10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________

FORM 10-Q

___________________________________________________ 

(Mark One)
x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2012

OR

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to

Commission file number 000-53193

WELLS TIMBERLAND REIT, INC.

(Exact name of registrant as specified in its charter)

Maryland	20-3536671
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

6200 The Corners Parkway

Norcross, Georgia 30092

(Address of principal executive offices)

(Zip Code)

(770) 449-7800

(Registrant’s telephone number, including area code)

N/A

___________________________________________________ 

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No   o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files)

Yes  x    No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one).

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	x	(Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o    No  x

Number of shares outstanding of the registrant’s only

class of common stock, as of October 31, 2012: 31,800,627 shares

FORM 10-Q

WELLS TIMBERLAND REIT, INC.

TABLE OF CONTENTS

			Page No.
PART I. FINANCIAL INFORMATION
	Item 1.	Condensed Consolidated Financial Statements	4
		Consolidated Balance Sheets as of September 30, 2012 (unaudited) and December 31, 2011	5
		Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2012 (unaudited) and 2011 (unaudited)	6
		Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2012 (unaudited) and 2011 (unaudited)	7
		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 (unaudited) and 2011 (unaudited)	8
		Condensed Notes to Consolidated Financial Statements (unaudited)	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
	Item 4.	Controls and Procedures	34
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	35
	Item 1A.	Risk Factors	35
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
	Item 3.	Defaults Upon Senior Securities	36
	Item 4.	Mine Safety Disclosures	36
	Item 5.	Other Information	36
	Item 6.	Exhibits	36

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q of Wells Timberland REIT, Inc. and subsidiaries (“Wells Timberland REIT,” “we,” “our,” or “us”) other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that this report is filed with the Securities and Exchange Commission (“SEC”). We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this report, and we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such forward-looking statements are subject to unknown risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, make distributions to stockholders, and maintain the value of our real estate properties, may be significantly hindered. See Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2011 and in our quarterly report on Form 10-Q for the period ended June 30, 2012, for a discussion of some of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements. The risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2011 and in our quarterly report on Form 10-Q for the period ended June 30, 2012 are not the only ones we face but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also harm our business.

3

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The information furnished in the accompanying consolidated balance sheets and related consolidated statements of operations, stockholders’ equity, and cash flows reflects all normal and recurring adjustments that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned financial statements.

The accompanying consolidated financial statements should be read in conjunction with the condensed notes to Wells Timberland REIT’s consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and with Wells Timberland REIT’s Annual Report on Form 10-K for the year ended December 31, 2011. Wells Timberland REIT’s results of operations for the three months and nine months ended September 30, 2012 are not necessarily indicative of the operating results expected for the full year.

4

WELLS TIMBERLAND REIT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	(Unaudited) September 30, 2012			December 31, 2011
Assets:
Cash and cash equivalents	$	11,603,041		$	6,848,973
Restricted cash and cash equivalents	1,612,657			6,762,246
Accounts receivable	945,273			644,622
Prepaid expenses and other assets	925,868			499,188
Deferred financing costs, less accumulated amortization of $1,707 and $809,158 as of September 30, 2012 and December 31, 2011, respectively	1,327,787			1,672,550
Timber assets, at cost:
Timber and timberlands, net (Note 3)	337,270,183			328,561,850
Intangible lease assets, less accumulated amortization of $801,434 and $703,675 as of September 30, 2012 and December 31, 2011, respectively	155,652			333,178
Total assets	$	353,840,461		$	345,322,607
Liabilities:
Accounts payable and accrued expenses	$	2,583,592		$	1,918,281
Due to affiliates (Note 8)	—			28,960,573
Other liabilities	4,849,462			2,609,809
Note payable and line of credit (Note 4)	133,000,000			122,025,672
Total liabilities	140,433,054			155,514,335
Commitments and Contingencies (Note 5)
Stockholders’ Equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized:
Series A preferred stock, $1,000 liquidation preference; 27,585 and 27,844 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively	36,406,725			36,539,548
Series B preferred stock, $1,000 liquidation preference; 9,807 and 9,904 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively	12,099,341			12,145,951
Common stock, $0.01 par value; 900,000,000 shares authorized; 31,800,627 and 31,465,274 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively	318,006			314,653
Additional paid-in capital	301,442,135			271,428,671
Accumulated deficit and distributions	(136,858,800		)	(130,620,551		)
Total stockholders’ equity	213,407,407			189,808,272
Total liabilities and stockholders’ equity	$	353,840,461		$	345,322,607

See accompanying notes.

5

WELLS TIMBERLAND REIT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	(Unaudited)						(Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues:
Timber sales	$	7,840,893		$	8,764,464		$	22,125,589		$	26,612,742
Timberland sales	420,260			—			10,972,440			1,021,200
Other revenues	673,549			697,927			2,014,830			2,068,715
	8,934,702			9,462,391			35,112,859			29,702,657
Expenses:
Contract logging and hauling costs	3,941,977			5,125,603			11,788,361			15,086,909
Depletion	2,670,288			2,594,248			8,144,576			8,675,870
Cost of timberland sales	282,037			306			7,849,652			712,613
Advisor fees and expense reimbursements	—			—			2,393,745			1,843,958
Forestry management fees	557,396			683,836			1,700,475			2,060,818
General and administrative expenses	569,949			502,734			1,697,464			1,729,570
Land rent expense	469,141			541,418			1,482,438			1,664,856
Other operating expenses	670,061			747,278			1,936,419			2,107,629
	9,160,849			10,195,423			36,993,130			33,882,223
Operating loss	(226,147		)	(733,032		)	(1,880,271		)	(4,179,566		)
Other income (expense):
Interest income	310			145			619			1,899
Interest expense	(2,274,272		)	(1,275,506		)	(4,235,665		)	(4,315,205		)
Loss on interest rate swap	(19,706		)	(112,178		)	(122,871		)	(448,569		)
	(2,293,668		)	(1,387,539		)	(4,357,917		)	(4,761,875		)
Net loss	(2,519,815		)	(2,120,571		)	(6,238,188		)	(8,941,441		)
Dividends to preferred stockholders	(93,992		)	(98,963		)	(280,003		)	(1,460,194		)
Net loss available to common stockholders	$	(2,613,807	)	$	(2,219,534	)	$	(6,518,191	)	$	(10,401,635	)
Per-share information—basic and diluted:
Net loss available to common stockholders	$	(0.08	)	$	(0.08	)	$	(0.20	)	$	(0.37	)
Weighted-average common shares outstanding—basic and diluted	31,848,476			29,110,422			31,862,389			27,825,695

See accompanying notes.

6

WELLS TIMBERLAND REIT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 (UNAUDITED)

	Common Stock					Preferred Stock					Additional Paid-In Capital			Accumulated Deficit and Distributions			Total Stockholders’ Equity
	Shares		Amount			Shares		Amount
Balance, December 31, 2011	31,465,274		$	314,653		37,748		$	48,685,499		$	271,428,671		$	(130,620,551	)	$	189,808,272
Issuance of common stock	414,441		4,144			—		—			4,130,658			(61		)	4,134,741
Redemptions of common stock	(79,088	)	(791		)	—		—			(742,324		)	—			(743,115		)
Dividends on preferred stock	—		—			—		280,003			(280,003		)	—			—
Redemptions of preferred stock	—		—			(356	)	(459,436		)	—			—			(459,436		)
Commissions and discounts on stock sales and related dealer-manager fees	—		—			—		—			(361,364		)	—			(361,364		)
Other offering costs	—		—			—		—			(48,752		)	—			(48,752		)
Write-off of due to affiliates	—		—			—		—			27,315,249			—			27,315,249
Net loss	—		—			—		—			—			(6,238,188		)	(6,238,188		)
Balance, September 30, 2012	31,800,627		$	318,006		37,392		$	48,506,066		$	301,442,135		$	(136,858,800	)	$	213,407,407
	Common Stock					Preferred Stock					Additional Paid-In Capital			Accumulated Deficit and Distributions			Total Stockholders’ Equity
	Shares		Amount			Shares		Amount
Balance, December 31, 2010	25,498,717		$	254,988		43,628		$	54,648,732		$	219,082,323		$	(113,326,358	)	$	160,659,685
Issuance of common stock	3,844,884		38,449			—		—			38,392,057			—			38,430,506
Issuance of stock dividends	407,461		4,074			—		—			4,096,791			(4,100,896		)	(31		)
Redemptions of common stock	(59,726	)	(597		)	—		—			(577,304		)	—			(577,901		)
Dividends on preferred stock	—		—			—		1,460,194			(1,460,194		)	—			—
Redemptions of preferred stock	—		—			(4,981	)	(6,360,854		)	—			—			(6,360,854		)
Commissions and discounts on stock sales and related dealer-manager fees	—		—			—		—			(3,378,436		)	—			(3,378,436		)
Other offering costs	—		—			—		—			(456,988		)	—			(456,988		)
Net loss	—		—			—		—			—			(8,941,441		)	(8,941,441		)
Balance, September 30, 2011	29,691,336		$	296,914		38,647		$	49,748,072		$	255,698,249		$	(126,368,695	)	$	179,374,540

See accompanying notes.

7

WELLS TIMBERLAND REIT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	(Unaudited)
	Nine Months Ended September 30,
	2012			2011
Cash Flows from Operating Activities:
Net loss	$	(6,238,188	)	$	(8,941,441	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depletion	8,144,576			8,675,870
Unrealized gain on interest rate swaps	(665,009		)	(209,026		)
Other amortization	220,232			161,846
Stock-based compensation expense	28,333			21,667
Noncash interest expense	1,674,257			344,748
Basis of timberland sold	7,187,733			628,229
Basis of casualty loss	25,541			78,091
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	(300,651		)	70,822
(Increase) decrease in prepaid expenses and other assets	(417,195		)	172,207
Increase in accounts payable and accrued expenses	565,375			132,255
(Decrease) increase in due to affiliates	(1,480,196		)	1,623,645
Increase in other liabilities	1,748,345			537,863
Net cash provided by operating activities	10,493,153			3,296,776
Cash Flows from Investing Activities:
Investment in timber, timberland, and related assets	(22,962,057		)	(924,880		)
Funds released from escrow accounts	5,149,589			4,283,783
Net cash (used in) provided by investing activities	(17,812,468		)	3,358,903
Cash Flows from Financing Activities:
Proceeds from CoBank loan	133,000,000			—
Financing costs paid	(1,229,558		)	(168,380		)
Repayments of Mahrt loan	(122,025,672		)	(35,866,376		)
Issuance of common stock	4,062,647			38,082,291
Redemptions of common stock	(743,115		)	(577,901		)
Redemptions of preferred stock	(356,000		)	(4,981,000		)
Dividends paid on preferred stock redeemed	(103,436		)	(1,379,854		)
Commissions on stock sales and related dealer-manager fees paid	(447,744		)	(3,067,842		)
Other offering costs paid	(83,739		)	(457,468		)
Placement and structuring agent fees paid	—			(93,264		)
Net cash provided by (used in) financing activities	12,073,383			(8,509,794		)
Net increase (decrease) in cash and cash equivalents	4,754,068			(1,854,115		)
Cash and cash equivalents, beginning of period	6,848,973			8,788,967
Cash and cash equivalents, end of period	$	11,603,041		$	6,934,852

See accompanying notes.

8

WELLS TIMBERLAND REIT, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012 (unaudited)

1. Organization

Wells Timberland REIT was formed on September 27, 2005 as a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes. Wells Timberland REIT engages in the acquisition and ownership of timberland located in the southeastern United States. Substantially all of Wells Timberland REIT’s business is conducted through Wells Timberland Operating Partnership, L.P. (“Wells Timberland OP”), a Delaware limited partnership formed on November 9, 2005, of which Wells Timberland REIT is the sole general partner, possesses full legal control and authority over its operations, and owns 99.99% of its common partnership units. Wells Timberland Management Organization, LLC (“Wells TIMO”), a wholly owned subsidiary of Wells Capital, Inc. (“Wells Capital”), is the sole limited partner of Wells Timberland OP. In addition, Wells Timberland OP formed Wells Timberland TRS, Inc. (“Wells Timberland TRS”), a wholly owned subsidiary organized as a Delaware corporation, on January 1, 2006. Unless otherwise noted, references herein to Wells Timberland REIT shall include Wells Timberland REIT and all of its subsidiaries, including Wells Timberland OP, and the subsidiaries of Wells Timberland OP, and Wells Timberland TRS. Under an agreement (the “Advisory Agreement”), Wells TIMO performs certain key functions on behalf of Wells Timberland REIT and Wells Timberland OP, including, among others, the investment of capital proceeds and management of day-to-day operations (see Note 8).

As of September 30, 2012, Wells Timberland REIT owned approximately 246,200 acres of timberland and held long-term leasehold interests in approximately 45,200 acres of additional timberland, all of which is located on the Lower Piedmont and Upper Coastal Plains of East Central Alabama and West Central Georgia (the “Mahrt Timberland”). Wells Timberland REIT acquired the Mahrt Timberland on October 9, 2007. Wells Timberland REIT generates a substantial portion of its revenues from selling timber and the right to access land and harvest timber to third parties pursuant to supply agreements and through open-market sales, selling higher-and-better-use timberland, and leasing land-use rights to third parties.

On August 11, 2006, Wells Timberland REIT commenced its initial public offering (the “Initial Public Offering”) of up to 85.0 million shares of common stock, of which 75.0 million shares were offered in the primary offering for $10.00 per share and 10.0 million shares were reserved for issuance through Wells Timberland REIT’s distribution reinvestment plan (“DRP”). Wells Timberland REIT stopped offering shares for sale under the Initial Public Offering on August 11, 2009. Wells Timberland REIT raised gross offering proceeds of approximately $174.9 million from the sale of approximately 17.6 million shares under the Initial Public Offering.

On August 6, 2009, Wells Timberland REIT commenced its follow-on offering (the “Follow-On Offering”, and together with the Initial Public Offering, the “Public Offerings”) of up to 220.9 million shares of common stock, of which 200.0 million shares were offered in a primary offering for $10.00 per share and 20.9 million shares of common stock were reserved for issuance through Wells Timberland REIT’s DRP for $9.55 per share. Effective December 31, 2011, Wells Timberland REIT ceased offering shares for sale under the Follow-On Offering. From January 1, 2012 to February 13, 2012, Wells Timberland REIT accepted $4.1 million of additional gross offering proceeds from the sale of approximately 0.4 million additional shares under the Follow-On Offering, which sales were agreed to by the investor on or before December 31, 2011. On March 15, 2012, Wells Timberland REIT withdrew from registration the unsold primary offering shares. Wells Timberland REIT raised gross offering proceeds of approximately $123.8 million from the sale of approximately 12.5 million shares under the Follow-On Offering.

Wells Timberland REIT offered up to approximately 11.4 million shares of its common stock, of which approximately 10.4 million shares were offered in a primary offering to non-U.S. persons at a price per share of $9.65, and up to approximately 1.0 million shares of common stock were reserved for issuance through an unregistered distribution reinvestment plan at a price per share equal to $9.55 (the “2010 German Offering”). The 2010 German Offering closed on August 6, 2011 and Wells Timberland REIT raised approximately $8.5 million from the sale of approximately 0.9 million shares in the 2010 German Offering.

9

Wells Timberland REIT raised gross offering proceeds from the sale of common stock under the Public Offerings and the 2010 German Offering of approximately $307.2 million. After deductions for payments of selling commissions and dealer-manager fees of approximately $24.7 million, other organization and offering expenses of approximately $1.4 million, approximately $0.4 million in placement and structuring agent fees, and common stock redemptions of approximately $2.6 million under the share redemption plan (“SRP”), Wells Timberland REIT had received aggregate net offering proceeds of approximately $278.1 million, which was used to partially fund the Mahrt Timberland acquisition, service acquisition-related debt, redeem shares of its preferred stock, and fund accrued dividends on redeemed shares of preferred stock.

Wells Timberland REIT’s common stock is not listed on a national securities exchange. Wells Timberland REIT’s charter requires that in the event its common stock is not listed on a national securities exchange by August 11, 2018, Wells Timberland REIT must either (i) seek stockholder approval of an extension or amendment of this listing deadline or (ii) seek stockholder approval to begin liquidating investments and distributing the resulting proceeds to the stockholders. In the event that Wells Timberland REIT seeks stockholder approval for an extension or amendment to this listing date and does not obtain it, Wells Timberland REIT will then be required to seek stockholder approval to liquidate. In this circumstance, if Wells Timberland REIT seeks and does not obtain approval to liquidate, Wells Timberland REIT will not be required to list or liquidate and could continue to operate indefinitely as an unlisted company.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements of Wells Timberland REIT have been prepared in accordance with the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, the statements for these unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of results for a full year.

Wells Timberland REIT owns a controlling financial interest in Wells Timberland OP and Wells Timberland TRS and, accordingly, includes the accounts of these entities in its consolidated financial statements. The financial statements of Wells Timberland OP and Wells Timberland TRS are prepared using accounting policies consistent with those used by Wells Timberland REIT. All intercompany balances and transactions have been eliminated in consolidation.

For further information, refer to the audited financial statements and footnotes included in Wells Timberland REIT’s Annual Report on Form 10-K for the year ended December 31, 2011.

Interest Rate Swaps

Wells Timberland REIT has entered into interest rate swap agreements to hedge its exposure to changing interest rates on variable rate debt instruments (see Note 4). Wells Timberland REIT does not enter into derivative or interest rate transactions for speculative purposes; however, certain of its derivatives may not qualify for hedge accounting treatment. The fair values of interest rate swaps are recorded as either prepaid expenses and other assets or other liabilities in the accompanying consolidated balance sheets. Changes in the fair value of the effective portion of interest rate swaps that are designated as hedges will be recorded as other comprehensive income or loss in a consolidated statement of other comprehensive income. The ineffective portion of the hedge, if any, is recognized in current earnings during the period of change in fair value. Changes in the fair value of interest rate swaps that do not qualify for hedge accounting treatment are recorded as gain or loss on interest rate swap in the accompanying consolidated statements of operations. Amounts received or paid under interest rate swaps are recorded as interest expense for contracts that qualify for hedge

10

accounting treatment and as gain or loss on interest rate swap for contracts that do not qualify for hedge accounting treatment.

As of September 30, 2012 and December 31, 2011, Wells Timberland REIT recognized the fair value of an interest rate swap that does not qualify for hedge accounting treatment of approximately $0.3 million and $1.0 million, respectively, in other liabilities. The detail of loss on the interest rate swap, which was recorded in the accompanying consolidated statements of operations, is provided below for the three months and nine months ended September 30, 2012 and 2011, respectively:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Noncash gain on interest rate swap	$	213,293		$	97,592		$	665,009		$	209,026
Net payments on interest rate swap	(232,999		)	(209,770		)	(787,880		)	(657,595		)
Loss on interest rate swap	$	(19,706	)	$	(112,178	)	$	(122,871	)	$	(448,569	)

Income Taxes

Wells Timberland REIT has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and has operated as such beginning with its taxable year ended December 31, 2009. To qualify to be taxed as a REIT, Wells Timberland REIT must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its ordinary taxable income to its stockholders. As a REIT, Wells Timberland REIT generally is not subject to federal income tax on taxable income it distributes to stockholders. Wells Timberland REIT is subject to certain state and local taxes related to the operations of timberland properties in certain locations, which have been provided for in the accompanying consolidated financial statements.

As of January 1, 2009, the beginning of the taxable year in which Wells Timberland REIT qualified for and elected to be taxed as a REIT, or its REIT commencement date, Wells Timberland REIT had net built-in gains on its timber assets of approximately $18.3 million. Wells Timberland REIT elected not to take such net built-in gains into income immediately prior to its REIT commencement date, but rather subsequently recognize gain on the disposition of any timber assets it holds at the REIT commencement date, if disposed of within the ten-year period beginning on the REIT commencement date. Wells Timberland REIT will be subject to tax on such net built-in gains at the highest regular corporate rate during the ten-year period beginning on the REIT commencement date on the least of (a) the excess of the fair market value of the timber assets disposed of as of the REIT commencement date over its basis in the timber assets as of the REIT commencement date (the built-in gain with respect to that timberland as of the REIT commencement date); (b) the amount of gain Wells Timberland REIT would otherwise recognize on the disposition; or (c) the amount of net built-in gain in its timber assets as of the REIT commencement date not already recognized during the ten-year period. At December 31, 2011, Wells Timberland REIT had federal and state net operating loss carryforwards of approximately $99.7 million and $83.3 million, respectively. Such net operating loss carryforwards may be utilized, subject to certain limitations, to offset future taxable income, including net built-in gains.

Wells Timberland REIT has elected to treat Wells Timberland TRS as a taxable REIT subsidiary. Wells Timberland REIT may perform certain non-customary services, including real estate or non-real-estate related services, through Wells Timberland TRS. Earnings from services performed through Wells Timberland TRS are subject to federal and state income taxes irrespective of the dividends paid deduction available to REITs for federal income tax purposes. In addition, for Wells Timberland REIT to continue to qualify to be taxed as a REIT, Wells Timberland REIT’s investment in Wells Timberland TRS may not exceed 25% of the value of the total assets of Wells Timberland REIT.

Deferred tax assets and liabilities represent temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on the enacted rates expected to be in effect when the temporary differences reverse. Deferred tax expense or benefit is recognized in the financial statements according to the changes in deferred tax assets or liabilities between years. Valuation allowances are established to reduce deferred tax assets when it becomes more likely than not that such assets, or portions thereof, will not be realized.

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No provision for federal income taxes has been made in the accompanying consolidated financial statements, other than the provision relating to Wells Timberland TRS, as Wells Timberland REIT did not generate taxable income for the periods presented. Wells Timberland REIT is subject to certain state and local taxes related to its operations in certain locations, which have been provided for in the accompanying consolidated financial statements.

Fair Value Measurements

Wells Timberland REIT estimates the fair value of its assets and liabilities (where currently required under GAAP) consistent with the provisions of the accounting standard for fair value measurements and disclosures. Under this guidance, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures provides the following fair value technique parameters and hierarchy, depending upon availability:

Level 1 — Assets or liabilities for which the identical term is traded on an active exchange, such as publicly-traded instruments or futures contracts.

Level 2 — Assets and liabilities valued based on observable market data for similar instruments.

Level 3 —Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally-developed, and considers risk premiums that a market participant would require.

Wells Timberland REIT applied the provisions of the accounting standard for fair value measurements and disclosures in recording its interest rate swap at fair value and to estimations of fair value of its debt instruments based on Level 2 assumptions. The fair values of the interest rate swap were determined using a proprietary model which is based on prevailing market data for contracts with matching durations, current and anticipated London Interbank Offered Rate (“LIBOR”) information, consideration of Wells Timberland REIT's credit standing, credit risk of the counterparties and reasonable estimates about relevant future market conditions.

The following table presents information about Wells Timberland REIT’s assets and liabilities measured at fair value and recorded in the accompanying consolidated balance sheets as of September 30, 2012 and December 31, 2011, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	Fair Value Measurements as of September 30, 2012
	Total		Level 1		Level 2		Level 3
Liabilities:
Interest rate swap	$	311,668	$	—	$	311,668	$	—
	Fair Value Measurements as of December 31, 2011
	Total		Level 1		Level 2		Level 3
Liabilities:
Interest rate swap	$	976,677	$	—	$	976,677	$	—

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2011-04, Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASU 2011-04”). ASU 2011-04 converges the GAAP and International Financial Reporting Standards definition of “fair value”, the requirements for measuring amounts at fair value, and disclosures about these measurements. The update does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The adoption of ASU 2011-04

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was effective for Wells Timberland REIT for the interim period beginning January 1, 2012. The adoption of ASU 2011-04 has not had a material impact on Wells Timberland REIT’s financial statements or disclosures.

In June 2011, the FASB issued Accounting Standards Update 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The adoption of ASU 2011-05 was effective for Wells Timberland REIT for the interim period beginning January 1, 2012, except for the specific requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income that has been deferred indefinitely. The adoption of ASU 2011-05 did not have a material impact on Wells Timberland REIT’s consolidated financial statements or disclosures.

3. Timber and Timberlands

On September 28, 2012, Wells Timberland REIT acquired approximately 29,900 acres of timberland (the "Property") for a purchase price of approximately $20.5 million, exclusive of closing costs. Wells Timberland REIT had previously held long-term leasehold interest in the Property, which is located within the Mahrt Timberland. In addition, Wells Timberland REIT paid $2.0 million to buy out a third party's interest in approximately 14,400 acres of timberland, including 12,400 acres within the Property and 2,000 acres where Wells Timberland REIT continues to hold long-term leasehold interests. Wells Timberland REIT will also make annual payments on approximately 8,300 acres of the Property at a per-acre rate equal to the then-current lease rate to the seller through May 2022. The estimated net present value of the liability was approximately $1.2 million and was recorded in other liabilities in the accompanying consolidated balance sheets. The acquisition was funded with cash on-hand and debt financing (seeNote 4).

During the three months ended September 30, 2012, Wells Timberland REIT sold approximately 210 acres of timberland for approximately $0.4 million. No timberland was sold during the third quarter of 2011. During the nine months ended September 30, 2012 and 2011, Wells Timberland REIT sold approximately 6,020 and 550 acres of timberland, respectively, for approximately $11.0 million and $1.0 million, respectively.

As of September 30, 2012 and December 31, 2011, timber and timberlands consisted of the following, respectively:

	As of September 30, 2012
	Gross		Accumulated Depletion or Amortization		Net
Timber	$	161,875,264	$	8,144,576	$	153,730,688
Timberlands	183,293,051		—		183,293,051
Mainline roads	406,286		159,842		246,444
Timber and timberlands	$	345,574,601	$	8,304,418	$	337,270,183

	As of December 31, 2011
	Gross		Accumulated Depletion or Amortization		Net
Timber	$	175,512,118	11,759,282		$	163,752,836
Timberlands	164,550,798		—		164,550,798
Mainline roads	376,406		118,190		258,216
Timber and timberlands	$	340,439,322	$	11,877,472	$	328,561,850

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4. Note Payable and Line of Credit

On September 28, 2012, Wells Timberland REIT entered into a first mortgage loan agreement (the "CoBank Loan") with a syndicate of banks with CoBank, ACB ("CoBank") serving as administrative agent, lead arranger, and bookrunner; Cooperatieve Centrale Raiffelsen-Boerenleenbank, B.A. ("RaboBank") serving as documentation agent; and Agfirst Farm Credit Bank serving as syndication agent. The CoBank Loan amended and restated the five-year senior loan agreement for $211.0 million (the "Mahrt Loan") entered into on March 24, 2010 and its amendments.

Under the CoBank Loan, Wells Timberland REIT initially can borrow up to $148.0 millionin principal, including$133.0 million through a term loan facility ("CoBank Term Loan") and up to $15.0 million through a revolving credit facility (the "CoBank Revolver"). Wells Timberland REIT also has the ability to increase the amount of the CoBank Term Loan by up to $50.0 million (the "CoBank Incremental Loan") during the term of the CoBank Loan. On August 11, 2018, all outstanding principal, interest, and any fees or other obligations on the CoBank Loan will be due and payable in full. The CoBank Loan is secured by a first mortgage in the Mahrt Timberland, a first priority security interest in all bank accounts held by Wells Timberland REIT, and a first priority security interest on all other assets of Wells Timberland REIT.

As of September 30, 2012, the outstanding balance of the CoBank Loan was $133.0 million, all of which was outstanding under the CoBank Term Loan. Proceeds from the CoBank Term Loan were used to pay off the outstanding balance of the Mahrt Loan, fund costs associated with closing the CoBank Loan, and partially fund the Property acquisition (see Note 3).

The CoBank Loan bears interest at an adjustable rate based on, at the option of Wells Timberland REIT, either the one-, two-, or three-month LIBOR plus an applicable margin ranging from 2.00% to 2.75% (the "LIBOR Rate") or at an alternate base rate plus an applicable margin ranging from 1.00% to 1.75% (the "Base Rate"). The Base Rate for any day is, as announced by CoBank on the first business day of each week, as the higher of (a) 1.5% greater than one-month LIBOR or (b) the prime rate as published from time to time in the Eastern Edition of the Wall Street Journal, or, if the Wall Street Journal shall cease publishing the “prime rate” on a regular basis, such other regularly published average prime rate applicable to such commercial banks as is acceptable to the lenders in their reasonable discretion. The margin component of the LIBOR Rate and the Base Rate is based on the loan-to-collateral-value ratio (the “LTV Ratio”), which is expressed as a percentage, of (a) the outstanding principal amount of all loans outstanding, less certain amounts permitted to be set aside under the terms of the CoBank Loan, for working capital and other purposes and any cash balances accumulated to fund distributions or future acquisitions, to (b) the value of the timberland assets, as determined in accordance with the CoBank Loan.

Wells Timberland REIT is required to pay a fee on the unused portion of the CoBank Revolver in an amount equal to the daily unused amount of the CoBank Revolver multiplied by a rate equal to (a) 0.375% per annum, if the LTV Ratio is greater than 40%, (b) 0.250% per annum, if the LTV Ratio is equal to or greater than 35% and less than 40%, and (c) 0.200% per annum, if the LTV Ratio is less than 35%.

The CoBank Loan is subject to mandatory prepayment from proceeds generated from dispositions of timberland and lease terminations. The mandatory prepayment excludes (1) the first $4.0 million of cost basis of timberland dispositions in any fiscal year if (a) LTV Ratio calculated on a pro forma basis after giving effect to such disposition does not exceed 40%, and (b) such cost basis is used as permitted under the the CoBank Loan; and (2) lease termination proceeds of less than $2.0 million in a single termination until aggregate lease termination proceeds during the term of the CoBank loan exceeds $5.0 million. Wells Timberland REIT may make voluntary prepayments at any time without premium or penalty.

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The CoBank Loan contains, among others, the following financial covenants:

• limits the LTV Ratio to 45% at the end of each fiscal quarter and upon the sale or acquisition of any property;

• requires a fixed-charge coverage ratio of not less than 1.05:1.00 at the end of each fiscal quarter.

Wells Timberland REIT believes it was in compliance as of September 30, 2012 and expects to remain in compliance with the financial covenants of the CoBank Loan. Additionally, the CoBank Loan requires funding of an account under the control of CoBank equal to approximately six months of interest on the CoBank Loan, during any time the LTV Ratio is 30% or greater, or approximately three months of interest if the LTV Ratio is less than 30%.

Interest Paid and Fair Value of Outstanding Debt

During the three months ended September 30, 2012 and 2011, after consideration of the interest rate swap, Wells Timberland REIT made interest payments of approximately $1.1 million and $1.4 million, respectively, on the Mahrt Loan. During the nine months endedSeptember 30, 2012 and 2011, interest payments on the Mahrt Loan totaled approximately $3.3 million and $4.7 million, respectively. No interest was paid on the CoBank Loan during the three months and nine months ended September 30, 2012.

As of September 30, 2012, the weighted-average interest rate of the CoBank Loan after consideration of the interest rate swap was 3.92% based on the then-effective Base Rate. As of September 30, 2012 and December 31, 2011, the estimated fair value of Wells Timberland REIT's note payable was approximately $133.0 million and $118.4 million, respectively. The fair value was estimated based on discounted cash flow analysis using the current market borrowing rates for similar types of borrowing arrangements as of the measurement dates. The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized.

5. Commitments and Contingencies

MeadWestvaco Timber Agreements

In connection with its acquisition of the Mahrt Timberland, Wells Timberland REIT entered into a fiber supply agreement and a master stumpage agreement (collectively, the “Timber Agreements”) with a wholly owned subsidiary of MeadWestvaco Corporation (“MeadWestvaco”). The fiber supply agreement provides that MeadWestvaco will purchase specified tonnage of timber from Wells Timberland TRS at specified prices per ton, depending upon the type of timber. The fiber supply agreement is subject to quarterly market pricing adjustments based on an index published by Timber Mart-South, a quarterly trade publication that reports raw forest product prices in 11 southern states. The master stumpage agreement provides that Wells Timberland REIT will sell specified amounts of timber and make available certain portions of the Mahrt Timberland to Wells Timberland TRS for harvesting at $0.10 per ton of qualifying timber purchased by MeadWestvaco plus a portion of the gross proceeds received from MeadWestvaco under the fiber supply agreement. The initial term of the Timber Agreements is October 9, 2007 through December 31, 2032, subject to extension and early termination provisions. The Timber Agreements ensure a long-term source of supply of wood fiber products for MeadWestvaco in order to meet its paperboard and lumber production requirements at specified mills and provide Wells Timberland REIT with a reliable customer for the wood products from the Mahrt Timberland.

FRC Timberland Operating Agreement

Wells Timberland REIT is party to a timberland operating agreement with Forest Resource Consultants, Inc. (“FRC”). Pursuant to the terms of the timberland operating agreement, FRC manages and operates the Mahrt Timberland and the related timber operations, including ensuring delivery of timber to MeadWestvaco in compliance with the Timber Agreements. In consideration for rendering the services described in the timberland operating agreement, Wells Timberland REIT pays FRC (i) a monthly management fee based on the actual acreage FRC manages, which is payable monthly in advance, and (ii) an incentive fee based on net revenues generated by the Mahrt Timberland. The incentive fee is payable annually in arrears. The timberland operating agreement, as amended, is effective through December 31,

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2013, with the option to extend for one-year periods and may be terminated by either party with mutual consent or by Wells Timberland REIT with or without cause upon providing 120 days’ prior written notice.

Litigation

From time to time, Wells Timberland REIT may be a party to legal proceedings that arise in the ordinary course of its business. Management makes assumptions and estimates concerning the likelihood and amount of any reasonably possible loss relating to these matters using the latest information available. Wells Timberland REIT records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, Wells Timberland REIT accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, Wells Timberland REIT accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, Wells Timberland REIT discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, Wells Timberland REIT discloses the nature and estimate of the possible loss of the litigation. Wells Timberland REIT does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote.

Wells Timberland REIT is not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the results of operations or financial condition of Wells Timberland REIT. Wells Timberland REIT is not aware of any legal proceedings contemplated by governmental authorities.

6.     Share Redemption Plan

The board of directors of Wells Timberland REIT has adopted an SRP, as amended and restated, that allows stockholders who hold their shares for more than one year to sell their shares back to Wells Timberland REIT, subject to certain limitations and penalties. Wells Timberland REIT's board of directors has approved a monthly, non-cumulative reserve of $150,000 for redemptions of common stock in connection with death, qualifying disability, or qualification for federal assistance for confinement to a long-term care facility. On August 6, 2012, the board of directors of Wells Timberland REIT voted to suspend the Amended SRP, as defined below, effective October 1, 2012 until the first full month following the initial publicationof the estimated per-share value.

Also on August 6, 2012, Wells Timberland REIT amended the SRP (the “Amended SRP”), effective October 1, 2012. The Amended SRP provides that the redemption price for all redemptions, including redemptions sought within two years of a stockholder's death, qualifying disability or confinement to a long-term care facility, will be calculated in the same manner. Specifically, until the initial publication in an Exchange Act report filed with the SEC of an estimated per-share value approved by the board of directors, the price per share will be 91% of the aggregate amount paid to Wells Timberland REIT for all shares owned by the redeeming stockholder, divided by the number of shares owned by such stockholder that were acquired from Wells Timberland REIT. After the initial estimated per-share value publication, the price will be 95% of the estimated per share value, plus or minus any valuation adjustment as provided in the Amended SRP.

During the three months and nine months ended September 30, 2012, Wells Timberland REIT redeemed approximately $231,000 and $756,600 of shares, respectively, under the SRP. In September 2012, qualified redemption requests exceeded the $150,000 limit set by the board of directors. As a result, September 2012 redemption requests were pro-rated per terms of the SRP. Wells Timberland REIT redeemed $150,000 of shares at 100% the aggregate amount paid to Wells Timberland REIT. Wells Capital reimbursed Wells Timberland REIT 9% of the amount of shares redeemed in September 2012, or $13,500. As of September 30, 2012, approximately $0.2 million of qualified redemption requests were unfulfilled and returned to the investors.

7. Supplemental Disclosures of Noncash Activities

Outlined below are significant noncash investing and financing transactions for the nine months endedSeptember 30, 2012 and 2011, respectively:

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	Nine Months Ended September 30,
	2012			2011
Write-off of due to affiliates	$	27,315,249		$	—
Dividends accrued on preferred stock	$	280,003		$	1,460,194
Discounts applied to issuance of common stock	$	43,761		$	326,548
(Cancellation) issuance of stock dividends	$	(329	)	$	4,069,990
Stock dividends payable to stockholders – additional paid-in capital	$	—		$	30,875
Stock dividends payable to stockholders – par value	$	—		$	31
Issuance of stock-based compensation	$	55,000		$	40,000
Other liabilities assumed upon acquisition of timberland	$	1,156,317		$	3,792
Deferred financing costs payable	$	99,936		$	—

8. Related-Party Transactions

Advisory Agreement

Wells Timberland REIT and Wells Timberland OP are party to the Advisory Agreement with Wells TIMO, a wholly owned subsidiary of Wells Capital. On March 16, 2012, the board of directors of Wells Timberland REIT approved a second amendment to the Advisory Agreement (“Advisory Agreement Amendment No. 2”), which amended certain provisions related to fees and expense reimbursements. Advisory Agreement Amendment No. 2, which was effective April 1, 2012, provides that for each quarter, the amount of fees and expense reimbursements payable to Wells TIMO will be limited to the lesser of (i) 1.0% of assets under management as of the last day of the quarter less advisor fees paid for the preceding three quarters, and (ii) free cash flow for the four quarters then ended in excess of an amount equal to 1.25 multiplied by Wells Timberland REIT’s interest expense. Free cash flow is defined as EBITDA (as defined in Wells Timberland REIT's loan agreements), less all capital expenditures paid by Wells Timberland REIT on a consolidated basis, less any cash distributions (except for the payments of accrued but unpaid dividends as a result of any redemptions of Wells Timberland REIT's outstanding preferred stock). The amount of the disposition fees and the reimbursement of organization and offering expenses payable pursuant to the Advisory Agreement, as amended, remained unchanged. No payments would be permitted under the Advisory Agreement, as amended, if they would cause a default under Wells Timberland REIT's loan agreements.

On April 1, 2011, the board of directors of Wells Timberland REIT approved an amendment to the Advisory Agreement (the “Advisory Agreement Amendment No. 1”) that limited the amount of fees and expense reimbursements to the least of: (1) the amounts noted below pursuant to the Advisory Agreement, (2) 1.5% of assets under management, or (3) all free cash flow in excess of an amount equal to 1.05 multiplied by interest on outstanding debt. Advisory Agreement Amendment No. 2 superseded Advisory Agreement Amendment No. 1.

Prior to April 1, 2011, Wells TIMO was entitled to the following fees and reimbursements pursuant to the Advisory Agreement:

• Reimbursement of organization and offering costs paid by Wells TIMO and its affiliates on behalf of Wells Timberland REIT, not to exceed 1.2% of gross offering proceeds.

• Monthly asset management fees equal to one-twelfth of 1.0% of the greater of (i) the gross cost of all investments made on behalf of Wells Timberland REIT and (ii) the aggregate value of such investments.

• Reimbursement for all costs and expenses Wells TIMO incurs in fulfilling its duties as the asset portfolio manager.

• For any property sold by Wells Timberland REIT, if Wells TIMO provided a substantial amount of services in connection with the sale (as determined by Wells Timberland REIT’s independent directors), a fee equal

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to (i) for each property sold at a contract price up to $20.0 million, up to 2.0% of the sales price, and (ii) for each property sold at a contract price in excess of $20.0 million, up to 1.0% of the sales price. The precise amount of the fee within the preceding limits will be determined by Wells Timberland REIT’s board of directors, including a majority of the independent directors, based on the level of services provided and market norms. The real estate disposition fee may be in addition to real estate commissions paid to third parties. However, the total real estate commissions (including such disposition fee) may not exceed the lesser of (i) 6.0% of the sales price of each property or (ii) the level of real estate commissions customarily charged in light of the size, type, and location of the property.

Effective July 11, 2012, the Advisory Agreement, as amended (the “Amended Advisory Agreement”) was renewed through July 10, 2013, upon terms identical to those in effect through July 10, 2012. The Amended Advisory Agreement may be renewed for successive one-year terms upon the mutual consent of the parties. Wells Timberland REIT may terminate the Amended Advisory Agreement without penalty upon 60 days’ written notice. If Wells Timberland REIT terminates the Amended Advisory Agreement, it will pay Wells TIMO all earned but unpaid fees. In addition, if the Amended Advisory Agreement is terminated without cause, the special units of limited partnership held by Wells TIMO will be redeemed. For further information on the special units, including redemption payments, refer to the consolidated financial statements and accompanying notes included in Wells Timberland REIT’s Annual Report on Form 10-K for the year ended December 31, 2011.

Under the terms of the Amended Advisory Agreement, Wells Timberland REIT was required to reimburse Wells TIMO for certain organization and offering costs up to the lesser of actual expenses or 1.2% of gross offering proceeds raised. Wells Timberland REIT incurred and charged to additional paid-in capital cumulative organization and offering costs of approximately $2.1 million related to the Initial Public Offering and approximately $1.5 million related to the Follow-On Offering, the sum of which represents approximately 1.2% of cumulative gross proceeds raised by Wells Timberland REIT under the Public Offerings. As of December 31, 2011, approximately $2.2 million of organization and offering costs incurred by Wells Timberland REIT and due to Wells TIMO had been deferred by the terms of Wells Timberland REIT's loan agreements. On January 27, 2012, Wells TIMO forgave the deferred organization and offering expenses. After adjusting for this write-off, organization and offering costs represents approximately 0.5% of cumulative gross proceeds raised under the Public Offerings. Upon the expiration of Wells Timberland REIT’s Follow-On Offering on December 31, 2011, approximately $6.4 million of organization and offering expenses related to the Follow-On Offering that had not been incurred and charged to additional paid-in capital by Wells Timberland REIT was expensed by Wells TIMO and is not subject to reimbursement by Wells Timberland REIT.

On January 20, 2012, Wells Timberland REIT entered into an agreement with Wells TIMO to forgive approximately $25.1 million of accrued but unpaid asset management fees and expense reimbursements that were previously deferred due to restrictions under Wells Timberland REIT's loan agreements. Due to the related-party nature of these transactions, this amount, along with the organizational and offering costs forgiven by Wells TIMO on January 27, 2012, were recorded as additional paid-in capital during the first quarter of 2012.

Dealer-Manager Agreement

Wells Timberland REIT had executed a dealer-manager agreement (the “Dealer-Manager Agreement”), whereby Wells Investment Securities, Inc. (“WIS”), an affiliate of Wells Capital, performed the dealer-manager function for Wells Timberland REIT’s Public Offerings. For these services, WIS earned a commission of up to 7.0% of the gross offering proceeds from the sale of Wells Timberland REIT’s shares, of which substantially all was re-allowed to participating broker/dealers. Wells Timberland REIT pays no commissions on shares issued under its DRP.

Additionally, WIS earned a dealer-manager fee of 1.8% of the gross offering proceeds at the time the shares are sold. A portion of the dealer-manager fee was re-allowed to participating broker-dealers. Dealer-manager fees applied to the sale of shares in the primary offering only and do not apply to the sale of shares under Wells Timberland REIT’s DRP.

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Structuring Agent Agreement

Wells Timberland REIT is party to a structuring agent agreement (the “Structuring Agent Agreement”) whereby Wells Germany GmbH, a limited partnership organized under the laws of Germany (“Wells Germany”), served as the structuring agent in connection with the 2010 German Offering. Wells Timberland REIT paid a structuring agent fee to Wells Germany of $0.20 per share sold under the 2010 German Offering. The Structuring Agent Agreement expired upon the conclusion of the 2010 German Offering, provided, however, that with respect to the ongoing services contemplated by the parties, the Structuring Agent Agreement will terminate upon the earlier of (i) a liquidity event or (ii) December 31, 2018.

Related-Party Costs

Pursuant to the terms of the agreements described above, Wells Timberland REIT incurred the following related-party costs for the three months and nine months ended September 30, 2012 and 2011, respectively:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Advisor fees and expense reimbursements	$	—	$	—	$	2,393,745	$	1,843,958
Disposition fees	8,405		—		219,449		22,774
Commissions(1)(2)	—		921,548		246,546		2,389,018
Dealer-manager fees(1)	—		254,996		71,057		662,870
Other offering costs(1)	—		176,756		48,752		456,988
Total	$	8,405	$	1,353,300	$	2,979,549	$	5,375,608

⁽¹⁾  Commissions, dealer-manager fees, and other offering costs were charged against stockholders’ equity as incurred.

⁽²⁾  Substantially all commissions were re-allowed to participating broker-dealers through the end of the Public Offerings.

Due to Affiliates

The detail of amounts due to affiliates is provided below as of September 30, 2012 and December 31, 2011:

`

	September 30, 2012		December 31, 2011
Advisor fees and expense reimbursements due to Wells TIMO (1)	$	—	$	25,504,045
Other offering cost reimbursements due to Wells TIMO (2)	—		2,258,696
Operating expense reimbursements due to Wells TIMO (1)	—		1,067,691
Commissions on stock sales and related dealer-manager fees due to WIS	—		130,141
Total	$	—	$	28,960,573

⁽¹⁾ On January 20, 2012, we entered into an agreement with Wells TIMO whereby Wells TIMO forgave approximately $25.1 million of accrued but unpaid asset management fees and reimbursements that were previously deferred due to restrictions under our loan agreements. Due to the related-party nature of this transaction, this amount was recorded as additional paid-in capital during the first quarter of 2012.

⁽²⁾ On January 27, 2012, approximately $2.2 million of other offering cost due to Wells TIMO was forgiven. Due to the related-party nature of this transaction, this amount was recorded as additional paid-in capital during the first quarter of 2012.

Conflicts of Interest

As of September 30, 2012, Wells TIMO had eight employees. Until such time, if ever, as Wells TIMO hires sufficient personnel of its own to perform the services under the Amended Advisory Agreement, it will continue to rely upon

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employees of Wells Capital to perform many of its obligations. Wells Capital, the parent company and manager of Wells TIMO, also is a general partner or advisor of the various affiliated public real estate investment programs (“Wells Real Estate Funds”). As such, in connection with serving as a general partner or advisor for Wells Real Estate Funds and managing Wells TIMO’s activities under the Amended Advisory Agreement, Wells Capital may encounter conflicts of interest with regard to allocating human resources and making decisions related to investments, operations, and disposition-related activities for Wells Timberland REIT and Wells Real Estate Funds.

Three members of Wells Timberland REIT’s board of directors serve on the board of another REIT sponsored by Wells Real Estate Funds, Inc. (“Wells REF”); additionally, one of them also serves on the board of a third REIT sponsored by Wells REF. Accordingly, they may encounter certain conflicts of interest regarding investment and operational decisions.

Operational Dependency

Wells Timberland REIT has engaged Wells TIMO to provide certain services essential to Wells Timberland REIT, including asset management services, supervision of the management of properties owned by Wells Timberland REIT, asset acquisition and disposition services, as well as other administrative responsibilities, including accounting services, stockholder communications, and investor relations. Wells TIMO is dependent on Wells Capital to provide certain services that are essential to their operations. This agreement is terminable by either party upon 60 days’ written notice. As a result of these relationships, Wells Timberland REIT's operations are dependent upon Wells Capital and Wells TIMO.

Wells Capital and Wells TIMO are all owned and controlled by Wells REF. The operations of Wells Capital, Wells TIMO, WIS, and Wells Management Company, Inc. (“Wells Management”) represent substantially all of the business of Wells REF. Accordingly, Wells Timberland REIT focuses on the financial condition of Wells REF when assessing the financial condition of Wells Capital and Wells TIMO. In the event that Wells REF were to become unable to meet its obligations as they become due, Wells Timberland REIT might be required to find alternative service providers.

Future net income generated by Wells REF will be largely dependent upon the amount of fees earned by Wells Capital, Wells TIMO, WIS, Wells Management, and their affiliates, based on, among other things, real estate assets managed, the amount of investor proceeds raised, and the volume of future acquisitions and dispositions of real estate assets by Wells Timberland REIT and other Wells REF-sponsored programs, as well as distribution income earned from equity interests in another REIT. As of September 30, 2012, Wells Timberland REIT had no reason to believe that Wells REF does not have access to adequate liquidity and capital resources, including cash flow generated from operations, cash on hand, other investments, and borrowing capacity, necessary to meet its current and future obligations as they become due. Modifying service agreements between Wells REF, or its affiliates, and Wells Timberland REIT, or other Wells REF-sponsored programs, could impact Wells REF’s future net income and future access to liquidity and capital resources. For example, a large portion of Wells REF's income is derived under an advisory agreement with Wells Real Estate Investment Trust II, Inc. ("Wells REIT II") and Wells REF does not expect to receive significant compensation from Wells REIT II beyond December 31, 2013.

9. Subsequent Event

On October 23, 2012, Wells Timberland REIT entered into an interest rate swap agreement with Rabobank to hedge its exposure to changing interest rates on $80.0 million of the CoBank Loan that is subject to a variable interest rate (the “Rabobank Forward Swap”). The Rabobank Forward Swap has an effective date of March 28, 2013 and matures on September 30, 2017. Under the terms of the Rabobank Forward Interest Swap, Wells Timberland REIT will pay interest at a fixed rate of 0.91% per annum to Rabobank and will receive one-month LIBOR-based interest payments from Rabobank.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and notes thereto. See also “Cautionary Note Regarding Forward-Looking Statements” preceding Part I, as well as our consolidated financial statements and the notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2011.

Overview

We engage in the acquisition and ownership of timberland properties located in the timber-producing regions of the southeastern United States. From 2007 through the first quarter of 2012, we raised approximately $307.2 million through the issuance of our common stock in our Offerings and approximately $43.6 million through the issuance of our preferred stock to Wells REF and, along with borrowings, invested those proceeds, net of fees, into timberland properties. As of September 30, 2012, we owned interests in approximately 291,400 acres of timberland located on the Lower Piedmont and Upper Coastal Plains of East Central Alabama and West Central Georgia, which we refer to as the Mahrt Timberland. As of January 1, 2012, the Mahrt Timberland consisted of approximately 76% of pine and approximately 24% of hardwood. We generate a majority of our revenues by selling timber and the right to access land and harvest timber to third parties pursuant to supply agreements and through open-market sales, from selling higher-and-better-use timberland, and leasing land-use rights to third parties. A substantial portion of our timber sales are derived from the Timber Agreements under which we sell specified amounts of timber to MeadWestvaco subject to market pricing adjustments. The initial term of the Timber Agreements is from October 9, 2007 through December 31, 2032, subject to extension and early termination provisions. See Note 5 of our accompanying consolidated financial statements for additional information regarding the material terms of the Timber Agreements.

We have no paid employees and are externally advised and managed by Wells TIMO, a wholly owned subsidiary of Wells Capital. On March 16, 2012, we entered into Advisory Agreement Amendment No. 2 to amend certain provisions of the Advisory Agreement related to fees and expense reimbursements. Advisory Agreement Amendment No. 2 provides that for each quarter, the amount of advisor fees and expense reimbursements payable to Wells TIMO will be limited to (1) the lesser of 1.0% of assets under management as of the last day of the quarter less advisor fees paid for the preceding three quarters, and (2) free cash flow for the four quarters then ended in excess of an amount equal to 1.25 multiplied by our interest expense. Free cash flow is defined as EBITDA (as defined in our loan agreements), less all capital expenditures paid by us on a consolidated basis, less any cash distributions (except for the payments of accrued but unpaid dividends as a result of any redemptions of our outstanding preferred stock). Advisory Agreement Amendment No. 2, which was effective April 1, 2012, superseded a previous amendment to our Advisory Agreement entered into on April 1, 2011, referred to herein as Advisory Agreement Amendment No. 1, which provided that, as of and for each quarter, the amount of fees and expense reimbursements payable to Wells TIMO were limited to the least of: (1) the amounts currently payable under the Advisory Agreement, (2) one-fourth of 1.5% of assets under management, or (3) all free cash flow in excess of an amount equal to 1.05 multiplied by our interest expense. The amount of the disposition fees and the reimbursement of organization and offering expenses payable pursuant to the Advisory Agreement remain unchanged. No payments will be permitted under the amended Advisory Agreement if they would cause a default under our debt facilities.

Subsequent to our fundraising stage, during 2012, we have concentrated our efforts on actively managing our timber assets and exploring a variety of strategic opportunities focused on enhancing the composition of our portfolio and the total return potential for Wells Timberland REIT. In doing so, we have made and will continue to make strategic acquisitions and dispositions of timberland properties.

On September 28, 2012, we acquired approximately 29,900 acres of timberland, or the Property, for a purchase price of approximately $20.5 million, exclusive of closing costs. Prior to the acquisition, we held long-term leasehold interest in the Property, which is located within the Mahrt Timberland. In addition, we paid approximately $2.0 million to buy out a third party's interest in approximately 14,400 acres of timberland, including 12,400 acres within the Property

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and 2,000 acres where we continue to hold long-term leasehold interests. We will also make annual payments on approximately 8,300 acres of the Property at a per-acre rate equal to the then-current lease rate to the seller through May 2022. The acquisition was funded with cash on-hand and debt financing.

Our operating strategy entails funding expenditures related to the recurring operations of the Mahrt Timberland, including interest on outstanding indebtedness and certain capital expenditures (excluding timberland acquisitions), with operating cash flows; assessing the amount of operating cash flows that will be required for redemptions of common stock and additional timberland acquisitions; and distributing residual operating cash flows, if any, to our stockholders. Our most significant risks and challenges include our ability to access a sufficient amount of capital that will allow us to repay or refinance the CoBank Loan and to further grow and diversify our portfolio of timber assets. To the extent that significant capital is not raised, we may not be able to repay the CoBank Loan or achieve sufficient economies of scale and diversification to guard against the general economic, industry-specific, financing, and operational risks generally associated with individual investments.

Liquidity and Capital Resources

Overview

We ceased offering shares for sale under the Follow-On Offering effective December 31, 2011. Between January 1, 2012 and February 13, 2012, we accepted gross offering proceeds of approximately $4.1 million from the sale of shares of our common stock under the Follow-On Offering, which sales were agreed to by the investors on or before December 31, 2011. The majority of these funds were set aside as working capital.

On September 28, 2012, we entered into the CoBank Loan. Under the CoBank Loan, we can borrow up to $148.0 million in principal, including $133.0 million through the CoBank Term Loan, and up to $15.0 million through the CoBank Revolver. We also have the ability to increase the amount of the CoBank Term Loan by up to $50.0 million under the CoBank Incremental Loan, during the term of the CoBank Loan. The CoBank Loan bears interest at an adjustable rate based on the one-, two-, or three-month LIBOR plus an applicable margin ranging from 2.00% to 2.75% that varies based on the LTV Ratio at the time of determination. Proceeds from the CoBank Loan were used to pay off the outstanding balance of the Mahrt Loan, fund costs associated with closing the CoBank Loan, and partially fund the Property acquisition. As of October 31, 2012 and September 30, 2012, the outstanding balance of the CoBank Loan was approximately $132.4 million and $133.0 million, respectively, all of which was outstanding under the CoBank Term Loan. We intend to maintain substantial amounts outstanding on the CoBank Loan in order to have more funds available for working capital and investment in timberland properties On August 11, 2018, all outstanding principal, interest, and any fees or other obligations on the CoBank Loan will be due and payable in full.

The CoBank Loan is subject to mandatory prepayment from proceeds generated from dispositions of timberland and lease terminations. The mandatory prepayment excludes (1) the first $4.0 million of cost basis of timberland dispositions in any fiscal year if (a) LTV Ratio calculated on a pro forma basis after giving effect to such disposition does not exceed 40%, and (b) such cost basis is used as permitted under the CoBank Loan; and (2) lease termination proceeds of less than $2.0 million in a single termination until aggregate lease termination proceeds during the term of the CoBank Loan exceeds $5.0 million. We may make voluntary prepayments at any time without premium or penalty.

The CoBank Loan prohibits us from declaring, setting aside funds for, or paying any dividend, distribution, or other payment to our stockholders other than as required to maintain our REIT qualification if our LTV Ratio is greater than or equal to 40%. So long as our LTV Ratio remains below 40% and we maintain a minimum fixed-charge coverage ratio of 1.05:1:00, we have the ability to declare, set aside funds for, pay dividends or distributions, or make other payments to our stockholders from operating cash flows on a discretionary basis. The amount of distributions that we may pay to our common stockholders will be determined by our board of directors and is dependent upon a number of factors, including, but not limited to, our financial condition, our capital requirements, our expectations of future sources of liquidity, current and future economic conditions and market demand for timber and timberlands, and tax considerations.

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We expect our primary sources of future capital will be derived from the operations of the Mahrt Timberland and from proceeds from the CoBank Revolver and the CoBank Incremental Loan. The amount of cash available for distribution to stockholders and the level of discretionary distributions declared will depend primarily upon the amount of cash generated from our operating activities, our determination of funding needs for near-term capital and debt service requirements, redemptions of our common stock, and our expectations of future cash flows.

Short-Term Liquidity and Capital Resources

Net cash provided by operating activities for the nine months endedSeptember 30, 2012 was approximately $10.5 million, which was primarily comprised of net cash receipts from timber and timberland sales and recreational leases in excess of payments for operating expenses, interest expense, advisor fees and expense reimbursements, forestry management fees, and general and administrative expenses. We intend to use the majority of future cash flows from operating activities, after payments of operating expenses and interest expense, to fund certain capital expenditures and redemptions of our common stock under our Amended SRP.

During the nine months endedSeptember 30, 2012, net cash used in investing activities was approximately $17.8 million, which was comprised of approximately $23.0 million invested in timber, timberland, and related assets, offset by approximately $5.1 million released from lender-required escrow accounts. We expect to utilize the residual cash balance of approximately $11.6 million as of September 30, 2012 to satisfy current liabilities and fund future capital expenditures.

Net cash provided by financing activities for the nine months endedSeptember 30, 2012 was approximately $12.1 million. We received gross debt proceeds of $133.0 million during the three months ended September 30, 2012, which were used to pay off the outstanding balances of the Mahrt Loan and associated interest (approximately $118.4 million), fund costs associated with closing the CoBank Loan (approximately $0.8 million), and partially fund the Property acquisition (approximately $13.8 million). During the nine months endedSeptember 30, 2012, we accepted proceeds from the sale of common stock under our Follow-On Offering, net of payments of commissions and fees, of approximately $3.5 million, which sales were agreed to by the investors on or before the effective close date for the primary offering of December 31, 2011. We used approximately $0.7 million to fund redemptions of common stock under our SRP and approximately $0.5 million to redeem 356 shares of our preferred stock and related accrued dividends.

We believe that we have access to adequate liquidity and capital resources, including cash flow generated from operations, cash on-hand, and borrowing capacity, necessary to meet our current and future obligations that become due over the next twelve months.

The CoBank Loan contains, among others, the following financial covenants:

• limits the LTV Ratio to 45% at the end of each fiscal quarter and upon the sale or acquisition of any property; and

• requires a fixed-charge coverage ratio of not less than 1.05:1.00 at the end of each fiscal quarter.

As of September 30, 2012, we believe we were in compliance and expect to remain in compliance with the financial covenants of the CoBank Loan. Additionally, the CoBank Loan requires funding of an account under the control of CoBank equal to approximately six months of interest on the CoBank Loan, during any time the LTV Ratio is 30% or greater, or approximately three months of interest if the LTV Ratio is less than 30%.

Long-Term Liquidity and Capital Resources

Over the long-term, we expect our primary sources of capital to include net cash flows from operations, including proceeds from strategic property sales and proceeds from secured or unsecured financings from banks and other lenders. Our principal demands for capital include operating expenses, interest expense on any outstanding indebtedness, certain capital expenditures (other than timberland acquisitions), repayment of debt, timberland acquisitions, redemptions of common and preferred stock, and distributions.

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In determining how and when to allocate cash resources in the future, we will initially consider the source of the cash. We anticipate using a substantial portion of cash generated from operations, after payments of periodic operating expenses and interest expense, to fund certain capital expenditures required for our timberland. Any remaining cash generated from operations may be used to partially fund timberland acquisitions, redeem common and preferred stock and, finally, pay distributions to stockholders. Therefore, to the extent that cash flows from operations are lower, timberland acquisitions and distributions, if any, are anticipated to be lower as well. Lower distributions may reduce the amount of proceeds raised through the DRP, if any, which would limit the number of shares that we may redeem through our Amended SRP. Proceeds generated from future debt financings may be used to fund capital expenditures, to pay down existing and future borrowings, and to redeem preferred stock.

Our charter precludes us from incurring debt in excess of 200% of our net assets. As of September 30, 2012, our debt-to-net-assets ratio, defined as our total debt as a percentage of our total gross assets (other than intangibles) less total liabilities, was approximately 46%. Our debt-to-net-assets ratio will vary based on our level of current and future borrowings, which will depend on the level of net cash flows from operations. As a result, we are not able to anticipate with any degree of certainty what our debt-to-net-assets ratio will be in the near future.

Contractual Obligations and Commitments

As of September 30, 2012, our contractual obligations are as follows:

	Payments Due by Period
Contractual Obligations	Total		2012		2013-2014		2015-2016		Thereafter
Debt obligations	$	133,000,000	$	—	$	—	$	—	$	133,000,000
Estimated interest on debt obligations (1)	17,887,238		953,571		6,115,669		5,995,418		4,822,580
Operating lease obligations	7,382,070		161,801		1,860,092		1,462,377		3,897,800
Other liabilities (2)	1,156,317		6,318		314,558		265,854		569,587
Total	$	159,425,625	$	1,121,690	$	8,290,319	$	7,723,649	$	142,289,967

⁽¹⁾  Interest obligations are measured at the contractual rate for variable-rate debt, or at the effectively-fixed rate for variable rate debt with interest rate swaps. See Item 3. Quantitative and Qualitative Disclosure About Market Risk for more information regarding our interest rate swap. We elected to accrue interest based on the LIBOR Rate on October 3, 2012 under the CoBank Loan and expect to continue to elect the LIBOR Rate. Therefore, future interest obligations are calculated based on the LIBOR Rate.

⁽²⁾ Represents net present value of future payments to satisfy a liability assumed upon acquisition of timberland (see Note 3 of the accompanying consolidated financial statements).

Results of Operations

Overview

Our results of operations are materially impacted by the fluctuating nature of timber prices, changes in the levels and composition of our harvest volumes, the level of timberland sales, changes to associated depletion rates, and varying interest expense based on the amount and cost of outstanding borrowings. Timber prices, harvest volumes, and changes in the levels and composition of each for the Mahrt Timberland for the three months and nine months ended September 30, 2012 and 2011 is shown in the following table:

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	Three Months Ended September 30,				Change		Nine Months Ended September 30,				Change
	2012		2011		%		2012		2011		%
Timber sales volume (tons)
Pulpwood	195,810		248,386		(21	)%	498,592		719,156		(31	)%
Sawtimber (1)	90,781		67,908		34	%	256,239		225,379		14	%
	286,591		316,294		(9	)%	754,831		944,535		(20	)%
Net timber sales price (per ton)(2)
Pulpwood	$	10	$	9	12	%	$	10	$	9	7	%
Sawtimber	$	21	$	20	5	%	$	20	$	21	(1	)%
Timberland sales
Gross sales	$	420,260	$	—			$	10,972,440	$	1,021,200
Sales volumes (acres)	213		—				6,016		552
Sales price (per acre)	$	1,973	$	—			$	1,824	$	1,850

⁽¹⁾  Includes sales of chip-n-saw and sawtimber.

⁽²⁾  Prices per ton are rounded to the nearest dollar and shown on a stumpage basis (i.e., net of contract logging and hauling costs) and, as such, the sum of these prices multiplied by the tons sold does not equal timber sales in the accompanying consolidated statements of operations for the three months and nine months ended September 30, 2012 and 2011.

Comparison of the three months ended September 30, 2011 versus the three months ended September 30, 2012

Revenue. Revenues decreased to approximately $8.9 million for the three months ended September 30, 2012 from approximately $9.5 million for the three months ended September 30, 2011 due to a decrease in timber sales revenue of approximately $0.9 million, offset by an increase in timberland sales revenue of approximately $0.4 million. Timber sales revenue decreased primarily due to planned reductions in harvest volumes. Timberland sales revenue increased due to selling more acres of timberland.

Details of timber sales by product for the three months ended September 30, 2012 and 2011 is shown in the following table:

	For the Three Months Ended September 30, 2011		Changes attributable to:					For the Three Months Ended September 30, 2012
			Price		Volume
Timber sales(1)
Pulpwood	$	6,599,009	$	249,389	$	(1,953,187	)	$	4,895,211
Sawtimber (2)	2,165,455		85,359		694,868			2,945,682
	$	8,764,464	$	334,748	$	(1,258,319	)	$	7,840,893

⁽¹⁾  Timber sales are presented on a gross basis.

⁽²⁾  Includes sales of chip-n-saw and sawtimber.

We expect future quarterly revenue from timber sales related to the Mahrt Timberland to be lower than 2011 based on planned reduction in harvest volumes.

Operating expenses. Contract logging and hauling costs decreased to approximately $3.9 million for the quarter ended September 30, 2012 from approximately $5.1 million for the quarter ended September 30, 2011 as a result of a decrease of approximately 24% in delivered wood volume. Depletion expense decreased less than the 9% decrease in total harvest volume primarily due to a higher blended depletion rate. Our blended depletion rate was higher in 2012 due to an increase in sawtimber harvests as a percentage of our total harvest from 21% in the third quarter of 2011 to 32% in the third quarter of 2012; sawtimber carries significantly higher depletion rates than pulpwood. Cost of timberland sales increased by approximately $0.3 million due to selling more acres of timberland. Forestry management fees

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decreased to approximately $0.6 million for the quarter ended September 30, 2012 from approximately $0.7 million for the quarter ended September 30, 2011 primarily due to a decrease in incentive fees incurred under the FRC Timberland Operating Agreement, which are based on net revenue.

Future contract logging and hauling costs and depletion expense are expected to fluctuate with harvest volumes, while forestry management expense, land rent expense, and other operating expenses are expected to remain relatively stable.

Interest expense. Interest expense increased to approximately $2.3 million for the quarter ended September 30, 2012 from approximately $1.3 million for the quarter ended September 30, 2011 primarily as a result of an increase in noncash interest expense due to a non-recurring write-off of approximately $1.3 million of deferred financing costs in connection with the closing of the CoBank Loan, offset by a lower principal balance outstanding on our debt facility. Interest expense in future periods will vary based on our level of current and future borrowings, the cost of future borrowings, and the opportunities to acquire timber assets fitting our investment objectives. Before additional borrowings and significant changes to the LIBOR Rate, we expect future interest expense to decrease as compared to the quarter ended September 30, 2012 due to a lower interest rate on our debt facility and the non-recurring write-off of deferred financing costs incurred during the current period.

Interest rate risk instrument. Our loss on an interest rate swap that does not qualify for hedge accounting treatment decreased by approximately $0.1 million from the three months ended September 30, 2011. The loss was primarily due to the fact that the variable interest rate incurred on the Mahrt Loan was lower than the contractual interest rate of the related interest rate swap during the quarter ended September 30, 2012. The decrease in the loss was primarily due to a decrease in the length of time remaining under the swap contract and changes in the outlook of future market interest rates. We expect future gains and losses on our interest rate swap that does not qualify for hedge account treatment will fluctuate primarily as a result of additional changes in market interest rates and changes in the economic outlook for future market rates.

Net loss. Our net loss increased to approximately $2.5 million for the three months ended September 30, 2012 from approximately $2.1 million for the three months ended September 30, 2011, primarily as a result of an approximately $1.0 million increase in interest expense, offset by an approximately $0.5 million improvement in operating loss and an approximately $0.1 million decrease in loss on interest rate swap. Our operating loss improved due to an increase in net timber and timberland sales revenue of approximately $0.3 million and an approximately $0.2 million decrease in operating expense. We sustained a net loss for the three months ended September 30, 2012 primarily as a result of incurring interest expense of approximately $2.3 million in connection with borrowings used to finance the purchase of the Mahrt Timberland and an operating loss of approximately $0.2 million. We leveraged the Mahrt Timberland acquisition with substantial short-term and medium-term borrowings as a result of sourcing this acquisition in advance of raising investor proceeds under our Offerings. Our net loss per share available to common stockholders for the three months ended September 30, 2012 and 2011 was $0.08 and $0.08, respectively. We anticipate future net losses to fluctuate with timber prices, harvest volumes, timberland sales, and interest expense based on our level of current and future borrowings.

Comparison of the nine months ended September 30, 2011 versus the nine months ended September 30, 2012

Revenue. Revenues increased to approximately $35.1 million for the nine months ended September 30, 2012 from approximately $29.7 million for the nine months ended September 30, 2011 due to an increase in timberland sales revenue of approximately $10.0 million, offset by a decrease in timber sales revenue of approximately $4.5 million. Timberland sales revenue increased due to selling more acres of timberland. Timber sales revenue decreased primarily due to planned reductions in harvest volumes, offset by improvement in average pricing.

Details of timber sales by product for the nine months ended September 30, 2012 and 2011 is shown in the following table:

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	For the Nine Months Ended September 30, 2011		Changes attributable to:					For the Nine Months Ended September 30, 2012
			Price		Volume
Timber sales(1)
Pulpwood	$	18,936,342	$	320,510	$	(6,145,024	)	$	13,111,828
Sawtimber (2)	7,676,400		95,723		1,241,638			9,013,761
	$	26,612,742	$	416,233	$	(4,903,386	)	$	22,125,589

⁽¹⁾  Timber sales are presented on a gross basis.

⁽²⁾  Includes sales of chip-n-saw and sawtimber.

Future revenue in 2012 from timber sales related to the Mahrt Timberland is expected to be lower than 2011 based on planned reduction in harvest volumes.

Operating expenses. Contract logging and hauling costs decreased to approximately $11.8 million for the nine months ended September 30, 2012 from approximately $15.1 million for the nine months ended September 30, 2011 as a result of an approximately 23% decrease in delivered wood volume. Depletion expense decreased approximately 6% to approximately $8.1 million for the first nine months of 2012 from approximately $8.7 million for the same period in 2011 primarily due to an approximately 20% decrease in total harvest volumes, offset by a higher blended depletion rate. Our blended depletion rate was higher in 2012 due to an increase in harvests on leased tracts and an increase in sawtimber harvests as a percentage of our total harvest; timber from leased tracts and sawtimber carry significantly higher depletion rates. Cost of timberland sales increased by approximately $7.1 million due to selling more acres of timberland. Forestry management fees decreased to approximately $1.7 million for the first nine months in 2012 from approximately $2.1 million for the same period in 2011 primarily due to a decrease in incentive fees incurred under the FRC Timberland Operating Agreement, which are based on net revenue. Land rent expense decreased by approximately $0.2 million primarily due to lease expirations.

Future contract logging and hauling costs and depletion expense are expected to fluctuate with harvest volumes, while forestry management expense, land rent expense, and other operating expenses are expected to remain relatively stable. Cost of timberland sales is directly correlated to the numbers of acres sold.

Advisor fees and expense reimbursements. Advisor fees and expense reimbursements increased to approximately $2.4 million for the nine months ended September 30, 2012 from approximately $1.8 million for the nine months ended September 30, 2011 as a result of using different methodologies to determine the amounts due under the Advisory Agreement and its amendments. In the first quarter of 2011, advisor fees and expense reimbursements of approximately $1.6 million were determined under the Advisory Agreement. From the second quarter of 2011 to the first quarter of 2012, advisor fees and expense reimbursements were determined under the Advisory Agreement No. 1. Beginning with the second quarter of 2012, advisor fees and expense reimbursements were determined under Advisory Agreement Amendment No. 2. See Note 8 of our accompanying consolidated financial statements for additional information regarding the Advisory Agreement and its amendments. Future advisor fees and expense reimbursements are expected to correlate to the amount of free cash flow in excess of interest on our outstanding debt or our assets under management.

General and administrative expenses. General and administrative expenses for the nine months ended September 30, 2012 was comparable to that for the nine months ended September 30, 2011. General and administrative expenses are expected to remain relatively stable in future periods prior to the acquisition of additional timber assets.

Interest expense. Interest expense decreased to approximately $4.2 million for the nine months ended September 30, 2012 from approximately $4.3 million for the nine months ended September 30, 2011 as a result of a lower principal balance outstanding on our debt facility and a lower weighted-average interest rate, offset by higher noncash interest expense due to a non-recurring write-off of approximately $1.3 million of deferred financing costs in connection with the closing of the CoBank Loan. Interest expense in future periods will vary based on our level of current and future borrowings, the cost of future borrowings, and the opportunities to acquire timber assets fitting our investment objectives. Before additional borrowings and significant changes to the LIBOR Rate, we expect future interest expense

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to decrease as compared to the nine months ended September 30, 2012 due to a lower interest rate on our debt facility and the non-recurring write-off of deferred financing costs incurred during the current period.

Interest rate risk instrument. Our loss on an interest rate swap that does not qualify for hedge accounting treatment decreased to approximately $0.1 million for the nine months ended September 30, 2012 from approximately $0.4 million for the same period in 2011. The loss was primarily due to the fact that the variable interest rate incurred on the Mahrt Loan was lower than the contractual interest rate of the related interest rate swap during the nine months ended September 30, 2012. The decrease in the loss was primarily due to a decrease in the length of time remaining under the swap contract and changes in the outlook of future market interest rates. We expect future gains and losses on our interest rate swap that does not qualify for hedge account treatment will fluctuate primarily as a result of additional changes in market interest rates and changes in the economic outlook for future market rates.

Net loss. Our net loss decreased to approximately $6.2 million for the nine months ended September 30, 2012 from approximately $8.9 million for the nine months ended September 30, 2011, primarily as a result of an approximately $2.3 million decrease in operating loss, a decrease in interest expense of approximately $0.1 million, and a decrease in loss on interest rate swap of approximately $0.3 million. Our operating loss was lower primarily due to an increase in net timberland sales revenue of approximately $2.8 million, offset by a decrease in net timber sales of approximately $0.7 million. We sustained a net loss for the nine months ended September 30, 2012 primarily as a result of incurring an operating loss of approximately $1.9 million and incurring interest expense and loss on our interest rate swap of approximately $4.4 million in connection with borrowings used to finance the purchase of the Mahrt Timberland. We leveraged the Mahrt Timberland acquisition with substantial short-term and medium-term borrowings as a result of sourcing this acquisition in advance of raising investor proceeds under our Offerings. Our net loss per share available to common stockholders for the nine months ended September 30, 2012 and 2011 was $0.20 and $0.37, respectively. We anticipate future net losses to fluctuate with timber prices, harvest volumes, timberland sales, and interest expense based on our level of current and future borrowings.

Adjusted EBITDA

The discussion below is presented to enhance the reader’s understanding of our liquidity, ability to generate cash, and ability to satisfy lender requirements. Earnings from Continuing Operations before Interest, Taxes, Depletion, and Amortization (“EBITDA”) is a non-GAAP measure of our operating performance and cash-generating capacity. EBITDA is defined by the SEC; however, we have excluded certain other expenses due to their noncash nature, and we refer to this measure as Adjusted EBITDA. As such, Adjusted EBITDA, may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA should not be viewed as an alternative to net income or cash from operations as a measurement of our operating performance, as it excludes certain expenses related to fixed-asset investments required to generate revenues. Due to our significant amount of debt, management views operating income as the most appropriate earnings measure of our underlying timber operations. Management considers Adjusted EBITDA to be an important measure of our financial condition and cash-generating ability due to the significant amount of fixed assets subject to depletion and the significant amount of financing subject to interest and amortization expense. Our credit agreement, as amended, contains a minimum debt service coverage ratio based, in part, on Adjusted EBITDA since the measure is representative of adjusted income available for interest payments.

For the three months ended September 30, 2012, Adjusted EBITDA was approximately $2.8 million, an approximately $0.8 million increase from the three months ended September 30, 2011, primarily due to an increase in net revenue from timber and timberland sales and lower interest payments. For the nine months ended September 30, 2012, Adjusted EBITDA was approximately $13.7 million, an approximately $8.3 million increase from the nine months ended September 30, 2011, primarily due to an increase in net revenue from timberland sales and a decrease in interest payments, offset by a decrease in net revenue from timber sales and an increase in advisor fees and expense reimbursements.

Our reconciliation of net loss to Adjusted EBITDA for the three months and nine months ended September 30, 2012 and 2011 follows:

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net loss	$	(2,519,815	)	$	(2,120,571	)	$	(6,238,188	)	$	(8,941,441	)
Add:
Depletion	2,670,288			2,594,248			8,144,576			8,675,870
Unrealized (gain) loss on interest rate swaps that do not qualify for hedge accounting treatment	(213,293		)	(97,592		)	(665,009		)	(209,026		)
Interest expense (1)	1,092,534			1,363,655			3,349,288			4,628,052
Amortization (1)	1,523,793			176,240			1,894,489			506,594
Basis of timberland sold	225,460			—			7,187,733			628,229
Basis of casualty loss	25,541			78,091			25,541			78,091
Adjusted EBITDA	$	2,804,508		$	1,994,071		$	13,698,430		$	5,366,369

⁽¹⁾  For the purpose of the above reconciliation, amortization includes amortization of deferred financing costs, amortization of intangible lease assets, and amortization of mainline road costs, which are included in either interest expense, land rent expense, or other operating expenses in the accompanying consolidated statements of operations.

Election as a REIT

We have elected to be taxed as a REIT under the Code, and have operated as such beginning with our taxable year ended December 31, 2009. To qualify to be taxed as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income, as defined in the Code, to our stockholders, computed without regard to the dividends-paid deduction and by excluding our net capital gain. As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify to be taxed as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for that year and for the four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to our stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes.

Inflation

In connection with the acquisition of the Mahrt Timberland, we entered into the Timber Agreements with MeadWestvaco. The Timber Agreements provide that we will sell to MeadWestvaco specified amounts of timber subject to quarterly market pricing adjustments and monthly fuel pricing adjustments, which are intended to protect us from, and mitigate the risk of, the impact of inflation. The price of timber has generally increased with increases in inflation; however, we have not noticed a significant impact from inflation on our revenues, net sales, or income from continuing operations.

Application of Critical Accounting Policies

Our accounting policies have been established to conform to GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If management’s judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied or different amounts of assets, liabilities, revenues, and expenses would have been recorded, thus resulting in a different presentation of the financial statements or different amounts reported in the financial statements.

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Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses.

A discussion of the accounting policies that management deems critical because they may require complex judgment in their application or otherwise require estimates about matters that are inherently uncertain, is provided below:

Timber Assets

Timber and timberlands, including logging roads, are stated at cost less accumulated depletion for timber harvested and accumulated amortization. We capitalize timber and timberland purchases and reforestation costs and other costs associated with the planting and growing of timber, such as site preparation; growing or purchases of seedlings; planting; fertilization; herbicide application; and the thinning of tree stands to improve growth. Timber carrying costs, such as real estate taxes; insect control; wildlife control; leases of timberlands; and forestry management personnel salaries and fringe benefits, are expensed as incurred. Costs of major roads are capitalized and amortized over their estimated useful lives. Costs of roads built to access multiple logging sites over numerous years are capitalized and amortized over seven years. Costs of roads built to access a single logging site are expensed as incurred.

Depletion

Depletion, or costs attributed to timber harvested, is charged against income as trees are harvested. Fee-simple timber tracts owned for longer than one year and similarly managed are pooled together for depletion calculation purposes. Depletion rates are determined at least annually by dividing (a) the sum of (i) net carrying value of the timber, which equals the original cost of the timber less previously recorded depletion, and (ii) capitalized silviculture costs incurred and the projected silviculture costs, net of inflation, to be capitalized over the harvest cycle, by (b) the total timber volume estimated to be available over the harvest cycle. The capitalized silviculture cost is limited to the expenditures that relate to establishing stands of timber. For each fee-simple timber tract owned less than one year, depletion rates are determined by dividing the acquisition cost attributable to its timber by the volume of timber acquired. Depletion rates for lease tracts, which are generally limited to one harvest, are calculated by dividing the acquisition cost attributable to its timber by the volume of timber acquired. Net carrying value of the timber and timberlands is used to compute the gain or loss in connection with timberland sales. No book basis is allocated to the sale of conservation easements.

Evaluation of the Recoverability of Timber Assets

We continually monitor events and changes in circumstances that could indicate that the carrying amounts of our timber assets may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of timber assets may not be recoverable, we assess the recoverability of these assets by determining whether the carrying value will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. Impairment losses would be recognized for (i) long-lived assets used in our operations when the carrying value of such assets exceeds the undiscounted cash flows estimated to be generated from the future operations of those assets, and (ii) long-lived assets held for sale when the carrying value of such assets exceeds an amount equal to their fair value less selling costs. Estimated fair values are calculated based on the following information in order of preference, dependent upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of undiscounted cash flows, including estimated salvage value. We intend to use one harvest cycle for the purpose of evaluating the recoverability of timber and timberlands used in our operations. Future cash flow estimates are based on probability-weighted projections for a range of possible outcomes and are discounted at risk-free rates of interest. We consider assets to be held for sale at the point at which a sale contract is executed and the buyer has made a nonrefundable earnest money deposit against the contracted purchase price. We have determined that there has been no impairment of our long-lived assets to date.

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Allocation of Purchase Price of Acquired Assets

Upon the acquisition of timberland properties, we allocate the purchase price to tangible assets, consisting of timber and timberland, and identified intangible assets and liabilities, which may include values associated with in-place leases or supply agreements, based in each case on our estimate of their fair values. The fair values of timber and timberland are determined based on available market information and estimated cash flow projections that utilize appropriate discount factors and capitalization rates. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions. The values are then allocated to timber and timberland based on our determination of the relative fair value of these assets.

Intangible Lease Assets

In-place ground leases with us as the lessee have value associated with effective contractual rental rates that are below market rates. Such values are calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place lease and (ii) our estimate of fair market lease rates for the corresponding in-place lease, measured over a period equal to the remaining terms of the leases. The capitalized below-market in-place lease values are recorded as intangible lease assets and are amortized as adjustments to land rent expense over the weighted-average remaining term of the respective leases.

Revenue Recognition

Revenue from the sale of timber is recognized when the following criteria are met: (i) persuasive evidence of an agreement exists, (ii) legal ownership and the risk of loss are transferred to the purchaser, (iii) price and quantity are determinable, and (iv) collectibility is reasonably assured. Our primary sources of revenue are recognized as follows:

(1) For delivered sales contracts, which include amounts sufficient to cover costs of logging and hauling of timber, revenues are recognized upon delivery to the customer.

(2) For pay-as-cut contracts, the purchaser acquires the right to harvest specified timber on a tract, at an agreed-upon price per unit. Payments and contract advances are recognized as revenue as the timber is harvested based on the contracted sale rate per unit.

(3) Revenues from the sale of HBU timberland and nonstrategic timberlands are recognized when title passes and full payment or a minimum down payment is received and full collectibility is assured. If a down payment of less than the minimum down payment is received at closing, we will record revenue based on the installment method.

(4) For recreational leases, rental income collected in advance is recorded as other liabilities in the accompanying consolidated balance sheets until earned over the term of the respective recreational lease and recognized as other revenue.

In addition to the sources of revenue noted above, we also may enter into lump-sum sale contracts, whereby the purchaser generally pays the purchase price upon execution of the contract. Title to the timber and risk of loss transfers to the buyer at the time the contract is consummated. Revenues are recognized upon receipt of the purchase price. When the contract expires, ownership of the remaining standing timber reverts to us; however, adjustments are not

made to the revenues previously recognized. Any extensions of time will be negotiated under a new or amended contract.

Related-Party Transactions and Agreements

We have engaged Wells TIMO and its affiliates to perform certain services under agreements which require us to pay fees and reimbursements to Wells TIMO or its affiliates, including, subject to certain limitations, advisor fees and expense reimbursements, disposition fees, and reimbursements of organization and offering costs. We also previously paid WIS, an affiliate of Wells TIMO, selling commissions and dealer-manager fees in connection with our Public

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Offerings pursuant to a dealer-manager agreement. See Note 8 to our accompanying consolidated financial statements for a detailed discussion of our related-party agreements and transactions.

Assertions of Legal Actions against Related Parties

On March 12, 2007, a stockholder of Piedmont Office Realty Trust, Inc. (“Piedmont REIT”) filed a putative class action and derivative complaint, presently styled In re Wells Real Estate Investment Trust, Inc. Securities Litigation, in the United States District Court for the District of Maryland against, among others, Piedmont REIT; Leo F. Wells, III, our President and Director; Wells Capital, the owner of our advisor; Wells Management Company, Inc. (“Wells Management”); certain affiliates of Wells REF; the directors of Piedmont REIT; and certain individuals who formerly served as officers or directors of Piedmont REIT prior to the closing of an internalization transaction by Piedmont REIT on April 16, 2007.

The complaint alleged, among other things, violations of the federal proxy rules and breaches of fiduciary duty arising from the Piedmont REIT internalization transaction and the related proxy statement filed with the SEC on February 26, 2007, as amended. The complaint sought, among other things, unspecified monetary damages and nullification of the Piedmont REIT internalization transaction.

On June 27, 2007, the plaintiff filed an amended complaint, which attempted to assert class action claims on behalf of those persons who received and were entitled to vote on the Piedmont REIT proxy statement filed with the SEC on February 26, 2007, and derivative claims on behalf of Piedmont REIT.

On March 31, 2008, the Court granted in part the defendants’ motion to dismiss the amended complaint. The Court dismissed five of the seven counts of the amended complaint in their entirety. The Court dismissed the remaining two counts with the exception of allegations regarding the failure to disclose in the Piedmont REIT proxy statement details of certain expressions of interest in acquiring Piedmont REIT. On April 21, 2008, the plaintiff filed a second amended complaint, which alleged violations of the federal proxy rules based upon allegations that the proxy statement to obtain approval for the Piedmont REIT internalization transaction omitted details of certain expressions of interest in acquiring Piedmont REIT. The second amended complaint sought, among other things, unspecified monetary damages, to nullify and rescind the internalization transaction, and to cancel and rescind any stock issued to the defendants as consideration for the internalization transaction. On May 12, 2008, the defendants answered and raised certain defenses to the second amended complaint. Subsequent to the filing of the second amended complaint, the plaintiff said it intended to seek monetary damages of approximately $159 million plus prejudgment interest.

On June 23, 2008, the plaintiff filed a motion for class certification. On September 16, 2009, the Court granted the plaintiff’s motion for class certification. On September 20, 2009, the defendants filed a petition for permission to appeal immediately the Court’s order granting the motion for class certification with the Eleventh Circuit Court of Appeals. The petition for permission to appeal was denied on October 30, 2009.

On April 13, 2009, the plaintiff moved for leave to amend the second amended complaint to add additional defendants. The Court denied the plaintiff’s motion for leave to amend on June 23, 2009.

On December 4, 2009, the parties filed motions for summary judgment. On August 2, 2010, the Court entered an order denying the defendants’ motion for summary judgment and granting, in part, the plaintiff’s motion for partial summary judgment. The Court ruled that the question of whether certain expressions of interest in acquiring Piedmont REIT constituted “material” information required to be disclosed in the proxy statement to obtain approval for the Piedmont REIT internalization transaction raises questions of fact that must be determined at trial.

On November 17, 2011, the Court issued rulings granting several of the plaintiff’s motions in limine to prohibit the defendants from introducing certain evidence, including evidence of the defendants’ reliance on advice from their outside legal and financial advisors, and limiting the defendants’ ability to relate their subjective views, considerations, and observations during the trial of the case. On February 23, 2012, the Court granted several of the defendants' motions, including a motion for reconsideration regarding a motion the plaintiff had filed seeking exclusion of certain evidence

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impacting damages, and motions seeking exclusion of certain evidence proposed to be submitted by the plaintiff. The suit has been removed from the Court's trial calendar pending resolution of a request for interlocutory appellate review of certain legal rulings made by the Court.

On March 20, 2012, the Court granted the defendants leave to file a motion for summary judgment. On April 5, 2012, the defendants filed a motion for summary judgment. On April 24, 2012, the plaintiff filed its response to the defendants' motion for summary judgment. On May 7, 2012, the defendants filed their reply in support of their motion for summary judgment. On September 26, 2012, the Court granted the defendants' motion for summary judgment and entered judgment in favor of the defendants.

On October 12, 2012, the plaintiff filed a notice of appeal with the Eleventh Circuit Court of Appeals. On October 22, 2012, Piedmont REIT announced that the parties had reached agreement in principle to settle the lawsuit on October 12, 2012. Under the terms of the proposed settlement, the plaintiff will dismiss the appeal and release all defendants from liability in exchange for total payment of $4.9 million in cash by Piedmont REIT and its insurer. The settlement, which is subject to Court approval following the negotiation and execution of definitive agreements and the provision of notice to the class, will resolve the appeal and result in the final disposition of the litigation.

Mr. Wells, Wells Capital, and Wells Management believe that the allegations contained in the complaint are without merit and intend to vigorously defend this action if for any reason the settlement is not approved. Although Wells REF believes that it has meritorious defenses to the claims of liability and damages in these actions, Wells REF is unable at this time to predict the outcome of the appeal of this action or, if reinstated, reasonably estimate a range of damages, or how any liability and responsibility for damages might be allocated among the 17 defendants in the action, which includes 11 defendants not affiliated with Mr. Wells, Wells Capital, or Wells Management. The ultimate resolution of this matter could have a material adverse impact on Wells REF's financial results, financial condition, or liquidity.

Commitments and Contingencies

We are subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 1, Note 5, and Note 8of our accompanying consolidated financial statements for further explanation. Examples of such commitments and contingencies include:

• MeadWestvacoTimber Agreements;

• FRC Timberland Operating Agreement;

• Advisory Agreement, as amended;

• Dealer-Manager Agreement; and

• Structuring Agent Agreement.

Subsequent Event

On October 23, 2012, we entered into an interest rate swap agreement with Rabobank to hedge our exposure to changing interest rates on $80.0 million of the CoBank Loan that is subject to a variable interest rate, or the Rabobank Forward Swap. The Rabobank Forward Swap has an effective date of March 28, 2013 and matures on September 30, 2017. Under the terms of the Rabobank Forward Interest Swap, we will pay interest at a fixed rate of 0.91% per annum to Rabobank and will receive one-month LIBOR-based interest payments from Rabobank.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

As a result of entering into our loan agreements, we are exposed to interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we have entered into interest rate swap agreements, and may enter into other interest rate swaps, caps, or other arrangements in order to mitigate our interest rate risk on a related

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financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes; however, our derivatives do not qualify for hedge accounting treatment. All of our debt was entered into for other than trading purposes. We manage our ratio of fixed- to floating-rate debt with the objective of achieving a mix that we believe is appropriate in light of anticipated changes in interest rates. We closely monitor interest rates and will continue to consider the sources and terms of our borrowing facilities to determine whether we have appropriately guarded ourselves against the risk of increasing interest rates in future periods.

As of September 30, 2012, we had approximately $133.0 million outstanding on the CoBank Loan, which matures on August 11, 2018 and bears interest at an adjustable rate based on either the LIBOR Rate or the Base Rate. As of September 30, 2012, the weighted-average interest rate of the CoBank Loan, after consideration of the interest rate swap, was 3.92%, based on the then-effective Base Rate.

We entered into an interest rate swap agreement with Rabobank (the “Rabobank Interest Rate Swap”), effective from September 30, 2010 to March 28, 2013. Under the terms of the Rabobank Interest Rate Swap, we will pay interest at a fixed rate of 2.085% per annum and will receive variable LIBOR-based interest payments from Rabobank based the following schedule:

Start Date	End Date	Notional Amount
September 28, 2012	December 31, 2012	$  37,500,000
December 31, 2012	March 28, 2013	$  28,500,000

As of September 30, 2012, $133.0 million of our total debt outstanding is subject to a variable interest rate. As such, a 1.0% change in interest rates would result in a change in interest expense of approximately $1.3 million per year. The amount outstanding on our variable-rate debt facility in the future will be largely dependent upon the level of cash from operations and investor proceeds raised under our DRP, if any, and the rate at which we are able to employ such proceeds in the acquisition of timberland properties and toward the repayment of the CoBank Loan.

ITEM 4. CONTROLS AND PROCEDURES

Management’s Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report in providing a reasonable level of assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods in SEC rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings, which arise in the ordinary course of our business. We are not currently involved in any legal proceedings of which the outcome is reasonably likely to be material to our business or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2011 and our quarterly report on Form 10-Q for the period ended June 30, 2012.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) On August 6, 2012, we granted 3,000 shares of restricted common stock to our independent directors, Mr. Moss, Mr. Sands, and Mr. Potts, upon their re-election to the board of directors. On September 14, 2012, we granted 2,500 shares of restricted common stock to Henry G. Zigtema upon his appointment to our board of directors. The shares of restricted common stock vest in thirds on each of the first anniversaries of the date of grant. These shares were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act for transactions not involving a public offering.

(b) Not applicable.

(c) During the quarter ended September 30, 2012, we redeemed shares as follows:

Period	Total Number of Shares Redeemed	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program	Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program
July 2012	1,152	$	9.54	1,152	(1)
August 2012	7,335	$	9.54	7,335	(1)
September 2012 (2)	15,534	$	9.66	15,534	(1)

⁽¹⁾  Our share redemption plan commenced on August 11, 2006 and was amended on November 8, 2010, March 16, 2012, and August 6, 2012. The Amended SRP limits redemptions of our common stock as follows: the shares redeemed under the share redemption plan cannot exceed the lesser of (i) the amount redeemable from the sum of net proceeds from the sale of shares through the distribution reinvestment plan plus any additional amounts reserved for redemptions by our board of directors, or (ii) in any calendar year, 5% of the weighted-average common shares outstanding during the preceding year. The terms of the our debt agreements prohibit us from making redemptions, other than upon the death or qualifying disability of a stockholder, during any period in which the LTV ratio exceeds 40% (see Note 4 of the accompanying consolidated financial statements). Redemptions sought within two years of the death or qualifying disability of a stockholder do not require a one-year holding period and are subject only to the overall limitation that during any calendar year, aggregate redemptions may not exceed 100% of the net proceeds from our distribution reinvestment plan during the calendar year and any additional amounts reserved for such purpose by our board of directors. Our board of directors may amend, suspend, or terminate the share redemption plan upon 30 days notice. Our board of directors approved a monthly, noncumulative reserve of $150,000 funded with operating cash flows for death or qualifying disability redemptions of common stock. Effective October 1, 2012, the redemption price for all redemptions, including redemptions sought within two years of a stockholder's death, qualifying disability or confinement to a long-term care facility, will be calculated in the same manner. Specifically, until the initial publication in an Exchange Act report filed with the SEC of an estimated per share value approved by the board, the price per share will be 91% of the aggregate amount paid to us for all shares owned by the redeeming stockholder, divided by the number of shares owned by such stockholder that were acquired from us. After the initial estimated per share value publication, the price will be 95% of the estimated per share value, plus or minus any valuation adjustment as provided

35

in the Amended SRP. On August 6, 2012, our board of directors suspended the Amended SRP effective October 1, 2012 until the first full month following the initial publication of the estimated per share value.

⁽²⁾  In September 2012, qualified redemption requests exceeded the $150,000 limit set by our board of directors. As a result, September 2012 redemption requests were pro-rated per terms of the SRP. We redeemed $150,000 of shares at 100% of the aggregate amount paid to us. Wells Capital reimbursed us 9% of the amount of shares redeemed in September 2012, or $13,500. As of September 30, 2012, approximately $0.2 million of qualified redemption requests were unfulfilled and returned to the investors.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

(a) There have been no defaults with respect to any of our indebtedness.

(b) Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(a) During the third quarter of 2012, there was no information that was required to be disclosed in a report on Form 8-K that was not disclosed in a report on Form 8-K.

(b) There are no material changes to the procedures by which stockholders may recommend nominees to our board of directors since the filing of our Schedule 14A.

ITEM 6. EXHIBITS

The exhibits required to be filed with this report are set forth on the Exhibit Index hereto and incorporated by reference herein.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		WELLS TIMBERLAND REIT, INC. (Registrant)
Date:	November 5, 2012	By:	/s/ DOUGLAS P. WILLIAMS
			Douglas P. Williams Executive Vice President, Secretary, Treasurer and Principal Financial Officer

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EXHIBIT INDEX TO

THIRD QUARTER 2012 FORM 10-Q OF

WELLS TIMBERLAND REIT, INC.

Exhibit Number	Description
3.1	Fifth Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 filed on August 12, 2010 (the “2010 Second Quarter Form 10-Q”))
3.2	Articles of Amendment to the Fifth Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 filed on August 9, 2011 (the “2011 Second Quarter Form 10-Q”))
3.3	Third Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the 2010 Second Quarter Form 10-Q)
3.4	First Amendment to Third Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on October 12, 2010)
4.1	Third Amended and Restated Share Redemption Plan (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 filed on August 7, 2012.
10.1*	Second Amended and Restated Credit Agreement
31.1*	Certification of the Principal Executive Officer of the Company, pursuant to Securities Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of the Principal Financial Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Statement of the Principal Executive Officer and Principal Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema Document
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document

*     Filed herewith

** Furnished with this Form 10-Q. Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

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EX-10.1

EXHIBIT 10.1

______________________________________________________________________________

$148,000,000

SECOND AMENDED AND RESTATED CREDIT AGREEMENT,

dated as of September 28, 2012

among

TIMBERLANDS II, LLC

and

WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P.,

as the Borrowers,

COBANK, ACB,

as the Administrative Agent, Lead Arranger and Bookrunner,

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A. “RABOBANK NEDERLAND”, NEW YORK BRANCH,

as Documentation Agent,

AGFIRST FARM CREDIT BANK,

as Syndication Agent,

and

CERTAIN FINANCIAL INSTITUTIONS,

as the Lenders.

TABLE OF CONTENTS

ARTICLE I	Definitions and Accounting Terms	2
SECTION 1.1 Defined Terms		2
SECTION 1.2 Use of Defined Terms		28
SECTION 1.3 Certain Rules of Construction		28
SECTION 1.4 Accounting Determinations		29
ARTICLE II	FUNDING OF LOANS	29
SECTION 2.1 Amount and Terms of Loans		29
SECTION 2.2 Notes		32
SECTION 2.3 Termination of Term Loan Commitments		32
SECTION 2.4 Continuation and Conversion Elections		33
ARTICLE III	Payments, Interest and Fees	34
SECTION 3.1 Repayments and Prepayments		34
SECTION 3.2 Interest Provisions		36
SECTION 3.3 Commitment Fee		37
ARTICLE IV	YIELD PROTECTION, TAXES AND RELATED PROVISIONS	37
SECTION 4.1 Eurodollar Rate Lending Unlawful		37
SECTION 4.2 Inability to Determine Rates		37
SECTION 4.3 Capital Adequacy and Other Adjustments		38
SECTION 4.4 Funding Losses		39
SECTION 4.5 Mitigation Obligations; Replacement of Lender		39
SECTION 4.6 Taxes		40
SECTION 4.7 Payments, Interest Calculations, etc		44
SECTION 4.8 Sharing of Payments		45
SECTION 4.9 Right of Setoff		46
SECTION 4.10 Use of Proceeds		46
SECTION 4.11 Payment Reliance		46
SECTION 4.12 Defaulting Lenders		47
ARTICLE V	CONDITIONS PRECEDENT TO INITIAL FUNDING DATE	49
SECTION 5.1 Conditions		49
SECTION 5.2 Conditions to the making of all Borrowings on the Revolving Loans		55
ARTICLE VI	Representations and Warranties	56
SECTION 6.1 Organization, etc		56
SECTION 6.2 Due Authorization, Non-Contravention, etc		57
SECTION 6.3 Required Approvals		57
SECTION 6.4 Validity, etc		58
SECTION 6.5 No Material Liabilities		58

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SECTION 6.6 No Material Adverse Change, etc		58
SECTION 6.7 Litigation, Labor Matters, etc		58
SECTION 6.8 Capitalization		59
SECTION 6.9 Compliance with Laws, etc		59
SECTION 6.10 Properties, Permits, etc		59
SECTION 6.11 Taxes, etc		60
SECTION 6.12 ERISA		61
SECTION 6.13 Environmental Warranties		61
SECTION 6.14 Accuracy of Information		62
SECTION 6.15 Transaction Agreement, etc		63
SECTION 6.16 Absence of Default and Restrictions		63
SECTION 6.17 Margin Regulations; Bank Secrecy Act, etc		64
SECTION 6.18 Investment Company Status		64
SECTION 6.19 Material Agreements; Governmental Approvals		64
SECTION 6.20 Solvency		65
SECTION 6.21 Insurance		65
SECTION 6.22 Affiliate Transactions		65
SECTION 6.23 Patriot Act, etc		65
SECTION 6.24 Separateness; Special Representations and Covenants Relating to Loan Parties		66
ARTICLE VII	Covenants	68
SECTION 7.1 Affirmative Covenants		68
SECTION 7.2 Negative Covenants		101
ARTICLE VIII	Events of Default and Remedies	111
SECTION 8.1 Listing of Events of Default		111
SECTION 8.2 Action if Bankruptcy		114
SECTION 8.3 Action if Other Event of Default		114
SECTION 8.4 Remedies		114
SECTION 8.5 Foreclosure on Collateral		115
SECTION 8.6 Appointment of Administrative Agent as Attorney-in-Fact		115
SECTION 8.7 Payments Upon Acceleration		116
ARTICLE IX	RECEIPT ACCOUNT	117
SECTION 9.1 Establishment of Receipt Account		117
SECTION 9.2 Deposit of Revenues into the Receipt Account		118
SECTION 9.3 Payment of Funds From Accounts		118
SECTION 9.4 Pledge of Receipt Account		121
SECTION 9.5 Administrative Agent Appointed Attorney-In-Fact		122
ARTICLE X	The Administrative Agent	122
SECTION 10.1 Appointment and Authority		122
SECTION 10.2 Rights as a Lender		123
SECTION 10.3 Exculpatory Provisions		123
SECTION 10.4 Reliance by Administrative Agent		124
SECTION 10.5 Delegation of Duties		124

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SECTION 10.6 Resignation of Administrative Agent		125
SECTION 10.7 Non-Reliance on Administrative Agent and Other Lenders		126
SECTION 10.8 No Other Duties, Etc		126
SECTION 10.9 Administrative Agent May File Proof of Claims		126
SECTION 10.10 Agency for Perfection; Enforcement of Security by Administrative Agent		127
SECTION 10.11 Collateral and Guaranty Matters		127
SECTION 10.12 Indemnification		128
ARTICLE XI	Miscellaneous Provisions	129
SECTION 11.1 Waivers, Amendments, etc		129
SECTION 11.2 Notices		130
SECTION 11.3 Payment of Costs and Expenses		131
SECTION 11.4 Indemnification by the Borrowers		133
SECTION 11.5 Survival		135
SECTION 11.6 Severability		135
SECTION 11.7 Headings		135
SECTION 11.8 Counterparts; Integration; Effectiveness		135
SECTION 11.9 Governing Law		136
SECTION 11.10 Entire Agreement		136
SECTION 11.11 Assignments and Participations		136
SECTION 11.12 Press Releases and Related Matters		140
SECTION 11.13 Consent to Jurisdiction and Service of Process		141
SECTION 11.14 Waiver of Jury Trial, etc		142
SECTION 11.15 Waiver of Consequential Damages, etc		142
SECTION 11.16 No Strict Construction		142
SECTION 11.17 Protection of Interests		142
SECTION 11.18 Confidentiality		143
SECTION 11.19 Patriot Act Information		144
SECTION 11.20 Joint and Several Liability		144
SECTION 11.21 Waiver of Farm Credit Rights		144
SECTION 11.22 Effectiveness of Amendment and Restatement; No Novation		144
SECTION 11.23 Purchase of AgSouth Equity Interests		144
SECTION 11.24 Initial Funding Date Assignment		145
SECTION 11.25 Borrowers’ Agent		145

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SCHEDULES

SCHEDULE I    -    Disclosure Schedule

SCHEDULE II    -    Term and Revolving Loan Commitment Amounts

SCHEDULE III    -    Voting Participants

EXHIBITS

EXHIBIT A    -    Form of Term Note

EXHIBIT A-1    -    Form of Revolving Note

EXHIBIT B-1    -    Form of Borrowing Request

EXHIBIT B-2    -    Form of Continuation/Conversion Notice

EXHIBIT C    -    Form of Assignment and Assumption

EXHIBIT D    -    Form of Closing Date Certificate

EXHIBIT E-1    -    Form of Wells Timberland Solvency Certificate

EXHIBIT E-2    -    Form of Wells Partnership Solvency Certificate

EXHIBIT E-3    -    Form of Wells TRS Subsidiary Solvency Certificate

EXHIBIT E-4    -    Form of Wells HBU Solvency Certificate

EXHIBIT E-5    -    Form of Wells REIT Solvency Certificate

EXHIBIT E-6    -    Form of Wells TRS Solvency Certificate

EXHIBIT F    -    Form of Compliance Certificate

EXHIBIT G    -    Form of Amendment and Reaffirmation Agreement

EXHIBIT H    -    Form of Landlord Estoppel Certificate

EXHIBIT I-1 -    Form of Georgia Second Amended and Restated Deed to Secure Debt

EXHIBIT I-2    -    Form of Alabama Second Mortgage Amendment

EXHIBIT I-3        Form of Alabama Third Mortgage Amendment

EXHIBIT J    -    Form of Opinion of New York Counsel to the Borrowers

EXHIBIT K    -    Form of Opinion of Georgia Counsel to the Borrowers

EXHIBIT L    -    Form of Opinion of Alabama Counsel to the Borrowers

EXHIBIT M        Form of Account Control Agreement

EXHIBIT N-1        Form of Collateral Assignment of Material Agreement

EXHIBIT N-2        Form of Reaffirmation of Collateral Assignment of Material Agreement

EXHIBIT O -    Form of Reaffirmation of Amended and Restated Timber Manager Subordination

EXHIBIT P Form of LTC Lease Recognition Agreement

EXHIBIT 4.6(A) Form of U.S. Tax Compliance Certificate (Foreign Lenders Not a Partnership)

EXHIBIT 4.6(B) Form of U.S. Tax Compliance Certificate (Foreign Participants Not a Partnership)

EXHIBIT 4.6(C) Form of U.S. Tax Compliance Certificate (Foreign Participant Partnerships)

EXHIBIT 4.6(D) Form of U.S. Tax Compliance Certificate (Foreign Lender Partnerships)

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT

This SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 28, 2012 (this “Agreement”), among TIMBERLANDS II, LLC, a Delaware limited liability company (“Wells Timberland”), and WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“Wells Partnership”; Wells Timberland and Wells Partnership each a “Borrower” and collectively, the “Borrowers”), the various financial institutions as are, or may from time to time become, parties hereto (collectively, the “Lenders”), and COBANK, ACB (“CoBank”), as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms to Article I.

W I T N E S S E T H:

WHEREAS, the Borrowers, the Administrative Agent and certain of the Lenders previously entered into a Credit Agreement, dated as of October 9, 2007, as amended and restated by that certain Amended and Restated Credit Agreement, dated as of March 24, 2010 (the “Original Credit Agreement”), which Original Credit Agreement was amended by that certain Amendment No. 1 to Amended and Restated Credit Agreement, dated as of June 29, 2010, that certain Amendment No. 2 to Amended and Restated Credit Agreement, dated as of June 10, 2011, that certain Amendment No. 3 to Amended and Restated Credit Agreement, dated as of December 13, 2011, and that certain Amendment No. 4 to Amended and Restated Credit Agreement, dated as of April 18, 2012 (as so amended, and as otherwise previously amended, supplemented, extended, restated or otherwise modified, the “Existing Credit Agreement”), pursuant to which the Lenders party thereto extended certain financial accommodations to the Borrowers;

WHEREAS, the Borrowers’ only business is the direct or indirect ownership and operation of the Real Property;

WHEREAS, in order to, among other things, refinance outstanding balances due under the Existing Credit Agreement, fund costs and expenses associated with closing the Loans, and partially fund the acquisition of certain real property currently leased by Borrowers under the LTC Lease, the Borrowers desire that the Lenders make Loans to the Borrowers in an aggregate principal amount of up to $148,000,000;

WHEREAS, in order to make such Loans, the Borrowers, the Administrative Agent and the Lenders under the Existing Credit Agreement have agreed to amend and restate the Existing Credit Agreement as described herein; and

WHEREAS, the Lenders are willing, on the terms and subject to the conditions hereinafter set forth (including Article V), to make such Loans to the Borrowers.

NOW, THEREFORE, the parties hereto hereby agree as follows:

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ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1Defined Terms. The following terms when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meaning:

“Account Bank” means each bank or other financial institution that has entered into a Account Control Agreement including, without limitation, any Domestic Account Bank.

“Account Control Agreement” means each Account Control Agreement, substantially in the form of Exhibit M (with respect to any Domestic Account Bank or another Account Bank in the United States) attached hereto or such other form as may be reasonably acceptable to the Administrative Agent, executed by a Domestic Account Bank, or another Account Bank, each applicable Loan Party and the Administrative Agent.

“Administrative Agent” is defined in the preamble and includes each successor Administrative Agent pursuant to Section 10.5.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means with respect to a specific Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agent Parties” means, collectively, the Administrative Agent and each of its Related Parties.

“Agreement” is defined in the preamble.

“AgSouth” means AgSouth Farm Credit, ACA.

“AgSouth Equity Interests” is defined in Section 11.22.

“Applicable Base Rate Margin” means (a) 1.75% per annum, if the Loan to Value Ratio is equal to or greater than 40%, (b) 1.50% per annum, if the Loan to Value Ratio is equal to or greater than 35% and less than 40%, (c) 1.00% per annum, if the Loan to Value Ratio is less than 35%. The Loan to Value Ratio used to compute the Applicable Base Rate Margin shall be the Loan to Value Ratio most recently calculated and reported pursuant to clause (e) of Section 7.1.1 or clause (w) or (x) of Section 7.1.11, as applicable; changes in the Applicable Base Rate Margin resulting from a change in the Loan to Value Ratio shall become effective upon delivery by Wells Manager to the Administrative Agent of a new Compliance Certificate, as required by clause (e) of Section 7.1.1 and upon the delivery by Wells Manager to the Administrative Agent of an updated Loan to

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Value Ratio, as required from time to time by clause (w) or (x) of Section 7.1.11. If Wells Manager shall fail to deliver a Compliance Certificate with respect to a Fiscal Quarter as and when required pursuant to clause (e) of Section 7.1.1, the

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Applicable Base Rate Margin, from and including the date it was required to deliver such Compliance Certificate to but not including the date Wells Manager delivers to the Administrative Agent a Compliance Certificate with respect to such Fiscal Quarter, shall conclusively be presumed to equal the highest relevant Applicable Base Rate Margin set forth above. The Applicable Base Rate Margin shall be automatically increased to the highest Applicable Base Rate Margin set forth above during all periods of time in which any Event of Default has occurred and is continuing.

“Applicable Commitment Fee Rate” means (a) 0.375% per annum, if the Loan to Value Ratio is equal to or greater than 40%, (b) 0.250% per annum, if the Loan to Value Ratio is equal to or greater than 35% and less than 40%, and (c) 0.200% per annum, if the Loan to Value Ratio is less than 35%. The Loan to Value Ratio used to compute the Applicable Commitment Fee Rate shall be the Loan to Value Ratio most recently calculated and reported pursuant to clause (e) of Section 7.1.1 or clause (w) or (x) of Section 7.1.11, as applicable; changes in the Applicable Commitment Fee Rate resulting from a change in the Loan to Value Ratio shall become effective upon delivery by Wells Manager to the Administrative Agent of a new Compliance Certificate, as required by clause (e) of Section 7.1.1 and upon the delivery by Wells Manager to the Administrative Agent of an updated Loan to Value Ratio, as required from time to time by clause (w) or (x) of Section 7.1.11. If Wells Manager shall fail to deliver a Compliance Certificate with respect to a Fiscal Quarter as and when required pursuant to clause (e) of Section 7.1.1, the Applicable Commitment Fee Rate, from and including the date it was required to deliver such Compliance Certificate to but not including the date Wells Manager delivers to the Administrative Agent a Compliance Certificate with respect to such Fiscal Quarter, shall conclusively be presumed to equal the highest relevant Applicable Commitment Fee Rate set forth above. The Applicable Commitment Fee Rate shall be automatically increased to the highest Applicable Commitment Fee Rate set forth above during all periods of time in which any Event of Default has occurred and is continuing.

“Applicable LIBOR Margin” means (a) 2.75% per annum, if the Loan to Value Ratio is equal to or greater than 40%, (b) 2.50% per annum, if the Loan to Value Ratio is equal to or greater than 35% and less than 40%, (c) 2.00% per annum, if the Loan to Value Ratio is less than 35%. The Loan to Value Ratio used to compute the Applicable LIBOR Margin shall be the Loan to Value Ratio most recently calculated and reported pursuant to clause (e) of Section 7.1.1 or clause (w) or (x) of Section 7.1.11, as applicable; changes in the Applicable LIBOR Margin resulting from a change in the Loan to Value Ratio shall become effective upon delivery by Wells Manager to the Administrative Agent of a new Compliance Certificate, as required by clause (e) of Section 7.1.1 and upon the delivery by Wells Manager to the Administrative Agent of an updated Loan to Value Ratio, as required from time to time by clause (w) or (x) of Section 7.1.11. If Wells Manager shall fail to deliver a Compliance Certificate with respect to a Fiscal Quarter as and when required pursuant to clause (e) of Section 7.1.1, the Applicable LIBOR Margin, from and including the date it was required to deliver such Compliance Certificate to but not including the date Wells Manager delivers to the Administrative Agent a Compliance Certificate with respect to such Fiscal Quarter, shall conclusively be presumed to equal the highest relevant Applicable LIBOR Margin set forth above. The Applicable LIBOR Margin shall be automatically increased to the highest Applicable LIBOR Margin set forth above during all periods of time in which any Event of Default has occurred and is continuing.

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“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Amendment and Reaffirmation Agreement” means the Amendment and Reaffirmation Agreement, substantially in the form of Exhibit G attached hereto.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required pursuant to Section 11.11), and accepted by the Administrative Agent, in substantially the form of Exhibit C or any other form approved by the Administrative Agent.

“Authorized Officer” means, relative to any Loan Party, each Financial Officer and other officers of such Loan Party whose signatures and incumbency shall have been certified to the Administrative Agent and the Lenders pursuant to Section 5.1.2.

“Availability Period” is defined in clause (c)(i) of Section 2.1.1.

“Base Rate” means the rate in effect from day to day defined as a rate per annum announced by the Administrative Agent on the first Business Day of each week as the higher of (a) 1.50% greater than one-month LIBOR or (b) the prime rate as published from time to time in the Eastern Edition of the Wall Street Journal as the average prime lending rate for seventy percent (70%) of the United States’ ten largest commercial banks, or, if the Wall Street Journal shall cease publication or cease publishing the “prime rate” on a regular basis, such other regularly published average prime rate applicable to such commercial banks as is acceptable to the Lenders in their reasonable discretion.

“Best Management Practices” means forest management, silvicultural, planting, thinning and timber harvesting practices that are in accordance with (a) SFI-certification requirements of Sustainable Forestry Initiative, Inc. and (b) “Best Management Practices” (or similarly titled regulations or non-binding guidance) issued with respect to the management and harvesting of timberlands by Governmental Authorities in the States where the Real Property is located.

“Borrower” and “Borrowers” is defined in the preamble.

“Borrowing” means a borrowing from the Lenders of (a) the Terms Loans on the Initial Funding Date in accordance with the Lenders’ Term Loan Commitments, (b) the Incremental Term Loans on the closing date therefor in accordance with the Lenders’ Incremental Term Loan Commitments or (c) the Revolving Loans during the Availability Period in accordance with the Lenders’ Revolving Loan Commitments.

“Borrowing Request” means a Borrowing Request, duly executed by a Financial Officer of each Borrower, in substantially the form of Exhibit B-1 attached hereto.

“Business Day” means (a) any day on which the Administrative Agent is open for business and is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required

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to be closed in New York, New York or Denver, Colorado; and (b) relative to the making, continuing, prepaying or repaying of the Loans, any day which is a Business Day described in clause (a) above and which is also a day on which dealings in Dollars are carried on in the interbank Eurodollar market.

“Carbon Credit Acreage” is defined in clause (e) of Section 7.2.9.

“Carbon Storage Agreement” is defined in clause (b) of Section 7.1.11.

“Cash Equivalent Investment” means, at any time:

(a)any evidence of Indebtedness, with overnight maturities issued or guaranteed by the United States;

(b)commercial paper, maturing not more than one day from the date of issuance and rated at least A-1 by S&P or P-1 by Moody’s, which is issued by a corporation (other than an Affiliate of any Loan Party) organized under the Laws of any state of the United States or of the District of Columbia;

(c)any certificate of deposit or bankers acceptance or time deposit, maturing daily, which is issued by a commercial banking institution that (i) is a member of the Federal Reserve System, (ii) has a combined capital and surplus and undivided profits of not less than $1,000,000,000 and (iii) has a credit rating of A2 or higher from Moody’s or A or higher from S&P; or

(d)any investment in money market mutual funds having portfolio assets in excess of $5,000,000,000 that comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940 and are rated AAA by S&P and Aaa by Moody’s.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.

“Change in Law” means the occurrence, after the date of this Agreement, or any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

“CoBank” is defined in the preamble.

“Code” means the Internal Revenue Code of 1986.

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“Collateral” means (a) the Equity Interests ofWells Timberland, Wells TRS, Wells TRS Subsidiary and Wells HBU, and (b) all the other assets of the Borrowers and each other Loan Party that are subject to a Lien pursuant to any Loan Document.

“Collateral Assignment of Material Agreement” means each Collateral Assignment of Material Agreement in substantially the form of Exhibit N-1 attached hereto, executed by each relevant Loan Party and other Persons that are parties to the Material Agreement the subject thereof. In the discretion of the Administrative Agent, the form of the relevant Collateral Assignment of Material Agreement with respect to any particular Material Agreement may vary.

“Collateral Insurance Proceeds” means all insurance proceeds that have been paid on account of any of the Collateral.

“Commitment” means, Term Loan Commitment, Incremental Term Loan Commitment and Revolving Loan Commitment, as applicable.

“Commitment Fee” is defined in Section 3.3.

“Commitment Termination Event” means (a) the occurrence of any Default described in clauses (a) through (d) of Section 8.1.7 or (b) the occurrence and continuance of any other Event of Default and either (i) the declaration of the Loans to be due and payable pursuant to Section 8.3 or (ii) the giving of notice by the Administrative Agent, acting at the direction of the Required Lenders, to the Borrowers that the Commitments have been terminated.

“Communications” means collectively, all information, documents and other materials that any Loan Party or any Subsidiary of any Loan Party is obligated to furnish to the Administrative Agent pursuant to the Loan Documents, including all notices, requests, financial statements, financial and other reports, certificates and other information materials, but excluding any such communication that (a) relates to a request for a new, or a conversion of an existing, borrowing or other extension of credit (including any election of an interest rate or interest period relating thereto), (b) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, or (c) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement and/or any borrowing or other extension of credit hereunder.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Compliance Certificate” means a Compliance Certificate duly executed by a Financial Officer of Wells Manager, substantially in the form of Exhibit F attached hereto, together with such changes thereto as the Administrative Agent may from time to time reasonably request.

“Contingent Liability” means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss (including by providing a Lien

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on its property or assets, maintaining any financial statement condition or liquidity level, or purchasing or leasing any property or services)) the indebtedness, obligation or any other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The principal amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the debt, obligation or other liability guaranteed thereby.

“Continuation/Conversion Notice” means a Continuation/Conversion Notice duly executed by a Financial Officer of each Borrower, substantially in the form of Exhibit B-2 attached hereto.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Cost Basis” means the cost basis of any of the Collateral as set forth in Item 1.1(a) (“Cost Basis of Collateral”) of the Disclosure Schedule to the Existing Credit Agreement, as modified by the Land Sales Adjustment attached hereto as Item 1.1(a)(i) (“Land Sales Adjustment to Cost Basis of Collateral”) as of the date of this Agreement, and as otherwise supplemented, replaced or otherwise modified from time to time pursuant to Section 7.2.8 or otherwise.

“Cost Basis Collateral Disposition Proceeds” means, with respect to any of the Collateral (other than the sale of Timber in accordance with clause (m) of Section 7.1.11 and the termination of Timber Leases in accordance with clause (x) of Section 7.1.11) sold, leased, transferred or otherwise disposed of (whether voluntarily or involuntarily, or under power of eminent domain, condemnation or otherwise), the allocated Cost Basis (it being understood that, if less than the relevant tract of the Collateral as set forth in the Disclosure Schedule is so disposed of, the cost basis of such tract so disposed of shall be determined by the Administrative Agent).

“CTB” is defined in clause (b) of Section 7.1.11.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.

“Defaulting Lender” means, subject to Section 4.12(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and Borrowers in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative

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Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified Borrowers or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or Borrowers, to confirm in writing to the Administrative Agent and Borrowers that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and Borrowers), (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender, or (e) that has (or its parent company or a financial institution affiliate thereof has) notified the Administrative Agent, or has stated publically, that it will not comply with its funding obligations under any other loan agreement or credit agreement or other similar/other financing agreement. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (e) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 4.12(b)) upon delivery of notice of such determination to Borrowers and each Lender.

“Disclosure Schedule” means the Disclosure Schedule attached as Schedule I hereto, as amended, supplemented or otherwise modified from time to time by the Borrowers pursuant to the terms hereof or with the consent of the Administrative Agent and the Required Lenders.

“Division” means those portions of the Timberlands, whether owned or leased, which are grouped together for management purposes as tracts as described in Exhibits A and B of the MW Transaction Agreement.

“Dollar” and the symbol “$” mean lawful money of the United States.

“Domestic Account Bank” means each of one or more United States depository or other financial institutions approved by the Administrative Agent in which any of the Receipt Account, the Interest Reserve Account, the Wells TRS Subsidiary Account, the Revenue Account, the Working Capital Account or the Expense Account are maintained.

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“EBITDA” means the result of (a) net income or deficit, as the case may be, calculated in accordance with GAAP; less (b) any gain on Rate Protection Agreements; plus, (c) the sum, without duplication, of (i) income taxes, (ii) total interest expense (including non-cash interest), (iii) depletion and other amortization expense, (iv) with respect to the sale of up to two percent (2%) of the fee acreage of the Real Property in any Fiscal Year, cash proceeds from such sales equal to the Cost Basis of the Real Property sold, (v) the amount of any cash received representing unearned revenue with respect to a non-refundable option or other similar payments in connection with the sale of Real Property, (vi) any loss on Rate Protection Agreements, (vii) any non-cash expenses representing amounts due to Affiliates, (viii) any non-cash expenses associated with the termination of Timber Leases, (ix) any non-cash expenses incurred in connection with the prepayment of Indebtedness, and (x) any one-time expenses incurred in connection with the permitted acquisition of real property to the extent the add back of such expenses under this definition has been approved by the Administrative Agent; less (d) in the year earned as revenue, the amount of any cash previously included in EBITDA pursuant to clause (c)(v) hereof.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.11(b)(iii), (v) and (vi) (subject to any such consents, if any, as may be required under Section 11.11(b)(iii)).

“Environmental Laws” means all Laws relating to public health and safety and protection of the environment, threatened or endangered species, preservation or reclamation of natural resources, Release of any Hazardous Material or to health and safety matters, including CERCLA, the Surface Mining Control and Reclamation Act of 1977, the Resource Conservation and Recovery Act, the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq., the Clean Air Act of 1970, 42 U.S.C. §§ 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C. §§ 2601 et seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C., §§ 651 et seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C. §§ 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C. §§ 5101 et seq., the Solid Waste Disposal Act, 42 U.S.C. §§ 6901 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq., the Endangered Species Act of 1973, 16 U.S.C. §§ 1531 et seq., and any similar or implementing state or local Law.

“Environmental Tests” is defined in clause (d) of Section 7.1.6.

“Equity Interests” means, with respect to any Person, all shares of capital stock, partnership interests, membership interests in a limited liability company or other ownership in participation or equivalent interests (however designated, whether voting or non-voting) of such Person’s equity capital (including any warrants, options or other purchase rights with respect to the foregoing), whether now outstanding or issued after the Initial Funding Date.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Loan Party, is treated as a single employer under Section 414(b), (c), (m) or (o) of the

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Code or Section 4001(b) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“Event of Default” is defined in Section 8.1.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by Borrowers under Section 4.5) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.6, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.6(f) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Expense Account” is defined in clause (a) of Section 7.1.17.

“Expense Account Collateral” is defined in clause (b) of Section7.1.17.

“Farm Credit Lender” means a federally-chartered Farm Credit System lending institution organized under the Farm Credit Act of 1971, as amended.

“FATCA” means Subsections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“Fee Letter” means the Fee Letter, dated August 8, 2012, by and between CoBank and the Borrowers.

“Fiber Supply Agreement” means the Fiber Supply Agreement, dated as of the October 9, 2007, among MW, MeadWestvaco Corporation and Wells TRS Subsidiary, as amended, restated or otherwise modified from time to time in accordance with clause (l) of Section 7.1.11.

“Financial Officer” means with respect to any Loan Party and with respect to Wells Manager and Timber Manager on behalf of any Loan Party, as applicable, the president, chief financial officer, principal accounting officer or controller whose signatures and incumbency have been certified to the Administrative Agent and the Lenders pursuant to Section 5.1.2.

“Fiscal Quarter” means any quarter of a Fiscal Year.

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“Fiscal Year” means any period of twelve consecutive calendar months ending on December 31.

“Fixed Charge Coverage Ratio” means the ratio derived on any measurement date by dividing for the most recent four Fiscal Quarters ending on such measurement date, (a) EBITDA for Wells REIT, calculated on a consolidated basis less all capital expenditures related to Land maintenance paid by Wells REIT on a consolidated basis less any dividends or distributions paid by Wells REIT on a consolidated basis but not including any accrued dividends paid as part of any permitted preferred stock redemption by (b) Interest Expense.

“Foreign Lender” means (a) if either Borrower is a U.S. Person, a Lender that is not a U.S. Person and (b) if either Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which Borrower is a resident for tax purposes.

“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.

“Fuel Wood Residue” is defined in clause (f) of Section 7.2.9.

“Fund” means any person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” is defined in Section 1.4.

“Governmental Authority” means the government of the United States of America or any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank), and any corporation or other entity exercising such functions owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“Guaranty” means, collectively, the Amended and Restated Limited Guaranty, dated as of March 24, 2010, by Wells REIT in favor of the Administrative Agent for each of the Lender Parties, the Amended and Restated Guaranty, dated as of March 24, 2010, by Wells TRS in favor of the Administrative Agent for each of the Lender Parties, the Amended and Restated Guaranty, dated as of March 24, 2010, by Wells TRS Subsidiary in favor of the Administrative Agent for each of the Lender Parties and the Guaranty, dated as of March 24, 2010, by Wells HBU in favor of the Administrative Agent for each of the Lender Parties.

“Harvest Plan” is defined in clause (c) of Section 7.1.11.

“Hazardous Material” means (a) any “hazardous substance” as defined by CERCLA, (b) any “hazardous waste” as defined by the Resource Conservation and Recovery Act, (c) any petroleum product or byproduct or (d) any pollutant or contaminant or hazardous, dangerous or

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toxic chemical, material or substance within the meaning of any Law relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material.

“Incremental Term Loan” is defined in clause (b) of Section 2.1.1.

“Incremental Term Loan Commitment” is defined in clause (b) of Section 2.1.1.

“Indebtedness” of any Person means, without duplication:

(a)all obligations of such Person for borrowed money, including all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments (including, without limitation, the Loans);

(b)all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker’s acceptances issued for the account of such Person;

(c)all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as capitalized lease liabilities;

(d)whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable arising in the ordinary course of business), and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(e)all obligations of such Person to purchase, redeem, retire or otherwise acquire for value (including by means of converting into, or exchanging for, Indebtedness) any Equity Interest of such Person;

(f)the liquidation value of any preferred capital stock or similar Equity Interest of such Person or its Subsidiaries held by any Person;

(g)all obligations and liabilities secured by any Lien on such Person’s property or assets, even though such Person shall not have assumed or become liable for the payment thereof;

(h)all Off-Balance Sheet Obligations; and

(i)all Contingent Liabilities of such Person in respect of any of the foregoing.

“Indemnified Liabilities” is defined in clause (a) of Section 11.4.

“Indemnified Parties” is defined in clause (a) of Section 11.4.

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“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document, and (b) to the extent not otherwise described in (a), Other Taxes.

“Initial Funding Date” means the date on which all conditions precedent in Section 5.1 have been satisfied, and the Lenders fund the Term Loans in accordance with their Term Loan Commitments and, to the extent requested in the initial Borrowing Request, the Revolving Loans in accordance with their Revolving Loan Commitments, which date shall be a Business Day.

“Intellectual Property Collateral” is defined in the Security Agreement.

“Interest Expense” means, for any period, the aggregate interest expense of the Borrowers in respect of the Loans for such period, as determined in accordance with GAAP, including, without duplication, all commissions, discounts and other fees charged with respect to the amortization of debt discounts and the net costs under Rate Protection Agreements, in each case paid or payable during such period.

“Interest Period” means, relative to the Loans, the period beginning on (and including) the Borrowing or the date of the conversion or continuation and ending on (but excluding) the day which numerically corresponds to such date one, two or threemonths thereafter (or such other date as the Administrative Agent and the Lenders shall agree to in their sole discretion), provided, however, that:

(a)the Borrowers shall not be permitted to select Interest Periods to be in effect at any one time which have expiration dates occurring on more than five different dates;

(b)if such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day (unless such next following Business Day is the first Business Day of a month, in which case such Interest Period shall end on the Business Day next preceding such numerically corresponding day); and

(c)if there is no numerically corresponding day in such month, such Interest Period shall end on the last Business Day of such month.

The Loans shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loans.

“Interest Reserve” is defined in clause (a) of Section 7.1.12.

“Interest Reserve Account” is defined in clause (a) of Section 7.1.12.

“Interest Reserve Account Collateral” is defined in clause (b) of Section 7.1.12.

“Investment” means, with respect to any Person, (a) any loan, advance, other extension of credit or capital made by such Person to any other Person (excluding account receivables generated in the ordinary course of business of such Person and payable or dischargeable in accordance with

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customary trade terms), (b) any Contingent Liability of such Person incurred in connection with any item described in clause (a) and (c) any Equity Interest held by such Person in any other Person.

“IRS” means the United States Internal Revenue Service.

“Land” means all the land from time to time owned and held by the Borrowers and Wells HBU in fee simple, including the land described in Exhibit A of the MW Transaction Agreement and identified therein as Purchased Assets as defined in the MW Transaction Agreement and the land described in Exhibit A of the Saunders Transaction Agreement and identified therein as Property as defined in the Saunders Transaction Agreement, together with (a) all buildings, structures or other improvements thereon, (b) all Timber located thereon, (c) roads, bridges and other improvements and fixtures thereon and (d) all other privileges and heriditaments, tenements, appurtenances, easements, rights-of-way (including the Purchaser Easements (as defined in the MW Transaction Agreement) in respect thereof) and other rights relating, including all development, air and water rights and water stock relating to such land and any strips and gores.

“Landlord Estoppel Certificate” means a Landlord Estoppel Certificate in substantially the form of Exhibit H attached hereto, executed by each landlord of each Leasehold Interest other than the LTC Lease. For the avoidance of doubt, Landlord Estoppel Certificates in substantially the form of Exhibit H attached hereto that were executed and delivered in connection with the Original Credit Agreement are included in this definition.

“Laws” means, collectively, all applicable constitutions, statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities of any Governmental Authority (including any of the foregoing that relates to zoning and planning, building, subdivision, Environmental Laws, wildlife protection, forest practices, mining, drilling, extraction and reclamation), including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, decisions, judgments, consent decrees, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority or arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound. For the avoidance of doubt, the definition of “Laws” shall include FATCA.

“Leasehold Interests” means the rights of the Borrowers as lessee with respect to the Timber Leases including all purchase options, prepaid rents and security deposits relating thereto, together with leasehold improvements with respect thereto.

“Leaseholds” means, collectively, all real estate leased, subleased or licensed by Wells Timberland under the Timber Leases.

“Lender Party” means, as the context may require, any Lender or the Administrative Agent, together with each of the respective successors, transferees and assigns.

“Lender” or “Lenders” means the Persons listed on Schedule II and any other Person that shall have become party thereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party thereto pursuant to an Assignment and Assumption.

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“LIBOR” means for each applicable Interest Period, a fixed annual rate equal to: (A) the rate of interest determined by the Administrative Agent at which deposits in U.S. dollars for the relevant Interest Period are offered based on information published by Bloomberg as quoted by the British Bankers Association as of 11:00 a.m. (London time) on the day which is two (2) Business Days prior to the first day of such Interest Period, provided, that in the event British Bankers Association ceases to provide such quotations (as determined by the Administrative Agent), then the Administrative Agent will notify the Borrowers and the Administrative Agent and the Borrowers will agree upon a substitute basis for obtaining such quotations, divided by (B) a number equal to 1.0 minus the aggregate (but without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on the day which is two (2) Business Days prior to the beginning of such Interest Period for Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of such Board) which are required to be maintained by a member bank of the Federal Reserve System (including, basic, supplemental, marginal and emergency reserves under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto, as now and from time to time in effect); such rate to be rounded upward to the next whole multiple of 0.01 percent.

“Lien” means any security interest, mortgage, pledge, hypothecation, collateral, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation, or other priority or preferential arrangement of any kind or nature whatsoever.

“Loan” means, collectively, the Term Loans, the Incremental Term Loans and the Revolving Loans.

“Loan Documents” means, collectively, this Agreement, the Notes, the Security Agreement, the Pledge Agreement, the Guaranty, any Rate Protection Agreement of a Borrower with a Lender, each Assignment and Assumption, each Account Control Agreement, any securities account control agreement, each Landlord Estoppel Certificate, each Recognition Agreement, each Collateral Assignment of a Material Agreement, each Reaffirmation of Collateral Assignment of a Material Agreement, each Mortgage, each Mortgage Amendment, the Timber Manager Subordination Agreement, the LTC Lease Support Agreement, the Amendment and Reaffirmation Agreement, and each other agreement, instrument or document executed and delivered pursuant to or in connection with this Agreement and the other Loan Documents, including, without limitation, reaffirmations of any Loan Document and amendments and supplements reflecting the Incremental Term Loans and the Revolver Increase.

“Loan Party” means the Borrowers, Wells TRS Subsidiary, Wells HBU, Wells REIT, Wells TRS and any other Person (other than any Lender Party) that after the Initial Funding Date becomes obligated under any Loan Document.

“Loan to Value Ratio” means, as of the Initial Funding Date, the close of any Fiscal Quarter thereafter, and the date of the sale or acquisition of any Real Property, as applicable, the ratio, expressed as a percentage, of (a) the outstanding principal amount of the Loans less the amount of funds contained in the Working Capital Account as of such measurement date less the amount of

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funds contained in the Receipt Account pursuant to Section 9.3(a)(vii)(B)(3) or (C)(4) as of such measurement date, to (b) the Value of the Timberlands.

“LTC Lease” means the Timber Contract, dated as of June 1, 1956, entered into by and among Gerald B. Saunders, Charlotte A. Saunders, C.V. Saunders, Ruth M. Saunders, J. Frank Alexander, Helen C. Alexander and Alexander Brothers Lumber Company, Inc., as lessors and the predecessors in interest of Timberlands II, LLC, as lessee.

“LTC Lease Disposition Proceeds” means amounts payable to the Administrative Agent pursuant to Section 2.4 of the LTC Lease Support Agreement.

“LTC Lease Recognition Agreement” means the LTC Lease Recognition Agreement, dated on or about the date hereof, substantially in the form of Exhibit P attached hereto.

“LTC Lease Support Agreement” means the LTC Lease Support Agreement, dated as of the October 9, 2007, among Wells Timberland, Wells Acquisition, MW, MeadWestvaco Corporation and the Administrative Agent, as amended, restated or otherwise modified from time to time.

“Master Stumpage Agreement” means the Master Stumpage Agreement, dated as of the October 9, 2007, among MW, MeadWestvaco Corporation, Wells Timberland and Wells TRS Subsidiary, as amended, restated or otherwise modified from time to time in accordance with clause (l) of Section 7.1.11.

“Material Adverse Effect” means any event or series of events (whether or not related) that could reasonably be expected to have a material adverse effect on:

(a)the business, assets, operations, properties, condition (financial or otherwise) or prospects of the Borrowers and the other Loan Parties, taken as a whole;

(b)the ability of either Borrower or any other Loan Party to perform or pay its Obligations in accordance with the terms hereof or of any other Loan Document;

(c)the Administrative Agent’s first priority security interest in the Collateral;

(d)the value of the Collateral or the amount the Administrative Agent and the Lenders would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of the Collateral; or

(e)the validity or enforceability of any Loan Document or the rights and remedies available to the Administrative Agent or the Lenders under any Loan Document.

“Material Agreements” means those agreements that are material to the business or operations of either Borrower, Wells TRS Subsidiary or Wells HBU, including, without limitation, the MW Supply Agreements and those other agreements identified on Item 1.1(b) (“Material Agreements) of the Disclosure Schedule, including as each such agreement may be amended, restated or otherwise modified from time to time in accordance with Section 7.2.10.

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“Material Governmental Approvals” is defined in clause (c) of Section 6.19.

“Material Environmental Amount” means an amount payable by either Borrower or any other Loan Party in excess of $1,000,000 for remedial costs, compliance costs, compensatory damages, punitive damages, fines, penalties or any combination thereof, in each case with respect to Environmental Laws.

“Maximum Incremental Amount” means, as of the Initial Funding Date, $50,000,000 and shall be permanently reduced by the principal amount of any Revolver Increase, determined on the date such Revolver Increase is effective, and by the principal amount of any Incremental Term Loan, determined on the initial funding date of such Incremental Term Loan.

“Mineral Activity” is defined in clause (c) of Section 7.2.18.

“Mineral Leases” is defined in clause (c)(ii) of Section 7.2.18.

“Minerals” means all mineral substances in, on or under the Land.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” means collectively, (a) with respect to the Real Property located in Georgia and owned in fee simple or leased by Wells Timberland, the Deeds to Secure Debt executed and delivered by the Borrowers, and which are recorded in each county in Georgia in which any of the Real Property is located, and (b) with respect to the Real Property located in Alabama and owned in fee simple or leased by Wells Timberland, the Mortgages executed and delivered by the Borrowers, and which are recorded in each county in Alabama in which any of the Real Property is located; both (a) and (b), as amended by the Mortgage Amendments.

“Mortgage Amendments” means collectively, the (a) the Amended and Restated Deed to Secure Debt, executed and delivered by the Borrowers, and recorded in each county in Georgia in which any of the Real Property is located, (b) the Second Amended and Restated Deed to Secure Debt, substantially in the form of Exhibit I-1 attached hereto, which are recorded in each county in Georgia in which any of the Real Property is located, (c) the First Amendments to Mortgage, executed and delivered by the Borrowers, and recorded in each county in Alabama in which any of the Real Property is located, except for Tallapoosa County, (d) the Second Amendments to Mortgage substantially in the form of Exhibit I-2 attached hereto, which are recorded in each county in Alabama in which any of the Real Property is located, except for Tallapoosa County, (e) the Second Amendment to Mortgage, executed and delivered by the Borrowers, and which was recorded in Tallapoosa County, Alabama, and (f) the Third Amendments to Mortgage substantially in the form of Exhibit I-3 attached hereto, which are recorded in each county in Alabama in which any of the Real Property is located, except for Tallapoosa County.

“Multiemployer Plan” means a Pension Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

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“MW” means MeadWestvaco Coated Board, Inc., a Delaware corporation, and its successor by merger MeadWestvaco Coated Board, LLC, a Delaware limited liability company, as applicable.

“MW Supply Agreements” means, collectively, the Master Stumpage Agreement and the Fiber Supply Agreement.

“MW Transaction Agreement” means the Purchase and Sale Agreement, dated as of August 3, 2007, between Wells Acquisition and MW, as amended, restated or otherwise modified from time to time in accordance with Section 7.2.10.

“Net Collateral Disposition Proceeds” means the result of (a) the gross cash proceeds received by either of the Borrowers or any other Loan Party with respect to the sale, lease, transfer, or disposition (whether voluntarily or involuntarily, or under power of eminent domain, condemnation or otherwise) of any of the Collateral (other than the sale of Timber in accordance with clause (m) of Section 7.1.11 and the termination of Timber Leases in accordance with clause (x) of Section 7.1.11), including any cash payments received by way of a deferred payment of principal pursuant to a permitted note or installment receivable or otherwise, but only when and as received, minus (b) (i) all reasonable and customary fees and expenses actually paid in cash by either of the Borrowers or any other Loan Party in connection with such disposition which fees and expenses have not been paid to a Loan Party or an Affiliate of a Loan Party and (ii) all taxes actually paid or reasonably estimated by either of the Borrowers (determined in good faith by a Financial Officer) to be payable in cash for the same year with respect to such disposition.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of the affected Lender in accordance with the terms of Section 11.1 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is a not a Defaulting Lender at such time.

“Non-Recourse” means, with respect to any Unrestricted Timber Transaction, that none of the Borrowers, Wells TRS Subsidiary or Wells HBU (a) has made or will make any Investment with respect to such Unrestricted Timber Transaction or any Unrestricted Timber Subsidiary; (b) has any liability (including any Contingent Liability) with respect to the Indebtedness or other obligations with respect to such Unrestricted Timber Transaction or any Unrestricted Timber Subsidiary; or (c) is a party or otherwise subject to any agreement or arrangement with respect to such Unrestricted Timber Transaction or any Unrestricted Timber Subsidiary.

“Note” means, as the context may require, either a Revolving Note or a Term Note.

“Obligations” means (a) all obligations (monetary or otherwise) of either Borrower and each other Loan Party arising under or in connection with this Agreement and each other Loan Document, including principal, interest (including post-default interest and interest accruing after the commencement of any proceeding under any Debtor Relief Laws referred to in Section 8.1.7, whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding), reimbursement obligations, fees, indemnities, costs and expenses (including the reasonable fees

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and disbursements of counsel to the Administrative Agent and each Lender required to be paid by the Borrowers) that are owing under this Agreement and the other Loan Documents and (b) all obligations of either Borrower under any Rate Protection Agreements between either Borrower and any Lender, an Affiliate of any Lender or any Person that was a Lender or an Affiliate of a Lender at the time such Rate Protection Agreement was entered into, in each case whether now existing or hereafter incurred, direct or indirect, absolute or contingent, and due or to become due.

“Off-Balance Sheet Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use of property or sale of assets that create obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, could be characterized as Indebtedness of such Person (without regard to accounting treatment).

“Organizational Document” means, with respect to any Loan Party, its articles or certificate of incorporation, organization or formation, partnership agreement, operating agreement, by-laws and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized Equity Interests.

“Original Credit Agreement” is defined in the recitals.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sole or assigned any interest in any Loan or Loan Documents).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 4.5).

“Participant” is defined in clause (d) of Section 11.11.

“Participant Register” is defined in clause (d) of Section 11.11.

“Patriot Act” is defined in clause (a) of Section 6.23.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Loan Party or any ERISA Affiliate is (or, if such plan were

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terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Percentage” means, relative to any Lender, the percentage set forth opposite the name of such Lender on Schedule II hereto or in a duly executed Assignment and Assumption, as such percentage may be adjusted from time to time pursuant to each Assignment and Assumption executed and delivered pursuant to Section 11.11.

“Permitted Affiliate Fees” means (a) Wells Operating Expenses and (b) to the extent earned on or after the Initial Funding Date, Wells Advisor Fees and Wells Other Operating Expenses.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Platform” has the meaning assigned to such term in Section 11.2(c).

“Pledge Agreement” means that certain Amended and Restated Pledge Agreement, dated as of March 24, 2010, made by the Borrowers, Wells TRS, Wells TRS Subsidiary, Wells HBU, and each additional grantor party thereto from time to time in favor of the Administrative Agent for the benefit of itself and each other Lender Party.

“PLM Leases” means those Timber Leases labeled as such on Item 1.1(c) of the Disclosure Schedule (“PLM Leases”).

“Quarterly Payment Date” means the last Business Day of each March, June, September and December, or, if any such day is not a Business Day, the next succeeding Business Day.

“Rate Protection Agreement” means any interest rate cap agreement, interest rate collar agreement, floating to fixed rate swap agreement, interest rate swap agreement or similar arrangement designed to protect a Person against fluctuations in interest rates.

“Reaffirmation of Collateral Assignment of Material Agreement” means each Reaffirmation of Collateral Assignment of Material Agreement in substantially the form of Exhibit N-2 attached to hereto, executed by each relevant Loan Party and other Persons that are parties to the Collateral Assignment of Material Agreement the subject thereof. In the discretion of the Administrative Agent, the form of the relevant Reaffirmation of Collateral Assignment of Material Agreement with respect to any particular Collateral Assignment of Material Agreement may vary.

“Real Property” means, collectively, (a) the Land, (b) the Leasehold Interests and (c) the Minerals.

“Receipt Account” is defined in Section 9.1.1.

“Receipt Account Collateral” is defined in Section 9.5.1.

“Receipt Waterfall” is defined in clause (a) of Section 9.3.

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“Receipt Waterfall Dates” is defined in clause (a) of Section 9.3.

“Receipt Waterfall Period” means, for each Receipt Waterfall Date designated in accordance with clause (a) of Section 9.3, an approximately one month period beginning on the date three Business Days prior to the last Receipt Waterfall Date and ending on the date three Business Days prior to the designated Receipt Waterfall Date.

“Recipient” means (a) the Administrative Agent and (b) any Lender, as applicable.

“Recognition Agreement” means, collectively, the Recognition Agreement (Fiber Supply Agreement) and the Recognition Agreement (Master Stumpage Agreement), each dated on or about the date of the Existing Credit Agreement, and the LTC Lease Recognition Agreement.

“Register” is defined in clause (c) of Section 11.11.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Release” means a “release” or “threatened release” as such terms are defined in CERCLA, including any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, seeping, migrating, dumping or disposing of any Hazardous Material into the indoor or outdoor environment, including the abandonment or discarding of barrels, containers and other closed receptacles containing any Hazardous Materials or pollutants or contaminants.

“Release Parcel”is defined in clause (n) of Section 7.1.11.

“Removal Effective Date” is defined in clause (f) of Section 8.2.

“Required Lenders” means, at the time any determination thereof is to be made, two or more Lenders (including Voting Participants) who are not Defaulting Lenders and who hold in the aggregate more than 51% of the sum of (a) the then aggregate unused Commitments plus (b) the unpaid principal amount of the Notes (excluding the unused Commitments and aggregate unpaid principal amount of Notes held by Defaulting Lenders).

“Resignation Effective Date” is defined in clause (a) of Section 10.6.

“Resource Conservation and Recovery Act” means collectively the Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, as amended, 42 U.S.C. §§6901, et seq., as in effect from time to time.

“Revenue Account” is defined in clause (a) of Section 7.1.14.

“Revenue Account Collateral” is defined in clause (b) of Section 7.1.14.

“Revolver Increase” means an increase in the aggregate of up to the lesser of $5,000,000 and the Maximum Incremental Amount in the Revolving Loan Commitment Amount; provided

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that, (a) the Borrowers give the Administrative Agent at least ten (10) days prior written notice; (b) no Default or Event of Default shall have occurred and be continuing or result after giving effect to such increase in the Revolving Loan Commitment Amount; and (c) the Borrowers shall be in compliance, on a proformabasis after giving effect to such increase in the Revolving Loan Commitment Amount, with all covenants set forth in this Agreement, including the financial covenants set forth in Section 7.2.4, and such compliance shall be evidenced by a Compliance Certificate delivered to the Administrative Agent.

“Revolving Lender” means each Lender with a Revolving Loan Commitment or holding Revolving Loans as designated on Schedule II hereto or in an Assignment and Assumption.

“Revolving Loan” is defined in clause (c)(i) of Section 2.1.1.

“Revolving Loan Commitment” is defined in clause (c)(i) of Section 2.1.1.

“Revolving Loan Commitment Amount” means, for each Lender, the amount set forth opposite such Lender’s name on Part II of Schedule II attached hereto, as such amount is reduced from time to time pursuant to Section 2.1.1(c)(iii) and as such amount may be increased pursuant to Section 2.1.1(c)(i).

“Revolving Loan Commitment Termination Date” means the earliest of (a) the Stated Maturity Date, (b) the date on which the Revolving Loan Commitment Amount is terminated in full or reduced to zero pursuant to Section 2.1.1(c)(iii), 8.2 or 8.3 and (c) the date on which any Commitment Termination Event occurs. Upon the occurrence of any event described above, the Revolving Loan Commitments shall terminate automatically and without any further action.

“Revolving Note” means a promissory note of the Borrowers that is payable to any Revolving Lender, substantially in the form of Exhibit A-1 attached hereto, evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting from outstanding Revolving Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof.

“REIT Status” is defined in clause (ii)(y)(G) of Section 7.2.6.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“Saunders Transaction Agreement” means the Purchase and Sale Agreement, dated as of July 25, 2012, by and among Saunders Grandchildren Timberland, LLLP; Synovus Trust Company, as successor trustee to Wells Fargo Bank, N.A., successor by merger to Wachovia Bank, N.A. (as successor trustee to First Union National Bank of Georgia), under that certain “Saunders Family Trust Agreement,” made as of the 20th day of May 1998, between Gerald B. Saunders, Jr., Charlotte Saunders Conniff, Nancy Saunders Smith, and Richard V. Saunders; Alexander Brothers Lumber Company, Inc. and Wells Timberland, as amended, restated or otherwise modified from time to time in accordance with Section 7.2.10.

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“Security Agreement” means that certain Amended and Restated Security Agreement, dated as of March 24, 2010, made by the Borrowers, Wells TRS, Wells TRS Subsidiary, Wells HBU, and each additional grantor party thereto from time to time in favor of the Administrative Agent for the benefit of itself and each other Lender Party.

“Solvent” means, when used with respect to any Person, that, as of any date of determination:

(a)the amount of the “present fair saleable value” of the assets of such Person will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise,” as of such date, as such value is established and such liabilities are evaluated in accordance with Section 101(32) of the Federal Bankruptcy Code and the state Laws governing determinations of the insolvency of debtors of New York and each state where such Person is doing business or has its principal place of business;

(b)such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business; and

(c)such Person will be able to pay its debts as they mature.

For purposes of this definition, (i) “debt” means liability on a “claim” and (ii) “claim” means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

“Stated Maturity Date” means August 11, 2018.

“Subsidiary” means, with respect to any Person:

(a)any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors or other governing body of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, or by one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of more than 50% of such Equity Interests (whether by proxy, agreement, operation of law or otherwise); or

(b)any partnership, joint venture, limited liability company or other entity as to which such Person, or one or more Subsidiaries of such Person, owns (whether in the form of voting or participation in profits or capital contribution) more than a 50% Equity Interest, acts as the general partner or has power to direct or cause the direction of management and policies, or the power to elect the managing partner (or the equivalent), of such partnership, joint venture or other entity, as the case may be.

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“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholdings), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Loan” or “Term Loans” is defined in of Section 2.1.1.

“Term Loan Commitment” means, for each Lender, the commitment to make Term Loans in an aggregate principal amount not exceeding its Term Loan Commitment Amount.

“Term Loan Commitment Amount” means, for each Lender, the amount set forth opposite such Lender’s name on Part I of Schedule II attached hereto.

“Term Note” means a promissory note of the Borrowers that is payable to any Term Lender, substantially in the form of Exhibit A attached hereto, evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting from outstanding Term Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof.

“Timber” means any trees of any age, species or condition, whether standing, lying, growing or to be grown, alive or dead and now or hereafter at any time located on the Real Property.

“Timber Leases” means, collectively, the LTC Lease, the PLM Leases, and any other lease, sublease or license of real estate by Wells Timberland pursuant to Section 7.2.8(c) or otherwise, together with any replacement thereof.

“Timber Lease Termination Proceeds” the gross cash proceeds received by either of the Borrowers or any other Loan Party with respect to the termination or other disposition of any PLM Lease or any portion of the LTC Lease or any other Timber Lease.

“Timber Manager” means Forest Resource Consultants, Inc., a Georgia corporation, and any other manager of the Timberland that is acceptable to the Administrative Agent.

“Timber Manager Subordination Agreement” means that certain Amended and Restated Timber Manager Subordination Agreement, dated as of March 24, 2010, among the Administrative Agent, for the benefit of itself and the other Lender Parties, the Borrowers, Wells TRS Subsidiary, Wells HBU, and the Timber Manager.

“Timberlands” means, collectively, the Land and the Leasehold Interests.

“Title Insurance Company” is defined in clause (c) of Section 5.1.16.

“Transaction” meansthe acquisition by Wells Timberland of certain Real Property pursuant to the Transaction Documents.

“Transaction Agreements” means the MW Transaction Agreement and the Saunders Transaction Agreement.

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“Transaction Documents” means the Transaction Agreements, together with all schedules and exhibits thereto, and each other instrument or document executed and delivered pursuant to or in connection with any Transaction Agreements, including, without limitation, the MW Supply Agreements and the various assignment and assumption agreements and deed contemplated under any of the Transaction Agreements.

“U.C.C.” means the Uniform Commercial Code as from time to time in effect in the State of New York.

“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.

“Unrestricted Timber Subsidiary” means any wholly-owned Subsidiary, other than Wells Partnership, acquired or organized by Wells REIT or Wells TRS for the purpose of consummating an Unrestricted Timber Transaction, provided that (a) (i) each such direct Subsidiary of Wells REIT shall act as an intermediate holding company performing substantially the same functions as Wells Partnership and (ii) each such direct Subsidiary of Wells TRS shall perform substantially the same functions as Wells TRS Subsidiary in connection with such Unrestricted Timber Transaction and (b) each such Subsidiary satisfies the requirements set forth in the definition of “Unrestricted Timber Transaction.”

“Unrestricted Timber Transaction” means the purchase or acquisition of real property or leases of real property (either through the purchase of assets or the purchase of Equity Interests of any Person that owns such assets) for the purpose of harvesting Timber thereon, provided that each such transaction is consummated and conducted exclusively by Unrestricted Timber Subsidiaries, and in the case of each such transaction (b) Wells REIT and Wells TRS perform in all material respects the same functions in each such transaction as they perform with respect to the Transaction; (c) each such Unrestricted Timber Subsidiary performs the functions specified in clause (a) of the proviso that is contained in the definition of “Unrestricted Timber Subsidiary”; (d) each such Unrestricted Timber Subsidiary has been capitalized solely through amounts contributed by Wells REIT or funded by Persons other than a Loan Party; (e) neither Wells REIT nor Wells TRS shall in any respect be subject to any material restriction or obligation imposed by, or provide any additional material benefits to, the lenders providing any financing with respect to such transaction, in each case without complying with Section 7.2.19; (f) all the representations and warranties contained in this Agreement and in the other Loan Documents shall be true and correct, provided that if any such representation or warranty relates to an earlier date it shall be true and correct as of such date; (g) all obligations in connection with each such transaction are Non-Recourse; (h) no Default or Event of Default has occurred or is continuing or would result from the consummation of each such transaction; (i) each such transaction shall be consummated in accordance with the Laws and (j) no Material Adverse Effect could reasonably be expected to result from the consummation of each such transaction.

“U.S. Person” means any Person that is a “United States Person” as identified in Subsection 7701(a)(30) of the Code.

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“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 4.6(f)(iv).

“Value of the Timberlands” means, with respect to the Real Property, the appraised value thereof as determined by the appraisal dated September 22, 2010, or the most recent appraisal delivered thereafter; provided, however, that such value shall be reduced or increased from time to time upon the sale or acquisition of any Real Property over certain thresholds as provided in clause (w) of Section 7.1.11 and shall be reduced from time to time upon the termination of Timber Leases over certain thresholds as provided in clause (x) of Section 7.1.11.

“Voting Participant” is defined in clause (d) of Section 11.11.

“Voting Participant Notification” is defined in clause (d) of Section 11.11.

“Wells Acquisition” means Wells Timberland Acquisition, LLC.

“Wells Advisor Fees” means the amount of advisor fees payable to Wells Manager pursuant to the terms of that certain Amended and Restated Advisory Agreement, dated as of July 11, 2010, by and among Wells REIT, Wells Partnership, and Wells Manager, as amended through the date hereof; provided that the Wells Advisor Fees shall be (i) set forth in the operating expense budget delivered pursuant to clause (a) of Section 5.1.20 and clause (p) of Section 7.1.1, (ii) approved by the Administrative Agent (or, if the Borrowers have delivered such operating expense budget as provided in clause (p) of Section 7.1.1 and the Administrative Agent has not approved the same, the amount of Wells Advisor Fees set forth in the most recent operating expense budget approved by the Administrative Agent to the extent such amount does not exceed the amount set forth in the proposed operating expense budget) and (iii) reasonably allocated (as determined by the Administrative Agent) among the operations of the Borrowers, Wells TRS Subsidiary and Wells HBU, on the one hand, and the other operations (including pursuant to Unrestricted Timber Transactions) of Wells REIT and its Subsidiaries (other than the Borrowers, Wells TRS Subsidiary and Wells HBU), on the other hand.

“Wells HBU” means Wells Timberland HBU, LLC, a Delaware limited liability company.

“Wells Manager” means Wells Timberland Management Organization, LLC, a Georgia limited liability company.

“Wells Operating Expenses” means all costs and expenses paid or incurred, from time to time, by Wells Manager that are related to the operations of the Borrowers, Wells TRS Subsidiary or Wells HBU (but expressly excluding the Wells Other Operating Expenses and the Wells Advisor Fees); provided that the Wells Operating Expenses shall be (a) set forth in the operating expense budget delivered pursuant to clause (a) of Section 5.1.20 and clause (p) of Section 7.1.1, (b) approved by the Administrative Agent (or, if the Borrowers have delivered such operating expense budget as provided in clause (p) of Section 7.1.1 and the Administrative Agent has not approved the same, the amount of Wells Operating Expenses set forth in the most recent operating expense budget approved by the Administrative Agent to the extent such amount does not exceed the amount set forth in the proposed operating expense budget) and (c) reasonably allocated (as determined by the

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Administrative Agent) among the operations of the Borrowers, Wells TRS Subsidiary and Wells HBU, on the one hand, and the other operations (including pursuant to Unrestricted Timber Transactions) of Wells REIT and its Subsidiaries (other than the Borrowers, Wells TRS Subsidiary and Wells HBU), on the other hand.

“Wells Other Operating Expenses” means reimbursement of Wells Manager’s expenses in connection with its provision of services to Wells REIT (including related personnel, rent, utilities and information technology costs (but excluding personnel costs relating to services for which Wells Manager earns real estate disposition fees)) in an amount not to exceed the greater of (a) 2% of Wells REIT’s average invested assets or (b) 25% of Wells REIT’s net income; provided that the Wells Other Operating Expenses shall be (i) set forth in the operating expense budget delivered pursuant to clause (a) of Section 5.1.20 and clause (p) of Section 7.1.1, (ii) approved by the Administrative Agent (or, if the Borrowers have delivered such operating expense budget as provided in clause (p) of Section 7.1.1 and the Administrative Agent has not approved the same, the amount of Wells Other Operating Expenses set forth in the most recent operating expense budget approved by the Administrative Agent to the extent such amount does not exceed the amount set forth in the proposed operating expense budget) and (iii) reasonably allocated (as determined by the Administrative Agent) among the operations of the Borrowers, Wells TRS Subsidiary and Wells HBU, on the one hand, and the other operations (including pursuant to Unrestricted Timber Transactions) of Wells REIT and its Subsidiaries (other than the Borrowers, Wells TRS Subsidiary and Wells HBU), on the other hand.

“Wells Partnership” is defined in the preamble.

“Wells REIT” means Wells Timberland REIT, Inc., a Maryland corporation.

“Wells Timberland” is defined in the preamble.

“Wells Timberland Operating Agreement” means the Amended and Restated TimberlandOperating Agreement, dated October 9, 2007,between Wells TRS Subsidiary, Wells Timberland and the Timber Manager, as amended, restated or otherwise modified from time to time in accordance with Section 7.2.10.

“Wells TRS” means Wells Timberland TRS, Inc., a Delaware corporation.

“Wells TRS Subsidiary” means Wells TRS Harvesting Operations, LLC, a Delaware limited liability company.

“Wells TRS Subsidiary Account” is defined in clause (a) of Section 7.1.13.

“Wells TRS Subsidiary Account Collateral” is defined in clause (b) of Section 7.1.13.

“Withholding Agent” means any Loan Party and Administrative Agent.

“Working Capital Account” is defined in clause (a) of Section 7.1.16.

“Working Capital Account Collateral” is defined in clause (b) of Section 7.1.16.

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SECTION 1.2Use of Defined Terms. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in the Disclosure Schedule and each other Loan Document.

SECTION 1.3Certain Rules of Construction. References to “Sections,” “Exhibits” and “Schedules” shall be to Sections, Exhibits and Schedules, respectively, of this Agreement unless otherwise specifically provided. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” The word “or” is not exclusive. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and any successor statutes and regulations, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived by the Required Lenders pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived by the Required Lenders. Whenever any provision in any Loan Document refers to the knowledge (or an analogous phrase) of any Loan Party, such words are intended to signify that a member of management or officer or member of the board of directors of such Loan Party has actual knowledge or awareness of a particular fact or circumstance or a member of management or officer or director of such Loan Party, if it had exercised reasonable diligence, would have known or been aware of such fact or circumstance. For purposes of computing a period of time from a specified date, the word “from” means “from and including” and the word “to” and “until” each mean “to, but excluding.” Any reference to a Loan Party that is an individual as “it” shall refer to such Loan Party in his or her individual capacity.

SECTION 1.4Accounting Determinations. Unless otherwise specified, all accounting terms “used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared in accordance with, those generally accepted accounting principles (“GAAP”) as in effect from time to time.

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ARTICLE IIFUNDING OF LOANS

SECTION 2.1Amount and Terms of Loans.

SECTION 2.1.1The Loans.Term Loans. Subject to and upon the terms and conditions set forth herein, each Lender severally agrees to make, on the Initial Funding Date, one loan (each, a “Term Loan” and, collectively for all the Lenders, the “Term Loans”) to the Borrowers in a principal amount equal to such Lender’s Term Loan Commitment Amount.

(a)Incremental Term Loans. The Borrowers and any one or more Lenders (including any Person not previously a Lender hereunder who executes and delivers a joinder agreement executed by the Borrowers, the Administrative Agent and such Lender, in form and substance reasonably acceptable to each of them), which Lenders are reasonably acceptable to the Administrative Agent, may agree, upon at least thirty (30) days’ prior notice to the Administrative Agent, that such Lenders shall make one or more additional term loans available to the Borrowers under this clause (b) of Section 2.1.1 (each, an “Incremental Term Loan” and collectively, the “Incremental Term Loans”; each commitment thereunder an “Incremental Term Loan Commitment” and collectively, the “Incremental Term Loan Commitments”) on substantially the same terms and subject to substantially the same conditions as the Term Loans. Any Incremental Term Loan shall be documented by an amendment or supplement to, or a restatement of, this Agreement, setting forth the specific terms and conditions of the Incremental Term Loan Facility, which amendment, supplement or restatement shall be signed by the Borrowers and the Lenders providing such Incremental Term Loan Commitments. Notwithstanding the foregoing: (i) the aggregate principal amount of all Incremental Term Loan Commitments shall not exceed the Maximum Incremental Amount; (ii) on a proforma basis after giving effect to the initial funding of any Incremental Term Loan, the Loan to Value Ratio must be less than 40%; (iii) the maturity date of any Incremental Term Loan shall be the same as the Stated Maturity Date; (iv) no Default or Event of Default shall have occurred and be continuing or result after giving effect to any Incremental Term Loan; (v) the Borrowers shall be in compliance on a proformabasis after giving effect to any Incremental Term Loans with all covenants set forth in this Agreement, including the financial covenants set forth in Section 7.2.4, and such compliance shall be evidenced by a Compliance Certificate delivered to the Administrative Agent; (vi) the proceeds of any Incremental Term Loans shall be used to acquire additional Real Property or to refinance the acquisition of additional Real Property purchased with the proceeds of the Revolving Loans which will become or is Collateral hereunder subject to a first priority Lien and security interest in favor of the Administrative Agent, for the benefit of the Lender Parties; (vii) with respect to such Real Property to be acquired, the Administrative Agent and each Lender extending an Incremental Term Loan Commitment shall have received and approved an appraisal from American Forest Management or another nationally recognized forestry appraisal firm that is satisfactory to the Administrative Agent; (viii) the weighted average life of any Incremental Term Loan shall be equal to or greater than the remaining weighted average life of the Term Loan, determined as of the initial funding date for such Incremental Term Loan; (ix) to the extent that the applicable interest margins on such Incremental Term Loan exceed by more than 0.25% the applicable interest rate margin for the Term Loan, determined as of the initial funding date for such Incremental Term Loan, the applicable interest rate margin for the Term Loan shall

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be increased so that the applicable interest rate margin for the Term Loan and for such Incremental Term Loan are equal; (x) any covenant or Event of Default applicable to any Incremental Term Loan that is more restrictive than the equivalent covenant or Event of Default set forth in this Agreement shall be deemed to be applicable to the Loans hereunder; and (xi) the original issue discount and/or the upfront fees applicable to any such Incremental Term Loan shall not be more than 1% of the principal amount of such Incremental Term Loan.

(b)Revolving Loan Facility.

(i)Revolving Loan Commitment.On the terms and subject to the conditions of this Agreement (including Article V), from time to time on any Business Day occurring on or after the Initial Funding Date and prior to the Revolving Loan Commitment Termination Date (the “Availability Period”), each Revolving Lender severally agrees to make loans (relative to such Revolving Lender, its “Revolving Loans”) to the Borrowers equal to such Revolving Lender’s Percentage of the aggregate amount of the Borrowing of the Revolving Loans requested by the Borrowers to be made on such day. The commitment of each Revolving Lender described in this clause (c)(i) is herein referred to as its “Revolving Loan Commitment.” On the terms and subject to the conditions hereof, the Borrowers may from time to time borrow, prepay and reborrow Revolving Loans. Upon satisfaction of the conditions precedent set forth in the definition of Revolver Increase, the Revolving Loan Commitment Amount may be increased in the aggregate by the lesser of (x) $5,000,000 and (y) the Maximum Incremental Amount. The Administrative Agent shall select and reasonably approve one or more Lenders to participate in any Revolver Increase. Lenders shall have no obligation and no right to participate in any Revolver Increase.

(ii)Revolving Loan Availability. No Borrowing of Revolving Loans shall be made if, after giving effect thereto the aggregate outstanding principal amount of all the Revolving Loans (x) of all the Revolving Lenders would exceed the Revolving Loan Commitment Amount or (y) of any Revolving Lender would exceed such Revolving Lender’s Percentage of the Revolving Loan Commitment Amount.

(iii)Reduction of the Revolving Loan Commitment Amount.

(x) Optional Reduction. The Borrowers may, from time to time on any Business Day after the date of the initial Borrowing on the Revolving Loan, voluntarily reduce the unused amount of the Revolving Loan Commitment Amount; provided, however, that (i) all such reductions shall be made on not less than one nor more than five Business Days’ prior notice to the Administrative Agent and be permanent, (ii) any partial reduction of the unused amount of the Revolving Loan Commitment Amount shall be in a minimum amount of $1,000,000 and in an integral multiple of $1,000,000 and (iii) the Revolving Loans shall have been prepaid to the extent required by Section 3.1.2 or pursuant to Section 4.12(c).

(y) Mandatory Reduction. The Revolving Loan Commitment Amount shall be permanently reduced by the aggregate amount that the Revolving Loans are prepaid or repaid (or would be prepaid or repaid if the

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outstanding principal amount of the Revolving Loans was not less than such amount) pursuant to clause (b) of Section 3.1.2 (but without giving effect to the penultimate sentence of clause (b) of Section 3.1.2) at any time that the Term Loans and any Incremental Term Loans have been paid in full and the Loan to Value Ratio is greater than 45%, calculated on a pro forma basis.

(iv)Borrowing Procedures. By delivering a duly completed and executed Borrowing Request to the Administrative Agent by facsimile, email or other method of delivery permitted by Section 11.2 on or before 11:00 A.M. (New York City time), on a Business Day occurring prior to the Revolving Loan Commitment Termination Date, the Borrowers may from time to time irrevocably request that (i) a Base Rate Loan be made not less than three nor more than five Business Days thereafter or that (ii) a LIBOR Loan be made not less than three nor more than five Business Days thereafter; provided, however, that no Revolving Loan shall be made as a LIBOR Loan for an Interest Period extending beyond the Stated Maturity Date. All (i) Base Rate Loans shall be made in a minimum amount of $500,000 and an integral multiple of $100,000 or, if less, in the unused amount of the Revolving Loan Commitment Amount, and (ii) LIBOR Loans shall be made in a minimum amount of $1,000,000 and an integral multiple of $1,000,000. The proceeds of all Loans shall be used solely for the purposes described in Section 4.10.

SECTION 2.1.2Notice of Initial Borrowing. The Borrowers shall deliver to the Administrative Agent, on or prior to 11:00 a.m. (New York City time) on the Initial Funding Date, a Borrowing Request, which Borrowing Request shall request that each Lender fund its pro rata share of such Borrowing (in an aggregate principal amount not exceeding each Lender’s Term Loan Commitment Amount) as a Base Rate Loan on the Initial Funding Date.

SECTION 2.1.3Disbursement of Funds under the Loans. The Administrative Agent shall promptly notify each Lender of its receipt of a Borrowing Request pursuant to clause (iv) of Section 2.1.1(c) or Section 5.1.22, the amount required to be funded by each such Lender and when such amount must be funded. On the terms and subject to the conditions of this Agreement, each Borrowing shall be made on the Business Day specified in such Borrowing Request. On or before 1:00 P.M. (New York City time) on such Business Day each Lender shall deposit with the Administrative Agent same day funds in an amount equal to such Lender’s Percentage of the requested Borrowing. Such deposit will be made to an account which the Administrative Agent shall specify from time to time by notice to the Lenders. To the extent funds are received from the Lenders, the Administrative Agent shall make such funds available to the Borrowers by wire transfer to the accounts the Borrowers shall have specified in their Borrowing Request. No Lender’s obligation to make any Loan shall be affected by any other Lender’s failure to make any Loan. Nothing in this Section 2.1.3 or elsewhere in this Agreement or the other Loan Documents shall be deemed to require the Administrative Agent (or any other Lender) to advance funds on behalf of any Lender or to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that the Administrative Agent or the Borrowers may have against any Lender as a result of any default by such Lender hereunder.

SECTION 2.2Notes.

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(a)The Borrowers’ obligation to pay the principal of, and interest on, the Term Loan made to them by each Lender shall be evidenced by a Term Note, dated as of the Initial Funding Date and with blanks appropriately completed in conformity herewith. Upon the request of any applicable Lender, the Borrowers shall execute and deliver to such Lender a separate Note for each applicable Incremental Term Loan or for the Revolving Loan, each dated the closing date of such Incremental Term Loan or Revolving Loan, or, if later, the date of such request, in the principal amount of such Lender’s prorata share of such Incremental Term Loan Commitment or Revolving Loan Commitment, as applicable.

(b)The Notes issued to each Lender pursuant to clause (a) shall (i) be executed by the Borrowers, (ii) be payable to the order of such Lender or such Lender’s assigns, (iii) be in the stated principal amount equal to the Term Loan made by such Lender on date of such Note or the principal amount of such Lender’s prorata share of the Revolving Loan Commitment, (iv) be payable as provided in Section 3.1, (v) accrue interest as provided in Section 3.2 and (vi) be entitled to the benefits of this Agreement and the other Loan Documents.

(c)Each Lender shall record in its records the amount and date of (i) the Term Loan made by such Lender to the Borrowers on the Initial Funding Date and of any Incremental Term Loans or Revolving Loans made by such Lender to the Borrowers on the respective closing dates therefor, and (ii) each repayment date of the Loans made pursuant to (i). The aggregate unpaid principal amount so recorded shall, absent manifest error, be conclusive evidence of the principal amount of the Loan owing and unpaid. The failure to so record any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the Obligations of the Borrowers hereunder or under the Note to repay the principal amount of the Loan hereunder, together with interest accruing thereon.

SECTION 2.3Termination of Term Loan Commitments. The Term Loan Commitment of each Lender to make its Term Loan to the Borrowers shall terminate immediately following the making of such Lender’s Term Loan on the Initial Funding Date pursuant to clause (a) of Section 2.1.1.

SECTION 2.4Continuation and Conversion Elections. By delivering a Continuation/Conversion Notice to the Administrative Agent by facsimile, email or other method of delivery of notice permitted pursuant to Section 11.2, on or before 11:00 A.M. (New York City time) on a Business Day, the Borrowers may from time to time irrevocably elect on not less than one Business Day nor more than five Business Days’ notice, in the case of Loans accruing interest at the Base Rate, and not less than three nor more than five Business Days’ notice, in the case of Loans accruing interest at LIBOR, that all, or any portion in an aggregate minimum amount of $1,000,000 and an integral multiple of $1,000,000 be, in the case of Loans accruing at the Base Rate, converted into Loans accruing interest at LIBOR or be, in the cause of Loans accruing interest at LIBOR, converted into Loans accruing interest at the Base Rate or continued as Loans accruing interest at LIBOR (in the absence of delivery of a Continuation/Conversion Notice, by facsimile, email or other method of delivery of notice permitted pursuant to Section 11.2, with respect to any Loan accruing interest at LIBOR at least three Business Days (but not more than five Business Days) before the last day of the then current Interest Period with respect thereto, such Loan shall, on such last day, automatically convert to a Loan accruing interest at the Base Rate); provided,

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however, that (a) each such conversion or continuation shall be prorated among the applicable outstanding Loans of all Lenders, (b) no portion of the outstanding principal amount of any Loans may be continued as, or be converted to, Loans accruing interest at LIBOR when any Event of Default has occurred and is continuing, unless the Required Lenders otherwise agree in writing, (c) no Loans may be continued as, or be converted into, Loans accruing interest at LIBOR for an Interest Period extending beyond the Stated Maturity Date and (d) with respect to the Loans accruing interest at LIBOR that have an Interest Period ending on one particular date such Loans shall not be subject to the integral multiple requirement set forth above (it being understood that, if there are Loans with Interest Periods ending on more than one date, this clause shall only apply to those Loans with an Interest Period ending on one particular date and no other date).

ARTICLE IIIPAYMENTS, INTEREST AND FEES

SECTION 3.1Repayments and Prepayments. The Loans shall be repaid as set forth in this Section.

SECTION 3.1.2Voluntary Prepayments.

(a)Prior to the Stated Maturity Date, the Borrowers may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loans; provided, however, that:

(i)all such voluntary prepayments shall require notice on or before 11:00 A.M. (New York City time) not less than one nor more than five Business Days’ in advance of any prepayment of any Loan;

(ii)all such voluntary partial prepayments shall be in an aggregate minimum amount of $1,000,000 and an integral multiple of $500,000 or, if less, the aggregate principal amount of the relevant Loans outstanding hereunder; and

(iii)all such prepayments shall be made prorata among Loans having the same Interest Period.

SECTION 3.1.3Mandatory Repayments and Prepayments.

(a)Stated Maturity Date. On the Stated Maturity Date, the Borrowers shall repay in full the then aggregate outstanding principal amount of each Loan.

(b)Mandatory Prepayments from Certain Sources. The Borrowers shall apply 100% of any Cost Basis Collateral Disposition Proceeds, Collateral Insurance Proceeds, LTC Lease Disposition Proceeds and Timber Lease Termination Proceeds (except as specified below) to prepay the outstanding principal amount of the Term Loans and any Incremental Term Loans and any Revolving Loans subject to the limitations set forth in Section 2.1.1(c)(iii)(y);provided, however, that if no Event of Default has occurred and is continuing, the Borrowers shall not be required to repay the Loans with the first $4,000,000 of Cost Basis Collateral Disposition Proceeds in any fiscal year if (x) the Loan to Value Ratio, calculated on a pro forma basis after giving effect to such disposition, does not exceed 40%, and (y) such Cost Basis Collateral Disposition Proceeds are used

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for (1) general working capital, (2) acquisitions of additional Real Property otherwise permitted pursuant to the terms and provisions of this Agreement, or (3) dividends, distributions or other payments permitted pursuant to Section 7.2.6 of this Agreement. For the avoidance of doubt, until the aggregate amount of Cost Basis Collateral Disposition Proceeds exceeds $4,000,000 in any fiscal year and so long as clause (x) of the preceding sentence is satisfied, Cost Basis Collateral Disposition Proceeds shall be deposited into the Revenue Account for further deposit into the Receipt Account and application in accordance with the Receipt Waterfall and clause (y) of the preceding sentence. Notwithstanding the foregoing, with respect to Timber Lease Termination Proceeds, the Borrowers shall prepay the Loans in an amount equal to 100% of such proceeds (i) to the extent the Timber Lease Termination Proceeds exceed $2,000,000 in connection with the termination of a single PLM Lease or a single portion of the LTC Lease or any other Timber Lease and (ii) once the aggregate amount of Timber Lease Termination Proceeds received during the term hereof exceeds $5,000,000 (regardless of whether such $5,000,000 in aggregate proceeds have been applied to prepay the Loans or applied in accordance with the Receipt Waterfall). In addition, the outstanding principal amount of the Loans shall be prepaid as and when required pursuant to the terms of the Receipt Waterfall. For the avoidance of doubt, until the aggregate amount of Timber Lease Termination Proceeds exceeds $5,000,000, Timber Lease Termination Proceeds not exceeding $2,000,000 in connection with the termination of a single PLM Lease or a single portion of the LTC Lease or any other Timber Lease shall be deposited into the Revenue Account for further deposit into the Receipt Account and application in accordance with the Receipt Waterfall.

(c)Reserved.

(d)Acceleration. The Borrowers shall, immediately upon any acceleration of the Stated Maturity Date of any Loans pursuant to Section 8.2 or Section 8.3, repay all (or if only a portion is accelerated thereunder, such portion of) the Loans then outstanding.

(e)Incremental Term Loans. The Borrowers shall repay the aggregate outstanding balance of any Incremental Term Loans as provided in the amendment or supplement to this Agreement documenting such Incremental Term Loans; provided, however, that the Borrowers shall repay aggregate amount outstanding under any Incremental Term Loans on the Stated Maturity Date.

(f)Revolving Loans. The Borrowers shall, on each date when the sum of the aggregate outstanding principal amount of all Revolving Loans exceeds the Revolving Loan Commitment Amount (as it may be reduced from time to time), repay the Revolving Loans until they have been paid in an amount equal to such excess.

SECTION 3.1.4Application of Payments. Each prepayment of any Loans made pursuant to Section 3.1.2 shall be applied as follows: (a) first, pro rata to the outstanding balance of the Term Loans and any Incremental Term Loans (if and when applicable); and second, after the Term Loans and any Incremental Term Loans (if and when applicable) have been paid in full, to repay any Revolving Loans. Each prepayment of any Loans made pursuant to Section 3.1.1 shall be applied first, to the prepayment of the Revolving Loans; and second, after the Revolving Loans have been paid in full, pro rata to the outstanding balance of the Term Loans and any Incremental Term Loans (if and when applicable); provided, that the Borrowers may, at their option,

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request that the prepayments be applied as provided in the first sentence of this Section 3.1.3. All payments made pursuant to Sections 3.1.1 and 3.1.2 shall first be applied to Loans accruing interest at the Base Rate or Loans accruing interest at LIBOR, as the Borrowers shall direct in writing and, in the absence of such direction, shall first be applied to Loans accruing interest at the Base Rate and then to Loans accruing interest at LIBOR as the Administrative Agent shall elect. Each prepayment of any Loans made pursuant to this Section 3.1 (and assignments pursuant to Section 11.11) shall, except as provided in Section 4.4, be without premium or penalty and be accompanied by the payment of accrued and unpaid interest on the amount prepaid.

SECTION 3.2Interest Provisions. Interest on the outstanding principal amount of Loans shall, pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion Notice, accrue and be payable in accordance with this Section.

SECTION 3.2.1Interest Rates.

Subject to Section 3.2.2, the Borrowers may elect, pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion Notice:

(b)a Borrowing of Loans that accrue interest at a rate per annum equal to the sum of the Base Rate from time to time in effect plus the Applicable Base Rate Margin; and

(c)a Borrowing of Loans that accrue interest at a rate per annum equal to LIBOR for such Interest Period plus the Applicable LIBOR Margin.

provided, that any Incremental Term Loans or Revolving Loans shall accrue interest as provided in the amendment or supplement to this Agreement evidencing such Incremental Term Loans.

SECTION 3.2.2Post-Default Rates. Upon the occurrence and during the continuation of any Event of Default, the Borrowers shall pay, but only to the extent permitted by the Law, interest (after as well as before judgment) on (a) the Loans at the rate otherwise in effect plus 2% per annum and (b) on all other Obligations at a rate per annum equal to the highest interest rate with respect to the Loans as in effect from time to time plus 2% per annum; provided, however, that if no Loans are outstanding such interest rate shall be based upon the Base Rate plus the highest Applicable Base Rate Margin.

SECTION 3.2.3Interest Payment Dates.

Interest accrued on each Loan shall be paid as follows:

(a)on the Stated Maturity Date therefor;

(b)on the date of any payment or prepayment, in whole or in part, of principal outstanding on such Loan on the principal amount so paid or prepaid;

(c)on the last day of each applicable Interest Period and, if interest on the Loans is accruing at the Base Rate, on each Quarterly Payment Date; and

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(d)on that portion of any Loans the Stated Maturity Date of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.

Interest accrued on Loans or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise) shall be payable upon demand.

SECTION 3.1Commitment Fee. The Borrowers agree to pay to the Administrative Agent, for the pro rata account of each Revolving Lender (other than each Revolving Lender that is a Defaulting Lender), for the period (including any portion thereof when the Revolving Loan Commitment is suspended by reason of the Borrower’s inability to satisfy any condition of Article V) commencing on the Initial Funding Date and continuing through the Revolving Loan Commitment Termination Date, a commitment fee (the “Commitment Fee”) at the Applicable Commitment Fee Rate on such Lender’s Percentage of the average daily unused portion of the Revolving Loan Commitment Amount during the quarter ending on the applicable Quarterly Payment Date (without taking into account that portion of Revolving Loan Commitment Amount attributable to such Defaulting Lender). Such commitment fees are non-refundable and shall be payable by the Borrowers in arrears on each Quarterly Payment Date, commencing with the first Quarterly Payment Date following the Initial Funding Date, and on the Revolving Loan Commitment Termination Date.

ARTICLE IVYIELD PROTECTION, TAXES AND RELATED PROVISIONS

SECTION 4.1Eurodollar Rate Lending Unlawful. If any Lender shall determine (which determination shall, upon notice thereof to the Borrowers and the Administrative Agent, be conclusive and binding on the Borrowers) that any Change in Law makes it unlawful, or any central bank or other Governmental Authority asserts that it is unlawful, for such Lender to accrue interest on the Loans at LIBOR, the obligations of the Lenders to continue to accrue interest on the Loans at LIBOR shall, upon such determination, forthwith be suspended until such Lender shall notify the Administrative Agent that the circumstances causing such suspension no longer exist, and all Loans shall automatically, at the end of the then current Interest Period, continue to accrue interest at the Base Rate.

SECTION 4.2Inability to Determine Rates. If the Administrative Agent shall have determined or been instructed by the Required Lenders that adequate means do not exist for adequately and fairly determining the cost to the Lenders of making or maintaining Loans that accrue interest at LIBOR or calculating the same then, upon notice from the Administrative Agent to the Borrowers and the Lenders, the obligations of all the Lenders to make or continue any Loans that accrue interest at LIBOR shall forthwith be suspended until the Administrative Agent shall notify the Borrowers and the Lenders that the circumstances causing such suspension no longer exist. Until such time as the Administrative Agent rescinds such notice the Loans shall accrue interest at the Base Rate.

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SECTION 4.3Capital Adequacy and Other Adjustments.

(e)Increased Costs, Generally. If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in LIBOR);

(ii)subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (B) through (D) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii)impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or any Loan;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to reduce the amount of any sum received or receivable by such Lender or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or other Recipient, Borrowers will pay to such Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(f)Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time Borrowers will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(g)Certificates of Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to Borrowers (with a copy to the Administrative Agent), shall be conclusive absent manifest error. Borrowers shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(h)Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that Borrowers shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that

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such Lender notifies Borrowers of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 4.4Funding Losses. In the event any Lender shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender) as a result of any Loan not being made in accordance with a Borrowing Request, the Interest Period of any Loan not being continued in accordance with the Continuation/Conversion Notice therefor or any repayment or prepayment of the principal amount of any Loans on a date other than the scheduled last day of the Interest Period applicable thereto, whether pursuant to Section 3.1, Section 4.1, Section 4.2, Article VIII or any assignment pursuant to Section 4.3 or otherwise then, upon the notice of such Lender to the Borrowers (with a copy to the Administrative Agent), the Borrowers shall promptly (and, in any event, within three Business Days of receipt of such notice) pay directly to such Lender such amount as will (in the reasonable determination of such Lender) reimburse such Lender for such loss or expense. Such notice (which shall include calculations in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Borrowers. For the purpose of calculating amounts payable to a Lender under this Section, each Lender shall be deemed to have actually funded its relevant Loan through the purchase of a deposit bearing interest at LIBOR in an amount equal to the amount of that Loan and having a maturity comparable to the relevant Interest Period; provided, that each Lender may fund each of its Loans in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this Section.

SECTION 4.5Mitigation Obligations; Replacement of Lender.

(a)Designation of Different Lending Office If any Lender requests compensation under Section 4.3, or requires Borrowers to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.6, then such Lender shall (at the request of Borrowers) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 4.3 or Section 4.6, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)Replacement of Lenders. If any Lender requests compensation under Section 4.3, or if Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.6 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with clause (a), or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then Borrowers may, at their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.11), all of its interests, rights (other

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than its existing rights to payments pursuant to the Loan Documents) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

(i)Borrowers shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.11;

(ii)such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 11.3, Section 4.4 and Section 3.1) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrowers (in the case of all other amounts);

(iii)in the case of any such assignment resulting from a claim for compensation under Section 4.3 or payments required to be made pursuant to Section 4.6, such assignment will result in a reduction in such compensation or payments thereafter;

(iv)such assignment does not conflict with the Laws; and

(v)in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply

SECTION 4.6Taxes

(a)Payments Free of Taxes. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by the Laws. If any Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with the Laws and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)Payment of Other Taxes by the Borrowers. The Borrowers shall timely pay to the relevant Governmental Authority in accordance with the Laws, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

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(c)Indemnification by the Loan Parties. The Loan Parties shall jointly and severally indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrowers by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.11(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (d).

(e)Evidence of Payments. As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 4.6, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(f)Status of Lenders.

(i)Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to Borrowers and the Administrative Agent, at the time or times prescribed by the Laws or reasonably requested by Borrowers or the Administrative Agent, such properly completed and executed documentation reasonably requested by Borrowers or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by either Borrower or the Administrative Agent, shall deliver such other documentation prescribed by the Laws or reasonably requested by either Borrower or Administrative Agent as will enable either Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

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Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 4.6 (f)(ii)(A), (ii)(B), (ii)(C) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)Without limiting the generality of the foregoing, in the event that either Borrower is a U.S. Person,

(A)any Lender that is a U.S. Person shall deliver to such Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of such Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of either Borrower or the Administrative Agent), whichever of the following is applicable:

(i)in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(ii)executed originals of IRS Form W-8ECI;

(iii)in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit 4.6 (A) to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of either Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

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(iv)to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit 4.6 (B) or Exhibit 4.6 (C), IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit 4.6 (D) on behalf of each such direct and indirect partner;

(C)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrowers or the Administrative Agent), executed originals of any other form prescribed by the Laws as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by the Laws to permit Borrowers or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrowers and the Administrative Agent at the time or times prescribed by the Laws and at such time or times reasonably requested by Borrowers or the Administrative Agent such documentation prescribed by the Laws (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrowers or the Administrative Agent as may be necessary for Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrowers and the Administrative Agent in writing of its legal inability to do so.

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(g)Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 4.6 (including by the payment of additional amounts pursuant to this Section 4.6), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 4.6 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h)Survival. Each party’s obligations under this Section 4.6 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

SECTION 4.7Payments, Interest Calculations, etc.

(a)Unless otherwise expressly provided, all payments by the Borrowers pursuant to or in respect of this Agreement, the Notes or any other Loan Document shall be made by the Borrowers to the Administrative Agent for the prorata account of the Lenders entitled to receive such payment; provided, however, that in the case of any Revolving Lender that is a Defaulting Lender due to failure to fund, the Administrative Agent shall be entitled to set off the funding shortfall against such Defaulting Lender’s respective share of all payments received from the Borrowers. All such payments required to be made to the Administrative Agent shall be made without setoff, deduction or counterclaim, not later than 11:00 A.M. (New York City time), on the date due, in same day or immediately available funds, to such account as the Administrative Agent shall specify from time to time by notice to the Borrowers. Funds received after that time shall be deemed to have been received by the Administrative Agent on the next succeeding Business Day and any applicable interest shall continue to accrue thereon. The Administrative Agent shall promptly remit (and, in any event, on the same Business Day as received by the Administrative Agent is so received on or prior to 11:00 A.M. (New York City time)) in same day funds to each Lender its share, if any, of such payments received by the Administrative Agent for the account of such Lender.

(b)All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such

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interest or fee is payable over a year comprised of 360 days. If a Loan is repaid on the same day it is made one day’s interest shall be charged. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (b) of the definition of the term “Interest Period”) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.

(c)The Administrative Agent is authorized to charge any account maintained by either Borrower or any other Loan Party with it for any Obligations owing to it or any of the Lender Parties.

SECTION 4.8Sharing of Payments.

If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein (other than pursuant to Section 4.5(b)), then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:

(i)if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii)the provisions of this paragraph shall not be construed to apply to (x) any payment made by Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to either Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under the Laws, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Loan Party in the amount of such participation.

SECTION 4.9Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by the Laws, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) or other property at any time held, and other obligations (in whatever currency) at any time owing, by such Lender

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or any such Affiliate, to or for the credit or the account of Borrowers or any other Loan Party against any and all of the obligations of such Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or their respective Affiliates, irrespective of whether or not such Lender or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of such Borrower or such Loan Party may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 4.12 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or its respective Affiliates may have. Each Lender agrees to notify Borrowers and Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

SECTION 4.10Use of Proceeds. The Borrowers shall apply all the proceeds of the Term Loans to (i) refinance outstanding Indebtedness due under the Existing Credit Agreement, (ii) fund costs and expenses associated with this Agreement, and (iii) to partially fund the acquisition of certain property pursuant to the terms and subject to the conditions of the Saunders Transaction Agreement. The proceeds of any Incremental Term Loans shall be used solely to finance acquisitions of additional Real Property in accordance with clause (b)(iv) of Section 2.1.1. The proceeds of any Revolving Loans shall be used for (w) general working capital, (x) acquisitions of additional Real Property, provided that, any such acquisition is permitted pursuant to the terms and provisions of this Agreement including, without limitation, Section 7.2.8, (y) redemption of Equity Interests permitted by clause (y)(D) of the provision of clause (ii) of Section 7.2.6 of up to $150,000 in the aggregate during any month, and (z) other general corporate purposes.

SECTION 4.11Payment Reliance

(a)Unless the Administrative Agent shall have been notified from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s Percentage of such Borrowing, the Administrative Agent may assume that such Lender has made such share available to the Administrative Agent on such date in accordance with Section 2.1.3 and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its Percentage of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to Borrowers to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank

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compensation, and (ii) in the case of a payment to be made by Borrowers, the interest rate applicable to Base Rate Loans. If the Borrowers and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the Borrowers for such period. If such Lender pays its Percentage of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrowers shall be without prejudice to any claim the Borrowers may have against a Lender that shall have failed to make such payment to this Administrative Agent. Nothing in this Subsection or elsewhere in this Agreement or the other Loan Documents shall be deemed to require the Administrative Agent (or any other Lender) to advance funds on behalf of any Lender or to relieve any Lender from its obligations to fulfill its commitments hereunder or to prejudice any rights that the Administrative Agent or the Borrowers may have against any Lender as a result of any default by such Lender hereunder.

(b)Unless the Administrative Agent shall have received notice from either Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

SECTION 4.12Defaulting Lenders.

(a)Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by the Laws:

(i)Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 11.1.

(ii)Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 4.8 or Section 4.9 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and Borrowers, to be held in a deposit account and released

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pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to Borrowers as a result of any judgment of a court of competent jurisdiction obtained by Borrowers against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 5.1 were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments under the applicable Facility. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section 4.12(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)Certain Fees. No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(b)Defaulting Lender Cure. If Borrowers and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the Commitments under the applicable Commitment, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c)Reduction of Revolving Loan Commitment of Defaulting Lender. Borrowers may terminate the unused amount of the Commitment of any Revolving Lender that is a Defaulting Lender upon not less than 15 Business Days’ prior notice to the Administrative Agent (which shall promptly notify the Lenders thereof), and in such event the provisions of Section 4.14(a)(ii) will apply to all amounts thereafter paid by Borrowers for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts); provided that (i) no Event of Default shall have occurred and be continuing, and (ii) such termination

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shall not be deemed to be a waiver or release of any claim Borrowers, the Administrative Agent or any Lender may have against such Defaulting Lender.

ARTICLE VCONDITIONS PRECEDENT TO INITIAL FUNDING DATE

SECTION 5.1Conditions. The obligations of each Lender to enter into this Agreement and make Loans on the Initial Funding Date shall be subject to the prior or concurrent fulfillment of each of the conditions precedent set forth in this Section to the satisfaction of each Lender.

SECTION 5.1.1Agreement. The Administrative Agent shall have received this Agreement duly executed by each Lender, the Administrative Agent and an Authorized Officer of each Borrower.

SECTION 5.1.2Resolutions, Good Standing, etc.

Each Lender shall have received from each Loan Party a certificate, dated the Initial Funding Date, of its Secretary or Assistant Secretary as to:

(i)resolutions of its Board of Directors (or equivalent body) then in full force and effect authorizing the execution, delivery and performance of each Loan Document to be executed by it;

(j)each Organizational Document of each such Loan Party; and

(k)the incumbency and signatures of each officer (including each Authorized Officer and Financial Officer) of each such Loan Party that is authorized to act with respect to each Loan Document executed by it,

upon which certificate each Lender Party may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of the relevant Loan Party canceling or amending such prior certificate. The Administrative Agent shall have received satisfactory good standing certificates for each jurisdiction where the Collateral is located and each other jurisdiction where the Borrowers and each other Loan Party are organized and are authorized (or should be authorized under the Laws) to conduct business.

SECTION 5.1.3Delivery of Notes. Each Lender shall have received its Note in an amount equal to such Lender’s Term Loan Commitment Amount and such Lender’s Revolving Loan Commitment Amount, dated the Initial Funding Date, duly completed as herein provided and duly executed and delivered by an Authorized Officer of each Borrower.

SECTION 5.1.4Required Consents and Approvals. All required consents and approvals shall have been obtained and be in full force and effect with respect to the transactions contemplated hereby from (a) all relevant Governmental Authorities and (b) any other Person whose consent or approval any Lender deems necessary or appropriate to effect the transactions contemplated hereby.

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SECTION 5.1.5Opinion of Counsel. The Administrative Agent shall have received legal opinions, dated the Initial Funding Date and addressed to the Administrative Agent and all the Lenders, from New York, Georgia and Alabama legal counsel to the Borrowers, substantially in the form of Exhibits J, K and L, respectively, attached hereto.

SECTION 5.1.6Evidence of Insurance. The Administrative Agent shall have received evidence of the insurance coverage required to be maintained pursuant to Section 7.1.4, which insurance shall have been reviewed by one or more of the Administrative Agent’s risk managers and be satisfactory to the same. All such insurance shall be subject to satisfactory endorsements in favor of the Administrative Agent.

SECTION 5.1.7Guaranty. The Administrative Agent shall have received an amendment to and a reaffirmation of the Guaranty, in substantially the form of the Amendment and Reaffirmation Agreement, executed by an Authorized Officer of each of Wells REIT, Wells TRS, Wells TRS Subsidiary and Wells HBU.

SECTION 5.1.8Pledged Property.

The Administrative Agent shall have received:

(a)a reaffirmation of the Pledge Agreement, in substantially the form of the Amendment and Reaffirmation Agreement, dated as of the date hereof, duly executed by an Authorized Officer of Wells Partnership, Wells TRS, Wells Timberland, Wells TRS Subsidiary and Wells HBU pursuant to which each of those entities shall reaffirm their pledge all of the Equity Interests in each of their respective Subsidiaries;

(b)original certificates evidencing all of the issued and outstanding shares of capital stock and other Equity Interests required to be pledged pursuant to the terms of the Pledge Agreement, which certificates shall be accompanied by undated stock and other powers duly executed in blank by each relevant pledgor.

SECTION 5.1.9U.C.C. Search Results, etc.

The Administrative Agent shall have received:

(a)U.C.C. search reports certified by a party acceptable to the Administrative Agent, dated a date reasonably near (but prior to) the Initial Funding Date, listing all effective U.C.C. financing statements, federal and state tax Liens, and judgment Liens which name the Borrowers or any other Loan Party as the debtor, and which are filed in each jurisdiction in which U.C.C. filings are to be made pursuant to this Agreement or the other Loan Documents and in such other jurisdictions as the Administrative Agent may reasonably request, together with copies of such financing statements; and

(b)with respect to all the Intellectual Property Collateral, search results from the United States Patent and Trademark Office and United States Copyright Office to the extent of any patents, trademarks or copyrights form a part of the Collateral.

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SECTION 5.1.10Security Agreements, Filings, etc.

(c)The Administrative Agent shall have received a reaffirmation of the Security Agreement, in substantially the form of the Amendment and Reaffirmation Agreement, dated as of the date hereof, duly executed by an Authorized Officer of each Borrower, Wells TRS Subsidiary and Wells HBU, together with:

(i)confirmation that all necessary U.C.C. financing statements naming each such Person as the debtor and the Administrative Agent as the secured party have been properly filed under the U.C.C. of all jurisdictions as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the first priority security interest of the Administrative Agent in the Collateral subject thereto; and

(ii)evidence satisfactory to the Administrative Agent of the filing (or delivery for filing) of appropriate trademark, copyright and patent security supplements with the United States Patent and Trademark Office and United States Copyright Office to the extent relevant in order to perfect the first priority security interest of the Administrative Agent therein; and

(iii)evidence of completion of all other actions, reasonably requested by the Administrative Agent, in order to perfect its first priority security interest in the Collateral the subject thereof.

SECTION 5.1.11Solvency Certificate. The Administrative Agent shall have received solvency certificates in substantially the form of Exhibits E-1, E-2, E-3, E-4, E-5 and E-6 attached hereto, duly executed by a Financial Officer of Wells Manager as Manager of Wells Timberland, Wells REIT as General Partner of Wells Partnership, Timber Manager as Manager of Wells TRS Subsidiary, Wells Manager as Manager of Wells HBU, Wells REIT and Wells TRS, respectively, and dated the Initial Funding Date.

SECTION 5.1.12Closing Date Certificate. The Administrative Agent shall have received a Closing Date Certificate in substantially the form of Exhibit D attached hereto, duly executed by a Financial Officer of each Borrower and dated the Initial Funding Date. All documents and agreements appended to such Closing Date Certificate shall be in form and substance satisfactory to the Administrative Agent and the Lenders.

SECTION 5.1.13Interest Reserve. The Administrative Agent shall have received evidence that the Interest Reserve has been funded as required by Section 7.1.12.

SECTION 5.1.14Material Government Approvals. The Borrowers shall have delivered to each Lender a certificate signed by a Financial Officer of each Borrower and dated the Initial Funding Date, certifying true and copies of all the approvals, if any, of Governmental Authorities set forth on Item 6.19(b) (“Material Governmental Approvals”) of the Disclosure Schedule.

SECTION 5.1.15Collateral Assignment of Material Agreements; Reaffirmation Agreements.

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The Administrative Agent shall have received with respect to the Wells Timberland Operating Agreement, each MW Supply Agreement and each other Material Agreement a duly executed Collateral Assignment of Material Agreement or a duly executed Reaffirmation of Collateral Assignment of Material Agreement, as applicable.

SECTION 5.1.16Mortgages, etc.

With respect to the Real Property, the Administrative Agent shall have received all of the following:

(a)counterparts of the Mortgage Amendments referred to in clauses (b), (d) and (f) of the definition of “Mortgage Amendments,” each dated as of the date hereof and duly executed by Wells Timberland and Wells HBU, as applicable;

(b)an endorsement to each of the existing mortgagee’s title insurance policies. Each such endorsement shall (i) be in form and substance satisfactory to the Administrative Agent; (ii) be issued at ordinary rates; (iii) extend the effective date of each such policy to the date of the applicable Mortgage Amendments, (iv) confirm no change in the first priority Lien and security interest in favor of the Administrative Agent for the benefit of the Lender Parties, except for changes acceptable to the Administrative Agent; and (v) be issued directly by First American Title Insurance Company. The Administrative Agent shall have received evidence satisfactory to it that all premiums in respect of each such endorsement, all charges for mortgage recording and similar taxes, and all related expenses, if any, have been paid;

(c)a mortgagee’s title insurance policy or marked up unconditional commitment for such insurance for the land described in Exhibit A of the Saunders Transaction Agreement and identified therein as Property (as defined in the Saunders Transaction Agreement).  Each such policy shall (i) be in an amount satisfactory to the Administrative Agent; (ii) be issued at ordinary rates; (iii) insure that each Mortgage and Mortgage Amendment insured thereby creates a valid first priority security interest in the Property (as defined in the Saunders Transaction Agreement) free and clear of all Liens, except for such Liens as are acceptable to the Administrative Agent; (iv) name the Administrative Agent for the benefit of itself and the Lenders, as the insured thereunder; (v) be in the form of ALTA Loan Policy - 1970 Form B (Amended 10/17/70 and 10/17/84) (or equivalent policies), if available; (vi) contain such endorsements and affirmative coverages as the Administrative Agent may require, including without limitation (to the extent applicable with respect to the relevant Property (as defined in the Saunders Transaction Agreement) and available in the jurisdiction in which such Property (as defined in the Saunders Transaction Agreement) is located), the following: variable rate endorsement; survey same as map endorsement; comprehensive endorsement; first loss, last dollar and tie-in endorsement; access coverage; separate tax parcel coverage; usury; doing business; subdivision; environmental protection lien; CLTA 119.2; and such other endorsements as the Administrative Agent shall require, including endorsements  in order to provide insurance against specific risks identified by the Administrative Agent in connection with the Property (as defined in the Saunders Transaction Agreement) and (vii) be issued directly by Fidelity National Title Insurance Company (together with First American Title Insurance Company, collectively, the “Title Insurance Company”) and with such co-insurance and reinsurance as may be required by the Administrative Agent.  The Administrative Agent shall have received evidence

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satisfactory to it that all premiums in respect of each such policy, all charges for mortgage recording and similar taxes, and all related expenses, if any, have been paid;

(d)with respect to the LTC Lease, a copy of the LTC Lease Recognition Agreement duly executed by the relevant landlords;

(e)a copy of (i) all documents referred to, or listed as exceptions to title in, the title insurance policies and title endorsements referred to in clauses (b) and (c) above and (ii) all other material documents affecting the Real Property, including all building, construction, environmental and other permits, licenses, franchises, approvals, consents, authorizations and other approvals required in connection with the construction, ownership, use, occupation or operation of the Real Property; and

(f)appraisal dated September 22, 2010 from American Forest Management;

(g)confirmation that all necessary U.C.C. financing statements relating to the Real Property naming Wells Timberland or Wells HBU as the debtor and the Administrative Agent as the secured party have been properly filed in the same offices where the applicable Mortgage is filed; and

(h)Harvest Plan dated January 20, 2012, covering the calendar year 2012.

SECTION 5.1.17Timber Manager Subordination Agreement. Each Lender shall have received a reaffirmation of the Timber Manager Subordination Agreement, in substantially the form of Exhibit O attached hereto, dated as of the date hereof, duly executed by the Timber Manager, Wells Timberland, Wells TRS Subsidiary, Wells HBU and the Administrative Agent, together with a copy of the Wells Timberland Operating Agreement and its corresponding Reaffirmation of Collateral Assignment of Material Agreement delivered to the Administrative Agent pursuant to Section 5.1.15.

SECTION 5.1.18Representations and Warranties True and Correct.

Both before and after giving effect to the making of the Loans:

(a)all the representations and warranties set forth in Article VI shall be true and correct in all respects with the same effect as if then made, provided that (i) such representations and warranties that relate solely to an earlier date shall be true and correct as of such earlier date and (ii) the inaccuracy of any of the representations and warranties set forth in Article VI shall, subject to the terms of Section 8.1.2, result in an Event of Default;

(b)no Default or Event of Default has occurred and is continuing or would result therefrom.

SECTION 5.1.19Environmental Matters.Each Lender shall have received satisfactory evidence that all environmental matters that were to be remediated prior to the Initial Funding Date, if any, have been so remediated.

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SECTION 5.1.20Financial Information, etc.

(a)The Administrative Agent shall have received a certificate of a Financial Officer of Wells REIT attaching true and correct copies of (i) drafts of the annual audit reports required by clause (b) of Section 7.1.1 for the Fiscal Year ended December 31, 2011, (ii) a projected operating expense budget for Wells Timberland, prepared on a monthly basis, for the Fiscal Year ending December 31, 2012 and (iii) pro forma financial projections for Wells REIT and its Subsidiaries for the 18-month period ending June 30, 2013.

(b)The Administrative Agent shall have received satisfactory evidence that the Expense Account has been funded in an amount equal to 30 days of operating expenses as set forth in the operating expense budget delivered pursuant to clause (a)(ii).

SECTION 5.1.21Account Control Agreements, etc. The Administrative Agent shall have received satisfactory evidence that Wells Timberland, Wells TRS Subsidiary and Wells HBU have directed that all amounts payable to them from their account debtors and other Persons shall be deposited either (a) (i) in the case of Wells Timberland and Wells HBU, in the Revenue Account, (ii) in the case of Wells TRS Subsidiary, in the Wells TRS Subsidiary Account or (b) in lock-box accounts pursuant to arrangements satisfactory to the Administrative Agent.

SECTION 5.1.22Borrowing Request, etc. The Administrative Agent shall have received, as herein provided, a duly completed and executed Borrowing Request.

SECTION 5.1.23Patriot Act. The Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the Patriot Act.

SECTION 5.1.24Satisfactory Due Diligence. Each Lender Party shall have completed, to its satisfaction, a due diligence analysis with respect to the business, assets, operations, condition (financial and otherwise) and prospects of the Borrowers and their Subsidiaries, including with respect to their ability to comply with the representations and warranties and covenants contained in the Loan Documents.

SECTION 5.1.25Initial Compliance Certificate. The Administrative Agent shall have received an initial Compliance Certificate, duly executed by a Financial Officer of Wells Timber Management Organization, LLC, as advisor to Wells REIT, and dated as of the date hereof, showing a calculation of the Loan to Value Ratio.

SECTION 5.1.26Satisfactory Legal Form. All documents executed or submitted pursuant hereto by or on behalf of any Loan Party shall be reasonably satisfactory in form and substance to each Lender Party and its legal counsel. In addition, the Administrative Agent shall have received all information, approvals, opinions, documents or instruments as its counsel may reasonably request.

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SECTION 5.1.27Fees and Expenses. The Administrative Agent shall have received for its own account, and for the account of each Lender, all fees, costs and expenses due and payable pursuant to the Fee Letter and Section 11.3.

SECTION 5.1.28Repayment of Existing Indebtedness; Release and Termination of Existing Liens. The Administrative Agent shall have received evidence, in form and substance reasonably satisfactory to the Administrative Agent, that (i) all Indebtedness of the Loans Parties has been fully paid, satisfied and discharged, other than Indebtedness permitted under Section 7.2.2, and (ii) all Liens in respect of any such Indebtedness have been or will be immediately released and terminated.

SECTION 5.1.29AgSouth Equity Interests. Wells Timberland shall have purchased Equity Interests in AgSouth as provided in Section 11.22.

SECTION 5.1.30Land Sales Adjustment. The Administrative Agent shall have received the Land Sales Adjustment to Cost Basis of Collateral, giving effect to the Saunders Transaction Agreement and in form and content reasonably acceptable to the Administrative Agent.

SECTION 5.2Conditions to the making of all Borrowings on the Revolving Loans. The obligation of each Revolving Lender to make any Revolving Loan shall be subject to the fulfillment of each of the conditions precedent set forth in this Section 5.2 to the satisfaction of the Administrative Agent:

SECTION 5.2.2Compliance with Warranties, No Default, etc.

Both before and after giving effect to any Borrowing on the Revolving Loans:

(a)the representations and warranties set forth in Article VI and in the other Loan Documents shall be true and correct in all material respects with the same effect as if then made; provided, that such representations and warranties (i) that relate solely to an earlier date shall be true and correct as of such earlier date and (ii) shall be true and correct in all respects if they are qualified by a materiality standard; and

(b)no Default or Event of Default shall have then occurred and be continuing or would result therefrom.

SECTION 5.2.3Borrowing Request, etc. The Administrative Agent shall have received, as herein provided, a duly completed and executed Borrowing Request. Each delivery of a Borrowing Request shall constitute a representation and warranty by the Borrowers that on the date of such Borrowing (both immediately before and after giving effect to such Borrowing and the application of the proceeds thereof) the statements made in Section 5.2.1 are true and correct.

SECTION 5.2.4Satisfactory Legal Form. All documents executed or submitted pursuant hereto by or on behalf of any Loan Party with respect to such Borrowing shall be reasonably satisfactory in form and substance to the Administrative Agent and its legal counsel. In addition, the Administrative Agent shall have received all information, approvals, opinions, documents or instruments as its counsel may reasonably request.

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SECTION 5.2.5Determinations Under Article V. For purposes of determining compliance with the conditions specified in Article V, each Lender shall be deemed to have consented to and approved each document or other matter required thereunder to be consented to or approved by each of them unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received a notice from such Lender prior to the making of any Borrowing on the Loans specifying its objection thereto and such Lender shall not have made available to the Administrative Agent its ratable portion of the requested Borrowing.

ARTICLE VIREPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into this Agreement and make the Loans, the Borrowers hereby represent and warrant as of the Initial Funding Date and as of the date of each subsequent request for a Loan, and after giving effect to the making of each Loan, to each Lender as set forth in this Article.

SECTION 6.1Organization, etc. The Borrowers and each other Loan Party (a) (i) is a corporation, limited partnership or limited liability company validly organized and existing and in good standing under the Laws of the jurisdiction of its organization and (ii) is duly qualified to do business and is in good standing as a foreign corporation or limited liability company in each jurisdiction where the nature of its business requires such qualification; and (b) has full power and authority and holds all requisite permits, licenses, authorizations, approvals, entitlements, accreditations and privileges, from Governmental Authorities or otherwise, to (i) enter into and perform its Obligations under this Agreement and each other Loan Document to which it is a party and (ii) own and hold under lease its property and to conduct its business in the ordinary course. Neither the Borrowers nor any other Loan Party are in violation of its Organizational Documents.

SECTION 6.2Due Authorization, Non-Contravention, etc.

SECTION 6.3The execution, delivery and performance by the Borrowers and each other Loan Party of this Agreement, each other Loan Document executed or to be executed by it, are within the Borrowers’ and each such other Loan Party’s corporate, limited partnership or limited liability company powers, have been duly authorized by all necessary corporate, limited partnership or limited liability company action, and do not:

(c)contravene or result in a default under the Borrowers’ or any such other Loan Party’s Organizational Documents;

(d)contravene any Law binding on the Borrowers or any such other Loan Party;

(e)violate, conflict with, result in a breach of, or constitute (along or with notice or lapse of time or both) a default of event of default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under, any agreement, document or other instrument to which it is a party;

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(f)violate, conflict with, result in a breach of, or result in the impairment, forfeiture or non-renewal of, any material permit, license, authorization, approval, entitlement, accreditation or privilege of any Governmental Authority; or

(g)result in, or require the creation or imposition of, any Lien on the Borrowers’ or any such other Loan Party’s properties.

SECTION 6.4Required Approvals.

SECTION 6.5Except as duly obtained and in full force and effect prior to the Initial Funding Date and the filing of U.C.C. financing statements that have not previously been filed and the Mortgage Amendments in the appropriate filing offices, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required for:

(d)the due execution, delivery or performance by the Borrowers or any other Loan Party of this Agreement, each other Loan Document to which it is a party;

(e)the grant by the Borrowers or any other Loan Party of the security interests, pledges and Liens granted by the Loan Documents; or

(f)the perfection of or the exercise by the Administrative Agent of its rights and remedies under this Agreement or any other Loan Document.

SECTION 6.6Validity, etc. This Agreement constitutes, and each other Loan Document executed by the Borrowers and each other Loan Party will, on the due execution and delivery thereof, constitute, the legal, valid and binding obligations of the Borrowers and each other relevant Loan Party enforceable in accordance with their respective terms, subject in each case to the effect of any Debtor Relief Laws or other similar Laws affecting creditors’ rights generally, and subject to the effect of general principles of equity (regardless of whether considered in a proceeding in equity or at Law). Each of the Loan Documents which purports to create a security interest in favor of the Administrative Agent (on behalf of the Lender Parties) creates a valid first priority security interest in the Collateral (subject, in the case of non-possessory security interests only, to Liens permitted by Section 7.2.3) securing the payment of the Obligations, and all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken. Upon the filing of the Mortgage Amendments described in clauses (b), (d) and (f) of the definition of “Mortgage Amendment” in the proper filing offices, the Liens granted to the Administrative Agent pursuant to the Security Agreement and the Mortgages shall constitute a valid first priority perfected security interest in Collateral covered thereby in compliance with all the Laws.

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SECTION 6.7No Material Liabilities. The Borrowers and each other Loan Party do not have any Indebtedness other than the Indebtedness permitted by Section 7.2.2.

SECTION 6.8No Material Adverse Change, etc.

(c)Since December 31, 2011, there has been no material adverse change in its condition (financial or otherwise), operations, assets, business, properties or prospects, taken as a whole.

(d)Neither of the Borrowers nor any other Loan Party has been involved in any bankruptcy or similar proceeding, and has never entered into an agreement or received the benefit of any settlement or compromise of Indebtedness.

SECTION 6.9Litigation, Labor Matters, etc.

(d)There are (i) no outstanding judgments against the Borrowers or any other Loan Party and (ii) no pending or, to the knowledge of the Borrowers and each other Loan Party, threatened, litigation, action, proceeding or labor controversy affecting any Loan Party or any of its respective properties, businesses, assets or revenues.

(e)To the extent the Borrowers or any of the other Loan Parties have employees, the hours worked by and payments made to employees of the Borrowers and each other Loan Party have not been in violation of the Fair Labor Standards Act or any other Laws dealing with such matters. Item 6.7(b) (“Labor Matters”) of the Disclosure Schedule sets forth, as of the Initial Funding Date, all collective bargaining agreements, management agreements, consulting agreements and employment agreements to which either of the Borrowers or any other Loan Party is a party. There are no strikes, slowdowns, labor disputes, work stoppages or controversies pending, or to the knowledge of the Borrowers threatened, between either of the Borrowers or any other Loan Party, on the one hand, and its employees, on the other hand, other than employee grievances arising in the ordinary course of business.

SECTION 6.10Capitalization. As of the Initial Funding Date, the authorized Equity Interests in the Borrowers, each other Loan Party and all other Persons in which either of the Borrowers or any other Loan Party owns any Equity Interests is set forth in Item 6.8 (“Initial Capitalization”) of the Disclosure Schedule. Except as set forth in such Disclosure Schedule, as of the Initial Funding Date there are no (a) outstanding rights to purchase, options, warrants or similar rights pursuant to which the Borrowers, any other Loan Party or any other Persons in which either of the Borrowers or any other Loan Party owns any Equity Interests may be required to issue, sell, repurchase or redeem any of its Equity Interests or (b) voting rights agreements. The Equity Interests so specified in Item 6.8 (“Initial Capitalization”) of the Disclosure Schedule are fully paid and non-assessable and are owned by the applicable Person, directly or indirectly, free and clear of all Liens (other than Liens in favor of the Administrative Agent pursuant to the Loan Documents). From and after the Initial Funding Date neither the Borrowers nor any other Loan Party will establish or acquire any additional Equity Interests in any Person except as permitted by Section 7.2.5.

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SECTION 6.11Compliance with Laws, etc. The Borrowers and each other Loan Party are in compliance in all material respects with all Laws applicable to each of them or their properties.

SECTION 6.12Properties, Permits, etc.

(a)The Borrowers and each other Loan Party have, and are in material compliance with, all material permits, licenses, authorizations, approvals, entitlements, accreditations and privileges of Governmental Authorities or otherwise that are required for such Person to lawfully own, lease, manage or operate the Real Property. Except as disclosed in Item 6.10(a) (“Property Matters”) of the Disclosure Schedule, no condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or non-renewal of any such permit, license, authorization, approval, entitlement, accreditation or privilege, and there is no claim that any of the foregoing is not in full force and effect.

(b)The Borrowers and each other Loan Party, as applicable, have (i) good, valid and marketable fee title to all of the Land and (ii) good, valid, and marketable title to the Leasehold Interests, in each case free and clear of all Liens, easements, covenants, rights-of-way and other similar restrictions of any nature whatsoever, except Liens permitted by Section 7.2.3.

(c)All permits, licenses, authorizations, approvals, entitlements, accreditations and privileges required to have been issued to either of the Borrowers or any other Loan Party with respect to the Real Property in order to enable such property to be lawfully occupied and used for all of the purposes for which it is currently occupied and used or is installed intended to be occupied and used have been lawfully issued and are in full force and effect, other than such permits which, if not obtained, would not have a Material Adverse Effect on the intended use or operation of the Real Property. Except as disclosed in Item 6.10(c) (“Consents and Approvals”) of the Disclosure Schedule, all the Real Property complies in all material respects with all Laws and no consent or approval of any landlord or other third party in connection with any Leasehold Interest or other leased property is necessary for either of the Borrowers or any other Loan Party to enter into and execute the Loan Documents or grant any Liens thereunder.

(d)Except as disclosed in Item 6.10(d) (“Timber Operations”) of the Disclosure Schedule, no Person other than the Borrowers, Wells TRS Subsidiary, Wells HBU and their agents and representatives has any right to conduct timbering operations on the Real Property or any right, title or interest in and to any Timber located thereon, except for Liens permitted by Section 7.2.3. 

(e)Except as disclosed in Item 6.10(e) (“Condemnation Proceedings”) of the Disclosure Schedule, there is no pending or, to the knowledge of the Borrowers, contemplated condemnation or eminent domain proceeding affecting any of the Real Property. 

(f)Except as may be disclosed in the title insurance endorsements delivered pursuant to Section 5.1.16, there are no unresolved claims or disputes relating to access to any portion of the Real Property that could reasonably be expected to have a Material Adverse Effect on the intended use of such Real Property by the Borrowers.

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(g)The representations and warranties contained in the Security Agreement, the Pledge Agreement, each Mortgage and each other Loan Document with respect to the Collateral are true and correct.

SECTION 6.13Taxes, etc.

(a)The Borrowers and each other Loan Party have (i) timely filed all tax returns and reports required by Law to have been filed by it, which tax returns and reports are correct and complete in all material respects, and (ii) paid all income Taxes and other Taxes of Governmental Authorities thereby shown to be owing, except any such Taxes which are being diligently contested in good faith by appropriate proceedings which stay the enforcement of any Lien resulting from the non-payment thereof and for which adequate reserves in accordance with GAAP shall have been set aside on its books.

(b)Neither of the Borrowers nor any other Loan Party is a party to any tax sharing agreement.

(c)The Borrowers and each other Loan Party have made adequate provision to establish reserves for liabilities for all Taxes as are or may become payable for the period prior to or after the Initial Funding Date. Neither of the Borrowers nor any other Loan Party has knowledge of any proposed additional material tax assessment against it or its properties.

SECTION 6.14ERISA. None of the Borrowers, any other Loan Party, any of their Subsidiaries or any ERISA Affiliates thereof sponsor, maintain or contribute or are required to sponsor, maintain or contribute to, any Pension Plan or Multiemployer Plan.

SECTION 6.15Environmental Warranties.

(i)The Real Property has been and is owned, operated or leased by the Borrowers and each other Loan Party in compliance with all Environmental Laws, except for such violations that, either individually or in the aggregate, could not reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(j)There have been no past (to the knowledge of the Borrowers and the other Loan Parties), and there are no pending or threatened claims, complaints, written notices or requests for information received by the Borrowers or any other Loan Party with respect to any alleged violation of any Environmental Law that, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount, or alleges criminal misconduct or injunctive relief.

(k)There have been no Releases of Hazardous Materials at, on or under the Real Property that, either individually or in the aggregate, has, or could reasonably be expected to result in having, a liability exceeding a Material Environmental Amount.

(l)The Borrowers and each other Loan Party have been issued, and are in compliance with, all permits, licenses, authorizations, approvals, entitlements and accreditations relating to environmental matters that are necessary or desirable for their businesses and required

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by Environmental Laws, except where the failure to have or do any of the foregoing, either individually or in the aggregate, could not reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(m)No property now or previously owned, operated or leased by either of the Borrowers or any other Loan Party is listed or (to the best of their knowledge) proposed for listing on the National Priorities List pursuant to CERCLA or on any similar state list of sites requiring investigation or clean-up.

(n)Except as set forth in Item 6.13(f) (“Environmental Matters/Storage Tanks”) of the Disclosure Schedule, there are no above ground or underground storage tanks, active or abandoned, including petroleum storage tanks, on or under the Real Property.

(o)None of the Borrowers, any other Loan Party or any other Person (to the best of their knowledge (after due inquiry)) has transported or arranged for the transportation of any Hazardous Material to any location which is listed or (to the best of their knowledge) proposed for listing on the National Priorities List pursuant to CERCLA or on any similar state list or which is the subject of federal, state or local enforcement actions or other investigations, which may lead to claims against the Borrowers or any other Loan Party for any remedial work, damage to natural resources or personal injury (including claims under CERCLA) which, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(p)There are no polychlorinated biphenyls, friable asbestos or other Hazardous Materials present on the Real Property that, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(q)No conditions exist at, on or under any property now or previously owned, operated or leased by the Borrowers or any other Loan Party which, with the passage of time, or the giving of notice or both, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount.

(r)There are no areas of the Real Property with respect to which either of the Borrowers or any other Loan Party has a legal obligation under the Endangered Species Act of 1973, 16 U.S.C. §§ 1531 et seq., on the Real Property, and no portion of the Real Property has been designated as a “critical habitat,” as defined in such Act.

SECTION 6.16Accuracy of Information.

(a)All information furnished from time to time (whether prior to or after the Initial Funding Date) by or on behalf of the Borrowers, any other Loan Party or any of their Related Parties in writing to the Administrative Agent or any Lender in connection with this Agreement, any other Loan Document or any transaction contemplated hereby or thereby, is and will be, as the case may be, true and accurate in every material respect on the date as of which such information is dated or certified, and such information is not, or shall not be, as the case may be, incomplete by omitting to state any material fact necessary to make such information not misleading.

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(b)All information prepared by any consultant or professional advisor on behalf of the Borrowers, any other Loan Party or any of their Related Parties which was furnished to the Administrative Agent or any Lender in connection with this Agreement or any other Loan Document has been reviewed by the Borrowers, and nothing has come to the attention of the Borrowers in the context of such review which would lead it to believe that such information (or the assumptions on which such information is based) is not true and correct in all material respects or that such information omits to state any material fact necessary to make such information not misleading in any material respect.

(c)Insofar as any of the information described above includes assumptions, estimates, projections or opinions, the Borrowers have reviewed such matters and nothing has come to the attention of the Borrowers which would lead them to believe that such matters were not when made true and correct in all material respects or that such assumptions, estimates, projections or opinions omitted to state any material fact necessary to make such assumptions, estimates, projections or opinions not reasonable or not misleading in any material respect. All projections and estimates have been prepared in good faith on the basis of reasonable assumptions and represent the best estimate of future performance by the party supplying the same, it being agreed that projections are subject to uncertainties and contingencies and that no assurance can be given that any projection will be realized.

(d)(i)    The balance sheets and financial statements delivered to the Lenders pursuant to Section 5.1.20 and Section 7.1.1 have each been or will be, as the case may be, prepared in accordance with GAAP consistently applied and do or will, as the case may be, present fairly in all material respects the financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended; provided that unaudited interim financial statements are subject to normal year-end adjustments.

(ii)    Except as disclosed in the financial statements referred to above or the notes thereto and for the items disclosed in the Disclosure Schedule, neither of the Borrowers nor any of the other Loan Parties has, as of the Initial Funding Date, any material contingent liabilities, unusual long-term commitments or unrealized losses.

SECTION 6.17Transaction Agreement, etc.

(c)All representations and warranties by the Borrowers and each other Loan Party under the Transaction Documents, to the extent still in effect, are true and correct as of the Initial Funding Date; provided, however, that such representations and warranties that relate solely to an earlier date shall be true and correct as of such earlier date. The Borrowers agree that, by this reference, such representations and warranties contained in the Transaction Documents, to the extent still in effect, are incorporated herein, mutatis, mutandis, for the benefit of the Lenders.

(d)No default exists and no events have occurred or conditions exist that, with notice or lapse of time or both, would constitute a default under the Transaction Documents by any party thereto, and, except as expressly provided by the terms of the Transaction Documents because of the lapse of time, the Transaction Documents are in full force and effect, and the rights, benefits

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and indemnities in favor of the Borrowers thereunder are not subject to any defenses, offsets or claims of any kind.

SECTION 6.18Absence of Default and Restrictions.

(a)Neither any Borrower nor any other Loan Party is (i) in default in the payment of (or in the performance of any obligation applicable to) any Indebtedness or (ii) in violation in any material respect of any (A) Law, (B) contract, agreement, lease or other instrument to which it is a party or (C) permit, license, authorization, entitlement, accreditation or privilege of any Governmental Authority binding upon it or its property or assets. No event has occurred and no condition exists that, upon the making of the Loans hereunder, would constitute a Default or an Event of Default.

(b)Neither any Borrower nor any other Loan Party (i) is a party to any contract, agreement, lease or other instrument, or subject to any other restriction, that restricts its ability to incur Indebtedness (other than this Agreement) or (ii) has agreed or consented to exist on any of the Real Property or other Collateral, whether now or in the future, any Lien other than those Liens permitted by Section 7.2.3.

SECTION 6.19Margin Regulations; Bank Secrecy Act, etc.

(c)Neither any Borrower nor any other Loan Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying “margin stock” (as defined in F.R.S. Board Regulation U). None of the proceeds of any Loan will be used for the purpose of, or be made available by either Borrower or any other Loan Party in any manner to any other Person to enable or assist such Person in, directly or indirectly purchasing or carrying “margin stock” (as so defined) or otherwise in violation of Regulations T, U or X of the F.R.S. Board.

(d)None of the proceeds of any Loan shall be used, directly or indirectly, in a manner that would cause the Administrative Agent or any Lender to violate the Foreign Corrupt Practices Act of 1977, the Bank Secrecy Act or any of the sanctions programs administered by the Office of the Foreign Assets Control of the United States Department of Treasury.

(e)None of the proceeds of any Loan shall be used, directly or indirectly, in a manner inconsistent with Section 4.10.

SECTION 6.20Investment Company Status. None of the Borrower or the other Loan Parties are an “investment company” or a “company controlled by an investment company” within the meaning of the Investment Company Act of 1940, as amended.

SECTION 6.21Material Agreements; Governmental Approvals.

(a)The Borrowers, each other Loan Party and (to the best of their knowledge) each other party to a Material Agreement are in compliance in all material respects with all the terms contained in each Material Agreement, each Material Agreementis in full force and effect and all consents to duly assign each relevant Material Agreement (as required by Section 5.1.15)

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from the Borrowers and each other Loan Party to the Administrative Agent have been obtained and are in full force and effect.

(b)Set forth on Item 6.19(b) (“Material Governmental Approvals”) of the Disclosure Schedule is a listing, as of the Initial Funding Date, of all material licenses, permits and other approvals of Governmental Authorities (collectively, the “Material Governmental Approvals”) that are required to (i) own, operate or lease the Real Property and (ii) operate the business of the Borrowers and each other Loan Party in the ordinary course (including with respect to activities related to Timber harvesting, building, zoning, sub-division, wildlife protection, mining, drilling, extraction or reclamation). Neither of the Borrowers nor any other Loan Party has failed to obtain any Material Governmental Approval and is not in violation of any Material Governmental Approval. Neither the Borrowers nor any other Loan Party have received written notice of any violation with respect to the matters the subject of this clause.

SECTION 6.22Solvency. The Borrowers and each other Loan Party are, and after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith pursuant to the Loan Documents or otherwise will be and will continue to be, Solvent.

SECTION 6.23Insurance. Item 6.21 (“Insurance”) of the Disclosure Schedule sets forth a true, complete and correct description of all insurance maintained by the Borrowers and each other Loan Party as of the Initial Funding Date. As of such date, such insurance is in full force and effect and all premiums have been duly paid.

SECTION 6.24Affiliate Transactions. Except as described on Item 6.22 (“Affiliate Transactions”) of the Disclosure Schedule, as of the Initial Funding Date no Affiliate of the Borrowers or any other Loan Party (or any of their respective family members) is a party to any transaction with any Loan Party, including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such Person or any Person in which any officer, director, or any such employee or family member has a substantial interest or is an officer, director, partner, member or trustee.

SECTION 6.25Patriot Act, etc.

(a)Each of the Borrowers and each other Loan Party is in compliance, in all material respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (ii) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”). No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any official or employee of any Governmental Authority, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. No Borrower or any other Loan Party is engaged in or has engaged in any course of conduct that could reasonably be expected

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to subject any of their respective properties to any Lien, seizure or other forfeiture under any criminal Law, racketeer influenced and corrupt organizations Law, civil or criminal, or other similar Laws.

(b)Neither of the Borrowers nor any other Loan Party (i) is a Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of such Executive Order, or is otherwise associated with any such Person in any manner that violates such Section 2, or (iii) is a Person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

SECTION 6.26Separateness; Special Representations and Covenants Relating to Loan Parties

SECTION 6.26.1Purpose.

(a)The only business that Wells REIT conducts or will conduct will be (i) owning and holding the Equity Interests of Wells Partnership, (ii) entering into the Loan Documents, (iii) pledging all of the Collateral that it owns as collateral for the Loans, (iv) owning the Equity Interests of Unrestricted Timber Subsidiaries and (v) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing and appropriate or necessary to its status as a public company.

(b)The only business that Wells Partnership conducts or will conduct will be (i) owning and holding the Equity Interests of Wells TRS and Wells Timberland, (ii) entering into the Loan Documents, (iii) pledging all of the Collateral that it owns as collateral for the Loans and (iv) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

(c)The only business that Wells Timberland conducts or will conduct will be (i) acquiring, owning and holding the Real Property, incidental personal property related thereto and proceeds thereof, and operating and managing the Real Property including the selling and harvesting of Timber by itself any by others pursuant to Timber rights granted by Wells Timberland, (ii) entering into the Loan Documents, (iii) pledging all of the Collateral that it owns as collateral for the Loans and (iv) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

(d)The only business that Wells TRS conducts or will conduct will be (i) owning and holding the Equity Interests of Wells TRS Subsidiary and Wells HBU, (ii) entering into the Loan Documents, (iii) pledging all of the Collateral that it owns as collateral for the Loans, (iv) owning the Equity Interests of Unrestricted Timber Subsidiaries and (v) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

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(e)The only business that Wells TRS Subsidiary conducts or will conduct will be (i) entering into the MW Supply Agreements, (ii) processing and selling Fuel Wood Residue in accordance with the terms of this Agreement, (iii) entering into the Loan Documents, (iv) pledging all of the Collateral that it owns as collateral for the Loans and (v) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

(f)The only business that Wells HBU conducts or will conduct will be (i) acquiring, owning and holding certain higher and better use portions of the Real Property, (ii) selling such portions of the Real Property in accordance with the terms and conditions of this Agreement, (iii) pledging all of the Collateral that it owns as collateral for the Loans and (iv) transacting any and all lawful business under the laws of the state of its organization that is incident, necessary and appropriate to accomplish the foregoing.

SECTION 6.26.2Financial Statements. Each Loan Party has and will have its own separate financial statement, provided, however, that each Loan Party’s assets may be included in a consolidated financial statement of its parent companies if inclusion on such a consolidated statement is required to comply with the requirements of GAAP, provided, further, that (a) such consolidated financial statement shall contain a footnote to the effect that each Loan Party’s assets are owned by such Loan Party and that the assets are being included on the financial statement of its parent solely to comply with the requirements of GAAP and (b) such assets shall be listed on such Loan Party’s own separate balance sheet.

SECTION 6.26.3Tax Return. Each of Wells Timberland and Wells Partnership is and will be treated as a disregarded entity or pass-through entity for Federal income tax purposes, with all items of income, gain, loss and expense of each such Person being treated as though earned or incurred by Wells REIT (except for the 1% interest in Wells Partnership that is not owned by Wells REIT). Each of Wells TRS Subsidiary and Wells HBU is and will be treated as a disregarded entity or pass-through entity for Federal income tax purposes, with all items of income, gain, loss and expense of each such Person being treated as though earned or incurred by Wells TRS.

SECTION 6.26.4Separateness. Each Loan Party has, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other Person, shall correct any known misunderstanding regarding its status as a separate entity, shall conduct and operate its business in its own name and shall not identify itself or any of its Affiliates as a division or part of the other.

SECTION 6.26.5Overhead. Each Loan Party has and will allocate fairly and reasonably any overhead expenses that are shared with any other Loan Party or any Affiliate thereof, including paying for office space and services performed by any employee of an affiliate.

SECTION 6.26.6Liabilities and Expenses. Item 6.24 (“Accounts”) of the Disclosure Schedule identifies all deposit and securities accounts in the name of each Loan Party, including, for each such account, the name on the account, the account number, the type of account, the name and address of the financial institution at which the account is located, and the sources and uses of funds contained in such account. Except as identified in Item 6.24 (“Accounts”) of the

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Disclosure Schedule, each Loan Party has and will pay its own liabilities and expenses out of its own funds drawn on its own bank account.

SECTION 6.26.7Adequate Capital. Each Loan Party has and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations.

SECTION 6.26.8Separateness of Assets. Other than as provided in Item 6.24 (“Accounts”) of the Disclosure Schedule, each Loan Party (a) has and will (i) maintain all of its bank accounts separate from any other Person, (ii) hold all of its assets in its own name and (iii) maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any other entity; and (b) has not and will not (i) commingle its funds or other assets with those of any other Person or (ii) participate in a cash management system with any other Person.

SECTION 6.26.9Guarantees. Other than as provided in the Loan Documents and the Unrestricted Timber Transactions, no Loan Party has or will hold itself out as being responsible for the debts or obligations of any other Person, or hold out its credit as available to satisfy the obligations of any other Person.

SECTION 6.26.10Corporate Formalities. Each Loan Party has and will hold regular meetings, as appropriate, to conduct its business in the ordinary course, and each Loan Party has done and will do all things necessary to observe all customary organizational and operational formalities and record keeping and to preserve its existence. Each Loan Party has and will maintain all of its books and records separate from those of any other Person and will maintain separate telephone numbers, stationery, invoices and checks.

SECTION 6.26.11Bankruptcy. Neither of the Borrowers nor any other Loan Party will file a bankruptcy or insolvency petition or otherwise institute insolvency proceedings with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest.

ARTICLE VIICOVENANTS

SECTION 7.1Affirmative Covenants. The Borrowers and the Loan Parties agree with each Lender Party that, until all the Obligations have been paid in full in cash and performed in full, the Borrowers and the Loan Parties will perform the obligations set forth in this Section.

SECTION 7.1.1Financial Information, Reports, Notices, etc..

Each Borrower and each Loan Party will furnish, or will cause to be furnished, to the Administrative Agent copies of the following financial statements, reports, notices and information (all of which shall be in form and scope reasonably satisfactory to the Administrative Agent):

(c)(i) as soon as available and in any event within 45 days after the end of each Fiscal Quarter except for the last Fiscal Quarter of each Fiscal Year, consolidated and consolidating

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balance sheets of Wells REIT and its Subsidiaries as of the end of such Fiscal Quarter and consolidated and consolidating statements of earnings and cash flow of Wells REIT and its Subsidiaries for such Fiscal Quarter and (when available) for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter (when available), together with comparable information adjusted to reflect any changes at the close of and for the corresponding Fiscal Quarter for the prior Fiscal Year and for the corresponding portion of the previous Fiscal Year, certified as complete and correct by a Financial Officer of Wells REIT as fairly presenting the financial position of Wells REIT and its consolidated Subsidiaries as of the date thereof and for the period then ended; and (ii) as soon as available and in any event within 45 days after the end of each Fiscal Quarter except for the last Fiscal Quarter of each Fiscal Year, consolidated and consolidating balance sheets of Wells Timberland as of the end of such Fiscal Quarter and consolidated and consolidating statements of earnings and cash flow of Wells Timberland for such Fiscal Quarter and (when available) for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter (when available), together with comparable information adjusted to reflect any changes at the close of and for the corresponding Fiscal Quarter for the prior Fiscal Year and for the corresponding portion of the previous Fiscal Year, certified as complete and correct by a Financial Officer of Wells Timberland as fairly presenting the financial position of Wells Timberland as of the date thereof and for the period then ended;

(d)(i) as soon as available and in any event within 90 days after the end of each Fiscal Year, a copy of the annual audit report for such Fiscal Year for Wells REIT and its Subsidiaries, including therein consolidated and consolidating balance sheets of Wells REIT and its Subsidiaries as of the end of such Fiscal Year and consolidated and consolidating statements of earnings and consolidated statements of cash flow of Wells REIT and its Subsidiaries for such Fiscal Year, in each case certified without any “going concern” or other material qualification in a manner reasonably acceptable to the Administrative Agent by Deloitte & Touche LLP or other independent public accountants acceptable to the Administrative Agent, together (A) with the annual letters to such accountants in connection with their audit examination detailing contingent liabilities and material litigation matters and (B) comparable information adjusted to reflect any changes at the close of the prior Fiscal Year (when available); and (ii) as soon as available and in any event within 90 days after the end of each Fiscal Year, a copy of the annual audit report for such Fiscal Year for Wells Timberland, including therein consolidated and consolidating balance sheets of Wells Timberland as of the end of such Fiscal Year and consolidated and consolidating statements of earnings and consolidated statements of cash flow of Wells Timberland for such Fiscal Year, in each case certified without any “going concern” or other material qualification in a manner reasonably acceptable to the Administrative Agent by Deloitte & Touche LLP or other independent public accountants acceptable to the Administrative Agent, together (A) with the annual letters to such accountants in connection with their audit examination detailing contingent liabilities and material litigation matters and (B) comparable information adjusted to reflect any changes at the close of the prior Fiscal Year (when available);

(e)concurrently with the delivery of the financial statements pursuant to clauses (a) and (b), a certificate from a Financial Officer of Wells REIT that, to the best of his knowledge, each Loan Party during the period covered by such financial statements has observed or performed all of its covenants and other agreements contained in this Agreement and the other Loan Documents

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required to be observed, performed or satisfied by it, and that such Financial Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate;

(f)concurrently with the delivery of the financial statements pursuant to clause (b):

(i)the final management letter, if any, prepared by the independent public accountants who prepared such financial statements with respect to internal audit and financial controls of the Borrowers and their Subsidiaries; and

(ii)a certificate of a Financial Officer of Wells Manager (A) setting forth the information required pursuant to the disclosure schedules of the Security Agreement and Pledge Agreement or confirming that there has been no change in such information since the Initial Funding Date or the date of the most recent certificate delivered pursuant to this clause and (B) certifying that all U.C.C. financing statements (including fixture filings, as applicable), mortgages or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each Governmental Authority and other appropriate office in each jurisdiction that is necessary to protect and perfect the security interests under the Loan Documents;

(g)as soon as available and in no event later than the date the financial statements are delivered (or are required to be delivered) pursuant to clause (a), a Compliance Certificate, executed by a Financial Officer of Wells Manager, showing (in reasonable detail and with appropriate calculations and computations in all respects satisfactory to the Administrative Agent) the calculation of the Loan to Value Ratio and Fixed Charge Coverage Ratio;

(h)as soon as possible and in any event within three Business Days after (i) the occurrence of any material adverse development with respect to any litigation, action, proceeding or labor controversy described in Section 6.7, (ii) the commencement of any litigation, action, proceeding or labor controversy of the type described in Section 6.7, (iii) the commencement of any legal proceeding seeking injunctive relief or which may materially impair the ability of the Borrowers or any Loan Party to perform their Obligations or (iv) any change in the certified public accountants of the Borrowers, notice thereof by an Authorized Officer of any Borrower and copies of all documentation relating thereto;

(i)as soon as possible and in any event within three Business Days after the occurrence of each Default, Event of Default or event that could reasonably be expected to result in a Material Adverse Effect, a statement of an Authorized Officer of a Borrower setting forth reasonably detailed information regarding such Default, Event of Default or event, and the action which the Borrowers have taken and proposes to take with respect thereto;

(j)concurrently with the sending or filing thereof, copies of all (i) reports and documents which either of the Borrowers or any other Loan Party sends to any of its holders of Equity Interests, (ii) press releases and other statements made available by the Borrowers or any other Loan Party to the public concerning material changes or developments in it business and (iii) reports, financial statements and registration statements which the Borrowers or any other Loan

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Party files with the Securities and Exchange Commission or any securities exchange, except that the Borrowers shall not be required to deliver any of the foregoing which has previously been delivered hereunder;

(k)promptly after becoming aware of any events which would give rise to a mandatory prepayment under clause (b) of Section 3.1.2, a statement of the Financial Officer of Wells Manager setting forth reasonably detailed information regarding the same;

(l)all such notices and documents required to be delivered pursuant to the other Loan Documents;

(m)promptly after the receipt thereof by either of the Borrowers or any other Loan Party, copies of any notice of non-payment or underpayment of Taxes or other charges by the Borrowers or any other Loan Party that is received from any relevant Governmental Authority;

(n)promptly after either of the Borrowers or any other Loan Party obtains knowledge that any statement contained in any representation or warranty in any Loan Document was not when made true and correct, a statement of an Authorized Officer of either Borrower setting forth reasonably detailed information regarding the same;

(o)concurrently with the receipt or delivery thereof by either of the Borrowers or any other Loan Party, all material notices, including notices of default or termination, received or delivered by any such Borrower or other Loan Party pursuant to any Material Agreement;

(p)promptly after the assertion or occurrence thereof, notice of any proceeding, demand, investigation or claim of any Governmental Authority regarding the noncompliance by the Borrowers or any other Loan Party with any Environmental Law that could (i) reasonably be expected to result in a liability exceeding a Material Environmental Amount or (ii) cause any Real Property to be subject to any restrictions on ownership, transferability or occupancy;

(q)as soon as available and in no event later than 10 Business Days prior to the consummation of any Unrestricted Timber Transaction (or such shorter period of time as may be acceptable to the Administrative Agent), Wells REIT shall (i) certify to the Lenders that all the terms and conditions contained in the definition of “Unrestricted Timber Transaction” have been satisfied with respect thereto, (ii) deliver to the Lenders substantially final copies of the operative documents evidencing such Unrestricted Timber Transaction and (iii) provide such other evidence, as may be reasonably requested by the Administrative Agent or any Lender, in connection therewith;

(r)as soon as available and in no event later than 10 Business Days prior to the beginning of each calendar year, (i) a projected operating expense budget for Wells REIT and its Subsidiaries, prepared on a monthly basis for such calendar year and (ii) proforma financial projections for the next following 18-month period for Wells REIT and its Subsidiaries; and

(s)such other information respecting the condition or operations, financial or otherwise, of any Loan Party as any Lender through the Administrative Agent may from time to time reasonably request.

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SECTION 7.1.2Compliance with Laws; Payment of Obligations.

(h)Each Borrower and each other Loan Party will comply in all material respects with all material permits, licenses, authorizations, approvals, entitlements, accreditations and privileges of each Governmental Authority and all applicable Laws.

(i)Each Borrower and each other Loan Party will pay before the same become delinquent, all (i) its Indebtedness and other obligations, including all income and other Taxes, assessments and charges imposed by Governmental Authorities upon it or upon its property, and (ii) lawful claims for labor, materials and supplies or otherwise, except for the non-payment of such other obligations, Taxes and claims that (A) are being diligently contested in good faith by appropriate proceedings which (i) suspend collection of the contested other obligation or Tax or charge and any Lien arising therefrom and (ii) for which adequate reserves in accordance with GAAP shall have been set aside on its books and (B) could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. If such contest is terminated, adversely resolved or the conditions set forth in this Section are no longer met, each of the Borrowers and each other Loan Party shall promptly pay or discharge the contested other obligations, Taxes and claims.

SECTION 7.1.3Maintenance of Properties and Franchises.

(i)Each Borrower and each other Loan Party will, in the exercise of its reasonable business judgment, maintain, preserve, protect and keep its properties in good repair, working order and condition (reasonable wear and tear excepted), and make necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times.

(j)Each Borrower and each other Loan Party will do or cause to be done all things necessary to preserve, renew and keep in full force and effect (i) its legal existence and qualification as a foreign corporation, limited liability company or partnership in each jurisdiction where it has assets or conducts business and (ii) the permits, licenses, authorizations, approvals, entitlements, accreditations, privileges and franchises of all Governmental Authorities or otherwise necessary for the proper conduct of its business (including the ownership and the leasing of the Real Property).

SECTION 7.1.4Insurance.

(g)Each Borrower, Wells TRS Subsidiary, Wells HBUand each other Loan Party (to the extent relating to the Collateral) will maintain, insurance policies and coverage with respect to its property and assets at least as expansive as set forth on Item 6.21 (“Insurance”) of the Disclosure Schedule and, in any event, to such extent and covering such risks as is customary for companies in sound financial condition in the same or similar businesses and operations and in the same or similar locations. In addition, each Borrower, Wells TRS Subsidiary, Wells HBU and each other Loan party (to the extent relating to the Collateral) will maintain such other additional insurance coverage in such amounts and with respect to such risks as the Administrative Agent or the Required Lenders may reasonably request from time to time. All such insurance will be provided (i) by insurers

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authorized by Lloyds of London to underwrite such risks, (ii) by insurers having an A.M. Best policyholders rating of not less than “A” or (iii) by such other insurers as the Administrative Agent may approve.

(h)All premiums on insurance policies required under this Section will be paid by the Borrowers. All insurance policies relating to any loss or damage sustained in respect of any item constituting a part of the Collateral will contain a loss payable endorsement, in form and substance reasonably satisfactory to the Administrative Agent, in favor of the Administrative Agent. All insurance policies relating to general liability, umbrella and excess insurance coverage will contain an additional insured endorsement, in form and substance satisfactory to the Administrative Agent, in favor of the Administrative Agent. All such insurance policies will provide that:

(i)none of the Borrowers, any other Loan Party, or any Lender will be a coinsurer thereunder; and

(ii)such insurance will not be affected by any unintentional act or negligence or representation or warranty on the part of the Borrowers, any other Loan Party or other owner of the policy or the property described in such policy.

All such insurance policies will provide that the insurer will, simultaneously with the delivery to either Borrower or any other Loan Party of any notice of a material event under such policy, deliver to the Administrative Agent a copy of such notice. All such insurance policies and loss payable clauses will provide that they may not be canceled, amended or terminated unless the Administrative Agent is given at least the same number of days’ notice that the insurance company which issued such policies is required to give the Borrowers or any other Loan Party, but in no event less than 30 days’ prior written notice.

(i)The Borrowers will provide to the Administrative Agent and to its insurance consultant (or any agent, officer or employee of the Administrative Agent) such other information relating to its insurance coverage as may be reasonably requested by the Administrative Agent. The insurance consultant (through its officers or employees) shall have the right to visit the Borrowers’ and the other Loan Parties’ offices, upon reasonable prior notice during usual business hours, to inspect the insurance policies provided for herein. The reasonable fees, costs and expenses of the insurance consultant shall be paid for by the Borrowers.

(j)If any Borrower or other Loan Party fails to maintain any of the policies of insurance required by this Section the Administrative Agent may (but shall not be required), at the sole cost and expense of the Borrowers, obtain and maintain such policies of insurance, pay the related premiums and take such other action as it deems reasonably advisable. All costs related to the foregoing shall be charged to the Borrowers’ loan account. Notwithstanding the foregoing, the Administrative Agent shall have no liability with respect to the cost, scope, amount or other terms with respect to the insurance purchased by it pursuant to this provision.

(k)Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent shall have the sole right, in the name of the Lenders and each other Loan Party, to file claims under any insurance policies with respect to which the Administrative Agent

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is the loss payee, to receive receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

(l)The Borrowers will furnish to the Administrative Agent at least annually and at such other times as the Administrative Agent shall request, a certificate of insurance and other evidence as to the insurance required to be maintained pursuant to this Section.

SECTION 7.1.5Books and Records; Inspections; Annual Meeting.

(b)Each Borrower and each other Loan Party will keep books and records which accurately reflect in all material respects all of its business affairs and transactions. Each Borrower and each other Loan Party will maintain at all times books and records pertaining to the Collateral in such detail, form, and scope as the Administrative Agent shall reasonably require.

(c)Each Borrower, Wells TRS Subsidiary, Wells HBU and each other Loan Party (to the extent relating to the transactions contemplated by the Loan Documents) will permit the Administrative Agent and each Lender or any of their respective representatives (including outside auditors), at reasonable times and intervals and with reasonable prior notice unless a Default or Event of Default has occurred and is continuing, to visit all of its offices, to discuss its financial matters with its officers and independent public accountant (and the Borrowers and the other Loan Parties hereby authorize such independent public accountant to discuss the Borrowers’ and the other Loan Parties’ financial matters with each Lender or its representatives whether or not any representative of the Borrowers are present) and to examine (and, at the expense of the Borrowers, copy extracts from) and conduct audits of any of its account receivables, other assets and books or other corporate records (including computer records).

(d)If any Default or Event of Default has occurred and is continuing, as may be requested by the Administrative Agent or the Required Lenders, the Borrowers shall host a meeting of the Lenders to discuss their financial condition and results of operations (including its financial reports and related material delivered with respect to such Fiscal Year). Such meeting shall be held at a mutually convenient location as agreed to by the Administrative Agent and the Lenders.

(e)The Borrowers will pay all the reasonable fees and expenses of the Administrative Agent and each Lender in the exercise of their rights pursuant to this Section, including the reasonable fees and expenses of independent public accountants and other professionals retained by the Administrative Agent and the Lenders; provided that, notwithstanding the foregoing, (i) if no Default or Event of Default has occurred and is continuing, the Borrower shall not be required to reimburse the Administrative Agent for such fees and expenses in connection with more than one audit and one visit per calendar year, and (ii) unless a Default or an Event of Default has occurred and is continuing, the Borrower shall not be required to reimburse the Lenders for any such fees and expenses.

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SECTION 7.1.6Environmental Covenants.

(c)Each Borrower and each other Loan Party will, and will cause all lessees and other Persons occupying any of the Real Property or their other properties to:

(iii)use and operate all of its facilities and properties in compliance with all Environmental Laws, keep all permits, approvals, certificates, licenses and other authorizations relating to environmental matters in effect and remain in compliance therewith, and handle all Hazardous Materials in compliance with all applicable Environmental Laws, except where the failure to do any of the foregoing, either individually or in the aggregate, could not reasonably be expected to result in a liability exceeding a Material Environmental Amount;

(iv)take all such actions as are necessary and appropriate so that no liability with respect to the Environmental Laws may arise which, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount;

(v)promptly notify the Administrative Agent and provide copies upon receipt of all material written claims, complaints, notices or inquiries relating to the condition of the Real Property or compliance with Environmental Laws, and shall cure and have dismissed with prejudice to the reasonable satisfaction of the Administrative Agent any actions and proceedings relating to compliance with or liability pursuant to Environmental Laws which, either individually or in the aggregate, could reasonably be expected to result in a liability exceeding a Material Environmental Amount; and

(vi)provide such information and certifications which the Administrative Agent may reasonably request from time to time to evidence compliance with this Section.

(d)Prior to acquiring any ownership or leasehold interest in any additional real property after the Initial Funding Date that could give rise to the Borrowers, Wells TRS Subsidiary or Wells HBUbeing found subject to potential liability under any Environmental Law, the Borrowers will (i) obtain a written report by a reputable independent environmental consultant reasonably acceptable to the Administrative Agent (an “Environmental Consultant”) as to its assessment of the presence or potential presence of significant levels of any Hazardous Material on, in, under or about such property, or of other conditions that could give rise to a potentially significant liability to the Borrowers, Wells TRS Subsidiary or Wells HBU under violations of any Environmental Law relating to such transaction, and notify the Administrative Agent of such potential transaction, and (ii) afford the Administrative Agent a reasonable opportunity to review, to discuss such report with the Environmental Consultant who prepared it and a knowledgeable representative of the Borrowers. The Administrative Agent shall have the right, but shall not have any duty, to obtain, review, or discuss any such report.

(e)If any Default or Event of Default has occurred and is continuing or if the Administrative Agent or any Lender has formed a reasonable belief that material violations of Environmental Laws may exist or Hazardous Materials may be present on the Real Property in amounts or under circumstances which could reasonably be expected to result in a liability exceeding

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a Material Environmental Amount, then, at the Administrative Agent’s request, the Borrowers and the other Loan Parties shall perform, or use commercially reasonable efforts to cause to be performed by any other responsible party, tests, including subsurface testing, soil and groundwater testing, and other tests which may physically invade the Real Property pursuant to a scope of work proposed by the Borrowers and approved by the Administrative Agent (the “Environmental Tests”), as the Administrative Agent, in its reasonable discretion, determines is necessary to (i) investigate the condition of the Real Property, (ii) protect the security interest created under the Mortgages and the other Loan Documents and (iii) determine compliance in all material respects with all Environmental Laws, the provisions of the Loan Documents and other matters relating thereto. The Borrowers and the other Loan Parties shall provide true and accurate copies of the results of the Environmental Tests to the Administrative Agent and the Lenders upon receipt of the results. In the event that (i) the Borrowers or the other Loan Parties fail to promptly initiate the Environmental Tests requested by the Administrative Agent, (ii) the Borrowers or the other Loan Parties fail to provide to the Administrative Agent and the Lenders with the results of such Environmental Tests within 60 days of the request therefor or such additional time as the Administrative Agent shall agree in its sole discretion or (iii) the Administrative Agent or the Required Lenders are not reasonably satisfied with the results of such Environmental Tests, then the Administrative Agent may undertake to perform or cause to be performed, at the Borrower’s expense, such Environmental Tests for the account of the Borrowers and the other Loan Parties.

(f)The Borrowers, Wells TRS Subsidiary and Wells HBU shall, in accordance with prudent industry practice, from time to time perform any remediation, reclamation or similar action required under any applicable Environmental Law, any such actions with respect to the Real Property to include, but not be limited to, the investigation of the condition of the Real Property, the preparation of any feasibility studies, reports or remedial plans, and the performance of any cleanup, remediation, containment, operation, maintenance, monitoring or restoration work, whether on or off of the Real Property. Each plan of remediation shall be subject to the prior review of the Administrative Agent. All such work shall be performed by one or more Environmental Consultants. The Borrowers, Wells TRS Subsidiary and Wells HBU shall proceed continuously and diligently with such investigatory and remedial actions, provided that in all cases such actions shall (i) be in accordance with the remediation plan approved by an appropriate Governmental Authority and all applicable Environmental Laws and (ii) be performed in a good, safe and workmanlike manner so as to minimize, to the extent practicable, any impact on the business conducted at or the value of the Real Property. The Borrowers shall pay all costs actually incurred in connection with such investigatory and remedial activities, including all power and utility costs, and any and all Taxes or fees that may be applicable to such activities. The Borrowers, Wells TRS Subsidiary and Wells HBU shall promptly provide to the Administrative Agent and the Lenders copies of testing reports and results generated in connection with such activities. Promptly upon completion of such investigation and remediation, the Borrowers, Wells TRS Subsidiary and Wells HBU shall permanently close all monitoring wells and test holes in compliance with applicable Laws, remove all associated equipment and restore the Real Property to the maximum extent practicable, which shall include, without limitation, the repair of any surface damage. Within 30 days of demand therefor, the Borrowers shall provide the Administrative Agent with a bond, letter of credit or similar financial assurance reasonably satisfactory to the Administrative Agent evidencing that the necessary funds are available to perform the obligations established by this

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clause, unless a bond or similar financial assurance at least in the amount required by the Administrative Agent is in full force and effect and is available and is in fact used by the relevant Governmental Authority to pay such obligations.

(g)The Administrative Agent, whether or not the Administrative Agent has acquired possession or title to the Real Property, shall have the right to undertake any and all actions to remediate the Real Property which the Borrowers or any of the other Loan Parties shall fail to perform or cause to be performed in accordance with the requirements of this clause.

SECTION 7.1.7As to Intellectual Property Collateral.

(e)Each of the Borrowers, Wells TRS Subsidiary and Wells HBU shall take all actions necessary to ensure that no Intellectual Property Collateral lapses, becomes abandoned, dedicated to the public, invalid, unenforceable or subject to any adverse determination or development (including the institution of, or any adverse determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any foreign counterpart thereof or any court), unless the Borrowers shall either (i) reasonably and in good faith determine (and notice of such determination shall have been delivered to the Administrative Agent) that any of such Intellectual Property Collateral is of negligible economic value to the Borrowers, Wells TRS Subsidiary or Wells HBU or (ii) have a valid business purpose (exercised in the ordinary course of business that is consistent with past practice).

(f)In no event shall either of the Borrowers, Wells TRS Subsidiary, Wells HBUorany of their agents, employees, designees or licensees file an application for the registration of any Intellectual Property Collateral with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, unless it promptly informs the Administrative Agent, and upon request of the Administrative Agent, executes and delivers any and all agreements, instruments, documents and papers as the Administrative Agent may reasonably request to evidence the Administrative Agent’s first priority security interest in such Intellectual Property Collateral and the goodwill and general intangibles of the each of the Borrowers and each of the other Loan Parties relating thereto or represented thereby.

(g)Each Borrower, Wells TRS Subsidiary and Wells HBU will take all necessary steps, including in any proceeding before the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue any application (and to obtain the relevant registration) filed with respect to, and to maintain any registration of, the Intellectual Property Collateral, including the filing of applications for renewal, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings and the payment of fees and taxes (except to the extent that dedication, abandonment or invalidation is permitted under clause (a)).

SECTION 7.1.8Payment of Taxes and Claims; Deposits for Taxes and Insurance Premiums.

(f)Each Borrower and each other Loan Party will comply in all material respects with all material permits, licenses, authorizations, approvals, entitlements, accreditations and

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privileges of each Governmental Authority and all applicable Laws that are, in each case, binding on any of them, the Real Property or their other property or assets.

(g)Each Borrower and each other Loan Party will pay before the same become delinquent, all (i) its Indebtedness and other obligations and (ii) lawful claims for labor, materials and supplies or otherwise, except for the non-payment of such claims that (A) are being diligently contested in good faith by appropriate proceedings which (i) suspend collection of the contested Indebtedness or claim and any Lien arising therefrom and (ii) for which adequate reserves in accordance with GAAP shall have been set aside on its books and (B) could not reasonably be expected to result in, either individually or in the aggregate, a material liability to any of them. If such contest is terminated, adversely resolved or the conditions set forth in this Section are no longer met, each Borrower and each other Loan Party shall promptly pay or discharge the contested Indebtedness and claims.

(h)Each Borrower and each other Loan Party will file all Federal and other material tax returns required to be filed in any jurisdiction and pay all Taxes imposed or levied upon the Collateral or on the interests created by any Mortgage or with respect to the filing of any Mortgage, or on the Lien and other interests created by any Mortgage, to the extent such Taxes have become due and payable and before they have become delinquent. The Borrowers and the other Loan Parties may, at the their own expense, in good faith and by appropriate proceedings diligently contest any such Taxes and, in the event of any such contest, may permit the Taxes so contested to remain unpaid during the period of such contest and any appeal therefrom, provided that during such period the Borrowers shall be in compliance with this Agreement and that adequate reserves for such Taxes shall have been set aside on their books in accordance with GAAP.

(i)[reserved.]

(j)In the event of the passage, after the Initial Funding Date, of any Law that deducts from the value of the Collateral any Tax or changes the taxation of mortgages, deeds of trust and/or security agreements, or the manner of the collection of any such Taxes, in each case which has the effect of imposing any additional payment or expense against any of the Collateral or upon the Administrative Agent or any Lender, the Borrowers shall pay such Tax or promptly reimburse the Administrative Agent or such Lender for its or their payment.

SECTION 7.1.9Further Assurances; Additional Collateral.

(d)Each Borrower and each other Loan Party will execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds to secure debt and other documents), which may be required under any Law, or which the Administrative Agent or the Required Lenders may reasonably request, to comply with the terms of this Agreement and the other Loan Documents, including causing the Collateral to be subject to a first priority security interest in favor of the Administrative Agent, for the benefit of the Lender Parties (subject, in the case of non-possessory security interests, to the Liens permitted by Section 7.2.3), securing all the Obligations, all at the expense of the Borrowers. The Borrowers also agree to provide to the Administrative Agent, from time to time upon request, evidence reasonably

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satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Loan Documents.

(e)If any property or asset is acquired or leased by any Borrower, Wells TRS Subsidiary or Wells HBUafter the Initial Funding Date, the Borrowers will notify the Administrative Agent promptly thereof (except such notice shall not be required if the Administrative Agent has a valid first priority perfected security interest in such property or asset by virtue of any actions previously taken by or on behalf of the Administrative Agent), and will cause such property or asset to be subjected to a first priority security interest in favor of the Administrative Agent (subject, in the case of non-possessory security interests, to the Liens permitted by Section 7.2.3), and will take, and cause Wells TRS Subsidiary and Wells HBU to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens (including the actions described in clause (a) and obtaining Landlord Estoppel Certificates with respect to assets located on leased Real Property).

SECTION 7.1.10Exercise of Rights under Transaction Documents. Each Borrower and each other Loan Party will enforce in their reasonable business judgment all of their material rights under each Transaction Document, including, without limitation, all material indemnification rights thereunder, and pursue all material remedies that are available to the Loan Parties with diligence and in good faith in connection with the enforcement of any such rights.

SECTION 7.1.11Timber Affirmative Covenants.

(h)Management. The Timberland shall be operated in accordance with (i) industry standards for their highest and best use as timberlands, having due regard to soil conditions, stand arrangements and other factors relevant to the conduct of sound silvicultural and harvesting practices and (ii) Best Management Practices.

(i)Wells Timberland Operating Agreement. The Wells Timberland Operating Agreement shall remain in full force and effect and there shall be no default, breach or violation existing thereunder by any party thereto and no event shall occur (other than payments due but not yet delinquent) that would entitle either party thereto to terminate such Agreement. The Wells Timberland Operating Agreement shall not be modified in any respect except as provided in clause (b) of Section 7.2.10. The Loan Parties shall not enter into any agreement relating to the management or operation of the Timberland without the express consent of the Administrative Agent except for (i) agreements with Wells Manager and (ii) subject to the terms and conditions of clause (e) of Section 7.2.9, that certain Carbon Storage Agreement, dated as of February __, 2009, as amended by that certain First Amendment to Carbon Storage Agreement, dated as of July 8, 2009 and as further amended in accordance with the terms of this Agreement (the “Carbon Storage Agreement”), between Wells Timberland and Carbon Treebank, LLC (“CTB”). If at any time the Administrative Agent consents to the appointment of a new manager, such new manager and the Loan Parties shall, as a condition of the Administrative Agent’s consent, execute an agreement in substantially the form of the Timber Manager Subordination Agreement.

(j)Annual Operating Plan. As soon as available and in no event later than 10 Business Days prior to the beginning of each calendar year, Wells Timberland will submit to the

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Lenders an annual plan of operations for forest management, silviculture, planting, thinning and Timber harvesting (the “Harvest Plan”) for the Timberland (which shall be prepared on a per Division basis), for the following year, which shall be prepared or reviewed by the Timber Manager, the Administrative Agent and the Administrative Agent’s consultant (if any). The Harvest Plan shall identify by a GIS based system of identification that corresponds to the legal descriptions of the Timberland attached to the Mortgages, the land area of each Division to be harvested, so that the Administrative Agent can verify that the Timberland is being harvested in an orderly and efficient manner. Also, each Harvest Plan shall be accompanied by a certification by a Financial Officer of Wells Timberland that Wells Timberland can meet the performance requirements of the MW Supply Agreements on a current and prospective basis during the period covered by such Harvest Plan. Wells Timberland shall promptly notify the Administrative Agent of any material changes in the Harvest Plan, which changes shall be subject to approval by the Administrative Agent.

(k)Timber Harvesting and Forest Management Operations. If no Default or Event of Default has occurred and is continuing, Wells Timberland may cut and remove Timber from the Timberland subject to satisfaction of the following conditions:

(i)All cutting, logging and removal of Timber shall be in accordance with Best Management Practices.

(ii)All cutting operations of Timber shall be conducted in such a manner as to realize in accordance with industry standards the greatest return from the Timber, to effect suitable utilization of the Timberland, to assure the early and complete regeneration of stands of desirable Timber and to maximize development of Timber, both as to growth and quality. All standing Timber shall be cut as close to the ground as practicable in order to leave the lowest stump, with jump-butting to be used when necessary. All desirable Timber that is not at the time being harvested, including young trees, shall be protected against unnecessary injury from felling, skidding and hauling. All measures reasonably practicable shall be used in cutting operations to prevent soil erosion including the proper location of skidways and roads.

(iii)Any intermediate harvesting of Timber shall be carried out in accordance with industry standards to produce the maximum growth on the maximum number of stems, consistent with the production in accordance with industry standards in order to maximize the greatest quantity and quality of merchantable Timber, and all harvesting shall be carried on in a manner calculated to realize in accordance with industry standards the maximum investment value in the Timberland.

(iv)Wells Timberland shall keep and maintain at its offices adequate and accurate books and records of all Timber cut and removed from the Timberland and the payments received therefrom. Wells Timberland shall furnish a record of cuttings and payments to the Administrative Agent in a form and at such times as the Administrative Agent may specify from time to time, but not less frequently than 45 days after each calendar quarter (with a comprehensive year-end summary with the fourth calendar quarter report). All such reports shall include (A) independent information for each Division; (B) the total net volume of logs scaled by species for each product type; (C) the number of acres of the Timberland and in each Division on which cutting in the form of clear cutting, seed tree, shelterwood, cover story removal and commercial thinning

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was conducted (with the number of acres for each such form of cutting being separately stated and the location of the acreage for each such form of cutting being identified according to the descriptions of Divisions used in the Harvest Plan); (D) the number of acres of the Timberland in which Timber was lost or destroyed (with the number of acres lost or destroyed by each cause being separately stated and the location of the acreage lost or destroyed by each cause being identified); (E) a description of all improvements made on the Timberland (including, but not limited to, all buildings and capitalized forest roads and all pre-commercial thinning) and the acres affected by each such improvement (with the location of such improvements and acres being identified according to said descriptions); (F) a description of silviculture operations, site preparation and replanting (with the number of acres affected, the location and the type of product replanted); and (G) such other information as the Administrative Agent may reasonably specify from time to time with respect to the management of and activities on the Timberland. No later than 45 days after the end of each calendar year (or such later date as the Administrative Agent may approve in its sole discretion), Wells Timberland shall provide a summary report of cuttings and payments for the preceding calendar year, including all information on each quarterly report that was delivered for the preceding calendar year and a comparison of the respective period’s cutting compared with the Harvest Plan for such period and the requirements of the MW Supply Agreements. Wells Timberland shall also furnish with each such periodic report, unless previously provided, maps satisfactory to the Administrative Agent, showing the location of the Divisions on which the cutting, loss or destruction, site preparing and replanting and improvements reported on by Wells Timberland occurred or were made. Each such quarterly report shall be certified true and correct by a Financial Officer of Wells Timberland and the Timber Manager, including a certification that Wells Timberland and the Timberland are in compliance with the Harvest Plan and the requirements of this Section.

(v)The Administrative Agent will have the right to inspect the Timberland, scaling practices, scaling slips and summaries, at any reasonable time and upon prior notice. Additionally, the Administrative Agent may, at its option, appoint a third party consulting forester of its choice to perform loan monitoring services, including conducting property inspections, monitoring of Timber harvesting, audit of Wells Timberland’s current cruise and inventory data, Timber volumes, Timber management plans and other services deemed reasonably necessary by the Administrative Agent so as to monitor compliance by the Loan Parties with the requirements of this Agreement or any of the other Loan Documents. Each Borrower agrees to pay all reasonable fees and expenses charged by such consulting foresters for such inspections and services.

(vi)Wells Timberland shall comply in all material respects with all Laws concerning the harvesting of Timber and operation of a tree farm with respect to the Timberland.

(vii)The remainder of any Timber cut for pine sawtimber or hardwood sawtimber not utilized through generally accepted sawmilling processes and normally referred to as topwood may be utilized as pulpwood at Wells Timberland’s discretion.

(viii)The cutting restrictions contained in this Section shall not apply to Timber cut for the purpose of salvaging Timber from loss due to oil, gas or mineral operations, insect infestation, fire or, with the prior approval of the Administrative Agent, for the purpose of carrying out sound forestry practices.

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(ix)The words “year(s)” and “cutting period(s)” as used in this Agreement shall mean the period from January 1 to December 31.

(x)If during any cutting period there is damage to the Timber on the Timberland by trespass, unauthorized cutting, mining, drilling, right-of-way clearing, condemnation, fire, disease, insects, storm or other hazards, Wells Timberland shall promptly cut Timber or take such other reasonable and prompt measures as may be necessary to protect Timber from further damage in accordance with good forestry practices.

(xi)Wells Timberland will promptly notify the Administrative Agent of any damage to the Timberland affecting more than 500 acres.

(xii)All reasonable measures shall be taken by Wells Timberland to insure proper regeneration of the Timber on the Timberland in order to maximize the development of the Timber, both as to growth and quality. Any clear-cut area and each area without adequate seed source shall be site-prepared and replanted within 12 months of such cutting (or such later date as the Administrative Agent may approve in its sole discretion) with desirable species using the most superior-type seedlings available and in any event, using then-current sound forestry practices. In other areas when regeneration is not accomplished by natural means within a reasonable time, Wells Timberland shall institute and maintain a planting program designed adequately to reforest such land. Notwithstanding the foregoing, Wells Timberland shall not be required to take any actions pursuant to this subclause which is not required by the terms of any Timber Lease in which it is the lessee.

(xiii)Prior to the commencement by Wells Timberland of any harvesting, mining or similar activities near any boundary line of the Timberland, Wells Timberland shall have said boundaries marked in order to prevent unauthorized harvesting from occurring. In the event adjoining landowners are conducting timber harvesting, mining or similar activities on their property near any boundary line of the Timberland, Wells Timberland will cause the boundary lines to be clearly marked to prevent unauthorized cutting. Wells Timberland shall cause the Timberland to be inspected periodically for the purpose of preventing the unauthorized cutting of Timber.

(xiv)Wells Timberland shall maintain at all times in accordance with sound silvicultural practices all reasonable and effective measures to prevent the development of and to control the spread of disease and insect infestation on the Timberland, including, the shifting of logging operations, to the extent economically feasible, to remove diseased or insect-infested Timber and other Timber threatened with disease or insect infestation and all such other accepted forest sanitation and control measures as are necessary to prevent the development and spread of disease and insect infestation.

(l)Salvage. To the extent economically feasible, all Timber that is dead, diseased, fallen or otherwise damaged by casualty or as a result of insect infestation, shall be salvaged and harvested in accordance with sound silvicultural practices.

(m)Fire Protection. All measures shall be taken which are reasonably necessary to protect the Timberland from loss by fire, which measures shall be at least equal to fire-control

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practices generally followed on timber producing property in the same general area, including the adoption of suitable prevention and control measures, the maintenance of adequate firefighting equipment, the maintenance of fire lanes where needed, the use of fire patrols, proper disposal of slash and full cooperation with Governmental Authorities on matters of fire prevention and control. Wells Timberland shall maintain membership in forest protective associations where any of the Timberland fall within a forest protective district under the jurisdiction of any such association, and shall pay as due any forest patrol assessments of any state forester or of such forest protective association.

(n)Maintenance of Roads. The existing system of roads and roadways shall be maintained in such manner as to permit access of mobile firefighting equipment to substantially all parts of the Timberland.

(o)Appraisals. On or before December 31, 2012 and thereafter within 60 days of a request by the Administrative Agent in the exercise of its reasonable commercial judgment (which request, unless an Event of Default has occurred and is continuing, shall not be made more than once in any period of 12 consecutive months), Wells Timberland, at its sole cost and expense, shall deliver to the Lenders an appraisal of the entire Timberland, which appraisal shall assign independent values to each Division and any Timber Lease. Each such appraisal shall be done by American Forest Management or other nationally recognized forestry appraisal firm that is acceptable to the Administrative Agent, and the appraisal, as well as the scope thereof and the methods and assumptions included therein (including any “extraordinary assumptions” or “hypothetical conditions” (each as defined by the Uniform Standards of Professional Appraisal Practice), must be acceptable in form and substance to the Administrative Agent.

(p)Inventory Updates. In connection with any appraisals conducted pursuant to clause (h), Wells Timberland shall, if requested by the Administrative Agent, deliver to the Lenders an updated Timberland inventory report that is reasonably acceptable to the Administrative Agent. Such updated Timberland inventory report shall, among other things, reflect volumes removed, destroyed or miscalculated pursuant to the records and/or knowledge of Wells Timberland and/or the Timber Manager, plus the then applicable added growth of the Timber volumes since the latest of either (i) the date of the last inventory report or (ii) Wells Timberland’s last proprietary internal inventory system volume estimate.

(q)Cruise or Appraisal with Event of Default. If any Default or Event of Default has occurred and is continuing, the Administrative Agent may require that Wells Timberland furnish to the Administrative Agent, at the expense of the Borrowers, a Timber cruise and/or appraisal of all or any portion of the Timberland. Any such cruise or appraisal shall be in form and substance, prepared by a third party professional, and with methods and assumptions, acceptable to the Administrative Agent.

(r)Notice of Appraisal or Cruise. Wells Timberland shall promptly provide to the Lenders a copy of any appraisal or cruise related to the Timberland.

(s)MW Supply Contracts. Wells Timberland shall not consent to any amendment, supplement, waiver or other modification, termination or assignment of the MW Supply

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Agreements without the prior consent of the Administrative Agent, and shall furnish the Administrative Agent all information available to Wells Timberland, as well as any additional information reasonably requested by the Administrative Agent, with respect thereto.

(t)Timber Sale and Release. If no Event of Default has occurred and is continuing or would result from the taking of any actions pursuant to this clause, permission is hereby granted by the Lenders to Wells Timberland to cut, or allow others to cut, Timber from the Timberland in accordance with the current Harvest Plan previously approved by the Administrative Agent and on the terms and conditions set forth in this Agreement, including, without limitation, clause (d), and so as not to result in a violation of Section 7.2.4. If no Event of Default has occurred and is continuing, the Lien of the Mortgages (and the related security interests under the U.C.C.) against any cut or severed Timber (but not the proceeds thereof, it being the intent hereof that the Administrative Agent’s Lien, on behalf of the Lenders, and security interest continue in the proceeds) shall be released, without any action by any of Wells Timberland, the Administrative Agent or the Lenders, upon the sooner of: (i) receipt by Wells Timberland of full payment therefor and deposit of such amounts in the Revenue Account, or (ii) its removal from the Timberland and after weight or volume is established and payment therefore assured in a manner reasonably acceptable to the Administrative Agent. The Borrowers shall pay to the Administrative Agent all reasonable fees, costs and expenses incurred by the Administrative Agent in connection with any such partial releases including, without limitation, legal, appraisal and accounting fees incurred by the Administrative Agent and all other expense, and recording and title insurance and title expenses.

(u)Partial Release Provisions. If no Default or Event of Default has occurred and is continuing or would result from the taking of any actions pursuant to this clause, the Administrative Agent agrees to provide Wells Timberland and Wells HBU with partial releases of the Mortgages with respect to the Timberland sold or otherwise disposed of (the portions of the Timberland subject to such partial release being, the “Release Parcel”), subject to the following terms and conditions:

(i)All proceeds of the Release Parcel have been applied as provided in clause (b) of Section 3.1.2 and clause (a) of Section 9.3.

(ii)The proposed release of the Release Parcel does not adversely affect the Administrative Agent’s security interest on any of the other Collateral.

(iii)The proposed release of the Release Parcel does not, in the Administrative Agent’s judgment, impair in any material respect (in the determination of the Administrative Agent) the access to, or value, income producing ability, marketability or operational efficiency of, the remaining Timberland.

(iv)At the Administrative Agent’s request, the Borrowers shall cause the applicable Title Insurance Company which issued the Administrative Agent’s title insurance policy in connection with the Mortgage relating to the Release Parcel to issue an endorsement to such title insurance policy which is in form and substance satisfactory to the Administrative Agent with respect to the Release Parcel.

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(v)All reasonable out of pocket fees, costs and expenses actually incurred by the Administrative Agent in connection with the consideration of any request for a partial release of the Release Parcel (including, without limitation, legal, appraisal and accounting fees and expenses, and all recording, title insurance premiums and title expenses) shall be borne solely by the Borrowers. In addition, in connection with each request for a partial release of a Release Parcel under this clause, the Administrative Agent shall be entitled to receive payment of a reasonable administration fee for each Release Parcel so released.

(v)Leases. With respect to all Timberland that Wells Timberland is the lessor (including the Mineral Leases), Wells Timberland shall (i) enforce such leases in a diligent, commercially reasonable and professional manner and (ii) furnish to the Administrative Agent annually (together with the year-end summary report delivered pursuant to clause (d)(iv)), and upon request of the Administrative Agent any other time, a rent roll certified by a Financial Officer of Wells Timberland, which lists the expiration date, the rental and when paid through, whether any default exists thereto and any other information reasonably requested by the Administrative Agent. Wells Timberland shall not enter into any lease, as lessor, affecting any portion of the Timberlands without the prior consent of the Administrative Agent, provided that the Administrative Agent and Wells Timberland shall work together to establish forms and parameters for routine leases so as to avoid the necessity of review of individual routine leases by the Administrative Agent (it being agreed that lease transactions documented utilizing such forms that are approved by the Administrative Agent shall not require the consent of the Administrative Agent to enter into the same).

(w)Estoppel Certificates as to Loans. Each Borrower, within five Business Daysafter request by the Administrative Agent, shall furnish the Lenders from time to time with a statement, duly acknowledged and certified, setting forth (i) the amount of the original principal amount of the Loans, (ii) the unpaid principal amount of the Loans, (iii) the rate of interest on the Loans, (iv) the date through which all installments of interest, commitment fees and/or principal have been paid, (v) any offsets or defenses to the payment of the Obligations, if any and (vi) such other information as shall be reasonably requested by the Administrative Agent.

(x)Estoppel Certificates as to Third-Parties. Wells Timberland, upon request by the Administrative Agent, will use commercially reasonable efforts to obtain and furnish (within 30 days after request therefor and, if no Default or Event of Default has occurred and is continuing, not more frequently than once in any period of 12 consecutive months with respect to each relevant Person) statements from purchasers of Timber or lessees under coal leases and oil and gas leases, as to the amount of timber purchased or coal, oil or gas extracted, as the case may be, and the amounts paid therefrom to Wells Timberland during the preceding 12 months.

(y)Timber Leases, Generally. In addition to making payment of all rent, Tax and other payments and charges required to be made by Wells Timberland as tenant under and pursuant to the provisions of each Timber Lease, Wells Timberland covenants that it will:

(i)diligently and timely perform and observe all of the terms, conditions and covenants of each such Timber Lease that are required to be performed and observed by Wells Timberland, to the end that all things shall be done which are necessary to keep unimpaired Wells

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Timberland rights under each such Timber Lease, and Wells Timberland agrees that no release or forbearance of any of its obligations under any Timber Lease shall release Wells Timberland from any of its obligations under this Agreement or any other Loan Agreement with regard to the same;

(ii)promptly notify the Administrative Agent of any default by any Person in the performance and observance of any of the terms, conditions or covenants to be performed or observed under each such Timber Lease;

(iii)promptly notify the Administrative Agent of the giving of any notice under each such Timber Lease of any default of Wells Timberland in the observance of any terms, covenants or conditions of each such Timber Lease, and promptly deliver to the Administrative Agent a true copy of each such notice; and

(iv)except as permitted pursuant to clause (x) of this Section 7.1.11, not surrender the leasehold estate that is the subject of each such Timber Lease nor cause or permit the termination or cancellation of any such Timber Lease except at the stated end of the lease term or enter into any agreement (whether oral or written) modifying, supplementing or amending any such Timber Lease, in each case without the prior consent of the Administrative Agent.

(z)Timber Leases, Corrective Action. The Administrative Agent shall have the right (but shall not be obligated) to take any action that the Administrative Agent deems necessary or desirable to prevent or to cure any default by Wells Timberland in the performance of or compliance with any of Wells Timberland’s obligations under any Timber Lease. Upon receipt by the Administrative Agent of any notice of a default by Wells Timberland under a Timber Lease, the Administrative Agent may take any action it deems reasonably appropriate in order to cure such default even though the existence of such default or the nature thereof may be questioned or denied by Wells Timberland. Wells Timberland hereby expressly grants to the Administrative Agent, and agrees that the Administrative Agent shall have, the absolute and immediate right to enter in and upon the Timberland or any part thereof to such extent and as often as the Administrative Agent, in its sole discretion, deems necessary or desirable in order to prevent or to cure any such default by Wells Timberland under any Timber Lease. The Administrative Agent may pay and expend such sums of money as the Administrative Agent deems reasonably necessary for any such purpose, and each Borrower hereby agrees to pay to the Administrative Agent, promptly upon demand, all such sums so paid and expended by the Administrative Agent.

(aa)Timber Leases, Further Security. As further security for the repayment of the Indebtedness secured hereby and for the performance of the covenants contained herein and in each Timber Lease, Wells Timberland hereby assigns to the Administrative Agent, for the benefit of the Lender Parties, all of its rights, privileges and prerogatives as lessee under each Timber Lease to terminate, cancel, modify, change, supplement, alter or amend each such Timber Lease, and any such termination, cancellation, modification, change, supplement, alteration or amendment of any Timber Lease without the prior consent by the Administrative Agent shall be void and of no force and effect; provided, however, that so long as no Event of Default has occurred and is continuing, the Administrative Agent shall have no right to terminate, cancel, modify, change, supplement, alter or amend any such Timber Lease. Wells Timberland represents and warrants that it has delivered

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to the Administrative Agent a true and accurate copy of each Timber Lease, together with all amendments thereto if any.

(bb)Timber Lease, No Merger. Unless the Administrative Agent shall otherwise expressly consent, the fee title to the land leased under any Timber Lease and the leasehold estate therein held by Wells Timberland shall not merge but shall always remain separate and distinct, notwithstanding the union of said estates either in the lessor or in the lessee under the Timber Lease, or in a third party by purchase or otherwise.

(cc)Timber Lease, Certificates of Estoppel. Wells Timberland shall, from time to time, use its best efforts to obtain from the lessor under any Timber Leases such certificates of estoppel with respect to compliance by Wells Timberland with the terms of the Timber Lease as may be requested by the Administrative Agent.

(dd)Updated Value of the Timberlands.    Upon the sale of any Real Property for an amount greater than $1,000,000 in connection with a single sale or $5,000,000 in the aggregate since the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11, Wells Timberland shall deliver to the Lenders a report updating the Value of the Timberlands. The Value of the Timberlands set forth in such reports shall be calculated by reducing the Value of the Timberlands reported in the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11 by the Cost Basis of the Real Property sold. Upon the acquisition of any Real Property for an amount greater than $1,000,000 in connection with a single purchase or $5,000,000 in the aggregate since the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11, Wells Timberland may deliver to the Lenders a report updating the Value of the Timberlands; provided that, (1) for any acquisition of any Real Property by Wells Timberland for an amount greater than $5,000,000 in connection with a single purchase, the Administrative Agent and each Lender shall have received and approved an appraisal from American Forest Management or another nationally recognized forestry appraisal firm that is reasonably satisfactory to the Administrative Agent, (2) such acquisition is permitted pursuant to the terms of this Agreement, (3) such Real Property is subject to a first priority security interest in favor of the Administrative Agent, and (4) the Loan Parties have complied with the terms of and all requests of the Administrative Agent made pursuant to the Loan Documents, including, without limitation, Section 7.1.9(b) of this Agreement.

(ee)Termination of Timber Leases. If no Event of Default has occurred and is continuing or would result from the taking of any actions pursuant to this clause, permission is hereby granted by the Lenders to Wells Timberland to terminate PLM Leases or portions of the LTC Lease or other Timber Lease on the terms and conditions set forth in this Agreement, including, without limitation, clause (d); provided, that (i) any such termination shall not result in a violation of Section 7.2.4, (ii) Wells Timberland shall notify the Administrative Agent in writing of each such termination, which written notification will include (A) the allocated Cost Basis of each terminated PLM Lease or each portion of the LTC Lease or other Timber Lease and (B) the net amount of proceeds received in connection with such termination, (iii) all related Timber Lease Termination Proceeds shall be applied as provided in clause (b) of Section 3.1.2 and clause (a) of Section 9.3, and (iv) to the extent Timber Lease Termination Proceeds exceed $1,000,000 in connection with the termination of a single Timber Lease or a single portion of the LTC Lease, or $5,000,000 in the

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aggregate since the most recent appraisal delivered pursuant to clause (h) of this Section 7.1.11, Wells Timberland shall deliver to the Lenders a report updating the Value of the Timberlands.

SECTION 7.1.12Interest Reserve Account.

(d)On the Initial Funding Date the Borrowers shall continue to deposit in one or more accounts at a Domestic Account Bank (collectively, the “Interest Reserve Account”) in the name of Wells Timberland and for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties, the sum representing approximately six-months interest on the Loans, calculated on a quarterly basis using a forward looking estimation of interest on the Loans, including the effect of any Rate Protection Agreements, as determined by the Borrowers and approved by the Administrative Agent (said funds, together with any interest thereon, the “Interest Reserve”). An Event of Default shall occur automatically under Section 8.1.3 of this Agreement if at any time, without the prior written consent of the Administrative Agent in its sole discretion, Wells Timberland, any other Loan Party or any Person acting as agent for or otherwise on behalf of Wells Timberland or any other Loan Party withdraws or attempts to withdraw any funds from, directs or attempts to direct the Domestic Account Bank to make a payment using funds deposited in, or otherwise uses or offers as collateral (or attempts to do so) any funds or rights associated with, the Interest Reserve Account. Wells Timberland and each other Loan Party acknowledge that the Domestic Account Bank may comply with instructions originated by the Administrative Agent without further consent by any of Wells Timberland or the other Loan Parties. Notwithstanding the foregoing, funds, investment property, security entitlements and other financial assets of Wells Timberland that are deposited in or credited to the Interest Reserve Account may at the direction of Wells Timberland, if no Default or Event of Default has occurred and is continuing, be invested in one or more Cash Equivalent Investments; provided, that under no circumstances shall the Lender Parties be liable for any losses that may be incurred by the Borrowers in the making of any such Cash Equivalent Investments. Except as provided below for periods in which the Loan to Value Ratio is equal to or less than 35%, the Borrowers shall be required to maintain an Interest Reserve representing approximately six-months interest on the Loans (as determined by the Borrowers and approved by the Administrative Agent), which shall be funded from the Receipt Waterfall, if necessary. During periods in which the Loan to Value Ratio is equal to or less than 35%, the Borrowers shall be required to maintain an Interest Reserve representing approximately three-months interest on the Loans (as determined by the Borrowers and approved by the Administrative Agent), which shall be funded from the Receipt Waterfall, if necessary. If and when the Interest Reserve Account is reduced to a level of approximately three-months interest on the Loans, as provided in the immediately preceding sentence, any excess funds in the Interest Reserve Account at such time shall be deposited directly into the Receipt Account for application in accordance with the Receipt Waterfall. An Event of Default shall not result hereunder if the applicable Interest Reserve is not maintained as a result of insufficient funds being available from the Receipt Waterfall (it being understood that, notwithstanding the foregoing, compliance with the second sentence of this clause (a) of Section 7.1.12 and compliance with the Fixed Charge Coverage Ratio are separate and independent requirements that the Borrowers are required to comply with as herein provided). If at any time the Borrowers fail to pay accrued interest on the Loans when due, the Administrative Agent may in its sole discretion, without notice to or any consent by the Borrowers, apply amounts on deposit in the Interest Reserve Account to pay such interest, and the

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Borrowers, subject to the terms of the Receipt Waterfall, shall be required to deposit into the Interest Reserve Account an amount so that, in the determination of the Borrowers (subject to the approval of the Administrative Agent), approximately six-months of accrued interest (or three-months of accrued interest if the then applicable Loan to Value Ratio is equal to or less than 35%) on the Loans is on deposit therein. All interest which accrues on the Interest Reserve shall be taxable to the Borrowers, and shall be retained in the Interest Reserve Account until the Interest Reserve is fully funded, at which time amounts in the Interest Reserve exceeding six-months of interest or three-months of interest (as applicable) on the Loans (as determined by the Borrowers and approved by the Administrative Agent) shall be transferred to the Receipt Account and applied as provided in Section 9.3. The Interest Reserve will be calculated based on the assumptions that Borrowings will be made on the Revolving Loans during such six or three month period equal to the average daily balance for the immediately preceding six-month period.

(e)To secure the full and punctual payment and performance of all the Obligations, Wells Timberland and each of the other Loan Parties hereby grant to the Administrative Agent, for the benefit of the Lender Parties, a first priority continuing security interest in and to all of Wells Timberland’s right, title and interest in, to and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of the same, collectively, the “Interest Reserve Collateral”):

(i)the Interest Reserve Account and all cash, checks, drafts, certificates, securities, instruments, investment property, security entitlements, and other financial assets credited, deposited or held in the Interest Reserve Account, including, without limitation, all deposits or wire transfers made to the Interest Reserve Account, and any and all Interest Reserve Collateral;

(ii)any and all amounts on deposit in or credited to the Interest Reserve Account that are invested in Cash Equivalent Investments;

(iii)all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and

(iv)to the extent not covered by clauses (i), (ii) or (iii), all “proceeds” (as defined under the U.C.C.) of any or all of the foregoing.

The Administrative Agent and the Domestic Account Bank, as agent for the Administrative Agent on behalf of the Lender Parties, shall have with respect to the foregoing collateral, in addition to the rights and remedies herein set forth, all of the rights and remedies available to a secured party under the U.C.C., as if such rights and remedies were fully set forth herein.

(f)In addition to the rights and remedies provided in Article VIII and elsewhere herein, if any Event of Default has occurred and is continuing, the Administrative Agent shall have all rights and remedies pertaining to the Interest Reserve Collateral as are provided for in any of the Loan Documents, the U.C.C. and other Laws. Without limiting the foregoing, upon and at all times after the occurrence and during the continuance of any Event of Default, the Administrative Agent in its sole and absolute discretion, may use the Interest Reserve Collateral (or any portion

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thereof) for any purpose, including but not limited to any combination of the following: (i) payment of any of the Obligations, in the order set forth in Section 8.7; provided, that such application of funds shall not cure or be deemed to cure any Default or Event of Default but shall reduce the Obligations to the extent of any such repayment; and (ii) reimbursement of the Administrative Agent or any Lender for any losses or expenses (including, without limitation, reasonable legal fees) suffered or incurred as a result of such Event of Default.

(g)Wells Timberland and each other Loan Party hereby irrevocably constitute and appoint the Administrative Agent (and its agents and designees) as such Person’s true and lawful attorney-in-fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver at any time any instruments and to exercise and enforce every right, power, remedy, option and privilege of Wells Timberland with respect to the Interest Reserve Collateral, and do in the name, place and stead of Wells Timberland, all such acts, things and deeds for and on behalf of and in the name of Wells Timberland, which Wells Timberland is required to do hereunder or under the other Loan Documents, or which the Domestic Account Bank or the Administrative Agent (or its agents or designees) may deem necessary or desirable, to more fully vest the in the Administrative Agent (or its agents or designees) the rights and remedies provided for in this Section. The foregoing powers of attorney are irrevocable and coupled with an interest. Such authority in favor of the Administrative Agent (and its agents and designees) pursuant to this Section shall include the right to (i) take control in any manner of any item of payment in respect of the Interest Reserve Collateral or otherwise received in or for deposit in the Interest Reserve Account, (ii) endorse Wells Timberland’s name upon any item of payment constituting Interest Reserve Collateral or otherwise received by the Administrative Agent (or its agents or designees) or any Lender and deposit the same in Interest Reserve Account, and (iii) sign Wells Timberland’s name on any verification of account receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof. Wells Timberland hereby releases the Administrative Agent (or its agents or designees) and the Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of any such Person’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

SECTION 7.1.13Wells TRS Subsidiary Account.

(a)Each of the Borrowers, Wells TRS Subsidiary and each other Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement, Wells TRS Subsidiary has established and will maintain one or more accounts at a Domestic Account Bank for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties, to serve as the “Wells TRS Subsidiary Account” (said account or accounts, and any account or accounts replacing the same in accordance with this Agreement, collectively, the “Wells TRS Subsidiary Account”), and into which Wells TRS shall deposit all amounts that are payable to it from any source whatsoever. Wells TRS Subsidiary and the other Loan Parties acknowledge that the Domestic Account Bank may comply with instructions originated by the Administrative Agent without further consent by Wells TRS Subsidiary or any of the other Loan Parties. All funds, investment properties, security entitlements and other financial assets of

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Wells TRS Subsidiary which are deposited in or credited to the Wells TRS Subsidiary Account may at the direction of Wells TRS Subsidiary, if no Default or Event of Default has occurred and is continuing, be invested in one or more Cash Equivalent Investments; provided, that under no circumstances shall the Lender Parties be liable for any losses that may be incurred by Wells TRS Subsidiary in the making of any such Cash Equivalent Investments.

(b)To secure the full and punctual payment and performance of all the Obligations, Wells TRS Subsidiary hereby grants to the Administrative Agent, for the benefit of the Lender Parties, a first priority continuing security interest in and to all of Wells TRS Subsidiary’s right, title and interest in, to and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of the same, collectively, the “Wells TRS Subsidiary Account Collateral”):

(i)The Wells TRS Subsidiary Account and all cash, checks, drafts, certificates, securities, instruments, investment property, security entitlements, and other financial assets credited, deposited or held in the Wells TRS Subsidiary Account, including, without limitation, all deposits or wire transfers made to the Wells TRS Subsidiary Account;

(ii)any and all amounts on deposit in or credited to the Wells TRS Subsidiary Account that are invested in Cash Equivalent Investments;

(iii)all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and

(iv)to the extent not covered by clauses (i), (ii) or (iii), all “proceeds” (as defined under the U.C.C.) of any or all of the foregoing.

The Administrative Agent and the Domestic Account Bank, as agent for the Administrative Agent on behalf of the Lender Parties, shall have with respect to the foregoing collateral, in addition to the rights and remedies herein set forth, all of the rights and remedies available to a secured party under the U.C.C., as if such rights and remedies were fully set forth herein.

(c)In addition to the rights and remedies provided in Article VIII and elsewhere herein, if any Event of Default has occurred and is continuing, the Administrative Agent shall have all rights and remedies pertaining to the Wells TRS Subsidiary Account Collateral as are provided for in any of the Loan Documents, the U.C.C. and other Laws. Without limiting the foregoing, upon and at all times after the occurrence and during the continuance of any Event of Default, the Administrative Agent in its sole and absolute discretion, may use the Wells TRS Subsidiary Account Collateral (or any portion thereof) for any purpose, including but not limited to any combination of the following: (i) payment of any of the Obligations, in the order set forth in Section 8.7; provided, that such application of funds shall not cure or be deemed to cure any Default or Event of Default but shall reduce the Obligations to the extent of any such repayment; and (ii) reimbursement of the Administrative Agent or any Lender for any losses or expenses (including, without limitation, reasonable legal fees) suffered or incurred as a result of such Event of Default.

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(d)Wells TRS Subsidiary and each other Loan Party hereby irrevocably constitute and appoint the Administrative Agent (and its agents and designees) as such Person’s true and lawful attorney-in-fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver at any time any instruments and to exercise and enforce every right, power, remedy, option and privilege of Wells TRS Subsidiary with respect to the Wells TRS Subsidiary Account Collateral, and do in the name, place and stead of Wells TRS Subsidiary, all such acts, things and deeds for and on behalf of and in the name of Wells TRS Subsidiary, which Wells TRS Subsidiary is required to do hereunder or under the other Loan Documents, or which the Domestic Account Bank or the Administrative Agent (or its agents or designees) may deem necessary or desirable, to more fully vest the in the Administrative Agent (or its agents or designees) the rights and remedies provided for in this Section. The foregoing powers of attorney are irrevocable and coupled with an interest. Such authority in favor of the Administrative Agent (and its agents and designees) pursuant to this Section shall include the right to (i) take control in any manner of any item of payment in respect of the Wells TRS Subsidiary Account Collateral or otherwise received in or for deposit in the Wells TRS Subsidiary Account, (ii) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of account receivables or other proceeds of Wells TRS Subsidiary Account Collateral are sent or received, (iii) endorse Wells TRS Subsidiary’s name upon any items of payment in respect of account receivables or constituting Wells TRS Subsidiary Account Collateral or otherwise received by the Administrative Agent (or its agents or designees) or any Lender and deposit the same in Wells TRS Subsidiary Account, (iv) endorse Wells TRS Subsidiary’s name upon any chattel paper, document, instrument, invoice or similar document or agreement relating to any account receivable or any goods pertaining thereto or any other Wells TRS Subsidiary Account Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, and (v) sign Wells TRS Subsidiary’s name on any verification of account receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof. Wells TRS Subsidiary hereby releases the Administrative Agent (or its agents or designees) and the Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of any such Person’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

SECTION 7.1.14Revenue Account.

(s)Each of the Borrowers and each other Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement, Wells Timberland has established and will maintain one or more accounts at a Domestic Account Bank for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties, to serve as the “Revenue Account” (said account or accounts, and any account or accounts replacing the same in accordance with this Agreement, collectively, the “Revenue Account”). Wells Timberland shall cause and direct all amounts that are payable to it, including under the Master Stumpage Agreement from the harvesting of Timber, lease revenues, Net Collateral Disposition Proceeds in excess of Cost Basis Collateral Disposition Proceeds, the Cost Basis Collateral Disposition Proceeds (to the extent such Cost Basis Collateral Disposition Proceeds are not required to be applied to prepay the outstanding principal amount of the Loans pursuant to clause (b) of

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Section 3.1.2), payments under the LTC Lease Support Agreement (other than LTC Lease Disposition Proceeds), Timber Lease Termination Proceeds (to the extent such Timber Lease Termination Proceeds are not required to be applied to prepay the outstanding principal amount of the Loans pursuant to clause (b) of Section 3.1.2) and all other revenues from the ownership and operation of the Collateral to be deposited directly in the form received into the Revenue Account. Wells HBU shall cause and direct all amounts that are payable to it, including lease revenues, Net Collateral Disposition Proceeds in excess of Cost Basis Collateral Disposition Proceeds, the Cost Basis Collateral Disposition Proceeds (to the extent such Cost Basis Collateral Disposition Proceeds are not required to be applied to prepay the outstanding principal amount of the Loans pursuant to clause (b) of Section 3.1.2) and all other revenues from the ownership and operation of the Collateral to be deposited directly in the form received into the Revenue Account. Wells TRS Subsidiary shall pay directly into the Revenue Account, as and when due, all amounts owing by it to Wells Timberland pursuant to the Master Stumpage Agreement or otherwise. Wells Timberland, Wells HBU and each other Loan Party represents, warrants and covenants that except for the Revenue Account, the Interest Reserve Account, the Wells TRS Subsidiary Account, the Receipt Account, the Expense Account and the Working Capital Account, there are no other accounts into which revenues from the ownership and operation of the Collateral are deposited or held. So long as any Obligations shall be outstanding, none of Wells Timberland, Wells HBU or any other Loan Party shall open any accounts for the deposit of revenues from the ownership and operation of the Collateral other than the accounts listed in the immediately preceding sentence. Wells Timberland and the other Loan Parties acknowledge that the Domestic Account Bank may comply with instructions originated by the Administrative Agent without further consent by any of Wells Timberland or the other Loan Parties. All funds, investment property, security entitlements and other financial assets of Wells Timberland and Wells HBU which are deposited in or credited to the Revenue Account may at the direction of Wells Timberland, if no Default or Event of Default has occurred and is continuing, be invested in one or more Cash Equivalent Investments; provided, that under no circumstances shall the Lender Parties be liable for any losses that may be incurred by Wells Timberland or Wells HBU in the making of any such Cash Equivalent Investments.

(t)To secure the full and punctual payment and performance of all the Obligations, Wells Timberland and each of the other Loan Parties hereby grant to the Administrative Agent, for the benefit of the Lender Parties, a first priority continuing security interest in and to all of Wells Timberland’s right, title and interest in, to and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of the same, collectively, the “Revenue Account Collateral”):

(i)The Revenue Account and all cash, checks, drafts, certificates, securities, instruments, investment property, security entitlements, and other financial assets credited, deposited or held in the Revenue Account, including, without limitation, all deposits or wire transfers made to the Revenue Account;

(ii)any and all amounts on deposit in or credited to the Revenue Account that are invested in Cash Equivalent Investments;

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(iii)all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and

(iv)to the extent not covered by clauses (i), (ii) or (iii), all “proceeds” (as defined under the U.C.C.) of any or all of the foregoing.

The Administrative Agent and the Domestic Account Bank, as agent for the Administrative Agent on behalf of the Lender Parties, shall have with respect to the foregoing collateral, in addition to the rights and remedies herein set forth, all of the rights and remedies available to a secured party under the U.C.C., as if such rights and remedies were fully set forth herein.

(u)In addition to the rights and remedies provided in Article VIII and elsewhere herein, if any Event of Default has occurred and is continuing, the Administrative Agent shall have all rights and remedies pertaining to the Revenue Account Collateral as are provided for in any of the Loan Documents, the U.C.C. and other Laws. Without limiting the foregoing, upon and at all times after the occurrence and during the continuance of any Event of Default, the Administrative Agent in its sole and absolute discretion, may use the Revenue Account Collateral (or any portion thereof) for any purpose, including but not limited to any combination of the following: (i) payment of any of the Obligations, in the order set forth in Section 8.7; provided, that such application of funds shall not cure or be deemed to cure any Default or Event of Default but shall reduce the Obligations to the extent of any such repayment; and (ii) reimbursement of the Administrative Agent or any Lender for any losses or expenses (including, without limitation, reasonable legal fees) suffered or incurred as a result of such Event of Default.

(v)Wells Timberland and each other Loan Party hereby irrevocably constitute and appoint the Administrative Agent (and its agents and designees) as such Person’s true and lawful attorney-in-fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver at any time any instruments and to exercise and enforce every right, power, remedy, option and privilege of Wells Timberland or any other Loan Party with respect to the Revenue Account Collateral, and do in the name, place and stead of Wells Timberland or any other Loan Party, all such acts, things and deeds for and on behalf of and in the name of Wells Timberland or any other Loan Party, which Wells Timberland or any other Loan Party is required to do hereunder or under the other Loan Documents, or which the Domestic Account Bank or the Administrative Agent (or its agents or designees) may deem necessary or desirable, to more fully vest the in the Administrative Agent (or its agents or designees) the rights and remedies provided for in this Section. The foregoing powers of attorney are irrevocable and coupled with an interest. Such authority in favor of the Administrative Agent (and its agents and designees) pursuant to this Section shall include the right to (i) take control in any manner of any item of payment in respect of the Revenue Account Collateral or otherwise received in or for deposit in the Revenue Account, (ii) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of account receivables or other proceeds of Revenue Account Collateral are sent or received, (iii) endorse Wells Timberland’s name upon any items of payment in respect of account receivables or constituting Revenue Account Collateral or otherwise received by the Administrative Agent (or its agents or designees) or any Lender and deposit the same in Revenue Account, (iv) endorse Wells

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Timberland’s name upon any chattel paper, document, instrument, invoice or similar document or agreement relating to any account receivable or any goods pertaining thereto or any other Revenue Account Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, and (v) sign Wells Timberland’s name on any verification of account receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof. Wells Timberland hereby releases the Administrative Agent (or its agents or designees) and the Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of any such Person’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

SECTION 7.1.15Reserved.

SECTION 7.1.16Working Capital Account.

(e)Each of the Borrowers and each other Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement, Wells Timberland has established and will maintain one or more accounts with a Domestic Account Bank for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties, to serve as the “Working Capital Account” (said account or accounts, and any account or accounts replacing the same in accordance with this Agreement, collectively, the “Working Capital Account”). Wells Timberland agrees to apply all amounts in the Working Capital Account exclusively to the payment (directly or through a transfer to the Expense Account) of the Permitted Affiliate Fees and other ordinary course operating expenses set forth in the most recently approved operating expense budget and not otherwise expressly prohibited by the terms of this Agreement. Wells Timberland and the other Loan Parties acknowledge that the Domestic Account Bank may comply with instructions originated by the Administrative Agent without further consent by Wells Timberland or any of the other Loan Parties. All funds, investment property, security entitlements and other financial assets which are credited to the Working Capital Account may at the direction of Wells Timberland, if no Default or Event of Default has occurred and is continuing, be invested in one or more Cash Equivalent Investments; provided, that under no circumstances shall the Lender Parties be liable for any losses that may be incurred by Wells Timberland in the making of any such Cash Equivalent Investments.

(f)To secure the full and punctual payment and performance of all the Obligations, Wells Timberland and each of the other Loan Parties hereby grant to the Administrative Agent, for the benefit of the Lender Parties, a first priority continuing security interest in and to all of Wells Timberland’s right, title and interest in, to and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of the same, collectively, the “Working Capital Account Collateral”):

(xv)The Working Capital Account and all cash, checks, drafts, certificates, securities, instruments, investment property, security entitlements, and other financial assets credited, deposited or held in the Working Capital Account at any time and from time to time;

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(xvi)any and all amounts deposited in or credited to the Working Capital Account that are invested in Cash Equivalent Investments;

(xvii)all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and

(xviii)to the extent not covered by clauses (i), (ii) or (iii), all “proceeds” (as defined under the U.C.C.) of any or all of the foregoing.

The Administrative Agent and the Domestic Account Bank, as agent for the Administrative Agent on behalf of the Lender Parties, shall have with respect to the foregoing collateral, in addition to the rights and remedies herein set forth, all of the rights and remedies available to a secured party under the U.C.C., as if such rights and remedies were fully set forth herein.

(g)In addition to the rights and remedies provided in Article VIII and elsewhere herein, if any Event of Default has occurred and is continuing, the Administrative Agent shall have all rights and remedies pertaining to the Working Capital Account Collateral as are provided for in any of the Loan Documents, the U.C.C. and other Laws. Without limiting the foregoing, upon and at all times after the occurrence and during the continuance of any Event of Default, the Administrative Agent in its sole and absolute discretion, may use the Working Capital Account Collateral (or any portion thereof) for any purpose, including but not limited to any combination of the following: (i) payment of any of the Obligations, in the order set forth in Section 8.7; provided, that such application of funds shall not cure or be deemed to cure any Default or Event of Default but shall reduce the Obligations to the extent of any such repayment; and (ii) reimbursement of the Administrative Agent or any Lender for any losses or expenses (including, without limitation, reasonable legal fees) suffered or incurred as a result of such Event of Default.

(h)Wells Timberland and each other Loan Party hereby irrevocably constitute and appoint the Administrative Agent (and its agents and designees) as such Person’s true and lawful attorney-in-fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver at any time any instruments and to exercise and enforce every right, power, remedy, option and privilege of Wells Timberland with respect to the Working Capital Account Collateral, and do in the name, place and stead of Wells Timberland, all such acts, things and deeds for and on behalf of and in the name of Wells Timberland, which Wells Timberland is required to do hereunder or under the other Loan Documents, or which the Domestic Account Bank or the Administrative Agent (or its agents or designees) may deem necessary or desirable, to more fully vest the in the Administrative Agent (or its agents or designees) the rights and remedies provided for in this Section. The foregoing powers of attorney are irrevocable and coupled with an interest. Such authority in favor of the Administrative Agent (and its agents and designees) pursuant to this Section shall include the right to (i) take control in any manner of any item of payment in respect of the Working Capital Account Collateral or otherwise received in or credited to the Working Capital Account, (ii) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of account receivables or other proceeds of Working Capital Account Collateral are sent or received, (iii) endorse Wells Timberland’s name upon any items of payment in respect of account receivables or constituting Working Capital Account Collateral or

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otherwise received by the Administrative Agent (or its agents or designees) or any Lender and cause the same to be credited to the Working Capital Account, (iv) endorse Wells Timberland’s name upon any chattel paper, document, instrument, invoice or similar document or agreement relating to any account receivable or any goods pertaining thereto or any other Working Capital Account Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, and (v) sign Wells Timberland’s name on any verification of account receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof. Wells Timberland hereby releases the Administrative Agent (or its agents or designees) and the Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of any such Person’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

SECTION 7.1.17Expense Account.

(c)Each of the Borrowers and each other Loan Party acknowledges and confirms that, on or before the date hereof and pursuant to the terms of this Agreement, Wells Timberland has established and will maintain one or more accounts at a Domestic Account Bank for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties, to serve as the “Expense Account” (said account or accounts, and any account or accounts replacing the same in accordance with this Agreement, the “Expense Account”). By 11:00 a.m. on each Receipt Waterfall Date, funds on deposit in the Revenue Account shall be used to fund the Expense Account to an amount sufficient to cover all ordinary course operating expenses for the immediately following month as set forth in the most recently approved operating budget (or to the extent of permitted prepayments from the Working Capital Account or the Receipt Account, for such purposes as permitted for such payments under Sections 7.1.16 or 9.3, respectively). Wells Timberland agrees to apply all amounts in the Expense Account exclusively to the payment of such ordinary course operating expenses. Wells Timberland and the other Loan Parties acknowledge that the Domestic Account Bank may comply with instructions originated by the Administrative Agent without further consent by Wells Timberland or any of the other Loan Parties. All funds, investment properties, security entitlements and other financial assets which are deposited in or credited to the Expense Account may at the direction of Wells Timberland, if no Default or Event of Default has occurred and is continuing, be invested in one or more Cash Equivalent Investments; provided, that under no circumstances shall the Lender Parties be liable for any losses that may be incurred by Wells Timberland in the making of any such Cash Equivalent Investments.

(d)To secure the full and punctual payment and performance of all the Obligations, Wells Timberland hereby grants to the Administrative Agent, for the benefit of the Lender Parties, a first priority continuing security interest in and to all of Wells Timberland’s right, title and interest in, to and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of the same, collectively, the “Expense Account Collateral”):

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(i)The Expense Account and all cash, checks, drafts, certificates, securities, instruments, investment property, security entitlements, and other financial assets credited, deposited or held in the Expense Account, including, without limitation, all deposits or wire transfers made to the Expense Account;

(ii)any and all amounts on deposit in or credited to the Expense Account that are invested in Cash Equivalent Investments;

(iii)all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and

(iv)to the extent not covered by clauses (i), (ii) or (iii), all “proceeds” (as defined under the U.C.C.) of any or all of the foregoing.

The Administrative Agent and the Domestic Account Bank, as agent for the Administrative Agent on behalf of the Lender Parties, shall have with respect to the foregoing collateral, in addition to the rights and remedies herein set forth, all of the rights and remedies available to a secured party under the U.C.C., as if such rights and remedies were fully set forth herein.

(e)In addition to the rights and remedies provided in Article VIII and elsewhere herein, if any Event of Default has occurred and is continuing, the Administrative Agent shall have all rights and remedies pertaining to the Expense Account Collateral as are provided for in any of the Loan Documents, the U.C.C. and other Laws. Without limiting the foregoing, upon and at all times after the occurrence and during the continuance of any Event of Default, the Administrative Agent in its sole and absolute discretion, may use the Expense Account Collateral (or any portion thereof) for any purpose, including but not limited to any combination of the following: (i) payment of any of the Obligations, in the order set forth in Section 8.7; provided, that such application of funds shall not cure or be deemed to cure any Default or Event of Default but shall reduce the Obligations to the extent of any such repayment; and (ii) reimbursement of the Administrative Agent or any Lender for any losses or expenses (including, without limitation, reasonable legal fees) suffered or incurred as a result of such Event of Default.

(f)Wells Timberland and each other Loan Party hereby irrevocably constitute and appoint the Administrative Agent (and its agents and designees) as such Person’s true and lawful attorney-in-fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver at any time any instruments and to exercise and enforce every right, power, remedy, option and privilege of Wells Timberland with respect to the Expense Account Collateral, and do in the name, place and stead of Wells Timberland, all such acts, things and deeds for and on behalf of and in the name of Wells Timberland, which Wells Timberland is required to do hereunder or under the other Loan Documents, or which the Domestic Account Bank or the Administrative Agent (or its agents or designees) may deem necessary or desirable, to more fully vest the in the Administrative Agent (or its agents or designees) the rights and remedies provided for in this Section. The foregoing powers of attorney are irrevocable and coupled with an interest. Such authority in favor of the Administrative Agent (and its agents and designees) pursuant to this Section shall include the right to (i) take control in any manner of any item of payment in respect of the Expense

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Account Collateral or otherwise received in or for deposit in the Expense Account, (ii) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of account receivables or other proceeds of Expense Account Collateral are sent or received, (iii) endorse Wells Timberland’s name upon any items of payment in respect of account receivables or constituting Expense Account Collateral or otherwise received by the Administrative Agent (or its agents or designees) or any Lender and deposit the same in Expense Account, (iv) endorse Wells Timberland’s name upon any chattel paper, document, instrument, invoice or similar document or agreement relating to any account receivable or any goods pertaining thereto or any other Expense Account Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, and (v) sign Wells Timberland’s name on any verification of account receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof. Wells Timberland hereby releases the Administrative Agent (or its agents or designees) and the Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of any such Person’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

SECTION 7.1.18Reserved.

SECTION 7.1.19Post-Closing Matters.

(a)Not later than thirty (30) days after the Initial Funding Date, the Borrowers shall have entered into, with a Lender or other Person reasonably satisfactory to the Administrative Agent, a Rate Protection Agreement or Rate Protection Agreements in amount, type and term satisfactory to the Administrative Agent. All Rate Protection Agreements shall be unsecured unless the counterparty is a Lender, an Affiliate of a Lender or a Person that was a Lender or an Affiliate of a Lender at the time such Rate Protection Agreement was entered into, in which case the obligations under each such Rate Protection Agreement shall be secured prorata with all the other Obligations hereunder.

(b)At the end of each calendar year, either:

(v) the Administrative Agent shall have received, with respect to at least eighty percent (80%) of property subject to the PLM Leases on which final harvest has not occurred, either (A) a Landlord Estoppel Certificate duly executed by the relevant landlords or (B) certification that all payments due and payable during the immediately following three-months have been paid to the relevant landlords; or

(vi)theAdministrative Agent shall have received:

(X) a certified list of those PLM Leases on which final harvest has not occurred that do not meet the requirements of subclause (A) or subclause (B) of clause (i) above;

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(Y) a certified schedule containing the amounts and due dates of all payments due and payable during the immediately following twelve-month period with respect to those PLM Leases on which final harvest has not occurred that do not meet the requirements of subclause (A) or subclause (B) of clause (i) above; and

(Z) evidence that Wells Timberland has sufficient funds in the Working Capital Account or the Receipt Account (to the extent such funds in the Receipt Account are available and permitted to be transferred to the Working Capital Account) to make each of the payments referred to in subclause (Y) of this clause (ii) that are due and payable during the immediately following twelve-months.

(c)Not later than ninety (90) days after the Initial Funding Date (or such later date as the Administrative Agent shall agree to in its sole discretion), the Borrowers shall deliver or cause to be delivered to the Administrative Agent (i) recorded copies of the Mortgage Amendments, and (ii) endorsements, in form and substance reasonably acceptable to Administrative Agent, to the title insurance policies related to the Mortgages, as amended by the Mortgage Amendments.

(d)Not later than thirty (30) days after the Initial Funding Date (or such later date as the Administrative Agent shall agree to in its sole discretion), the Borrowers shall deliver or cause to be delivered to the Administrative Agent a copy of each Timber Lease, certified as true and correct by a Financial Officer of each Borrower.

(e)Not later than thirty (30) days after the Initial Funding Date (or such later date as the Administrative Agent shall agree to in its sole discretion), the Borrower shall deliver or cause to be delivered to First American Title Insurance Copy, with a copy to the Administrative Agent, that certain Tax Order issued by the Alabama Department of Revenue in response to that certain Petition for Ascertainment of Mortgage Tax made by the Administrative Agent.

(f)Not later than within thirty (30) days after request by the Administrative Agent (or such later date as the Administrative Agent shall agree to in its sole discretion), the Borrower shall deliver or cause to be delivered to the Administrative Agent recorded mortgages, in form and substance reasonably acceptable to the Administrative Agent, with respect to the parcels of Real Property acquired by Wells Timberland pursuant to the Saunders Transaction Agreement after the Initial Funding Date, as more fully described in that certain Post Closing Agreement, dated as of September 28, 2012, between Page, Scrantom, Sprouse, Tucker & Ford, P.C. and Fidelity National Title Insurance Company, together with such title insurance policies and endorsements thereto as may be requested by the Administrative Agent in its sole discretion, in form and substance reasonably acceptable to the Administrative Agent, with regard to such parcels of Real Property.

SECTION 7.2Negative Covenants. Each of the Borrowers and each other Loan Party agree with each Lender Party that, until all the Obligations have been paid in full in cash and performed in full, each of the Borrowers and each other Loan Party will perform the obligations set forth in this Section.

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SECTION 7.2.2Business Activities. The Borrowers and each of the other Loan Parties will not engage in any business activity, except those business activities described in Section 6.24.1 and in the recitals.

SECTION 7.2.3Indebtedness.

Neither of the Borrowers nor any of the other Loan Parties will create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:

(m)Indebtedness in respect of the Loans;

(n)Contingent Liabilities of Wells REIT and Wells TRS, in the form of limited recourse guarantees in form and substance satisfactory to the Administrative Agent, in each case with respect to Indebtedness incurred pursuant to any Unrestricted Timber Transaction pursuant to the definition thereof;

(o)Indebtedness with respect to cash management and similar arrangements in the ordinary course of business; and

(p)Indebtedness with respect to Rate Protection Agreements permitted pursuant to Section 7.2.21.

SECTION 7.2.4Liens.

Neither of the Borrowers nor any of the other Loan Parties will create, incur, assume or suffer to exist any Lien upon any of the Collateral, whether now owned or hereafter acquired, except:

(f)Liens securing payment of the Obligations and granted pursuant to any Loan Document in favor of the Administrative Agent;

(g)with respect to the Real Property, Liens listed as exceptions on Schedule B of any title insurance with respect thereto that have been approved by the Administrative Agent;

(h)Liens for taxes, assessments or other charges or levies of any Governmental Authority not at the time delinquent or being diligently contested in good faith by appropriate proceedings which suspends enforcement of such Liens and for which adequate reserves in accordance with GAAP shall have been set aside on its books;

(i)easements, rights of way and similar restrictions that (i) arise in the ordinary course of business of Wells Timberland and Wells HBU, (ii) are not in a substantial amount and (iii) do not in any respect materially impair the value or usefulness of the Real Property; and

(j)judgment Liens which do not result in an Event of Default under Section 8.1.6.

In addition, Wells Partnership shall not permit there to be a Lien on any of its Equity Interests.

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SECTION 7.2.5Financial Covenants.

(h)At the end of each Fiscal Quarter, the Fixed Charge Coverage Ratio shall not be less than 1.05:1.00.

(i)At the end of each Fiscal Quarter and upon the sale or acquisition of any Real Property in accordance with the terms of this Agreement, the Loan to Value Ratio may not exceed 45%.

SECTION 7.2.6Investments; Change in Capital Structure.

(h)Neither of the Borrowers nor any other Loan Party will make, incur, assume or suffer to exist (or agree to do any of the foregoing) any Investment in any other Person, except (i) investments set forth on Item 6.8 (“Initial Capitalization”) of the Disclosure Schedule, (ii) Investments by Wells REIT, Wells Partnership and Wells TRS in Unrestricted Timber Subsidiaries in connection with Unrestricted Timber Transactions, (iii) Rate Protection Agreements permitted pursuant to Section 7.2.21 and (iv) Investments in AgSouth Equity Interests as provided in Section 11.22.

(i)Neither of the Borrowers nor any other Loan Party will make any change in its capital structure or ownership, including, without limitation, raising, taking any contribution of, or receiving any cash equity in the United States, and entering into any partnership, joint venture or similar relationship, except as provided in the preceding clause (a).

SECTION 7.2.7Restricted Payments. Neither of the Borrowers nor any other Loan Party will (notwithstanding the terms of any Organizational Document or any other agreement or instrument), (i) declare, pay or make on any of its Equity Interests (or any warrants, options or other rights with respect thereto) any dividend, distribution or other payment, whether on account of the purchase, redemption, sinking or analogous fund, retirement, defeasance of any Equity Interests and whether in cash, property or obligations (other than dividends or distributions payable solely in its Equity Interests, warrants to purchase its Equity Interests or split-ups or reclassifications of its Equity Interests into additional or other shares of its Equity Interests), or apply, or permit any other Loan Party to apply, any of its funds, property or assets to the purchase, redemption, sinking or analogous fund or other retirement of, any such Equity Interests (or any options, warrants or other rights with respect thereto); or (ii) make any payment, loan, advance, contribution or other transfer of funds or property to any holder of its Equity Interests; provided, however, that (x) any Subsidiary of Wells TRS Subsidiary, Wells HBU or Wells Timberland may make dividends, distributions and other payments to each of them and (y) if no Default or Event of Default has occurred and is continuing or would result from the taking of any actions pursuant to this clause, (A) Wells TRS Subsidiary and Wells HBU may make dividends and distributions and other payments to Wells TRS, (B) Wells Timberland may make intercompany loans, dividends and distributions and other payments to Wells Partnership, (C) Wells TRS may make dividends, distributions and other payments to Wells Partnership, (D) Wells REIT may redeem from any individual shareholder, within two years of his death or disability (as defined from time to time in the United States Social Security Act of 1965, U.S.C. Sections 601-687), all or any part of his Equity Interests in Wells REIT, (E) for so long as Wells REIT is qualified as a real estate investment trust

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under the Code (“REIT Status”), Wells Partnership may make dividends, distributions and other payments to Wells REIT and Wells REIT may make dividends, distributions and other payments to its shareholders, in each case, as required for Wells REIT to maintain REIT Status, and (F) subject to the terms and conditions of the Receipt Waterfall and in accordance with the Receipt Waterfall, Wells Partnership may make dividends, distributions and other payments to Wells REIT and Wells REIT may make dividends, distributions and other payments to its shareholders or redeem Equity Interests of its individual shareholders (1) pursuant to the share redemption plan adopted by Wells REIT’s board of directors and (2) otherwise at the discretion of Wells REIT’s board of directors.

SECTION 7.2.8Take or Pay Contracts. Neither of the Borrowers nor any other Loan Party will enter into or be a party to any arrangement for the purchase of materials, supplies, other property or services if such arrangement by its express terms requires that payment be made by the Borrowers or any other Loan Party regardless of whether such materials, supplies, other property or services are delivered or furnished to it.

SECTION 7.2.9Mergers, Asset Acquisitions, etc. Neither of the Borrowers nor any other Loan Party will (or agree to), liquidate or dissolve, consolidate or amalgamate with, or merge into or with, any other Person, or establish, purchase, lease or otherwise acquire (in each case in one transaction or series of transactions) all or any part of the assets or Equity Interests of any Person (or of any division thereof), other than (a) Investments by the Borrowers and the other Loan Parties permitted by Section 6.8 comprising the Equity Interests of Persons referred to therein, (b) transactions permitted by Section 7.2.5, (c) the acquisition of assets that (i) are to be utilized in the ordinary course of the business of the Borrowers accordance with Section 7.2.1, (ii) are from the amounts paid to the Borrowers pursuant to clause (a)(vii)(B) and clause (a)(vii)(C) of Section 9.3 or from the proceeds of any Loan to the extent permitted by Section 4.10, (iii), in the event that the acquired asset is a lease, sublease, or license by Wells Timberland of any additional real property, are in form and substance reasonably acceptable to the Administrative Agent, (iv) are subject to a first priority security interest in favor of the Administrative Agent and the Loan Parties have complied with the terms of and all requests of the Administrative Agent made with respect to such assets pursuant to the terms of the Loan Documents, including, without limitation, Section 7.1.9, and (v) the Borrowers have delivered to the Administrative Agent a supplement to Item 1.1(a) of the Disclosure Schedules setting forth the allocated Cost Basis for such Real Property, in form and substance acceptable to the Administrative Agent; and (d) subject to the other terms of this Agreement, the purchase or lease of additional real property pursuant to an Unrestricted Timber Transaction.

SECTION 7.2.10Asset Dispositions, etc.

Neither of the Borrowers nor any other Loan Party will sell, transfer, lease, contribute or otherwise convey or dispose of (in each case in one transaction or series of transactions), or grant options, warrants or other rights with respect to (in each case in one transaction or series of related transactions, whether voluntary or involuntary), all or any part of its assets or property, except:

(ff)the sale of Timber in accordance with the conditions of clause (m) of Section 7.1.11;

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(gg)the sale of Land, provided, that (i) such sales are conducted pursuant to and in accordance with the applicable restrictions contained in the Master Stumpage Agreement without giving effect to any waivers with respect to such restrictions that have not been approved by the Required Lenders, (ii) all the related Cost Basis Collateral Disposition Proceeds are applied to prepay the Loans in accordance with clause (b) of Section 3.1.2 and (iii) all the related Net Collateral Disposition Proceeds in excess of such Cost Basis Collateral Disposition Proceeds are deposited in the Revenue Account for further deposit into the Receipt Account and application in accordance with the Receipt Waterfall;

(hh)in the ordinary course of business the sale or disposition of worn-out or obsolete equipment;

(ii)pursuant to any Unrestricted Timber Transaction, each relevant Unrestricted Timber Subsidiary may do any of the foregoing in accordance with the terms of the relevant Unrestricted Timber Transaction; and

(jj)the sale by Wells Timberland to CTB of carbon dioxide offset credits derived from up to 50,000 acres of timberland (the “Carbon Credit Acreage”) pursuant to the Carbon Storage Agreement; provided, however, that the Administrative Agent, for the benefit of the Lender Parties, shall continue to have a first priority Lien on and security interest in the Carbon Credit Acreage unaffected by the Carbon Storage Agreement, any other documents or instruments delivered or recorded in connection therewith or the transactions contemplated thereby and superior to any interest created in favor of CTB pursuant to the foregoing;

(kk)in the ordinary course of business, the sale of fuel wood residue materials such as tree branches, tree tops and other wood residue inherent or resulting from the harvesting of timber (collectively, “Fuel Wood Residue”);

(ll)in order to maintain REIT Status or for other legitimate corporate or business purposes, the transfer of Fuel Wood Residue by way of contribution, assignment or other conveyance from one Loan Party to another Loan Party prior to the sale of such Fuel Wood Residue to a third party as permitted by clause (f); and

(mm)subject to the terms and conditions hereof, including, without limitation, clause (x) of Section 7.1.11, the termination of Timber Leases.

SECTION 7.2.11Modification of Certain Agreements.

(h)Subject to clause (b) and other applicable terms, neither of the Borrowers nor any other Loan Party will consent to any amendment, supplement, waiver or other modification of any of the terms or provisions contained in, or applicable to, any of their Organizational Documents or any Transaction Document which in any case:

(i)is contrary to the terms of this Agreement or any other Loan Document;

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(ii)could reasonably be expected to be adverse to the rights, interests or privileges of the Administrative Agent or the Lenders or their ability to enforce the same;

(iii)results in the imposition or expansion in any material respect of any restriction or burden on the Borrowers or any other Loan Party;

(iv)reduces in any material respect any rights or benefits of the Borrowers or any other Loan Party; or

(v)could reasonably be expected to result in a Material Adverse Effect.

(i)Neither of the Borrowers nor any other Loan Party will consent to any amendment, supplement, waiver or other modification of any of the terms or provisions contained in, or applicable to, (i) the Wells Timberland Operating Agreement if the effect of such amendment, supplement, waiver or other modification is to replace the Timber Manager, or (ii) the MW Supply Agreements in a manner contrary to clause (l) of Section 7.1.11.

SECTION 7.2.12Transactions with Related Parties.

Except for the Transactions Documents and the other Material Agreements listed on Item 1.1(b) (“Material Agreements”) of the Disclosure Schedule, neither of the Borrowers nor any other Loan Party will enter into, or cause, suffer or permit to exist any arrangement or contract with, any of its Related Parties unless such arrangement or contract:

(e)is not otherwise prohibited by this Agreement or the other Loan Documents;

(f)(i) is in the ordinary course of business of the Borrowers, (ii) is on fair and reasonable terms and (iii) is an arrangement or contract of the kind which would be entered into by a prudent Person in the position of a Borrower or any other Loan Party with a Person which is not one of its Related Parties;

(g)is for the payment of fees and compensation paid to, and customary indemnities and reimbursements provided on behalf of, officers, directors, employees and agents of either of the Borrowers or any other Loan Party.

SECTION 7.2.13Negative Pledges, Restrictive Agreements, etc.

Neither of the Borrowers nor any of the other Loan Parties will enter into any agreement (excluding this Agreement and any other Loan Document) prohibiting or restricting:

(w)their ability to comply with and perform their Obligations;

(x)the creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired, provided that, with respect to each Unrestricted Timber Transaction, Wells REIT and Wells TRS may be subject to any of such restrictions solely as it relates to each such Unrestricted Timber Transaction;

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(y)the ability of the Borrowers or any other Loan Party to amend or otherwise modify this Agreement or any other Loan Document; or

(z)the ability of any Subsidiary of a Borrower, Wells TRS Subsidiary or Wells HBU to make any payments, directly or indirectly, to the Borrowers, Wells TRS Subsidiary or Wells HBU by way of dividends, distributions, return on equity, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Subsidiary to make any payment or transfer any property or asset, directly or indirectly, to the Borrowers, Wells TRS Subsidiary or Wells HBU.

SECTION 7.2.14Management Fees, Expenses, etc.

Neither of the Borrowers nor any other Loan Party will:

(e)pay management, advisory, consulting, director or other similar fees, other than:

(vi)fees payable to the Administrative Agent, the Lenders or any of their Affiliates;

(vii)fees payable to non-Affiliate consultants engaged on arm’s-length basis as approved by the board of directors, partners, or members of the applicable Borrower or any other Loan Party;

(viii)director fees and reimbursement of out-of-pocket expenses incurred in connection with attending the board of director, partnership, or member meetings, in an aggregate amount not to exceed $250,000 in any Fiscal Year; or

(ix)the Wells Advisor Fees.

(f)reimburse employees or any Affiliates for any expenses unless the same is incurred in the ordinary course of business of the Borrowers and each other Loan Party and is reasonable.

SECTION 7.2.15Limitation on Sale and Leaseback Transactions. Neither of the Borrowers nor any other Loan Party will enter into any arrangement with any Person whereby in a substantially contemporaneous transaction the Borrowers or any of the other Loan Parties sells or transfers all or substantially all of its right, title and interest in an asset and, in connection therewith, acquires or leases back the right to use such asset.

SECTION 7.2.16Fiscal Year End, etc. No Borrower will, or will permit any other Loan Party to, change their Fiscal Year. In addition, except as required by GAAP neither the Borrowers nor any other Loan Party shall make any significant change in its accounting treatment or reporting practices.

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SECTION 7.2.17ERISA. Neither the Borrowers, any of the other Loan Parties nor any Affiliate thereof shall establish any Pension Plan or Multiemployer Plan, or shall enter into any arrangements that could be expected to require the Borrowers, any other Loan Party or any Affiliate thereof to contribute to any Pension Plan or Multiemployer Plan. Neither the Borrowers nor any other Loan Party shall have any ERISA Affiliates and shall not be an ERISA Affiliate of any other Person.

SECTION 7.2.18Account Control Agreements.

(g)None of the Borrowers, Wells TRS, Wells TRS Subsidiary or Wells HBU will have any bank account unless the same is subject to a Account Control Agreement with the Domestic Account Bank or another Account Bank.

(h)None of the Borrowers, Wells TRS, Wells TRS Subsidiary or Wells HBU will have any securities account unless the same is subject to a securities account control agreement with a securities intermediary appointed by the Administrative Agent.

SECTION 7.2.19Timber Negative Covenants.

(c)Timber Sale, Harvesting and Stumpage Agreements. Other than the MW Supply Agreements, without the prior approval of the Administrative Agent, the Borrowers shall not enter into, and the Timberland shall not be subject to, any contracts or agreements (whether written or oral) for the cutting, sale, removal or disposition of Timber which have: (i) a term (including renewal options but excluding extensions for weather) of more than one year, (ii) a sale price of less than then current fair market value or (iii) terms and conditions inconsistent with the then current approved Harvest Plan or the requirements of this Agreement.

(d)Restrictions on Grazing and Use of Fire. Wells Timberland shall not permit the grazing of livestock on the Timberland except with the consent of the Administrative Agent, provided, that, in no event shall the grazing of the livestock be injurious to forest regeneration, soils or forest growth. The application of fire in a controlled manner for the benefit of Timber production (“prescribed burning”) shall not be utilized in the management of the Timberland unless (i) local fire protection agencies are notified and all fire protection and other Laws are followed, (ii) appropriate equipment and trained personnel are available and utilized, (iii) fire is applied only when weather conditions are favorable and (iv) the prescribed burning area is isolated from other areas by appropriate natural or manmade fire breaks.

(e)Coal, Oil, Gas and Other Minerals.Wells Timberland shall not hold and shall not permit any other Person to hold for Wells Timberland’s benefit or as Wells Timberland’s agent, whether directly or indirectly, any permit or license which permits the exploration, extraction, mining, processing, production, storage, transportation or handling of any coal, oil, gas or any other mineral (collectively, “Mineral Activity”) with respect to the Timberlands.

(i)Except as permitted hereby, Wells Timberland shall not undertake or operate or cause or permit to be undertaken or operated for its benefit or by its agent, or under any lease of the Real Property, whether directly or indirectly, any Mineral Activity.

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(ii)Any Mineral Activity on the Timberland, with respect to minerals owned by Wells Timberland, if any, shall be carried out by third party (not Affiliates of either of the Borrowers or any other Loan Party) tenants under bona fide leases (collectively, “Mineral Leases”) which, to the extent not in existence on the date of this Agreement, shall be in form and substance reasonably acceptable to the Administrative Agent and shall contain covenants by the tenant to comply with all Laws, including without limitation, Environmental Laws, and an agreement by the tenant to indemnify, defend and hold harmless the Borrowers, the Administrative Agent and the Lenders and their respective successors and assigns against any loss, claims or damage, including legal fees, arising from any breach of its Mineral Lease or liability arising from such tenant’s activity or presence on the Timberland (including as a result of a violation of any Environmental Laws).

(iii)Wells Timberland shall (A) reasonably inspect and monitor the activities of all tenants under the Mineral Leases, if any, to assure compliance in all material respects with the terms and conditions of the Mineral Leases, (B) enforce the material terms and conditions of the Mineral Leases and cause the tenants thereunder to comply with all material terms and conditions of the Mineral Leases and (C) assure that all Mineral Activity complies in all material respects with all Environmental Laws in the manner set forth in Section 7.1.6. Wells Timberland shall furnish to the Administrative Agent, promptly following a request therefor, copies of its records with regard to the compliance by tenants with all material terms and conditions of the Mineral Leases.

(iv)Any Mineral Activity on the Timberlands permitted hereunder shall not be undertaken or permitted by Wells Timberland, except in such manner that none of the Administrative Agent or the Lenders shall be liable in any event for any of such activities under applicable Environmental Laws, including claims based upon the existence of any Hazardous Material, non-hazardous wastes, discoloration or degradation of any water or streams, interference with the bed of any stream or the natural flow thereof, reclamation or revegetation. Wells Timberland shall assure that all reclamation and revegetation of the Timberland that is conducted as a result of any Mineral Lease be timely completed in accordance with applicable Environmental Laws, other Laws and applicable Best Management Practices.

(v)Without limiting Section 7.1.6, in connection with the Mineral Activity, the Borrowers and the other Loan Parties shall, to the extent required by applicable Environmental Laws, clean up, or cause to be cleaned up, any Hazardous Material or nonhazardous waste materials held, released, spilled, abandoned or placed upon the Timberland or released intothe environment by Wells Timberland, any lessees, contractors, subcontractors, suppliers, employees, agents, or by anyone for whom Wells Timberland or any lessees are responsible, at its own expense.

(vi)Wells Timberland shall use commercially reasonable efforts (A) to cause all Mineral Activity to be conducted with due regard for the present and future value of both the Timberland as Timber producing coal mining and oil and gas properties, particularly with respect to the support of overlying coal seams and prevention of slips, slides, squeezes and other distortions of said seams; (B) all Mineral Activity be conducted in material compliance with all Environmental Laws and other Laws; (C) to require that any Mineral Activity complies with all material conditions,

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covenants and limitations contained in any of the instruments under which Wells Timberland holds title to the Timberland or where Wells Timberland owns minerals without ownership of the surface overlying said minerals; and (D) to cause its tenants to obtain rights from the then surface owners with respect to such Mineral Activities.

(vii)The Administrative Agent shall have the right (subject to the proviso of the last sentence of clause (d) of Section 7.1.5), but not the duty, at any and all reasonable times to enter upon the Timberland for the purposes of inspecting the Mineral Activities being conducted thereon, including the financial records, royalty summaries, mining reports, weighing devices and maps related thereto. Wells Timberland shall keep, or use commercially reasonable efforts to cause its tenants to keep, adequate and accurate records of all depths of mining and drilling, maps of the locations of all Mineral Activities, both above and below ground, quantities of minerals extracted and amounts shipped, and all payments payable and received with respect to all minerals and Mineral Leases. Wells Timberland agrees that it will promptly furnish the Administrative Agent, without cost to the Administrative Agent, the results of all core drilling and other exploratory openings and tests made for coal, oil, gas or other minerals upon the Timberland, including the results of any analytical test made to determine the quality, type or characteristics thereof, upon request.

(viii)Without limiting Section 11.4, the Borrowers shall indemnify and hold harmless the Administrative Agent and the Lenders and their respective officers, directors and employees and their respective successors, from and against all fines, penalties, actions, suits, legal proceedings and all costs and expenses associated therewith (including legal fees) arising out of or in any way connected with any failure of either Borrower to perform its obligations under this Section.

SECTION 7.2.20Unrestricted Timber Transactions. Neither of the Borrowers nor any other Loan Party shall consummate any Unrestricted Timber Transaction unless (a) the certification required to be delivered pursuant to clause (o) of Section 7.1.1 has been timely delivered as therein provided and (b) no Lender Party has objected to the accuracy of any statement contained in such certification (it being agreed that if any Lender Party fails to object to such certification, on or prior to 10 Business Days after the delivery thereof, such Lender Party shall be deemed to have accepted such certification). If any Lender Party reasonably objects to such certification, the relevant Unrestricted Timber Transaction shall not be consummated until the Loan Parties provide reasonably satisfactory evidence as to the accuracy of the statements contained in such certification. Without limiting the foregoing, if, in connection with any Unrestricted Timber Transaction that is consummated pursuant the definition thereof, Wells REIT or Wells TRS are subject in any respect to any material restriction or obligation imposed by, or provide any material benefit to, any of the lenders providing financing in connection with such Unrestricted Timber Transaction, then such Persons shall be subject to similar restrictions or obligations, or provide similar benefits, to the Lender Parties pursuant to the Loan Documents (which additional restrictions, obligations and benefits shall be evidenced by amendments to the relevant Loan Documents within five Business Days after the Administrative Agent makes a request therefore).

SECTION 7.2.21Transfer of Funds. Wells Timberland, Wells TRS Subsidiary and Wells HBU shall not fail to cause their account debtors and other Persons owing money to them

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to deposit the same into either (i) (A) in the case of Wells Timberland and Wells HBU, in the Revenue Account, or (B) in the case of Wells TRS Subsidiary, in the Wells TRS Subsidiary Account, or (ii) in lock-box accounts pursuant to arrangements satisfactory to the Administrative Agent. In addition Wells TRS Subsidiary shall not fail to pay into the Revenue Account, as and when due, all amounts owing by it to Wells Timberland pursuant to the Master Stumpage Agreement or otherwise.

SECTION 7.2.22Rate Protection Agreements. No Loan Party will engage in any speculative transactions or in any transaction involving a Rate Protection Agreement except (a) with respect to the Borrowers, as required by clause (a) of Section 7.1.19, and (b) withrespect to each Loan Party other than the Borrowers, for the sole purpose of hedging in the normal course of business.

ARTICLE VIIIEVENTS OF DEFAULT AND REMEDIES

SECTION 8.1Listing of Events of Default. Each of the following events or occurrences described in this Section shall constitute an “Event of Default.”

SECTION 8.1.23Non-Payment of Obligations. Either Borrower or any other Loan Party shall default in the payment or prepayment when due of any (a) principal or (b) interest on a Loan or (c) any fee, indemnity or other monetary Obligation hereunder or under any other Loan Document, provided that the failure to make any such payments pursuant to clause (b) or (c) shall not result in an Event of Default unless such failure is not cured within two Business Days after the occurrence thereof.

SECTION 8.1.24Breach of Representations and Warranties. Any representation or warranty of either Borrower or any other Loan Party made or deemed to be made hereunder, in any other Loan Document or any other writing or certificate furnished by or on behalf of either Borrower or any other Loan Party to any Lender Party in connection with this Agreement or any such other Loan Document (including any certificates delivered pursuant to Article V), is or shall be incorrect in any respect when made (or in any material respect if such representation or warranty is not by its terms already qualified as to materiality).

SECTION 8.1.25Non-Performance of Certain Covenants and Obligations. Either Borrower or any other Loan Party shall default in the due performance and observance of any of its obligations under Sections 4.10, 5.2, 6.24 and 7.1.1 (subject to a three Business Day grace period, except with respect to clause (g) of Section 7.1.1, for which there shall be no grace period), clause (a) of Section 7.1.2 (with respect to the Borrowers’ existence), 7.1.4, 7.1.5, 7.1.8, 7.1.9 (with respect to maintaining the Administrative Agent’s first priority security interest in the Collateral), 7.1.12, 7.1.13, 7.1.14, 7.1.16, 7.1.17, 7.1.19 or 7.2 or Article IX.

SECTION 8.1.26Non-Performance of Other Covenants and Obligations. Either Borrower or any other Loan Party shall default in the due performance and observance of any other agreement contained herein or in any other Loan Document (other than items covered by Sections 8.1.1 or 8.1.3), and such default shall continue unremedied for a period of 30 days after

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the earlier of (a) any officer of the Borrowers or any other Loan Party having knowledge thereof or (b) notice thereof having been given to any Borrower or other Loan Party.

SECTION 8.1.27Default on Other Obligations. Any event of default shall occur under any agreement, document or instrument in which any Borrower or any other Loan Party is a party, or their property or assets are bound, which involves a claim or liability of $500,000 or more.

SECTION 8.1.28Judgments. Any money judgment, writs or warrants of attachment, executions or similar processes involving any aggregate amount (to the extent not paid or fully covered by insurance maintained in accordance with the requirements of this Agreement and as to which the relevant insurance company has acknowledged coverage) in excess of $250,000 shall be rendered against either Borrower, any other Loan Party or any of the respective properties and either (a) enforcement proceeding shall have been commenced by any creditor upon such judgment or order or (b) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal, bond or otherwise, shall not be in effect.

SECTION 8.1.29Bankruptcy, Insolvency, etc.

Either Borrower or any other Loan Party shall:

(a)generally fail to pay debts as they become due, or admit in writing its inability to pay debts as they become due;

(b)apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator, or other custodian for either Borrower or any other Loan Party or any property of any thereof, or make a general assignment for the benefit of creditors;

(c)in the absence of such application, consent or acquiescence, permit or suffer to exist the involuntary appointment of a trustee, receiver, sequestrator or other custodian for either Borrower or any other Loan Party or for any part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 30 days;

(d)permit or suffer to exist the involuntary commencement of, or voluntarily commence, any bankruptcy, reorganization, debt arrangement or other case or proceeding under any Debtor Relief Laws, or permit or suffer to exist the involuntary commencement of, or voluntarily commence, any dissolution, winding up or liquidation proceeding, in each case, by or against either Borrower or any other Loan Party; provided, however, that if not commenced by either Borrower or any such other Loan Party such proceeding shall be consented to or acquiesced in by either Borrower or any such other Loan Party, or shall result in the entry of an order for relief or shall remain for 30 days undismissed; or

(e)take any corporate action authorizing, or in furtherance of, any of the foregoing.

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SECTION 8.1.30Impairment of Loan Documents, Security, etc. Any Loan Document, or any Lien granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of the Borrowers or any other Loan Party that is a party thereto; either Borrower, any other Loan Party, any Governmental Authority or any other Person shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability; or any security interest in favor of the Administrative Agent for the benefit of the Lender Parties securing (or required to secure) any Obligation shall, in whole or in part, cease to be a perfected first priority security interest in the Collateral, subject to the Liens permitted by Section 7.2.3.

SECTION 8.1.31Non-Payment of Taxes. Either Borrower or any other Loan Party shall have failed to pay when due any Taxes or other charges of any Governmental Authority in excess of $250,000, except any such Taxes or other charges which are being diligently contested by it in good faith by appropriate proceedings which stay the enforcement of any Lien resulting from the non-payment thereof and for which adequate reserves in accordance with GAAP shall have been set aside on its books.

SECTION 8.1.32Impairment of Material Agreements. Any Material Agreement shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of either Borrower or any other Loan Party that is a party thereto; or there shall be any event of default under any Material Agreement.

SECTION 8.1.33Impairment of Business.

(a)Either Borrower or any other Loan Party shall be prohibited or otherwise materially restrained, for a period of 10 or more consecutive days, from conducting all or any material part of its business in the ordinary course in accordance with past practice, as a result of (i) any casualty, strike, lockout, labor dispute, embargo, condemnation, order of any Governmental Authority or act of God, (ii) one or more licenses, permits, accreditations or authorizations of either Borrower or any other Loan Party being suspended, limited or terminated or (iii) any other reason.

(b)The indictment or threatened indictment of either Borrower or any other Loan Party under any criminal statute, or the commencement or threatened commencement of a criminal or civil proceedings against either Borrower or any other Loan Party, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture to any Governmental Authority of any portion of the property of such Person.

SECTION 8.1.34Bankruptcy Claims. Either Borrower or any other Loan Party shall be subject to a claim arising out of any proceeding of the type referred to in Section 8.1.7 to which MW or any of its Affiliates shall be subject.

SECTION 8.1.35Material Adverse Effect. There shall have occurred any event described in clause (a), (c), (d) or (e) of the definition “Material Adverse Effect.”

SECTION 8.2Action if Bankruptcy. If any Event of Default described in clauses

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(a) through (d) of Section 8.1.7 shall occur, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of all outstanding Loans and all other Obligations shall automatically become immediately due and payable, without notice or demand.

SECTION 8.3Action if Other Event of Default. If any Event of Default (other than any Event of Default described in clauses (a) through (d) of Section 8.1.7) shall occur and be continuing for any reason, whether voluntary or involuntary, the Administrative Agent, may, and upon the direction of the Required Lenders, shall, by notice to the Borrowers declare all or any portion of the outstanding principal amount of the Loans and other Obligations to be due and payable and the Commitments (if not theretofore terminated) to be terminated, whereupon (without further notice, demand or presentment) the full unpaid amount of such Loans and other Obligations which shall be so declared due and payable shall become immediately due and payable and the Commitments shall terminate.

SECTION 8.4Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement, the other Loan Documents and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the U.C.C. Without limiting the generality of the foregoing, the Administrative Agent without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by Law or referred to below) to or upon any Borrower, any other Loan Party or any other Person (each and all of which demands, presentments, protests, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels or as an entirety at public or private sale or sales, at any exchange, broker’s board or office of the Administrative Agent or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Administrative Agent shall have the right upon any such public sale or sales, and, to the extent permitted by Law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Borrowers, which right or equity is hereby waived or released. The Borrowers and each other Loan Party further agree, at the Administrative Agent’s request, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at the Borrowers’ premises or elsewhere. The Administrative Agent shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale, after deducting all costs and expenses of every kind incurred therein or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Lender Parties hereunder, including without limitation attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations, in the order set forth in Section 8.7, and only after such application and after the payment by the Administrative Agent of any other amount required or permitted by any provision of Law, including without limitation Section 9-615(a)(3) of the U.C.C., need the Administrative Agent account for the surplus, if any, to the Borrowers. If any notice of a proposed sale or other disposition of Collateral shall be required by Law, such notice shall be deemed reasonable and proper if given at least ten (10) days before

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such sale or other disposition. The Borrowers shall remain liable for any deficiency (plus accrued interest thereon as contemplated pursuant to Article III) if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent to collect such deficiency. The rights, powers and remedies of the Administrative Agent and the Lenders under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which the Administrative Agent or the Lenders may have against the Borrowers pursuant to this Agreement or the other Loan Documents, or existing at Law or in equity or otherwise.

SECTION 8.5Foreclosure on Collateral. If any Event of Default shall occur and be continuing, the Administrative Agent shall have, in addition to all rights and remedies provided for in the U.C.C. and Laws, all such rights (including the right of foreclosure) with respect to the Collateral as provided in the Pledge Agreement, the Security Agreement, the Mortgages, the Mortgage Amendments and each other Loan Document.

SECTION 8.6Appointment of Administrative Agent as Attorney-in-Fact. The Borrowers hereby constitute and appoint the Administrative Agent as the Borrowers’ attorney-in-fact with full authority in the place and stead of the Borrowers and in the name of the Borrowers, from time to time in the Administrative Agent’s discretion while any Event of Default is continuing, to take any action and to execute any instrument that the Administrative Agent may deem necessary or advisable to accomplish the purposes of this Agreement and any other Loan Document, including to: (a) ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral; (b) enforce the obligations of obligors of account receivables or other Person obligated on the Collateral and enforce the rights of the Borrowers with respect to such obligations and to any property that secures such obligations; (c) file any claims or take any action or institute any proceedings that the Administrative Agent may deem necessary or desirable for the collection of or to preserve the value of any of the Collateral or otherwise to enforce the rights of the Administrative Agent and the Lenders with respect to any of the Collateral; (d) pay or discharge Taxes or Liens levied or placed upon or threatened against the Collateral in amounts necessary to discharge the same as determined by the Administrative Agent in its sole discretion (all of such payments made by the Administrative Agent shall become Obligations, due and payable immediately without demand); (e) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, assignments, verifications and notices in connection with the account receivables, chattel paper or general intangibles and other documents relating to the Collateral; (f) take any act required of the Borrowers under this Agreement or any other Loan Document; and (g) sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and to do, at the Administrative Agent’s option and the Borrowers’ expense, at any time, all acts and things that the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral. The Borrowers hereby ratify and approve all acts of the Administrative Agent made or taken pursuant to this Section 8.6, agrees to cooperate with the exercise by the Administrative Agent in the exercise of its rights pursuant to this Section 8.6 and shall not, either directly or indirectly, take or fail to take any action which could impair, in any respect, any action taken by the Administrative Agent pursuant to this Section 8.6. The appointment pursuant to this Section 8.6 of the Administrative

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Agent as the Borrowers’ attorney and the Administrative Agent’s rights and powers are coupled with an interest and are irrevocable, so long as any of the Commitments hereunder shall be in effect and until payment in full in cash of all Obligations.

SECTION 8.7Payments Upon Acceleration.

SECTION 8.8After the occurrence of an Event of Default and the acceleration of the Obligations pursuant to Section 8.2 or 8.3, the Administrative Agent shall apply all payments in respect of the Obligations and all proceeds of Collateral to the Obligations in the following order:

(f)first, to pay Obligations in respect of any fees, expenses or indemnities then due to the Administrative Agent (including, without limitation, fees and expenses referred to in Sections 11.3 or 11.4), whether or not the same is allowed in any bankruptcy or insolvency proceeding of any Loan Party;

(g)second, to pay Obligations in respect of any fees, expenses or indemnities then due to the Lenders, whether or not the same is allowed in any bankruptcy or insolvency proceeding of any Loan Party;

(h)third, to pay interest due in respect of the Loans, whether or not the same is allowed in any bankruptcy or insolvency proceeding of any Loan Party;

(i)fourth, to pay, on a pari passu basis, the principal outstanding with respect to the Loans and Obligations in respect of Rate Protection Agreements in which the counterparty is a Lender, an Affiliate of a Lender or a Person that was a Lender or an Affiliate of a Lender at the time such Rate Protection Agreement was entered into;

(j)fifth, to pay all other Obligations, including, without limitation, cash management obligations; and

(k)sixth, to pay who may be lawfully entitled thereto.

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order of each category and shall only be applied to the next succeeding category after all amounts in the preceding category have been paid in full in cash and (ii) amounts owing to each relevant Lender Party in clauses (b) through (e) shall be allocated to the payment of the relevant Obligations ratably, based on the proportion of each Lender Party’s interest in the aggregate outstanding Obligations described in each such relevant clause.

ARTICLE IXRECEIPT ACCOUNT

SECTION 9.1Establishment of Receipt Account.

SECTION 9.1.2Receipt Account. The Borrowers and each other Loan Party acknowledge and confirm that, on or before the date hereof and pursuant to the terms of this Agreement, Wells Timberland has established and will maintain one or more accounts at a Domestic

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Account Bank for the benefit of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties, to serve as the “Receipt Account” (said account or accounts, and any account or accounts replacing the same in accordance with this Agreement, collectively, the “Receipt Account”). Wells Timberland and the other Loan Parties acknowledge that the Domestic Account Bank may comply with instructions originated by the Administrative Agent without further consent by any of Wells Timberland or the other Loan Parties. The Administrative Agent reserves the right, from time to time in its sole discretion, to change the Domestic Account Bank at which the Receipt Account is maintained.

SECTION 9.1.3Account Name. The Receipt Account shall be in the name of Wells Timberland, in favor of the Administrative Agent, as first priority secured party for the benefit of the Lender Parties; provided, that if the Administrative Agent is replaced, the Domestic Account Bank, at the departing Administrative Agent’s request, shall change the name of the secured party with respect to the Receipt Account to the name of the replacement Administrative Agent.

SECTION 9.1.4Characterization of Account. All securities or other property underlying any financial assets credited to the Receipt Account (other than cash) shall be registered in the name of the Domestic Account Bank, indorsed to the Domestic Account Bank or in blank or credited to another securities account maintained in the name of the Domestic Account Bank and in no case will any financial asset credited to the Receipt Account be registered in the name of Wells Timberland or any other Loan Party, payable to the order of Wells Timberland or any other Loan Party or specially indorsed to Wells Timberland or any other Loan Party.

SECTION 9.1.5Investments. All funds, investment properties, security entitlements and other financial assets of the Loan Parties which are deposited in or credited to the Receipt Account may at the direction of Wells Timberland, if no Default or Event of Default has occurred and is continuing, be invested in one or more Cash Equivalent Investments; provided, that under no circumstances shall the Lender Parties be liable for any losses that may be incurred by Wells Timberland or any of the other Loan Parties in the making of any such Cash Equivalent Investments. Wells Timberland hereby irrevocably authorizes and directs the Domestic Account Bank to apply any income earned from Cash Equivalent Investments to the Receipt Account. Wells Timberland shall be responsible for payment of any federal, state or local income or other tax applicable to income earned from Cash Equivalent Investments. The Receipt Account shall be assigned the federal tax identification number of Wells Timberland. Any interest, dividends or other earnings from amounts on deposit in the Receipt Account shall be added to the balance in the Receipt Account and allocated and/or disbursed in accordance with the terms hereof.

SECTION 9.2Deposit of Revenues into the Receipt Account.

(q)By 2:00 p.m. on each Receipt Waterfall Date, Wells Timberland shall pay directly into the Receipt Account all funds deposited into the Revenue Account during the Receipt Waterfall Period for such Receipt Waterfall Date, less ordinary course operating expenses for the immediately following month as set forth in the most recently approved operating expense budget (which ordinary course operating expenses shall be deposited directly into the Expense Account in accordance with clause (a) of Section 7.1.17).

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(r)Wells TRS Subsidiary shall pay directly into the Revenue Account (i) as and when due, all amounts owing by Wells TRS Subsidiary to Wells Timberland pursuant to the Master Stumpage Agreement or otherwise and (ii) by 2:00 p.m. on each Receipt Waterfall Date, all funds deposited into the Wells TRS Subsidiary Account during the Receipt Waterfall Period for such Receipt Waterfall Date, less all ordinary course expenses incurred by Wells TRS in the previous month and all budgeted ordinary course operating expenses for the immediately following month.

(s)By 2:00 p.m. on each Receipt Waterfall Date, the Borrowers shall cause Wells REIT to pay directly into the Receipt Account all funds raised by, contributed to or received by Wells REIT or any other Loan Party in the United States or outside the United States less (i) any commissions due to unaffiliated third parties and (ii) any funds necessary to make dividends, distributions and other payments permitted by clause (y)(D) of the proviso of Section 7.2.6 (regarding redemptions by Wells REIT upon death or disability of its shareholders).

SECTION 9.3Payment of Funds From Accounts.

(k)Except as provided in Section 8.7 (which Section shall govern how the Loans are repaid if the Lenders are exercising their remedies during the continuance of any Event of Default), from time to time but in no event less than once per calendar month (each such occurrence, a “Receipt Waterfall Date”), to the extent funds have been deposited into the Receipt Account during such month, the funds shall be used to make payments in the following order of priority (which payments may be made, through a transfer to the Expense Account), provided that no payment shall be made under any clause below until all payments then required to be made under all prior clauses shall have been fully paid (the “Receipt Waterfall”):

(i)to the payment of Obligations in respect of fees, expenses and indemnities then due and owing to the Administrative Agent and the Lenders, including, without limitation, the fees and expenses referred to in Sections 11.3 and 11.4 (it being agreed that no amounts shall be paid to the Lenders pursuant to this clause until all amounts then due and owing to the Administrative Agent pursuant to this clause have been paid);

(ii)to the payment of (x) accrued and unpaid interest on the Loans and (y) amounts due to a Lender under any Rate Protection Agreement with a Borrower, in each case then due and owing;

(iii)[reserved];

(iv)so long as Wells REIT has REIT Status, to pay dividends permitted by clause (ii)(y)(E) of the proviso of Section 7.2.6;

(v)to the deposit in the Interest Reserve Account in an amount necessary to satisfy the requirements of Section 7.1.12

(vi)to fund the Working Capital Account in an amount necessary to satisfy the requirements of clause (b) of Section 7.1.19 (if applicable) and then up to but not exceeding a level of $2,000,000;

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AND

(vii)based on the most recently calculated Loan to Value Ratio as follows:

(A)If the Loan to Value Ratio is greater than or equal to 40%, to make additional prepayments on the outstanding principal amount of the Loans, together with interest on the principal amount so prepaid as provided in clause (b) of Section 3.2.3;

(B)If the Loan to Value Ratio is less than 40% but greater than or equal to 30%, any of the following, as determined by the Borrowers: (1) to acquire additional Real Property which will become Collateral hereunder subject to a first priority Lien and security interest in favor of the Administrative Agent, for the benefit of the Lender Parties; (2) to make additional prepayments on the outstanding principal amount of the Loans, together with interest on the principal amount so prepaid as provided in clause (b) of Section 3.2.3; (3) to accumulate a cash balance in the Receipt Account; or (4) to fund dividends, distributions, redemptions and other payments, including, without limitation, redemptions of outstanding preferred stock, provided that the Fixed Charge Coverage Ratio reported on the Compliance Certificate for the most recent Fiscal Quarter for which the same is required to be delivered pursuant to clause (e) of Section 7.1.1 is greater than 1.05:1.00 and the Borrowers deliver a Compliance Certificate to the Administrative Agent demonstrating compliance with Section 7.2.4 on a proforma basis giving effect to such dividends, distributions, redemptions and other payments

(C)If the Loan to Value Ratio is less than 30%, any of the following, as determined by the Borrowers: (1) to acquire additional Real Property which will become Collateral hereunder subject to a first priority Lien and security interest in favor of the Administrative Agent, for the benefit of the Lender Parties; (2) to pay any accrued organizational and offering fees due to Affiliates; (3) to make additional prepayments on the outstanding principal amount of the Loans, together with interest on the principal amount so prepaid as provided in clause (b) of Section 3.2.3; or (4) to accumulate a cash balance in the Receipt Account; or (5) to fund dividends, distributions, redemptions and other payments, including, without limitation, redemptions of outstanding preferred stock, pursuant to clause (y)(F) of the proviso of clause (ii) of Section 7.2.6, provided that the Fixed Charge Coverage Ratio reported on the Compliance Certificate for the most recent Fiscal Quarter for which the same is required to be delivered pursuant to clause (e) of Section 7.1.1 is greater than 1.05:1.00 and the Borrowers deliver a Compliance Certificate to the

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Administrative Agent demonstrating compliance with Section 7.2.4 on a proforma basis giving effect to such dividends, distributions, redemptions and other payments;

provided, however, that, notwithstanding anything to the contrary herein, no payments shall be made under clause(vii)(B) and (C) above unless (A)(I) Wells Partnership has timely delivered to the Administrative Agent a duly completed and executed Compliance Certificate for the most recent Fiscal Quarter for which the same is required to be delivered pursuant to clause (e) of Section 7.1.1 and (II) the Administrative Agent has confirmed to Wells Partnership that, in its reasonable and good faith determination, the calculations contained therein are satisfactory (which confirmation the Administrative Agent agrees to provide not later than five Business Days after the delivery of each such Compliance Certificate (it being agreed that the failure of the Administrative Agent to fail to provide such confirmation shall constitute its acceptance of each Compliance Certificate)) and (B) no Default or Event of Default has occurred and, is continuing. Notwithstanding the preceding sentence or any of the terms of this Section, if any Event of Default has occurred and is continuing under Section 8.1.7, or the Administrative Agent or the Lenders are exercising any of their remedies under Section 8.3 with respect to any other Event of Default that has occurred and is continuing, all amounts from the Receipt Waterfall from and thereafter shall be applied to the payment of the Obligations as set forth in Section 8.7.

(l)The Administrative Agent agrees that it shall make all payments pursuant to clauses (a)(i), (a)(ii) and (a)(iii) so as to avoid the incurrence of liabilities by the Borrowers under Section 4.4; provided that (i) in connection with the foregoing the Administrative Agent is authorized to delay making such payments until such time as it determines in its sole discretion that no such liabilities would result (it being agreed that no amounts retained by the Administrative Agent for such purpose shall be available or applied to the payment of any other amounts to be paid pursuant to the Receipt Waterfall under any circumstances) and (ii) if any Event of Default has occurred and is continuing the Administrative Agent may apply amounts available pursuant to clauses (a)(i), (a)(ii) and (a)(iii) at its sole discretion without regard to the incurrence by the Borrowers of liabilities under Section 4.4.

SECTION 9.4Pledge of Receipt Account.

SECTION 9.4.1Security for Obligations.

To secure the full and punctual payment and performance of all the Obligations, Wells Timberland and each of the other Loan Parties hereby grant to the Administrative Agent, for the benefit of the Lender Parties, a first priority continuing security interest in and to all of Wells Timberland’s right, title and interest in, to and under the following property, whether now owned or existing or hereafter acquired or arising and regardless of where located (all of the same, collectively, the “Receipt Account Collateral”):

(j)the Receipt Account and all cash, checks, drafts, certificates, securities, instruments, investment property, security entitlements, and other financial assets credited, deposited or held in the Receipt Account, including, without limitation, all deposits or wire transfers made to the Receipt Account, and any and all Receipt Account Collateral;

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(k)any and all amounts on deposit in and credited to the Receipt Account that are invested in Cash Equivalent Investments;

(l)all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise payable in respect of, or in exchange for, any or all of the foregoing; and

(m)to the extent not covered by clauses (a), (b) or (c), all “proceeds” (as defined under the U.C.C.) of any or all of the foregoing.

The Administrative Agent and the Domestic Account Bank, as agent for the Administrative Agent on behalf of the Lender Parties, shall have with respect to the foregoing collateral, in addition to the rights and remedies herein set forth, all of the rights and remedies available to a secured party under the U.C.C., as if such rights and remedies were fully set forth herein.

SECTION 9.4.2Rights on Default. Upon the occurrence and during the continuance of any Event of Default the Administrative Agent on behalf of the Lender Parties may exercise any and all rights and remedies with respect to the Receipt Account Collateral under the Loan Documents, the U.C.C. and other Laws, including liquidating the same and applying all proceeds therefrom to the payment of the Obligations as set forth in Section 8.6.

SECTION 9.4.3Financing Statement; Further Assurances. Wells Timberland and each other Loan Party agree that at any time and from time to time, at the expense of the Borrowers, Wells Timberland and each other Loan Party will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or desirable, or that the Administrative Agent or any Lender may reasonably request, in order to perfect and protect any security interest granted in the Receipt Account Collateral or purported to be granted or to enable the Administrative Agent or any Lender to exercise and enforce its rights and remedies hereunder with respect to any Receipt Account Collateral. In the event of any change in name, identity or structure of any of Wells Timberland or as otherwise reasonable requested by the Administrative Agent from time to time, each such Person, at its sole cost and expense, shall promptly notify the Administrative Agent and take all actions reasonably requested by the Administrative Agent in order to maintain its first priority perfected security interest in the Receipt Account Collateral.

SECTION 9.5Administrative Agent Appointed Attorney-In-Fact. Wells Timberland and each other Loan Party hereby irrevocably constitute and appoint the Administrative Agent (and its agents and designees) as such Person’s true and lawful attorney-in-fact, coupled with an interest and with full power of substitution, to execute, acknowledge and deliver at any time any instruments and to exercise and enforce every right, power, remedy, option and privilege of Wells Timberland or any other Loan Party with respect to the Receipt Account Collateral, and do in the name, place and stead of Wells Timberland or any other Loan Party, all such acts, things and deeds for and on behalf of and in the name of Wells Timberland or any other Loan Party which Wells Timberland or any other Loan Party is required to do hereunder or under the other Loan Documents, or which the Domestic Account Bank, any other Account Bank or the Administrative Agent (or its agents or designees) may deem necessary or desirable, to more fully vest the in the Administrative

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Agent (or its agents or designees) the rights and remedies provided for in this Section. The foregoing powers of attorney are irrevocable and coupled with an interest. Such authority in favor of the Administrative Agent (and its agents and designees) pursuant to this Section shall include the right to (a) take control in any manner of any item of payment in respect of the Receipt Account Collateral or otherwise received in or for deposit in the Receipt Account, (b) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of account receivables or other proceeds of Collateral are sent or received, (c) endorse Wells Timberland’s name upon any items of payment in respect of account receivables or constituting Collateral or otherwise received by the Administrative Agent (or its agents or designees) or any Lender and deposit the same in Receipt Account, (d) endorse Wells Timberland’s name upon any chattel paper, document, instrument, invoice or similar document or agreement relating to any account receivable or any goods pertaining thereto or any other Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, and (e) sign Wells Timberland’s name on any verification of account receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof. Wells Timberland hereby releases the Administrative Agent (or its agents or designees) and the Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of any such Person’s or any Lender’s own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

ARTICLE XTHE ADMINISTRATIVE AGENT

SECTION 10.1Appointment and Authority. Each of the Lenders on behalf of itself and its Affiliates holding Obligations pursuant to clause (ii) of the definition of “Obligations” hereby irrevocably appoints CoBank to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 10.1 are solely for the benefit of Administrative Agent and the Lenders and its Affiliates holding Obligations pursuant to clause (ii) of the definition of “Obligations”, and neither the Borrowers nor any other Loan Party nor any of their Subsidiaries shall have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Laws. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

SECTION 10.2Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the

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financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, any Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

SECTION 10.3Exculpatory Provisions.

(k)The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i)shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii)shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Law, including for the avoidance of doubt, any action that may be in violation of the automatic stay under any Debtor Relief Law or that may affect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii)shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(l)The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 11.1 and Article VIII), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Borrowers or a Lender.

(m)Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument

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or document, or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent.

SECTION 10.4Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including facsimile, e-mail, Platform, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

SECTION 10.5Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub‑agents appointed by the Administrative Agent. The Administrative Agent and any such sub‑agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section 10.5 shall apply to any such sub‑agent and to the Related Parties of the Administrative Agent and any such sub‑agent, and shall apply to their respective activities in connection with the syndication of the Commitments as well as activities as the Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

SECTION 10.6Resignation of Administrative Agent

(l)The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrowers. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders, appoint a successor Administrative Agent. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(m)If the Person serving as the Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by the Laws, by notice in writing to Borrowers and such Person remove such Person as the

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Administrative Agent and, in consultation with Borrowers, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(n)With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Section and Sections 11.3 and 11.4 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub‑agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

SECTION 10.7Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 10.8No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Lead Arranger, the Bookrunner, the Documentation Agent or the Syndication Agent listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

SECTION 10.9Administrative Agent May File Proof of Claims.

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In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on Borrowers) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(j)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 11.3 and Section 11.14) allowed in such judicial proceeding; and

(k)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each Affiliate holding Obligations pursuant to clause (ii) of the definition of “Obligations,” to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and such Affiliates, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 11.3, Section 11.4 and Section 10.12.

SECTION 10.10Agency for Perfection; Enforcement of Security by Administrative Agent. Administrative Agent and each Lender hereby appoint each other Lender as agent for the purpose of perfecting the Administrative Agent’s security interest in assets which, in accordance with Article 9 of the Uniform Commercial Code in any applicable jurisdiction, can be perfected only by possession or control. Should any Lender (other than the Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor, shall deliver such Collateral (or control thereof) to the Administrative Agent or in accordance with the Administrative Agent’s instructions without affecting any Lender’s right to set-off. Each Lender agrees that it will not have any right individually to enforce or seek to enforce any Security Document or to realize upon any collateral security for the Loans, it being understood and agreed that such rights and remedies may be exercised only by the Administrative Agent.

SECTION 10.11Collateral and Guaranty Matters.

(aa)The Lenders and their respective Affiliates irrevocably authorize the Administrative Agent, at its option and in its discretion,

(i)to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (v) upon termination of all Commitments and

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payment in full of all Obligations (other than contingent indemnification obligations), (w) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Loan Documents, (x) constituting property in which the Borrowers or any other Loan Party owned no interest at the time the security interest and/or Lien was granted, (y) constituting property leased to the Borrowers or any other Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement or is about to expire and which has not been, and is not intended by the Borrowers or any other Loan Party to be, renewed or extended, or (z) if approved by the Required Lenders or, if required by Section 11.1, each Lender, if applicable; providedthat, upon the request of Borrower or any Loan Party, the Administrative Agent, in its sole discretion, may provide a non-disturbance and attornment agreement or subordinate the Administrative Agent’s Lien in Real Property subject to a Mortgage to easements, rights of way and similar restrictions where such Borrower or such other Loan Party is permitted to create such easement, right of way or similar restriction pursuant to Section 7.2.3(d) hereof;

(ii)to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Permitted Encumbrance; and

(iii)to release any guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any guarantor from its obligations under the Guaranty pursuant to this Section 10.11.

(bb)The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

(cc)The Administrative Agent may from time to time make disbursements and advances that, in its sole discretion, it deems necessary or desirable to preserve, protect, prepare for sale or lease or dispose of the Collateral, to enhance the likelihood or maximize the amount of the Obligations that are repaid by the Loan Party or pay any other amount chargeable to the Loan Party hereunder. All such amounts disbursed or advanced by the Administrative Agent shall be Obligations that are secured by the Collateral and be repayable by the Borrowers on demand.

SECTION 10.12Indemnification. Lenders will reimburse and indemnify Administrative Agent and all other Agent Parties on demand (to the extent not actually reimbursed by the Loan Parties, but without limiting the obligations of the Loan Parties under this Agreement) for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, reasonable attorneys’ fees and expenses), advances or

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disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative Agent or any other Agent Parties (a) in any way relating to or arising out of this Agreement or any of the Loan Documents or any action taken or omitted by the Administrative Agent or any other Agent Parties under this Agreement or any of the Loan Documents, and (b) in connection with the preparation, negotiation, execution, delivery, administration, amendment, modification, waiver or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any of the other Loan Documents in proportion to each Lender’s Percentage; provided, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, advances or disbursements resulting from the Administrative Agent’s or any other Agent Parties’ gross negligence, bad faith or willful misconduct, as determined by a final, non-appealable judgment by a court of competent jurisdiction. If any indemnity furnished to any Agent Party for any purpose shall, in the opinion of Administrative Agent, be insufficient or become impaired, Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The obligations of Lenders under this Section 10.12 shall survive the payment in full of the Obligations and the termination of this Agreement.

ARTICLE XIMISCELLANEOUS PROVISIONS

SECTION 11.1Waivers, Amendments, etc.

(m)Except for actions expressly permitted to be taken by the Administrative Agent pursuant to the terms of the Loan Documents, no amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, or any consent to any departure by the Borrowers or any other Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, the Borrowers and the Required Lenders. Except as set forth in clause (b) below, all such amendments, modifications, terminations or waivers requiring the consent of the Lenders shall only require the written consent of the Required Lenders.

(n)Notwithstanding clause (a), no amendment, modification, termination or waiver of this Agreement or any other Loan Document shall, unless in writing and signed by the Administrative Agent, each Lender and each Voting Participant directly affected thereby: (i) increase the amount of the Commitment of any affected Lender or Voting Participant; (ii) reduce the principal of, or rate of interest on, or fees payable with respect to, any Loan of any affected Lender or Voting Participant; (iii) extend the due date for, or reduce the amount of, any scheduled payment or prepayment under clause (a) or (b) or (f) of Section 3.1.2 of principal on any Loan of any affected Lender or Voting Participant; (iv) extend the due date for, or reduce the amount of, any payment of interest (other than any waiver of any increase in the interest rate pursuant to Section 3.2.2) as to any affected Lender or Voting Participant; (v) alter Section 2.1 (with the exception of the Revolver Increase) or 2.3 or 9.3; (vi) release any material part of the Collateral unless Section 9.3 has been complied with (which action shall be deemed to affect all the Lenders); (vii) release any Loan Party from its guarantee obligations under any Loan Document except as specifically provided for in the Loan Documents (which action shall be deemed to affect all the Lenders); (viii) alter in any manner

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the prorata sharing of payments required hereunder (which action shall be deemed to affect all the Lenders and Voting Participants); (ix) amend or waive this Section or the definition of the “Required Lenders” insofar as such definition affects the substance of this Section, or any other provision specifying the number or percentage of Lenders and Voting Participants required to take any action under any Loan Document (which action shall be deemed to affect all the Lenders and Voting Participants); or (x) increase the amount of the Commitment (which action shall be deemed to affect all the Lenders and Voting Participants) other than with respect to the Revolver Increase. Furthermore, no amendment, modification, termination or waiver affecting the rights or duties of the Administrative Agent under this Agreement or any other Loan Document shall be effective unless in writing and signed by the Administrative Agent, in addition to Lenders required hereinabove to take such action.

(o)No failure or delay on the part of any Lender Party in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Borrowers in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by any Lender Party shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. The remedies provided in this Agreement are cumulative, and not exclusive of remedies provided by Law.

(p)Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender (it being understood that any Commitments or Loans held or deemed to be held by any such Defaulting Lender shall be excluded from a vote of the Lenders hereunder requiring the consent of the Lenders).

SECTION 11.2Notices.

(n)Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or e-mail as follows:

(xix)If to Borrowers: c/o Wells REIT, Inc., 6200 The Corners Parkway, Norcross, Georgia 30092-3365, Attention Ursula Godoy-Arbelaez (Facsimile no. (770) 243-8367; Telephone No. (770) 243-8505; email: Ursula.Godoy @WellsREF.com);

(xx)if to Administrative Agent, to CoBank, ACB at 5500 S. Quebec Street, Greenwood Village, Colorado 80111, Attention of Syndications Coordinator, Corporate Finance Division (Facsimile No. (303) 694-5830; Telephone No. (303) 740-4000; email: TousigM@cobank.com;agencybank@cobank.com);

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(xxi)If to a Lender to it at its address (or facsimile number or e-mail address) set forth in its Administrative Questionnaire or in the Assignment and Assumption pursuant to which it became a Lender, as the case may be; and

(xxii)as to any other party, at such other address as shall be designated by such party in a notice to the other parties.

Any party hereto may change its address, facsimile number, telephone number, or e-mail address, by notice to the other parties. Notices and communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices and communications sent by facsimile or e-mail shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient); providedthat, notices and communications sent by facsimile or email to the Administrative Agent shall not be effective until received by Administrative Agent.

(o)Delivery of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement or the Notes or any Exhibit hereto to be executed and delivered hereunder by facsimile or in electronic (i.e. “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart thereof.

(p)Each Loan Party agrees that the Administrative Agent may, but shall not be obligated to, make the Communications available to the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”). Each Lender agrees that notice to it (as provided in the next sentence) specifying that the Communications have been posted to the Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents. Each Lender shall (i) notify Administrative Agent in writing (including by e-mail) from time to time of its e-mail address to which the foregoing notice may be sent by e-mail and (ii) that the foregoing notice may be sent to such e-mail address. Nothing herein shall prejudice the rights of Administrative Agent or any Lender to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

(q)THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES DO NOT WARRANT THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL ANY AGENT PARTY HAVE ANY LIABILITY TO BORROWERS, ANY OTHER LOAN PARTY, ANY LENDER, OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND, INCLUDING FOR ANY DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY BORROWER’S, ANY LOAN PARTY’S,

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ADMINISTRATIVE AGENT’S, ANY LENDER’S OR ANY OTHER PERSON’S TRANSMISSION OF COMMUNICATIONS THROUGH THE PLATFORM, THE INTERNET OR ANY OTHER TELECOMMUNICATIONS, ELECTRONIC OR INFORMATION TRANSMISSION SYSTEM, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

SECTION 11.3Payment of Costs and Expenses.

(j)Subject to the proviso of the last sentence of clause (d) of Section 7.1.5, the Borrowers agree to pay all reasonable fees and out-of-pocket expenses of the Administrative Agent, its directors, officers, employees, agents, Affiliates and their Related Parties (including, without limitation, the reasonable fees and out-of-pocket expenses of legal counsel to the Administrative Agent and accountants, appraisers, investment bankers, environmental advisors, management consultants and other consultants, if any, who may be retained by the Administrative Agent) that are actually incurred in connection with:

(v)the syndication of the credit facilities provided for herein;

(vi)the negotiation, preparation, execution, delivery and administration of this Agreement and each other Loan Document (including with respect to due diligence matters, the preparation of additional Loan Documents, the review and preparation of agreements, instruments or documents pursuant to Section 7.1.9), and any amendments, waivers, consents, supplements or other modifications to this Agreement or any other Loan Document as may from time to time hereafter be required, and the Administrative Agent’s consideration of their rights and remedies hereunder or in connection herewith from time to time whether or not the transactions contemplated hereby or thereby are consummated;

(vii)the filing, recording, refiling or rerecording of the Loan Documents and any other security instruments executed in connection with the transactions contemplated hereby;

(viii)the preparation and review of the form of any document or instrument relevant to this Agreement or any other Loan Document;

(ix)sums paid or incurred to pay any amount or take any action required by the Borrowers or any other Loan Party under the Loan Documents that the Borrowers or any such Loan Party fail to pay or take; and

(x)costs of appraisals, field exams, inspections and verification of the Collateral, including, without limitation, travel, lodging, meals and other charges, including the costs, fees and expenses of independent auditors and appraisers.

(k)The Borrowers further agree to reimburse each Lender Party upon demand for all out-of-pocket expenses (including, without limitation, the fees and out-of-pocket expenses

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of legal counsel and consultants to each Lender Party who may be retained by each such Lender Party) actually incurred by each Lender Party in connection with (i) the consideration of their rights and remedies hereunder in connection with any current or prospective Default or Event of Default; (ii) the negotiation of any restructuring or “work-out,” whether or not consummated, of any Obligations; (iii) the enforcement or protection of its rights in connection with this Agreement or any other Loan Document; and (iv) any litigation, dispute, suit or proceeding relating to this Agreement or any Loan Document.

(l)[reserved].

(m)All amounts due under this Section shall be payable promptly and, in any event, not later than 10 days after demand therefor.

SECTION 11.4Indemnification by the Borrowers.

(r)The Borrowers agree, at their sole cost and expense, to indemnify, exonerate and hold each Lender Party and each of their respective directors, officers, employees, agents, Affiliates and Related Parties (collectively, the “Indemnified Parties”) free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities, damages and out-of-pocket expenses (in each case whether asserted by any third party or the Borrowers or any of its Affiliates and irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including, without limitation, the fees and out-of-pocket expenses of the Indemnified Parties (including the fees and out-of-pocket expenses of legal counsel and consultants to the Indemnified Parties who may be retained by the Indemnified Parties) (collectively, the “Indemnified Liabilities”), that arise out of or relate to:

(i)the negotiation, preparation, execution, delivery or performance of the terms of, or consummation of the transactions contemplated by, this Agreement, any other Loan Document or any other agreement or instrument contemplated thereby (including any action brought by or on behalf of the Borrowers or any other Loan Party as the result of any determination by the Required Lenders pursuant to Article V not to fund any Borrowing);

(ii)any Loan and any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Loan;

(iii)any Environmental Laws;

(iv)any presence, release, or threat of Release of Hazardous Materials, at, upon, under or within the Real Property;

(v)the falsity in any material respect of any of the representations made in Section 6.13, whether or not caused by the Borrowers;

(vi)the failure of the Borrowers to duly perform the covenants, obligations or actions set forth in Section 7.1.6, including with respect to: (A) the imposition by any Governmental Authority of any lien upon the Real Property, (B) remediation of the Real Property or any other land or water contaminated by Hazardous Materials which were generated on or

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migrated from the Real Property, (C) liability for personal injury or property damage or damage to the environment, (D) any diminution in the value of the Real Property and (E) claims, costs, liabilities and damages arising under any Environmental Law, or any other claims, liabilities or costs which may be incurred by or asserted against Indemnified Parties directly or indirectly resulting from the presence of any Hazardous Material in, on, under or affecting the Real Property;

(vii)any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory;

except for any such Indemnified Liabilities arising from the relevant Indemnified Party’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrowers agree to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under the Laws. Such indemnification shall be available regardless whether the relevant Indemnified Party is found to have acted with comparative, contributory or sole negligence. Under no circumstances shall any Indemnified Party be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(s)The Borrowers further agree that Lender Parties and their respective directors, officers, employees, agents, Affiliates and Related Parties shall not assume any liability or obligation for loss, damage, fines, penalties, claims or duty to remediate or dispose of wastes or Hazardous Substances on or relating to Real Property as a result of any conveyance of title to the Real Property to any of the Lender Parties or otherwise or as a result of any inspections or any other actions made or taken by and Lender Party on the Real Property, except to the extent that any of the foregoing matters are attributable to actions or omissions by such Lender Party or its agents constituting fraud, gross negligence or willful misconduct. The Borrowers agree to remain fully liable under the indemnification contained in this Section.

(t)Promptly following completion of any actions imposed upon the Borrowers by any order, judgment or other final resolution of a matter indemnified under this Agreement, or completion of any other remediation requirement under any applicable Environmental Laws, the Borrowers shall certify to the Administrative Agent and the Lenders that all such required actions have been completed. The Administrative Agent or any Lender, at its option, may require the Borrowers, at the Borrowers’ expense, to obtain and deliver to the Administrative Agent and the Lenders an environmental report in form and substance reasonably acceptable to Administrative Agent from a consultant reasonably acceptable to the Administrative Agent confirming that all such actions have been completed in accordance with any such order, judgment or resolution or other legal or remediation requirements, and that the Real Property is in compliance in all material respects with applicable Environmental Laws. To the extent that the Borrowers for any reason fail to indefeasibly pay any amount required under clause (a) to be paid by it to the Administrative Agent (or any director, officer, employee, agent, Affiliate or Related Party thereof), each Lender severally agrees to pay to the Administrative Agent (or any director, officer, employee, agent, Affiliate or

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Related Party thereof), such Lender’s prorata share (determined as of the time that the applicable unreimbursed indemnity payment is sought) of such unpaid amount. The obligations of the Lenders under this clause are several and not joint and shall survive the termination of this Agreement.

(u)Each Loan Party also agrees that, without the prior consent of the Administrative Agent (not to be unreasonably withheld), neither it nor any of its Affiliates will settle, compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding in respect of which indemnification has been or could be sought under the indemnification provisions hereof (whether or not any Indemnified Party is an actual or potential party to such claim, action or proceeding), unless such settlement, compromise or consent (i) includes a full and unconditional written release of each Indemnified Party from all liability arising out of such claim, action or proceeding and (ii) does not include any statement as to or an admission of fault, culpability or failure to act by or on behalf of any Indemnified Party.

(v)This Section 11.4 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

SECTION 11.5Survival. The obligations of the Borrowers under Sections 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4 and under any other provision specifically providing for indemnification or reimbursement of fees, costs and expenses incurred by any of the Lender Parties in connection with this Agreement and the other Loan Documents, and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement, the payment in full of all the Obligations and the termination of all the Commitments. All covenants, agreements, representations and warranties made by each Loan Party in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lender Parties and shall survive the execution and delivery of the Loan Documents and the making of any Loan, regardless of any investigation made by any Lender Party or on its behalf and notwithstanding that any Lender Party may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder.

SECTION 11.6Severability. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 11.7Headings. The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.

SECTION 11.8Counterparts; Integration; Effectiveness.

(l)This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents,

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and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Article V, this Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

(m)Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 11.9Governing Law.This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York, without regard to conflicts of law principals that require or permit application of the laws of any other state or jurisdiction.

SECTION 11.10Entire Agreement. This Agreement and each other Loan Document constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto.

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SECTION 11.11Assignments and Participations.

(g)Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither Borrowers nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (including Voting Participants) to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(h)Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that (in each case with respect to any credit facility) any such assignment shall be subject to the following conditions:

(i)Minimum Amounts

(A)in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it (in each case with respect to any Commitment) or contemporaneous assignments to related Approved Funds that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B)in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed).

(ii)Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Commitments on a non-pro rata basis.

(iii)Required Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

(A)the consent of Borrowers (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment, or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that Borrowers shall be deemed to have consented to any such assignment unless it shall object thereto by notice to the Administrative Agent within 5 Business Days after having received notice thereof and provided,further, that Borrowers’ consent shall not be required during the primary syndication of the Commitments;

(B)the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) the Revolving Commitment or any unfunded Commitments with respect to any Term Loan Commitment if such assignment is to a Person that is not a Lender with a Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender, or (ii) any Term Loans to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund.

(iv)Assignment and Assumption. The parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)No Assignment to Certain Persons. No such assignment shall be made to (a) Borrowers or any of Borrowers’ Affiliates or Subsidiaries or (b) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (b).

(vi)No Assignment to Natural Persons. No such assignment shall be made to a natural Person.

(vii)Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount

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sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrowers and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (a) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent and each other Lender hereunder (and interest accrued thereon), and (b) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its pro rata share. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Laws without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (c), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Upon request, the Borrowers (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (d) of this Section.

(i)Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at an office specified from time to time a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(j)Participations. Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”)

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in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 11.1 (b)(i) through (x) that affects such Participant. Borrowers agrees that each Participant shall be entitled to the benefits of Sections 4.3, 4.4, 11.4 and 4.6 (subject to the requirements and limitations therein, including the requirements under Section 4.6(f) (it being understood that the documentation required under Section 4.6(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Subsection; providedthat, such Participant (A) agrees to be subject to the provisions of Section 4.5 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 4.3 and 4.6, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrowers’ request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 4.5 with respect to any Participant. To the extent permitted by the Laws, each Participant also shall be entitled to the benefits of Sections 4.8 and 4.9as though it were a Lender; provided that such Participant agrees to be subject to Sections 4.8 and 4.9as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as the Administrative Agent) shall have no responsibility for maintaining a Participant Register.

Any Participant that is a Farm Credit Lender and that (i) has purchased a participation in a minimum amount of $5,000,000, (ii) if the Administrative Agent is other than CoBank, has been designated as a voting participant (a “Voting Participant”) in a notice (a “Voting Participant Notice”)

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sent by the relevant Lender to the Administrative Agent as being entitled to be accorded the right of a Voting Participant, and (iii) receives the prior written consent of the Administrative Agent (such consent being required only if Administrative Agent is other than CoBank) and of the Borrowers (such consent being required only if no Event of Default then exists and is continuing and only as to Farm Credit Lenders not disclosed to the Borrowers on Schedule 11.11(d) as being a Participant as of the Initial Funding Date) to become a Voting Participant, shall be entitled to vote, and the voting rights of the selling Lender shall be correspondingly reduced, on a dollar-for-dollar basis, as if such Participant were a Lender, on any matter requiring or allowing a Lender to provide or withhold its consent, or to otherwise vote on any proposed action to which the Lender selling such participation is entitled to vote.

(k)Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 11.12Press Releases and Related Matters. The Borrowers agree that neither it nor any other Loan Party will issue any press release or other public disclosure using the name of CoBank or its Affiliates (other than the filing of the Loan Documents with the Securities and Exchange Commission) without the prior consent of CoBank. The Borrowers consent to the publication by the Administrative Agent or any Lender of a tombstone or similar advertising material relating to the financing transactions contemplated by this Agreement. The Administrative Agent and each such Lender shall provide a draft of any such tombstone or similar advertising material to the Borrowers for review and reasonable comment prior to the publication thereof. In addition, the Administrative Agent reserves the right to provide to industry trade organizations customary information for inclusion in league table measurements.

SECTION 11.13Consent to Jurisdiction and Service of Process

(g)Jurisdiction. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION WHETHER IN LAW OR IN EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK, SITTING IN NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT, OR TO THE FULLEST EXTENT PERMITTED BY THE LAWS, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH

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ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWERS OR ANY OTHER LOAN PARTY OR THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(h)Waiver of Venue. BORROWERS AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY THE LAWS, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (A) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY THE LAWS, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(i)Service of Process. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.2. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY THE LAWS.

SECTION 11.14Waiver of Jury Trial, etc. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY THE LAWS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 11.15Waiver of Consequential Damages, etc. TO THE FULLEST EXTENT PERMITTED BY THE LAWS, EACH BORROWER AND EACH OTHER LOAN PARTY SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ANY INDEMNIFIED PARTY, ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT

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CONTEMPLATED HEREBY, THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY LOAN OR OTHER CREDIT EXTENSION OR THE USE OF THE PROCEEDS THEREOF. NO INDEMNIFIED PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

SECTION 11.16No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

SECTION 11.17Protection of Interests. Without limiting any of the other provisions hereof and whether or not the Administrative Agent or any Lender acquires legal possession and title to the Real Property, if the Administrative Agent becomes aware of any matter for which the Borrowers may have liability in accordance with the other provisions of this Agreement, whether or not a claim is asserted against any Lender Party, the Administrative Agent shall have the right to take any action available to the Administrative Agent under the Laws, and the Borrowers hereby grant to the Administrative Agent and its respective agents, attorneys, employees, consultants, contractors and assigns, an irrevocable license and authorization for access to the Real Property and to conduct any such actions that the Administrative Agent deems reasonably appropriate in connection therewith. The Borrowers shall pay promptly following demand by the Administrative Agent all costs and expenses in connection with such investigatory and remedial activities. The foregoing license and authorization is intended to be a means of protection of the Administrative Agent’s or the Lenders’ security interest in the Real Property and not as participation in the management of the Borrowers or the Real Property.

SECTION 11.18Confidentiality. Each of the Administrative Agent and the Lenders agree to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its other Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by the Laws or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrowers and their obligations, this Agreement or payments hereunder; (g) on a confidential basis to (i) any

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rating agency in connection with rating Borrowers or their Subsidiaries or the Commitments or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Commitments; (h) with the consent of the Borrowers; or (I) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section, or (y) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrowers. For purposes of this Section, “Information” means all information received from Borrowers or any of their Subsidiaries relating to the Borrowers or any of their Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrowers or any of their Subsidiaries; provided that, in the case of information received from the Borrowers or any of their Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord its own confidential information.

SECTION 11.19Patriot Act Information. Each Lender Party hereby notifies the Borrowers and each other Loan Party that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrowers or any other Loan Party, which information includes the name and address of the Borrowers and each such other Loan Party and other information that will allow each Lender Party to identify the Borrowers and each other Loan Party in accordance with the Patriot Act. The Borrowers and each other Loan Party shall, and shall cause each other Loan Party to, provide such information and take such actions as are reasonably requested by any Lender Party in order to assist such Lender Party in maintaining compliance with the Patriot Act.

SECTION 11.20Joint and Several Liability. In consideration of the financial accommodations being provided by the Lender Parties, each of the Borrowers agree to be jointly and severally liable, not merely as a surety but also as a co-debtor, with respect to the payment and performance of all the Loans and other Obligations under this Agreement and the other Loan Documents. Without limiting the foregoing, if any Borrower fails to make any payment of, or perform with respect to, any of the Obligations, the other Borrower agrees to make such payment and complete such performance requirement in accordance with the terms hereof and the other Loan Documents.

SECTION 11.21Waiver of Farm Credit Rights. THE BORROWERS ACKNOWLEDGE AND AGREE THAT, TOGETHER WITH LEGAL COUNSEL, THEY HAVE REVIEWED ALL RIGHTS THAT THEY MAY OTHERWISE BE ENTITLED TO WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS UNDER THE STATUTES AND REGULATIONS OF THE FARM CREDIT ADMINISTRATION AS SPECIFIED AT 12 CFR § 617.7000 ET.SEQ., AND THAT THEY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVE ANY AND ALL SUCH RIGHTS.

SECTION 11.22Effectiveness of Amendment and Restatement; No Novation. The

1

amendment and restatement of the Existing Credit Agreement pursuant to this Agreement shall be effective upon the date hereof. All obligations and rights of the Loan Parties, the Administrative Agent and the Lenders arising out of or relating to the period commencing on the date hereof shall be governed by the terms and provisions of this Agreement; the obligations and rights of the Loan Parties, the Administrative Agent and the Lenders arising out of or relating to the period prior to the date hereof shall continue to be governed by the Existing Credit Agreement without giving effect to the amendment and restatement provided for herein. This Agreement shall not constitute a novation or termination of the Loan Parties’ obligations under the Existing Credit Agreement or any document, note or agreement executed or delivered in connection therewith, but shall constitute an amendment and restatement of the obligations and covenants of the Loan Parties under such documents, notes and agreements, and the Loan Parties hereby reaffirm all such obligations and covenants, as amended and restated hereby.

SECTION 11.23Purchase of AgSouth Equity Interests. Wells Timberland agrees to purchase Equity Interests in AgSouth (the “AgSouth Equity Interests”) as AgSouth may require in accordance with its bylaws and capital plan that are applicable to its borrowers generally. In connection with the foregoing, Wells Timberland hereby acknowledges receipt, prior to the execution of this Agreement, of: (a) AgSouth’s bylaws; (b) a written description of the terms and conditions under which the AgSouth Equity Interests are issued; and (c) the most recent annual financial report, and if more current, the latest quarterly financial report of AgSouth. Wells Timberland acknowledges and agrees that it shall not receive any patronage with respect to the AgSouth Equity Interests purchased by it.

SECTION 11.24Initial Funding Date Assignment. On the Initial Funding Date, AgSouth will assign all of its Loans to AgFirst Farm Credit and CoBank. Accordingly, Schedule II contains the Term and Revolving Loan Commitment Amounts both before and after giving effect to such assignment.

SECTION 11.25Borrowers’ Agent. Each of the Borrowers hereby appoints and authorizes the other to act as its agent under this Agreement and the other Loan Documents with such powers and discretion as are specifically delegated to the Borrowers (individually or collectively) by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto, including, without limitation, to execute and deliver to the Administrative Agent all notices, certificates and similar items (including, without limitation, any Borrowing Requests or Continuation/Conversion Notice) required or permitted under this Agreement on behalf of any Borrower or both Borrowers. The Administrative Agent and each Borrower may rely on any notice delivered by either Borrower on behalf of any Borrower or both Borrowers. Any act by one Borrower shall be deemed taken on behalf of both Borrowers.

1

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

TIMBERLANDS II, LLC

By: WELLS TIMBERLAND MANAGEMENT ORGANIZATION, LLC, its Manager

By:    

Name: Brian M. Davis

Title: Senior Vice President & Chief Financial Officer

WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P.

By: WELLS TIMBERLAND REIT, INC., its General Partner

By:    

Name: Douglas P. Williams

Title: Executive Vice President, Secretary & Treasurer

COBANK, ACB,as Administrative Agent, Lead Arranger and Bookrunner

By:    

Name: Michael Tousignant

Title: Vice President

LENDERS:

AGSOUTH FARM CREDIT, ACA

By:    

Name:

Title:

1

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A. “RABOBANK NEDERLAND,” NEW YORK BRANCH

By:    

Name:

Title:

By:    

Name:

Title:

METROPOLITAN LIFE INSURANCE COMPANY

By:    

Name:

Title:

Acknowledged and Agreed to:

WELLS TRS HARVESTING OPERATIONS, LLC

By: FOREST RESOURCE CONSULTANTS, INC., its Manager

By:
Name: David T. Foil
Title: President

2

WELLS TIMBERLAND REIT, INC.

By: _________________________________

Name: Douglas P. Williams

Title: Executive Vice President, Secretary & Treasurer

WELLS TIMBERLAND TRS, INC.

By: _________________________________

Name: Douglas P. Williams

Title: Executive Vice President, Secretary & Treasurer

WELLS TIMBERLAND HBU, LLC

By:    WELLS TIMBERLAND MANAGEMENT

ORGANIZATION, LLC, its Manager

By: _________________________________

Name: Brian M. Davis

Title: Senior Vice President & Chief Financial Officer

SCHEDULE I

DISCLOSURE SCHEDULE

ITEM 1.1(a)(i)    Land Sales Adjustment of Cost Basis of Collateral

ITEM 1.1(b)    Material Agreements.

ITEM 1.1 (c)    PLM Leases.

ITEM 6.7(b)    Labor Matters.

ITEM 6.8    Initial Capitalization.

3

ITEM 6.10(a)    Property Matters.

ITEM 6.10(c)    Consents and Approvals.

ITEM 6.10(d)    Timber Operations.

ITEM 6.10(e)    Condemnation Proceedings.

ITEM 6.13(f)    Environmental Matters/Storage Tanks.

ITEM 6.19(b)    Material Governmental Approvals.

ITEM 6.21    Insurance.

ITEM 6.22    Affiliate Transactions.

ITEM 6.24    Accounts.

SCHEDULE II

TERM AND REVOLVING LOAN COMMITMENT AMOUNT

Part I

TERM LOAN COMMITMENT AMOUNT

Lender	Term Loan Commitment Amount
AgSouth Farm Credit, ACA	$	107,000,000
Coöperatieve Centrale Raiffeisen-BoerenleenBank, B.A. “Rabobank Nederland,” New York Branch	$	11,000,000
Metropolitan Life Insurance Company	$	15,000,000
Total:	$	133,000,000

TERM LOAN COMMITMENT AMOUNT AFTER GIVING EFFECT TO THE INITIAL FUNDING DATE ASSIGNMENTS

Lender	Term Loan Commitment Amount
CoBank, ACB	$	72,000,000
AgFirst Farm Credit Bank	$	35,000,000
Coöperatieve Centrale Raiffeisen-BoerenleenBank, B.A. “Rabobank Nederland,” New York Branch	$	11,000,000
Metropolitan Life Insurance Company	$	15,000,000
Total:	$	133,000,000

Part II

REVOLVING LOAN COMMITMENT AMOUNT

Lender	Revolving Loan Commitment Amount
AgSouth Farm Credit, ACA	$	5,000,000
Coöperatieve Centrale Raiffeisen-BoerenleenBank, B.A. “Rabobank Nederland,” New York Branch	$	5,000,000
Metropolitan Life Insurance Company	$	5,000,000
Total:	$	15,000,000

REVOLVING LOAN COMMITMENT AMOUNT AFTER GIVING EFFECT TO THE INITIAL FUNDING DATE ASSIGNMENTS

Lender	Revolving Loan Commitment Amount
CoBank, ACB	$	5,000,000
Coöperatieve Centrale Raiffeisen-BoerenleenBank, B.A. “Rabobank Nederland,” New York Branch	$	5,000,000
Metropolitan Life Insurance Company	$	5,000,000
Total:	$	15,000,000

SCHEDULE III

VOTING PARTICIPANTS

Farm Credit Bank of Texas

Farm Credit Services of America, FLCA

Farm Credit West, FLCA

United FCS, FLCA, dba FCS Commercial Finance Group

EX-31.1

EXHIBIT 31.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. 1350)

I, Leo F. Wells, III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Wells Timberland REIT, Inc. for the quarter ended September 30, 2012;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s)and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting

to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	November 5, 2012	By:	/s/ LEO F. WELLS, III
			Leo F. Wells, III Principal Executive Officer

EX-31.2

EXHIBIT 31.2

PRINCIPAL FINANCIAL OFFICER

CERTIFICATION

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. 1350)

I, Douglas P. Williams, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Wells Timberland REIT, Inc. for the quarter ended September 30, 2012;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as

defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting

to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	November 5, 2012	By:	/s/ DOUGLAS P. WILLIAMS
			Douglas P. Williams Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. 1350)

In connection with the Quarterly Report on Form 10-Q of Wells Timberland REIT, Inc. (the “Registrant”) for the quarter ended September 30, 2012, as filed with the Securities and Exchange Commission (the “Report”), the undersigned, Leo F. Wells, III, Principal Executive Officer of the Registrant, and Douglas P. Williams, Principal Financial Officer of the Registrant, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge and belief:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ LEO F. WELLS, III

Leo F. Wells, III

Principal Executive Officer

November 5, 2012

/s/ DOUGLAS P. WILLIAMS

Douglas P. Williams

Principal Financial Officer

November 5, 2012

XML

Related-Party Transactions - Structuring Agent Agreement (Details) (Wells Germany GmbH, 2010 German Offering, USD $)	9 Months Ended
	Sep. 30, 2012
Wells Germany GmbH | 2010 German Offering
Related Party Transaction [Line Items]
Structuring agent agreement, basis for fee (per share sold)	$ 0.20

XML

Timber and Timberlands (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended
	Sep. 28, 2012 acre	Sep. 30, 2012 acre	Sep. 30, 2011 acre	Sep. 30, 2012 acre	Sep. 30, 2011 acre	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Timberland, Estate for Years	14,400
Payments to acquire real estate	$ 2,000,000
Timber and timberlands, net		337,270,183		337,270,183		328,561,850
Timberland, acres sold		210	0	6,020	550
Timberland, acres sold, value		420,260	0	10,972,440	1,021,200
Timber
Property, Plant and Equipment [Line Items]
Timber and timberlands, gross		161,875,264		161,875,264		175,512,118
Timber and timberlands, accumulated depletion or amortization		8,144,576		8,144,576		11,759,282
Timber and timberlands, net		153,730,688		153,730,688		163,752,836
Timberlands
Property, Plant and Equipment [Line Items]
Timber and timberlands, gross		183,293,051		183,293,051		164,550,798
Timber and timberlands, accumulated depletion or amortization		0		0		0
Timber and timberlands, net		183,293,051		183,293,051		164,550,798
Mainline roads
Property, Plant and Equipment [Line Items]
Timber and timberlands, gross		406,286		406,286		376,406
Timber and timberlands, accumulated depletion or amortization		159,842		159,842		118,190
Timber and timberlands, net		246,444		246,444		258,216
Timber and timberlands
Property, Plant and Equipment [Line Items]
Timber and timberlands, gross		345,574,601		345,574,601		340,439,322
Timber and timberlands, accumulated depletion or amortization		8,304,418		8,304,418		11,877,472
Timber and timberlands, net		337,270,183		337,270,183		328,561,850
Timberland Property
Property, Plant and Equipment [Line Items]
Number of acres acquired	29,900
Timberland, Estate for Years	12,400
Timberland, Estate for Years Requiring Future Payments	8,300
Payments to acquire real estate	20,500,000
Estimated net present value of future liability	$ 1,200,000
Long-Term Leashold Interest Properties
Property, Plant and Equipment [Line Items]
Timberland, Estate for Years	2,000

XML

Timber and Timberlands

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Timber and Timberlands

Timber and Timberlands

On September 28, 2012, Wells Timberland REIT acquired approximately 29,900 acres of timberland (the "Property") for a purchase price of approximately $20.5 million, exclusive of closing costs. Wells Timberland REIT had previously held long-term leasehold interest in the Property, which is located within the Mahrt Timberland. In addition, Wells Timberland REIT paid $2.0 million to buy out a third party's interest in approximately 14,400 acres of timberland, including 12,400 acres within the Property and 2,000 acres where Wells Timberland REIT continues to hold long-term leasehold interests. Wells Timberland REIT will also make annual payments on approximately 8,300 acres of the Property at a per-acre rate equal to the then-current lease rate to the seller through May 2022. The estimated net present value of the liability was approximately $1.2 million and was recorded in other liabilities in the accompanying consolidated balance sheets. The acquisition was funded with cash on-hand and debt financing (seeNote 4).

During the three months ended September 30, 2012, Wells Timberland REIT sold approximately 210 acres of timberland for approximately $0.4 million. No timberland was sold during the third quarter of 2011. During the nine months ended September 30, 2012 and 2011, Wells Timberland REIT sold approximately 6,020 and 550 acres of timberland, respectively, for approximately $11.0 million and $1.0 million, respectively.

As of September 30, 2012 and December 31, 2011, timber and timberlands consisted of the following, respectively:

	As of September 30, 2012
	Gross		Accumulated Depletion or Amortization		Net
Timber	$	161,875,264	$	8,144,576	$	153,730,688
Timberlands	183,293,051		—		183,293,051
Mainline roads	406,286		159,842		246,444
Timber and timberlands	$	345,574,601	$	8,304,418	$	337,270,183

	As of December 31, 2011
	Gross		Accumulated Depletion or Amortization		Net
Timber	$	175,512,118	11,759,282		$	163,752,836
Timberlands	164,550,798		—		164,550,798
Mainline roads	376,406		118,190		258,216
Timber and timberlands	$	340,439,322	$	11,877,472	$	328,561,850

XML

Share Redemption Plan (Details) (SRP, USD $)	0 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended
	Aug. 06, 2012	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2012
SRP
Stockholders' Equity Disclosures [Line Items]
Reserve for common stock redemptions		$ 150,000	$ 150,000	$ 150,000
Qualified death & disability redemption period (years)	2 years
Percentage of per share cost prior to NAV publication	91.00%
Percentage of estimated NAV after NAV publication	95.00%
Value of redeemed shares during period		150,000	231,000	756,600
Percentage of per share cost prior to amendment		100.00%
Percentage of redeemed common stock value reimbursed by related party		9.00%
Value of redeemed common stock reimbursed by related party		13,500
Amount of qualified redemption requests unfulfilled and returned		$ 200,000	$ 200,000	$ 200,000

XML

Commitments and Contingencies (Details)	9 Months Ended
	Sep. 30, 2012 states
Commitments and Contingencies Disclosure [Abstract]
Number of states reporting raw forest product prices	11
Master stumpage price premium per ton (in dollars per unit)	0.10
Operating agreement, term of extension option (years)	1 year
Operating agreement, notice of termination option (days)	120 days

XML

Supplemental Disclosures of Noncash Activities (Details) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Supplemental Cash Flow Elements [Abstract]
Write-off of due to affiliates	$ 27,315,249	$ 0
Dividends accrued on preferred stock	280,003	1,460,194
Discounts applied to issuance of common stock	43,761	326,548
(Cancellation) issuance of stock dividends	(329)	4,069,990
Stock dividends payable to stockholders - additional paid-in capital	0	30,875
Stock dividends payable to stockholders - par value	$ 0	$ 31
Issuance of stock-based compensation	55,000	40,000
Other liabilities assumed upon acquisition of timberland	1,156,317	3,792
Deferred financing costs payable	$ 99,936	$ 0

XML

Related-Party Transactions - Advisory Agreement (Details) (USD $)	0 Months Ended	9 Months Ended		0 Months Ended	3 Months Ended	18 Months Ended		0 Months Ended	3 Months Ended	12 Months Ended	9 Months Ended
	Jan. 20, 2012	Sep. 30, 2012	Sep. 30, 2012 Wells TIMO-Advisory Agreement Amendment No. 2	Apr. 02, 2011 Wells TIMO-Advisory Agreement Amendment No. 1	Mar. 31, 2011 Wells TIMO-Advisory Agreement	Jun. 30, 2012 Wells TIMO-Advisory Agreement	Jun. 30, 2012 Maximum Wells TIMO-Advisory Agreement	Jan. 27, 2012 Public Offerings Wells TIMO-Advisory Agreement	Mar. 31, 2011 Public Offerings Wells TIMO-Advisory Agreement	Dec. 31, 2011 Follow-On Offering Wells TIMO	Sep. 30, 2012 Follow-On Offering Wells TIMO-Advisory Agreement	Sep. 30, 2012 IPO Wells TIMO-Advisory Agreement
Related Party Transaction [Line Items]
Advisory agreement, organization and offering costs, percentage of offering proceeds									1.20%
Number of quarters of free cash flow, management fee threshold			4
Organization and offering costs charged to additional paid-in capital											$ 1,500,000	$ 2,100,000
Related party transaction, write-off of deferred costs	25,100,000	27,315,249						2,200,000
Advisory agreement, asset management fee, percentage					0.083%
Disposition commission,threshold for commission percentage						20,000,000
Disposition commission,percentage of proceeds under threshold							2.00%
Disposition commission,percentage of proceeds over threshold							1.00%
Commissions, maximum, percentage of sales price						6.00%
Fee and expense reimbursements, percentage of assets under management			1.00%	1.50%
Cash flow in excess, interest on outstanding debt multipler				1.05
Cash flow in excess, interest expense multipler			1.25
Advisory agreement, term of extension option			1 year
Amended advisory agreement, notice of termination option		60 days
Organization and offering costs, percentage of offering proceeds, after write-offs									0.50%
Organization and offering expenses not subject to reimbursement										$ 6,400,000

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements of Wells Timberland REIT have been prepared in accordance with the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In the opinion of management, the statements for these unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of results for a full year.

Wells Timberland REIT owns a controlling financial interest in Wells Timberland OP and Wells Timberland TRS and, accordingly, includes the accounts of these entities in its consolidated financial statements. The financial statements of Wells Timberland OP and Wells Timberland TRS are prepared using accounting policies consistent with those used by Wells Timberland REIT. All intercompany balances and transactions have been eliminated in consolidation.

For further information, refer to the audited financial statements and footnotes included in Wells Timberland REIT’s Annual Report on Form 10-K for the year ended December 31, 2011.

Interest Rate Swaps

Wells Timberland REIT has entered into interest rate swap agreements to hedge its exposure to changing interest rates on variable rate debt instruments (see Note 4). Wells Timberland REIT does not enter into derivative or interest rate transactions for speculative purposes; however, certain of its derivatives may not qualify for hedge accounting treatment. The fair values of interest rate swaps are recorded as either prepaid expenses and other assets or other liabilities in the accompanying consolidated balance sheets. Changes in the fair value of the effective portion of interest rate swaps that are designated as hedges will be recorded as other comprehensive income or loss in a consolidated statement of other comprehensive income. The ineffective portion of the hedge, if any, is recognized in current earnings during the period of change in fair value. Changes in the fair value of interest rate swaps that do not qualify for hedge accounting treatment are recorded as gain or loss on interest rate swap in the accompanying consolidated statements of operations. Amounts received or paid under interest rate swaps are recorded as interest expense for contracts that qualify for hedge accounting treatment and as gain or loss on interest rate swap for contracts that do not qualify for hedge accounting treatment.

As of September 30, 2012 and December 31, 2011, Wells Timberland REIT recognized the fair value of an interest rate swap that does not qualify for hedge accounting treatment of approximately $0.3 million and $1.0 million, respectively, in other liabilities. The detail of loss on the interest rate swap, which was recorded in the accompanying consolidated statements of operations, is provided below for the three months and nine months ended September 30, 2012 and 2011, respectively:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Noncash gain on interest rate swap	$	213,293		$	97,592		$	665,009		$	209,026
Net payments on interest rate swap	(232,999		)	(209,770		)	(787,880		)	(657,595		)
Loss on interest rate swap	$	(19,706	)	$	(112,178	)	$	(122,871	)	$	(448,569	)

Income Taxes

Wells Timberland REIT has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and has operated as such beginning with its taxable year ended December 31, 2009. To qualify to be taxed as a REIT, Wells Timberland REIT must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its ordinary taxable income to its stockholders. As a REIT, Wells Timberland REIT generally is not subject to federal income tax on taxable income it distributes to stockholders. Wells Timberland REIT is subject to certain state and local taxes related to the operations of timberland properties in certain locations, which have been provided for in the accompanying consolidated financial statements.

As of January 1, 2009, the beginning of the taxable year in which Wells Timberland REIT qualified for and elected to be taxed as a REIT, or its REIT commencement date, Wells Timberland REIT had net built-in gains on its timber assets of approximately $18.3 million. Wells Timberland REIT elected not to take such net built-in gains into income immediately prior to its REIT commencement date, but rather subsequently recognize gain on the disposition of any timber assets it holds at the REIT commencement date, if disposed of within the ten-year period beginning on the REIT commencement date. Wells Timberland REIT will be subject to tax on such net built-in gains at the highest regular corporate rate during the ten-year period beginning on the REIT commencement date on the least of (a) the excess of the fair market value of the timber assets disposed of as of the REIT commencement date over its basis in the timber assets as of the REIT commencement date (the built-in gain with respect to that timberland as of the REIT commencement date); (b) the amount of gain Wells Timberland REIT would otherwise recognize on the disposition; or (c) the amount of net built-in gain in its timber assets as of the REIT commencement date not already recognized during the ten-year period. At December 31, 2011, Wells Timberland REIT had federal and state net operating loss carryforwards of approximately $99.7 million and $83.3 million, respectively. Such net operating loss carryforwards may be utilized, subject to certain limitations, to offset future taxable income, including net built-in gains.

Wells Timberland REIT has elected to treat Wells Timberland TRS as a taxable REIT subsidiary. Wells Timberland REIT may perform certain non-customary services, including real estate or non-real-estate related services, through Wells Timberland TRS. Earnings from services performed through Wells Timberland TRS are subject to federal and state income taxes irrespective of the dividends paid deduction available to REITs for federal income tax purposes. In addition, for Wells Timberland REIT to continue to qualify to be taxed as a REIT, Wells Timberland REIT’s investment in Wells Timberland TRS may not exceed 25% of the value of the total assets of Wells Timberland REIT.

Deferred tax assets and liabilities represent temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on the enacted rates expected to be in effect when the temporary differences reverse. Deferred tax expense or benefit is recognized in the financial statements according to the changes in deferred tax assets or liabilities between years. Valuation allowances are established to reduce deferred tax assets when it becomes more likely than not that such assets, or portions thereof, will not be realized.

No provision for federal income taxes has been made in the accompanying consolidated financial statements, other than the provision relating to Wells Timberland TRS, as Wells Timberland REIT did not generate taxable income for the periods presented. Wells Timberland REIT is subject to certain state and local taxes related to its operations in certain locations, which have been provided for in the accompanying consolidated financial statements.

Fair Value Measurements

Wells Timberland REIT estimates the fair value of its assets and liabilities (where currently required under GAAP) consistent with the provisions of the accounting standard for fair value measurements and disclosures. Under this guidance, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures provides the following fair value technique parameters and hierarchy, depending upon availability:

Level 1 — Assets or liabilities for which the identical term is traded on an active exchange, such as publicly-traded instruments or futures contracts.

Level 2 — Assets and liabilities valued based on observable market data for similar instruments.

Level 3 —Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally-developed, and considers risk premiums that a market participant would require.

Wells Timberland REIT applied the provisions of the accounting standard for fair value measurements and disclosures in recording its interest rate swap at fair value and to estimations of fair value of its debt instruments based on Level 2 assumptions. The fair values of the interest rate swap were determined using a proprietary model which is based on prevailing market data for contracts with matching durations, current and anticipated London Interbank Offered Rate (“LIBOR”) information, consideration of Wells Timberland REIT's credit standing, credit risk of the counterparties and reasonable estimates about relevant future market conditions.

The following table presents information about Wells Timberland REIT’s assets and liabilities measured at fair value and recorded in the accompanying consolidated balance sheets as of September 30, 2012 and December 31, 2011, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	Fair Value Measurements as of September 30, 2012
	Total		Level 1		Level 2		Level 3
Liabilities:
Interest rate swap	$	311,668	$	—	$	311,668	$	—
	Fair Value Measurements as of December 31, 2011
	Total		Level 1		Level 2		Level 3
Liabilities:
Interest rate swap	$	976,677	$	—	$	976,677	$	—

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2011-04, Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (“ASU 2011-04”). ASU 2011-04 converges the GAAP and International Financial Reporting Standards definition of “fair value”, the requirements for measuring amounts at fair value, and disclosures about these measurements. The update does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The adoption of ASU 2011-04 was effective for Wells Timberland REIT for the interim period beginning January 1, 2012. The adoption of ASU 2011-04 has not had a material impact on Wells Timberland REIT’s financial statements or disclosures.

In June 2011, the FASB issued Accounting Standards Update 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income (“ASU 2011-05”). ASU 2011-05 gives an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The adoption of ASU 2011-05 was effective for Wells Timberland REIT for the interim period beginning January 1, 2012, except for the specific requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income that has been deferred indefinitely. The adoption of ASU 2011-05 did not have a material impact on Wells Timberland REIT’s consolidated financial statements or disclosures.

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Related-Party Transactions - Dealer-Manager Agreement (Details) (Wells Investment Securities (WIS))	9 Months Ended
	Sep. 30, 2012
Wells Investment Securities (WIS)
Related Party Transaction [Line Items]
Dealer-manager agreement, commission, percentage of gross offering proceeds	7.00%
Dealer-manager agreement, fee, percentage of gross offering proceeds	1.80%

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Consolidated Balance Sheets (USD $)	Sep. 30, 2012	Dec. 31, 2011
Assets:
Cash and cash equivalents	$ 11,603,041	$ 6,848,973
Restricted cash and cash equivalents	1,612,657	6,762,246
Accounts receivable	945,273	644,622
Prepaid expenses and other assets	925,868	499,188
Deferred financing costs, less accumulated amortization of $1,707 and $809,158 as of September 30, 2012 and December 31, 2011, respectively	1,327,787	1,672,550
Timber assets, at cost:
Timber and timberlands, net (Note 3)	337,270,183	328,561,850
Intangible lease assets, less accumulated amortization of $801,434 and $703,675 as of September 30, 2012 and December 31, 2011, respectively	155,652	333,178
Total assets	353,840,461	345,322,607
Liabilities:
Accounts payable and accrued expenses	2,583,592	1,918,281
Due to affiliates (Note 8)	0	28,960,573
Other liabilities	4,849,462	2,609,809
Note payable and line of credit (Note 4)	133,000,000	122,025,672
Total liabilities	140,433,054	155,514,335
Commitments and Contingencies (Note 5)
Stockholders’ Equity:
Common stock, $0.01 par value; 900,000,000 shares authorized; 31,800,627 and 31,465,274 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively	318,006	314,653
Additional paid-in capital	301,442,135	271,428,671
Accumulated deficit and distributions	(136,858,800)	(130,620,551)
Total stockholders’ equity	213,407,407	189,808,272
Total liabilities and stockholders’ equity	353,840,461	345,322,607
Series A Preferred Stock
Stockholders’ Equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, $1,000 liquidation preference:	36,406,725	36,539,548
Series B Preferred Stock
Stockholders’ Equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, $1,000 liquidation preference:	$ 12,099,341	$ 12,145,951

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Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash Flows from Operating Activities:
Net loss	$ (6,238,188)	$ (8,941,441)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depletion	8,144,576	8,675,870
Unrealized gain on interest rate swaps	(665,009)	(209,026)
Other amortization	220,232	161,846
Stock-based compensation expense	28,333	21,667
Noncash interest expense	1,674,257	344,748
Basis of timberland sold	7,187,733	628,229
Basis of casualty loss	25,541	78,091
Changes in assets and liabilities:
(Increase) decrease in accounts receivable	(300,651)	70,822
(Increase) decrease in prepaid expenses and other assets	(417,195)	172,207
Increase in accounts payable and accrued expenses	565,375	132,255
(Decrease) increase in due to affiliates	(1,480,196)	1,623,645
Increase in other liabilities	1,748,345	537,863
Net cash provided by operating activities	10,493,153	3,296,776
Cash Flows from Investing Activities:
Investment in timber, timberland, and related assets	(22,962,057)	(924,880)
Funds released from escrow accounts	5,149,589	4,283,783
Net cash (used in) provided by investing activities	(17,812,468)	3,358,903
Cash Flows from Financing Activities:
Proceeds from CoBank loan	133,000,000	0
Financing costs paid	(1,229,558)	(168,380)
Repayments of Mahrt loan	(122,025,672)	(35,866,376)
Issuance of common stock	4,062,647	38,082,291
Redemptions of common stock	(743,115)	(577,901)
Redemptions of preferred stock	(356,000)	(4,981,000)
Dividends paid on preferred stock redeemed	(103,436)	(1,379,854)
Commissions on stock sales and related dealer-manager fees paid	(447,744)	(3,067,842)
Other offering costs paid	(83,739)	(457,468)
Placement and structuring agent fees paid	0	(93,264)
Net cash provided by (used in) financing activities	12,073,383	(8,509,794)
Net increase (decrease) in cash and cash equivalents	4,754,068	(1,854,115)
Cash and cash equivalents, beginning of period	6,848,973	8,788,967
Cash and cash equivalents, end of period	$ 11,603,041	$ 6,934,852

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Related-Party Transactions - Conflicts of Interest (Details)	Sep. 30, 2012 employees
Limited Partner [Member]
Related Party Transaction [Line Items]
Entity number of employees	8
Sponsored Entity
Related Party Transaction [Line Items]
Number of Board of Directors members	3
Affiliate
Related Party Transaction [Line Items]
Number of Board of Directors members	1

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Organization - Stock Offerings (Details) (USD $)	9 Months Ended			36 Months Ended		1 Months Ended	29 Months Ended	19 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Aug. 11, 2009 IPO	Aug. 11, 2006 IPO	Feb. 13, 2012 Follow-On Offering	Dec. 31, 2011 Follow-On Offering	Aug. 06, 2011 2010 German Offering	Jan. 02, 2010 2010 German Offering	Sep. 30, 2012 Public Offerings and 2010 German Offering	Aug. 06, 2009 Primary Offering	Aug. 11, 2006 Primary Offering IPO	Jan. 02, 2010 Primary Offering 2010 German Offering	Aug. 06, 2009 Distribution Reinvestment Plan	Aug. 11, 2006 Distribution Reinvestment Plan IPO	Jan. 02, 2010 Distribution Reinvestment Plan 2010 German Offering	Aug. 06, 2009 Follow-On Offering
Class of Stock [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance					85,000,000				11,400,000		200,000,000	75,000,000	10,400,000	20,900,000	10,000,000	1,000,000	220,900,000
Share Price											$ 10.00	$ 10.00	$ 9.65	$ 9.55		$ 9.55
Proceeds from Issuance Initial Public Offering				$ 174,900,000
Common Stock, Shares Issued	31,800,627		31,465,274	17,600,000		400,000	12,500,000	900,000
Proceeds from Issuance of Common Stock	4,062,647	38,082,291				4,100,000	123,800,000	8,500,000		307,200,000
Payments of Commissions and Dealer-Manager Fees	447,744	3,067,842								24,700,000
Payments of Stock Issuance Costs	83,739	457,468								1,400,000
Payment of Placement And Structuring Agent Costs	0	93,264								400,000
Payments for Repurchase of Common Stock	743,115	577,901								2,600,000
Net Proceeds from Issuance of Common Stock										$ 278,100,000

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Subsequent Event (Details) (Swap, Interest Rate Swap, Subsequent Event, USD $) In Millions, unless otherwise specified	Oct. 23, 2012
Swap | Interest Rate Swap | Subsequent Event
Subsequent Event [Line Items]
Notional amount of interest rate derivatives	$ 80.0
Derivative fixed interest rate (percent)	0.91%

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Summary of Significant Accounting Policies (Details) (USD $) In Millions, unless otherwise specified	Jan. 02, 2009	Sep. 30, 2012 Internal Revenue Service (IRS)	Dec. 31, 2011 Internal Revenue Service (IRS)	Dec. 31, 2011 State and Local Jurisdiction	Sep. 30, 2012 Maximum Internal Revenue Service (IRS)
Income Tax Contingency [Line Items]
Requirement to distribute taxable income (percent)		90.00%
Built-in gains on land upon REIT election	$ 18.3
Operating loss carryforwards			$ 99.7	$ 83.3
Limit on investments in taxable real estate investments trusts (percent)					25.00%

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Organization

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Wells Timberland REIT was formed on September 27, 2005 as a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes. Wells Timberland REIT engages in the acquisition and ownership of timberland located in the southeastern United States. Substantially all of Wells Timberland REIT’s business is conducted through Wells Timberland Operating Partnership, L.P. (“Wells Timberland OP”), a Delaware limited partnership formed on November 9, 2005, of which Wells Timberland REIT is the sole general partner, possesses full legal control and authority over its operations, and owns 99.99% of its common partnership units. Wells Timberland Management Organization, LLC (“Wells TIMO”), a wholly owned subsidiary of Wells Capital, Inc. (“Wells Capital”), is the sole limited partner of Wells Timberland OP. In addition, Wells Timberland OP formed Wells Timberland TRS, Inc. (“Wells Timberland TRS”), a wholly owned subsidiary organized as a Delaware corporation, on January 1, 2006. Unless otherwise noted, references herein to Wells Timberland REIT shall include Wells Timberland REIT and all of its subsidiaries, including Wells Timberland OP, and the subsidiaries of Wells Timberland OP, and Wells Timberland TRS. Under an agreement (the “Advisory Agreement”), Wells TIMO performs certain key functions on behalf of Wells Timberland REIT and Wells Timberland OP, including, among others, the investment of capital proceeds and management of day-to-day operations (see Note 8).

As of September 30, 2012, Wells Timberland REIT owned approximately 246,200 acres of timberland and held long-term leasehold interests in approximately 45,200 acres of additional timberland, all of which is located on the Lower Piedmont and Upper Coastal Plains of East Central Alabama and West Central Georgia (the “Mahrt Timberland”). Wells Timberland REIT acquired the Mahrt Timberland on October 9, 2007. Wells Timberland REIT generates a substantial portion of its revenues from selling timber and the right to access land and harvest timber to third parties pursuant to supply agreements and through open-market sales, selling higher-and-better-use timberland, and leasing land-use rights to third parties.

On August 11, 2006, Wells Timberland REIT commenced its initial public offering (the “Initial Public Offering”) of up to 85.0 million shares of common stock, of which 75.0 million shares were offered in the primary offering for $10.00 per share and 10.0 million shares were reserved for issuance through Wells Timberland REIT’s distribution reinvestment plan (“DRP”). Wells Timberland REIT stopped offering shares for sale under the Initial Public Offering on August 11, 2009. Wells Timberland REIT raised gross offering proceeds of approximately $174.9 million from the sale of approximately 17.6 million shares under the Initial Public Offering.

On August 6, 2009, Wells Timberland REIT commenced its follow-on offering (the “Follow-On Offering”, and together with the Initial Public Offering, the “Public Offerings”) of up to 220.9 million shares of common stock, of which 200.0 million shares were offered in a primary offering for $10.00 per share and 20.9 million shares of common stock were reserved for issuance through Wells Timberland REIT’s DRP for $9.55 per share. Effective December 31, 2011, Wells Timberland REIT ceased offering shares for sale under the Follow-On Offering. From January 1, 2012 to February 13, 2012, Wells Timberland REIT accepted $4.1 million of additional gross offering proceeds from the sale of approximately 0.4 million additional shares under the Follow-On Offering, which sales were agreed to by the investor on or before December 31, 2011. On March 15, 2012, Wells Timberland REIT withdrew from registration the unsold primary offering shares. Wells Timberland REIT raised gross offering proceeds of approximately $123.8 million from the sale of approximately 12.5 million shares under the Follow-On Offering.

Wells Timberland REIT offered up to approximately 11.4 million shares of its common stock, of which approximately 10.4 million shares were offered in a primary offering to non-U.S. persons at a price per share of $9.65, and up to approximately 1.0 million shares of common stock were reserved for issuance through an unregistered distribution reinvestment plan at a price per share equal to $9.55 (the “2010 German Offering”). The 2010 German Offering closed on August 6, 2011 and Wells Timberland REIT raised approximately $8.5 million from the sale of approximately 0.9 million shares in the 2010 German Offering.

Wells Timberland REIT raised gross offering proceeds from the sale of common stock under the Public Offerings and the 2010 German Offering of approximately $307.2 million. After deductions for payments of selling commissions and dealer-manager fees of approximately $24.7 million, other organization and offering expenses of approximately $1.4 million, approximately $0.4 million in placement and structuring agent fees, and common stock redemptions of approximately $2.6 million under the share redemption plan (“SRP”), Wells Timberland REIT had received aggregate net offering proceeds of approximately $278.1 million, which was used to partially fund the Mahrt Timberland acquisition, service acquisition-related debt, redeem shares of its preferred stock, and fund accrued dividends on redeemed shares of preferred stock.

Wells Timberland REIT’s common stock is not listed on a national securities exchange. Wells Timberland REIT’s charter requires that in the event its common stock is not listed on a national securities exchange by August 11, 2018, Wells Timberland REIT must either (i) seek stockholder approval of an extension or amendment of this listing deadline or (ii) seek stockholder approval to begin liquidating investments and distributing the resulting proceeds to the stockholders. In the event that Wells Timberland REIT seeks stockholder approval for an extension or amendment to this listing date and does not obtain it, Wells Timberland REIT will then be required to seek stockholder approval to liquidate. In this circumstance, if Wells Timberland REIT seeks and does not obtain approval to liquidate, Wells Timberland REIT will not be required to list or liquidate and could continue to operate indefinitely as an unlisted company.

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Consolidated Balance Sheets Parenthetical (USD $)	Sep. 30, 2012	Dec. 31, 2011
Deferred financing cost, accumulated amortization	$ 1,707	$ 809,158
Intangible lease assets, accumulated amortization	$ 801,434	$ 703,675
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	31,800,627	31,465,274
Common stock, shares outstanding	31,800,627	31,465,274
Preferred stock, shares authorized	100,000,000	100,000,000
Series A Preferred Stock
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, liquidation value	$ 1,000	$ 1,000
Preferred Stock, Shares Issued	27,585	27,844
Preferred Stock, Shares Outstanding	27,585	27,844
Series B Preferred Stock
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, liquidation value	$ 1,000	$ 1,000
Preferred Stock, Shares Issued	9,807	9,904
Preferred Stock, Shares Outstanding	9,807	9,904

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Schedule of Interest Rate Derivatives

The detail of loss on the interest rate swap, which was recorded in the accompanying consolidated statements of operations, is provided below for the three months and nine months ended September 30, 2012 and 2011, respectively:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Noncash gain on interest rate swap	$	213,293		$	97,592		$	665,009		$	209,026
Net payments on interest rate swap	(232,999		)	(209,770		)	(787,880		)	(657,595		)
Loss on interest rate swap	$	(19,706	)	$	(112,178	)	$	(122,871	)	$	(448,569	)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents information about Wells Timberland REIT’s assets and liabilities measured at fair value and recorded in the accompanying consolidated balance sheets as of September 30, 2012 and December 31, 2011, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value:

	Fair Value Measurements as of September 30, 2012
	Total		Level 1		Level 2		Level 3
Liabilities:
Interest rate swap	$	311,668	$	—	$	311,668	$	—
	Fair Value Measurements as of December 31, 2011
	Total		Level 1		Level 2		Level 3
Liabilities:
Interest rate swap	$	976,677	$	—	$	976,677	$	—

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Document Information [Line Items]
Entity Registrant Name	Wells Timberland REIT, Inc.
Entity Central Index Key	0001341141
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		31,800,627

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Timber and Timberlands (Tables)

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

As of September 30, 2012 and December 31, 2011, timber and timberlands consisted of the following, respectively:

	As of September 30, 2012
	Gross		Accumulated Depletion or Amortization		Net
Timber	$	161,875,264	$	8,144,576	$	153,730,688
Timberlands	183,293,051		—		183,293,051
Mainline roads	406,286		159,842		246,444
Timber and timberlands	$	345,574,601	$	8,304,418	$	337,270,183

	As of December 31, 2011
	Gross		Accumulated Depletion or Amortization		Net
Timber	$	175,512,118	11,759,282		$	163,752,836
Timberlands	164,550,798		—		164,550,798
Mainline roads	376,406		118,190		258,216
Timber and timberlands	$	340,439,322	$	11,877,472	$	328,561,850

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Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues:
Timber sales	$ 7,840,893	$ 8,764,464	$ 22,125,589	$ 26,612,742
Timberland sales	420,260	0	10,972,440	1,021,200
Other revenues	673,549	697,927	2,014,830	2,068,715
Total revenues	8,934,702	9,462,391	35,112,859	29,702,657
Expenses:
Contract logging and hauling costs	3,941,977	5,125,603	11,788,361	15,086,909
Depletion	2,670,288	2,594,248	8,144,576	8,675,870
Cost of timberland sales	282,037	306	7,849,652	712,613
Advisor fees and expense reimbursements	0	0	2,393,745	1,843,958
Forestry management fees	557,396	683,836	1,700,475	2,060,818
General and administrative expenses	569,949	502,734	1,697,464	1,729,570
Land rent expense	469,141	541,418	1,482,438	1,664,856
Other operating expenses	670,061	747,278	1,936,419	2,107,629
Operating costs and expenses	9,160,849	10,195,423	36,993,130	33,882,223
Operating loss	(226,147)	(733,032)	(1,880,271)	(4,179,566)
Other income (expense):
Interest income	310	145	619	1,899
Interest expense	(2,274,272)	(1,275,506)	(4,235,665)	(4,315,205)
Loss on interest rate swap	(19,706)	(112,178)	(122,871)	(448,569)
Total other income (expense)	(2,293,668)	(1,387,539)	(4,357,917)	(4,761,875)
Net loss	(2,519,815)	(2,120,571)	(6,238,188)	(8,941,441)
Dividends to preferred stockholders	(93,992)	(98,963)	(280,003)	(1,460,194)
Net loss available to common stockholders	$ (2,613,807)	$ (2,219,534)	$ (6,518,191)	$ (10,401,635)
Per-share information—basic and diluted:
Net loss available to common stockholders	$ (0.08)	$ (0.08)	$ (0.20)	$ (0.37)
Weighted-average common shares outstanding-basic and diluted	31,848,476	29,110,422	31,862,389	27,825,695

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Share Redemption Plan

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Share Redemption Plan

Share Redemption Plan

The board of directors of Wells Timberland REIT has adopted an SRP, as amended and restated, that allows stockholders who hold their shares for more than one year to sell their shares back to Wells Timberland REIT, subject to certain limitations and penalties. Wells Timberland REIT's board of directors has approved a monthly, non-cumulative reserve of $150,000 for redemptions of common stock in connection with death, qualifying disability, or qualification for federal assistance for confinement to a long-term care facility. On August 6, 2012, the board of directors of Wells Timberland REIT voted to suspend the Amended SRP, as defined below, effective October 1, 2012 until the first full month following the initial publicationof the estimated per-share value.

Also on August 6, 2012, Wells Timberland REIT amended the SRP (the “Amended SRP”), effective October 1, 2012. The Amended SRP provides that the redemption price for all redemptions, including redemptions sought within two years of a stockholder's death, qualifying disability or confinement to a long-term care facility, will be calculated in the same manner. Specifically, until the initial publication in an Exchange Act report filed with the SEC of an estimated per-share value approved by the board of directors, the price per share will be 91% of the aggregate amount paid to Wells Timberland REIT for all shares owned by the redeeming stockholder, divided by the number of shares owned by such stockholder that were acquired from Wells Timberland REIT. After the initial estimated per-share value publication, the price will be 95% of the estimated per share value, plus or minus any valuation adjustment as provided in the Amended SRP.

During the three months and nine months ended September 30, 2012, Wells Timberland REIT redeemed approximately $231,000 and $756,600 of shares, respectively, under the SRP. In September 2012, qualified redemption requests exceeded the $150,000 limit set by the board of directors. As a result, September 2012 redemption requests were pro-rated per terms of the SRP. Wells Timberland REIT redeemed $150,000 of shares at 100% the aggregate amount paid to Wells Timberland REIT. Wells Capital reimbursed Wells Timberland REIT 9% of the amount of shares redeemed in September 2012, or $13,500. As of September 30, 2012, approximately $0.2 million of qualified redemption requests were unfulfilled and returned to the investors.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

MeadWestvaco Timber Agreements

In connection with its acquisition of the Mahrt Timberland, Wells Timberland REIT entered into a fiber supply agreement and a master stumpage agreement (collectively, the “Timber Agreements”) with a wholly owned subsidiary of MeadWestvaco Corporation (“MeadWestvaco”). The fiber supply agreement provides that MeadWestvaco will purchase specified tonnage of timber from Wells Timberland TRS at specified prices per ton, depending upon the type of timber. The fiber supply agreement is subject to quarterly market pricing adjustments based on an index published by Timber Mart-South, a quarterly trade publication that reports raw forest product prices in 11 southern states. The master stumpage agreement provides that Wells Timberland REIT will sell specified amounts of timber and make available certain portions of the Mahrt Timberland to Wells Timberland TRS for harvesting at $0.10 per ton of qualifying timber purchased by MeadWestvaco plus a portion of the gross proceeds received from MeadWestvaco under the fiber supply agreement. The initial term of the Timber Agreements is October 9, 2007 through December 31, 2032, subject to extension and early termination provisions. The Timber Agreements ensure a long-term source of supply of wood fiber products for MeadWestvaco in order to meet its paperboard and lumber production requirements at specified mills and provide Wells Timberland REIT with a reliable customer for the wood products from the Mahrt Timberland.

FRC Timberland Operating Agreement

Wells Timberland REIT is party to a timberland operating agreement with Forest Resource Consultants, Inc. (“FRC”). Pursuant to the terms of the timberland operating agreement, FRC manages and operates the Mahrt Timberland and the related timber operations, including ensuring delivery of timber to MeadWestvaco in compliance with the Timber Agreements. In consideration for rendering the services described in the timberland operating agreement, Wells Timberland REIT pays FRC (i) a monthly management fee based on the actual acreage FRC manages, which is payable monthly in advance, and (ii) an incentive fee based on net revenues generated by the Mahrt Timberland. The incentive fee is payable annually in arrears. The timberland operating agreement, as amended, is effective through December 31, 2013, with the option to extend for one-year periods and may be terminated by either party with mutual consent or by Wells Timberland REIT with or without cause upon providing 120 days’ prior written notice.

Litigation

From time to time, Wells Timberland REIT may be a party to legal proceedings that arise in the ordinary course of its business. Management makes assumptions and estimates concerning the likelihood and amount of any reasonably possible loss relating to these matters using the latest information available. Wells Timberland REIT records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, Wells Timberland REIT accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, Wells Timberland REIT accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, Wells Timberland REIT discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, Wells Timberland REIT discloses the nature and estimate of the possible loss of the litigation. Wells Timberland REIT does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote.

Wells Timberland REIT is not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the results of operations or financial condition of Wells Timberland REIT. Wells Timberland REIT is not aware of any legal proceedings contemplated by governmental authorities.

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Summary of Significant Accounting Policies - Interest Rate Swaps and Fair Value Measurements (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Interest Rate Swap	Sep. 30, 2011 Interest Rate Swap	Sep. 30, 2012 Interest Rate Swap	Sep. 30, 2011 Interest Rate Swap	Sep. 30, 2012 Interest Rate Swap Fair Value, Measurements, Recurring	Dec. 31, 2011 Interest Rate Swap Fair Value, Measurements, Recurring	Sep. 30, 2012 Interest Rate Swap Fair Value, Measurements, Recurring Fair Value, Inputs, Level 1	Dec. 31, 2011 Interest Rate Swap Fair Value, Measurements, Recurring Fair Value, Inputs, Level 1	Sep. 30, 2012 Interest Rate Swap Fair Value, Measurements, Recurring Fair Value, Inputs, Level 2	Dec. 31, 2011 Interest Rate Swap Fair Value, Measurements, Recurring Fair Value, Inputs, Level 2	Sep. 30, 2012 Interest Rate Swap Fair Value, Measurements, Recurring Fair Value, Inputs, Level 3	Dec. 31, 2011 Interest Rate Swap Fair Value, Measurements, Recurring Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative financial instruments, liabilities, fair value disclosure									$ 311,668	$ 976,677	$ 0	$ 0	$ 311,668	$ 976,677	$ 0	$ 0
Noncash gain on interest rate swap			665,009	209,026	213,293	97,592	665,009	209,026
Net payments on interest rate swap					(232,999)	(209,770)	(787,880)	(657,595)
Loss on interest rate swap	$ (19,706)	$ (112,178)	$ (122,871)	$ (448,569)	$ (19,706)	$ (112,178)	$ (122,871)	$ (448,569)

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Supplemental Disclosures of Noncash Activites (Tables)

9 Months Ended

Sep. 30, 2012

Supplemental Cash Flow Elements [Abstract]

Schedule of Other Significant Noncash Transactions

Outlined below are significant noncash investing and financing transactions for the nine months endedSeptember 30, 2012 and 2011, respectively:

	Nine Months Ended September 30,
	2012			2011
Write-off of due to affiliates	$	27,315,249		$	—
Dividends accrued on preferred stock	$	280,003		$	1,460,194
Discounts applied to issuance of common stock	$	43,761		$	326,548
(Cancellation) issuance of stock dividends	$	(329	)	$	4,069,990
Stock dividends payable to stockholders – additional paid-in capital	$	—		$	30,875
Stock dividends payable to stockholders – par value	$	—		$	31
Issuance of stock-based compensation	$	55,000		$	40,000
Other liabilities assumed upon acquisition of timberland	$	1,156,317		$	3,792
Deferred financing costs payable	$	99,936		$	—

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Subsequent Event

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Event

Subsequent Event

On October 23, 2012, Wells Timberland REIT entered into an interest rate swap agreement with Rabobank to hedge its exposure to changing interest rates on $80.0 million of the CoBank Loan that is subject to a variable interest rate (the “Rabobank Forward Swap”). The Rabobank Forward Swap has an effective date of March 28, 2013 and matures on September 30, 2017. Under the terms of the Rabobank Forward Interest Swap, Wells Timberland REIT will pay interest at a fixed rate of 0.91% per annum to Rabobank and will receive one-month LIBOR-based interest payments from Rabobank.

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Supplemental Disclosures of Noncash Activities

9 Months Ended

Sep. 30, 2012

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosures of Noncash Activities

Supplemental Disclosures of Noncash Activities

Outlined below are significant noncash investing and financing transactions for the nine months endedSeptember 30, 2012 and 2011, respectively:

	Nine Months Ended September 30,
	2012			2011
Write-off of due to affiliates	$	27,315,249		$	—
Dividends accrued on preferred stock	$	280,003		$	1,460,194
Discounts applied to issuance of common stock	$	43,761		$	326,548
(Cancellation) issuance of stock dividends	$	(329	)	$	4,069,990
Stock dividends payable to stockholders – additional paid-in capital	$	—		$	30,875
Stock dividends payable to stockholders – par value	$	—		$	31
Issuance of stock-based compensation	$	55,000		$	40,000
Other liabilities assumed upon acquisition of timberland	$	1,156,317		$	3,792
Deferred financing costs payable	$	99,936		$	—

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Related-Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related-Party Transactions

Related-Party Transactions

Advisory Agreement

Wells Timberland REIT and Wells Timberland OP are party to the Advisory Agreement with Wells TIMO, a wholly owned subsidiary of Wells Capital. On March 16, 2012, the board of directors of Wells Timberland REIT approved a second amendment to the Advisory Agreement (“Advisory Agreement Amendment No. 2”), which amended certain provisions related to fees and expense reimbursements. Advisory Agreement Amendment No. 2, which was effective April 1, 2012, provides that for each quarter, the amount of fees and expense reimbursements payable to Wells TIMO will be limited to the lesser of (i) 1.0% of assets under management as of the last day of the quarter less advisor fees paid for the preceding three quarters, and (ii) free cash flow for the four quarters then ended in excess of an amount equal to 1.25 multiplied by Wells Timberland REIT’s interest expense. Free cash flow is defined as EBITDA (as defined in Wells Timberland REIT's loan agreements), less all capital expenditures paid by Wells Timberland REIT on a consolidated basis, less any cash distributions (except for the payments of accrued but unpaid dividends as a result of any redemptions of Wells Timberland REIT's outstanding preferred stock). The amount of the disposition fees and the reimbursement of organization and offering expenses payable pursuant to the Advisory Agreement, as amended, remained unchanged. No payments would be permitted under the Advisory Agreement, as amended, if they would cause a default under Wells Timberland REIT's loan agreements.

On April 1, 2011, the board of directors of Wells Timberland REIT approved an amendment to the Advisory Agreement (the “Advisory Agreement Amendment No. 1”) that limited the amount of fees and expense reimbursements to the least of: (1) the amounts noted below pursuant to the Advisory Agreement, (2) 1.5% of assets under management, or (3) all free cash flow in excess of an amount equal to 1.05 multiplied by interest on outstanding debt. Advisory Agreement Amendment No. 2 superseded Advisory Agreement Amendment No. 1.

Prior to April 1, 2011, Wells TIMO was entitled to the following fees and reimbursements pursuant to the Advisory Agreement:

• Reimbursement of organization and offering costs paid by Wells TIMO and its affiliates on behalf of Wells Timberland REIT, not to exceed 1.2% of gross offering proceeds.

• Monthly asset management fees equal to one-twelfth of 1.0% of the greater of (i) the gross cost of all investments made on behalf of Wells Timberland REIT and (ii) the aggregate value of such investments.

• Reimbursement for all costs and expenses Wells TIMO incurs in fulfilling its duties as the asset portfolio manager.

• For any property sold by Wells Timberland REIT, if Wells TIMO provided a substantial amount of services in connection with the sale (as determined by Wells Timberland REIT’s independent directors), a fee equal to (i) for each property sold at a contract price up to $20.0 million, up to 2.0% of the sales price, and (ii) for each property sold at a contract price in excess of $20.0 million, up to 1.0% of the sales price. The precise amount of the fee within the preceding limits will be determined by Wells Timberland REIT’s board of directors, including a majority of the independent directors, based on the level of services provided and market norms. The real estate disposition fee may be in addition to real estate commissions paid to third parties. However, the total real estate commissions (including such disposition fee) may not exceed the lesser of (i) 6.0% of the sales price of each property or (ii) the level of real estate commissions customarily charged in light of the size, type, and location of the property.

Effective July 11, 2012, the Advisory Agreement, as amended (the “Amended Advisory Agreement”) was renewed through July 10, 2013, upon terms identical to those in effect through July 10, 2012. The Amended Advisory Agreement may be renewed for successive one-year terms upon the mutual consent of the parties. Wells Timberland REIT may terminate the Amended Advisory Agreement without penalty upon 60 days’ written notice. If Wells Timberland REIT terminates the Amended Advisory Agreement, it will pay Wells TIMO all earned but unpaid fees. In addition, if the Amended Advisory Agreement is terminated without cause, the special units of limited partnership held by Wells TIMO will be redeemed. For further information on the special units, including redemption payments, refer to the consolidated financial statements and accompanying notes included in Wells Timberland REIT’s Annual Report on Form 10-K for the year ended December 31, 2011.

Under the terms of the Amended Advisory Agreement, Wells Timberland REIT was required to reimburse Wells TIMO for certain organization and offering costs up to the lesser of actual expenses or 1.2% of gross offering proceeds raised. Wells Timberland REIT incurred and charged to additional paid-in capital cumulative organization and offering costs of approximately $2.1 million related to the Initial Public Offering and approximately $1.5 million related to the Follow-On Offering, the sum of which represents approximately 1.2% of cumulative gross proceeds raised by Wells Timberland REIT under the Public Offerings. As of December 31, 2011, approximately $2.2 million of organization and offering costs incurred by Wells Timberland REIT and due to Wells TIMO had been deferred by the terms of Wells Timberland REIT's loan agreements. On January 27, 2012, Wells TIMO forgave the deferred organization and offering expenses. After adjusting for this write-off, organization and offering costs represents approximately 0.5% of cumulative gross proceeds raised under the Public Offerings. Upon the expiration of Wells Timberland REIT’s Follow-On Offering on December 31, 2011, approximately $6.4 million of organization and offering expenses related to the Follow-On Offering that had not been incurred and charged to additional paid-in capital by Wells Timberland REIT was expensed by Wells TIMO and is not subject to reimbursement by Wells Timberland REIT.

On January 20, 2012, Wells Timberland REIT entered into an agreement with Wells TIMO to forgive approximately $25.1 million of accrued but unpaid asset management fees and expense reimbursements that were previously deferred due to restrictions under Wells Timberland REIT's loan agreements. Due to the related-party nature of these transactions, this amount, along with the organizational and offering costs forgiven by Wells TIMO on January 27, 2012, were recorded as additional paid-in capital during the first quarter of 2012.

Dealer-Manager Agreement

Wells Timberland REIT had executed a dealer-manager agreement (the “Dealer-Manager Agreement”), whereby Wells Investment Securities, Inc. (“WIS”), an affiliate of Wells Capital, performed the dealer-manager function for Wells Timberland REIT’s Public Offerings. For these services, WIS earned a commission of up to 7.0% of the gross offering proceeds from the sale of Wells Timberland REIT’s shares, of which substantially all was re-allowed to participating broker/dealers. Wells Timberland REIT pays no commissions on shares issued under its DRP.

Additionally, WIS earned a dealer-manager fee of 1.8% of the gross offering proceeds at the time the shares are sold. A portion of the dealer-manager fee was re-allowed to participating broker-dealers. Dealer-manager fees applied to the sale of shares in the primary offering only and do not apply to the sale of shares under Wells Timberland REIT’s DRP.

Structuring Agent Agreement

Wells Timberland REIT is party to a structuring agent agreement (the “Structuring Agent Agreement”) whereby Wells Germany GmbH, a limited partnership organized under the laws of Germany (“Wells Germany”), served as the structuring agent in connection with the 2010 German Offering. Wells Timberland REIT paid a structuring agent fee to Wells Germany of $0.20 per share sold under the 2010 German Offering. The Structuring Agent Agreement expired upon the conclusion of the 2010 German Offering, provided, however, that with respect to the ongoing services contemplated by the parties, the Structuring Agent Agreement will terminate upon the earlier of (i) a liquidity event or (ii) December 31, 2018.

Related-Party Costs

Pursuant to the terms of the agreements described above, Wells Timberland REIT incurred the following related-party costs for the three months and nine months ended September 30, 2012 and 2011, respectively:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Advisor fees and expense reimbursements	$	—	$	—	$	2,393,745	$	1,843,958
Disposition fees	8,405		—		219,449		22,774
Commissions(1)(2)	—		921,548		246,546		2,389,018
Dealer-manager fees(1)	—		254,996		71,057		662,870
Other offering costs(1)	—		176,756		48,752		456,988
Total	$	8,405	$	1,353,300	$	2,979,549	$	5,375,608

⁽¹⁾  Commissions, dealer-manager fees, and other offering costs were charged against stockholders’ equity as incurred.

⁽²⁾  Substantially all commissions were re-allowed to participating broker-dealers through the end of the Public Offerings.

Due to Affiliates

The detail of amounts due to affiliates is provided below as of September 30, 2012 and December 31, 2011:

`

	September 30, 2012		December 31, 2011
Advisor fees and expense reimbursements due to Wells TIMO (1)	$	—	$	25,504,045
Other offering cost reimbursements due to Wells TIMO (2)	—		2,258,696
Operating expense reimbursements due to Wells TIMO (1)	—		1,067,691
Commissions on stock sales and related dealer-manager fees due to WIS	—		130,141
Total	$	—	$	28,960,573

⁽¹⁾ On January 20, 2012, we entered into an agreement with Wells TIMO whereby Wells TIMO forgave approximately $25.1 million of accrued but unpaid asset management fees and reimbursements that were previously deferred due to restrictions under our loan agreements. Due to the related-party nature of this transaction, this amount was recorded as additional paid-in capital during the first quarter of 2012.

⁽²⁾ On January 27, 2012, approximately $2.2 million of other offering cost due to Wells TIMO was forgiven. Due to the related-party nature of this transaction, this amount was recorded as additional paid-in capital during the first quarter of 2012.

Conflicts of Interest

As of September 30, 2012, Wells TIMO had eight employees. Until such time, if ever, as Wells TIMO hires sufficient personnel of its own to perform the services under the Amended Advisory Agreement, it will continue to rely upon employees of Wells Capital to perform many of its obligations. Wells Capital, the parent company and manager of Wells TIMO, also is a general partner or advisor of the various affiliated public real estate investment programs (“Wells Real Estate Funds”). As such, in connection with serving as a general partner or advisor for Wells Real Estate Funds and managing Wells TIMO’s activities under the Amended Advisory Agreement, Wells Capital may encounter conflicts of interest with regard to allocating human resources and making decisions related to investments, operations, and disposition-related activities for Wells Timberland REIT and Wells Real Estate Funds.

Three members of Wells Timberland REIT’s board of directors serve on the board of another REIT sponsored by Wells Real Estate Funds, Inc. (“Wells REF”); additionally, one of them also serves on the board of a third REIT sponsored by Wells REF. Accordingly, they may encounter certain conflicts of interest regarding investment and operational decisions.

Operational Dependency

Wells Timberland REIT has engaged Wells TIMO to provide certain services essential to Wells Timberland REIT, including asset management services, supervision of the management of properties owned by Wells Timberland REIT, asset acquisition and disposition services, as well as other administrative responsibilities, including accounting services, stockholder communications, and investor relations. Wells TIMO is dependent on Wells Capital to provide certain services that are essential to their operations. This agreement is terminable by either party upon 60 days’ written notice. As a result of these relationships, Wells Timberland REIT's operations are dependent upon Wells Capital and Wells TIMO.

Wells Capital and Wells TIMO are all owned and controlled by Wells REF. The operations of Wells Capital, Wells TIMO, WIS, and Wells Management Company, Inc. (“Wells Management”) represent substantially all of the business of Wells REF. Accordingly, Wells Timberland REIT focuses on the financial condition of Wells REF when assessing the financial condition of Wells Capital and Wells TIMO. In the event that Wells REF were to become unable to meet its obligations as they become due, Wells Timberland REIT might be required to find alternative service providers.

Future net income generated by Wells REF will be largely dependent upon the amount of fees earned by Wells Capital, Wells TIMO, WIS, Wells Management, and their affiliates, based on, among other things, real estate assets managed, the amount of investor proceeds raised, and the volume of future acquisitions and dispositions of real estate assets by Wells Timberland REIT and other Wells REF-sponsored programs, as well as distribution income earned from equity interests in another REIT. As of September 30, 2012, Wells Timberland REIT had no reason to believe that Wells REF does not have access to adequate liquidity and capital resources, including cash flow generated from operations, cash on hand, other investments, and borrowing capacity, necessary to meet its current and future obligations as they become due. Modifying service agreements between Wells REF, or its affiliates, and Wells Timberland REIT, or other Wells REF-sponsored programs, could impact Wells REF’s future net income and future access to liquidity and capital resources. For example, a large portion of Wells REF's income is derived under an advisory agreement with Wells Real Estate Investment Trust II, Inc. ("Wells REIT II") and Wells REF does not expect to receive significant compensation from Wells REIT II beyond December 31, 2013.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Consolidation

Wells Timberland REIT owns a controlling financial interest in Wells Timberland OP and Wells Timberland TRS and, accordingly, includes the accounts of these entities in its consolidated financial statements. The financial statements of Wells Timberland OP and Wells Timberland TRS are prepared using accounting policies consistent with those used by Wells Timberland REIT. All intercompany balances and transactions have been eliminated in consolidation.

Interest Rate Swaps

Interest Rate Swaps

Wells Timberland REIT has entered into interest rate swap agreements to hedge its exposure to changing interest rates on variable rate debt instruments (see Note 4). Wells Timberland REIT does not enter into derivative or interest rate transactions for speculative purposes; however, certain of its derivatives may not qualify for hedge accounting treatment. The fair values of interest rate swaps are recorded as either prepaid expenses and other assets or other liabilities in the accompanying consolidated balance sheets. Changes in the fair value of the effective portion of interest rate swaps that are designated as hedges will be recorded as other comprehensive income or loss in a consolidated statement of other comprehensive income. The ineffective portion of the hedge, if any, is recognized in current earnings during the period of change in fair value. Changes in the fair value of interest rate swaps that do not qualify for hedge accounting treatment are recorded as gain or loss on interest rate swap in the accompanying consolidated statements of operations. Amounts received or paid under interest rate swaps are recorded as interest expense for contracts that qualify for hedge accounting treatment and as gain or loss on interest rate swap for contracts that do not qualify for hedge accounting treatment.

Income Taxes

Income Taxes

Wells Timberland REIT has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), and has operated as such beginning with its taxable year ended December 31, 2009. To qualify to be taxed as a REIT, Wells Timberland REIT must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its ordinary taxable income to its stockholders. As a REIT, Wells Timberland REIT generally is not subject to federal income tax on taxable income it distributes to stockholders. Wells Timberland REIT is subject to certain state and local taxes related to the operations of timberland properties in certain locations, which have been provided for in the accompanying consolidated financial statements.

As of January 1, 2009, the beginning of the taxable year in which Wells Timberland REIT qualified for and elected to be taxed as a REIT, or its REIT commencement date, Wells Timberland REIT had net built-in gains on its timber assets of approximately $18.3 million. Wells Timberland REIT elected not to take such net built-in gains into income immediately prior to its REIT commencement date, but rather subsequently recognize gain on the disposition of any timber assets it holds at the REIT commencement date, if disposed of within the ten-year period beginning on the REIT commencement date. Wells Timberland REIT will be subject to tax on such net built-in gains at the highest regular corporate rate during the ten-year period beginning on the REIT commencement date on the least of (a) the excess of the fair market value of the timber assets disposed of as of the REIT commencement date over its basis in the timber assets as of the REIT commencement date (the built-in gain with respect to that timberland as of the REIT commencement date); (b) the amount of gain Wells Timberland REIT would otherwise recognize on the disposition; or (c) the amount of net built-in gain in its timber assets as of the REIT commencement date not already recognized during the ten-year period. At December 31, 2011, Wells Timberland REIT had federal and state net operating loss carryforwards of approximately $99.7 million and $83.3 million, respectively. Such net operating loss carryforwards may be utilized, subject to certain limitations, to offset future taxable income, including net built-in gains.

Wells Timberland REIT has elected to treat Wells Timberland TRS as a taxable REIT subsidiary. Wells Timberland REIT may perform certain non-customary services, including real estate or non-real-estate related services, through Wells Timberland TRS. Earnings from services performed through Wells Timberland TRS are subject to federal and state income taxes irrespective of the dividends paid deduction available to REITs for federal income tax purposes. In addition, for Wells Timberland REIT to continue to qualify to be taxed as a REIT, Wells Timberland REIT’s investment in Wells Timberland TRS may not exceed 25% of the value of the total assets of Wells Timberland REIT.

Deferred tax assets and liabilities represent temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on the enacted rates expected to be in effect when the temporary differences reverse. Deferred tax expense or benefit is recognized in the financial statements according to the changes in deferred tax assets or liabilities between years. Valuation allowances are established to reduce deferred tax assets when it becomes more likely than not that such assets, or portions thereof, will not be realized.

No provision for federal income taxes has been made in the accompanying consolidated financial statements, other than the provision relating to Wells Timberland TRS, as Wells Timberland REIT did not generate taxable income for the periods presented. Wells Timberland REIT is subject to certain state and local taxes related to its operations in certain locations, which have been provided for in the accompanying consolidated financial statements.

Fair Value Measurements

Fair Value Measurements

Wells Timberland REIT estimates the fair value of its assets and liabilities (where currently required under GAAP) consistent with the provisions of the accounting standard for fair value measurements and disclosures. Under this guidance, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures provides the following fair value technique parameters and hierarchy, depending upon availability:

Level 1 — Assets or liabilities for which the identical term is traded on an active exchange, such as publicly-traded instruments or futures contracts.

Level 2 — Assets and liabilities valued based on observable market data for similar instruments.

Level 3 —Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally-developed, and considers risk premiums that a market participant would require.

Wells Timberland REIT applied the provisions of the accounting standard for fair value measurements and disclosures in recording its interest rate swap at fair value and to estimations of fair value of its debt instruments based on Level 2 assumptions. The fair values of the interest rate swap were determined using a proprietary model which is based on prevailing market data for contracts with matching durations, current and anticipated London Interbank Offered Rate (“LIBOR”) information, consideration of Wells Timberland REIT's credit standing, credit risk of the counterparties and reasonable estimates about relevant future market conditions.

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Related-Party Transaction - Related Party Costs and Due to Affiliates (Details) (USD $)	0 Months Ended	9 Months Ended														3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended				9 Months Ended				3 Months Ended				9 Months Ended				3 Months Ended				9 Months Ended
	Jan. 20, 2012	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Wells TIMO Advisor Fees and Expense Reimbursements		Dec. 31, 2011 Wells TIMO Advisor Fees and Expense Reimbursements		Sep. 30, 2012 Wells TIMO Other Offering Costs		Dec. 31, 2011 Wells TIMO Other Offering Costs		Sep. 30, 2012 Wells TIMO Operating Expense Reimbursements		Dec. 31, 2011 Wells TIMO Operating Expense Reimbursements		Sep. 30, 2012 Wells Investment Securities (WIS)	Sep. 30, 2011 Wells Investment Securities (WIS)	Sep. 30, 2012 Wells Investment Securities (WIS)	Sep. 30, 2011 Wells Investment Securities (WIS)	Sep. 30, 2012 Wells Investment Securities (WIS) Advisor Fees and Expense Reimbursements	Sep. 30, 2011 Wells Investment Securities (WIS) Advisor Fees and Expense Reimbursements	Sep. 30, 2012 Wells Investment Securities (WIS) Advisor Fees and Expense Reimbursements	Sep. 30, 2011 Wells Investment Securities (WIS) Advisor Fees and Expense Reimbursements	Sep. 30, 2012 Wells Investment Securities (WIS) Disposition Fees	Sep. 30, 2011 Wells Investment Securities (WIS) Disposition Fees	Sep. 30, 2012 Wells Investment Securities (WIS) Disposition Fees	Sep. 30, 2011 Wells Investment Securities (WIS) Disposition Fees	Sep. 30, 2012 Wells Investment Securities (WIS) Commissions		Sep. 30, 2011 Wells Investment Securities (WIS) Commissions		Sep. 30, 2012 Wells Investment Securities (WIS) Commissions		Sep. 30, 2011 Wells Investment Securities (WIS) Commissions		Sep. 30, 2012 Wells Investment Securities (WIS) Dealer-Manager Fees		Sep. 30, 2011 Wells Investment Securities (WIS) Dealer-Manager Fees		Sep. 30, 2012 Wells Investment Securities (WIS) Dealer-Manager Fees		Sep. 30, 2011 Wells Investment Securities (WIS) Dealer-Manager Fees		Sep. 30, 2012 Wells Investment Securities (WIS) Other Offering Costs		Sep. 30, 2011 Wells Investment Securities (WIS) Other Offering Costs		Sep. 30, 2012 Wells Investment Securities (WIS) Other Offering Costs		Sep. 30, 2011 Wells Investment Securities (WIS) Other Offering Costs		Sep. 30, 2012 Wells Investment Securities (WIS) Commissions and Dealer Manager Fees	Dec. 31, 2011 Wells Investment Securities (WIS) Commissions and Dealer Manager Fees
Related Party Transaction [Line Items]
Related party transaction, amounts of transaction																$ 8,405	$ 1,353,300	$ 2,979,549	$ 5,375,608	$ 0	$ 0	$ 2,393,745	$ 1,843,958	$ 8,405	$ 0	$ 219,449	$ 22,774	$ 0	[1],[2]	$ 921,548	[1],[2]	$ 246,546	[1],[2]	$ 2,389,018	[1],[2]	$ 0	[2]	$ 254,996	[2]	$ 71,057	[2]	$ 662,870	[2]	$ 0	[2]	$ 176,756	[2]	$ 48,752	[2]	$ 456,988	[2]
Due to affiliates		0	28,960,573	0	[3]	25,504,045	[3]	0	[4]	2,258,696	[4]	0	[3]	1,067,691	[3]																																					0	130,141
Related party transaction, write-off of deferred costs	$ 25,100,000	$ 27,315,249

[1] Substantially all commissions were re-allowed to participating broker-dealers through the end of the Public Offerings.

[2] Commissions, dealer-manager fees, and other offering costs were charged against stockholders’ equity as incurred.

[3] On January 20, 2012, we entered into an agreement with Wells TIMO whereby Wells TIMO forgave approximately $25.1 million of accrued but unpaid asset management fees and reimbursements that were previously deferred due to restrictions under our loan agreements. Due to the related-party nature of this transaction, this amount was recorded as additional paid-in capital during the first quarter of 2012.

[4] On January 27, 2012, approximately $2.2 million of other offering cost due to Wells TIMO was forgiven. Due to the related-party nature of this transaction, this amount was recorded as additional paid-in capital during the first quarter of 2012.

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Organization (Details)	9 Months Ended
	Sep. 30, 2012
Limited Liability Company or Limited Partnership, Managing Member or General Partner, Ownership Structure [Abstract]
Percentage of general partnership interest owned by the company in the Operating Partnership common units	99.99%
Timberland
Limited Liability Company or Limited Partnership, Managing Member or General Partner, Ownership Structure [Abstract]
Acres of timberland owned	246,200
Land subject to ground leases	45,200

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Note Payable and Line of Credit (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended	0 Months Ended			0 Months Ended							0 Months Ended
	Sep. 30, 2012	Sep. 28, 2012 Secured Debt CoBank Loan	Sep. 28, 2012 Term Loan CoBank Loan	Sep. 28, 2012 Revolving Credit Facility CoBank Loan	Sep. 28, 2012 Senior Loans Mahrt Loan	Mar. 24, 2010 Senior Loans Mahrt Loan	Sep. 30, 2012 Base Rate Loan Secured Debt CoBank Loan	Sep. 30, 2012 Base Rate Loan Secured Debt Minimum CoBank Loan	Sep. 30, 2012 Base Rate Loan Secured Debt Maximum CoBank Loan	Sep. 30, 2012 LIBOR Rate Loan Secured Debt Minimum CoBank Loan	Sep. 30, 2012 LIBOR Rate Loan Secured Debt Maximum CoBank Loan	Sep. 28, 2012 LTV Ration Greater Than 40% Revolving Credit Facility CoBank Loan	Sep. 28, 2012 LTV Ration Greater Than 40% Revolving Credit Facility Minimum CoBank Loan	Sep. 28, 2012 LTV Ratio Between 35-40% Revolving Credit Facility CoBank Loan	Sep. 28, 2012 LTV Ratio Between 35-40% Revolving Credit Facility Minimum CoBank Loan	Sep. 28, 2012 LTV Ratio Between 35-40% Revolving Credit Facility Maximum CoBank Loan	Sep. 28, 2012 LTV Ration Less Than 35% Revolving Credit Facility CoBank Loan	Sep. 28, 2012 LTV Ration Less Than 35% Revolving Credit Facility Maximum CoBank Loan
Debt Instrument [Line Items]
Term of loan agreement (years)						5 years
Amount of prior loan amended and restated					$ 211.0
Maximum borrowing capacity		148.0	133.0	15.0
Optional increase to maximum borrowings			50.0
Basis spread on variable rate (percent)							1.50%	1.00%	1.75%	2.00%	2.75%
Fee for unused portion of borrowing capacity (percent)												0.375%		0.25%			0.20%
Line of Credit Facility, Covenant Terms, Loan-to-Value Ratio													40.00%		35.00%	40.00%		35.00%
Threshold for mandatory repayment, cost basis of dispositions		4.0
Mandatory prepayment loan-to-collateral threshold		40.00%
Threshold for mandatory repayment, lease termination proceed, individual transaction		2.0
Threshold for mandatory repayment, lease termination proceeds, aggregate		$ 5.0
Maximum loan-to-collateral value ratio required		45.00%
Minimum fixed-charge coverage ratio required		1.05
Loan-to-collateral-value ratio, funding requirement threshold	30.00%
Maximum number of months of interest, funding requirement		6 months
Minimum number of months of interest, funding requirement		3 months

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Consolidated Statements of Stockholders' Equity (USD $)	Total	Common Stock	Preferred Stock	Additional Paid-in Capital	Accumulated Deficit and Distributions
Balance, value at Dec. 31, 2010	$ 160,659,685	$ 254,988	$ 54,648,732	$ 219,082,323	$ (113,326,358)
Balance, shares at Dec. 31, 2010		25,498,717	43,628
Issuance of common stock, value	38,430,506	38,449		38,392,057
Issuance of common stock, shares		3,844,884
Issuance of stock dividends, value	(31)	4,074		4,096,791	(4,100,896)
Issuance of stock dividends, shares		407,461
Redemptions of common stock, value	(577,901)	(597)		(577,304)
Redemptions of common stock and preferred stock, shares		(59,726)	(4,981)
Dividends on preferred stock	0		1,460,194	1,460,194
Redemptions of preferred stock, value	(6,360,854)		(6,360,854)
Commissions and discounts on stock sales and related dealer-manager fees	(3,378,436)			(3,378,436)
Other offering costs	(456,988)			(456,988)
Net loss	(8,941,441)				(8,941,441)
Balance, value at Sep. 30, 2011	179,374,540	296,914	49,748,072	255,698,249	(126,368,695)
Balance, shares at Sep. 30, 2011		29,691,336	38,647
Balance, value at Dec. 31, 2011	189,808,272	314,653	48,685,499	271,428,671	(130,620,551)
Balance, shares at Dec. 31, 2011		31,465,274	37,748
Issuance of common stock, value	4,134,741	4,144		4,130,658	(61)
Issuance of common stock, shares		414,441
Redemptions of common stock, value	(743,115)	(791)		(742,324)
Redemptions of common stock and preferred stock, shares		(79,088)	(356)
Dividends on preferred stock	0		280,003	280,003
Redemptions of preferred stock, value	(459,436)		(459,436)
Commissions and discounts on stock sales and related dealer-manager fees	(361,364)			(361,364)
Other offering costs	(48,752)			(48,752)
Write-off of due to affiliates	27,315,249			27,315,249
Net loss	(6,238,188)				(6,238,188)
Balance, value at Sep. 30, 2012	$ 213,407,407	$ 318,006	$ 48,506,066	$ 301,442,135	$ (136,858,800)
Balance, shares at Sep. 30, 2012		31,800,627	37,392

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Note Payable and Line of Credit

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Note Payable and Line of Credit

Note Payable and Line of Credit

On September 28, 2012, Wells Timberland REIT entered into a first mortgage loan agreement (the "CoBank Loan") with a syndicate of banks with CoBank, ACB ("CoBank") serving as administrative agent, lead arranger, and bookrunner; Cooperatieve Centrale Raiffelsen-Boerenleenbank, B.A. ("RaboBank") serving as documentation agent; and Agfirst Farm Credit Bank serving as syndication agent. The CoBank Loan amended and restated the five-year senior loan agreement for $211.0 million (the "Mahrt Loan") entered into on March 24, 2010 and its amendments.

Under the CoBank Loan, Wells Timberland REIT initially can borrow up to $148.0 millionin principal, including$133.0 million through a term loan facility ("CoBank Term Loan") and up to $15.0 million through a revolving credit facility (the "CoBank Revolver"). Wells Timberland REIT also has the ability to increase the amount of the CoBank Term Loan by up to $50.0 million (the "CoBank Incremental Loan") during the term of the CoBank Loan. On August 11, 2018, all outstanding principal, interest, and any fees or other obligations on the CoBank Loan will be due and payable in full. The CoBank Loan is secured by a first mortgage in the Mahrt Timberland, a first priority security interest in all bank accounts held by Wells Timberland REIT, and a first priority security interest on all other assets of Wells Timberland REIT.

As of September 30, 2012, the outstanding balance of the CoBank Loan was $133.0 million, all of which was outstanding under the CoBank Term Loan. Proceeds from the CoBank Term Loan were used to pay off the outstanding balance of the Mahrt Loan, fund costs associated with closing the CoBank Loan, and partially fund the Property acquisition (see Note 3).

The CoBank Loan bears interest at an adjustable rate based on, at the option of Wells Timberland REIT, either the one-, two-, or three-month LIBOR plus an applicable margin ranging from 2.00% to 2.75% (the "LIBOR Rate") or at an alternate base rate plus an applicable margin ranging from 1.00% to 1.75% (the "Base Rate"). The Base Rate for any day is, as announced by CoBank on the first business day of each week, as the higher of (a) 1.5% greater than one-month LIBOR or (b) the prime rate as published from time to time in the Eastern Edition of the Wall Street Journal, or, if the Wall Street Journal shall cease publishing the “prime rate” on a regular basis, such other regularly published average prime rate applicable to such commercial banks as is acceptable to the lenders in their reasonable discretion. The margin component of the LIBOR Rate and the Base Rate is based on the loan-to-collateral-value ratio (the “LTV Ratio”), which is expressed as a percentage, of (a) the outstanding principal amount of all loans outstanding, less certain amounts permitted to be set aside under the terms of the CoBank Loan, for working capital and other purposes and any cash balances accumulated to fund distributions or future acquisitions, to (b) the value of the timberland assets, as determined in accordance with the CoBank Loan.

Wells Timberland REIT is required to pay a fee on the unused portion of the CoBank Revolver in an amount equal to the daily unused amount of the CoBank Revolver multiplied by a rate equal to (a) 0.375% per annum, if the LTV Ratio is greater than 40%, (b) 0.250% per annum, if the LTV Ratio is equal to or greater than 35% and less than 40%, and (c) 0.200% per annum, if the LTV Ratio is less than 35%.

The CoBank Loan is subject to mandatory prepayment from proceeds generated from dispositions of timberland and lease terminations. The mandatory prepayment excludes (1) the first $4.0 million of cost basis of timberland dispositions in any fiscal year if (a) LTV Ratio calculated on a pro forma basis after giving effect to such disposition does not exceed 40%, and (b) such cost basis is used as permitted under the the CoBank Loan; and (2) lease termination proceeds of less than $2.0 million in a single termination until aggregate lease termination proceeds during the term of the CoBank loan exceeds $5.0 million. Wells Timberland REIT may make voluntary prepayments at any time without premium or penalty.

The CoBank Loan contains, among others, the following financial covenants:

• limits the LTV Ratio to 45% at the end of each fiscal quarter and upon the sale or acquisition of any property;

• requires a fixed-charge coverage ratio of not less than 1.05:1.00 at the end of each fiscal quarter.

Wells Timberland REIT believes it was in compliance as of September 30, 2012 and expects to remain in compliance with the financial covenants of the CoBank Loan. Additionally, the CoBank Loan requires funding of an account under the control of CoBank equal to approximately six months of interest on the CoBank Loan, during any time the LTV Ratio is 30% or greater, or approximately three months of interest if the LTV Ratio is less than 30%.

Interest Paid and Fair Value of Outstanding Debt

During the three months ended September 30, 2012 and 2011, after consideration of the interest rate swap, Wells Timberland REIT made interest payments of approximately $1.1 million and $1.4 million, respectively, on the Mahrt Loan. During the nine months endedSeptember 30, 2012 and 2011, interest payments on the Mahrt Loan totaled approximately $3.3 million and $4.7 million, respectively. No interest was paid on the CoBank Loan during the three months and nine months ended September 30, 2012.

As of September 30, 2012, the weighted-average interest rate of the CoBank Loan after consideration of the interest rate swap was 3.92% based on the then-effective Base Rate. As of September 30, 2012 and December 31, 2011, the estimated fair value of Wells Timberland REIT's note payable was approximately $133.0 million and $118.4 million, respectively. The fair value was estimated based on discounted cash flow analysis using the current market borrowing rates for similar types of borrowing arrangements as of the measurement dates. The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized.

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Note Payable and Line of Credit - Interest Paid and Fair Value of Outstanding Debt (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012 Senior Loans Mahrt Loan	Sep. 30, 2011 Senior Loans Mahrt Loan	Sep. 30, 2012 Senior Loans Mahrt Loan	Sep. 30, 2011 Senior Loans Mahrt Loan	Sep. 30, 2012 Secured Debt	Dec. 31, 2011 Secured Debt	Sep. 30, 2012 Secured Debt CoBank Loan
Debt Instrument [Line Items]
Interest paid	$ 1.1	$ 1.4	$ 3.3	$ 4.7
Debt, weighted average interest rate							3.92%
Long-term debt, fair value					$ 133.0	$ 118.4

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Related-Party Transactions (Tables)

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The detail of amounts due to affiliates is provided below as of September 30, 2012 and December 31, 2011:

`

	September 30, 2012		December 31, 2011
Advisor fees and expense reimbursements due to Wells TIMO (1)	$	—	$	25,504,045
Other offering cost reimbursements due to Wells TIMO (2)	—		2,258,696
Operating expense reimbursements due to Wells TIMO (1)	—		1,067,691
Commissions on stock sales and related dealer-manager fees due to WIS	—		130,141
Total	$	—	$	28,960,573

⁽¹⁾ On January 20, 2012, we entered into an agreement with Wells TIMO whereby Wells TIMO forgave approximately $25.1 million of accrued but unpaid asset management fees and reimbursements that were previously deferred due to restrictions under our loan agreements. Due to the related-party nature of this transaction, this amount was recorded as additional paid-in capital during the first quarter of 2012.

⁽²⁾ On January 27, 2012, approximately $2.2 million of other offering cost due to Wells TIMO was forgiven. Due to the related-party nature of this transaction, this amount was recorded as additional paid-in capital during the first quarter of 2012.

Pursuant to the terms of the agreements described above, Wells Timberland REIT incurred the following related-party costs for the three months and nine months ended September 30, 2012 and 2011, respectively:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Advisor fees and expense reimbursements	$	—	$	—	$	2,393,745	$	1,843,958
Disposition fees	8,405		—		219,449		22,774
Commissions(1)(2)	—		921,548		246,546		2,389,018
Dealer-manager fees(1)	—		254,996		71,057		662,870
Other offering costs(1)	—		176,756		48,752		456,988
Total	$	8,405	$	1,353,300	$	2,979,549	$	5,375,608

⁽¹⁾  Commissions, dealer-manager fees, and other offering costs were charged against stockholders’ equity as incurred.

⁽²⁾  Substantially all commissions were re-allowed to participating broker-dealers through the end of the Public Offerings.