<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 7, 1997
------------------
DEVELOPERS DIVERSIFIED REALTY CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 1-11690 34-1723097
- --------------------------------------------------------------------------------
(State or other Jurisdiction (Commission (IRS Employer
or incorporation) File Number) Identification Number)
34555 Chagrin Boulevard, Moreland Hills, Ohio 44022
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code (440) 247-4700
---------------------
N/A
- --------------------------------------------------------------------------------
(Former name of former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
- ---------------------
During the period June 16, 1997 (the date of the most recent current report on
Form 8-K disclosing the Company's acquisitions through that date) through
November 3, 1997, through individual transactions, the Company completed the
acquisition of four shopping centers (the "Acquisition Properties"), none of
which individually constitutes a "significant subsidiary". The shopping centers
total 1,460,906 square feet of retail space, of which 1,143,101 square feet is
Company-owned gross leasable area. The Company's net investment in the
Acquisition Properties aggregated approximately $101.2 million, before any
contingent consideration. In conjunction with the acquisition of three of the
shopping centers, the aggregate purchase price is subject to possible upward
adjustment by approximately $30.7 million upon completion of construction of
approximately 202,000 additional square feet within the agreed earnout periods.
The Company's net investment was initially funded through proceeds made
available through revolving credit facilities and cash. In addition, the
Company entered into an agreement to acquire a shopping center in Fayetteville,
Arkansas. This shopping center has approximately 140,000 square feet of GLA and
the estimated purchase price is approximately $12.0 million. This property is
referred to herein as the "Probable Acquisition Property." Although the Company
believes it is probable that this property will be acquired, there can be no
assurance that the purchase transaction will be consummated. Information
regarding the Acquisition Properties and the Probable Acquisition Property is
attached as SCHEDULE A.
The acquisition of, or investment in, the Acquisition Properties, or with
respect to the Probable Acquisition Property will be, pursuant to individual
agreements for the sale and purchase of each property between each selling
entity and the Company. The factors considered by the Company in determining
the price to be paid for the properties included their historical and/or
expected cash flow, nature of the tenants and terms of leases in place,
occupancy rates, opportunities for alternative and/or new tenancies, current
operating costs and taxes on the properties and anticipated changes therein
under Company ownership, the outlots and expansion areas available, the
physical condition and locations of the properties, the anticipated effect on
the Company's financial results (including particularly Funds From Operations)
and the ability to sustain and potentially increase its distributions to
Company shareholders, and other factors. The Company took into consideration
capitalization rates at which it believes other shopping centers have recently
sold, but determined the price it was willing to pay primarily on the factors
discussed above related to the properties themselves and their fit with the
Company's operations. Separate independent appraisals were not obtained in
connection with the acquisition of the properties by the Company. The Company,
after investigation of the properties, is not aware of any material factors,
other than those enumerated above, that would cause the financial information
reported, where available, to not be necessarily indicative of future operating
results.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- --------------------------------------------------------------------------
Financial Statements
- --------------------
The statements of revenue and certain expenses included in this report relates
to the Cooks Corner shopping center located in Brunswick, Maine and the Spring
Creek Centre shopping center located in Fayetteville, Arkansas (the Probable
Acquisition Property) for the year ended December 31, 1996 and the six month
periods ended June 30, 1996 and 1997. Financial information for the remaining
three shopping centers acquired in 1997 are not presented because these
properties were either under development or in the lease-up phase and,
accordingly, the related operating information for such centers does not exist
or would not be meaningful.
<PAGE> 3
Pro Forma Financial Information (unaudited)
- -------------------------------------------
Unaudited pro forma financial information is presented as follows:
- - Pro forma condensed consolidated balance sheet as of June 30, 1997.
- - Pro forma condensed consolidated statement of operations for the six
month period ended June 30, 1997 and for the year ended December 31,
1996.
- - Estimated twelve-month pro forma statement of taxable net operating
income and operating funds available.
Exhibits
- --------
4(f) Medium Term Note - Form of Fixed Rate Senior Security
4(g) Medium Term Note - Form of Floating Rate Senior Security
4(h) Medium Term Note - Form of Fixed Rate Subordinated Security
4(i) Medium Term Note - Form of Floating Rate Subordinated Security
23 Consent of Independent Accountants
<PAGE> 4
SCHEDULE A
DEVELOPERS DIVERSIFIED REALTY CORPORATION
<TABLE>
<CAPTION>
Company
Date of Owned Percent Year
Shopping Center Acquisition Square Feet Occupied Completed Principal Tenants
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Eagan Promenade HomePlace, Office Max, TJ Maxx and
Eagan, MN 07/01/97 224,350 100.0% 1997 Byerly's
Midway Marketplace
St. Paul, MN 07/11/97 309,876 100.0% 1997 Kmart, Cub Foods, PetsMart and Mervyn's
Cooks Corner
Brunswick, ME 08/14/97 290,784 99.7% 1965 Hoyt's Cinema, TJ Maxx and Sears
Centennal Promenade Border's, Golfsmith, HomePlace,
Denver, CO 10/02/97 318,091 100.0% 1997 Ross Dress for Less, Toys R Us,
Soundtrack, Office Max and Michael's
Spring Creek Centre Probable Wal Mart, National Home Center, Service
Fayetteville, AK Acquisition 139,962 97.8% 1995 Merchandise and TJ Maxx
</TABLE>
<PAGE> 5
DEVELOPERS DIVERSIFIED REALTY CORPORATION
INDEX TO FINANCIAL STATEMENTS
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
COOKS CORNER
Report of Independent Accountants ........................................ F-2
Statement of Revenue and Certain Expenses for the year ended
December 31, 1996 and (unaudited) six month periods ended June 30, 1996
and 1997 ........................................................... F-3
Notes to Statement of Revenue and Certain Expenses ....................... F-4
SPRING CREEK CENTRE
Report of Independent Accountants......................................... F-5
Statement of Revenue and Certain Expenses for the year ended December 31,
1996 and (unaudited) six month periods ended June 30, 1996
and 1997 ........................................................... F-6
Notes to Statement of Revenue and Certain Expenses ....................... F-7
DEVELOPERS DIVERSIFIED REALTY CORPORATION
(PRO FORMA - UNAUDITED):
Condensed Consolidated Balance Sheet as of June 30, 1997 ................. F-8
Condensed Consolidated Statement of Operations for the six month period
ended June 30, 1997 and for the year ended December 31, 1996 .......... F-11
Estimated Twelve Month Pro Forma Statement of Taxable Net Operating
Income and Operating Funds Available ................................. F-19
</TABLE>
F-1
<PAGE> 6
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Developers Diversified Realty Corporation
We have audited the accompanying Statement of Revenue and Certain
Expenses of Cooks Corner for the year ended December 31, 1996. This historical
statement is the responsibility of management. Our responsibility is to express
an opinion on this historical statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the historical statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying historical statement is prepared on the basis
described in Note 2, for the purpose of complying with the rules and regulations
of the Securities and Exchange Commission (for inclusion in the Form 8-K of
Developers Diversified Realty Corporation) and is not intended to be a complete
presentation of the revenues and expenses of Cooks Corner.
In our opinion, the historical statement referred to above presents
fairly, in all material respects, the revenue and certain expenses of Cooks
Corner, on the basis described in Note 2, for the year ended December 31, 1996,
in conformity with generally accepted accounting principles.
PRICE WATERHOUSE LLP
Cleveland, Ohio
July 28, 1997
F-2
<PAGE> 7
DEVELOPERS DIVERSIFIED REALTY CORPORATION
COOKS CORNER
STATEMENT OF REVENUE AND CERTAIN EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Six Months
Year Ended Ended Ended
December 31, 1996 June 30, 1996 June 30, 1997
----------------- ------------- -------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Revenue:
Minimum rents $2,074,197 $1,085,772 $1,097,659
Percentage and overage rents 165,805 134,306 143,484
Recoveries from tenants 446,655 126,933 280,973
Other income 24,834 15,350 11,805
---------- ---------- ----------
2,711,491 1,362,361 1,533,921
---------- ---------- ----------
Certain expenses:
Operating and maintenance 653,646 439,365 324,977
Real estate taxes 211,776 105,888 123,972
---------- ---------- ----------
865,422 545,253 448,949
---------- ---------- ----------
Revenue in excess of certain expenses $1,846,069 $ 817,108 $1,084,972
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this
statement of revenue and certain expenses.
F-3
<PAGE> 8
DEVELOPERS DIVERSIFIED REALTY CORPORATION
COOKS CORNER
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
- --------------------------------------------------------------------------------
1. OPERATION OF PROPERTY
---------------------
The accompanying statement of revenue and certain expenses relates to
the operations of Cooks Corner, located in Brunswick, ME. The shopping center
was built in 1965.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
BASIS OF PRESENTATION
- ---------------------
The accompanying statement of revenue and certain expenses has been
prepared on the accrual basis of accounting.
The accompanying financial statement is not representative of the
actual operations for the period presented, as certain revenues and expenses,
which may not be comparable to the revenues and expenses expected to be earned
or incurred by the Company, in the future operations of the Property have been
excluded. Revenues excluded consist of interest, gains on sales of land, and
other revenues unrelated to the continuing operations of the Property. Expenses
excluded consist of depreciation on the building and improvements and
amortization of organization costs and other intangible assets, interest expense
and other general and administrative and leasing costs not directly related to
the future operations of the Property.
INCOME RECOGNITION
- ------------------
Rental income is recorded on the straight line basis.
3. EVENT SUBSEQUENT TO INDEPENDENT ACCOUNTANTS' REPORT
---------------------------------------------------
Developers Diversified Realty Corporation acquired the property on
August 14, 1997.
F-4
<PAGE> 9
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Developers Diversified Realty Corporation
We have audited the accompanying Statement of Revenue and Certain
Expenses of Spring Creek Centre for the year ended December 31, 1996. This
historical statement is the responsibility of management. Our responsibility is
to express an opinion on this historical statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the historical statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying historical statement is prepared on the basis
described in Note 2, for the purpose of complying with the rules and regulations
of the Securities and Exchange Commission (for inclusion in the Form 8-K of
Developers Diversified Realty Corporation) and is not intended to be a complete
presentation of the revenues and expenses of Spring Creek Centre.
In our opinion, the historical statement referred to above presents
fairly, in all material respects, the revenue and certain expenses of Spring
Creek Centre, on the basis described in Note 2, for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
PRICE WATERHOUSE LLP
Cleveland, Ohio
October 7, 1997
F-5
<PAGE> 10
DEVELOPERS DIVERSIFIED REALTY CORPORATION
SPRING CREEK CENTRE
STATEMENT OF REVENUE AND CERTAIN EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Six Months
Year Ended Ended Ended
December 31, 1996 June 30, 1996 June 30, 1997
----------------- ------------- -------------
(unaudited) (unaudited)
<S> <C> <C> <C>
Revenue:
Minimum rents $1,134,768 $534,186 $597,438
Recoveries from tenants 110,198 39,971 54,038
---------- -------- --------
1,244,966 574,157 651,476
---------- -------- --------
Certain expenses:
Operating and maintenance 149,552 60,562 80,850
Real estate taxes 44,614 22,307 27,105
---------- -------- --------
194,166 82,869 107,955
---------- -------- --------
Revenue in excess of certain expenses $1,050,800 $491,288 $543,521
========== ======== ========
</TABLE>
The accompanying notes are an integral part of this
statement of revenue and certain expenses.
F-6
<PAGE> 11
DEVELOPERS DIVERSIFIED REALTY CORPORATION
SPRING CREEK CENTRE
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
- --------------------------------------------------------------------------------
1. OPERATION OF PROPERTY
---------------------
The accompanying statement of revenue and certain expenses relates to
the operations of Spring Creek Centre, located in Fayetteville, Arkansas. The
shopping center was built in 1995.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
BASIS OF PRESENTATION
- ---------------------
The accompanying statement of revenue and certain expenses has been
prepared on the accrual basis of accounting.
The accompanying financial statement is not representative of the
actual operations for the period presented, as certain revenues and expenses,
which may not be comparable to the revenues and expenses expected to be earned
or incurred by the Company, in the future operations of the Property have been
excluded. Revenues excluded consist of interest, gains on sales of land, and
other revenues unrelated to the continuing operations of the Property. Expenses
excluded consist of depreciation on the building and improvements and
amortization of organization costs and other intangible assets, interest expense
and other general and administrative and leasing costs not directly related to
the future operations of the Property.
INCOME RECOGNITION
- ------------------
Rental income is recorded on the straight line basis.
F-7
<PAGE> 12
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
- --------------------------------------------------------------------------------
(Unaudited)
The following unaudited pro forma condensed consolidated balance sheet is
presented as if the following had occurred as of June 30, 1997: (i) the
acquisition by the Company subsequent to June 30, 1997 of the Acquisition
Properties and the acquisition of the Probable Acquisition Property; (ii) the
sale by the Company of $50 million Medium Term Notes issued in July 1997 and
(iii) the sale by the Company of 507,960 common shares in September 1997
resulting in net proceeds of approximately $18.8 million. This pro forma
condensed consolidated balance sheet should be read in conjunction with the pro
forma condensed consolidated statement of operations of the Company presented
herein and the historical financial statements and notes thereto of the Company
included in the Developers Diversified Realty Corporation Forms 10-Q and 10-K
for the six-month period ended June 30, 1997 and the year ended December 31,
1996, respectively.
The unaudited pro forma condensed consolidated balance sheet does not purport to
represent what the actual financial position of the Company would have been at
June 30, 1997, nor does it purport to represent the future financial position of
the Company.
F-8
<PAGE> 13
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
(Dollars in Thousands)
- --------------------------------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Company Pro Forma Company
Historical Adjustments Pro Forma
--------------------------------------------------
<S> <C> <C> <C>
Assets:
Real estate, net $ 999,086 $113,225(a) $ 1,112,311
Cash and cash equivalents 15,111 - 15,111
Other assets 24,255 327(b) 24,582
Investment in and advances to
joint ventures 120,510 - 120,510
----------- -------- -----------
Total Assets $ 1,158,962 $113,552 $ 1,272,514
=========== ======== ===========
Liabilities:
Indebtedness:
Senior notes $ 291,594 $ 50,000(b) $ 341,594
Convertible debentures 59,257 - 59,257
Revolving credit agreements 20,000 40,332(d) 60,332
Mortgages payable 106,297 - 106,297
----------- -------- -----------
Total indebtedness 477,148 90,332 567,480
Other liabilities 34,702 4,063(a) 38,765
----------- -------- -----------
Total Liabilities 511,850 94,395 606,245
----------- -------- -----------
Minority interest 16,293 352(a) 16,645
Shareholders' equity:
Class A Preferred Shares 105,375 - 105,375
Class B Preferred Shares 44,375 - 44,375
Common shares 2,639 51(c) 2,690
Paid-in-capital 535,611 18,754(c) 554,365
Accumulated dividends in excess
of net income (56,566) - (56,566)
----------- -------- -----------
631,434 18,805 650,239
Less: Unearned compensation -
restricted stock (615) - (615)
----------- -------- -----------
630,819 18,805 649,624
----------- -------- -----------
Total Liabilities and
Shareholders' Equity $ 1,158,962 $113,552 $ 1,272,514
=========== ======== ===========
</TABLE>
F-9
<PAGE> 14
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
- --------------------------------------------------------------------------------
(Unaudited)
(a) Represents the investment in the Acquisition Properties purchased
during the period July 1, 1997 to November 3, 1997 and the assumed
acquisition of the Probable Acquisition Property. The acquired shopping
centers were initially funded through cash, minority equity interest,
other liabilities assumed and borrowings from revolving credit
facilities. The aggregate purchase price for the Probable Acquisition
Property reflected herein is assumed to be funded entirely through
proceeds from revolving credit agreements since the cash to be
utilized from operations or liabilities assumed is not determinable.
The initial purchase price, before any contingent consideration that
may be earned by the Sellers, is as follows:
<TABLE>
<S> <C>
Eagan Promenade, Minneapolis, MN $ 20,538
Midway Market Place, St. Paul, MN 22,340
Cooks Corner, Brunswick, ME 19,182
Centennial Promenade, Denver, CO 39,165
Spring Creek Centre, Fayetteville, AK 12,000
---------
$ 113,225
=========
</TABLE>
(b) Represents the sale by the Company of $50 million of Medium Term Notes
in July 1997 and the use of proceeds thereof. The net proceeds to the
Company, after underwriting discounts and offering costs, were
approximately $49.7 million and were used to repay borrowings under the
revolving credit facilities.
(c) Represents the sale by the Company of 507,960 common shares in
September 1997 and the use of proceeds thereof. The net proceeds to the
Company, after underwriting discounts and offering costs, were $18.8
million and were primarily used to repay borrowings under the revolving
credit facilities.
(d) The net increase in the revolving credit facility debt is summarized as
follows (in thousands):
<TABLE>
<S> <C>
Purchase of the Acquisition Properties $ 96,810
Purchase of the Probable Acquisition Property 12,000
Sale of Medium Term Notes (49,673)
Sale of common shares (18,805)
----------
$ 40,332
==========
</TABLE>
F-10
<PAGE> 15
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1997
AND FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
(Unaudited)
The unaudited pro forma condensed statement of operations for the six month
period ended June 30, 1997 is presented as if each of the following transactions
had occurred on January 1, 1997; (i) the acquisition by the Company of the
properties, which had an operating history, purchased from January 1, 1997
through November 3, 1997; (ii) the acquisition of the Probable Acquisition
Property; (iii) the sale by the Company of 3,350,000 common shares in January
1997; (iv) the sale by the Company of $75 million of 7.125% Pass-through Asset
Trust Securities in March 1997; (v) the sale by the Company of 1,300,000 common
shares in June 1997; (vi) the sale by the Company of $50 million of Medium Term
Notes in July 1997 and (vii) the sale by the Company of 507,960 common shares in
September 1997.
The unaudited pro forma condensed statement of operations for the year ended
December 31, 1996 is presented as if each of the following transactions had
occurred on January 1, 1996; (i) the acquisition by the Company of the
properties, which had an operating history, purchased from January 1, 1997
through November 3, 1997 (None of the properties acquired in 1996 had an
operating history.); (ii) the acquisition of the Probable Acquisition Property;
(iii) the sale by the Company of 175,000 Depositary Shares representing 9.44%
Class B Cumulative Redeemable Preferred Stock in January 1996; (iv) the sale by
the Company of 2,611,500 common shares in March 1996; (v) the sale by the
Company of $111.7 million of Medium Term Notes during 1996; (vi) the sale by the
Company of 3,350,000 common shares in January 1997 to the extent the proceeds
thereof were used to repay indebtedness assumed to be outstanding during 1996;
(vii) the sale by the Company of $75 million of 7.125% Pass-through Asset Trust
Securities in March 1997; (viii) the sale by the Company of 1,300,000 common
shares in June 1997; (ix) the sale by the Company of $50 million of Medium Term
Notes in July 1997 and (x) the sale by the Company of 507,960 common shares in
September 1997.
The foregoing pro forma information is based upon the historical consolidated
results of operations of the Company for the six month period ended year ended
June 30, 1997 and the year ended December 31, 1996, giving effect to the
transactions described above. The pro forma condensed consolidated statement of
operations should be read in conjunction with the pro forma condensed
consolidated balance sheet of the Company presented herein and the historical
financial statements and notes thereto of the Company included in the Developers
Diversified Realty Corporation Forms 10-Q and 10-K for the six month period
ended June 30, 1997 and the year ended December 31, 1996, respectively.
The unaudited pro forma condensed consolidated statements of operations are not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the transactions had been completed as set forth above,
nor do they purport to represent the Company's results of operations for future
periods.
F-11
<PAGE> 16
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTH PERIOD ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited) Pro Forma Adjustments
---------------------
Acquisitions,
Common
Share and Probable Company
Company Debt Share Acquisition Pro Forma
Historical Offerings Property (b) (Unaudited)
<S> <C> <C> <C> <C>
Revenues from rental properties $ 73,581 $ 1,534 (a) $ 652 $ 75,767
Management fees and other income 4,739 - - 4,739
-------- ------- -------- --------
78,320 1,534 652 80,506
-------- ------- -------- --------
Operating and maintenance 7,124 325(a) 81 7,530
Real estate taxes 9,325 124(a) 27 9,476
Depreciation and amortization 15,206 242(a) 151 15,599
General and administrative expenses 5,026 - - 5,026
Interest expense 16,478 717(a)(d) 449 16,209
(1,043)(c)(f)
(392)(e)(g)
-------- ------- -------- --------
53,159 (27) 708 53,840
-------- ------- -------- --------
Income (loss) before equity in net
income of joint ventures, minority
equity interest and gain on sales of
real estate 25,161 1,561 (56) 26,666
Equity in net income of
joint ventures 5,334 - - 5,334
Minority equity interest (526) (11)(a) - (537)
Gain on sales of real estate 3,526 - - 3,526
-------- ------- -------- --------
Net income (loss) $ 33,495 $ 1,550 $ (56) $ 34,989
======== ======= ======== ========
Per share data:
Income available to common shareholders:
Primary $ 1.06 $ 1.10 (h)
======== ========
Fully diluted $ 1.04 $ 1.08 (h)
======== ========
Weighted average number of common
shares (in thousands):
Primary 24,846 25,367
======== ========
Fully diluted 25,338 25,859
======== ========
</TABLE>
F-12
<PAGE> 17
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTH PERIOD ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
(Unaudited)
(a) Reflects revenues and expenses for the properties acquired during 1997, for
the period January 1, 1997 through the earlier of the date of acquisition, or
June 30, 1997 as follows:
<TABLE>
<CAPTION>
Effective Real
Date of Estate Operating & Minority
Shopping Center Acquisition Revenues Taxes Maintenance Depreciation Interest Interest
--------------- ----------- -------- ----- ----------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Great Northern Shopping
Center - North, Cleveland,
(North Olmsted), OH (1) 01/01/97 $ - $ - $ - $ - $ - $ -
Great Northern Shopping
Center - South, Cleveland,
(North Olmsted) OH (1) 01/01/97 - - - - - -
Plaza Del Norte, San
Antonio, TX (2), (3) 01/23/97 - - - - - -
Foothills Towne Center
Awatukee, AZ (2) 02/21/97 - - - - - -
Eagan Promenade
Minneapolis, MN (2) 07/01/97 - - - - - -
Midway Marketplace
St. Paul, MN (2) 07/11/97 - - - - - -
Cooks Corner
Brunswick, ME 08/14/97 1,534 124 325 242 717 11
Centennial Promenade
Denver, CO (2) 10/02/97 - - - - - -
-------- ------- ------- ------- ------ -----
$ 1,534 $ 124 $ 325 $ 242 $ 717 $ 11
======== ======= ======= ======= ====== =====
<FN>
(1) Included in historical statement of operation for the six
months ended June 30, 1997.
(2) No revenues or expenses have been included in the pro forma
statement of operations since the center was either under
development or in the lease-up phase during 1996 and 1997.
(3) Property acquired through a joint venture in which the Company
owns a 35% interest.
</TABLE>
(b) Reflects revenues and expenses of the Probable Acquisition Property
contemplated as of November 3, 1997, for the period January 1, 1997
through June 30, 1997 as follows:
<TABLE>
<CAPTION>
Real
Estate Operating &
Shopping Center Revenues Taxes Maintenance Depreciation Interest
--------------- -------- ----- ----------- ------------ --------
Spring Creek Centre
<S> <C> <C> <C> <C> <C>
Fayetteville, AR $652 $ 27 $ 81 $151 $449
==== ===== ===== ==== ====
</TABLE>
(c) Reflects the reduction of interest costs relating to variable rate
indebtedness effectively repaid with the proceeds from the sale of
3,350,000 common shares completed in January 1997.
F-13
<PAGE> 18
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTH PERIOD ENDED JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
(d) Interest expense relating to the issuance of $75 million of 7.125%
Pass-through Asset Trust Securities completed in March 1997 is not
reflected herein as the proceeds thereof were considered to be used to
acquire shopping centers with no previous operating history.
Accordingly, the Company would not have issued these securities until
the time of acquisition.
(e) Reflects the reduction of interest costs relating to variable rate
indebtedness effectively repaid with the proceeds from the sale of
1,300,000 common shares completed in June 1997. See Note (h) with
regard to shares included in earnings per share calculation.
(f) Interest expense relating to the issuance of $50 million of Medium Term
Notes completed in July 1997 is not reflected herein as the proceeds
thereof were considered to be used to acquire shopping centers with no
previous operating history and/or for properties currently under
development. Accordingly, the Company would not have issued these
securities until the time of acquisition.
(g) The issuance of 507,960 common shares completed in September 1997 is
not reflected herein as the proceeds thereof were considered to be
used to acquire shopping centers with no previous operating history
and/or for properties currently under development. Accordingly, the
Company would not have issued these securities until the time of
acquisition.
(h) Pro forma income per common share is based upon the weighted average
number of common shares assumed to be outstanding during 1997 and
includes all shares issued in conjunction with the 3,350,000 common
share offering in January 1997 and 273,000 shares of the 1,300,000
common share offering completed in June 1997 and 507,960 common shares
completed in September 1997. The remaining 1,027,000 shares issued in
June 1997 and the entire 507,960 shares issued in September 1997 were
not reflected in the pro forma statement of operations as the proceeds
were not considered to be received until the date the newly developed
shopping centers were acquired in 1997, since such centers had no
operating history.
In accordance with the Accounting Principles Board Opinion No. 15,
primary earnings per share before extraordinary item is calculated as
follows:
<TABLE>
<S> <C>
Undistributed loss:
Income available to common shareholders .......... $ 27,889
Total dividends declared - $1.26 per common share (31,962)
--------
Undistributed loss ............................... $ (4,073)
========
Per share data
Dividends declared ............................. $ 1.26
Undistributed loss ............................. (0.16)
--------
Primary ........................................ $ 1.10
========
Weighted average number of Common Shares:
Primary ........................................ 25,367
========
Fully diluted .................................. 25,859
========
</TABLE>
F-14
<PAGE> 19
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited) Pro Forma Adjustments
---------------------
Acquisitions,
Common
Adjustments Share and Probable Company
Company Previously Debt Share Acquisition Pro Forma
Historical Reported (a) Offerings Property(g) (Unaudited)
---------- ------------ --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues from rental properties $ 122,275 $ -(b) $ 9,639(f) $ 1,245 $ 133,159
Management fees and other income 8,630 - - - 8,630
--------- ------- ------- --------- ---------
130,905 - 9,639 1,245 141,789
--------- ------- ------- --------- ---------
Operating and maintenance 12,098 - 1,551(f) 149 13,798
Real estate taxes 14,589 - 1,051(f) 45 15,685
Depreciation and amortization 25,062 - 2,038(f) 305 27,405
General and administrative expenses 8,436 - - - 8,436
Interest expense 29,888 (884)(c)(d) 3,891(f)(j) 821 29,968
(e) (3,957)(h)(k)
209(i)(l)
--------- ------- ------- --------- ---------
90,073 (884) 4,783 1,320 95,292
--------- ------- ------- --------- ---------
Income (loss) before equity in net
income of joint ventures, minority
equity interest 40,832 884 4,856 (75) 46,497
Equity in net income of
joint ventures 8,710 - - - 8,710
Minority equity interest - - (1,080)(f) - (1,080)
--------- ------- ------- --------- ---------
Net income (loss) $ 49,542 $ 884 $ 3,776 $ (75) $ 54,127
========= ======= ======= ========= =========
Per share data:
Income available to common shareholders:
Primary $ 1.67 $ 1.70 (m)
======== =========
Fully diluted $ 1.66 $ 1.69 (m)
======== =========
Weighted average number of common
shares (in thousands):
Primary 21,142 23,441
======== =========
Fully diluted 21,262 23,561
======== =========
</TABLE>
F-15
<PAGE> 20
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
(Unaudited)
(a) Pro forma adjustments as previously reported represent adjustments for
those transactions enumerated in the Company's December 31, 1996 Form
10-K. Such adjustments are summarized in (b), (c), (d) and (e) below.
(b) No revenues or expenses have been included in the pro forma statement
of operations for the Properties acquired in 1996 because these
properties were either under development or in the lease-up phase and,
accordingly, the related operating information for such centers either
does not exist or would not be meaningful. The results of operations
from the date of acquisition are included in the Company's historical
results.
(c) Changes in interest expense relating to the use of proceeds from the
issuance of 175,000 Depositary Shares representing 9.44% Class B
Cumulative Redeemable Preferred stock in January 1996 to repay the
revolving credit facility borrowings is not reflected herein as the
effect is considered insignificant.
(d) Reflects the reduction of interest costs relating to variable rate
indebtedness effectively repaid with the proceeds from the sale of
2,611,500 common shares completed in March 1996.
(e) Changes in interest expense relating to the issuance of Medium Term
Notes completed in 1996 and the simultaneous repayment of the revolving
credit facility borrowings is not reflected herein as the effect is
considered insignificant.
F-16
<PAGE> 21
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
(Unaudited)
(f) Reflects revenues and expenses for the year ended December 31, 1996, of
the properties acquired during 1997, as follows:
<TABLE>
<CAPTION>
Effective Real
Date of Estate Operating & Minority
Shopping Center Acquisition Revenues Taxes Maintenance Depreciation Interest Interest
--------------- ----------- -------- ----- ----------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Great Northern Shopping
Center - North, Cleveland,
(North Olmsted), OH 01/01/97 $5,125 $ 631 $ 676 $ 1,206 $1,903 $ 876
Great Northern Shopping
Center - South, Cleveland,
(North Olmsted) OH 01/01/97 1,803 208 222 344 677 183
Plaza Del Norte, San
Antonio, TX (1), (2) 01/23/97 - - -
Foothills Towne Center - - -
Awatukee, AZ (1) 02/21/97 - - - -
- -
Eagan Promenade
Minneapolis, MN (1) 07/01/97 - - - - - -
Midway Marketplace
St. Paul, MN (1) 07/11/97 - - - - - -
Cooks Corner,
Brunswick, ME 08/14/97 2,711 212 653 488 1,311 21
Centennial Promenade
Denver, CO (1) 10/02/97 - - - - - -
------ -------- ------ ------ -------- --------
$9,639 $ 1,051 $1,551 $2,038 $ 3,891 $ 1,080
====== ======== ====== ====== ======== ========
<FN>
(1) No revenues or expenses have been included in the pro forma
statement of operations since the center was either under
development or in the lease-up phase during 1996.
(2) Property acquired through a joint venture in which the Company
owns a 35% interest.
</TABLE>
(g) Reflects revenues and expenses of the Probable Acquisition Property
contemplated as of November 3, 1997, for the period January 1, 1996
through December 31, 1996 as follows:
<TABLE>
<CAPTION>
Real Estate Operating &
Shopping Center Revenues Taxes Maintenance Depreciation Interest
--------------- -------- ----- ----------- ------------ --------
<S> <C> <C> <C> <C> <C>
Spring Creek Centre
Fayetteville, AR $1,245 $ 45 $ 149 $ 305 $ 821
====== ======= ====== ====== ======
</TABLE>
(h) Reflects the reduction of interest costs relating to variable rate
indebtedness effectively repaid with the proceeds from the sale of
3,350,000 common shares completed in January 1997. See Note (m) with
regard to shares included in earnings per share calculation.
(i) Reflects the net increase in interest cost of $209 relating to the
variable rate indebtedness repaid with the proceeds from the $75
million of 7.125% Pass-through Asset Trust Securities completed in
March 1997. Pro forma interest incurred for the year ended December 31,
1996 on the Pass-through Asset Trust Securities is estimated at $4,176
and interest savings on the variable rate indebtedness repaid is
estimated at $3,967. Pro forma
F-17
<PAGE> 22
DEVELOPERS DIVERSIFIED REALTY CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
interest expense is calculated based on the amount of proceeds assumed
to be used to fund the properties acquired in 1997 with operating
history. The remaining proceeds were not considered to be received
until the date the remaining 1997 shopping centers were acquired since
no previous operating history existed with regard to such properties.
(j) Interest expense relating to the issuance of $50 million of Medium Term
Notes completed in July 1997 is not reflected herein as the proceeds
thereof were considered to be used to acquire shopping centers with no
previous operating history and/or for properties currently under
development. Accordingly, the Company would not have issued these
securities until the time of acquisition.
(k) The issuance of 1,300,000 common shares completed in June 1997 is not
reflected herein as the proceeds thereof were considered to be used to
acquire shopping centers with no previous operating history.
Accordingly, the Company would not have issued these securities
until the time of acquisition.
(l) The issuance of 507,960 common shares completed in September 1997 is
not reflected herein as the proceeds thereof were considered to be
used to acquire shopping centers with no previous operating history.
Accordingly, the Company would not have issued these securities
until the time of acquisition.
(m) Pro forma income per common share is based upon the weighted average
number of common shares assumed to be outstanding during 1996 and
included 1,833,000 shares of the 3,350,000 common share offering
completed in January 1997. The remaining 1,517,000 shares issued in
June 1997 were not reflected in the pro forma statement of operations
as the proceeds were not considered to be received until the date the
1997 shopping centers were acquired since such centers had no
previous operating history.
In accordance with the Accounting Principles Board Opinion No. 15,
primary earnings per share before extraordinary item is calculated as
follows:
<TABLE>
<S> <C>
Undistributed loss:
Income available to common shareholders .......... $ 39,927
Total dividends declared - $2.40 per common share (56,258)
--------
Undistributed loss ............................... $(16,331)
========
Per share data
Dividends declared ............................. $ 2.40
Undistributed loss ............................. (0.70)
--------
Primary earnings per common share .............. $ 1.70
========
Weighted average number of Common Shares:
Primary earnings ............................... 23,441
========
Fully diluted .................................. 23,561
========
</TABLE>
F-18
<PAGE> 23
DEVELOPERS DIVERSIFIED REALTY CORPORATION
ESTIMATED TWELVE MONTH PRO FORMA STATEMENT OF
TAXABLE NET OPERATING INCOME AND OPERATING FUNDS AVAILABLE
- --------------------------------------------------------------------------------
(Unaudited)
The following unaudited statement is a pro forma estimate of taxable income and
funds available from operations of the Company for the year ended December 31,
1996. The pro forma statement is based on the Company's historical operating
results for the twelve-month period ended December 31, 1996 adjusted for the
effect of (i) historical operations of the Acquisition Properties during 1996,
and the Probable Acquisition Property (ii) 175,000 depositary shares
representing 9.44 % Class B Cumulative Redeemable Preferred stock completed in
January 1996, (iii) 2,611,500 common share offering completed in March 1996,
(iv) Medium Term Notes offerings completed in 1996 and 1997, (v) 3,500,000
common share offering completed in January 1997, (vi) Pass-through Asset Trust
Securities issued in March 1997, (vii) 1,300,000 common share offering
completed in June 1997, (viii) 509,760 common share offering completed in
September 1997 and certain other items related to operations which can be
factually supported. This statement does not purport to forecast actual
operating results for any period in the future.
This statement should be read in conjunction with (i) the 1996 historical
financial statements included on the Company's Form 10-K for the year ended
December 31, 1996 and (ii) the pro forma condensed financial statements of the
Company included elsewhere herein.
<TABLE>
<CAPTION>
ESTIMATE OF TAXABLE NET OPERATING INCOME (IN THOUSANDS):
<S> <C>
DDRC historical net income, exclusive of property depreciation and amortization (Note 1) ............ $ 74,604
Acquisition Properties - historical earnings from operations, as adjusted, exclusive
of depreciation and amortization (Note 2) ........................................................ 2,066
Probable Acquisition Property - historical earnings from operations, as adjusted, exclusive of
depreciation and amortization (Note 2) ........................................................... 230
Pro forma adjustments arising from the utilization of the proceeds from the 175,000 Class B
Depositary Shares ................................................................................ -
Pro forma adjustments reflecting the decrease in interest expense arising from the utilization of the
proceeds from the 2,611,500 common share offering ................................................ 884
Pro forma adjustments arising from the utilization of the proceeds from the issuance of Medium
Term Notes to repay variable rate indebtedness ................................................... -
Pro forma adjustments reflecting the decrease in interest expense arising from the utilization of
the proceeds from the 3,350,000 common share offering ............................................ 3,957
Pro forma adjustments arising reflecting the increase in interest expense from the utilization of the
proceeds from the issuance of Pass-through Asset Trust Securities to repay variable rate
indebtedness ..................................................................................... (209)
Pro forma adjustments arising from the utilization of the proceeds from the 1,300,000 common
share offering ................................................................................... -
Pro forma adjustments arising from the utilization of the proceeds from the 507,960 common
share offering ................................................................................... -
Estimated tax depreciation and amortization (Note 3):
Estimated 1996 tax depreciation and amortization .................................................... (19,295)
Pro forma tax depreciation for Properties acquired during 1996 ...................................... -
Pro forma tax depreciation for Properties acquired during 1997 ...................................... (1,605)
Pro forma tax depreciation for Probable Acquisition Property ........................................ (300)
--------
Pro forma taxable income before dividends deduction ................................................. 60,332
Estimated dividends deduction (Note 4) .......................................................... (70,458)
--------
$(10,126)
Pro forma taxable net operating income .............................................................. $ -
========
ESTIMATE OF OPERATING FUNDS AVAILABLE (IN THOUSANDS):
Pro forma taxable operating income before dividends deduction ....................................... $ 60,332
Add pro forma depreciation ...................................................................... 21,200
--------
Estimated pro forma operating funds available (Note 5) .............................................. $ 81,532
========
</TABLE>
F-19
<PAGE> 24
DEVELOPERS DIVERSIFIED REALTY CORPORATION
ESTIMATED TWELVE MONTH PRO FORMA STATEMENT OF
TAXABLE NET OPERATING INCOME AND OPERATING FUNDS AVAILABLE
- --------------------------------------------------------------------------------
(Unaudited)
Note 1 - The historical earnings from operations represents the Company's
earnings from operations for the twelve months ended December 31, 1996
as reflected in the Company's historical financial statements.
Note 2 - The historical earnings from operations for the properties acquired
during 1997 represent the revenues and certain expenses as referred to
in the pro forma condensed consolidated statement of operations for the
year ended December 31, 1996 included elsewhere herein.
Note 3 - Tax depreciation for the Company is based upon the Company's tax basis
in the properties which exceeds the historical cost basis, as reflected
in the Company's financial statements in accordance with generally
accepted accounting principles, by approximately $20 million before
accumulated depreciation. The costs are generally depreciated on a
straight-line method over a 40-year life for tax purposes.
Note 4 - Estimated dividends deduction is calculated as follows:
<TABLE>
<S> <C>
Common share dividend (23,441,000 x $2.40) $ 56,258
Class A Preferred Shares 10,011
Class B Preferred Shares 4,189
--------
$ 70,458
========
</TABLE>
Note 5 - Operating funds available does not represent cash generated from
operating activities in accordance with generally accepted accounting
principles and is not necessarily indicative of cash available to fund
cash needs.
F-20
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
Date November 7, 1997 /s/ William H. Schafer
-------------------------- ------------------------------------------
William H. Schafer
Vice President and Chief Financial Officer
F-21
<PAGE> 1
Exhibit 4(f)
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.(1)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(2)
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FXR-______ ___________ ____________________
DEVELOPERS DIVERSIFIED REALTY CORPORATION
MEDIUM-TERM NOTE
(Form of Fixed Rate Senior Security)
<TABLE>
<CAPTION>
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY DATE:
<S> <C> <C>
INTEREST PAYMENT DATE(S) DEFAULT RATE: %
[ ] _______ and ______
[ ] Other:
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE
REDUCTION: %
OPTIONAL REPAYMENT [ ] CHECK IF AN ORIGINAL
DATE(S): ISSUE DISCOUNT NOTE
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION: EXCHANGE RATE
[ ] United States dollars [ ] $1,000 and integral AGENT:
[ ] Other: multiples thereof
[ ] Other:
ADDENDUM ATTACHED OTHER/ADDITIONAL PROVISIONS:
[ ] Yes
[ ] No
- --------------
<FN>
1 This paragraph applies to global Notes only.
2 This paragraph applies to global Notes only.
</TABLE>
<PAGE> 2
DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the
"Company", which terms include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of , on the
Stated Maturity Date specified above (or any Redemption Date or Repayment Date,
each as defined on the reverse hereof) (each such Stated Maturity Date,
Redemption Date or Repayment Date being hereinafter referred to as the "Maturity
Date" with respect to the principal repayable on such date) and to pay interest
thereon, at Interest Rate per annum specified above, until the principal hereof
is paid or duly made available for payment, and (to the extent that the payment
of such interest shall be legally enforceable) at the Default Rate per annum
specified above on any overdue principal, premium and/or interest. The Company
will pay interest in arrears on each Interest Payment Date, if any, specified
above (each, an "Interest Payment Date"), commencing with the first Interest
Payment Date next succeeding the Original Issue Date specified above, and on the
Maturity Date; PROVIDED, HOWEVER, that if the Original Issue Date occurs between
a Record Date (as defined below) and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date next
succeeding the Original Issue Date to the holder of this Note on the Record Date
with respect to such second Interest Payment Date. Interest on this Note will be
computed on the basis of a 360-day year of twelve 30-day months.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for with respect to this Note) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each,
an "Interest Period"). The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the fifteenth
calendar day (whether or not a Business Day, as defined below) immediately
preceding such Interest Payment Date (the "Record Date"); PROVIDED, HOWEVER,
that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof and premium, if any, hereon shall be payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest") will
forthwith cease to be payable to the holder on any Record Date, and shall be
paid to the person in whose name this Note is registered at the close of
business on a special record date (the "Special Record Date") for the payment of
such Defaulted Interest to be fixed by the Trustee hereinafter referred to,
notice whereof
2
<PAGE> 3
shall be given to the holder of this Note by the Trustee not less than 10
calendar 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 this note may be listed, and upon such notice as may be
required by such exchange, all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, a duly completed election form as contemplated on the
reverse hereof) at the corporate trust office of the Trustee maintained for that
purpose in The Borough of Manhattan, The City of New York, currently located at
120 Broadway, 33rd Floor, New York, New York 10271, or at such other paying
agency in the Borough of Manhattan, The City of New York, as the Company may
determine; PROVIDED, HOWEVER, that if such payment is to be made in a Specified
Currency other than United States dollars as set forth below, such payment will
be made by wire transfer of immediately available funds to an account with a
bank designated by the holder hereof at least 15 calendar days prior to the
Maturity Date, provided that such bank has appropriate facilities therefor and
that this Note (and, if applicable, a duly completed election form) is presented
and surrendered at the aforementioned office of the Trustee in time for the
Trustee to make such payment in such funds in accordance with its normal
procedures. Payment of interest due on any Interest Payment Date other than the
Maturity Date will be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register maintained at the
aforementioned office of the Trustee; PROVIDED, HOWEVER, that a holder of
U.S.$10,000,000 (or, if the Specified Currency specified above is other than
United States dollars, the equivalent thereof in the Specified Currency) or more
in aggregate principal amount of Notes (whether having identical or different
terms and provisions) will be entitled to receive interest payments on such
Interest Payment Date by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 calendar days prior to such Interest Payment Date. Any
such wire transfer instructions received by the Trustee shall remain in effect
until revoked by such holder.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be, to the date of
such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on
3
<PAGE> 4
which banking institutions are authorized or required by law, regulation or
executive order to close in The City of New York; PROVIDED, HOWEVER, that if the
Specified Currency is other than United States dollars and any payment is to be
made in the Specified Currency in accordance with the provisions hereof, such
day is also not a day on which banking institutions are authorized or required
by law, regulation or executive order to close in the Principal Financial Center
(as defined below) of the country issuing the Specified Currency (or, in the
case of European Currency Units ("ECU"), is not a day that appears as an ECU
non- settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or is not a day so designated by the ECU Banking
Association) or, if ECU non-settlement days do not appear on that page (and are
not so designated), is not a day on which payments in ECU cannot be settled in
the international interbank market). "Principal Financial Center" (i) means the
capital city of the country issuing the Specified Currency (except as described
in the immediately preceding paragraph with respect to ECU) or (ii) the capital
city of the country in which the Index currency relates (or in the case of ECU,
Luxembourg), as applicable, except in the case of (i) or (ii) above, that with
respect to United States dollars, Canadian dollars, Australian dollars, Deutsche
marks, Dutch guilders, Italian lire, Swiss francs and ECU, the "Principal
Financial Center" shall be The City of New York, Sydney, Toronto, Frankfurt,
Amsterdam, Milan (solely in the case of the specified currency) and Zurich,
respectively.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is other
than United States dollars, any such amounts so payable by the Company will be
converted by the Exchange Rate Agent specified above into United States dollars
for payment to the holder of this Note; PROVIDED, HOWEVER, that the holder of
this Note may elect to receive such amounts in the Specified Currency pursuant
to the provisions set forth below.
If the Specified Currency is other than United States dollars and the
holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, any United States dollar
amount to be received by the holder of this Note will be based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on
4
<PAGE> 5
such payment date in the aggregate amount of the Specified Currency payable to
all holders of Notes scheduled to receive United States dollar payments and at
which the applicable dealer commits to execute a contract. All currency exchange
costs will be borne by the holder of this Note by deductions from such payments.
If three such bid quotations are not available, payments on this Note will be
made in the Specified Currency.
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this Note
in the Specified Currency by submitting a written request for such payment to
the Trustee at its corporate trust office in The City of New York on or prior to
the applicable Record Date or at least 15 calendar days prior to the Maturity
Date, as the case may be. Such written request may be mailed or hand delivered
or sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York. Any payment made
under such circumstances in United States dollars will not constitute an Event
of Default (as defined in the Indenture).
If the Specified Currency is a composite currency and the holder of
this Note shall have duly made an election to receive all or a specified portion
of any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the
5
<PAGE> 6
imposition of exchange controls or other circumstances beyond the control of the
Company, then the Company will be entitled to satisfy its obligations to the
holder of this Note by making such payment in United States dollars. The amount
of each payment in United States dollars shall be computed by the Exchange Rate
Agent on the basis of the equivalent of the composite currency in United States
dollars. The component currencies of the composite currency for this purpose
(collectively, the "Component Currencies" and each, a "Component Currency")
shall be the currency amounts that were components of the composite currency as
of the last day on which the composite currency was used. The equivalent of the
composite currency in United States dollars shall be calculated by aggregating
the United States dollar equivalents of the Component Currencies. The United
States dollar equivalent of each of the Component Currencies shall be determined
by the Exchange Rate Agent on the basis of the most recently available Market
Exchange Rate for each such Component Currency, or as otherwise specified on the
face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth on
the face hereof.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
6
<PAGE> 7
IN WITNESS WHEREOF, Developers Diversified Realty Corporation has
caused this Note to be executed.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
By
---------------------------------
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
NATIONAL CITY BANK,
as Trustee
By
----------------------------------
Authorized Signatory
7
<PAGE> 8
[REVERSE OF NOTE]
DEVELOPERS DIVERSIFIED REALTY CORPORATION
MEDIUM-TERM NOTE
(Form of Fixed Rate Senior Security)
This Note is one of a duly authorized series of Senior Debt Securities
(the "Debt Securities") of the Company issued and to be issued under an
Indenture, dated as of May 1, 1994, as amended, modified or supplemented from
time to time (the "Indenture"), between the Company and NATIONAL CITY BANK, as
Trustee (the "Trustee", which term includes any successor trustee under the
Indenture), to which the Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
holders of the Debt Securities, and of the terms upon which the Debt Securities
are, and are to be, authenticated and delivered. This Note is one of the series
of Debt Securities designated as "Medium-Term Notes Due Nine Months or More from
Date of Issue" (the "Notes"). All terms used but not defined in this Note
specified on the face hereof or in an Addendum hereto shall have the meanings
assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on and after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the Redemption Price (as defined below), together with unpaid interest accrued
thereon to the date fixed for redemption (each, a "Redemption Date"), on notice
given no more than 60 nor less than 30 calendar days prior to the Redemption
Date and in accordance with the provisions of the Indenture. The "Redemption
Price" shall initially be the Initial Redemption Percentage specified on the
face hereof multiplied by the unpaid principal amount of this Note to be
redeemed. The Initial Redemption Percentage, if any, shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
100% of unpaid principal amount to be redeemed. In the event of redemption of
this Note in
8
<PAGE> 9
part only, a new Note of like tenor for the unredeemed portion hereof and
otherwise having the same terms as this Note shall be issued in the name of the
holder hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of
the holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If this Note is an Original Issue Discount Note as specified on the
face hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(i) the Issue Price specified on the face hereof (increased by any accruals of
the Discount, as defined below) and, in the event redemption of this Note (if
applicable), multiplied by the Initial Redemption Percentage (as adjusted by the
Annual Redemption Percentage Reduction, if applicable) and (ii) any unpaid
interest accrued thereon, from the Original Issue Date to the date of
redemption, repayment or acceleration of maturity. The difference between the
Issue Price and 100% of the principal amount of this Note is referred to herein
as the "Discount", and the Discount will be ratably accrued over the term of
this Note for purposes of determining the amount payable upon redemption,
repayment or acceleration of maturity of this Note.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
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
9
<PAGE> 10
the Debt Securities 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 Debt Securities 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 Debt Securities of any series,
on behalf of the holders of all such Debt 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 Debt Securities of any series, in certain
instances, to waive, on behalf of all of the holders of Debt 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 heretofore
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 principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, 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 hereof
and any premium or interest hereon 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.
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
10
<PAGE> 11
the Trustee may treat the holder in whose name this Note is registered as the
owner thereof 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 this Note 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.
11
<PAGE> 12
-------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
Additional abbreviations may also be used though not in the above list.
----------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------
| |
|------------------------------|----------------------------------------------
_____________________________(Please print or typewrite name and address
including postal zip code of assignee)
______________________________________________________this Note and all rights
thereunder hereby irrevocably constituting and appointing
____________________________________________________________________ Attorney
to transfer this Note on the books of the Trustee, with full power of
substitution in the premises.
Dated:_____________________ _______________________________________
---------------------------------------
Notice: The signature(s) on this assignment
must correspond with the name(s) as written
upon the face of this Note in every
particular, without alteration or enlargement
or any change whatsoever.
12
<PAGE> 13
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at ___________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office, not more than 60 nor less than 30 calendar days prior to the
Repayment Date, this Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the
Specified Currency is other than United States dollars, the minimum Authorized
Denomination specified on the face hereof)) which the holder elects to have
repaid and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Notes to be issued to the holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $ ________ _____________
Notice: The signature(s) on this
Date: ______________ Option to Elect Repayment must
correspond with the name(s) as
written upon the face of this Note
in every particular, without
alteration or enlargement or any
change whatsoever.
13
<PAGE> 1
Exhibit 4(g)
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.(1)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(2)
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FLR- _____ ________________ ____________________________
DEVELOPERS DIVERSIFIED REALTY CORPORATION
MEDIUM-TERM NOTE
(Form of Floating Rate Senior Security)
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate Page:
[ ] LIBOR Telerate Designated CMT Maturity Index:
INDEX CURRENCY:
<TABLE>
<S> <C> <C>
INDEX MATURITY: INITIAL INTEREST RATE: % INITIAL INTEREST RESET
DATE:
SPREAD (PLUS OR MINIMUM INTEREST RATE: % INTEREST PAYMENT DATE(S):
MINUS):
SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: % INTEREST RESET DATE(S):
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
- --------
1 This paragraph applies to global Notes only.
2 This paragraph applies to global Notes only.
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
DATE: PERCENTAGE: % PERCENTAGE REDUCTION:
%
</TABLE>
OPTIONAL REPAYMENT CALCULATION AGENT:
DATE(S):
<TABLE>
<CAPTION>
INTEREST CATEGORY: DAY COUNT CONVENTION:
<S> <C>
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to .
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: % from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: % from to .
[ ] Original Issue Discount Note Applicable Interest Rate Basis:
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION:
[ ] United States dollars [ ] $1,000 and integral multiples
thereof
[ ] Other: [ ] Other:
EXCHANGE RATE AGENT:
DEFAULT RATE: %
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
</TABLE>
2
<PAGE> 3
DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the
"Company", which terms include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of , on
the Stated Maturity Date specified above (or any Redemption Date or Repayment
Date, each as defined on the reverse hereof) (each such Stated Maturity Date,
Redemption Date or Repayment Date being hereinafter referred to as the "Maturity
Date" with respect to the principal repayable on such date) and to pay interest
thereon, at a rate per annum equal to the Initial Interest Rate specified above
until the Initial Interest Reset Date specified above and thereafter at a rate
determined in accordance with the provisions specified above and on the reverse
hereof with respect to one or more Interest Rate Bases specified above until the
principal hereof is paid or duly made available for payment, and (to the extent
that the payment of such interest shall be legally enforceable) at the Default
Rate per annum specified above on any overdue principal, premium and/or
interest. The Company will pay interest in arrears on each Interest Payment
Date, if any, specified above (each, an "Interest Payment Date"), commencing
with the first Interest Payment Date next succeeding the Original Issue Date
specified above, and on the Maturity Date; PROVIDED, HOWEVER, that if the
Original Issue Date occurs between a Record Date (as defined below) and the next
succeeding Interest Payment Date, interest payments will commence on the second
Interest Payment Date next succeeding the Original Issue Date to the holder of
this Note on the Record Date with respect to such second Interest Payment Date.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for with respect to this Note) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each,
an "Interest Period"). The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the fifteenth
calendar day (whether or not a Business Day, as defined on the reverse hereof)
immediately preceding such Interest Payment Date (the "Record Date"); PROVIDED,
HOWEVER, that interest payable on the Maturity Date will be payable to the
person to whom the principal hereof and premium, if any, hereon shall be
payable. Any such interest not so punctually paid or duly provided for
("Defaulted Interest") will forthwith cease to be payable to the holder on any
Record Date, and shall be paid to the person in whose name this Note is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee hereinafter referred to, notice whereof shall be given to the
3
<PAGE> 4
holder of this Note by the Trustee not less than 10 calendar 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 this
note may be listed, and upon such notice as may be required by such exchange,
all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, a duly completed election form as contemplated on the
reverse hereof) at the corporate trust office of the Trustee maintained for that
purpose in The Borough of Manhattan, The City of New York, currently located at
120 Broadway, 33rd Floor, New York, New York 10271, or at such other paying
agency in The Borough of Manhattan, The City of New York, as the Company may
determine; PROVIDED, HOWEVER, that if such payment is to be made in a Specified
Currency other than United States dollars as set forth below, such payment will
be made by wire transfer of immediately available funds to an account with a
bank designated by the holder hereof at least 15 calendar days prior to the
Maturity Date, provided that such bank has appropriate facilities therefor and
that this Note (and, if applicable, a duly completed election form) is presented
and surrendered at the aforementioned office of the Trustee in time for the
Trustee to make such payment in such funds in accordance with its normal
procedures. Payment of interest due on any Interest Payment Date other than the
Maturity Date will be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register maintained at the
aforementioned office of the Trustee; PROVIDED, HOWEVER, that a holder of
U.S.$10,000,000 (or, if the Specified Currency specified above is other than
United States dollars, the equivalent thereof in the Specified Currency) or more
in aggregate principal amount of Notes (whether having identical or different
terms and provisions) will be entitled to receive interest payments on such
Interest Payment Date by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 calendar days prior to such Interest Payment Date. Any
such wire transfer instructions received by the Trustee shall remain in effect
until revoked by such holder.
If any Interest Payment Date other than the Maturity Date would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and interest
shall be made on the next succeeding Business Day with the same force and effect
as if made on the date such payment was due, and no interest shall accrue
4
<PAGE> 5
with respect to such payment for the period from and after the Maturity Date to
the date of such payment on the next succeeding Business Day.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is other
than United States dollars, any such amounts so payable by the Company will be
converted by the Exchange Rate Agent specified above into United States dollars
for payment to the holder of this Note; PROVIDED, HOWEVER, that the holder of
this Note may elect to receive such amounts in the Specified Currency pursuant
to the provisions set forth below.
If the Specified Currency is other than United States dollars and the
holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, any United States dollar
amount to be received by the holder of this Note will be based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments. If
three such bid quotations are not available, payments on this Note will be made
in the Specified Currency.
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this Note
in the Specified Currency by submitting a written request for such payment to
the Trustee at its corporate trust office in The City of New York on or prior to
the applicable Record Date or at least 15 calendar days prior to the Maturity
Date, as the case may be. Such written request may be mailed or hand delivered
or sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written
5
<PAGE> 6
notice of any such revocation must be received by the Trustee on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York. Any payment made
under such circumstances in United States dollars will not constitute an Event
of Default (as defined in the Indenture).
If the Specified Currency is a composite currency and the holder of
this Note shall have duly made an election to receive all or a specified portion
of any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the control
of the Company, then the Company will be entitled to satisfy its obligations to
the holder of this Note by making such payment in United States dollars. The
amount of each payment in United States dollars shall be computed by the
Exchange Rate Agent on the basis of the equivalent of the composite currency in
United States dollars. The component currencies of the composite currency for
this purpose (collectively, the "Component Currencies" and each, a "Component
Currency") shall be the currency amounts that were components of the composite
currency as of the last day on which the composite currency was used. The
equivalent of the composite currency in United States dollars shall be
calculated by aggregating the United States dollar equivalents of the Component
Currencies. The United States dollar equivalent of each of the Component
Currencies shall be determined by the Exchange Rate Agent on the basis of the
most recently available Market Exchange Rate for each such Component Currency,
or as otherwise specified on the face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are
6
<PAGE> 7
consolidated into a single currency, the amounts of those currencies as
Component Currencies shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated Component Currencies
expressed in such single currency. If any Component Currency is divided into two
or more currencies, the amount of the original Component Currency shall be
replaced by the amounts of such two or more currencies, the sum of which shall
be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth on
the face hereof.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions".
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
7
<PAGE> 8
IN WITNESS WHEREOF, Developers Diversified Realty Corporation has
caused this Note to be executed.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
By
---------------------------------
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
NATIONAL CITY BANK,
as Trustee
By
-------------------------------
Authorized Signatory
8
<PAGE> 9
[REVERSE OF NOTE]
DEVELOPERS DIVERSIFIED REALTY CORPORATION
MEDIUM-TERM NOTE
(Form of Fixed Rate Senior Security)
This Note is one of a duly authorized series of Senior Debt Securities
(the "Debt Securities") of the Company issued and to be issued under an
Indenture, dated as of May 1, 1994, as amended, modified or supplemented from
time to time (the "Indenture"), between the Company and NATIONAL CITY BANK, as
Senior Trustee (the "Trustee", which term includes any successor trustee under
the Indenture), to which the Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
holders of the Debt Securities, and of the terms upon which the Debt Securities
are, and are to be, authenticated and delivered. This Note is one of the series
of Debt Securities designated as "Medium-Term Notes Due Nine Months or More From
Date of Issue" (the "Notes"). All terms used but not defined in this Note
specified on the face hereof or in an Addendum hereto shall have the meanings
assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on and after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the Redemption Price (as defined below), together with unpaid interest accrued
thereon to the date fixed for redemption (each, a "Redemption Date"), on notice
given no more than 60 nor less than 30 calendar days prior to the Redemption
Date and in accordance with the provisions of the Indenture. The "Redemption
Price" shall initially be the Initial Redemption Percentage specified on the
face hereof multiplied by the unpaid principal amount of this Note to be
redeemed. The Initial Redemption Percentage, if any, shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
100% of unpaid principal amount to be redeemed. In the event of redemption of
this Note
9
<PAGE> 10
in part only, a new Note of like tenor for the unredeemed portion hereof and
otherwise having the same terms as this Note shall be issued in the name of the
holder hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of
the holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If the Interest Category of this Note is specified on the face hereof
as an Original Issue Discount Note, the amount payable to the holder of this
Note in the event of redemption, repayment or acceleration of maturity of this
Note will be equal to the sum of (1) the Issue Price specified on the face
hereof (increased by any accruals of Discount, as defined below) and, in the
event of any redemption of this Note (if applicable), multiplied by the Initial
Redemption Percentage specified in the applicable Pricing Supplement (as
adjusted by the Annual Redemption Percentage Reduction, if applicable) and (2)
any accrued and unpaid interest on this Note from the Original Issue Date to the
Redemption Date, Repayment Date or date of acceleration of maturity, as the case
may be. As used herein, the "Discount" shall mean the difference between the
Issue Price of an Original Issue Discount Note and par.
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued using a constant yield method. The
constant yield will be calculated using a 30-day month, 360-day year convention,
a compounding period that, except for the Initial Period (as defined below),
corresponds to the shortest period between Interest Payment Dates (with ratable
accruals within a compounding period), a coupon rate equal to the initial
interest rate applicable to this Note and an assumption that the maturity of
this Note will not be accelerated. If the period from the Original Issue Date to
the initial Interest Payment Date (the "Initial Period") is shorter than the
compounding period for this
10
<PAGE> 11
Note, a proportionate amount of the yield for an entire compounding period will
be accrued. If the Initial Period is longer than the compounding period, then
such period will be divided into a regular compounding period and a short
period, with the short period being treated as provided in the preceding
sentence.
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on
the face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse
Floating Rate Note", this Note shall be designated as a "Regular
Floating Rate Note" and, except as set forth below or on the face
hereof, shall bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread,
if any, and/or (b) multiplied by the Spread Multiplier, if any, in each
case as specified on the face hereof. Commencing on the Initial
Interest Reset Date, the rate at which interest on this Note shall be
payable shall be reset as of each Interest Reset Date specified on the
face hereof; PROVIDED, HOWEVER, that the interest rate in effect for
the period, if any, from the Original Issue Date to the Initial
Interest Reset Date shall be the Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note", then, except as set
forth below or on the face hereof, this Note shall bear interest at the
rate determined by reference to the applicable Interest Rate Basis or
Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by
the Spread Multiplier, if any. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note shall be payable shall be
reset as of each Interest Reset Date; PROVIDED, HOWEVER, that (y) the
interest rate in effect for the period, if any, from the Original Issue
Date to the Initial Interest Reset Date shall be the Initial Interest
Rate and (z) the interest rate in effect for the period commencing on
the Fixed Rate Commencement Date specified on the face hereof to the
Maturity Date shall be the Fixed Interest Rate specified on the face
hereof or, if no such Fixed Interest Rate is specified, the interest
rate in effect hereon on the day immediately preceding the Fixed Rate
Commencement Date.
(iii) If the Interest Category of this Note is specified on
the face hereof as an "Inverse Floating Rate Note", then, except as set
forth below or on the face hereof, this Note shall bear interest at the
Fixed Interest Rate minus the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread,
if any, and/or (b) multiplied by the Spread Multiplier, if any;
PROVIDED, HOWEVER, that, unless
11
<PAGE> 12
otherwise specified on the face hereof, the interest rate hereon shall
not be less than zero. Commencing on the Initial Interest Reset Date,
the rate at which interest on this Note shall be payable shall be reset
as of each Interest Reset Date; PROVIDED, HOWEVER, that the interest
rate in effect for the period, if any, from the Original Issue Date to
the Initial Interest Reset Date shall be the Initial Interest Rate.
Unless otherwise specified on the face hereof, the rate with respect to
each Interest Rate Basis will be determined in accordance with the applicable
provisions below. Except as set forth above or on the face hereof, the interest
rate in effect on each day shall be (i) if such day is an Interest Reset Date,
the interest rate determined as of the Interest Determination Date (as
hereinafter defined) immediately preceding such Interest Reset Date or (ii) if
such day is not an Interest Reset Date, the interest rate determined as of the
Interest Determination Date immediately preceding the most recent Interest Reset
Date. If any Interest Reset Date would otherwise be a day that is not a Business
Day, such Interest Reset Date shall be postponed to the next succeeding Business
Day, except that if LIBOR is an applicable Interest Rate Basis and such Business
Day falls in the next succeeding calendar month, such Interest Reset Date shall
be the immediately preceding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York; PROVIDED, HOWEVER, that if the Specified Currency is other
than United States dollars and any payment is to be made in the Specified
Currency in accordance with the provisions hereof, such day is also not a day on
which banking institutions are authorized or required by law, regulation or
executive order to close in the Principal Financial Center (as defined below) of
the country issuing the Specified Currency (or, in the case of European Currency
Units ("ECU"), is not a day that appears as an ECU non-settlement day on the
display designated as "ISDE" on the Reuter Monitor Money Rates Service (or is
not a day so designated by the ECU Banking Association) or, if ECU
non-settlement days do not appear on that page (and are not so designated), is
not a day on which payments in ECU cannot be settled in the international
interbank market); PROVIDED, FURTHER, that if LIBOR is an applicable Interest
Rate Basis, such day is also a London Business Day (as defined below). "London
Business Day" means any day on which dealings in the Index Currency (as
hereinafter defined) are transacted in the London interbank market. "Principal
Financial Center" (i) means the capital city of the country issuing the
Specified Currency (except as described in the immediately preceding paragraph
with respect to ECU) or (ii) the capital city of the country in which the Index
Currency relates (or in the case of ECU, Luxembourg), as applicable, except in
the case of (i) or (ii) above, that with respect to
12
<PAGE> 13
United States dollars, Canadian dollars, Australian dollars, Deutsche marks,
Dutch guilders, Italian lire, Swiss francs and ECU, the "Principal Financial
Center" shall be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam,
Milan (solely in the case of the specified currency) and Zurich, respectively.
The "Interest Determination Date" with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will
be the second Business Day immediately preceding the applicable Interest Reset
Date; the "Interest Determination Date" with respect to the Eleventh District
Cost of Funds Rate shall be the last working day of the month immediately
preceding the applicable Interest Reset Date on which the Federal Home Loan Bank
of San Francisco (the "FHLB of San Francisco") publishes the Index (as defined
below); and the "Interest Determination Date" with respect to LIBOR shall be the
second London Business Day immediately preceding the applicable Interest Reset
Date, unless the Index Currency is British pounds sterling, in which case the
"Interest Determination Date" will be the applicable Interest Reset Date. The
"Interest Determination Date" with respect to the Treasury Rate shall be the day
in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
PROVIDED, HOWEVER, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday; and PROVIDED, FURTHER, that if an auction shall
fall on any Interest Reset Date then the Interest Reset Date shall instead be
the first Business Day following such auction. If the interest rate of this Note
is determined with reference to two or more Interest Rate Bases specified on the
face hereof, the "Interest Determination Date" pertaining to this Note shall be
the most recent Business Day which is at least two Business Days prior to the
applicable Interest Reset Date on which each Interest Rate Basis is
determinable. Each Interest Rate Basis shall be determined as of such date, and
the applicable interest rate shall take effect on the related Interest Reset
Date.
CD RATE. If an Interest Rate Basis for this Note is specified on the
face hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication ("H.15(519)") under the
heading "CDs (Secondary Market)", or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date (as defined below), the rate on such
CD Rate Interest Determination Date for
13
<PAGE> 14
negotiable United States dollar certificates of deposit of the Index Maturity as
published by the Federal Reserve Bank of New York in its daily statistical
release "Composite 3:30 P.M. Quotations for United States Government Securities"
or any successor publication ("Composite Quotations") under the heading
"Certificates of Deposit". If such rate is not yet published in either H.15(519)
or Composite Quotations by 3:00 P.M., New York City time, on the related
Calculation Date, then the CD Rate on such CD Rate Interest Determination Date
will be calculated by the Calculation Agent specified on the face hereof and
will be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Rate Interest Determination Date, of three
leading nonbank dealers in negotiable United States dollar certificates of
deposit in The City of New York selected by the Calculation Agent for negotiable
certificates of deposit of major United States money market banks for negotiable
United States dollar certificates of deposit with a remaining maturity closest
to the Index Maturity in an amount that is representative for a single
transaction in that market at that time; PROVIDED, HOWEVER, that if the dealers
so selected by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate determined as of such CD Rate Interest Determination Date
will be the CD Rate in effect on such CD Rate Interest Determination Date.
CMT RATE. If an Interest Rate Basis for this Note is specified on the
face hereof as the CMT rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on the Designated CMT Telerate Page (as defined
below) under the caption "...Treasury Constant Maturities...Federal Reserve
Board Release H.15...Mondays Approximately 3:45 P.M.", under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which the related CMT Rate
Interest Determination Date occurs. If such rate is no longer displayed on the
relevant page or is not displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published or is not published by 3:00 P.M., New York City
time, on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant
14
<PAGE> 15
H.15(519). If such information is not provided by 3:00 P.M., New York City time,
on the related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date reported, according to their written records,
by three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least U.S.$100 million. If three or four (and not
five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers selected by the Calculation
Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT
Rate Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the Treasury
Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page specified on the face hereof (or any other page as
may replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)) for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
15
<PAGE> 16
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the Designated
CMT Maturity Index shall be 2 years.
COMMERCIAL PAPER RATE. If an Interest Rate Basis for this Note is
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as the Money Market Yield
(as defined below) on such date of the rate for commercial paper having the
Index Maturity as published in H.15(519) under the heading "Commercial
Paper--Nonfinancial". In the event that such rate is not published by 3:00 P.M.,
New York City time, on such Calculation Date, then the Commercial Paper Rate on
such Commercial Paper Rate Interest Determination Date will be the Money Market
Yield of the rate for commercial paper having the Index Maturity as published in
Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an Index
Maturity of 30 days or 90 days, respectively). If such rate is not yet published
in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
such Calculation Date, then the Commercial Paper Rate on such Commercial Paper
Rate Interest Determination Date will be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in The
City of New York selected by the Calculation Agent for commercial paper having
the Index Maturity placed for a non-financial issuer whose bond rating is "Aa",
or the equivalent from a nationally recognized statistical rating organization;
PROVIDED, HOWEVER, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate determined
as of such Commercial Paper Rate Interest Determination Date will be the
Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.
"Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield = ------------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable Interest Reset Period.
16
<PAGE> 17
ELEVENTH DISTRICT COST OF FUNDS RATE. If an Interest Rate Basis for
this Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 as of 11:00
A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
FEDERAL FUNDS RATE. If an Interest Rate Basis for this Note is
specified on the face hereof as the Federal Funds Rate, the Federal Funds Rate
shall be determined as of the applicable Interest Determination Date (a "Federal
Funds Rate Interest Determination Date") as the rate on such date for United
States dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)" or, if not published by 3:00 P.M., New York City time, on the
Calculation Date, the rate on such Federal Funds Rate Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate". If such rate is not published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on the related
Calculation Date, then the Federal Funds Rate on such Federal Funds Interest
Determination Date shall be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight United States
dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York selected by the Calculation Agent, prior to
9:00 A.M., New York City time, on such Federal Funds Rate Interest Determination
Date; PROVIDED, HOWEVER, that if the brokers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate
17
<PAGE> 18
determined as of such Federal Funds Rate Interest Determination Date will be the
Federal Funds Rate in effect on such Federal Funds Rate Interest Determination
Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:
(i) if (a) "LIBOR Reuters" is specified on the face hereof, the
arithmetic mean of the offered rates (unless the Designated LIBOR Page (as
defined below) by its terms provides only for a single rate, in which case such
single rate will be used) for deposits in the Index Currency having the Index
Maturity, commencing on the applicable Interest Reset Date, that appear (or, if
only a single rate is required as aforesaid, appears) on the Designated LIBOR
Page (as defined below) as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date, or (b) "LIBOR Telerate" is specified on the face hereof, or
if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof
as the method for calculating LIBOR, the rate for deposits in the Index Currency
having the Index Maturity, commencing on such Interest Reset Date, that appears
on the Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR
Interest Determination Date. If fewer than two such offered rates appear, or if
no such rate appears, as applicable, LIBOR on such LIBOR Interest Determination
Date shall be determined in accordance with the provisions described in clause
(ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
Designated LIBOR Page as specified in clause (i) above, the Calculation Agent
shall request the principal London offices of each of four major reference banks
in the London interbank market, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotation for deposits in the Index
Currency for the period of the Index Maturity, commencing on the applicable
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in
such Index Currency in such market at such time. If at least two such quotations
are so provided, then LIBOR on such LIBOR Interest Determination Date will be
the arithmetic mean of such quotations. If fewer than two such quotations are so
provided, then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center, on such LIBOR Interest Determination Date
by three major banks in such Principal Financial Center selected by the
Calculation Agent for loans in the Index Currency to leading European banks,
having the Index Maturity and in a principal amount that is representative for a
single transaction
18
<PAGE> 19
in such Index Currency in such market at such time; PROVIDED, HOWEVER, that if
the banks so selected by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR determined as of such LIBOR Interest Determination Date
shall be LIBOR in effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency or composite currency specified on
the face hereof as to which LIBOR shall be calculated. If no such currency or
composite currency is specified on the face hereof, the Index Currency shall be
United States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified on
the face hereof, the display on the Reuter Monitor Money Rates Service (or any
successor service) for the purpose of displaying the London interbank rates of
major banks for the Index Currency, or (b) if "LIBOR Telerate" is specified on
the face hereof or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on
the face hereof as the method for calculating LIBOR, the display on the Dow
Jones Telerate Service (or any successor service) for the purpose of displaying
the London interbank rates of major banks for the Index Currency.
PRIME RATE. If an Interest Rate Basis for this Note is specified on the
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
heading "Bank Prime Loan." If such rate is not published prior to 3:00 P.M., New
York City time, on the related Calculation Date, then the Prime Rate shall be
the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen NYMF Page (as defined below) as such bank's
prime rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
NYMF Page for such Prime Rate Interest Determination Date, the Prime Rate shall
be the arithmetic mean of the prime rates quoted on the basis of the actual
number of days in the year divided by a 360-day year as of the close of business
on such Prime Rate Interest Determination Date by four major money center banks
in The City of New York selected by the Calculation Agent. If fewer than four
such quotations are so provided, the Prime Rate shall be the arithmetic mean of
four prime rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Rate
Interest Determination Date as furnished in The City of New York by the major
money center banks, if any, that have provided such quotations and by as many
substitute banks or trust companies as necessary to obtain such four prime rate
quotations, provided such substitute banks or trust companies are organized and
doing business under the laws of the United States, or any State thereof, each
having total equity capital of at least U.S.$500 million and being subject to
supervision or examination by Federal or State
19
<PAGE> 20
authority, selected by the Calculation Agent to provide such rate or rates;
PROVIDED, HOWEVER, that if the banks or trust companies so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate
determined as of such Prime Rate Interest Determination Date will be the Prime
Rate in effect on such Prime Rate Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF"
on the Reuter Monitor Money Rates Service (or such other page as may replace the
NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
TREASURY RATE. If an Interest Rate Basis for this Note is specified on
the face hereof as the Treasury Rate, the Treasury Rate shall be determined as
of the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity, as such rate is published
in H.15(519) under the heading "Treasury bills-auction average (investment)" or,
if not published by 3:00 P.M., New York City time, on the related Calculation
Date, the auction average rate of such Treasury Bills (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the Auction of Treasury Bills having
the Index Maturity are not reported as provided above by 3:00 P.M., New York
City time, on such Calculation Date, or if no such Auction is held, then the
Treasury Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Treasury Rate Interest Determination Date, of three leading primary
United States government securities dealers selected by the Calculation Agent,
for the issue of Treasury Bills with a remaining maturity closest to the Index
Maturity; PROVIDED, HOWEVER, that if the dealers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate
determined as of such Treasury Rate Interest Determination Date will be the
Treasury Rate in effect on such Treasury Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.
20
<PAGE> 21
The Calculation Agent shall calculate the interest rate hereon on or
before each Calculation Date. The "Calculation Date", if applicable, pertaining
to any Interest Determination Date shall be the earlier of (i) the tenth
calendar day after such Interest Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity Date,
as the case may be. At the request of the Holder hereof, the Calculation Agent
will provide to the Holder hereof the interest rate hereon then in effect and,
if determined, the interest rate that will become effective as a result of a
determination made for the next succeeding Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying
the principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified as the Day Count
Convention on the face hereof, the interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis
or by the actual number of days in the year if the CMT Rate or the Treasury Rate
is an applicable Interest Rate Basis. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for this Note, if the
interest rate is calculated with reference to two or more Interest Rate Bases,
shall be calculated in each period in the same manner as if only the Applicable
Interest Rate Basis specified on the face hereof applied.
All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards, and all amounts used in or
resulting from such calculation on this Note shall be rounded, in the case of
United States dollars, to the nearest cent or, in the case of a Specified
Currency other than United States dollars, to the nearest unit (with one-half
cent or unit being rounded upwards).
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
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
21
<PAGE> 22
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the holders of the Debt Securities
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 Debt
Securities 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 Debt Securities of any series, on
behalf of the holders of all such Debt 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 Debt Securities of any series, in certain
instances, to waive, on behalf of all of the holders of Debt 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 principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, 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 hereof
and any premium or interest hereon 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.
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.
22
<PAGE> 23
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
holder in whose name this Note is registered as the owner thereof 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 this Note 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.
23
<PAGE> 24
-------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
Additional abbreviations may also be used though not in the above list.
----------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
| |
|------------------------------|----------------------------------------------
_____________________________________________________(Please print or typewrite
name and address including postal zip code of assignee)
_________________________________________________________________________this
Note and all rights thereunder hereby irrevocably constituting and appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ _______________________________________
---------------------------------------
Notice: The signature(s) on this
assignment must correspond with the
name(s) as written upon the face of
this Note in every particular, without
alteration or enlargement or any
change whatsoever.
24
<PAGE> 25
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at _____________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office, currently located at __________________________________________,
not more than 60 nor less than 30 calendar days prior to the Repayment Date,
this Note with this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the
Specified Currency is other than United States dollars, the minimum Authorized
Denomination specified on the face hereof)) which the holder elects to have
repaid and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Notes to be issued to the holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $________ _____________________________
Notice: The signature(s) on
Date:_____________________ this Option to Elect Repayment
must correspond with the
name(s) as written upon the
face of this Note in every
particular, without alteration
or enlargement or any change
whatsoever.
25
<PAGE> 1
Exhibit 4(h)
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.(1)
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(2)
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FXR- _____ __________________ ______________________
DEVELOPERS DIVERSIFIED REALTY CORPORATION
MEDIUM-TERM NOTE
(Form of Fixed Rate Subordinated Security)
<TABLE>
<CAPTION>
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY DATE:
<S> <C> <C>
INTEREST PAYMENT DATE(S) DEFAULT RATE: %
[ ] _______ and ______
[ ] Other:
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: % PERCENTAGE
REDUCTION: %
OPTIONAL REPAYMENT [ ] CHECK IF AN ORIGINAL
DATE(S): ISSUE DISCOUNT NOTE
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION: EXCHANGE RATE
[ ] United States dollars [ ] $1,000 and integral AGENT:
[ ] Other: multiples thereof
[ ] Other:
ADDENDUM ATTACHED OTHER/ADDITIONAL PROVISIONS:
[ ] Yes
[ ] No
- ------------
1 This paragraph applies to global Notes only.
2 This paragraph applies to global Notes only.
</TABLE>
<PAGE> 2
DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the
"Company", which terms include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of , on the
Stated Maturity Date specified above (or any Redemption Date or Repayment Date,
each as defined on the reverse hereof) (each such Stated Maturity Date,
Redemption Date or Repayment Date being hereinafter referred to as the "Maturity
Date" with respect to the principal repayable on such date) and to pay interest
thereon, at Interest Rate per annum specified above, until the principal hereof
is paid or duly made available for payment, and (to the extent that the payment
of such interest shall be legally enforceable) at the Default Rate per annum
specified above on any overdue principal, premium and/or interest. The Company
will pay interest in arrears on each Interest Payment Date, if any, specified
above (each, an "Interest Payment Date"), commencing with the first Interest
Payment Date next succeeding the Original Issue Date specified above, and on the
Maturity Date; PROVIDED, HOWEVER, that if the Original Issue Date occurs between
a Record Date (as defined below) and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date next
succeeding the Original Issue Date to the holder of this Note on the Record Date
with respect to such second Interest Payment Date. Interest on this Note will be
computed on the basis of a 360-day year of twelve 30-day months.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions".
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for with respect to this Note) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each,
an "Interest Period"). The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the fifteenth
calendar day (whether or not a Business Day, as defined below) immediately
preceding such Interest Payment Date (the "Record Date"); PROVIDED, HOWEVER,
that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof and premium, if any, hereon shall be payable. Any such
interest not so punctually paid or duly provided for ("Defaulted Interest") will
forthwith cease to be payable to the holder on any Record Date, and shall be
paid to the person in whose name this Note is registered at the close of
business on a special record date (the "Special Record Date") for the payment of
such Defaulted Interest to be fixed by the Trustee hereinafter referred to,
notice whereof
2
<PAGE> 3
shall be given to the holder of this Note by the Trustee not less than 10
calendar 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 this note may be listed, and upon such notice as
may be required by such exchange, all as more fully provided for in the
Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, a duly completed election form as contemplated on the
reverse hereof) at the corporate trust office of the Trustee maintained for that
purpose in The Borough of Manhattan, The City of New York, currently located at
450 West 33rd Street, New York, New York 10001, or at such other paying agency
in the Borough of Manhattan, The City of New York, as the Company may determine;
PROVIDED, HOWEVER, that if such payment is to be made in a Specified Currency
other than United States dollars as set forth below, such payment will be made
by wire transfer of immediately available funds to an account with a bank
designated by the holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note (and, if applicable, a duly completed election form) is presented and
surrendered at the aforementioned office of the Trustee in time for the Trustee
to make such payment in such funds in accordance with its normal procedures.
Payment of interest due on any Interest Payment Date other than the Maturity
Date will be made by check mailed to the address of the person entitled thereto
as such address shall appear in the Security Register maintained at the
aforementioned office of the Trustee; PROVIDED, HOWEVER, that a holder of
U.S.$10,000,000 (or, if the Specified Currency specified above is other than
United States dollars, the equivalent thereof in the Specified Currency) or more
in aggregate principal amount of Notes (whether having identical or different
terms and provisions) will be entitled to receive interest payments on such
Interest Payment Date by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 calendar days prior to such Interest Payment Date. Any
such wire transfer instructions received by the Trustee shall remain in effect
until revoked by such holder.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be, to the date of
such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on
3
<PAGE> 4
which banking institutions are authorized or required by law, regulation or
executive order to close in The City of New York; PROVIDED, HOWEVER, that if the
Specified Currency is other than United States dollars and any payment is to be
made in the Specified Currency in accordance with the provisions hereof, such
day is also not a day on which banking institutions are authorized or required
by law, regulation or executive order to close in the Principal Financial Center
(as defined below) of the country issuing the Specified Currency (or, in the
case of European Currency Units ("ECU"), is not a day that appears as an ECU
non- settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or is not a day so designated by the ECU Banking
Association) or, if ECU non-settlement days do not appear on that page (and are
not so designated), is not a day on which payments in ECU cannot be settled in
the international interbank market). "Principal Financial Center" (i) means the
capital city of the country issuing the Specified Currency (except as described
in the immediately preceding paragraph with respect to ECU) or (ii) the capital
city of the country in which the Index currency relates (or in the case of ECU,
Luxembourg), as applicable, except in the case of (i) or (ii) above, that with
respect to United States dollars, Canadian dollars, Australian dollars, Deutsche
marks, Dutch guilders, Italian lire, Swiss francs and ECU, the "Principal
Financial Center" shall be The City of New York, Sydney, Toronto, Frankfurt,
Amsterdam, Milan (solely in the case of the specified currency) and Zurich,
respectively.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is other
than United States dollars, any such amounts so payable by the Company will be
converted by the Exchange Rate Agent specified above into United States dollars
for payment to the holder of this Note; PROVIDED, HOWEVER, that the holder of
this Note may elect to receive such amounts in the Specified Currency pursuant
to the provisions set forth below.
If the Specified Currency is other than United States dollars and the
holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, any United States dollar
amount to be received by the holder of this Note will be based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on
4
<PAGE> 5
such payment date in the aggregate amount of the Specified Currency payable to
all holders of Notes scheduled to receive United States dollar payments and at
which the applicable dealer commits to execute a contract. All currency exchange
costs will be borne by the holder of this Note by deductions from such payments.
If three such bid quotations are not available, payments on this Note will be
made in the Specified Currency.
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this Note
in the Specified Currency by submitting a written request for such payment to
the Trustee at its corporate trust office in The City of New York on or prior to
the applicable Record Date or at least 15 calendar days prior to the Maturity
Date, as the case may be. Such written request may be mailed or hand delivered
or sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any such revocation must be received by the Trustee on or
prior to the applicable Record Date or at least 15 calendar days prior to the
Maturity Date, as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York. Any payment made
under such circumstances in United States dollars will not constitute an Event
of Default (as defined in the Indenture).
If the Specified Currency is a composite currency and the holder of
this Note shall have duly made an election to receive all or a specified portion
of any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the
5
<PAGE> 6
imposition of exchange controls or other circumstances beyond the control of the
Company, then the Company will be entitled to satisfy its obligations to the
holder of this Note by making such payment in United States dollars. The amount
of each payment in United States dollars shall be computed by the Exchange Rate
Agent on the basis of the equivalent of the composite currency in United States
dollars. The component currencies of the composite currency for this purpose
(collectively, the "Component Currencies" and each, a "Component Currency")
shall be the currency amounts that were components of the composite currency as
of the last day on which the composite currency was used. The equivalent of the
composite currency in United States dollars shall be calculated by aggregating
the United States dollar equivalents of the Component Currencies. The United
States dollar equivalent of each of the Component Currencies shall be determined
by the Exchange Rate Agent on the basis of the most recently available Market
Exchange Rate for each such Component Currency, or as otherwise specified on the
face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth on
the face hereof.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
6
<PAGE> 7
IN WITNESS WHEREOF, Developers Diversified Realty Corporation has
caused this Note to be executed.
DEVELOPERS DIVERSIFIED REALTY CORPORATION
By
--------------------------------------
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By
---------------------------------
Authorized Signatory
7
<PAGE> 8
[REVERSE OF NOTE]
DEVELOPERS DIVERSIFIED REALTY CORPORATION
MEDIUM-TERM NOTE
(Form of Fixed Rate Subordinated Security)
This Note is one of a duly authorized series of Subordinated Debt
Securities (the "Debt Securities") of the Company issued and to be issued under
an Indenture, dated as of May 1, 1994, as amended, modified or supplemented from
time to time (the "Indenture"), between the Company and THE CHASE MANHATTAN
BANK, as Trustee (the "Trustee", which term includes any successor trustee under
the Indenture), to which the Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
holders of the Debt Securities, and of the terms upon which the Debt Securities
are, and are to be, authenticated and delivered. This Note is one of the series
of Debt Securities designated as "Medium-Term Notes Due Nine Months or More from
Date of Issue" (the "Notes"). All terms used but not defined in this Note
specified on the face hereof or in an Addendum hereto shall have the meanings
assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on and after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the Redemption Price (as defined below), together with unpaid interest accrued
thereon to the date fixed for redemption (each, a "Redemption Date"), on notice
given no more than 60 nor less than 30 calendar days prior to the Redemption
Date and in accordance with the provisions of the Indenture. The "Redemption
Price" shall initially be the Initial Redemption Percentage specified on the
face hereof multiplied by the unpaid principal amount of this Note to be
redeemed. The Initial Redemption Percentage, if any, shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
100% of unpaid principal amount to be redeemed. In the event of redemption of
this Note in
8
<PAGE> 9
part only, a new Note of like tenor for the unredeemed portion hereof and
otherwise having the same terms as this Note shall be issued in the name of the
holder hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of
the holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If this Note is an Original Issue Discount Note as specified on the
face hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity will be equal to the sum of
(i) the Issue Price specified on the face hereof (increased by any accruals of
the Discount, as defined below) and, in the event redemption of this Note (if
applicable), multiplied by the Initial Redemption Percentage (as adjusted by the
Annual Redemption Percentage Reduction, if applicable) and (ii) any unpaid
interest accrued thereon, from the Original Issue Date to the date of
redemption, repayment or acceleration of maturity. The difference between the
Issue Price and 100% of the principal amount of this Note is referred to herein
as the "Discount", and the Discount will be ratably accrued over the term of
this Note for purposes of determining the amount payable upon redemption,
repayment or acceleration of maturity of this Note.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
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
9
<PAGE> 10
the Debt Securities 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 Debt Securities 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 Debt Securities of any series,
on behalf of the holders of all such Debt 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 Debt Securities of any series, in certain
instances, to waive, on behalf of all of the holders of Debt 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 heretofore
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Note.
The Debt Securities evidenced by this Note are, to the extent and in
the manner set forth in the Indenture, expressly subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness. Each
Holder of this Note, by accepting the same, agrees to and shall be bound by such
provisions of the Indenture and authorizes and directs the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate such
subordination as provided in the Indenture and appoints the Trustee its
attorney-in-fact for any and all such purposes.
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 principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, 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 hereof
and any premium or interest hereon 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
10
<PAGE> 11
different authorized denominations but otherwise having the same terms and
conditions, as requested by the holder hereof surrendering the same.
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
holder in whose name this Note is registered as the owner thereof 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 this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
11
<PAGE> 12
-------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
Additional abbreviations may also be used though not in the above list.
----------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------
| |
|------------------------------|----------------------------------------------
_________________________________________________(Please print or typewrite name
and address including postal zip code of assignee)
_____________________________________________________________________this Note
and all rights thereunder hereby irrevocably constituting and appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ _______________________________________
-------------------------
Notice: The signature(s) on this
assignment must correspond with the
name(s) as written upon the face of
this Note in every particular, without
alteration or enlargement or any
change whatsoever.
12
<PAGE> 13
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at _____________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office, not more than 60 nor less than 30 calendar days prior to the
Repayment Date, this Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the
Specified Currency is other than United States dollars, the minimum Authorized
Denomination specified on the face hereof)) which the holder elects to have
repaid and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Notes to be issued to the holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $_______ __________
Notice: The signature(s) on this
Date: _____________ Option to Elect Repayment must
correspond with the name(s) as
written upon the face of this
Note in every particular, without
alteration or enlargement or any
change whatsoever.
13
<PAGE> 1
Exhibit 4(i)
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.1
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.2
REGISTERED CUSIP No.: PRINCIPAL AMOUNT:
No. FLR-____ _________________ __________________________
DEVELOPERS DIVERSIFIED REALTY CORPORATION
MEDIUM-TERM NOTE
(Form of Floating Rate Subordinated Security)
<TABLE>
<CAPTION>
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
<S> <C> <C>
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate Page:
[ ] LIBOR Telerate Designated CMT Maturity Index:
INDEX CURRENCY:
INDEX MATURITY: INITIAL INTEREST RATE: % INITIAL INTEREST RESET
DATE:
SPREAD (PLUS OR MINIMUM INTEREST RATE: % INTEREST PAYMENT DATE(S):
MINUS):
SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: % INTEREST RESET DATE(S):
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
- ---------------------
1 This paragraph applies to global Notes only.
2 This paragraph applies to global Notes only.
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
DATE: PERCENTAGE: % PERCENTAGE REDUCTION:
%
<S> <C> <C>
OPTIONAL REPAYMENT CALCULATION AGENT:
DATE(S):
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to .
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: % from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: % from to .
[ ] Original Issue Discount Note Applicable Interest Rate Basis:
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION:
[ ] United States dollars [ ] $1,000 and integral multiples
thereof
[ ] Other: [ ] Other:
EXCHANGE RATE AGENT:
DEFAULT RATE: %
ADDENDUM ATTACHED
[ ] Yes
[ ] No
OTHER/ADDITIONAL PROVISIONS:
</TABLE>
2
<PAGE> 3
DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the
"Company", which terms include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of , on the
Stated Maturity Date specified above (or any Redemption Date or Repayment Date,
each as defined on the reverse hereof) (each such Stated Maturity Date,
Redemption Date or Repayment Date being hereinafter referred to as the "Maturity
Date" with respect to the principal repayable on such date) and to pay interest
thereon, at a rate per annum equal to the Initial Interest Rate specified above
until the Initial Interest Reset Date specified above and thereafter at a rate
determined in accordance with the provisions specified above and on the reverse
hereof with respect to one or more Interest Rate Bases specified above until the
principal hereof is paid or duly made available for payment, and (to the extent
that the payment of such interest shall be legally enforceable) at the Default
Rate per annum specified above on any overdue principal, premium and/or
interest. The Company will pay interest in arrears on each Interest Payment
Date, if any, specified above (each, an "Interest Payment Date"), commencing
with the first Interest Payment Date next succeeding the Original Issue Date
specified above, and on the Maturity Date; PROVIDED, HOWEVER, that if the
Original Issue Date occurs between a Record Date (as defined below) and the next
succeeding Interest Payment Date, interest payments will commence on the second
Interest Payment Date next succeeding the Original Issue Date to the holder of
this Note on the Record Date with respect to such second Interest Payment Date.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for with respect to this Note) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each,
an "Interest Period"). The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the fifteenth
calendar day (whether or not a Business Day, as defined on the reverse hereof)
immediately preceding such Interest Payment Date (the "Record Date"); PROVIDED,
HOWEVER, that interest payable on the Maturity Date will be payable to the
person to whom the principal hereof and premium, if any, hereon shall be
payable. Any such interest not so punctually paid or duly provided for
("Defaulted Interest") will forthwith cease to be payable to the holder on any
Record Date, and shall be paid to the person in whose name this Note is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee hereinafter referred to, notice whereof shall be given to the
3
<PAGE> 4
holder of this Note by the Trustee not less than 10 calendar 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 this note
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this Note (and, with respect to any applicable
repayment of this Note, a duly completed election form as contemplated on the
reverse hereof) at the corporate trust office of the Trustee maintained for that
purpose in The Borough of Manhattan, The City of New York, currently located at
450 West 33rd Street, New York, New York 10001, or at such other paying agency
in The Borough of Manhattan, The City of New York, as the Company may determine;
PROVIDED, HOWEVER, that if such payment is to be made in a Specified Currency
other than United States dollars as set forth below, such payment will be made
by wire transfer of immediately available funds to an account with a bank
designated by the holder hereof at least 15 calendar days prior to the Maturity
Date, provided that such bank has appropriate facilities therefor and that this
Note (and, if applicable, a duly completed election form) is presented and
surrendered at the aforementioned office of the Trustee in time for the Trustee
to make such payment in such funds in accordance with its normal procedures.
Payment of interest due on any Interest Payment Date other than the Maturity
Date will be made by check mailed to the address of the person entitled thereto
as such address shall appear in the Security Register maintained at the
aforementioned office of the Trustee; PROVIDED, HOWEVER, that a holder of
U.S.$10,000,000 (or, if the Specified Currency specified above is other than
United States dollars, the equivalent thereof in the Specified Currency) or more
in aggregate principal amount of Notes (whether having identical or different
terms and provisions) will be entitled to receive interest payments on such
Interest Payment Date by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 calendar days prior to such Interest Payment Date. Any
such wire transfer instructions received by the Trustee shall remain in effect
until revoked by such holder.
If any Interest Payment Date other than the Maturity Date would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and interest
shall be made on the next succeeding Business Day with the same force and effect
as if made on the date such payment was due, and no interest shall accrue
4
<PAGE> 5
with respect to such payment for the period from and after the Maturity Date to
the date of such payment on the next succeeding Business Day.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in the Specified Currency (or, if the
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued the Specified Currency as at the time of such payment is
legal tender for the payment of such debts). If the Specified Currency is other
than United States dollars, any such amounts so payable by the Company will be
converted by the Exchange Rate Agent specified above into United States dollars
for payment to the holder of this Note; PROVIDED, HOWEVER, that the holder of
this Note may elect to receive such amounts in the Specified Currency pursuant
to the provisions set forth below.
If the Specified Currency is other than United States dollars and the
holder of this Note shall not have duly made an election to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest
in respect of this Note in the Specified Currency, any United States dollar
amount to be received by the holder of this Note will be based on the highest
bid quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 A.M., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange
Rate Agent and approved by the Company for the purchase by the quoting dealer of
the Specified Currency for United States dollars for settlement on such payment
date in the aggregate amount of the Specified Currency payable to all holders of
Notes scheduled to receive United States dollar payments and at which the
applicable dealer commits to execute a contract. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments. If
three such bid quotations are not available, payments on this Note will be made
in the Specified Currency.
If the Specified Currency is other than United States dollars, the
holder of this Note may elect to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest in respect of this Note
in the Specified Currency by submitting a written request for such payment to
the Trustee at its corporate trust office in The City of New York on or prior to
the applicable Record Date or at least 15 calendar days prior to the Maturity
Date, as the case may be. Such written request may be mailed or hand delivered
or sent by cable, telex or other form of facsimile transmission. The holder of
this Note may elect to receive all or a specified portion of all future payments
in the Specified Currency in respect of such principal, premium, if any, and/or
interest and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice to the Trustee, but
written
5
<PAGE> 6
notice of any such revocation must be received by the Trustee on or prior to the
applicable Record Date or at least 15 calendar days prior to the Maturity Date,
as the case may be.
If the Specified Currency is other than United States dollars or a
composite currency and the holder of this Note shall have duly made an election
to receive all or a specified portion of any payment of principal, premium, if
any, and/or interest in respect of this Note in the Specified Currency and if
the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to the holder of this Note by making
such payment in United States dollars on the basis of the Market Exchange Rate
(as defined below) on the second Business Day prior to such payment date or, if
such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified on the face
hereof. The "Market Exchange Rate" for the Specified Currency means the noon
dollar buying rate in The City of New York for cable transfers for the Specified
Currency as certified for customs purposes by (or if not so certified, as
otherwise determined by) the Federal Reserve Bank of New York. Any payment made
under such circumstances in United States dollars will not constitute an Event
of Default (as defined in the Indenture).
If the Specified Currency is a composite currency and the holder of
this Note shall have duly made an election to receive all or a specified portion
of any payment of principal, premium, if any, and/or interest in respect of this
Note in the Specified Currency and if such composite currency is unavailable due
to the imposition of exchange controls or other circumstances beyond the control
of the Company, then the Company will be entitled to satisfy its obligations to
the holder of this Note by making such payment in United States dollars. The
amount of each payment in United States dollars shall be computed by the
Exchange Rate Agent on the basis of the equivalent of the composite currency in
United States dollars. The component currencies of the composite currency for
this purpose (collectively, the "Component Currencies" and each, a "Component
Currency") shall be the currency amounts that were components of the composite
currency as of the last day on which the composite currency was used. The
equivalent of the composite currency in United States dollars shall be
calculated by aggregating the United States dollar equivalents of the Component
Currencies. The United States dollar equivalent of each of the Component
Currencies shall be determined by the Exchange Rate Agent on the basis of the
most recently available Market Exchange Rate for each such Component Currency,
or as otherwise specified on the face hereof.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are
6
<PAGE> 7
consolidated into a single currency, the amounts of those currencies as
Component Currencies shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated Component Currencies
expressed in such single currency. If any Component Currency is divided into two
or more currencies, the amount of the original Component Currency shall be
replaced by the amounts of such two or more currencies, the sum of which shall
be equal to the amount of the original Component Currency.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and binding on the holder of this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth on
the face hereof.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions".
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
7
<PAGE> 8
IN WITNESS WHEREOF, Developers Diversified Realty Corporation has
caused this Note to be executed.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
By
----------------------------------
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By
-------------------------------
Authorized Signatory
8
<PAGE> 9
[REVERSE OF NOTE]
DEVELOPERS DIVERSIFIED REALTY CORPORATION
MEDIUM-TERM NOTE
(Form of Fixed Rate Subordinated Security)
This Note is one of a duly authorized series of Subordinated Debt
Securities (the "Debt Securities") of the Company issued and to be issued under
an Indenture, dated as of May 1, 1994, as amended, modified or supplemented from
time to time (the "Indenture"), between the Company and THE CHASE MANHATTAN
BANK, as Trustee (the "Trustee", which term includes any successor trustee under
the Indenture), to which the Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
holders of the Debt Securities, and of the terms upon which the Debt Securities
are, and are to be, authenticated and delivered. This Note is one of the series
of Debt Securities designated as "Medium-Term Notes Due Nine Months or More From
Date of Issue" (the "Notes"). All terms used but not defined in this Note
specified on the face hereof or in an Addendum hereto shall have the meanings
assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S.$1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on and after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S.$1,000 or the
minimum Authorized Denomination (provided that any remaining principal amount
hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at
the Redemption Price (as defined below), together with unpaid interest accrued
thereon to the date fixed for redemption (each, a "Redemption Date"), on notice
given no more than 60 nor less than 30 calendar days prior to the Redemption
Date and in accordance with the provisions of the Indenture. The "Redemption
Price" shall initially be the Initial Redemption Percentage specified on the
face hereof multiplied by the unpaid principal amount of this Note to be
redeemed. The Initial Redemption Percentage, if any, shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
100% of unpaid principal amount to be redeemed. In the event of redemption of
this Note
9
<PAGE> 10
in part only, a new Note of like tenor for the unredeemed portion hereof and
otherwise having the same terms as this Note shall be issued in the name of the
holder hereof upon the presentation and surrender hereof.
This Note will be subject to repayment by the Company at the option of
the holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S.$1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form hereon entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If the Interest Category of this Note is specified on the face hereof
as an Original Issue Discount Note, the amount payable to the holder of this
Note in the event of redemption, repayment or acceleration of maturity of this
Note will be equal to the sum of (1) the Issue Price specified on the face
hereof (increased by any accruals of Discount, as defined below) and, in the
event of any redemption of this Note (if applicable), multiplied by the Initial
Redemption Percentage specified in the applicable Pricing Supplement (as
adjusted by the Annual Redemption Percentage Reduction, if applicable) and (2)
any accrued and unpaid interest on this Note from the Original Issue Date to the
Redemption Date, Repayment Date or date of acceleration of maturity, as the case
may be. As used herein, the "Discount" shall mean the difference between the
Issue Price of an Original Issue Discount Note and par.
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued using a constant yield method. The
constant yield will be calculated using a 30-day month, 360-day year convention,
a compounding period that, except for the Initial Period (as defined below),
corresponds to the shortest period between Interest Payment Dates (with ratable
accruals within a compounding period), a coupon rate equal to the initial
interest rate applicable to this Note and an assumption that the maturity of
this Note will not be accelerated. If the period from the Original Issue Date to
the initial Interest Payment Date (the "Initial Period") is shorter than the
compounding period for this
10
<PAGE> 11
Note, a proportionate amount of the yield for an entire compounding period will
be accrued. If the Initial Period is longer than the compounding period, then
such period will be divided into a regular compounding period and a short
period, with the short period being treated as provided in the preceding
sentence.
The interest rate borne by this Note will be determined as follows:
(i) Unless the Interest Category of this Note is specified on
the face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse
Floating Rate Note", this Note shall be designated as a "Regular
Floating Rate Note" and, except as set forth below or on the face
hereof, shall bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread,
if any, and/or (b) multiplied by the Spread Multiplier, if any, in each
case as specified on the face hereof. Commencing on the Initial
Interest Reset Date, the rate at which interest on this Note shall be
payable shall be reset as of each Interest Reset Date specified on the
face hereof; PROVIDED, HOWEVER, that the interest rate in effect for
the period, if any, from the Original Issue Date to the Initial
Interest Reset Date shall be the Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note", then, except as set
forth below or on the face hereof, this Note shall bear interest at the
rate determined by reference to the applicable Interest Rate Basis or
Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by
the Spread Multiplier, if any. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note shall be payable shall be
reset as of each Interest Reset Date; PROVIDED, HOWEVER, that (y) the
interest rate in effect for the period, if any, from the Original Issue
Date to the Initial Interest Reset Date shall be the Initial Interest
Rate and (z) the interest rate in effect for the period commencing on
the Fixed Rate Commencement Date specified on the face hereof to the
Maturity Date shall be the Fixed Interest Rate specified on the face
hereof or, if no such Fixed Interest Rate is specified, the interest
rate in effect hereon on the day immediately preceding the Fixed Rate
Commencement Date.
(iii) If the Interest Category of this Note is specified on
the face hereof as an "Inverse Floating Rate Note", then, except as set
forth below or on the face hereof, this Note shall bear interest at the
Fixed Interest Rate minus the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread,
if any, and/or (b) multiplied by the Spread Multiplier, if any;
PROVIDED, HOWEVER, that, unless
11
<PAGE> 12
otherwise specified on the face hereof, the interest rate hereon shall
not be less than zero. Commencing on the Initial Interest Reset Date,
the rate at which interest on this Note shall be payable shall be reset
as of each Interest Reset Date; PROVIDED, HOWEVER, that the interest
rate in effect for the period, if any, from the Original Issue Date to
the Initial Interest Reset Date shall be the Initial Interest Rate.
Unless otherwise specified on the face hereof, the rate with respect to
each Interest Rate Basis will be determined in accordance with the applicable
provisions below. Except as set forth above or on the face hereof, the interest
rate in effect on each day shall be (i) if such day is an Interest Reset Date,
the interest rate determined as of the Interest Determination Date (as
hereinafter defined) immediately preceding such Interest Reset Date or (ii) if
such day is not an Interest Reset Date, the interest rate determined as of the
Interest Determination Date immediately preceding the most recent Interest Reset
Date. If any Interest Reset Date would otherwise be a day that is not a Business
Day, such Interest Reset Date shall be postponed to the next succeeding Business
Day, except that if LIBOR is an applicable Interest Rate Basis and such Business
Day falls in the next succeeding calendar month, such Interest Reset Date shall
be the immediately preceding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law, regulation or executive order to close in The
City of New York; PROVIDED, HOWEVER, that if the Specified Currency is other
than United States dollars and any payment is to be made in the Specified
Currency in accordance with the provisions hereof, such day is also not a day on
which banking institutions are authorized or required by law, regulation or
executive order to close in the Principal Financial Center (as defined below) of
the country issuing the Specified Currency (or, in the case of European Currency
Units ("ECU"), is not a day that appears as an ECU non-settlement day on the
display designated as "ISDE" on the Reuter Monitor Money Rates Service (or is
not a day so designated by the ECU Banking Association) or, if ECU
non-settlement days do not appear on that page (and are not so designated), is
not a day on which payments in ECU cannot be settled in the international
interbank market); PROVIDED, FURTHER, that if LIBOR is an applicable Interest
Rate Basis, such day is also a London Business Day (as defined below). "London
Business Day" means any day on which dealings in the Index Currency (as
hereinafter defined) are transacted in the London interbank market. "Principal
Financial Center" (i) means the capital city of the country issuing the
Specified Currency (except as described in the immediately preceding paragraph
with respect to ECU) or (ii) the capital city of the country in which the Index
currency relates (or in the case of ECU, Luxembourg), as applicable, except in
the case of (i) or (ii) above, that with respect to
12
<PAGE> 13
United States dollars, Canadian dollars, Australian dollars, Deutsche marks,
Dutch guilders, Italian lire, Swiss francs and ECU, the "Principal Financial
Center" shall be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam,
Milan (solely in the case of the specified currency) and Zurich, respectively.
The "Interest Determination Date" with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will
be the second Business Day immediately preceding the applicable Interest Reset
Date; the "Interest Determination Date" with respect to the Eleventh District
Cost of Funds Rate shall be the last working day of the month immediately
preceding the applicable Interest Reset Date on which the Federal Home Loan Bank
of San Francisco (the "FHLB of San Francisco") publishes the Index (as defined
below); and the "Interest Determination Date" with respect to LIBOR shall be the
second London Business Day immediately preceding the applicable Interest Reset
Date, unless the Index Currency is British pounds sterling, in which case the
"Interest Determination Date" will be the applicable Interest Reset Date. The
"Interest Determination Date" with respect to the Treasury Rate shall be the day
in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
PROVIDED, HOWEVER, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday; and PROVIDED, FURTHER, that if an auction shall
fall on any Interest Reset Date then the Interest Reset Date shall instead be
the first Business Day following such auction. If the interest rate of this Note
is determined with reference to two or more Interest Rate Bases specified on the
face hereof, the "Interest Determination Date" pertaining to this Note shall be
the most recent Business Day which is at least two Business Days prior to the
applicable Interest Reset Date on which each Interest Rate Basis is
determinable. Each Interest Rate Basis shall be determined as of such date, and
the applicable interest rate shall take effect on the related Interest Reset
Date.
CD RATE. If an Interest Rate Basis for this Note is specified on the
face hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication ("H.15(519)") under the
heading "CDs (Secondary Market)", or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date (as defined below), the rate on such
CD Rate Interest Determination Date for
13
<PAGE> 14
negotiable United States dollar certificates of deposit of the Index Maturity as
published by the Federal Reserve Bank of New York in its daily statistical
release "Composite 3:30 P.M. Quotations for United States Government Securities"
or any successor publication ("Composite Quotations") under the heading
"Certificates of Deposit". If such rate is not yet published in either H.15(519)
or Composite Quotations by 3:00 P.M., New York City time, on the related
Calculation Date, then the CD Rate on such CD Rate Interest Determination Date
will be calculated by the Calculation Agent specified on the face hereof and
will be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Rate Interest Determination Date, of three
leading nonbank dealers in negotiable United States dollar certificates of
deposit in The City of New York selected by the Calculation Agent for negotiable
certificates of deposit of major United States money market banks for negotiable
United States dollar certificates of deposit with a remaining maturity closest
to the Index Maturity in an amount that is representative for a single
transaction in that market at that time; PROVIDED, HOWEVER, that if the dealers
so selected by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate determined as of such CD Rate Interest Determination Date
will be the CD Rate in effect on such CD Rate Interest Determination Date.
CMT RATE. If an Interest Rate Basis for this Note is specified on the
face hereof as the CMT rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on the Designated CMT Telerate Page (as defined
below) under the caption "...Treasury Constant Maturities...Federal Reserve
Board Release H.15...Mondays Approximately 3:45 P.M.", under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which the related CMT Rate
Interest Determination Date occurs. If such rate is no longer displayed on the
relevant page or is not displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published or is not published by 3:00 P.M., New York City
time, on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant
14
<PAGE> 15
H.15(519). If such information is not provided by 3:00 P.M., New York City time,
on the related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date reported, according to their written records,
by three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least U.S.$100 million. If three or four (and not
five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers selected by the Calculation
Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT
Rate Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the Treasury
Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page specified on the face hereof (or any other page as
may replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)) for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
15
<PAGE> 16
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the Designated
CMT Maturity Index shall be 2 years.
COMMERCIAL PAPER RATE. If an Interest Rate Basis for this Note is
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as the Money Market Yield
(as defined below) on such date of the rate for commercial paper having the
Index Maturity as published in H.15(519) under the heading "Commercial
Paper--Nonfinancial". In the event that such rate is not published by 3:00 P.M.,
New York City time, on such Calculation Date, then the Commercial Paper Rate on
such Commercial Paper Rate Interest Determination Date will be the Money Market
Yield of the rate for commercial paper having the Index Maturity as published in
Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an Index
Maturity of 30 days or 90 days, respectively). If such rate is not yet published
in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
such Calculation Date, then the Commercial Paper Rate on such Commercial Paper
Rate Interest Determination Date will be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in The
City of New York selected by the Calculation Agent for commercial paper having
the Index Maturity placed for a non-financial issuer whose bond rating is "Aa",
or the equivalent from a nationally recognized statistical rating organization;
PROVIDED, HOWEVER, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate determined
as of such Commercial Paper Rate Interest Determination Date will be the
Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.
"Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield = --------------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the applicable Interest Reset Period.
16
<PAGE> 17
ELEVENTH DISTRICT COST OF FUNDS RATE. If an Interest Rate Basis for
this Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 as of 11:00
A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
FEDERAL FUNDS RATE. If an Interest Rate Basis for this Note is
specified on the face hereof as the Federal Funds Rate, the Federal Funds Rate
shall be determined as of the applicable Interest Determination Date (a "Federal
Funds Rate Interest Determination Date") as the rate on such date for United
States dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)" or, if not published by 3:00 P.M., New York City time, on the
Calculation Date, the rate on such Federal Funds Rate Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate". If such rate is not published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on the related
Calculation Date, then the Federal Funds Rate on such Federal Funds Interest
Determination Date shall be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight United States
dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York selected by the Calculation Agent, prior to
9:00 A.M., New York City time, on such Federal Funds Rate Interest Determination
Date; PROVIDED, HOWEVER, that if the brokers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate
17
<PAGE> 18
determined as of such Federal Funds Rate Interest Determination Date will be the
Federal Funds Rate in effect on such Federal Funds Rate Interest Determination
Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:
(i) if (a) "LIBOR Reuters" is specified on the face hereof, the
arithmetic mean of the offered rates (unless the Designated LIBOR Page (as
defined below) by its terms provides only for a single rate, in which case such
single rate will be used) for deposits in the Index Currency having the Index
Maturity, commencing on the applicable Interest Reset Date, that appear (or, if
only a single rate is required as aforesaid, appears) on the Designated LIBOR
Page (as defined below) as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date, or (b) "LIBOR Telerate" is specified on the face hereof, or
if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof
as the method for calculating LIBOR, the rate for deposits in the Index Currency
having the Index Maturity, commencing on such Interest Reset Date, that appears
on the Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR
Interest Determination Date. If fewer than two such offered rates appear, or if
no such rate appears, as applicable, LIBOR on such LIBOR Interest Determination
Date shall be determined in accordance with the provisions described in clause
(ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
Designated LIBOR Page as specified in clause (i) above, the Calculation Agent
shall request the principal London offices of each of four major reference banks
in the London interbank market, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotation for deposits in the Index
Currency for the period of the Index Maturity, commencing on the applicable
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in
such Index Currency in such market at such time. If at least two such quotations
are so provided, then LIBOR on such LIBOR Interest Determination Date will be
the arithmetic mean of such quotations. If fewer than two such quotations are so
provided, then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center, on such LIBOR Interest Determination Date
by three major banks in such Principal Financial Center selected by the
Calculation Agent for loans in the Index Currency to leading European banks,
having the Index Maturity and in a principal amount that is representative for a
single transaction
18
<PAGE> 19
in such Index Currency in such market at such time; PROVIDED, HOWEVER, that if
the banks so selected by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR determined as of such LIBOR Interest Determination Date
shall be LIBOR in effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency or composite currency specified on
the face hereof as to which LIBOR shall be calculated. If no such currency or
composite currency is specified on the face hereof, the Index Currency shall be
United States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified on
the face hereof, the display on the Reuter Monitor Money Rates Service (or any
successor service) for the purpose of displaying the London interbank rates of
major banks for the Index Currency, or (b) if "LIBOR Telerate" is specified on
the face hereof or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on
the face hereof as the method for calculating LIBOR, the display on the Dow
Jones Telerate Service (or any successor service) for the purpose of displaying
the London interbank rates of major banks for the Index Currency.
PRIME RATE. If an Interest Rate Basis for this Note is specified on the
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
heading "Bank Prime Loan". If such rate is not published prior to 3:00 P.M., New
York City time, on the related Calculation Date, then the Prime Rate shall be
the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen NYMF Page (as defined below) as such bank's
prime rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
NYMF Page for such Prime Rate Interest Determination Date, the Prime Rate shall
be the arithmetic mean of the prime rates quoted on the basis of the actual
number of days in the year divided by a 360-day year as of the close of business
on such Prime Rate Interest Determination Date by four major money center banks
in The City of New York selected by the Calculation Agent. If fewer than four
such quotations are so provided, the Prime Rate shall be the arithmetic mean of
four prime rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Rate
Interest Determination Date as furnished in The City of New York by the major
money center banks, if any, that have provided such quotations and by as many
substitute banks or trust companies as necessary to obtain such four prime rate
quotations, provided such substitute banks or trust companies are organized and
doing business under the laws of the United States, or any State thereof, each
having total equity capital of at least U.S.$500 million and being subject to
supervision or examination by Federal or State
19
<PAGE> 20
authority, selected by the Calculation Agent to provide such rate or rates;
PROVIDED, HOWEVER, that if the banks or trust companies so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate
determined as of such Prime Rate Interest Determination Date will be the Prime
Rate in effect on such Prime Rate Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF"
on the Reuter Monitor Money Rates Service (or such other page as may replace the
NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
TREASURY RATE. If an Interest Rate Basis for this Note is specified on
the face hereof as the Treasury Rate, the Treasury Rate shall be determined as
of the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity, as such rate is published
in H.15(519) under the heading "Treasury bills-auction average (investment)" or,
if not published by 3:00 P.M., New York City time, on the related Calculation
Date, the auction average rate of such Treasury Bills (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the Auction of Treasury Bills having
the Index Maturity are not reported as provided above by 3:00 P.M., New York
City time, on such Calculation Date, or if no such Auction is held, then the
Treasury Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Treasury Rate Interest Determination Date, of three leading primary
United States government securities dealers selected by the Calculation Agent,
for the issue of Treasury Bills with a remaining maturity closest to the Index
Maturity; PROVIDED, HOWEVER, that if the dealers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate
determined as of such Treasury Rate Interest Determination Date will be the
Treasury Rate in effect on such Treasury Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.
20
<PAGE> 21
The Calculation Agent shall calculate the interest rate hereon on or
before each Calculation Date. The "Calculation Date", if applicable, pertaining
to any Interest Determination Date shall be the earlier of (i) the tenth
calendar day after such Interest Determination Date or, if such day is not a
Business Day, the next succeeding Business Day or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity Date,
as the case may be. At the request of the Holder hereof, the Calculation Agent
will provide to the Holder hereof the interest rate hereon then in effect and,
if determined, the interest rate that will become effective as a result of a
determination made for the next succeeding Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying
the principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified as the Day Count
Convention on the face hereof, the interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis
or by the actual number of days in the year if the CMT Rate or the Treasury Rate
is an applicable Interest Rate Basis. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for this Note, if the
interest rate is calculated with reference to two or more Interest Rate Bases,
shall be calculated in each period in the same manner as if only the Applicable
Interest Rate Basis specified on the face hereof applied.
All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards, and all amounts used in or
resulting from such calculation on this Note shall be rounded, in the case of
United States dollars, to the nearest cent or, in the case of a Specified
Currency other than United States dollars, to the nearest unit (with one-half
cent or unit being rounded upwards).
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
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
21
<PAGE> 22
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the holders of the Debt Securities
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 Debt
Securities 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 Debt Securities of any series, on
behalf of the holders of all such Debt 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 Debt Securities of any series, in certain
instances, to waive, on behalf of all of the holders of Debt 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.
The Debt Securities evidenced by this Note are, to the extent and in
the manner set forth in the Indenture, expressly subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness. Each
Holder of this Note, by accepting the same, agrees to and shall be bound by such
provisions of the Indenture and authorizes and directs the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate such
subordination as provided in the Indenture and appoints the Trustee its
attorney-in-fact for any and all such purposes.
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 principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, 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 hereof
and any premium or interest hereon 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
22
<PAGE> 23
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.
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
holder in whose name this Note is registered as the owner thereof 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 this Note shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
23
<PAGE> 24
-------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian _____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
Additional abbreviations may also be used though not in the above list.
----------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
| |
|------------------------------|----------------------------------------------
____________________________________________________________(Please print or
typewrite name and address including postal zip code of assignee)
______________________________________________________________________ this Note
and all rights thereunder hereby irrevocably constituting and appointing
____________________________________________________________________ Attorney to
transfer this Note on the books of the Trustee, with full power of substitution
in the premises.
Dated:_____________________ _______________________________________
---------------------------------------
Notice: The signature(s) on this
assignment must correspond with the
name(s) as written upon the face of
this Note in every particular, without
alteration or enlargement or any
change whatsoever.
24
<PAGE> 25
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at _____________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office, currently located at __________________________________________,
not more than 60 nor less than 30 calendar days prior to the Repayment Date,
this Note with this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the
Specified Currency is other than United States dollars, the minimum Authorized
Denomination specified on the face hereof)) which the holder elects to have
repaid and specify the denomination or denominations (which shall be an
Authorized Denomination) of the Notes to be issued to the holder for the portion
of this Note not being repaid (in the absence of any such specification, one
such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $_____ _______________________________
Notice: The signature(s) on
Date: _______________ this Option to Elect Repayment
must correspond with the
name(s) as written upon the
face of this Note in every
particular, without alteration
or enlargement or any change
whatsoever.
25
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-37067) of
Developers Diversified Realty Corporation of our reports dated July 28, 1997 and
October 7, 1997 relating to the financial statements of Cooks Corner and Spring
Creek Centre, which appears on pages F-2 and F-5, respectively, of the current
report on Form 8-K of Developers Diversified Realty Corporation dated November
7, 1997.
PRICE WATERHOUSE LLP
Cleveland, Ohio
November 7, 1997
F-22
