Table of Contents

As filed with the Securities and Exchange Commission on June 30, 2004

Registration No. 333-                    



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM S-4

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933


Developers Diversified Realty Corporation
(Exact name of registrant as specified in its charter)
         
Ohio   6798   34-1723097
(State or other jurisdiction of incorporation or organization)   (Primary standard industrial classification number)   (I.R.S. Employer Identification No.)

3300 Enterprise Parkway

Beachwood, Ohio 44122
(216) 755-5500
(Address, including zip code, and telephone number, including area code, of
registrant’s principal executive offices)


SCOTT A. WOLSTEIN, CHIEF EXECUTIVE OFFICER

Developers Diversified Realty Corporation
3300 Enterprise Parkway
Beachwood, Ohio 44122
(216) 755-5500
(Name, address, including zip code, and telephone number, including area code, of agent for service)


Copies to:

Albert T. Adams, Esq.
Suzanne K. Hanselman, Esq.
Baker & Hostetler LLP
3200 National City Center
1900 East Ninth Street
Cleveland, Ohio 44114
(216) 621-0200

      Approximate date of commencement of proposed sale of the securities to the public: As soon as practical after this registration statement becomes effective.

      If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G , check the following box.  o

      If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

      If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

CALCULATION OF REGISTRATION FEE

                 


Title of each Proposed maximum Proposed maximum
class of securities Amount to be offering price aggregate offering Amount of
to be registered registered per unit price registration fee(1)

5.25% Notes Due 2011
  $250,000,000   100%   $250,000,000   $31,675

(1)  Determined in accordance with Rule 457(f) promulgated under the Securities Act of 1933, as amended.

      The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.




Table of Contents

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement that was filed with the Securities and Exchange Commission relating to these securities is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated June 30, 2004

PRELIMINARY PROSPECTUS

OFFER TO EXCHANGE

$250,000,000
NEW 5.25% NOTES DUE 2011
FOR ANY AND ALL OUTSTANDING 5.25% NOTES DUE 2011
OF
DEVELOPERS DIVERSIFIED REALTY CORPORATION

      We are offering to exchange up to $250,000,000 aggregate principal amount of new 5.25% Notes due 2011 (the “New Notes”), which will be freely transferable, for any and all outstanding 5.25% Notes due 2011 issued in a private offering on April 22, 2004, which are subject to certain transfer restrictions (the “Old Notes,” and together with the New Notes, the “Notes”).

      The exchange offer expires at 5 p.m., New York City time, on [                    ], unless extended. We do not currently intend to extend the expiration date.

      The terms of the New Notes are substantially identical to the terms of the Old Notes, except that the New Notes will be freely transferable and issued free of any covenants regarding exchange and registration rights.

      New Notes will be exchanged for all Old Notes that are validly tendered and not withdrawn. Tenders of Old Notes may be withdrawn at any time prior to expiration of the exchange offer. The exchange offer is not conditioned on a minimum aggregate principal amount of Old Notes being tendered. It is, however, subject to certain conditions, including that it not violate applicable laws or any applicable interpretation of the Securities and Exchange Commission.

      The exchange of Old Notes for New Notes should not be a taxable event for United States federal income tax purposes.

      Holders of Old Notes do not have any appraisal or dissenters’ rights in connection with the exchange offer. Old Notes not exchanged in the exchange offer will remain outstanding and will be entitled to the benefits of the Indenture, but, except under certain circumstances, will have no further exchange or registration rights under the Registration Rights Agreement.

      “Affiliates” of Developers Diversified Realty Corporation (within the meaning of the Securities Act of 1933, as amended, the “Securities Act”) may not participate in the exchange offer.

      Each broker-dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for outstanding notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, starting on the expiration date of the Exchange Offer and ending on the close of business 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution” beginning on page 50.

      WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE NOT REQUESTED TO SEND US A PROXY.

      We do not intend to apply for listing of the New Notes on any securities exchange or to arrange for them to be quoted on any quotation system.


      PLEASE SEE “RISK FACTORS” BEGINNING ON PAGE 13 FOR A DISCUSSION OF FACTORS YOU SHOULD CONSIDER BEFORE TENDING YOUR OLD NOTES IN THE EXCHANGE OFFER.


      Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the new notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

      We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus (and accompanying letter of transmittal and related documents) and any amendments or supplements carefully before making your investment decision.


The date of this prospectus is June 30, 2004


TABLE OF CONTENTS

         
Page

    1  
    2  
    3  
    4  
    10  
    13  
    17  
    22  
    22  
    23  
    30  
    45  
    48  
    50  
    50  
    50  
    51  
  EX-3.6 6th Amend to Amend/Restated Articles/Incorp
  EX-3.7 7th Amend to Amend/Restated Articles/Incorp
  EX-4.4 3rd Supplemental to Senior Indenture
  EX-4.5 4th Supplement to Senior Indentures
  EX-4.6 Form of 5.25% Note Due 2011
  EX-4.7 Registration Rights Agreement
  EX-5.1 Opinion of Baker & Hostetler LLP
  EX-8.1 Opinion of Baker & Hostetler LLP
  EX-23.1 Consent of PriceWaterhouseCoopers LLP
  EX-23.2 Consent of PriceWaterhouseCoopers LLP
  EX-23.3 Consent of Ernst & Young LLP
  EX-25.1 Form T-1 for National City Bank
  EX-99.1 Form of Letter of Transmittal
  EX-99.2 Form of Notice of Guaranteed Delivery
  EX-99.3 Form of Letters to Depository Trust
  EX-99.4 Form of Letter to Clients


WHERE YOU CAN FIND MORE INFORMATION

      The Company files annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). You may read and copy any document the Company files with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information about the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC (http://www.sec.gov). You can inspect reports and other information the Company files at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.

1


Table of Contents

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      This Prospectus incorporates by reference documents that the Company files with the SEC, which means that the Company can disclose important information to you by referring to those documents. The information incorporated by reference is an important part of this Prospectus. Any statement contained in a document which is incorporated by reference in this Prospectus is automatically updated and superseded if information contained in this Prospectus, or information that the Company later files with the SEC, modifies or replaces that information. The Company incorporates by reference the following documents the Company filed with the SEC:

      a. Annual Report on Form 10-K for the fiscal year ended December 31, 2003, filed on March 15, 2004;

      b. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004, filed on May 10, 2004;

      c. Current Reports on Form 8-K dated:

        (i) November 14, 2003 and filed on January 16, 2004;
 
        (ii) January 20, 2004 and filed on January 20, 2004;
 
        (iii) January 20, 2004 and filed on January 22, 2004;
 
        (iv) March 31, 2004 and filed on April 15, 2004;
 
        (v) April 21, 2004 and filed on May 6, 2004;
 
        (vi) May 6, 2004 and filed on May 6, 2004;
 
        (vii) June 22, 2004, and filed on June 24, 2004; and
 
        (viii) June 22, 2004 and filed on June 24, 2004.

      The pro forma financial statements contained in the Company’s Current Reports on Form 8-K dated November 14, 2003 and filed on January 16, 2004; dated March 31, 2004 and filed April 15, 2004; and dated May 6, 2004 and filed May 6, 2004 have been superseded by those contained in the Current Report on Form 8-K dated June 22, 2004 and filed on June 24, 2004.

      Any documents the Company files pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the date of this Prospectus and prior to the termination of the Offering of the Notes will automatically be deemed to be incorporated by reference in this Prospectus and a part of this Prospectus from the date of filing such documents.

      To receive a free copy of any of the documents incorporated by reference in this Prospectus (other than exhibits, unless they are specifically incorporated by reference in any such documents), call or write Developers Diversified Realty Corporation, 3300 Enterprise Parkway, Beachwood, Ohio 44122, Attention Michelle Mahue, Vice President of Investor Relations, telephone number (216) 755-5500. IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO NO LATER THAN FIVE DAYS BEFORE THE EXCHANGE OFFER EXPIRES. The Company also maintains a web site that contains additional information about us and provides an electronic means of communicating with its officers and employees (http://www.ddr.com).

      You should rely only on the information incorporated by reference or set forth in this Prospectus. The Company has not authorized anyone else to provide you with different information. The Company is offering the Notes only in states where the offer is permitted. You should not assume that the information in this Prospectus is accurate as of any date other than the date on the cover of this Prospectus.

2


Table of Contents

FORWARD-LOOKING STATEMENTS

      This prospectus includes and incorporates by reference forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “plan,” “estimate,” “project” or similar expressions. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Actual results could differ materially from those in forward-looking statements because of, among other reasons, the factors described under the caption “Risk Factors.” We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3


Table of Contents

SUMMARY

      The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this Prospectus or incorporated herein by reference. Unless indicated otherwise, the financial and statistical data contained in this Prospectus is presented as of March 31, 2004. Unless otherwise indicated or unless the context requires otherwise, all references in this Prospectus to “we,” “us,” “our” or the “Company” mean Developers Diversified Realty Corporation and all entities owned or controlled by Developers Diversified Realty Corporation.

The Company

      We are a self-managed real estate investment trust (a “REIT”) that acquires, develops, redevelops, owns, leases and manages shopping centers and business centers. We believe that our portfolio of shopping center properties is one of the largest (measured by amount of total gross leasable area (“GLA”)) currently held by any publicly traded REIT. Our executive offices are located at 3300 Enterprise Parkway, Beachwood, Ohio 44122, and our telephone number is (216) 755-5500.

Recent Developments

      On March 31, 2004, we announced that we entered into an agreement to purchase interests in 110 retail real estate assets, with approximately 18.8 million square feet of GLA, from Benderson Development Company, Inc., a New York corporation, and related entities (collectively, “Benderson”). One of those properties was subject to a right of first refusal, which has been exercised, so we expect to acquire 109 assets. The aggregate purchase price for the assets is approximately $2.3 billion, less assumed debt and the value of a 2.0% equity interest that Benderson is retaining in an entity owning certain of those assets. We assigned our rights to acquire fourteen of the assets, with an aggregate value of approximately $300.0 million, to an affiliate in which we hold a 14.5% equity interest. The purchase of those assets is complete and our affiliate paid the purchase price for the interests in the assigned assets directly to Benderson. We funded the transaction through a combination of assumed debt, new debt financing, the issuance of cumulative redeemable preferred shares and common shares and asset transfers to our affiliate as referenced in the preceding sentence.

      As of June 29, 2004, we had completed the acquisition from Benderson of interests in 100 of those retail real estate assets, including interests in the 14 assets purchased by our affiliate, with approximately 17.5 million square feet of GLA. We expect that the remaining assets will be purchased as various closing conditions, such as completion of title and survey documentation, lender consents relating to loan assumptions and partner approvals, are satisfied.

      The Benderson assets are located in eleven states, with over 80.0% of the GLA in New York and New Jersey. The Benderson assets are approximately 94.0% leased and the largest tenants, based on revenues, include Tops Markets (Ahold USA), Wal-Mart/ Sam’s Club, Home Depot and Dick’s Sporting Goods. Prior to the transaction, we owned less than 100,000 square feet of GLA in New York and approximately 2.7 million square feet of GLA in New Jersey. Upon completion of the transaction, we will own or manage 470 operating and development retail properties in 44 states, with over 100 million square feet of GLA.

      On April 21, 2004, we announced that we had received all capital commitments necessary to complete the expansion of our joint venture relationship with Macquarie DDR Trust (“MDT”). The capital commitments enabled our joint venture to acquire an ownership interest in 23 retail properties, which consist of over 5.6 million square feet of GLA. That transaction has been completed. Eight of the properties were acquired from us, one was acquired from one of our joint ventures, and 14 were acquired directly from Benderson.

      On April 22, 2004, we issued and sold the Old Notes through a private placement. On May 7, 2004, we sold 6,800,000 depository shares, each representing 1/20 of a share of 7.50% Class I Cumulative Redeemable Preferred Shares. On May 10, 2004, we sold 15,000,000 of our common shares. On May 20, 2004, we entered into an agreement with Bank One, Wachovia and Wells Fargo for a $200 million three-year term loan with two one-year extension options at an interest rate of LIBOR plus 75 basis points. Proceeds from the asset transfers, notes, depository shares, common shares and term loan were used to partially fund the Benderson transaction.

4


Table of Contents

The Exchange Offer

 
The Old Notes On April 22, 2004, we issued $250,000,000 aggregate principal amount of our 5.25% Notes due 2011 to Banc of America Securities LLC, J.P. Morgan Securities Inc., ABN AMRO Incorporated, Deutsche Bank Securities Inc., ING Financial Markets LLC, Piper Jaffray & Co., Wachovia Capital Markets, LLC, and Wells Fargo Brokerage Services, LLC (whom we refer to as the “initial purchasers”) who then sold those notes to qualified institutional buyers in reliance on Rule 144A under the Securities Act. Because they were sold pursuant to exemptions from registration under the Securities Act, the Old Notes are subject to transfer restrictions. In connection with the issuance of the Old Notes, we entered into a registration rights agreement with the initial purchasers in which we agreed to either: (a) file with the SEC a registration statement covering the New Notes, use our best efforts to cause the registration statement to become effective under the Securities Act, and upon effectiveness of the registration statement, complete the exchange offer; or (b) cause the Old Notes to be registered under the Securities Act pursuant to a resale shelf registration statement. If we do not comply with our obligations under the Registration Rights Agreement, we will be required to pay certain liquidated damages. See “Registration Rights.”
 
The Exchange Offer We are offering to exchange up to $250,000,000 principal amount of New Notes for an identical principal amount of Old Notes. Old Notes may be exchanged only in $1,000 increments. The terms of the New Notes are identical in all material respect to the terms of the Old Notes except that the New Notes have been registered under the Securities Act and will not bear legends restricting their transfer. The New Notes will evidence the same debt as the Old Notes and will be issued under and entitled to the benefits of the same indenture that governs the Old Notes. Holders of Old Notes do not have any appraisal or dissenters’ rights in connection with the exchange offer. Because we have registered the New Notes, the New Notes will not be subject to transfer restrictions and holders of New Notes will have no registration rights.
 
Consequences of Failure to Exchange If you do not exchange your Old Notes for New Notes pursuant to the exchange offer, you will still be subject to the restrictions on transfer of your Old Notes as described in the legend on the Old Notes. In general, you may not offer to sell or sell the Old Notes, except pursuant to a registration statement under the Securities Act or any exemption from registration thereunder and in compliance with applicable state securities laws.
 
Resale of New Notes We believe you may offer for resale, resell or otherwise transfer the New Notes you receive in the exchange offer without further compliance with the registration and prospectus delivery provisions of the Securities Act unless you:
 
•  are an “affiliate” of ours within the meaning of Rule 405 under the Securities Act;

•  are a broker-dealer who purchased Old Notes directly from us for resale under Rule 144A or any other exemption under the Securities Act;

5


Table of Contents

 
•  acquired the New Notes other than in the ordinary course of your business; or
 
•  have an arrangement with any person to engage in the distribution of New Notes.
 
Each broker-dealer who is issued New Notes in the exchange offer for its own account in exchange for Old Notes acquired by the broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the New Notes issued in the exchange offer. A broker-dealer may use this prospectus for an offer to resell, a resale or any other transfer of the New Notes issued to it in the exchange offer.
 
Expiration Time and Date The Exchange Offer expires at 5 p.m., New York City time, on the later to occur of                     , 2004 or 20 business days after the date the registration statement is declared effective. See “The Exchange Offer — Expiration Date; Extensions; Amendments.”
 
Withdrawal Rights You may withdraw Old Notes you tendered by furnishing a written notice of withdrawal to the exchange agent or by complying with DTC’s Automated Tender Offer Program System (ATOP) withdrawal procedures at any time before 5 p.m. New York City time on the expiration date unless we decide to extend the expiration date. See “The Exchange Offer — Withdrawal of Tenders.”
 
Accrued Interest on the New Notes and Old Notes The New Notes will bear interest from April 22, 2004 or, if later, from the most the recent date of payment of interest on the Old Notes. Accordingly, if you tender Old Notes that are accepted for exchange, you will not receive interest that is accrued but unpaid on the Old Notes at the time of tender.
 
Conditions to the Exchange Offer The exchange offer is subject only to the following conditions:
 
•  the compliance of the exchange offer with applicable securities laws;
 
•  the proper tender of the Old Notes;
 
•  our receipt of certain representations made by the holders of the Old Notes, as described below; and
 
•  no judicial or administrative proceeding having been threatened that would limit us from proceeding with the exchange offer.
 
The exchange offer is not conditioned upon any minimum aggregate principal amount of Old Notes being tendered for exchange.
 
Representations By participating in the exchange offer, you will represent to us that, among other things:
 
•  you will acquire the New Notes you receive in the exchange offer in the ordinary course of your business;
 
•  you are not engaging in and do not intend to engage in a distribution of the New Notes;
 
•  you do not have an arrangement or understanding with any person to participate in the distribution of the New Notes; and
 

6


Table of Contents

 
•  you are not an “affiliate,” as defined under Rule 405 of the Securities Act, of ours.
 
Procedures for Tendering Old Notes To accept the exchange offer, you must send the exchange agent either:
 
•  a properly completed and validly executed letter of transmittal; or
 
•  a computer-generated agent’s message transmitted pursuant to DTC’s ATOP System; and either
 
•  tendered Old Notes held in certificated form; or
 
•  a timely confirmation of book-entry transfer of your Old Notes into the exchange agent’s account at DTC.
 
Additional documents may be required if you tender pursuant to the guaranteed delivery procedures described below. For more information, see “The Exchange Offer — Procedures for Tendering.”
 
Tenders by Beneficial Owners If you are a beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee or are held in book-entry form and you wish to tender those Old Notes in the exchange offer, you should contact the registered holder as soon as possible and instruct the registered holder to tender on your behalf. See “The Exchange Offer — Procedures for Tendering.”
 
Guaranteed Delivery Procedures If you are unable to comply with the procedures for tendering, you may tender your Old Notes according to the guaranteed delivery procedures described in this prospectus under the heading “The Exchange Offer — Guaranteed Delivery Procedures.”
 
Certain United States Federal Tax Considerations The exchange of New Notes for Old Notes in the exchange offer will not be a taxable exchange for U.S. federal income tax purposes. See “Certain United States Federal Income Tax Considerations” for a discussion of U.S. federal income tax considerations you should consider before tendering Old Notes in the exchange offer.
 
Exchange Agent National City Bank is serving as exchange agent for the exchange offer. The address and telephone number for the exchange agent is listed under “The Exchange Offer — Exchange Agent.”

7


Table of Contents

The New Notes

      The form and terms of the New Notes are the same as the form and terms of the Old Notes for which they are being exchanged, except that the New Notes will be registered under the Securities Act. As a result, the New Notes will not bear legends restricting their transfer and will not have the benefit of the registration rights and liquidated damage provisions contained in the New Notes. The New notes represent the same debt as the Old notes for which they are being exchanged. Both the New Notes and the Old Notes are governed by the same indenture. The “Description of the Notes” section of this prospectus contains a more detailed description of the terms and conditions of the notes.

 
Notes Offered $250,000,000 principal amount of 5.25% Notes due 2011.
 
Maturity Unless redeemed prior to maturity as described below, the Notes will mature on April 15, 2011.
 
Optional Redemption The Notes are redeemable at any time and from time to time at the option of the Company, in whole or in part, at a redemption price equal to the greater of:
 
•  100% of the principal amount of the Notes; or
 
•  the sum of the present value of the remaining principal amount of and interest on the Notes being redeemed, plus a make-whole premium,
 
in each case, plus accrued and unpaid interest to the redemption date. See “Description of Notes — Optional Redemption.”
 
Interest Payment Dates Interest is payable semi-annually in arrears on each April 15 and October 15, commencing October 15, 2004 (the “Interest Payment Dates”).
 
Ranking The Notes will be unsecured and unsubordinated and will rank equally with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding, except that the Notes will be effectively subordinated to any claims of creditors, whether secured or unsecured, of subsidiaries of the Company to the extent of the assets of such subsidiaries. As of March 31, 2004, total consolidated mortgage indebtedness and other secured indebtedness of the Company aggregated approximately $719.4 million and there was $363.5 million of unsecured debt outstanding.
 
No Cash Proceeds We will not receive any proceeds from the issuance of the New Notes.
 
Limitations on Incurrence of Debt The Notes will contain various covenants, including the following:
 
•  We will not incur any additional Debt if, immediately after the incurrence of such additional Debt, the aggregate principal amount of all our outstanding Debt on a consolidated basis is greater than 65% of the sum of (i) our Undepreciated Real Estate Assets as of the end of the calendar quarter covered by our most recently filed 10-K or 10-Q and (ii) the purchase price of all real estate assets acquired by us since the end of such calendar quarter.
 
•  We will not incur any Debt if Consolidated Income Available for Debt Service for any 12 consecutive calendar months within the 15 calendar months immediately preceding the date on which such additional Debt is to be incurred shall have been less than 1.5 times the Maximum Annual Service Charge on our

8


Table of Contents

consolidated Debt to be outstanding immediately after the incurrence of such additional Debt.
 
•  We will not incur any Secured Debt if, after giving effect to the incurrence of such Secured Debt, the aggregate principal amount of all of our Secured Debt on a consolidated basis is greater than 40% of the sum of (i) our Total Assets as of the end of the calendar quarter covered by our most recently filed 10-K or 10-Q and (ii) the increase, if any, in Total Assets from the end of such quarter, including without limitation, any increase in Total Assets caused by the application of the proceeds of additional Debt.
 
•  We must maintain an Unencumbered Real Estate Asset Value of not less than 135% of the aggregate principal amount of all our and our subsidiaries’ outstanding unsecured Debt.
 
Form and Denomination The Notes will be issued in denominations of $1,000 and any integral multiple of $1,000.
 
The Notes will be represented by one or more permanent global certificates in fully registered, book-entry form without interest coupons, will be deposited with the Trustee as custodian for The Depository Trust Company, or “DTC,” and will be registered in the name of Cede & Co. or another nominee designated by DTC except in limited circumstances.
 
Lack of Public Market There is no existing trading market for the Notes, and there can be no assurance regarding any future development of a trading market for the Notes or the ability of holders of the Notes to sell their Notes at all or the price at which such holders may be able to sell their Notes. If such a market were to develop, the Notes may trade at prices that are higher or lower than their initial offering price, depending on many factors, including prevailing interest rates, our operating results and financial condition and the market for similar securities. The initial purchasers have advised us that they currently intend to make a market in the Notes. However, the initial purchasers are not obligated to do so and may discontinue any market-making activity with respect to the Notes at any time without notice. We do not intend to apply for listing or quotation of the Notes on any securities exchange or market.

You should refer to the section entitled “Risk Factors” in this Prospectus

for an explanation of some risks of investing in the Notes.

9


Table of Contents

SELECTED FINANCIAL DATA

      The financial data included in the following table has been derived from the financial statements for the last five years and includes the information required by Item 301 of Regulation S-K.

COMPARATIVE SUMMARY OF SELECTED FINANCIAL DATA

(Amounts in thousands, except per share data)
                                                           
Three Months Ended
March 31, For the Years Ended December 31,


2004 2003 2003(1) 2002(1) 2001(1) 2000(1) 1999(1)







Operating Data:
                                                       
Revenues (primarily real estate rentals)
  $ 126,329     $ 102,525     $ 475,917     $ 354,698     $ 314,830     $ 281,875     $ 259,733  
     
     
     
     
     
     
     
 
Expenses:
                                                       
 
Rental operation
    42,579       32,758       162,488       115,925       94,447       81,358       69,920  
 
Depreciation & amortization
    25,101       19,763       94,289       76,710       62,851       52,797       48,776  
 
Interest
    24,934       18,902       89,633       76,179       80,286       75,666       66,663  
 
Impairment charge
                            2,895              
 
Other expense
                9,190                          
     
     
     
     
     
     
     
 
      92,614       71,423       355,600       268,814       240,479       209,821       185,359  
     
     
     
     
     
     
     
 
Income before equity in net income from joint ventures, gain on sale of joint venture interests, minority equity investment, minority interests, discontinued operations, gain on disposition of real estate and real estate investments and income tax of taxable REIT subsidiaries and franchise taxes and cumulative effect of adoption of new accounting standards
    33,715       31,102       120,317       85,884       74,351       72,054       74,374  
Equity in net income from joint ventures
    18,221       10,099       44,967       32,769       17,010       17,072       18,993  
Gain on sale of joint venture interests
                7,950                          
Equity in net income from minority equity investment
                            1,550       6,224       5,720  
Minority interests
    (1,145 )     (3,064 )     (5,365 )     (21,570 )     (21,502 )     (19,593 )     (11,809 )
Income tax of taxable REIT subsidiaries and franchise taxes
    (671 )     (239 )                              
     
     
     
     
     
     
     
 
Income from continuing operations
    50,120       37,898       167,869       97,083       71,409       75,757       87,278  
Discontinued operations:
                                                       
 
(Loss) income from discontinued operations
    (10 )     287       (2,000 )     (2,818 )     2,666       1,636       1,782  
 
Gain (loss) on disposition of real estate, net
    (693 )           460       4,276                   568  
     
     
     
     
     
     
     
 
      (703 )     287       (1,540 )     1,458       2,666       1,636       2,350  
     
     
     
     
     
     
     
 
Income before gain on disposition of real estate and real estate investments and cumulative effect of adoption of new accounting standards
    49,417       38,185       166,329       98,541       74,075       77,393       89,628  
Gain (loss) on disposition of real estate and real estate investments, net of tax
    4,370       200       73,932       3,429       18,297       23,440       (2,231 )
Income before cumulative effect of adoption of a new accounting standard
    53,787       38,385       240,261       101,970       92,372       100,833       87,397  
Cumulative effect of adoption of a new accounting standard
    (3,001 )                                    
     
     
     
     
     
     
     
 
Net income
  $ 50,786     $ 38,385     $ 240,261     $ 101,970     $ 92,372     $ 100,833     $ 87,397  
     
     
     
     
     
     
     
 
Net income applicable to common shareholders
  $ 40,182     $ 26,510     $ 189,056     $ 69,368     $ 65,110     $ 73,571     $ 60,135  
     
     
     
     
     
     
     
 
Earnings per share data — Basic:
                                                       
 
Income from continuing operations applicable to common shareholders
  $ 0.51     $ 0.38     $ 2.33     $ 1.07     $ 1.13     $ 1.28     $ 0.94  
 
(Loss) income from discontinued operations
    (0.01 )           (0.02 )     0.02       0.05       0.03       0.04  
 
Cumulative effect of adoption of a new accounting standard
    (0.03 )                                    
     
     
     
     
     
     
     
 
 
Net income applicable to common shareholders
  $ 0.47     $ 0.38     $ 2.31     $ 1.09     $ 1.18     $ 1.31     $ 0.98  
     
     
     
     
     
     
     
 
 
Weighted average number of common shares
    86,344       70,087       81,903       63,807       55,186       55,959       60,985  
Earnings per share data — Diluted:
                                                       
 
Income from continuing operations applicable to common shareholders
  $ 0.50     $ 0.37     $ 2.29     $ 1.05     $ 1.12     $ 1.28     $ 0.91  
 
(Loss) income from discontinued operations
    (0.01 )           (0.02 )     0.02       0.05       0.03       0.04  
 
Cumulative effect of adoption of a new accounting standard
    (0.03 )                                    
     
     
     
     
     
     
     
 
 
Net income applicable to common shareholders
  $ 0.46     $ 0.37     $ 2.27     $ 1.07     $ 1.17     $ 1.31     $ 0.95  
     
     
     
     
     
     
     
 
 
Weighted average number of common shares
    87,646       71,218       84,188       64,837       55,834       56,176       63,468  
 
Cash dividends
  $ 0.46     $ 0.41     $ 1.69     $ 1.52     $ 1.48     $ 1.44     $ 1.40  

10


Table of Contents

                                                 
March 31, At December 31, 2001


2004 2003 2002 2001 2000 1999






Balance Sheet Data:
                                               
Real estate (at cost)
  $ 4,004,187     $ 3,884,911     $ 2,804,056     $ 2,493,665     $ 2,161,810     $ 2,068,274  
Real estate, net of accumulated depreciation
    3,510,717       3,426,698       2,395,264       2,141,956       1,864,563       1,818,362  
Advances to and investment in joint ventures
    245,905       260,143       258,610       255,565       260,927       299,176  
Total assets
    3,921,415       3,941,151       2,776,852       2,497,207       2,332,021       2,320,860  
Total debt
    2,082,855       2,083,131       1,498,798       1,308,301       1,227,575       1,152,051  
Shareholders’ equity
    1,619,678       1,614,070       945,561       834,014       783,750       852,345  
                                                           
Three Months Ended
March 31, For the Years Ended December 31,


2004 2003 2003(1) 2002(1) 2001(1) 2000(1) 1999(1)







Other Data:
                                                       
Cash flow provided from (used in):
                                                       
 
Operating activities
  $ 48,916     $ 51,959     $ 263,129     $ 210,739     $ 174,326     $ 146,272     $ 152,272  
 
Investing activities
    77,374       (93,442 )     (16,246 )     (279,997 )     (37,982 )     (20,579 )     (209,708 )
 
Financing activities
    (115,300 )     51,468       (251,561 )     66,560       (121,518 )     (127,442 )     60,510  
Funds from operations (2):
                                                       
Net income applicable to common shareholders
  $ 40,182     $ 26,510     $ 189,056     $ 69,368     $ 65,110     $ 73,571     $ 60,135  
Depreciation and amortization of real estate investments
    24,757       19,721       93,174       76,462       63,200       52,974       49,137  
Equity in net income from joint ventures
    (18,221 )     (10,099 )     (44,967 )     (32,769 )     (17,010 )     (17,072 )     (18,993 )
Gain on sale of joint venture interests
                (7,950 )                        
Joint ventures’ funds from operations
    12,676       7,794       47,942       44,473       31,546       30,512       32,316  
Equity in net income from minority equity investment
                            (1,550 )     (6,224 )     (5,720 )
Minority equity investment funds from operations
                            6,448       14,856       12,965  
Minority interests (OP Units)
    572       377       1,769       1,450       1,531       4,126       6,541  
(Gain) loss on sales and impairment charge on depreciable real estate and real estate investments, net
    (160 )           (64,712 )     454       (16,688 )     (23,440 )     1,664  
Impairment charge
                            2,895              
     
     
     
     
     
     
     
 
Cumulative effect of adoption of a new accounting standard
    3,001                                      
     
     
     
     
     
     
     
 
Funds from operations available to common shareholders
    62,807       44,303       214,312       159,438       135,482       129,303       138,045  
Preferred dividends
    10,604       11,875       51,205       32,602       27,262       27,262       27,262  
     
     
     
     
     
     
     
 
Funds from operations
  $ 73,411     $ 56,178     $ 265,517     $ 192,040     $ 162,744     $ 156,565     $ 165,307  
     
     
     
     
     
     
     
 
Weighted average shares and OP Units (Diluted) (3)
    88,908       72,287       84,319       65,910       56,957       59,037       62,309  


(1)  As described in the consolidated financial statements, the Company acquired 124 properties in 2003 (three of which are owned through joint ventures), 11 properties in 2002 (four of which the Company acquired its joint venture partners’ interest), eight properties in 2001 (all of which are owned through joint ventures), three properties in 2000 (two of which are owned through joint ventures), and five properties in 1999 (two of which are owned through joint ventures). In addition, in conjunction with the AIP merger in 2001, the Company obtained ownership of 39 properties. The Company sold/transferred its interest in seven properties through March 31, 2004 (six of which were held through joint ventures), 38 properties in 2003 (12 of which were owned through joint ventures), 15 properties in 2002 (six of which were owned through joint ventures), ten properties in 2001 (three of which were owned through joint ventures), 9 properties and 3 Wal-Marts in 2000 (six of which were owned through joint ventures) and four properties in 1999 (two of which were owned through joint ventures). All amounts have been presented to reflect the Company’s adoption of SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, which was adopted by the Company on January 1, 2002, as appropriate. In accordance with that standard, long-lived assets that were sold or are classified as held for sale as a result of disposal activities initiated subsequent to December 31, 2001 have been classified as discontinued operations for all periods presented, excluding those interests where the Company maintains continuing involvement.

11


Table of Contents

(2)  Management believes that Funds From Operations (“FFO”) provides an additional indicator of the financial performance of a REIT. The Company also believes that FFO appropriately measures the core operations of the Company and provides a benchmark to its peer group. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles (“GAAP”) and is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income as an indicator of the Company’s operating performance or as an alternative to cash flow as a measure of liquidity. FFO is defined generally and calculated by the Company as net income, adjusted to exclude: (i) preferred dividends, (ii) gains (or losses) from sales of depreciable real estate property, except for those sold through the Company’s merchant building program, which are presented net of taxes, (iii) sales of securities, (iv) extraordinary items and (v) certain non-cash items. These non-cash items principally include real property depreciation, equity income from its joint ventures and equity income from minority equity investments, impairment losses on real properties and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and minority equity investments, determined on a consistent basis. Other real estate companies may calculate FFO in a different manner. See Funds From Operations discussion in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 7 below.
 
(3)  Represents weighted average shares and operating partnership units, or OP Units, at the end of the respective period.

12


Table of Contents

RISK FACTORS

      Prospective participants in the Exchange Offer should consider carefully, among other factors, the matters addressed below.

The Restrictions on Transfer of the Old Notes Will Continue If They Are Not Accepted for Exchange

      We will issue the New Notes in exchange for the Old Notes timely received by the exchange agent and accompanied by a properly completed and duly executed letter of transmittal and all other documentation. Therefore, if you want to tender your Old Notes, you must properly complete all documentation and allow sufficient time to ensure timely delivery. Neither we nor the exchange agent is under any duty to give notification of defects or irregularities with respect to your tender of the Old Notes.

      If you do not tender your Old Notes or they are not accepted by the exchange agent, your Old Notes will continue to be subject to the existing restrictions upon transfer thereof even after the exchange offer and you will be required, in the absence of an applicable exemption, to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. See “The Exchange Offer.” In addition, you will no longer be able to require us to register the Old Notes under the Securities Act except in the limited circumstances provided under our registration rights agreement.

      To the extent that Old Notes are tendered and accepted in the exchange offer, the trading market for the untendered and the tendered but unaccepted Old Notes could be adversely affected due to the limited principal amount of the Old Notes that is expected to remain outstanding following the exchange offer. A small outstanding amount of Old Notes could result in less demand to purchase Old Notes, and could, therefore, result in lower prices for the Old Notes. Moreover, if you do not tender your Old Notes, you will hold an investment subject to some restrictions on transfer not applicable to the New Notes and, as a result, you may only be able to sell your Old Notes at a price that is less than the price available to sellers of the freely tradable New Notes.

There Is No Current Public Market for the New Notes

      The New Notes are a new issue of securities for which there is currently no trading market. We cannot guarantee:

  •  the liquidity of any market that may develop for the New Notes;
 
  •  your ability to sell the New Notes; or
 
  •  the price at which you would be able to sell the New Notes.

      Liquidity of any market for the New Notes and future trading prices of the Notes will depend on many factors, including:

  •  prevailing interest rates;
 
  •  our operating results; and
 
  •  the market for similar securities.

      The initial purchasers have advised us that they currently intend to make a market in the New Notes, but they are not obligated to do so and may cease any market-making at any time without notice.

There Are Risks Inherent in Our Real Estate Investments

      The Economic Performance and Values of Our Centers Depend on Many Factors. The economic performance and values of our real estate holdings can be affected by many factors including the following:

  •  changes in the national, regional and local economic climate;
 
  •  local conditions such as an oversupply of space or a reduction in demand for real estate in the area;
 
  •  the attractiveness of the properties to tenants;
 
  •  competition from other available space; and
 
  •  increased operating costs.

13


Table of Contents

      We Depend on Rental Income from Real Property. Substantially all of our income is derived from rental income from real property. As a result, our income and funds for distribution would be negatively affected if a significant number of our tenants were unable to meet their obligations to us or if we were unable to lease a significant amount of space in our properties on economically favorable lease terms. We cannot be sure that any tenant whose lease expires will renew that lease or that we will be able to re-lease space on economically advantageous terms.

      Our Real Estate Development Activities May Not Be Profitable. We intend to continue to actively pursue shopping center development projects, including the expansion of existing centers. Our current projects, including partnership and joint venture investments, generally require the expenditure of capital and various forms of government and other approvals. We cannot be sure that we will always receive such government and other approvals. Consequently, we cannot be sure that any such projects will be completed or that such projects will prove to be profitable.

      Our Real Estate Investments Contain Environmental Risks. Under various federal, state and local laws, ordinances and regulations, we may be considered an owner or operator of real property or to have arranged for the disposal or treatment of hazardous or toxic substances. As a result, we may become liable for the costs of removal or remediation of certain hazardous substances released on or in our property. We may also be liable for other potential costs that could relate to hazardous or toxic substances (including governmental fines and injuries to persons and property). We may incur such liability whether or not we knew of, or were responsible for, the presence of such hazardous or toxic substances.

We Rely on Major Tenants

      As of March 31, 2004, the annualized base rental revenues from Wal-Mart, Lowe’s and Kohl’s represented 3.7%, 2.9% and 2.8%, respectively, of our aggregate annualized shopping center base rental revenues, including our proportionate share of joint venture aggregate annualized shopping center base rental revenues. Upon completion of the Benderson transaction, on a pro forma basis (not taking into account any assignment of interests to MDT), we estimate that annualized base rental revenues from Wal-Mart, Tops, TJ Maxx, Lowe’s and Kohl’s will represent 4.9%, 4.8%, 2.3%, 2.3% and 2.1%, respectively, of our aggregate annualized shopping center base rental revenues, including our proportionate share of joint venture aggregate annualized shopping center base rental revenues.

      We could be adversely affected in the event of the bankruptcy or insolvency of, or a significant downturn in the business of, one of these tenants. In addition, we could be adversely affected if any of these tenants does not renew its leases as they expire. We could also be adversely affected in the event of the bankruptcy or insolvency of, or a downturn in the business of, other major tenants.

Property Ownership Through Partnerships and Joint Ventures Could Limit Our Control of Those Investments

      Partnership or joint venture investments may involve risks not otherwise present for investments made solely by us, including the possibility that our partner or co-venturer might become bankrupt, that our partner or co-venturer might at any time have different interests or goals than we do, and that our partner or co-venturer may take action contrary to our instructions, requests, policies or objectives, including our policy with respect to maintaining our qualification as a REIT. Other risks of joint venture investments include impasse on decisions, such as a sale, because neither our partner or co-venturer nor we would have full control over the partnership or joint venture. There is no limitation under our amended and restated articles of incorporation, as amended, or our code of regulations as to the amount of funds that we may invest in partnerships or joint ventures. As of March 31, 2004, we had approximately $245.9 million of investments in and advances to unconsolidated partnerships and joint ventures holding 122 operating shopping centers.

Our Acquisition, Development and Construction Activities Could Result in Losses

      We intend to acquire existing retail properties to the extent that suitable acquisitions can be made on advantageous terms. Acquisitions of commercial properties entail risks, such as the risks that we may not be in a position or have the opportunity in the future to make suitable property acquisitions on advantageous terms and that our investments will fail to perform as expected.

14


Table of Contents

      We also intend to continue the selective development and construction of retail properties in accordance with our development and underwriting policies as opportunities arise. Our development and construction activities include the risks that:

  •  we may abandon development opportunities after expending resources to determine feasibility;
 
  •  construction costs of a project may exceed our original estimates;
 
  •  occupancy rates and rents at a newly completed property may not be sufficient to make the property profitable;
 
  •  financing may not be available to us on favorable terms for development of a property;
 
  •  we may not complete construction and lease-up on schedule, resulting in increased debt service expense and construction costs; and
 
  •  we may not be able to obtain, or may experience delays in obtaining, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations.

      If any of the above events occur, the ability to pay distributions to our shareholders and service our indebtedness could be adversely affected. In addition, new development activities, regardless of whether or not they are ultimately successful, typically require a substantial portion of management’s time and attention.

Our Articles of Incorporation Contain Limitations on Acquisitions and Changes in Control

      Our articles of incorporation prohibit any person, except for certain existing shareholders at the time of our initial public offering, from owning more than 5% of our outstanding common shares. This restriction is likely to discourage third parties from acquiring control of the Company without consent of our board of directors even if a change in control were in the interest of shareholders.

There Would Be an Adverse Impact on Our Distributions if We Failed to Qualify as a REIT

      We intend to operate so as to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). We believe that we have been organized and have operated in a manner which would allow us to qualify as a REIT under the Code beginning with our taxable year ended December 31, 1993. However, it is possible that we have been organized or have operated in a manner which would not allow us to qualify as a REIT, or that our future operations could cause us to fail to qualify. We must satisfy numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions to qualify as a REIT. There are limited judicial and administrative interpretations of these tax provisions. Our status as a REIT also involves the determination of various factual matters and circumstances not entirely within our control. Legislation, new regulations, administrative interpretations or court decisions could significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification.

      If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates. Unless we are entitled to relief under certain statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year during which we lost qualification. If we lose our REIT status, our net earnings available for investment or distribution to shareholders would be significantly reduced for each of the years involved. In addition, we would no longer be required to make distributions to our shareholders.

There is No Limitation in Our Organizational Documents on Incurrence of Debt

      We intend to continue to maintain a conservative debt capitalization with a ratio of debt to total market capitalization (the sum of the aggregate market value of our common shares, the liquidation preference on any preferred shares outstanding and our total indebtedness) of less than 50%. However, our organizational documents do not contain any limitation on the amount or percentage of indebtedness we may incur. Despite this lack of limitation, the indenture that governs our outstanding indebtedness and our unsecured credit facilities contains limits on our ability to incur indebtedness.

15


Table of Contents

We Could Be Adversely Affected by Required Payments of Debt or of Related Interest

      We are generally subject to the risks associated with debt financing. These risks include:

  •  the risk that our cash flow will not satisfy required payments of principal and interest;
 
  •  the risk that we cannot refinance existing indebtedness on our properties as necessary or that the terms of the refinancing will be less favorable to us than the terms of existing debt; and
 
  •  the risk that necessary capital expenditures for purposes such as re-leasing space cannot be financed on favorable terms.

      If a property is mortgaged to secure payment of indebtedness and we cannot pay the mortgage payments, we may have to surrender the property to the lender with a consequent loss of any prospective income and equity value from such property.

Our Ability to Increase Our Debt Could Adversely Affect Our Cash Flow

      Our organizational documents do not limit the level or amount of debt that we may incur. At March 31, 2004, we had outstanding debt of approximately $2.1 billion (excluding our proportionate share of joint venture mortgage debt aggregating $339.6 million). If we were to become more highly leveraged, our cash needs to fund debt service would increase accordingly. Such an increase could adversely affect our financial condition and results of operations. In addition, increased leverage could increase the risk of default on our debt obligations, which could reduce our cash available for distribution and our asset values.

Our Financial Condition Could Be Adversely Affected by Financial Covenants

      Our credit facilities and the indentures under which our senior and subordinated unsecured indebtedness is, or may be, issued contain certain financial and operating covenants, including, among other things, certain coverage ratios, as well as limitations on our ability to incur secured and unsecured indebtedness, sell all or substantially all of our assets and engage in mergers and consolidations and certain acquisitions.

Our Ability to Continue to Obtain Permanent Financing Cannot Be Assured

      In the past, we have financed certain acquisitions and certain development activities in part with proceeds from our credit facilities. These financings have been, and may continue to be, replaced by more permanent financing. However, we may not be able to obtain more permanent financing for future acquisitions or development activities on acceptable terms. If market interest rates were to increase at a time when amounts were outstanding under our credit facilities or if other variable rate debt was outstanding, our debt interest costs would increase, causing potentially adverse effects on our financial condition and results of operations.

Jobs and Growth Tax Relief Reconciliation Act of 2003

      On May 28, 2003, the President signed into law the Jobs and Growth Tax Relief Reconciliation Act of 2003, which reduces the maximum tax rate for both long-term capital gains and dividends to 15% for most non-corporate taxpayers. Because we generally are not subject to federal income tax on the portion of our REIT taxable income distributed to our shareholders, our ordinary dividends generally are not eligible for the reduced rate and continue to be taxed at the higher tax rates applicable to ordinary income. This legislation may cause individual investors to view investments in shares of REITs less favorably in comparison to investments in shares of non-REIT corporations and thereby adversely affect the market price of our shares and, consequently, our ability to raise capital.

16


Table of Contents

THE COMPANY

      We are a self-administered and self-managed REIT that was formed in November 1992 by the principals of the entities comprising the Developers Diversified Group. We acquire, develop, redevelop, own, lease and manage shopping centers and business centers. We believe that our portfolio of shopping center properties is one of the largest (measured by amount of total gross leasable area (“GLA”)) currently held by any publicly traded REIT.

      At March 31, 2004, our portfolio consisted of 343 shopping centers and 34 business centers (including 122 properties that are owned through joint ventures) and over 550 acres of undeveloped land (of which approximately 50 acres are owned through joint ventures). As of March 31, 2004, our portfolio was 95.0% leased and we owned or managed over 83 million square feet of GLA, which includes all of the portfolio properties and two properties owned by third parties.

      Our investment objective is to increase cash flow and the value of our portfolio of properties and to see continued growth through the selective acquisition, development, redevelopment, renovation and expansion of income-producing real estate properties, primarily shopping centers. In pursuing our investment objective, we will continue to seek to acquire and develop high quality, well-located shopping centers with attractive initial yields and strong prospects for future cash flow growth and capital appreciation where our financial strength and management and leasing capabilities can enhance value.

      Our real estate strategy and philosophy is to grow our business through a combination of leasing, expansion, acquisition and development. We seek to:

  •  increase cash flows and property values through strategic leasing, re-tenanting, renovation and expansion of our portfolio;
 
  •  continue to selectively acquire well-located, quality shopping centers (individually or in portfolio transactions) that have leases at rental rates below market rates or other cash flow growth or capital appreciation potential where our financial strength, relationships with retailers and management capabilities can enhance value;
 
  •  increase cash flows and property values by continuing to take advantage of attractive financing and refinancing opportunities;
 
  •  increase per share cash flows through the strategic disposition of low growth assets and utilizing the proceeds to repay debt, invest in other real estate assets and developments and for other corporate purposes;
 
  •  selectively develop our undeveloped parcels or new sites in areas with attractive demographics;
 
  •  hold properties for long-term investment and place a strong emphasis on regular maintenance, periodic renovation and capital improvements; and
 
  •  continue to manage and develop the properties of others to generate fee income, subject to restrictions imposed by federal income tax laws, and create opportunities for acquisitions.

RECENT DEVELOPMENTS

MDT Joint Venture

      On April 21, 2004, we announced that we had received all capital commitments necessary to complete the expansion of our MDT joint venture. The capital commitments enabled MDT to acquire an indirect ownership interest in 23 retail properties, which consist of over 5.6 million square feet of GLA. The aggregate purchase value of the properties is approximately $538.0 million.

      The purchase of the 23 above referenced properties has been completed by MDT. As such, we indirectly hold a 14.5% interest in those properties. Eight of the properties sold to MDT were owned by us and one of the properties was held by us through a joint venture. Fourteen of the properties were held by Benderson. See “— Benderson Transaction” below.

17


Table of Contents

Recent Financings

      On April 22, 2004, we issued and sold the Old Notes through a private placement. Proceeds from the sale of the Old Notes were used to partially fund the Benderson transaction.

      On May 7, 2004, we issued and sold 6,800,000 depository shares, each representing 1/20 of a share of 7.50% Class I Cumulative Redeemable Preferred Shares. Proceeds from the sale of the depository shares were used to partially fund the Benderson transaction.

      On May 10, 2004, we issued and sold 15,000,000 of our common shares. Proceeds from the sale of the common shares were used to partially fund the Benderson transaction.

      On May 20, 2004, we entered into an agreement with Bank One, Wachovia and Wells Fargo for a $200 million three-year term loan with two one-year extension options at an interest rate of LIBOR plus 75 basis points, which was used to partially fund the Benderson transaction.

Benderson Transaction

      On March 31, 2004, we announced that we entered into an agreement to purchase interests in 110 retail real estate assets, with approximately 18.8 million square feet of GLA, from Benderson. One of those properties was subject to a right of first refusal, which has been exercised, so we expect to acquire interests in 109 assets. The purchase price of the assets, including associated expenses, is expected to be approximately $2.3 billion, less assumed debt and the value of a 2% equity interest (estimated to be approximately $16.2 million) that Benderson will retain as set forth below. Benderson is transferring to us 100% ownership in certain assets or entities owning certain assets. The remaining assets will be held by a joint venture in which we will hold a 98.0% interest and Benderson will hold a 2.0% interest.

      As of June 29, 2004, we completed the purchase of 100 properties, including 14 purchased directly by our MDT joint venture and 52 held by the joint venture with Benderson.

      With respect to the joint venture with Benderson, after one year and eight months, Benderson will have the right to cause the joint venture to redeem its 2.0% interest for a price equal to the agreed value of the interest on the closing date (estimated to be approximately $16.2 million), increased or decreased to reflect changes in the price of our common shares during the period in which Benderson holds the 2.0% interest, less certain distributions Benderson receives from the joint venture. If Benderson exercises the foregoing right, we will have the right to satisfy the joint venture’s obligation by purchasing Benderson’s interest for cash or by issuing Benderson our common shares. If Benderson does not elect to exercise its right to have its interest redeemed, we will have the right after two years and six months following the closing of the transaction to purchase that 2.0% interest for cash or common shares for a price determined in the same manner as if Benderson had elected to cause such redemption.

      We funded the transaction through a combination of assumed debt, new debt financing, cumulative preferred financing, and the issuance of equity (see “— Recent Financings”) and asset transfers to the MDT joint venture (see “— MDT Joint Venture”). With respect to assumed debt, the fair value of existing indebtedness that we have assumed or intend to assume upon closing is approximately $408.0 million, which includes an adjustment of approximately $30.0 million to fair value, based on rates for debt with similar terms and remaining maturities as of May 2004.

      The Benderson assets are located in eleven states, with over 80.0% of the GLA in New York and New Jersey. The Benderson assets are approximately 94.0% leased, and the largest tenants, based on revenues, include Tops Markets (Ahold USA), Wal-Mart/ Sam’s Club, Home Depot and Dick’s Sporting Goods. Prior to the transaction, we owned less than 100,000 square feet of GLA in New York and approximately 2.7 million square feet of GLA in New Jersey. Upon completion of the transaction, we will own or manage over 470 operating and development retail properties in 44 states, with over 100 million square feet of GLA.

      Benderson has entered into a five-year master lease for vacant space that is either covered by a letter of intent as of the closing date or a new lease with respect to which the tenant has not begun to pay rent as of the closing date. Benderson has agreed to pay the rent for such vacant space, approximately 1.1 million square feet of GLA, until each applicable tenant’s rent commencement date.

18


Table of Contents

      The following table sets forth information regarding the 109 retail real estate assets we have purchased or have agreed to purchase from Benderson.

                                                     
Our
Anticipated Total
Ownership Owned Percent
Project City ST Interest GLA Leased Anchor Tenants







  1     MEADOWS SQUARE     BOYNTON BEACH       FL       100 %     106,224       99.7 %   Publix Supermarket
  2     ROTONDA PLAZA     ENGLEWOOD       FL       100 %     46,835       100.0 %   Food Lion
  3     ARLINGTON ROAD PLAZA     JACKSONVILLE       FL       100 %     182,098       90.7 %   Food Lion
  4     HIGHLANDS PLAZA THE VILLAGE     LAKELAND       FL       100 %     102,572       93.4 %   Winn Dixie Stores
  5     SHOPPING CTR     ORANGE PARK       FL       100 %     73,081       100.0 %   Beall’s Dept. Stores
  6     HORIZON PARK     TAMPA       FL       100 %     214,484       95.5 %   Home Depot, Staples, Pearl Artist Craft & Supply
  7     HOME DEPOT — ORLAND PARK     ORLAND PARK       IL       100 %     149,498       96.1 %   Home Depot
  8     TURFWAY SHOPPING CENTER     FLORENCE       KY       100 %     133,985       98.5 %   Winn Dixie, Big Lots
  9     EASTWOOD SHOPPING CT     FRANKFORT       KY       100 %     155,226       91.7 %   Save-A-Lot Food Store, Sears
  10     OUTER LOOP PLAZA     LOUISVILLE       KY       100 %     120,477       90.2 %   Value Discount, Family Recreation
  11     ALPINE AVE. — WALKER     WALKER       MI       100 %     93,877       55.2 %   Circuit City
  12     MOORESVILLE CONSUMER SQ     MOORESVILLE       NC       100 %     447,946       90.1 %   Wal*Mart Supercenter, Amstar Theater
  13     UNION TOWN CENTER     UNION COUNTY       NC       100 %     102,400       72.2 %   Food Lion
  14     WRANGLEBORO CONSUMER SQ     MAYS LANDING       NJ       100 %     839,446       97.6 %   Best Buy, Kohl’s, Staples, Babies ‘R’ Us, Dick’s Sporting Goods, BJ’s Wholesale Club, Seaman’s Furniture, Linens ’N Things, Michaels, Target, PETsMART, Borders
  15     HAMILTON COMMONS     MAYS LANDING       NJ       100 %     398,137       94.4 %   Bed Bath & Beyond, Ross Stores, Sports Authority, Marshalls, Circuit City, Regal Cinema
  16     MONMOUTH CONSUMER SQUARE     WEST LONG BRANCH       NJ       100 %     292,999       100.0 %   Sports Authority, Barnes & Noble, PETsMART, Home Depot
  17     TOPS — ALDEN, NY     ALDEN       NY       100 %     67,992       93.2 %   Tops Market
  18     TOPS — ROBINSON RD PLAZA     AMHERST       NY       100 %     145,192       100.0 %   Tops Market, Shanor Lighting Center
  19     TOPS — TRANSIT COMMONS     AMHERST       NY       100 %     112,427       95.1 %   Tops Market
  20     UNIVERSITY PLAZA     AMHERST       NY       100 %     162,686       94.2 %   Tops Market, A.J. Wright
  21     BARNES & NOBLE — TRANSIT RD     CLARENCE       NY       14.5 %     16,030       100.0 %   Barnes & Noble
  22     BOULEVARD CONSUMER SQUARE     AMHERST       NY       100 %     708,442       94.1 %   Barnes & Noble, Babies ‘R’ Us, Target, A.C. Moore, Bed Bath & Beyond, Best Buy, Lowes, Kmart, DSW Shoe Warehouse
  23     BURLINGTON/ JOANN PLAZA     AMHERST       NY       100 %     199,496       97.2 %   Burlington Coat, Jo-Ann Fabrics
  24     DICK’S — MAPLE RD     AMHERST       NY       100 %     55,745       100.0 %   Dick’s Sporting Goods
  25     TOPS — ARCADE     ARCADE       NY       100 %     65,915       100.0 %   Tops Market
  26     TOPS PLAZA — AVON     AVON       NY       100 %     63,288       97.9 %   Tops Market
  27     TOPS PLAZA — BATAVIA     BATAVIA       NY       14.5 %     37,140       84.9 %   Tops Market
  28     BJ’S — BATAVIA     BATAVIA       NY       14.5 %     95,846       100.0 %   BJ’s Wholesale Club
  29     BATAVIA COMMONS     BATAVIA       NY       14.5 %     49,431       100.0 %   CVS, Dollar Tree

19


Table of Contents

                                                     
Our
Anticipated Total
Ownership Owned Percent
Project City ST Interest GLA Leased Anchor Tenants







  30     BIG FLATS CONSUMER SQUARE     BIG FLATS       NY       100 %     641,264       99.7 %   Wal*Mart Supercenter, Sam’s Club, Tops Market, Dick’s Sporting Goods, Bed Bath & Beyond, Michaels, TJ Maxx, Barnes & Noble, Old Navy, Staples
  31     DICK’S — MCKINLEY     BLASDELL       NY       100 %     128,944       96.7 %   Dick’s Sporting Goods, Rosa’s Home Store
  32     DELAWARE CONSUMER SQUARE     BUFFALO       NY       100 %     241,253       95.2 %   Tops Market, AJ Wright, OfficeMax, Target
  33     ELMWOOD REGAL CENTER     BUFFALO       NY       100 %     126,240       98.5 %   Regal Cinema, Office Depot
  34     MARSHALL’S PLAZA     BUFFALO       NY       100 %     82,126       96.4 %   Marshalls
  35     TOPS — CANANDAIGUA     CANANDAIGUA       NY       100 %     57,498       100.0 %   Tops Market
  36     THRUWAY PLAZA     CHEEKTOWAGA       NY       100 %     441,776       78.6 %   Wal*Mart Supercenter, Tops Market, JGM Entertainment, M & T Bank, Value City Furniture
  37     TOPS UNION — URBAN     CHEEKTOWAGA       NY       100 %     151,357       82.2 %   Tops Market
  38     BORDERS BOOKS — WALDEN     CHEEKTOWAGA       NY       14.5 %     26,500       100.0 %   Borders Books
  39     DICK’S PLAZA — UNION ROAD     CHEEKTOWAGA       NY       14.5 %     170,264       98.0 %   Schultz Furniture, Dick’s Sporting Goods
  40     UNION CONSUMER SQUARE     CHEEKTOWAGA       NY       14.5 %     385,991       90.9 %   Marshalls, Sam’s Club/ Walmart, OfficeMax, Circuit City, Jo-Ann Fabrics
  41     WALDEN CONSUMER SQUARE     CHEEKTOWAGA       NY       14.5 %     255,964       97.1 %   Office Depot, Linens ‘N Things, Michaels, Target, PETsMART
  42     WALDEN PLACE     CHEEKTOWAGA       NY       14.5 %     68,002       87.3 %   Media Play
  43     KMART PLAZA — CHILI     CHILI       NY       100 %     116,868       100.0 %   Kmart
  44     EASTGATE PLAZA     CLARENCE       NY       14.5 %     527,219       97.2 %   BJ’s Wholesale Club, Wal*Mart Supercenter, Dick’s Sporting Goods, Linens ’N Things, Michaels, PETsMART
  45     JO-ANN PLAZA — TRANSIT RD     CLARENCE       NY       14.5 %     92,720       100.0 %   Home Depot, Toys ‘R’ Us, OfficeMax, JoAnn Fabrics, Big Lots
  46     TOPS PLAZA — CORTLAND     CORTLAND       NY       100 %     134,223       100.0 %   Tops Market, Staples
  47     TOPS — DANSVILLE     DANSVILLE       NY       100 %     74,600       82.8 %   Tops Market
  48     TOPS D&L PLAZA     DEPEW       NY       100 %     148,245       100.0 %   Tops Market, Big Lots
  49     DEWITT COMMONS     DEWITT       NY       100 %     320,669       79.0 %   Toys ‘R’ Us, Marshalls, Bed Bath & Beyond, A.C. Moore, Syracuse Orthopedic, PETsMART
  50     MICHAELS/ CHUCK E CHEESE’S     DEWITT       NY       100 %     49,713       100.0 %   Michaels
  51     TOPS PLAZA — ELMIRA     ELMIRA       NY       100 %     98,300       100.0 %   Tops Market
  52     WESTGATE PLAZA     GATES       NY       100 %     332,809       98.5 %   Staples, Wal*Mart Supercenter
  53     JO-ANN STORES — GREECE     GREECE       NY       100 %     75,916       100.0 %   Jo-Ann Fabrics, PETsMART
  54     TOPS — SOUTH PARK PLAZA     HAMBURG       NY       100 %     84,000       100.0 %   Tops Market
  55     BJ’S PLAZA — HAMBURG     HAMBURG       NY       100 %     175,965       100.0 %   Toys ‘R’ Us, BJ’s Wholesale Club, OfficeMax
  56     HAMBURG VILLAGE SQUARE     HAMBURG       NY       100 %     92,934       93.4 %   Tuesday Morning, Dollar Tree, Rite Aid
  57     HOME DEPOT — HAMBURG     HAMBURG       NY       100 %     139,413       100.0 %   Home Depot
  58     MCKINLEY/ MILESTRIP PLAZA     HAMBURG       NY       100 %     106,774       100.0 %   Old Navy, Jo-Ann Fabrics
  59     TOPS PLAZA — HAMLIN     HAMLIN       NY       100 %     60,488       97.6 %   Tops Market

20


Table of Contents

                                                     
Our
Anticipated Total
Ownership Owned Percent
Project City ST Interest GLA Leased Anchor Tenants







  60     HEN-JEF PLAZA     HENRIETTA       NY       100 %     159,517       83.1 %   City Mattress, Comp USA, PETsMART, Tile USA
  61     MARKETPLACE PHASE II     HENRIETTA       NY       100 %     91,147       100.0 %   Gander Mountain
  62     CULVER RIDGE PLAZA     IRONDEQUOIT       NY       100 %     226,608       100.0 %   Regal Cinema, AJ Wright
  63     RIDGEVIEW PLACE     IRONDEQUOIT       NY       100 %     65,229       92.7 %   Rochester General Hospital, Rochester Business Institute, U.S. Marine Center
  64     TOPS PLAZA — ITHACA     ITHACA       NY       100 %     229,263       100.0 %   Wal*Mart, Wegman’s Market, Lowe’s Home Improvement, Staples, Kmart, Tops Market, Michaels, Barnes & Noble, OfficeMax
  65     SOUTHSIDE PLAZA     JAMESTOWN       NY       100 %     59,940       100.0 %   Quality Markets
  66     TOPS — JAMESTOWN     JAMESTOWN       NY       100 %     98,001       90.1 %   Tops Market
  67     REGAL CINEMAS — LANCASTER     LANCASTER       NY       14.5 %     112,949       99.7 %   Regal Cinema
  68     TOPS PLAZA — LEROY     LEROY       NY       100 %     62,747       100.0 %   Tops Market
  69     WAL-MART/ TOPS LOCKPORT     LOCKPORT       NY       100 %     296,582       100.0 %   Tops Market, Wal*Mart Supercenter, Sears Hardware
  70     TOPS — MEDINA     MEDINA       NY       100 %     80,028       100.0 %   Tops Market
  71     MID-CITY PLAZA     N. TONAWANDA       NY       100 %     240,743       76.9 %   Tops Market, Sears Hardware
  72     TOPS — KELLOGG RD     NEW HARTFORD       NY       100 %     127,740       82.7 %   Tops Market
  73     NEW HARTFORD CONSUMER SQ     NEW HARTFORD       NY       14.5 %     516,801       93.8 %   Wal*Mart Supercenter, Best Buy, TJMaxx, Michaels, Staples, Bed, Bath & Beyond, Barnes & Noble, Sports Authority
  74     HOME DEPOT PLAZA — NF     NIAGARA FALLS       NY       100 %     153,838       100.0 %   Home Depot, Regal Cinema
  75     PINE PLAZA     NIAGARA FALLS       NY       100 %     82,980       97.3 %   OfficeMax
  76     TOPS — PORTAGE RD     NIAGARA FALLS       NY       100 %     116,903       93.5 %   Tops Market
  77     WEGMANS PLAZA-NIAGARA FALLS     NIAGARA FALLS       NY       100 %     124,063       87.3 %   Wegman’s Food Markets
  78     MOHAWK COMMONS     NISKAYUNA       NY       100 %     404,994       96.9 %   Target, Price Choppers, Marshalls, Bed Bath & Beyond, Lowe’s Home Improvement, Barnes & Noble, PETsMART
  79     TOPS — NORWICH     NORWICH       NY       100 %     85,453       100.0 %   Tops Market
  80     WAL-MART PLAZA — OLEAN     OLEAN       NY       100 %     363,601       98.1 %   Wal*Mart Supercenter, Home Depot, BJ’s Wholesale Club, Eastwynn Theatres
  81     TOPS PLAZA — ONTARIO     ONTARIO       NY       100 %     77,040       100.0 %   Tops Market
  82     CROSSROADS CENTRE     ORCHARD PARK       NY       100 %     167,805       90.5 %   Lowe’s Home Improvement, Tops Market, Stein Mart
  83     PLATTSBURGH CONSUMER SQ     PLATTSBURGH       NY       100 %     491,506       94.9 %   Wal*Mart Supercenter, Sam’s, TJ Maxx, PETsMART, Michaels, Staples
  84     HENRIETTA PLAZA     ROCHESTER       NY       100 %     246,012       95.3 %   Tops Market, Big Lots, Office Depot, Guitar Center
  85     PANORAMA PLAZA     ROCHESTER       NY       100 %     278,241       98.6 %   Tops Market, Linens ‘N Things
  86     FREEDOM PLAZA     ROME       NY       100 %     194,868       83.1 %   Tops Market, Staples, J.C. Penney
  87     SPRINGVILLE PLAZA     SPRINGVILLE       NY       100 %     108,500       91.6 %   Tops Market
  88     BEAR ROAD PLAZA     SYRACUSE       NY       100 %     59,483       100.0 %   Blockbuster Video, Dollar General, Harbor Freight & Tool
  89     TOPS PLAZA — TONAWANDA     TONAWANDA       NY       100 %     97,014       98.3 %   Tops Market
  90     SHERIDAN/ DELAWARE PLAZA     TONAWANDA       NY       100 %     188,200       83.8 %   Tops Market, Bon Ton Home Store

21


Table of Contents

                                                     
Our
Anticipated Total
Ownership Owned Percent
Project City ST Interest GLA Leased Anchor Tenants







  91     TOPS/ GANDER MT PLAZA     TONAWANDA       NY       100 %     310,921       97.5 %   Tops Market, BJ’s Wholesale Club, Gander Mountain, Big Lots
  92     DEL-TON PLAZA     TONAWANDA       NY       100 %     55,473       94.7 %   Valu Home Centers
  93     OFFICE DEPOT PLAZA     TONAWANDA       NY       100 %     121,846       91.4 %   Computer City, Office Depot
  94     TOPS — MOHAWK ST     UTICA       NY       100 %     190,376       71.2 %   Tops Market, A.J. Wright
  95     VICTOR SQUARE     VICTOR       NY       100 %     56,134       100.0 %   Thomasville Home Furnishing, Bassett Furniture, Floorz
  96     TOPS — WARSAW     WARSAW       NY       100 %     74,105       88.3 %   Tops Market
  97     HOME DEPOT PLAZA — W. SEN     WEST SENECA       NY       100 %     139,453       97.2 %   Home Depot
  98     SENECA RIDGE PLAZA     WEST SENECA       NY       100 %     62,424       82.9 %   Sears Hardware
  99     PREMIER PLACE     WILLIAMSVILLE       NY       14.5 %     142,536       96.4 %   Jonmark Corp., Stein Mart
  100     SHERIDAN/ HARLEM PLAZA     WILLIAMSVILLE       NY       100 %     58,458       90.1 %   CVS, Chuck E. Cheese
  101     WILLIAMSVILLE PLACE     WILLIAMSVILLE       NY       100 %     98,257       83.6 %   Jos A. Bank, Damon’s
  102     TOPS — ASHTABULA, OH     ASHTABULA       OH       100 %     57,874       100.0 %   Tops Market
  103     CONSUMER SQ. WEST     COLUMBUS       OH       100 %     356,515       88.4 %   OfficeMax, Target Stores, Kroger Co.
  104     DICK’S SPORTING GOODS OH     TOLEDO       OH       100 %     80,160       100.0 %   Dick’s Sporting Goods
  105     TOPS — ERIE     ERIE       PA       100 %     99,631       100.0 %   Tops Market
  106     BJ’S — HANOVER     HANOVER       PA       100 %     112,230       100.0 %   BJ’s Wholesale Club
  107     N. CHARLESTON CENTER     N. CHARLESTON       SC       100 %     235,501       93.5 %   Big Lots
  108     FAIRVIEW SQUARE     LYNCHBURG       VA       100 %     85,209       62.3 %   Food Lion
  109     BJ’s — VIRGINIA BEACH     VIRGINIA BEACH       VA       100 %     123,468       100.0 %   BJ’S Wholesale Club

USE OF PROCEEDS

      We will not receive any proceeds from the issuance of the New Notes and we have agreed to pay the expenses of the exchange offer. The Old Notes surrendered in exchange for the New Notes will be cancelled.

      The net proceeds to us from the sale of the Old Notes, after deducting the initial purchasers’ discount and estimated expenses of that offering, were approximately $248.2 million. The proceeds of that offering were used to repay indebtedness and for general corporate purposes, which may include working capital, capital expenditures, acquisitions, investments and repurchases of our debt and equity securities.

RATIO OF EARNINGS TO FIXED CHARGES

                                                         
Three Months
Ended
Fiscal Year Ended December 31, March 31,


1999 2000 2001 2002 2003 2003 2004







Ratio of Earnings to Fixed Charges
    1.93 x     1.80 x     1.72 x     1.94 x     3.28 x     2.62 x     2.71 x

      For purposes of computing these ratios, earnings have been calculated by adding fixed charges (excluding capitalized interest, preferred dividend requirements of consolidated subsidiaries and preferred dividends) and the minority interest in the income of majority owned joint ventures that have fixed charges and subtracting any undistributed net income of joint ventures accounted for using the equity method of accounting from pre-tax income from continuing operations, including gains and losses on the disposition of real estate. Fixed charges include interest costs, whether expensed or capitalized, the interest component of rental expense, the amortization of debt discounts and issue costs, whether expensed or capitalized, and preferred dividend requirements of consolidated subsidiaries.

22


Table of Contents

THE EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

      On April 22, 2004, we sold $ 250,000,000 aggregate principal amount of Old Notes to the initial purchasers in a transaction not registered under the Securities Act. The sale of the Old Notes was made in reliance on an exemption from registration under the Securities Act. The initial purchasers then sold the Old Notes to qualified institutional buyers under Rule 144A of the Securities Act. Because the Old Notes have been sold pursuant to exemptions from registration, the Old Notes are subject to transfer restrictions.

      In connection with the issuance of the Old Notes, we entered into a registration rights agreement with the initial purchasers that requires us to:

  •  file with the SEC a registration statement under the Securities Act covering the New Notes;
 
  •  use our best efforts to cause the registration statement to become effective under the Securities Act; and
 
  •  complete the exchange offer upon effectiveness of the registration statement.

      A copy of the registration rights agreement with the initial purchasers has been filed with the SEC as Exhibit 4.7 to our registration statement. Any discussion of the terms of the registration rights agreement is qualified in its entirety by reference to the complete agreement.

      Following the completion of the exchange offer, holders of the Old Notes not tendered will not have any further registration rights other than as set forth in the paragraphs below, and those Old Notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for the Old Notes may be adversely affected. Upon completion of the exchange offer, holders of New Notes will have no registration rights.

Resale of New Notes

      Based on existing interpretations of the Securities Act by the staff of the SEC described in several no-action letters to third parties, we believe that, subject to the exceptions set forth below, the New Notes issued in the exchange offer may be offered for resale, resold and otherwise transferred by you without further compliance with the registration and prospectus delivery provisions of the Securities Act unless you:

  •  are an “affiliate” of ours within the meaning of Rule 405 under the Securities Act;
 
  •  are a broker-dealer who purchased Old Notes directly from us for resale under Rule 144A or any other available exemption under the Securities Act;
 
  •  acquired the New Notes other than in the ordinary course of your business; or
 
  •  have an arrangement with any person to engage in the distribution of New Notes.

      Broker-dealers that are receiving New Notes for their own account must have acquired the Old Notes as a result of market-making or other trading activities in order to participate in the exchange offer. Each broker-dealer that receives New Notes for its own account under the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the New Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be admitting that it is an “underwriter” within the meaning of the Securities Act. We are required to allow broker-dealers to use this prospectus following the exchange offer in connection with the resale of New Notes received in exchange for Old Notes acquired by broker-dealers for their own account as a result of market-making or other trading activities. If required by applicable securities laws, we will, upon written request, make this prospectus available to any broker-dealer for use in connection with a resale of New Notes for a period of 180 days after the consummation of the exchange offer. See “Plan of Distribution.”

Terms of the Exchange Offer

      Upon the terms and subject to the conditions stated in this prospectus and in the letter of transmittal, we will accept all Old Notes validly tendered by you and not withdrawn before 5:00 p.m. New York City time on the expiration date. After authentication of the New Notes by the trustee or an authenticating agent, we will issue $1,000 principal amount of New Notes in exchange for each $1,000 principal amount of Old Notes accepted in

23


Table of Contents

the exchange offer. You may tender some or all of your Old Notes pursuant to the exchange offer. However, Old Notes may be tendered only in integral multiples of $1,000 in principal amount.

      The terms of the New Notes are identical in all material respects to the terms of the Old Notes except that the New Notes have been registered under the Securities Act and will not bear legends restricting transfer. The New Notes will evidence the same debt as the Old Notes and will be issued under and entitled to the benefits of the same indenture.

      As of the date of this prospectus, $250,000,000 aggregate principal amount of the Old Notes was outstanding.

      By tendering your Old Notes for New Notes in the exchange offer and signing or agreeing to be bound by the letter of transmittal, you will represent to us that:

  •  you will acquire the New Notes you receive in the exchange offer in the ordinary course of your business;
 
  •  you are not engaging in and do not intend to engage in a distribution of the New Notes;
 
  •  you do not have an arrangement or understanding with any person to participate in the distribution of the New Notes; and
 
  •  you are not an “affiliate,” as defined under Rule 405 of the Securities Act, of ours.

      This prospectus, together with the accompanying letter of transmittal, is initially being sent to all registered holders of the Old Notes. There will be no fixed record date for determining registered holders of Old Notes entitled to participation in the exchange offer.

      We intend to conduct the exchange offer as required by the Exchange Act, and the rules and regulations of the SEC under the Exchange Act, including Rule 14e-1, to the extent applicable. Rule 14e-1 describes unlawful tender practices under the Exchange Act. This section requires us, among other things:

  •  to hold our exchange offer open for at least 20 business days;
 
  •  to give 10 days notice of any change in certain terms of this offer; and
 
  •  to issue a press release in the event of an extension of the exchange offer.

      The exchange offer is not conditioned upon any minimum aggregate principal amount of Old Notes being tendered.

      We will be considered to have accepted Old Notes tendered according to the procedures in this prospectus when and if we have given oral or written notice of acceptance to the exchange agent. See “— Exchange Agent.” The exchange agent will act as agent for the tendering holders of the Old Notes for the purpose of receiving New Notes from us and delivering New Notes to those holders.

      If any tendered Old Notes are not accepted for exchange because of an invalid tender or the occurrence of other events described in this prospectus, certificates for these unaccepted Old Notes will be returned, at our cost, to the tendering holder of the Old Notes or, in the case of Old Notes tendered by book-entry transfer, into the holder’s account at DTC according to the procedures described below, as soon as practicable after the expiration date.

      If you tender Old Notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes related to the exchange of Old Notes in the exchange offer. We will pay all charges and expenses, other than applicable taxes, in connection with the exchange offer. See “— Solicitation of Tenders; Fees and Expenses.”

Expiration Date; Extensions; Amendments

      The exchange offer will expire at 5:00 p.m., New York City time, on the later to occur of [                    ], 2004 or 20 business days after the date that notice of the exchange offer is first mailed to the holders of Old Notes.

24


Table of Contents

      We expressly reserve the right, in our sole discretion:

  •  to delay acceptance of any Old Notes, to extend the Exchange Offer or to terminate the exchange offer and to refuse to accept Old Notes not previously accepted, if any of the conditions described below shall not have been met and is not waived by us;
 
  •  to amend the terms of the exchange offer in any manner;
 
  •  to purchase or make offers for any Old Notes that remain outstanding subsequent to the expiration date; and
 
  •  to the extent permitted by applicable law, to purchase Old Notes in the open market, in privately negotiated transactions or otherwise.

      Any delay in acceptance, termination, extension, or amendment will be followed as promptly as practicable by oral or written notice to the exchange agent and by making a public announcement. If the exchange offer is amended in a manner determined by us to constitute a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform you of the amendment. Without limiting the manner in which we may choose to make public announcements of any delay in acceptance, termination, extension, or amendment of the exchange offer, we shall have no obligation to publish, advise, or otherwise communicate any public announcement, other than by making a timely release to a financial news service.

      You are advised that we may extend the exchange offer in the event some of the holders of the Old Notes do not tender on a timely basis. In order to give these noteholders the ability to participate in the exchange and to avoid the significant reduction in liquidity associated with holding an unexchanged note, we may elect to extend the exchange offer until all outstanding Old Notes are tendered.

Interest on the New Notes

      The New Notes will bear interest from April 22, 2004 or, if later, from the most recent date of payment of interest on the Old Notes. Accordingly, if you tender Old Notes that are accepted for exchange, you will not receive interest that is accrued but unpaid on the Old Notes at the time of tender. Interest on the New Notes will be payable semi-annually on each April 15 and October 15, commencing on the next interest payment date.

Procedures for Tendering

      Only a registered holder of Old Notes may tender Old Notes in the exchange offer. If you are a beneficial owner whose Old Notes are registered in the name of your broker, dealer, commercial bank, trust company or other nominee or are held in book-entry form and wish to tender, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf. If you are a beneficial owner and wish to tender on your own behalf, you must, before completing and executing the letter of transmittal and delivering your Old Notes, either make appropriate arrangements to register ownership of the Old Notes in your name or obtain a properly completed bond power from the registered holder. The transfer of record ownership may take considerable time.

      Your tender will constitute an agreement between you and us according to the terms and subject to the conditions described in this prospectus and in the letter of transmittal. If you desire to tender Old Notes and cannot comply with the procedures set forth herein for tender on a timely basis or your Old Notes are not immediately available, you must comply with the procedures for guaranteed delivery set forth in “— Guaranteed Delivery Procedures.”

      The method of delivery to the exchange agent of Old Notes, the letter of transmittal and all other required documents are at your election and risk. Delivery of such documents will be considered made only when the exchange agent actually receives them or they are deemed received under the ATOP procedures described below. In all cases, sufficient time should be allowed to assure delivery to the exchange agent before the expiration date. No letter of transmittal or Old Notes should be sent to us. You may also request that your respective brokers, dealers, commercial banks, trust companies or nominees effect the tender for you, in each case as described in this prospectus and in the letter of transmittal.

25


Table of Contents

Old Notes Held in Certificated Form

      For you to validly tender Old Notes held in physical form, the exchange agent must receive, before 5:00 p.m. New York City time on the expiration date, at its address set forth in this prospectus:

  •  a properly completed and validly executed letter of transmittal, or a manually signed facsimile thereof, together with any signature guarantees and any other documents required by the instructions to the letter of transmittal, and
 
  •  certificates for tendered Old Notes.

Old Notes Held in Book-Entry Form

      We understand that the exchange agent will make a request promptly after the date of the prospectus to establish accounts for the Old Notes at DTC for the purpose of facilitating the exchange offer, and, subject to their establishment, any financial institution that is a participant in DTC may make book-entry delivery of Old Notes by causing DTC to transfer the Old Notes into the exchange agent’s account for the Old Notes using DTC’s procedures for transfer.

      If you desire to transfer Old Notes held in book-entry form with DTC, the exchange agent must receive, before 5:00 p.m. New York City time on the expiration date, at its address set forth in this prospectus, a confirmation of book-entry transfer of the Old Notes into the exchange agent’s account at DTC, which is referred to in this prospectus as a “book-entry confirmation,” and:

  •  a properly completed and validly executed letter of transmittal, or manually signed facsimile thereof, together with any signature guarantees and other documents required by the instructions in the letter of transmittal; or
 
  •  an agent’s message transmitted pursuant to DTC’s Automated Tender Offer Program.

Tender of Old Notes Using DTC’s Automated Tender Offer Program (ATOP)

      The exchange agent and DTC have confirmed that the exchange offer is eligible for DTC’s Automated Tender Offer Program (“ATOP”). Accordingly, DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer Old Notes held in book-entry form to the exchange agent in accordance with DTC’s ATOP procedures for transfer. DTC will then send a book-entry confirmation, including an agent’s message to the exchange agent.

      The term “agent’s message” means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering Old Notes that are the subject of that book-entry confirmation that the participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce such agreement against such participant. If you use ATOP procedures to tender Old Notes you will not be required to deliver a letter of transmittal to the exchange agent, but you will be bound by its terms just as if you had signed it.

Signatures

      Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an “eligible institution” unless the Old Notes tendered with the letter of transmittal are tendered:

  •  by a registered holder who has not completed the box entitled “Special Registration Instructions” or “Special Delivery Instructions” in the letter of transmittal; or
 
  •  for the account of an “eligible institution.”

      An “eligible institution” is a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc.; a commercial bank or trust company having an office or correspondent in the United States; an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Exchange Act; or an “eligible institution” that is a participant in a recognized medallion guarantee program.

      If the letter of transmittal is signed by a person other than the registered holder or DTC participant who is listed as the owner, the Old Notes must be endorsed or accompanied by appropriate bond powers which authorize

26


Table of Contents

the person to tender the Old Notes on behalf of the registered holder or DTC participant who is listed as the owner, in either case signed as the name of the registered holder who appears on the Old Notes or the DTC participant who is listed as the owner. If the letter of transmittal or any Old Notes or bond powers are signed or endorsed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing, and, unless waived by us, evidence satisfactory to us of their authority to so act must be submitted with the letter of transmittal.

      If you tender your notes through ATOP, signatures and signature guarantees are not required.

Determinations of Validity

      All questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of the tendered Old Notes will be determined by us in our sole discretion. Our determinations will be final and binding. We reserve the absolute right to reject any and all Old Notes not properly tendered or any Old Notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any defects, irregularities or conditions of tender as to particular Old Notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within the time we shall determine. Although we intend to notify holders of defects or irregularities related to tenders of Old Notes, neither we nor the exchange agent nor any other person will be under any duty to give notification of defects or irregularities related to tenders of Old Notes nor will any of them incur liability for failure to give notification. Tenders of Old Notes will not be considered to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the exchange agent that we determine are not properly tendered or the tender of which is otherwise rejected by us and as to which the defects or irregularities have not been cured or waived by us will be returned by the exchange agent to the tendering holder unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

Guaranteed Delivery Procedures

      If you wish to tender your Old Notes and:

  •  your Old Notes are not immediately available;
 
  •  you cannot complete the procedure for book-entry transfer on a timely basis;
 
  •  you cannot deliver your Old Notes, the letter of transmittal or any other required documents to the exchange agent before the expiration date; or
 
  •  you cannot complete a tender of Old Notes held in book-entry form using DTC’s ATOP procedures on a timely basis,

      then, you may effect a tender if you tender through an eligible institution as defined under “— Procedures for Tendering — Signatures,” or if you tender using ATOP’s guaranteed delivery procedures.

      A tender of Old Notes made by or through an eligible institution will be accepted if:

  •  before 5:00 p.m., New York City time, on the expiration date, the exchange agent receives from an eligible institution a properly completed and duly executed notice of guaranteed delivery, by facsimile transmittal, mail or hand delivery, that: (1) sets forth the name and address of the holder, the certificate number or numbers of the holder’s Old Notes and the principal amount of the Old Notes tendered, (2) states that the tender is being made, and (3) guarantees that, within three business days after the expiration date, a properly completed and validly executed letter of transmittal or facsimile, together with certificates representing the Old Notes to be tendered in proper form for transfer, or a book-entry confirmation, and any other documents required by the letter of transmittal, will be deposited by the eligible institution with the exchange agent; and
 
  •  the properly completed and executed letter of transmittal or a facsimile, together with the certificates representing all tendered Old Notes in proper form for transfer, or a book-entry confirmation, and all other documents required by the letter of transmittal, are received by the exchange agent within three business days after the expiration date.

27


Table of Contents

      A tender made through DTC’s ATOP will be accepted if:

  •  before 5:00 p.m., New York City time, on the expiration date, the exchange agent receives an agent’s message from DTC stating that DTC has received an express acknowledgment from the participant in DTC tendering the Old Notes that it has received and agrees to be bound by the notice of guaranteed delivery; and
 
  •  the exchange agent receives, within three business days after the expiration date, either: (1) a book-entry confirmation transmitted via DTC’s ATOP procedures; or (2) a properly completed and executed letter of transmittal or a facsimile, together with the certificates representing all tendered Old Notes in proper form for transfer, or a book-entry confirmation, and all other documents required by the letter of transmittal.

      Upon your request, the exchange agent will send to you a notice of guaranteed delivery so that you may tender your Old Notes according to the guaranteed delivery procedures described above.

Withdrawal of Tenders

      You may withdraw Old Notes you tendered at any time before 5:00 p.m. New York City time on the expiration date. To withdraw a tender of Old Notes in the exchange offer:

  •  a written or facsimile transmission of a notice of withdrawal must be received by the exchange agent at its address listed below before 5:00 p.m., New York City time, on the expiration date; or
 
  •  you must comply with the appropriate DTC ATOP procedures.
 
  •  Any notice of withdrawal must:

  •  specify the name of the person having deposited the Old Notes to be withdrawn;
 
  •  identify the Old Notes to be withdrawn, including the certificate number or numbers and principal amount of the Old Notes or, in the case of Old Notes transferred by book-entry transfer, the name and number of the account at the depositary to be credited;
 
  •  be signed by the same person and in the same manner as the original signature on the letter of transmittal by which the Old Notes were tendered, including any required signature guarantee, or be accompanied by documents of transfer sufficient to permit the trustee for the Old Notes to register the transfer of the Old Notes into the name of the person withdrawing the tender; and
 
  •  specify the name in which any of the Old Notes are to be registered, if different from that of the person who deposited the Old Notes to be withdrawn.

      All questions as to the validity, form and eligibility, including time of receipt, of the withdrawal notices will be determined by us, and our determinations will be final and binding on all parties. Any Old Notes so withdrawn will be judged not to have been tendered for purposes of the exchange offer, and no New Notes will be issued in exchange for those Old Notes unless you validly retender the Old Notes so withdrawn. If your Old Notes that have been tendered are not accepted for exchange, they will be returned to you without cost to you or, in the case of Old Notes tendered by book-entry transfer, into your account at DTC according to the procedures described above. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn Old Notes by following one of the procedures described above under “— Procedures for Tendering” at any time before the expiration date.

Conditions

      The exchange offer is subject only to the following conditions:

  •  the compliance of the exchange offer with securities laws;
 
  •  the proper tender of the Old Notes;
 
  •  our receipt of the required representations by the holders of the Old Notes described above; and
 
  •  no judicial or administrative proceeding being pending or threatened that would limit us from proceeding with the exchange offer.

28


Table of Contents

      The foregoing conditions are for our sole benefit and we may assert them regardless of the circumstances giving rise to any such condition or we may waive them in whole or in part at any time and from time to time in our sole discretion. Our failure at any time to exercise any of the forgoing rights does not constitute a waiver of that right. Each of these rights is an ongoing right that we may assert at any time and from time to time.

      In addition, we will not accept for exchange any Old Notes tendered, and no New Notes will be issued in exchange for those Old Notes, if at such time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or with respect to the qualification of the indenture under the Trust Indenture Act of 1939.

Exchange Agent

      National City Bank, the trustee under the indenture, has been appointed as exchange agent for the exchange offer. In this capacity, the exchange agent has no fiduciary duties and will be acting solely on the basis of our directions. You should direct requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal to the exchange agent at the address below. You should send certificates for Old Notes, letters of transmittal and any other required documents to the exchange agent addressed as follows:

      By Hand or Overnight Courier and by Registered or Certified Mail:

  National City Bank
  Developers Diversified Realty Corporation Exchange Agent
  629 Euclid Avenue, Suite 635
  Cleveland, Ohio 44114
  Attention: James Schultz
 
  New York Drop:
  The Depository Trust Company
  Transfer Agent Drop Service
  55 Water Street
  Jeanette Park Entrance
  New York, New York 10041

      By Facsimile (for eligible institutions only):
  (614) 463-7002
  Attention: James Schultz

      For information, call:
  James Schultz (614) 463-6996

      Delivery of the letter of transmittal to an address other than as listed above or transmission of instructions via facsimile other than as described above does not constitute a valid delivery of the letter of transmittal.

Solicitation of Tenders; Fees and Expenses

      We will bear the expenses of soliciting tenders. The principal solicitation under the exchange offer is being made by mail. Our officers and regular employees and our affiliates may make additional solicitations in person, by telegraph, telephone or telecopier.

      We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or other persons soliciting acceptances of the exchange offer. We, however, will pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket costs and expenses in connection with the exchange offer and will indemnify the exchange agent for all losses and claims incurred by it as a result of the exchange offer.

      We will pay the expenses to be incurred in connection with the exchange offer, including fees and expenses of the exchange agent and trustee, accounting and legal fees and printing costs.

Transfer Taxes

      You will not be obligated to pay any transfer tax in connection with the exchange, unless you instruct us to register New Notes in the name of, or request that notes not tendered or not accepted in the exchange offer be

29


Table of Contents

returned to, a person other than you. Under those circumstances, you will be responsible for the payment of any applicable transfer tax.

Accounting Treatment

      The New Notes will be recorded at the same carrying value as the Old Notes, as reflected in our accounting records on the date of the exchange. Accordingly, no gain or loss for accounting purposes will be recognized by us upon the closing of the exchange offer. We will amortize the expenses of the exchange offer over the term of the New Notes.

Participation in the Exchange Offer; Untendered Notes

      Participation in the exchange offer is voluntary. We are not asking you for a proxy and you are requested not to send us a proxy. Holders of the Old Notes are urged to consult their financial and tax advisors in making their own decisions on what action to take.

      As a result of the making of, and upon acceptance for exchange of all Old Notes tendered under the terms of, this exchange offer, we will have fulfilled a covenant contained in the registration rights agreement. If you do not tender your Old Notes in the exchange offer, you will continue to hold your Old Notes and will be entitled to all the rights, subject to certain limitations, applicable to the Old Notes under the indenture. Holders of Old Notes will no longer be entitled to any rights under the registration rights agreement, which terminate and cease to have effect upon consummation of this exchange offer. All untendered Old Notes will continue to be subject to the restrictions on transfer described in the Old Notes. To the extent that Old Notes are tendered and accepted in the exchange offer, the trading market for untendered Old Notes could be adversely affected. The reduction in the number of outstanding Old Notes following the exchange will probably significantly reduce the liquidity of the untendered notes.

      If you do not exchange your restricted Old Notes for registered New Notes pursuant to the exchange offer, you will continue to be subject to the restrictions on transfer of the restricted notes as described in the legend on the notes. In general, the restricted notes may be offered or sold only if registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will register the restricted notes under the Securities Act. However, under limited circumstances we may be required to file with the SEC a shelf registration statement to cover resales of the restricted notes by the holders of Old Notes who satisfy conditions relating to the provision of information in connection with the shelf registration statement.

      We may in the future seek to acquire untendered Old Notes in the open market or through privately negotiated transactions, through subsequent exchange offers or otherwise. The terms of any such purchases or offers could differ from the terms of the exchange offer. We intend to make any acquisition of Old Notes in accordance with the applicable requirements of the Exchange Act, and the rules and regulations of the SEC under the Exchange Act, including Rule 14e-1, to the extent applicable. We have no present plan to acquire any Old Notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any Old Notes that are not tendered in the exchange offer. Holders of Old Notes do not have any appraisal or dissenters’ rights in connection with the exchange offer.

DESCRIPTION OF NOTES

      The New Notes are to be issued under an Indenture dated as of May 1, 1994, as amended or supplemented from time to time, between the Company and National City Bank, as Trustee (the “Indenture”). References to “Notes” in this section include both the New Notes and any Old Notes that remain outstanding following the completion of the exchange offer. The terms of the Notes include those provisions contained in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”). The Old Notes and the New Notes will constitute a single series of securities under the Indenture and therefore will vote together as a single class for purposes of determining whether holders of the requisite percentage in principal amount thereof have taken actions or exercised rights they are entitled to take or exercise under the Indenture.

      The following description is a summary of the material provisions of the Indenture including references to the applicable section of the Indenture. It does not restate the Indenture in its entirety. We urge you to read the Indenture because it, and not this description, defines the rights of holders of the Notes.

30


Table of Contents

      The Indenture is available for inspection at the corporate trust offices of the Trustee at National City Bank, 629 Euclid Avenue, Corporate Trust Division, Cleveland, Ohio 44114. The Indenture is subject to, and is governed by, the TIA. All section references appearing herein are to sections of the Indenture.

General

      The Notes will be initially limited in aggregate principal amount to $250,000,000. The Notes will be available for purchase in fully registered form, without coupons, in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof. The Notes will be unsecured and unsubordinated and will rank equally with all other unsecured and unsubordinated obligations of the Company from time to time outstanding (other than obligations preferred by mandatory provisions of law). The Notes will be effectively subordinated to any claims of creditors, whether secured or unsecured, of subsidiaries of the Company to the extent of the assets of such subsidiaries. Subject to certain limitations set forth in the Indenture, and as described under “— Material Covenants — Limitation on Incurrence of Debt” below, the Indenture will permit the Company and its subsidiaries to incur additional secured and unsecured indebtedness.

      Unless redeemed prior to maturity as described under “— Optional Redemption,” the entire principal amount of the Notes will mature and become due and payable, together with accrued and unpaid interest thereon, if any, on April 15, 2011. The Notes are not subject to any sinking fund provisions.

      Except as set forth under the captions “— Material Covenants — Limitation on Incurrence of Debt” and “— Material Covenants — Maintenance of Unencumbered Real Estate Assets,” the Indenture does not contain any additional provision that would limit our ability to incur indebtedness or that would afford holders of the Notes protection in a highly leveraged or similar action involving us or in the event of a change of control of the Company.

Principal and Interest; Denominations; Registration and Transfer

      The Notes will bear interest at 5.25% per annum, from April 22, 2004, or from the immediately preceding Interest Payment Date to which interest has been paid, payable semi-annually in arrears on each April 15 and October 15, commencing October 15, 2004, and on the maturity date. The interest on the Notes will be payable to the persons in whose names the applicable Notes are registered in the security register applicable to the Notes maintained by the Company at the corporate trust office of the Trustee (the “Security Register”) at the close of business 15 calendar days prior to such Interest Payment Date regardless of whether such day is a Business Day, as defined below. Interest on the Notes will be computed on the basis of a year of twelve 30-day months.

      All payments of principal, premium, if any, and interest will be made to each holder of Notes by wire transfer of funds to such holder at an account maintained within the United States (sections 301, 305, 306, 307 and 1002 of the Indenture).

      Any interest with respect to the Notes that is not punctually paid or duly provided for on the date the interest is due and payable will cease to be payable thereafter to the holder on the applicable record date. The interest may be paid to the holder at the close of business on a special record date fixed by the Trustee for the payment of the interest. Notice of such payment must be given to the holder of such debt security not less than 10 days prior to the special record date. Such interest may also be paid at any time in any other lawful manner, all as more completely described in the Indenture (section 307 of the Indenture).

      Unless otherwise described in this Prospectus, the Notes will be issued in denominations of $1,000 and integral multiples thereof (section 302 of the Indenture).

      Subject to certain limitations applicable to debt securities issued in book-entry form, the Notes will be exchangeable for other Notes and of a like aggregate principal amount and tenor of different authorized denominations upon surrender of such Notes at the corporate trust office of the Trustee. In addition, subject to certain limitations applicable to debt securities issued in book-entry form, the Notes may be surrendered for conversion or registration of transfer thereof at the corporate trust office of the Trustee. Every Note surrendered for conversion, registration of transfer or exchange must be duly endorsed or accompanied by a written instrument of transfer. No service charge will be incurred for any registration of transfer or exchange of any Note, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith (section 305 of the Indenture).

31


Table of Contents

      Neither we nor the Trustee will be required:

  •  to issue, register the transfer of or exchange of Notes during a period beginning at the opening of business 15 days before any selection of Notes to be redeemed and ending at the close of business on the day of mailing of the relevant notice of redemption; or
 
  •  to register the transfer of or exchange any Notes, or portion thereof, called for redemption, except the unredeemed portion of the Notes being redeemed in part.

Further Issues

      The Company may from time to time, without the consent of existing Note holders, create and issue further notes having the same terms and conditions as the Notes in all respects, except for issue date, issue price and the first payment of interest thereon. Additional notes issued in this manner will be consolidated with and will form a single series with the Notes.

Optional Redemption

      We may redeem the Notes at our option, at any time in whole or from time to time in part, at a redemption price equal to the greater of:

  •  100% of the principal amount of the Notes being redeemed, or
 
  •  the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed (not including the portion of any payments of interest accrued to the redemption date) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points,

plus, in each case, any interest accrued but not paid to the date of redemption.

      “Treasury Rate” means, with respect to any redemption date for the Notes, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which established yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the maturity date for the Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. The Treasury Rate shall be calculated by the Independent Investment Banker on the third Business Day preceding the redemption date.

      “Comparable Treasury Issue” means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

      “Independent Investment Banker” means one of the Reference Treasury Dealers that we have appointed.

      “Comparable Treasury Price” means with respect to any redemption date for the Notes (i) the average of four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

      “Reference Treasury Dealer” means each of Banc of America Securities LLC and J.P. Morgan Securities Inc. and their respective successors and any two of ABN AMRO Incorporated, Deutsche Bank Securities Inc., ING Financial Market LLC, Piper Jaffray & Co., Wachovia Capital Markets, LLC and Wells Fargo Brokerage Services, LLC and their respective successors (each, a “Primary Treasury Dealer”); provided, however, that if

32


Table of Contents

any of the foregoing shall cease to be a Primary Treasury Dealer, we shall substitute in its place another Primary Treasury Dealer.

      “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such redemption date.

      Notice of any redemption will be mailed by first-class mail at least 30 days but no more than 60 days before the redemption date to each holder of Notes to be redeemed. If we are redeeming less than all the Notes, the Trustee will select the particular Notes to be redeemed pro rata, by lot or by another method the Trustee deems fair and appropriate.

      Unless we default in our payment of the redemption price, on and after the redemption date interest will cease to accrue on the Notes or portions of such Notes called for redemption.

Merger, Consolidation or Sale

      The Indenture provides that we may consolidate with, or sell, lease or convey all or substantially all of our assets to, or merge with or into, any other corporation, provided that:

        (1) we are the continuing corporation, or the successor corporation expressly assumes payment of the principal of (and premium, if any), and interest on, all of the outstanding Notes and the due and punctual performance and observance of all of the covenants and conditions contained in the Indenture;
 
        (2) immediately after giving effect to such transaction and treating any indebtedness which becomes our or our subsidiaries’ obligation as a result thereof as having been incurred by us or our subsidiaries at the time of such transaction, no Event of Default under the Indenture, and no event which, after notice or the lapse of time, or both, would become such an Event of Default, occurs and is continuing; and
 
        (3) an officer’s certificate and legal opinion confirming the satisfaction of the conditions are delivered to the Trustee (sections 801 and 803 of the Indenture).

Material Covenants

      The Indenture contains the following covenants:

      Limitation on Incurrence of Debt. We will not, and will not permit any Subsidiary (as defined below) to, incur any Debt (as defined below) if, immediately after the incurrence of such additional Debt, the aggregate principal amount of all our outstanding Debt on a consolidated basis determined in accordance with generally accepted accounting principles is greater than 65% of the sum of:

        (1) our Undepreciated Real Estate Assets (as defined below) as of the end of the calendar quarter covered in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q most recently filed with the SEC (or, if such filing is not permitted under the Exchange Act, with the Trustee) prior to the incurrence of such additional Debt, and
 
        (2) the purchase price of all real estate assets acquired by us or our Subsidiaries since the end of such calendar quarter, including those obtained in connection with the incurrence of such additional Debt (section 1004 of the Indenture).

      In addition to the foregoing limitation on the incurrence of Debt, we will not, and will not permit any Subsidiary to, incur any Debt if Consolidated Income Available for Debt Service for any 12 consecutive calendar months within the 15 calendar months immediately preceding the date on which such additional Debt is to be incurred shall have been less than 1.5 times the Maximum Annual Service Charge on our consolidated Debt to be outstanding immediately after the incurrence of such additional Debt (section 1004 of the Indenture).

      Secured Debt. Neither we nor any Subsidiary will incur any Debt secured by any encumbrance on our property or our Subsidiaries’ property (“Secured Debt”) if, immediately after giving effect to the incurrence of

33


Table of Contents

such Secured Debt and the application of the proceeds from such Secured Debt, the aggregate amount of all of our and our Subsidiaries’ outstanding Secured Debt on a consolidated basis is greater than 40% of the sum of:

        (1) our Total Assets as of the end of the calendar quarter covered in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q most recently filed with the SEC (or, if such filing is not permitted under the Exchange Act, with the Trustee) prior to the incurrence of such additional Secured Debt, and
 
        (2) the increase, if any, in Total Assets from the end of such quarter including, without limitation, any increase in Total Assets caused by the application of the proceeds of additional Debt (section 1015 of the Indenture).

      Restrictions on Dividends and Other Distributions. We will not:

  •  declare or pay any dividends (other than dividends payable in our capital stock) on any shares of our capital stock,
 
  •  apply any of our property or assets to the purchase, redemption or other acquisition or retirement of any shares of our capital stock,
 
  •  set apart any sum for the purchase, redemption or other acquisition or retirement of any shares of our capital stock, or
 
  •  make any other distribution on any shares of our capital stock, by reduction of capital or otherwise,

if, immediately after such declaration or other such action, the aggregate of all such declarations and other actions since the date on which the Indenture was originally executed exceeds the sum of (a) Funds from Operations (as defined below) from December 31, 1993 until the end of the latest calendar quarter covered in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q most recently filed with the SEC (or, if such filing is not permitted under the Exchange Act, with the Trustee) prior to such declaration or other action and (b) $20,000,000.

      This limitation does not apply to any declaration or other action referred to above which is necessary to maintain our status as a REIT under the Code if the aggregate principal amount of all our and our subsidiaries’ outstanding Debt at such time is less than 65% of our Undepreciated Real Estate Assets as of the end of the latest calendar quarter covered in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q most recently filed with the SEC (or, if such filing is not permitted under the Exchange Act, with the Trustee) prior to such declaration or other action (section 1005 of the Indenture).

      Notwithstanding the provisions described above, we will not be prohibited from making the payment of any dividend within 30 days after the declaration thereof if at the date of declaration such payment would have complied with those provisions (section 1005 of the Indenture).

      Existence. Except as permitted under the provisions of the Indenture described in “— Merger, Consolidation or Sale,” we must preserve and keep in full force and effect our corporate existence, rights (charter and statutory) and franchises. We will not be required to preserve any right or franchise if we determine that the preservation of that right or franchise is no longer desirable in the conduct of our business and that the loss thereof is not disadvantageous in any material respect to the holders of the Notes (section 1006 of the Indenture).

      Maintenance of Properties. All of our properties that are used or useful in the conduct of our business or the business of our Subsidiaries must be maintained and kept in good condition, repair and working order and supplied with all necessary equipment. We also are required to make all necessary repairs, renewals, replacements, betterments and improvements to our properties. We must do these things as necessary in our judgment to conduct the business carried on in connection therewith in a proper and advantageous manner at all times. However, we and our Subsidiaries will not be prevented from selling or otherwise disposing of properties for value in the ordinary course of business (section 1007 of the Indenture).

      Insurance. We will, and will cause each of our Subsidiaries to, keep all of our or their respective insurable properties insured against loss or damage at least equal to the properties’ then full insurable value with insurers of recognized responsibility having a rating of at least A:VIII in Best’s Key Rating Guide (section 1008 of the Indenture).

34


Table of Contents

      Payment of Taxes and Other Claims. We must pay or discharge or cause to be paid or discharged, before the same becomes delinquent:

        (1) all taxes, assessments and governmental charges levied or imposed upon us or any of our subsidiaries or upon our or any of our subsidiaries’ income, profits or property; and
 
        (2) all lawful claims for labor, materials and supplies that, if unpaid, might by law become a lien upon our property or the property of any of our Subsidiaries. However, we will not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings (section 1009 of the Indenture).

      Provision of Financial Information. Whether or not we are subject to Section 13 or 15(d) of the Exchange Act, we must, to the extent permitted under the Exchange Act, file with the SEC the annual reports, quarterly reports and other documents which we would have been required to file with the SEC pursuant to such Section 13 or 15(d) if we were so subject, on or prior to the respective dates by which we would have been required to file such documents. We must also in any event:

        (1) within 15 days after such document would have been required to be filed:

        (a) mail to all holders of the Notes, as their names and addresses appear in the register for the Notes, without cost to such holders, copies of such annual reports and quarterly reports which we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject to those sections, and
 
        (b) file with the Trustee copies of such annual reports, quarterly reports and other documents which we would have been required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act if we were subject to those Sections, and

        (2) if we are not permitted to file such documents with the SEC under the Exchange Act, we must supply copies of such documents to any prospective holder of Notes promptly upon written request and payment of the reasonable cost of duplication and delivery of such documents (section 1010 of the Indenture).

      Maintenance of Unencumbered Real Estate Assets. We must maintain an Unencumbered Real Estate Asset Value of not less than 135% of the aggregate principal amount of all our and our Subsidiaries’ Outstanding unsecured Debt (section 1011 of the Indenture).

Events of Default, Notice and Waiver

      The Indenture provides that the following events are “Events of Default” with respect to any series of debt securities issued thereunder, including the Notes:

        (1) default for 30 days in the payment of any installment of interest, Additional Amounts (as defined below) or coupons on any debt security of such series;
 
        (2) default in the payment of the principal of (or premium, if any, on) any debt security of such series at the time such payment becomes due and payable;
 
        (3) default in making any sinking fund payment as required for any debt security of such series;
 
        (4) default in the performance, or breach, of any other covenant or warranty contained in the Indenture continued for 60 days after written notice as provided in the Indenture; however, default in the performance, or breach, of a covenant or warranty added to the Indenture solely for the benefit of a series of debt securities issued thereunder other than such series is not an Event of Default;
 
        (5) default under any bond, debenture, note or other evidence of indebtedness of the Company or under any mortgage, indenture or other instrument of the Company under which there may be issued or by which there may be secured or evidenced any indebtedness of the Company (or by any subsidiary, the repayment of which the Company has guaranteed or for which the Company is directly responsible or liable as obligor or guarantor) which results in the acceleration of indebtedness in an aggregate principal amount exceeding $10,000,000, but only if such indebtedness is not discharged or such acceleration is not rescinded or annulled as provided in the Indenture;

35


Table of Contents

        (6) certain events of bankruptcy, insolvency or reorganization, or court appointment of a receiver, liquidator or trustee, of the Company or of any significant subsidiary as defined in Regulation S-X promulgated under the Securities Act or of the respective property of either; and
 
        (7) any other Event of Default provided with respect to that series of debt securities (section 501 of the Indenture).

      If an Event of Default occurs under the Indenture with respect to the Notes and is continuing, then the Trustee or the holders of not less than 25% in principal amount of the Notes may declare the principal amount of all of the Notes to be due and payable immediately by written notice to us. If the holders give notice to us, they must also give notice to the Trustee. However, at any time after a declaration of acceleration with respect to the Notes has been made, the holders of a majority in principal amount of the Notes may rescind and annul such declaration and its consequences if:

        (1) we have deposited with the Trustee all required payments of the principal of (and premium, if any) and interest and Additional Amounts payable on the Notes, plus certain fees, expenses, disbursements and advances of the Trustee, and
 
        (2) all Events of Default have been cured or waived as provided in the Indenture (except for the nonpayment of accelerated principal (or specified portion thereof) with respect to the Notes) (section 502 of the Indenture).

      The Indenture also provides that the holders of a majority in principal amount of the Notes may waive any past default with respect to such series and its consequences.

      However, holders may not waive a default:

  •  in the payment of the principal of (or premium, if any) or interest on the Notes; or
 
  •  in respect of a covenant or provision contained in the Indenture that cannot be modified or amended without the consent of the holders of the Notes affected thereby (section 513 of the Indenture).

      The Indenture provides that the Trustee is required to give notice to the holders of the Notes within 90 days of a default under the Indenture. However, the Trustee may withhold notice of any default to the holders of the Notes if certain officers of the Trustee consider such withholding to be in the interest of the holders. The Trustee may not withhold notice with respect to a default in the payment of the principal of (or premium, if any) or interest on the Notes (section 601 of the Indenture).

      The Indenture provides that no holder of the Notes may institute any proceeding, judicial or otherwise, with respect to the Indenture or for any remedy thereunder. However, a holder of the Notes may institute a proceeding if the Trustee fails to act for 60 days after it has received a written request to institute proceedings in respect of an Event of Default from the holders of not less than 25% in principal amount of the Outstanding Notes, as well as an offer of reasonable indemnity (section 507 of the Indenture). However, this provision will not prevent the holder of any Note from instituting suit for the enforcement of payment of the principal of (and premium, if any) and interest on the Notes held by that holder at the respective due dates thereof (section 508 of the Indenture).

      Subject to provisions in the Indenture relating to its duties in case of default and unless holders of the Notes have offered reasonable security or indemnity to the Trustee, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of the holders (section 602 of the Indenture). The holders of a majority in principal amount of the Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to such Trustee. They also have the right to direct the time, method and place of exercising any trust or power conferred upon such Trustee. However, such Trustee may refuse to follow any direction which is in conflict with the Indenture or any law which may involve the Trustee in personal liability or which may be unduly prejudicial to the holders of Notes not joining therein (section 512 of the Indenture).

      Within 120 days after the close of each fiscal year, we must deliver to the Trustee a certificate signed by one of several specified officers. The certificate must state whether such officer has knowledge of any default under the Indenture and, if so, specify each such default and the nature and status thereof (section 1012 of the Indenture).

36


Table of Contents

Modification of the Indenture

      Modifications and amendments to the Indenture may be made only with the consent of the holders of a majority in principal amount of all Outstanding (as defined below) debt securities issued thereunder which are affected by such modification or amendment. Unless the consent of the holders of the Notes is obtained, no modification or amendment may:

  •  change the date specified in the Notes as the fixed date on which the principal thereof is due and payable;
 
  •  change the date specified in the Notes as the fixed date on which any installment of interest (or premium, if any) is due and payable;
 
  •  reduce the principal amount of the Notes;
 
  •  reduce the rate or amount of interest on the Notes;
 
  •  reduce any premium payable on redemption of the Notes;
 
  •  reduce any Additional Amount payable in respect of the Notes;
 
  •  reduce the amount of principal of an Original Issue Discount Security (as defined below) that would be due and payable upon declaration of acceleration of the maturity thereof or would be provable in bankruptcy, or adversely affect any right of repayment of the holder of the Notes, if any;
 
  •  change the place of payment of principal of (or premium, if any) or interest on the Notes;
 
  •  change the currency or currencies for payment of principal of (or premium, if any) or interest on the Notes;
 
  •  change our obligation to pay Additional Amounts;
 
  •  impair the right to institute suit for the enforcement of any payment on or with respect to the Notes;
 
  •  reduce the percentage of Outstanding Notes necessary to modify or amend the Indenture, to waive compliance with certain provisions thereof or certain defaults and consequences thereunder, or to reduce the quorum or voting requirements set forth in the Indenture; or
 
  •  modify any of the foregoing provisions or any of the provisions relating to the waiver of certain past defaults or certain covenants, except to increase the required percentage to effect such action or to provide that certain other provisions may not be modified or waived without the consent of the Notes (section 902 of the Indenture).

      The Indenture provides that the holders of a majority in principal amount of Outstanding Notes have the right to waive our compliance with certain covenants in the Indenture, including those described in the section of this Prospectus captioned “— Material Covenants” (section 1014 of the Indenture).

      We and the Trustee may modify and amend the Indenture without the consent of any holder of the Notes for any of the following purposes:

  •  to evidence the succession of another Person to our obligations under the Indenture;
 
  •  to add to our covenants for the benefit of the holders of the Notes or to surrender any right or power conferred upon us in the Indenture;
 
  •  to add Events of Default for the benefit of the holders of the Notes;
 
  •  to add or change any provisions of the Indenture to facilitate the issuance of, or to liberalize certain terms of, debt securities issued thereunder in bearer form, or to permit or facilitate the issuance of such debt securities in uncertificated form, provided that such action shall not adversely affect the interests of the holders of such debt securities of any series in any material respect;
 
  •  to change or eliminate any provision of the Indenture, provided that any such change or elimination shall become effective only when there are no debt securities Outstanding of any series issued thereunder which are entitled to the benefit of such provision;
 
  •  to secure the debt securities issued thereunder;

37


Table of Contents

  •  to establish the form or terms of debt securities of any series issued thereunder, including the provisions and procedures, if applicable, for the conversion of such debt securities into our common shares or preferred shares;
 
  •  to provide for the acceptance of appointment by a successor Trustee;
 
  •  to facilitate the administration of the trusts under the Indenture by more than one Trustee;
 
  •  to cure any ambiguity, defect or inconsistency in the Indenture, provided that such action shall not adversely affect in any material respect the interests of holders of debt securities of any series issued thereunder; or
 
  •  to supplement any of the provisions of the Indenture to the extent necessary to permit or facilitate defeasance and discharge of any series of debt securities issued thereunder; however, such action shall not adversely affect in any material respect the interests of the holders of the debt securities of any series issued thereunder (section 901 of the Indenture).

      The Indenture provides that in determining whether the holders of the requisite principal amount of Outstanding debt securities of a series issued thereunder have given any request, demand, authorization, direction, notice, consent or waiver thereunder or whether a quorum is present at a meeting of holders of such debt securities:

  •  the principal amount of any Original Issue Discount Security Outstanding shall be the amount of the principal that would be due and payable as of the date of such determination upon declaration of acceleration of the maturity of the security;
 
  •  the principal amount of any debt security denominated in a foreign currency Outstanding shall be the U.S. dollar equivalent, determined on the issue date for such debt security, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent on the issue date of such debt security in the amount determined as provided above);
 
  •  the principal amount of any Indexed Security (as defined below) Outstanding shall be the principal face amount of such Indexed Security at original issuance, unless otherwise provided with respect to such Indexed Security pursuant to section 301 of the Indenture; and
 
  •  debt securities owned by us, any other obligor upon the debt securities, any of our Affiliates (as defined below) or of such other obligor shall be disregarded (section 101 of the Indenture).

      The Indenture contains provisions for convening meetings of the holders of the Notes (section 1501 of the Indenture). The Trustee may call a meeting at any time. We or the holders of at least 10% in principal amount of the Outstanding Notes may also call a meeting upon request. Notice of a meeting must be given as provided in the Indenture (section 1502 of the Indenture). Except for any consent that must be given by the holder of each debt security affected by certain modifications and amendments of the Indenture, any resolution presented at a meeting or adjourned meeting duly reconvened at which a quorum is present may be adopted by the affirmative vote of the holders of a majority in principal amount of the Outstanding Notes. However, except as referred to above, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other action that may be made, given or taken by the holders of a specified percentage which is less than a majority in principal amount of the Outstanding Notes may be adopted at a meeting or adjourned meeting duly reconvened at which a quorum is present by the affirmative vote of the holders of such specified percentage in principal amount of the Outstanding Notes. Any resolution passed or decision taken at any duly held meeting of holders of the Notes will be binding on all holders of the Notes. The quorum at any meeting called to adopt a resolution, and at any reconvened meeting, will be the persons holding or representing a majority in principal amount of the Outstanding Notes. However, if any action is to be taken at such meeting with respect to a consent or waiver which may be given by the holders of not less than a specified percentage in principal amount of the Outstanding Notes, the persons holding or representing such specified percentage in principal amount of the Outstanding Notes will constitute a quorum (section 1504 of the Indenture).

      Notwithstanding the provisions described above, if any action is to be taken at a meeting of holders of the Notes with respect to any request, demand, authorization, direction, notice, consent, waiver or other action that the Indenture expressly provides may be made, given or taken by the holders of a specified percentage in

38


Table of Contents

principal amount of all Outstanding Notes affected thereby, or of the holders of the Notes and one or more additional series:

        (1) there shall be no minimum quorum requirement for such meeting; and
 
        (2) the principal amount of the Outstanding Notes that vote in favor of such request, demand, authorization, direction, notice, consent, waiver or other action shall be taken into account in determining whether such request, demand, authorization, direction, notice, consent, waiver or other action has been made, given or taken under the Indenture (section 1504 of the Indenture).

Discharge, Defeasance and Covenant Defeasance

      We may discharge certain obligations to holders of Notes that have not already been delivered to the Trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by irrevocably depositing with the Trustee, in trust, funds in an amount sufficient to pay the entire indebtedness on such Notes in respect of principal, premium, if any, and interest to the date of such deposit if such Notes have become due and payable or to the date specified as the fixed date on which the payment of principal and interest on the Notes are due and payable or the date fixed for redemption of such Notes, as the case may be (section 401 of the Indenture). Funds shall be deposited in such currency or currencies, currency unit(s) or composite currency or currencies in which the Notes are payable.

      The Indenture provides that, if the provisions of Article Fourteen thereof (relating to defeasance and covenant defeasance) are made applicable to the Notes, we may elect either:

        (1) to defease and be discharged from any and all obligations with respect to the Notes. However, we will not be discharged from the obligation to pay Additional Amounts, if any, upon the occurrence of certain events of tax, assessment or governmental charge with respect to payments on the Notes. In addition, we will not be discharged from the obligations to register the transfer or exchange of Notes, to replace temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office or agency in respect of the Notes and to hold moneys for payment in trust (“defeasance”) (section 1402 of the Indenture); or
 
        (2) to be released from our obligations relating to sections 1004 to 1011, inclusive, and section 1015 of the Indenture (being the restrictions described under the caption “— Material Covenants”) and, if provided under the Indenture, our obligations with respect to any other covenant contained in the Indenture, and any omission to comply with such obligations, shall not constitute a default or an Event of Default with respect to the Notes (“covenant defeasance”) (section 1403 of the Indenture).

      Defeasance or covenant defeasance will occur upon our irrevocable deposit with the Trustee, in trust, of an amount sufficient to pay the principal of (and premium, if any) and interest on the Notes, on their scheduled due dates. The amount deposited will be in Government Obligations (as defined below) or such currency or currencies, currency unit(s) or composite currency or currencies in which the Notes are payable at maturity, or both.

      Such a trust may be established only if, among other things, we have delivered to the Trustee an opinion of counsel (as specified in the Indenture) to the effect that the holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such defeasance or covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance or covenant defeasance had not occurred. In the case of defeasance, the opinion of counsel must refer to and be based upon a ruling of the Internal Revenue Service (the “IRS”) or a change in applicable United States federal income tax law occurring after the date of the Indenture (section 1404 of the Indenture).

      Unless otherwise provided in this Prospectus, if after we have deposited funds and/or Government Obligations to effect defeasance or covenant defeasance with respect to the Notes:

        (1) the holder of a Note is entitled to, and does, elect under the Indenture or the terms of the Notes to receive payment in a currency, currency unit or composite currency other than that in which such deposit has been made in respect of the Notes; or
 
        (2) a Conversion Event (as defined below) occurs in respect of the currency, currency unit or composite currency in which such deposit has been made,

39


Table of Contents

the indebtedness represented by the Notes shall be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium, if any) and interest on the Notes as they become due out of the proceeds yielded by converting the amount deposited in respect of the Notes into the currency, currency unit or composite currency in which the Notes become payable as a result of such election or such cessation of usage based on the applicable market exchange rate (section 1405 of the Indenture).

      Unless otherwise described in this Prospectus, all payments of principal of (and premium, if any) and interest on the Notes that are payable in a foreign currency that ceases to be used by its government of issuance shall be made in U.S. dollars.

      If we effect covenant defeasance with respect to the Notes and the Notes are declared due and payable because of the occurrence of any Event of Default, other than:

        (1) the Event of Default described in clause (4) under “— Events of Default, Notice and Waiver” or
 
        (2) the Event of Default described in clause (7) under “— Events of Default, Notice and Waiver” with respect to any other covenant as to which there has been covenant defeasance,

the amount in such currency, currency unit or composite currency in which the Notes are payable, and Government Obligations on deposit with the Trustee, will be sufficient to pay amounts due on the Notes at the fixed date on which they become due and payable but may not be sufficient to pay amounts due on the Notes at the time of the acceleration resulting from such Event of Default. In any such event, we would remain liable to make payment of such amounts due at the time of acceleration.

Certain Definitions

      Set forth below are defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

      “Additional Amounts” means any additional amounts which are required by a debt security or by or pursuant to a resolution of our Board of Directors, under circumstances specified therein, to be paid by us in respect of certain taxes imposed on certain holders and which are owing to such holders.

      “Affiliate” of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. Control means the power to direct the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

      “Business Day” means a day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in New York City, New York are authorized or required by law, regulation or executive order to close.

      “Consolidated Income Available for Debt Service” for any period means Consolidated Net Income of Developers Diversified Realty Corporation and its subsidiaries:

        (1) plus amounts which have been deducted for

        (a) interest on our and our subsidiaries’ Debt,
 
        (b) provision for our and our subsidiaries’ taxes based on income,
 
        (c) amortization of debt discount,
 
        (d) depreciation and amortization, and

        (2) adjusted, as appropriate, for

        (a) the effect of any noncash charge resulting from a change in accounting principles in determining Consolidated Net Income for such period, and
 
        (b) the effect of equity in net income or loss of joint ventures in which we own an interest to the extent not providing a source of, or requiring a use of, cash, respectively.

40


Table of Contents

      “Consolidated Net Income” for any period means the amount of our and our subsidiaries’ net income (or loss) for such period determined on a consolidated basis in accordance with generally accepted accounting principles.

      “Conversion Event” means the cessation of use of (i) a Foreign Currency both by the government of the country which issued such currency and for settlement of transactions by a central bank or other public institutions of or within the international banking community, (ii) the ECU both within the European Monetary System and for the settlement of transactions by public institutions of or within the European Communities or (iii) any currency unit (or composite currency) other than the ECU for the purposes for which it was established.

      “Debt” means any of our or our subsidiaries’ indebtedness, whether or not contingent, in respect of:

        (1) borrowed money or evidenced by bonds, notes, debentures or similar instruments;
 
        (2) indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or any security interest existing on property owned by us or our subsidiaries;
 
        (3) letters of credit or amounts representing the balance deferred and unpaid of the purchase price of any property except any such balance that constitutes an accrued expense or trade payable; or
 
        (4) any lease of property by us or our subsidiaries as lessee which is reflected on our Consolidated Balance Sheet as a capitalized lease in accordance with generally accepted accounting principles, in the case of items of indebtedness under (1) through (3) above to the extent that any such items (other than letters of credit) would appear as a liability on our Consolidated Balance Sheet in accordance with generally accepted accounting principles. Debt also includes, to the extent not otherwise included, any obligation of ours or our subsidiaries to be liable for, or to pay, as obligor, guarantor or otherwise (other than for purposes of collection in the ordinary course of business), indebtedness of another Person (other than us or our subsidiaries). Debt shall be deemed to be incurred by us or our subsidiaries whenever we or any such subsidiary shall create, assume, guarantee or otherwise become liable in respect thereof.

      “ECU” means the European Currency Unit as defined and revised from time to time by the Council of the European Communities.

      “European Communities” means the European Economic Community, the European Coal and Steel Community and the European Atomic Energy Community.

      “European Monetary System” means the European Monetary System established by the Resolution of December 5, 1978 of the Council of the European Communities.

      “Foreign Currency” means any currency, currency unit or composite currency, including, without limitation, the ECU, issued by the government of one or more countries other than the United States of America or by any recognized confederation or association of such governments.

      “Funds from Operations” means Consolidated Net Income for any period without giving effect to depreciation and amortization, nonrecurring gains and losses from extraordinary items, gains or losses on sales of real estate, gains or losses on investments in marketable securities and any provision/benefit for income taxes plus funds from operations of unconsolidated joint ventures, all determined on a consistent basis for such period.

      “Government Obligations” means securities that are

        (1) direct obligations of the United States of America or the government which issued the foreign currency in which the debt securities of a particular series are payable, and for which the full faith and credit of the applicable government is pledged, or
 
        (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or such government which issued the foreign currency in which the debt securities of such series are payable. The payment of these obligations must be unconditionally guaranteed as a full faith and credit obligation by the United States of America or such other government, and the obligations may not be callable or redeemable at the option of the issuer thereof. Such obligations also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of

41


Table of Contents

  such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of the Government Obligation evidenced by such depository receipt (section 101 of the Indenture).

      “holder” means the Person in whose name a debt security is registered in the register for each series of debt securities.

      “Indexed Security” means a debt security for which the principal amount payable on the date specified in such debt security as the fixed date on which the principal of such security is due and payable may be more or less than the principal face amount thereof at original issuance.

      “Maximum Annual Service Charge” as of any date means the maximum amount which may become payable in a period of 12 consecutive calendar months from such date for interest on, and required amortization of, Debt. The amount payable for amortization will include the amount of any sinking fund or other analogous fund for the retirement of Debt. It will also include the amount payable on account of principal of any such Debt which matures serially other than at the final maturity date of such Debt.

      “Original Issue Discount Security” means any security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to the Indenture.

      “Outstanding,” when used with respect to debt securities, means, as of the date of determination, all debt securities theretofore authenticated and delivered under the Indenture, except:

        (1) debt securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;
 
        (2) debt securities, or portions thereof, for whose payment or redemption or repayment at the option of the holder money in the necessary amount has been deposited with the Trustee or any paying agent (other than by us) in trust or set aside and segregated in trust by us (if we shall act as our own paying agent) for the holders of such debt securities and any coupons appertaining thereto, provided that, if such debt securities are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor satisfactory to the Trustee has been made;
 
        (3) debt securities, except to the extent provided in sections 1402 and 1403 of the Indenture, with respect to which we have effected defeasance and/or covenant defeasance;
 
        (4) debt securities which have been paid pursuant to section 306 of the Indenture or in exchange for or in lieu of which other debt securities have been authenticated and delivered pursuant to the Indenture, other than any such debt securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such debt securities are held by a bona fide purchaser in whose hands such debt securities are our valid obligations; and
 
        (5) debt securities converted into common shares or preferred shares in accordance with or as contemplated by the Indenture, if the terms of such debt securities provide for convertibility pursuant to section 301 of the Indenture;

provided, however, that in determining whether the holders of the requisite principal amount of the Outstanding securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder or are present at a meeting of holders for quorum purposes, and for the purpose of making the calculations required by section 313 of the TIA:

        (1) the principal amount of an Original Issue Discount Security that may be counted in making such determination or calculation and that shall be deemed to be Outstanding for such purpose shall be equal to the amount of principal that would be (or shall have been declared to be) due and payable, at the time of such determination, upon a declaration of acceleration of the maturity thereof;
 
        (2) the principal amount of any debt security denominated in a foreign currency that may be counted in making such determination or calculation and that shall be deemed Outstanding for such purpose shall be equal to the U.S. dollar equivalent, determined pursuant to section 301 as of the date such debt security is originally issued by us, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent as of such date of original issuance of the amount determined as provided in clause (1) above) of such debt security;

42


Table of Contents

        (3) the principal amount of any Indexed Security that may be counted in making such determination or calculation and that shall be deemed Outstanding for such purpose shall be equal to the principal face amount of such Indexed Security at original issuance, unless otherwise provided with respect to such Indexed Security pursuant to section 301 of the Indenture; and
 
        (4) debt securities owned by us or any other obligor upon the debt securities or any Affiliate of ours or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in making such calculation or in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only debt securities which the Trustee knows to be so owned shall be so disregarded. Debt securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to any such debt securities and that the pledgee is not us or any other obligor upon the debt securities or any Affiliate of ours or of such other obligor.

      “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

      “Subsidiary” means a corporation a majority of the outstanding voting stock of which is owned, directly or indirectly, by us or by one or more of our other Subsidiaries. For purposes of this definition, “voting stock” means stock having voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

      “Total Assets” as of any date means the sum of (i) Undepreciated Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with generally accepted accounting principles (but excluding intangibles and trade receivables related to rent and other charges derived from leases with tenants) after eliminating intercompany accounts and transactions.

      “Undepreciated Real Estate Assets” as of any date means the amount of our and our subsidiaries’ real estate assets on such date, before depreciation and amortization and determined on a consolidated basis in accordance with generally accepted accounting principles.

      “Unencumbered Real Estate Asset Value” as of any date means the sum of:

        (1) our Undepreciated Real Estate Assets, which are not encumbered by any mortgage, lien, charge, pledge or security interest, as of the end of the latest calendar quarter covered in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently filed with the SEC (or, if that filing is not required under the Exchange Act, with the Trustee) prior to such date; and
 
        (2) the purchase price of any real estate assets that are not encumbered by any mortgage, lien, charge, pledge, or security interest and were acquired by us or any subsidiary after the end of such calendar quarter.

Book-Entry

      The Notes will be issued only in book-entry form and will be represented by one or more global securities (“Global Notes”). DTC will act as securities depository for the Global Notes. The Global Notes will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.

      The Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for Notes in certificated form except in the limited circumstances described below. See “— Exchange of Book-Entry Notes for Certificated Notes.”

      Transfer of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants, which may change from time to time.

      Depository Procedures. The following description of the operations and procedures of DTC are provided soley as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.

43


Table of Contents

      DTC has advised the Company that DTC is a limited purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants (“Participants”) deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants’ accounts, thereby eliminating the need for physical movement of securities certificates. Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Participants and by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (“Indirect Participants”). The rules applicable to DTC and its Participants and Indirect Participants are on file with the SEC.

      DTC has also advised the Company that purchases of Global Notes under the DTC system must be made by or through Participants, which will receive a credit for the Global Notes on DTC’s records. The ownership interest of each actual purchaser of each Global Note (“Beneficial Owner”) is in turn to be recorded on the Participants’ and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Participant or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Global Notes are to be accomplished by entries made on the books of Participants and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Global Notes, except in the event that use of the book-entry system for the Global Notes is discontinued. Pursuant to procedures established by it, (i) upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the initial purchasers of the Notes with portions of the principal amount of the Global Notes and (ii) ownership of such interests in the Global Notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes). To facilitate subsequent transfers, all Global Notes deposited by Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Global Notes with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Global Notes; DTC’s records reflect only the identity of the Participants to whose accounts such Global Notes are credited, which may or may not be the Beneficial Owners. The Participants and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

      The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such persons may be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants and certain banks, the ability of a person having beneficial interests in a Global Note to pledge such interests to persons or entities that do not participate in the DTC System, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests. For certain other restrictions on the transferability of the Notes, see “— Exchange of Book-Entry Notes for Certificated Notes.”

      Redemption proceeds and payments in respect of the principal of (and premium, if any) and interest on the Global Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, in its capacity as the registered holder under the Indenture. DTC’s practice is to credit Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the Company or the Trustee, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Company or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds and payments in respect of the principal of (and premium, if any) and interest on the Global Notes to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Company and

44


Table of Contents

the Trustee, disbursement of such payments to Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Participants and Indirect Participants. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the Notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for (i) any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interests in the Global Notes, or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes, or (ii) any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. Neither the Company nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the Beneficial Owners of the Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the Notes for all purposes.

      Interests in the Global Notes will trade in DTC’s Same-Day Funds Settlement System and secondary market trading activity in such interests will therefore settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its Participants.

      Transfers between Participants in DTC will be effected in accordance with DTC’s procedures, and will be settled in same-day funds.

      DTC has advised the Company that conveyance of notices and other communications by DTC to Participants, by Participants to Indirect Participants, and by Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. DTC has also advised the Company that it will take any action permitted to be taken by a holder of Notes only at the direction of one or more Participants to whose account with DTC interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of the Notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange the Global Notes for legended Notes in certificated form, and to distribute such Notes to its Participants.

      The information in this section concerning DTC and its book-entry system has been obtained from sources that the Company believes to be reliable, but the Company takes no responsibility for the accuracy thereof.

      Exchange of Book-Entry Notes for Certificated Notes. DTC may discontinue providing its services as securities depository with respect to the Global Notes at any time by giving reasonable notice to the Company or the Trustee. If DTC is at any time unwilling or unable to continue as depository and a successor depository is not appointed by the Company within 90 days, or if the Company decides to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository), the Company will issue individual, fully registered, definitive Notes (“Definitive Notes”) in exchange for the Global Note or Notes representing such Definitive Notes. Upon the exchange of a Global Note for individual Notes, such Global Note shall be cancelled by the Trustee and the Definitive Notes shall be registered in such names and in such authorized denominations as DTC, pursuant to instructions from its Participants, any Indirect Participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Notes to the persons in whose names such Notes are so registered and shall recognize the holders thereof as Note holders.

REGISTRATION RIGHTS

      The Company has entered into a registration rights agreement with the initial purchasers (the “Registration Rights Agreement”) for the benefit of the holders of the Old Notes wherein the Company agreed, to use its reasonable best efforts (i) to file with the SEC within 90 calendar days after April 22, 2004 (the “Closing Date”), a registration statement with respect to New Notes identical in all material respects to the Old Notes (except that the New Notes will not contain terms with respect to transfer restrictions under the Securities Act and will not provide for any Additional Interest) and (ii) to cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 180 calendar days after the Closing Date. As promptly as practicable after the Exchange Offer Registration Statement has been declared effective, the Company will offer to holders

45


Table of Contents

the opportunity to exchange all their Old Notes for New Notes. The Company will keep the Exchange Offer open for not less than 20 business days (or longer if required by applicable law) after the date notice of the Exchange Offer is mailed to the holders of the Old Notes but will, in any event, use its reasonable best efforts to cause the Exchange Offer to be consummated within 210 days of the Closing Date. For each Old Note validly tendered to the Company pursuant to the Exchange Offer, the holder of such Note will receive an New Note having a principal amount equal to the principal amount of the tendered Old Note.

      Based on existing interpretations of the Securities Act by the staff of the SEC (the “Staff”) set forth in several no-action letters to third parties, and subject to the immediately following sentence, the Company believes that the New Notes to be issued pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by the holders thereof (other than holders who are broker-dealers) without further compliance with the registration and prospectus delivery provisions of the Securities Act. However, any holder of Old Notes who is an affiliate of the Company or who intends to participate in the Exchange Offer for the purpose of distributing the New Notes, or any broker-dealer who purchased the Old Notes from the Company for resale pursuant to Rule 144A or any other available exemption under the Securities Act, (i) will not be able to rely on the interpretations of the Staff set forth in the abovementioned no-action letters, (ii) will not be entitled to tender its Old Notes in the Exchange Offer and (iii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any sale or transfer of the Old Notes unless such sale or transfer is made pursuant to an exemption from such requirements. The Company does not intend to seek its own no-action letter, and there can be no assurance that the Staff would make a similar determination with respect to the New Notes as it has in such no-action letters to third parties.

      Each holder of the Old Notes (other than certain specified holders) who wishes to exchange the Old Notes for New Notes in the Exchange Offer will be required to represent that (i) it is not an affiliate of the Company, (ii) the New Notes to be received by it will be acquired in the ordinary course of its business and (iii) at the time of the Exchange Offer, it has no arrangement with any person to participate in the distribution (within the meaning of the Securities Act) of the New Notes. In addition, in connection with any resales of New Notes, any broker-dealer who acquired the Note for its own account as a result of market-making or other trading activities (a “Participating Broker-Dealer”) must deliver a prospectus meeting the requirements of the Securities Act. The SEC has taken the position that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to the New Notes (other than a resale of an unsold allotment from the original sale of the Old Notes) with the prospectus contained in the Exchange Offer Registration Statement. Under the Registration Rights Agreement, the Company is required to allow Participating Broker-Dealers and other persons, if any, subject to similar prospectus delivery requirements to use the prospectus contained in the Exchange Offer Registration Statement in connection with the resale of such New Notes for a period of 180 days from the issuance of the New Notes.

      If, (i) because of any change in law or applicable interpretations thereof by the Staff, the Company is not permitted to effect the Exchange Offer, (ii) if for any other reason (A) the Exchange Offer Registration Statement is not declared effective within 180 days following the Closing Date or (B) the Exchange Offer is not consummated within 30 days after effectiveness of the Exchange Offer Registration Statement, (iii) if any holder (other than an Initial Purchaser holding Notes acquired directly from the Company) is not eligible to participate in the Exchange Offer or participates in the Exchange Offer (by validly tendering its Notes and not withdrawing them) but does not receive New Notes which are freely tradable without any limitations or restrictions under the Securities Act or (iv) under certain circumstances, if the initial purchasers shall so request, then in each case, the Company will (x) promptly deliver to the holders written notice thereof and (y) at the Company’s sole expense (a) as promptly as practicable (but no later than (i) 180 days after the Closing Date or (ii) 60 days after the filing obligation arises, whichever is later), file a shelf registration statement covering resales of the Old Notes, (b) use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act no later than 210 days after the Closing Date (or in the case of a request by an Initial Purchaser, within 60 days of such filing) and (c) use its reasonable best efforts to keep effective the Shelf Registration Statement until the earlier of two years (or, if Rule 144(k) is amended to provide a shorter restrictive period, the end of such shorter period) after the Closing Date or such time as all of the applicable Notes have been sold thereunder. The Company will, if a Shelf Registration Statement is filed, provide to each holder copies of the prospectus that is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement for the Old Notes has become effective and take certain other actions as are required to permit unrestricted resales of the Old Notes. A holder that sells Old Notes pursuant to the Shelf Registration Statement will be required to be

46


Table of Contents

named as a selling security holder in the related prospectus, to provide information related thereto and to deliver such prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such a holder (including certain indemnification rights and obligations).

      If the Company fails to comply with certain provisions of the Registration Rights Agreement, in each case as described below, then Additional Interest (as defined below) shall become payable in respect of the Old Notes as follows:

      If (i) the Exchange Offer Registration Statement is not filed with the SEC on or prior to the 90th day following the Closing Date, (ii) the Exchange Offer Registration Statement is not declared effective by the SEC on or prior to the 180th day following the Closing Date, (iii) the Exchange Offer is not consummated on or prior to the 30th day following the effective date of the Exchange Offer Registration Statement, (iv) if required, a Shelf Registration Statement is not filed with the SEC on or prior to (A) the 180th day following the Closing Date or (B) the 60th day after the filing obligation arises, whichever is later, (v) if required, a Shelf Registration Statement is not declared effective on or prior to the 210th day following the Closing Date (or, if a Shelf Registration Statement is required to be filed upon the request of any Initial Purchaser, within 60 days after such filing), (vi) a Shelf Registration Statement is declared effective by the SEC but such Shelf Registration Statement ceases to be effective or such Shelf Registration Statement or the prospectus included therein ceases to be usable in connection with resales of Notes for any reason and the aggregate number of days in any consecutive 365-day period for which the Shelf Registration Statement or such prospectus shall not be effective or usable exceeds 45 days or (vii) the Exchange Offer Registration Statement is declared effective by the SEC but, if the Exchange Offer Registration Statement is being used in connection with the resale of New Notes, the Exchange Offer Registration Statement ceases to be effective or the Exchange Offer Registration Statement or the prospectus included therein ceases to be usable in connection with resales of New Notes for any reason during the 180-day period in which it is required to remain effective (each of the events referred to in clauses (i) through (vii) above being hereinafter called a “Registration Default”), the per annum interest rate borne by the Old Notes shall be increased (“Additional Interest”) by one-quarter of one percent (0.25%) per annum immediately following such 90-day period in the case of clause (i) above, immediately following such 180-day period in the case of clause (ii) above, immediately following such 30-day period in the case of clause (iii) above, immediately following any such 180-day period or 60-day period, whichever ends later, in the case of clause (iv) above, immediately following any such 210-day period or 60-day period, whichever ends first, in the case of clause (v) above, immediately following the 45th day in any consecutive 365-day period that a Shelf Registration Statement shall not be effective or a Shelf Registration Statement or the prospectus included therein shall not be usable as contemplated by clause (vi) above, or immediately following the day that the Exchange Offer Registration Statement shall not be effective or the Exchange Offer Registration Statement or the prospectus included therein shall not be usable as contemplated by clause (vii) above, which rate will be increased by an additional one-quarter of one percent (0.25%) per annum immediately following each 90-day period that any Additional Interest continues to accrue under any circumstances; provided that the aggregate increase in such annual interest rate may in no event exceed one-half of one percent (0.50%) per annum. Upon the filing of the Exchange Offer Registration Statement after the 90-day period described in clause (i) above, the effectiveness of the Exchange Offer Registration Statement after the 180-day period described in clause (ii) above, the consummation of the Exchange Offer after the 30-day period described in clause (iii) above, the filing of the Shelf Registration Statement after the 180-day period or 60-day period day, as the case may be, described in clause (iv) above, the effectiveness of a Shelf Registration Statement after the 210-day period or 60-day period, as the case may be, described in clause (v) above, or the Shelf Registration Statement once again being effective or the Shelf Registration Statement and the prospectus included therein becoming usable in connection with resales of Notes, as the case may be, in the case of clause (vi) above, or the Exchange Offer Registration Statement once again becoming effective or the Exchange Offer Registration Statement and the prospectus included therein becoming usable in connection with resales of New Notes, as the case may be, in the case of clause (vii) thereof, the interest rate borne by the Old Notes from the date of such filing, effectiveness, consummation or resumption of effectiveness or usability, as the case may be, shall be reduced to the original interest rate so long as no other Registration Default shall have occurred and shall be continuing at such time and the Company is otherwise in compliance with this paragraph; provided, however, that, if after any such reduction in interest rate, one or more Registration Defaults shall again occur, the interest rate shall again be increased pursuant to the foregoing provisions.

47


Table of Contents

      The Company shall notify the Trustee within three business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an “Event Date”). Additional Interest shall be paid by depositing with the Trustee, in trust, for the benefit of the holders of Notes, on or before the applicable semi-annual Interest Payment Date, immediately available funds in sums sufficient to pay the Additional Interest then due. The Additional Interest due shall be payable on each Interest Payment Date to the record holder of Notes entitled to receive the interest payment to be paid on such date as set forth in the Indenture. Each obligation to pay Additional Interest shall be deemed to accrue from and including the day following the applicable Event Date.

      Anything herein to the contrary notwithstanding, any holder who was, at the time the Exchange Offer was pending and consummated, eligible to exchange, and did not validly tender, its Notes for New Notes in the Exchange Offer will not be entitled to receive any Additional Interest. For purposes of clarity, it is hereby acknowledged and agreed that, under current interpretations of law by the SEC, initial purchasers holding unsold allotments of Notes acquired from the Company are not eligible to participate in the Exchange Offer.

      Each Note will contain a legend to the effect that the holder thereof, by its acceptance thereof, will be deemed to have agreed to be bound by the provisions of the Registration Rights Agreement.

      The Registration Rights Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Registration Rights Agreement, a form of which is available upon request to the Company. In addition, the information set forth above concerning certain interpretations of and positions taken by the Staff is not intended to constitute legal advice, and prospective investors should consult their own legal advisors with respect to such matters.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

      The following discussion is a summary of certain United States federal income tax consequences expected to result from the purchase, ownership and disposition of the Notes by holders acquiring the Notes on original issue for cash. This summary is based upon current provisions of the Code, applicable Treasury regulations, judicial authority and administrative rulings and practice, any of which may be altered with retroactive effect thereby changing the federal income tax consequences discussed below. There can be no assurance that the IRS will not take a contrary view, and no ruling from the IRS has been or will be sought.

      The tax treatment of a holder of Notes may vary depending upon such holder’s particular situation. Certain holders (including, but not limited to, certain financial institutions, insurance companies, broker-dealers, foreign corporations, nonresident alien individuals and persons holding the Notes as part of a “straddle,” “hedge” or “conversion transaction”) may be subject to special rules not discussed below. This discussion is limited to holders who will hold the Notes as “capital assets” (generally, property held for investment) within the meaning of Section 1221 of the Code. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.

      As used herein, the term “U.S. Holder” means a beneficial owner of Notes that is for United States federal income tax purposes (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or of any political subdivision thereof (other than a partnership that is not treated as a United States person under applicable Treasury regulations), (iii) an estate whose income is subject to United States federal income tax regardless of its source, (iv) a trust, if both (A) a court within the United States is able to exercise primary supervision over the administration of the trust and (B) one or more United States persons have the authority to control all substantial decisions of the trust, or (v) any other person whose income or gain in respect of the Notes is effectively connected with the conduct of a United States trade or business. Notwithstanding the preceding sentence, to the extent provided in Treasury regulations, certain trusts in existence on August 20, 1996, and treated as United States persons prior to such date, that elect to continue to be treated as United States persons also will be a U.S. Holder. As used herein, the term “Non-U.S. Holder” means a beneficial owner of Notes that is not a U.S. Holder.

48


Table of Contents

Exchange Offer

      Pursuant to the Exchange Offer, Old Notes may be exchanged for New Notes, which do not differ materially either in kind or extent from the Old Notes. Accordingly, no gain or loss will be realized for United States federal income tax purposes upon an exchange of the Old Notes for the New Notes pursuant to the Exchange Offer. A U.S. Holder will have the same basis and holding period in the New Notes that it had in the Old Notes immediately prior to the exchange.

Sale, Retirement or Other Taxable Disposition

      In general, a U.S. Holder of a Note will recognize gain or loss upon the sale, retirement or other taxable disposition of such Note in an amount equal to the difference between (i) the amount of cash and the fair market value of property received in exchange therefor (except to the extent attributable to the payment of accrued interest, which generally will be taxable to a holder as ordinary income) and (ii) the holder’s adjusted tax basis in such Note. A U.S. Holder’s tax basis in a Note generally will be equal to the price paid for such Note. Currently, net capital gain (i.e., generally, capital gain in excess of capital loss) recognized by an individual from the sale of a capital asset (such as the Note) that has been held for more than one year will be subject to tax at a rate not to exceed 15%, and net capital gain from the sale of an asset held for one year or less will be subject to tax at ordinary income tax rates. In addition, capital gain recognized by a corporate taxpayer will continue to be subject to tax at the ordinary income tax rates applicable to corporations.

Non-U.S. Holders

      A Non-U.S. Holder will not be subject to United States federal income taxes on payments of principal, premium (if any) or interest (including original issue discount, if any) on a Note, unless such Non-U.S. Holder is a direct or indirect 10% or greater shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Company, a controlled foreign corporation related to the Company or a bank receiving interest described in Section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation, the last United States payor in the chain of payment prior to payment to a Non-U.S. Holder (the “Withholding Agent”) must have received, before payment, a statement that (i) is signed by the beneficial owner of the Note under penalties of perjury, (ii) certifies that such owner is not a U.S. Holder and (iii) provides the name and address of the beneficial owner. The statement may be made on an IRS Form W-8BEN or a substantially similar form, and the beneficial owner must inform the Withholding Agent of any change in the information on the statement within 30 days of such change. If a Note is held through a securities clearing organization or certain other financial institutions the beneficial owner must provide to such organization or institution an IRS Form W-8BEN and the organization or institution must provide a certificate stating that such organization or institution has been provided with a valid IRS Form W-8BEN to the Withholding Agent. The Treasury Department is considering implementation of further certification requirements aimed at determining whether the issuer of a debt obligation is related to holders thereof.

      In addition, a Non-U.S. Holder will not be subject to federal income taxes on any amount which constitutes gain upon retirement or disposition of a Note, provided (1) the gain is not effectively connected with the conduct of a trade or business in the United States by the Non-U.S. Holder and (2) the Non-U.S. Holder is not a resident alien individual who was present in the United States for 183 or more days during the taxable year. Certain other exceptions may be applicable, and a Non-U.S. Holder should consult its tax advisor in this regard. The Note will not be includable in the estate of a Non-U.S. Holder unless the individual is a direct or indirect 10% or greater shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Company or, at the time of such individual’s death, payments in respect of the Note would have been effectively connected with the conduct by such individual of a trade or business in the United States.

Backup Withholding

      Backup withholding of United States federal income tax at a rate of 28% may apply to payments made in respect of a Note to registered owners who are not “exempt recipients” and who fail to provide certain identifying information (such as the registered owner’s taxpayer identification number) and an IRS Form W-8BEN (in the case of a Non-U.S. Holder) or an IRS Form W-9 (in the case of a U.S. Holder). Compliance with the identification procedures described in the preceding section would establish an exemption from backup withholding for those holders who are not exempt recipients. In addition, upon the sale of a Note to

49


Table of Contents

(or through) a broker, the broker must withhold 28% of the entire purchase price, unless the seller provides, in the required manner, certain identifying information and, in the case of a Non-U.S. Holder, certifies that such seller is a Non-U.S. Holder (and certain other conditions are met). Such a sale must also be reported by the broker to the IRS, unless the seller certifies its Non-U.S. status (and certain conditions are met). Certification of the registered owner’s Non-U.S. status would be made normally on an IRS Form W-8BEN under penalties of perjury, although in certain cases it may be possible to submit other documentary evidence. Any amounts withheld under the backup withholding rules from a payment to a beneficial owner would be allowed as a refund or a credit against such beneficial owner’s federal income tax liability provided the required information is furnished to the IRS.

STATE AND LOCAL TAX CONSIDERATIONS

      In addition to the United States federal tax consequences described in “Certain Federal Income Tax Considerations,” potential investors should consider the state and local tax consequences of the acquisition, ownership and disposition of the Notes. State and local tax law may differ substantially from the corresponding federal law, and this discussion does not purport to describe any aspect of the tax laws of any state or locality. Therefore, potential investors should consult their own tax advisors with respect to the various state and local tax consequences of an investment in the Notes.

PLAN OF DISTRIBUTION

      Each broker-dealer that receives New Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of New Notes received in exchange for private notes if such private notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for at least 180 days after the exchange offer is completed, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.

      We will not receive any proceeds from any sale of New Notes by broker-dealers or any other person. New Notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such New Notes. Any broker-dealer that resells New Notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of any such notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit of any such resale of New Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

      For a period of 180 days after the exchange offer is completed, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holder of private notes) other than commissions or concessions of any brokers or dealers and the fees of any advisors or experts retained by holders of Old Notes, and will indemnify the holders of the private notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

EXPERTS

      The financial statements of the Company incorporated in this prospectus by reference to the Company’s Current Report of Form 8-K dated June 22, 2004, the financial statement schedules included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 and the audited historical financial statements of Benderson Development Company Portfolio I and Benderson Development Company Portfolio II for the year ended December 31, 2003 included in the Company’s Current Report on Form 8-K dated March 31,

50


Table of Contents

2004 have been so incorporated in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

      The consolidated financial statements of JDN Realty Corporation, our subsidiary as of March 13, 2003, at December 31, 2002 and 2001, and for each of the three years in the period ended December 31, 2002 appearing in our Current Report on Form 8-K dated January 20, 2004, incorporated by reference in this prospectus have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

LEGAL MATTERS

      The validity of the New Notes will be passed upon for us by Baker & Hostetler LLP, Cleveland, Ohio.

51


Table of Contents

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

 
Item 20. Indemnification of Directors and Officers

      The Ohio Revised Code (the “Ohio Code”) authorizes Ohio corporations to indemnify officers and directors from liability if the officer or director acted in good faith and in a manner reasonably believed by the officer or director to be in or not opposed to the best interests of the corporation, and, with respect to any criminal actions, if the officer or director had no reason to believe his action was unlawful. In the case of an action by or on behalf of a corporation, indemnification may not be made (1) if the person seeking indemnification is adjudged liable for negligence or misconduct, unless the court in which such action was brought determines such person is fairly and reasonably entitled to indemnification, or (2) if liability asserted against such person concerns certain unlawful distributions. The indemnification provisions of the Ohio Code require indemnification if a director or officer has been successful on the merits or otherwise in defense of any action, suit or proceeding that he or she was a party to by reason of the fact that he or she is or was a director or officer of the corporation. The indemnification authorized under Ohio law is not exclusive and is in addition to any other rights granted to officers and directors under the articles of incorporation or code of regulations of the corporation or any agreement between officers and directors and the corporation. A corporation may purchase and maintain insurance or furnish similar protection on behalf of any officer or director against any liability asserted against such person and incurred by person in his or her capacity, or arising out of the status, as an officer or director, whether or not the corporation would have the power to indemnify him against such liability under the Ohio Code.

      The registrant’s code of regulations provides for the indemnification of directors and officers of the registrant to the maximum extent permitted by Ohio law as authorized by the board of directors of the registrant and for the advancement of expenses incurred in connection with the defense of any action, suit or proceeding that he or she was a party to by reason of the fact that he or she is or was a director or officer of the registrant upon the receipt of an undertaking to repay such amount unless it is ultimately determined that the director or officer is entitled to indemnification.

      The registrant maintains a directors’ and officers’ insurance policy which insures the directors and officers of the registrant from claims arising out of an alleged wrongful act by such persons in their respective capacities as directors and officers of the registrant, subject to certain exceptions.

      The registrant has entered into indemnification agreements with its directors and officers which provide for indemnification to the fullest extent permitted under Ohio law.

 
Item 21. Exhibits
         
Exhibit No. Exhibit Description


  3 .1   Amended and Restated Articles of Incorporated, as amended, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .2   Second Amendment to the Amended and Restated Articles of Incorporation, as amended, incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .3   Third Amendment to the Amended and Restated Articles of Incorporation, as amended, incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .4   Fourth Amendment to the Amended and Restated Articles of Incorporation, as amended, incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .5   Fifth Amendment to the Amended and Restated Articles of Incorporation, as amended, incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .6   Sixth Amendment to the Amended and Restated Articles of Incorporation, as amended, filed herewith.
  3 .7   Seventh Amendment to the Amended and Restated Articles of Incorporation, as amended, filed herewith.

52


Table of Contents

         
Exhibit No. Exhibit Description


  3 .8   Code of Regulations, as amended, incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  4 .1   Senior Indenture, dated as of May 1, 1994, between the Registrant and the Trustee, incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  4 .2   First Supplement to Senior Indenture, dated as of May 10, 1995, between the Registrant and the Trustee, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  4 .3   Second Supplement to Senior Indenture, dated as of April 22, 2004, between the Registrant and the Trustee, incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  4 .4   Third Supplement to Senior Indenture, dated as of January 23, 2004, between the Registrant and the Trustee, filed herewith.
  4 .5   Fourth Supplement to Senior Indenture, dated as of April 22, 2004, between the Registrant and the Trustee, filed herewith.
  4 .6   Form of the 5.25% Note due 2011, filed herewith.
  4 .7   Registration Rights Agreement, dated as of April 22, 2004, by and among the Registrant and the initial purchasers, filed herewith.
  5 .1   Opinion of Baker & Hostetler LLP regarding legality, filed herewith.
  8 .1   Opinion of Baker & Hostetler LLP regarding certain tax matters, filed herewith.
  12 .1   Calculation of Ratio of Earnings to Fixed Charges, incorporated by reference to the Company’s Current Report on Form 8-K dated June 22, 2004 and filed on June 24, 2004.
  23 .1   Consent of PricewaterhouseCoopers LLP, filed herewith.
  23 .2   Consent of PricewaterhouseCoopers LLP, filed herewith.
  23 .3   Consent of Ernst & Young LLP, filed herewith.
  23 .4   Consent of Baker & Hostetler LLP (included in Exhibit 5).
  24 .1   Power of Attorney (included in signature page of this Registration Statement).
  25 .1   Statement of Eligibility of Trustee on Form T-1 for National City Bank, filed herewith.
  99 .1   Form of Letter of Transmittal, filed herewith.
  99 .2   Form of Notice of Guarantied Delivery, filed herewith.
  99 .3   Form of Letters to Depository Trust Company Participants, filed herewith.
  99 .4   Form of Letter to Clients, filed herewith.
 
Item 22. Undertakings

      The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

      The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

53


Table of Contents

      The undersigned registrant hereby undertakes:

        1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933.
 
        (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
 
        (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

        2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
        3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

      Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

      The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, on the company being acquired involved therein, that was not the subject of and included in the registration statement when it becomes effective.

54


Table of Contents

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Beachwood, State of Ohio, on June 30, 2004.

  DEVELOPERS DIVERSIFIED REALTY CORPORATION

  By:  /s/ SCOTT A. WOLSTEIN
 
  Scott A. Wolstein
  Chief Executive Officer and Chairman

      KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Scott A. Wolstein, David M. Jacobstein and William H. Schafer, or any one of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all pre-or post-effective amendments to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

      Pursuant to the requirement of the Securities Act of 1933, this Registration Statement has been signed below as of June 30, 2004 by the following persons in the capacities and on the dates indicated:

         
 
/s/ SCOTT A. WOLSTEIN

Scott A. Wolstein
  Chairman of the Board, Chief Executive Officer and Director (Principal Executive Officer)
 
/s/ WILLIAM H. SCHAFER

William H. Schafer
  Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
 


Dean S. Adler
  Director
 
/s/ TERRANCE R. AHERN

Terrance R. Ahern
  Director
 
/s/ MOHSEN ANVARI

Mohsen Anvari
  Director
 
/s/ ROBERT H. GIDEL

Robert H. Gidel
  Director
 
/s/ VICTOR B. MACFARLANE

Victor B. MacFarlane
  Director
 
/s/ CRAIG MACNAB

Craig Macnab
  Director
 
/s/ SCOTT D. ROULSTON

Scott D. Roulston
  Director
 
/s/ BARRY A. SHOLEM

Barry A. Sholem
  Director
 
/s/ WILLIAM B. SUMMERS, JR. 

William B. Summers, Jr. 
  Director

55


Table of Contents

EXHIBIT INDEX

         
Exhibit No. Exhibit Description


  3 .1   Amended and Restated Articles of Incorporated, as amended, incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .2   Second Amendment to the Amended and Restated Articles of Incorporation, as amended, incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .3   Third Amendment to the Amended and Restated Articles of Incorporation, as amended, incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .4   Fourth Amendment to the Amended and Restated Articles of Incorporation, as amended, incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .5   Fifth Amendment to the Amended and Restated Articles of Incorporation, as amended, incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  3 .6   Sixth Amendment to the Amended and Restated Articles of Incorporation, as amended, filed herewith.
  3 .7   Seventh Amendment to the Amended and Restated Articles of Incorporation, as amended, filed herewith.
  3 .8   Code of Regulations, as amended, incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  4 .1   Senior Indenture, dated as of May 1, 1994, between the Registrant and the Trustee, incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  4 .2   First Supplement to Senior Indenture, dated as of May 10, 1995, between the Registrant and the Trustee, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  4 .3   Second Supplement to Senior Indenture, dated as of April 22, 2004, between the Registrant and the Trustee, incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-3 (No. 333-108361) filed on August 29, 2003.
  4 .4   Third Supplement to Senior Indenture, dated as of January 23, 2004, between the Registrant and the Trustee, filed herewith.
  4 .5   Fourth Supplement to Senior Indenture, dated as of April 22, 2004, between the Registrant and the Trustee, filed herewith.
  4 .6   Form of the 5.25% Note due 2011, filed herewith.
  4 .7   Registration Rights Agreement, dated as of April 22, 2004, by and among the Registrant and the initial purchasers, filed herewith.
  5 .1   Opinion of Baker & Hostetler LLP regarding legality, filed herewith.
  8 .1   Opinion of Baker & Hostetler LLP regarding certain tax matters, filed herewith.
  12 .1   Calculation of Ratio of Earnings to Fixed Charges, incorporated by reference to the Company’s Current Report on Form 8-K dated June 22, 2004 and filed on June 24, 2004.
  23 .1   Consent of PricewaterhouseCoopers LLP, filed herewith.
  23 .2   Consent of PricewaterhouseCoopers LLP, filed herewith.
  23 .3   Consent of Ernst & Young LLP, filed herewith.
  23 .4   Consent of Baker & Hostetler LLP (included in Exhibit 5).
  24 .1   Power of Attorney (included in signature page of this Registration Statement).
  25 .1   Statement of Eligibility of Trustee on Form T-1 for National City Bank, filed herewith.
  99 .1   Form of Letter of Transmittal, filed herewith.
  99 .2   Form of Notice of Guarantied Delivery, filed herewith.
  99 .3   Form of Letters to Depository Trust Company Participants, filed herewith.
  99 .4   Form of Letter to Clients, filed herewith.

56

Exhibit 3.06

SIXTH AMENDMENT
TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION, AS AMENDED,
OF DEVELOPERS DIVERSIFIED REALTY CORPORATION

                                                                      ------------------------------------------
[OHIO SEAL]            PRESCRIBED BY J. KENNETH BLACKWELL             EXPEDITE THIS FORM: (SELECT ONE)
                                                                      ------------------------------------------
                            Ohio Secretary of State                   MAIL FORM TO ONE OF THE FOLLOWING:
                                                                      ------------------------------------------
                          Central Ohio: (614) 466-3910                         PO Box 1390
                   Toll Free: 1-877-SOS-FILE (1-877-767-3453)         [ ] Yes    Columbus, OH 43216
                                                                      *** REQUIRES AN ADDITIONAL FEE OF $100 ***
www.state.oh.us/sos                                                   ------------------------------------------
-------------------                                                            PO Box 1028
e-mail: busserv@sos.state.oh.us                                       [X] NO   COLUMBUS, OH 43216
                                                                      ------------------------------------------

CERTIFICATE OF AMENDMENT BY DIRECTORS
OR INCORPORATORS TO ARTICLES
(Domestic)

Filing Fee $50.00

(CHECK ONLY ONE (1) BOX)

-----------------------------------------------------------------------------------
(1) [X]  Amendment by Directors         (2) [ ]  Amendment by Incorporators
    [ ]  Amended by Directors               [ ]  Amended by Incorporators
         (123-AMDD)                              (124-AMDI)
-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------
COMPLETE THE GENERAL INFORMATION IN THIS SECTION FOR THE BOX CHECKED ABOVE.
-----------------------------------------------------------------------------------

Name of Corporation                Developers Diversified Realty Corporation
                                   ------------------------------------------------

Charter Number                     831795
                                   ------------------------------------------------

[X}  Please check if additional provisions attached thereto are incorporated herein
and made a part of these articles of organization.

-----------------------------------------------------------------------------------------------
COMPLETE THE INFORMATION IN THIS SECTION IF BOX (1) IS CHECKED.
-----------------------------------------------------------------------------------------------

Name the Title of Officer          Joan U. Allgood          Senior Vice President and Secretary
                                   ------------------       -----------------------------------
                                   (name)                   (title)

(CHECK ONLY ONE (1) BOX)

     [X] A meeting of the directors was duly called and held on  February 24, 2004
                                                                 ------------------------------
                                                                            (Date)

     [ ] In an writing signed by all the Directors pursuant to section 1701.54 of the ORC

The following resolution was adopted pursuant to section 1701.70(B)  (7)         of the ORC:
                                                                        --------
                                                              (insert proper paragraph number)

     See Attachment A.
     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

Page 1 of 2 Last Revised: May 2002


------------------------------------------------------------------------------------------------
COMPLETE THE INFORMATION IN THIS SECTION IF BOX (2) IS CHECKED.
------------------------------------------------------------------------------------------------

WE, the undersigned, being all of the incorporators of the above named corporation, do certify
that the subscriptions to shares have not been received and the initial directors are not named
in the articles. We hereby have elected to amend the articles as follows:

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------



        REQUIRED
  Must be authenticated             /s/ Joan U. Allgood                           3/8/04
(SIGNED) by an authorized           -----------------------------------  ------------------------
     representative                 Authorized Representative                      Date
   (SEE INSTRUCTIONS)
                                    Joan U. Allgood
                                    -----------------------------------
                                    (Print Name)
                                    Senior Vice President and Secretary
                                    -----------------------------------

                                    -----------------------------------

                                    -----------------------------------  ------------------------
                                    Authorized Representative                      Date

                                    -----------------------------------
                                    (Print Name)

                                    -----------------------------------

                                    -----------------------------------

                                    -----------------------------------

                                    -----------------------------------

                                    -----------------------------------  ------------------------
                                    Authorized Representative                      Date

                                    -----------------------------------
                                    (Print Name)

                                    -----------------------------------

                                    -----------------------------------

                                  Page 2 of 2             Last Revised: May 2002

Developers Diversified Realty Corporation
Charter Number: 831795

ATTACHMENT A

PRINCIPAL OFFICE

RESOLVED, that in connection with the relocation of the Company's headquarters from Moreland Hills, Ohio to Beachwood, Ohio, the Company's Amended and Restated Articles of Incorporation, as amended (the "Articles"), are hereby amended by deleting Article SECOND in its entirety and substituting the following:

SECOND: The place in the State of Ohio where the principal office of the Corporation is located is Beachwood, Cuyahoga County.


Exhibit 3.07

SEVENTH AMENDMENT
TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION, AS AMENDED,
OF DEVELOPERS DIVERSIFIED REALTY CORPORATION

                                                                       ------------------------------------------
[OHIO SEAL]            PRESCRIBED BY J. KENNETH BLACKWELL              EXPEDITE THIS FORM: (SELECT ONE)
                                                                       ------------------------------------------
                            Ohio Secretary of State                    MAIL FORM TO ONE OF THE FOLLOWING:
                                                                       ------------------------------------------
                          Central Ohio: (614) 466-3910                          PO Box 1390
                   Toll Free: 1-877-SOS-FILE (1-877-767-3453)          [X] Yes    Columbus, OH 43216
                                                                       *** REQUIRES AN ADDITIONAL FEE OF $100 ***
www.state.oh.us/sos                                                    ------------------------------------------
-------------------                                                             PO Box 1028
e-mail: busserv@sos.state.oh.us                                        [ ] NO   COLUMBUS, OH 43216
                                                                       ------------------------------------------

CERTIFICATE OF AMENDMENT BY DIRECTORS
OR INCORPORATORS TO ARTICLES
(Domestic)

Filing Fee $50.00

(CHECK ONLY ONE (1) BOX)

-----------------------------------------------------------------------------------
(1) [X]  Amendment by Directors         (2) [ ]  Amendment by Incorporators
    [ ]  Amended by Directors               [ ]  Amended by Incorporators
         (123-AMDD)                              (124-AMDI)
-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------
COMPLETE THE GENERAL INFORMATION IN THIS SECTION FOR THE BOX CHECKED ABOVE.
-----------------------------------------------------------------------------------

Name of Corporation                Developers Diversified Realty Corporation
                                   ------------------------------------------------

Charter Number                     831795
                                   ------------------------------------------------

[X}  Please check if additional provisions attached thereto are incorporated herein
and made a part of these articles of organization.

-----------------------------------------------------------------------------------------------
COMPLETE THE INFORMATION IN THIS SECTION IF BOX (1) IS CHECKED.
-----------------------------------------------------------------------------------------------

Name the Title of Officer          Joan U. Allgood          Senior Vice President and Secretary
                                   ------------------       -----------------------------------
                                   (name)                   (title)

(CHECK ONLY ONE (1) BOX)

     [ ] A meeting of the directors was duly called and held on   ------------------------------
                                                                            (Date)

     [X] In an writing signed by all the Directors pursuant to section 1701.54 of the ORC

The following resolution was adopted pursuant to section 1701.70(B)  (1)         of the ORC:
                                                                        --------
                                                              (insert proper paragraph number)

     See Attachment A.
     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

Page 1 of 2 Last Revised: May 2002


------------------------------------------------------------------------------------------------
COMPLETE THE INFORMATION IN THIS SECTION IF BOX (2) IS CHECKED.
------------------------------------------------------------------------------------------------

WE, the undersigned, being all of the incorporators of the above named corporation, do certify
that the subscriptions to shares have not been received and the initial directors are not named
in the articles. We hereby have elected to amend the articles as follows:

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------

     -------------------------------------------------------------------------------------------



        REQUIRED
  Must be authenticated             /s/ Joan U. Allgood                        May 4, 2004
(SIGNED) by an authorized           -----------------------------------  ------------------------
     representative                 Authorized Representative                      Date
   (SEE INSTRUCTIONS)
                                    Joan U. Allgood
                                    -----------------------------------
                                    (Print Name)
                                    Senior Vice President and Secretary
                                    -----------------------------------

                                    -----------------------------------

                                    -----------------------------------  ------------------------
                                    Authorized Representative                      Date

                                    -----------------------------------
                                    (Print Name)

                                    -----------------------------------

                                    -----------------------------------

                                    -----------------------------------

                                    -----------------------------------

                                    -----------------------------------  ------------------------
                                    Authorized Representative                      Date

                                    -----------------------------------
                                    (Print Name)

                                    -----------------------------------

                                    -----------------------------------

Page 2 of 2 Last Revised: May 2002


ATTACHMENT A

The Amended and Restated Articles of Incorporation, as amended, of Developers Diversified Realty Corporation, an Ohio corporation, are amended by adding at the end of Division A-IX of Article FOURTH thereof a new Section 6 reading as follows:

Section 6. 7.50% Class I Cumulative Redeemable Preferred Shares. Of the 750,000 authorized Class I Shares, 345,000 shares are designated as a series entitled "7.50% Class I Cumulative Redeemable Preferred Shares" (hereinafter called "7.50% Class I Preferred Shares"). The 7.50% Class I Preferred Shares shall have the express terms set forth in this Division as being applicable to all Class I Shares as a class and, in addition, the following express terms applicable to all 7.50% Class I Preferred Shares as a series of Class I Shares:

(a) The annual dividend rate of the 7.50% Class I Preferred Shares shall be 7.50% of the liquidation preference of $500.00 per share.

(b) Dividends on the 7.50% Class I Preferred Shares shall be payable, if declared, quarterly in arrears on or about the fifteenth day of each January, April, July, and October or, if not a business day, the next succeeding business day, the first quarterly dividend being payable, if declared, on July 15, 2004. The dividends payable for each full quarterly dividend period on each 7.50% Class I Preferred Share shall be $9.375.

Dividends for the initial dividend period on the 7.50% Class I Preferred Shares, or for any period shorter or longer than a full dividend period on the 7.50% Class I Preferred Shares, shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The aggregate dividend payable quarterly to each holder of 7.50% Class I Preferred Shares shall be rounded to the nearest one one-hundredth of one cent with $.00005 being rounded upward. Each dividend shall be payable to the holders of record on such record date, no less than 10 nor more than 30 days preceding the payment date thereof, as shall be fixed from time to time by the Company's Board of Directors.

(c) Dividends on 7.50% Class I Preferred Shares shall be cumulative as follows:

(1) With respect to shares included in the initial issue of 7.50% Class I Preferred Shares and shares issued any time thereafter up to and including the record date for the payment of the first dividend on the initial issue of 7.50% Class I Preferred Shares, dividends shall be cumulative from the date of the initial issue of 7.50% Class I Preferred Shares; and

(2) With respect to shares issued any time after the aforesaid record date, dividends shall be cumulative from the dividend payment date next preceding the date of issue of such shares, except that if such shares are issued during the period commencing the day after the record date for the payment of a dividend on 7.50% Class I Preferred Shares and ending on the payment date of that dividend, dividends with respect to such shares shall be cumulative from that dividend payment date.

(d) Except as required to preserve the Company's status as a real estate investment trust under the Internal Revenue Code of 1986, as amended, the 7.50% Class I Preferred Shares may


not be redeemed prior to May 7, 2009. At any time or from time to time on and after May 7, 2009 the Company, at its option upon not less than thirty (30) nor more than sixty (60) days' written notice, may redeem all or any part of the 7.50% Class I Preferred Shares at a redemption price of $500.00 per share plus, in each case, an amount equal to all dividends accrued and unpaid thereon to the redemption date, without interest.

(e) The amount payable per 7.50% Class I Preferred Share in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company shall be $500.00, plus an amount equal to all dividends accrued and unpaid thereon to the date of payment.

(f) All dividend payments made on the 7.50% Class I Preferred Shares, at any time during which the Company is in default in the payment of dividends on such 7.50% Class I Preferred Shares for any dividend period, shall, for the purposes of Section 5(b)(1) of this Division A-IX, be deemed to be made in respect of the earliest dividend period with respect to which the Company is in default.


 

Exhibit 4.4

FORM OF
THIRD SUPPLEMENTAL INDENTURE

          THIS THIRD SUPPLEMENTAL INDENTURE, is entered into as of January 23, 2004, by and between Developers Diversified Realty Corporation, an Ohio corporation (the “Company”), and National City Bank, a national banking association organized and existing under the laws of the United States, as trustee (the “Trustee”).

          WHEREAS, the parties entered into the Indenture dated as of May 1, 1994 (as supplemented by a First Supplemental Indenture dated as of May 10, 1995, and a Second Supplemental Indenture dated as of July 18, 2003, the “Indenture”), relating to the Company’s senior debt securities;

          WHEREAS, the Company has made a request to the Trustee that the Trustee join with it, in accordance with Section 901 of the Indenture, in the execution of this Third Supplemental Indenture to add a covenant for the benefit of Holders of the Company’s $275,000,000 aggregate principal amount 3.875% Notes Due 2009 (the “Designated Securities”);

          WHEREAS, the Company and the Trustee are authorized to enter into this Third Supplemental Indenture; and

          NOW, THEREFORE, the Company and the Trustee agree as follows:

          Section 1. Relation to Indenture. This Third Supplemental Indenture supplements the Indenture and shall be a part and subject to all the terms thereof. Except as supplemented hereby, the Indenture and the Securities issued thereunder shall continue in full force and effect.

          Section 2. Capitalized Terms. Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

          Section 3. Definitions. Section 101 of the Indenture is amended by adding the following definitions:

    “Total Assets” as of any date means the sum of (i) Undepreciated Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries determined on a consolidated basis in accordance with generally accepted accounting principles (but excluding intangibles and trade receivables related to rent and other charges derived from leases with tenants) after eliminating intercompany accounts and transactions.

    “Secured Debt” means, without duplication, Debt that is secured by a mortgage, trust deed, deed of trust, deed to secure Debt, security agreement, pledge, conditional sale or other title retention agreement, capitalized lease, or other like agreement granting or conveying security title to or a security interest in real property or other tangible asset(s). Secured Debt shall be deemed to be incurred (i) on the date the obligor thereon creates, assumes, guarantees or otherwise becomes liable in respect thereof if it is secured in the manner described in the

 


 

    preceding sentence on such date or (ii) on the date the obligor thereon first secures such Debt in the manner described in the preceding sentence if such Debt was not so secured on the date it was incurred.

          Section 4. Limitations on Incurrence of Secured Debt. The following is inserted into the Indenture as Section 1015:

Section 1015. Limitations on Incurrence of Secured Debt. So long as any of the Designated Securities remain outstanding, the Company will not, and will not permit any Subsidiary to, incur any Secured Debt, if immediately after giving effect to the incurrence of such Secured Debt and the application of the proceeds from such Secured Debt, the aggregate amount of all of the Company’s and its Subsidiaries’ outstanding Secured Debt on a consolidated basis is greater than 40% of the sum of (i) the Company’s Total Assets as of the end of the calendar quarter covered in the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently filed with the Commission (or, if such filing is not permitted under the Securities Exchange Act of 1934, with the Trustee) prior to the incurrence of such additional Secured Debt and (ii) the increase, if any, in Total Assets from the end of such quarter including, without limitation, any increase in Total Assets caused by the application of the proceeds of additional Debt.

          Section 5. Waiver of Certain Covenants. Section 1014 of the Indenture is deleted in its entirety and replaced with the following:

    Section 1014. Waiver of Certain Covenants. The Company may omit in any particular instance to comply with any term, provision or condition set forth in Sections 1004 to 1011, inclusive, and Section 1015 if before or after the time for such compliance the Holders of at least a majority in principal amount of all outstanding Securities thereby affected, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.

          Section 6. Counterparts. This Third Supplemental Indenture may be executed in counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

          Section 7. Governing Law. THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).

          Section 8. Concerning the Trustee. The Trustee shall not be responsible for any recital herein (other than the third recital as it appears as it applies to the Trustee)

-2-


 

as such recitals shall be taken as statements of the Company, or the validity of the execution by the Company of this Third Supplemental Indenture.

-3-


 

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

             
Attest:   DEVELOPERS DIVERSIFIED REALTY CORPORATION
             
             
/s/ Joan V. Allgood   By:  /s/ David M. Jacobstein

     
Title: Secretary       Name:   David M. Jacobstein
           
        Title:   President and Chief Operating Officer
           
             
             
Attest:   NATIONAL CITY BANK, as Trustee
             
             
/s/ Holly Patterson   By:     /s/ James Schultz

     
Title: Vice President       Name:  James Schultz
           
        Title:  Vice President    
           

-4-


 

                 
STATE OF OHIO  

)
       
   

)
  SS:    
COUNTY OF CUYAHOGA  

)
       

     On the    day of January, 2004, before me personally came David M. Jacobstein, to me known, who, being by me duly sworn, did depose and say that he resides at Beachwood, Ohio, that he is the President of DEVELOPERS DIVERSIFIED REALTY CORPORATION, one of the corporations described in and which executed the foregoing instrument and that he signed his name thereto by authority of the Board of Directors of said corporation.

     
[Notarial Seal]    /s/
   
    Notary Public
    COMMISSION EXPIRES
                 
STATE OF OHIO  

)
       
   

)
  SS:    
COUNTY OF CUYAHOGA  

)
       

     On the    day of January, 2004, before me personally came James Schultz, to me known, who, being by me duly sworn, did depose and say that he resides at Lakewood, Ohio, that he is the Vice President of NATIONAL CITY BANK, one of the corporations described in and which executed the foregoing instrument and that he signed his name thereto by authority of the Board of Directors of said corporation.

[Notarial Seal]

     
    [illegible]
    Notary Public
    COMMISSION EXPIRES

-5-

Exhibit 4.5

FOURTH SUPPLEMENTAL INDENTURE

THIS FOURTH SUPPLEMENTAL INDENTURE is entered into as of April 22, 2004, by and between Developers Diversified Realty Corporation, an Ohio corporation (the "Company"), and National City Bank, a national banking association organized and existing under the laws of the United States, as trustee (the "Trustee").

WHEREAS, the parties entered into the Indenture dated as of May 1, 1994 (as supplemented by a First Supplemental Indenture dated as of May 10, 1995, by a Second Supplemental Indenture dated July 18, 2003, and by a Third Supplemental Indenture dated January 23, 2004, the "Indenture"), relating to the Company's senior debt securities;

WHEREAS, the Company has made a request to the Trustee that the Trustee join with it, in accordance with Section 901 of the Indenture, in the execution of this Fourth Supplemental Indenture to include the Company's $250,000,000 principal amount 5.25% Notes Due 2011 in the definition of Designated Securities such that the covenant in Section 1015 of the Indenture will inure to their benefit;

WHEREAS, the Company and the Trustee are authorized to enter into this Fourth Supplemental Indenture; and

NOW, THEREFORE, the Company and the Trustee agree as follows:

Section 1. Relation to Indenture. This Fourth Supplemental Indenture supplements the Indenture and shall be a part and subject to all the terms thereof. Except as supplemented hereby, the Indenture and the Securities issued thereunder shall continue in full force and effect.

Section 2. Capitalized Terms. Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

"Designated Securities" means the Company's $300,000,000 principal amount of 4.625% Notes Due 2010, the Company's $275,000,000 principal amount of 3.875% Notes Due 2009, and the Company's $250,000,000 principal amount of 5.25% Notes Due 2011.

Section 3. Counterparts. This Fourth Supplemental Indenture may be executed in counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

Section 4. Governing Law. THIS FOURTH SUPPLEMENTAL
INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).

Section 5. Concerning the Trustee. The Trustee shall not be responsible for any recital herein (other than the third recital as it appears as it applies to the Trustee)


as such recitals shall be taken as statements of the Company, or the validity of the execution by the Company of this Fourth Supplemental Indenture. The Trustee makes no representations as to the validity or sufficiency of this Fourth Supplemental Indenture.

-2-

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

Attest: DEVELOPERS DIVERSIFIED REALTY

CORPORATION

  /s/  Joan U. Allgood
----------------------
Name:  Joan U. Allgood               By: /s/ David M Jacobstein
Title:  Secretary                        --------------------------------------
                                         Name:  David M. Jacobstein
                                         Title: President and Chief Operating
                                                Officer


Attest:                              NATIONAL CITY BANK, as Trustee



/s/ Holly Patterson                  By: /s/ James Schultz
----------------------                   --------------------------------------
Title:  Vice President                 Name:  James Schultz
                                       Title: Vice President

-3-

STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )

On the 22nd day of April, 2004, before me personally came David M. Jacobstein, to me known, who, being by me duly sworn, did depose and say that he resides at Beachwood, Ohio, that he is the President of DEVELOPERS DIVERSIFIED REALTY CORPORATION, one of the corporations described in and which executed the foregoing instrument and that he signed his name thereto by authority of the Board of Directors of said corporation.

[Notarial Seal]

/s/ Catherine B. Kletecka
--------------------------------------
Notary Public
COMMISSION EXPIRES

STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )

On the 22nd day of April, 2004, before me personally came, to me known, who, being by me duly sworn, did depose and say that he resides at Lakewood, Ohio, that he is the Vice President of NATIONAL CITY BANK, one of the corporations described in and which executed the foregoing instrument and that he signed his name thereto by authority of the Board of Directors of said corporation.

[Notarial Seal]

/s/ Angela D. Deabvearr
--------------------------------------
Notary Public
COMMISSION EXPIRES

SOLICITORS, 35160, 00095, 100545346.1, Exhibit 4.7 Fourth Supplemental Indenture

-4-

Exhibit 4.6

[NOTE: THIS FORM OF NOTE IS TO BE AUTHENTICATED AND DELIVERED UPON THE EXCHANGE
OF 5.25% NOTES DUE 2011 DULY TENDERED PURSUANT TO THE EXCHANGE OFFER TO BE CONSUMMATED PURSUANT TO A REGISTRATION RIGHTS AGREEMENT, DATED AS OF APRIL 22, 2004, AMONG THE COMPANY AND THE INITIAL PURCHASERS REFERRED TO THEREIN.]

REGISTERED                                                            REGISTERED

NO.                                                             PRINCIPAL AMOUNT

CUSIP NO.  251591 ___                                               $250,000,000

[FACE OF NOTE]

DEVELOPERS DIVERSIFIED REALTY CORPORATION

5.25% Notes Due 2011

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO DEVELOPERS DIVERSIFIED REALTY CORPORATION (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.

DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (herein referred to as the "Company", which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to CEDE & CO., c/o The Depository Trust Company, 55 Water Street, New York, New York 10041, or registered assigns, the principal sum of TWO HUNDRED FIFTY MILLION Dollars ($250,000,000) on April 15, 2011 (the "Stated Maturity Date"), unless redeemed prior to such date in accordance with the provisions referred to on the reverse hereof (the Stated Maturity Date or date of earlier redemption, as the case may be, is referred to herein as the "Maturity Date" with respect to the principal payable on such date), and to pay interest thereon from April 22,


2004 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on April 15 and October 15 of each year commencing October 15, 2004 (each, an "Interest Payment Date"), and on the Maturity Date, at a rate of 5.25% per annum, until the principal hereof is paid or duly provided for.

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date and on the Maturity Date will, as provided in such Indenture, be paid to the Holder in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be fifteen calendar days (whether or not a Business Day, as defined below) next preceding such Interest Payment Date or the Maturity Date, as the case may be (each, a "Regular Record Date"). Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Holder in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee referred to on the reverse hereof, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture.

The principal of this Note payable on the Maturity Date will be paid against presentation and surrender of this Note at either of the offices or agencies of the Company maintained for that purpose in the Borough of Manhattan, The City of New York and Cleveland, Ohio. The Company hereby appoints National City Bank as Paying Agent for the Notes where Notes of the series may be presented and surrendered for payment and where notices, designations or requests in respect of payments with respect to the Notes may be served.

Interest payable on this Note on any Interest Payment Date and on the Maturity Date, as the case may be, will include interest accrued from and including the next preceding Interest Payment Date in respect of which interest has been paid or duly provided for (or from and including April 22, 2004, if no interest has been paid on this Note) to but excluding such Interest Payment Date or the Maturity Date, as the case may be. If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, as defined below, principal, premium, if any, and/or interest payable with respect to such Interest Payment Date or Maturity Date, as the case may be, will be paid on the next succeeding Business Day with the same force and effect as if it were paid on the date such payment was due, and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date or Maturity Date, as the case may be. "Business Day" means any day, other than a Saturday or Sunday, on which banks in the Borough of Manhattan, the City of New York, are not required or authorized by law or executive order to close.

All payments of principal, premium, if any, and interest by the Company in respect of this Note will be made by wire transfer of immediately available funds.

2

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature of one of its authorized signatories, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

3

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:

DEVELOPERS DIVERSIFIED
REALTY CORPORATION

By:

Name:


Title:

Attest:


Name:
Title:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

Dated:

NATIONAL CITY BANK, as
Trustee

By:
Authorized Officer

4

[Reverse of Note]

DEVELOPERS DIVERSIFIED REALTY CORPORATION

5.25% Notes Due 2011

This Note is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of May 1, 1994, as supplemented by the First Supplemental Indenture dated as of May 10, 1995, the Second Supplemental Indenture dated as of July 18, 2003, the Third Supplemental Indenture dated as of January 23, 2004 and the Fourth Supplemental Indenture dated as of April 22, 2004 (herein called the "Indenture"), between the Company and National City Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture with respect to the series of which this Note is a part), to which the Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Note is one of the duly authorized series of Securities designated as "5.25% Notes Due 2011" (collectively, the "Notes"), and the aggregate principal amount of the Notes to be issued under such series is limited to $250,000,000 (except for Notes authenticated and delivered upon transfer of, or in exchange for, or in lieu of other Notes). All terms used but not defined in this Note shall have the meanings assigned to such terms in the Indenture.

If an Event of Default shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

This Note may be redeemed at the option of the Company, at any time in whole or from time to time in part, at a Redemption Price equal to the greater of (1) 100% of the principal amount of the Notes being redeemed, or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed (not including the portion of any payments of interest accrued to the Redemption Date) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 25 basis points, plus, in each case, any interest accrued but not paid to the Redemption Date. For the avoidance of doubt, any calculation of the remaining scheduled payments of principal and interest pursuant to clause (2) of the preceding sentence shall not include interest accrued as of the applicable Redemption Date.

"Treasury Rate" means, with respect to any Redemption Date for the Notes, (i) the yield under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which established yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Maturity Date, yields for the two published maturities most closely corresponding to the


Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated by the Independent Investment Banker on the third Business Day preceding the Redemption Date.

"Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

"Independent Investment Banker" means one of the Reference Treasury Dealers that has been appointed by the Company.

"Comparable Treasury Price" means with respect to any Redemption Date for the Notes (i) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

"Reference Treasury Dealer" means each of Banc of America Securities LLC and J.P. Morgan Securities Inc. and the respective successors and any two of ABN AMRO Incorporated, Deutsche Bank Securities Inc., ING Financial Markets LLC, Piper Jaffray & Co., Wachovia Capital Markets, LLC and Wells Fargo Brokerage Services, LLC and their respective successors (each, a "Primary Treasury Dealer") provided, however, that if any of the foregoing shall cease to be a Primary Treasury Dealer, the Company shall substitute in its place another Primary Treasury Dealer.

"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such Redemption Date.

Notice of any redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the Redemption Date to each Holder of Notes to be redeemed. If the Company redeems less than all of the Notes, the Trustee will select the particular Notes to be redeemed pro rata, by lot or by another method the Trustee deems fair and appropriate.

This Note is not subject to any sinking fund.

The Indenture contains provisions for defeasance of (i) the entire indebtedness of the Notes or (ii) certain covenants and Events of Default with respect to the Notes, in each case upon compliance with certain conditions set forth therein, which provisions apply to the Notes.


The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of all Securities issued under the Indenture at the time Outstanding and affected thereby. The Indenture also contains provisions permitting the Holders of not less than a majority of the aggregate principal amount of the Outstanding Securities, on behalf of the Holders of all such Securities, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the Holders of not less than a majority of the aggregate principal amount of the Outstanding Securities of any series, in certain instances, to waive, on behalf of all of the Holders of Securities of such series, certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and other Notes issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein and herein set forth, the transfer of this Note is registrable in the Security Register of the Company upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of, premium, if any, and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or by his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

As provided in the Indenture and subject to certain limitations therein and herein set forth, this Note is exchangeable for a like aggregate principal amount of Notes of different authorized denominations but otherwise having the same terms and conditions, as requested by the Holder hereof surrendering the same.

The Notes are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue,


and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of Ohio applicable to agreements made and to be performed entirely in such State.


ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations.

TEN COM     -     as tenants in common
TEN ENT     -     as tenants by the entireties
JT TEN      -     as joint tenants with right of survivorship
                  and not as tenants in common

UNIF GIFT MIN ACT _____________ Custodian _____________

(cust) (Minor)

under Uniform Gifts to Minors Act
(State)

Additional abbreviations may also be used
though not in the above list

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)

and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE





(Please print or typewrite Name and Address including Postal Zip Code of Assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints



to transfer said Note on the books of the Company, with full power of substitution in the premises.

Dated: Signature Guaranteed

------------------------------------        ------------------------------------
NOTICE: Signature must be guaranteed        NOTICE: The signature to this
by a member firm of the New York            assignment must correspond with the
Stock Exchange or a commercial bank         name as  written  upon the face of
or trust company.                           the within Note in every particular,
                                            without alteration or enlargement or
                                            any change whatever.


EXHIBIT 4.7

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of April 22, 2004 among Developers Diversified Realty Corporation, an Ohio corporation (the "Company"), and Banc of America Securities LLC and J.P. Morgan Securities Inc. and the other parties referred to in Annex A hereto (each, an "Initial Purchaser" and collectively, the "Initial Purchasers").

This Agreement is made pursuant to the Purchase Agreement dated April 15, 2004 by and among the Company and the Initial Purchasers (the "Purchase Agreement"), which provides for the sale by the Company to the Initial Purchasers of $250,000,000 aggregate principal amount of the Company's 5.25% Notes due 2011 (the "Securities"). In order to induce the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the Initial Purchasers' obligations thereunder, the Company has agreed to provide to the Initial Purchasers and their respective direct and indirect transferees and assigns the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement.

In consideration of the foregoing, the parties hereto agree as follows:

1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings:

"1933 Act" shall mean the Securities Act of 1933, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.

"1934 Act" shall mean the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.

"Additional Interest" shall have the meaning set forth in
Section 2(e) hereof.

"Banc of America" shall mean Banc of America Securities LLC and its successors.

"Closing Time" shall mean April 22, 2004.

"Depositary" shall mean The Depository Trust Company, or any other depositary appointed by the Company, including any agent thereof; provided, however, that any such depositary must at all times have an address in the Borough of Manhattan, The City of New York.

"Event Date" shall have the meaning set forth in Section 2(e).

"Exchange Offer" shall mean the exchange offer by the Company of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof.

"Exchange Offer Registration" shall mean a registration under the 1933 Act effected pursuant to Section 2(a) hereof.


"Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) covering the Registrable Securities, and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated or deemed to be incorporated by reference therein.

"Exchange Securities" shall mean the 5.25% Notes due 2011, issued by the Company under the Indenture containing terms identical to the Securities (except that (i) interest thereon shall accrue, from the last date to which interest has been paid or duly provided for on the Securities or, if no such interest has been paid or duly provided for, from the Interest Accrual Date, (ii) provisions relating to an increase in the stated rate of interest thereon upon the occurrence of a Registration Default shall be eliminated, and (iii) the transfer restrictions and legends relating to restrictions on ownership and transfer thereof as a result of the issuance of the Securities without registration under the 1933 Act shall be eliminated) to be offered to Holders of Registrable Securities in exchange for Registrable Securities pursuant to the Exchange Offer.

"Holders" shall mean (i) the Initial Purchasers, for so long as they own any Registrable Securities, and each of their respective successors, assigns and direct and indirect transferees who become registered owners of Registrable Securities under the Indenture and
(ii) each Participating Broker-Dealer that holds Exchange Securities for so long as such Participating Broker-Dealer is required to deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities.

"Indenture" shall mean the Indenture dated as of May 1, 1994 between the Company and National City Bank, as Trustee, as supplemented by the First Supplemental Indenture, dated as of May 10, 1995, between the Company and the Trustee, the Second Supplemental Indenture, dated as of July 18, 2003, the Third Supplemental Indenture, dated as of January 23, 2004 and the Fourth Supplemental Indenture dated as of April 22, 2004, between the Company and the Trustee, as the same may be further amended or supplemented from time to time in accordance with the terms thereof.

"Interest Accrual Date" means April 22, 2004.

"Initial Purchasers" shall have the meaning set forth in the preamble of this Agreement.

"Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of Registrable Securities outstanding, excluding Exchange Securities referred to in clause (ii) of the definition of "Holders" above; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities or Exchange Securities is required hereunder, Registrable Securities and Exchange Securities held by the Company or any of its affiliates (as such term is defined in Rule 405 under the 1933 Act) shall also be disregarded in determining whether such consent or approval was given by the Holders of such required percentage.

2

"NASD" shall mean the National Association of Securities Dealers, Inc.

"Notifying Broker-Dealer" shall have the meaning set forth in
Section 3(f).

"Participating Broker-Dealer" shall have the meaning set forth in Section 3(f).

"Person" shall mean an individual, partnership, joint venture, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof.

"Private Exchange Securities" shall have the meaning set forth in Section 2(a) hereof.

"Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated or deemed to be incorporated by reference therein.

"Purchase Agreement" shall have the meaning set forth in the preamble to this Agreement.

"Registrable Securities" shall mean the Securities; provided, however, that any Securities shall cease to be Registrable Securities when (i) a Registration Statement with respect to such Securities shall have been declared effective under the 1933 Act and such Securities shall have been disposed of pursuant to such Registration Statement,
(ii) such Securities shall have been sold to the public pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A) under the 1933 Act, (iii) such Securities shall have ceased to be outstanding, (iv) the Exchange Offer Registration Statement has been declared effective covering the exchange of all Securities for Exchange Securities and the Exchange Offer has been consummated unless, in the case of any Exchange Securities, such Exchange Securities are held by Participating Broker-Dealers or otherwise are not freely tradable without any limitations or restrictions under the 1933 Act (in which case such Exchange Securities will be deemed to be Registrable Securities until such time as such Exchange Securities are sold to a purchaser in whose hands such Exchange Securities are freely tradeable without any limitations or restrictions under the 1933 Act) or (v) such Securities have been exchanged for Private Exchange Securities pursuant to this Agreement (in which case such Private Exchange Securities will be deemed to be Registrable Securities until such time as such Private Exchange Securities are sold to a purchaser in whose hands such Private Exchange Securities are freely tradeable without any limitations or restrictions under the 1933 Act).

"Registration Default" shall have the meaning set forth in
Section 2(e).

"Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company with this Agreement, including without limitation: (i)

3

all SEC, stock exchange or NASD registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state or other securities or blue sky laws or real estate syndication laws and compliance with the rules of the NASD (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with qualification of any of the Exchange Securities or Registrable Securities under state or other securities or blue sky laws or real estate syndication laws and any filing with and review by the NASD),
(iii) all expenses of any Persons in preparing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements, certificates representing the Securities, Private Exchange Securities, if any, or Exchange Securities and other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and expenses incurred in connection with the listing, if any, of any of the Securities, Private Exchange Securities (if any) or Exchange Securities on any securities exchange or exchanges or on any quotation system, (vi) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vii) the fees and disbursements of counsel for the Company and the fees and expenses of independent public accountants for the Company or for any other Person, business or assets whose financial statements are included in any Registration Statement or Prospectus, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, (viii) the fees and expenses of a "qualified independent underwriter" as defined by Conduct Rule 2720 of the NASD (if required by the NASD rules) and the fees and disbursements of its counsel, (ix) the fees and expenses of the Trustee, any registrar, any depositary, any paying agent, any escrow agent or any custodian, in each case including fees and disbursements of their respective counsel, (x) the reasonable fees and expenses of the Initial Purchasers in connection with the Exchange Offer, including the reasonable fees and expenses of counsel to the Initial Purchasers in connection therewith, (xi) the reasonable fees and disbursements, if any, of special counsel representing the Holders of Registrable Securities and (xii) in the case of an underwritten offering, any fees and disbursements of the underwriters customarily paid by issuers or sellers of securities and the fees and expenses of any special experts retained by the Company in connection with any Registration Statement but excluding (except as otherwise provided herein) fees of counsel to the underwriters or the Holders and underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder.

"Registration Statement" shall mean any registration statement of the Company relating to any offering of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement (including, without limitation, any Exchange Offer Registration Statement and any Shelf Registration Statement), and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated or deemed to be incorporated by reference therein.

"SEC" shall mean the Securities and Exchange Commission or any successor thereto.

4

"Securities" shall have the meaning set forth in the preamble to this Agreement.

"Shelf Registration" shall mean a registration effected pursuant to Section 2(b) hereof.

"Shelf Registration Statement" shall mean a "shelf registration statement of the Company pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the Registrable Securities or Private Exchange Securities (if any), as the case may be, on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated or deemed to be incorporated by reference therein.

"TIA" shall mean the Trust Indenture Act of 1939, as amended from time to time, and the rules and regulations of the SEC promulgated thereunder.

"Trustee" shall mean the trustee with respect to the Securities, the Private Exchange Securities (if any) and the Exchange Securities under the Indenture.

For purposes of this Agreement, (i) all references in this Agreement to any Registration Statement, preliminary prospectus or Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the SEC pursuant to its Electronic Data Gathering, Analysis and Retrieval system; (ii) all references in this Agreement to financial statements and schedules and other information which is "contained", "included" or "stated" in any Registration Statement, preliminary prospectus or Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated or deemed to be incorporated by reference in such Registration Statement, preliminary prospectus or Prospectus, as the case may be; (iii) all references in this Agreement to amendments or supplements to any Registration Statement, preliminary prospectus or Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated or deemed to be incorporated by reference in such Registration Statement, preliminary prospectus or Prospectus, as the case may be; (iv) all references in this Agreement to Rule 144, Rule 144A or Rule 405 under the 1933 Act, and all references to any sections or subsections thereof or terms defined therein, shall in each case include any successor provisions thereto; and (v) all references in this Agreement to days (but not to business days) shall mean calendar days.

2. Registration Under the 1933 Act.

(a) Exchange Offer Registration. The Company shall use its reasonable best efforts to (A) file with the SEC on or prior to the 90th day after the Closing Time an Exchange Offer Registration Statement covering the offer by the Company to the Holders to exchange all of the Registrable Securities for a like aggregate principal amount of Exchange Securities, (B) cause such Exchange Offer Registration Statement to be declared effective by the SEC no later than the 180th day after the Closing Time, (C) cause such Registration Statement to remain effective until the closing of the Exchange Offer and (D) consummate the Exchange Offer no later than 30 days

5

after the effective date of the Exchange Offer Registration Statement. Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall as promptly as practicable commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Registrable Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of Rule 405 under the 1933 Act, acquires the Exchange Securities in the ordinary course of such Holder's business and has no arrangements or understandings with any Person to participate in the Exchange Offer for the purpose of distributing such Exchange Securities) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the 1933 Act or under the securities or blue sky laws or real estate syndication laws of the states of the United States.

In connection with the Exchange Offer, the Company shall:

(i) as promptly as practicable mail or cause to be mailed to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

(ii) keep the Exchange Offer open for not less than 20 business days (or longer if required by applicable law) after the date notice thereof is mailed to the Holders and, during the Exchange Offer, offer to all Holders who are legally eligible to participate in the Exchange Offer the opportunity to exchange their Registrable Securities for Exchange Securities;

(iii) use the services of a depositary with an address in the Borough of Manhattan, The City of New York for the Exchange Offer;

(iv) permit Holders to withdraw tendered Registrable Securities at any time prior to the close of business, New York City time, on the last business day on which the Exchange Offer shall remain open, by sending to the institution specified in the Prospectus or the related letter of transmittal or related documents a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange, and a statement that such Holder is withdrawing its election to have such Securities exchanged;

(v) notify each Holder that any Registrable Security not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement (except in the case of the Initial Purchasers and Participating Broker-Dealers as provided herein); and

(vi) otherwise comply in all material respects with all applicable laws relating to the Exchange Offer.

If, at or prior to the consummation of the Exchange Offer, any of the Initial Purchasers holds any Securities acquired by it and having the status of an unsold allotment in the initial distribution, the Company shall, upon the request of any such Initial Purchaser, simultaneously with the delivery of the Exchange Securities in the Exchange Offer, issue and deliver to such Initial Purchaser in exchange for such Securities a like principal amount of debt securities of the

6

Company that are identical (except that such debt securities shall be subject to transfer restrictions and shall bear a legend relating to restrictions on ownership and transfer identical to those applicable to the Securities as a result of the issuance thereof without registration under the 1933 Act and shall provide for the payment of Additional Interest) to the Exchange Securities (the "Private Exchange Securities"). The Company shall use its reasonable best efforts to have the Private Exchange Securities bear the same CUSIP number as the Exchange Securities and, if unable to do so, the Company will, at such time as any Private Exchange Security ceases to be a "restricted security" within the meaning of Rule 144 under the 1933 Act, permit any such Private Exchange Security to be exchanged for a like principal amount of Exchange Securities. The Company shall not have any liability under this Agreement solely as a result of any such Private Exchange Securities not bearing the same CUSIP number as the Exchange Securities.

The Exchange Securities and the Private Exchange Securities (if any) shall be issued under the Indenture, which shall be qualified under the TIA. The Indenture shall provide that the Exchange Securities, the Private Exchange Securities (if any) and the Securities shall vote and consent together on all matters as a single class and shall constitute a single series of debt securities issued under the Indenture.

As soon as practicable after the close of the Exchange Offer, the Company shall:

(i) accept for exchange all Registrable Securities duly tendered and not validly withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer Registration Statement and the letter of transmittal which is an exhibit thereto;

(ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities so accepted for exchange by the Company; and

(iii) cause the Trustee promptly to authenticate and deliver Exchange Securities to each Holder of Registrable Securities so accepted for exchange equal in principal amount to the principal amount of the Registrable Securities of such Holder so accepted for exchange.

Interest on each Exchange Security and such Private Exchange Security (if any) will accrue from the last date on which interest was paid or duly provided for on the Securities surrendered in exchange therefor or, if no interest has been paid or duly provided for on such Securities, from the Interest Accrual Date. The Exchange Offer shall not be subject to any conditions, other than (i) that the Exchange Offer, or the making of any exchange by a Holder, does not violate any applicable law or any applicable interpretation of the staff of the SEC, (ii) that no action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in the Company's judgment, would reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer, and (iii) that the Holders tender the Registrable Securities to the Company in accordance with the Exchange Offer. Each Holder of Registrable Securities (other than Participating Broker-Dealers) who wishes to exchange such Registrable Securities for Exchange Securities in the Exchange Offer will be required to represent that (i) it is not an affiliate (as defined in Rule 405 under the 1933 Act) of the Company, (ii) any Exchange Securities to be

7

received by it will be acquired in the ordinary course of business and (iii) it has no arrangement with any Person to participate in the distribution (within the meaning of the 1933 Act) of the Exchange Securities, and shall be required to make such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4 or another appropriate form under the 1933 Act available. To the extent permitted by law, the Company shall inform the Initial Purchasers of the names and addresses of the Holders of Securities to whom the Exchange Offer is made and, to the extent such information is available to the Company, the names and addresses of the beneficial owners of such Securities, and the Initial Purchasers shall have the right to contact such Holders and beneficial owners and otherwise facilitate the tender of Registrable Securities in the Exchange Offer.

(b) Shelf Registration. (i) If, because of any change in law or applicable interpretations thereof by the staff of the SEC, the Company is not permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof, or (ii) if for any other reason (A) the Exchange Offer Registration Statement is not declared effective within 180 days following the Closing Time or (B) the Exchange Offer is not consummated within 30 days after effectiveness of the Exchange Offer Registration Statement (provided that if the Exchange Offer Registration Statement shall be declared effective after such 180-day period or if the Exchange Offer shall be consummated after such 30-day period, then the Company's obligations under this clause (ii) arising from the failure of the Exchange Offer Registration Statement to be declared effective within such 180-day period or the failure of the Exchange Offer to be consummated within such 30-day period, respectively, shall terminate), or (iii) if any Holder (other than an Initial Purchaser holding Securities acquired directly from the Company) is not eligible to participate in the Exchange Offer or elects to participate in the Exchange Offer (and validly tenders and does not withdraw its Securities prior to the expiration of the Exchange Offer) but does not receive Exchange Securities which are freely tradeable without any limitations or restrictions under the 1933 Act or (iv) upon the request of any of the Initial Purchasers within 90 days following the consummation of the Exchange Offer (provided that, in the case of this clause (iv), such Initial Purchaser shall hold Registrable Securities (including, without limitation, Private Exchange Securities) that it acquired directly from the Company), the Company shall, at its cost:

(A) as promptly as practicable, but no later than (a) the 180th day after the Closing Time or (b) the 60th day after any such filing obligation arises, whichever is later, file with the SEC a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time in accordance with the methods of distribution elected by the Majority Holders of such Registrable Securities and set forth in such Shelf Registration Statement;

(B) use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective by the SEC as promptly as practicable, but in no event later than the 210th day after the Closing Time (or, in the case of a request by any of the Initial Purchasers pursuant to clause (iv) above, within 60 days after such request). In the event that the Company is required to file a Shelf Registration Statement pursuant to clause (iii) or (iv) above, the Company shall file and use its reasonable best efforts to have declared effective by the SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration

8

Statement) with respect to offers and sales of Registrable Securities held by such Holder or such Initial Purchaser, as applicable;

(C)use its reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required, in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years after the latest date on which any Securities are originally issued by the Company (subject to extension pursuant to the last paragraph of Section 3) or, if earlier, when all of the Registrable Securities covered by such Shelf Registration Statement (i) have been sold pursuant to the Shelf Registration Statement in accordance with the intended method of distribution thereunder, (ii) become eligible for resale pursuant to Rule 144(k) under the 1933 Act or (iii) cease to be Registrable Securities; and

(D) notwithstanding any other provisions hereof, use its reasonable best efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming a part thereof and any supplements thereto comply in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement and any amendment or supplement to such Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

The Company shall not permit any securities other than Registrable Securities to be included in the Shelf Registration Statement without the prior written consent of Banc of America. The Company further agrees, if necessary, to supplement or amend the Shelf Registration Statement if required by Section 3(b) below, to use its reasonable best efforts to cause any such amendment to become effective and such Shelf Registration Statement to become usable as soon as practicable thereafter and to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC.

(c) Expenses. The Company shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) and 2(b) and, in the case of any Shelf Registration Statement, will reimburse the Holders or the Initial Purchasers for the reasonable fees and disbursements of one counsel (in addition to any local counsel) designated in writing by the Majority Holders
(or, if a Shelf Registration Statement is filed solely pursuant to clause (iv) of the first paragraph of Section 2(b), designated by the Initial Purchasers) to act as counsel for the Holders of the Registrable Securities in connection therewith. Each Holder shall pay all fees and disbursements of its counsel other than as set forth in the preceding sentence or in the definition of Registration Expenses and all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Securities pursuant to a Shelf Registration Statement.

9

(d) Effective Registration Statement.

(i) The Company shall be deemed not to have used its reasonable best efforts to cause the Exchange Offer Registration Statement or any Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite periods set forth herein if the Company voluntarily takes any action that could reasonably be expected to result in any such Registration Statement not being declared effective or remaining effective or in the Holders of Registrable Securities (including, under the circumstances contemplated by Section 3(f) hereof, Exchange Securities) covered thereby not being able to exchange or offer and sell such Registrable Securities during that period unless (A) such action is required by applicable law or (B) such action is taken by the Company in good faith and for valid business reasons (but not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of assets or a material corporate transaction or event so long as the Company promptly complies with the notification requirements of Section 3(k) hereof, if applicable. Nothing in this paragraph shall prevent the accrual of Additional Interest on any Securities or Exchange Securities.

(ii) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof shall not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Securities pursuant to a Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement shall be deemed not to have been effective during the period of such interference until the offering of Registrable Securities pursuant to such Registration Statement may legally resume.

(e) Increase in Interest Rate. In the event that:

(i) the Exchange Offer Registration Statement is not filed with the SEC on or prior to the 90th day following the Closing Time, or

(ii) the Exchange Offer Registration Statement is not declared effective by the SEC on or prior to the 180th day following the Closing Time, or

(iii) the Exchange Offer is not consummated on or prior to the 30th day following the effective date of the Exchange Offer Registration Statement, or

(iv) if required, a Shelf Registration Statement is not filed with the SEC on or prior to (A) the 180th day following the Closing Time or (B) the 60th day after the filing obligation arises, whichever is later, or

(v) if required, a Shelf Registration Statement is not declared effective on or prior to the 210th day following the Closing Time (or, if a Shelf Registration Statement is required to be filed upon the request of any Initial Purchaser, within 60 days after such filing), or

10

(vi) a Shelf Registration Statement is declared effective by the SEC but such Shelf Registration Statement ceases to be effective or such Shelf Registration Statement or the Prospectus included therein ceases to be usable in connection with resales of Registrable Securities for any reason and the aggregate number of days in any consecutive 365-day period for which the Shelf Registration Statement or such Prospectus shall not be effective or usable exceeds 45 days, or

(vii) the Exchange Offer Registration Statement is declared effective by the SEC but, if the Exchange Offer Registration Statement is being used in connection with the resale of Exchange Securities as contemplated by Section 3(f)(B) of this Agreement, the Exchange Offer Registration Statement ceases to be effective or the Exchange Offer Registration Statement or the Prospectus included therein ceases to be usable in connection with resales of Exchange Securities for any reason during the 180-day period referred to in Section 3(f)(B) of this Agreement (as such period may be extended pursuant to the last paragraph of Section 3 of this Agreement),

(each of the events referred to in clauses (i) through (vii) above being hereinafter called a "Registration Default"), the per annum interest rate borne by the Registrable Securities shall be increased ("Additional Interest") by one-quarter of one percent (0.25%) per annum immediately following such 90-day period in the case of clause (i) above, immediately following such 180-day period in the case of clause (ii) above, immediately following such 30-day period in the case of clause (iii) above, immediately following any such 180-day period or 60-day period, whichever ends later, in the case of clause (iv) above, immediately following any such 210-day period or 60-day period, whichever ends first, in the case of clause (v) above, immediately following the 45th day in any consecutive 365-day period that a Shelf Registration Statement shall not be effective or a Shelf Registration Statement or the Prospectus included therein shall not be usable as contemplated by clause (vi) above, or immediately following the day that the Exchange Offer Registration Statement shall not be effective or the Exchange Offer Registration Statement or the Prospectus included therein shall not be usable as contemplated by clause (vii) above, which rate will be increased by an additional one-quarter of one percent (0.25%) per annum immediately following each 90-day period that any Additional Interest continues to accrue under any circumstances; provided that the aggregate increase in such annual interest rate may in no event exceed one-half of one percent (0.50%) per annum. Upon the filing of the Exchange Offer Registration Statement after the 90-day period described in clause (i) above, the effectiveness of the Exchange Offer Registration Statement after the 180-day period described in clause (ii) above, the consummation of the Exchange Offer after the 30-day period described in clause (iii) above, the filing of the Shelf Registration Statement after the 180-day period or 60-day period, as the case may be, described in clause (iv) above, the effectiveness of a Shelf Registration Statement after the 210-day period or 60-day period, as the case may be, described in clause (v) above, or the Shelf Registration Statement once again being effective or the Shelf Registration Statement and the Prospectus included therein becoming usable in connection with resales of Registrable Securities, as the case may be, in the case of clause (vi) above, or the Exchange Offer Registration Statement once again becoming effective or the Exchange Offer Registration Statement and the Prospectus included therein becoming usable in connection with resales of Exchange Securities, as the case may be, in the case of clause (vii) thereof, the interest rate borne by the Securities from the date of such filing, effectiveness, consummation or resumption of effectiveness or usability, as the case may be, shall be reduced to the original

11

interest rate so long as no other Registration Default shall have occurred and shall be continuing at such time and the Company is otherwise in compliance with this paragraph; provided, however, that, if after any such reduction in interest rate, one or more Registration Defaults shall again occur, the interest rate shall again be increased pursuant to the foregoing provisions.

The Company shall notify the Trustee within three business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). Additional Interest shall be paid by depositing with the Trustee, in trust, for the benefit of the Holders of Registrable Securities, on or before the applicable semi-annual interest payment date, immediately available funds in sums sufficient to pay the Additional Interest then due. The Additional Interest due shall be payable on each interest payment date to the record Holder of Securities entitled to receive the interest payment to be paid on such date as set forth in the Indenture. Each obligation to pay Additional Interest shall be deemed to accrue from and including the day following the applicable Event Date.

Anything herein to the contrary notwithstanding, any Holder who was, at the time the Exchange Offer was pending and consummated, eligible to exchange, and did not validly tender, or withdrew, its Securities for Exchange Securities in the Exchange Offer will not be entitled to receive any Additional Interest. For purposes of clarity, it is hereby acknowledged and agreed that, under current interpretations of law by the SEC, Initial Purchasers holding unsold allotments of Securities acquired from the Company are not eligible to participate in the Exchange Offer.

(f) Specific Enforcement. Without limiting the remedies available to the Initial Purchasers and the Holders, the Company acknowledges that any failure by the Company to comply with its obligations under Sections 2(a) through 2(d) hereof may result in material irreparable injury to the Initial Purchasers, the Holders or the Participating Broker-Dealers for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers, any Holder and any Participating Broker-Dealer may obtain such relief as may be required to specifically enforce the Company's obligations under Sections 2(a) through 2(d) hereof.

3. Registration Procedures. In connection with the obligations of the Company with respect to the Registration Statements pursuant to Sections 2(a) and 2(b) hereof, the Company shall:

(a) prepare and file with the SEC a Registration Statement or, if required, Registration Statements, within the time periods specified in
Section 2, on the appropriate form under the 1933 Act, which form (i) shall be selected by the Company, (ii) shall, in the case of a Shelf Registration Statement, be available for the sale of the Registrable Securities by the selling Holders thereof and (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith, and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof;

12

(b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act; and comply with the provisions of the 1933 Act and the 1934 Act with respect to the disposition of all Securities covered by each Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holders thereof;

(c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Securities, at least ten business days prior to filing, that a Shelf Registration Statement with respect to the Registrable Securities is being filed and advising such Holders that the distribution of Registrable Securities will be made in accordance with the method elected by the Majority Holders; (ii) furnish to each Holder of Registrable Securities, to counsel for the Initial Purchasers, to counsel for the Holders and to each underwriter of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder, counsel or underwriter may reasonably request, including financial statements and schedules and, if such Holder, counsel or underwriter so requests, all exhibits (including those incorporated by reference) in order to facilitate the public sale or other disposition of the Registrable Securities; and (iii) subject to the penultimate paragraph of this Section 3, the Company hereby consents to the use of the Prospectus, including each preliminary Prospectus, or any amendment or supplement thereto by each of the Holders and underwriters of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by any Prospectus or any amendment or supplement thereto;

(d) use its reasonable best efforts to register or qualify the Registrable Securities under all applicable state securities or "blue sky" laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement and each underwriter of an underwritten offering of Registrable Securities shall reasonably request, to cooperate with the Holders and the underwriters of any Registrable Securities in connection with any filings required to be made with the NASD, to keep each such registration or qualification effective during the period such Registration Statement is required to be effective and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d) or
(ii) take any action which would subject it to general service of process or taxation in any such jurisdiction if it is not then so subject;

(e) in the case of a Shelf Registration, notify each Holder of Registrable Securities and counsel for such Holders promptly and, if requested by such Holder or counsel, confirm such advice in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto

13

become effective, (ii) of any request by the SEC or any state securities authority for post-effective amendments or supplements to a Registration Statement or Prospectus or for additional information after a Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to such offering cease to be true and correct,
(v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (vi) of the happening of any event or the discovery of any facts during the period a Shelf Registration Statement is effective which is contemplated in Section 2(d)(i)(A) or 2(d)(i)(B) or which makes any statement made in such Shelf Registration Statement or the related Prospectus untrue in any material respect or which constitutes an omission to state a material fact in such Shelf Registration Statement or Prospectus and (vii) of any determination by the Company that a post-effective amendment to a Registration Statement would be appropriate. Without limitation to any other provisions of this Agreement, the Company agrees that this Section 3(e) shall also be applicable, mutatis mutandis, with respect to the Exchange Offer Registration Statement and the Prospectus included therein to the extent that such Prospectus is being used by Participating Broker-Dealers as contemplated by Section 3(f);

(f) (A) in the case of an Exchange Offer, (i) include in the Exchange Offer Registration Statement (x) a "Plan of Distribution" section substantially in the form set forth in Annex B hereto or other such form as is reasonably acceptable to Bane of America covering the use of the Prospectus included in the Exchange Offer Registration Statement by broker-dealers who have exchanged their Registrable Securities for Exchange Securities for the resale of such Exchange Securities and (y) a statement to the effect that any such broker-dealers who wish to use the related Prospectus in connection with the resale of Exchange Securities acquired as a result of market-making or other trading activities will be required to notify the Company to that effect, together with instructions for giving such notice (which instructions shall include a provision for giving such notice by checking a box or making another appropriate notation on the related letter of transmittal) (each such broker-dealer who gives notice to the Company as aforesaid being hereinafter called a "Notifying Broker-Dealer"), (ii) furnish to each Notifying Broker-Dealer who desires to participate in the Exchange Offer, without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such broker-dealer may reasonably request, (iii) include in the Exchange Offer Registration Statement a statement that any broker-dealer who holds Registrable Securities acquired for its own account as a result of market-making activities or other trading activities (a "Participating Broker-Dealer"), and who receives Exchange Securities for Registrable Securities pursuant to the Exchange Offer, may be a statutory underwriter and must deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities, (iv) subject to the penultimate paragraph of this

14

Section 3, the Company hereby consents to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto by any Notifying Broker-Dealer in connection with the sale or transfer of Exchange Securities, and (v) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer the following provision:

"If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable Securities, it represents that the Registrable Securities to be exchanged for Exchange Securities were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities pursuant to the Exchange Offer; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the 1933 Act;"

(B) to the extent any Notifying Broker-Dealer participates in the Exchange Offer, (i) the Company shall use its reasonable best efforts to maintain the effectiveness of the Exchange Offer Registration Statement for a period of 180 days (subject to extension pursuant to the last paragraph of this Section 3) following the last date on which exchanges are accepted pursuant to the Exchange Offer, and (ii) the Company will comply, insofar as relates to the Exchange Offer Registration Statement, the Prospectus included therein and the offering and sale of Exchange Securities pursuant thereto, with its obligations under Section 2(b)(D), the last paragraph of Section 2(b), Section 3(c), 3(d), 3(e), 3(i), 3(j),
3(k), 3(o) and 3(p), and the last two paragraphs of this Section 3 as if all references therein to a Shelf Registration Statement, the Prospectus included therein and the Holders of Registrable Securities referred, mutatis mutandis, to the Exchange Offer Registration Statement, the Prospectus included therein and the applicable Notifying Broker-Dealers and, for purposes of this Section 3(f), all references in any such paragraphs or sections to the "Majority Holders" shall be deemed to mean, solely insofar as relates to this Section 3(f), the Notifying Broker-Dealers who are the Holders of the majority in aggregate principal amount of the Exchange Securities which are Registrable Securities;

(C) the Company shall not be required to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement as would otherwise be contemplated by Section 3(b) or 3(k) hereof, or take any other action as a result of this Section 3(f), for a period exceeding 180 days (subject to extension pursuant to the last paragraph of this Section
3) after the last date on which exchanges are accepted pursuant to the Exchange Offer and Notifying Broker-Dealers shall not be authorized by the Company to, and shall not, deliver such Prospectus after such period in connection with resales contemplated by this Section 3; and

(D) in the case of any Exchange Offer Registration Statement, the Company agrees to deliver to the Initial Purchasers on behalf of the Participating Broker-Dealer upon the effectiveness of the Exchange Offer Registration Statement (i) an opinion of

15

counsel or opinions of counsel reasonably satisfactory to the Initial Purchasers, (ii) officers' certificates substantially in the form customarily delivered in a public offering of debt securities and (iii) a comfort letter or comfort letters in customary form to the extent permitted by Statement on Auditing Standards No. 100 of the American Institute of Certified Public Accountants (or if such a comfort letter is not permitted, an agreed upon procedures letter in customary form) from the Company's independent certified public accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in the Registration Statement) substantially equivalent in scope and coverage as the comfort letter or comfort letters delivered to the Initial Purchasers in connection with the initial sale of the Securities to the Initial Purchasers;

(g) (i) in the case of an Exchange Offer, furnish counsel for the Initial Purchasers and (ii) in the case of a Shelf Registration, furnish counsel for the Holders of Registrable Securities and counsel for any underwriters of Registrable Securities copies of any request by the SEC or any state securities authority for amendments or supplements to a Registration Statement or Prospectus or for additional information;

(h) use its reasonable best effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement as soon as practicable and provide immediate notice to each Holder of the withdrawal of any such order;

(i) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, without charge, at least one conformed copy of each Registration Statement and any post-effective amendments thereto (without documents incorporated or deemed to be incorporated therein by reference or exhibits thereto, unless requested), if such documents are not available via the SEC EDGAR database;

(j) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and cause such Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and in a form eligible for deposit with the Depositary and registered in such names as the selling Holders or the underwriters, if any, may reasonably request in writing at least one business day prior to the closing of any sale of Registrable Securities;

(k) in the case of a Shelf Registration, upon the occurrence of any event or the discovery of any facts as contemplated by Section 3(e)(vi) hereof, use its reasonable best efforts to prepare a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated or deemed to be incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company agrees to notify each Holder to

16

suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and each Holder hereby agrees to suspend use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission. At such time as such public disclosure is otherwise made or the Company determines that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the Company agrees promptly to notify each Holder of such determination and to furnish each Holder such number of copies of the Prospectus, as amended or supplemented, as such Holder may reasonably request;

(l) obtain CUSIP numbers for all Exchange Securities or Registrable Securities, as the case may be, not later than the effective date of a Registration Statement, and provide the Trustee with printed or word-processed certificates for the Exchange Securities or Registrable Securities, as the case may be, in a form eligible for deposit with the Depositary;

(m) (i) cause the Indenture to be qualified under the TIA in connection with the registration of the Exchange Securities or Registrable Securities, as the case may be, (ii) cooperate with the Trustee and the Holders to effect such changes, if any, to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and (iii) execute, and use its best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, if any, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner;

(n) in the case of a Shelf Registration, the holders of a majority in principal amount of the Registrable Securities registered pursuant to such Shelf Registration Statement shall have the right to direct the Company to effect not more than one underwritten registration and, in connection with such underwritten registration, the Company shall enter into agreements (including underwriting agreements or similar agreements) and take all other customary and appropriate actions (including those reasonably requested by the holders of a majority in principal amount of the Registrable Securities being sold) in order to expedite or facilitate the disposition of such Registrable Securities and in such connection, in a manner that is reasonable and customary:

(i) make such representations and warranties to the Holders of such Registrable Securities and the underwriters, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings as may be reasonably requested by such Holders and underwriters;

(ii) obtain opinions of counsel to the Company (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, and the Holders of a majority in principal amount of the Registrable Securities being sold) addressed to each selling Holder and the underwriters, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters;

17

(iii) obtain "cold comfort" letters and updates thereof with respect to such Shelf Registration Statement and the Prospectus included therein, all amendments and supplements thereto and all documents incorporated or deemed to be incorporated by reference therein from the Company's independent certified public accountants and from the independent certified public accountants for any other Person or any business or assets whose financial statements are included or incorporated by reference in the Shelf Registration Statement, each addressed to the underwriters, and use reasonable best efforts to have such letters addressed to the selling Holders of Registrable Securities, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters to underwriters in connection with similar underwritten offerings and such letters to be delivered at the time of the pricing of such underwritten registration with an update to such letter to be delivered at the time of closing of such underwritten registration;

(iv) if an underwriting agreement or other similar agreement is entered into, cause the same to set forth indemnification and contribution provisions and procedures substantially equivalent to the indemnification and contribution provisions and procedures set forth in Section 5 hereof with respect to the underwriters and all other parties to be indemnified pursuant to Section 5 hereof or such other indemnification and contribution as shall be satisfactory to the Company, the applicable underwriters and the Holders of the majority in principal amount of the Registrable Securities being sold; and

(v) deliver such other documents and certificates as may be reasonably requested and as are customarily delivered in similar offerings.

The documents referred to in Sections 3(n)(ii) and 3(n)(v) shall be delivered at the closing under any underwriting or similar agreement as and to the extent required thereunder. In the case of any such underwritten offering, the Company shall provide written notice to the Holders of all Registrable Securities of such underwritten offering at least 30 days prior to the filing of a prospectus supplement for such underwritten offering. Such notice shall (x) offer each such Holder the right to participate in such underwritten offering, (y) specify a date, which shall be no earlier than 15 days following the date of such notice, by which such Holder must inform the Company of its intent to participate in such underwritten offering and (z) include the instructions such Holder must follow in order to participate in such underwritten offering;

(o) in the case of a Shelf Registration, make available for inspection by a representative of the Holders of the Registrable Securities and any underwriters participating in any disposition pursuant to a Shelf Registration Statement and any counsel or accountant retained by such Holders or underwriters, all financial statements and other records, documents and properties of the Company reasonably requested by any such Persons, and cause the respective officers, directors, employees, and any other agents of the Company to supply all information reasonably requested by any such Persons in connection with a Shelf Registration Statement;

18

(p) (i) in the case of an Exchange Offer, a reasonable time prior to the filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof, any amendment to an Exchange Offer Registration Statement or amendment or supplement to such Prospectus, provide copies of such documents to the Initial Purchasers, and make such changes in any such documents prior to the filing thereof as the Initial Purchasers or their counsel may reasonably request; (ii) in the case of a Shelf Registration, a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Holders of Registrable Securities, to the Initial Purchasers, to the underwriter or underwriters of an underwritten offering of Registrable Securities, and to counsel for any such Holders, Initial Purchasers or underwriters, and make such changes in any such document prior to the filing thereof as the Holders of Registrable Securities, the Initial Purchasers, any such underwriter or underwriters or any of their respective counsel may reasonably request; and (iii) cause the representatives of the Company to be available for discussion of such documents as shall be reasonably requested by the Holders of Registrable Securities, the Initial Purchasers on behalf of such Holders or any underwriter, and shall not at any time make any filing of any such document of which such Holders, the Initial Purchasers on behalf of such Holders, their counsel or any underwriter shall not have previously been advised and furnished a copy or to which such Holders, the Initial Purchasers on behalf of such Holders, their counsel or any underwriter shall reasonably object within a reasonable time period;

(q) in the case of a Shelf Registration, use commercially reasonable best efforts to cause the Registrable Securities to be rated with the appropriate rating agencies, if so requested by the Majority Holders of Registrable Securities or by the underwriter or underwriters of an underwritten offering, unless the Registrable Securities are already so rated;

(r) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC and, with respect to each Registration Statement and each post-effective amendment, if any, thereto and each filing by the Company of an Annual Report on Form 10-K, make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least twelve months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;

(s) cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter and its counsel;

(t) in the case of a Shelf Registration, a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Initial Purchasers on behalf of such Holders; and make representatives of the Company as shall be reasonably requested by the Holders of Registrable Securities, or the Initial Purchasers on behalf of such Holders, available for discussion of such document; and

19

(u) in the case of a Shelf Registration, use its reasonable best efforts to cause all Registrable Securities to be listed on any securities exchange on which similar debt securities issued by the Company are then listed if requested by the Majority Holders or by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any.

In the case of a Shelf Registration Statement, the Company may (as a condition to such Holder's participation in the Shelf Registration) require each Holder of Registrable Securities to furnish to the Company such information regarding such Holder and the proposed distribution by such Holder of such Registrable Securities as the Company may from time to time reasonably request in writing and require such Holder to agree in writing to be bound by all provisions of this Agreement applicable to such Holder.

In the case of a Shelf Registration Statement, each Holder agrees and, in the event that any Participating Broker-Dealer is using the Prospectus included in the Exchange Offer Registration Statement in connection with the sale of Exchange Securities pursuant to Section 3(f), each such Participating Broker-Dealer agrees that, upon receipt of any notice from the Company of the happening of any event or the discovery of any facts of the kind described in
Section 3(e)(ii), 3(e)(iii) or 3(e)(v) through 3(e)(vii) hereof, such Holder or Participating Broker-Dealer, as the case may be, will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until receipt by such Holder or Participating Broker-Dealer, as the case may be, of
(i) the copies of the supplemented or amended Prospectus contemplated by Section 3(k) hereof or (ii) written notice from the Company that the Shelf Registration Statement or the Exchange Offer Registration Statement, respectively, are once again effective or that no supplement or amendment is required. If so directed by the Company, such Holder or Participating Broker-Dealer, as the case may be, will deliver to the Company (at the Company's expense) all copies in its possession, other than permanent file copies then in its possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. Nothing in this paragraph shall prevent the accrual of Additional Interest on any Securities or Exchange Securities.

If the Company shall give any such notice to suspend the disposition of Registrable Securities pursuant to the immediately preceding paragraph, the Company shall be deemed to have used its reasonable best efforts to keep the Shelf Registration Statement or, in the case of Section 3(f), the Exchange Offer Registration Statement, as the case may be, effective during such period of suspension; provided that (i) such period of suspension shall not exceed the time periods provided in Section 2(e)(vii) hereof and (ii) the Company shall use its reasonable best efforts to file and have declared effective (if an amendment) as soon as practicable thereafter an amendment or supplement to the Shelf Registration Statement or the Exchange Offer Registration Statement or both, as the case may be, or the Prospectus included therein and shall extend the period during which the Shelf Registration Statement or the Exchange Offer Registration Statement or both, as the case may be, shall be maintained effective pursuant to this Agreement (and, if applicable, the period during which Participating Broker-Dealers may use the Prospectus included in the Exchange Offer Registration Statement pursuant to Section 3(f) hereof) by the number of days during the period from and including the date of the giving of such notice to and including the earlier of the date when the Holders or Participating Broker-Dealers, respectively, shall have received copies of the supplemented or amended Prospectus

20

necessary to resume such dispositions and the effective date of written notice from the Company to the Holders or Participating Broker-Dealers, respectively, that the Shelf Registration Statement or the Exchange Offer Registration Statement, respectively, are once again effective or that no supplement or amendment is required.

4. Underwritten Registrations. In the event that the Company fails to effect the Exchange Offer or file any Shelf Registration Statement and maintain the effectiveness of any Shelf Registration Statement as provided herein, the Company shall not file any Registration Statement with respect to any securities (within the meaning of Section 2(1) of the 1933 Act) of the Company other than Registrable Securities.

If any of the Registrable Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Majority Holders of such Registrable Securities included in such offering, subject to the consent of the Company, which consent shall not be unreasonably withheld.

No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

5. Indemnification and Contribution.

(a) The Company agrees to indemnify and hold harmless each Initial Purchaser, each Holder, each Participating Broker-Dealer, each underwriter who participates in an offering of Registrable Securities (each, an "Underwriter") and each Person, if any, who controls any Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) pursuant to which Exchange Securities or Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by reference, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon written information furnished to the Company by any Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter with respect to such Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter, as the case may be, expressly for use in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto).

(b) Each Holder, each Initial Purchaser, each Participating Broker-Dealer and each Underwriter, severally but not jointly, agrees to indemnify and hold harmless the Company, each

21

director of the Company, each officer of the Company who signs the Shelf Registration Statement, each other Initial Purchaser, each other Participating Broker-Dealer, each other Underwriter and each other selling Holder and each Person, if any, who controls the Company, any Initial Purchaser, any Underwriter, any Participating Broker-Dealer or any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing, but only with respect to information with respect to such Holder, Initial Purchaser, Underwriter or Participating Broker-Dealer furnished in writing to the Company by such Holder, Initial Purchaser, Underwriter or Participating Broker-Dealer respectively, expressly for use in the Shelf Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto); provided, however, that no such Holder, Initial Purchaser, Underwriter or Participating Broker-Dealer shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Shelf Registration Statement.

(c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 5(a) or 5(b), such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the indemnifying party does not promptly retain counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and the indemnified party reasonably concludes that the representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of

22

which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless (i) such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 5 is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party or parties on the one hand and the indemnified party or parties on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or parties or such indemnified party or parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) The Company, the Holders and the Initial Purchasers agree that it would not be just or equitable if contribution pursuant to this Section 5 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 5 shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 5, no Initial Purchaser or Holder, Participating Broker-Dealer or Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which Registrable Securities sold by it were offered exceeds the amount of any damages that such Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.

No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 5, each Person, if any, who controls an Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter within the meaning of Section 15 of the 1933

23

Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter, as the case may be, and each director of the Company, each officer of the Company who signed the Registration Statement and each Person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The respective obligations of the Initial Purchasers, Holders, Participating Broker-Dealers and Underwriters to contribute pursuant to this Section 5 are several in proportion to the principal amount of Securities purchased by them and not joint.

The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter or any Person controlling any Initial Purchaser, Holder, Participating Broker-Dealer or Underwriter, or by or on behalf of the Company, its officers or directors or any Person controlling the Company, (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities or Exchange Securities pursuant to a Shelf Registration Statement.

6. Miscellaneous.

(a) Rule 144 and Rule 144A. For so long as the Company is subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Company covenants that it will file all reports required to be filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder, that if it ceases to be so required to file such reports, it will upon the request of any Holder or beneficial owner of Registrable Securities (i) make publicly available such information (including, without limitation, the information specified in Rule 144(c)(2) under the 1933 Act) as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii) deliver or cause to be delivered, promptly following a request by any Holder or beneficial owner of Registrable Securities or any prospective purchaser or transferee designated by such Holder or beneficial owner, such information (including, without limitation, the information specified in Rule 144A(d)(4) under the 1933 Act) as is necessary to permit sales pursuant to Rule 144A under the 1933 Act, and (iii) take such further action that is reasonable in the circumstances, in each case to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration under the 1933 Act within the limitation of the exemptions provided by (x) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (y) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (z) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder or beneficial owner of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.

(b) No Inconsistent Agreements. The Company has not entered into nor will the Company on or after the date of this Agreement enter into any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not and will not in any way conflict with and are not and will not be inconsistent with the rights granted to the holders of any of the Company's other issued and outstanding securities under any other agreements entered into by the Company or any of its subsidiaries.

24

(c) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure.

(d) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder or Participating Broker-Dealer (other than an Initial Purchaser), at the most current address set forth on the records of the registrar under the Indenture, (ii) if to an Initial Purchaser, at the most current address given by such Initial Purchaser to the Company by means of a notice given in accordance with the provisions of this Section 6(d), which address initially is the address set forth in the Purchase Agreement; (iii) if to the Company, initially at the address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this
Section 6(d) and (iv) if to any Underwriter, at the most current address given by such Underwriter to the Company by means of a notice given in accordance with the provisions of this Section 6(d), which address initially shall be the address set forth in the applicable underwriting agreement.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, first class, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture.

(e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms hereof or of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities, such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits hereof.

(f) Third Party Beneficiary. Each Holder and Participating Broker-Dealer shall be a third party beneficiary of the agreements made hereunder between the Company, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of other Holders hereunder. Each Holder, by its acquisition of Securities, shall be deemed to have agreed to the provisions of Section 5(b) hereof.

25

(g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(i) Restriction on Resales. If (i) the Company or any of its subsidiaries or affiliates (as defined in Rule 144 under the 1933 Act) shall redeem, purchase or otherwise acquire any Registrable Security or any Exchange Security which is a "restricted security" within the meaning of Rule 144 under the 1933 Act, the Company will deliver or cause to be delivered such Registrable Security or Exchange Security, as the case may be, to the Trustee for cancellation and neither the Company nor any of its subsidiaries or affiliates will hold or resell such Registrable Security or Exchange Security or issue any new Security or Exchange Security to replace the same.

(j) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(k) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

[SIGNATURE PAGE FOLLOWS]

26

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

DEVELOPERS DIVERSIFIED REALTY
CORPORATION

By:_________________________________
Name: William H. Schafer
Title: Senior Vice President and
Chief Financial Officer


Confirmed and accepted
as of the date first above written:

BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
And the other parties referred to in Annex A hereto

By: Banc of America Securities LLC

By: ________________________________
Name:
Title:

For itself and on behalf of the other Initial Purchasers


ANNEX A

INITIAL PURCHASERS

Banc of American Securities LLC
J.P. Morgan Securities Inc.
ABN AMRO Incorporated
Deutsche Bank Securities Inc.
ING Financial Markets LLC
Piper Jaffrey & Co.
Wachovia Capital Markets, LLC
Wells Fargo Brokerage Services, LLC


ANNEX B

PLAN OF DISTRIBUTION

Each broker-dealer that receives new notes for its own account under the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of those notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer for resales of new notes received in exchange for original notes that had been acquired as a result of market-making or other trading activities. We have agreed that, for a period of 180 days after the expiration date of the exchange offer, we will make this prospectus, as it may be amended or supplemented, available to any broker-dealer for use in connection with any such resale. Any broker-dealers required to use this prospectus and any amendments or supplements to this prospectus for resales of the new notes must notify us of this fact by checking the box on the letter of transmittal requesting additional copies of these documents.

Notwithstanding the foregoing, we are entitled under the registration rights agreements to suspend the use of this prospectus by broker-dealers under specified circumstances. For example, we may suspend the use of this prospectus if:

- the SEC or any state securities authority requests an amendment or supplement to this prospectus or the related registration statement or additional information;

- the SEC or any state securities authority issues any stop order suspending the effectiveness of the registration statement or initiates proceedings for that purpose;

- we receive notification of the suspension of the qualification of the new notes for sale in any jurisdiction or the initiation or threatening of any proceeding for that purpose;

- the suspension is required by law; or

- an event occurs which makes any statement in this prospectus untrue in any material respect or which constitutes an omission to state a material fact in this prospectus.

If we suspend the use of this prospectus, the 180-day period referred to above will be extended by a number of days equal to the period of the suspension.

We will not receive any proceeds from any sale of new notes by broker- dealers. New notes received by broker-dealers for their own account under the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on those notes or a combination of those methods, at market prices prevailing at the time of resale, at prices related to prevailing market prices or at negotiated prices. Any resales may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from the selling broker-dealer or the purchasers of the new notes. Any broker-dealer that resells new notes received by it for its own account under the exchange offer and any broker or dealer that participates in a distribution of the new notes may be deemed to be an "underwriter" within the


meaning of the Securities Act and any profit on any resale of new notes and any commissions or concessions received by these persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

We have agreed to pay all expenses incidental to the exchange offer other than commissions and concessions of any broker or dealer and will indemnify holders of the notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.


Exhibit 5.1

[Baker & Hostetler LLP LETTERHEAD]

June 30, 2004

Developers Diversified Realty Corporation

Re: Registration Statement on Form S-4 with respect to $250,000,000 aggregate principal amount 5.25% Notes due 2011 of Developers Diversified Realty Corporation

Ladies and Gentlemen:

We have acted as counsel for Developers Diversified Realty Corporation, an Ohio corporation (the "Issuer"), in connection with (i) the offer to exchange (the "Exchange Offer") up to $250,000,000 aggregate principal amount of the Issuer's 5.25% Notes due 2011 (the "New Notes") for its $250,000,000 aggregate principal amount 5.25% Notes due 2011 (the "Old Notes") that are presently outstanding and (ii) the preparation of the registration statement on Form S-4 (the "Registration Statement") filed as of the date hereof with the Securities and Exchange Commission by the Issuer for the purpose of registering the New Notes under the Securities Act of 1933, as amended (the "Act"). The Old Notes have been, and the New Notes will be, issued pursuant to an Indenture, dated as of May 1, 1994 and supplemented by the First Supplemental Indenture, dated as of May 10, 1995, the Second Supplemental Indenture, dated as of July 18, 2003, the Third Supplemental Indenture, dated as of January 23, 2004, and the Fourth Supplemental Indenture, dated as of April 23, 2004 (collectively, the "Indenture"), between the Issuer, and National City Bank, as Trustee.

In connection with the foregoing, we have examined such records of the Issuer and such other documents as we deem necessary to render this opinion.

Based on such examination, we are of the opinion that when the New Notes, substantially in the form as set forth in Exhibit 4.6 to the Registration Statement, have been duly executed by the Issuer and authenticated by the Trustee in accordance with the Indenture and duly delivered in exchange for the Old Notes in accordance with the Exchange Offer in the manner described in the Registration Statement, the New Notes will be valid and binding obligations of the Issuer and will be entitled to the benefits of the Indenture.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and the reference to us under the caption "Legal Matters" in the prospectus that is a part of the Registration Statement.

Sincerely,

/s/ Baker & Hostetler LLP


Exhibit 8.1

[Baker & Hostetler LLP Letterhead]

June 30, 2004

Developers Diversified Realty Corporation 3300 Enterprise Parkway
Beachwood, Ohio 44122

Re: Status as a REIT

Ladies and Gentlemen:

In connection with the Registration Statement on Form S-4 to be filed with the Securities and Exchange Commission on the date hereof (the "Registration Statement"), you have requested our opinion regarding whether Developers Diversified Realty Corporation (the "Company") has qualified as a real estate investment trust ("REIT") for its taxable years ended December 31, 1993 through December 31, 2003, has been organized in conformity with the requirements for qualification as a REIT, and whether its method of operation has enabled the Company to meet, and will enable it to continue to meet, the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"). This opinion is based upon certain representations made by the Company as to factual matters as set forth in the Registration Statement and the registration statements on Forms S-3 and S-11 previously filed with the Securities and Exchange Commission (the "Prior Registrations"). In addition, the Company has provided a representation letter and certificate ("Representation Letter") certifying, among other items, that it has made a timely election to be taxed as a REIT under the Code commencing with its initial taxable year ended December 31, 1993, and that commencing with the first taxable year that the Company has elected to be taxed as a REIT, the Company has operated and will continue to operate in accordance with the terms and provisions of its Articles of Incorporation and Code of Regulations and in accordance with the method of operation described in the Registration Statement and the Prior Registrations. We have not attempted to verify independently such representations and statements, but in the course of our representation nothing has come to our attention that would cause us to question the accuracy thereof.

Based on the Representation Letter and subject to the foregoing and to the qualifications below, it is our opinion that the Company has qualified as a REIT for its taxable years ended December 31, 1993 through December 31, 2003, the Company is organized in conformity with the requirements for qualification as a REIT, and the Company's current and proposed method of


Developers Diversified Realty Corporation June 30, 2004

Page 2

operation will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code.

The opinions set forth in this letter are based on existing law as contained in the Code and regulations promulgated thereunder, in effect on the date hereof, and the interpretations of such provisions and regulations by the Internal Revenue Service (the "IRS") and the courts having jurisdiction over such matters, all of which are subject to change either prospectively or retroactively, and to possibly different interpretations. Also, any variation from the factual statements set forth in the Registration Statement, the Prior Registrations or the Representation Letter may affect the conclusions stated herein. Moreover, the Company's qualification and taxation as a REIT depends upon the Company's ability to meet, through actual annual operating results, distributions to shareholders, asset composition levels, and diversity of stock ownership, the various qualification tests imposed under the Code, the results of which will not be reviewed by Baker & Hostetler LLP. Accordingly, no assurance can be given that the actual results of the Company's operations for any one taxable year will satisfy such requirements. We wish to point out that our opinion represents our best judgment of how a court would decide if presented with the issues addressed herein but, because our opinions are not binding upon the IRS or any court, there can be no assurance that contrary positions may not successfully be asserted by the IRS.

This opinion is limited to the federal income tax matters addressed herein, and no other opinions are rendered with respect to other federal tax matters or to any issues arising under the tax laws of any state or locality. We undertake no obligation to update the opinions expressed herein after the date of this letter. This opinion is rendered to the addressee of this letter solely for the purpose referred to in the first paragraph hereof, and may not be relied on or referred to by any other person or entity or by any addressee for any other purpose without the express written consent of this Firm. We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement.

/s/ Baker & Hostetler LLP

    Baker & Hostetler LLP


EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Developers Diversified Realty Corporation of our report dated March 12, 2004, except for Note 16, as to which the date is June 22, 2004, relating to the financial statements, which appears in the Developers Diversified Realty Corporation's Current Report on Form 8-K dated June 22, 2004. We also consent to the incorporation by reference of our report dated March 12, 2004 relating to the financial statement schedules, which appears in the Developers Diversified Realty Corporation's Annual Report on Form 10-K for the year ended December 31, 2003. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP
Cleveland, Ohio
June 29, 2004


EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Developers Diversified Realty Corporation of our reports dated April 12, 2004 relating to the financial statements of Benderson Development Company Portfolio I and Benderson Development Company Portfolio II for the year ended December 31, 2003, which appear in Developers Diversified Realty Corporation's Current Report on Form 8-K dated March 31, 2004.

/s/ PricewaterhouseCoopers LLP
Cleveland, Ohio
June 29, 2004


EXHIBIT 23.3

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in the Registration Statement on Form S-4 and related Prospectus of Developers Diversified Realty Corporation ("DDR") dated June 30, 2004 and to the incorporation by reference therein of our report dated March 18, 2003, except for Note 24, as to which the date is January 20, 2004, with respect to the consolidated financial statements of JDN Realty Corporation included in the Current Report on Form 8-K of DDR, as filed with the Securities and Exchange Commission on January 20, 2004.

                                                  /s/ Ernst & Young LLP

Atlanta, Georgia
June 29, 2004


 

Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form T-1

STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER

THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

o   Check if an application to determine eligibility of a Trustee pursuant to section 305(b)(2)

National City Bank

(Exact name of Trustee as specified in its charter)

34-0420310

(I.R.S. Employer Identification No.)
     
1900 East Ninth Street
Cleveland, Ohio
(Address of principal executive offices)
 
44114
(Zip Code)

David L. Zoeller

Senior Vice President and General Counsel
National City Corporation
1900 East Ninth Street
Cleveland, Ohio 44114
(216) 575-9313
(Name, address and telephone number of agent for service)


Developers Diversified Realty Corporation

(Exact name of obligor as specified in its charter)
     
Ohio   34-1723097
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
 
3300 Enterprise Parkway
Beachwood, Ohio
(Address of principal executive offices)
 
44122
(Zip Code)

5.25% Notes due 2011

(Title of the Indenture securities)


 

GENERAL

1.  General information. Furnish the following information as to the trustee:

  (a)  Name and address of each examining or supervising authority to which it is subject.
 
    Comptroller of the Currency, Washington, D.C. The Federal Reserve Bank of Cleveland, Cleveland, Ohio Federal Deposit Insurance Corporation, Washington, D.C.
 
  (b)  Whether it is authorized to exercise corporate trust powers.

        National City Bank is authorized to exercise corporate trust powers.

2.  Affiliations with obligor. If the obligor is an affiliate of the trustee, describe such affiliation.

      NONE

16. List of exhibits

  (1)  A copy of the Articles of Association of the Trustee.
 
    Incorporated herein by reference is Charter No. 786 Merger No. 1043 the Articles of Association of National City Bank, which Articles of Association were included as a part of Exhibit 1 to Form T-1 filing made by said National City Bank with the Securities and Exchange Commission in November 1973 (File No. 2-49786).
 
    Incorporated herein by reference is an amendment to the Articles of Association of National City Bank, which amendment was included as a part of Exhibit 1 to Form T-1 filing made by said National City Bank with the Securities and Exchange Commission in April 1996 (File No. 333-02761)
 
  (2)  A copy of the certificate of authority of the Trustee to commence business:

  (a)  a copy of the certificate of NCB National Bank to commence business.
 
    Incorporated herein by reference is a true and correct copy of the certificate issued by the Comptroller of the Currency under date of April 26, 1973, whereby NCB National Bank was authorized to commence the business of banking as a National banking Association, which true copy of said Certificate was included as Exhibit 2(a) to Form T-1 filing made by said National City Bank with the Securities and Exchange Commission in November 1973 (File 2-49786)
 
  (b)  a copy of the approval of the merger of The National City Bank of Cleveland into NCB National Bank under the charter of NCB National Bank and under the title “National City Bank.”
 
    Incorporated herein by reference is a true and correct copy of the certificate issued by the Comptroller of the Currency under date of April 27, 1973, whereby the National City Bank of Cleveland was merged into NCB National Bank, which true copy of said certificate was included as Exhibit 2(b) to Form T-1 filing made by said National City Bank with the Securities and Exchange Commission in November 1973 (File 2-49786).
 
  (3)  A copy of the authorization of the Trustee to exercise corporate trust powers.
 
    Incorporated herein by reference is a true and correct copy of the certificate dated April 13, 1973 issued by the Comptroller of the Currency whereby said National City Bank has been granted the right to exercise certain trust powers, which true copy of said certificate was included as Exhibit 3 to Form T-1 filing made by said National City Bank with the Securities and Exchange Commission in November 1973 (File 2-49786).
 
  (4)  A copy of existing By-Laws of the Trustee.
 
    Incorporated herein by reference is a true and correct copy of the National City Bank By-Laws as amended through January 1, 1993. This true copy of said By-Laws was included as Exhibit 4 to Form T-1 filing made by National City Bank with the Securities and Exchange Commission in March, 1995 (File 22-26594).
 
  (5)  Not applicable.


 

  (6)  Consent of the United States Institutional Trustee required by Section 321(b) of the Act.

  Attached hereto as Exhibit 6 is the Consent of the Trustee in accordance with Section 321 (b) of the Trust Indenture Act of 1939 as amended.

  (7)  A copy of the latest report of condition of the Trustee published pursuant to law or the requirements of its supervising or examining authority.

  Attached hereto as Exhibit 7 is the latest report of condition of National City Bank.

  (8)  Not applicable.
 
  (9)  Not applicable.

NOTES

      In answering any item of this Statement of Eligibility and Qualification which relates to matters peculiarly with the knowledge of the obligor or any underwriter for the obligor or any underwriter for the obligor, the trustee has relied upon the information furnished to it by the obligor and the underwriters, and the trustee disclaims responsibility for the accuracy or completeness of such information.

      The answer furnished to Item 2. of this statement will be amended, if necessary, to reflect any facts which differ from those stated and which would have been required to be stated if known at the date hereof.


 

SIGNATURE

      Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, National City Bank, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Cleveland, and State of Ohio, on the 28th day of May, 2004.

  NATIONAL CITY BANK

  By:  /s/ JAMES E. SCHULTZ
 
  James E. Schultz
  Vice President

 


 

CONSENT

      In accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, and to the extent required thereby to enable it to act as an indenture trustee, National City Bank hereby consents as of the date hereof that reports of examinations of it by the Treasury Department, the Comptroller of the Currency, the Board of Governors of the Federal Reserve Banks, the Federal Deposit Insurance Corporation or of any other Federal or State authority having the right to examine National City Bank, may be furnished by similar authorities to the Securities and Exchange Commission upon request thereon.

  NATIONAL CITY BANK

  By  /s/ JAMES E. SCHULTZ
 
  James E. Schultz
  Vice President

 


 

SIGNATURE

      Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, National City Bank, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Cleveland, and State of Ohio, on the 28th day of May, 2004.

  NATIONAL CITY BANK

  By:  /s/ JAMES E. SCHULTZ
 
  James E. Schultz
  Vice President

 


 

CONSENT

      In accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, and to the extent required thereby to enable it to act as an indenture trustee, National City Bank hereby consents as of the date hereof that reports of examinations of it by the Treasury Department, the Comptroller of the Currency, the Board of Governors of the Federal Reserve Banks, the Federal Deposit Insurance Corporation or of any other Federal or State authority having the right to examine National City Bank, may be furnished by similar authorities to the Securities and Exchange Commission upon request thereon.

  NATIONAL CITY BANK

  By:  /s/ JAMES E. SCHULTZ
 
  James E. Schultz
  Vice President

 


 

REPORT OF CONDITION

NATIONAL CITY BANK
(Including Domestic and Foreign Subsidiaries)
In the State of Ohio, at the close of business on March 31, 2004
                         
(In Thousands)

ASSETS
Cash and balances due from depository institutions:
               
     
Noninterest-bearing balances and currency and coin
          $ 1,798,481  
     
Interest-bearing balances
            36,100  
Securities:
               
     
Held-to-maturity securities
            0  
     
Available-for-sale securities
            2,454,613  
Federal funds sold and securities purchased under agreements to resell
               
       
Federal funds sold in domestic offices
            52,210  
       
Securities purchased under agreements to resell
            477,492  
Loans and lease financing receivables:
               
     
Loans and leases held for sale
            10,002  
     
Loans and leases, net of unearned income
  $ 38,504,399          
     
Less: Allowance for loan and lease losses
    592,107          
     
Loans and leases, net of unearned income and allowance
            37,912,292  
Assets held in trading accounts
            241,715  
Premises and fixed assets (including capitalized leases)
            508,192  
Other real estate owned
            4,955  
Investments in unconsolidated subsidiaries and associated companies
            0  
Customers’ liability to this bank on acceptances outstanding
            18,347  
Intangible assets
            110,375  
Other assets
            3,241,098  
             
 
 
TOTAL ASSETS
          $ 46,865,872  
             
 
LIABILITIES
Deposits:
               
     
In domestic offices
          $ 22,043,036  
       
Non-interest bearing
  $ 8,517,890          
       
Interest-bearing
    13,525,146          
     
In foreign offices, Edge and Agreement subsidiaries, and IBFs
            3,419,810  
       
Interest-bearing
    3,419,810          
Federal funds purchased and securities sold under agreements to repurchase:
               
   
Federal funds purchased in domestic offices
            5,942,859  
   
Securities sold under agreements to repurchase
            1,243,280  
Demand notes issued to the U.S. Treasury
            0  
Trading Liabilities
            0  
Other borrowed money
            7,011,569  
Bank’s liability on acceptances executed and outstanding
            18,347  
Subordinated notes and debentures
            1,459,656  
Other liabilities
            2,640,309  
             
 
     
TOTAL LIABILITIES
            43,778,866  
             
 
EQUITY CAPITAL
Common Stock
            7,311  
Surplus
            287,689  
Retained Earnings
            2,781,235  
Accumulated other comprehensive income
            10,771  
             
 
     
TOTAL EQUITY CAPITAL
            3,087,006  
             
 
     
TOTAL LIABILITIES AND EQUITY CAPITAL
          $ 46,865,872  
             
 
 

Exhibit 99.1

  THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [               ], 2004, UNLESS EXTENDED (THE “EXPIRATION DATE”). TENDERS OF EXISTING NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE EXPIRATION DATE.  

DEVELOPERS DIVERSIFIED REALTY CORPORATION

LETTER OF TRANSMITTAL

5.25% NOTES DUE 2011

TO: NATIONAL CITY BANK, THE EXCHANGE AGENT

         
By Mail:   By Hand or Overnight Courier:   New York Drop:
 
National City Bank
P.O. Box 92301
Cleveland, Ohio 44193-0900
  National City Bank
Corporate Trust Operations
3rd Floor-North Annex
4100 West 150th Street
Cleveland, Ohio 44135-1385
  The Depository Trust Company
Transfer Agent Drop Service
55 Water Street
Jeanette Park Entrance
New York, NY 10041

By Facsimile:

(614) 463-7002

Confirm by Telephone:

(614) 463-6996
Attn: James Schultz

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED . WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE NOT REQUESTED TO SEND US A PROXY.


 

HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES FOR THEIR OLD NOTES PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR EXISTING NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.

      The undersigned acknowledges receipt of the Prospectus dated June [          ], 2004 (the “Prospectus”) of DEVELOPERS DIVERSIFIED REALTY CORPORATION (the “Company”) and this Letter of Transmittal (the “Letter of Transmittal”), which together constitute the Company’s Offer to Exchange (the “Exchange Offer”) $1,000 principal amount of its 5.25% Notes Due 2011 (the “Exchange Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Registration Statement of which the Prospectus is a part, for each $1,000 principal amount of its outstanding 5.25% Notes Due 2011 (the “Old Notes”), of which $250,000,000 principal amount is outstanding, upon the terms and conditions set forth in the Prospectus. Other capitalized terms used but not defined herein have the meaning given to them in the Prospectus.

      The Holder of each Old Note accepted for exchange will receive a New Note having a principal amount equal to that of the surrendered Old Note. Interest on the New Notes will accrue from the last interest payment date on which interest was paid on the Old Notes surrendered in exchange therefor or, if no interest has been paid on the Old Notes, from the date of original issue of the Old Notes. Holders of Old Notes accepted for exchange will be deemed to have waived the right to receive any other payments or accrued interest on the Old Notes. The Company reserves the right, at any time or from time to time, to extend the Exchange Offer at its discretion, in which event the term “Expiration Date” shall mean the latest time and date to which the Exchange Offer is extended. The Company shall notify holders of the Old Notes of any extension by means of a press release or other public announcement prior to 9:00 A.M., New York City time, on the next business day after the previously scheduled Expiration Date.

      This Letter of Transmittal is to be used by Holders if: (i) certificates representing Old Notes are to be physically delivered to the Exchange Agent herewith by Holders; (ii) tender of Old Notes is to be made by book-entry transfer to the Exchange Agent’s account at The Depository Trust Company (“DTC”), pursuant to the procedures set forth in the Prospectus under “The Exchange Offer — Procedures for Tendering” by any financial institution that is a participant in DTC and whose name appears on a security position listing as the owner of Old Notes; or (iii) tender of Old Notes is to be made according to the guaranteed delivery procedures set forth in the prospectus under “The Exchange Offer — Guaranteed Delivery Procedures.” DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

      The term “Holder” with respect to the Exchange Offer means any person: (i) in whose name Old Notes are registered on the books of the Company or any other person who has obtained a properly completed bond power from the registered Holder; or (ii) whose Old Notes are held of record by DTC who desires to deliver such Old Notes by book-entry transfer at DTC. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

      The instructions included with this Letter of Transmittal must be followed. Questions and requests for assistance or for additional copies of the Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Exchange Agent. See Instruction 11 herein.

2


 

      HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OLD NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY BOX BELOW.

             

BOX 1 — DESCRIPTION OF 5.25% NOTES DUE 2011 (OLD NOTES)

Aggregate Principal Principal Amount
Name(s) and Address(es) of Registered Holders(s) Certificate Registered by Tendered
(Please fill in, if blank) Number(s)* Certificate(s) (If less than all)**

   
   
   
   
   
   
   
    Total        

 *  Need not be completed by Holders tendering by book-entry transfer.
 
**  Unless indicated in the column labeled “Principal Amount Tendered,” any tendering Holder of Old Notes will be deemed to have tendered the entire aggregate principal amount represented by the column labeled “Aggregate Principal Amount Represented by Certificate(s).” If the space provided above is inadequate, list the certificate numbers and principal amounts on a separate signed schedule and affix the list to this Letter of Transmittal.

The minimum permitted tender is $1,000 in principal amount of Old Notes. All other tenders must be integral multiples of $1,000.

3


 

BOX 2

SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)

        To be completed ONLY if certificates for Old Notes in a principal amount not tendered or not accepted for exchange, or New Notes issued in exchange for Old Notes accepted for exchange, are to be issued in the name of someone other than the undersigned, or if the Old Notes tendered by book-entry transfer that are not accepted for exchange are to be credited to an account maintained by DTC.  

Issue certificate(s) to:

Name 

(Please Print)

Address     


(Include Zip Code)


(Tax Identification or Social Security No.)

BOX 3

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5 AND 6)

        To be accepted ONLY if certificates for Old Notes in a principal amount not tendered or not accepted for exchange, are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown above.  

Return mail to:

Name 

(Please Print)

Address     


(Include Zip Code)


(Tax Identification or Social Security No.)

  CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT’S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING:  

Name of Tendering Institution: 


DTC Book-Entry Account: 


Transaction Code No.: 


4


 

  CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:  

Name(s) of Registered Holder(s): 


Window Ticket Number (if any): 


Date of Execution of Notice of Guaranteed Delivery: 


IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:

Account Number: 

Transaction Code Number: 

  CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.  

Name: 


Address: 


  CHECK HERE IF YOU ARE A BROKER-DEALER AND ARE RECEIVING NEW NOTES FOR YOUR OWN ACCOUNT IN EXCHANGE FOR OLD NOTES THAT WERE ACQUIRED AS A RESULT OF MARKET MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES.  

Name: 


Address: 


5


 

Ladies and Gentlemen:

      Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to the Company the principal amount of Old Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Old Notes tendered in accordance with this Letter of Transmittal, the undersigned sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to the Old Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Company and as Trustee under the Indenture for the Old Notes and New Notes) with respect to the tendered Old Notes with full power of substitution to (i) deliver certificates for such Old Notes to the Company, or transfer ownership of such Old Notes on the account books maintained by DTC and deliver all accompanying evidence of transfer and authenticity to, or upon the order of, the Company and (ii) present such Old Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms and subject to the conditions of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed irrevocable and coupled with an interest.

      The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Old Notes tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim, when the same are acquired by the Company. The undersigned hereby further represents that any New Notes acquired in exchange for Old Notes tendered hereby will have been acquired in the ordinary course of business of the Holder receiving such New Notes, whether or not such person is the Holder, that neither the Holder nor any such other person has any arrangement or understanding with any person to participate in the distribution of such New Notes and that neither the Holder nor any such other person is an “affiliate,” as defined in Rule 405 under the Securities Act, of the Company or any of its subsidiaries.

      The undersigned also acknowledges that this Exchange Offer is being made based on certain interpretations issued by the staff of the Securities and Exchange Commission (the “Commission”) to third parties in unrelated transactions. Based on those interpretations, the Company believes that the New Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an “affiliate” of the Company within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holders’ business and such holders have no arrangements or understandings with any person to participate in the distribution of such New Notes. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

      The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Company to be necessary or desirable to complete the assignment, transfer and purchase of the Old Notes tendered hereby. All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned and every obligation of the undersigned under this Letter of Transmittal shall be binding upon the undersigned’s heirs, personal representatives, successors and assigns, trustees in bankruptcy or other legal representatives of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in “The Exchange Offer — Withdrawal of Tenders” section of the Prospectus.

      For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Old Notes when, as and if the Company has given oral or written notice thereof to the Exchange Agent.

      If any tendered Old Notes are not accepted for exchange pursuant to the Exchange Offer for any reason, certificates for any such unaccepted Old Notes will be returned (except as noted below with respect to tenders

6


 

through DTC), without expense, to the undersigned as promptly as practicable after the Expiration Date at the address shown below or at a different address as may be indicated under “Special Delivery Instructions.”

      The undersigned acknowledges that tenders of Old Notes pursuant to the procedures described under the caption “The Exchange Offer — Procedures for Tendering” in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer.

      Unless otherwise indicated under “Special Payment Instructions,” please issue the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and return any Old Notes not tendered or not exchanged in the name(s) of the undersigned (or in either such event in the case of the Old Notes tendered through DTC, by credit to the undersigned’s account, at DTC). Similarly, unless otherwise indicated under “Special Delivery Instructions,” please send the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned’s signature(s), unless, in either event, tender is being made through DTC. In the event that both “Special Payment Instructions” and “Special Delivery Instructions” are completed, please issue the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and return any Old Notes not tendered or not exchanged in the name(s) of, and send said certificates to, the person(s) so indicated. The Company has no obligation pursuant to the “Special Payment Instructions” and “Special Delivery Instructions” to transfer any Old Notes from the name of the registered Holder(s) thereof if the Company does not accept for exchange any of the Old Notes so tendered.

      Holders of Old Notes who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent, or cannot complete the procedure for book-entry transfer, prior to the Expiration Date, may tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption “The Exchange Offer — Guaranteed Delivery Procedures.” See Instruction 1 regarding the completion of the Letter of Transmittal printed below.

7


 

PLEASE SIGN HERE WHETHER OR NOT
  OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY  
 
 
    Date 
 


    Date 
Signature(s) of Registered Holder(s)
Or Authorized Signatory

Area Code and Telephone Number 

     The above lines must be signed by the registered Holder(s) of Old Notes as their name(s) appear(s) on the Old Notes or, if the Old Notes are tendered by a participant in DTC, as such participant’s name appears on a security position listing as the owner of Old Notes, or by person(s) authorized to become registered Holder(s) by a properly completed bond power from the registered Holder(s), a copy of which must be transmitted with this Letter of Transmittal. If Old Notes to which this Letter of Transmittal relates are held of record by two or more joint Holders, then all such holders must sign this Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must (i) set forth his or her full title below and (ii) unless waived by the Company, submit evidence satisfactory to the Company of such person’s authority to act. See Instruction 4 regarding the completion of this Letter of Transmittal printed below.

Name: 

(Please Print)

Capacity: 


Address: 

(Include Zip Code)

Signature(s) Guaranteed by an Eligible Institution:

(If required by Instruction 4)


(Authorized Signature)


(Title)


(Name of Firm)

Dated: 

8


 

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER

      1. Delivery of this Letter of Transmittal and Old Notes; Guaranteed Delivery Procedures. This Letter of Transmittal is to be completed by noteholders, either if certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in “The Exchange Offer — Procedures for Tendering” section of the Prospectus. Certificates for all physically tendered Old Notes, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter of Transmittal (or manually signed facsimile hereof) and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Old Notes tendered hereby must be in denominations of principal amount of maturity of $1,000 and any integral multiple thereof.

      Holders whose certificates for Old Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Old Notes pursuant to the guaranteed delivery procedures set forth in “The Exchange Offer — Guaranteed Delivery Procedures” section of the Prospectus. Pursuant to such procedures, (i) such tender must be made through an Eligible Institution (as defined in Instruction 4 below), (ii) prior to the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and Notice of Guaranteed Delivery, substantially in the form provided by the Company (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Old Notes and the amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange (“NYSE”) trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Old Notes, or a Book-Entry Confirmation, and any other documents required by this Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically tendered Old Notes, in proper form for transfer, or Book-Entry confirmation, as the case may be, and all other documents required by this Letter of Transmittal, are received by the Exchange Agent within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery.

      The method of delivery of this Letter of Transmittal, the Old Notes and all other required documents is at the election and risk of the tendering holders, but the delivery will be deemed made only when actually received or confirmed by the Exchange Agent or deemed received under the ATOP Procedures. If Old Notes are sent by mail, it is suggested that the mailing be made sufficiently in advance of the Expiration Date to permit the delivery to the Exchange Agent prior to 5:00 p.m. New York City time, on the Expiration Date. See “The Exchange Offer” section in the Prospectus.

      2. Tender by Holder. Only a holder of Old Notes may tender such Old Notes in the Exchange Offer. Any beneficial holder of Old Notes who is not the registered holder and who wishes to tender should arrange with the registered holder to execute and deliver this Letter of Transmittal on his or her behalf or must, prior to completing and executing this Letter of Transmittal and delivering his or her Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such holder’s name or obtain a properly completed bond power from the registered holder.

      3. Partial Tenders. Tenders of Old Notes will be accepted only in integral multiples of $1,000. If less than the entire principal amount of any Old Notes is tendered, the tendering holder should fill in the principal amount tendered in the fourth column of the box entitled “Description of 5.25% Notes Due 2011 (Old Notes)” above. The entire principal amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes is not tendered, then Old Notes for the principal amount of Old Notes not tendered and a certificate or certificates representing New Notes issued in exchange for any Old Notes accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal promptly after the Old Notes are accepted for exchange.

9


 

      4. Signatures on this Letter of Transmittal; Powers of Attorney and Endorsements; Guarantee of Signatures. If this Letter of Transmittal is signed by the registered holder of the Old Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates without any change whatsoever.

      If any tendered Old Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

      If any tendered Old Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates.

      When this Letter of Transmittal is signed by the registered holder or holders of the Old Notes specified herein and tendered hereby, no endorsements of certificates or separate powers of attorney are required. If, however, the New Notes are to be issued, or any untendered Old Notes are to be reissued, to a person other than the registered holder, then endorsements of any certificates transmitted hereby or separate powers of attorney are required. Signatures on such certificate(s) must be guaranteed by an Eligible Institution.

      If this Letter of Transmittal is signed by a person other than the registered holder or holders of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate powers of attorney, in either case signed exactly as the names on the registered holder or holders appear(s) on the certificate(s) and signatures on such certificate(s) must be guaranteed by an Eligible Institution.

      If this Letter of Transmittal or any certificates or powers of attorney are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted.

      Endorsements on certificates for Old Notes or signatures on powers of attorney required by this Instruction 4 must be guaranteed by a firm which is a participant in a recognized signature guarantee medallion program (“Eligible Institutions”).

      Signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution unless the Old Notes are tendered (i) by a registered holder of Old Notes (which term, for purposes of the Exchange Offer, includes any participant in the Book-Entry Transfer Facility system whose name appears on a security position listing as the holder of such Old Notes) who has not completed the box entitled “Special Registration Instructions” or “Special Delivery Instructions” on this Letter of Transmittal, or (ii) for the account of an Eligible Institution.

      5. Special Payment And Delivery Instructions. Tendering holders should indicate, in the applicable box or boxes, the name and address to which New Notes or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal (or in the case of tender of Old Notes through DTC, if different from DTC). In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. Noteholders tendering Old Notes by book-entry transfer may request that Old Notes not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such noteholder may designate hereon. If no such instructions are given, such Old Notes not exchanged will be returned to the name and address of the person signing this Letter of Transmittal.

      6. Tax Identification Number. Federal income tax law requires that a holder whose offered Old Notes are accepted for exchange must provide the Company (as payer) with his, her or its correct Taxpayer Identification Number (“TIN”), which, in the case of an exchanging holder who is an individual, is his or her social security number. If the Company is not provided with the correct TIN or an adequate basis for exemption, such holder may be subject to a $50 penalty imposed by the Internal Revenue Service (the “IRS”), and payments made with respect to Old Notes purchased pursuant to the Exchange Offer may be subject to backup withholding at a 28% rate. If withholding results in an overpayment of taxes, a refund may be obtained. Exempt holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and

10


 

reporting requirements. See the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.”

      To prevent backup withholding, each exchanging holder must provide his, her or its correct TIN by completing the Substitute Form W-9 enclosed herewith, certifying that the TIN provided is correct (or that such Holder is awaiting a TIN) and that (i) the holder is exempt from backup withholding, (ii) the holder has not been notified by the IRS that he, she or it is subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified the holder that he, she or it is no longer subject to backup withholding. In order to satisfy the Exchange Agent that a foreign individual qualifies as an exempt recipient, such holder must submit a statement signed under penalty of perjury attesting to such exempt status. Such statements may be obtained from the Exchange Agent. If the Old Notes are in more than one name or are not in the name of the actual owner, consult the Substitute Form W-9 for information on which TIN to report. If you do not provide your TIN to the Company within 60 days, backup withholding will begin and continue until you furnish your TIN to the Company.

      7. Transfer Taxes. The Company will pay all transfer taxes, if any, applicable to the exchange of Old Notes pursuant to the Exchange Offer. If, however, certificates representing New Notes or Old Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Old Notes pursuant to the Exchange Offer, then any such transfer taxes (whether imposed on the registered holder or on any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder.

      Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Old Notes listed in this letter.

      8. Waiver of Conditions. The Company reserves the absolute right to amend, waive or modify specified conditions in the Exchange Offer in the case of any Old Notes tendered.

      9. No Conditional Transfers. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Old Notes, by execution of this Letter of Transmittal or by tendering Old Notes via ATOP, shall waive any right to receive notice of the acceptance of their Old Notes for exchange.

      Neither the Company, the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Existing Notes nor shall any of them incur any liability for failure to give any such notice.

      10. Mutilated, Lost, Stolen or Destroyed Old Notes. Any tendering holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instructions.

      11. Requests for Assistance or Additional Copies. Questions and requests for assistance for additional copies of the Prospectus, this Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Exchange Agent at the address specified in the Prospectus.

11


 

(DO NOT WRITE IN SPACE BELOW)

         
Certificate
Surrendered


  Old Notes
Tendered


  Old Notes
Accepted



 
 
Delivery Prepared by: 

 Checked by
 
 Date


PAYER’S NAME: DEVELOPERS DIVERSIFIED REALTY CORPORATION


  Name  (if joint names, list first and circle the name of the person or entity whose number you enter in Part I below. See instructions if your name has changed.)
______________________________________________________________________________


Address  ______________________________________________________________________________


City, State and Zip Code  ______________________________________________________________________________


List account number(s) here (optional)  ___________________________________________________________________________
 


SUBSTITUTE

Form W-9

Department of the Treasury

Internal Revenue Service

Payer’s Request for Taxpayer

Identification Number (TIN)
       
  Part 1 — PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION OR TIN NUMBER (TIN) IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW:  
Social Security Number or TIN

  PART 2  — Check the box if you are NOT subject to backup withholding under the provisions of section 3408(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer subject to backup withholding.   Part 3  — 

Awaiting TIN


Certification  — Under the penalties of perjury, I certify that the information provided on this form is true, correct and complete.
 
  Signature     Date 

 

NOTE:  FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

12

 

Exhibit 99.2

DEVELOPERS DIVERSIFIED REALTY CORPORATION

NOTICE OF GUARANTEED DELIVERY

FOR
5.25% NOTES DUE 2011

      As set forth in the Prospectus dated June [ ], 2004, (the “Prospectus”) of DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the “Company”), and in the accompanying Letter of Transmittal and instructions thereto (the “Letter of Transmittal”), this form or one substantially equivalent hereto must be used to accept the Company’s offer to exchange (the “Exchange Offer”) all of its outstanding 5.25% Notes Due 2011 (the “Old Notes”) for its 5.25% Notes Due 2011, which have been registered under the Securities Act of 1933, as amended (the “New Notes”), if certificates for the Old Notes are not immediately available or if the Old Notes, the Letter of Transmittal or any other documents required thereby cannot be delivered to the Exchange Agent, or the procedure for book-entry transfer cannot be completed, prior to 5:00 P.M., New York City time, on the Expiration Date (as defined in the Prospectus). This form may be delivered by an Eligible Institution (as defined in the Prospectus), by hand or transmitted by facsimile transmission, overnight courier or mail to the Exchange Agent as set forth below. Capitalized terms used but not defined herein have the meaning given to them in the Prospectus.

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON

JULY [     ], 2004,

UNLESS THE OFFER IS EXTENDED (THE “EXPIRATION DATE”).

TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY TIME
PRIOR TO 5:00 P.M. ON THE EXPIRATION DATE.

TO: NATIONAL CITY BANK, THE EXCHANGE AGENT

         
By Mail: By Hand or Overnight Courier: New York Drop:
National City Bank
P.O. Box 92301
Cleveland, Ohio 44193-0900
  National City Bank
Corporate Trust Operations
3rd Floor-North Annex
4100 West 150th Street
Cleveland, Ohio 44135-1385
  The Depository Trust Company
Transfer Agent Drop Service
55 Water Street
Jeanette Park Entrance
New York, NY 10041

By Facsimile:

(614) 463-7002

Confirm by Telephone:

(614) 463-6996

Attn: James Schultz

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF

INSTRUCTIONS VIA A FACSIMILE, OTHER THAN AS SET FORTH
ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.

      This form is not to be used to guarantee signatures. If a signature on the Letter of Transmittal to be used to tender Old Notes is required to be guaranteed by an “Eligible Institution” under the instructions thereto, such signature guarantee must appear in the applicable space provided in the Letter of Transmittal.


 

Ladies and Gentlemen:

      The undersigned hereby tenders to DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the “Company”), upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal (which together constitute the “Exchange Offer”), receipt of which is hereby acknowledged, $          principal amount of Old Notes pursuant to the guaranteed delivery procedures set forth in Instruction 1 of the Letter of Transmittal.

      The undersigned acknowledges that tenders of Old Notes will be accepted only in principal amounts equal to $1,000 or integral multiples thereof. The undersigned acknowledges that tenders of Old Notes pursuant to the Exchange Offer may not be withdrawn after 5:00 p.m., New York City time, on the Expiration Date.

      All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death, incapacity or dissolution of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned.

NOTE:  SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.

Certificate No(s). for Old Notes (if available) 




Principal Amount of Old Notes 




Name(s) of Record Holder(s) 




Please Print or Type

Address 




Area Code and Tel. No. 


Signature(s):



Dated: 


If Old Notes will be delivered by book-entry transfer at the Depository Trust Company,

Depository Account No.


2


 

This Notice of Guaranteed Delivery must be signed by the registered holder(s) of Old Notes exactly as its (their) name(s) appear on certificates for Old Notes or on a security position listing as the owner of Old Notes, or by person(s) authorized to become registered holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information:

Name(s) 


Capacity: 


Address(es): 


GUARANTEE

(Not to be Used for Signature Guarantee)

The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States or an “eligible guarantor institution” within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), hereby (a) represents that the above named person(s) “own(s)” the Old Notes tendered hereby within the meaning of Rule 14e-4 under the Exchange Act, (b) represents that such tender of Old Notes complies with Rule 14e-4 under the Exchange Act and (c) guarantees that delivery to the Exchange Agent of certificates for the Old Notes tendered hereby, in proper form for transfer (or confirmation of the book-entry transfer of such Old Notes into the Exchange Agent’s Account at the Depository Trust Company, pursuant to the procedures for book-entry transfer set forth in the Prospectus), with delivery of a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signatures and any other required documents, will be received by the Exchange Agent at one of its addresses set forth above within three New York Stock Exchange (“NYSE”) trading days after the execution of this Notice of Guaranteed Delivery.

THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF

TRANSMITTAL AND OLD NOTES TENDERED HEREBY TO THE EXCHANGE
AGENT WITHIN THE TIME PERIOD SET FORTH AND THAT FAILURE TO
DO SO COULD RESULT IN FINANCIAL LOSS TO THE UNDERSIGNED.

Name of Firm 


Authorized Signature 
Address 
Name 
(Please Print or Type)
Title: 
Area Code and Tel. No. 
Dated: ______________________________, 2004

NOTE:  DO NOT SEND OLD NOTES WITH THIS FORM; OLD NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE EXCHANGE AGENT WITHIN THREE NYSE TRADING DAYS AFTER THE EXECUTION OF THIS NOTICE OF GUARANTEED DELIVERY.

3

 

Exhibit 99.4

DEVELOPERS DIVERSIFIED REALTY CORPORATION

LETTER TO

DEPOSITORY TRUST COMPANY PARTICIPANTS

EXCHANGE OF ALL OUTSTANDING

5.25% NOTES DUE 2011
FOR
5.25% NOTES DUE 2011

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,

ON JULY [ ], 2004, UNLESS EXTENDED (THE “EXPIRATION DATE”)

OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME

PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To Depository Trust Company Participants:

      We are enclosing herewith the material listed below relating to the offer by DEVELOPERS DIVERSIFIED REALTY CORPORATION, to exchange its 5.25% Notes due 2011 (the “New Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for like principal amount of its issued and outstanding 5.25% Notes due 2011 (the “Old Notes”), upon the terms and subject to the conditions set forth in Developers Diversified Realty Corporation’s prospectus, dated June [ ], 2004, and the related letter of transmittal (which together constitute the “Exchange Offer”).

      Enclosed are copies of the following documents:

        1. Prospectus, dated June [ ], 2004;
 
        2. Letter of Transmittal (together with accompanying Substitute Form W-9 Guidelines);
 
        3. Notice of Guaranteed Delivery; and
 
        4. Letter that may be sent to your clients for whose account you hold Old Notes in your name or in the name of your nominee, with space provided for obtaining such client’s instruction with regard to the Exchange Offer.

      We urge you to contact your clients promptly. Please note that the Exchange Offer will expire on the Expiration Date unless extended.

      The Exchange Offer is not conditioned upon any minimum number of Old Notes being tendered.

      Pursuant to the letter of transmittal, each holder of Old Notes will represent to Developers Diversified Realty Corporation that:

        (i) any New Notes that the holder will acquire in exchange for Old Notes will be acquired in the ordinary course of business of the holder,
 
        (ii) the holder has not engaged in, does not intend to engage in, and has no arrangement with any person to engage in, a distribution of any New Notes issued to the holder, and
 
        (iii) the holder is not an “affiliate” (as defined in Rule 405 under the Securities Act) of Developers Diversified Realty Corporation.


 

      If the holder is a broker-dealer (whether or not it is also an “affiliate”) that will receive New Notes for its own account in exchange for Old Notes, it will represent that the Old Notes were acquired as a result of market-making activities or other trading activities, and it will acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of those New Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of those New Notes, the broker-dealer is not deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

      The enclosed Letter to Clients contains an authorization by the beneficial owners of the Old Notes for you to make the foregoing representations.

      Developers Diversified Realty Corporation will not pay any fee or commission to any broker or dealer to any other persons (other than the Exchange Agent) in connection with the solicitation of tenders of Old Notes pursuant to the Exchange Offer. Developers Diversified Realty Corporation will pay or cause to be paid any transfer taxes payable on the transfer of Old Notes to it, except as otherwise provided in Instruction 7 of the enclosed letter of transmittal.

      Additional copies of the enclosed material may be obtained from the undersigned.

  Very truly yours,
 
  NATIONAL CITY BANK

2

 

Exhibit 99.3

DEVELOPERS DIVERSIFIED REALTY CORPORATION

EXCHANGE OF ALL OUTSTANDING

5.25% NOTES DUE 2011
FOR
5.25% NOTES DUE 2011

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,

ON JULY [ ], 2004, UNLESS EXTENDED (THE “EXPIRATION DATE”). NOTES TENDERED
IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To Our Clients:

      We are enclosing herewith a prospectus, dated June [ ], 2004, of Developers Diversified Realty Corporation, and the accompanying letter of transmittal that together constitute the offer by Developers Diversified Realty Corporation (the “Exchange Offer”), to exchange its 5.25% Notes due 2011, (the “New Notes”), which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), for like principal amount of its issued and outstanding 5.25% Notes due 2011, (the “Old Notes”), upon the terms and subject to the conditions set forth in the Exchange Offer.

      The Exchange Offer is not conditioned upon any minimum number of Old Notes being tendered.

      We are the holder of record of Old Notes held by us for your own account. A tender of such Old Notes can be made only by us as the record holder and pursuant to your instructions. The letter of transmittal is furnished to you for your information only and cannot be used by you to tender Old Notes held by us for your account.

      We request instructions as to whether you wish to tender any or all of the Old Notes held by us for your account pursuant to the terms and conditions of the Exchange Offer. We also request that you confirm that we may, on your behalf, make the representations contained in the letter of transmittal.

      Pursuant to the letter of transmittal, each holder of Old Notes will represent to Developers Diversified Realty Corporation that:

        (i) any New Notes that the holder will acquire in exchange for Old Notes will be acquired in the ordinary course of business of the holder,
 
        (ii) the holder has not engaged in, does not intend to engage in, and has no arrangement with any person to engage in, a distribution of any New Notes issued to the holder, and
 
        (iii) the holder is not an “affiliate” (as defined in Rule 405 under the Securities Act) of Developers Diversified Realty Corporation.

      If the holder is a broker-dealer (whether or not it is also an “affiliate”) that will receive New Notes for its own account in exchange for Old Notes, it will represent that the Old Notes were acquired as a result of market-making activities or other trading activities, and it will acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of those New Notes. By acknowledging that it will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of those New Notes, the broker-dealer is not deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

      Please return your instructions to us in the enclosed envelope within ample time to permit us to submit a tender on your behalf prior to the Expiration Date.


 

INSTRUCTIONS TO BOOK ENTRY TRANSFER PARTICIPANT

To Participant of the DTC:

      The undersigned hereby acknowledges receipt of the prospectus, dated June [ ], 2004, (the “Prospectus”) of Developers Diversified Realty Corporation and the accompanying letter of transmittal (the “Letter of Transmittal”), that together constitute Developers Diversified Realty Corporation’s offer (the “Exchange Offer”) to exchange its 5.25% Notes due 2011 (the “New Notes”), for all of its outstanding 5.25% Notes due 2011 (the “Old Notes”). Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus or the Letter of Transmittal.

      This will instruct you, the DTC participant, as to the action to be taken by you relating to the Exchange Offer with respect to the Old Notes held by you for the account of the undersigned.

      The aggregate face amount of the Old Notes held by you for the account of the undersigned is (FILL IN AMOUNT):

      $____________ of the 5.25% Notes due 2011.

      With respect to the Exchange Offer, we hereby instruct you (check appropriate box):

  o   TO TENDER the following amount of Old Notes you hold for our account (Insert Principal Amount of Old Notes to be Tendered, if any) $____________.
 
  o NOT TO TENDER any Old Notes you hold for our account.

      If we instruct you to tender the Old Notes held by you for our account, it is understood that you are authorized to make, on behalf of us (and, by signing below, we hereby make to you), the representations contained in the Letter of Transmittal that are to be made with respect to us as a beneficial owner, including, but not limited to, the representations, that:

        (i) any New Notes that we will acquire in exchange for Old Notes will be acquired in the ordinary course of our business;
 
        (ii) we have not engaged in, do not intend to engage in, and have no arrangement with any person to engage in, a distribution of any New Notes issued to us; and
 
        (iii) we are not an “affiliate” (as defined in Rule 405 under the Securities Act) of Developers Diversified Realty Corporation.

      If we are a broker-dealer that will receive New Notes for our own account in exchange for Old Notes, we represent that the Old Notes were acquired as a result of market-making activities or other trading activities, and we acknowledge that we will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of those New Notes. By acknowledging that we will deliver and by delivering a prospectus meeting the requirements of the Securities Act in connection with any resale of those New Notes, we are not deemed to admit that we are an “underwriter” within the meaning of the Securities Act.

Name of beneficial owner(s): 


Signature(s): 
Name(s): 
(Please Print)
Address: 
Telephone Number: 
Taxpayer Identification or Social Security Number: 
Dated: 

2