<PAGE>   1

                        ENVIRONMENTAL INDEMNITY AGREEMENT


This ENVIRONMENTAL INDEMNITY AGREEMENT (together with all Exhibits and Schedules
attached hereto, this "Indemnity Agreement"), effective as of the Restatement
Effective Date, is made and entered into as of November 2, 2000 between Getty
Properties Corp., a Delaware corporation, whose address is 125 Jericho Turnpike,
Jericho, New York 11753 (formerly known as Getty Realty Corp.,) (as further
defined hereinafter, "Landlord"), and Getty Petroleum Marketing Inc., a Maryland
corporation whose address is 125 Jericho Turnpike, Jericho, New York 11753 (as
further defined hereinafter, "Tenant") (together referred to as the "Parties").

                                    RECITALS

A.   Contemporaneously with this Indemnity Agreement, the Parties are executing
     that certain Consolidated, Amended and Restated Master Lease (the "Restated
     Master Lease") and related documents, pursuant to which Landlord leased to
     Tenant certain lands and subleased or sub-subleased to Tenant certain other
     lands, together with all right, title and interest of Landlord, if any, in
     and to certain improvements and appurtenances (together, the "Premises").

B.   Landlord and Tenant desire to allocate risks associated with certain
     liabilities, potential liabilities and responsibilities regarding the
     environmental condition of certain of the Properties.

     NOW, THEREFORE, in exchange for good and valuable consideration and of the
mutual covenants and agreements contained herein, and as a further inducement to
enter the Restated Master Lease, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

SECTION I. DEFINITIONS.

1.   Any term not otherwise defined herein shall have the meaning assigned to
     such term in the Restated Master Lease. For purposes of this Indemnity
     Agreement, the following term shall have the following meaning.

     a. "Highspire Petroleum Terminal Property" shall mean, for purposes of this
        Indemnity Agreement, any and all land and Improvements at the Highspire
        Petroleum Terminal, 911 South Eisenhower, Middletown, Pennsylvania,
        except for the land and Improvements that constitute the terminal
        loading rack at which Tenant has rights to obtain fuel through operation
        of a cardlock or similar access system.

SECTION II. LANDLORD'S REPRESENTATIONS AND WARRANTIES.

1.   Landlord represents and warrants to Tenant that, to the knowledge of
     Landlord, as of the date hereof, except for (i) those Service Station
     Properties listed on Exhibits D and E to the 1997 Master Lease, Schedules 2
     and 3 and Exhibit C to the Restated Master Lease, and Schedule 12 and
     Schedule Z hereto, (ii) those Service Station Properties and Petroleum
     Terminal Properties listed on Schedule 7A and Schedule 7B to that certain
     Informational Side Letter of even date herewith between the parties hereto
     and on Schedule 3.1(r)(ii) to the Merger Agreement, and


<PAGE>   2

     (iii) those Service Station Properties and Petroleum Terminal Properties
     set forth in the July 31, 2000 Project Summary Binders:

     a. There are no material permits, licenses or other authorizations for
        which Landlord is responsible that are required with respect to the
        business, operations, assets or current uses of the Service Station
        Properties or Petroleum Terminal Properties under applicable
        Environmental Laws that have not been obtained and complied with and are
        not otherwise in full force and effect.

     b. Except as authorized by the permits, licenses or Environmental Law: (i)
        no Hazardous Substances are located on the Service Station Properties or
        Petroleum Terminal Properties, nor have Hazardous Substances been
        generated, treated, contained, handled, located, used, manufactured,
        processed, buried, incinerated, deposited, stored, discharged, refined,
        dumped, disposed, or released on, under or about any part of the Service
        Station Properties or Petroleum Terminal Properties by Landlord or any
        previous owner, tenant, occupant, or user of the Premises except as set
        forth on Schedule 3 to the Restated Master Lease; and (ii) no Hazardous
        Substances have migrated from or to the Service Station Properties or
        Petroleum Terminal Properties upon, under or about other properties in
        violation of any Environmental Laws.

     c. Landlord has not received, and is not aware that there is proposed or
        threatened, with respect to the Service Station Properties or Petroleum
        Terminal Properties any written notice, demand, request for information,
        Claim (as hereinafter defined), proceeding, citation, complaint,
        summons, investigation, order, agreement or litigation alleging
        violation of Environmental Laws on the Service Station Properties or
        Petroleum Terminal Properties, or alleging the suspected presence or
        release of Hazardous Substances thereon, for which Landlord (or Tenant
        after the Restatement Effective Date) may be liable.

     d. None of the Service Station Properties or Petroleum Terminal Properties
        are or have been listed on the National Priorities List, or any other
        list, schedule, law, inventory or record of hazardous or solid waste
        sites maintained by any federal, state or local agency, and Landlord has
        not been designated as a "potentially responsible party" with respect to
        any such sites.

     e. Landlord has reported to the applicable Government, to the extent
        required by the Environmental Laws, any matter required to be reported
        by Landlord under such Environmental Laws.


SECTION III. PETROLEUM TERMINAL PROPERTIES.

1.   In the event that one or more of the owned Petroleum Terminal Properties
     set forth on Schedule Y hereto is not in compliance in any respect with any
     Environmental Law(s) as in effect as of the Restatement Effective Date or
     if there are conditions existing at any Petroleum Terminal Property as of
     the Restatement Effective Date that Tenant addresses to ensure continuing
     compliance, or to mitigate the cost of continuing compliance, with such
     Environmental Laws or to

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<PAGE>   3


     mitigate the potential for future non-compliance with such Environmental
     Laws, Tenant and Landlord shall share the actual, out-of-pocket costs and
     expenses related to the Remediation and other compliance-related activities
     (any such Remediation and other compliance-related activities being
     referred to herein as the "Preexisting Condition Terminal
     Compliance") (Liabilities associated with any Remediation activities at the
     Newark Petroleum Terminal Property related to or arising from the
     Industrial Sites Recovery Act ("ISRA") shall not be considered Preexisting
     Condition Terminal Compliance, but shall be addressed by Subsection 4
     below) as follows:

     a. First, Tenant shall pay all costs and expenses incurred in connection
        with such Preexisting Condition Terminal Compliance until the amount so
        incurred with respect thereto equals $1,500,000 in aggregate.

     b. Second, Landlord and Tenant shall share equally the next $8,500,000 of
        such costs and expenses incurred in connection with such Preexisting
        Condition Terminal Compliance until the amount so incurred with respect
        thereto equals $10,000,000 in aggregate.

     c. Third, to the extent that such costs and expenses incurred in connection
        with such Preexisting Condition Terminal Compliance exceeds $10,000,000,
        all such costs and expenses shall be borne by Tenant.

     d. Notwithstanding the above, Landlord shall be solely responsible for the
        actual, out-of-pocket costs and expenses related to the Preexisting
        Condition Terminal Compliance for the Highspire Petroleum Terminal
        Property.

     The net effect of the foregoing provisions is that, for Petroleum Terminal
     Properties other than the Highspire Petroleum Terminal Property, Landlord
     shall not pay more than $4,250,000 in connection with all Preexisting
     Condition Terminal Compliance. Until the amount expended with respect to
     Preexisting Condition Terminal Compliance exceeds $10,000,000, Tenant shall
     forward to Landlord copies of all invoices and bills received by Tenant in
     connection with such Preexisting Condition Terminal Compliance and evidence
     of Tenant's payment therefor. Within forty-five (45) days after receipt of
     such evidence, Landlord shall, if so required pursuant to this Section III,
     reimburse Tenant for Landlord's share of the amount paid by Tenant with
     respect to such invoices and bills.

2.   In connection with any proposed Preexisting Condition Terminal Compliance
     contemplated at a time when the costs and expenses incurred by Tenant for
     all prior Preexisting Condition Terminal Compliance expenditures exceed
     $1,500,000 in aggregate (and Landlord shall not have paid its maximum
     amount), Tenant shall furnish to Landlord plans setting forth the scope of
     such project and an estimate of the cost thereof, certified by a reputable
     environmental engineering firm (a "Terminal Expenditure Plan").

     a. Landlord shall have thirty (30) days from the receipt of any such
        Terminal Expenditure Plan either to approve such Terminal Expenditure
        Plan or provide Tenant with an alternate Terminal Expenditure Plan,
        certified by a reputable environmental engineering firm, which alternate
        Terminal Expenditure Plan shall have the same scope as Tenant's Terminal
        Expenditure Plan but may have a lower cost estimate than that set forth
        in Tenant's Terminal Expenditure Plan.



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<PAGE>   4

     b. If Landlord fails to approve Tenant's Terminal Expenditure Plan or to
        provide Tenant with such alternate Terminal Expenditure Plan within such
        thirty (30) day period, Landlord's approval of such Terminal Expenditure
        Plan shall be deemed granted.

     c. In the event that Landlord provides Tenant with an alternate Terminal
        Expenditure Plan, such Preexisting Condition Terminal Compliance shall
        be conducted in accordance with such alternate Terminal Expenditure
        Plan, unless Tenant reasonably disapproves of such Terminal Expenditure
        Plan within seven (7) days of receipt of the same.

     d. If Tenant fails to respond to such alternate Terminal Expenditure Plan
        within such seven (7) day period, then Tenant's approval of such
        alternate Terminal Expenditure Plan shall be deemed granted.

     e. If Tenant reasonably disapproves of such alternate Terminal Expenditure
        Plan and if Landlord and Tenant cannot thereafter promptly agree on a
        Terminal Expenditure Plan, such dispute shall be resolved by an
        arbitration conducted in accordance with the applicable provisions set
        forth in Exhibit F of the Restated Master Lease.

     f. Except as provided in Subsection g. below, all Preexisting Condition
        Terminal Compliance shall be conducted in accordance with the Terminal
        Expenditure Plan.

     g. In the event of an imminent and substantial endangerment or when, in the
        reasonable judgment of Tenant, immediate action is necessary to avoid
        enforcement activities, or a fine and/or penalty in excess of $1500 per
        day or $100,000 in the aggregate, by an applicable Government, Tenant
        may take such action as necessary to respond to the imminent and
        substantial endangerment or to avoid enforcement by the applicable
        Government, prior to agreement on a Terminal Expenditure Plan and such
        action shall not affect in any way Landlord's obligations under this
        Section.

     All costs and expenses incurred by Landlord related in any way to the
     development of an alternate Terminal Expenditure Plan (as contemplated by
     subsection a, above) or by Tenant and Landlord related in any way to
     arbitration of a dispute concerning a Terminal Expenditure Plan (as
     contemplated by subsection e., above) shall not be chargeable as costs and
     expenditures hereunder.

3.   With respect to any Preexisting Condition Terminal Compliance for which
     Notice has been given in good faith prior to the tenth (10th) anniversary
     of the Restatement Effective Date, Landlord's obligations hereunder shall
     survive and continue in full force and effect until completion of the
     Terminal Expenditure Plan or Landlord's fulfillment of its obligations
     hereunder, whichever is sooner. Landlord shall have no liability or
     obligation whatsoever hereunder with respect to any Preexisting Condition
     Terminal Compliance for which Notice has been received after the tenth
     (10th) anniversary of the Restatement Effective Date.

4.   Landlord shall be solely responsible for any and all liability or
     obligation at the Newark Petroleum Terminal Property related to or arising
     from ISRA, except for that liability or obligation under ISRA created or
     caused by Tenant after the Restatement Effective Date, including but not
     limited to all liability or obligation related in any way to the
     Contamination for which Texaco is responsible, or to Contamination
     discovered as a result of the sampling for




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<PAGE>   5

     which the New Jersey Department of Transportation has given notice and
     shall hold Tenant harmless for any such liability or obligation. Landlord
     shall retain and continue to exercise whatever rights it may have to compel
     a third party to fully discharge any Remediation or other related
     obligations the third party may have under ISRA, and shall remain solely
     responsible for any associated actual, out-of-pocket costs and expenses. If
     Landlord fails to compel such third party to fully discharge any
     Remediation or other similar obligations under ISRA, Landlord shall be
     fully responsible for the discharge of such responsibilities.


SECTION IV. TENANT'S OBLIGATIONS.

1.   Notwithstanding anything to the contrary herein, in the Restated Master
     Lease, or any other agreement, Tenant shall have no liability or obligation
     whatsoever, and Landlord shall indemnify and hold Tenant harmless with
     respect to any and all allegations, actions, orders, decrees, suits,
     demands, demand letters, injunctions, judgments, orders, decrees, rulings,
     damages, dues, penalties, fines, costs, amounts paid in settlement,
     liabilities, obligations, taxes, liens, losses, expenses, and fees
     (hereinafter "Claims") with respect to a breach of Landlord's
     representations in Section II, above, as well as:

     a. The Highspire Petroleum Terminal Property;

     b. Any Petroleum Terminal Property and Service Station Property closed,
        sold or otherwise disposed of prior to February 1, 1997 (the "Spinoff
        Transaction");

     c. Service Stations Properties closed, sold or otherwise disposed of after
        the Spinoff Transaction and before the Restatement Effective Date,
        except for the Service Station Properties identified on Schedule Z
        hereto;

     d. UST Upgrades at the Service Station Properties for which Landlord is
        responsible pursuant to Section 7.6 of the Restated Master Lease; and

     e. Remediation activities at the Service Station Properties for which
        Landlord is responsible pursuant to Section 9 of the Restated Master
        Lease.

2.   Notwithstanding anything to the contrary herein, in the Restated Master
     Lease, or any other agreement, any condition not in full compliance with
     any Environmental Law as of the Restatement Effective Date at any Service
     Station Property or Petroleum Terminal Property shall not operate as a
     lease default and Tenant shall have no liability or obligation whatsoever
     to engage in any Remediation or other compliance-related activity with
     respect to any such non-compliance condition as of the Restatement
     Effective Date at any such Service Station Property or Petroleum Terminal
     Property, except when required by a bona fide Claim asserted by an
     applicable Government or a party other than Landlord or any Landlord
     affiliate (excluding any Claim relating to any breach of Landlord's
     representations in Section II, above), provided, however, that at any time,
     in Tenant's sole discretion, Tenant may engage in any Remediation or other
     compliance-related activity with respect to any Service Station Property or
     Petroleum Terminal Property. Landlord shall not take any action (i)
     reasonably likely to cause an applicable Government or a party other than
     Landlord to assert a Claim that seeks such Remediation or other
     compliance-related activity or (ii) to compromise, admit any fact, concede
     liability or otherwise materially prejudice Tenant's ability to defend any
     actual or potential Claim. Tenant shall not be deemed to be required by a
     bona fide Claim to take action if Tenant



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<PAGE>   6

     has a reasonable, good faith basis for asserting a challenge or defense and
     Tenant is, in fact, diligently challenging or defending against such Claim.
     So long as Tenant has a reasonable, good faith basis for asserting a
     challenge or defense and Tenant is, in fact, diligently challenging or
     defending against such Claim, any condition that is the subject of Tenant's
     challenge or defense shall not operate as a lease default.

3.   Except as set forth in this Indemnity Agreement and in the Restated Master
     Lease, Landlord shall have no liability to Tenant for any environmental
     matter related to the Service Station Properties or Petroleum Terminal
     Properties.



SECTION V. LANDLORD'S ADDITIONAL OBLIGATIONS.


1.   LANDLORD'S COOPERATION. Landlord hereby grants Tenant the right to exercise
     Landlord's rights to compel each third party listed on Schedule 12 hereto
     to discharge fully any Remediation or other similar obligations that such
     third party may owe to Landlord pursuant to any purchase and sale or
     similar agreement for any of those Properties (a "Sale Agreement"). Tenant
     shall comply with all applicable obligations of Landlord under any Sale
     Agreement, including, without limitation, Landlord's obligation to provide
     for and permit access to the Property that is the subject matter of such
     Sale Agreement by such third party and/or its employees, agents and
     contractors in the manner set forth in such Sale Agreement. Such third
     parties shall be solely responsible for fulfilling all Remediation and
     similar obligations, and Landlord shall under no circumstance have any
     obligation or liability with respect thereto, except as may be specifically
     required by Article 9 of the Restated Master Lease. If such rights of
     Landlord under any such Sale Agreement are not assignable, then Landlord
     shall cooperate with Tenant (which cooperation may include, without
     limitation, litigation) as Tenant shall reasonably request, and at Tenant's
     expense (including, without limitation, Indemnifying Landlord), so as to
     enforce the performance of such third party obligations under such Sale
     Agreement.

2.   RESTATEMENT EFFECTIVE DATE. Upon the occurrence of the Restatement
     Effective Date, Landlord shall deliver to Tenant a certificate containing
     representations as of the Restatement Effective Date substantially
     identical to those contained in Section II, except that the Exhibits and
     Schedules referred to in that Section shall, for the purposes of such
     certificate, contain such modifications or amendments as may be necessary
     to cause the representations contained in such certificate to be true and
     correct as of the Restatement Effective Date. In no event, shall the
     modifications or amendments to the Exhibits and Schedules serve to cure any
     breach of the representations made on the date hereof.

SECTION VI. MISCELLANEOUS PROVISIONS.

1.   AMENDMENT AND MODIFICATION. Any amendment or modification to this Indemnity
     Agreement must be in writing signed by both of the Parties hereto.

2.   ASSIGNMENT. This Indemnity Agreement and all of the provisions hereof shall
     bind and benefit the Parties hereto and their respective successors and
     permitted assigns. Nothing in this Indemnity Agreement, expressed or
     implied, is intended or shall be construed to confer upon any person other
     than the Parties hereto, and their respective successors and assigns, any
     right,



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     remedy, or Claim under or by reason of this Indemnity Agreement or any
     provision herein contained. Both Parties have the right to assign (and each
     successive assignee may further assign) their rights under this Indemnity
     Agreement to any person or entity, which such person or entity by
     acceptance of such assignment shall be deemed to assume all liabilities,
     indebtedness and obligations included in the rights assigned.

3.   GOVERNING LAW. This Indemnity Agreement and its interpretation and
     performance shall be governed by and construed and regulated in accordance
     with the laws of the State of New York, without regard to principles of
     conflicts of law.

4.   COUNTERPARTS. This Indemnity Agreement may be executed in two or more
     counterparts, each of which shall be deemed an original, but all of which
     together shall constitute one and the same instrument and shall become a
     binding agreement when one or more of the counterparts have been signed by
     each of the Parties and delivered to the other party.

5.   AGENT FOR SERVICE OF PROCESS. Tenant hereby irrevocably names and
     designates Lukoil Americas Corporation, a Delaware corporation whose
     address is 540 Madison Avenue, New York, NY, as Tenant's agent (Tenant's
     "Agent") for service of process, including all notices required to
     institute any proceeding in any court or in any other way required to
     confer personal jurisdiction over Tenant in any court, and for the receipt
     of any Notices or other communications required under this Indemnity
     Agreement, including any and all Notices under this Indemnity Agreement
     issued for the purpose of demanding compliance with this Indemnity
     Agreement. Service or demand upon Agent shall be good and sufficient
     service and demand upon Tenant for all purposes, including, without
     limitation, the purpose of obtaining personal jurisdiction over Tenant for
     any legal action or proceeding or for the purpose of commencing any
     proceeding. Tenant agrees to take any and all action necessary to continue
     Agent's designation in full force and effect. If Agent becomes unable to
     act as Agent for any reason then Tenant shall forthwith irrevocably
     designate a replacement Agent satisfying the requirements of this Section
     that would apply to any replacement Agent, as set forth in the next
     sentence. By Notice to Landlord (but no more frequently than once every six
     months), Tenant may substitute in place of Agent any other Person having
     full-time business offices and a street address in Manhattan. Tenant agrees
     that delivery of any Notice to Agent, or any service of process upon Agent,
     in accordance with the notice requirements of this Indemnity Agreement,
     shall constitute valid and effective personal service upon Tenant. Any such
     Notice or service of process shall be effective in accordance with the
     provisions of this Indemnity Agreement relating to Notices. Any failure of
     Agent to give any notice of such service of process or Notice to Tenant
     shall not impair or affect the validity of such Notice, service of process,
     or any judgment rendered in any proceeding based thereon.

6.   ENTIRE AGREEMENT. This Indemnity Agreement embodies the entire agreement
     and understanding of the Parties hereto in respect of the subject matter
     contained herein. There are no separate understandings or agreements, oral
     or written, between the Parties with respect to the subject matter
     contained herein. This Indemnity Agreement supersedes all prior agreements
     and understandings between the Parties with respect to such subject matter.
     The Restated Master Lease contains certain parallel provisions, but in the
     event of any conflict between this Indemnity Agreement and the Restated
     Master Lease, this Indemnity Agreement governs and controls.





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<PAGE>   8

7.   HEADINGS. The article and section headings contained in this Indemnity
     Agreement are for convenience and reference purposes only and shall not
     affect in any way the meaning or interpretation of this Indemnity
     Agreement.

8.   SEVERABILITY. If any one or more terms or provisions contained in this
     Indemnity Agreement or the application of such terms or provisions shall,
     for any reason and to any extent, be held to be invalid, illegal or
     unenforceable in any respect, then the remainder of this Indemnity
     Agreement, or the application of terms or provisions to persons or
     circumstances other than those as to which it is invalid, illegal or
     unenforceable, shall not be affected by such invalidity. All remaining
     provisions of this Indemnity Agreement shall be valid and enforced to the
     fullest extent permitted by law.

9.   FURTHER ASSURANCES. Each party to this Indemnity Agreement agrees to
     execute such documents or instruments, and to take such action, as the
     other party may reasonably request after the date hereof in order to
     effectuate and perfect the indemnification contemplated hereby.

10.  THIRD PARTY BENEFICIARY. The Landlord and Tenant are the intended
     beneficiaries of this Indemnity Agreement.

11.  SUBMISSION TO JURISDICTION. Each of the Parties to this Indemnity Agreement
     hereby submits to the exclusive jurisdiction of the United Stated District
     Court for the Southern District of New York for purposes of all legal
     proceedings arising out of or relating to this Indemnity Agreement and the
     estates and relationships created hereby. If the Parties hereto are unable
     to submit to the jurisdiction of the United States District Court for the
     Southern District of New York notwithstanding reasonably diligent efforts
     to do so, then the Parties shall submit to the exclusive jurisdiction of
     any New York State court sitting in New York County, New York. Each of the
     Parties to this Indemnity Agreement hereby irrevocably waives, to the
     fullest extent it may effectively do so, any objection which it may now or
     hereafter have to the laying of venue of any such proceedings brought in
     any such court and any Claim that any such proceeding brought in any such
     court has been brought in an inconvenient forum.

12.  INTERPRETATION. No inference in favor of or against any party shall be
     drawn from the fact that such party has drafted any portion of this
     Indemnity Agreement. The Parties have both participated substantially in
     the negotiation, drafting and revision of this Indemnity Agreement with
     representation by counsel and such other advisers as they have deemed
     appropriate. The words "include" and "including" shall be construed to be
     followed by the words: "without limitation."

13.  REMEDIES. Any breach by Tenant of any obligation or undertaking herein
     shall not, under any circumstances, absolve Landlord of its obligations and
     undertakings herein. The sole remedies available to Landlord upon breach by
     Tenant shall be the ability to seek injunctive relief to ensure compliance
     and to seek actual damages accrued as a result of the breach.


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<PAGE>   9

IN WITNESS WHEREOF, the Parties have caused this Indemnity Agreement to be
signed by their respective officers thereunto duly authorized as of the date
above.



                                               Getty Properties Corp.

                                               By: /s/ John Fitteron
                                                  ------------------------------
                                                  Name: John Fitteron
                                                       -------------------------
                                                  Title: Senior Vice President
                                                        ------------------------

                                               Getty Petroleum Marketing Inc.

                                               By: /s/ Leo Liebowitz
                                                  ------------------------------
                                                  Name: Leo Liebowitz
                                                       -------------------------
                                                  Title: Chairman and Chief
                                                         Executive Officer
                                                        ------------------------



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                                   SCHEDULE Y


                         (Petroleum Terminal Properties)



<TABLE>
<S>                                         <C>                                 <C>
Newark Petroleum Terminal                   86 Doremus Avenue                   Newark, NJ

Mt. Vernon Petroleum Terminal               4301 Boston Post Road               Bronx, NY

Long Island City Petroleum Terminal         3023 Greenpoint Ave.                Long Island, NY

New Haven Petroleum Terminal                85 Forbes Avenue                    New Haven, CT

E. Providence Petroleum Terminal            Massasoit Ave. and Dexter Road      E. Providence, RI

Rensselaer Petroleum Terminal               49 Riverside Avenue                 Rensselaer, NY
</TABLE>




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