DUKEREALTY CORPORATION (an Indiana Corporation) 4,000,000 Depositary Shares Each Representing 1/10 of a 7.25% Series N Cumulative Redeemable Preferred Share (Par Value $0.01 Per Share) (Liquidation PreferenceEquivalent to $25.00 Per Depositary Share) TERMS AGREEMENT
Exhibit 1.1
DUKE REALTY CORPORATION
(an Indiana Corporation)
4,000,000 Depositary Shares
Each Representing 1/10 of a 7.25% Series N Cumulative Redeemable
Preferred Share (Par Value $0.01 Per Share)
(Liquidation Preference Equivalent to $25.00 Per Depositary Share)
TERMS AGREEMENT
Dated: As of June 15, 2006
| To: |
| Duke Realty Corporation |
|
|
| Duke Realty Limited Partnership |
|
|
| 600 East 96th Street, Suite 100 |
|
|
| Indianapolis, IN 46240 |
Attention: Chairman of the Board of Directors
Ladies and Gentlemen:
We understand that Duke Realty Corporation, an Indiana corporation (the “Company”), proposes to issue and sell 4,000,000 depositary shares (the “Depositary Shares”) each representing 1/10th of a 7.25% Series N Cumulative Redeemable Preferred Share, par value $0.01 (collectively, the “Series N Preferred Shares”), of the Company (such Depositary Shares being collectively hereinafter referred to as the “Underwritten Securities”). Subject to the terms and conditions set forth or incorporated by reference herein, the underwriters named below (the “Underwriters”) offer to purchase the Initial Securities (as defined in the Underwriting Agreement referred to below) at the purchase price set forth below. For purposes of this offering, the term “Registration Statement” (as defined in the Underwriting Agreement referred to below) means the registration statement on Form S-3 (No. 333-120492).
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| Underwriter |
| Number of Shares |
|
| Morgan Stanley & Co. Incorporated |
| 1,066,668 |
|
| UBS Securities LLC |
| 1,066,666 |
|
| Wachovia Capital Markets, LLC |
| 1,066,666 |
|
| A.G. Edwards & Sons, Inc. |
| 400,000 |
|
| Stifel, Nicolaus & Company Incorporated |
| 400,000 |
|
| Total: |
| 4,000,000 |
|
The Underwritten Securities shall have the following terms:
| Title of securities: |
| Depositary Shares each representing 1/10th of a 7.25% Series N Cumulative Redeemable Preferred Share (Par Value $0.01 Per Share) (Liquidation Preference Equivalent to $25.00 Per Depositary Share). |
| Number of shares: |
| 4,000,000 |
| Public offering price per share: |
| $25.00, plus accumulated dividends, if any, from the date of original issue. |
| Purchase price per share: |
| $24.2125 |
| Number of Option Securities, if any, that may be purchased by the Underwriters: |
| 600,000 |
| Dividend rate: |
| Cumulative dividends in the amount of 7.25% of the liquidation preference per annum (equivalent to $1.8125 per annum per Depositary Share); payable quarterly on or about March 31, June 30, September 30 and December 31 of each year, beginning September 30, 2006. |
| Voting and other rights: |
| If distributions on the Series N Preferred Shares are in arrears for six or more quarterly periods, whether or not consecutive, holders of the Underwritten Securities (voting separately as a class with all other series of preferred shares upon which like voting rights have been conferred and are exercisable) will be entitled to vote for the election of two additional Directors to serve on the Board of Directors of the Company until all distribution arrearages are paid. |
| Joint Book-Runners: |
| Morgan Stanley & Co. Incorporated, UBS Securities LLC and Wachovia Capital Markets, LLC |
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| Liquidation preference: |
| $25.00 per Depositary Share. |
| Ranking: |
| The Underwritten Securities will rank pari passu with any other preferred shares (except the Series C Junior Preferred Stock to which the Underwritten Securities rank senior) and will rank senior to the Common Stock of the Company and any other shares of the Company ranking junior to the Series N Preferred Shares. |
| Conversion provision: |
| The Series N Preferred Shares are not convertible or exchangeable for any other property or securities of the Company. |
| Redemption provisions: |
| The Depositary Shares may be redeemed, in whole or in part at the option of the Company, as of June 30, 2011, at a redemption price of $25.00 per Depositary Share, plus accrued and unpaid distributions thereon to the date fixed for redemption, without interest. |
| Sinking fund provisions: |
| None. |
| Closing time, date and location: |
| June 30, 2006, 10:00 a.m., New York City Time, Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019. |
| Other Terms: |
| Sections 3(o) and 5(h) of the Underwriting Agreement are inapplicable to this transaction. |
Underwriting Agreement:
Except as expressly provided herein, all the provisions contained in the document attached as Annex A hereto entitled “Duke Realty Corporation and Duke Realty Limited Partnership — Common Stock, Preferred Stock, Depositary Shares and Debt Securities - Underwriting Agreement”, dated January 5, 2006, are incorporated by reference in their entirety herein and shall be deemed to be a part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Terms used but not defined shall have the meanings set forth in the Underwriting Agreement. Notices to the Underwriters shall be directed to Morgan Stanley & Co. Incorporated, 1585 Broadway, 29th Floor, New York, NY 10036, Attention: Investment Banking Department.
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Please accept this offer no later than 10 o’clock P.M. (New York City time) on June 15, 2006 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: _/s/ Michael Borut
Name: Michael Borut
Title:
UBS SECURITIES LLC
By: _/s/ Scott Whitney
Name: Scott Whitney
Title: Executive Director
By: _/s/ Ryan Donovan
Name: Ryan Donovan
Title: Executive Director
WACHOVIA CAPITAL MARKETS, LLC
By: _/s/ Teresa Hee
Name: Teresa Hee
Title: Managing Director
A.G. EDWARDS & SONS, INC.
By: _/s/ Brian N. Hansen
Name: Brian N. Hansen
Title: Vice President
STIFEL, NICOLAUS & COMPANY INCORPORATED
By: _/s/ David M. Minnick
Name: David M. Minnick
Title: Senior Vice President
For Themselves and as Representatives of the other named underwriters
Accepted:
DUKE REALTY CORPORATION
By: _/s/ Howard L. Feinsand
Name: Howard L. Feinsand
Title: Executive Vice President, General Counsel and Corporate Secretary
DUKE REALTY LIMITED PARTNERSHIP
By: DUKE REALTY CORPORATION,
its sole General Partner
By: /s/ Howard L. Feinsand
Name Howard L. Feinsand
Title: Executive Vice President, General Counsel and Corporate Secretary
Annex A
Underwriting Agreement
Schedule I
Free Writing Prospectus, dated June 15, 2006
