Exhibit 10.23

EXECUTION COPY

AMENDMENT NO. 2

TO

SUBORDINATED CREDIT AGREEMENT

AMENDMENT NO. 2 TO SUBORDINATED CREDIT AGREEMENT, dated as of February 29, 2008
(this “Amendment”), among TIMBERLANDS II, LLC, a Delaware limited liability
company (“Wells Timberland”), and WELLS TIMBERLAND ACQUISITION, LLC, a Delaware
limited liability company (“Wells Acquisition”; Wells Timberland and Wells
Acquisition, each a “Borrower” and, collectively, the “Borrowers”), the various
other Loan Parties (as defined below) that are parties hereto, the various
financial institutions parties hereto (collectively, the “Lenders”), and
WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity,
the “Administrative Agent”) for the Lenders.

WITNESSETH:

WHEREAS, the Borrowers, the Lenders and the Administrative Agent are parties to
that certain Subordinated Credit Agreement (the “Subordinated Credit
Agreement”), dated as of October 9, 2007, as amended by that certain Amendment
No. 1 to Subordinated Credit Agreement, dated as of November 26, 2007 (together,
the “Existing Credit Agreement”), and along with the other Loan Parties, as
applicable, the other Loan Documents;

WHEREAS, the Borrowers have requested that, as of the Effective Date (as defined
below), the Existing Credit Agreement be amended as herein provided; and

WHEREAS, the Lenders are willing, subject to the terms and conditions
hereinafter set forth, to make such amendments.

NOW, THEREFORE, in consideration of the agreements herein contained, the parties
hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings:

“Administrative Agent” is defined in the preamble.

“Amended Credit Agreement” means the Existing Credit Agreement as amended by
this Amendment as of the Effective Date.

“Amendment” is defined in the preamble.

“Borrower” is defined in the preamble.

“Effective Date” is defined in Section 5.1.

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“Existing Credit Agreement” is defined in the first recital.

“Lenders” is defined in the preamble.

SECTION 1.2. Other Definitions. Unless otherwise defined or the context
otherwise requires, terms used herein (including in the preamble and recitals
hereto) have the meanings provided for in the Amended Credit Agreement.

ARTICLE II

AMENDMENTS

Effective on (and subject to the occurrence of) the Effective Date, the Existing
Credit Agreement is amended as follows:

SECTION 2.1. Addition to Section 1.1. The following new definitions are added to
Section 1.1 of the Existing Credit Agreement in the appropriate alphabetical
order:

“Amendment No. 2 to Subordinated Credit Agreement” means Amendment No. 2 to
Subordinated Credit Agreement, dated as of February 29, 2008, among the parties
to this Amendment.

“Extended Maturity Date” means March 2, 2009.

“Secured Guaranty Pledge Agreement” means that certain Secured Guaranty Pledge
Agreement, dated as of October 9, 2007, by Wells Advisory Services I, LLC, a
Georgia limited liability company, in favor of the Administrative Agent, as
amended by that certain Amendment No. 1 to Secured Guaranty Pledge Agreement,
dated as of February 29, 2008.

SECTION 2.2. Amendments to Section 1.1. Section 1.1 of the Existing Credit
Agreement is amended as follows:

(a) The definition of “Agreement” is amended and restated in its entirety to
read as follows: ““Agreement” means this Agreement, as amended by Amendment
No. 1 to Subordinated Credit Agreement and Amendment No. 2 to Subordinated
Credit Agreement.”

(b) The definition of “First Principal Reduction Date” is amended by replacing
“February 29, 2008” with “June 30, 2008”.

(c) The definition of “Interest Rate” is amended by replacing “nine percent
(9%)” with “eleven percent (11%)”.

(d) The definition of “Second Principal Reduction Date” is amended by replacing
“April 30, 2008” with “August 29, 2008”.

(e) The definition of “Stated Maturity Date” is amended and restated to read in
its entirety as follows:

 

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“Stated Maturity Date” means October 17, 2008; provided, however, that if terms
of Section 3.1.2(a) hereof are satisfied and the aggregate outstanding principal
amount of all Loans, all other Obligations of Borrower under the Loan Documents,
including all Fees, shall be due and payable in full on the Extended Maturity
Date, then “Stated Maturity Date” shall mean the Extended Maturity Date.

SECTION 2.3. Amendment to Section 3.1.2. Section 3.1.2 of the Existing Credit
Agreement is amended as follows:

(a) Subsection (a) is amended by adding the following at the end of such
section: “provided, however, that if on the Stated Maturity Date (i) the
aggregate outstanding principal amount of all Loans is no greater than sixty
million dollars ($60,000,000) and (ii) a lien and security interest in favor of
the Administrative Agent has attached to eighty percent (80%) of the Pledged
Common Stock (as such term is defined in the Secured Guaranty Pledge Agreement)
under the Secured Guaranty Pledge Agreement, then the aggregate outstanding
principal amount of all Loans, all other Obligations of Borrower under the Loan
Documents, including all Fees, shall be due and payable in full on the Extended
Maturity Date.”

(b) Subsection (b) is amended and restated to read in its entirety as follows:

“(b) A principal payment shall be made on the First Principal Reduction Date in
an amount which, when added to all previously made principal payments, reduces
the aggregate outstanding principal balance of the Loans to an amount not
greater than one hundred twenty million dollars ($120,000,000);”

(c) Subsection (c) is amended and restated to read in its entirety as follows:

“(c) A principal payment shall be made on the Second Principal Reduction Date in
an amount which, when added to all previously made principal payments, reduces
the aggregate outstanding principal balance of the Loans to an amount not
greater than ninety million dollars ($90,000,000);”

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1. Representations and Warranties. In order to induce the Lenders to
make the amendments provided for in Article II, the Borrowers hereby jointly and
severally represent and warrant that:

(a) each of the representations and warranties of the Loan Parties contained in
the Existing Credit Agreement and in the other Loan Documents is true and
correct in all material respects as of the date hereof as if made on the date
hereof (except, if any such representation and warranty relates to an earlier
date, such representation and warranty shall be true and correct in all material
respects as of such earlier date);

 

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(b) no Default or Event of Default has occurred and is continuing; and

(c) the execution, delivery and performance by each Loan Party of this Amendment
and the consummation of the transactions contemplated hereby and the fulfillment
of the terms hereof do not (i) conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of time)
a default under (A) the formation documents of the Loan Parties, or (B) any
material indenture, agreement, mortgage, deed of trust, or other instrument to
which any Loan Party is a party or by which it is bound or any of its properties
are subject; (ii) result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust, or other instrument; or (iii) violate any law, order, rule, or
regulation applicable to any Loan Party of any court or of any Federal or State
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over any Loan Party or its properties.

SECTION 3.2. Further Agreement. The Borrowers hereby jointly and severally agree
that (a) the incorrectness in any material respect of any representation and
warranty contained in the preceding Section 3.1 shall constitute an immediate
Event of Default, (b) each Loan Document to which each Loan Party is a party is
in full force and effect with respect to it, and (c) no event that would
reasonably be expected to have a Material Adverse Effect has occurred since the
execution of Amendment No. 1 to Subordinated Credit Agreement.

ARTICLE IV

ACKNOWLEDGMENT OF OTHER LOAN PARTIES

By executing this Amendment, each of the Loan Parties (other than the Borrowers)
hereby confirms and agrees that each Loan Document to which it is a party is,
and shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, except that on and after the Effective Date each
reference therein to the Subordinated Credit Agreement shall refer to the
Existing Credit Agreement after giving effect to this Amendment.

ARTICLE V

CONDITIONS TO EFFECTIVENESS; EXPIRATION

SECTION 5.1. Effective Date. This Amendment shall become effective on such date
(herein called the “Effective Date”) when the conditions set forth in this
Section have been satisfied.

SECTION 5.2. Execution of Amendment. The Administrative Agent shall have
received counterparts of this Amendment duly executed and delivered on behalf of
the Borrower, each of the other Loan Parties, the Administrative Agent and all
the Lenders.

SECTION 5.3. Representations and Warranties. The representations, warranties and
agreements made by the Borrowers pursuant to Article III as of the Effective
Date shall be true and correct.

 

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SECTION 5.4. Amendment to Secured Guaranty Pledge Agreement. The Administrative
Agent shall have received a duly executed original copy of that certain
Amendment No. 1 to Secured Guaranty Pledge Agreement, dated as of even date
herewith, made by Wells Advisory Services I, LLC, a Georgia limited liability
company, in favor of the Administrative Agent.

SECTION 5.5. Expiration. If the Effective Date has not occurred on or prior to
February 29, 2008, the agreements of the parties contained in this Amendment
shall, unless otherwise agreed by all the Lenders, terminate immediately on such
date and without further action.

ARTICLE VI

MISCELLANEOUS

SECTION 6.1. Legal Opinions. No later than five (5) Business Days after the date
of this Amendment, the Administrative Agent shall have received from counsel to
the Loan Parties legal opinions regarding due organization, existence and good
standing, due authorization, due execution and delivery, enforceability and
usury for the Loan Parties and the Amended Credit Agreement substantially in the
forms received by the Administrative Agent at the closing of the Subordinated
Credit Agreement.

SECTION 6.2. Cross-References. References in this Amendment to any Article or
Section are, unless otherwise specified, to such Article or Section of this
Amendment.

SECTION 6.3. Loan Document Pursuant to Amended Credit Agreement. This Amendment
is a Loan Document executed pursuant to the Amended Credit Agreement. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions contained in the Existing Credit Agreement shall remain
unamended or otherwise unmodified and in full force and effect.

SECTION 6.4. Limitation of Amendments. The amendments set forth in Article II
shall be limited precisely as provided for herein and shall not be deemed to be
a waiver of, amendment of, consent to or modification of any other term or
provision of the Existing Credit Agreement or of any term or provision of any
other Loan Document or of any transaction or further or future action on the
part of the Borrower or any other Loan Party which would require the consent of
any of the Lenders under the Existing Credit Agreement or any other Loan
Document.

SECTION 6.5. Counterparts. This Amendment may be executed by the parties hereto
in several counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.

SECTION 6.6. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

SECTION 6.7. Further Assurances. The Borrower shall execute and deliver, and
shall cause each other Loan Party to execute and deliver, from time to time in
favor of the Administrative Agent and the Lenders, such documents, agreements,
certificates and other instruments as shall be necessary or advisable to effect
the purposes of this Amendment.

 

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SECTION 6.8. Costs and Expenses. The Borrowers agree to pay all reasonable costs
and expenses of the Administrative Agent (including the reasonable fees and
out-of-pocket expenses of legal counsel of the Administrative Agent) that are
incurred in connection with the execution and delivery of this Amendment and the
other agreements and documents entered into in connection herewith.

SECTION 6.9. No Waiver; Reservation of Rights. In no way or manner shall this
Amendment or any provision herein be construed as a waiver by the Loan Parties
of their rights or remedies under the Amended Credit Agreement and the other
Loan Documents. The Loan Parties hereby expressly, fully and completely reserve
all of their rights and remedies under the Amended Credit Agreement and the
other Loan Documents.

SECTION 6.10. Release. Each of the Loan Parties hereby releases the
Administrative Agent, the Lenders and their respective officers, directors,
equity owners, agents and employees (collectively, the “Specified Parties”) of,
from and against any and all claims, liability, losses, costs and expenses
directly or indirectly relating to or arising out of the Loan Documents and the
execution and delivery thereof or any act or omission of the Specified Parties
thereunder or relating thereto which has occurred up through and including the
time of the execution and delivery of this Amendment and which is known by, or
should have been known by, any of the Loan Parties.

SECTION 6.11. GOVERNING LAW; WAIVER OF JURY TRIAL; ENTIRE AGREEMENT. THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. EACH PERSON A PARTY HERETO KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
ARISING UNDER OR IN CONNECTION WITH THIS AMENDMENT OR ANY AGREEMENT OR DOCUMENT
ENTERED INTO IN CONNECTION HEREWITH. THIS AMENDMENT CONSTITUTES THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND SUPERSEDES ANY PRIOR AGREEMENT, WRITTEN OR ORAL, WITH RESPECT HERETO.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers hereunto duly authorized as of the day and year
first above written.

 

BORROWERS:

TIMBERLANDS II, LLC, a Delaware limited liability company By:   WELLS TIMBERLAND
MANAGEMENT ORGANIZATION, LLC, a Georgia limited liability company, as Manager
By:  

 

Name:   Brian Davis Title:   VP Finance WELLS TIMBERLAND ACQUISITION, LLC, a
Delaware limited liability company By:   WELLS TIMBERLAND MANAGEMENT
ORGANIZATION, LLC, a Georgia limited liability company, as Manager By:  

 

Name:   Brian Davis Title:   VP Finance

Amendment No. 2 to Subordinated Credit Agreement

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OTHER LOAN PARTIES: WELLS TRS HARVESTING OPERATIONS, LLC, a Delaware limited
liability company BY:   Forest Resource Consultants, Inc., a Georgia
corporation, Manager By:  

 

Name:   David Foil Title:   President WELLS TIMBERLAND REIT, INC., a Maryland
corporation By:  

 

Name:   Randall D. Fretz Title:   Senior Vice President WELLS TIMBERLAND TRS,
INC., a Delaware corporation By:  

 

Name:   Randall D. Fretz Title:   Senior Vice President WELLS REAL ESTATE FUNDS,
INC., a Georgia corporation By:  

 

Name:   Randall D. Fretz Title:   Vice President [continued on next page]

Amendment No. 2 to Subordinated Credit Agreement

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WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P., a Delaware limited partnership BY:
  Wells Timberland REIT, Inc., a Maryland corporation, its General Partner By:  

 

Name:   Randall D. Fretz Title:   Senior Vice President

Amendment No. 2 to Subordinated Credit Agreement

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ADMINISTRATIVE AGENT: WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
Agent By:  

 

Name:   Brian Rubins Title:   Vice President

Amendment No. 2 to Subordinated Credit Agreement

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LENDERS: WACHOVIA BANK, NATIONAL ASSOCIATION By:  

 

Name:   Brian Rubins Title:   Vice President

Amendment No. 2 to Subordinated Credit Agreement