Environmental Compliance And Indemnity Agreement

This Environmental Compliance and Indemnity Agreement (hereinafter, the "Environmental Indemnity" or "Agreement") is given pursuant to the terms and conditions of a certain Loan Agreement (hereinafter, the "Loan Agreement") dated January 30, 2004 by and among CEDAR SHOPPING CENTERS PARTNERSHIP, L.P., a Delaware limited partnership having an address at 44 South Bayles Avenue, Port Washington, New York 11050 (hereinafter, the "Borrower"), Fleet National Bank and the other lending institutions which are or become parties to the Loan Agreement (Fleet National Bank and the other lending institutions which are or become parties to the Loan Agreement are collectively referred to as the "Lenders" and individually as the "Lender"), and Fleet National Bank, a national banking association having an address at 100 Federal Street, 8th Floor, Boston, Massachusetts 02110, as Agent (hereinafter, together with any successors and assigns thereof, the "Agent"). Capitalized terms used herein which are not otherwise specifically defined shall have the same meaning herein as in the Loan Agreement.


As used herein:


A. The term "Environmental Legal Requirements" shall mean all applicable present or future federal, state, county and local laws, by-laws, rules, regulations, codes and ordinances, or any judicial or administrative interpretations thereof, and the requirements of any governmental agency or authority having or claiming jurisdiction with respect thereto, applicable to the regulation or protection of the environment, the health and safety of persons and property and all other environmental matters and shall include, but not be limited to, all orders, decrees, judgments and rulings imposed through any public or private enforcement proceedings, relating to Hazardous Materials or the existence, use, discharge, release, containment, transportation, generation, storage, management or disposal thereof, or otherwise regulating or providing for the protection of the environment applicable to the Property and relating to Hazardous Materials, or to the existence, use, discharge, release or disposal thereof. Environmental Legal Requirements presently include, but are not limited to, the following laws: Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. 59601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. 51801 et seq.), the Public Health Service Act (42 U.S.C. 5300(f) et seq.), the Pollution Prevention Act (42 U.S.C. 513101 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 5136 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss.6901 et seq.), the Federal Clean Water Act (33 U.S.C. ss.1251 et seq.), The Federal Clean Air Act (42 U.S.C. 57401 et seq.), the Pennsylvania Solid Waste Management Act, 35 P.S. ss.6018.101 et seq. and/or Pa. Code ss.75.260 and 75.261, the Pennsylvania Hazardous Sites Cleanup Act, 35 P.S. ss.6020.101 et seq., the Clean Streams Law, 35 P.S. ss.691.1 et seq., and the Storage Tank and Spill Prevention Act, 35 P.S. ss.6021.101 et seq.


B. The term "Hazardous Materials" shall mean asbestos, mold, flammable materials, explosives, radioactive or nuclear substances, polychlorinated biphenyls, other carcinogens, oil and other petroleum products, radon gas, urea formaldehyde, chemicals, gases, solvents, pollutants, contaminants, and any other hazardous or toxic materials, wastes and substances which are defined, determined or identified as such in any present or future federal, state or local laws, by-laws, rules, regulations, codes or ordinances or any judicial or administrative interpretation thereof.


C. The term "Property" shall mean the land located at the intersection of Route 255 and Commons Drive, Sandy Township, Clearfield County, Pennsylvania.


-1-


D. The term "Surrounding Property" shall mean any property located within one hundred (100) feet of the perimeter of the Property.


E. The term "Guarantor" shall mean, jointly and severally, Cedar Dubois, LLC, and Cedar Shopping Centers, Inc.


F. The term "Indemnitors" shall mean Borrower and Guarantor.


G. The term "Indemnified Party" shall mean: (i) Agent and each of the Lenders; (ii) all those claiming by, through or under Agent or any Lender, including any subsequent holder of the Loan and any present or future owner of a participation interest therein; (iii) any subsequent owner or tenant of all or any portion of the Property following the exercise by Agent of its rights under the Loan Agreement, the Guaranty, the Mortgage, the Assignment of Leases and Rents or the other Loan Documents, including, but not limited to, a foreclosure sale or deed in lieu thereof; and (iv) as to each of the foregoing, their respective affiliate, parent and subsidiary corporations, and, as applicable, the respective officers, directors, stockholders, agents, employees, accountants and attorneys of any one or more of them, and any person, firm or entity which controls, is controlled by, controlling, or under common control with, any one or more of them.


H. The term "Environmental Enforcement Action" shall mean all actions, orders, requirements or liens instituted, threatened in writing, required, completed, imposed or placed by any governmental authority and all claims made or threatened in writing by any other person against or with respect to the Property, or any present or past owner or occupant thereof, arising out of or in connection with any of the Environmental Legal Requirements, any environmental condition, or the assessment, monitoring, clean-up, containment, remediation or removal of, or damages caused or alleged to be caused by, any Hazardous Materials (i) located on or under the Property, or (ii) emanating from the Property.


I. The terms "generated," "stored," "transported," "utilized," "disposed," "managed," "released" and "threat of release," and all conjugates thereof, shall have the meanings and definitions set forth in the Environmental Legal Requirements.


J. The term "Environmental Reports" shall mean those written reports with respect to environmental matters affecting the Property furnished to the Agent prior to the execution of this Agreement.


FOR VALUE RECEIVED, and to induce Agent and the Lenders to grant the Loan and extend credit to the Borrower as provided for in the Loan Agreement and the other Loan Documents, Indemnitors hereby unconditionally agree as follows:


1. Compliance with Environmental Legal Requirements.


1.1 Compliance. Until the full satisfaction of the Borrower's
Obligations, and full satisfaction of the Guaranteed Obligations (as
defined in the Guaranty executed by the Guarantor), as applicable, the
Indemnitors hereby guaranty that the Indemnitors shall comply in all
materials respects with all Environmental Legal Requirements applicable
to the Property, and that the Indemnitors shall take all remedial
action necessary to avoid any liability of the Indemnitors or any
Indemnified Party, or any subsequent owner of the Property, and to
avoid the imposition of, or to discharge (by payment, bonding, or
otherwise), any liens on the Property, as a result of any failure to
comply with Environmental Legal Requirements applicable to the
Property.


-2-


1.2 Prohibitions. Without limitation upon the generality of
foregoing, Indemnitors and each of them agree that they:


(a) shall not release or permit any release of any
Hazardous Materials on the Property;


(b) shall not generate or permit any Hazardous
Materials to be generated on the Property;


(c) shall not except in strict compliance with all
Environmental Legal Requirements, store, or utilize, or permit
any Hazardous Materials to be stored or utilized on the
Property;


(d) shall not dispose of or permit any Hazardous
Materials to be disposed of on the Property;


(e) shall not fail to operate, maintain, repair and
use the Property in accordance with all Environmental Legal
Requirements; or


(f) shall use commercially reasonable efforts not to
allow, permit or suffer any other person or entity to operate,
maintain, repair and use the Property except in accordance
with Environmental Legal Requirements.


2. Notice of Conditions. Indemnitors shall provide Agent with prompt
written notice, but in no event later than ten (10) Business Days after
obtaining any actual knowledge or actual notice thereof, of any of the
following conditions: (i) the presence, or any release or threat of
release, of any Hazardous Materials on, under or from the Property,
whether or not caused by any of the Indemnitors; (ii) any Environmental
Enforcement Action instituted or threatened with respect to the
Property; or (iii) any condition or occurrence on the Property that may
constitute a violation of any of the Environmental Legal Requirements
with respect to the Property.


3. Indemnitors' Agreement to take Remedial Actions.


3.1 Remedial Actions. Upon any of the Indemnitors becoming
aware of the violation of any Environmental Legal Requirement related
to the Property, or the presence, or any release or any threat of
release, of any Hazardous Materials on, under, or from the Property,
whether or not caused by any of the Indemnitors, Indemnitors shall,
subject to the rights to contest set forth in Section 6, immediately
take all actions to cure or eliminate any such violation of any such
Environmental Legal Requirement and, where required by any such
Environmental Legal Requirement, to arrange for the assessment,
monitoring, clean-up, containment, removal, remediation, or restoration
of the Property.


3.2 Security For Costs. If the potential costs associated with
the actions required in Section 3.1, the release of any lien against
the Property, and the release or other satisfaction of the liability,
if any, of any of the Indemnitors with respect to the Property arising
under or related to any of the Environmental Legal Requirements or any
Environmental Enforcement Action are determined by Agent, in good
faith, to exceed $500,000.00, Agent shall have the right to require the
Indemnitors to provide, and the Indemnitors shall provide, within
thirty (30) days after written request therefor, a bond, letter of
credit or other similar financial assurance, in form and substance
satisfactory to Agent, in its good faith judgment, evidencing to


-3-


Agent's reasonable satisfaction that the necessary financial resources
will be unconditionally available to pay for all of the foregoing.


3.3 Environmental Assessments. Agent shall have the right to
require the Indemnitors, at their own cost and expense, to obtain a
professional environmental assessment of the Property in accordance
with Agent's then standard environmental assessment requirements and
sufficient in scope to comply with the requirements of Section 4 upon
the occurrence of any one or more of the following events: (i) an Event
of Default, or (ii) upon receipt of any notice of any of the conditions
specified in Section 2 of this Agreement.


4. Agent's Rights to Inspect the Property and Take Remedial Actions.


4.1 Agent's Rights. So long as any of the Loan Documents shall
remain in force and effect, Agent shall have the right, but not the
obligation, through such representatives or independent contractors as
it may designate, to enter upon the Property, at reasonable times and
upon reasonable notice to the Indemnitors and subject to the rights of
any tenants at the Property, and to expend funds to:


4.1.1 Assessments. Cause one (1) or more
environmental assessments of the Property to be undertaken, if
Agent in its reasonable discretion determines that any of the
conditions set forth in Section 2 exists. Such environmental
assessments may include, without limitation, (i) detailed
visual inspections of the Property, including without
limitation all storage areas, storage tanks, drains, drywells
and leaching areas; (ii) the taking of soils and surface and
sub-surface water samples; (iii) the performance of soils and
ground water analysis; and (iv) the performance of such other
investigations or analysis as are reasonably necessary and
consistent with sound professional environmental engineering
practice in order for Agent to obtain a complete assessment of
the compliance of the Property and the use thereof with all
Environmental Legal Requirements and to make a determination
as to whether or not any of the conditions set forth in
Section 2 exists;


4.1.2 Cure. Cure any breach of the representations,
warranties, covenants and conditions made by or imposed upon
Indemnitors under this Agreement including without limitation
any violation by any of Indemnitors, or by the Property, or by
any other occupant, prior occupant or prior owner thereof, of
any of the Environmental Legal Requirements applicable to the
Property;


4.1.3 Prevention and Precaution. Take all actions as
are necessary to (i) prevent the migration of Hazardous
Materials on, under, or from the Property to any other
property; (ii) clean-up, contain, remediate or remove any
Hazardous Materials on, under, or from any other property
which Hazardous Materials originated on, under, or from the
Property; or (iii) prevent the migration of any Hazardous
Materials on, under, or from any other property to the
Property;


4.1.4 Environmental Enforcement Actions. Comply with,
settle, or otherwise satisfy any Environmental Enforcement
Action including, but not limited to, the payment of any funds
or penalties imposed by any governmental au ...