EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

AGREEMENT made as of the 14th day of September, 2009, by and among Cedar Shopping Centers, Inc., a Maryland corporation (the “Corporation”), Cedar Shopping Centers Partnership, L.P., a Delaware limited partnership (the “Partnership”), and Joel I. Yarmak (the “Executive”).

1.1       The Executive shall serve in an executive capacity as Chief Administrative Officer of both the Corporation and the Partnership with duties consistent therewith and shall perform such other functions and undertake such other responsibilities as are customarily associated with such capacity. The Executive shall report directly to the Chief Executive Officer of the Corporation. The Executive shall also hold such directorships and officerships in the Corporation, the Partnership and any of their subsidiaries to which, from time to time, the Executive may be elected or appointed during the term of this Agreement.

1.2       The Executive shall devote Executive’s full business time and skill to the business and affairs of the Corporation and the Partnership and to the promotion of their interests.

2.1       The term of employment shall be two years, commencing with the date hereof, unless sooner terminated as provided in this Agreement.

2.2       Notwithstanding the provisions of Section 2.1 hereof, each of the Corporation and the Partnership shall have the right, on written notice to the Executive, to terminate the Executive’s employment for Cause (as defined in Section 2.3), such termination to be effective as of the date on which notice is given or as of such later date otherwise specified in the notice and, upon such termination of employment for Cause, Executive shall not be entitled to receive any additional compensation hereunder. The Executive shall have the right, on written notice to the Corporation and the Partnership, to terminate the Executive’s employment for Good Reason (as defined in Section 2.4), such termination to be effective as of the date on which notice is given or as of such later date otherwise specified in the notice; provided, however, the Executive’s right to terminate Executive’s employment shall lapse 60 days after the occurrence of any of the events specified in clauses (iii) or (iv) of the definition of Good Reason.

2.3       For purposes of this Agreement, the term “Cause” shall mean any of the following actions by the Executive: (a) failure to comply with any of the material terms of this Agreement, which shall not be cured within 10 days after written notice, or if the same is not of a nature that it can be completely cured within such 10 day period, if Executive shall have failed to commence to cure the same within such 10 day period and shall have failed to pursue the cure of the same diligently thereafter; (b) engagement in gross misconduct injurious to the business or reputation of the Corporation or the Partnership; (c) knowing and willful neglect or refusal to attend to the material duties assigned to the Executive by the Board of Directors of the Corporation, which shall not be cured within 10 days after written notice; (d) intentional misappropriation of property of the Corporation or the Partnership to the Executive’s own use; (e) the commission by the Executive of an act of fraud or embezzlement; (f) Executive’s conviction for a felony; or (g) Executive’s engaging in any activity which is prohibited pursuant to Section 5 of this Agreement, which shall not be cured within 10 days after written notice.

2.4       For purposes of this Agreement, the term “Good Reason” shall mean any of the following: (i) a material breach of this Agreement by the Corporation or the Partnership which shall not be cured within 10 days after written notice; (ii) a material reduction in the Executive’s duties or responsibilities; (iii) the relocation of the Executive’s office or the Corporation’s or Partnership’s executive offices to a location more than 30 miles from New York City; or (iv) a “Change in Control”, as defined below. As used herein, a “Change in Control” shall be deemed to occur if: (i) there shall be consummated (x) any consolidation or merger of the Corporation or the Partnership in which the Corporation or the Partnership is not the continuing or surviving corporation or pursuant to which the stock of the Corporation or the units of the Partnership would be converted into cash, securities or other property, other than a merger or consolidation of the Corporation or Partnership in which the holders of the Corporation’s stock immediately prior to the merger or consolidation hold more than fifty percent (50%) of the stock or other forms of equity of the surviving corporation immediately after the merger, or (y) any sale, lease, exchange or other transfer (in one transaction or series of related transactions) of all, or substantially all, the assets of the Corporation or the Partnership; (ii) the Board approves any plan or proposal for liquidation or dissolution of the Corporation or the Partnership; or (iii) any person acquires more than 29% of the issued and outstanding common stock of the Corporation.

3.1       The Partnership shall pay to the Executive for the services to be rendered by the Executive hereunder to the Corporation and the Partnership a base salary at the rate of $275,000 per annum. Upon Executive’s commencement of employment, (a) the Partnership shall pay to the Executive the amount of $10,000 in cash and (b) the Corporation shall make an award to the Executive of 7,500 shares of restricted stock of the Corporation which will cliff-vest on the third anniversary of the date of this Agreement if the Executive remains employed by the Corporation at that date, except as such vesting may otherwise be accelerated pursuant to Section 4.1(ii) hereof. The base salary shall be payable in accordance with the Corporation’s or Partnership’s normal payroll practices, but not less frequently than twice a month. Such base salary will be reviewed at least annually and may be increased (but not decreased) by the Board of Directors of the Corporation in its sole discretion. The Executive shall participate in the Corporation’s annual bonus plan for senior executive officers. The payment of any bonus is within the discretion of the Board of Directors of the Corporation, based on recommendations of the Compensation Committee. For calendar year 2010, the Executive’s bonus would be targeted at an annualized initial amount of not less than $100,000, payable in a combination of cash and restricted stock issued under the Corporation’s stock incentive plan; provided, however, that if the bonus target is not met, then the bonus will be adjusted in the same way as the bonus of other executive officers of the Corporation is adjusted. The amount of the bonus will be guaranteed for one year from the date hereof, based on the pro-rata portion of the 2009 year and the pro rata portion of the 2010 year ending on the first anniversary of the date of this Agreement. The Executive will also be entitled to participate in the Corporation’s long-term incentive compensation plan pursuant to which he will be granted annual long-term restricted stock grants as determined by the Board of Directors, based on the recommendations of the Compensation Committee, which the Corporation projects will be in the initial amount of $75,000 for the first year, subject to normal vesting and performance requirements established by the Board of Directors. The amount of the long-term incentive compensation award will be guaranteed for one year from the date hereof, based on the pro-rata portion of the 2009 year and the pro-rata portion of the 2010 year ending on the first anniversary of the date of this Agreement.

3.2       The Executive shall be entitled to participate in, and receive benefits from, on the basis comparable to other senior executives, any insurance, medical, disability, or other employee benefit plan of the Corporation, the Partnership or any of their subsidiaries which may be in effect at any time during the course of Executive’s employment by the Corporation and the Partnership and which shall be generally available to senior executives of the Corporation, the Partnership or any of their subsidiaries.

3.3       The Partnership agrees to reimburse the Executive for all reasonable and necessary business expenses incurred by the Executive on behalf of the Corporation or the Partnership in the course of Executive’s duties hereunder upon the presentation by the Executive of appropriate vouchers therefor, including a cell phone, portable computer, continuing legal education, professional licenses and organizations and conferences.

3.4       The Executive shall be entitled each year of this Agreement to paid vacation in accordance with the Corporation’s or Partnership’s policies but not less than three weeks plus personal and floating holidays (and a ratable number of sick days), which if not taken during such year will be forfeited (unless management requests postponement).

3.5       If, during the period of employment hereunder, because of illness or other incapacity, the Executive shall fail for a period of 90 consecutive days, or for shorter periods aggregating more than six months during the term of this Agreement, to render the services contemplated hereunder, then the Corporation or the Partnership, at either of their options, may terminate the term of employment hereunder by notice from the Corporation or the Partnership, as the case may be, to the Executive, effective on the giving of such notice.

During any period of disability of Executive during the term hereof, the Corporation shall continue to pay to Executive the salary and bonus to which the Executive is entitled pursuant to Section 3.1 hereof.

3.6       In the event of the death of the Executive during the term hereof, the employment hereunder shall terminate on the date of death of the Executive.

3.7       Each of the Corporation and the Partnership shall have the right to obtain for their respective benefits an appropriate life insurance policy on the life of the Executive, naming the Corporation or the Partnership as the beneficiary. If requested by the Corporation or the Partnership, the Executive agrees to cooperate with the Corporation or the Partnership, as the case may be, in obtaining such policy.

4.1       If the Executive’s employment with the Corporation or the Partnership shall be terminated (a) by the Corporation or Partnership other than for C