EX-10.1




Exhibit
10.1



STOCK PURCHASE AGREEMENT




between




Mr. Alexander Otto




“Purchaser”




and




Developers Diversified Realty Corporation




“Issuer”




Dated as of February 23, 2009




 









 





TABLE OF CONTENTS





	 	 	 	 	 
	Article 1 PURCHASE AND SALE OF THE SHARES
	 	 	1	 
	 
	 	 	 	 
	1.1 Purchase and Sale of the Shares
	 	 	1	 
	1.2 Purchase Price
	 	 	2	 
	1.3 Payment of Purchase Price
	 	 	2	 
	1.4 Purchaser Restrictions
	 	 	2	 
	1.5 Anti-Dilution
	 	 	2	 
	1.6 Purchase Price Adjustment
	 	 	3	 
	 
	 	 	 	 
	Article 2 PROCEDURE FOR CLOSING
	 	 	3	 
	 
	 	 	 	 
	2.1 Time and Place of Closing
	 	 	3	 
	2.2 Transactions at the Closing
	 	 	3	 
	 
	 	 	 	 
	Article 3 REPRESENTATIONS AND WARRANTIES OF ISSUER
	 	 	4	 
	 
	 	 	 	 
	3.1 Listing; Filing and Effectiveness of Registration Statement
	 	 	4	 
	3.2 Well-Known Seasoned Issuer Status; Ineligible Issuer Status and Automatic Shelf
Registration Statement
	 	 	5	 
	3.3 Compliance with Securities Act Regulations
	 	 	5	 
	3.4 Incorporated Documents
	 	 	6	 
	3.5 No Material Adverse Change in Business
	 	 	6	 
	3.6 Financial Statements
	 	 	7	 
	3.7 Independent Accountants
	 	 	7	 
	3.8 Good Standing of Issuer
	 	 	8	 
	3.9 Subsidiaries
	 	 	8	 
	3.10 Capitalization
	 	 	8	 
	3.11 Shares
	 	 	9	 
	3.12 Litigation
	 	 	9	 
	3.13 No Conflicts
	 	 	10	 
	3.14 Compliance with Laws; Permits and Orders
	 	 	10	 
	3.15 Authorization
	 	 	11	 
	3.16 REIT Status
	 	 	11	 
	3.17 Investment Company Act
	 	 	12	 
	3.18 Registration Rights
	 	 	12	 
	3.19 No Stabilization or Manipulation
	 	 	12	 
	3.20 Property
	 	 	12	 
	3.21 Title Insurance
	 	 	13	 
	3.22 Mortgages and Deeds of Trust
	 	 	13	 
	3.23 Environmental Laws
	 	 	14	 
	3.24 Internal Accounting and Other Controls
	 	 	14	 
	3.25 Disclosure Controls
	 	 	15	 
	3.26 Insolvency; Financial Covenants
	 	 	15	 
	3.27 Absence of Labor Dispute
	 	 	15	 
	3.28 Use of Proceeds
	 	 	15	 
	3.29 No Finder’s Fees
	 	 	16	 
	3.30 Insurance
	 	 	16	 






i









 






	 	 	 	 	 
	3.31 Absence of Undisclosed Liabilities
	 	 	16	 
	3.32 Taxes
	 	 	16	 
	3.33 Certain Information
	 	 	17	 
	 
	 	 	 	 
	Article 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER
	 	 	17	 
	 
	 	 	 	 
	4.1 Authority
	 	 	17	 
	4.2 Brokers and Finders
	 	 	18	 
	4.3 Securities Act
	 	 	18	 
	4.4 Beneficial Ownership of Common Stock
	 	 	18	 
	4.5 Availability of Funds
	 	 	18	 
	4.6 Assignee Representations and Warranties
	 	 	18	 
	 
	 	 	 	 
	Article 5 COVENANTS OF ISSUER
	 	 	18	 
	 
	 	 	 	 
	5.1 Access and Information
	 	 	18	 
	5.2 Conduct of Business Prior to Closing
	 	 	19	 
	5.3 Shareholders’ Meeting; Proxy Statement; Listing
	 	 	19	 
	5.4 Notification of Changes; Supplemental Disclosure
	 	 	20	 
	 
	 	 	 	 
	Article 6 MUTUAL COVENANTS
	 	 	20	 
	 
	 	 	 	 
	6.1 Governmental Filings
	 	 	20	 
	6.2 Further Mutual Covenants
	 	 	20	 
	6.3 Commercially Reasonable Efforts
	 	 	21	 
	 
	 	 	 	 
	Article 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
	 	 	21	 
	 
	 	 	 	 
	7.1 Representations and Warranties
	 	 	21	 
	7.2 Compliance by Issuer
	 	 	21	 
	7.3 No Injunction; Litigation
	 	 	22	 
	7.4 Consents; Authorizations; Approval of Legal Matters
	 	 	22	 
	7.5 Certified Resolutions
	 	 	22	 
	7.6 Incumbency
	 	 	22	 
	7.7 Certified Documents
	 	 	22	 
	7.8 Going Concern Opinion
	 	 	23	 
	7.9 New York Stock Exchange Approval
	 	 	23	 
	7.10 Articles of Incorporation
	 	 	23	 
	7.11 Code of Regulations
	 	 	23	 
	7.12 Waiver Agreement
	 	 	23	 
	7.13 Opinions of Issuer’s Counsel
	 	 	23	 
	7.14 Investor Rights Agreement
	 	 	24	 
	7.15 Voting Agreement
	 	 	24	 
	7.16 Certificate Regarding Domestically Controlled Qualified Investment Entity Status
	 	 	24	 
	7.17 Tax Agreement
	 	 	24	 
	7.18 No Material Adverse Change
	 	 	24	 
	7.19 Change of Control
	 	 	24	 
	7.20 Investor Rights of Purchaser
	 	 	25	 
	7.21 Term Loan
	 	 	25	 
	7.22 Financing
	 	 	25	 






ii









 






	 	 	 	 	 
	Article 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF ISSUER
	 	 	25	 
	 
	 	 	 	 
	8.1 Certificate Regarding Representations and Warranties
	 	 	26	 
	8.2 Compliance by Purchaser
	 	 	26	 
	8.3 No Injunction, Litigation
	 	 	26	 
	8.4 New York Stock Exchange Approval
	 	 	26	 
	8.5 Articles of Incorporation
	 	 	26	 
	8.6 Code of Regulations
	 	 	27	 
	8.7 Payment of Purchase Price
	 	 	27	 
	 
	 	 	 	 
	Article 9 CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
	 	 	27	 
	 
	 	 	 	 
	9.1 Confidentiality
	 	 	27	 
	9.2 Public Announcements
	 	 	27	 
	 
	 	 	 	 
	Article 10 TERMINATION
	 	 	27	 
	 
	 	 	 	 
	Article 11 GENERAL PROVISIONS
	 	 	28	 
	 
	 	 	 	 
	11.1 Definitions
	 	 	28	 
	11.2 Fees and Expenses
	 	 	35	 
	11.3 Notices
	 	 	36	 
	11.4 Assignment
	 	 	37	 
	11.5 No Benefit to Others
	 	 	37	 
	11.6 Headings and Gender; Construction; Interpretation
	 	 	37	 
	11.7 Counterparts
	 	 	38	 
	11.8 Integration of Agreement
	 	 	38	 
	11.9 Waiver
	 	 	38	 
	11.10 Time of Essence
	 	 	39	 
	11.11 Governing Law
	 	 	39	 
	11.12 Partial Invalidity
	 	 	39	 
	11.13 Survival
	 	 	40	 
	11.14 Specific Enforcement
	 	 	40	 






iii









 






SCHEDULE INDEX




	 	 	 
	Key Executive List

	 	Schedule 1
	 
	 	 
	Key Indebtedness of Issuer

	 	Schedule 2
	 
	 	 
	Key Tenants of Issuer

	 	Schedule 3
	 
	 	 
	“Significant Subsidiary” List

	 	Schedule 4
	 
	 	 
	Change in Control Waivers

	 	Schedule 5
	 
	 	 
	Term Loan

	 	Schedule 6
	 
	 	 
	Financing Terms

	 	Schedule 7






iv









 






EXHIBIT INDEX




	 	 	 
	Warrant

	 	Exhibit A
	 
	 	 
	Amendment to Articles of Incorporation

	 	Exhibit B
	 
	 	 
	Amendment to the Code of Regulations

	 	Exhibit C
	 
	 	 
	Waiver Agreement

	 	Exhibit D
	 
	 	 
	Opinion of Jones Day

	 	Exhibit E
	 
	 	 
	REIT Opinion of Jones Day

	 	Exhibit F
	 
	 	 
	Investors’ Rights Agreement

	 	Exhibit G
	 
	 	 
	Shareholder Voting Agreement

	 	Exhibit H
	 
	 	 
	Tax Agreement

	 	Exhibit I






v









 






STOCK PURCHASE AGREEMENT




     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
February 23, 2009, between Mr. Alexander Otto (“Purchaser”) and Developers Diversified
Realty Corporation (“Issuer”).



     Issuer desires to sell and Purchaser desires to purchase 30,000,000 of Issuer’s common shares,
$0.10 par value per share (the “Common Stock”), for the consideration and on the terms set
forth in this Agreement.



     Certain capitalized terms used in this Agreement are defined in Section 11.1 of this
Agreement.



     In consideration of the mutual representations, warranties, covenants and agreements contained
in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:



ARTICLE 1 PURCHASE AND SALE OF THE SHARES




1.1 Purchase and Sale of the Shares.





     (a) Subject to Section 1.1(c), on and subject to the terms and conditions of this Agreement,
Issuer shall sell, and Purchaser shall purchase the Purchased Shares; and Issuer shall transfer
and convey, and Purchaser shall purchase, the Purchased Shares free and clear of any and all
Liens (other than those imposed by the Articles of Incorporation and federal and state securities
Laws).




     (b) Purchaser shall purchase the Purchased Shares in two tranches (“Tranches”). The
number of shares of Common Stock to be purchased shall be 15,000,000 shares in the first Tranche
(the “First Tranche Shares”) and 15,000,000 shares in the second Tranche (the “Second
Tranche Shares” and together with the First Tranche Shares, the “Purchased Shares”).




     (c) In the event that, after giving effect to the purchase of any Purchased Shares, the Otto
Family would Beneficially Own more than 29.8% of the outstanding shares of Common Stock, the
number of Purchased Shares to be purchased by Purchaser shall be reduced by such number of
Purchased Shares necessary to maintain the Beneficial Ownership of Common Stock by the Otto
Family at a number of shares of Common Stock equal to 29.8% of the outstanding shares of Common
Stock on the relevant Closing Date.




     (d) As additional consideration for the purchase of the First Tranche Shares, Issuer shall
grant Purchaser a warrant representing the right to purchase 5,000,000 shares of Common Stock,
and as additional consideration for the purchase of the Second Tranche Shares, Issuer shall grant
Purchaser a second warrant (each a “Warrant” and together, the “Warrants”)
representing the right to purchase 5,000,000



1









 







shares of Common Stock (collectively, the
“Warrant Shares” and together with the Purchased Shares, the “Shares”) in the
form attached hereto as Exhibit A, without deviation.




     (e) The provisions of Section 11.4 notwithstanding, Purchaser shall have the right to assign
its rights and obligations under this Agreement to purchase the Purchased Shares and to receive
the Warrants to one or more Persons who are members of the Otto Family; provided, however, that
if any assignee breaches its obligation to purchase any Purchased Shares, Purchaser shall remain
obligated to purchase such Purchased Shares.



1.2 Purchase Price.




     Subject to Section 1.6, the purchase price per share for the First Tranche Shares shall be
US$3.50 (the “First Tranche Purchase Price”), and the purchase price per share for the
Second Tranche Shares shall be US$4.00 (the “Second Tranche Purchase Price” and together
with the First Tranche Purchase Price, the “Purchase Price”).



1.3 Payment of Purchase Price




     On the relevant Closing Date, and subject to the satisfaction or waiver of the conditions set
forth in Article 7 and Article 8 below, Purchaser shall pay or deliver to Issuer an amount in cash
equal to the product of (a) the relevant Purchase Price and (b) the number of Purchased Shares
being purchased by wire transfer in immediately available funds in U.S. dollars to an account
designated in writing at least two Business Days prior to such Closing Date by Issuer. A Federal
Reserve Reference Number shall be requested by Purchaser at the time of the transfer for the
purpose of assisting Issuer in confirming receipt of the transfer.



1.4 Purchaser Restrictions




     Excluding any shares of Common Stock Beneficially Owned by the Otto Family as of the date
hereof as set forth in Section 4.4, Purchaser hereby agrees not to purchase or otherwise become the
Beneficial Owner of, and shall cause the Otto Family not to purchase or otherwise become the
Beneficial Owner of, any shares of Common Stock other than those pursuant to this Agreement from
the date hereof through the first to occur of the Non-Tranche Closing Date or the Second Closing
Date. Purchaser acknowledges that it shall be responsible for any filings required by it or any
member of the Otto Family under Sections 13 or 16 of the Exchange Act in connection with the
purchase or acquisition of any shares of Common Stock, and that Purchaser shall provide Issuer with
a copy of any such filing contemporaneously with such filing being submitted to the Commission.



1.5 Anti-Dilution




     From the date hereof through the relevant Closing Date, the Purchased Shares shall be adjusted
to avoid dilution as provided herein.  At each Closing Date, in consideration for the Purchase
Price, in addition to the Purchased Shares Purchaser shall



2









 







receive that number of shares of Common
Stock issuable in connection with any dividend declared on shares of Common Stock that would have
been issued to Purchaser if the Purchased Shares to be purchased on the relevant Closing Date had
been owned of record by Purchaser as of the date hereof and Purchaser had elected to receive the
maximum amount of such dividends in shares of Common Stock.



1.6 Purchase Price Adjustment




     On each Closing Date, Purchaser and Issuer shall calculate the New Purchase Price, and if the
New Purchase Price is less than the Floor Price, then the relevant Purchase Price shall be adjusted
by subtracting from it the difference between the Floor Price and the New Purchase Price.



ARTICLE 2 PROCEDURE FOR CLOSING




2.1 Time and Place of Closing.




     The consummation of the purchase and sale of the Purchased Shares contemplated by this
Agreement shall be held at the offices of Alston & Bird LLP, 90 Park Avenue, New York, New York
10016, or such other location that is mutually agreed upon by the Parties.




     (a) In the event Purchaser waives in writing its right under Section 1.1(b) to purchase the
Purchased Shares in Tranches, the Purchased Shares shall be purchased by Purchaser on the fifth
Business Day following the satisfaction or waiver of the conditions set forth in Article 7 and
Article 8 below (excluding the conditions that, by their terms, cannot be satisfied until the
Closing Date), or such other date as the parties shall mutually agree in writing (the
“Non-Tranche Closing Date”).




     (b) In the event Purchaser retains its right to purchase the Purchased Shares in Tranches
pursuant to Section 1.1(b), the First Tranche Shares shall be purchased by Purchaser on the fifth
Business Day following the satisfaction or waiver of the conditions set forth in Article 7 and
Article 8 below (excluding the conditions that, by their terms, cannot be satisfied until the
Closing Date), or such other date as the Parties shall mutually agree in writing (the “First
Closing Date”). After the First Closing Date, the Second Tranche Shares shall be purchased
by Purchaser in one transaction at any time during the period ending on the six-month anniversary
of the date that Issuer’s shareholders approve the Articles Amendment as set forth in Section
7.10, upon five Business Days notice from Purchaser to Issuer (the “Second Closing Date,”
and together with the First Closing Date and the Non-Tranche Closing Date, each a “Closing
Date”).



2.2 Transactions at the Closing.




     On a Closing Date, each of the following shall be delivered:




     (a) Issuer shall deliver to Purchaser (i) the Purchased Shares issuable on such Closing Date
in book-entry form at the broker designated by Purchaser, (ii) a Warrant



3









 







or Warrants, as
applicable, to purchase 5,000,000 Shares, and (iii) to the extent not previously delivered, the
items required to be delivered by Issuer set forth in Article 7. The documents and certificates
to be delivered hereunder by or on behalf of Issuer on a Closing Date shall be in form and
substance reasonably satisfactory to Purchaser and its counsel.




     (b) Purchaser shall deliver to Issuer (i) by wire transfer of immediately available funds to
an account designated by Issuer, as set forth in Section 1.3 above, an amount equal to the
product of (A) the relevant Purchase Price and (B) the number of Purchased Shares to be delivered
on such Closing Date and (ii) the items set forth in Article 8. The documents and certificates
to be delivered hereunder by or on behalf of Purchaser on the Closing Date shall be in form and
substance reasonably satisfactory to Issuer and its counsel.



ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF ISSUER




     Issuer hereby represents and warrants to Purchaser that:



3.1 Listing; Filing and Effectiveness of Registration Statement.





     (a) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is
currently listed and quoted on the New York Stock Exchange under the trading symbol “DDR.” As of
the date hereof, Issuer meets the requirements for the use of Form S-3 under the Securities Act
and the rules and regulations thereunder for the registration of the issuance of the Purchased
Shares contemplated by this Agreement.




     (b) Issuer has filed with the Commission an automatic shelf registration statement on Form
S-3 (No. 333-139118), which registers the issuance and sale by Issuer of the Purchased Shares
under the Securities Act. Such registration statement, together with any information deemed to
be a part thereof pursuant to Rule 430B under the Securities Act, and all documents incorporated
or deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3 under the
Securities Act, as from time to time amended or supplemented, is herein referred to as the
“Registration Statement,” and the prospectus constituting a part of such Registration
Statement, together with a prospectus supplement filed with the Commission pursuant to Rule
424(b) under the Securities Act relating to the Purchased Shares, and all documents incorporated
or deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3 under the
Securities Act, as from time to time amended or supplemented, are referred to herein as the
“Prospectus.” The term “preliminary prospectus” means any preliminary form of
the Prospectus. As used in this Agreement, the terms “amendment” or “supplement” when applied to
the Registration Statement or the Prospectus shall be deemed to include the filing by Issuer with
the Commission of any document under the Exchange Act after the date hereof that is or is deemed
to be incorporated therein by reference.




     (c) All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration



4









 







Statement, any
preliminary prospectus or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other information
which is or is deemed to be incorporated by reference in or otherwise deemed by the Securities
Act to be a part of or included in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be, as of any specified date; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include, without limitation, the filing of any document
under the Exchange Act which is or is deemed to be incorporated by reference in or otherwise
deemed by the rules and regulations under the Securities Act to be a part of or included in the
Registration Statement, such preliminary prospectus or the Prospectus, as the case may be, as of
any specified date.




			
	3.2	 	Well-Known Seasoned Issuer Status; Ineligible Issuer Status and Automatic Shelf Registration
Statement.





     (i) At the time of the initial filing of the Registration Statement and (ii) at the time of
the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the
Securities Act (whether such amendment was by post-effective amendment, incorporated report filed
pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), Issuer was a
“well-known seasoned issuer” as defined in Rule 405 under the Securities Act. The Registration
Statement is an “automatic shelf registration statement,” as defined in Rule 405 under the
Securities Act, that initially became effective within three years of the relevant Closing Date.
Issuer has not received from the Commission any notice pursuant to Rule 401(g)(2) under the
Securities Act objecting to the use of the automatic shelf registration statement form.



3.3 Compliance with Securities Act Regulations.





     (a) The Registration Statement became effective upon filing under Rule 462(e) under the
Securities Act on December 4, 2006. No stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no proceedings for that
purpose have been instituted, are pending or, to the knowledge of Issuer, have been threatened.




     (b) As of the date hereof and as of each Closing Date (as applicable), the Registration
Statement, as amended as of such date complies and will comply in all material respects with the
requirements of the Securities Act and the rules and regulations thereunder, and the Registration
Statement, as amended as of such date, does not and will not 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 (except that the foregoing shall not apply to those parts
of the Registration Statement that constitute the Statements of Eligibility (Forms T-1) under the
Trust Indenture Act of 1939). As of the date hereof and as of each Closing Date (as applicable),
the Prospectus, as amended as of such date, will conform in all material respects to the
requirements of the Securities Act and the rules and regulations thereunder and, as of such
respective dates, will not contain an untrue statement of a



5









 







material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.



3.4 Incorporated Documents.




     The documents incorporated or deemed to be incorporated by reference in the Registration
Statement and the Prospectus, at the time they were filed or hereafter are filed with the
Commission, complied and will comply in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, as applicable, and none of such documents contained
or will contain an untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.



3.5 No Material Adverse Change in Business.




     Since the respective dates as of which information is provided in the Registration Statement
and the Prospectus, (i) there has not occurred any material adverse change or any development that
is reasonably likely to have a material adverse effect on the condition (financial or otherwise),
results of operations, business, properties or assets (tangible and intangible) of Issuer and its
subsidiaries considered as one enterprise (other than changes or developments relating to
(a) changes in general economic conditions in the United States, other than changes which adversely
affect Issuer and its subsidiaries to a materially greater extent than their competitors, (b) the
execution or the announcement of this Agreement, or the consummation of the transactions
contemplated hereby, or (c) changes in GAAP or the accounting rules or regulations of the
Commission) (a “Material Adverse Effect”), (ii) except for regular quarterly distributions
on the Common Stock (whether payable in cash, shares of Common Stock or a combination thereof), and
regular distributions declared, paid or made in accordance with the terms of any class or series of
Issuer preferred shares, there has been no dividend or distribution of any kind declared, paid or
made by Issuer on any class of its capital shares, (iii) there has been no change in one or more of
the Executive Officers listed on Schedule 1 other than as a result of the disability or death of
such Executive Officer, (iv) there has not been an announcement by Issuer of an allegation made by
a Governmental Body of fraud or malfeasance on the part of an Executive Officer of Issuer, without
regard to its impact on the results of operations, business, properties or assets of Issuer and its
subsidiaries, (v) there has not been an announcement by Issuer of a breach of a covenant in the
indebtedness of Issuer set forth on Schedule 2, or an announcement of the receipt by Issuer of a
notice of default issued by any lender of the indebtedness set forth on Schedule 2, (vi) none of
the tenants of Issuer listed on Schedule 3 have filed a voluntary petition for bankruptcy
protection under the United States Bankruptcy Code, or (vii) there has not occurred a decrease of
more than 50% in Issuer’s market capitalization over any three consecutive trading day period when
compared to Issuer’s market capitalization as of the close of business on February 19, 2009 (3.5(i)
through (vii) together, a “Material Adverse Change”).



6









 





3.6 Financial Statements.




     The consolidated financial statements and supporting schedules of Issuer included in, or
incorporated by reference into, the Registration Statement and the Prospectus (in each case, other
than any pro forma financial information and projections) present fairly, in all material respects,
the financial position of Issuer and its consolidated Subsidiaries as of the dates indicated and
the results of their operations for the periods specified; except as otherwise stated in the
Registration Statement and the Prospectus, said financial statements have been prepared in
conformity with GAAP applied on a consistent basis; and the supporting schedules, if any, included
in, or incorporated by reference into, the Registration Statement and the Prospectus present fairly
in all material respects the information required to be stated therein. The selected financial
data and the summary financial information included in, or incorporated by reference into, the
Registration Statement and the Prospectus (in each case, other than any pro forma financial
information and projections) present fairly, in all material respects, the information shown
therein and have been compiled on a basis consistent with that of the audited financial statements
included in, or incorporated by reference into, the Registration Statement and the Prospectus. The
statements of certain revenues and expenses of the properties acquired or proposed to be acquired,
if any, included in, or incorporated by reference into, the Registration Statement and the
Prospectus present fairly in all material respects the information set forth therein and have been
prepared, in all material respects, in accordance with the applicable financial statement
requirements of Regulation S-X under the Exchange Act with respect to real estate operations
acquired or to be acquired. The pro forma financial statements and the other pro forma financial
information (including the notes thereto), included in, or incorporated by reference into, the
Registration Statement and the Prospectus present fairly, in all material respects, the information
set forth therein, have been prepared, in all material respects, in accordance with the
Commission’s rules and guidelines with respect to pro forma financial statements and have been
properly compiled on the basis described therein and the assumptions used in the preparation of
such pro forma financial statements and other pro forma financial information (including the notes
thereto), if any, are reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein. All disclosures contained in the
Registration Statement and the Prospectus regarding “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission), if any, comply with Regulation G under the
Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable.



3.7 Independent Accountants.




     PricewaterhouseCoopers LLP, who has expressed its opinion on the audited financial statements
and related schedules included in, or incorporated by reference into, the Registration Statement
and the Prospectus, is an independent registered public accounting firm within the meaning of the
Securities Act and the applicable rules and regulations thereunder.



7









 





3.8 Good Standing of Issuer.




     Issuer has been duly organized and is validly existing and in good standing as a corporation
under the laws of the State of Ohio, with power and authority (corporate and other) to own, lease
and operate its properties and to conduct its business as described in the Registration Statement
and the Prospectus; and Issuer is duly qualified to do business and is in good standing as a
foreign corporation in all other jurisdictions where its ownership or leasing of properties or the
conduct of its business requires such qualification, except where the failure to qualify and be in
good standing could not reasonably be expected to have or result in a Material Adverse Effect.



3.9 Subsidiaries.




     Each Subsidiary listed on Schedule 4 (“Significant Subsidiary”) has been duly
incorporated or formed and is validly existing as a corporation, partnership or limited liability
company in good standing under the laws of the jurisdiction of its incorporation or formation; has
corporate, partnership or limited liability company power and authority to own, lease and operate
its properties and to conduct its business and is duly qualified as a foreign corporation,
partnership or limited liability company to transact business; and is in good standing in each
jurisdiction in which such qualification is required, except where the failure to qualify and be in
good standing could not reasonably be expected to have or result in a Material Adverse Effect.



3.10 Capitalization.





     (a) On the date hereof, the authorized capital stock of Issuer consists of (i) 300,000,000
common shares, par value $0.10, of which 129,316,003 shares are issued and outstanding; (ii)
750,000 Class A Cumulative Preferred Shares, without par value, of which no shares are issued and
outstanding; (iii) 750,000 Class B Cumulative Preferred Shares, without par value, of which no
 shares are issued and outstanding; (iv) 750,000 Class C Cumulative Preferred Shares, without par
value, of which no shares are issued and outstanding; (v) 750,000 Class D Cumulative Preferred
Shares, without par value, of which no shares are issued and outstanding; (vi) 750,000 Class E
Cumulative Preferred Shares, without par value, of which no shares are issued and outstanding;
(vii) 750,000 Class F Cumulative Preferred Shares, without par value, of which no shares are
issued and outstanding; (viii) 750,000 Class G Cumulative Preferred Shares, without par value, of
which 600,000 shares are issued and outstanding; (ix) 750,000 Class H Cumulative Preferred
Shares, without par value, of which 410,000 shares are issued and outstanding; (x) 750,000 Class
I Cumulative Preferred Shares, without par value, of which 340,000 shares are issued and
outstanding; (xi) 750,000 Class J Cumulative Preferred Shares, without par value, of which no
 shares are issued and outstanding; (xii) 750,000 Class K Cumulative Preferred Shares, without par
value, of which no shares are issued and outstanding; (xiii) 750,000 Noncumulative Preferred
Shares, without par value, of which no shares are issued and outstanding; and (xiv) 2,000,000
Cumulative Voting Preferred Shares, without par, of which no shares are issued and outstanding.
All of the issued and outstanding shares of capital stock of each class of Issuer on the date
hereof have been



8









 







duly authorized and validly issued and are fully paid and non-assessable. On
the date hereof, Issuer has issued 398,700.435 operating partnership units. On the date hereof,
other than shares of Common Stock reserved for issuance under Issuer’s equity compensation plans
or arrangements for officers, directors and other Employees, outstanding convertible debt
securities and outstanding operating partnership units, and in connection with dividends declared
on shares of Common Stock payable in shares of Common Stock, no shares of the capital stock of
Issuer are reserved for issuance. On the date hereof, other than the Shares and shares of Common
Stock to be issued under Issuer’s equity compensation plans or arrangements for officers,
directors and other Employees, outstanding convertible debt securities and outstanding operating
partnership units, and in connection with dividends declared on shares of Common Stock payable in
 shares of Common Stock, Issuer has no obligation to issue any additional shares of its capital
stock, or securities convertible into or exchangeable for shares of its capital stock. None of
the shares of capital stock of Issuer outstanding on the date hereof has been issued in violation
of any preemptive rights of the current or past shareholders of Issuer. On the date hereof,
other than as set forth above, no rights relating to the purchase of capital stock of any class
or series of Issuer are issued or outstanding nor are there any agreements, written or oral,
providing for the issuance of any rights relating to the capital stock of any class or series of
Issuer. All dividends required to be paid on Issuer’s capital stock have been paid.




     (b) All of the issued and outstanding capital stock, membership interests or partnership
interests of Issuer’s wholly-owned Significant Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are owned directly or indirectly by Issuer, free
and clear of any Liens, except as set forth in the Prospectus and except for such Liens that
could not reasonably be expected to have or result in a Material Adverse Effect.



3.11 Shares.




     The Shares, after receipt of the approval by Issuer’s shareholders of (a) the issuance of the
Shares for purposes of Section 312.03 of the New York Stock Exchange Listing Manual and (b) the
Articles Amendment as set forth in Section 7.10 (collectively, the “Requisite Shareholder
Approval”), will have been duly authorized for issuance and sale pursuant to this Agreement
and, when issued and delivered pursuant to this Agreement against payment of the consideration
therefor specified herein, will be validly issued, fully paid and non-assessable.



3.12 Litigation.




     There is no Litigation before or by any court or other Governmental Body currently pending,
or, to the knowledge of Issuer, threatened against or adversely affecting Issuer or its
Subsidiaries, their business or any of their respective assets or properties, at law or in equity,
which is required to be disclosed in the Prospectus (other than as disclosed therein), or which
could reasonably be expected to have or result in a Material Adverse Effect or would materially and
adversely affect the consummation of this Agreement or the transactions contemplated herein.



9









 





3.13 No Conflicts.




     Neither Issuer nor any of its Significant Subsidiaries is in violation of its respective
articles of incorporation or other organizational document, or its code of regulations or bylaws,
as the case may be, or in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which it is a party or by which it or its respective properties may be
bound, where such defaults could reasonably be expected to have or result in a Material Adverse
Effect; and the execution and delivery of this Agreement have been, and, after receipt of the
Requisite Shareholder Approval, the consummation of the issuance and sale of the Purchased Shares
contemplated herein will have been, duly authorized by all necessary corporate action, and
compliance by Issuer with its obligations hereunder will not conflict with or constitute a breach
of, or default under (or constitute a default which with the passage of time or giving of notice,
or both, would constitute an event of a default), or result in the creation or imposition of any
Lien upon any properties or assets of Issuer or its Significant Subsidiaries pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other instrument to which Issuer or
any of its Significant Subsidiaries is a party or by which it may be bound or to which any of the
properties or assets of Issuer or any of its Significant Subsidiaries is subject, nor will such
action result in any violation of the provisions of their respective articles of incorporation or
other organizational document, or their respective code of regulations or bylaws, as the case may
be, or, to the knowledge of Issuer, any Law or Order; and no Consent or Order of any court or
Governmental Body is required for the consummation by Issuer of the issuance and sale of the
Purchased Shares contemplated by this Agreement, except such as has been or will be obtained or as
may be required under the Securities Act, the Exchange Act, the HSR Act, and state securities Laws
in connection with the transactions contemplated hereby.



3.14 Compliance with Laws; Permits and Orders.




     Neither Issuer nor any of its Significant Subsidiaries is engaged in any activity or has
omitted to take any action that is or creates a violation of any Law applicable to Issuer or such
Significant Subsidiary, except where such violation could not reasonably be expected to have or
result in a Material Adverse Effect. Neither Issuer nor any of its Significant Subsidiaries is
subject to any Order which has had or could reasonably be expected to result in a Material Adverse
Effect. Issuer and its Significant Subsidiaries possess all Permits necessary for the lawful
operation of their business as presently conducted and are in compliance with all such Permits and
all applicable Laws and Orders where a failure to have such Permits or to so comply could
reasonably be expected to have or result in a Material Adverse Effect. Neither Issuer nor any of
its Significant Subsidiaries has received any written notice of proceedings relating to the
revocation or modification of any Permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected to have or result in a
Material Adverse Effect. To the knowledge of Issuer, no officer, director or Employee of Issuer or
any of its Significant Subsidiaries is subject to any Order that prohibits such officer, director
or Employee from engaging in or continuing any conduct, activity, or practice relating to Issuer,
its Significant Subsidiaries or their respective



10









 







businesses except where such prohibition could not
reasonably be expected to have or result in a Material Adverse Effect. To the knowledge of Issuer,
neither Issuer nor any of its Significant Subsidiaries has at any time during the last five years
(i) made any unlawful contribution to any political candidate, or failed to disclose fully any
contribution in violation of Law, or (ii) made any payment to any federal, state or local
governmental, regulatory or administrative officer or official, or other Person charged with
similar public or quasi-public duties, other than payments required or permitted by the Laws of the
United States or any jurisdiction thereof. Neither Issuer nor any of its Significant Subsidiaries
has received at any time any written notice or other written communication from any Governmental
Body or any other Person regarding (i) any actual, alleged, possible, or potential violation of, or
failure to comply with, any Law, or (ii) any actual, alleged, possible, or potential obligation on
the part of Issuer or any of its Significant Subsidiaries to undertake, or to bear all or any
portion of any Liability related to, any non-environmental remedial action of any nature, where
such violation or obligation could reasonably be expected to have or result in a Material Adverse
Effect.



3.15 Authorization.




     Issuer’s Board of Directors has approved the Articles Amendment, the Ancillary Agreements, and
the Code Amendment, and has adopted resolutions recommending that Issuer’s shareholders approve the
Articles Amendment and the Code Amendment. Issuer has the full right, power and authority to
execute and deliver this Agreement and the Ancillary Agreements and, after receipt of the Requisite
Shareholder Approval, will have the power and authority to perform its obligations hereunder to
issue and sell the Purchased Shares to Purchaser; and all corporate action required to be taken for
the due and proper authorization, execution and delivery of this Agreement and the Ancillary
Agreements has been duly and validly taken and, after receipt of the Requisite Shareholder
Approval, all corporate action required to be taken for the consummation of the issuance and sale
of the Purchased Shares to Purchaser will have been duly and validly taken. This Agreement and the
Ancillary Agreements represent valid and binding obligations of Issuer, enforceable against Issuer
in accordance with its terms, except as enforceability may be limited by applicable equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting
creditors’ rights generally, by the exercise of judicial discretion in accordance with equitable
principles and by public policy to the extent that any provision relates to indemnification,
contribution or exculpation.



3.16 REIT Status.





     (a) Issuer has been subject to taxation as a real estate investment trust (“REIT”)
within the meaning of Sections 856 and 857 of the Code and has qualified as a REIT for all of its
taxable years ended December 31, 1993 through December 31, 2008, has been organized and operated
since December 31, 2008 to the date of this representation and intends to continue be organized
and to operate in such a manner as to qualify as a REIT for its taxable year ending December 31,
2009, and has not taken or failed to take any action which would reasonably be expected to result
in a challenge to its taxation as a REIT, and no such challenge is pending or threatened.



11









 






     (b) As of the date hereof, to Issuer’s knowledge based on its reasonable inquiry as set
forth in Section 7.16, Issuer is, and after giving effect to the issuance by Purchaser of all the
Shares, will be, a “domestically controlled qualified investment entity” within the meaning of
Section 897(h)(4) of the Code.



3.17 Investment Company Act.




     Neither Issuer nor any of its Subsidiaries is, or will be immediately after the consummation
of the issuance and sale of the Shares contemplated by this Agreement, required to be registered as
an investment company under the Investment Company Act of 1940, as amended.



3.18 Registration Rights.




     Except as set forth in the Prospectus, there are no Persons with registration or other similar
rights to have any securities registered pursuant to the Registration Statement.



3.19 No Stabilization or Manipulation.




     None of Issuer or any of its Subsidiaries or, to Issuer’s knowledge, any of the officers and
directors thereof acting on Issuer’s or such subsidiaries’ behalf has taken, directly or
indirectly, any action resulting in a violation of Regulation M under the Exchange Act or designed
to cause or result in, or which has constituted or which reasonably might be expected to
constitute, the stabilization or manipulation of the price of the Common Stock.



3.20 Property.




     Except as described in the Prospectus, (i) Issuer or its Subsidiaries have good and marketable
title or leasehold interest, as the case may be, to the Portfolio Properties described in the
Registration Statement and the Prospectus as being owned by Issuer or its Subsidiaries (except with
respect to properties described in the Registration Statement and the Prospectus as being held by
Issuer through joint ventures), in each case free and clear of all Liens and defects (collectively,
“Defects”), except where such Defects could not reasonably be expected to have or result in
a Material Adverse Effect; (ii) the joint venture interest in each Portfolio Property described in
the Registration Statement and the Prospectus, as being held by Issuer through a joint venture, is
owned free and clear of all Defects except for such Defects that could not reasonably be expected
to have or result in a Material Adverse Effect; (iii) all Liens on or affecting the Portfolio
Properties of Issuer or its Subsidiaries are disclosed in the Registration Statement and the
Prospectus, except for any such interests that could not reasonably be expected to have or result
in a Material Adverse Effect; (iv) none of Issuer, its Subsidiaries or, to the knowledge of Issuer,
any lessee of any of the Portfolio Properties is in default under any of the leases governing the
Portfolio Properties, except such defaults that could not reasonably be expected to have or result
in a Material Adverse Effect, and Issuer does not know of any event which, but for the passage of
time or the giving of notice, or both, would constitute a default under any of such leases, except
such defaults that could not reasonably be expected to have or



12









 







result in a Material Adverse Effect;
(v) assuming that the contracts are valid and binding obligations of the Third Parties party
thereto, all contracts of Issuer and any Subsidiary to provide leasing, property management and
construction management services, general contractor services for third parties and real estate
development, construction and miscellaneous tenant services businesses, are enforceable by and in
the name of Issuer or a Subsidiary, as the case may be, except as could not reasonably be expected
to have or result in a Material Adverse Effect; (vi) each of the Portfolio Properties complies with
all applicable Laws, except for such failures to comply that could not reasonably be expected to
have or result in a Material Adverse Effect; and (vii) neither Issuer nor any Subsidiary has any
knowledge of any pending or threatened condemnation proceedings, zoning change or other proceeding
or action that would in any manner affect the size of, use of, improvements on, construction or
access to the Portfolio Properties, except such proceedings, changes, or actions that could not
reasonably be expected to have or result in a Material Adverse Effect. The sale and issuance of
the Purchased Shares to Purchaser will not create or constitute a default under any leasehold
interest of Issuer or any of its Subsidiaries, except such defaults that could not reasonably be
expected to have or result in a Material Adverse Effect.



3.21 Title Insurance.




     Issuer or its subsidiaries have title insurance on each of the Portfolio Properties (except
with respect to each property described in the Prospectus as held by Issuer through a joint
venture): (i) insuring that Issuer or the applicable Subsidiary has good and marketable title (or
leasehold interest) to the applicable Portfolio Property, free and clear of all Defects other than
such Defects as could not reasonably be expected to have or result in a Material Adverse Effect,
and (ii) in an amount at least equal to the greater of (x) the cost of acquisition of such
Portfolio Property and (y) the cost of construction of the improvements located on such Portfolio
Property except, in each case, where the failure to have such title insurance could not reasonably
be expected to have or result in a Material Adverse Effect. The joint venture owning each property
described in the Prospectus as held by Issuer through a joint venture has title insurance on such
property: (i) insuring that such joint venture has good and marketable title (or leasehold
interest) to the applicable Portfolio Property, free and clear of all Defects other than such
Defects as could not reasonably be expected to have or result in a Material Adverse Effect, and
(ii) in an amount at least equal to the greater of (x) the cost of acquisition of such Portfolio
Property by such joint venture and (y) the cost of construction of the improvements located on such
Portfolio Property, except in each case, where the failure to have such title insurance could not
reasonably be expected to have or result in a Material Adverse Effect.



3.22 Mortgages and Deeds of Trust.




     The notes secured by the mortgages and deeds of trust encumbering the Portfolio Properties
(except with respect to each property described in the Prospectus as held by Issuer through a joint
venture) are not convertible, and said mortgages and deeds of trust are not cross-defaulted or
cross-collateralized to any property that is not a Portfolio



13









 







Property, except where such
cross-default or cross-collateralization, if triggered, could not reasonably be expected to have or
result in a Material Adverse Effect.



3.23 Environmental Laws.




     Except as disclosed in writing to Purchaser, (a) with respect to the Portfolio Properties
there (i) is, to Issuer’s knowledge, no unlawful presence of any Hazardous Materials in violation
of Environmental Laws, and (ii) are, to Issuer’s knowledge, no spills, releases, discharges or
disposals of Hazardous Materials in violation of Environmental Laws that have occurred or are
presently occurring as a result of any construction on or operation and use of the Portfolio
Properties, which presence or occurrence in (i) or (ii) above could reasonably be expected to have
or result in a Material Adverse Effect; (b) in connection with the construction on or operation and
use of the Portfolio Properties, Issuer represents that Issuer has no knowledge of (i) any failure
to comply with all applicable Environmental Laws except where such failure could not reasonably be
expected to have or result in a Material Adverse Effect, (ii) the receipt by Issuer or any
Subsidiary of any written notice of a claim pursuant to any Environmental Law or under common law
pertaining to Hazardous Materials on or originating from any Portfolio Property that could
reasonably be expected to have or result in a Material Adverse Effect, (iii) the receipt by Issuer
or any Subsidiary of any written notice from any Governmental Body claiming any material violation
of any Environmental Law that could reasonably be expected to have or result in a Material Adverse
Effect, or (iv) the inclusion or proposed inclusion of any Portfolio Property on the National
Priorities List issued pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. §§ 9601 et seq., by the EPA, on the Comprehensive Environmental Response,
Compensation, and Liability Information System database maintained by the EPA, or on any similar
list published by any Governmental Body of contaminated sites potentially requiring removal,
remediation, or response action pursuant to any other Environmental Law, except where such
inclusion could not reasonably be expected to have or result in a Material Adverse Effect; and (c)
to Issuer’s knowledge, Issuer has received and is in compliance with all Environmental Permits in
connection with Issuer’s operation and use of the Portfolio Properties, except where such
noncompliance could not reasonably be expected to have or result in a Material Adverse Effect. The
representations and warranties in this Section 3.23 are the sole and exclusive representations in
this Agreement relating to compliance with or liability under Environmental Laws.



3.24 Internal Accounting and Other Controls.




     Issuer and its Subsidiaries maintain a system of internal accounting and other controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain accountability
for assets, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accounting for assets is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to any differences. Issuer
has no material



14









 







weaknesses in its internal control over financial reporting and, except as
described in the Prospectus, since the end of Issuer’s most recent audited fiscal year, there has
been no change in Issuer’s internal control over financial reporting that has materially affected,
or is reasonably likely to materially affect, Issuer’s internal control over financial reporting.



3.25 Disclosure Controls.




     Issuer has established and maintains disclosure controls and procedures (as such term is
defined in Rules 13a-15 and 15d-15 under the Exchange Act) in accordance with the rules and
regulations under the Sarbanes-Oxley Act of 2002, the Securities Act and the Exchange Act.



3.26 Insolvency; Financial Covenants.





     (a) After giving effect to the issuance and sale of the Purchased Shares contemplated by
this Agreement, neither Issuer nor any of its Subsidiaries will: (i) be insolvent (either because
its financial condition is such that the sum of its debts is greater than the fair market value
of its assets or because the fair saleable value of its assets is less than the amount required
to pay its probable liabilities on its existing debts as they mature); (ii) have unreasonably
small capital with which to engage in its business; or (iii) have incurred debts beyond its
ability to pay as they become due. Further, to Issuer’s knowledge, Issuer will not receive an
opinion from PricewaterhouseCoopers LLP with respect to its financial statements as of and for
the year ended December 31, 2008, containing a “going concern” determination, whereby the
independent auditors expressed substantial doubt as to Issuer’s ability to continue to meet its
obligations for the next 12 months.




     (b) After giving effect to the transactions contemplated by this Agreement, neither Issuer
nor any of its Subsidiaries is or will be in breach of any financial covenant contained in any
indebtedness set forth on Schedule 2 that could reasonably be expected to have or result in a
Material Adverse Effect; nor does Issuer have knowledge of any existing condition, including the
transactions contemplated by this Agreement, that will, with the passage of time, result in a
default under any indebtedness set forth on Schedule 2.



3.27 Absence of Labor Dispute.




     No labor problem, dispute or Litigation with the Employees exists or, to the knowledge of
Issuer, is threatened or imminent, that could reasonably be expected to have or result in a
Material Adverse Effect.



3.28 Use of Proceeds.




     Issuer will use the net proceeds from the offering of Shares for general corporate purposes,
including, without limitation, the repayment of indebtedness.



15









 





3.29 No Finder’s Fees.




     Except as previously disclosed to Purchaser, Issuer has not incurred (directly or indirectly)
nor will it incur, directly or indirectly, any Liability for any broker’s, finder’s, financial
advisor’s or other similar fee, charge or commission in connection with this Agreement or the
transactions contemplated hereby.



3.30 Insurance.




     Issuer and its Subsidiaries, their assets and properties and their Employees are insured under
various policies of general liability and other forms of insurance, which policies are of the type
and in the amounts customary and adequate for their business.



3.31 Absence of Undisclosed Liabilities.




     Issuer and its Subsidiaries have no material Undisclosed Liabilities.



3.32 Taxes.





     (a) All Tax Returns required to be filed by or on behalf of Issuer or any Subsidiary have
been duly and timely filed with the appropriate Taxing Authority in all jurisdictions in which
such Tax Returns are required to be filed (after giving effect to any valid extensions of time in
which to make such filings), and all such Tax Returns are true, complete, and correct in all
respects, except, other than with respect to federal income tax returns of Issuer, where such
failure to file or failure to be true, complete, and correct could not reasonably be expected to
have or result in a Material Adverse Effect. All Taxes payable by or on behalf of Issuer or any
Subsidiary have been fully and timely paid (whether or not shown on any Tax Return), except where
such failure to fully and/or timely pay could not reasonably be expected to have or result in a
Material Adverse Effect. With respect to any period for which Tax Returns of or relating to
Issuer or any of its subsidiaries have not yet been filed or for which Taxes are not yet due or
owing, Issuer has made due and sufficient accruals for such material Taxes on the face of the
most recent balance sheet included in the financial statements of Issuer and on its Books and
Records. All required estimated Tax payments sufficient to avoid any underpayment penalties have
been made by or on behalf of Issuer and each Subsidiary, except where such failure to make such
payments could not reasonably be expected to have or result in a Material Adverse Effect. Issuer
has not incurred any Liability for Taxes under Section 857(b), 860(c), or 4981 of the Code.
There are no Liens as a result of any unpaid Taxes upon any of the assets of Issuer or any of its
subsidiaries, except for such Liens as could not reasonably be expected to have or result in a
Material Adverse Effect. Neither Issuer nor any of its subsidiaries is the subject of any audit,
examination or other proceeding in respect of Taxes, and neither Issuer nor any of its
subsidiaries has received written notice that it is the subject of any audit, examination or
other proceeding in respect of Taxes by any Taxing Authority. No deficiencies for any Taxes have
been proposed, asserted or assessed against Issuer or any of its subsidiaries, and no requests
for waivers of the time to assess any such Taxes



16









 







are pending, except where such deficiencies
could not reasonably be expected to have or result in a Material Adverse Effect.




     (b) Each of Issuer and its subsidiaries has complied in all respects with all applicable
Laws relating to the payment and withholding of Taxes and has duly and timely withheld and paid
over to the appropriate Taxing Authority all amounts required to be so withheld and paid under
all applicable Laws, except where such failure to comply, withhold or pay could not reasonably be
expected to have or result in a Material Adverse Effect.




     (c) Issuer and its subsidiaries have disclosed on their federal income tax returns all
positions taken therein that could give rise to substantial understatement of federal income tax
within the meaning of Section 6662 of the Code.




     (d) Neither Issuer nor any of its subsidiaries have participated in any reportable
transaction, as defined in Treasury Regulation Section 1.6011-4(b)(1), or a transaction
substantially similar to a reportable transaction.




     (e) Issuer is “diversified” within the meaning of paragraph 4 of Article 10 of the income
tax treaty between the United States and Germany, as amended by the Protocol signed on June 1,
2006.




     (f) For purposes of this Section 3.32, any reference to Issuer or its subsidiaries shall be
deemed to include any Person which merged with or was liquidated into Issuer or any Subsidiary of
Issuer.



3.33 Certain Information




     All information provided by Issuer to Purchaser or Purchaser’s representatives in connection
with the transactions contemplated by this Agreement, regardless of when provided, is true and
correct in all material respects.



ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER




     Purchaser hereby represents and warrants to Issuer as follows:



4.1 Authority.




     Purchaser has full power and authority to enter into this Agreement. The Agreement is a valid
and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms,
except as enforceability may be limited by applicable equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting creditors’ rights generally, and
by the exercise of judicial discretion in accordance with equitable principles.



17









 





4.2 Brokers and Finders.




     Neither Purchaser nor any Related Person of Purchaser has incurred any Liability to any party
for any brokerage fees, agent’s commissions, or finder’s fees in connection with the transactions
contemplated by this Agreement.



4.3 Securities Act.




     Purchaser is acquiring the Shares for its own account and not with a view towards their
distribution within the meaning of Section 2(a)(11) of the Securities Act in any manner that would
be in violation of the Securities Act.



4.4 Beneficial Ownership of Common Stock.




     As of the date hereof, neither Purchaser nor the Otto Family is the Beneficial Owner of (i)
any Common Stock or (ii) any securities or other instruments representing the right to acquire
Common Stock, except that Purchaser is the Beneficial Owner of 6,171,061 shares of Common Stock.
Other than pursuant to the Voting Agreement, neither Purchaser nor the Otto Family has a formal or
informal agreement, arrangement or understanding with any Person (other than Issuer) to acquire,
dispose of or vote any securities of Issuer.



4.5 Availability of Funds.




     Purchaser has, and at each Closing Date, Purchaser will have, available cash in an amount
sufficient for Purchaser to timely pay the aggregate Purchase Price for the Purchased Shares and
all fees, expenses and other amounts contemplated to be paid by Purchaser in connection with the
transactions contemplated by this Agreement.



4.6 Assignee Representations and Warranties.




     To the extent Purchaser transfers its right and obligation under this Agreement to purchase
the Purchased Shares, if any, in whole or in part, to one or more Persons who are members of the
Otto Family, the representations and warranties in Article 4 shall be deemed to also be made by
Purchaser in respect of each such Person and the representations and warranties in Article 4 shall
be deemed to be made in respect of Purchaser and such Person collectively.



ARTICLE 5 COVENANTS OF ISSUER




     Issuer covenants and agrees with Purchaser as follows:



5.1 Access and Information.




     Subject to the confidentiality restrictions set forth in Section 9.1 hereof, from the date
hereof to each Closing Date (as applicable) and during normal business hours, Issuer shall afford
to Purchaser, its lenders, counsel, accountants, and other representatives that need Information
with respect to assisting Purchaser with the evaluation or financing of



18









 







the purchase of the
Purchased Shares, reasonable access to the offices, properties, books, contracts, commitments, and
records of Issuer. Issuer shall furnish such Persons with all Information (including financial and
operating data) concerning Issuer as they reasonably may request.



5.2 Conduct of Business Prior to Closing.




     From the date hereof to each Closing Date (as applicable), except as set forth in Section 5.2,
and except to the extent that Purchaser shall otherwise consent in writing, which shall not be
withheld unreasonably:




     (a) Issuer and its Subsidiaries shall operate substantially as previously operated and only
in the regular and Ordinary Course of Business;




     (b) Issuer and its Subsidiaries shall comply with all applicable Laws where the failure to
so comply would have a Material Adverse Effect;




     (c) Issuer and its Subsidiaries shall maintain the Books and Records in the usual, regular,
and ordinary manner, on a basis consistent with past practices, and prepare and file all Tax
Returns and amendments thereto required to be filed by Issuer after taking into account any
extensions of time granted by any Taxing Authorities;




     (d) not grant any waiver of, or approve any increases in, the restrictions on Beneficial
Ownership contained in the Articles of Incorporation, other than as contemplated by this
Agreement or the Articles Amendment; and




     (e) otherwise report periodically to Purchaser concerning the status of the business,
operations and finances of Issuer.



5.3 Shareholders’ Meeting; Proxy Statement; Listing.





     (a) Issuer shall call a meeting of Issuer’s shareholders to adopt the Articles Amendment and
the Code Amendment (the “Shareholders’ Meeting”) and shall prepare and file a proxy
statement with the Commission related to the notice of the Shareholders’ Meeting and the adoption
of the Articles Amendment, and the Code Amendment, as soon as reasonably practicable (the
“Proxy Statement”). The Proxy Statement will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder, and will not 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, in the light of the circumstances under
which they were made, not misleading.




     (b) Upon approval of the Articles Amendment and the Code Amendment by the shareholders,
Issuer shall prepare and file an application with the New York Stock Exchange to register the
Shares for listing thereon.




19











 





5.4 Notification of Changes; Supplemental Disclosure.




     Between the date hereof and each Closing Date (as applicable), Issuer shall promptly notify
Purchaser in writing of (i) any change or development that constitutes a Material Adverse Effect
or, (ii) the institution of or, if known by Issuer, the threat of institution of Litigation against
Issuer or a Subsidiary where such Litigation could reasonably be expected to have or result in a
Material Adverse Effect, and any Litigation related to this Agreement.



ARTICLE 6 MUTUAL COVENANTS




6.1 Governmental Filings.




     To the extent required by the HSR Act, each of the Parties will, within a reasonable period of
time, file with the United States Federal Trade Commission (“FTC”) and the United States
Department of Justice (“DOJ”) the notification and report form required for the
transactions contemplated hereby, will promptly file any supplemental or additional information
that reasonably may be requested in connection therewith pursuant to the HSR Act, and will comply
in all material respects with the requirements of the HSR Act. In the event any Litigation is
threatened or instituted challenging the transactions contemplated by this Agreement as violative
of Antitrust Laws, each Party shall use its commercially reasonable efforts to avoid the filing of,
or resist or resolve such Litigation. Each Party shall use its commercially reasonable efforts to
take such action as may be required by: (i) the FTC and/or the DOJ in order to resolve such
objections as either of them may have to the transactions contemplated by this Agreement under the
Antitrust Laws, or (ii) any federal or state court of the United States, or similar court of
competent jurisdiction in any foreign jurisdiction, in any Litigation brought by any Governmental
Body or any other Person challenging the transactions contemplated by this Agreement as violative
of the Antitrust Laws, in order to avoid the entry of any Order (whether temporary, preliminary or
permanent) that has the effect of preventing the consummation of the transactions contemplated by
this Agreement and to have vacated, lifted, reversed or overturned any such Order. Commercially
reasonable efforts shall not include the willingness of Purchaser to accept an Order agreeing to
the divestiture, or the holding separate, of any assets of Purchaser or Issuer or any of their
respective Related Persons that Purchaser reasonably determines to be material to Purchaser or to
the benefits of the transaction for which it has bargained hereunder. Purchaser shall be entitled
to direct any proceedings or negotiations with any Governmental Body relating to any of the
foregoing, provided that it shall afford Issuer a reasonable opportunity to participate therein.



6.2 Further Mutual Covenants.




     Purchaser and Issuer shall each take all actions contemplated by this Agreement, and, subject
to Purchaser’s and Issuer’s, as applicable, right to terminate this Agreement pursuant to Article
10 hereof, do all things reasonably necessary to effect the consummation of the transactions
contemplated by this Agreement. Except as otherwise provided in this Agreement, Purchaser and
Issuer shall each refrain from knowingly



20









 




taking or failing to take any action which would render any of the representations or
warranties contained in Article 3 or Article 4, as applicable, of this Agreement inaccurate in any
material respect as of a Closing Date (as applicable). Each Party shall promptly notify the other
Party of any Litigation that shall be instituted or threatened against such Party to restrain,
prohibit, or otherwise challenge the legality of any transaction contemplated by this Agreement.




6.3 Commercially Reasonable Efforts.




     Issuer and Purchaser will use commercially reasonable efforts to cause the conditions in
Article 7 and Article 8 to be satisfied.



ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF

PURCHASER




     The obligation of Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction, on or before the relevant Closing Date (as applicable), of
each of the following conditions, all or any of which may be waived in writing, in whole or in
part, by Purchaser:



7.1 Representations and Warranties.




     The representations and warranties of Issuer (i) contained in Section 3.5 and Section 3.26
shall be true and correct in all respects, both when made and as of the Closing Date, (ii)
contained in Section 3.10(a) shall be true and correct in all respects both when made and as of the
Closing Date (except to the extent expressly made as of an earlier date, in which case as of such
date), and (iii) contained elsewhere in Article 3 shall be true and correct in all respects
(without giving effect to any materiality or Material Adverse Effect qualifications contained
therein) both when made and as of the Closing Date (except to the extent expressly made as of an
earlier date, in which case as of such date), except, with regard to Section 7.1(iii) only, where
the failure of such representations and warranties to be so true and correct could not reasonably
be expected to have or result in a Material Adverse Effect; and Purchaser shall have received a
certificate dated as of such Closing Date executed by an authorized officer of Issuer to such
effect.



7.2 Compliance by Issuer.




     Issuer shall have duly performed in all material respects all of the covenants, agreements,
and conditions contained in this Agreement to be performed by Issuer on or prior to each Closing
Date (as applicable) and Purchaser shall have received a certificate dated such Closing Date,
executed by an authorized officer of Issuer to such effect. Purchaser shall have received from
Issuer such certificates or other evidence, dated as of such Closing Date, as Purchaser or its
counsel shall reasonably request to evidence the performance of all covenants and the fulfillment
by Issuer, or such other satisfaction at or prior to such Closing Date, of the terms and conditions
of this Agreement.



21









 





7.3 No Injunction; Litigation.




     No Litigation, regulation, or legislation shall be pending or overtly threatened by a Third
Party which seeks to enjoin, restrain, or prohibit Purchaser in respect of the consummation of the
transactions contemplated hereby.



7.4 Consents; Authorizations; Approval of Legal Matters.




     All authorizations, Orders, or Consents of any Governmental Body required to consummate the
issuance and sale of the Purchased Shares to Purchaser shall have been obtained. Purchaser shall
have received a certificate dated as of the relevant Closing Date, executed by Issuer to the
foregoing effect, and Purchaser shall be reasonably satisfied with the terms, conditions, and
restrictions of and obligations under each such authorization, Order, or Consent.



7.5 Certified Resolutions.




     Purchaser shall have received a certificate of the Secretary or Assistant Secretary of Issuer
containing a true and correct copy of the resolutions duly adopted by the Board of Directors of
Issuer, approving and authorizing the Agreement. The Secretary or Assistant Secretary of Issuer
shall also certify that such resolutions have not been rescinded, revoked, modified, or otherwise
affected and remain in full force and effect.



7.6 Incumbency.




     Purchaser shall have received a certificate of incumbency of Issuer executed by the Secretary
or Assistant Secretary of Issuer listing the officers of Issuer authorized to execute the
Agreement, and certifying the authority of each such officer to execute the agreements, documents,
and instruments on behalf of Issuer in connection with the consummation of the transactions
contemplated hereby.



7.7 Certified Documents.




     Purchaser shall have received (a) the Articles of Incorporation, including the Articles
Amendment, of Issuer, certified as of a recent date by the Secretary of State of the State of Ohio
and a copy of the Code of Regulations of Issuer, as amended by the Code Amendment, certified as of
the relevant Closing Date by the Secretary or Assistant Secretary of Issuer, (b) the articles of
incorporation or similar organizational document, as amended, of each Significant Subsidiary,
certified as of a recent date by the Secretary of State of the state under the Laws of which the
Significant Subsidiary is incorporated or organized, and a copy of the code of regulations, bylaws,
or similar operating document of each Significant Subsidiary, as amended, certified as of the
relevant Closing Date by the Secretary or Assistant Secretary of the Significant Subsidiary; and
(c) a certificate of status, good standing or existence with respect to Issuer and each Significant
Subsidiary from the Secretary of State of the state under the laws of which Issuer or such
Significant Subsidiary is incorporated, organized, as applicable, and of each other state in which
Issuer is qualified or registered to do business, dated as of a recent date.



22









 





7.8 Going Concern Opinion.




     Issuer shall have received from PricewaterhouseCoopers LLP an audit report on Issuer’s
consolidated financial statements as of December 31, 2007 and 2008 and for the three years ended
December 31, 2008, and such report shall not include a “going concern” determination, whereby the
independent auditors expressed substantial doubt as to Issuer’s ability to continue to meet its
obligations for the next 12 months.



7.9 New York Stock Exchange Approval.




     The shareholders of Issuer shall have approved the issuance and sale of the Shares to
Purchaser for purposes of Section 312.03 of the New York Stock Exchange Listed Company Manual.



7.10 Articles of Incorporation.




     The Articles Amendment in the form attached hereto as Exhibit B, without deviation, shall have
been (i) adopted by the shareholders of Issuer in accordance with applicable Law, and (ii) filed
with the Secretary of State of the State of Ohio.



7.11 Code of Regulations.




     The Code Amendment in the form attached hereto as Exhibit C, without deviation, shall have
been approved by the shareholders of Issuer in accordance with applicable Law.



7.12 Waiver Agreement.




     A
waiver agreement in the form attached hereto as Exhibit D, without deviation (the
“Waiver Agreement”), relating to a waiver of the Related Party Limit (as defined in the
Articles of Incorporation), shall have been executed by a duly authorized officer of Issuer.



7.13 Opinions of Issuer’s Counsel.





     (a) Purchaser shall have received the opinion of Jones Day, counsel to Issuer, in
substantially the form of Exhibit E hereto, and otherwise in form and substance (including the
exhibits thereto) reasonably satisfactory to Purchaser.




     (b) Purchaser shall have received the opinion of Jones Day, counsel to Issuer, substantially
in the form of Exhibit F hereto, that commencing with the taxable year ended December 31, 1993,
Issuer was organized and has operated in conformity with the requirements for qualification and
taxation as a REIT under the Code and that Issuer’s organization (taking into account the
purchase of the Purchased Shares and the Articles Amendment contemplated by this Agreement) and
proposed method of operation will enable it to continue to meet the requirements for
qualification and taxation as a REIT (with customary exceptions, assumptions and qualifications
and based upon customary representations).



23









 





7.14 Investor Rights Agreement.




     An investor rights agreement in the form attached hereto as Exhibit G, without deviation (the
“Investor Rights Agreement”), addressing Purchaser’s rights to representation on Issuer’s
Board of Directors and to the registration of the resale of the Purchased Shares under the
Securities Act shall have been executed by a duly authorized officer of Issuer.



7.15 Voting Agreement.




     A voting agreement in the form attached hereto as Exhibit H, without deviation (the
“Voting Agreement”), relating to the agreement of certain key shareholders to vote in favor
of Purchaser’s nominees to Issuer’s Board of Directors, shall have been executed by the parties
thereto (other than Purchaser).



7.16 Certificate Regarding Domestically Controlled Qualified Investment Entity Status.




     Issuer shall have delivered to Purchaser a certification dated the Closing Date that, to
Issuer’s knowledge, after reasonable inquiry, Issuer is a “domestically controlled qualified
investment entity” within the meaning of Section 897(h)(4) of the Code as of the date thereof. For
purposes of such certification, reasonable inquiry shall be deemed to be a review of all Schedule
13D and 13G filings made under the Exchange Act with the Commission with respect to Issuer after
December 31, 2006, and all IRS Form 1042 filings made by or on behalf of Issuer since December 31,
2006. Such certificate shall be accompanied by copies of information that have been obtained or
relied upon by Issuer for purposes of such certificate.



7.17 Tax Agreement.




     A tax agreement in the form attached hereto as Exhibit I, without deviation (the “Tax
Agreement”), pursuant to which Issuer will agree to provide Purchaser information and take
certain actions on an ongoing basis relating to Issuer’s status as a “domestically controlled
qualified investment entity” and providing information relating to withholding tax on dividends,
shall have been executed by a duly authorized officer of Issuer.



7.18 No Material Adverse Change.




     There shall not have occurred any change or development that would constitute a Material
Adverse Change, and Purchaser shall have received a certificate dated as of the relevant Closing
Date, executed by a duly authorized officer of Issuer to such effect.



7.19 Change of Control.




     Purchaser has received a waiver from each of the officers of Issuer set forth on Schedule 5
that the acquisition by the Otto Family of “beneficial ownership” (as defined in Section 13(d) of
the Exchange Act) of 20% or more of the outstanding shares of



24









 







Common Stock will not constitute a “change in control” for purposes of such officer’s change
in control agreement with Issuer.



7.20 Investor Rights of Purchaser.





     (a) In the event Purchaser does not purchase the Purchased Shares in Tranches, Issuer’s
Board of Directors shall have appointed two directors identified by Purchaser and reasonably
satisfactory to Issuer, to fill vacancies on the Board of Directors, and shall have expanded the
Board of Directors if necessary to create such vacancies.




     (b) In the event Purchaser purchases the Purchased Shares in Tranches, (i) on the First
Closing Date, Issuer’s Board of Directors shall have appointed one director identified by
Purchaser and reasonably satisfactory to Issuer, to fill a vacancy on the Board of Directors, and
shall have expanded the Board of Directors if necessary to create such vacancy, and (ii) on the
Second Closing Date, Issuer’s Board of Directors shall have appointed one director identified by
Purchaser (for purposes of clarification, the Second Closing Date director would be the second of
two directors named by Purchaser and appointed by Issuer’s Board of Directors pursuant to the
terms hereof) and reasonably satisfactory to Issuer, to fill a vacancy on the Board of Directors,
and shall have expanded the Board of Directors if necessary to create such vacancy; provided,
however, that if the Second Closing Date occurs after a definitive proxy statement for the 2008
annual meeting of shareholders has been mailed to Issuer’s shareholders but prior to the annual
meeting of Issuer’s shareholders, Issuer’s Board of Directors shall appoint Purchaser’s nominee
immediately following the annual meeting of Issuer’s shareholders.



7.21 Term Loan.




     Issuer or one of its wholly owned Subsidiaries shall have obtained and entered into a term
loan that provides Issuer with financing as of the First Closing Date or Non-Tranche Closing Date,
as applicable, in the aggregate amount of at least US$60 million. As of the date hereof, Issuer
has obtained a non-binding commitment for such funding, the terms and conditions of which are set
forth on Schedule 6 hereto.



7.22 Financing.




     In addition to the term loan provided for in Section 7.21, Issuer or one of its wholly owned
Subsidiaries shall have obtained and entered into one or more debt financing arrangements that
provides Issuer or its wholly owned Subsidiaries with aggregate debt financing as of the First
Closing Date or Non-Tranche Closing Date, as applicable, that is at least equal to the total
Purchase Price, and each such debt financing arrangement shall be under substantially the same
terms and conditions as set forth on Schedule 7 hereto.



ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF ISSUER




     The obligation of Issuer to consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction, on or before the relevant Closing Date (as



25









 







applicable) hereunder, of each of the following conditions, all or any of which may be waived,
in whole or in part, by Issuer.



8.1 Certificate Regarding Representations and Warranties.




     The representations and warranties of Purchaser contained in Article 4 shall be true and
correct in all respects both when made and as of the Closing Date (except to the extent expressly
made as of an earlier date, in which case as of such date), except where the failure of such
representations and warranties to be so true and correct could not reasonably be expected to have
or result in a material adverse effect on the ability of Purchaser to consummate the purchase of
the Purchased Shares, and Issuer shall have received a certificate dated as of such Closing Date,
executed by Purchaser, to such effect.



8.2 Compliance by Purchaser.




     Purchaser shall have duly performed in all material respects all of the covenants, agreements,
and conditions contained in this Agreement to be performed by Purchaser on or before the relevant
Closing Date, and Issuer shall have received a certificate dated as of such Closing Date, executed
by Purchaser, to such effect. Issuer shall have received from Purchaser all applicable closing
deliveries, and such certificates or other evidence, duly executed by Purchaser, dated as of such
Closing Date, as Issuer or its counsel shall reasonably request to evidence the performance of all
covenants and the fulfillment by Purchaser, or such other satisfaction at or prior to such Closing
Date, of the terms and conditions of this Agreement.



8.3 No Injunction, Litigation.




     No Litigation, regulation, or legislation shall be pending or overtly threatened by a Third
Party which seeks to enjoin, restrain, or prohibit Issuer, in respect of the consummation of the
transactions contemplated hereby.



8.4 New York Stock Exchange Approval.




     The shareholders of Issuer shall have approved the issuance and sale of the Shares to
Purchaser for purposes of Section 312.03 of the New York Stock Exchange Listed Company Manual.



8.5 Articles of Incorporation.




     The Articles Amendment in the form attached hereto as Exhibit B, without deviation, shall have
been: (i) adopted by the shareholders of Issuer in accordance with applicable Law, and (ii) filed
with the Secretary of State of the State of Ohio.



26









 





8.6 Code of Regulations.




     The Code Amendment in the form attached hereto as Exhibit C, without deviation, shall have
been approved by the shareholders of Issuer in accordance with applicable Law.



8.7 Payment of Purchase Price.




     Issuer shall have received an amount equal to the product of the Purchase Price and the number
of Purchased Shares purchased on such Closing Date (as applicable) from Purchaser.



ARTICLE 9 CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS




9.1 Confidentiality.




     The Information is disclosed to Purchaser solely for Purchaser’s use in completing its
analysis incidental to this Agreement, and Purchaser agrees that its use of the Information will be
governed by the terms and conditions of the Confidentiality Agreement.



9.2 Public Announcements.




     Issuer and Purchaser will consult with each other before issuing any press releases or
otherwise making any public statements or filings with any Governmental Body with respect to this
Agreement or the transactions contemplated hereby, shall modify any portion thereof if the other
Party reasonably objects thereto, and shall not issue any press releases or make any public
statements or filings with any Governmental Body prior to such consultation, unless the same may be
required by applicable Law or the rules and regulations of the New York Stock Exchange.
Notwithstanding anything to the contrary in the foregoing, Issuer shall not be required to consult
with Purchaser before disclosing or describing this Agreement or transactions contemplated hereby
in (a) filings with the Commission other than (i) a Current Report on Form 8-K announcing the entry
into this Agreement, (ii) a preliminary proxy statement and definitive proxy statement relating to
Issuer shareholder approvals required as conditions by the terms of this Agreement, (iii) the
prospectus supplement relating to the issuance of the Purchased Shares, and (iv) communications
made pursuant to Rule 14a-12 under the Exchange Act, or (b) non-scripted conference calls not
specifically designed to discuss this Agreement or the transactions contemplated hereby or analyst
conference or meetings.



ARTICLE 10 TERMINATION




          (a) This Agreement may be terminated:



          (i) by the mutual consent of Purchaser and Issuer;




          (ii) by Purchaser if any condition in Article 7 becomes impossible to perform or satisfy
(other than as a result of a breach or default by Purchaser in the




27









 







performance of its obligations hereunder) and the performance of such condition has not been
waived by Purchaser in writing at or prior to the relevant Closing Date;




          (iii) by Issuer if any condition in Article 8 becomes impossible to perform or satisfy
(other than as a result of a breach or default by Issuer in the performance of its obligations
hereunder) and the performance of such condition has not been waived by Issuer in writing at or
prior to the relevant Closing Date; or




          (iv) by either Party (other than a Party that is in material default of its obligations
under this Agreement) if the Non-Tranche Closing Date or the First Closing Date, as applicable,
shall not have occurred on or before July 15, 2009.




     (b) Upon termination, each provision of this Agreement shall have no further force and
effect, except for Article 9 (Confidentiality; Public Announcements) and Article 11.2 (Fees and
Expenses), each of which shall survive.



ARTICLE 11 GENERAL PROVISIONS




11.1 Definitions.




     (a) The terms set forth below shall have the meanings ascribed thereto in the referenced
sections:



	 	 	 	 	 
	Term	 	Page
	Agreement
	 	 	1	 
	Closing Date
	 	 	3	 
	Common Stock
	 	 	1	 
	Defects
	 	 	12	 
	DOJ
	 	 	20	 
	First Closing Date
	 	 	3	 
	First Tranche Purchase Price
	 	 	2	 
	First Tranche Shares
	 	 	1	 
	FTC
	 	 	20	 
	Investor Rights Agreement
	 	 	24	 
	Issuer
	 	 	1	 
	Material Adverse Change
	 	 	6	 
	Material Adverse Effect
	 	 	6	 
	Non-Tranche Closing Date
	 	 	3	 
	preliminary prospectus
	 	 	4	 
	Prospectus
	 	 	4	 
	Proxy Statement
	 	 	19	 
	Purchase Price
	 	 	2	 
	Purchased Shares
	 	 	1	 
	Purchaser
	 	 	1	 
	Registration Statement
	 	 	4	 
	REIT
	 	 	11	 
	Requisite Shareholder Approval
	 	 	9	 
	Second Closing Date
	 	 	3	 
	Second Tranche Purchase Price
	 	 	2	 
	Second Tranche Shares
	 	 	1	 
	Shareholders’ Meeting
	 	 	19	 
	Shares
	 	 	2	 
	Significant Subsidiary
	 	 	8	 
	Tax Agreement
	 	 	24	 
	Tranches
	 	 	1	 
	Voting Agreement
	 	 	24	 
	Waiver Agreement
	 	 	23	 
	Warrant
	 	 	1	 
	Warrant Shares
	 	 	2	 
	Warrants
	 	 	1	 






     (b) Except as otherwise provided herein, the capitalized terms set forth below shall have
the following meanings:



28









 





          (i) “Aggregate Stock Issuances” shall mean the aggregate number of shares of Common Stock
issued and sold by Issuer, including Stock Equivalents deemed to have been issued by Issuer, but
not including (A) Excluded Stock, (B) other issuances of Common Stock provided in Section 1.5 that
have occurred from and after the date hereof and to and including the relevant Closing Dates, (C)
shares of Common Stock issued in connection with the exercise, conversion or exchange of Stock
Equivalents to the extent that the issuance of such Stock Equivalents has previously been deemed an
issuance and sale of shares of Common Stock for purposes of this definition, and (D) the Shares.



          (ii) “Ancillary Agreements” means the Waiver Agreement, the Investor Rights Agreement, and the
Tax Agreement.



          (iii) “Antitrust Laws” means the HSR Act, the Sherman Act, as amended, the Clayton Act, as
amended, the Federal Trade Commission Act, as amended, and any other federal, state or foreign Law
or Order designed to prohibit, restrict or regulate actions in order to promote or enhance
competition and/or prevent monopolization or restraint of trade.



          (iv) “Articles Amendment” means the amendment to the Articles of Incorporation, without
deviation, in the form attached hereto as Exhibit B.



          (v) “Articles of Incorporation” means the Second Amended and Restated Articles of
Incorporation of Issuer.



          (vi) “Beneficial Ownership” shall have the meaning ascribed to it in Issuer’s Articles of
Incorporation. The terms “Beneficial Owner,” “Beneficially Own,” and “Beneficially Owned” shall
have the correlative meanings.



          (vii) “Board of Directors” shall mean Issuer’s Board of Directors.



          (viii) “Books and Records” means all existing data, databases, books, records, correspondence,
business plans and projections, tenant and vendor lists, files, papers, and, to the extent
permitted under applicable Law, copies of historical personnel, payroll and medical records of each
of the Employees in the possession of Issuer, including employment applications, employment
agreements, confidentiality and non-compete agreements, corrective action reports, disciplinary
reports, notices of transfer, notices of rate changes, other similar documents, and any summaries
of such documents regularly prepared by Issuer; all reported medical claims made for each Employee;
and all manuals and printed instructions of Issuer.



          (ix) “Business Day” means any day on which national banks are open for business in the City of
New York.



          (x) “Code” means the Internal Revenue Code of 1986, as amended.



          (xi) “Code Amendment” means the amendment to Issuer’s Code of Regulations granting Issuer’s
Board of Directors the authority to fix the number of the



29









 







members of the Board of Directors, without deviation, in the form attached hereto as Exhibit
C.



          (xii) “Code of Regulations” means the Amended and Restated Code of Regulations of Issuer.



          (xiii) “Commission” shall mean the United States Securities and Exchange Commission.



          (xiv) “Confidentiality Agreement” means that certain confidentiality agreement, dated as of
February 9, 2009, between Purchaser and Issuer.



          (xv) “Consent” means any consent, approval, authorization, clearance, exception, waiver or
similar affirmation by any Person required pursuant to any contract, Law, Order or Permit.



          (xvi) “Employees” means all employees of Issuer or any Subsidiary of Issuer.



          (xvii) “Environmental Law” means any and all statutes, codes, laws (including common law),
ordinances, agency rules, regulations, and reporting or licensing requirements relating to
pollution or protection of human health (with respect to exposure to Hazardous Materials) or the
environment (including ambient air, surface water, ground water, land surface, or subsurface
strata), or emissions, discharges, releases, or threatened releases of, or the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or handling of, any
Hazardous Material, including, (A) the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. §§9601 et seq.; (B) the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. §§6901 et seq.; (C) the Emergency
Planning and Community Right to Know Act (42 U.S.C. §§11001 et seq.); (D) the Clean Air Act (42
U.S.C. §§ 7401 et seq.); (E) the Clean Water Act (33 U.S.C. §1251 et seq.); (F) the Toxic
Substances Control Act (15 U.S.C. §2601 et seq.); (G) the Hazardous Materials Transportation Act
(49 U.S.C. §§ 5101 et seq.); (H) the Safe Drinking Water Act (41 U.S.C. §300f et seq.); (I) any
state, county, municipal or local Laws similar or analogous to the federal Laws listed in parts
(A)-(H) of this subparagraph, (J) any amendments to the Laws listed in parts (A)-(I) of this
subparagraph, and (K) any Laws or Orders adopted pursuant to or implementing the Laws listed in
parts (A)-(J) of this subparagraph.



          (xviii) “Environmental Permits” means Permits, Licenses, approvals, Consents, Orders, and
authorizations which are required under Environmental Laws in connection with Issuer’s operations
and business or the ownership, use, or lease of Issuer’s assets or properties.



          (xix) “EPA” means the United States Environmental Protection Agency.



          (xx) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.



30









 





          (xxi) “Excluded Stock” means (i) shares of Common Stock, or options or other equity awards for
shares of Common Stock, issued or issuable pursuant to equity compensation plans or arrangements
for officers, directors and other Employees of Issuer, (ii) shares of Common Stock issued or
issuable upon the conversion or exchange of any security of Issuer or its Subsidiaries convertible
into or exchangeable for Common Stock outstanding on the date hereof, including, without
limitation, upon conversion of Issuer’s convertible debt securities and operating partnership
units, and (iii) shares of Common Stock issued in connection with any dividends declared on shares
of Common Stock.



          (xxii) “Executive Officer” means, with respect to Issuer, any “officer” (as such term is
defined in Rule 16a-1(f) under the Exchange Act) of Issuer.



          (xxiii) “Existing Holder” has the meaning ascribed to it in the Articles of Incorporation.



          (xxiv) “Existing Holder Limit” has the meaning ascribed to it in the Articles of
Incorporation.



          (xxv) “Floor Price” means US$2.94.



          (xxvi) “GAAP” means generally accepted accounting principles as employed in the United States
of America, applied consistently with prior periods and with Issuer’s historical practices and
methods, provided that standards of materiality applicable to Issuer shall be employed without
regard to standards of materiality used by Issuer in prior periods, and provided further, that
Issuer’s historical practices and methods shall not be consistently applied to the extent they are
not in accordance with GAAP.



          (xxvii) “Governmental Body” means any government or governmental entity or political
subdivision thereof, whether federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).



          (xxviii) “Hazardous Materials” means (A) any hazardous substance, hazardous material,
hazardous waste, regulated substance, or toxic substance (as those terms are defined by any
applicable Environmental Laws) and (B) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil, asbestos-containing materials and any polychlorinated biphenyls.



          (xxix) “HSR Act” means Section 7A of the Clayton Act, as added by Title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder.



          (xxx) “Information” means information or documentation owned by Issuer which information may
include, but is not necessarily limited to, financial data, business plans, personnel information
(to the extent permitted under applicable Law), drawings, samples, devices, trade secrets,
technical information, results of research and other data in either oral or written form; provided,
however, that “Information” does not include information which (A) is or becomes generally
available to the public other than



31









 







as a result of a disclosure by Purchaser or its representatives, (B) was lawfully within
Purchaser’s possession prior to its being furnished to Purchaser by or on behalf of Issuer,
provided further that the source of such information was not known by Purchaser to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary obligation of
confidentiality to Issuer or any other Person with respect to such information, or (C) is developed
by Purchaser after initial disclosure by Issuer.



          (xxxi) “IRS” means the Internal Revenue Service of the United States of America.



          (xxxii) “Law” means any code, directive, law (including common law), ordinance, regulation,
reporting or licensing requirement, rule, or statute, including those promulgated, interpreted, or
enforced by any Governmental Body.



          (xxxiii) “Liability” means any direct or indirect, primary or secondary, liability,
indebtedness, obligation, penalty, cost or expense (including costs of investigation, collection
and defense), claim, deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection or deposit in the
Ordinary Course of Business) of any type, secured or unsecured whether accrued, absolute or
contingent, direct or indirect, liquidated or unliquidated, matured or unmatured, known or unknown
or otherwise.



          (xxxiv) “License” means any license, franchise, notice, permit, easement, right, certificate,
authorization, or approval to which any Person is a party or that is or may be binding on any
Person or its securities, property or business.



          (xxxv) “Lien” means any conditional sale agreement, default of title, easement, encroachment,
encumbrance, hypothecation, lien, mortgage, pledge, reservation, restriction, right of way,
security interest, title retention or other security arrangement, on, or with respect to any
property or property interest.



          (xxxvi) “Litigation” means any suit, action, administrative or other audit (other than regular
audits of financial statements by outside auditors), proceeding, arbitration, cause of action,
charge, claim, complaint, compliance review, criminal prosecution, grievance inquiry, hearing,
inspection, investigation (governmental or otherwise), before any Governmental Body.



          (xxxvii) “New Purchase Price” shall mean and be calculated as follows:



NPP = (P1) (Q1) + (P2) (Q2)

Q1 + Q2




where:



NPP = New Purchase Price



P1 = Floor Price




32









 







Q1 = number of shares of Common Stock outstanding and Stock Equivalents at the Closing Date, other than the Excluded Stock and issuances of Common Stock provided in Section 1.5



P2 = weighted average price per share received for the Aggregate Stock Issuances



Q2 = number of shares in the Aggregate Stock Issuances since the date of this Agreement




          (xxxviii) “Order” means any decree, injunction, judgment, order, ruling, writ, quasi-judicial
decision or award or administrative decision or award of any federal, state, local, foreign or
other court, arbitrator, mediator, tribunal, administrative agency or Governmental Body to which
any Person is a party or that is or may be binding on any Person or its securities, assets or
business.



          (xxxix) “Ordinary Course of Business” means the following: an action taken by a Person will be
deemed to have been taken in the Ordinary Course of Business only if that action: (A) is
consistent in nature, scope and magnitude with the past practices of such Person and is taken in
the ordinary course of the normal, day-to-day operations of such Person; and (B) does not require
authorization by the shareholders of such Person (or by any Person or group of Persons exercising
similar authority).



          (xl) “Otto Family” means (i) Professor Werner Otto, his wife Maren Otto and/or all descendants
of Professor Werner Otto, including without limitation Purchaser (illegitimate descendants only if
they have obtained the status of a legitimate descendant by legitimation or adoption by Professor
Werner Otto or one of his legitimate descendants, or if they are children of a female legitimate
descendant of Professor Werner Otto); (ii) any trust or any family foundation which has exclusively
been established in favor of one or several of the individuals named under (i) above; and (iii) any
partnership, firm, corporation, association, trust, unincorporated organization, joint venture,
limited liability company or other legal entity, in which the individuals or entities named under
(i) and (ii) hold (either directly or indirectly) more than 50% of the voting rights or more than
50% of the equity capital of any such partnership, firm, corporation, association, trust,
unincorporated organization, joint venture, limited liability company or other legal entity.



          (xli) “Ownership Limit” has the meaning ascribed to it in the Articles of Incorporation.



          (xlii) “Party” means any party hereto and “Parties” means all parties hereto.



          (xliii) “Permit” means any Governmental Body approval, authorization, certificate, easement,
filing, franchise, license, notice, permit, or right to which any Person is a party or that is or
may be binding upon or inure to the benefit of any Person or its securities, assets, or business.



33









 





          (xliv) “Person” means a natural person or any legal, commercial or governmental entity, such
as, but not limited to, a corporation, general partnership, joint venture, limited partnership,
limited liability company, limited liability partnership, trust, business association, group acting
in concert, or any person acting in a representative capacity.



          (xlv) “Portfolio Properties” means the portfolio properties, including, without limitation,
shopping centers, residential properties, office buildings and business centers (including, without
limitation, centers owned through unconsolidated joint ventures and other than are otherwise
consolidated by Issuer) and undeveloped land described in the Registration Statement and Prospectus
as being owned by Issuer or its subsidiaries.



          (xlvi) “Related Person” means with respect to a particular individual: (A) each other member
of such individual’s Family; (B) any Person that is directly or indirectly controlled by such
individual or any one or more members of such individual’s Family; (C) any Person in which members
of such individual’s Family hold (individually or in the aggregate) a Material Interest; and (D)
any Person with respect to which one or more members of such individual’s Family serves as a
director, officer, partner, executor or trustee (or in a similar capacity). With respect to a
specified Person other than an individual: (aa) any Person that directly or indirectly controls,
is directly or indirectly controlled by or is directly or indirectly under common control with such
specified Person; (bb) any Person that holds a Material Interest in such specified Person; (cc)
each Person that serves as a director, officer, partner, executor or trustee of such specified
Person (or in a similar capacity); (dd) any Person in which such specified Person holds a Material
Interest; and (ee) any Person with respect to which such specified Person serves as a general
partner or a trustee (or in a similar capacity). For purposes of this definition, (I)
“control” (including “controlling,” “controlled by,” and “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or
otherwise, and shall be construed as such term is used in the rules promulgated under the
Securities Act; (II) the “Family” of an individual includes (1) the individual, (2) the
individual’s spouse, (3) any other natural person who is the parent, child, grandparent, grandchild
or sibling of the individual or the individual’s spouse and (4) any other natural person who
resides with such individual; and (III) “Material Interest” means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of voting securities or
other voting interests representing at least five percent (5%).



          (xlvii) “Securities Act” means the Securities Act of 1933, as amended.



          (xlviii) “Stock Equivalents” means any security, option, warrant, right or claim exercisable
into, exchangeable for, or convertible into Common Stock, and if Issuer in any manner grants or
issues Stock Equivalents, it shall be deemed to have issued the maximum number of shares of Common
Stock such Stock Equivalents are exercisable or exchangeable for or convertible into and for a
consideration equal to the consideration, if any, to be received by Issuer upon the issuance of the
Stock Equivalents plus the



34









 







minimum exercise or conversion price provided in such Stock Equivalents for the Common Stock
covered thereby.



          (xlix) “Subsidiary” of a Person means any business entity of which the Person either (A) owns
or controls 50% or more of the outstanding equity securities, either directly or indirectly,
(provided there shall not be included any such entity the equity securities of which are owned or
controlled in a fiduciary capacity), (B) in the case of partnerships, serves as a general partner,
(C) in the case of a limited liability company, serves as a managing member, or (D) otherwise has
the ability to elect a majority of the directors, trustees, managing members or others thereof.



          (l) “Tax” means any federal, state, county, local, or foreign tax, charge, fee, levy, impost,
duty, or other assessment, including income, gross receipts, excise, employment, sales, use,
transfer, recording, License, payroll, franchise, severance, documentary, stamp, occupation,
windfall profits, environmental, federal highway use, commercial rent, customs duty, capital stock,
paid-up capital, profits, withholding, Social Security, single business and unemployment,
disability, real property, personal property, registration, ad valorem, value added, alternative or
add-on minimum, estimated, or other tax or governmental fee of any kind whatsoever, imposed or
required to be withheld by any Governmental Body, including any interest, penalties, and additions
imposed thereon or with respect thereto, and including Liability for the taxes of any other Person
under Treas. Reg. 1.1502-6 (or any similar provision of state, local, or foreign Law) as a
transferee or successor, by contract, or otherwise.



          (li) “Tax Return” means any return (including any informational return) report, statement,
schedule, notice, form or other document or information filed with or submitted to, or required to
be filed with or submitted to any Taxing Authority in connection with the determination,
assessment, collection or payment of any Tax or in connection with the administration,
implementation or enforcement of compliance with any legal requirement relating to any Tax.



          (lii) “Taxing Authority” means the IRS and any other federal, state, local or foreign
Governmental Body responsible for the administration of any Tax.



          (liii) “Third Party” means any Person other than a Party.



          (liv) “Undisclosed Liabilities” means any Liability that is not fully reflected or reserved
against in Issuer’s financial statements.



11.2 Fees and Expenses.




     (a) Except as otherwise specifically provided below or elsewhere in this Agreement,
regardless of whether the transactions contemplated by this Agreement are consummated, Issuer and
Purchaser each shall pay their respective fees and expenses in connection with the transactions
contemplated by this Agreement, including, without limitation, attorneys’ fees in connection with
the notification and report form required by the HSR Act.



35









 





     (b) Issuer on the one hand, and Purchaser, on the other, shall each pay one-half of the fee
payable to the FTC with respect to the notification and report form required by the HSR Act.



     (c) If the condition described in Section 7.10 does not occur by June 30, 2009, Issuer shall
reimburse Purchaser for all of Purchaser’s reasonable out-of-pocket expenses related to the
transactions contemplated by this Agreement.



11.3 Notices.




     All notices, requests, demands, and other communications hereunder shall be in writing (which
shall include communications by e-mail) and shall be delivered (a) in person or by courier or
overnight service, or (b) by e-mail with a copy delivered as provided in clause (a), as follows:



          If to Issuer:



3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: Chief Executive Officer

Telephone: (216) 755-5500

E-mail: SWolstein@ddr.com




          with a copy (which shall not constitute notice) to:



3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: General Counsel

Telephone: (216) 755-5500

E-mail: DWeiss@ddr.com



Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114

Attention: Michael J. Solecki

Telephone: (216) 586-7103

E-mail: mjsolecki@jonesday.com




          If to Purchaser:



KG CURA Vermögensverwaltung G.m.b.H. & Co.

Wandsbeker Str. 3-7

D-22179 Hamburg

Germany

Attention: Mr. Wilhelm

Telephone: 0049 40 6461 1286




36









 







E-mail: wilhelm@kgcura.de




          with a copy (which shall not constitute notice) to:



Alston & Bird LLP

90 Park Avenue

New York, NY 10016

Attention: Mark F. McElreath

Telephone: (212) 210-9595

E-mail: mark.mcelreath@alston.com



or to such other address as the parties hereto may designate in writing to the other in accordance
with this Section 11.3. Any Party may change the address to which notices are to be sent by giving
written notice of such change of address to the other parties in the manner above provided for
giving notice. If delivered personally or by courier, the date on which the notice, request,
instruction or document is delivered shall be the date on which such delivery is made and if
delivered by e-mail transmission or mail as aforesaid, the date on which such notice, request,
instruction or document is received shall be the date of delivery.




11.4 Assignment




     Any assignment under this Agreement by any of the Parties hereto shall be void, invalid and of
no effect without the written consent of the other Party; provided, however, that Purchaser may
assign its rights under this Agreement, in whole or in part, to any Person who is a member of the
Otto Family so long as the assignee(s) agree to be bound in writing by the terms and conditions of
this Agreement; provided, further, that any such assignment shall not release, or be construed to
release, Purchaser from its duties and obligations under this Agreement. If any assignee breaches
its obligations to purchase the Purchased Shares, Purchaser shall remain obligated to purchase the
Purchased Shares and shall be liable for any breaches of any assignees obligations hereunder.



11.5 No Benefit to Others.




     The representations, warranties, covenants, and agreements contained in this Agreement are for
the sole benefit of the Parties hereto and their respective heirs, executors, administrators, legal
representatives, successors and assigns, and they shall not be construed as conferring any Third
Party beneficiary or any other rights on any other Persons.



11.6 Headings and Gender; Construction; Interpretation.





     (a) The table of contents and the captions and section headings contained in this Agreement
are for convenience of reference only, do not form a part of this Agreement and shall not affect
in any way the meaning or interpretation of this Agreement. All references in this Agreement to
“Section” or “Article” shall be deemed to be references to a Section or Article of this
Agreement.



37









 






     (b) Words used herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any other gender,
masculine, feminine, or neuter, as the context requires. Whenever the words “include,”
“includes” or “including” are used in this Agreement, they shall be deemed followed by the words
“without limitation.”




     (c) Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or
resolved against Purchaser or Issuer, whether under any rule of construction or otherwise. No
Party to this Agreement shall be considered the draftsman. On the contrary, this Agreement has
been reviewed, negotiated and accepted by all Parties and their attorneys and shall be construed
and interpreted according to the ordinary meaning of the words so as fairly to accomplish the
purposes and intentions of all the Parties.



11.7 Counterparts.




     This Agreement may be executed in two (2) or more counterparts, all of which shall be
considered one and the same Agreement, and shall become effective when one counterpart has been
signed by each Party and delivered to the other Party hereto.



11.8 Integration of Agreement.





     (a) This Agreement and the exhibits and the other agreements contemplated by this Agreement,
including the Confidentiality Agreement, constitutes the entire agreement between the Parties
relating to the subject matter hereof and supersede all prior agreements, oral and written,
between the Parties with respect to the subject matter hereof, including that certain Term Sheet
Memorandum between the Parties dated January 14, 2009.




     (b) Neither this Agreement, nor any provision hereof, may be changed, waived, discharged,
supplemented, or terminated orally, but only by an agreement in writing signed by the Party
against which the enforcement of such change, waiver, discharge or termination is sought. The
failure or delay of any Party at any time or times to require performance of any provision of
this Agreement shall in no manner affect its right to enforce that provision. No single or
partial waiver by any Party of any condition of this Agreement, or the breach of any term of this
Agreement or the inaccuracy or warranty of this Agreement, whether by conduct or otherwise, in
any one or more instances shall be construed or deemed to be a further or continuing waiver of
any such condition, breach or inaccuracy or a waiver of any other condition, breach or
inaccuracy.



11.9 Waiver.




     The rights and remedies of the Parties to this Agreement are cumulative and not alternative.
Neither the failure nor any delay by any Party in exercising any right, power, or privilege under
this Agreement will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power, privilege. To the
maximum extent permitted by applicable Law,



38









 




(a) no claim or right arising out of this Agreement can be discharged by one Party, in whole
or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other
Party; (b) no waiver that may be given by a Party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving such notice or demand to
take further action without notice or demand as provided in this Agreement.




11.10 Time of Essence.




     Time is of the essence in this Agreement.



11.11 Governing Law.




     Regardless of any conflict of law or choice of law principles that might otherwise apply, the
Parties agree that this Agreement shall be governed by and construed in all respects in accordance
with the Laws of the State of New York. The Parties agree and acknowledge that the State of New
York has a reasonable relationship to the Parties and/or this Agreement. As to any dispute or
Litigation arising out of or relating in any way to this Agreement or the transaction at issue in
this Agreement, the Parties hereby agree and consent to be subject to the jurisdiction of the
United States District Court for the Southern District of New York. If jurisdiction is not present
in federal court, then the Parties hereby agree and consent to the jurisdiction of the state courts
of New York County, New York. Each Party hereby irrevocably waives, to the fullest extent
permitted by Law, (a) any objection that it may now or hereafter have to laying venue of any
Litigation brought in such court, (b) any claim that any Litigation brought in such court has been
brought in an inconvenient forum, and (c) any defense that it may now or hereafter have based on
lack of personal jurisdiction in such forum.



11.12 Partial Invalidity.




     Whenever possible, each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable Law, but in case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision or provisions had never been contained herein unless the deletion of such
provision or provisions would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable. To the extent the deemed deletion of the
invalid, illegal or unenforceable provision or provisions is reasonably likely to have a material
adverse effect on the ability of the Parties to consummate the transactions contemplated by this
Agreement, the Parties shall endeavor in good faith to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which comes as close as
practicable to that of the invalid, illegal or unenforceable provisions.



39









 





11.13 Survival.




     The representations, warranties, covenants and agreements made in this Agreement and the
condition in Section 7.20 of this Agreement shall survive any investigation made by any party
hereto and the closing of the transactions contemplated hereby.



11.14 Specific Enforcement.




     The Parties agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise
breached. The Parties accordingly agree that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement, this being in addition to any other remedy to which they are entitled
at law or in equity.



40









 





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



	 	 	 	 	 
	 	 	DEVELOPERS DIVERSIFIED REALTY CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	/s/ Scott A. Wolstein
	 

	 	 	 	 
	 

	 	Name:	 	Scott A. Wolstein
	 

	 	Title:	 	Chairman and Chief Executive Officer
	 
	 	 	 	 
	 	 	MR. ALEXANDER OTTO
	 
	 
	 	/s/ Alexander Otto
	 	 	 






41









 






EXHIBIT A




COMMON SHARE PURCHASE WARRANT




To Purchase 5,000,000 Common Shares of




Developers Diversified Realty Corporation




     THIS COMMON SHARE PURCHASE WARRANT CERTIFIES that, for value received, Mr. Alexander Otto or
his permitted transferees, assigns and successors (the “Holder”), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or
after April [     ], 20091 (the “Issue Date”) and on or prior to the close of business on
the 5th anniversary of the Issue Date (the “Termination Date”) but not thereafter, to
subscribe for and purchase from Developers Diversified Realty Corporation, an Ohio corporation (the
“Company”), up to 5,000,000 common shares (the “Warrant Shares”), par value $ 0.10 per share, of
the Company (the “Common Stock”). The purchase price of one share of Common Stock (the “Exercise
Price”) under this Warrant shall be $6.00, subject to adjustment herein. The Exercise Price and
the number of Warrant Shares for which the Warrant is exercisable shall be subject to adjustment as
provided herein.



     Capitalized terms used and not otherwise defined herein shall have the meanings set forth in
that certain Stock Purchase Agreement (the “Purchase Agreement”), dated February 23, 2009, between
the Company and the Holder. All references herein to “dollars” or “$” are to United States
dollars.


1. Authorization of Warrant Shares. The Company covenants that all Warrant Shares which may be
issued upon exercise of the purchase rights represented by this Warrant will, upon exercise, be
duly authorized, validly issued, fully paid and non-assessable, free and clear of any Liens (other
than those imposed by the Articles of Incorporation of the Company and federal and state securities
Laws).



2. Exercise of Warrant.





     (a) Exercise of the purchase rights represented by this Warrant, in whole or in part,
may be made at any time or times on or after the Issue Date and on or before the
Termination Date by the surrender of this Warrant and the Notice of Exercise form annexed
hereto duly executed, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered Holder at the address of
such Holder appearing on the books of the Company) and upon payment of the Exercise Price
of the Warrant Shares being purchased upon such exercise, or by means of a cashless
exercise pursuant to Section 2(d), the Company shall deliver the number of Warrant Shares
so purchased in book-entry form to the brokerage account designated by the





 




			
	1	 	Date will be the First Closing Date or the Non-Tranche
Closing Date (whichever occurs under the Purchase Agreement).




 









 











Holder in the Notice of Exercise form annexed hereto, and the Holder shall be entitled
to receive from the Company shares of Common Stock representing the number of Warrant
Shares so purchased. Common Stock for shares purchased hereunder shall be delivered to the
Holder within three trading days after the date on which this Warrant shall have been
exercised as aforesaid. This Warrant shall be deemed to have been exercised and such
Warrant Shares shall be deemed to have been issued, and the Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record of such
Common Stock for all purposes, as of the date the Warrant has been exercised by payment to
the Company of the Exercise Price (or by means of a cashless exercise pursuant to Section
2(d)) and all taxes required to be paid by the Holder, if any, pursuant to Section 4 prior
to the issuance of such Common Stock, have been paid (each exercise date, a “Warrant
Exercise Date”), provided that the Holder shall have delivered the Company a completed
Notice of Exercise that designates a brokerage account to which the Holder desires to have
any purchased Warrant Shares delivered.




     (b) If this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the Common Stock representing Warrant Shares, deliver to the Holder a new
Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects be identical with
this Warrant.




     (c) If the Company fails to deliver to the Holder the Common Stock representing the
Warrant Shares pursuant to this Section 2 by the close of business on the third trading day
after exercise hereof, then the Holder will have the right to rescind such exercise. In
addition to any other rights available to the Holder, if the Company fails to deliver to
the Holder the Common Stock representing the purchased Warrant Shares pursuant to this
Section 2 by the close of business on the third trading day after exercise hereof, and if
after such date the Holder is required by its broker to purchase (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder
of Common Stock representing the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount
by which (x) the Holder’s total purchase price (including brokerage commissions, if any)
for the Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of shares of Common Stock that the Company was required to deliver to the Holder in
connection with the exercise at issue multiplied by (B) the price at which the sell order
giving rise to the Holder’s purchase obligation was executed, and (2) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares
for which such exercise was not honored or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In, together with
applicable



2









 







confirmations and other evidence reasonably requested by the Company. Nothing herein
shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver the Common Stock
upon exercise of the Warrant as required pursuant to the terms hereof.




     (d) At any time after the Issue Date, this Warrant may also be exercised at such time
by means of a “cashless exercise” in which the Holder shall be entitled to receive a number
of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:




	 	(A)	= 	 the average of the closing prices of the Common Stock on
the five consecutive trading days immediately preceding the date of such
election;
	 
	 	(B)	= 	 the Exercise Price of the Warrant, as adjusted; and
	 
	 	(X)	= 	 the number of Warrant Shares issuable upon exercise of this
Warrant in accordance with the terms of this Warrant.




3. No Fractional Shares or Scrip. No fractional shares of Common stock or scrip representing
fractional shares of Common Stock shall be issued upon the exercise of this Warrant. As to any
fraction of a share of Common Stock which the Holder would otherwise be entitled to purchase upon
such exercise of the Warrant, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise Price.



4. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that in the event Common Stock for Warrant Shares is to be issued in a
name other than the name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly exercised by the Holder; and the Company
may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto.



5. Further Actions by Company. The Company will not close its shareholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof. The
Company shall provide reasonable assistance and cooperation to the Holder if required to make any
governmental filings or obtain any governmental approvals prior to or in connection with any
exercise of the Warrant.




3









 







6. Transfer, Division and Combination.





     (a) Subject to compliance with any applicable securities laws and the conditions set
forth in Section 6(e) hereof, this Warrant and all rights hereunder are transferable, in
whole or in part, to a member of the Otto Family or, if outside of the Otto Family, to any
other Person provided such transfer would not cause such Person to exceed the Ownership
Limit (as defined in the Second Amended and Restated Articles of Incorporation of the
Company), upon surrender of this Warrant at the office of the Company, together with a
written assignment of this Warrant substantially in the form attached hereto duly executed
by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of Warrant Shares
without having a new Warrant issued.




     (b) This Warrant may be divided or combined with other Warrants upon presentation
hereof at the aforesaid office of the Company, together with a written notice specifying
the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 6(a), as to any transfer which
may be involved in such division or combination, the Company shall execute and deliver a
new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined
in accordance with such notice.




     (c) The Company shall prepare, issue and deliver at its own expense (other than
transfer taxes) the new Warrant or Warrants under this Section 6.




     (d) The Company agrees to maintain, at its aforesaid office, books for the
registration and the registration of transfer of the Warrants.




     (e) If, at the time of surrender of this Warrant in connection with any transfer of
this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective
registration statement under the Securities Act and under applicable state securities or
blue sky laws, the Company may require, as a condition of allowing such transfer that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that such transfer may be
made without registration under the Securities Act and under applicable state securities or
blue sky laws.



4









 




7. No Rights as Shareholder until Exercise. This Warrant does not entitle the Holder to any voting
rights or other rights as a shareholder of the Company prior to the exercise hereof.



8. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation
of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond)
and any transfer agent appointed by the Company for the Warrant, and upon surrender and
cancellation of such Warrant, if mutilated, the Company at its expense will make and deliver a new
Warrant of like tenor dated as of such cancellation, in lieu of such Warrant.



9. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or
expiration of any right required or granted herein, or if the Termination Date, shall be a
Saturday, Sunday or a legal holiday, such action may be taken or such right may be exercised on the
next succeeding day not a Saturday, Sunday or legal holiday.



10. Adjustments of Warrant Shares Due to Issuances of Common Stock or Stock Equivalents.





     (a) At each Warrant Exercise Date, the Company will calculate a potential adjustment
to the Exercise Price for the Warrant Shares then being exercised by (i) calculating the
aggregate number of outstanding shares of Common Stock issued and sold by the Company,
including Stock Dividends (as defined below) and outstanding Stock Equivalents (as defined
below) deemed to have been issued and sold by the Company (but not including the Excluded
Stock (as defined below) or other issuances of Common Stock provided in Section 11 below)
that have occurred from and after the Issue Date to and including the Warrant Exercise Date
(collectively, the “Aggregate Stock Issuances”), (ii) calculating the weighted average
price per share for the Aggregate Stock Issuances and (iii) calculating a potential New
Exercise Price determined in accordance with the following formula:



NEP = (P1) (Q1) + (P2) (Q2)



Q1 + Q2





where:




NEP = New Exercise Price.




P1 =    Exercise Price




	 	Q1	= 	  Number of shares of Common Stock outstanding and Stock Equivalents deemed
to be outstanding in accordance with Section 10(c), at the Issue Date, other than the
Excluded Shares





5









 






	 	P2 	= 	 weighted average price per share received for the Aggregate Stock Issuances
	 
	 	Q2 	= 	 Number of shares in the Aggregate Stock Issuances






     (b) If the New Exercise Price, calculated in accordance with the above formula, is
less than $6.00, then the Exercise Price shall be reduced to such New Exercise Price for
purposes of the exercise of the Warrants on the Warrant Exercise Date. If the New Exercise
Price is greater than $6.00, then the Exercise Price shall not be adjusted but shall remain
at $6.00. After each partial exercise of the Warrant, the Exercise Price shall be reset at
the Exercise Price of $6.00 and then, upon each future exercise of the Warrant, the above
calculation shall be made to determine if any adjustment to the Exercise Price shall then
be necessary at such future Warrant Exercise Date.




     (c)
“Stock Dividends” for purposes of the above the calculation means the aggregate shares of Common Stock issued to Company shareholders from a regularly quarterly dividend
declared by the Company that is payable to the shareholders in both Common Stock and cash.




     (d) “Excluded Stock” means (i) shares of Common Stock, or options or other equity
awards for shares of Common Stock, issued or issuable pursuant to equity compensation plans
or arrangements for officers, directors and other employees of the Company, (ii) shares of
Common Stock issued or issuable upon the conversion or exchange of any security of the
Company or its subsidiaries convertible into or exchangeable for Common Stock outstanding
on the Issue Date, including, without limitation, upon conversion of the Company’s
convertible debt securities and operating partnership units, (iii) the Purchased Shares
purchased by the Holder under the Purchase Agreement and (iv) the Warrant Shares purchased
under this Warrant or under the second Warrant granted by the Company to Holder under the
Purchase Agreement.




     (e) If the Company in any manner grants or issues Stock Equivalents (as defined
below), it shall be deemed to have issued the maximum number of shares of Common Stock such
Stock Equivalents are exercisable or exchangeable for or convertible into and for a
consideration equal to the consideration, if any, received by the Company upon the issuance
of the Stock Equivalents plus the minimum exercise or conversion price provided in such
Stock Equivalents for the Common Stock covered thereby. For purposes of determining each
calculation of P2 and Q2 above, Aggregate Stock Issuances that take into account prices per
share and number of shares of Common Stock underlying Stock Equivalents will not also
include the prices per share and number of shares of Common Stock upon actual issue of the
Common Stock underlying such Stock Equivalents or upon exercise of any rights under such
Stock Equivalents. “Stock Equivalents” means



6









 







any security, option, warrant, right or claim exercisable into, exchangeable for, or
convertible into Common Stock.




     (f) If the Company takes a record of the holders of shares of Common Stock for the
purpose of entitling them (i) to receive a dividend or other distribution payable in Stock
Equivalents or (ii) to subscribe for or purchase Stock Equivalents, then such record date
shall be deemed to be the date of the issue or sale of the Stock Equivalents deemed to have
been issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or purchase, as the
case may.


11. Adjustments of Exercise Price Upon Events Regarding Common Stock. The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In case the Company shall
(i) pay a dividend payable solely in Common Stock or make a distribution solely in Common Stock to
all holders of its outstanding Common Stock, (ii) subdivide its outstanding Common Stock into a
greater number of shares, (iii) combine its outstanding Common Stock into a smaller number of
Shares or (iv) issue any securities in a reclassification of the Common Stock, then, in each such
event, the Exercise Price shall, simultaneously with the happening of such event, be adjusted by
multiplying the then Exercise Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the denominator of which
shall be the number of shares of Common Stock immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any successive event or
events described in this Section 11. The number of shares of Common Stock that the Holder shall
thereafter, upon exercise of the Warrant, be entitled to receive shall be adjusted to a number
determined by multiplying the number of shares of Common Stock that would otherwise (but for the
provisions of this Section 11) be issuable on such exercise by a fraction of which (a) the
numerator is the Exercise Price that would otherwise (but for the provisions of this Section 11) be
in effect and (b) the denominator is the Exercise Price in effect on the date of such exercise
(taking into account the provisions of this Section 11).



An adjustment made pursuant to this paragraph shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such event.



12. Reclassification, Merger, Consolidation or Disposition of Assets. In case the Company shall
reclassify its Common Stock, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where the Company’s shareholders immediately prior to
the consummation of such consolidation or merger do not hold at least a majority of the voting
power of the surviving corporation), or sell, transfer or otherwise dispose of all or substantially
all its assets to another corporation and, pursuant to the terms of such reclassification, merger,
consolidation or disposition of assets, shares of common stock of the successor or acquiring
corporation or any cash, shares of stock or other securities or property of any nature whatsoever




7









 







(including warrants or other subscription or purchase rights) in addition to or in lieu of common
stock of the successor or acquiring corporation (“Other Property”), are to be received by or
distributed to the holders of the Common Stock of the Company, then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the number of shares of common stock of the
successor or acquiring corporation and Other Property receivable upon or as a result of such
reclassification, merger, consolidation or disposition of assets as may be issued and payable with
respect to or in exchange for the number of shares of Common Stock immediately acquirable upon such
exercise of this Warrant. The successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and take all appropriate
action in order to provide for adjustments of Warrant Shares for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided for in this Section
12. For purposes of this Section 12, “common stock of the successor or acquiring corporation”
shall include stock of such corporation of any class which is not preferred as to dividends or
assets over any other class of stock of such corporation and which is not subject to redemption and
shall also include any evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other rights to subscribe
for or purchase any such stock. The foregoing provisions of this Section 12 shall similarly apply
to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets.



13. Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of securities or
other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, as
herein provided, the Company shall give notice thereof to the Holder, which notice shall state the
number of Warrant Shares (and other securities or property) purchasable upon the exercise of this
Warrant and the Exercise Price of such Warrant Shares (and other securities or property) after such
adjustment, setting forth a brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made.



14. Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure that such Common
Stock may be issued as provided herein without violation of any applicable law or regulation, or of
any requirements of the trading market upon which the Common Stock may be listed.




     Except and to the extent as waived or consented to by the Holder, the Company shall not by any
action, including without limitation, amending its organizational or governing documents or through
any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, intentionally avoid or seek to avoid the observance or
performance of any of the express terms of this



8









 







Warrant, but will at all times in good faith assist in the carrying out of all such terms. Without
limiting the generality of the foregoing, the Company will (a) not increase the par value of any
Warrant Shares above the amount payable therefore upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant, and (c) obtain any necessary authorization, exemption or consent from any
public regulatory body having jurisdiction thereof as may be necessary to enable the Company to
perform its obligations under this Warrant.



     Before taking any action which would result in an adjustment in the number of Warrant Shares
for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.


15. Miscellaneous.





     (a) Jurisdiction. This Warrant shall constitute a contract under the laws of the
State of New York, without regard to its conflict of law provisions, principals or rules.




     (b) Nonwaiver. No course of dealing or any delay or failure to exercise any right
hereunder on the part of the Holder shall operate as a waiver of such right or otherwise
prejudice the Holder’s rights, powers or remedies, notwithstanding all rights hereunder
terminate on the Termination Date.




     (c) Notices. Any notice, request or other document required or permitted to be given
or delivered to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement; provided that upon any permitted assignment of this
Warrant, the assignee shall promptly provide the Company with its contact information.




     (d) Limitation of Liability. No provision hereof, in the absence of any affirmative
action by the Holder to exercise this Warrant or purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise to any liability
of Holder for the purchase price of any shares of Common Stock or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of the Company.




     (e) Remedies. The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific performance of
its rights under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the provisions
of this Warrant and hereby agrees to waive the



9









 







defense in any action for specific performance that a remedy at law would be adequate.




     (f) Successors and Assigns. Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be binding
upon the successors of the Company and the successors and permitted assigns of the Holder.
The provisions of this Warrant are intended to be for the benefit of all Holders from time
to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant
Shares.




     (g) Amendment; Waiver. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and the Holder.




     (h) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of this Warrant.




     (i) Headings. The headings used in this Warrant are for the convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.



[signature on following page]




10









 








     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer
thereunto duly authorized.



	 	 	 	 	 
	Dated:                     , 2009             	DEVELOPERS DIVERSIFIED
REALTY CORPORATION

 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




11









 





NOTICE OF EXERCISE




To: Developers Diversified Realty Corporation




     (1) The undersigned hereby elects to purchase                       Warrant Shares of Developers
Diversified Realty Corporation pursuant to the terms of the attached Warrant, and tenders herewith
payment of the Exercise Price in full.



     (2) Please issue Common Stock representing said Warrant Shares in the name of the undersigned
or in such other name as specified below:




	 	 	 	 






     (3) Mark all that apply:



     o Cash Payment [Payment enclosed in the amount of $                    .]



     o Cashless Exercise [Number of Warrant Shares exercised:                     .]



     (4) The Common Stock should be delivered to the following brokerage account:



 





 





 





	 	 	 	 	 
	 	 	PURCHASER:
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






12









 





ASSIGNMENT FORM



(To assign the foregoing Warrant, execute this form and supply required information. Do not use
this form to exercise the Warrant).




     FOR
VALUE RECEIVED,                                           hereby sells, assigns, and transfers all of the
rights of the undersigned under the attached Warrant with respect to the Warrant Shares covered
thereby set forth below, unto:



	 	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 






Number of Warrant Shares assigned:                     




Dated:                                         ,                     




	 	 	 	 	 
	Holder’s Signature:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Holder’s Address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 






Signature Guaranteed:                                                             



NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face
of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed
by a bank or trust company. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the foregoing Warrant.




13









 








EXHIBIT B




Amendment to the Articles of Incorporation




     The Articles shall be amended by:



     1. Deleting the definition of “Initial Public Offering,” “Existing Holder” and “Existing
Holder Limit” from subsection (a) to the Article thereof numbered “ARTICLE FOURTH,” Division B,
Section 4 and either adding or replacing, as applicable, the following definitions.




     “Effective Date” shall mean                                         , 2009.




     “Exempt Holder” shall mean, collectively, (i) Professor Werner Otto, his wife
Maren Otto and/or all descendants of Professor Werner Otto (illegitimate
descendants only if they have obtained the status of a legitimate descendant by
legitimation or adoption by Professor Werner Otto or one of his legitimate
descendants, or if they are children of a female legitimate descendant of Professor
Werner Otto), (ii) any trust or any family foundation that has exclusively been
established in favor of one or several of the individuals named under (i) above,
and (iii) any partnership, firm, corporation, association, trust, unincorporated
organization, joint venture, limited liability company or other legal entity, in
which the individuals or entities named under (i) and (ii) hold (either directly or
indirectly) more than 50% of the voting rights or more than 50% of the
equity capital of such any such partnership, firm, corporation, association, trust,
unincorporated organization, joint venture, limited liability company or other
legal entity.




     “Exempt
Holder Limit” shall initially mean 29.8% of the outstanding
Common Shares of the Corporation, and after any adjustment pursuant to Section
(4)(i)(i) of this Division B of this Article FOURTH, shall mean such percentage of
the outstanding Common Shares as so adjusted.




     “Existing Holder” shall mean, collectively, Iris Wolstein and/or all
descendants of Iris Wolstein, including, without limitation, Scott A. Wolstein,
(ii) any trust or any family foundation that has exclusively been established in
favor of one or several of the individuals named under (i) above, and (iii) any
partnership, firm, corporation, association, trust, unincorporated organization,
joint venture, limited liability company or other legal entity, in which the
individuals or entities named under (i) and (ii) hold (either directly or
indirectly) more than 50% of the voting rights as well as more than 50% of the
equity capital of such any such partnership, firm, corporation, association, trust,
unincorporated organization, joint venture, limited liability company or other
legal entity.



 









 






     “Existing Holder Limit” shall initially mean 5.1% of the outstanding Common
Shares of the Corporation, and after any adjustment pursuant to Section 4(i)(ii) of
this Division B of this Article FOURTH, shall mean such percentage of the
outstanding Common Shares as so adjusted.




     “Non-U.S. Person” shall mean a Person other than a U.S. Person.




     “Ownership Limit” shall initially mean 5.0% of the outstanding Common Shares
of the Corporation, and after any adjustment pursuant to Section (4)(j) of this
Division B of this Article FOURTH, shall mean such percentage of the outstanding
Common Shares as so adjusted.






     “REIT” shall mean a real estate investment trust within the meaning of
Section 856 of the Code.




     “U.S. Person” shall mean (i) a citizen or resident of the United States,
(ii) a partnership created or organized in the United States or under the laws of
the United States or any state therein (including the District of Columbia), (iii)
a corporation created or organized in the United States or under the laws of the
United States or any state therein (including the District of Columbia), and (iv)
any estate or trust (other than a foreign estate or foreign trust, within the
meaning of Section 7701(a)(31) of the Code).



               2. Deleting subsection (b) from the Article thereof numbered “ARTICLE FOURTH,” Division B,
Section 4 and replacing it in its entirety, as follows:




    (b) Restrictions on Transfers.




     (i) Except as provided in Section 4(l) of this Division B of
this Article FOURTH, (A) no Person (other than the Exempt Holder
and the Existing Holder) shall Beneficially Own Common Shares in
excess of the Ownership Limit, (B) the Exempt Holder shall not
Beneficially Own Common Shares in excess of the Exempt Holder
Limit and (C) the Existing Holder shall not Beneficially Own
Common Shares in excess of the Existing Holder Limit.




     (ii) Except as provided in Section 4(l) of this Division B of
this Article FOURTH, any Transfer that, if



2









 







effective, would result in any Person (other than the Exempt
Holder or the Existing Holder) Beneficially Owning Common Shares
in excess of the Ownership Limit shall be void ab initio as to the
Transfer of such Common Shares which would be otherwise
Beneficially Owned by such Person in excess of the Ownership
Limit, and the intended transferee shall acquire no rights in such
Common Shares.




     (iii) Except as provided in Section 4(l) of this Division B
of this Article FOURTH, any Transfer that, if effective, would
result in the Exempt Holder Beneficially Owning Common Shares in
excess of the Exempt Holder Limit shall be void ab initio as to
the Transfer of such Common Shares which would be otherwise
Beneficially Owned by the Exempt Holder in excess of the Exempt
Holder Limit, and the Exempt Holder shall acquire no rights in
such Common Shares.




     (iv) Except as provided in Section 4(l) of this Division B of
this Article FOURTH, any Transfer that, if effective, would result
in the Existing Holder Beneficially Owning Common Shares in excess
of the Existing Holder Limit shall be void ab initio as to the
Transfer of such Common Shares which would be otherwise
Beneficially Owned by the Existing Holder in excess of the
Existing Holder Limit, and the Existing Holder shall acquire no
rights in such Common Shares.




     (v) Except as provided in Section 4(l) of this Division B of
this Article FOURTH, any Transfer that, if effective, would result
in any Person Constructively Owning Common Shares in excess of the
Related Party Limit shall be void ab initio as to the Transfer of
such Common Shares which would be otherwise Constructively Owned
by such Person in excess of such amount, and the intended
transferee shall acquire no rights in such Common Shares.




     (vi) Except as provided in Section 4(l) of this Division B of
this Article FOURTH, any Transfer that, if effective, would result
in the Common Shares being beneficially owned by less than 100
Persons (determined without reference to any rules of attribution)
shall be void ab initio as to the Transfer of such Common Shares
which would be otherwise beneficially owned by the transferee,
and the intended transferee shall acquire no rights in such
Common Shares.



3









 






     (vii) Any Transfer that, if effective, would result in the
Corporation being “closely held” within the meaning of Section
856(h) of the Code shall be void ab initio as to the Transfer of
the Common Shares which would cause the Corporation to be “closely
held” within the meaning of Section 856(h) of the Code, and the
intended transferee shall acquire no rights in such Common Shares.




     (viii) No Person shall acquire Beneficial Ownership of
any Common Shares after the Effective Date if, as a result of such
acquisition of Beneficial Ownership, the fair market value of the
Common Shares owned directly and indirectly by Non-U.S. Persons
for purposes of Section 897(h)(4)(B) of the Code would comprise
49% or more of the fair market value of the issued and outstanding
Common Shares.



            3. Deleting subsection (f) from the Article thereof numbered “ARTICLE FOURTH,” Division B,
Section 4 and replacing it in its entirety, as follows:




     (f) Owners Required to Provide Information.




     (i) Every Beneficial Owner of more than 5.0% (or such other
percentage provided in the regulations promulgated pursuant to the
Code) of the outstanding Common Shares of the Corporation shall,
within 30 days after January 1 of each year, give written notice
to the Corporation stating the name and address of such Beneficial
Owner, the number of shares Beneficially Owned, and description of
how such shares are held. Each such Beneficial Owner shall provide
to the Corporation such additional information as the Corporation
may request in order to determine the effect, if any, of such
Beneficial Ownership on the Corporation’s status as a REIT.




     (ii) Each Person who is a Beneficial Owner or Constructive
Owner of Common Shares and each Person (including the shareholder
of record) who is holding Common Shares for a Beneficial Owner or
Constructive Owner shall provide to the Corporation such
information that the Corporation may request, in good faith, in
order to determine the Corporation’s status as a REIT.



4









 






     (iii)
Each Person who is a Beneficial or
Constructive Owner of Common Shares and each Person (including the
shareholder of record) who is holding Common Shares for a
Beneficial or Constructive Owner
shall provide to the Corporation such information as the
Corporation may require, in good faith, in order to determine the
Trust’s status as a REIT or a “domestically controlled qualified
investment entity” (within the meaning of Section 897(h)(4)(B) of
the Code) and to comply with the requirements of any taxing
authority or to determine such compliance.



             4. Deleting subsections (i), (j) and (k) from the Article thereof numbered “ARTICLE FOURTH,”
Division B, Section 4 and replacing them in their entirety, as follows:




     (i) Modification of Exempt Holder Limit and Existing Holder
Limit.




(i) Subject to the
limitations provided in Section 4(k) of this
Division B of this Article FOURTH, the Board of Directors
may reduce the Exempt Holder Limit if: (A) based on
the annual written notice delivered to the Corporation
pursuant to Section 4(f)(i) of this Division B of this
Article FOURTH, the Beneficial Ownership of the Exempt
Holder is less than 17.5% of the outstanding Common
Shares, then the Board of Directors may reduce the Exempt
Holder Limit to 17.5%; (B) based on the annual written
notice delivered to the Corporation pursuant to Section
4(f)(i) of this Division B of this Article FOURTH, the
Beneficial Ownership of the Exempt Holder is 7.5% or less
of the outstanding Common Shares, then the Board of
Directors may reduce the Exempt Holder Limit to 7.5%; or
(C) after the Exempt Holder Limit has been reduced to
7.5%, the Board of Directors may further reduce the
Exempt Holder Limit to reflect the Beneficial Ownership
of the Exempt Holder as set forth on the annual written
notice delivered to the Corporation pursuant to Section
4(f)(i) of this Division B of this Article FOURTH.




(ii)
Subject to the limitations provided in Section 4(k) of
this Division B of this Article FOURTH, the Board of
Directors may increase the Existing Holder Limit if the
Board of Directors



5









 






reduces the Exempt Holder Limit
pursuant to Section 4(i)(i) of this Division B of this
Article FOURTH.




(j) Modification of Ownership Limit. Subject to the limitations
provided in Section 4(k) of this Division B of this Article FOURTH, the
Board of Directors may from time to time increase the Ownership Limit.




     (k) Limitations on Modifications. Notwithstanding any other provision of
this Division B of this Article FOURTH:




     (i) Neither the Ownership Limit nor the Existing
Holder Limit may be  increased if, after giving effect to
such increase, five Beneficial Owners of Common Shares (including
the Exempt Holder and the Existing Holder) could Beneficially Own,
in the aggregate, more than 49.9% of the outstanding Common
Shares.




     (ii)
Prior to the modification of any Exempt Holder Limit,
Existing Holder Limit or Ownership Limit pursuant to Section 4(i)
or Section 4(j) of this Division B of this Article FOURTH, the
Board of Directors of the Corporation may require such opinions of
counsel, affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or ensure the
Corporation’s status as a REIT.




     (iii)
The Exempt Holder Limit shall not be reduced to
a percentage which is less than the Ownership Limit.




     (iv) The Related Party Limit may not be increased to a
percentage which is greater than 9.8%.



            5. Deleting subsection (l) from the Article thereof numbered “ARTICLE FOURTH,” Division B,
Section 4 and replacing it in its entirety, as follows:




     (l) Exceptions.




     (i) The Board of Directors, with a ruling from the Internal
Revenue Service or an opinion of counsel, may exempt a Person from
the Ownership Limit, the Exempt Holder Limit or the Existing
Holder Limit, as the case may be, if such Person is not an
individual for purposes of Section 542(a)(2) of the Code and the
Board of Directors obtains such representations and undertakings
from such Person as are reasonably necessary to ascertain that no



6









 






individual’s Beneficial Ownership of such Common Shares will
violate the Ownership Limit, the Exempt Holder Limit or the
Existing Holder Limit, as the case may be, and agrees that any
violation or attempted violation will result in such Common Shares
in excess of the Ownership Limit, the Exempt Holder Limit or the
Existing Holder Limit, as applicable, being deemed to be Excess
Shares and subject to repurchase by the Corporation as set forth
in Section 4(d) of this Division B of this Article FOURTH.




     (ii) The Board of Directors, with a ruling from the Internal
Revenue Service or an opinion of counsel, may exempt a Person from
the limitation on such Person Constructively
Owning Common Shares in excess of the Related Party Limit if
such Person does not own and represents that it will not own,
directly or constructively (by virtue of the application of
Section 318 of the Code, as modified by Section 856(d)(5) of the
Code), more than a 9.9% interest (as set forth in Section
8 56(d)(2)(B) in a tenant of any real property owned or leased by
the Corporation, and the Corporation obtains such representations
and undertakings from such Person as are reasonably necessary to
ascertain this fact and agrees that any violation or attempted
violation will result in such Common Shares in excess of 9.8%
being deemed to be Excess Shares and subject to repurchase by the
Corporation as set forth in Section 4(d) of this Division B of
this Article FOURTH.




     (iii) The Board of Directors may exempt the Exempt
Holder, and any Person who would Constructively Own Common
Shares Constructively Owned by the Exempt Holder, from the
limitation on the Exempt Holder  (or such other Person who
would Constructively Own Common Shares Constructively Owned by the
Exempt Holder) Constructively Owning Common Shares in excess of
the Related Party Limit in its sole discretion based on the facts
and circumstances existing at the time of such proposed exemption
and the information provided by the Exempt Holder,
including, without limitation, information regarding a tenant of
any real property owned or leased by the Corporation, of which
tenant the Exempt Holder (or such other Person who would
Constructively Own Common Shares Constructively Owned by the
Exempt Holder) owns, directly or constructively (by virtue of the
application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code), more than a 9.9% interest



7









 






(as set forth in
Section  856(d)(2)(B) of the Code). As a condition to the granting
of any such exemption, the Corporation may require that the Exempt
Holder  provide representations and undertakings as are
reasonably necessary to ascertain information regarding the
ownership by the Exempt Holder (or such other Person who would
Constructively Own Common Shares Constructively Owned by the
Exempt Holder) of any interest in a tenant of any real property
owned or leased by the Corporation and may impose conditions upon
any such exemption as the Board of Directors deems necessary or
advisable in order to determine or ensure the Corporation’s status
as a REIT, including that any exemption may terminate upon any
violation or attempted violation of any such representations,
undertakings, conditions or other terms of any agreement between
the Company and the Exempt Holder. If, upon any termination of an
exemption granted under this Section  4(l)(iii) of this Division B
of this Article FOURTH, the Exempt Holder (or such other
Person who would Constructively Own Common Shares Constructively
Owned by the Exempt Holder) would Constructively Own Common Shares
in excess of the Related Party Limit, then the number of Common
Shares
actually owned by the Exempt Holder (and such other Person
who would Constructively Own Common Shares Constructively Owned by
the Exempt Holder) in excess of the Related Party Limit will be
being deemed to be Excess Shares and subject to repurchase by the
Corporation as set forth in Section 4(d) of this Division B of
this Article FOURTH such that the Exempt Holder (and such other
Person who would Constructively Own Common Shares Constructively
Owned by the Exempt Holder) will not Constructively Own Common
Shares in excess of the Related Party Limit.




     (iv) The Exempt Holder will not be deemed to have
violated the Exempt Holder Limit if the Exempt Holder’s Beneficial
Ownership in excess of the Exempt Holder Limit is solely the
result of (A) a stock dividend, stock split or similar
transaction effected by the Corporation in which all holders of
Common Shares are treated equally or (B) a reduction in
the number of Common Shares outstanding, unless and until, in case
of either clause (A) or (B) above, such time as the Exempt Holder
thereafter becomes the Beneficial Owner of any additional Common
Shares (other than as a result of a stock dividend, stock split or
similar transaction effected by the Corporation in which all
holders of Common Shares are



8









 






treated equally). In addition,
the Board of Directors may exempt the Exempt Holder from the
Exempt Holder Limit should it determine that the Beneficial
Ownership of the Exempt Holder does not result in the Corporation
being “closely held” within the meaning of Section 856(h) of the
Code; provided, however, that notwithstanding the foregoing, this
paragraph (iv) shall not be interpreted as a waiver of, or
exemption from, the restriction in Section 4(b)(vi).



             6. Deleting Section 5 of the Article thereof numbered “ARTICLE FOURTH,” Division B and
replacing it in its entirety, as follows:




     Section 5. Legend. Each certificate for Common Shares shall bear the
following legend:




     “The Common Shares represented by this certificate are subject to restrictions
on transfer for the purpose of the Corporation’s maintenance of its status as a
Real Estate Investment Trust under the Internal Revenue Code of 1986, as amended.
Subject to certain provisions of the Corporation’s Articles of Incorporation, no
Person may Beneficially Own Common Shares in excess of 5.0% of the outstanding
Common Shares of the Corporation (unless such Person is an Exempt Holder or an
Existing Holder), no Person may Constructively Own Common Shares in excess
of
9.8% of the outstanding Common Shares of the Corporation and no Person may
acquire Beneficial Ownership of any Common Shares after the Effective Date if, as a
result of such acquisition, the fair market value of the Shares owned directly and
indirectly by Non-U.S. Persons would comprise more than 49% of the fair market
value of the issued and outstanding Common Shares. Any Person who attempts to
Beneficially Own or Constructively Own Common Shares in excess of the above
limitations must immediately notify the Corporation. All capitalized items in this
legend have the meanings defined in the Corporation’s Articles of Incorporation, a
copy of which, including the restrictions on transfer, will be sent without charge
to each shareholder who so requests. If the restrictions on transfer are violated,
certain of the Common Shares represented may be subject to repurchase by the
Corporation on the terms and conditions set forth in the Corporation’s Articles of
Incorporation.”



9









 





EXHIBIT C




Amendment to the Code of Regulations



The full text of Section 1 of Article II of the Code of Regulations, as it is proposed to be
amended, is set forth below, marked to show changes from the current provision contained in the
Code of Regulations





Section 1. Number of Directors. Until changed in accordance with the
provisions of this section, the number of directors of the Corporation, none of
whom need be shareholders, shall be seven (7). The number of directors may be
fixed or changed, but in no case shall the number be fewer than three (3) or more
than fifteen (15), at any annual meeting or at any special meeting called for that
purpose by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the Corporation on such proposal.
In addition to the authority of the shareholders to fix or change the number
of directors as described above, the directors of the Corporation may fix or
change the number of directors by a majority vote of the directors then in office
and may fill any vacancy that is created by an increase in the number of
directors. Notwithstanding the foregoing, the aggregate number of members of
the Board of Directors shall automatically increase by the number of directors
elected pursuant to Section 5(b) of Item 1, Section 5(b) of Item II, Section 5(b)
of Item III, Section 5(b) of Item IV, Section 5(b) of Item V, Section 5(b) of
Item VI, Section 5(b) of Item VII, Section 5(b) of Item VIII, Section 5(b) of
Item IX, Section 5(b) of Item X, Section 5(b) of Item XI and/or Section 5(b) of
Item XII of Division A of Article FOURTH of the Amended and Restated Articles of
Incorporation of the Corporation, as amended, such directors to be elected and
hold office in accordance with such provisions of the Amended and Restated
Articles of Incorporation of the Corporation, as amended, notwithstanding any
other provision of this Code of Regulations.



 









 





EXHIBIT D




WAIVER AGREEMENT




     THIS WAIVER AGREEMENT (this “Agreement”) is made and entered into as of [___],
2009, by and among Mr. Alexander Otto (the “Purchaser”) and Developers Diversified Realty
Corporation (the “Company”).



RECITALS




     A. WHEREAS, on February 23, 2009, the Purchaser and the Company entered into a Stock Purchase
Agreement (the “Stock Purchase Agreement”), which provides for the purchase and sale of
those certain shares of the Company as defined therein;



     B. WHEREAS, as an inducement to enter into the Stock Purchase Agreement, and as one of the
conditions to the consummation of the transactions contemplated by the Stock Purchase Agreement,
the parties agreed to enter into a waiver agreement relating to a waiver of the Related Party Limit
(as defined below);



     C. WHEREAS, the number of shares to be purchased by the Purchaser pursuant to the Stock
Purchase Agreement and owned by the Purchaser as of the date hereof would exceed the Related Party
Limit;



     D. WHEREAS, the Board of Directors of the Company (the “Board”) has agreed to waive
application of the Related Party Limit (as defined below) on the terms and conditions set forth
below; and



     E. WHEREAS, the purpose of this Agreement is to set forth the parties’ agreements and
respective obligations regarding the waiver of the Related Party Limit.



     Unless otherwise provided, all capitalized terms shall have the meaning ascribed to them in
Section 1.



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:



     1. Definitions. For purposes of this Agreement:



     (a) “Articles” means the Second Amended and Restated Articles of Incorporation of the Company,
as amended, attached hereto as Exhibit A.



     (b) “Business Days” means any day on which national banks are open for business in the City of
New York.



     (c) “Code” means the United States Internal Revenue Code of 1986, as amended.



1









 





     (d) “Common Shares” has the meaning set forth in the Articles.



     (e) “Constructive Ownership” has the meaning set forth in Section 4(b) of Division B of the
Articles.



     (f) “Exempt Holder” has the meaning set forth in Section 4(a) of Division B of the Articles.



     (g) “Person” has the meaning set forth in Section 4(a) of Division B of the Articles.



     (h) “Related Party Limit” has the meaning set forth in Section 4a) of Division B of the
Articles.



     2. Purchaser Representations and Agreements.



     (a) As of the date hereof, the Purchaser represents that none of (i) the Purchaser, (ii) any
Person who is listed in the definition of Exempt Holder in the Articles (each a “Member”),
or (iii) any Person who Constructively Owns Common Shares in excess of the Related Party Limit as a
result of Constructively Owning Common Shares Constructively Owned by the Purchaser or a Member
(Persons described in clauses (i), (ii), and (iii) being collectively referred to herein as the
“Owners”), Constructively Owns 10% or more of any interest described in Section
856(d)(2)(B) of the Code (an such interest described in Section 856(d)(2)(B) being referred to
herein as a “Relevant Equity Interest”) of any Person that is (A) a tenant of the Company,
a tenant of any entity the income of which is included in the determination of the Company’s REIT
taxable income, or a tenant of any real estate investment trust in which the Company owns a
Relevant Equity Interest of at least 10% and (B) listed on Schedule 1 hereto (the “Original
Tenant Schedule”). Each tenant listed in the Original Tenant Schedule or any updates of the
Original Tenant Schedule (collectively and individually, such updated schedules and the Original
Tenant Schedules are referred to herein as a “Tenant Schedule”) shall be referred to herein
as a (“Disclosed Tenant”). Each tenant identified as an owned tenant on Schedule 1 is
referred to herein as an (“Owned Tenant”).



     (b) At the end of each calendar quarter of the Company, the Company shall provide the
Purchaser an updated Tenant Schedule. The Purchaser, within twenty Business Days of receipt of an
updated Tenant Schedule, shall inform the Company of any tenant on such updated Tenant Schedule in
which any Owner Constructively Owns a Relevant Equity Interest of at least 10%. If the Purchaser
informs the Company of any such tenant, such tenant shall also be considered an Owned Tenant (i) if
such tenant appeared on such updated Tenant Schedule for the first time (i.e., the tenant was not
listed on the Original Tenant Schedule, a previous updated Tenant Schedule or on a notice of new
tenants under the procedure set forth in Section 2(c)) or (ii) with respect to leases entered into
with such tenant after such tenant has been identified by the Purchaser.



     (c) The Company will notify the Purchaser from time to time of material (individually or in
the aggregate) prospective leases with tenants not previously identified as Disclosed Tenants
(including tenants of properties the Company is considering



2









 







acquiring, directly or indirectly). The Purchaser, within five Business Days of receipt of
such notice, shall inform the Company of any such tenant in which any Owner Constructively Owns a
Relevant Equity Interest of at least 10% (an “Identified Tenant”). If the Company executes
a lease with such Identified Tenant, such tenant shall be considered an Owned Tenant. If the
Purchaser does not inform the Company that such tenant is an Identified Tenant within five Business
Days of receiving notice and if the Company executes a lease with such tenant, the Company shall
notify the Purchaser of such lease and such tenant will thereafter be considered a Disclosed
Tenant. If the Company enters into a lease with a tenant not previously identified as a Disclosed
Tenant without notifying Purchaser in accordance with this Section 2(c) and if any Owner
Constructively Owns a Relevant Equity Interest of at least 10% in such tenant, such tenant shall be
considered an Owned Tenant.



     (d) The Purchaser agrees not to take any action to acquire, and to cause Owners under his
control not to take any action to acquire, Constructive Ownership of 10% or more of the Relevant
Equity Interest of Disclosed Tenants. The Purchaser will make reasonable efforts to share the
Tenant Schedules with Owners not under his control and to advise them not to acquire Constructive
Ownership of Relevant Equity Interests in Disclosed Tenants and to advise the Purchaser of any such
acquisitions. If the Purchaser determines that any Owner has acquired Constructive Ownership of
10% or more of the Relevant Equity Interests of a Disclosed Tenant, the Purchaser shall inform the
Company as soon as reasonably possible, but in no event more than five Business Days after such
discovery. Such a tenant shall be treated as an Owned Tenant only with respect to leases entered
into after the Purchaser informs the Company of such ownership.



     (e) By the 15th day of each of January, April, July, and October, the Company shall
provide the Purchaser a projection of gross income of the Company (as determined for purposes of
Sections 856(c)(2) and 856(c)(3) of the Code) for that calendar year (“Projected Gross
Income”). The Purchaser agrees that if (i) an Owner is a Constructive Owner of 10% or more of
the Relevant Equity Interests of a Disclosed Tenant that is not an Owned Tenant and (ii) at such
time projected rents (as determined for purposes of Sections 856(c)(2) of the Code) for the
calendar year from Disclosed Tenants in which any Owner Constructively Owns a Relevant Equity
Interest of at least 10% (“Related Tenant Rents”) (the date on which both conditions (i)
and (ii) are satisfied shall constitute the “Default Event”) would exceed 1.0% of Projected
Gross Income as set forth on the most recent projections existing on the Relevant Date, (as
hereinafter defined), the waivers granted pursuant to Section 3 shall be terminated as of the date
immediately prior to the date of the Default Event (the “Relevant Date”) with all resulting
consequences under the Articles; provided, however, that Related Tenant Rents do not include rents
from Owned Tenants.



     (f) The Purchaser and the Company hereby agree to use their best efforts to mutually implement
updated procedures mutually agreed upon to make the procedures for ensuring satisfaction by the
Company and any real estate investment trust described in Section 2(a)(A) of Sections 856(c)(2)
and 856(c)(3) of the Code more effective.



     3. Company Agreements.



3









 





     The Board has granted waivers from the Related Party Limit to the Owners in excess of the
Related Party Limit pursuant to its authority provided in Section 4(l)(iii) of Division B of the
Articles. A copy of the Board resolution granting such waiver is attached as Exhibit B hereto.



     4. Miscellaneous.



     (a) Survival. The representations, warranties, and agreements of the Company and the
Purchaser contained in this Agreement shall survive delivery of this Agreement and shall remain in
full force and effect, regardless of any investigation made by or on behalf of them or any person
controlling them.



     (b) Entire Agreement. This Agreement constitutes the entire agreement among the
parties to this Agreement and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.



     (c) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.



     (d) Assignment and Successors. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and
permitted assigns, provided that except as otherwise specifically provided herein, neither this
Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by
any party hereto without prior written consent of the other party hereto. The Purchaser may assign
his rights and obligations under this Agreement to any Exempt Holder to whom he has transferred
actual ownership of his Common Shares; provided, however that Purchaser shall not be relieved of
his obligations under the first two sentences of Section 2(d) under this Agreement by any such
assignment.



     (e) Termination. This Agreement shall terminate on the date upon which the waiver
granted pursuant to Section 3 terminates pursuant to Section 2.2(d).



     (f) No Third Party Rights. Nothing in this Agreement, express or implied, is intended
to or shall confer upon any Person (other than the parties hereto) any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.



     (g) Cooperation. The Company agrees to cooperate fully with the Purchaser and to
execute and deliver such further documents, certificates, agreements and instruments and to take
such other actions as may be reasonably requested by the Purchaser to carry out the intent and
purpose of this Agreement.



     (h) Severability. If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable.



4









 





     (j) Notices. All notices, requests, demands, and other communications hereunder shall
be in writing (which shall include communications by facsimile) and shall be delivered (a) in
person or by courier or overnight service, or (b) by facsimile transmission, as follows:



     If to the Company:


3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: Chief Executive Officer

Telephone: (216) 755-5500

E-mail: SWolstein@ddr.com




     with a copy (which shall not constitute notice) to:


3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: General Counsel

Telephone: (216) 755-5500

E-mail: DWeiss@ddr.com



Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114

Attention: Michael J. Solecki

Telephone: (216) 586-7103

E-mail: mjsolecki@jonesday.com




     If to the Purchaser:


KG CURA Vermögensverwaltung G.m.b.H. & Co.

Wandsbeker Str. 3-7

D-22179 Hamburg

Germany

Attention: Mr. Wilhelm

Telephone: 0049 40 6461 1286

E-mail: wilhelm@kgcura.de




     with a copy (which shall not constitute notice) to:


Alston & Bird LLP

90 Park Avenue

New York, NY 10016

Attention: Mark F. McElreath

Telephone: (212) 210-9595

E-mail: mark.mcelreath@alston.com




5









 








     or to such other address as the parties hereto may designate in writing to the other in
accordance with this Section 4(i). Any Party may change the address to which notices are to be
sent by giving written notice of such change of address to the other parties in the manner above
provided for giving notice. If delivered personally or by courier, the date on which the notice,
request, instruction or document is delivered shall be the date on which such delivery is made and
if delivered by facsimile transmission or mail as aforesaid, the date on which such notice,
request, instruction or document is received shall be the date of delivery.



     (k) Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the same instrument,
and shall become effective when counterparts have been signed by each of the parties and delivered
to the other parties; it being understood that all parties need not sign the same counterpart.



     (l) Headings. The headings contained in this Agreement are for the convenience of
reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in
connection with the construction or interpretation of this Agreement.



[Signatures on following page]




6









 








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



	 	 	 	 	 
	 	DEVELOPERS DIVERSIFIED REALTY

CORPORATION

 	 
	 	By:  	 	 
	 	Name: 	  	 	 
	 	Title: 	  	 	 
	 



	 	 	 	 	 
	 	MR. ALEXANDER OTTO

 	 
	 	
 	 
	 	 	 
	 	 	 
	 




7









 





Exhibit E




	 	 	 
	[Purchaser]

	 	 
	 
	 	 
	[Address]
	 	 
	 
	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 
	 	 
	 	 	 





[______], 2009





			
	Re:	 	Common Shares of Developers Diversified Realty Corporation 





Ladies and Gentlemen:




     We have acted as counsel for Developers Diversified Realty Corporation, an Ohio corporation
(the “Company”), in connection with purchase from the Company by [Investor] (the “Purchaser”) of
[number of shares to be sold at closing to be provided] common shares (the “Shares”), $0.10 par
value per share, of the Company to be offered by the Company pursuant to the Stock Purchase
Agreement, dated as of February ___, 2009 (the “Stock Purchase Agreement”) by and between the
Company and the Purchaser. Except as otherwise defined herein, terms used in this letter but not
otherwise defined herein are used as defined in Stock Purchase Agreement. This letter is furnished
to the Purchaser pursuant to Section 7.13 of the Stock Purchase Agreement.



     In connection with the opinions and views expressed herein, we have examined such documents,
records and matters of law as we have deemed relevant or necessary for purposes of such opinions
and views. Based on the foregoing, and subject to the further limitations, qualifications and
assumptions set forth herein, we are of the opinion that:




	1.	 	The Company is a corporation existing and in good standing under the laws of the State of
Ohio, with the corporate power and authority to conduct its business and to own or lease its
properties as described in the Prospectus, dated December 4, 2006 (the “Base Prospectus”, as
supplemented by the Prospectus Supplement, dated February [___], 2009 (the “Prospectus
Supplement,” and together with the Base Prospectus, the “Prospectus”). The Company is
qualified to do business and is in good standing as a foreign corporation in each jurisdiction
and as of the dates listed for the Company on Exhibit A attached hereto.
	 
	2.	 	Each of JDN QRS LLC, DDR PR Ventures II LLC, DDR PR Ventures LLC, S.E. and DDR IRR
Acquisition LLC (together with TRT DDR Venture I General Partnership, the “Significant
Subsidiaries”) is a limited liability company existing and in good standing under the laws of
the State of Delaware. TRT DDR Venture I General Partnership is a general partnership
existing and in good standing under the laws of the State of Delaware. Each of the Significant
Subsidiaries is qualified to do business





 









 





Page 2





	 	 	and is in good standing as a foreign limited liability company or general partnership, as
applicable, in each jurisdiction and as of the dates listed for such Significant Subsidiary
on Exhibit A attached hereto.
	 
	3.	 	The Company has an authorized equity capitalization as set forth under the captions
“Description of Preferred Shares — Capitalization” and “Description of Common Shares —
Capitalization” in the Prospectus Supplement.
	 
	4.	 	The Shares have been authorized by all necessary corporate action of the Company and, when
issued and delivered pursuant to the Stock Purchase Agreement against payment of the
consideration therefor as provided therein, will be validly issued, fully paid and
nonassessable.
	 
	5.	 	Each of the Stock Purchase Agreement, the Investor Rights Agreement, the Waiver Agreement,
the Tax Agreement and the Warrant issued on the date hereof (collectively, the “Transaction
Documents”) has been authorized by all necessary corporate action of, and has been executed
and delivered by, the Company and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
	 
	6.	 	No consent, approval, authorization or order of, or filing with, any governmental agency or
body or any court is required in connection with the execution, delivery or performance of the
Transaction Documents by the Company, or in connection with the issuance and sale of the
Shares by the Company to the Purchaser, except (i) for the registration of the sale of the
Shares by the Company under the Securities Act and the rules and regulations thereunder, (ii)
for the registration of the resale of the Shares by the Purchaser or its permitted tranferees
under the Securities Act and the rules and regulations thereunder, (iii) periodic and other
reporting requirements under the Exchange Act and the rules and regulations thereunder, (iii)
as may be required under state securities or “blue sky” laws, (iv) for the filing of the
amendments to the Company’s Second Amended and Restated Articles of Incorporation with the
Ohio Secretary of State pursuant to the terms and conditions of the Stock Purchase Agreement
or (v) as required by the Section 7A of the Clayton Act, as added by Title II of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
	 
	7.	 	The execution, delivery and performance of the Transaction Documents by the Company, the
issuance and sale of the Shares by the Company and the compliance with the terms and
provisions of the Stock Purchase Agreement by the Company will not violate any law or
regulation that, in our experience, is generally applicable to transactions of this type, or
any order or decree of any court, arbitrator or governmental agency that is binding upon the
Company or its property or violate or result in a default under any of the terms and
provisions of the Second Amended and Restated Articles of Incorporation of the Company or the
Amended Code of Regulations of the Company or any agreement to which the Company is a party or
bound (this opinion being limited (i) to those orders and decrees identified on Exhibit
B attached hereto and to those agreements identified on Exhibit C attached hereto
and (ii) in that we express no opinion with respect to any violation (a) not readily
ascertainable from the face of any such order, decree or agreement, (b) arising under





-2-









 





Page 3





	 	 	or based upon any cross default provision insofar as it relates to a default under an
agreement not identified on Exhibit C attached hereto or (c) arising as a result of
any violation of any agreement or covenant by failure to comply with any financial or
numerical requirement requiring computation).
	 
	8.	 	The holders of common shares, $0.10 par value per share, of the Company are not entitled to
any statutory pre-emptive rights pursuant to Title XVII, Chapter 1701 of the Ohio Revised
Code, the Second Amended and Restated Articles of Incorporation of the Company or the Amended
Code of Regulations of the Company or, to our knowledge, contractual pre-emptive rights (this
opinion being limited to those agreements identified on Exhibit C attached hereto.
	 
	9.	 	The Company is not required to register as an “investment company,” as such term is defined
in the Investment Company Act of 1940.





     The Registration Statement on Form S-3 filed by the Company with the Securities and Exchange
Commission (the “Commission”) on December 4, 2006 (Registration No. 333-139118) (the “Registration
Statement”) has become effective under the Securities Act, and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and no proceedings for
that purpose are pending or threatened by the Commission.



     The opinions and views set forth above are subject to the following limitations,
qualifications and assumptions:



     We have assumed, for purposes of the opinions and views expressed herein, the legal capacity
of all natural persons executing documents, the genuineness of all signatures, the authenticity of
original and certified documents and the conformity to original or certified copies of all
documents submitted to us as conformed or reproduction copies. For the purposes of the opinions
and views expressed herein, we also have assumed that the Purchaser has authorized, executed and
delivered the documents to which the Purchaser is a party and that each of such documents is the
valid, binding and enforceable obligation of the Purchaser.



     As to facts material to the opinions and assumptions expressed herein, we have, with your
consent, relied upon written statements and representations of officers and other representatives
of the Company and others, including the representations and warranties of the Company in the Stock
Purchase Agreement. We have not independently verified such matters.



     The opinions expressed in paragraphs 1 and 2 above with respect to the existence and/or good
standing, as the case may be, of the Company and the entities referred to therein, are based solely
on certificates of public officials as to factual matters or legal conclusions set forth therein.



     With respect to our opinions in paragraph 4, we have assumed that (i) the resolutions
authorizing the Company to issue and deliver and sell the Shares pursuant to the Stock Purchase
Agreement will be in full force and effect at all times at which the Shares are issued or delivered
or sold by the Company, and the Company will take no action



-3-









 





Page 4



inconsistent with such resolutions and (ii) each issuance of Shares by the Company under the
Stock Purchase Agreement will be approved by the Board of Directors of the Company or an authorized
committee of the Board of Directors.




     Our opinions set forth in paragraph 5 above with respect to the enforceability of the
documents referred to in such opinions are subject to (i) bankruptcy, insolvency, reorganization,
fraudulent transfer and fraudulent conveyance, voidable preference, moratorium or other similar
laws, and related regulations and judicial doctrines from time to time in effect, relating to or
affecting creditors’ rights and remedies generally; (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or at law (including the
possible unavailability of specific performance or injunctive relief), concepts of materiality,
good faith and fair dealing and the discretion of the court before which any proceeding may be
brought; (iii) the qualification that we express no opinion as to the validity, binding effect or
enforceability of any provision in any document or security relating to indemnification,
contribution or exculpation that may be violative of the public policy underlying any law, rule or
regulation (including any federal or state securities law, rule or regulation); and (iv) the
qualification that to the extent any opinion relates to the enforceability of the choice of New
York law and choice of New York forum provisions of the documents or securities referred to
therein, our opinion is rendered in reliance upon N.Y. Gen. Oblig. Law §§ 5-1401, 5-1402 (McKinney
2001, Supp. 2009) and N.Y. C.P.L.R. 327(b) (McKinney 2001, Supp. 2009), and that such
enforceability may be limited by public policy considerations.



     With respect to our opinions in paragraph 7, we express no opinion as to state securities or
“blue sky” laws.



     The statements above with respect to the effectiveness of the Registration Statement under the
Securities Act and no stop order suspending the effectiveness of the Registration Statement having
been issued and no proceedings for that purpose being pending or threatened by the Commission are
based solely on telephone conversations involving lawyers in our firm actively engaged in our
representation of the Company in this matter and members of the staff of the Commission, and such
statements are made as of the time of such conversations.



     The opinions and views expressed herein are limited to (i) the federal laws of the United
States of America, (ii) the laws of the State of Ohio, (iii) the laws of the State of New York,
(iv) the Delaware Limited Liability Company Act and (v) the Delaware Revised Uniform Partnership
Act, in each case as currently in effect, and we express no opinion or view as to the effect of the
laws of any other jurisdiction on the opinions and views expressed herein.



     This letter is furnished by us to you solely for your benefit and solely in your capacity as
Purchaser in connection with the execution and delivery of the Stock Purchase Agreement, upon the
understanding that we are not hereby assuming any professional responsibility to any other person
whatsoever, and that this letter is not to be used, circulated, quoted or otherwise referred to for
any other purpose.



Very truly yours,





-4-











 





Exhibit F




_________, 2009




[Purchaser]

[address]




Ladies and Gentlemen:




     We have acted as counsel for Developers Diversified Realty Corporation, an Ohio corporation
(the “Company”), in connection with the purchase from the Company by [Investor] (the
“Purchaser”) of [___] common shares (the “Shares”), $0.10 par value per share, of the
Company pursuant to the Stock Purchase Agreement, dated as of [___], 2009 (the “Stock
Purchase Agreement”) by and between the Company and the Purchaser. Except as otherwise defined
herein, terms used in this letter but not otherwise defined herein are used as defined in Stock
Purchase Agreement. This letter is furnished to the Purchaser pursuant to Section 7.13 of the
Stock Purchase Agreement.



     In connection with our opinion, we have reviewed and are relying upon (i) the Amended and
Restated Articles of Incorporation of the Company (the “Articles”) as in effect on the date
hereof, (ii) the Code of Regulations of the Company as in effect on the date hereof, (iii) the
[Stock Purchase Agreement], (iv) the [Investors’ Rights Agreement], (v) the [Shareholder Voting
Agreement], (vi) the [Tax Agreement], (vii) the [Waiver Agreement] and (viii) such other documents,
records and instruments that we have deemed necessary or appropriate for purposes of our opinion,
and have assumed their accuracy as of the date hereof. For purposes of our review, we have also
assumed, with your consent, the authenticity of all documents we have examined as well as the
genuineness of signatures and the validity of the indicated capacity of each party executing a
document. In addition, we have relied upon the factual representations contained in a certificate,
dated as of the date hereof (the “Officer’s Certificate”), executed by a duly appointed
officer of the Company, setting forth certain representations relating to the organization and
operation of the Company.



     We have made such investigations of law and fact as we have deemed appropriate as a basis for
our opinion. However, for purposes of our opinion, we have not made an independent investigation
of the facts set forth in the Officer’s Certificate. Our opinion is conditioned on the accuracy
and completeness of the factual representations made in the Officer’s Certificate and
any change or inaccuracy in the factual representations referred to in the Officer’s
Certificate may affect our conclusions set forth herein.



     Our opinion is based upon current provisions of the Internal Revenue Code of 1986, as amended
(the “Code”), the legislative history thereto, the existing applicable United States






 









 










[Purchaser]

___, 2009

Page 2



federal income tax regulations promulgated or proposed under the Code, published judicial authority
and currently effective published rulings and administrative pronouncements of the Internal Revenue
Service (the “IRS”), all of which are subject to change at any time, possibly with
retroactive effect, and subject to differing interpretations.




     Based upon and subject to the foregoing and the qualifications set forth below, it is our
opinion that, during the period commencing with the Company’s taxable year ended December 31, 1993
through its taxable year ended December 31, 2008, the Company was organized and has operated in
conformity with the requirements for qualification and taxation as a real estate investment trust
(a “REIT”) under the Code, and the Company’s current and proposed method of operation will
enable the Company to continue to meet the requirements for qualification and taxation as a REIT
under the Code for its taxable year ending December 31, 2009 and for future taxable years.



     Other than as expressly stated above, we express no opinion on any issue relating to the
Company or to any investment therein. The qualification and taxation of the Company as a REIT
depend upon the ability of the Company to meet on a continuing basis, through actual annual
operating and other results, the various requirements under the Code and the Treasury Regulations
promulgated thereunder with regard to, among other things, the sources of its income, the
composition of its assets, the level of its distributions to holders of the Company’s shares and
the diversity of ownership of the Company’s shares. Jones Day will not review the compliance of
the Company with these requirements on a continuing basis. Accordingly, no assurance can be given
that the actual results of the operations of the Company, the sources of its income, the nature of
its assets, the level of the Company’s distributions to shareholders, the diversity of ownership of
the Company’s shares, and other matters required for REIT qualification for 2009 and subsequent
taxable years will satisfy the requirements under the Code and the applicable Treasury Regulations
for qualification and taxation as a REIT.



     In rendering our opinion, we are expressing our views only as to the United States federal
income tax laws. We do not undertake to advise you of the effect of changes in matters of law or
fact occurring subsequent to the date hereof. Further, the opinion set forth above represents our
conclusion based upon our review of the documents, facts and representations referred to above.
Any material amendments to such documents, changes in any significant facts, or inaccuracy of such
representations could affect the opinions referred to herein. This opinion is not binding upon the
IRS or the courts. There can be no assurance, and none is hereby given, that the IRS will not take
a position contrary to one or more of the positions reflected in the foregoing opinion or that our
opinion will be upheld by the courts if challenged by the IRS.



     To ensure compliance with U.S. Treasury Department Circular 230, you are hereby notified that:
(a) any discussion of United States federal tax issues in this letter is not intended or



 









 








[Purchaser]

___, 2009

Page 3



written by us to be relied upon, and cannot be relied upon by you for the purpose of avoiding penalties
that may be imposed under the Code; (b) such discussion is written in connection with the promotion
or marketing (within the meaning of Circular 230) of the transactions or matters addressed herein
by the Company; and (c) you should seek advice based on your particular circumstances from your own
independent tax advisor.




Very truly yours,





 











 





EXHIBIT G




INVESTORS’ RIGHTS AGREEMENT




          THIS INVESTORS’ RIGHTS AGREEMENT (the “Agreement”) is made and entered into as of the
[                    ] day of [                                        ], 2009, by and between Developers Diversified Realty Corporation, an
Ohio corporation (the “Company”), and Mr. Alexander Otto (the “Investor”).




RECITALS




          A. WHEREAS, on February 23, 2009, the Investor and the Company entered into a Stock Purchase
Agreement (the “Stock Purchase Agreement”), which provides for the purchase and sale of up
to 30,000,000 of the Company’s common shares, $0.10 par value per share (“Common Shares”),
to the Investor and a grant of warrants to purchase 10,000,000 Common Shares (the
“Warrants”);




          B. WHEREAS, the terms and conditions of the Stock Purchase Agreement require that the board of
directors of the Company (the “Board of Directors”) nominate up to two director nominees
selected by the Investor to the Board of Directors (the “Investor Director” or
“Investor Directors,” as the case may be);




          C. WHEREAS, as an inducement to the Company to enter into the Stock Purchase Agreement and as
an inducement to the Investor to purchase up to 30,000,000 Common Shares pursuant to the Stock
Purchase Agreement, the Investor and the Company hereby agree that this Agreement shall govern the
rights of the Investor to nominate up to two director nominees selected by the Investor to serve on
the Board of Directors in accordance with the terms set forth below; and




          D. WHEREAS, in order to permit the Investor to sell the Common Shares (including those
underlying the Warrants) purchased pursuant to the Stock Purchase Agreement, the Investor and the
Company hereby agree that this Agreement shall govern the registration rights of the Investor for
the resale of such Common Shares under the Securities Act.




          Unless otherwise provided, all capitalized terms shall have the meaning ascribed to them in
Section 1.




          NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:




     1. Definitions. For purposes of this Agreement:



               (a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or
indirectly, controls, is controlled by, or is under common control with such Person.



 









 





               (b) “beneficially own” shall have the meaning ascribed to such term under Rule 13d-3 of the
Exchange Act.



               (c) “Blackout Period” means a period of time, not to exceed 60 days, during which the Company
may postpone the preparation, filing or effectiveness or suspend the effectiveness of a
registration statement, if the Company, in good faith determines that the registration and/or
distribution of Registrable Securities (i) would materially impede, delay, or interfere with any
financing, acquisition, corporate reorganization or other significant transaction, or any
negotiations, discussions or pending proposals with respect thereto, involving the Company or any
of its subsidiaries or their respective assets, including, without limitation, any primary offering
of securities by the Company, or (b) would require the disclosure of material nonpublic
information, the disclosure of which could adversely affect the Company.



               (d) “Damages” means any loss, damage or liability (joint or several) to which a party hereto
may become subject under the Securities Act, the Exchange Act, or other federal or state law,
insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any
registration statement of the Company filed pursuant to the terms of this Agreement, including any
preliminary prospectus or prospectus contained therein or any amendments or supplements thereto, or
(ii) an omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (with respect to any preliminary prospectus or
prospectus or any amendments or supplements thereto, in the light of the circumstances under which
they were made) not misleading.



               (e) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.



               (f) “Form S-3” means such form under the Securities Act as in effect on the date hereof or any
registration form under the Securities Act subsequently adopted by the SEC that permits
incorporation of substantial information by reference to other documents filed by the Company with
the SEC.



               (g) “Otto Family” means the Investor and/or a member of the Investor’s family as follows: (i)
Professor Werner Otto, his wife Maren Otto and/or all descendants of Professor Werner Otto,
including without limitation the Investor (illegitimate descendants only if they have obtained the
status of a legitimate descendant by legitimation or adoption by Professor Werner Otto or one of
his legitimate descendants, or if they are children of a female legitimate descendant of Professor
Werner Otto); (ii) any trust or any family foundation which has exclusively been established in
favor of one or several of the individuals named under (i) above, and (iii) any partnership, firm,
corporation, association, trust, unincorporated organization, joint venture, limited liability
company or other legal entity, in which the individuals or entities named under (i) or (ii) hold
(either directly or indirectly) more than 50% of the voting rights or more than 50% of the equity
capital of any such partnership, firm,



2









 




corporation, association, trust, unincorporated organization, joint venture, limited liability
company or other legal entity.




               (h) “Person” means a natural person or any legal, commercial or governmental entity, such as,
but not limited to, a corporation, general partnership, joint venture, limited partnership, limited
liability company, limited liability partnership, trust, business association, group acting in
concert, or any person acting in a representative capacity.



               (i) “Registrable Securities” means (i) Common Shares beneficially owned by the Otto Family in
an amount equal to the aggregate number of Common Shares sold by the Company to the Investor and
its assignees pursuant to the Stock Purchase Agreement, plus any Common Shares distributed to the
Otto Family by the Company as a dividend on such Common Shares, and (ii) Common Shares underlying
the Warrants owned by the Otto Family, plus any Common Shares distributed to the Otto Family by the
Company as a dividend on such Common Shares.



               (j) “SEC” means the United States Securities and Exchange Commission.



               (k) “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.



               (l) “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.



               (m) “Selling Expenses” means all underwriting discounts, selling commissions, and stock
transfer taxes applicable to the sale of Registrable Securities and the fees and disbursements of
counsel to the Investor and any other member of the Otto Family in connection with the sale of
Registrable Securities.



     2. Board of Directors; Control Person



               (a) At any time that the Otto Family collectively beneficially owns 17.5% or more of the
outstanding Common Shares, the Investor, on behalf of the members of the Otto Family, shall have
the right to nominate two Investor Directors pursuant to this Section 2, at every annual meeting of
the shareholders of the Company in which directors are generally elected, including, without
limitation, at every adjournment or postponement thereof, and on any action approval by written
consent of the shareholders of the Company relating to the election of directors generally.



               (b) At any time that the Otto Family collectively beneficially owns less than 17.5% of the
outstanding Common Shares and more than 7.5% of the outstanding Common Shares, the Investor, on
behalf of the members of the Otto Family, shall have the right to nominate one Investor Director
pursuant to this Section 2, at every annual meeting of the shareholders of the Company in which
directors are generally elected, including, without limitation, at every adjournment or
postponement thereof, and



3









 




on any action approval by written consent of the shareholders of the Company relating to the
election of directors generally.




               (c) The following procedures shall be followed with respect to the nomination of Investor
Directors pursuant to Section 2(a) or 2(b):




               (i) For purposes of whether the Investor has a right to nominate an Investor
Director pursuant to Section 2(a) or 2(b), the Otto Family’s beneficial ownership of the
outstanding Common Shares will be measured as of the record date for such annual meeting
or written consent.




               (ii) No later than January 10 of each year, the Investor shall provide the Board of
Directors with the Investor’s nominee(s), as the case may be, for the Investor
Director(s), along with any other information reasonably requested by the Board of
Directors to evaluate the suitability of such candidate(s) for directorship. With
respect to any Investor nominee, Investor shall use its best efforts to ensure that any
such nominee satisfies all stated criteria and guidelines for director nominees of the
Company. The Company shall be entitled to rely on any written direction from Investor
regarding the Investor’s nominee(s) on behalf of the Otto Family without further action
by the Company. In the event Investor is no longer able to select such nominee(s), then
the Company may rely on the nominee(s) proposed by any individual member of the Otto
Family designated as being authorized to propose such Investor Director(s) in lieu of
Investor.




               (iii) Within 20 days of receiving the Investor’s nominee(s) for the Investor
Director(s) in accordance with Section 2(c)(ii), the Board of Directors or any authorized
committee thereof shall have made a good faith and reasonable determination as to the
suitability of the Investor’s nominee(s) for Investor Director(s) and shall notify the
Investor of its determination in writing.




               (iv) If the Board of Directors or any authorized committee thereof approves of the
Investor’s nominee(s) for Investor Director(s), as the case may be, the Board of
Directors shall recommend that the shareholders vote to elect such director(s) at the
next annual meeting of shareholders at which directors will be generally elected.




               (v) If the Board of Directors or any authorized committee thereof raises a
reasonable objection to one or both of the Investor’s nominees, as the case may be, for
the Investor Director(s), then the Investor and the Board of Directors shall use their
best efforts to agree on the nominee(s) for such Investor Director(s), and if the
Investor and the Board of Directors cannot agree on the nominee(s) on or before the tenth
day prior to the proposed filing of the Company’s annual proxy statement, then such
nominee for Investor Director(s) shall not be nominated by the Company at such annual
meeting.



4









 






               (vi) If one or both of the Investor nominees is not nominated (as described in the
foregoing clause (v)), then as soon as practicable after the annual meeting, the Investor
and the Board of Directors shall use their best efforts to agree on the nominee(s) for
such Investor Director(s), which nominee(s) shall be appointed as director(s) by the
Board of Directors promptly after such agreement is reached.



               (d) Notwithstanding anything to the contrary in this Agreement and without any further action
by the Company, the Investor’s right to nominate any Person to the Company’s Board of Directors
shall automatically terminate, and be of no further force and effect, on the date that the Otto
Family beneficially owns 7.5% or less of the outstanding Common Shares. The Investor shall
promptly, but in any case within five days, provide notice to the Company upon the Otto Family
ceasing to beneficially own 7.5% or less of the outstanding Common Shares.



               (e) Each of the Investor Directors, upon appointment or election to the Board of Directors,
will be governed by the same protections and obligations as all other directors of the Company,
including, without limitation, protections and obligations regarding customary liability insurance
for directors and officers, confidentiality, conflicts of interests, fiduciary duties, trading and
disclosure policies, director evaluation process, director code of ethics, director share ownership
guidelines, stock trading and pre-approval policies, and other governance matters. The Company
agrees that it shall offer to enter into an indemnification agreement with each Investor Director
substantially similar to the indemnification agreements then in effect with the Company’s directors
when each Investor Director becomes a member of the Board of Directors.



               (f) Commencing on the election or appointment of the Investor nominees as Investor Directors
of the Company in accordance with this Agreement and thereafter for so long as at least one
Investor Director is serving as a member of the Board of Directors, the Investor will, and will
cause each member of the Otto Family to: (i) with respect to the Company or its Common Shares, not
make, engage or in any way participate in, directly or indirectly, any “solicitation” (as such term
is used in the proxy rules of the SEC) of proxies or consents (whether or not relating to the
election or removal of directors), (ii) except as provided for in this Agreement, and except as
provided for in that certain Voting Agreement by and among the Investor and certain shareholders of
the Company of even date herewith, not seek, alone or in concert with others, election or
appointment to, or representation on, or nominate or propose the nomination of any candidate to,
the Board of Directors, (iii) not initiate, propose or otherwise “solicit” (as such term is used in
the proxy rules of the SEC) shareholders of the Company for the approval of shareholder proposals
made to the Company whether made pursuant to Rule 14a-8 or Rule 14a-4 under the Exchange Act or
otherwise, or cause or encourage or attempt to cause or encourage any other person to initiate any
such shareholder proposal, regardless of its purpose, or (iv) cause all Common Shares beneficially
owned by the Investor and the members of the Otto Family as to which they are entitled to vote at
any meeting of shareholders to be voted in favor of the election of each member of any slate of
directors recommended by the Company’s Board of



5









 




Directors that includes at least one Investor nominee; provided, that each Investor Director
on the Company’s Board of Directors shall have voted in favor of such slate of director nominees.




               (g) The Company agrees that it shall offer to enter into an indemnification agreement with the
Investor, on similar terms as the agreements in effect with the Company’s existing directors as of
the date hereof, indemnifying the Investor against a third party claim of control person liability
within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act so long
as the Investor has acted in good faith and not directly or indirectly induced the act or acts
constituting the violation or cause of action giving rise to the third party claim. Any payment to
be made under any indemnification agreement entered into between the Company and the Investor shall
be paid only if nationally recognized counsel selected by the Company and reasonably acceptable to
the Investor provides an opinion either (i) that such payment should not be treated as a
preferential dividend for purposes of Section 562 of the Internal Revenue Code (the “Code”)
or (ii) that such payment should not (a) reduce current earnings and profits of the Company for
purposes of Section 857(d) of the Code below the level necessary for the Company to satisfy its
requirements under Section 857(a)(1) of the Code, or (b) cause declared distributions of the
Company to be treated as preferential dividends and cause the Company to fail to satisfy its
requirements under Section 857(a)(1) of the Code. In the event a payment to Investor will not be
made due to the application of the previous sentence, the Company shall, upon Investor’s request,
seek a private letter ruling and make the payment in the event a favorable private letter ruling is
received.



     3. Registration Rights. The Company covenants and agrees as follows:



          3.1 Registration Rights.




               (a) Form S-3. So long as the Company is eligible to use Form S-3 for secondary
offerings, the Company shall, as promptly as practicable, and in any event within 30 days following
the Second Closing Date (as defined in the Stock Purchase Agreement) or the Non-Tranche Closing
Date (as defined in the Stock Purchase Agreement), as applicable, file a shelf registration
statement on Form S-3 under the Securities Act covering such Registrable Securities.



               (b) Form S-1. In the event the Company is not eligible to use Form S-3 for secondary
offerings, Investor may request in writing that the Company file a shelf registration statement on
Form S-1 with respect to the Registrable Securities. The written request shall specify (i) the
then-current name and address of the member of the Otto Family proposing to have registered
Registrable Securities, (ii) the aggregate number of Registrable Securities proposed to be
registered, (iii) the total number of Common Shares beneficially owned by each member of the Otto
Family proposing to have registered Registrable Securities and (iv) the intended method of
distribution of the Registrable Securities proposed to be registered. The Company shall, as
promptly as practicable, and in any event within 30 days after the date such written request is
received



6









 




by the Company, file a registration statement on Form S-1 under the Securities Act covering
such Registrable Securities.




               (c) In the event the Company becomes eligible to use Form S-3 following the use of Form S-1
upon a demand made pursuant to Section 3.1(b), the Company may elect to file a Form S-3 with
respect to any Registrable Securities registered on such Form S-1; provided, that, the Company
shall maintain the effectiveness of the Form S-1 while registering such Registrable Securities on
Form S-3.



               (d) Notwithstanding the foregoing obligations, the Company shall not be required to file a
registration statement as indicated below:




               (i) with respect to Section 3.1(b), prior to the date of the request, the Company
has already effected four registrations pursuant to such section;




               (ii) prior to the date of the request, the Company has already effected a
registration pursuant to Section 3.1(a) and/or Section 3.1(b) covering all of the
Registrable Securities and such registration statement is still effective;




               (iii) with respect to Sections 3.1(a) and (b), a registration statement is effective
at the time such request is made and such registration statement may be utilized for the
offering and sale of the Registrable Securities requested to be registered; and




               (iv) during the pendency of any Blackout Period.



               (e) The Company shall not be obligated to effect, or to take any action to effect, any
registration pursuant to Sections 3.1(a) or (b) during the period that is 30 days before the
Company’s good faith estimate of the date of filing of, and ending on a date that is 90 days (or
such shorter time period as the managing underwriter of any underwritten offering shall agree to,
but in no case less than 30 days) after the effective date of, a Company-initiated registration
statement, provided that the Company is actively employing in good faith commercially reasonable
efforts to cause such registration statement to become effective.



               (f) Limitation on Sales of Common Shares. Investor hereby agrees, and will use his
best efforts to prohibit each member of the Otto Family, to not sell any Common Shares until the
sixth-month anniversary of the earlier of the Non-Tranche Closing Date or the Second Closing Date
(each as defined in the Stock Purchase Agreement). Following such sixth-month anniversary,
Investor will be permitted to sell up to 15,000,000 Registrable Securities, which shall consist of
5,000,000 Common Shares (which, for the sake of clarity, shall include, in addition to such
5,000,000 Common Shares, any Common Shares issued to Investor as a dividend with respect to such
Registrable Shares) and 10,000,000 Common Shares underlying the Warrants (which, for the sake of
clarity, shall include any Common Shares attributable to such 10,000,000 Common Shares due to any
adjustments made to the Warrants in accordance



7









 




with their terms). At the end of each three-month period following the sixth-month
anniversary of the earlier of the Non-Tranche Closing Date or the Second Closing Date, and
aggregating in each such three-month period, up to an additional 5,000,000 Registrable Securities
(which, for the sake of clarity, shall include, in addition to such 5,000,000 Common Shares, any
Common Shares issued to Investor as a dividend with respect to such Registrable Shares) may be sold
by Investor. In the event that the Company is not eligible to file or maintain the effectiveness
of a registration statement with the SEC for any reason, the restrictions applicable to Registrable
Shares pursuant to this Section 3.1(e) shall immediately terminate.




          3.2 Obligations of the Company. Whenever required under Section 3.1 to effect the
registration of any Registrable Securities, the Company shall:




               (a) prepare and file with the SEC a registration statement with respect to such Registrable
Securities and use its commercially reasonable efforts to cause such registration statement to
become effective under the Securities Act;



               (b) use its commercially reasonable efforts to keep a registration statement that has become
effective continuously effective if it is on Form S-3, and if it is on Form S-1, then until the
earlier of (i) two years following the first day of effectiveness of such registration statement
(subject to extension pursuant to Section 3.3(b) or Section 3.3(c)) and (ii) the date on which all
Registrable Securities covered by such registration statement have been disposed of pursuant to
such registration statement;



               (c) furnish to the Investor such number of copies of a prospectus, including a preliminary
prospectus, as required by the Securities Act, and such other documents as the Investor may
reasonably request in order to facilitate the disposition of Registrable Securities;



               (d) promptly following its actual knowledge thereof, notify the Investor:




               (i) of the time when such registration statement has been declared effective or when
a supplement or amendment to any prospectus forming a part of such registration statement
has been filed (other than any deemed amendment of such registration statement by means
of a document filed by the Company under the Exchange Act);




               (ii) after such registration statement becomes effective, of any request by the SEC
that the Company amend or supplement such registration statement or prospectus forming a
part of such registration statement or for additional information;




               (iii) of the issuance by the SEC or any other governmental authority of any stop
order suspending the effectiveness of such registration statement or the initiation of
any proceeding for such purpose; and



8









 






               (iv) of the occurrence of any event that makes any statement made in the
registration statement or any prospectus forming a part of such registration statement
untrue in any material respect or which requires the making of any changes in such
registration statement or prospectus so that it will not include an untrue statement of a
material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances
under which they were made;



               (e) use its commercially reasonable efforts to register and qualify the Registrable Securities
covered by such registration statement under the securities or blue-sky laws of such jurisdictions
within the United States as shall be reasonably requested by the Investor; provided that
the Company shall not be required in connection therewith or as a condition thereto to qualify to
do business or otherwise become subject to taxation or service of process in suits in any such
jurisdictions where it is not already so qualified or subject;



               (f) in the event of any underwritten public offering of Registrable Securities, enter into and
perform its obligations under an underwriting agreement, in usual and customary form, with the
underwriter(s) of such offering;



               (g) use its commercially reasonable efforts to cause all such Registrable Securities covered
by such registration statement to be listed on each national securities exchange or trading system
on which the Common Shares are then listed;



               (h) provide a transfer agent and registrar for all Registrable Securities and provide a CUSIP
number for all such Registrable Securities, in each case not later than the effective date of such
registration statement; and



               (i) promptly make available for inspection by the Investor or his representatives and agents,
any managing underwriter(s) participating in any underwritten offering pursuant to such
registration statement, and any attorney or accountant or other agent retained by any such
underwriter or selected by the Investor, all financial and other records, pertinent corporate
documents and properties of the Company during normal business hours at the offices where such
information is typically kept, and cause the Company’s officers, directors, employees and
independent accountants to supply all information reasonably requested by the Investor or any such
underwriter, attorney, accountant, agent or other representative, in each case, as reasonably
necessary or advisable to verify the accuracy of the information in such registration statement and
to conduct appropriate due diligence in connection therewith as is customary for similar due
diligence examinations, provided that, any information that is designated in writing by the
Company, in good faith, as confidential at the time of delivery of such information shall be kept
confidential by the Investor or any such underwriter, attorney, accountant, agent or other
representative.



9









 





          3.3 Obligations of the Investor and Other Members of the Otto Family. Whenever the
Investor has requested that the Company effect the registration of any Registrable Securities under
Section 3.1:




               (a) the Investor and any other member of the Otto Family that has requested inclusion of its
Registrable Securities in a registration statement shall furnish to the Company such information
regarding the Investor and/or other member of the Otto Family, as applicable, and its plan and
method of distribution of such Registrable Securities as the Company may, on advice of counsel,
reasonably determine is required by applicable law, including, without limitation, information
required by Item 507 of Regulation S-K promulgated under the Securities Act, provided that the
Company may refuse to proceed with the registration of the Registrable Securities of the Investor
and /or other member of the Otto Family if such Person fails to provide such information within a
reasonable time after receiving such request;



               (b) upon receipt of any notice from the Company of the occurrence of any event of the type
described in Sections 3.2(d)(ii), 3.2(d)(iii) or 3.2(d)(iv), the Investor and any other member of
the Otto Family that has requested inclusion of its Registrable Securities in a registration
statement will discontinue disposition of Registrable Securities covered by a registration
statement and suspend use of such registration statement or prospectus forming a part of such
registration statement until the Company has provided an amendment or supplement to such
registration statement or prospectus or the Company has advised that the use of the registration
statement or prospectus may be resumed, provided that, in the event that the Company shall give any
such notice, the period of time for which a registration statement must remain effective as set
forth in Section 3.2(b) will be extended by the number of days during the time period from and
including the date of the giving of such notice to and including the date when the Company has
either provided an amendment to such registration statement or prospectus or advised that the use
of the registration statement or prospectus may be resumed;



               (c) upon receipt of any notice from the Company of a Blackout Period, the Investor and any
other member of the Otto Family that has requested inclusion of its Registrable Securities in a
registration statement will discontinue disposition of Registrable Securities covered by a
registration statement and suspend use of such registration statement or prospectus forming a part
of such registration statement until the Company has provided an amendment or supplement to such
registration statement or prospectus or the Company has advised that the use of the registration
statement or prospectus may be resumed, provided that, in the event that the Company shall give any
such notice, the period of time for which a registration statement must remain effective as set
forth in Section 3.2(b) will be extended by the number of days during the time period from and
including the date of the giving of such notice to and including the date when the Company has
either provided an amendment to such registration statement or prospectus or advised that the use
of the registration statement or prospectus may be resumed;



10









 





               (d) in the event of any underwritten public offering of Registrable Securities, the Investor
and any other member of the Otto Family that has requested inclusion of its Registrable Securities
in a registration statement shall enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the underwriter(s) of such offering;



               (e) in the event of any underwritten public offering of securities by the Company, the
Investor and any other member of the Otto Family that beneficially owns Registrable Securities, if
requested by the Company and any managing underwriter, shall agree not to directly or indirectly
offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant for the sale of or otherwise dispose of or
transfer any Common Share held by them for such period that the executive officers and directors of
the Company agree to with the managing underwriter.



          3.4 Expenses of Registration. All expenses (other than Selling Expenses) incurred in
connection with registrations, filings, or qualifications pursuant to this Section 3, including all
registration, filing, and qualification fees, printers’ and accounting fees, and fees and
disbursements of counsel for the Company, shall be borne and paid by the Company; provided,
however, that the Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 3.1 if the registration request is subsequently withdrawn at
the request of the Investor or any other member of the Otto Family; provided
further that if, at the time of such withdrawal, the Investor shall have learned of a
material adverse change that is reasonably likely to have a material adverse effect on the
financial condition or business of the Company and its subsidiaries considered as one enterprise
from that known to the Investor at the time of the Investor’s request and has withdrawn the request
with reasonable promptness after learning of such information, then the Company shall be required
to pay all of such expenses. All Selling Expenses relating to Registrable Securities registered
pursuant to this Section 3 shall be borne and paid by the Investor.




          3.5 Indemnification. If any Registrable Securities are included in a registration
statement under this Section 3:




               (a) To the extent permitted by law, the Company will indemnify and hold harmless each member
of the Otto Family that has included Registrable Securities in a registration statement and such
member’s officers, directors, managers, partners and shareholders, and each Person who controls
such member (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) against any Damages, and the Company will reimburse each such member of the Otto Family,
controlling Person or other aforementioned Person for any legal or other expenses reasonably
incurred thereby in connection with investigating or defending any claim or proceeding from which
Damages may result, as such expenses are incurred; provided, however, that the indemnity
agreement contained in this Section 3.5(a) shall not apply to amounts paid in settlement of any
such claim or proceeding if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the
extent



11









 




that they arise out of or are based upon actions or omissions made in reliance upon and in
conformity with written information furnished by or on behalf of any such member of the Otto
Family, controlling Person or other aforementioned Person expressly for use in connection with such
registration statement.




               (b) To the extent permitted by law, the Investor will indemnify and hold harmless the Company,
its directors, its officers who have signed the registration statement and each Person who controls
the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) against any Damages, and the Investor will reimburse the Company, controlling Person or other
aforementioned Person for any legal or other expenses reasonably incurred thereby in connection
with investigating or defending any claim or proceeding from which Damages may result, as such
expenses are incurred, in each case only to the extent that such Damages arise out of or are based
upon actions or omissions made in reliance upon and in conformity with written information
furnished by or on behalf of any member of the Otto Family that has included Registrable Securities
in a registration statement expressly for use in connection with such registration statement;
provided, however, that the indemnity agreement contained in this Section 3.5(b) shall not
apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected
without the consent of the Investor, which consent shall not be unreasonably withheld; and
provided further that in no event shall the aggregate amounts payable by the Investor by
way of indemnity or contribution under Section 3.5(b) exceed the proceeds from the offering
received by such member of the Otto Family (net of any underwriting discounts and commissions paid
by such member of the Otto Family), except in the case of fraud or willful misconduct by such
member of the Otto Family.



               (c) Promptly after receipt by an indemnified party under this Section 3.5 of notice of the
commencement of any action (including any governmental action) for which a party may be entitled to
indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 3.5, give the indemnifying party notice of the
commencement thereof. In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying
party shall be entitled to participate in, and, to the extent that it shall elect, jointly with all
other indemnifying parties similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel selected by the indemnifying party that is reasonably satisfactory to such
indemnified party; provided, however, that an indemnified party (together with all other
indemnified parties that may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such action. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party’s election so to assume the
defense of such action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this



12









 




Section 3.5 for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless the indemnified party shall have employed separate
counsel in accordance with the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the fees and expenses of more than one separate firm of
attorneys (together with local counsel), representing all of the indemnified parties who are
parties to such action). The failure to give notice to the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than under this Section 3.5,
except to the extent that the indemnifying party would be materially prejudiced as a proximate
result of such failure to notify.




          3.6 Reports Under Exchange Act by the Company. With a view to making available to the
Otto Family the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at
any time permit a member of the Otto Family to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3 or Form S-1, the Company shall:




                (a) make and keep available adequate current public information, as those terms are understood
and defined in SEC Rule 144;




                (b) use commercially reasonable efforts to file with the SEC in a timely manner all reports
and other documents required of the Company under the Securities Act and the Exchange Act; and




                (c) furnish upon request (i) to the extent accurate, a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, the Securities Act, and the
Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form
S-3; (ii) a copy of the most recent annual or quarterly report of the Company and such other
reports and documents filed by the Company with the SEC; and (iii) such other information as may be
reasonably requested in availing any member of the Otto Family of any rule or regulation of the SEC
that permits the selling of any such securities without registration.




          3.7 Reports Under Exchange Act by the Investor and Other Members of the Otto Family.
The Investor acknowledges and agrees that the Investor and the other members of the Otto Family
shall be solely responsible for any required filings under Sections 13 and 16 of the Exchange Act
in connection with any acquisition or disposition of Common Shares. The Investor shall provide the
Company with a copy of any such filing contemporaneously with such filing being submitted to the
SEC.




          3.8 Limitations on Subsequent Registration Rights. From and after the date of this
Agreement, the Company shall not, without the prior written consent of the Investor, enter into any
agreement with any holder or prospective holder of any securities of the Company that would provide
to such holder the right to include such holder’s securities of the Company in any registration
statement that the Company would be required to file pursuant to Section 3.1.




13









 








          3.9 Termination of Registration Rights. Notwithstanding anything to the contrary in
this Agreement, the right of the Investor and any other member of the Otto Family to request
registration or inclusion of Registrable Securities in any registration statement pursuant to
Section 3.1 shall terminate when the Investor no longer has the right to nominate any Investor
Director pursuant to Section 2 hereof.




     4. Miscellaneous.



               (a) Successors and Assigns. Any assignment of this Agreement or any of the rights or
obligations under this Agreement by either of the parties hereto (whether by operation of law or
otherwise) shall be void, invalid and of no effect without the prior written consent of the other
party; provided, however, that the rights under this Agreement may be assigned (but
only with all related obligations) by the Investor to one or more member(s) of the Otto Family so
long as the assignee(s) agree in writing to be bound by the terms and conditions of this Agreement;
provided, further, that any such assignment shall not release, or be construed to
release, the Investor from its duties and obligations under this Agreement. The terms and
conditions of this Agreement inure to the benefit of and are binding upon the respective successors
and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective successors and permitted
assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided herein.



               (b) Termination. This Agreement shall terminate at such time as the Investor or any
assignee of the Investor, as permitted under Section 4(a) hereof, no longer has the authority to
nominate a director to the Board of Directors of the Company pursuant to Section 2. Upon such
termination, no party shall have any further obligations or liabilities hereunder other than
pursuant to Section 2(f) and Section 3.5; provided that such termination shall not relieve any
party from liability for any breach of this Agreement prior to such termination.



               (c) Governing Law. This Agreement and any controversy arising out of or relating to
this Agreement shall be governed by and construed in accordance with the laws of the State of New
York as to matters within the scope thereof, and as to all other matters shall be governed by and
construed in accordance with the internal laws of New York, without regard to conflict of law
principles that would result in the application of any law other than the law of the State of New
York.



               (d) Counterparts; Facsimile. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement may also be executed and delivered by portable
document format (pdf) and in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.



14









 





               (e) Titles and Subtitles. The titles and subtitles used in this Agreement are for
convenience only and are not to be considered in construing or interpreting this Agreement.



               (f) Notices All notices, requests, demands, and other communications hereunder shall
be in writing (which shall include communications by e-mail) and shall be delivered (a) in person
or by courier or overnight service, or (b) by e-mail with a copy delivered as provided in clause
(a), as follows:


If to the Company:



3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: Chief Executive Officer

Telephone: (216) 755-5500

E-mail: SWolstein@ddr.com



with a copy (which shall not constitute notice) to:



3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: General Counsel

Telephone: (216) 755-5500

Email: DWeiss@ddr.com



Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114

Attention: Michael J. Solecki

Telephone: (216) 586-7103

E-mail: mjsolecki@jonesday.com



If to Investor:



KG CURA Vermögensverwaltung G.m.b.H. & Co.

Wandsbeker Str. 3-7

D-22179 Hamburg

Germany

Attention: Mr. Wilhelm

Telephone: 0049 40 6461 1286

Email: wilhelm@kgcura.de



with a copy (which shall not constitute notice) to:



Alston & Bird LLP

90 Park Avenue




15









 







New York, NY 10016

Attention: Mark F. McElreath

Telephone: (212) 210-9595

E-mail: mark.mcelreath@alston.com




               (g) Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance, and either retroactively or prospectively) only with the written consent of both parties.
No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or
more instances, shall be deemed to be or construed as a further or continuing waiver of any such
term, condition, or provision.



               (h) Severability. In case any one or more of the provisions contained in this
Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement,
and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it
will be valid, legal, and enforceable to the maximum extent permitted by law.



               (i) Entire Agreement. This Agreement (including any Schedules and Exhibits hereto)
constitutes the full and entire understanding and agreement among the parties with respect to the
subject matter hereof, and any other written or oral agreement relating to the subject matter
hereof existing between the parties is expressly canceled.



16









 





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



	 	 	 	 	 	 	 
	 	 	DEVELOPERS DIVERSIFIED REALTY

CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MR. ALEXANDER OTTO	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 





17









 





EXHIBIT H




SHAREHOLDER VOTING AGREEMENT




     THIS SHAREHOLDER VOTING AGREEMENT (this “Agreement”) is made and entered into as
of [                    ], 2009, by and among Mr. Alexander Otto (the “Purchaser”) and the undersigned
shareholders of Developers Diversified Realty Corporation the “Company”) (in his or her
individual capacity, each a “Shareholder” and collectively, the “Shareholders”).



RECITALS




     A. WHEREAS, on February 23, 2009, Purchaser and the Company entered into a Stock Purchase Agreement
(the “Stock Purchase Agreement”), which provides for the purchase and sale of up to
30,000,000 shares of Company Common Stock (the “Stock Purchase”), and for a grant of
warrants to purchase 10,000,000 shares of Company Common Stock;



     B. WHEREAS, as an inducement to enter into the Stock Purchase Agreement, and as one of the
conditions to the consummation of the transactions contemplated by the Stock Purchase Agreement, an
agreement providing for Purchaser’s rights to nominate up to two individuals for representation on
the Company’s Board of Directors was approved by the Company’s Board of Directors (the
“Investor Rights Agreement”), and will be entered into concurrently with the execution of
this Agreement;



     C. WHEREAS, each Shareholder is the beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of, and has the right
to direct the voting of, the number of shares of Company Common Stock indicated on the
signature page of this Agreement; and



     D. WHEREAS, each Shareholder desires to agree to vote the Shares over which Shareholder has voting
power as described below.



     Unless otherwise provided, all capitalized terms shall have the meanings ascribed to them in
Section 1.



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:



     1. Definitions. For purposes of this Agreement:




          “Company Common Stock” means the common shares, $0.10 par value per share, of the
Company.




          “Person” means a natural person or any legal, commercial or governmental entity,
such as, but not limited to, a corporation, general partnership, joint venture, limited
partnership, limited liability company, limited



 









 







liability partnership, trust, business association, group acting in concert, or any
person acting in a representative capacity.




          ”Shares” means any shares of Company Common Stock owned, beneficially or of
record, by each Shareholder and over which such Shareholder has the power to direct the
vote, including, without limitation, shares of Company Common Stock acquired by each
Shareholder upon the exercise of Company options and/or Company warrants, and any shares of
Company Common Stock acquired by each Shareholder pursuant to a compensation plan of the
Company.



     2. Agreement to Vote Shares.



          (a) From the date hereof until the Expiration Date, at every annual meeting of the
shareholders of the Company, and at every adjournment or postponement thereof, and on any action or
approval by written consent of the shareholders of the Company, in each case, relating to the
election of members of the Company’s Board of Directors, each Shareholder (in Shareholder’s
capacity as such) shall appear at the meeting or otherwise cause the Shares to be present for
purposes of establishing a quorum and shall vote the Shares in favor of the nominee or nominees, as
applicable, for the Board of Directors of the Company proposed by Purchaser pursuant to, and in
accordance with, the Investor Rights Agreement.




          (b) If a Shareholder is the beneficial owner, but not the record holder, of the Shares, such
Shareholder agrees to take all reasonable actions necessary to cause the record holder and any
nominees to vote all of the Shares in the manner provided in Section 2(a).




          (c) This Agreement shall not, and shall not be construed to, grant any other rights with
regard to the voting of the Shares other than the limited rights set forth
in this Section 2. Purchaser shall have no right to influence in any manner the voting of the
Shares on any other matters that may come before the shareholders of the Company.




          (d) This Agreement shall not, and shall not be construed to, restrict the ability of any
Shareholder to sell any Shares, in the open market or otherwise.




     3. Action in Shareholder Capacity Only. Each Shareholder makes no agreement or
understanding herein as director or officer of the Company or as a fiduciary of, or participant in,
any compensation plan of the Company. Each Shareholder has entered into this Agreement solely in
his or her individual capacity as a record holder and/or beneficial owner of Shares, and nothing
herein shall limit or affect any actions taken in his or her capacity as an officer or director of
the Company or as a fiduciary of, or participant in, any compensation plan of the Company.



     4. Representations and Warranties of Shareholder.



          (a) Each Shareholder hereby represents and warrants to Purchaser as of the date of this
Agreement as follows: (i) Shareholder is the beneficial or record owner of the shares of Company
Common Stock indicated on the signature page of this




2









 







Agreement; (ii) Shareholder does not
beneficially own any securities of the Company other than (x) the shares of Company Common Stock,
Company options and Company warrants set forth on the signature page of this Agreement and (y) any
Company Common Stock beneficially owned under any compensation plan of the Company;
(iii) Shareholder has full power and authority to make, enter into and carry out the terms of this
Agreement; and (iv) this Agreement has been duly and validly executed and delivered by Shareholder
and constitutes a valid and binding agreement of Shareholder enforceable against such Shareholder
in accordance with its terms.




          (b) Except for this Agreement or as otherwise permitted by this Agreement, Shareholder has
full legal power, authority and right to vote or to direct the voting of all of the Shares then
owned of record or beneficially as described in this Agreement, without the consent or approval of,
or any other action on the part of, any other Person. Without limiting the generality of the
foregoing, Shareholder has not entered into any voting agreement (other than this Agreement) with
any Person with respect to any of the Shares, granted any Person any proxy (revocable or
irrevocable) or power of attorney with respect to any of the Shares, deposited any of the Shares in
a voting trust, or entered into any arrangement or agreement with any Person limiting or affecting
his legal power, authority or right to vote the Shares on any matter.




          (c) The execution and delivery of this Agreement and the performance by Shareholder of his or
her agreements and obligations hereunder will not result in any breach or violation of or be in
conflict with or constitute a default under any term of any
agreement, judgment, injunction, order, decree, law, regulation or arrangement to which
Shareholder is a party or by which Shareholder (or any of his or her assets) is bound.




     5. Termination. This Agreement shall terminate on the earlier of (i) such time as
Purchaser or any assignee of Purchaser, as permitted under Section 6(d) hereof, no longer has the
authority to nominate a director to the Board of Directors of the Company pursuant to the Investor
Rights Agreement, and (ii) the termination of the Investor Rights Agreement (the “Expiration
Date”). Upon such termination, no party shall have any further obligations or liabilities
hereunder; provided that such termination shall not relieve any party from liability for any breach
of this Agreement prior to such termination.



     6. Miscellaneous Provisions.



          (a) Amendments, Modifications and Waivers. No amendment, modification or waiver in
respect of this Agreement shall be effective against any party unless it shall be in writing and
signed by Purchaser and the Shareholders.




          (b) Entire Agreement. This Agreement constitutes the entire agreement among the
parties to this Agreement and supersede all other prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof.




3









 








          (c) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof.




          (d) Assignment and Successors. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto. This Agreement and all the
provisions hereof are personal to the Shareholders, shall not inure to their respective successors
and may not be assigned by any Shareholder without
the prior written consent of Purchaser. This Agreement and all of the provisions hereof shall
inure to the benefit of the successors of Purchaser and its permitted assigns, provided that,
except as otherwise specifically provided herein, neither this Agreement nor any of the rights,
interests or obligations of Purchaser may be assigned without prior written consent of the
Shareholders party hereto except that Purchaser, without obtaining the consent of the Shareholders,
shall be entitled to assign this Agreement to any one or more members of the Otto Family (as such
term is defined in the Stock Purchase Agreement). Any assignment in violation of the foregoing
shall be void and of no effect.




          (e) No Third Party Rights. Nothing in this Agreement, express or implied, is intended
to or shall confer upon any Person (other than the parties hereto) any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.




          (f) Cooperation. Shareholder agrees to cooperate fully with Purchaser and to execute
and deliver such further documents, certificates, agreements and instruments and to take such other
actions as may be reasonably requested by Purchaser to evidence or reflect the transactions
contemplated by this Agreement and to carry out the intent and purpose of this Agreement.
Shareholders, on the one hand, and Purchaser, on the other hand, each hereby agree that the other
party may publish and disclose such Shareholder’s identity and ownership of Shares and the nature
of such Shareholder’s commitments, arrangements and understandings under this Agreement as may be
required by applicable law in any filing made by Purchaser, the Company or the Shareholder with the
Securities and Exchange Commission.




          (g) Severability. If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable.




          (h) Specific Performance; Injunctive Relief. Shareholder acknowledges that Purchaser
may be irreparably harmed and that there may be no adequate remedy at law for a breach of any of
the covenants or agreements of Shareholder set forth in this Agreement. Therefore, Shareholder
hereby agrees that, in addition to any other remedies that may be available to Purchaser upon any
such breach, such party shall have the right to seek specific performance, injunctive relief or any
other remedies available to such party at law or in equity without posting any bond or other
undertaking in order to enforce such covenants and agreements.




4









 








          (i) Notices. All notices, consents, requests, claims, demands and other
communications under this Agreement shall be in writing (which shall include communications by
e-mail) and shall be delivered (a) in person or by courier or overnight service, or (b) by e-mail
with a copy delivered as provided in clause (a). If to a Shareholder, to Shareholder’s address or
e-mail address shown below Shareholder’s signature on the signature pages hereof, and



with a copy (which shall not constitute notice) to:



3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: General Counsel

Telephone: (216) 755-5500

E-mail: DWeiss@ddr.com



Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114

Attention: Michael J. Solecki

Telephone: (216) 586-7103

E-mail: mjsolecki@jonesday.com



If to Investor:



KG CURA Vermögensverwaltung G.m.b.H. & Co.

Wandsbeker Str. 3-7

D-22179 Hamburg

Germany

Attention: Mr. Wilhelm

Telephone: 0049 40 6461 1286

E-mail: wilhelm@kgcura.de



with a copy (which shall not constitute notice) to:



Alston & Bird LLP

90 Park Avenue

New York, NY 10016

Attention: Mark F. McElreath

Telephone: (212) 210-9595

E-mail: mark.mcelreath@alston.com



or to such other address as the parties hereto may designate in writing to the other in accordance
with this Section 6(i). Any party may change the address to which notices are to be sent by giving
written notice of such change of address to the other parties in the manner above provided for
giving notice. If delivered personally or by courier, the date




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on which the notice, request,
instruction or document is delivered shall be the date on which such delivery is made and if
delivered by e-mail transmission or mail as aforesaid, the date on which such notice, request,
instruction or document is received shall be the date of delivery.




          (j) Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the same instrument,
and shall become effective when counterparts have been signed by each of the parties and delivered
to the other parties; it being understood that all parties need not sign the same counterpart.




          (k) Headings. The headings contained in this Agreement are for the convenience of
reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in
connection with the construction or interpretation of this Agreement.




[Signatures on the Following Pages]





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



	 	 	 	 	 
	 

	 	MR. ALEXANDER OTTO
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	SHAREHOLDERS	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Print Name:	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Telephone: (___) ___-                    	 	 
	 

	 	E-Mail Address:                                             	 	 
	 
	 	 	 	 
	 

	 	Shares Beneficially Owned:	 	 
	 
	 	 	 	 
	 

	 	                     shares of Company Common Stock	 	 
	 

	 	                     Company Options	 	 
	 

	 	                     Company Warrants	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	Print Name:	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Telephone: (___) ___-                    	 	 
	 

	 	E-Mail Address:                                              	 	 
	 
	 	 	 	 
	 

	 	Shares Beneficially Owned:	 	 
	 
	 	 	 	 
	 

	 	                     shares of Company Common Stock	 	 
	 

	 	                     Company Options	 	 
	 

	 	                     Company Warrants	 	 






 









 





EXHIBIT I




TAX AGREEMENT




     THIS TAX AGREEMENT (this “Agreement”) is made and entered into as of [___] 2009,
by and among Mr. Alexander Otto (the “Purchaser”) and Developers Diversified Realty
Corporation (the “Company”).



RECITALS




     A. WHEREAS, on February 23, 2009, the Purchaser and the Company entered into a Stock Purchase
Agreement (the “Stock Purchase Agreement”), which provides for the purchase and sale of up
to 30,000,000 shares of the Company’s common shares, $0.10 par value per share (“Common Shares”),
and a grant of 10,000,000 warrants to purchase Common Shares; and



     B. WHEREAS, as an inducement to enter into the Stock Purchase Agreement, and as one of the
conditions to the consummation of the transactions contemplated by the Stock Purchase
Agreement, the parties agreed to enter into a tax agreement whereby the Company would provide
the Exempt Holder (as defined herein) certain information and take certain actions on an
ongoing basis relating to the Company’s status as a “domestically controlled qualified
investment entity” and providing information relating to withholding on capital gain dividends.



     Unless otherwise provided, all capitalized terms shall have the meanings ascribed to them in
Section 1.



     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:



     1. Definitions. For purposes of this Agreement:




          “Affiliates” means with respect to a particular individual: (A) each other member
of such individual’s Family; (B) any Person that is directly or indirectly controlled by
any one or more members of such individual’s Family; (C) any Person in which members of
such individual’s Family hold (individually or in the aggregate) a Material Interest; and
(D) any Person with respect to which one or more members of such individual’s Family serves
as a director, officer, partner, executor or trustee (or in a similar capacity). With
respect to a specified Person other than an individual: (aa) any Person that directly or
indirectly controls, is directly or indirectly controlled by or is directly or indirectly
under common control with such specified Person; (bb) any Person that holds a Material
Interest in such specified Person; (cc) each Person that
serves as a director, officer, partner, executor or trustee of such specified Person
(or in a similar capacity); (dd) any Person in which such specified Person holds a Material
Interest; and (ee) any Person with respect to which such specified Person



 









 




serves as a
general partner or a trustee (or in a similar capacity). For purposes of this definition,





(I) “control” (including “controlling,” “controlled by,” and “under common
control with”) means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise, and shall be construed as such term is used in the rules
promulgated under the Securities Act of 1933, as amended;




(II) the “Family” of an individual includes (1) the individual, (2) the
individual’s spouse, (3) any other natural person who is the parent,
child, grandparent or grandchild of the individual or the individual’s
spouse and (4) any other natural person who resides with such individual;
and




(III) “Material Interest” means direct or indirect beneficial ownership
(as defined in Rule 13d-3 under the Exchange Act) of voting securities or
other voting interests representing at least five percent (5%).



               “Articles” shall mean the Second Amended and Restated Articles of Incorporation of
the Company, as amended, as filed with the Secretary of State of the State of Ohio on
[___], 2009, and attached hereto as Exhibit A.




               “Code” means the Internal Revenue Code of 1986, as amended.




               “Commission” means the United States Securities and Exchange Commission.




               “Exchange Act” means the Securities Exchange Act of 1934, as amended.




               “Exempt Holder” shall mean, collectively, (i) Professor Werner Otto, his wife Maren
Otto and/or all descendants of Professor Werner Otto (illegitimate descendants only if they
have obtained the status of a legitimate descendant by legitimation or adoption by
Professor Werner Otto or one of his legitimate descendants, or if they are children of a
female legitimate descendant of Professor Werner Otto), (ii) any trust or any family
foundation that has exclusively been established in favor of one or several of the
individuals named under (i) above, and (iii) any partnership, firm, corporation,
association, trust, unincorporated organization, joint venture, limited liability company
or other legal entity, in which the individuals or entities named under (i) and (ii) hold
(either directly or indirectly) more than 50% of the voting rights or more than 50% of the
equity capital of such any such partnership, firm, corporation,
association, trust, unincorporated organization, joint venture, limited liability
company or other legal entity.




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               “Exempt Holder Limit” has the meaning ascribed to it in the Articles.




               “IRS” means the Internal Revenue Service.




           “Ownership Limit” has the meaning ascribed to it in the Articles.




           “Person” means a natural person or any legal, commercial or governmental entity,
such as, but not limited to, a corporation, general partnership, joint venture, limited
partnership, limited liability company, limited liability partnership, trust, business
association, group acting in concert, or any person acting in a representative capacity.




          “Treasury Regulations” shall mean the federal income tax regulations promulgated under
the Code, as such regulations may be amended from time to time.




     2. Covenants of the Company.



          (a) Upon request from the Purchaser made from time to time (but not more frequently than once
each calendar year), the Company shall endeavor to deliver to the Exempt Holder within fifteen
business days after the request for a statement (based upon reasonable inquiry) disclosing whether,
to the knowledge of the Company, the Company qualifies as a “domestically controlled qualified
investment entity” (within the meaning of Section 897(h)(4)(B) of the Code). For purposes of such
statement, reasonable inquiry shall be deemed to be a review of all Schedule 13D and 13G filings
made under the Exchange Act with the Commission with respect to the Company during the five
calendar years preceding the date of the statement, all IRS Form 1042 filings made by or on behalf
of the Company with respect to each of the five taxable years preceding the date of the statement,
the list of the Company’s registered shareholders as of a date within 90 days of such statement
(and to the extent reasonably available, as of a date within 90 days of the end of each of the
preceding five calendar years), a report obtained by the Company from a shareholders tracking
service within 90 days of such statement (and any similar reports in the possession of the Company
or otherwise reasonably available to the Company providing information as of a date within 90 days
of the end of each of the five preceding calendar years), and a list of “non-objecting beneficial
owners” of shares of the Company obtained as of a date within 90 days of such statement (and to the
extent reasonably available, as of a date within 90 days of the end of each of the preceding five
calendar years). At the request of the Purchaser, the Company shall provide the Exempt Holder with
copies of the information that has been obtained or relied upon by the Company for purposes of such
statement, provided that the Exempt Holder shall treat such information as confidential, and shall
use such information solely for the purposes of evaluating the accuracy of such statement. In the
event that the Company should determine in good faith that it cannot provide to the Exempt Holder
the requested statement for any reason, the Company shall notify the Exempt Holder of such
conclusion and the facts that cause it to be unable to render such statement. In addition
to, and without limiting, the foregoing, in the event that the general counsel of the




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Company
shall have actual knowledge that more than forty percent (40%), by fair market value of the
outstanding equity interests of the Company are owned directly or indirectly by “foreign persons”
(as that term is used for purposes of Section 897(h)(4)(B) of the Code), the Company shall provide
written notice thereof (together with a summary of the relevant facts) to the Exempt Holder,
provided that the only duty of inquiry of the Company shall be as set forth in the first sentence
of this subparagraph (a).




          (b) Upon request from the Purchaser made from time to time (but not more frequently than once
each calendar quarter), the Company shall endeavor to deliver to the Exempt Holder within fifteen
business days after the request for a statement disclosing whether, to the knowledge of the
Company, the Company qualifies as a “domestically controlled qualified investment entity” (within
the meaning of Section 897(h)(4)(B) of the Code).




          (c) The Company will include in any issuance of preferred stock by the Company or any issuance
by the Company or any Affiliate of the Company of warrants, options, convertible or exchangeable
debt or any other right to acquire preferred stock of the Company, protections comparable to the
provisions in Section 4(b)(vii) in Division B of the Articles designed to cause the Company to
qualify as a “domestically controlled qualified investment entity” within the meaning of Section
897(h)(4)(B) of the Code.




          (d) In the event that the Company shall make any distributions to the Exempt Holder that it
concludes in good faith would be subject to withholding of tax pursuant to the last sentence of
Section 1445(e)(6) of the Code and any applicable Treasury Regulations, the Company shall provide
such reasonable cooperation as the Exempt Holder may request in applying to the IRS for a
“withholding certificate” within the meaning of Treasury Regulation §1.1445-6 that would reduce or
eliminate the requirement for such withholding; provided, however, that the Exempt Holder
shall be responsible for the preparation and submission of the application for such withholding
certificate and that the Company shall not be precluded from withholding such tax unless and until
a “withholding certificate” is obtained (in which event the Company would not withhold tax that,
under the express terms of the “withholding certificate,” is not required to be withheld).




     3. Termination. This Agreement shall terminate five years following the date on
which the Exempt Holder no longer Beneficially Owns Common Shares in excess of five percent of the
outstanding Common Shares. Upon such termination, no party shall have any further obligations or
liabilities hereunder; provided that such termination shall not relieve any party from
liability for any breach of this Agreement prior to such termination.



     4. Miscellaneous Provisions.



          (a) Amendments, Modifications and Waivers. No amendment, modification or waiver in
respect of this Agreement shall be effective against any party unless it shall be in writing and
signed by the Exempt Holder and the Company.




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          (b) Entire Agreement. This Agreement constitutes the entire agreement among the
parties to this Agreement and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.




          (c) Governing Law. This Agreement shall be governed by and construed in all respects
in accordance with the Laws of the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law thereof.




          (d) Assignment and Successors. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and
permitted assigns, provided that except as otherwise specifically provided herein, any assignment
of this Agreement or any of the rights, interests or obligations of the parties hereto shall be
void, invalid, and of no effect without the prior written consent of the other party hereto, except
that the Purchaser, without obtaining the consent of Company, shall be entitled to assign this
Agreement or all or any of his rights or obligations hereunder to any one or more Persons within
the
definition of Exempt Holder, but no assignment by the Purchaser under this Section 4(d) shall
relieve the Purchaser of his obligations under this Agreement.




          (e) No Third Party Rights. Nothing in this Agreement, express or implied, is intended
to or shall confer upon any Person (other than the parties hereto) any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.




          (f) Cooperation. The Company agrees to cooperate fully with the Exempt Holder and to
execute and deliver such further documents, certificates, agreements and instruments and to take
such other actions as may be reasonably requested by the Exempt Holder to carry out the intent and
purpose of this Agreement.




          (g) Severability. If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable.




          (h) Specific Performance; Injunctive Relief. The Company acknowledges that the Exempt
Holder shall be irreparably harmed and that there shall be no adequate remedy at law for a
violation of any of the covenants or agreements of the Company set forth in this Agreement.
Therefore, the Company hereby agrees that, in addition to any other remedies that may be available
to the Exempt Holder, the Exempt Holder shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means available to such party
at law or in equity without posting any bond or other undertaking.




          (i) Notices. All notices, requests, demands, and other communications hereunder
shall be in writing (which shall include communications by




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e-mail) and shall be delivered (a) in
person or by courier or overnight service, or (b) by e-mail with a copy delivered as provided in
clause (a), as follows:



If to the Company:



3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: Chief Executive Officer

Telephone: (216) 755-5500

E-mail: SWolstein@ddr.com



with a copy (which shall not constitute notice) to:



3300 Enterprise Parkway

Beachwood, Ohio 44122

Attention: General Counsel

Telephone: (216) 755-5500

E-mail: DWeiss@ddr.com



Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114

Attention: Michael J. Solecki

Telephone: (216) 586-7103

E-mail: mjsolecki@jonesday.com



If to the Purchaser and/or the Exempt Holder:



KG CURA Vermögensverwaltung G.m.b.H. & Co.

Wandsbeker Str. 3-7

D-22179 Hamburg

Germany

Attention: Mr. Wilhelm

Telephone: 0049 40 6461 1286

E-mail: wilhelm@kgcura.de



with a copy (which shall not constitute notice) to:



Alston & Bird LLP

90 Park Avenue

New York, NY 10016

Attention: Mark F. McElreath

Telephone: (212) 210-9595

E-mail: mark.mcelreath@alston.com




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          (j) Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which shall constitute one and the same instrument,
and shall become effective when counterparts have been signed by each of the parties and delivered
to the other parties; it being understood that all parties need not sign the same counterpart.




          (k) Headings. The headings contained in this Agreement are for the convenience of
reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in
connection with the construction or interpretation of this Agreement.




[Signatures on the Following Pages]




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



	 	 	 	 	 	 	 
	 	 	DEVELOPERS DIVERSIFIED REALTY

CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	MR. ALEXANDER OTTO	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 





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