DUKE REALTY INVESTMENTS, INC.
1,500,000 Shares
(Common Stock, $0.01 par value)
DISTRIBUTION AGREEMENT
July ___, 1998
FRITH BROTHERS INVESTMENTS, INC.
992 Old Eagle School Road
Suite 915
Wayne, Pennsylvania 19087
Gentlemen:
Duke Realty Investments, Inc., an Indiana corporation (the
"Company"), confirms its agreement with Frith Brothers Investments,
Inc. (the "Agent"), as follows:
SECTION 1. Description of Securities.
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The Company proposes to issue and sell through the Agent, as sales
agent, up to 1,500,000 shares (the "Maximum Amount") of common stock,
par value $0.01 per share (the "Stock"), on the terms set forth in
Section 3 hereof.
SECTION 2. Representations and Warranties of the Company.
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The Company represents and warrants to, and agrees with, the Agent
that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933 (the "Act") and the rules and regulations
thereunder ("Rules and Regulations"). A registration statement on Form
S-3 (Registration No. 333-26845) with respect to, among other
securities, the Stock, including a form of prospectus, has been
prepared by the Company in conformity with the requirements of the Act
and the Rules and Regulations and filed with the Securities and
Exchange Commission (the "Commission") and has become effective. Such
registration statement and prospectus may have been amended or
supplemented prior to the date of this Agreement. Any such amendment or
supplement was so prepared and filed, and any such amendment filed
after the effective date of such registration statement has become
effective. No stop order suspending the effectiveness of the
registration statement has been issued, and no proceeding for that
purpose has been instituted or, to the knowledge of the Company,
threatened by the Commission. Copies of such registration statement and
prospectus, any such amendment or supplement and all documents
incorporated by reference therein that were filed with the Commission
on or prior to the date of this Agreement have been delivered to the
Agent. Such registration statement, as it may have heretofore been
amended, is referred to herein as the "Registration Statement," and the
final form of prospectus included in the Registration Statement, as
amended or supplemented from time to time, is referred to herein as the
"Prospectus." Any reference herein to the Registration Statement, the
Prospectus, or any
amendment or supplement thereto shall be deemed to refer to and include
the documents incorporated (or deemed to be incorporated) by reference
therein, and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or Prospectus
shall be deemed to refer to and include the filing after the execution
hereof of any document with the Commission deemed to be incorporated by
reference therein. To the extent the Company desires to sell more
shares of Stock pursuant to this Agreement than can be sold pursuant to
the Registration Statement, the Company shall file a new registration
statement with respect to such shares (or amend an existing
registration statement to describe the transactions contemplated by
this Agreement to the extent required by the Rules and Regulations) and
shall cause such registration statement (or amendment) to become
effective (subject to the satisfaction of the Agent, in its reasonable
discretion, that the foregoing is in conformity with then applicable
legal requirements). After the effectiveness of said registration
statement (or amendment), all references to "Registration Statement"
included in this Agreement shall be deemed to include such new (or
amended) registration statement.
(b) Each part of the Registration Statement, when such part
became or becomes effective, and the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at each Closing Date (as hereinafter defined), conformed or will
conform in all material respects with the requirements of the Act and
the Rules and Regulations; each part of the Registration Statement,
when such part became or becomes effective, did not or will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each
Closing Date, did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; except that the foregoing shall not apply to
statements in or omissions from any such document in reliance upon, and
in conformity with, written information furnished to the Company by or
on behalf of the Agent, specifically for use in the Registration
Statement, the Prospectus or any amendment or supplement thereto.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto,
when they became or become effective under the Act or were or are filed
with the Commission under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), as the case may be, conformed or will conform
in all material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
(d) The consolidated financial statements of the Company,
together with the related notes and schedules, set forth or
incorporated by reference in the Registration Statement and Prospectus
fairly present the consolidated financial condition and the results of
operations and cash flows of the Company as of the dates indicated or
for the periods therein specified and were prepared in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein).
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of its incorporation with power and authority (corporate and other) to
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and Prospectus; and the Company
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify and be
in good standing, considering all such cases in the aggregate, would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company, the Operating Partnership (as defined below), the Services
Partnership (as defined below), the Construction Partnership (as
defined below) and any Property Partnership (as defined below)
considered as one enterprise (the "Duke Group").
(f) Each significant subsidiary (as defined in Section 1-02 of
Regulation S-X) of the Company has been duly formed and is validly
existing as a corporation or partnership in good standing under the
laws of the jurisdiction of its organization, has corporate or
partnership power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and Prospectus and is duly qualified as a foreign corporation
or partnership to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify and be in good standing would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Duke Group as a whole (a "Material Adverse Effect"); and all of the
issued and outstanding capital stock and partnership interests, as the
case may be, of each corporation, partnership, limited liability
company or other entity a majority of the outstanding voting stock or
voting interests, as the case may be, of which is owned or controlled,
directly or indirectly, by the Company (a "Subsidiary") has been duly
authorized and validly issued, is fully paid and nonassessable (except
as provided under Indiana Code 23-16-7-8) and, except for Duke Realty
Limited Partnership (the "Operating Partnership"), Duke Realty Services
Limited Partnership (the "Services Partnership"), Duke Construction
Limited Partnership (the "Construction Partnership") and entities
wholly or partially owned by the Company, the Operating Partnership or
any subsidiary which directly or indirectly own real property (the
"Property Partnerships") or as otherwise stated in the Registration
Statement) is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. All of the issued and outstanding capital
stock of Duke Services, Inc. ("DSI") is owned by the Company. DSI is
the sole general partner and a 1% owner of the Services Partnership,
and the Operating Partnership and DMI Partnership are the sole limited
partners and 9% and 90% owners, respectively, of the Services
Partnership. The Services Partnership is the sole general partner and a
1% owner of the Construction Partnership. The 99% limited partnership
interest of the Construction Partnership is owned by Duke Realty
Construction, Inc., an Indiana corporation which is owned 4.04% by the
Services Partnership and 95.96% by DMI Partnership.
(g) The outstanding shares of common stock of the Company and the
Stock have been duly authorized and are, or when issued as contemplated
hereby will be, validly issued, fully paid and nonassessable and
conform, or when so issued will conform, to the description
thereof in the Prospectus. The Stock will be sold free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable
interest. Neither the shareholders of the Company nor any other person
or entity has any preemptive or similar rights with respect to the
Stock.
(h) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary
course of business, that are material to the Duke Group as a whole, and
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Duke Group as a whole, or any material
change, or any development involving a prospective material change, in
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Duke Group as a whole.
(i) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of the Company, threatened any action, suit or
proceeding to which the Company or any of its subsidiaries is a party,
before or by any court or governmental agency or body, that could
reasonably be expected to result in any Material Adverse Effect, or
that could reasonably be expected to materially and adversely affect
the properties or assets of the Duke Group considered as a whole.
(j) There are no contracts or documents of the Company or any of
its subsidiaries that are required to be filed as exhibits to the
Registration Statement or to any of the documents incorporated by
reference therein by the Act or the Exchange Act or by the rules and
regulations of the Commission thereunder that have not been so filed.
(k) All necessary action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly and validly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Agent, constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles.
(l) The performance of this Agreement and the consummation of the
transactions contemplated herein will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which the Company or any
of its subsidiaries is a party or by which it is bound or to which any
of the property of the Company or any of its subsidiaries is subject
except for such breaches or defaults that would not in the aggregate
have a material adverse effect on the Company's ability to perform its
obligations under this Agreement or on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Duke Group considered as one enterprise, nor will such action
result in the violation of the Company's articles of incorporation or
by-laws, or, to the extent it is material, any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of its
properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or
body is required for the consummation by the Company of the
transactions contemplated by this Agreement, except such as may be
required under the Securities Act, the Rules and Regulations, the
Exchange Act, or state securities, real estate syndication or blue sky
laws, or such as have been received prior to the date of this
Agreement.
(m) Each of the Company, the Operating Partnership and the
Property Partnerships has good and indefeasible title to all items of
real property (and improvements thereon), leasehold interests and
general and limited partnership interests described in the Prospectus
or in the Company's Annual Report on Form 10-K for the most recently
ended fiscal year as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are (i) described in the
Prospectus or in the Company's Annual Report on Form 10-K for the most
recently ended fiscal year, (ii) referred to in the title policies of
such real properties, (iii) serving as security for loans described in
the Prospectus or (iv) not material to the business, condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Duke Group considered as one enterprise. Each of the
Company and its subsidiaries has peaceful and undisturbed possession
under all material leases to which it is party as lessee, except where
the failure to have such possession would not have a Material Adverse
Effect. Each of the Company and its subsidiaries has all governmental
or regulatory licenses, certificates, permits, authorizations,
approvals, franchises or other rights necessary to engage in the
business currently conducted by it, except such as are not material to
the business, condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Duke Group as a whole,
and none of the Company and its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
licenses, certificates, permits, authorizations, approvals, franchises
or other rights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect. None of the Company and its subsidiaries has received any
notice that any governmental body or agency is considering enacting,
amending or repealing any statute, law, ordinance or regulation
required to be described in the Registration Statement and Prospectus
that is not so described as required. Neither the Operating
Partnership, any Property Partnership nor any tenant of any of the
properties owned by the Operating Partnership or a Property Partnership
(the "Properties") is in default under any of the ground leases (as
lessee) or space leases (as lessor) relating to the Properties, other
than defaults that, individually or in the aggregate, would not have a
Material Adverse Effect.
(n) None of the entities comprising the Duke Group is required to
own or possess any trademarks, service marks, trade names, patents or
copyrights not now lawfully owned, possessed or licensed in order to
conduct the business now operated by such entity, except where a
failure to own, possess or license such right would not have a Material
Adverse Effect. None of the entities comprising the Duke Group has
received any notice of infringement of or conflict with asserted rights
of others with respect to any of the foregoing which, if singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(o) The Company and its subsidiaries have not violated and are in
compliance in all material respects with all laws, statutes,
ordinances, regulations, rules and orders of any foreign, federal,
state or local government and any
other governmental department or agency, and any judgment, decision,
decree or order of any court or governmental agency, department or
authority, including, without limitation, environmental laws, except
where such a violation or failure to comply would not have a Material
Adverse Effect. Neither the Company nor any of its subsidiaries has
received any notice to the effect that, or otherwise been advised that,
it is not in compliance with any such statutes, regulations, rules,
judgments, decrees, orders, ordinances or other laws, and the Company
is not aware of any existing circumstances which are likely to result
in material violations of any of the foregoing, except where such a
failure to comply or violation would not have a Material Adverse
Effect.
(p) The Company and its qualified real estate investment trust
subsidiaries are organized in conformity with the requirements for
qualification as, and operate in a manner that qualifies them as, a
real estate investment trust under the Internal Revenue Code of 1986,
as amended (the "Code"), and the rules and regulations thereunder and
will be so qualified after consummation of the transactions
contemplated by this Agreement.
(q) Except for transactions described in the Prospectus and
transactions in connection with dividend reinvestment plans, and stock
option and other employee benefit plans, there are no outstanding
rights, warrants or options to acquire, or instruments convertible into
or exchangeable for, or agreements or understandings with respect to
the sale or issuance of, any shares of capital stock of or partnership
or other equity interest in the Company, the Operating Partnership or
any subsidiary except for the shares of Stock which may be issued in
exchange for Units.
(r) None of the entities comprising the Duke Group is in
violation of its articles of incorporation, charter, by-laws,
certificate of limited partnership, partnership agreement, operating
agreement or other organizational document, as the case may be, or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which such entity is
a party or by which such entity may be bound, or to which any of its
property or assets is subject, which default separately or in the
aggregate would have a Material Adverse Effect.
(s) No labor dispute with the employees of the Duke Group exists
or, to the knowledge of the Company or the Operating Partnership, is
imminent; and neither the Company nor the Operating Partnership is
aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers, manufacturers or contractors which
might be expected to have a Material Adverse Effect.
(t) None of the entities comprising the Duke Group is required to
be registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), or is or will become a "holding company" or a "subsidiary
company" of a "registered holding company" as defined in the Public
Utility Holding Company Act of 1935, as amended.
(u) None of the entities comprising the Duke Group is required to
own or possess any trademarks, service marks, trade names or copyrights
not now lawfully owned, possessed or licensed in order to conduct the
business now operated by such entity.
(v) Except as disclosed in the Prospectus and except for persons
who received Units in connection with transactions with the Operating
Partnership, there are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company or the Operating
Partnership under the Act.
(w) The Stock to be sold on a Closing Date (as defined below)
will be listed on the New York Stock Exchange on the applicable Closing
Date.
(x) Except as disclosed in the Prospectus, and, with respect to
clauses (A), (B) and (C) below, except for activities, conditions,
circumstances or matters that would not have a Material Adverse Effect,
(A) each Property, including, without limitation, the Environment (as
defined below) associated with such Property, is free of any Hazardous
Substance (as defined below), (B) neither the Company nor the Operating
Partnership nor any Property Partnership has caused or suffered to
occur any Release (as defined below) of any Hazardous Substance into
the Environment on, in, under or from any Property, and no condition
exists on, in, under or from any Property, to the knowledge of the
Company or the Operating Partnership, that could result in the
incurrence of material liabilities or any material violations of any
Environmental Law (as defined below), give rise to the imposition of
any Lien (as defined below) under any Environmental Law, or cause or
constitute a health, safety or environmental hazard to any property,
person or entity; (C) neither the Company, the Operating Partnership
nor any Property Partnership is engaged in or intends to engage in any
manufacturing or any other operations at the Properties that (1)
require the use, handling, transportation, storage, treatment or
disposal of any Hazardous Substance or (2) require permits or are
otherwise regulated pursuant to any Environmental Law, other than
permits which have been obtained; (D) neither the Company nor the
Operating Partnership nor any Property Partnership has received any
notice of a claim material to the Duke Group as a whole under or
pursuant to any Environmental Law or under common law pertaining to
Hazardous Substances on or originating from any Property; (E) neither
the Company nor the Operating Partnership nor any Property Partnership
has received any notice from any Governmental Authority (as defined
below) claiming any violation of any Environmental Law; and (F) no
Property is included or, to the knowledge of the Company or the
Operating Partnership, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA (as defined below) by the
United States Environmental Protection Agency (the "EPA") or, with the
exception of one Property, in respect to which the EPA has advised the
Company that no further remedial action is planned, on the
Comprehensive Environmental Response, Compensation, and Liability
Information System database maintained by the EPA, and has not
otherwise been identified by the EPA as a potential CERCLA removal,
remedial or response site or included or, to the knowledge of the
Company or the Operating Partnership, proposed for inclusion on, any
similar list of potentially contaminated sites pursuant to any other
Environmental Law.
Excluding such customary amounts as may be lawfully generated,
stored, used, treated, disposed of, or otherwise handled or located at
any Property, as used herein "Hazardous Substance" shall include,
without limitation, any hazardous substance, hazardous waste, toxic or
dangerous substance, pollutant, toxic waste or similarly designated
materials, including, without limitation, oil, petroleum or any
petroleum-derived substance or waste, asbestos or asbestos-containing
materials, PCBs, pesticides, explosives, radioactive materials,
dioxins, urea formaldehyde insulation or any constituent of any such
substance, pollutant or waste, including
any such substance, pollutant or waste identified or regulated under
any Environmental Law (including, without limitation, materials listed
in the United States Department of Transportation Optional Hazardous
Material Table, 49 C.F.R. Section 172.101, as the same may now or
hereafter be amended, or in the EPA's List of Hazardous Substances and
Reportable Quantities, 40 C.F.R. Part 3202, as the same may now or
hereafter be amended); "Environment" shall mean any surface water,
drinking water, ground water, land surface, subsurface strata, river
sediment, buildings, structures, and ambient, workplace and indoor and
outdoor air; "Environmental Law" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section
6901, et seq.), the Clean Air Act, as amended (42 U.S.C. Section 7401,
et seq.), the Clean Water Act, as amended (33 U.S.C. Section 1251, et
seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section
2601, et seq.), the Occupational Safety and Health Act of 1970, as
amended (29 U.S.C. Section 651, et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Section 1801, et seq.), and
all other federal, state and local laws, ordinances, regulations,
rules, orders, decisions and permits relating to the protection of the
environments or of human health from environmental effects;
"Governmental Authority" shall mean any federal, state or local
governmental office, agency or authority having the duty or authority
to promulgate, implement or enforce any Environmental Law; "Lien" shall
mean, with respect to any Property, any mortgage, deed of trust,
pledge, security interest, lien, encumbrance, penalty, fine, charge,
assessment, judgment or other liability in, on or affecting such
Property; and "Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, emanating or disposing of any Hazardous Substance
into the Environment, including, without limitation, the abandonment or
discard of barrels, containers, tanks (including, without limitation,
underground storage tanks) or other receptacles containing or
previously containing any Hazardous Substance or any release, emission,
discharge or similar term, as those terms are defined or used in any
Environmental Law.
SECTION 3. Sale and Delivery of Securities.
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(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions
herein set forth and subject to the reservation by the Company of the
right to sell Stock directly on its own behalf or through other dealers
or agents, the Company agrees to issue and sell through the Agent,
subject to Section 4(h), as non-exclusive sales agent, and the Agent
agrees to sell, as sales agent for the Company, on a best efforts
basis, up to the Maximum Amount of Stock during a maximum of 52 Pricing
Periods (as hereinafter defined) on the terms set forth herein;
provided, however, that the Company shall not be obligated to issue and
sell, and the Agent shall not be obligated to use its best efforts to
sell, Stock if the Stock is at a price lower than the Minimum Price (as
defined below). "Minimum Price" means a price of $24.00 per share or
such other amount determined by the Board of Directors of the Company
or the Finance Committee of the Board of Directors of the Company and
set forth in a certificate of the Company delivered to the Agent. The
Company may from time to time offer Stock for sale or accept offers to
purchase Stock otherwise than through the Agent.
(b) The Stock, up to the Maximum Amount, is to be sold during one
or more pricing periods (each a "Pricing Period"), each Pricing Period
consisting of five consecutive trading days or such lesser number of
days as shall be agreed to by the Company and the Agent. The Company
and the Agent from time to time will, by mutual written agreement,
designate Pricing Period(s) and the maximum number of shares of Stock
that the Agent will attempt to sell on a best efforts basis during each
such Pricing Period (the "Average Market Price Shares"). If the Company
does not meet the exemptive provisions set forth in Rule 101(c)(1) of
Regulation M of the Exchange Act, the number of Average Market Price
Shares and any Additional Shares sold on any day in any Pricing Period
shall not exceed 10% of the average daily trading volume of the Stock
for the sixty days prior to such Pricing Period. Subject to the terms
and conditions hereof, the Agent shall use its best efforts to sell all
of the designated Average Market Price Shares during each such Pricing
Period. The Agent shall sell the shares of Stock only by means of
ordinary brokers' transactions on the New York Stock Exchange (the
"NYSE") or other markets on which the Stock is then traded. The Agent
shall not solicit or arrange for the solicitation of customer's orders
in anticipation of or in connection with such transactions. The Agent
shall not engage in any special selling efforts or selling methods
relating to the Stock within the meaning of Rule 100 of Regulation M of
the Exchange Act, nor shall the Agent or the Company take any action
relating to the Stock which would violate Regulation M of the Exchange
Act. The Agent shall calculate on a weekly basis the average daily
trading volume of the Stock. If either party has reason to believe that
the exemptive provisions set forth in Rule 101(c)(1) of Regulation M of
the Exchange Act are not satisfied, it shall notify the other party and
sales of Stock under this Agreement shall be suspended until such time
as the parties mutually agree to recommence sales hereunder. In
addition, the Company or the Agent may, upon notice to the other party
hereto by telephone (confirmed promptly by telecopy), suspend the
offering of Stock; provided, however, that such suspension or
termination shall not affect or impair the parties' respective
obligations with respect to shares of Stock sold hereunder prior to the
giving of such notice.
(c) The net proceeds (the "Net Proceeds") to the Company for the
Average Market Price Shares sold by the Agent during a Pricing Period
will equal the sum of (i) the product of (x) the Company's Percent (as
defined below) times (y) the average of the arithmetic mean of the high
and low sales prices of the common stock of the Company reported on the
NYSE for each trading day of such Pricing Period (the "Average Market
Price"), times (z) the number of Average Market Price Shares sold
during such Pricing Period plus (ii) Alternative Proceeds (defined
below), if any, plus (iii) Excess Proceeds (defined below), if any.
Subject to adjustment as set forth in subsection (g) of this section,
the compensation to the Agent with respect to the sale of Average
Market Price Shares sold hereunder shall equal the difference between
the aggregate gross sales prices at which such sales are actually
effected by the Agent and the Net Proceeds.
(d) During any Pricing Period (whether or not Average Market
Price Shares are being sold during such Pricing Period), the Company
and the Agent may agree upon the sale of shares ("Additional Shares")
of Stock in addition to or instead of the sale of Average Market Price
Shares (such Additional Shares to be included in the Maximum Amount).
The compensation to the Agent for sales of Additional Shares shall be,
with respect to any Pricing Period, the Agent's Percent of the gross
sales price per share in connection with the number of Additional
Shares sold in any Pricing Period. The sale of Additional Shares during
any day shall be confirmed in
writing by the Agent to the Company following the end of the Pricing
Period. All other shares sold during a Pricing Period not so confirmed
shall be deemed Average Market Price Shares.
(e) The "Company's Percent" for Average Market Price Shares or
Additional Shares shall be (i) 98.0% for the first 250,000 shares of
Stock that may be sold pursuant to this Agreement, (ii) 98.25% for the
second 250,000 shares that may be sold pursuant to this Agreement and
(iii) 98.5% for the remaining shares of Stock that may be sold pursuant
to this Agreement. The "Agent's Percent" with respect to any shares of
Stock to be sold pursuant to this Agreement shall equal 100% minus the
applicable Company's Percent.
(f) To the extent that the compensation payable to the Agent
hereunder would otherwise exceed the maximum amount permitted to be
received pursuant to the rules and interpretations of the National
Association of Securities Dealers, Inc. ("NASD"), as determined in good
faith by the Agent, such excess over such amount shall constitute
"Excess Proceeds" payable to the Company.
(g) During any Pricing Period, the Company may instruct the Agent
by telephone (confirmed promptly by telecopy) not to sell shares of
Stock if such sales cannot be effected at or above the price designated
by the Company in any such instruction. If such an instruction is given
and as a result thereof the Agent is unable to sell shares of Stock in
an amount greater than or equal to the daily pro rata portion (e.g.,
20% as to any five-day Pricing Period) of Average Market Price Shares
to be sold during such Pricing Period, then (i) that day's highest and
lowest executed sales price of common stock of the Company reported on
the NYSE shall not be included in the calculation of Average Market
Price and (ii) the net proceeds payable to the Company (the
"Alternative Proceeds") and the compensation payable to the Agent in
respect of any sales of Average Market Price Shares effected that day
(the "Alternative Shares") by the Agent shall be equal to the Company's
Percent and the Agent's Percent, respectively, of the weighted average
sales prices at which the Agent has actually effected sales of Stock
during that day and the Alternative Shares shall be excluded from the
number used in clause (i)(z) in subsection (c) of this section.
(h) The Agent shall provide written confirmation to the Company
following the close of business on the final day of each Pricing Period
setting forth, with regard to such Pricing Period, the dates included
in the Pricing Period, the number of Average Market Price Shares and
Additional Shares, if any, sold, the gross proceeds from the sale of
such shares, the highest and lowest executed sales price at which such
shares were sold, the Net Proceeds to the Company, the amount of Excess
Proceeds, if any, the amount of Alternative Proceeds, if any, the
compensation payable by the Company to the Agent with respect to such
sales and the Average Market Price for such Pricing Period.
(i) Settlement for sales of Additional Shares will occur on the
third business day following the date on which such sales are made. The
amount of proceeds for such sales to be delivered to the Company
against the receipt of the Additional Shares sold shall be equal to the
aggregate sales prices at which such Additional Shares were sold, net
of the Agent's compensation for such sales and shall be delivered to
the Company on the settlement date. Unless the Company and the Agent
otherwise agree, settlement for sales of Average Market Price Shares
will occur on the third business day following the date on which such
sales are
made and, except as provided in the following sentence, the amount
payable to the Company at settlement will be the Net Proceeds
applicable to such Average Market Price Shares. On the third business
day following the end of a Pricing Period (each a "Closing Date"), the
Average Market Price Shares sold through the Agent on the last business
day of such Pricing Period will be delivered by the Company to the
Agent against payment to the Company of the difference between (i) the
aggregate Net Proceeds for all Average Market Price Shares sold by the
Agent during the Pricing Period and (ii) all proceeds previously
delivered by the Agent to the Company in settlement of Average Market
Price Shares sold by the Agent during such Pricing Period. Settlement
for all shares shall be effected by free delivery of shares to the
Agent's account at The Depository Trust Corporation in return for
payments in same day funds delivered to the account designated by the
Company.
(j) At the time of each settlement of securities hereunder, the
Company shall be deemed to have affirmed each representation, warranty,
covenant and other agreement contained in the Agreement and on each
Closing Date, the Company shall affirm in writing each representation,
warranty, covenant and other agreement contained in this Agreement. The
Company covenants and agrees with the Agent that on or prior to the
second business day after the termination of each Pricing Period, the
Company will file a prospectus supplement under the applicable
paragraph of Rule 424(b), which prospectus supplement will set forth,
with regard to such Pricing Period, the dates included within the
Pricing Period, the number of shares of Stock sold through the Agent
(separately identifying the number of Average Market Price Shares and
the number of Additional Shares), the highest and lowest executed sales
price at which Average Market Price Shares were sold, the Net Proceeds
to the Company and the compensation payable by the Company to the Agent
with respect to sales of Average Market Price Shares and with respect
to sales of Additional Shares (all as provided in writing by the Agent
for inclusion in each such prospectus supplement), and any other
information then required by applicable law. Any obligation of the
Agent to use its best efforts to sell the Stock shall be subject to the
continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its obligations
hereunder and to the continuing satisfaction of the additional
conditions specified in Section 5 of this Agreement.
SECTION 4. Covenants of the Company.
------------------------
The Company covenants and agrees with the Agent and the Company that:
(a) During the period in which a prospectus relating to the Stock
is required to be delivered under the Act, the Company will notify the
Agent promptly of the time when any subsequent amendment to the
Registration Statement has been filed or has become effective or any
subsequent supplement to the Prospectus has been filed and of any
request by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or for additional information; it
will prepare and file with the Commission, promptly upon the Agent's
request, any amendments or supplements to the Registration Statement or
Prospectus that, in the Agent's reasonable opinion, may be necessary or
advisable in connection with the distribution of the Stock by the
Agent; the Company will not file any amendment or supplement to the
Registration Statement or Prospectus (other than any prospectus
supplement relating to the offering of other securities (including,
without limitation, common stock not to be sold hereunder) registered
under the Registration Statement) unless a copy thereof has been
submitted
to the Agent a reasonable period of time before the filing and the
Agent has not reasonably objected thereto; and it will furnish to the
Agent at the time of filing thereof a copy of any document that upon
filing is deemed to be incorporated by reference in the Registration
Statement or Prospectus; and the Company will cause each amendment or
supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the
Rules and Regulations or, in the case of any document to be
incorporated therein by reference, to be filed with the Commission as
required pursuant to the Exchange Act, within the time period
prescribed.
(b) The Company will advise the Agent, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Stock for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; and it will
promptly use every reasonable effort to prevent the issuance of any
stop order or to obtain its withdrawal if such a stop order should be
issued.
(c) Within the time during which a prospectus relating to the
Stock is required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon it by
the Act and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or
dealings in the Stock as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to
amend or supplement the Registration Statement or Prospectus to comply
with the Act, the Company will promptly notify the Agent to suspend the
offering of Stock during such period and the Company will amend or
supplement the Registration Statement or Prospectus (at the expense of
the Company, unless the misstatements or omissions in question were
made solely in reliance on written information furnished to the Company
by the Agent expressly for use in the Registration Statement or
Prospectus in which case such amendment or supplement shall be at the
expense of the Agent) so as to correct such statement or omission or
effect such compliance.
(d) The Company will use its best efforts, in cooperation with
the Agent, to qualify the Stock for sale under the securities laws of
such jurisdictions as the Agent designates and to continue such
qualifications in effect so long as required for the distribution of
the Stock, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
(e) The Company will furnish to the Agent and its counsel (at the
expense of the Company) copies of the Registration Statement, the
Prospectus (including all documents incorporated by reference therein)
and all amendments and supplements to the Registration Statement or
Prospectus that are filed with the Commission during the period in
which a prospectus relating to the Stock is required to be delivered
under the Act (including all documents filed with the Commission during
such period that are deemed to be incorporated by reference therein),
in each case as soon as available and in such quantities as the Agent
may from
time to time reasonably request and will also furnish copies of the
Prospectus to the NYSE in accordance with Rule 153 of the Rules and
Regulations.
(f) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month
period that satisfies the provisions of Section 11(a) of the Act and
Rule 158 of the Rules and Regulations.
(g) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay all
of its expenses incident to the performance of its obligations
hereunder (including, but not limited to, any transaction fees imposed
by any governmental or self-regulatory organization with respect to
transactions contemplated by this Agreement and any blue sky fees) and
will pay the expenses of printing all documents relating to the
offering. The Company will reimburse the Agent for its reasonable
out-of-pocket costs and expenses incurred on or after December 1, 1997
in connection with entering into this Agreement and the transactions
contemplated by this Agreement, including, without limitation,
reasonable travel, reproduction, printing and similar expenses, as well
as the reasonable fees and disbursements of its legal counsel incurred
on or after December 1, 1997.
(h) The Company will apply the net proceeds from the sale of the
Stock as set forth in the Prospectus.
(i) The Company will not, directly or indirectly, offer or sell
or enter into any agreement to offer or sell any shares of common stock
(other than the Stock) or securities convertible into or exchangeable
for, or any rights to purchase or acquire, common stock during the
period from the date of this Agreement through the final Closing Date
for the sale of Stock hereunder without (a) giving the Agent at least
three business days' prior written notice specifying the nature of the
proposed sale and the date of such proposed sale and (b) suspending
activity under this program for such period of time as may reasonably
be determined by agreement of the Company and the Agent; provided,
however, that no such notice and suspension shall be required in
connection with (i) the possible issuance of shares of common stock
upon the exchange of interests in the Operating Partnership ("Units")
by holders of Units other than DMI Partnership (except as to Units
exchanged by DMI Partnership pursuant to a Unit bonus plan for
employees of the Company and its subsidiaries); (ii) grants of options
and the issuance of shares of common stock pursuant to any employee or
director stock option or benefits plan or stock ownership plan of the
Company; (iii) the issuance of shares pursuant to the Duke Realty
Investments, Inc. Direct Stock Purchase and Dividend Reinvestment Plan,
as amended from time to time, or any other dividend reinvestment plan
of the Company; (iv) the issuance of shares of common stock, or any
security convertible into or exchangeable or exercisable for common
stock, in connection with the acquisition of real property or an
interest or interests in real property; and (v) common stock issuable
upon conversion of securities or the exercise of warrants, options or
other rights in effect or outstanding on the date hereof.
(j) The Company will, at any time during the term of this
Agreement, as supplemented from time to time, advise the Agent
immediately after it shall have received notice
or obtain knowledge thereof, of any information or fact that would
materially alter or affect any opinion, certificate, letter and other
document provided to the Agent pursuant to Section 5 herein.
(k) Each time that (i) the Registration Statement or the
Prospectus shall be amended or supplemented (other than a supplement
filed pursuant to Rule 424(b) under the Act that contains solely the
information set forth in the final paragraph of Section 3 of this
Agreement or an amendment or supplement which relates exclusively to
the issuance of securities other than the Stock) or (ii) there is filed
with the Commission any document incorporated by reference into the
Prospectus (other than a Current Report on Form 8-K solely for the
purpose of filing exhibits), the Company shall furnish or cause to be
furnished to the Agent forthwith a certificate dated the date of filing
with the Commission of such supplement or other document and the date
of effectiveness of such amendment, as the case may be, in form
satisfactory to the Agent to the effect that the statements contained
in the certificate referred to in Section 5(f) hereof which were last
furnished to the Agent are true and correct at the time of such
amendment, supplement, filing, as the case may be, as though made at
and as of such time (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such time) or, in lieu of such certificate, a
certificate of the same tenor as the certificate referred to in said
Section 5(f), modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of
delivery of such certificate.
(l) Each time that (i) the Registration Statement or the
Prospectus is amended or supplemented (other than a supplement filed
pursuant to Rule 424(b) under the Act that contains solely the
information set forth in the final paragraph of Section 3 of this
Agreement or an amendment or supplement which relates exclusively to
the issuance of securities other than the Stock) or (ii) there is filed
with the Commission any document incorporated by reference into the
Prospectus (other than a Current Report on Form 8-K solely for the
purpose of filing exhibits), the Company shall furnish or cause to be
furnished forthwith to the Agent and to counsel to the Agent a written
opinion of Bose McKinney & Evans, counsel to the Company ("Company
Counsel"), or other counsel reasonably satisfactory to the Agent, dated
the date of filing with the Commission of such amendment, supplement or
other document and the date of effectiveness of such amendment, as the
case may be, in form and substance reasonably satisfactory to the
Agent, of the same tenor as the opinion referred to in Section 5(d)
hereof, but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of
delivery of such opinion.
(m) Each time that the Registration Statement or the Prospectus
shall be amended or supplemented to include additional amended
financial information or there is filed with the Commission any
document incorporated by reference into the Prospectus which contains
additional amended financial information, the Company shall cause KPMG
Peat Marwick LLP, or other independent accountants reasonably
satisfactory to the Agent, forthwith to furnish the Agent a letter,
dated the date of effectiveness of such amendment, or the date of
filing of such supplement or other document with the Commission, as the
case may be, in form reasonably satisfactory to the Agent, of the same
tenor as the letter referred to in Section 5(e) hereof but modified to
relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter.
(n) The Company hereby consents to the Agent trading in the
Company's common stock for its own account on the same side of the
market and at the same time as the Company's sales pursuant to this
Agreement.
(o) The Company shall not be required to comply with the
provisions of subsection (a) or (c) during any period of time the Agent
has suspended the offering of Stock pursuant to a request from the
Company, until the time the Company shall determine that solicitation
of offers for the purchase of Stock should be resumed.
SECTION 5. Conditions of Agent's Obligations.
---------------------------------
The obligations of the Agent to sell the Stock as provided herein shall
be subject to the accuracy, as of the date hereof, and as of each
Closing Date for any Pricing Period contemplated under this Agreement,
of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the
following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for
that purpose shall have been instituted or, to the knowledge of the
Company or the Agent, threatened by the Commission, and any request of
the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) or otherwise
shall have been complied with to the Agent's reasonable satisfaction.
(b) The Agent shall not have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact that in the Agent's
reasonable opinion is material, or omits to state a fact that in the
Agent's reasonable opinion is material and is required to be stated
therein or is necessary to make the statements therein, in light of the
circumstances existing at such time, not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall not have been any material
change, on a consolidated basis, in the capital stock of the Company
and its subsidiaries, or any material adverse change, or any
development that may reasonably be expected to cause a material adverse
change, in the condition (financial or other), business, prospects, net
worth or results of operations of the Duke Group considered as a whole,
or any change in the rating assigned to any securities of the Company.
(d) The Agent shall have received at the date of the commencement
of the first Pricing Period hereunder (the "Commencement Date") and at
every other date specified in Section 4(m) hereof, opinions of Company
Counsel, dated as of the Commencement Date and dated as of such other
date, respectively, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation under the laws of its jurisdiction
of incorporation, has corporate power and authority to
conduct its business as described in the Registration
Statement and Prospectus and is duly qualified to do business
in each jurisdiction set forth on a
schedule thereto; to their knowledge, such jurisdictions
are the only jurisdictions in which such qualification is
required, whether by reason of the Company's ownership or
leasing of real property or conduct of its business, except
where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or
the earnings, assets, business affairs or business prospects
of the Duke Group considered as a whole.
(ii) The Operating Partnership has been duly organized and is
validly existing as a limited partnership under the laws of
its jurisdiction of organization, has partnership power and
authority to conduct its business as described in the
Registration Statement and Prospectus and is duly qualified
to do business in each jurisdiction set forth on a schedule
thereto; to their knowledge, such jurisdictions are the only
jurisdictions in which such qualification is required,
whether by reason of the Operating Partnership's ownership or
leasing of real property or conduct of its business, except
where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or
the earnings, assets, business affairs or business prospects
of the Duke Group considered as a whole.
(iii) Each Subsidiary of the Company or the Operating
Partnership (other than the Property Partnerships) has been
duly formed and is validly existing as a corporation (or
partnership, as the case may be) in good standing under the
laws of the jurisdiction of its organization, and has
corporate (or partnership) power and authority to own, lease
and operate its properties and conduct its business as
described in the Registration Statement and Prospectus.
(iv) All of the issued outstanding capital stock (or other
equity interests) of each Subsidiary identified in an exhibit
to such opinion have been validly issued and are fully paid
and nonassessable (except for partnership or limited
liability company interests which are assessable in
accordance with applicable partnership or operating
agreements and applicable law), and all such shares and
equity interests, as the case may be, that are owned by the
Company, the Operating Partnership or a Subsidiary are in
each case owned free and clear of any security interest,
mortgage, pledge, lien, encumbrance claim or equity.
(v) The shares of Stock have been duly and validly
authorized, and, when issued and delivered to and paid for by
the purchasers thereof pursuant to this Agreement, will be
fully paid and nonassessable and conform to the description
thereof in the Prospectus. Neither the shareholders of the
Company nor any other person or entity has any statutory
preemptive or similar rights with respect to the Stock or, to
their knowledge, any nonstatutory preemptive or similar
rights with respect to the Stock. All corporate action
required to be taken for the authorization, issue and sale of
the Stock has been validly and sufficiently taken.
(vi) The Registration Statement has become effective under
the Act; (if applicable, the filings of the Prospectus
Supplements pursuant to Rule 424(b) have been made
in the manner and within the time period required by
Rule 424(b)); to the knowledge of such counsel no stop order
suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission.
(vii) The Registration Statement, when it became
effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission
(and at each Closing Date on or prior to the date of the
opinion), excluding in each case the financial statements and
supporting schedules and other financial data contained or
incorporated by reference therein (as to which no opinion
need be rendered), complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; and the documents incorporated by reference in
the Registration Statement or Prospectus or any amendment or
supplement thereto, excluding in each case the financial
statements and supporting schedules and other financial data
contained or incorporated by reference therein (as to which
no opinion need be rendered), when filed with the Commission
under the Exchange Act, complied as to form in all material
respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the
Commission thereunder.
(viii) The description in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings,
contracts and other documents are accurate in all material
respects and fairly present the information required to be
shown; and such counsel does not know of any statutes or
legal or governmental proceedings required to be described in
the Prospectus that are not described as required, or of any
contracts or documents of a character required to be
described in the Registration Statement or Prospectus (or
required to be filed under the Exchange Act if upon such
filing they would be incorporated by reference therein) or to
be filed as exhibits to the Registration Statement that are
not described and filed as required.
(ix) This Agreement has been duly authorized, executed and
delivered by the Company.
(x) The execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated herein by the Company do not and
will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any
agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which it
is bound or to which any of the property of the Company or
any of its subsidiaries is subject except for such breaches
or defaults that would not in the aggregate have a material
adverse effect on the Company's ability to perform its
obligations under this Agreement or on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Duke Group considered as one
enterprise, nor will such action result in the violation of
the Company's charter or by-laws, or, to the extent it is
material, any statute or any order, rule or regulation
known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of
its subsidiaries or any of its properties; and no consent,
approval, authorization or order of, or filing with, any
court or governmental agency or body is required for the
consummation of the transactions contemplated by this
Agreement and the Prospectus in connection with the issuance
or sale of the Stock by the Company or the sale of the Stock
by the Agent, except such as have been obtained under the Act
(or filings under Rule 424(b) for particular offerings and
sales of Stock which have not yet been consummated) and such
as may be required under state securities, blue sky or real
estate syndication laws in connection with the sale and
distribution of the Stock by the Agent.
(xi) To the knowledge of such counsel, there are no actions,
suits or proceedings pending or threatened against or
affecting the Company or any of its subsidiaries or the
business, properties, business prospects, condition
(financial or otherwise) or results of operations of the
Company or any of its subsidiaries, or any of their
respective officers in their capacities as such, before or by
any Federal or state or foreign court, commission or
regulatory body, which are required to be disclosed in the
Registration Statement or the Prospectus, other than those
disclosed therein.
(xii) Assuming the Company was organized in conformity
with and has satisfied the requirements for qualification and
taxation as a "real estate investment trust" under the Code
for each of its taxable years from and including the first
taxable year for which the Company made the election to be
taxed as a "real estate investment trust", the proposed
methods of operation of the Company, the Operating
Partnership and the Services Partnership as described in the
Registration Statement and the Prospectus and as represented
by the Company, the Operating Partnership and the Services
Partnership will permit the Company to continue to qualify to
be taxed as a "real estate investment trust" for its current
and subsequent taxable years. The information presented in
the Registration Statement under the caption "Certain Federal
Income Tax Considerations," to the extent it constitutes
matters of law or legal conclusions, is accurate in all
material respects.
In addition, such counsel shall state that such counsel has no
reason to believe that either the Registration Statement, at the time
it (including each post-effective amendment thereto) became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading or that the Prospectus and any amendments or
supplements thereto, on the date of filing thereof with the Commission
and at the Commencement Date and at each Closing Date on or prior to
the date of the opinion, included an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; it being understood that such counsel need
express no opinion as to the financial statements or other financial
and statistical data included in any of the documents mentioned in this
paragraph.
(e) At the Commencement Date and at such other dates specified in
Section 4(n) hereof, the Agent shall have received a letter from KPMG
Peat Marwick LLP, independent public accountants for the Company, or
other independent accountants reasonably satisfactory to the Agent,
dated the date of delivery thereof, substantially in the form attached
hereto as Annex I and otherwise in form and substance satisfactory to
Agent.
(f) The Agent shall have received from the Company a certificate,
or certificates, signed by the President, an Executive Vice President
or a Vice President and by the principal financial or accounting
officer of the Company, dated as of the Commencement Date and dated as
of each Closing Date contemplated by this Agreement, to the effect
that, to the best of their knowledge based upon reasonable
investigation:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made at and as of
the Commencement Date or the Closing Date for such Pricing
Period (as the case may be), and the Company has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the
Commencement Date and each such Closing Date (as the case may
be);
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for
that purpose has been instituted or, to the knowledge of such
officer after due inquiry, is threatened, by the Commission;
(iii) Since the date of this Agreement there has occurred
no event required to be set forth in an amendment or
supplement to the Registration Statement or Prospectus that
has not been so set forth and there has been no document
required to be filed under the Exchange Act and the rules and
regulations of the Commission thereunder that upon such
filing would be deemed to be incorporated by reference in the
Prospectus that has not been so filed; and
(iv) Since the date of this Agreement, there has not been any
material adverse change, on a consolidated basis, in the
business, financial condition or results of operations of the
Duke Group considered as one enterprise which has not been
described in an amendment or supplement to the Registration
Statement or Prospectus (directly or by incorporation).
In addition, on each Closing Date the certificate shall also state
that the shares of Stock to be sold on that date have been duly and
validly authorized by the Company and that all corporate action
required to be taken for the authorization, issuance and sale of the
Stock on that date has been validly and sufficiently taken.
(g) At the Commencement Date and on each Closing Date, the
Company shall have furnished to the Agent such appropriate further
information, certificates and documents as the Agent may reasonably
request.
All such opinions, certificates, letters and other documents will
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Agent. The Company will
furnish the Agent with such conformed copies of such opinions,
certificates, letters and other documents as the Agent shall reasonably
request.
SECTION 6. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless the Agent
and each person, if any, who controls the Agent within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever for
which indemnification is provided under subsection (i) above,
if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable
fees and disbursements of counsel chosen by the Agent),
reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or
any claim whatsoever for which indemnification is provided
under subsection (i) above, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in
the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) The Agent agrees to indemnify and hold harmless the Company
and its directors and each officer of the Company who signed the
Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by the Agent
expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Any indemnified party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section 6, notify each such indemnifying party of the commencement of
such action, enclosing a copy of all papers served, but the omission so
to notify such indemnifying party will not relieve the indemnifying
party from (i) any liability that it might have to any indemnified
party otherwise than under this Section 6 and (ii) any liability that
it may have to any indemnified party under the foregoing provision of
this Section 6 unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement
of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the
action, with counsel satisfactory to the indemnified party, and after
notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except
as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the
defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there
may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists (based
on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party
will not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in fact
employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying
party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they
are incurred. An indemnifying party will not be
liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with
its terms but for any reason is held to be unavailable from the Company
or the Agent, the Company and the Agent will contribute to the total
losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Agent,
such as persons who control the Company within the meaning of the Act,
officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to
which the Company and the Agent may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company on the one hand and the Agent on the other. The relative
benefits received by the Company on the one hand and the Agent on the
other hand shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by
the Company bear to the total compensation (before deducting expenses)
received by the Agent from the sale of Stock on behalf of the Company,
in each case as set forth in the applicable Prospectus Supplement or
Prospectus Supplements. If, but only if, the allocation provided by the
foregoing sentence is not permitted by applicable law, the allocation
of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing
sentence but also the relative fault of the Company, on the one hand,
and the Agent, on the other, with respect to the statements or omission
which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall
be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Agent, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company and the Agent agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to be
determined by pro rata allocation or by any other method of allocation
which does not take into account the equitable considerations referred
to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 6(d) shall be deemed
to include, for the purpose of this Section 6(d), any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the foregoing provisions of this Section 6(d), the
Agent shall not be required to contribute any amount in excess of the
amount by which the total actual sales price at which Stock sold by the
Agent exceeds the amount of any damages that the Agent has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this
Section 6(d), any person who controls a party to this Agreement within
the meaning of the Act or the Exchange Act will have the same rights to
contribution as that party, and each officer or director of the Company
who signed the Registration Statement will have the same rights to
contribution as the
Company, subject in each case to the provisions hereof. Any party
entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 6(d), will notify
any such party or parties from whom contribution may be sought, but the
omission so to notify will not relieve that party or parties from whom
contribution may be sought from any other obligation it or they may
have under this Section 6(d). No party will be liable for contribution
with respect to any action or claim settled without its written consent
(which consent will not be unreasonably withheld).
(e) The indemnity and contribution provided by this Section 6
shall not relieve the Company and the Agent from any liability the
Company and the Agent may otherwise have (including, without
limitation, any liability the Agent may have for a breach of its
obligations under Section 3 hereof).
SECTION 7. Representations and Agreements to Survive Delivery.
--------------------------------------------------
All representations, warranties and agreements of the Company
herein or in certificates delivered pursuant hereto, and the agreements
of the Agent contained in Section 6 hereof, shall remain operative and
in full force and effect regardless of any investigation made by or on
behalf of the Agent or any controlling persons, or the Company (or any
of their officers, directors or controlling persons), and shall survive
delivery of and payment for the Stock.
SECTION 8. Termination.
(a) The Agent shall have the right by giving notice as
hereinafter specified at any time at or prior to any Closing Date, to
terminate this Agreement if (i) any material adverse change, or any
development that has actually occurred and that is reasonably expected
to cause material adverse change, in the business, financial condition
or results of operations of the Duke Group as a whole has occurred
which, in the judgment of such Agent, materially impairs the investment
quality of the Stock, (ii) the Company shall have failed, refused or
been unable, at or prior to the Closing Date, to perform any agreement
on its part to be performed hereunder, (iii) any other condition of the
Agent's obligations hereunder is not fulfilled, (iv) any suspension or
limitation of trading in the Stock on the New York Stock Exchange, or
any setting of minimum prices for trading of the Stock on such
exchange, shall have occurred, (v) any banking moratorium shall have
been declared by Federal or New York authorities or (vi) an outbreak or
material escalation of major hostilities in which the United States is
involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of
a similar character shall have occurred since the execution of this
Agreement that, in the judgment of the Agent, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment
for the Stock to be sold by the Agent on behalf of the Company. Any
such termination shall be without liability of any party to any other
party except that the provisions of Section 4(g), Section 6 and Section
7 hereof shall remain in full force and effect notwithstanding such
termination. If the Agent elects to terminate this Agreement as
provided in this Section, the Agent shall provide the required notice
as specified herein.
(b) Notwithstanding anything in this Agreement to the contrary,
the Company shall have the right, by giving at least ten (10) days'
written notice to the Agent as hereinafter specified, to terminate this
Agreement in its sole discretion at any time. Any such termination
shall be without liability of any party to any other party except that
the provisions of Section
4(g), Section 6 and Section 7 hereof shall remain in full force and
effect notwithstanding such termination.
(c) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 8(a) or (b) above or otherwise by
mutual agreement of the parties; provided that any such termination by
mutual agreement shall in all cases be deemed to provide that Section
4(g), Section 6 and Section 7 shall remain in full force and effect.
(d) Any termination of this Agreement shall be effective on the
date specified in such notice of termination; provided that such
termination shall not be effective until the close of business on the
date of receipt of such notice by the Agent or the Company, as the case
may be. If such termination shall occur during a Pricing Period, any
Additional Shares and Average Market Price Shares shall settle in
accordance with the provisions of the second to last paragraph of
Section 3 hereof.
SECTION 9. Notices.
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All notices or communications hereunder shall be in writing and if sent
to the Agent shall be mailed, delivered, telexed or telecopied and
confirmed to the Agent at Frith Brothers Investments, Inc., 992 Old
Eagle School Road, Suite 915, Wayne, Pennsylvania 19087, telecopy no.
(610) 975-9993, Attention: Mr. Wes Frith, or if sent to the Company,
shall be mailed, delivered, telexed or telecopied and confirmed to the
Company at Duke Realty Investments, Inc., 8888 Keystone Crossing, Suite
1200, Indianapolis, Indiana 46240, telecopy no. (317) 574-6032,
Attention: Mr. Thomas Peck. Each party to this Agreement may change
such address for notices by sending to the other party to this
Agreement written notice of a new address for such purpose.
SECTION 10. Parties.
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This Agreement shall inure to the benefit of and be binding upon the
Company and the Agent and their respective successors and the
controlling persons, officers and directors referred to in Section 6
hereof, and no other person will have any right or obligation
hereunder.
SECTION 11. Entire Agreement.
----------------
This Agreement constitutes the entire agreement and supersedes all
other prior and contemporaneous agreements and undertakings, both
written and oral, among the parties hereto with regard to the subject
matter hereof.
SECTION 12. Applicable Law.
---------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 13. Counterparts.
------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
If the foregoing correctly sets forth the understanding between
the Company and the Agent, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and the Agent. Alternatively, the
execution of this
Agreement by the Company and its acceptance by or on behalf of the
Agent may be evidenced by an exchange of telegraphic, telecopied or
other written communications.
Very truly yours,
DUKE REALTY INVESTMENTS, INC.
By: /s/ Dennis D. Oklak
------------------------------------
Dennis D. Oklak
Executive Vice President, Chief
Administrative Officer and Treasurer
ACCEPTED as of the date
first above written
FRITH BROTHERS INVESTMENTS, INC.
By: /s/ Wesley H. Frith
--------------------------------
Printed Name: Wesley H. Frith
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Title: Presdient
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