DUKEREALTY CORPORATION (anIndiana Corporation) 8,000,000Depositary Shares EachRepresenting 1/10 of a 6.60% Series L Cumulative Redeemable PreferredShare (Par Value $0.01 Per Share) (LiquidationPreference Equivalent to $25.00 Per Depositary Share) TERMSAGREEMENT
EXHIBIT 1.1
DUKE REALTY CORPORATION
(an Indiana Corporation)
8,000,000 Depositary Shares
Each Representing 1/10 of a 6.60% Series L Cumulative Redeemable
Preferred Share (Par Value $0.01 Per Share)
(Liquidation Preference Equivalent to $25.00 Per Depositary Share)
TERMS AGREEMENT
Dated: November 2, 2004
To: Duke Realty Corporation
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 8,000,000 depositary shares (the “Depositary Shares”) each representing 1/10th of a 6.60% Series L Cumulative Redeemable Preferred Share, par value $0.01 (collectively, the “Series L 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. 333-108557).
| Underwriter |
| Number of Shares |
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| Morgan Stanley & Co. Incorporated |
| 1,927,000 |
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| UBS Securities LLC |
| 1,927,000 |
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| Wachovia Capital Markets, LLC |
| 1,926,000 |
|
| A.G. Edwards & Sons, Inc. |
| 400,000 |
|
| J.P. Morgan Securities Inc. |
| 400,000 |
|
| Legg Mason Wood Walker, Incorporated |
| 400,000 |
|
| Advest, Inc. |
| 60,000 |
|
| Banc of America Securities LLC |
| 60,000 |
|
| BB&T Capital Markets, Inc. |
| 60,000 |
|
| City Securities Corporation |
| 60,000 |
|
| Davenport & Company LLC |
| 60,000 |
|
| H&R Block Financial Advisors, Inc. |
| 60,000 |
|
| Janney Montgomery Scott LLC |
| 60,000 |
|
| KeyBanc Capital Markets, a Division of McDonald Investments Inc. |
| 60,000 |
|
| McGinn, Smith & Co. Inc. |
| 60,000 |
|
| Morgan Keegan & Company, Inc. |
| 60,000 |
|
| Oppenheimer & Co. Inc. |
| 60,000 |
|
| Raymond James & Associates, Inc. |
| 60,000 |
|
| RBC Dain Rauscher Inc. |
| 60,000 |
|
| Charles Schwab & Co., Inc. |
| 60,000 |
|
| Stifel, Nicolaus & Company Incorporated |
| 60,000 |
|
| U.S. Bancorp Piper Jaffray Inc. |
| 60,000 |
|
| Wells Fargo Brokerage Services, LLC |
| 60,000 |
|
| Total |
| 8,000,000 |
|
The Underwritten Securities shall have the following terms:
| Title of securities: |
| Depositary Shares each representing 1/10th of a 6.60% Series L Cumulative Redeemable Preferred Share (Par Value $0.01 Per Share) (Liquidation Preference Equivalent to $25.00 Per Depositary Share). |
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| Number of shares: |
| 8,000,000 |
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| Public offering price per share: |
| $25.00, plus accumulated dividends, if any, from the date of original issue. |
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| Purchase price per share: |
| $24.2125 |
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| Number of Option Securities, if any, that may be purchased by the Underwriters: |
| 1,200,000 |
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| Dividend rate: |
| Cumulative dividends in the amount of 6.60% of the liquidation preference per annum (equivalent to $1.65 per annum per Depositary Share); payable quarterly on or about the last calendar day of each February, May, August and November of each year, |
2
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| commencing on February 28, 2005. |
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| Voting and other rights: |
| If distributions on the Series L 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. |
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| Joint Book-Runners: |
| Morgan Stanley & Co. Incorporated and UBS Securities LLC |
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| Liquidation preference: |
| $25.00 per Depositary Share. |
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| 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 L Preferred Shares. |
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| Conversion provision: |
| The Series L Preferred Shares are not convertible or exchangeable for any other property or securities of the Company. |
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| Redemption provisions: |
| The Depositary Shares may be redeemed, in whole or in part at the option of the Company, as of November 30, 2009, at a redemption price of $25.00 per Depositary Share, plus accrued and unpaid distributions thereon to the date fixed for redemption, without interest. |
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| Sinking fund provisions: |
| None. |
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| Closing time, date and location: |
| November 30, 2004, 10:00 a.m., New York City Time, Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019. |
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| Other Terms: |
| Sections 3(o) and 5(h) of the Underwriting Agreement are inapplicable to this transaction. |
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| At Closing Time, the Underwriters will pay $30,000 to the Company by wire transfer in immediately available funds as a reimbursement of the Company’s expenses related to the transactions contemplated by this Agreement. |
3
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” 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 herein shall have the meanings set forth in the Underwriting Agreement.
4
Please accept this offer no later than 5 o’clock P.M. (New York City time) on November 2, 2004 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us.
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| Very truly yours, | |||
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| MORGAN STANLEY & CO. INCORPORATED | |||
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| By: | /s/ Harold J. Hendershot III |
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| Name: | Harold J. Hendershot III | |
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| Title: | Executive Director | |
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| UBS SECURITIES LLC | |||
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| By: | /s/ Christopher Forshner |
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| Name: | Christopher Forshner | |
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| Title: | Managing Director | |
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| By: | /s/ Ryan Donovan |
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| Name: | Ryan Donovan | |
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| Title: | Associate Director | |
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| For Themselves and as Representatives of the other named underwriters | |||
| Accepted: |
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| DUKE REALTY CORPORATION |
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| By: | /s/ Matthew A. Cohoat |
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| Name: | Matthew A. Cohoat |
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| Title: | Executive Vice President and Chief Financial Officer |
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| DUKE REALTY LIMITED PARTNERSHIP |
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| By: | DUKE REALTY CORPORATION |
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| General Partner |
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| By: | /s/ Matthew A. Cohoat |
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| Name: | Matthew A. Cohoat |
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| Title: | Executive Vice President and Chief Financial Officer |
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Annex A
Underwriting Agreement
