[merrill.gif]

Confirmation of Forward Stock Sale Transaction

August 11, 2005

ML Ref:

To: Cedar Shopping Centers Inc.   Cedar Shopping Centers Partnership, L.P.   44
South Bayles Avenue   Port Washington, NY 11050         From: Merrill Lynch
International   Merrill Lynch Financial Centre   2 King Edward Street   London
EC1A 1HQ     From: Merrill Lynch Pierce Fenner & Smith Incorporated (“MLPF&S”),
  Solely as Agent   tel: (212) 449-3149   fax: (212) 449-2697

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Dear Sirs,

The purpose of this letter agreement (this “Confirmation”) is to confirm the
terms and conditions of the transaction entered into between us on the Trade
Date specified below (the “Transaction”). This Confirmation constitutes a
“Confirmation” as referred to in the ISDA Master Agreement specified below.

1.   The definitions and provisions contained in the 2000 ISDA Definitions (the
“2000 Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “2002
Definitions” and, together with the 2000 Definitions, the “Definitions”), each
as published by the International Swaps and Derivatives Association, Inc., are
incorporated into this Confirmation. In the event of any inconsistency between
the 2002 Definitions and the 2000 Definitions, the 2002 Definitions will govern.
In the event of any inconsistency between the Definitions and this Confirmation,
this Confirmation will govern.

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      This Confirmation evidences a complete and binding agreement between Party
A and Party B as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of, and be subject to
an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as
if Party A and Party B had executed an agreement in such form with a Schedule
thereto having the elections and variables set forth in Part 5 of this
Confirmation. In the event of any inconsistency between provisions of the
Agreement and this Confirmation, this Confirmation will prevail for the purpose
of the Transaction to which this Confirmation relates. The parties hereby agree
that no Transaction other than the Transaction to which this Confirmation
relates shall be governed by the Agreement.                   Party A and Party
B each represents to the other that it has entered into this Transaction in
reliance upon such tax, accounting, regulatory, legal, and financial advice as
it deems necessary and not upon any view expressed by the other.             2.
    The terms of the particular Transaction to which this Confirmation relates
are as follows:                    General Terms:                             
Party A:     Merrill Lynch International.                             Party B:  
  Cedar Shopping Centers Inc.                             Trade Date:     August
11, 2005                             Effective Date:     August 17, 2005        
                    Base Amount:     3,000,000 Shares. At the election of Party
A, such Base Amount shall be increased by up to 1,350,000 Shares upon delivery
of written notice by Party A to Party B on or prior to 30 calendar days
following the Trade Date. For the avoidance of doubt, all of the terms
applicable herein to the original Base Amount shall be applicable to the
additional Base Amount, including without limitation, the Initial Forward Price
and the calculation of the Forward Price as of any day and all references to
Base Amount shall be inclusive of the original Base Amount and the additional
Base Amount. On each Settlement Date, the Base Amount shall be reduced by the
number of Settlement Shares for such Settlement Date.  

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      Maturity Date:     August 17, 2006 (or, if such date is not a Scheduled
Trading Day, the next following Scheduled Trading Day); subject to extension if
a Settlement Date on such date is deferred as provided below in clauses (ii) or
(iii) of the proviso to the definition of Settlement Date; provided that if the
Maturity Date is a Disrupted Day, then the Maturity Date shall be the first
succeeding Scheduled Trading Day that is not a Disrupted Day. For the avoidance
of doubt, if on the Maturity Date the Base Amount is zero, then such date will
not constitute a Settlement Date and neither party will have a payment or
delivery obligation resulting from the occurrence of the Maturity Date.        
                                Forward Price:     The Forward Price will be, on
the Effective Date, the Initial Forward Price, and on any other day, will be the
Forward Price as of the immediately preceding calendar day (a) multiplied by the
sum of (i) 1 plus (ii) the Daily Rate for such day and (b) reduced by $0.225 on
each of the following dates (each such date, a “Forward Price Reduction Date”):
November 7, 2005, February 6, 2006, May 8, 2006 and August 7, 2006.            
                            Initial Forward Price:     $13.87                  
    Daily Rate:     For any day, (i)(A) USD-Federal Funds Rate for such day
minus (B) the Spread divided by (ii) 360.                         USD-Federal
Funds Rate:     For any day,the rate set forth for such day opposite the caption
“Federal funds”, as such rate is displayed on the page “FedsOpen <Index><GO>” on
the BLOOMBERG Professional Service, or any successor page; provided that if no
rate appears on such day on such page, the rate for the immediately preceding
day on which a rate appears shall be used for such day.                        
Spread:     1.00%  

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    Shares:   Common Stock, $0.06 par value per share, of Cedar Shopping Centers
Inc. (the “Issuer”) (Exchange identifier: “CDR”).               Exchange:   NYSE
              Related Exchange(s):   All Exchanges.               Clearance
System:   DTC.               Calculation Agent:   Merrill Lynch International.  
            Determining Party:   Merrill Lynch International.            
Settlement Terms:                   Settlement Date:   Any Scheduled Trading Day
following the Effective Date and up to and including the Maturity Date, as
designated by Party B in a written notice (a “Settlement Notice”) which
satisfies the Settlement Notice Requirements and which (a) if related to any
Cash Settlement or Net Stock Settlement, is delivered to Party A at least 5
Scheduled Trading Days prior to such Settlement Date (the period from the giving
of any such notice to the Settlement Date being the “Cash/Net Stock Notice
Period”) and (b) if related to Physical Settlement, may be delivered at any time
and settlement will be completed as promptly as practicable thereafter; provided
that (i) subject to clauses (ii) and (iii) below, the Maturity Date shall be a
Settlement Date if on such date the Base Amount is greater than zero; (ii) if
Cash Settlement or Net Stock Settlement applies, any Settlement Date, including
a Settlement Date on the Maturity Date, shall be deferred until the date on
which Party A is able to completely purchase the Hedge Unwind Shares if Party A
is unable to completely purchase the Hedge Unwind Shares during the Unwind
Period due to (A) the restrictions of Rule 10b-18 under the Exchange Act, (B)
the existence of any Suspension Day or Disrupted Day, or (C) if Party A is
otherwise unable to completely purchase the Hedge Unwind Shares during the
Unwind Period, (iii) if the conditions requiring

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        designation of an Additional Settlement Date have been satisfied as set
forth in “Limit on Beneficial Ownership” in Section 4 of this Confirmation,
settlement will take place on the Partial Settlement Date and the related
Additional Settlement Date and (iv) no more than three Settlement Dates other
than the Maturity Date and the Additional Settlement Dates may be designated by
Party B; provided further that if Party A shall completely purchase the Hedge
Unwind Shares during an Unwind Period by a date that is more than three
Scheduled Trading Days prior to a Settlement Date, Party A may, by written
notice to Party B, specify any Scheduled Trading Day prior to such Settlement
Date as the Settlement Date; provided further that if any Settlement Date is not
a Scheduled Trading Day, the Settlement Date shall instead be the next Scheduled
Trading Day.               Settlement Shares:   With respect to any Settlement
Date, a number of Shares, not to exceed the Base Amount, designated as such by
Party B in the related Settlement Notice; provided that, on the Maturity Date
the number of Settlement Shares shall be equal to the Base Amount on such date;
provided further that if a Settlement Date has been specified for a number of
Shares equal to the Base Amount on or prior to the Maturity Date and such
Settlement Date has been deferred as described above until a date later than the
Maturity Date, the number of Settlement Shares on the Maturity Date shall be
zero.               Hedge Unwind Shares:   With respect to any Settlement Date,
the number of Shares required to be purchased by Party A in order to completely
unwind its hedge with respect to the Settlement Shares, taking into account
Shares anticipated to be delivered or received (as the case may be) if Net Stock
Settlement applies. Such Hedge Unwind Shares shall also take into account the
number of Shares that would be owed to Party A by Party B if Party B elects to
pay any Net Stock Settlement Fee with Shares.

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    Settlement:   Physical, Cash, or Net Stock, at the election of Party B as
set forth in a Settlement Notice that satisfies the Settlement Notice
Requirements; provided that Physical Settlement shall apply (i) if no Settlement
method is selected, (ii) if a Suspension Day exists during the Cash/Net Stock
Notice Period, but only to the extent that Party A has been unable as a result
thereof to completely purchase the Hedge Unwind Shares prior to the Settlement
Date and has provided notice to such effect to Party B or (iii) if an
Acceleration Event set forth in paragraphs (a) through (c) of the definition
thereof has occurred (except to the extent Net Stock Settlement applies as set
forth in “Termination Settlement” in Section 3 of this Confirmation).
Notwithstanding the foregoing, if an Acceleration Event set forth in paragraphs
(d) through (f) of the definition thereof has occurred, Cash Settlement shall
not apply.               Settlement Notice         Requirements:  
Notwithstanding any other provisions hereof, a Settlement Notice delivered by
Party B will not be effective to establish a Settlement Date unless Party B
represents in such Settlement Notice that it has complied with the agreement set
forth in clause (c) under “Additional Representations, Warranties and Agreements
of Party B” in Section 3 of this Confirmation.                   Notwithstanding
any other provisions hereof, a Settlement Notice delivered by Party B that
specifies Cash Settlement or Net Stock Settlement will not be effective to
establish a Settlement Date or require Cash Settlement or Net Stock Settlement
(as applicable) unless Party B delivers to Party A with such Settlement Notice a
representation signed by Party B substantially in the following form: “as of the
date of this Settlement Notice, neither Cedar Shopping Centers Inc. nor Cedar
Shopping Centers Partnership, L.P. is aware of any material nonpublic
information concerning itself or the Shares, and each is designating the date
contained herein as a Settlement Date in good faith and not as part of a plan or
scheme to evade compliance with the federal securities laws.”

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    Unwind Period:   The period from and including the first Scheduled Trading
Day following the date Party B elects Cash Settlement or Net Stock Settlement in
respect of a designated Settlement Date to and including the third Scheduled
Trading Day preceding such Settlement Date (as such date may be changed by Party
A as described in the second proviso to the definition of Settlement Date
above); provided that if an Acceleration Event occurs during an Unwind Period,
the Acceleration Event provisions shall apply with respect to the relevant
number of affected Settlement Shares and such affected number of Shares shall be
subject to Termination Settlement (as defined below)     Unwind Daily Share    
    Amount:   On each Scheduled Trading Day during the Unwind Period, other than
a Suspension Day or a Disrupted Day, Party A will, in accordance with the
principles of best execution, purchase a number of Shares equal to the lesser of
(i) 100% of the applicable volume limitation of Rule 10b-18 for the Shares on
such Scheduled Trading Day, without reference to any block purchases, (ii)  25%
of the average daily trading volume for the Shares on the Exchange on such
Scheduled Trading Day, or (iii) the number of Shares necessary to complete the
purchase of the Hedge Unwind Shares and calculate the Cash Settlement Amount or
the Net Stock Settlement Shares, as the case may be.               Exchange Act:
  The Securities Exchange Act of 1934, as amended from time to time.            
  Securities Act:   The Securities Act of 1933, as amended from time to time.  
            Physical Settlement:   On any Settlement Date in respect of which
Physical Settlement applies, Party B shall deliver to Party A a number of Shares
equal to the Settlement Shares for such Settlement Date, and Party A shall
deliver to Party B, by wire transfer of immediately available funds to an
account designated by Party B, an amount in cash equal to the Physical
Settlement Amount for such Settlement Date, on a delivery versus payment basis.

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    Physical Settlement Amount:   For any Settlement Date in respect of which
Physical Settlement applies, an amount in cash equal to the product of the
Forward Price on such Settlement Date and the number of Settlement Shares for
such Settlement Date.               Cash Settlement:   On any Settlement Date in
respect of which Cash Settlement applies, if the Cash Settlement Amount is a
positive number, Party A will pay the Cash Settlement Amount to Party B. If the
Cash Settlement Amount is a negative number, Party B will pay the absolute value
of the Cash Settlement Amount to Party A. Such amounts shall be paid on the
Settlement Date.               Cash Settlement Amount:   An amount determined by
the Calculation Agent equal to: (i)(A) the Forward Price as of the first day of
the applicable Unwind Period minus (B) the weighted average price at which Party
A is able to purchase the relevant number of Hedge Unwind Shares in compliance
with the Unwind Daily Share Amount provisions herein and the timing and volume
restrictions of Rule 10b-18 under the Exchange Act as if it applied to Party A
during the Unwind Period, plus $0.02, multiplied by (ii) the Settlement Shares.
              Net Stock Settlement:   On any Settlement Date in respect of which
Net Stock Settlement applies, if the number of Net Stock Settlement Shares is a
(i) positive number, Party A shall deliver a number of Shares to Party B equal
to the Net Stock Settlement Shares, and (ii) negative number, Party B shall
deliver a number of Shares to Party A equal to the absolute value of the Net
Stock Settlement Shares; provided that if Party A determines in its good faith
judgment that it would be required to deliver Net Stock Settlement Shares to
Party B, Party A may elect to deliver a portion of such Net Stock Settlement
Shares on one or more dates prior to the applicable Settlement Date.

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    Net Stock Settlement         Shares:   For any Settlement Date in respect of
which Net Stock Settlement applies, a number of Shares equal to the quotient of
(a)(i) the Cash Settlement Amount for such Settlement Date, minus (ii) if Party
B elects to pay the Net Stock Settlement Fee in Shares, the Net Stock Settlement
Fee for such Settlement Date; divided by (b) the weighted average price at which
Party A is able to purchase relevant number of the Hedge Unwind Shares in
compliance with the Unwind Daily Share Amount provisions herein and with Rule
10b-18 under the Exchange Act as if it applied to Party A during the Unwind
Period.               Net Stock Settlement Fee:   For any Settlement Date in
respect of which Party B has elected Net Stock Settlement, Party B shall pay to
Party A on such Settlement Date a fee of $0.02 multiplied by the number of
Settlement Shares, payable in cash or Shares at the option of Party B.          
    Settlement Currency:   USD.               Failure to Deliver:   Applicable.
            Suspension of Cash or Net       Stock Settlement:                  
Suspension Day:   Any day on which Party A determines based on the advice of
counsel that Cash or Net Stock Settlement may violate applicable securities
laws. Party A shall notify Party B if it receives such advice from its counsel.
Notwithstanding any provision in the Agreement to the contrary, Physical
Settlement shall apply if a Suspension Day exists during the Cash/Net Stock
Notice Period, but only to the extent that Party A has been unable as a result
thereof to completely purchase the Hedge Unwind Shares prior to the Settlement
Date and has provided notice to such effect to Party B.

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  Adjustments:                   Method of Adjustment:   Calculation Agent
Adjustment. For the avoidance of doubt, Regular Quarterly Dividend (as defined
below) shall not constitute a Potential Adjustment Event.            
Extraordinary Events:                      Consequences of Merger Events:       
        Share-for-Share:   Cancellation and Payment.              
Share-for-Other:   Cancellation and Payment.               Share-for-Combined:  
Cancellation and Payment.               Determination of the Settlement method
following an occurrence of a Merger Event is subject to “Share Settlement upon
Certain Events” in Section 4 of this Confirmation. The parties hereto
acknowledge that it would be commercially reasonable for Merrill Lynch
International, as Determining Party, to take into account the considerations set
forth in Section 12.8(e) in the 2002 Definitions.                  Settlement
Following other Extraordinary Events:               As provided hereinafter
under “Termination Settlement”, for purposes of the Extraordinary Events
constituting Acceleration Events set forth in paragraph (f) of the definition
thereof, Party B shall elect whether payment of the Settlement Amount is to be
effected by Physical Settlement or Net Stock Settlement within one Scheduled
Trading Day of the designation of the related Settlement Date; provided, that if
Party B fails to do so, Physical Settlement shall apply.                        
        Account Details:                      Payments to Party A:   To be
advised under separate cover or telephone confirmed prior to each Settlement
Date.                  Payments to Party B:   To be advised under separate cover
or telephone confirmed prior to each Settlement Date.                  Delivery
of Shares to Party A:   To be advised.                  Delivery of Shares to
Party B:   To be advised.

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3.  
Other Provisions:
                  Conditions to Effectiveness:                     The
effectiveness of this Confirmation on the Effective Date shall be subject to (i)
the condition that the representations and warranties of Party B contained in
the Purchase Agreement dated the date hereof among Party A, Party B, and the
underwriters named therein (the “Purchase Agreement”) and any certificate
delivered pursuant thereto by Party B be true and correct on the Effective Date
as if made as of the Effective Date, (ii) the condition that Party B have
performed all of the obligations required to be performed by it under the
Purchase Agreement on or prior to the Effective Date, (iii) the satisfaction of
all of the conditions set forth in Section 5 of the Purchase Agreement, and (iv)
the condition that none of the following has occurred: (A) Party A is unable to
borrow and deliver for sale a number of Shares equal to the Base Amount or (B)
Party A would incur a stock loan cost of more than 50 basis points per annum to
do so (in which event this Confirmation shall be effective but the Base Amount
for this Transaction shall be the number of Shares, if any, Party A is required
to deliver in accordance with Section 2(a)(ii) of the Purchase Agreement);
provided that if the circumstances set forth in clause (B) above occur, Party B
may, within three Scheduled Trading Days, refer Party A to a lending party
reasonably acceptable to Party A that will lend Party A Shares at a stock loan
cost of no more than 50 basis points per annum (a “Referral Lending Party”) in
order to satisfy the conditions to effectiveness.                     Additional
Representations, Warranties and Agreements of Party B: Party B hereby represents
and warrants to, and agrees with, Party A as of the date hereof that:           
                  (a)       Any Shares, when issued and delivered in accordance
with the terms of the Transaction, will be duly authorized and validly issued,
fully paid and nonassessable, and the issuance thereof will not be subject to
any preemptive or similar rights.                               (b)       Party
B has reserved and will keep available, free from preemptive or similar rights,
out of its authorized but unissued Shares, solely for the purpose of issuance
upon settlement of the Transaction as herein provided, the full number of Shares
as shall then be issuable upon settlement of the Transaction. All Shares so
issuable shall, upon such issuance, be accepted for listing or quotation on the
Exchange.                               (c)       Prior to any Settlement Date,
the Settlement Shares with respect to that Settlement Date shall have been
approved for listing or quotation on the Exchange, subject to official notice of
issuance, and such Settlement Shares shall have been registered under the
Securities Act.  

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    (d)   The execution, delivery and performance by Party B of this
Confirmation (including, without limitation, the issuance and delivery of Shares
on any Settlement Date), and compliance by Party B with its obligations
hereunder have been duly authorized by all necessary action and do not and will
not result in any violation of the provisions of the charter or by-laws (or
other constituent documents) of Party B or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government
instrumentality or court, domestic or foreign, having jurisdiction over Party B
or any subsidiary or any of their assets, properties or operations.          
(e)   No filing with, or authorization, approval, consent, license, order
registration, qualification or decree of, any court or governmental authority or
agency is necessary or required for the execution, delivery and performance by
Party B of this Confirmation and the consummation of the Transaction (including,
without limitation, the issuance and delivery of Shares on any Settlement Date)
except (i) such as have been obtained under the Securities Act and (ii) as may
be required to be obtained under state securities laws.           (f)   Party B
agrees not to repurchase any Shares if, immediately following such repurchase,
the Base Amount would be equal to or greater than either 9.0% of the number of
then-outstanding Shares or Shares in excess of the REIT Limit (as hereinafter
defined).           (g)   Party B agrees not to declare any distribution, issue
or dividend consisting of cash to existing holders of the Shares with a record
date on or prior to the final Settlement Date under this Confirmation except for
Regular Quarterly Dividends.           (h)   Party B is not insolvent, nor will
Party B be rendered insolvent as a result of this Transaction.           (i)  
Neither Party B nor any of its officers or directors shall take, and Party B
shall not cause any of its affiliates to take, any action that would cause any
purchases of Shares by Party A in connection with any Cash Settlement or Net
Stock Settlement of this Transaction not to comply with Rule 10b-18 under the
Exchange Act.           (j)   Party B will not engage in any “distribution” (as
defined in Regulation M under the Exchange Act) during any Unwind Period.

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    (k)   Party B is an “eligible contract participant” (as such term is defined
in Section 1(a)(12) of the Commodity Exchange Act, as amended).           (l)  
In addition to any other requirements set forth herein, Party B agrees not to
elect Cash Settlement or Net Stock Settlement if such settlement would result in
a violation of either a) the U.S. federal securities laws, or b) any other
federal or state law or regulation applicable to Party B.         Covenant of
Party B:           The parties acknowledge and agree that any Shares delivered
by Party B to Party A on any Settlement Date will be newly issued Shares and
when delivered by Party A (or an affiliate of Party A) to securities lenders
from whom Party A (or an affiliate of Party A) borrowed Shares in connection
with hedging its exposure to the Transaction will be freely saleable without
further registration or other restrictions under the Securities Act in the hands
of those securities lenders, irrespective of whether such stock loan used to
hedge Party A’s exposure is effected by Party A or an affiliate of Party A.
Accordingly, Party B agrees that the Settlement Shares that it delivers to Party
A on each Settlement Date will not bear a restrictive legend and that such
Settlement Shares will be deposited in, and the delivery thereof shall be
effected through the facilities of, the Clearance System.         Covenants of
Party A:           (a)   Party A shall use any Settlement Shares delivered by
Party B to Party A to return to securities lenders to close out borrowings
created by Party A or an affiliate of Party A in connection with its hedging
activities related to exposure under this Transaction.           (b)   In
connection with bids and purchases of Shares in connection with any Cash
Settlement or Net Stock Settlement of this Transaction, Party A shall use its
best efforts to comply, or cause compliance, with the provisions of Rule 10b-18
under the Exchange Act, as if such provisions were applicable to such purchases.
          (c)   Party A shall use its reasonable efforts to maintain its hedge
of its exposure to the Transaction by borrowing sufficient Shares from lenders
at a stock loan cost not to exceed 50 basis points per annum.        
Acceleration Events: An Acceleration Event shall occur if:           (a)   Stock
Borrow Events. Notwithstanding any other provision hereof, if in its judgment
Party A is unable to hedge Party A’s exposure to the Transaction (a “Stock
Borrow Event”) because (i) of the lack of sufficient Shares being made available
for borrowing by lenders, or (ii) it would incur a stock loan cost of more than
50 basis points per annum, then Party A shall have the right to designate any
Scheduled Trading Day to be a Settlement Date for which Physical Settlement
shall apply on at least two Scheduled Trading Days’ notice, and to select the
number of Settlement Shares for such Settlement Date; provided that (x) prior to
the designation of a Stock Borrow Event under this paragraph (a), Party B may,
within two Scheduled Trading Days, refer Party A to a Referral Lending Party and
(y) the number of Settlement Shares for any Settlement Date so designated by
Party A shall not exceed the number of Shares as to which such inability to
borrow exists; or  

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  (b) Share Price Reduction. Notwithstanding any other provision hereof, if the
average of the closing bid and offer prices or, if available, the closing sale
price per Share on the Exchange for the regular trading session on any Scheduled
Trading Day occurring after the Trade Date is less than or equal to $7.00, Party
A shall have the right to designate any Scheduled Trading Day to be a Settlement
Date for which Physical Settlement shall apply on at least ten Scheduled Trading
Days’ notice, and to select the number of Settlement Shares for such Settlement
Date; or         (c) Dividends and Other Distributions. Notwithstanding any
other provision hereof, if on any day occurring after the Trade Date Party B
declares a distribution, issue or dividend to existing holders of the Shares of
(i) an extraordinary cash dividend, (ii) a regular quarterly dividend either (A)
in an amount greater than $0.225 per Share per quarter or (B) on a date earlier
than the quarterly Forward Price Reduction Date (“Regular Quarterly Dividend”),
or (iii) securities or share capital of another entity acquired or owned
(directly or indirectly) by Party B as a result of a spin-off or other similar
transaction or (iv) any other type of securities (other than Shares, which may
constitute a Potential Adjustment Event), rights or warrants or other assets, in
any case for payment (cash or other consideration) at less than the prevailing
market price as determined by Party A, then Party A shall have the right to
designate any Scheduled Trading Day to be a Settlement Date for the entire
Transaction on at least three Scheduled Trading Days’ notice. Upon the
designation of such Settlement Date, Party B shall notify Party A within one
Scheduled Trading Day whether Physical Settlement or Net Stock Settlement
applies; provided that if Party B fails to do so, Physical Settlement shall
apply; and provided further, that if Party B elects Net Stock Settlement and
Party A determines in its reasonable judgment that the record date for any such
distribution, issue or dividend may occur during the Unwind Period, then Party A
may require Physical Settlement for the remaining portion of the Settlement
Shares prior to such record date; or  

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    (d)   ISDA Early Termination Date. Notwithstanding anything to the contrary
herein, in the Agreement or in the Definitions, if either Party A or Party B has
the right to designate an Early Termination Date pursuant to Section 6 of the
Agreement, such party shall have the right to designate any Scheduled Trading
Day to be a Settlement Date for the entire Transaction on at least three
Scheduled Trading Days’ notice. Upon the designation of such Settlement Date,
Party B shall notify Party A within one Scheduled Trading Day whether Physical
Settlement or Net Stock Settlement applies; provided, that if Party B fails to
do so, Physical Settlement shall apply; or       (e)   Board Approval of Merger.
Notwithstanding any other provision hereof, if on any day occurring after the
Trade Date the board of directors of Party B votes to approve any action that,
if consummated, would constitute a Merger Event (as defined in the 2002
Definitions), Party B shall notify Party A of any such vote within one Scheduled
Trading Day. Party A shall have the right to designate any Scheduled Trading Day
to be a Settlement Date for the entire Transaction on at least three Scheduled
Trading Days’ notice. Upon the designation of such Settlement Date, Party B
shall notify Party A within one Scheduled Trading Day whether Physical
Settlement or Net Stock Settlement applies; provided, that if Party B fails to
do so, Physical Settlement shall apply; or             (f)   Other ISDA Events.
Notwithstanding anything to the contrary herein, in the Agreement or in the
Definitions, if a Nationalization, Insolvency, Insolvency Filing, Delisting or
Change in Law occurs, Party A shall have the right to designate any Scheduled
Trading Day to be a Settlement Date for the entire Transaction on at least three
Scheduled Trading Days’ notice and Party A shall be the Determining Party. Upon
the designation of such Settlement Date, Party B shall notify Party A of the
settlement method within one Scheduled Trading Day whether Physical Settlement
or Net Stock Settlement applies; provided, that if Party B fails to do so,
Physical Settlement shall apply.           Termination Settlement:         If a
Settlement Date is specified following an Acceleration Event (a “Termination
Settlement Date”), Physical Settlement or Net Stock Settlement shall apply with
respect to such Termination Settlement Date as set forth above; provided, that
if, Physical Settlement with respect to any Termination Settlement Date would
result in Merrill Lynch & Co., Inc. (“ML & Co.”), directly or indirectly
beneficially owning (as such term is delivered for purposes of Section 13(d) of
the Exchange Act) at any time in excess of the lesser of: a) 9.0% of the
outstanding Shares or Shares, or b) the ownership limit specified in the charter
(or other constituent document) of Cedar Shopping Centers Inc. (the “REIT
Limit”), then, in either of such events (collectively, the “Share Limit”) at the
option of Party B, either (i) Net Stock Settlement shall apply with respect to
such Termination Settlement Date to the extent (but only to the extent)
necessary to maintain ownership of Shares by ML & Co. below the Share Limit (in
conjunction with the application of Physical Settlement to the Settlement Shares
that are not so settled by Net Stock Settlement with respect to such Termination
Settlement Date), or (ii) Physical Settlement shall apply, subject to the
provisions of “Limit on Beneficial Ownership” below.

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  Maximum Share Delivery:         Notwithstanding any other provision of this
Confirmation, in no event will Party B be required to deliver on any Settlement
Date, whether pursuant to Physical Settlement or Net Stock Settlement, Shares in
excess of the Base Amount to Party A.       Assignment:         Party A may
assign or transfer any of its rights or delegate any of its duties hereunder to
any affiliate of Party A or any entity organized or sponsored by Party A without
the prior written consent of Party B; provided, however, that such assignee’s
obligations shall be guaranteed by ML & Co. Notwithstanding any other provision
of this Confirmation to the contrary requiring or allowing Party A to purchase
or receive any Shares from Party B, Party A may designate any of the
aforementioned affiliates or entities to purchase or receive such Shares or
otherwise to perform Party A’s obligations in respect of this Transaction if
such obligations are guaranteed by ML & Co. and any such designee may assume
such obligations, and Party A shall be discharged of its obligations to Party B
in respect of such obligations.       Guarantee of Party A:         ML & Co.
shall guarantee all obligations of Party A under this Confirmation and shall
execute a Guarantee in favor of Party B substantially in the form of Annex A
hereto.       Matters Relating to Agent:         (a)   As a broker-dealer
registered with the U.S. Securities and Exchange Commission, MLPF&S, in its
capacity as Agent, will be responsible for (i) effecting the Transaction, (ii)
issuing all required confirmations and statements to Party A and Party B and
(iii) maintaining books and records relating to the Transaction.

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        (b)   MLPF&S shall act as “agent” for Party A and Party B within the
meaning of Rule 15a-6 under the Exchange Act in connection with the Transaction.
        (c)   The Agent, in its capacity as such, shall have no responsibility
or liability (including, without limitation, by way of guarantee, endorsement or
otherwise) to Party A or Party B or otherwise in respect of the Transaction,
including, without limitation, in respect of the failure of Party A or Party B
to pay or perform under this Confirmation, except for its gross negligence or
willful misconduct in performing its duties as Agent hereunder.         (d)  
Each of Party A and Party B agree to proceed solely against the other to collect
or recover any securities or monies owing to Party A or Party B, as the case may
be, in connection with or as a result of the Transaction.         (e)   The
Agent will be Party A’s agent for service of process for the purpose of Section
13(c) of the Agreement.

    Indemnity           Party B agrees to indemnify Party A and its affiliates
and their respective directors, officers, agents and controlling parties (Party
A and each such affiliate or person being an “Indemnified Party”) from and
against any and all losses, claims, damages and liabilities, joint and several,
to which such Indemnified Party may become subject under, in connection with,
relating to, or arising out of, the Agreement or Transaction with respect to any
applicable securities laws, Maryland corporate law or Delaware limited
partnership law and will reimburse any Indemnified Party for all reasonable
expenses (including reasonable legal fees and reasonable expenses) as they are
incurred in connection with the investigation of, preparation for, or defense of
any pending or threatened claim or any action or proceeding arising therefrom,
whether or not such Indemnified Party is a party thereto. Party B will not be
liable under this Indemnity paragraph to the extent that any loss, claim,
damage, liability or expense is found in a final nonappealable judgment by a
court of competent jurisdiction to have resulted from Party A’s gross
negligence, fraud, bad faith and/or willful misconduct.     Miscellaneous      
    Non-Reliance:   Applicable         Additional Acknowledgements:   Applicable
        Agreements and Acknowledgments Regarding Hedging Activities:  
Applicable    

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4.  
The Agreement is further supplemented by the following provisions:
                   
Share Settlement upon Certain Events:
                      Notwithstanding anything to the contrary herein, in the
Agreement or in the Definitions, if at any time (i) an Early Termination Date
occurs and Party B would be required to make a payment pursuant to Sections 6(d)
and 6(e) of the Agreement, or (ii) a Merger Event occurs and Party B would be
required to make a payment pursuant to Sections 12.2 and 12.7 of the 2002
Definitions, then in lieu of any such payment, Party B, at its election, may
deliver to Party A, at the time such payment would have been due and in the
manner provided under “Physical Settlement” in the 2002 Definitions, a number of
Shares (or, in the case of a Merger Event, common equity securities of the
surviving entity) equal to the quotient obtained by dividing (A) the amount that
would have been so payable by (B) the fair market value per Share (or per unit
of such common equity security) of the Shares (or units) at the time of such
delivery, as determined by the Calculation Agent (which fair market value shall
take into account whether the Shares so delivered are freely tradable). Upon
Party B’s election to deliver Shares, the Transaction will not be considered for
purposes of determining an Early Termination Amount under Section 6(e) of the
Agreement.                    
Agreement Regarding Set-off:
                      The last sentence of the first paragraph of Section 6(e)
of the Agreement shall not apply with respect to the Transaction to the extent
that any of the events described in Section 5(a)(vii) of the Agreement occurs
with respect to Party B.                    
Bankruptcy Rights:
                      In the event of Party B’s bankruptcy, Party A acknowledges
and agrees that this Confirmation is not intended to convey to it rights with
respect to this Transaction that are senior to the claims of common
stockholders. For the avoidance of doubt, the parties acknowledge and agree that
Party A’s rights with respect to any other claim arising from this Transaction
prior to Party B’s bankruptcy shall remain in full force and effect and shall
not be otherwise abridged or modified in connection herewith.                  
 
Limit on Beneficial Ownership:
                      Notwithstanding any other provisions hereof, Party A shall
not , and shall not be entitled to, receive Shares hereunder (whether in
connection with the purchase of Shares on any Settlement Date or otherwise) to
the extent (but only to the extent) that such receipt would result in ML & Co.
directly or indirectly beneficially owning (as such term is defined for purposes
of Section 13(d) of the Exchange Act) at any time in excess of the Share Limit.
Any purported delivery of Shares hereunder shall be void and have no effect to
the extent (but only to the extent) that such delivery would result in ML & Co.
directly or indirectly so beneficially owning in excess of the Share Limit. If
use of Physical Settlement on any Settlement Date (other than a Termination
Settlement Date) would result in Party A receiving more than the Share Limit,
then (1) the Physical Settlement on such Settlement Date (the “Partial
Settlement Date”) shall be limited to that number of Shares which would result
in Party A receiving the no more than the Share Limit, and (2) the Settlement
Date for the remaining Shares (the “Additional Settlement Date”) shall be the
next Scheduled Trading Day on which the conditions specified above shall be
satisfied. An Additional Settlement Date may be later than the Maturity Date.  

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      Miscellaneous:                     (a)       Addresses for Notices. For
the purpose of Section 12(a) of the Agreement:                              
Address for notices or communications to Party A:                              
      Address:     c/o Merrill Lynch, Pierce, Fenner & Smith                    
                                 Incorporated                           Four
World Financial Center                           North Tower, 5th Floor        
                  New York, NY 10080                     Attention:    
Equity-Linked Capital Markets Group                     Telephone No.:    
(212) 449-6763
                    Facsimile No.:    
(212) 738-1069
                                          Address for notices or communications
to Party B:                                                 Address:     Cedar
Shopping Centers Inc.                           44 South Bayles Avenue          
                Port Washington, NY 11050                     Attention:    
Chairman and Chief Executive Officer                                            
                                          (b)       Waiver of Right to Trial by
Jury. Each party waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any suit, action or
proceeding relating to this Confirmation or any Credit Support Documentation.
Each party (i) certifies that no representative, agent or attorney of the other
party has represented, expressly or otherwise, that such other party would not,
in the event of such a suit action or proceeding, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other party have been induced to
enter into this Confirmation by, among other things, the mutual waivers and
certifications in this Section.  

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5.     ISDA Master Agreement       With respect to the Agreement, Party A and
Party B each agree as follows:             Specified Entities:                  
(i) in relation to Party A, for the purposes of:                         Section
5(a)(v): not applicable             Section 5(a)(vi): not applicable            
Section 5(a)(vii): not applicable             Section 5(b): not applicable      
                      and (ii) in relation to Party B, for purposes of:        
                Section 5(a)(v): not applicable             Section 5(a)(vi):
not applicable             Section 5(a)(vii): not applicable             Section
5(b)(iv): not applicable                       “Specified Transaction” will have
the meaning specified in Section 14 of the Agreement.       The “Cross Default”
provisions of Section 5(a)(vi) of the Agreement will apply to Party A and will
apply to Party B.     The “Credit Event Upon Merger” provisions of Section
5(b)(v) of the Agreement will apply to Party A and will apply to Party B.      
The “Automatic Early Termination” provision of Section 6(a) of the Agreement
will not apply to Party A and will not apply to Party B.       “Termination
Currency” means USD.       Additional Termination Event will not apply.      
Tax Representations:         (I)   For the purpose of Section 3(e) of the
Agreement, each party represents to the other party that it is not required by
any applicable law, as modified by the practice of any Relevant Authority, to
make any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 9(h) of the Agreement) to be made by it to
the other party under the Agreement. In making this representation, each party
may rely on (i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of the Agreement, (ii) the satisfaction of the
agreement contained in Section 4(a)(i) or 4(a)(iii) of the Agreement, and (iii)
the satisfaction of the agreement of the other party contained in Section 4(d)
of the Agreement except that it will not be a breach of this representation
where reliance is placed on clause (ii) above and the other party does not
deliver a form or document under Section 4(a)(iii) of the Agreement by reason of
material prejudice to its legal or commercial position.  

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                (II)   Each party makes the following representations to the
other party:           (i)   Party A represents that it is a corporation
organized under the laws of England and Wales.           (ii)   Cedar Shopping
Centers Inc. represents that it is a corporation incorporated under the laws of
the State of Maryland; and Cedar Shopping Centers Partnership, L.P. represents
that it is a limited partnership formed under the laws of Delaware.      
Agreement to Deliver Documents: For the purpose of Section 4(a)(i) and 4(a)(ii)
of the Agreement, each party agrees to deliver the following document, as
applicable:       (I)   Tax forms, documents or certificates to be delivered
are:       Each party agrees to complete (accurately and in a manner reasonably
satisfactory to the other party), execute, and deliver to the other party,
United States Internal Revenue Service Form W-9 or W-8 BEN, or any successor of
such form(s): (i) before the first payment date under this Confirmation; (ii)
promptly upon reasonable demand by the other party; and (iii) promptly upon
learning that any such form(s) previously provided by the other party has become
obsolete or incorrect.       (II)   Other Documents to be delivered:

Party Required to
Deliver Document   Document Required to be Delivered   When Required   Covered
by
Section 3(d)
Representation

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Party A and Party B   Evidence of the authority and true signatures of each
official or representative signing this Confirmation   Upon or before execution
and delivery of this Confirmation   Yes               Party B   Certified copy
of the resolution of the Board of Directors or equivalent document authorizing
the execution and delivery of this Confirmation   Upon or before execution and
delivery of this Confirmation   Yes               Party A   Guarantee of its
Credit Support Provider, substantially in the form of Exhibit A attached hereto
  Upon or before execution and delivery of this Confirmation   Yes

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(I)     Miscellaneous Addresses for Notices: For the purpose of Section 12(a) of
the Agreement:                   Address for notices or communications to Party
A:                         Address:     Merrill Lynch International            
        c/o Merrill Lynch, Pierce, Fenner                     & Smith
Incorporated                     Four World Financial Center                    
North Tower, 5th Floor                     New York, NY 10080              
Attention:     Equity-Linked Capital Markets Group               Telephone No.:
    (212) 449-6763               Facsimile No.:     (212) 738-1069              
                        (For all purposes)                   Additionally, a
copy of all notices pursuant to Sections 5, 6, and 7 of the Agreement as well as
any changes to Party B’s address, telephone number or facsimile number should be
sent to:                        GMI Counsel              Merrill Lynch World
Headquarters              4 World Financial Center              New York, New
York 10080              Attention: Global Equity Derivatives        
     Facsimile No.: 212 449-6576 Telephone No.: 212 449-6309                  
Address for notices or communications to Party B for all purposes: PLEASE ADVISE
                       Cedar Shopping Centers Inc.              44 South Bayles
Avenue              Port Washington, NY 11050              Attention: Chairman
and Chief Executive Officer  

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  Process Agent: For the purpose of Section 13(c) of the Agreement, Party A
appoints as its process agent:         Merrill Lynch, Pierce, Fenner & Smith
Incorporated     222 Broadway, 16th Floor     New York, NY 10038     Attention:
Litigation Department         Party B does not appoint a Process Agent.     (II)
Calculation Agent. The Calculation Agent is Party A, unless otherwise specified
in a Confirmation in relation to the relevant Transaction, provided, however
that if an Event of Default has occurred and is continuing with respect to Party
A, Party B shall be the Calculation Agent.     (III) Credit Support Document:  
    Party A: Guarantee of ML & Co. in the form attached hereto as Exhibit A.    
  Party B: None     (IV) Credit Support Provider:       With respect to Party A:
ML & Co. and with respect to Party B, Not Applicable.     (V) Governing Law.
This Confirmation will be governed by, and construed in accordance with, the
laws of the State of New York.     (VI) Netting of Payments. “Multiple
Transaction Payment Netting” will not apply for the purpose of Section 2(c) of
the Agreement; provided, however, that with respect to the Agreement or any
other ISDA Master Agreement between the parties, any Share delivery obligations
on any day of Party B, on the one hand, and Party A, on the other hand, shall be
netted. The resulting Share delivery obligation of a party upon such netting
shall be rounded down to the nearest number of whole Shares, such that neither
party shall be required to deliver any fractional Shares.     (VII) Accuracy of
Specified Information. Section 3(d) of the Agreement is hereby amended by adding
in the third line thereof after the word “respect” and before the period the
words “or, in the case of audited or unaudited financial statements or balance
sheets, a fair presentation of the financial condition of the relevant person.”

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            (VIII)   Amendment of Section 3(a)(iii). Section 3(a)(iii) of the
Agreement is modified to read as follows:                 No Violation or
Conflict. Such execution, delivery and performance do not materially violate or
conflict with any law known by it to be applicable to it, any provision of its
constitutional documents, any order or judgment of any court or agency of
government applicable to it or any of its assets or any material contractual
restriction relating to Specified Indebtedness binding on or affecting it or any
of its assets.             (IX)   Amendment of Section 3(a)(iv). Section
3(a)(iv) of the Agreement is modified by inserting the following at the
beginning thereof:                 “To such party’s best knowledge,”            
(X)   Additional Representations will apply for the purpose of Section 3 of the
Agreement. The following will constitute Additional Representations:            
 Party A and Party B Representations.                 Relationship between the
Parties. The Agreement is hereby amended by the addition of the following
proviso:                 Relationship between the Parties.                
     Each party will be deemed to represent to the other party on the date on
which it enters into a Transaction (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for that
Transaction):                      (a) Non Reliance. It is acting for its own
account, and it has made its own independent decisions to enter into that
Transaction and as to whether that Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that
Transaction; it being understood that information and explanations related to
the terms and conditions of a Transaction shall not be considered investment
advice or a recommendation to enter into that Transaction. No communication
(written or oral) received from the other party shall be deemed to be an
assurance or guarantee as to the expected results of that Transaction.          
           (b) Assessment and Understanding. It is capable of assessing the
merits of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms, conditions and
risks of that Transaction.

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                (c) Status of Parties. The other party is not acting as a
fiduciary for or an advisor to it in respect of that Transaction.            
 Party A Representations.             FDICIA Representation. Party A represents
that it is a “financial institution” for purposes of Section 402 of the Federal
Deposit Insurance Corporation Improvement Act of 1991, as amended (the
“Statute”), and the regulations promulgated pursuant thereto because either (A)
it is a broker or dealer, a depository institution or a futures commission
merchant (as such terms are defined in the Statute) or (B) it will engage in
financial contracts (as so defined) as a counterparty on both sides of one or
more financial markets (as so defined) and either (I) had one or more financial
contracts of a total gross dollar value of at least $1 billion in notional
principal amount outstanding on any day during the previous 15-month period with
counterparties that are not its affiliates or (II) had total gross
mark-to-market positions of at least $100,000,000 (aggregated across
counterparties) in one or more financial contracts on any day during the
previous 15-month period with counterparties that are not its affiliates.      
       Acknowledgements:              (1)   The parties acknowledge and agree
that there are no other representations, agreements or other undertakings of the
parties in relation to this Transaction, except as set forth in this
Confirmation.              (2)   The parties hereto intend for:                
   (a)   this Transaction to be a “securities contract” as defined in Section
741(7) of Title 11 of the United States Code (the “Bankruptcy Code”), qualifying
for the protections under Section 555 of the Bankruptcy Code;                  
   (b)   a party’s right to liquidate this Transaction and to exercise any other
remedies upon the occurrence of any Event of Default under the Agreement with
respect to the other party to constitute a “contractual right” as defined in the
Bankruptcy Code; and                      (c)   all payments for, under or in
connection with this Transaction, all payments for the Shares and the transfer
of such Shares to constitute “settlement payments” as defined in the Bankruptcy
Code.               Amendment of Section 6(d)(ii). Section 6(d)(ii) of the
Agreement is modified by deleting the words “on the day” in the second line
thereof and substituting therefor “on the day that is three Local Business Days
after the day”. Section 6(d)(ii) is further modified by deleting the words “two
Local Business Days” in the fourth line thereof and substituting therefor “three
Local Business Days.”

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Recording of Conversations. Each party consents to the recording of telephone
conversations of trading, marketing and other relevant personnel of the parties
in connection with the Agreement.

Severability. If any term, provision, covenant or condition of this
Confirmation, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable in whole or in part for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Confirmation had been executed with the invalid
or unenforceable provision eliminated, so long as this Confirmation as so
modified continues to express, without material change, the original intentions
of the parties as to the subject matter of this Confirmation and the deletion of
such portion of this Confirmation will not substantially impair the respective
benefits or expectations of parties to the Agreement; provided, however, that
this severability provision shall not be applicable if any provision of Section
2, 5, 6 or 13 of the Agreement (or any definition or provision in Section 14 to
the extent that it relates to, or is used in or in connection with any such
Section) shall be so held to be invalid or unenforceable.

Affected Parties. For purposes of Section 6(e) of the Agreement, each party
shall be deemed to be an Affected Party in connection with Illegality and any
Tax Event.

Tax Event. Section 5(b)(ii) is amended by deleting the words “, or there is a
substantial likelihood that it will,” from line four thereof.

Interpretation.  In the event of any inconsistency between the provisions of
this Schedule and the Definitions, this Schedule will prevail. In the event of
any inconsistency between the provisions of this Schedule and the printed
Agreement of which it forms a part, this Schedule will prevail. In the event of
any inconsistency between the provisions of any Confirmation and this Schedule,
such Confirmation will prevail for the purpose of the relevant Transaction.

[Remainder of page intentionally left blank]

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Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation.

  Yours faithfully,       MERRILL LYNCH INTERNATIONAL               By: /s/
RHONDA LUCARELLI   Name: Rhonda Lucarelli   Title: Authorized Signatory

Confirmed as of the date first written above:

CEDAR SHOPPING CENTERS INC.

By: /s/ LEO S. ULLMAN
Name: Leo S. Ullman
Title: President

CEDAR SHOPPING CENTERS PARTNERSHIP, L.P.
By: CEDAR SHOPPING CENTERS INC.

By: /s/ LEO S. ULLMAN
Name: Leo S. Ullman
Title: President

MERRILL LYNCH, PIERCE, FENNER & SMITH
                      INCORPORATED

By: /s/ ANGELINA LOPES
Name: Angelina Lopes
Title: Vice President

 

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Annex A

GUARANTEE OF MERRILL LYNCH & CO., INC.

     FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH
& CO., INC., a corporation duly organized and existing under the laws of the
State of Delaware (“ML & Co.”), hereby unconditionally guarantees to Cedar
Shopping Centers Inc.(the “Company”), the due and punctual payment of any and
all amounts payable by Merrill Lynch International, a company organized under
the laws of England and Wales (“ML”), under the terms of the Confirmation, dated
August 11, 2005, between the Company and ML (the “Agreement”), including, in
case of default, interest on any amount due, when and as the same shall become
due and payable, whether on the scheduled payment dates, at maturity, upon
declaration of termination or otherwise, according to the terms thereof. In case
of the failure of ML punctually to make any such payment, ML & Co. hereby agrees
to make such payment, or cause such payment to be made, promptly upon demand
made by the Company to ML & Co.; provided, however that delay by the Company in
giving such demand shall in no event affect ML & Co.’s obligations under this
Guarantee. This Guarantee shall remain in full force and effect or shall be
reinstated (as the case may be) if at any time any payment guaranteed hereunder,
in whole or in part, is rescinded or must otherwise be returned by the Company
upon the insolvency, bankruptcy or reorganization of ML or otherwise, all as
though such payment had not been made.

     ML & Co. hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Agreement; the absence of any action to enforce the same; any waiver or consent
by the Company concerning any provisions thereof; the rendering of any judgment
against ML or any action to enforce the same; or any other circumstances that
might otherwise constitute a legal or equitable discharge of a guarantor or a
defense of a guarantor. ML & Co. covenants that this guarantee will not be
discharged except by complete payment of the amounts payable under the
Agreement. This Guarantee shall continue to be effective if ML merges or
consolidates with or into another entity, loses its separate legal identity or
ceases to exist.

     ML & Co. hereby waives diligence; presentment; protest; notice of protest,
acceleration, and dishonor; filing of claims with a court in the event of
insolvency or bankruptcy of ML; all demands whatsoever, except as noted in the
first paragraph hereof; and any right to require a proceeding first against ML.

     ML & Co. hereby certifies and warrants that this Guarantee constitutes the
valid obligation of ML & Co. and complies with all applicable laws.

     This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.

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     This Guarantee may be terminated at any time by notice by ML & Co. to the
Company given in accordance with the notice provisions of the Agreement,
effective upon receipt of such notice by the Company or such later date as may
be specified in such notice; provided, however, that this Guarantee shall
continue in full force and effect with respect to any obligation of ML under the
Agreement entered into prior to the effectiveness of such notice of termination.

     This Guarantee becomes effective concurrent with the effectiveness of the
Agreement, according to its terms.

     IN WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed in
its corporate name by its duly authorized representative.

  MERRILL LYNCH & CO. INC.               By: /s/ PATRICIA KROPIEWNICKI     Name:
Patricia Kropiewnicki     Title: Designated Signatory     Dated: August 11, 2005

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