DUKE REALTY INVESTMENTS, INC.
(AN INDIANA CORPORATION)
4,000,000 DEPOSITARY SHARES
EACH REPRESENTING 1/10 OF A 8 1/4% SERIES E CUMULATIVE REDEEMABLE
PREFERRED SHARE (PAR VALUE $0.01 PER SHARE)
(LIQUIDATION PREFERENCE EQUIVALENT TO $25.00 PER DEPOSITARY SHARE)
TERMS AGREEMENT
Dated: January 14, 1999
To: Duke Realty Investments, Inc.
8888 Keystone Crossing, Suite 1150
Indianapolis, IN 46240
Attention: Chairman of the Board of Directors
Ladies and Gentlemen:
We understand that Duke Realty Investments, Inc., an Indiana corporation
(the "Company"), proposes to issue and sell 4,000,000 depositary shares (the
"Depositary Shares") each representing 1/10 of a 8 1/4% Series E Cumulative
Redeemable Preferred Share, par value $0.01 (collectively, the "Series E
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) and the Option
Securities (as defined in the Underwriting Agreement referred to below) to the
extent any are purchased, at the purchase price set forth below.
Number of Shares
of Initial
Underwriter Underwritten Securities
----------- -----------------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 735,000
A.G.Edwards & Sons, Inc. 735,000
Morgan Stanley & Co. Incorporated 735,000
PaineWebber Incorporated 735,000
Salomon Smith Barney Inc. 735,000
BT Alex. Brown Incorporated 25,000
Robert W. Baird & Co. Incorporated 25,000
CIBC Oppenheimer Corp. 25,000
Dain Rauscher Incorporated 25,000
EVEREN Securities, Inc. 25,000
Legg Mason Wood Walker, Incorporated 25,000
NationsBanc Montgomery Securities LLC. 25,000
Piper Jaffray Inc. 25,000
Raymond James & Associates, Inc. 25,000
Roney Capital Markets, A Division of First
Chicago Capital Markets, Inc. 25,000
SG Cowen Securities Corporation 25,000
Tucker Anthony Incorporated 25,000
Wheat First Securities, Inc. 25,000
The Underwritten Securities shall have the following terms:
Title of securities: Depositary Shares each representing 1/10
of a 8 1/4% Series E Cumulative
Redeemable Preferred Share (Par Value
$0.01 Per Share) (Liquidation Preference
Equivalent to $25.00 Per Depositary
Share).
Number of shares: 4,000,000
Public offering price per share: $25.00, plus accumulated dividends, if
any, from the date of original issue.
Purchase price per share: $24.2125
Number of Option Securities, if
any, that may be purchased by
the Underwriters: 600,000
Dividend rate: Cumulative dividends in the amount of
8 1/4% of the liquidation preference per
annum (equivalent to $2.0625 per annum
per Depositary Share); payable quarterly
on or about the last day of each March,
June, September and December of each
year.
Voting and other rights: If distributions on the Series E
Preferred Shares are in arrears for six
or more quarterly periods, whether or
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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.
Additional co-managers: A.G. Edwards & Sons, Inc., Morgan
Stanley Dean Witter, PaineWebber
Incorporated and Salomon Smith Barney
Inc.
Liquidation preference: $25.00 per Depositary Share.
Ranking: The Underwritten Securities will rank
PARI PASSU with any other preferred
shares (except the Series C Junior
Preferred Stock to which the
Underwritten Securities rank senior) and
will rank senior to the Common Stock of
the Company and any other shares of the
Company ranking junior to the Series E
Preferred Shares.
Conversion provision: The Series E Preferred Shares are not
convertible or exchangeable for any
other property or securities of the
Company.
Redemption provisions: The Depositary Shares may be redeemed,
in whole or in part at the option of the
Company, as of January 20, 2004, solely
from the proceeds of an offering of the
Company's capital shares, at a
redemption price of $25.00 per
Depositary Share, plus accrued and
unpaid distributions thereon to the date
fixed for redemption, without interest.
Sinking fund provisions: None
Closing time, date and location: January 20, 1999, 10:00 a.m., New York
City Time, Rogers & Wells LLP, 200 Park
Avenue, New York, New York 10166
Other Terms: Sections 3(o) and 5(h) of the
Underwriting Agreement are inapplicable
to this transaction.
All the provisions contained in the document attached as Annex A hereto
entitled "Duke Realty Investments, Inc. 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 defined in such
document are used herein as therein defined.
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Please accept this offer no later than 5 o'clock P.M. (New York City time)
on January 14, 1999 by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------------------
For Themselves and as Representatives of the other
named underwriters
Name:
Title:
Accepted:
DUKE REALTY INVESTMENTS, INC.
By:
-------------------------------
Name:
Title:
DUKE REALTY LIMITED PARTNERSHIP
By: DUKE REALTY INVESTMENTS, INC.
-----------------------------
General Partner
By:
-------------------------------
Name:
Title:
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