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Exhibit
10.1
MASTER PURCHASE
AGREEMENT
This MASTER PURCHASE
AGREEMENT, dated as of July 11, 2008 (including all exhibits
and schedules, this “ Agreement ”), is by and
between Wells-DFH Timberland Nr.88 GmbH & Co. KG, a German
closed end fund that will elect to be treated as partnership for
U.S. tax purposes (the “ Fund ”), Deutsche Fonds
Holding AG (“ DFH ”), a corporation organized
under the laws of Germany, Wells Timberland Management
Organization, LLC, a Georgia limited liability company (“
Wells TIMO ”) and Wells Timberland REIT, Inc., a
corporation organized and existing under the laws of the State of
Maryland (the “ Company, ” and, together with
DFH, Wells TIMO and the Fund, the “ Parties ,”
and each a “ Party ”).
WHEREAS, pursuant to the
Company’s confidential offering memorandum, dated
July 11, 2008 (together with all documents incorporated by
reference therein, as well as all amendments, supplements and
exhibits thereto, the “ Offering Memorandum ”)
and the accompanying prospectus, dated December 14, 2007
(together with all amendments, supplements and exhibits thereto,
and any new prospectus included in a post-effective amendment to
the registration statement that includes such prospectus, the
“ Prospectus ”), the Company is offering (the
“ Offering ”) to the Fund up to 53,763,441
shares of the Company’s common stock, par value $.01 per
share (the “ Common Stock ”);
WHEREAS, pursuant to the
terms and conditions applicable to the Offering, as described in
the Offering Memorandum, the Prospectus, this Agreement, and each
subscription agreement between the Fund and the Company,
substantially in the form attached hereto as Exhibit A (each
a “ Subscription Agreement ”), the Fund desires
to subscribe to purchase shares of the Company’s Common
Stock, from time to time, at a price per share of $9.30;
and
WHEREAS, in making
subscriptions for shares of the Company’s Common Stock, the
Fund is relying and will rely upon the representations, warranties,
covenants and agreements of the Company and Wells TIMO contained
herein and confirmed in each Subscription Agreement, and, in
considering and accepting the Fund’s subscription under each
Subscription Agreement, the Company is relying and will rely upon
the representations, warranties, covenants and agreements of the
Fund and DFH contained herein and confirmed in each Subscription
Agreement;
NOW, THEREFORE, in
consideration of the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, intending to be legally bound
hereby, do hereby agree as follows:
1. Subscription
. The Fund may, from time to time, subscribe for shares of the
Company’s Common Stock by entering into one or more
Subscription Agreements with the Company, which Subscription
Agreements shall set forth the number of shares that the Fund is
subscribing for (the “ Shares ”), up to a
maximum of 53,763,441 shares in the aggregate, and the aggregate
purchase price for such Shares (the “ Purchase Price
”). The Parties shall make to each other and confirm the
representations and warranties contained herein as of the date of
each Subscription Agreement and as of each related Closing Date (as
defined below). In the event of any conflict between the terms of a
Subscription Agreement and this Agreement, the terms of the
Subscription Agreement shall govern.
2. Closings .
Each closing (each a “ Closing ”) and settlement
of the Fund’s purchases of shares of the Company’s
Common Stock shall occur on such dates as are mutually agreed upon
by the Parties (each a “ Closing Date ”), and
shall occur no later than the third
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business day following the acceptance of
a Subscription Agreement by the Company. At each Closing, the
Company shall confirm to the Fund that the Company’s transfer
agent has reflected the Fund’s purchase and ownership of the
Shares in the Company’s stock ledger maintained by such
transfer agent, against payment by the Fund of the Purchase Price
in good and immediately available funds by wire transfer or check
in accordance with the Company’s instructions.
3. Representations and
Warranties of the Company .
As of the date hereof and the
date of each Subscription Agreement and each Closing, the Company
and Wells TIMO hereby represent, warrant and agree to, and for the
benefit of, the Fund as follows:
(a) The Offering Memorandum
and the Prospectus (including any supplements) do not include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(b) All documents filed by
the Company with the United States Securities and Exchange
Commission (the “ Commission ”) pursuant to
Sections 12, 13, 14 or 15 of the Securities Exchange Act of 1934,
as amended (the “ Exchange Act ”) and
incorporated by reference into the Offering Memorandum and/or the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, complied in all material respects
with the requirements of the Securities Act of 1933, as amended
(the “ Securities Act ”), and the rules
thereunder or the Exchange Act and the rules thereunder, as
applicable.
(c) Neither the Company nor
any of its affiliates (as such term is defined in Rule 405 of the
Securities Act, “ Affiliates ”) or any person
acting on its or their behalf has engaged in any “directed
selling efforts” within the meaning of Rule 902(c) of
Regulation S (“ Regulation S ”), as promulgated
under the Securities Act, with respect to the Shares.
(d) None of the Company or
its Affiliates or any person authorized to act on its or their
behalf has, directly or indirectly, made any offers or sales of any
security, or solicited any offers to buy, any security under
circumstances that would require the registration of the Shares
under the Securities Act.
(e) No registration of the
Shares under the Securities Act is required for the purchase of the
Shares by the Fund in the manner contemplated herein and in the
Offering Memorandum and the Prospectus.
(f) (i) The Company
(x) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Maryland with full corporate power and authority to own or lease,
as the case may be, and to operate its properties and conduct its
business as described in the Offering Memorandum and the
Prospectus, and to enter into and perform its obligations under
this Agreement and each Subscription Agreement, (y) is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified and in
good standing would not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
Subsidiaries (as defined below) taken as a whole, whether or not
arising from transactions in the ordinary course of business (a
“ Material Adverse Effect ”).
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(ii) Each Subsidiary of the
Company listed on Schedule 3(f)(ii) hereto (each a “
Subsidiary ” and together, the “
Subsidiaries ”) has been duly formed and is validly
existing as a corporation, business trust, limited liability
company or limited partnership, as the case may be, in good
standing under the laws of the jurisdiction in which it is
chartered or organized with full power and authority (corporate and
other) to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Offering
Memorandum and the Prospectus, and is duly qualified to do business
as a foreign corporation, business trust, limited liability company
or limited partnership, as the case may be, and is in good standing
under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified and in
good standing could not reasonably be expected to have a Material
Adverse Effect.
(g) All of the outstanding
shares of capital stock or other ownership interests of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and all outstanding shares of capital
stock or other ownership interests of the Subsidiaries are owned by
the Company either directly or through wholly owned Subsidiaries
free and clear of any perfected security interest or any other
security interests, claims, mortgages, pledges, liens, encumbrances
or other restrictions of any kind (collectively, “
Liens ”), except as set forth on Schedule 3(g)
hereto. There are no outstanding options, warrants or other rights
to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities or
interests for capital stock or other ownership interests of any
Subsidiary of the Company.
(h) The capital stock of the
Company conforms in all material respects to the description
thereof contained in the Offering Memorandum and the Prospectus;
the outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable; the
Shares have been duly and validly authorized, and, when issued and
delivered to and paid for by the Fund pursuant to this Agreement,
will be fully paid and nonassessable; the holders of outstanding
shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Shares; and, except
as set forth in the Offering Memorandum and the Prospectus, no
options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of Common Stock or ownership
interests in the Company are outstanding; all offers and sales of
Common Stock prior to the date hereof were at all relevant times
duly registered under the Securities Act or were exempt from the
registration requirements of the Securities Act and were duly
registered or the subject of an available exemption from the
registration requirements of the applicable state securities or
blue sky laws.
(i) The statements in the
Offering Memorandum and the Prospectus, when read together with the
documents incorporated by reference therein, under the headings
“Legal Proceedings,” “Transfer
Restrictions,” “Risk Factors—The Shares are
subject to a voting agreement,” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources,” insofar as
such statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries of
such legal matters, agreements, documents or proceedings. The
Shares conform in all material respects to the respective
statements relating thereto contained in the Offering Memorandum
and the Prospectus.
(j) To the Company’s
knowledge, there are no material transfer taxes or other similar
fees or charges under federal law or the laws of any state, or any
political subdivision thereof,
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required to be paid by the Company,
Wells TIMO or its Subsidiaries in connection with the execution and
delivery of this Agreement or the issuance by the Company or sale
and delivery by the Company of the Shares.
(k) This Agreement and each
applicable Subscription Agreement has been duly authorized,
executed and delivered by the Company and Wells TIMO and
constitutes a legally valid and binding obligation of the Company
and Wells TIMO, enforceable against the Company and Wells TIMO in
accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws
affecting creditors’ rights and general principles of equity,
and except as to rights to indemnity and contribution thereunder as
may be limited by applicable law or policies underlying such
law.
(l) The Company is not and,
after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Offering
Memorandum and the Prospectus, will not be an “investment
company” as defined in the Investment Company Act of 1940, as
amended.
(m) No consent, approval,
authorization, filing with or order of any court or governmental
agency or body is required in connection with the transactions
contemplated herein and in each Subscription Agreement, other than
such as will be made or obtained under the Securities Act, and
those the absence of which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse
Effect.
(n) Neither the issuance and
sale of the Shares nor the consummation of any other of the
transactions contemplated herein or in each Subscription Agreement
nor the fulfillment of the terms hereof or thereof will conflict
with, result in a breach or violation of, or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or any of its Subsidiaries pursuant to, (i) the
charter or bylaws of the Company or the organizational or other
governing documents of any of its Subsidiaries, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust,
franchise, note, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of
its Subsidiaries is a party or bound or to which its or their
property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or
any of its Subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
Subsidiaries or any of its or their properties, except, in the case
of clauses (ii) or (iii) above, for such conflicts,
breaches, violations, liens, charges or encumbrances that,
individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
(o) Except with respect to
the registration rights granted to the Fund pursuant to this
Agreement and any other similar agreement between the Company and
the Fund, there are no contracts, agreements or understandings
between the Company and any person granting such person the right
to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include
such securities in any securities being registered pursuant to any
other registration statement filed by the Company under the
Securities Act. In the event of a liquidation of the Company, a
sale or merger of the Company, a sale of all or substantially all
of the Company’s assets, or the listing of the
Company’s Common Stock on a national securities exchange, the
Shares will have the same rights, privileges and preferences as
those rights, privileges and preferences of the shares of Common
Stock purchased by the Company’s other
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stockholders, except (i) as
described in this Agreement; (ii) as described in the Offering
Memorandum; (iii) with respect to any limitations as may be
imposed under German law; and (iv) with respect to any
limitations contained in the Fund’s organizational
documents.
(p) The financial statements
and schedules of the Company, including the notes thereto, included
or incorporated by reference in the Offering Memorandum and the
Prospectus (including any supplements) present fairly in all
material respects the financial condition, results of operations
and cash flows of the Company as of the dates and for the periods
indicated, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). Such financial
statements and schedules fairly present in all material respects,
on the basis stated therein, the information included
therein.
(q) No action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
Subsidiaries or its or their property is pending or, to the best
knowledge of the Company, threatened that could reasonably be
expected to have (i) a material adverse effect on the
performance of this Agreement or any Subscription Agreement or the
consummation of any of the transactions contemplated hereby or
thereby or (ii) a Material Adverse Effect, except as set forth
in or contemplated in the Offering Memorandum and the
Prospectus.
(r)(i) The Company or its
Subsidiaries have fee simple title or insurable leasehold title to
all of the properties described in the Offering Memorandum and the
Prospectus as owned or leased by them and the improvements
(exclusive of improvements owned by tenants) located thereon (the
“ Properties ” and individually, a “
Property ”), in each case, free and clear of all
liens, encumbrances, claims, security interests, restrictions and
defects, except those that are disclosed in the Offering Memorandum
and the Prospectus or that do not materially and adversely affect
the value of such Property and do not materially and adversely
interfere with the use made and proposed to be made of such
Property by the Company and any Subsidiary; (ii) except as
otherwise set forth in the Offering Memorandum and the Prospectus,
the mortgages and deeds of trust encumbering the Properties
described in the Offering Memorandum and the Prospectus are not
convertible into debt or equity securities of the Company and such
mortgages and deeds of trust are not cross-defaulted or
cross-collateralized to any property not owned directly or
indirectly by the Company or its Subsidiaries; (iii) neither
the Company nor any of its Subsidiaries is in default under any of
the mortgages or deeds of trust, nor has an event occurred which
with the delivery of notice and passing of a cure period would
become a default under any mortgage or deed of trust that could
reasonably be expected to have a Material Adverse Effect;
(iv) neither the Company nor any of its Subsidiaries has
received from any governmental authority any written notice of any
condemnation of or zoning change affecting the Properties or any
part thereof, and none of the Company or any Subsidiary knows of
any such condemnation or zoning change which is threatened and
which, if consummated, would reasonably be expected to have a
Material Adverse Effect; (v) each of the Properties complies
with all applicable codes, laws and regulations (including without
limitation, building and zoning codes, laws and regulations and
laws relating to access to the Properties), except if and to the
extent disclosed in the Offering Memorandum and the Prospectus and
except for such failures to comply that would not individually or
in the aggregate reasonably be expected to have a Material Adverse
Effect; (vi) a Subsidiary holds a valid owner’s policy
of title insurance for each Property insuring such Subsidiary as
the fee title owner or the leasehold titleholder, and the Company
and/or its Subsidiaries has the benefit of such title insurance
policies; and (vii) neither the Company nor any of its
Subsidiaries is in default under any
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ground lease, nor has an event occurred
which with delivery of notice and passing of a cure period would
become a default under any ground lease, except for such defaults
or events that could not reasonably be expected to have a Material
Adverse Effect.
(s) Neither the Company nor
any Subsidiary is in violation or default of (i) any provision
of its charter, bylaws or other organizational or governing
documents, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which
it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its Subsidiaries or any of
its properties, as applicable, except, in the case of
clauses (ii) or (iii) above, for such violations or
defaults that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse
Effect.
(t) Deloitte &
Touche LLP, who have certified the Company’s financial
statements and supporting schedules included in the Offering
Memorandum and the Prospectus, and any document that is
incorporated by reference therein, and delivered their reports with
respect to the audited financial statements and schedules included
in the Offering Memorandum and the Prospectus, are independent
registered public accountants within the meaning of the Securities
Act and the applicable published rules and regulations
thereunder.
(u) The Company and each of
its Subsidiaries has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested
extensions thereof, except in any case in which the failure so to
file would not have a Material Adverse Effect, and except as
disclosed in the Offering Memorandum and the Prospectus, and has
paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such tax, assessment,
fine or penalty that is currently being contested in good faith or
as would not have a Material Adverse Effect.
(v) No material labor problem
or dispute with the employees of the Company or any of its
Subsidiaries exists or, to the Company’s knowledge, is
threatened or imminent.
(w) The Company and each of
its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are, in the Company’s reasonable judgment, prudent and
customary in the businesses in which they are engaged; all policies
of insurance and fidelity or surety bonds insuring the Company or
any of its Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; the
Company and its Subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; and there
are no claims by the Company or any of its Subsidiaries under any
such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights
clause; neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for; and neither
the Company nor any such Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect.
(x) Except with respect to
restrictive covenants contained in certain of the Company’s
financing arrangements as set forth on Schedule 3(x) to this
Agreement, no Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends or
distributions
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to the Company, from making any other
distribution on such Subsidiary’s capital stock or equity
interests, from repaying to the Company any loans or advances to
such Subsidiary from the Company or from transferring any of such
Subsidiary’s property or assets to the Company or any other
Subsidiary of the Company.
(y) The Company and its
Subsidiaries (i) possess all valid and current licenses,
certificates, permits and other authorizations issued by the
appropriate federal or state regulatory authorities necessary to
conduct their respective businesses, except those the absence of
which would not have a Material Adverse Effect; and (ii) have
not received any written notice of proceedings relating to the
revocation or modification of any such certificate, authorization
or permit, which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
(z) The Company and each of
its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in the Offering Memorandum and the Prospectus, since
the date of the Company’s most recent audited balance sheet,
there has been (x) no material weakness in the Company’s
internal control over financial reporting (whether or not
remediated) and (y) no change in the Company’s internal
control over financial reporting that has materially and adversely
affected, or is reasonably likely to materially and adversely
affect, the Company’s internal control over financial
reporting.
(aa) The Company and its
Subsidiaries are (i) in compliance with any and all applicable
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants (“
Environmental Laws ”), (ii) have received and are
in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) have not received notice
of any actual or potential liability under any Environmental Laws,
except, in the cases of each of clause (i) through
(iii) above, where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, and except as disclosed
in the Offering Memorandum and the Prospectus. Neither the Company
nor any of the Subsidiaries has, to its knowledge, been named as a
“potentially responsible party” under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended. Except as otherwise set forth in the Offering Memorandum
and the Prospectus, to the knowledge of the Company, there have
been no and are no (x) aboveground or underground storage
tanks; (y) polychlorinated biphenyls (“ PCBs
”) or PCB-containing equipment; (z) asbestos or asbestos
containing materials; (xx) lead based paints; (yy) mold
or other airborne contaminants; or (zz) dry-cleaning
facilities in, on, under, or about any property owned by the
Company or its Subsidiaries.
(bb) In the ordinary course
of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of
the Company and its Subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure
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of properties or compliance with
Environmental Laws, or any permit, license or approval, or any
related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a Material
Adverse Effect, except as disclosed in the Offering Memorandum and
the Prospectus.
(cc) The Company has no
“welfare plans” or “pension plans” within
the meaning of Sections 3(1) and 3(2) of ERISA, respectively. Each
“employee benefit plan” (within the meaning of
Section 3(3) of ERISA) established or maintained by the
Company and/or one or more of its Subsidiaries is in compliance
with the currently applicable provisions of ERISA, except as could
not reasonably be expected to have a Material Adverse
Effect.
(dd) There is and has been no
failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply with
any applicable prov
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