Document:

Exhibit 4.2 - Third Supplemental Indenture

 

Exhibit 4.2

FORM OF

THIRD SUPPLEMENTAL INDENTURE

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

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

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

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

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

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

-2-

 

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

-3-

 

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

	 	 	 	 	 	 	 
	Attest:	 	DEVELOPERS DIVERSIFIED REALTY CORPORATION
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	By:
	
	 	 	 	

	Title:	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Attest:	 	NATIONAL CITY BANK, as Trustee
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	By:
	
	 	 	 	

	Title:	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

-4-

 

	 	 	 	 	 	 	 	 	 
	STATE OF OHIO	 	

	

	)

	 	 	 	 
	 	 	

	

	)

	 	SS:
	 	 
	COUNTY OF CUYAHOGA	 	

	

	)

	 	 	 	 

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

	 	 	 
	[Notarial Seal]	 	 
	 	 	

	 	 	
Notary Public
	 	 	
COMMISSION EXPIRES

	 	 	 	 	 	 	 	 	 
	STATE OF OHIO	 	

	

	)

	 	 	 	 
	 	 	

	

	)

	 	SS:
	 	 
	COUNTY OF CUYAHOGA	 	

	

	)

	 	 	 	 

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

[Notarial Seal]

	 	 	 
	 	 	

	 	 	
Notary Public
	 	 	
COMMISSION EXPIRES

-5-Exhibit 4.1 - Form of Note

 

Exhibit 4.1

Form of 3.875% Notes Due 2009

			
	 
 	 	 
	REGISTERED 
 	 	
REGISTERED
	NO. 001 
 	 	
PRINCIPAL AMOUNT
	CUSIP NO. 251591 AH6	 	
$275,000,000

[FACE OF NOTE]

DEVELOPERS DIVERSIFIED REALTY CORPORATION

3.875% Notes Due 2009

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

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

     DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (herein
referred to as the “Company”, which term includes any successor corporation
under the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to CEDE & CO., c/o The Depository Trust Company, 55
Water Street, New York, New York 10041, or registered assigns, the principal
sum of TWO HUNDRED AND SEVENTY-FIVE MILLION Dollars ($275,000,000) on January
30, 2009 (the “Stated Maturity Date”), unless redeemed prior to such date in
accordance with the provisions referred to on the reverse hereof (the Stated
Maturity Date or date of earlier redemption, as the case may be, is referred to
herein as the “Maturity Date” with respect to the principal payable on such
date), and to pay interest thereon from January 23, 2004 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, on January 30 and July 30 of each year, commencing July 30, 2004 (each, an
“Interest Payment Date”), and on the Maturity Date, at a rate of 3.875% per
annum, until the principal hereof is paid or duly provided for.

 

 

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

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

     Interest payable on this Note on any Interest Payment Date and on the
Maturity Date, as the case may be, will include interest accrued from and
including the next preceding Interest Payment Date in respect of which interest
has been paid or duly provided for (or from and including January 23, 2004, if
no interest has been paid on this Note) to but excluding such Interest Payment
Date or the Maturity Date, as the case may be. If any Interest Payment Date or
the Maturity Date falls on a day that is not a Business Day, as defined below,
principal, premium, if any, and/or interest payable with respect to such
Interest Payment Date or Maturity Date, as the case may be, will be paid on the
next succeeding Business Day with the same force and effect as if it were paid
on the date such payment was due, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date or Maturity
Date, as the case may be. “Business Day” means any day, other than a Saturday
or Sunday, on which banks in the Borough of Manhattan, the City of New York,
are not required or authorized by law or executive order to close.

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

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

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

2

 

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

	 	 	 	 	 
	Dated: January 23, 2004	 	 	 	 
	 	 	 	 	 
	 	 	DEVELOPERS DIVERSIFIED

     REALTY CORPORATION
	 
 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	Attest:	 	 	 	 
	 	 	 	 	 
	
	 	 	 	 
	Name:	 	 	 	 
	Title:	 	 	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

	 	 	 	 	 
	Dated: January 23, 2004	 	 	 	 
	 	 	 	 	 
	 	 	NATIONAL CITY BANK, as

     Trustee
	 
 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Authorized Officer

3

 

[REVERSE OF NOTE]

DEVELOPERS DIVERSIFIED REALTY CORPORATION

3.875% Notes Due 2009

     This Note is one of a duly authorized issue of securities of the Company
(herein called the “Securities”), issued and to be issued in one or more series
under an Indenture, dated as of May 1, 1994, as supplemented by the First
Supplemental Indenture dated as of May 10, 1995, the Second Supplemental
Indenture dated as of July 18, 2003 and the Third Supplemental Indenture dated
as of January 23, 2004 (herein called the “Indenture”), between the Company and
National City Bank, as Trustee (herein called the “Trustee”, which term
includes any successor trustee under the Indenture with respect to the series
of which this Note is a part), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Note is one of
the duly authorized series of Securities designated as “3.875% Notes Due 2009”
(collectively, the “Notes”), and the aggregate principal amount of the Notes to
be issued under such series is limited to $275,000,000 (except for Notes
authenticated and delivered upon transfer of, or in exchange for, or in lieu of
other Notes). The Company may, without the consent of the Holders of
any Securities, create and issue additional notes in the future
having the same terms other than the date of original issuance, the
issue price and the date on which interest begins to accrue so as to
form a single series with the Notes. No additional notes may be
issued if an Event of Default has occurred with respect to the Notes.
The Notes are the unsecured and unsubordinated obligations of the
Company and rank equally with all existing and future unsecured and
unsubordinated indebtedness of the Company. All terms used but not defined in this Note shall have the
meanings assigned to such terms in the Indenture.

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

     The Notes may be redeemed at the option of the Company, at any time in
whole or from time to time in part, at a Redemption Price equal to the greater
of (1) 100% of the principal amount of the Notes being redeemed, or (2) the sum
of the present values of the remaining scheduled payments of principal and
interest on the Notes being redeemed (not including the portion of any payments
of interest accrued to the Redemption Date) discounted to the Redemption Date
on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 15 basis points, plus, in each case, any
interest accrued but not paid to the date of redemption. For the avoidance of
doubt, any calculation of the remaining scheduled payments of principal and
interest pursuant to clause (2) of the preceding sentence shall not include
interest accrued as of the applicable Redemption Date.

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

 

 

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

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

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

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

     “Reference Treasury Dealer” means each of J.P. Morgan Securities Inc. and
Deutsche Bank Securities Inc. and the respective successors and any two of Banc
of America Securities LLC, Banc One Capital Markets, Inc., Wachovia Capital
Markets, LLC and Wells Fargo Brokerage Services, LLC and their respective
successors (each, a “Primary Treasury Dealer”) provided, however, that if any
of the foregoing shall cease to be a Primary Treasury Dealer, the Company shall
substitute in its place another Primary Treasury Dealer.

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

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

     This Note is not subject to any sinking fund.

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

 

 

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

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

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

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

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

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

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

 

 

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

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

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