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                        ENVIRONMENTAL INDEMNITY AGREEMENT
                        ---------------------------------

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

                                   Background
                                   ----------

                  Borrower and Lender have entered into a certain Loan Agreement
dated this date (as the same may be amended, modified or supplemented, from time
to time, the "Loan Agreement") pursuant to which Lender has agreed to extend a
credit facility to Borrower in the principal amount of up to Five Million Five
Hundred Thirty Five Thousand Dollars ($5,535,000) (the "Loan"), which Loan is
evidenced by a certain Promissory Note dated this date (the "Note") executed by
Borrower and made payable to the order of Lender in the stated principal amount
of the Loan. The Note is secured, inter alia, by an Open-end Mortgage and
Security Agreement dated this date (the "Mortgage") given by Borrower to Lender
covering certain land and the buildings and improvements thereon known as
Newport Plaza located at U.S. Route 322 and Route 34 in Howe Township, Perry
County, Pennsylvania (collectively, the "Project"), all as more particularly
described in Exhibit A attached hereto and made a part hereof.

                  As a material inducement for Lender to make the Loan, Borrower
has agreed to provide to Lender the assurances, agreements and indemnities
regarding environmental matters as are hereinafter more specifically set forth.

                                    Agreement
                                    ---------

                  NOW, THEREFORE, in consideration of the Loan and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, intending to be legally bound, hereby represents,
certifies and agrees as follows:

                  1. Definitions. Whenever used in this Agreement, the following
words and phrases shall have the respective meanings set forth below:

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

                     (b) Clean-Up: Response, Removal or other Remedial Action or
any other actions required under any Environmental Law.








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                     (c) Contamination: The uncontained presence of any
Hazardous Substances on, about or beneath the Project or arising from the
Project which requires Clean-Up or which is in violation of any Environmental
Law.

                     (d) Environmental Laws: All applicable federal, state and
local laws, statutes, orders, ordinances, codes, rules, regulations, policies,
guidance documents, judgments, decrees, injunctions and requirements of or
agreements with any governmental authority (including any governmental action
pursuant to or required by any Environmental Law, including but not limited to
any permit, license or authorization issued under or in connection with any
Environmental Law), now or hereafter enacted or amended, relating to the
protection of health and the environment and/or governing the handling, use,
generation, treatment, storage, transportation or disposal of Hazardous
Substances. Environmental Laws include, but are not limited to: The Clean Air
Act, 42 U.S.C. ss. 7401 et seq.; The Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq. ("CERCLA");
The Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; The
Hazardous Material Transportation Act, 49 U.S.C. ss. 1801 et seq.; The Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss. 136; The Resource
Conservation and Recovery Act of 1976,42 U.S.C. ss. 6901 et seq. (including the
Hazardous and Solid Waste Amendments of 1984); The Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq.; The Federal Occupational Safety & Health Act of
1970, 29 U.S.C. ss. 651 et seq. (including ss. 3101 of the Omnibus
Reconciliation Act of 1990); The Oil Pollution Act of 1990, Pub. L. No. 101-380,
104 Stat. 484 (1990); and the state analogues to any of the foregoing; all as
amended from time to time and the regulations promulgated pursuant thereto; and
any requirements of the common law which may impose obligations or liabilities
as a result of the presence of or exposure to Hazardous Substances.

                     (e) Environmental Permits: Any permits, licenses,
registrations, approvals or authorizations required under any Environmental Law.

                     (f) Environmental Report: means the Phase I Environmental
Site Assessment dated August 22, 2002 prepared by Eckland Consultants, Inc.

                     (g) Hazardous Substances: Any substance which is or becomes
regulated under any Environmental Law, including, without limitation, any
substance which is (1) gasoline, petroleum products, explosives, radioactive
materials, including by-products, source and/or special nuclear material and
solid wastes, urea formaldehyde, polychlorinated biphenyls or related or similar
materials ("PCBs"), asbestos or material containing asbestos or lead-based
paint; or (2) defined, designated or listed as a "Hazardous Substance",
"Hazardous Material", "Hazardous Waste" or "Industrial Waste" under any
Environmental Law.

                     (h) Occupant: Any prior owner of the Project, or any
portion thereof, or any prior, present or intended tenant, subtenant or other
person or entity having possession of the Project or any portion thereof.

                     (i) Permitted Substances. Hazardous Substances of the types
and in the quantities customarily used in the construction, maintenance or
operation of commercial projects similar to the proposed use of the Project, and
inventory of gasoline at the fueling station operated by Giant Food Stores, Inc.
at the Project, provided that such Hazardous Substances are stored, used and
disposed of in accordance with all applicable Environmental Laws.








                                       -2-
<PAGE>

                     (j) Proscribed Activities: (1) generating, manufacturing,
refining, transporting, treating, storing, handling, disposing, transferring,
producing, processing, recycling or in any manner dealing with Hazardous
Substances (other than Permitted Substances handled in compliance with
applicable Environmental Laws); (2) causing or permitting, as a result of any
intentional or unintentional act or omission on the part of Borrower or any
Affiliate or Occupant, the installation or placement or the disposal of
Hazardous Substances (other than Permitted Substances) in or on the Project or a
release of Hazardous Substances (other than Permitted Substances) onto the
Project or onto any other property; or (3) suffering the presence of Hazardous
Substances other than Permitted Substances on the Project.

                     (k) Regulatory Action(s): Any notice of violation,
citation, complaint, request for information, order, directive, compliance
schedule, notice of claim, consent decree, action, litigation or proceeding
brought or instituted by any governmental authority under or in connection with
any Environmental Law involving the Project, Borrower, any Affiliate or any
Occupant with respect to such Occupant's use of the Project.

                     (l) Response, Removal, Remedial Action: The terms
"Response," "Removal" and "Remedial Action" shall be defined with reference to
Sections 101(23)-I 01(25) of CERCLA, 42 U.S.C. Sections 9601(23)- 9601(25).

                     (m) Third Party Claims: Claims by a party other than
Borrower or Lender (other than Regulatory Actions) based on negligence,
trespass, strict liability, nuisance, toxic tort or detriment to human health or
welfare due to Hazardous Substances on, about, beneath or arising from the
Project or in any way related to any alleged violation of any Environmental
Laws.

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

                  2. Representations and Warranties. Borrower hereby represents
and warrants to Lender that:

                     (a) To the best of Borrower's knowledge, except as may be
specifically disclosed in the Environmental Report, the Project, Borrower, all
Affiliates and each Occupant and all of Borrower's and each Occupant's
operations and activities at the Project are now and have been in compliance
with all Environmental Laws. To the extent necessary for the conduct of its
business, Borrower and, to the best of Borrower's knowledge, each Occupant (with
respect to such Occupant's operations and activities conducted at the Project)
is in possession of, and in compliance with, all Environmental Permits. To the
best of Borrower's knowledge all such Environmental Permits are currently in
effect; no proceeding is pending or threatened to modify, suspend, revoke,
withdraw, or otherwise limit such Environmental Permits; and no Regulatory
Action has been taken or, to Borrower's knowledge, threatened in connection with
the expiration or renewal of such Environmental Permits. There are no Regulatory
Actions or Third Party Claims pending or, to Borrower's knowledge, threatened
against Borrower, any Affiliate or any Occupant with respect to the Project or
any other real property owned, leased or operated by Borrower or any Affiliate
of Borrower, and neither Borrower nor any Affiliate has received any notice of
Regulatory Action or a Third Party Claim.






                                       -3-
<PAGE>

                     (b) Except as may be specifically disclosed in the
Environmental Report, (i) neither Borrower nor any Affiliate nor to Borrower's
knowledge any Occupant conducts, allows or suffers Proscribed Activities on,
about, beneath or arising from the Project, and (ii) to Borrower's knowledge,
there are no conditions on, about, near, beneath or arising from the Project
which could reasonably be expected to give rise to liability, the imposition of
a statutory lien, or require Clean-Up under any Environmental Law.

                     (c) Neither Borrower nor, to the best of Borrower's
knowledge, any Affiliate or any Occupant (with respect to such Occupant's
operations and activities conducted at the Project) has received any request for
information, claim, demand, or other notification that it is or may be
potentially responsible or liable for any Clean-Up at any site, including
properties not owned, operated or leased by or to Borrower or any Affiliate or
any Occupant. Hazardous Substances generated by Borrower or any Affiliate and,
to the best of Borrower's knowledge, any Occupant have never, directly or
indirectly, been sent, transferred or transported to, or treated, stored or
disposed of at any site listed or formally proposed for listing on the National
Priorities List promulgated pursuant to CERCLA or on any state list of sites
requiring any CleanUp.

                  3. Covenants. Borrower hereby covenants with Lender that:

                     (a) Borrower and its Affiliates shall comply, and shall
seek to cause each present and future Occupant (with respect to such Occupant's
operations and activities conducted at the Project) to comply, with all
Environmental Laws and, to the extent necessary for the conduct of its or their
business, shall obtain, maintain, and comply with all Environmental Permits.
Borrower, its Affiliates and each Occupant (with respect to such Occupant's
operations and activities conducted at the Project) shall comply with all
governmental orders, directives, judgments, orders, decrees, awards,
administrative consent orders, settlement agreements, or other settlement
documents issued by or entered into with any administrative or governmental
agency or entity concerning compliance with Environmental Laws and Environmental
Permits.

                     (b) Borrower shall not, and Borrower shall seek to cause
any Occupant not to, use or allow the use of the Project for Proscribed
Activities. Neither Borrower nor any Occupant shall use or permit the use of the
Project in a manner which could reasonably be expected to give rise to
liability, the imposition of a statutory lien, or require any Clean-Up. In the
event that conditions are discovered on, about, beneath or arising from the
Project which may give rise to liability, the imposition of a statutory lien, or
require Clean-Up, Borrower shall, and shall cause any Occupant to, promptly take
all necessary actions to address such conditions, including Clean-Up.

                     (c) Borrower shall immediately notify Lender, in writing,
of Borrower's receipt, knowledge or discovery of any: (i) Regulatory Action;
(ii) request for information, claim, demand, or notification that it or any
Affiliate is or may potentially be responsible or liable for any Clean-Up at any
site owned, operated or leased by or to Borrower or any Affiliate; (iii) notice
of any claim, action, or proceeding of any nature whatsoever, including Third
Party Claims, concerning conditions on, about, beneath or arising from the
Project or any alleged violation of any Environmental Law; and (iv) other
information concerning conditions on, about, beneath or arising from the Project
which could reasonably be expected to give rise to liability, the imposition of
a statutory lien, or require Clean-Up.






                                       -4-
<PAGE>

                     (d) Lender shall have the right from time to time to
designate such persons (the "Environmental Auditors") as Lender may select to
inspect any of Borrower's or its Affiliates' properties, documents, products or
wastes for the purpose of investigating actual or potential Regulatory Actions
or Third Party Claims or any condition which could reasonably be expected to
result in any liability, cost or expense to Lender. Any such investigation made
after commencement of any Regulatory Action or Third Party Claim or upon the
good faith belief of Lender that Contamination has occurred, shall be at
Borrower's expense; otherwise any such investigation shall be without expense to
Borrower. Such investigation may include, among other things, above and below
ground testing for the presence of Hazardous Substances and such other tests as
may be necessary or advisable in the opinion of Lender. Borrower shall furnish
the Environmental Auditors with such historical and operational information as
the Environmental Auditors may request regarding Borrower's or its Affiliates'
properties, documents, products and wastes as are within Borrower's or its
Affiliates' possession, custody or control, or which are available to it,
including without limitation, analytical records and results, correspondence
with governmental authorities and environmental audits or reviews.

Upon the Environmental Auditors' request, Borrower, at Borrower's sole cost and
expense, shall make available for meetings with the Environmental Auditors,
appropriate personnel and consultants employed or retained by Borrower and its
Affiliates having knowledge of such environmental matters.

                  4. Indemnities: Litigation.

                     (a) As a material inducement to Lender to make the Loan to
Borrower, Borrower hereby indemnifies and agrees to defend and hold harmless
each Lender, its parent corporation, subsidiaries, successors, assigns,
officers, directors, shareholders, employees and agents ("Lender Parties"), from
and against any and all claims, actions, causes of action, liabilities,
penalties, fines, damages, judgments, losses, suits, expenses, legal or
administrative proceedings, interest, costs and expenses (including the
reasonable allocated cost of in-house counsel and staff, court costs and
reasonable outside attorneys', consultants' and experts' fees), arising out of
or in any way relating to: (i) the presence of Hazardous Substances on, about,
beneath or arising from the Project; (ii) the failure of Borrower or any of its
Affiliates or subsidiaries or any Occupant to comply with the Environmental
Laws; (iii) Borrower's breach of any of the representations, warranties and
covenants contained herein; (iv) Regulatory Actions and Third Party Claims; or
(v) the imposition or recording of a lien against the Project in connection with
any Contamination at or on the Project, or arising from the Project or pursuant
to any Environmental Law; provided, however, that the aforesaid indemnification
obligations shall not apply to any liability, loss, cost or expense relating to
Hazardous Substances first introduced to the Project or Proscribed Activities or
Contamination or failure to comply with the Environmental Laws which first
occurs after Lender or its nominee takes title to or physical possession of the
Project or any liability, loss, cost or expense resulting solely from Lender's
or Lender Parties' gross negligence or willful misconduct. For purposes of the
preceding sentence, Borrower shall have the burden of proving whether Hazardous
Substances are first introduced or any Proscribed Activities or Contamination or
failure to comply with the Environmental Laws which first occurs after Lender or
its nominee takes title to or physical possession of the Project. Borrower's
indemnity and defense obligations under this section shall include, without
limitation and whether foreseeable or unforeseeable, any and all costs related
to any indemnified Clean-Up.






                                       -5-
<PAGE>

                     (b) Borrower shall have the right to control any Regulatory
Action or Third Party Claim, including an action for which indemnity is required
herein, through knowledgeable and experienced counsel of its choice, subject to
Lender's consent, which shall not be unreasonably withheld or delayed; provided,
however, that at Lender's option, Lender may participate in and contribute to
such action and appoint its own counsel at any time, all of which shall be at
Borrower's sole cost and expense. If, however, Lender determines that Borrower
is not adequately controlling any such action and Borrower does not correct or
commenced to correct such deficiencies within thirty (30) days after written
notice from Lender, Lender shall have the right, utilizing commercially
reasonable judgment, to undertake the control, conduct or settlement of such
claims through its own counsel at Borrower's sole cost and expense and may
settle such matters, with notice to Borrower, but without Borrower's consent, at
Borrower's sole cost and expense. In the event any proposed settlement includes
non-monetary relief, including Clean-Up, Lender may, acting in good faith, agree
to such Clean-Up and settle such matter only with the prior consent of Borrower,
which may not be unreasonably withheld or delayed, and provided that if Borrower
fails to notify Lender in writing as to whether it shall consent to such
non-monetary relief within ten (10) days from Lender's request for Borrower's
approval, Borrower shall be deemed to have consented to such non-monetary
relief.

                  5. General. Borrower agrees with Lender that:

                     (a) The representations, warranties, covenants and
indemnities contained herein shall, as to Lender or any purchaser of an interest
or participation in the Loan prior to repayment, survive repayment of the Loan
and satisfaction, release and discharge of the Loan Documents, whether through
full payment of the Loan, foreclosure, deed in lieu of foreclosure or otherwise
until the expiration of all applicable statutes of limitation and repose.

                     (b) Lender's rights and remedies against Borrower hereunder
shall be in addition to and not in lieu of any other rights and remedies
available to Lender under the Loan Documents or at law or in equity, and
Lender's rights hereunder shall not be terminated, affected or impaired in any
manner by the assertion or failure to assert by Lender of any of the rights and
remedies reserved to Lender pursuant to the Loan Documents or otherwise
available to Lender at law or in equity.

                     (c) Lender shall be entitled to rely upon any notice or
consent from Borrower. All notices hereunder shall, except as otherwise
expressly provided in this Agreement be effective (i) in case of hand delivered
notice, when hand delivered, (iii) if given by U.S. mail, upon delivery or, if
delivery is refused, on the date delivery is first attempted, and (iv) if given
by any other means (including by air courier), when delivered. All notices shall
be directed to the party to receive the same at its address stated above or at
such other address as may be substituted by notice as herein provided.

                     (d) It shall constitute an Event of Default hereunder if
(i) there occurs an Event of Default as defined in the Loan Agreement or in any
other Loan Documents, (ii) any representation or warranty contained herein is
determined by Lender to be untrue in any material adverse respect when made, or
(iii) Borrower fails to observe and perform each and every one of the terms,
covenants, promises and agreements on its part to be observed and performed
under this Agreement and such default is not cured within thirty (30) days after





                                       -6-
<PAGE>

written notice of such default is given to Borrower, provided that, if such
default is curable but not reasonably capable of cure within such thirty (30)
day period, Borrower shall have such further period, not to exceed a period of
sixty (60) days in the aggregate, as may be required to cure such default, on
the condition that Borrower commences such cure within the original thirty (30)
day period and thereafter diligently prosecute such cure to completion. Upon the
occurrence of any such Event of Default, Lender shall, subject to any applicable
limits of liability set forth in this Agreement, be entitled to exercise all or
any of its rights and remedies under the Loan Agreement, Note, Mortgage or this
Agreement, or as may otherwise be available to Lender at law or in equity, in
such order as Lender may elect.

                     (e) Any agreement hereafter made shall be ineffective to
amend, modify, discharge or effect an abandonment of this Agreement in whole or
in part unless such agreement is in writing and signed by Lender.

                     (f) This Agreement shall be governed by and construed in
accordance with the laws of the State in which the Project are located, and
shall be binding upon Borrower and its successors and assigns, and shall inure
to the benefit of Lender and its successors and assigns, including, without
limitation, any endorsee of the Note and any participants in the Loan.

                     (g) To the extent there is any conflict between the
provisions of this Agreement and any of the Loan Documents, the terms of this
Agreement shall control.

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                  IN WITNESS WHEREOF, Borrower has duly executed this Agreement,
under seal, on the date first written above.

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

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

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

                                                  Cedar Income Fund, Ltd., a
                                                  Maryland corporation

Attest: ___________________________               By: __________________________
        Stuart H. Widowski                            Brenda J. Walker
        Secretary                                     Vice President




























<PAGE>


STATE OF                                    )

                                            ) SS
COUNTY OF __________________                )

                  On this, the ___ day of _____________, 2003, before me a
Notary Public in and for the State and County aforesaid, personally appeared
Brenda J. Walker and Stuart H. Widowski, who acknowledged themselves to be the
Vice President and Secretary, respectively, of Cedar Income Fund, Ltd., a
Maryland corporation, the sole general partner of Cedar Income Fund Partnership,
L.P., a Delaware limited partnership, the sole member of CIF-Newport Plaza
Associates, LLC, a Delaware limited liability company, the sole general partner
of NEWPORT PLAZA ASSOCIATES, LP, a Delaware limited partnership, d/b/a Newport
Plaza Shopping Center, and that as such officers being authorized to do so,
executed the foregoing instrument for the purposes therein contained, by signing
the name of the corporation.

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

                                                     ________________________
                                                     Notary Public
                                                     My Commission Expires:





















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                                    EXHIBIT A
                                    ---------

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


































