EX-10.22 AMENDMENT NO.1 TO CREDIT AGREEMENT



 





Exhibit 10.22




AMENDMENT NO. 1

TO

SUBORDINATED CREDIT AGREEMENT




     AMENDMENT NO. 1 TO SUBORDINATED CREDIT AGREEMENT, dated as of November 26, 2007 (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 (such capitalized term and
all other capitalized terms not defined herein shall have the meanings provided for in Article
I) that are parties hereto, the various financial institutions parties hereto (collectively,
the “Lenders”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as agent (in such capacity, the
“Administrative Agent”) for the Lenders.



W I T N E S S E T H:




     WHEREAS, the Borrowers, the Lenders and the Administrative Agent are parties to the
Subordinated Credit Agreement, dated as of October 9, 2007 (the “Existing Credit
Agreement”), and, along with the other Loan Parties, as applicable, the other Loan Documents;
and



     WHEREAS, the Borrowers have requested that, as of the Effective Date, 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.



     “Amendment” is defined in the preamble.



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



     “Borrower” is defined in the preamble.



 









 





     “Effective Date” is defined in Section 5.1.



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



     (a) adding the following new definitions in the appropriate alphabetical order:



     ““Amendment No. 1 to Subordinated Credit Agreement” means Amendment No. 1 to
Subordinated Credit Agreement, dated as of November 26, 2007, among the parties to this Amendment.”



     ““Working Capital Sub-Account” is defined in Section 1.1 of the Senior Credit
Agreement.”; and



     (b) amending and restating in the entirety the definition “Interest Expense” as follows:



     ‘“Interest Expense” means, for any period, the aggregate interest expense of Wells
Timberland in respect of the Senior Loans for such period, as determined in accordance with GAAP,
including, without duplication, the portion of any capitalized lease liabilities of such Persons
allocable to interest expense, 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.”



     SECTION 2.2. Amendments to Section 7.2.6. Section 7.2.6 of the Existing Credit
Agreement is amended as follows:



     (a) Sub-clause (E) is amended and restated in the entirety as follows:



     “(E) Wells Partnership may make dividends, distributions and other payments to Wells REIT, in
each case from the amounts available therefore pursuant to clauses (a)(ii),
(a)(ix)and (a)(x) of Section 9.3 and clauses (a)(ii), (a)(vii), and
(a)(viii) of Section 9.3 of the Senior Credit Agreement if such amounts are promptly applied to the
payment of the relevant obligations specified in such Sections., and”; and



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     (b) by replacing “and” before sub-clause (E) with a comma and adding at the end thereof the
following:



     “(F) Wells REIT may redeem from any of its individual shareholders, 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 and (G) if all
Loans have been paid in full in cash, Wells REIT may redeem from any of its shareholders all or any
part of his or its Equity Interests in Wells REIT, provided that the Equity Interests of
Wells REIT redeemed in any calendar year pursuant to this sub-clause (G) shall not, in the
aggregate, exceed 5% of the weighted average number of Equity Interests of Wells REIT outstanding
during the prior calendar year.”



     SECTION 2.3. Amendments to Section 9.3; Omnibus Section Reference Change. Section 9.3
of the Existing Credit Agreement is amended as follows:



     (a) adding “(a)” immediately prior to the first word of the text in such Section;



     (b) adding new sub-clauses (v) and (vii) as follows:



          “(v) to pay Wells REIT an amount equal to the cost to it of redeeming from any of its
individual shareholders, within two years of his death or disability (as defined in clause
(a)(F) of Section 7.2.6) all or any part of his Equity Interests in Wells REIT;” and




          “(vii) to pay Wells REIT an amount equal to the cost to it of redeeming from any of its
shareholders all or any part of his or its Equity Interests in Wells REIT (other than for the death
or disability of a stockholder as described in sub-clause (v)), provided that the
Equity Interests of Wells REIT redeemed in any calendar year pursuant to this sub-clause
(vii) shall not, in the aggregate, exceed 5% of the weighted average number of Equity Interests
of Wells REIT outstanding during the prior calendar year;”;




     (c) renumbering the existing sub-clause (v) to read (vi) and existing sub-clauses (vi) -
(viii) to read (viii) – (x), respectively. All references in the Amended Credit Agreement to such
sub-clauses being renumbered shall refer to such sub-clauses as so renumbered; and



     (d) amending and restating the new sub-clause (x) as follows:



          “(x) to fund (A) the acquisition of assets by the Borrowers pursuant to clause (d) of
Section 7.2.8, or (B) dividends, distributions or other payments as specified by Wells
REIT.”




     SECTION 2.4. Amendments to Section 9.3(b). Clause (b) of Section 9.3 of the Existing
Credit Agreement is amended and restated in the entirety as follows:



     “(b) To the extent funds constituting Collateral Disposition Proceeds, Collateral Insurance
Proceeds or LTC Lease Disposition Proceeds are on deposit in the Revenue Account, the
Administrative Agent shall apply 100% of the same, first, to make mandatory prepayments on the
outstanding principal amount of the Senior Loans pursuant to clause (b) of Section
3.1.2 of the Senior Credit Agreement; provided, however, that if no Default or
Event of Default has



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occurred and is continuing under either the Senior Credit Agreement or this Agreement the
Borrowers may, with respect to any Collateral Disposition Proceeds received in respect of any
Collateral sold, leased, transferred or otherwise disposed of, fund the Working Capital Sub-Account
in an amount with respect thereto equal to the excess, if any, provided for in clause (b)
of the definition “Collateral Disposition Proceeds” over the amount with respect thereto provided
for in clause (a) of the definition “Collateral Disposition Proceeds”; and second,
following the Discharge of the Senior Obligations to the mandatory prepayments of the outstanding
principal of the Loans pursuant to clause (d) of Section 3.1.2, including, without
limitation, the Exit Fee.”




     SECTION 2.5. Amendment to Section 11.1(b). Sub-clause (v) of Section 11.1(b) of the
Existing Credit Agreement is amended and restated in the entirety as follows:



     “(v) alter Section 2.1 or 2.3 or 9.3;”.



ARTICLE III

REPRESENTATIONS AND WARRANTIES




     In order to induce the Lenders to make the amendments provided for in Article II, the
Borrowers hereby jointly and severally (a) represent and warrant that (i) each of the
representations and warranties of the Loan Parties contained in the Subordinated 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) and (ii) no Default or Event of Default has occurred and is continuing and
(b) agrees that the incorrectness in any material respect of any representation and warranty
contained in the preceding clause (a) shall constitute an immediate Event of Default.



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 Subordinated 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.



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     SECTION 5.1.1 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 5.1.2 Senior Credit Agreement Amendment. The parties to the Senior Credit
Agreement shall have entered into a satisfactory amendment thereto that gives effect to the
relevant terms hereof.



     SECTION 5.1.3 Representations and Warranties. The representations and warranties made
by the Borrowers pursuant to Article III as of the Effective Date shall be true and
correct.



     SECTION 5.2. Expiration. If the Effective Date has not occurred on or prior to
November ___, 2007, 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. Cross-References. References in this Amendment to any Article or Section
are, unless otherwise specified, to such Article or Section of this Amendment.



     SECTION 6.2. 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 and each other Loan Document shall remain unamended or otherwise
unmodified and in full force and effect.



     SECTION 6.3. 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 6.4. 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 6.5. 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 6.6. 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



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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.




     SECTION 6.7. Costs and Expenses. The Borrower agrees 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 6.8. 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.



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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.



	 	 	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 	 	 
	 	 	TIMBERLANDS II, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	WELLS TIMBERLAND MANAGEMENT

ORGANIZATION, LLC, as Manager
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jess E. Jarratt	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Jess E. Jarratt

Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS TIMBERLAND ACQUISITION, LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	WELLS TIMBERLAND MANAGEMENT

ORGANIZATION, LLC, as Manager
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jess E. Jarratt	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Jess E. Jarratt

Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	OTHER LOAN PARTIES:
	 
	 	 	 	 	 	 
	 	 	WELLS TRS HARVESTING OPERATIONS,

LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 
	 	 	BY:	 	Forest Resource Consultants, Inc., a Georgia
	 

	 	 	 	corporation, Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ David Foil	 	 
	 	 	 	 	 
	 	 	 	 	Name: David Foil
	 	 	 	 	Title: President
	 
	 	 	 	 	 	 
	 	 	WELLS TIMBERLAND REIT, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Randall D. Fretz	 	 
	 	 	 	 	 
	 	 	 	 	Name: Randall D. Fretz
	 	 	 	 	Title: Senior Vice President






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	 	 	WELLS TIMBERLAND TRS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Randall D. Fretz	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Randall D. Fretz	 	 
	 

	 	 	 	Title: Senior Vice President	 	 






	 	 	 	 	 
	 	 	WELLS REAL ESTATE FUNDS, INC., a

Georgia corporation
	 
	 	 	 	 
	 

	 	By:	 	/s/ Randall D. Fretz
	 

	 	 	 	 
	 

	 	Name:	 	Randall D. Fretz 
	 

	 	 	 	 
	 

	 	Title:	 	Vice President
	 

	 	 	 	 
	 
	 	 	 	 





	 	 	 	 	 	 	 
	 	 	ADMINISTRATIVE AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL

ASSOCIATION

as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John D. Hart	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Name: John D. Hart

Title: Director	 	 
	 
	 	 	 	 	 	 
	 	 	LENDERS:
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ John D. Hart 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Name: John D. Hart	 	 
	 

	 	 	 	Title: Director	 	 







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