Agreement and Plan of Merger (2007)Full Document 

Start of Preview

AGREEMENT AND PLAN OF MERGER

by and among

WELLS REAL ESTATE INVESTMENT TRUST, INC.,

WRT ACQUISITION COMPANY, LLC,

WGS ACQUISITION COMPANY, LLC,

WELLS REAL ESTATE FUNDS, INC.,

WELLS CAPITAL, INC.,

WELLS MANAGEMENT COMPANY, INC.,

WELLS ADVISORY SERVICES I, LLC,

WELLS REAL ESTATE ADVISORY SERVICES, INC.

and

WELLS GOVERNMENT SERVICES, INC.

Dated as of February 2, 2007


TABLE OF CONTENTS

 

          Page

ARTICLE I

   DEFINITIONS    2

Section 1.1

  

Definitions

   2

ARTICLE II

   THE MERGER    9

Section 2.1

  

Generally

   9

Section 2.2

  

Effect of the Mergers

   9

Section 2.3

  

Articles of Organization; Operating Agreements

   9

Section 2.4

  

Resignation of Directors and Officers

   9

Section 2.5

  

Effective Time

   9

Section 2.6

  

Closing

   10

Section 2.7

  

Conversion of WREAS Shares and WGS Shares

   10

Section 2.8

  

Exchange of Certificates

   10

Section 2.9

  

Escrow

   10

Section 2.10

  

Adjustments to Prevent Dilution

   10

Section 2.11

  

Closing Balance Sheet

   10

Section 2.12

  

Wells Capital Operating Partnership Interests

   11

ARTICLE III

   REPRESENTATIONS AND WARRANTIES OF THE ADVISOR COMPANIES    11

Section 3.1

  

Organization of the Advisor Companies

   11

Section 3.2

  

Authority; Non-Contravention; Approvals

   12

Section 3.3

  

Organization and Qualification of WREAS and WGS

   13

Section 3.4

  

Capitalization

   13

Section 3.5

  

Financial Statements

   14

Section 3.6

  

Absence of Undisclosed Liabilities

   14

Section 3.7

  

Absence of Certain Changes or Events

   15

Section 3.8

  

Books and Records

   15

Section 3.9

  

Tax Matters

   15

Section 3.10

  

ERISA and Employee Benefits

   16

Section 3.11

  

Employment Matters

   16

Section 3.12

  

Labor Relations

   17

Section 3.13

  

Absence of Litigation

   17

Section 3.14

  

No Violation of Law

   17

Section 3.15

  

Title to Assets; Encumbrances

   18

Section 3.16

  

Sufficiency of Assets

   18

Section 3.17

  

Insurance

   18

Section 3.18

  

Contracts and Other Agreements

   18

Section 3.19

  

Intellectual Property

   20

 

i


TABLE OF CONTENTS

 

          Page

Section 3.20

  

Real Property

   20

Section 3.21

  

Environmental, Health and Safety Matters

   21

Section 3.22

  

Bank Accounts

   21

Section 3.23

  

No Other Business

   22

Section 3.24

  

Licenses

   22

Section 3.25

  

Powers of Attorney

   22

Section 3.26

  

Transactions and Related Parties

   22

Section 3.27

  

Brokers

   22

Section 3.28

  

Information for Proxy Statement

   22

Section 3.29

  

Appraisals; Valuations; Offers

   22

Section 3.30

  

Expenses

   23

Section 3.31

  

Securities Laws Matters

   23

Section 3.32

  

Non-Foreign Status

   23

Section 3.33

  

In-House Property Management

   23

Section 3.34

  

Knowledge Regarding REIT’s Representations

   23

Section 3.35

  

Government Properties Compliance

   23

ARTICLE IV

   REPRESENTATIONS AND WARRANTIES OF REIT    24

Section 4.1

  

Organization and Qualification

   24

Section 4.2

  

Authority; Non-Contravention; Approvals

   24

Section 4.3

  

Capitalization

   25

Section 4.4

  

Brokers

   25

Section 4.5

  

Proxy Statement

   25

Section 4.6

  

Absence of Certain Change or Events

   25

ARTICLE V

   COVENANTS    25

Section 5.1

  

Conduct of the Business

   25

Section 5.2

  

Conduct of REIT’s Business

   27

Section 5.3

  

Access to Information

   27

Section 5.4

  

Commercially Reasonable Efforts

   27

Section 5.5

  

Preparation of the Proxy Statement; REIT Stockholders Meeting

   28

Section 5.6

  

Notification

   29

Section 5.7

  

Transfer Taxes

   29

Section 5.8

  

Delivery of Financial Statements

   29

Section 5.9

  

Restrictions on Resale of Merger Shares; Maintenance of Assets; Pledge

   30

Section 5.10

  

Public Statements

   30

Section 5.11

  

Confidentiality

   30

Section 5.12

  

Office Leases

   31

 

ii


TABLE OF CONTENTS

 

          Page

Section 5.13

  

Insurance

   31

Section 5.14

  

Regional Property Management Offices

   31

Section 5.15

  

Qualifying Property Management Contracts

   32

Section 5.16

  

Assets of WREAS

   32

Section 5.17

  

Intercompany Agreements

   32

Section 5.18

  

Litigation Support

   33

Section 5.19

  

Employee Matters

   33

Section 5.20

  

Non-Solicitation/No Hire

   34

Section 5.21

  

Restrictive Legends and Stop Transfer Orders

   35

Section 5.22

  

Directors and Officers’ Insurance

   35

Section 5.23

  

Covenants Relating to Status of the Mergers as Reorganizations under the Code

   35

Section 5.24

  

Dividends

   36

Section 5.25

  

Property Management Guaranty

   36

ARTICLE VI

   CONDITIONS    37

Section 6.1

  

Conditions to Each Party’s Obligations

   37

Section 6.2

  

Conditions to REIT’s Obligations

   37

Section 6.3

  

Conditions to the Advisor Companies’ Obligations

   39

ARTICLE VII

   POST-CLOSING TAX MATTERS    39

Section 7.1

  

Covenants

   39

Section 7.2

  

Cooperation on Tax Matters

   40

Section 7.3

  

Tax Indemnity

   40

Section 7.4

  

Tax Returns

   41

ARTICLE VIII

   SURVIVAL; INDEMNIFICATION    41

Section 8.1

  

Survival of Representations, Warranties, Covenants and Agreements

   41

Section 8.2

  

Indemnification of REIT

   42

Section 8.3

  

Indemnification of the Advisor Companies

   42

Section 8.4

  

Limitations

   42

Section 8.5

  

Method of Asserting Claims

   42

Section 8.6

  

Character of Indemnity Payments

   43

Section 8.7

  

Appointment of the Advisor Parties’ Representative

   43

Section 8.8

  

Exclusive Remedy

   43

Section 8.9

  

Subrogation; Insurance

   44

ARTICLE IX

   TERMINATION OF AGREEMENT    44

Section 9.1

  

Termination

   44

Section 9.2

  

Effect of Termination

   44

 

iii


TABLE OF CONTENTS

 

          Page

ARTICLE X

   MISCELLANEOUS    45

Section 10.1

  

Notices

   45

Section 10.2

  

Entire Agreement

   46

Section 10.3

  

Expenses

   46

Section 10.4

  

Waiver

   46

Section 10.5

  

Amendment

   46

Section 10.6

  

No Third-Party Beneficiary

   46

Section 10.7

  

Assignment; Binding Effect

   46

Section 10.8

  

Specific Performance

   46

Section 10.9

  

Arbitration

   46

Section 10.10

  

Invalid Provisions

   47

Section 10.11

  

Governing Law

   47

Section 10.12

  

Counterparts; Facsimile Signatures

   47

Section 10.13

  

Interpretation

   47

Section 10.14

  

Further Assurances

   47

Section 10.15

  

REIT Board Actions

   47

Section 10.16

  

Advisor Disclosure Schedule

   47

Section 10.17

  

License of Name

   48

 

iv


AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), is entered into as of the 1st day of February, 2007, by and among Wells Real Estate Investment Trust, Inc., a Maryland corporation (“REIT”), WRT Acquisition Company, LLC, a Georgia limited liability company and a wholly-owned subsidiary of REIT (“REIT Sub”), WGS Acquisition Company, LLC, a Georgia limited liability company and a wholly-owned subsidiary of REIT (“REIT GS Sub”), Wells Real Estate Funds, Inc., a Georgia corporation (“Wells REF”), Wells Capital, Inc., a Georgia corporation and a wholly-owned subsidiary of Wells REF (“Wells Capital”), Wells Management Company, Inc., a Georgia corporation and a wholly-owned subsidiary of Wells REF (“Wells Management”), Wells Advisory Services I, LLC, a Georgia limited liability company, majority owned by Wells Capital and Wells Management (“WAS I” and, collectively with Wells Capital, Wells Management and Wells REF, the “Advisor Companies”), Wells Real Estate Advisory Services, Inc., a Georgia corporation and a wholly-owned subsidiary of WAS I (“WREAS”), and Wells Government Services, Inc., a Georgia corporation and a wholly-owned subsidiary of WAS I (“WGS”).

RECITALS

WHEREAS, Wells Management, REIT and Wells Operating Partnership, L.P., a Delaware limited partnership of which REIT is the sole general partner (the “Operating Partnership”), are parties to that certain Asset Management Advisory Agreement dated January 1, 2005 (the “Advisory Agreement”) and that certain Master Property Management, Leasing and Construction Management Agreement dated January 1, 2005 (the “Management Agreement”);

WHEREAS, Wells Capital and REIT are parties to that certain Acquisition Advisory Agreement dated January 1, 2005 (the “Acquisition Agreement” and, collectively with the Advisory Agreement and the Management Agreement, the “REIT Contracts”);

WHEREAS, Wells Management and Wells Capital assigned the REIT Contracts to WAS I, and WAS I assigned the REIT Contracts to WREAS;

WHEREAS, the Advisor Companies and their Affiliates are engaged in the business of providing services to REIT (including all of the services necessary to satisfy their obligations under the REIT Contracts);

WHEREAS, WGS is engaged in the business of providing property management services with respect to properties owned by REIT or other entities managed by Wells Management;

WHEREAS, subject to the terms and conditions of this Agreement, the respective boards of directors and members, as applicable, of REIT, REIT Sub, REIT GS Sub, WREAS and WGS have determined that the merger of WREAS with and into REIT Sub, with REIT Sub being the surviving entity, and the merger of WGS with and into REIT GS Sub, with REIT GS Sub being the surviving entity, are in the best interests of their respective stockholders and members, as applicable, and have approved such mergers subject to the terms and conditions set forth herein;

End of Preview