this
Agreement may not be assigned by Cedar.

                            [Signature Page Follows]

                                      -35-
<PAGE>

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

                                    DELAWARE 1851 ASSOCIATES, LP
                                    By:  Welsh-Square, Inc., its general partner

                                         By:  /s/  Bart Blatstein
                                              -------------------
                                              Name:  Bart Blatstein
                                              Title: President

                                    WELSH-SQUARE, INC.

                                         By:  /s/  Bart Blatstein
                                              -------------------
                                              Name:  Bart Blatstein
                                              Title: President

                                    INDENTURE OF TRUST OF BART
                                    BLATSTEIN DATED AS OF JUNE 9, 1998

                                         By:  /s/ Jil Blatsttein
                                              ------------------
                                              Name:  Jil Blatstein
                                              Title: Co-Trustee

                                         By:  /s/ Brian K. Friedman
                                              ---------------------
                                              Name:  Brian K. Friedman
                                              Title: Co-Trustee

                                         By:  /s/ Joseph W. Seidle
                                              --------------------
                                              Name:  Joseph W. Seidle
                                              Title: Co-Trustee

                                    IRREVOCABLE INDENTURE OF TRUST OF
                                    BARTON BLATSTEIN DATED JULY 13, 1999

                                         By:  /s/  Brian K. Friedman
                                              ----------------------
                                              Name:  Brian K. Friedman
                                              Title: Co-Trustee

                                         By:  /s/  Joseph W. Seidle
                                              ---------------------
                                              Name:  Joseph W. Seidle
                                              Title: Co-Trustee

                                      -36-
<PAGE>

                                    CSC-COLUMBUS LLC

                                    By:  CEDAR SHOPPING CENTERS PARTNERSHIP,
                                         L.P., ITS MEMBER

                                         By:  CEDAR SHOPPING CENTERS, INC.,
                                              ITS GENERAL PARTNER

                                              By:  /s/  Leo S. Ullman
                                                   ------------------
                                                   Name:   Leo S. Ullman
                                                   Title:  President

                                    ESCROW AGENT (and to acknowledge agreement
                                    with Article IX)
                                    LEGAL ABSTRACT CO.

                                         By:  /s/  Ellis Cook
                                              ---------------
                                              Name:  Ellis Cook
                                              Title: Vice President

                                      -37-
</TEXT>
</DOCUMENT>
