Document:

exv10w18

 

Exhibit 10.18

LIMITED WAIVER TO

CREDIT AGREEMENT

     This Limited Waiver to Credit Agreement (this “Limited Waiver”), dated as of July 31, 2007, is
by and among SOFTBRANDS, INC., a Delaware corporation (the “Parent”), the subsidiaries of Parent
identified on the signature pages hereto (collectively, with the Parent, the “Borrowers” and
individually, a “Borrower”), WELLS FARGO FOOTHILL, INC., a California corporation, as
Administrative Agent (the “Agent”) and each of the lenders parties hereto (the “Lenders”).

R E C I T A L S

     A. The Borrowers, the Agent and the Lenders are parties to that certain Credit Agreement dated
as of August 14, 2006 (as amended, the “Credit Agreement”).

     B. The Borrowers have requested a limited one-time waiver to the Borrowers’ non-compliance
with the Permitted Investment covenant, as provided herein.

     C. The Agent and the Lenders are willing to waive such non-compliance, subject to the terms
and conditions of this Limited Waiver.

     NOW, THEREFORE, in consideration of the premises herein contained, and for other good and
valuable consideration (the receipt, sufficiency and adequacy of which are hereby acknowledged),
the parties hereto (intending to be legally bound) hereby agree as follows:

     1. Definitions. Terms capitalized herein and not otherwise defined herein shall have
the meanings ascribed to such terms in the Credit Agreement.

     2. Limited Waiver. The Agent waives the Borrower’s non-compliance with the definition
of Permitted Investments in Schedule 1.1 requiring that Investments by Subsidiaries other than U.S.
Subsidiaries be in Securities Accounts, Deposit Accounts or other similar investments outside the
United States so long as the aggregate amount of such Investments outside the United States does
not constitute more than (1) 75% of all Investments by Parent and its Subsidiaries from the period
commencing on the Closing Date and ending on December 31, 2006 and (2) 50% of all Investments by
Parent and its Subsidiaries for any period on or after January 1, 2007 (excluding from such
percentage any Investments held in China) and 35% of all Investments by Parent and its Subsidiaries
for any period on or after January 1, 2007 (including in such percentage any Investments held in
China) so long as the Borrower is in compliance with such requirements on and after November 30,
2007.

     3. Conditions Precedent. The Limited Waiver contained in Section 2 above is
subject to, and contingent upon, the prior or contemporaneous satisfaction of each of the following
conditions precedent, each in form and substance satisfactory to the Agent:

     (a) The Borrowers, the Agent and the Lenders shall have executed and delivered to each
other this Limited Waiver; and

 

 

     (b) The Borrowers shall have satisfied any other conditions of the Agent required in
connection with this Limited Waiver.

     4. Reference to and Effect on the Credit Agreement. Except as expressly provided
herein, the Credit Agreement and all of the Loan Documents shall remain unmodified and continue in
full force and effect and are hereby ratified and confirmed. Except as set forth in Section
4 above, the execution, delivery and effectiveness of this Limited Waiver shall not operate as
a waiver of: (a) any right, power or remedy of the Agent or the Lenders under the Credit Agreement
or any of the Loan Documents, or (b) any Default or Event of Default under the Credit Agreement or
any of the Loan Documents.

     5. Representations and Warranties of the Borrowers. Each of the Borrowers hereby
represents and warrants to the Agent and the Lenders, which representations and warranties shall
survive the execution and delivery of this Limited Waiver, that on and as of the date hereof and
after giving effect to this Limited Waiver:

     (a) As to each Borrower, the execution, delivery, and performance by such Borrower of
this Limited Waiver have been duly authorized by all necessary action on the part of such
Borrower.

     (b) As to each Borrower, the execution, delivery, and performance by such Borrower of
this Limited Waiver does not and will not (i) violate any provision of federal, state, or
local law or regulation applicable to any Borrower, the Governing Documents of any Borrower,
or any order, judgment, or decree of any court or other Governmental Authority binding on
any Borrower, (ii) conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any material contractual obligation of any Borrower,
(iii) result in or require the creation or imposition of any Lien of any nature whatsoever
upon any properties or assets of Borrower, other than Permitted Liens, or (iv) require any
approval of any Borrower’s interest holders or any approval or consent of any Person under
any material contractual obligation of any Borrower, other than consents or approvals that
have been obtained and that are still in force and effect.

     (c) As to each Borrower, this Limited Waiver and all other documents contemplated
hereby, when executed and delivered by such Borrower will be the legally valid and binding
obligations of such Borrower, enforceable against such Borrower in accordance with their
respective terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally.

     (d) The representations and warranties of each of the Borrowers set forth in the Credit
Agreement and in the Loan Documents to which it is a party are true, correct and complete on
and as of the date hereof; provided that the references to the Credit Agreement therein
shall be deemed to include the Credit Agreement as modified by this Limited Waiver.

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     (e) Each of the Borrowers acknowledges that the Agent and each Lender is specifically
relying upon the representations, warranties and agreements contained in this Limited Waiver
and that such representations, warranties and agreements constitute a material inducement to
the Agent and each Lender in entering into this Limited Waiver.

     6. Reference to Credit Agreement; No Waiver.

     The Agent’s and a Lender’s failure, at any time or times hereafter, to require
strict performance by the Borrowers of any provision or term of the Credit
Agreement, this Limited Waiver or the other Loan Documents shall not waive, affect
or diminish any right of the Agent or a Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by the Agent or a
Lender of a breach of this Limited Waiver or any Event of Default under the Credit
Agreement shall not, except as expressly set forth herein, suspend, waive or affect
any other breach of this Limited Waiver or any Event of Default under the Credit
Agreement, whether the same is prior or subsequent thereto and whether of the same
or of a different kind or character. None of the undertakings, agreements,
warranties, covenants and representations of any Borrower contained in this Limited
Waiver, shall be deemed to have been suspended or waived by the Agent or a Lender
unless such suspension or waiver is: (i) in writing and signed by the Agent and each
Lender and (ii) delivered to the Borrower. In no event shall the Agent’s and each
Lender’s execution and delivery of this Limited Waiver establish a course of dealing
among the Agent, each Lender, the Borrowers, or any other obligor or in any other
way obligate the Agent or each Lender to hereafter provide any amendments or waivers
with respect to the Credit Agreement. The terms and provisions of this Limited
Waiver shall be limited precisely as written and shall not be deemed: (A) to be a
consent to a modification or waiver of any other term or condition of the Credit
Agreement or of any other Loan Documents, or (B) to prejudice any right or remedy
that the Agent or each Lender may now have under or in connection with the Credit
Agreement or any of the other Loan Documents.

     7. Successors and Assigns; Limited Waiver. This Limited Waiver shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns;
provided, however, no Borrower may assign this Limited Waiver or any of its
respective rights hereunder without the Agent’s and each Lender’s prior written consent. Any
prohibited assignment of this Limited Waiver shall be absolutely null and void. This Limited
Waiver may only be amended or modified by a writing signed by the Agent, each Lender and the
Borrowers.

     8. Severability; Construction. Wherever possible, each provision of this Limited
Waiver shall be interpreted in such a manner so as to be effective and valid under applicable law,
but if any provision of this Limited Waivers held to be prohibited by or invalid under applicable
law, such provision or provisions shall be ineffective only to the extent of such provision and
invalidity, without invalidating the remainder of this Limited Waiver. Neither this Limited Waiver
nor any uncertainty or ambiguity herein shall be construed or resolved against Agent or each
Lender, whether under any rule of construction or otherwise. On the contrary, this

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Limited Waiver has been reviewed by all parties hereto and shall be construed and interpreted
according to the ordinary meaning of the words used so as to fairly accomplish the purposes and
intentions of the parties hereto.

     9. Counterparts; Facsimile. This Limited Waiver may be executed in one or more
counterparts, each of which taken together shall constitute one and the same instrument. Delivery
of an executed counterpart of this Limited Waiver by telefacsimile shall be equally as effective as
delivery of a manually executed counterpart of this Limited Waiver. Any party delivering an
executed counterpart of this Limited Waiver by telefacsimile shall also deliver a manually executed
counterpart of this Limited Waiver, but the failure to deliver a manually executed counterpart
shall not affect the validity, enforceability or binding effect of this Limited Waiver.

     10. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

     (a) THE VALIDITY OF THIS LIMITED WAIVER, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

     (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
LIMITED WAIVER SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN
THE COUNTY OF COOK, STATE OF ILLINOIS, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY BORROWER COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH BORROWERS
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER, AGENT AND THE LENDERS WAIVE, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 11(b).

     (c) BORROWERS, AGENT AND THE LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LIMITED WAIVER OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWERS, AGENT AND THE
LENDERS REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS
LIMITED WAIVER MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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     IN WITNESS WHEREOF, the undersigned have caused this Limited Waiver to be duly executed and
delivered as of the date first above written.

	 	 	 	 	 
	 	SoftBrands, Inc.

a Delaware corporation, as a Borrower

 	 
	 	By:  	 	 
	 	 	Title:       	 
	 	 	 	 
	 

	 	 	 	 	 
	 	SoftBrands Manufacturing, Inc.

a Minnesota corporation, as a Borrower

 	 
	 	By:  	 	 
	 	 	Title:       	 
	 	 	 	 
	 

	 	 	 	 	 
	 	SoftBrands International, Inc.

a Delaware corporation, as a Borrower

 	 
	 	By:  	 	 
	 	 	Title:       	 
	 	 	 	 
	 

	 	 	 	 	 
	 	SoftBrands Licensing, Inc.

a Delaware corporation, as a Borrower

 	 
	 	By:  	 	 
	 	 	Its:       	 
	 	 	 	 
	 

	 	 	 	 	 
	 	MAI Systems Corporation

a Delaware corporation, as a Borrower

 	 
	 	By:  	 	 
	 	 	Its:       	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Hotel Information Systems, Inc.

a Delaware corporation, as a Borrower

 	 
	 	By:  	 	 
	 	 	Its:       	 
	 	 	 	 
	 

	 	 	 	 	 
	 	CLS Software International, Inc.

a California corporation, as a Borrower

 	 
	 	By:  	 	 
	 	 	Its:       	 
	 	 	 	 
	 

	 	 	 	 	 
	 	Wells Fargo Foothill, Inc.

a California corporation, as Agent and a Lender

 	 
	 	By:  	 	 
	 	 	Its:EX-10.1 SECOND AMENDED AND RESTATED ADVISORY AGRMT

 

Exhibit 10.1

AMENDED AND RESTATED ADVISORY AGREEMENT

     THIS AMENDED AND RESTATED ADVISORY AGREEMENT (this “AGREEMENT”), dated as of December 13, 2007
and effective as of August 11, 2007, (the “EFFECTIVE DATE”), is by and among WELLS TIMBERLAND REIT,
INC., a Maryland corporation (the “COMPANY”), WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership (the “PARTNERSHIP”), and WELLS TIMBERLAND MANAGEMENT ORGANIZATION,
LLC, a Georgia limited liability company (the “ADVISOR”).

WITNESSETH

     WHEREAS, the Company has filed with the Securities and Exchange Commission (the “SEC”) a
Registration Statement on Form S-11 (the “REGISTRATION STATEMENT”) covering the initial public
offering of its common stock, par value $0.01 per share (the “SHARES”), and the SEC declared the
Registration Statement effective on August 11, 2006;

     WHEREAS, the Company intends to qualify as a REIT (as defined below), and intends to invest
its funds in investments permitted by the terms of the Company’s Articles of Incorporation and
Sections 856 through 860 of the Code (as defined below);

     WHEREAS, the Company is the general partner of the Partnership and intends to conduct all of
its business and make all of its investments in Properties through the Partnership;

     WHEREAS, the Company and the Partnership desire to avail themselves of the experience,
sources of information, advice, assistance and certain facilities available to the Advisor and to
have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of,
and subject to the supervision of, the Board of Directors of the Company all as provided herein;
and

     WHEREAS, the Advisor is willing to undertake to render such services, subject to the
supervision of the Board of Directors, on the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:

     1. DEFINITIONS. As used in this Agreement, the following terms have the definitions
hereinafter indicated:

     ACQUISITION EXPENSES. Any and all expenses incurred by the Company, the Partnership, the
Advisor, or any Affiliate of either in connection with the selection, acquisition or development of
any Property, whether or not acquired, including, without limitation, legal fees and expenses,
travel and communications expenses, costs of appraisals, nonrefundable option payments on property
not acquired, accounting fees and expenses, and title insurance premiums.

     ADVISOR. Wells Timberland Management Organization, LLC, a Georgia limited liability company,
any successor advisor to the Company, the Partnership or any Person(s) to which Wells Timberland
Management Organization, LLC. or any successor advisor

 

 

subcontracts substantially all of its functions.

     AFFILIATE OR AFFILIATED. An Affiliate of another Person includes only the following: (i) any
Person directly or indirectly controlling, controlled by, or under common control with such other
Person; (ii) any Person directly or indirectly owning, controlling, or holding with the power to
vote 10% or more of the outstanding voting securities of such other Person; (iii) any legal entity
for which such Person acts as an executive officer, director, trustee, or general partner, (iv) any
Person 10% or more of whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with power to vote, by such other Person; and (v) any executive officer,
director, trustee, or general partner of such other Person. An entity shall not be deemed to
control or be under common control with an Advisor-sponsored program unless (i) the entity owns 10%
or more of the voting equity interests of such program or (ii) a majority of the board (or
equivalent governing body) of such program is comprised of Affiliates of the entity.

     APPRAISED VALUE. Value according to an appraisal made by an Independent Appraiser.

     ARTICLES OF INCORPORATION. The Articles of Incorporation of the Company under Title 2 of the
Corporations and Associations Article of the Annotated Code of Maryland, as amended from time to
time.

     ASSET MANAGEMENT FEE. A monthly fee in an amount equal to one-twelfth of 1.0% of the sum of
(a) the actual amount invested on behalf of the Company in the Properties (including any incurred
or assumed indebtedness related to the Properties and any capital improvements made subsequent to
the initial investment) plus (b) with respect to Joint Ventures, the actual amount invested on
behalf of the Company in the Joint Ventures plus the Company’s allocable share of capital
improvements made by the Joint Venture from cash flows generated by the Joint Venture, until such
time as Advisor may estimate the value of all interests the Company holds in Properties or Joint
Ventures for ERISA reporting purposes; and after such time, ASSET MANAGEMENT FEE means a monthly
fee in an amount equal to one-twelfth of 1.0% of the greater of (1) the sum of (x) the actual
amount invested on behalf of the Company in the Properties (including any incurred or assumed
indebtedness related to the Properties and any capital improvements made subsequent to the initial
investment) plus (y) with respect to Joint Ventures, the actual amount invested on behalf of the
Company in the Joint Ventures plus the Company’s allocable share of capital improvements made by
the Joint Venture from cash flows generated by the Joint Venture, or (2) the aggregate value of the
Company’s interest in the Properties and Joint Ventures as established in connection with the most
recent estimated valuation to assist ERISA fiduciaries in fulfilling their annual valuation and
reporting responsibilities.

     AVERAGE INVESTED ASSETS. For a specified period, the average of the aggregate book value of
the assets of the Company invested, directly or indirectly, in Properties and Loans secured by real
estate before reserves for depreciation, depletion, bad debts or other similar non-cash reserves,
computed by taking the average of such values at the end of each month during such period.

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     BOARD OF DIRECTORS OR BOARD. The persons holding such office, as of any particular time,
under the Articles of Incorporation of the Company, whether they be the Directors named therein or
additional or successor Directors.

     BYLAWS. The bylaws of the Company, as the same are in effect from time to time.

     CAPPED O&O EXPENSES. All Organizational and Offering Expenses other than selling commissions
and the dealer manager fee as described under “Plan of Distribution” to the Registration Statement.

     CAUSE. With respect to the termination of this Agreement, fraud, criminal conduct, willful
misconduct or willful or grossly negligent breach of fiduciary duty by the Advisor, or a material
breach of this Agreement by the Advisor, provided that (i) the Advisor does not cure any such
material breach within 60 days of receiving notice of such material breach from the Company or the
Partnership, or (ii) such material breach is not of a nature that can be remedied within such
period.

     CODE. Internal Revenue Code of 1986, as amended from time to time, or any successor statute
thereto. Reference to any provision of the Code shall mean such provision as in effect from time to
time, as the same may be amended, and any successor provision thereto, as interpreted by any
applicable regulations as in effect from time to time.

     COMPANY. Wells Timberland REIT, Inc., a corporation organized under the laws of the State of
Maryland.

     COMPETITIVE REAL ESTATE COMMISSION. A real estate or brokerage commission for the purchase or
sale of property which is reasonable, customary, and competitive in light of the size, type, and
location of the property.

     CONTRACT SALES PRICE. The total consideration received by the Company for the sale of a
Property.

     DIRECTOR. A member of the Board of Directors of the Company.

     DISTRIBUTIONS. Any distributions of money or other property by the Company to owners of
Shares, including distributions that may constitute a return of capital for federal income tax
purposes.

     GOOD REASON. With respect to the termination of this Agreement, (i) any failure to obtain a
satisfactory agreement from any successor to the Company and the Partnership to assume and agree to
perform the Company’s and the Partnership’s obligations under this Agreement; or (ii) any material
breach of this Agreement by the Company, provided that (x) the Company does not cure such material
breach within 60 days of receiving notice of such material breach from the Advisor, or (y) such
material breach is not of a nature that can be remedied within such period.

     GROSS PROCEEDS. The aggregate cash purchase price of all Shares sold for the account of the
Company through an Offering, without deduction for Organization and Offering

3

 

Expenses.

     INDEPENDENT APPRAISER. A person or entity with no material current or prior business or
personal relationship with the Advisor or the Directors, who is engaged to a substantial extent in
the business of rendering opinions regarding the value of assets of the type held by the Company,
and who is a qualified appraiser of real estate as determined by the Board. Membership in a
nationally recognized appraisal society such as the American Institute of Real Estate Appraisers or
the Society of Real Estate Appraisers shall be conclusive evidence of such qualification.

     INDEPENDENT DIRECTOR. A Director who is not and within the last two years has not been
directly or indirectly associated with the Advisor by virtue of (i) ownership of an interest in the
Advisor or its Affiliates, (ii) employment by the Advisor or its Affiliates, (iii) service as an
officer or director of the Advisor or its Affiliates, (iv) performance of services, other than as a
Director, for the Company, (v) service as a director or trustee of more than three real estate
investment trusts advised by the Advisor, or (vi) maintenance of a material business or
professional relationship with the Advisor or any of its Affiliates. A business or professional
relationship is considered material if the gross revenue derived by the Director from the Advisor
and Affiliates exceeds 5% of either the Director’s annual gross revenue during either of the last
two years or the Director’s net worth on a fair market value basis. An indirect relationship shall
include circumstances in which a Director’s spouse, parents, children, siblings, mothers or
fathers-in-law, sons or daughters-in-law, or brothers or sisters-in-law is or has been associated
with the Advisor, any of its Affiliates, or the Company.

     JOINT VENTURE. Any joint venture, limited liability company or other Affiliate of the Company
(other than the Partnership) that owns, in whole or in part on behalf of the Company, any
Properties.

     LISTING. The term “LISTING” shall mean that the Shares have been approved for trading on a
national securities exchange. Upon such Listing, the Shares shall be deemed Listed.

     NASAA GUIDELINES. The NASAA Statement of Policy Regarding Real Estate Investment Trusts as in
effect on the date hereof.

     NET ASSETS. The total assets of the Company (other than intangibles) at cost, before
deducting depreciation, reserves for bad debt or other non-cash reserves, less total liabilities,
calculated quarterly by the Company of a basis consistently applied.

     NET INCOME. For any period, the total revenues applicable to such period, less the total
expenses applicable to such period excluding additions to reserves for depreciation, depletion, bad
debts or other similar non-cash reserves; provided, however, Net Income for purposes of calculating
total allowable Operating Expenses (as defined herein) shall exclude the gain from the sale of the
Company’s assets.

     OFFERING. Any offering of Shares that is registered with the SEC, excluding Shares offered
under any employee benefit plan.

     OFFERING STAGE. The period from the commencement of the Company’s initial

4

 

public equity offering through the termination of the Company’s last public equity offering
prior to Listing. For purposes of this definition, “public equity offering” does not include
offerings on behalf of selling stockholders or offerings related to a dividend reinvestment plan,
employee benefit plan or the redemption of interests in the Partnership.

     OPERATING EXPENSES. All costs and expenses incurred by the Company, as determined under
generally accepted accounting principles, which in any way are related to the operation of the
Company or to Company business, including fees paid to the Advisor, but excluding (i) the expenses
of raising capital such as Organization and Offering Expenses, legal, audit, accounting,
underwriting, brokerage, listing, registration, and other fees, printing and other such expenses
and tax incurred in connection with the issuance, distribution, transfer, registration and Listing
of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as
depreciation, amortization and bad loan reserves, (v) incentive fees paid in compliance with
Section IV.F of the NASAA Guidelines and (vi) Acquisition Expenses, real estate commissions on
resale of property, and other expenses connected with the acquisition, disposition, and ownership
of real estate interests, mortgage loans or other property (such as the costs of foreclosure,
insurance premiums, legal services, maintenance, repair and improvement of property).

     ORGANIZATION AND OFFERING EXPENSES. All expenses incurred by and to be paid from the assets
of the Company in connection with and in preparing the Company for registration of and subsequently
offering and distributing its Shares to the public, which may include but are not limited to, total
underwriting and brokerage discounts and commissions (including fees of the underwriters’
attorneys); expenses for printing, engraving and mailing; salaries of employees while engaged in
sales, education and marketing activities; charges of transfer agents, registrars, trustees, escrow
holders, depositaries and experts; and expenses of registration and qualification of the sale of
the securities, including taxes and fees, accountants’ and attorneys’ fees.

     PARTNERSHIP. Wells Timberland Operating Partnership, L.P., a Delaware limited partnership
formed to own and operate properties on behalf of the Company.

     PARTNERSHIP AGREEMENT. The Agreement of Limited Partnership of the Partnership, as amended
from time to time, between the Company, as General Partner and the Advisor, as the initial Limited
Partner.

     PERSON. An individual, corporation, partnership, estate, trust (including a trust qualified
under Section 401(a) or 501(c) (17) of the Code), a portion of a trust permanently set aside for or
to be used exclusively for the purposes described in Section 642(c) of the Code, association,
private foundation within the meaning of Section 509(a) of the Code, joint stock company or other
entity, or any government or any agency or political subdivision thereof, and also includes a group
as that term is used for purposes of Section 13(d) (3) of the Securities Exchange Act of 1934, as
amended.

     PROPERTY OR PROPERTIES. Any real property or properties, or any portion thereof, transferred
or conveyed to the Company or the Partnership, either directly or indirectly.

5

 

     REIT. A real estate investment trust under Sections 856 through 860 of the Code.

     REAL ESTATE DISPOSITION FEE. The fee payable to the Advisor under certain circumstances in
connection with the Sale of one or more Properties pursuant to Section 8 (b).

     SALE OR SALES. (i) Any transaction or series of transactions whereby: (A) the Company or the
Partnership sells, grants, transfers, conveys, or relinquishes its ownership of any Property or
portion thereof, including the lease of any Property consisting of the building only, and including
any event with respect to any Property which gives rise to a significant amount of insurance
proceeds or condemnation awards; (B) the Company or the Partnership sells, puts, transfers,
conveys, or relinquishes its ownership of all or substantially all of the interest of the Company
or the Partnership in any joint venture in which it is a co-venturer or partner; or (C) any joint
venture in which the Company or the Partnership as a co-venturer or partner sells, grants,
transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including any
event with respect to any Property which gives rise to insurance claims or condemnation awards, but
(ii) not including any transaction or series of transactions specified in clause (i) (A), (i) (B),
or (i) (C) above in which the proceeds of such transaction or series of transactions are reinvested
in one or more Properties within 180 days thereafter.

     SPECIAL UNITS. The separate series of limited partnership interests issued to Wells Capital,
Inc. pursuant to the Partnership Agreement as referenced in Section 8(c), which Wells Capital, Inc.
subsequently transferred to Wells Timberland Management Organization, LLC.

     STOCKHOLDERS. The registered holders of the Shares.

     TERMINATION DATE. The date of termination of the Agreement.

     TERMINATION EVENT. The termination or nonrenewal of this Agreement (i) in connection with a
merger, sale of assets or other corporate transaction involving the Company, (ii) by the Advisor
for Good Reason or (iii) by the Company and the Operating Partnership other than for Cause.

     TIMBER MANAGER. Any entity that has been retained to perform and carry out property
management services at one or more of the Properties, excluding persons, entities or independent
contractors retained or hired to perform facility management or other services or tasks at a
particular Property.

     2%/25% GUIDELINES. The requirement pursuant to the NASAA Guidelines that, in any 12-month
period, total Operating Expenses not exceed the greater of 2% of the Company’s Average Invested
Assets during such 12-month period or 25% of the Company’s Net Income over the same 12-month
period.

     2. APPOINTMENT. The Company and the Partnership appoints the Advisor to serve as its advisor
and asset manager as of the Effective Date, on the terms and conditions set forth in this
Agreement, and the Advisor accepts such appointment as of the Effective Date.

     3. DUTIES AND AUTHORITY OF THE ADVISOR. The Advisor undertakes to use its reasonable efforts
(1) to present to the Company and the Partnership potential investment

6

 

opportunities to provide a continuing and suitable investment program consistent with (i) the
investment objectives and policies of the Company as determined and adopted from time to time by
the Board and (ii) the investment allocation method described at Section 10(b) of this Agreement
and (2) to manage, administer, promote, maintain, and improve the Properties on an overall
portfolio basis in a diligent manner. The services of the Advisor are to be of scope and quality
not less than those generally performed by professional asset managers of other similar property
portfolios. The Advisor shall make available the full benefit of the judgment, experience and
advice of the members of the Advisor’s organization and staff with respect to the duties it will
perform under this Agreement. The Advisor may engage one or more Timber Managers, which may include
Affiliates of the Advisor, to manage, promote, and lease the Properties. To facilitate the
Advisor’s performance of these undertakings, but subject to the restrictions included in Sections 4
and 7 and to the continuing and exclusive authority of the Board of the Company and the general
partner of the Partnership, the Company and the Partnership hereby delegate to the Advisor the
authority to, and the Advisor hereby agrees to, either directly or by engaging an Affiliate:

     (A) serve as the Company’s and the Partnership’s investment and financial advisor and provide
research and economic and statistical data in connection with the Company’s assets and investment
policies;

     (B) provide the daily management of the Company and the Partnership and perform and supervise
the various administrative functions reasonably necessary for the management of the Company and the
Partnership;

     (C) maintain and preserve the books and records of the Company, including a stock ledger
reflecting a record of the Stockholders and their ownership of the Company’s Shares and acting as
transfer agent for the Company’s Shares and maintaining the accounting and other record-keeping
functions at the Property and Company levels;

     (D) investigate, select, and, on behalf of the Company and the Partnership, engage and conduct
business with such Persons as the Advisor deems necessary to the proper performance of its
obligations hereunder, including but not limited to consultants, accountants, correspondents,
lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow
agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks,
builders, developers, property owners, mortgagors, and any and all agents for any of the foregoing,
including Affiliates of the Advisor, and Persons acting in any other capacity deemed by the Advisor
necessary or desirable for the performance of any of the foregoing services, including but not
limited to entering into contracts in the name of the Company and the Partnership with any of the
foregoing;

     (E) consult with the officers and Board and assist the Board in the formulation and
implementation of the Company’s financial policies, and, as necessary, furnish the Board with
advice and recommendations with respect to the making of investments consistent with the investment
objectives and policies of the Company and in connection with any borrowings proposed to be
undertaken by the Company and the Partnership;

     (F) oversee the performance by each Timber Manager of its duties, including

7

 

collection of payments due from sales of timber and third parties under contracts related to
use of the Property and other assets of the Company and payment of Property expenses and
maintenance;

     (G) conduct periodic on-site property visits to some or all (as the Advisor deems reasonably
necessary) of the Properties to inspect the physical condition of the Properties and to evaluate
the performance of the Timber Manager of its duties;

     (H) review, analyze and comment upon the operating budgets, capital budgets, harvest schedules
and leasing plans prepared and submitted by the Timber Manager and aggregate these property budgets
into the Company’s overall budget;

     (I) review and analyze on-going financial information pertaining to each Property and the
overall portfolio of Properties;

     (J) if a transaction requires approval by the Board of Directors, deliver to the Board of
Directors all documents requested by them in their evaluation of the proposed investment in the
Property;

     (K) formulate and oversee the implementation of strategies for the administration, promotion,
management, operation, maintenance, improvement, financing and refinancing, marketing, leasing, and
disposition of Properties on an overall portfolio basis;

     (L) subject to the provisions of Sections 3(M) and 4 hereof, (i) locate, analyze and select
potential investments in Properties, (ii) structure and negotiate the terms and conditions of
transactions pursuant to which investment in Properties will be made; (iii) make investments in
Properties on behalf of the Company or the Partnership in compliance with the investment objectives
and policies of the Company; (iv) arrange for financing and refinancing and make other changes in
the asset or capital structure of, and dispose of, reinvest the proceeds from the sale of, or
otherwise deal with the investments in, Property; (v) enter into leases, supply agreements and
other income-producing contracts relating to third party use of the Property and other assets of
the Company, including timber harvesting; (vi) enter into service contracts for Property, including
oversight of Affiliated companies that perform property management services for the Company and the
Partnership; (vii) oversee the non-affiliated Timber Manager and other non-affiliated Persons who
perform services for the Company; and (viii) to the extent necessary, perform all other operational
functions for the maintenance and administration of such Property;

     (M) obtain the prior approval of the Board for any and all investments in Properties;

     (N) negotiate on behalf of the Company and the Partnership with banks or lenders for loans to
be made to the Company, and negotiate on behalf of the Company and the Partnership with investment
banking firms and broker-dealers or negotiate private sales of Shares and other securities or
obtain loans for the Company and the Partnership, but in no event in such a way so that the Advisor
shall be acting as broker-dealer or underwriter; and provided, further, that any fees and costs
payable to third parties incurred by the Advisor in connection with the foregoing shall be the
responsibility of the Company or the Partnership;

8

 

     (O) obtain reports (which may be prepared by the Advisor or its Affiliates), where
appropriate, concerning the value of investments or contemplated investments of the Company and the
Partnership in Properties;

     (P) from time to time, or at any time reasonably requested by the Board, provide information
or make reports to the Board related to its performance of services to the Company and the
Partnership under this Agreement;

     (Q) from time to time, or at any time reasonably requested by the Board, make reports to the
Board of the investment opportunities it has presented to other Advisor-sponsored programs or that
it has pursued directly or through an Affiliate;

     (R) provide the Company and the Partnership with all necessary cash management services;

     (S) deliver to or maintain on behalf of the Company copies of all appraisals obtained in
connection with the investments in Properties;

     (T) notify the Board of all proposed material transactions before they are completed; and

     (U) at the direction of Company management, prepare the Company’s periodic reports and other
filings made under the Securities Exchange Act of 1934, as amended, and the Company’s
Post-Effective Amendments to the Registration Statement as well as all related prospectuses,
prospectus supplements and supplemental sales literature and assist in connection with the filing
of such documents with the appropriate regulatory authorities;

     (V) effect any private placements of Units or other interests in Properties as may be approved
by the Board; and

     (W) do all things necessary to assure its ability to render the services described in this
Agreement.

     4. MODIFICATION OR REVOCATION OF AUTHORITY OF ADVISOR. The Board may, at any time upon the
giving of notice to the Advisor, modify or revoke the authority or approvals set forth in Section
3, provided however, that such modification or revocation shall be effective upon receipt by the
Advisor and shall not be applicable to investment transactions to which the Advisor has committed
the Company and the Partnership prior to the date of receipt by the Advisor of such notification.

     5. BANK ACCOUNTS. The Advisor may establish and maintain one or more bank accounts in its own
name for the account of the Company and the Partnership or in the name of the Company and the
Partnership and may collect and deposit into any such account or accounts, and disburse from any
such account or accounts, any money on behalf of the Company and the Partnership, under such terms
and conditions as the Board may approve, provided that no funds shall be commingled with the funds
of the Advisor; and the Advisor shall from time to time render appropriate accountings of such
collections and payments to the Board and to the auditors of the Company.

9

 

     6. RECORDS; ACCESS. The Advisor shall maintain appropriate records of all its activities
hereunder and make such records available for inspection by the Board and by counsel, auditors and
authorized agents of the Company, at any time or from time to time during normal business hours.
The Advisor shall at all reasonable times have access to the books and records of the Company and
the Partnership.

     7. LIMITATIONS ON ACTIVITIES. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made
in good faith, would (a) adversely affect the status of the Company as a REIT, (b) subject the
Company to regulation under the Investment Company Act of 1940, as amended, or (c) violate any law,
rule, regulation or statement of policy of any governmental body or agency having jurisdiction over
the Company or the Partnership, its Shares or its other securities, or otherwise not be permitted
by the Articles of Incorporation or Bylaws of the Company, except if such action shall be ordered
by the Board, in which case the Advisor shall notify promptly the Board of the Advisor’s judgment
of the potential impact of such action and shall refrain from taking such action until it receives
further clarification or instructions from the Board. In such event the Advisor shall have no
liability for acting in accordance with the specific instructions of the Board so given.
Notwithstanding the foregoing, the Advisor, its directors, officers, employees and stockholders,
and stockholders, directors and officers of the Advisor’s Affiliates shall not be liable to the
Company, the Partnership or to the Board or stockholders for any act or omission by the Advisor,
its directors, officers or employees, or stockholders, directors or officers of the Advisor’s
Affiliates taken or omitted to be taken in the performance of their duties under this Agreement
except as provided in Sections 16 and 17 of this Agreement.

     8. FEES.

     (A) ASSET MANAGEMENT FEE. Subject to the overall limitations contained below in this Section
8(a), commencing on the Effective Date, the Advisor shall receive the Asset Management Fee in
consideration for the services rendered in connection with the management of the Company’s assets,
calculated on the last day of each preceding month. The Asset Management Fee shall be payable by
the Company in cash or in Shares at the election of the Advisor in whole or in part, from time to
time, by the Advisor (without interest). If the Advisor elects to receive the Asset Management Fee
in the form of Shares, then the Shares shall be valued at a price per share equal to the average
closing price of the Shares over the ten trading days immediately preceding the date of such
election if the Shares are Listed at such time. If the Shares are not Listed and the Company is
still in its Offering Stage at such time, the Advisor will estimate the per share value of the
Shares at a price per share equal the most recent price paid to acquire a Share (excluding any
Shares sold at a purchase price discounts for certain categories of purchasers). If the Shares are
not Listed and the Offering Stage has been completed for 12 month at such time, the Shares shall be
valued at a price per share equal the published annual estimated value of the shares as determined
by the Advisor based upon the Appraised Value of the Assets on the date of election.

     (B) REAL ESTATE DISPOSITION FEE. If the Advisor or an Affiliate provides a substantial amount
of the services (as determined by a majority of the Independent Directors) in connection with the
Sale of one or more Properties, the Advisor or such Affiliate shall receive at closing a Real
Estate Disposition Fee equal to the lesser of (i) one-half of the Competitive Real

10

 

Estate Commission, or (1) if the contract price for the Sale is in excess of $20 million, then
an amount not to exceed 1.0% of the contract price of such Property or Properties, and (2) if the
contract price for the sale is $20 million or less, then an amount not to exceed 2.0% of the sales
price of such Property or Properties. In each case in which a Real Estate Disposition Fee may be
payable, the precise amount of the fee within the limits set forth in the preceding sentence shall
be determined by the Board, including a majority of the Independent Directors, based upon the
extent of the services provided by the Advisor or its Affiliate and market norms for the services
provided. Notwithstanding anything to the contrary herein, no Real Estate Disposition Fee shall be
payable to the Advisor for Property Sales if such Sales involve the Company selling all or
substantially all of its Properties in one or more transactions designed to effectuate a business
combination transaction (as opposed to a Company liquidation, in which case the Real Estate
Disposition Fee would be payable if the Advisor or an Affiliate provides a substantial amount of
services as provided above). Any Real Estate Disposition Fee payable under this section may be paid
in addition to real estate commissions paid to non-Affiliates, provided that the total real estate
commissions (including such Real Estate Disposition Fee) paid to all Persons by the Company for
each Property shall not exceed an amount equal to the lesser of (i) 6.0% of the Contract Sales
Price of the Property or (ii) the Competitive Real Estate Commission for the Property.

     (C) SPECIAL PARTNERSHIP UNITS. The Advisor has made capital contributions to the Partnership
in exchange for certain partnership units as described as follows: $2,000 in exchange for 200
common units and $1,000 in exchange for 100 Special Units. Upon the earliest to occur of the
termination of this Agreement for Cause, a Termination Event, or a Listing, all of the Special
Units shall be redeemed by the Partnership in accordance with the terms of the Partnership
Agreement.

     (D) CHANGES TO FEE STRUCTURE. In the event of Listing, the Company and the Advisor shall
negotiate in good faith to establish a fee structure appropriate for a perpetual-life entity.

     (E) NO DUPLICATION OF FEES. Under no circumstances shall the Advisor be entitled to receive
duplicate fees from the Company and the Operating Partnership for the provision of the same
services.

     9. EXPENSES.

     (A) REIMBURSABLE EXPENSES. In addition to the compensation paid to the Advisor pursuant to
Section 8 hereof, the Company or the Partnership shall pay directly or reimburse the Advisor for
all of the expenses paid or incurred by the Advisor (to the extent not reimbursable by another
party, such as the dealer manager) in connection with the services it provides to the Company and
the Partnership pursuant to this Agreement, including, but not limited to:

     (i) the Organization and Offering Expenses; provided, however, that within 60 days
after the end of the month in which an Offering terminates, the Advisor shall reimburse the
Company to the extent (i) Capped O&O Expenses borne by the Company exceed the maximum amount
permitted pursuant to the prospectus for the Offering and

11

 

(ii) Organization and Offering Expenses borne by the Company exceed 15% of the Gross
Proceeds raised in a completed Offering;

     (ii) Acquisition Expenses payable to unaffiliated Persons incurred in connection with
the selection and acquisition of Properties;

     (iii) the actual cost of goods and services used by the Company and obtained from
entities not affiliated with the Advisor, other than Acquisition Expenses, including
brokerage fees paid in connection with the purchase and sale of securities;

     (iv) interest and other costs for borrowed money, including discounts, points and other
similar fees;

     (v) taxes and assessments on income of the Company or Properties;

     (vi) costs associated with insurance required in connection with the business of the
Company or by the Board;

     (vii) expenses of managing and operating Properties owned by the Company, whether
payable to an Affiliate of the Company or a non-affiliated Person;

     (viii) all expenses in connection with payments to the Board and meetings of the Board
and Stockholders;

     (ix) expenses associated with Listing or with the issuance and distribution of
securities other than the Shares, such as selling commissions and fees, advertising
expenses, taxes, legal and accounting fees, listing and registration fees;

     (x) expenses connected with payments of Distributions in cash or otherwise made or
caused to be made by the Company to the Stockholders;

     (xi) expenses of organizing, redomesticating, merging, liquidating or dissolving the
Company or of amending the Articles of Incorporation or the Bylaws;

     (xii) expenses of maintaining communications with Stockholders or their financial
advisors, including the cost of preparation, printing, and mailing annual reports and other
Stockholder reports, proxy statements and other reports required by governmental entities;

     (xiii) administrative service expenses (including (i) personnel costs; provided,
however, that no reimbursement shall be made for costs of personnel to the extent that such
personnel perform services in transactions for which the Advisor receives a separate fee,
and (ii) the Company’s allocable share of other overhead of the Advisor such as rent and
utilities); and

     (xiv) audit, accounting and legal fees.

     (B) OTHER SERVICES. Should the Board request that the Advisor or any director, officer or
employee thereof render services for the Company and the Partnership other than set

12

 

forth in Section 3, such services shall be separately compensated at such rates and in such
amounts as are agreed by the Advisor and the Board, including a majority of the Independent
Directors, subject to the limitations contained in the Articles of Incorporation, and shall not be
deemed to be services pursuant to the terms of this Agreement.

     (C) TIMING OF AND LIMITATIONS ON REIMBURSEMENTS.

     (i) Expenses incurred by the Advisor on behalf of the Company and the Partnership and
payable pursuant to this Section 9 shall be reimbursed no less than monthly to the Advisor.
The Advisor shall prepare a statement documenting the expenses of the Company and the
Partnership during each quarter, and shall deliver such statement to the Company and the
Partnership within 45 days after the end of each quarter.

     (ii) Notwithstanding anything else in this Section 9 to the contrary, the expenses
enumerated in this Section 9 shall not become reimbursable out of proceeds of an Offering to
the Advisor unless and until the Company has raised the minimum offering amount, if any, as
provided in the prospectus for the Offering.

     (iii) The Company shall not reimburse the Advisor at the end of any fiscal quarter
Operating Expenses that, in the four consecutive fiscal quarters then ended (the “EXPENSE
YEAR”) exceed (the “EXCESS AMOUNT”) the 2%/25% Guidelines for such year unless a majority of
the Independent Directors determines that such excess was justified, based on unusual and
nonrecurring factors which a majority of our Independent Directors deems sufficient. If a
majority of the Independent Directors does not approve such excess as being so justified, any
Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company. If a
majority of the Independent Directors determines such excess was justified, then within 60
days after the end of any fiscal quarter of the Company for which total reimbursed Operating
Expenses for the Expense Year exceed the 2%/25% Guidelines, the Advisor, at the direction of a
majority of our Independent Directors, shall send to the stockholders a written disclosure of
such fact, together with an explanation of the factors the Independent Directors considered in
determining that such excess expenses were justified. The Company will ensure that such
determination will be reflected in the minutes of the meetings of the Board of Directors. All
figures used in the foregoing computation shall be determined in accordance with generally
accepted accounting principles applied on a consistent basis.

     10. OTHER ACTIVITIES OF THE ADVISOR.

     (A) GENERAL. Nothing herein contained shall prevent the Advisor from engaging in other
activities, including, without limitation, the rendering of advice to other Persons (including
other REITs) and the management of other programs advised, sponsored or organized by the Advisor or
its Affiliates; nor shall this Agreement limit or restrict the right of any director, officer,
employee, or stockholder of the Advisor or its Affiliates to engage in any other business or to
render services of any kind to any other partnership, corporation, firm, individual, trust or
association. The Advisor may, with respect to any investment in which the Company or the
Partnership is a participant, also render advice and service to each and every other participant
therein. The Advisor shall report to the Board the existence of any condition or circumstance,
existing or anticipated, of which it has knowledge, which creates or could create a conflict of
interest between the Advisor’s obligations to the Company and the Partners and its obligations to

13

 

or its interest in any other partnership, corporation, firm, individual, trust or association.

     (B) POLICY WITH RESPECT TO ALLOCATION OF INVESTMENT OPPORTUNITIES. Before the Advisor
presents an investment opportunity that would in its judgment be suitable for the Company or the
Partnership to another Advisor-sponsored program, the Advisor shall determine in its sole
discretion that the investment opportunity is more suitable for such other program than for the
Company or the Partnership based on factors such as the following: the investment objectives and
criteria of each program; the cash requirements and anticipated cash flow of each program; the size
of the investment opportunity; the effect of the acquisition on diversification of each program’s
investments by type of property and geographic area and, if applicable, tenant base; the policies
of each program relating to leverage; the estimated income tax effects of the purchase on each
entity; the funds of each entity available for investment and the length of time such funds have
been available for investment. In the event that an investment opportunity becomes available that
is, in the sole discretion of the Advisor, equally suitable for the Company, the Partnership and
another Advisor-sponsored program, then the Advisor may offer the other program the investment
opportunity if it has had the longest period of time elapse since it was offered an investment
opportunity. The Advisor will use its reasonable efforts to fairly allocate investment
opportunities in accordance with such allocation method and will promptly disclose any material
deviation from such policy or the establishment of a new policy, which shall be allowed provided
(1) the Board is provided with notice of such policy at least 60 days prior to such policy becoming
effective and (2) such policy provides for the reasonable allocation of investment opportunities
among such programs. The Advisor shall provide the Independent Directors with any information
reasonably requested so that the Independent Directors can insure that the allocation of investment
opportunities is applied fairly. Nothing herein shall be deemed to prevent the Advisor or an
Affiliate from pursuing an investment opportunity directly rather than offering it to the Company
or another Advisor-sponsored program so long as the Advisor is fulfilling its obligation to present
a continuing and suitable investment program to the Company which is consistent with the investment
policies and objectives of the Company and the Partnership.

     11. RELATIONSHIP OF ADVISOR AND COMPANY. The Company, the Partnership and the Advisor are not
partners or joint venturers with each other, and nothing in this Agreement shall be construed to
make them such partners or joint venturers or impose any liability as such on either of them.

     12. INTELLECTUAL PROPERTY.

     (A) WORK PRODUCT. All right, title, and interest, including, without limitation, all
intellectual property rights, in or related to any services, work product, and development work
provided or performed by Advisor or Advisor’s subcontractors under or in connection with this
Agreement, including, without limitation, any works of authorship, inventions, processes, formulas,
proprietary information, databases, customer lists, marketing plans, business strategies, financial
information, forecasts, trademarks, services marks, brand names, documents, data, designs, ideas,
concepts, technical data, and any other work product (collectively, “Work Product”) shall vest in
and be the sole and exclusive property of Company. All copyrightable Work Product performed by or
for Advisor under this Agreement shall be considered works made for hire (as that phrase is defined
the United States Copyright Act, 17 U.S.C. Section 101,

14

 

and used in 17 U.S.C. Section 201) and, as such, shall be owned by Company. In the event that
any Work Product under this Agreement cannot be considered as a work made for hire, Advisor hereby
assigns, agrees to assign, and will cause its employees and subcontractors to assign, to Company
for no additional consideration, all right, title, and interest that it may possess in such Work
Product. If and to the extent it is impossible as a matter of law to assign ownership rights,
including, without limitation, intellectual property rights in any portion of the Work Product to
Company, Advisor hereby grants to Company an exclusive, irrevocable, perpetual, transferable, fully
paid-up, worldwide and unlimited right to use and exploit in any possible way (including, without
limitation, to modify, copy, amend, translate, further develop, prepare derivative works of,
distribute and sublicense) all intellectual property rights pertaining to the Work Product, and any
portion of it, and warrants with respect to its employees and subcontractors, that they will do the
same. Advisor represents and warrants that Advisor has enforceable written agreements with all of
its employees and subcontractors involved in the provision of services and work product under the
Agreement to assign to Advisor ownership of work product, and the intellectual property rights
therein, created in the course of their employment or engagement.

     (B) FURTHER ACTIONS. At Company’s request and without further consideration, Advisor and
Advisor’s successors in interest shall execute any and all powers of attorney, applications,
assignments, declarations, affidavits, and any other papers or documents necessary to perfect such
right, title, and interest in Company, its successors, assigns, and legal representatives. Advisor
shall not apply for the registration of rights in any of the Work Product under any local, state or
federal law of the United States or any other nation and will not oppose or object in any way to
applications for registration of same by Company or Company’s designee. Nothing in this Agreement
shall be interpreted as granting to Advisor any rights to the Work Product or any license to copy,
adapt or take any other action in respect of any Work Product, except on behalf of Company as
provided in this Agreement.

     (C) THIRD PARTY MATERIALS. If Advisor shall incorporate into any Work Product any materials
of any third party, Advisor is responsible for obtaining, at its own expense, all rights, licenses,
consents, and permissions necessary for Company to have the fully paid up, perpetual, irrevocable,
worldwide and unlimited right to use and exploit in any possible way (including, without
limitation, to modify, copy, amend, translate, further develop, prepare derivative works of,
distribute and sublicense) the third party materials in connection with the Work Product,
consistent with the terms of this Agreement, and to sublicense these rights to others.

     13. TERM; TERMINATION OF AGREEMENT.

     (A) TERM. This Agreement shall continue in force until the first anniversary of the Effective
Date, subject to an unlimited number of successive one-year renewals upon mutual consent of the
parties. The Company, acting through the Board, will evaluate the performance of the Advisor
annually before renewing the Agreement, and each such renewal shall be for a term of no more than
one year.

     (B) TERMINATION BY EITHER PARTY.

     (i) BY EITHER PARTY. This Agreement may be terminated upon 60 days written notice
without Cause or penalty, by either party (if by the Company, upon

15

 

approval of a majority of the Independent Directors).

     (ii) BY THE COMPANY. At the sole option of the Company, this Agreement may be
terminated by the Company immediately, subject to the 60-day cure period, for Cause due to a
material breach of this Agreement, upon written notice of termination from the Board of
Directors to the Advisor that the Company has Cause to terminate this Agreement.

     (iii) BY THE ADVISOR. At the sole option of the Advisor, this Agreement shall be
terminated by the Advisor immediately, subject to the 60-day cure period, for “Good Reason”
due to a material breach of this Agreement, upon written notice of termination from the
Advisor to the Company that the Advisor has Good Reason to terminate this Agreement.

     (iv) SURVIVAL. The provisions of Section 12 and Sections 15 through 27 shall survive
termination of this Agreement.

     14. ASSIGNMENT TO AN AFFILIATE. This Agreement may be assigned by the Advisor to an Affiliate
with the approval of the Board, including a majority of the Independent Directors. The Advisor may
assign any rights to receive fees or other payments under this Agreement without obtaining the
approval of the Board. This Agreement shall not be assigned by the Company or the Partnership
without the consent of the Advisor, except in the case of an assignment by the Company or the
Partnership to a corporation or other organization which is a successor to all of the assets,
rights and obligations of the Company or the Partnership, as the case may be, in which case such
successor organization shall be bound hereunder and by the terms of said assignment in the same
manner as the Company and the Partnership is bound by this Agreement.

     15. PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION. Payments to the Advisor pursuant to
this Section 15 shall be subject to the 2%/25% Guidelines to the extent applicable.

     (A) After the Termination Date, the Advisor shall not be entitled to compensation for further
services hereunder except it shall be entitled to receive from the Company within 30 days after the
effective date of such termination all unpaid reimbursements of expenses and all earned but unpaid
fees payable to the Advisor prior to termination of this Agreement; and

     (B) The Advisor shall promptly upon termination:

     (i) pay over to the Company all money collected and held for the account of the Company
pursuant to this Agreement, after deducting any accrued compensation and reimbursement for
its expenses to which it is then entitled;

     (ii) deliver to the Board a full accounting, including a statement showing all payments
collected by it and a statement of all money held by it, covering the period following the
date of the last accounting furnished to the Board;

     (iii) deliver to the Board all assets, including Properties, and documents of the
Company then in the custody of the Advisor; and

16

 

     (iv) cooperate with the Company to provide an orderly management transition.

     16. INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and hold harmless the Advisor
and its Affiliates, including their respective officers, directors, partners and employees, from
all liability, claims, damages or losses arising in the performance of their duties hereunder, and
related expenses, including reasonable attorneys’ fees, to the extent such liability, claims,
damages or losses and related expenses are not fully reimbursed by insurance, provided that the
Company shall not indemnify and hold harmless the Advisor or its Affiliates unless all of the
following conditions are met:

     (i) The Advisor or its Affiliates has determined, in good faith, that the course of
conduct that caused the loss or liability was in the best interests of the Company.

     (ii) The Advisor or its Affiliates was acting on behalf of or performing services for
the Company.

     (iii) Such liability or loss was not the result of negligence or misconduct by the
Advisor or its Affiliates.

     (iv) Such indemnification or agreement to hold harmless is recoverable only out of Net
Assets and not from the Stockholders.

     17. INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and hold harmless the Company
from contract or other liability, claims, damages, taxes or losses and related expenses including
attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related
expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s bad
faith, fraud, willful misfeasance, misconduct, or reckless disregard of its duties, but the Advisor
shall not be held responsible for any action of the Board in following or declining to follow
advice or recommendation given by the Advisor.

     18. NOTICES. Any notice, report or other communication required or permitted to be given
hereunder shall be in writing unless some other method of giving such notice, report or other
communication is required by the Articles of Incorporation, the Bylaws, or accepted by the party to
whom it is given, and shall be given by being delivered by hand or by overnight mail or other
overnight delivery service to the addresses set forth herein:

	 	 	 
	To the Board and to the Company:

	 	Wells Timberland REIT, Inc.
	 

	 	6200 The Corners Parkway
	 

	 	Norcross, Georgia 30092-3365
	 

	 	Attention: Chairman of the Board
	 
	 	 
	To the Partnership:

	 	Wells Timberland Operating Partnership, L.P
	 

	 	6200 The Corners Parkway
	 

	 	Norcross, Georgia 30092-3365
	 

	 	Attention: Chairman of the Board of
	 

	 	          Wells Timberland REIT, Inc.,
	 

	 	          General Partner

17

 

	 	 	 
	To the Advisor:

	 	Wells Timberland Management Organization, LLC
	 

	 	6200 The Corners Parkway
	 

	 	Norcross, Georgia 30092-3365
	 

	 	Attention: President

     Either party may at any time give notice in writing to the other party of a change in its
address for the purposes of this Section 18.

     19. MODIFICATION. This Agreement shall not be changed, modified, terminated, or discharged,
in whole or in part, except by an instrument in writing signed by both parties hereto, or their
respective successors or assignees.

     20. SEVERABILITY. The provisions of this Agreement are independent of and severable from each
other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the
fact that for any reason any other or others of them may be invalid or unenforceable in whole or in
part.

     21. CONSTRUCTION. The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Georgia.

     22. ENTIRE AGREEMENT. This Agreement contains the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended other than by an agreement
in writing.

     23. INDULGENCES, NOT WAIVER. Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

     24. GENDER. Words used herein regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context requires.

     25. TITLES NOT TO AFFECT INTERPRETATION. The titles of sections and subsections contained in
this Agreement are for convenience only, and they neither form a part of this Agreement nor are
they to be used in the construction or interpretation hereof.

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     26. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument. This Agreement
shall become binding when the counterparts hereof, taken together, bear the signatures of all of
the parties reflected hereon as the signatories.

     27. NAME. Wells Timberland Management Organization, LLC has a proprietary interest in the
name “Wells.” Accordingly, and in recognition of this right, if at any time the Company or the
Partnership ceases to retain Wells Timberland Management Organization, LLC or an Affiliate thereof
to perform the services of Advisor, the Company or the Partnership, as the case may be, will,
promptly after receipt of written request from Wells Timberland Management Organization, LLC, cease
to conduct business under or use the name “Wells” or any derivative thereof and the Company or the
Partnership shall use its best efforts to change the name of the Company to a name that does not
contain the name “Wells” or any other word or words that might, in the sole discretion of the
Advisor, be susceptible of indication of some form of relationship between the Company and the
Advisor or any Affiliate thereof. Consistent with the foregoing, it is specifically recognized that
the Advisor or one or more of its Affiliates has in the past and may in the future organize,
sponsor or otherwise permit to exist other investment vehicles (including vehicles for investment
in real estate) and financial and service organizations having “Wells” as a part of their name, all
without the need for any consent (and without the right to object thereto) by the Company or its
Board.

[Signatures appear on next page.]

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     IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Advisory
Agreement as of December 13, 2007.

	 	 	 	 	 	 	 	 	 
	 	 	WELLS TIMBERLAND REIT, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Douglas P. Williams	 	 
	 	 	 	 	Name: Douglas P. Williams	 	 
	 	 	 	 	Title: Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Wells Timberland REIT, Inc.	 	 
	 	 	 	 	General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Douglas P. Williams	 	 
	 
	 	 	 	 	 	Name: Douglas P. Williams	 	 
	 

	 	 	 	 	 	Title: Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	WELLS TIMBERLAND MANAGEMENT ORGANIZATION, LLC	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Jess E. Jarratt	 	 
	 	 	 	 	Name: Jess E. Jarratt	 	 
	 	 	 	 	Title: President	 	 

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