Document:

exv10w4

 

Exhibit 10.4

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”), dated as of January 30, 2006,
is made by and between USG Corporation, a Delaware corporation (as debtor in possession and a
reorganized debtor, as applicable, the “Company”), and Berkshire Hathaway Inc., a Delaware
corporation (the “Investor”).

RECITALS

     A. In connection with the consummation of the transactions contemplated by that certain Equity
Commitment Agreement dated as of January 30, 2006 (the “Equity Commitment Agreement”) by
and between the Company and the Investor, the Investor may acquire shares of common stock, par
value $0.10 per share, of the Company (the “Common Stock”) in accordance with the
provisions of the Equity Commitment Agreement (such shares, the “Investor Shares”).

     B. In consideration of the Investor’s commitment to purchase, or to cause its designee to
purchase, the Investor Shares pursuant to and on the terms and conditions set forth in the Equity
Commitment Agreement, the Company has agreed to enter into a registration rights agreement with
respect to certain securities held by Investor and certain of its Affiliates.

AGREEMENTS

     NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements contained
herein and in the Equity Commitment Agreement, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:

Article I. Definitions

     For purposes of this Agreement, the following terms have the following meanings:

     “Affiliate”: As defined in Rule 12b-2 under the Exchange Act.

     “Blackout Period”: Any period during which, in accordance with Article IV,
the Company is not required to effect the filing of a Registration Statement or is entitled to
postpone the preparation, filing or effectiveness or suspend the effectiveness of a Registration
Statement.

     “Business Day”: Any day, other than a Saturday or Sunday, on which national banking
institutions in New York, New York, are open.

     “Company”: As defined in the introductory paragraph hereof.

     “Exchange Act”: The Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations of the SEC thereunder.

 

 

     “Filing Date”: (a) With respect to a Registration Statement to be filed on Form S-1
(or any applicable successor form), not later than 90 days after receipt by the Company of a
request for such Registration Statement and (b) with respect to a Registration Statement to be
filed on Form S-3 (or any applicable successor form), not later than 60 days after receipt by the
Company of a request for such Registration Statement.

     “Free Writing Prospectus”: A free writing prospectus as defined in Rule 405 under the
Securities Act.

     “Holders”: The Investor or any member of the Restricted Group (as defined in the
Shareholder’s Agreement) that is or becomes the owner of Registrable Securities.

     “Indemnified Party”: As defined in Section 6.3.

     “Indemnifying Party”: As defined in Section 6.3.

     “Issuer Free Writing Prospectus”: An issuer free writing prospectus as defined in
Rule 433 under the Securities Act.

     “Losses”: As defined in Section 6.1.

     “Other Holders”: Any Person having rights to participate in a registration of the
Company’s securities.

     “Permitted Free Writing Prospectus”: As defined in Article VII.

     “Person”: Any individual, corporation, general or limited partnership, limited
liability company, joint venture, trust or other entity or association, including without
limitation any governmental authority.

     “Piggyback Notice”: As defined in Section 3.1.

     “Piggyback Registration”: As defined in Section 3.1.

     “Prospectus”: The prospectus included in the applicable Registration Statement, as
supplemented by any and all prospectus supplements and as amended by any and all amendments
(including post-effective amendments) and including all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.

     “Registrable Securities”: (a) Any shares of Common Stock held by any of the Holders
now or at any time in the future and (b) any securities paid, issued or distributed in respect of
any such shares by way of stock dividend, stock split or distribution, or in connection with a
combination of shares, recapitalization, reorganization, merger or consolidation, or otherwise;
provided, however, that as to any Registrable Securities, such securities will irrevocably cease to
constitute Registrable Securities upon the earliest to occur of: (i) the date on which the
securities are disposed of pursuant to an

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effective registration statement under the Securities Act; (ii) the date on which the
securities are distributed to the public pursuant to Rule 144 (or any successor provision) under
the Securities Act; (iii) the date on which the securities may be freely sold publicly without
registration under the Securities Act; (iv) the date on which the securities have been transferred
to any Person other than a Holder; (v) the date on which the securities cease to be outstanding;
and (vi) the seventh anniversary of the first day of the Standstill Period (as defined in the
Shareholder’s Agreement); provided, that this subsection (vi) shall not apply with respect to the
Investor Additional Shares (as defined in the Equity Commitment Agreement) held by the Holders if
such Investor Additional Shares exceed 1% of the then-outstanding Common Stock.

     “Registration Expenses”: As defined in Section 5.4(a).

     “Registration Statement”: Any registration statement of the Company under the
Securities Act that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the related Prospectus, all amendments and supplements to such registration
statement (including post-effective amendments), and all exhibits and all materials incorporated by
reference or deemed to be incorporated by reference in such registration statement.

     “Required Period”: With respect to a “shelf registration” requested pursuant to
Section 2.1(b), two years following the first day of effectiveness of such Registration
Statement, and with respect to any other Registration Statement, 90 days following the first day of
effectiveness of such Registration Statement.

     “Rule 144”: Rule 144 promulgated under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

     “SEC”: The United States Securities and Exchange Commission and any successor United
States federal agency or governmental authority having similar powers.

     “Securities Act”: The Securities Act of 1933, as amended, or any successor statute,
and the rules and regulations of the SEC thereunder.

     “Shareholder’s Agreement”: That certain Shareholder’s Agreement dated as of January
30, 2006 by and between the Company and the Investor.

     “Underwritten Registration” or “Underwritten Offering”: A registration in
which securities of the Company are sold to an underwriter for reoffering to the public.

Article II. Demand Registration

     2.1 Right to Demand Registration.

          (a) At any time and from time to time, any Holder or group of Holders representing at least
75% of all Registrable Securities may request in writing that the

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Company effect the registration of all or part of such Holder’s or Holders’ Registrable
Securities with the SEC under and in accordance with the provisions of the Securities Act (which
written request will specify (i) the then current name and address of such Holder or Holders, (ii)
the aggregate number of shares of Registrable Securities requested to be registered, (iii) the
total number of shares of Common Stock then held by such Holder or Holders, and (iv) the intended
means of distribution). The Company will file a Registration Statement covering such Holder’s or
Holders’ Registrable Securities requested to be registered as promptly as practicable (and, in any
event, by the applicable Filing Date) after receipt of such request; provided, however, that the
Company will not be required to take any action pursuant to this Article II:

     (A) if prior to the date of such request, the Company has effected three
registrations pursuant to this Article II;

     (B) if within the 12-month period preceding such request the Company has
effected either (1) two registrations pursuant to this Article II or (2) one
registration pursuant to this Article II and a registration statement of
the Company under the Securities Act has been declared effective within the 12-month
period preceding such request and at least 10% of the then-outstanding Registrable
Securities were entitled pursuant to the terms of this Agreement to be included in
such registration statement;

     (C) if a Registration Statement is effective at the time such request is made
and such Registration Statement may be utilized for the offering and sale of the
Registrable Securities requested to be registered;

     (D) in the case of an Underwritten Offering, unless the Registrable Securities
requested to be registered (1) have an aggregate then-current market value of $100
million or more (before deducting underwriting discounts and commission) or (2)
constitute all of the then-outstanding Registrable Securities held by Holders; or

     (E) during the pendency of any Blackout Period.

          (b) If a Holder or Holders request that the Company effect a registration pursuant to this
Section 2.1 and the Company is at such time eligible to use Form S-3, the Holder or Holders
making such request may specify that the requested registration be a “shelf registration” for an
offering on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.

     2.2 Effective Demand Registrations.

          (a) The Company may satisfy its obligations under Section 2.1 by amending (to the
extent permitted by applicable law) any registration statement previously filed by the Company
under the Securities Act so that such amended registration statement will permit the disposition
(in accordance with the intended methods of disposition specified as aforesaid) of all of the
Registrable Securities for

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which a demand for registration has been properly made under Section 2.1. If the
Company so amends a previously filed registration statement, it will be deemed to have effected a
registration for purposes of Section 2.1; provided that the date such registration
statement is amended pursuant to this Section 2.2(a) shall be the “the first day of
effectiveness” of such registration statement for purposes of determining the Required Period with
respect to such registration statement.

          (b) A registration requested pursuant to Section 2.1 will not be deemed to be effected
by the Company for purposes of Section 2.1 if it has not been declared effective by the SEC
or become effective in accordance with the Securities Act and kept effective as contemplated by
Section 2.3.

     2.3 Continuous Effectiveness of Registration Statement.

          (a) The Company will use its reasonable efforts to keep a Registration Statement that has
become effective as contemplated by this Article II continuously effective, and not subject
to any stop order, injunction or other similar order or requirement of the SEC, until the earlier
of (a) the expiration of the Required Period (subject to extension pursuant to Section
2.3(b) or Section 5.3) and (b) the date on which all Registrable Securities covered by
such Registration Statement (i) have been disposed of pursuant to such Registration Statement or
(ii) cease to be Registrable Securities; provided, however, that in no event will such period
expire prior to the expiration of the applicable period referred to in Section 4(3) of the
Securities Act and Rule 174 promulgated thereunder.

          (b) In the event of any stop order, injunction or other similar order or requirement of the
SEC relating to any Registration Statement, the Required Period for such Registration Statement
will be extended by the number of days during which such stop order, injunction or similar order or
requirement is in effect.

     2.4 Underwritten Demand Registration.

          (a) In the event that a registration requested pursuant to Section 2.1 is to be an
Underwritten Registration, the Company shall in its reasonable discretion and with the consent of
the Investor (which consent shall not be unreasonably withheld) select an investment banking firm
of national standing to be the managing underwriter for the Underwritten Offering relating thereto.
All Holders proposing to distribute their securities through an Underwritten Offering agree to
enter into an underwriting agreement with the underwriters, provided that the underwriting
agreement is in customary form and reasonably acceptable to the Holders of a majority of the
Registrable Securities to be included in the Underwritten Offering.

          (b) If so requested (pursuant to a timely notice) by the managing underwriter for the
Underwritten Offering relating thereto, the Company will agree not to effect any underwritten
public sale or distribution of any securities that are the same as, or similar to, the Registrable
Securities, or any securities convertible into, or exchangeable or exercisable for, any securities
of the Company that are the same as,

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or similar to, the Registrable Securities, during a period specified by the managing
underwriter not to exceed 30 days.

     2.5 Priority on Demand Registrations. No securities to be sold for the account of any
Person other than a Holder (including the Company) shall be included in a registration pursuant to
Section 2.1 if, in the case that such registration is to be an Underwritten Registration,
the managing underwriter of the Underwritten Offering relating thereto advises the Holders (or, in
the case that such registration is not to be an Underwritten Registration, the Holders requesting
registration determine in good faith) that the total amount of Registrable Securities requested to
be registered, together with such other securities that the Company and any Other Holders propose
to include in such offering is such as to adversely affect the success of such offering, then the
Company will include in such registration all Registrable Securities requested to be included
therein, up to the full amount that, in the view of such managing underwriter or such Holders
requesting registration, as the case may be, can be sold without adversely affecting the success of
such offering, before including any securities of any Person (including the Company) other than the
Holder(s) making such request.

     2.6 Revocation of Demand Registration. Holders of at least a majority of the
Registrable Securities to be included in a Registration Statement pursuant to Section 2.1
may, at any time prior to the effective date of the Registration Statement relating to such
registration, revoke their request to have Registrable Securities included therein by providing a
written notice to the Company. In the event such Holders of Registrable Securities revoke such
request, either (a) the Holders of Registrable Securities who revoke such request shall reimburse
the Company for all of its out-of-pocket expenses incurred in the preparation, filing and
processing of the Registration Statement or (b) the requested registration that has been revoked
will be deemed to have been effected for purposes of Section 2.1.

Article III. Piggyback Registration

     3.1 Right to Piggyback. If at any time, and from time to time, the Company proposes
to file a registration statement under the Securities Act with respect to an offering of any class
of equity securities (other than a registration statement (a) on Form S-8 or any successor form
thereto, (b) on Form S-4 or any successor form thereto relating solely to the sale of securities to
employees, directors, officers, consultants or advisors of the Company or its Affiliates pursuant
to a stock option, stock purchase or similar benefit plan or (c) relating solely to a transaction
under Rule 145 under the Securities Act), whether or not for its own account, on a form that would
permit registration of Registrable Securities for sale to the public under the Securities Act, then
the Company will give written notice (the “Piggyback Notice”) of such proposed filing to
the Holders at least 10 Business Days before the anticipated filing date. Such notice will include
the number and class of equity securities proposed to be registered, the proposed date of filing of
such registration statement, any proposed means of distribution of such equity securities, any
proposed managing underwriter of such equity securities and a good faith estimate by the Company of
the proposed maximum offering price of such equity securities as such price is proposed to appear
on the facing page of

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such registration statement, and will offer the Holders the opportunity to register such
amount of Registrable Securities as each Holder may request on the same terms and conditions as the
registration of the Company’s or Other Holders’ securities, as the case may be (a “Piggyback
Registration”). The Company will include in each Piggyback Registration all Registrable
Securities for which the Company has received written requests for inclusion within 5 Business Days
after delivery of the Piggyback Notice, subject to Section 3.2.

     3.2 Priority on Piggyback Registrations.

          (a) If the Piggyback Registration is an Underwritten Offering, the Company will cause the
managing underwriter of that proposed offering to permit the Holders that have requested
Registrable Securities to be included in the Piggyback Registration to include all such Registrable
Securities on the same terms and conditions as any similar securities, if any, of the Company.
Notwithstanding the foregoing, if the managing underwriter of such Underwritten Offering advises
the Company and the selling Holders that, in its view, the total amount of securities that the
Company, such Holders and any Other Holders propose to include in such offering is such as to
adversely affect the success of such Underwritten Offering, then:

     (i) if such Piggyback Registration is a primary registration by the Company for its own
account, the Company will include in such Piggyback Registration: (A) first, all securities
to be offered by the Company; (B) second, (1) if Registrable Securities constitute 10% or
more of the outstanding securities of any class of equity securities of the Company, up to
the full amount of securities requested to be included in such Piggyback Registration by the
Holders, or (2) if Registrable Securities constitute less than 10% of the outstanding
securities of any class of equity securities of the Company, up to the full amount of
securities requested to be included in such Piggyback Registration by the Holders and any
Other Holders having registration rights on a pari passu basis, allocated pro rata among
such holders, on the basis of the amount of securities requested to be included therein by
each such holder; and (C) third, up to the full amount of securities requested to be
included in such Piggyback Registration by any Other Holders in accordance with the
priorities, if any, then existing among the Company and the Other Holders so that the total
amount of securities to be included in such Underwritten Offering is the full amount that,
in the view of such managing underwriter, can be sold without adversely affecting the
success of such Underwritten Offering; and

     (ii) if such Piggyback Registration is an underwritten secondary registration for the
account of holders of securities of the Company, the Company will include in such
registration: (A) first, all securities of the Persons exercising “demand” registration
rights requested to be included therein; (B) second, up to the full amount of securities
proposed to be included in the registration by the Company, (C) third, up to the full amount
of securities requested to be included in such Piggyback Registration by the Holders and any
Other Holders having registration rights on a pari passu basis, allocated pro rata among
such holders,

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on the basis of the amount of securities requested to be included therein by each such
holder; and (D) fourth, up to the full amount of securities requested to be included in such
Piggyback Registration by the Other Holders in accordance with the priorities, if any, then
existing among the Company and the Other Holders so that the total amount of securities to
be included in such Underwritten Offering is the full amount that, in the view of such
managing underwriter, can be sold without adversely affecting the success of such
Underwritten Offering.

          (b) If so requested (pursuant to a timely notice) by the managing underwriter in any
Underwritten Offering, the Holders participating in such Underwritten Offering will agree not to
effect any public sale or distribution (or any other type of sale as the managing underwriter
reasonably determines is appropriate in order to not adversely affect the Underwritten Offering) of
any such Registrable Securities, including a sale pursuant to Rule 144 (but excluding any
Registrable Securities included in such Underwritten Offering), during the 10 days prior to, and
during a period specified by the managing underwriter not to exceed 90 days (or such additional
period as the managing underwriter reasonably determines is appropriate in order to not adversely
affect the Underwritten Offering) following, the closing date of such Underwritten Offering. In
the event of such a request, the Company may impose, during such period, appropriate stop-transfer
instructions with respect to the Registrable Securities subject to such restrictions.

     3.3 Withdrawal of Piggyback Registration.

          (a) If at any time after giving the Piggyback Notice and prior to the effective date of the
Registration Statement filed in connection with the Piggyback Registration, the Company determines
for any reason not to register or to delay the Piggyback Registration, the Company may, at its
election, give notice of its determination to all Holders, and in the case of a determination not
to register, will be relieved of its obligation to register any Registrable Securities in
connection with the abandoned Piggyback Registration, without prejudice, provided, however, that
such Registration Statement will not be counted for purposes of Section 2.1.

          (b) Any Holder of Registrable Securities requesting to be included in a Piggyback Registration
may withdraw its request for inclusion by giving written notice to the Company of its intention to
withdraw from that registration, provided, however, that (i) the Holder’s request be made in
writing and (ii) the withdrawal will be irrevocable and, after making the withdrawal, a Holder will
no longer have any right to include its Registrable Securities in that Piggyback Registration.

          (c) An election by the Company to withdraw a Piggyback Registration under this Section
3.3 shall not be deemed to be a breach of the Company’s obligations with respect to such
Piggyback Registration.

     3.4 Most-Favored-Nations for Piggyback Registration. If the Company grants any Person
any rights with respect to the registration of any shares of equity securities of the Company or
any securities convertible or exercisable into shares of any equity

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securities of the Company that are more favorable to such Person than the rights of the
Holders set forth in this Agreement, the Company shall grant to the Holders the rights granted to
such other Person.

Article IV. Blackout Period

     4.1 Demand Blackout. Notwithstanding anything contained in Article II to the
contrary, if (a) at any time during which Holders may request a registration pursuant to
Section 2.1, the Company files or proposes to file a registration statement with respect to
an offering of equity securities of the Company for its own account and (b) with reasonable prior
notice (i) the Company (in the case of an offering that is not an Underwritten Offering) advises
the Holders that the Company has determined in good faith that a sale or distribution of
Registrable Securities would adversely affect such offering or (ii) the managing underwriter, if
any, advises the Company (in which case the Company will notify the Holders) that a sale or
distribution of Registrable Securities would adversely affect such offering, then the Company will
not be obligated to effect the initial filing of a Registration Statement pursuant to Section
2.1 beginning the 10 days prior to the date the Company in good faith estimates will be the
date of the filing of, and ending on the date which is 90 days following the effective date of,
such registration statement.

     4.2 Demand and Piggyback Blackout. Notwithstanding anything contained in Articles
II or III to the contrary, if the Board of Directors of the Company determines in good
faith that the registration and distribution of Registrable Securities (a) would materially impede,
delay or interfere with any financing, acquisition, corporate reorganization or other significant
transaction, or any negotiations, discussions or pending proposals with respect thereto, involving
the Company or any of its subsidiaries or (b) would require disclosure of non-public material
information, the disclosure of which would materially and adversely affect the Company, the Company
will promptly give the Holders notice of such determination and will be entitled to postpone the
preparation, filing or effectiveness or suspend the effectiveness of a Registration Statement for a
reasonable period of time not to exceed 90 days.

     4.3 Blackout Period Limits. Notwithstanding anything contained in this Article
IV to the contrary, in no event will the number of days included in all Blackout Periods during
any consecutive 12-month period exceed an aggregate of 120 days and in no event will the Company be
entitled to postpone the preparation, filing or effectiveness or suspend the effectiveness of a
Registration Statement pursuant to this Article IV unless it postpones or suspends during
the Blackout Period the effectiveness of any registration statements required pursuant to the
registration rights of the Other Holders.

Article V. Procedures and Expenses

     5.1 Registration Procedures. In connection with the Company’s registration
obligations pursuant to Articles II and III, the Company will use its reasonable
efforts to effect such registrations to permit the sale of Registrable Securities by a Holder in

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accordance with the intended method or methods of disposition thereof, and pursuant thereto
the Company will as promptly as reasonably practicable:

          (a) prepare and file with the SEC a Registration Statement on an appropriate form under the
Securities Act available for the sale of the Registrable Securities by the selling Holders in
accordance with the intended method or methods of distribution thereof; provided, however, that the
Company will, before filing, furnish to each selling Holder and the managing underwriter, if any,
copies of the Registration Statement or Prospectus proposed to be filed and provide each selling
Holder, the managing underwriter, if any, and their counsel with a reasonable opportunity to
comment on such Registration Statement or Prospectus;

          (b) furnish, at its expense, to the selling Holders such number of conformed copies of the
Registration Statement and each amendment thereto, of the Prospectus and each supplemental thereto,
and of such other documents as the selling Holders reasonably may request from time to time;

          (c) subject to Section 2.3, prepare and file with the SEC any amendments and
post-effective amendments to the Registration Statement as may be necessary and any supplements to
the Prospectus as may be required or appropriate, in the view of the Company and its counsel, by
the rules, regulations or instructions applicable to the registration form used by the Company or
by the Securities Act to keep the Registration Statement effective until the earlier of (i) such
time as all Registrable Securities covered by the Registration Statement are sold in accordance
with the intended plan of distribution set forth in the Registration Statement or supplement to the
Prospectus and (ii) the termination of the Required Period (giving effect to any extensions thereof
pursuant to Section 2.3(b) or Section 5.3);

          (d) promptly following its actual knowledge thereof, notify the selling Holders and the
managing underwriter, if any:

     (i) when a Registration Statement, Prospectus, Issuer Free Writing Prospectus or any
supplement or amendment has been filed and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective;

     (ii) of any request by the SEC or any other governmental authority for amendments or
supplements to a Registration Statement, Prospectus or Issuer Free Writing Prospectus or for
additional information;

     (iii) of the issuance by the SEC or any other governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose;

     (iv) of the receipt by the Company of any written notification with respect to the
suspension of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;

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     (v) of the occurrence of any event which makes any statement made in the Registration
Statement or Prospectus or any Issuer Free Writing Prospectus untrue in any material respect
or which requires the making of any changes in a Registration Statement, Prospectus, Issuer
Free Writing Prospectus or other documents so that it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and

     (vi) of the Company’s reasonable determination that a post-effective amendment to a
Registration Statement is necessary;

          (e) use its reasonable efforts to prevent the issuance or obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the
qualification or exemption from qualification of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable date;

          (f) prior to any public offering of Registrable Securities, register or qualify and cooperate
with the selling Holders, the managing underwriter, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the securities or blue sky
laws of such jurisdictions within the United States as the selling Holders or the managing
underwriter reasonably requests in writing and maintain each registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is required to be kept
effective; provided, however, that the Company will not be required to qualify generally to do
business in any jurisdiction in which it is not then so qualified or take any action which would
subject it to general service of process or material taxation in any jurisdiction in which it is
not then so subject;

          (g) as promptly as practicable upon the occurrence of any event contemplated by Sections
5.1(d)(v) or 5.1(d)(vi) hereof, prepare (and furnish, at its expense, to the selling
Holders a reasonable number of copies of) a supplement or post-effective amendment to each
Registration Statement or a supplement to the related Prospectus (including by means of an Issuer
Free Writing Prospectus), or file any other required document so that, as thereafter delivered to
the purchasers of the Registrable Securities being sold thereunder, such Prospectus or Issuer Free
Writing Prospectus will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein not
misleading;

          (h) in the case of an Underwritten Offering, enter into customary agreements (including an
underwriting agreement) and take other actions reasonably necessary to expedite the disposition of
the Registrable Securities, and in connection therewith:

     (i) use its reasonable efforts to obtain opinions of counsel to the Company (such
counsel being reasonably satisfactory to the managing

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underwriter, if any) and updates thereof covering matters customarily covered in
opinions of counsel requested in Underwritten Offerings, addressed to each selling Holder
and the managing underwriter;

     (ii) use its reasonable efforts to obtain “comfort” letters and updates thereof from
the independent certified public accountants of the Company addressed to each selling Holder
and the managing underwriter, if any, covering matters customarily covered in “comfort”
letters in connection with Underwritten Offerings; and

     (iii) provide officers’ certificates and other customary closing documents reasonably
requested by the managing underwriter;

          (i) upon reasonable notice and at reasonable times during normal business hours, make
available for inspection by a representative of each selling Holder and the managing underwriter,
if any, participating in any disposition of Registrable Securities and any attorney or accountant
retained by any selling Holder or any underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the officers, directors and employees
of the Company to supply all information reasonably requested by any such representative,
underwriter, attorney or accountant in connection with the Registration Statement;

          (j) use its reasonable efforts to comply with all applicable rules and regulations of the SEC
relating to such registration and make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act, provided that the
Company will be deemed to have complied with this Section 5.1(j) if it has satisfied the
provisions of Rule 158 under the Securities Act (or any similar rule promulgated under the
Securities Act);

          (k) use its reasonable efforts to cause all Registrable Securities to be listed on the New
York Stock Exchange; and

          (l) use its reasonable efforts to procure the cooperation of the Company’s transfer agent in
settling any offering or sale of Registrable Securities.

     5.2 Information from Holders.

          (a) Each selling Holder that has requested inclusion of its Registrable Securities in any
Registration Statement shall furnish to the Company such information regarding such Holder and its
plan and method of distribution of such Registrable Securities as the Company may, from time to
time, reasonably request in writing. The Company may refuse to proceed with the registration of
such Holder’s Registrable Securities if such Holder unreasonably fails to furnish such information
within a reasonable time after receiving such request.

          (b) Each selling Holder will promptly (i) following its actual knowledge thereof, notify the
Company of the occurrence of any event that makes any statement made in a Registration Statement,
Prospectus, Issuer Free Writing Prospectus or other

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Free Writing Prospectus regarding such selling Holder untrue in any material respect or that
requires the making of any changes in a Registration Statement, Prospectus or Free Writing
Prospectus so that, in such regard, it will not contain any untrue statement of a material fact or
omit any material fact required to be stated therein or necessary to make the statements not
misleading and (ii) provide the Company with such information as may be required to enable the
Company to prepare a supplement or post-effective amendment to any such Registration Statement or a
supplement to such Prospectus or Free Writing Prospectus.

          (c) With respect to any Registration Statement for an Underwritten Offering, the inclusion of
a Holder’s Registrable Securities therein will be conditioned, at the managing underwriter’s
request, upon the execution and delivery by such Holder of an underwriting agreement in form, scope
and substance as is customary in Underwritten Offerings.

     5.3 Suspension of Disposition.

          (a) Each selling Holder will be deemed to have agreed that, upon receipt of any notice from
the Company of the occurrence of any event of the type described in Sections 5.1(d)(ii),
5.1(d)(iii), 5.1(d)(iv), 5.1(d)(v) or 5.1(d)(vi), such Holder will
discontinue disposition of Registrable Securities covered by a Registration Statement, Prospectus
or Free Writing Prospectus and suspend use of such Prospectus or Free Writing Prospectus until such
Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 5.1(g) or until it is advised by the Company that the use of the applicable
Prospectus or Free Writing Prospectus may be resumed and have received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by reference in such
Prospectus or Free Writing Prospectus. In the event the Company shall give any such notice, the
period of time for which a Registration Statement must remain effective as set forth in Section
2.3 will be extended by the number of days during the time period from and including the date
of the giving of such notice to and including the date when each selling Holder of Registrable
Securities covered by such Registration Statement has received (i) the copies of the supplemented
or amended Prospectus or Issuer Free Writing Prospectus contemplated by Section 5.1(g) or
(ii) the advice referenced in this Section 5.3(a).

          (b) Each selling Holder will be deemed to have agreed that, upon receipt of any notice from
the Company of the happening of an event specified in Section 4.2, such selling Holder will
discontinue disposition of Registrable Securities covered by a Registration Statement, Prospectus
or Free Writing Prospectus and suspend use of such Prospectus or Free Writing Prospectus until the
earlier to occur of the Holder’s receipt of (i) copies of a supplemented or amended Prospectus or
Issuer Free Writing Prospectus describing the event giving rise to the aforementioned suspension
and (ii) (A) notice from the Company that the use of the applicable Prospectus or Issuer Free
Writing Prospectus may be resumed and (B) copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or Issuer Free Writing
Prospectus; provided, however, that in no event will the number of days during which the offer and
sale of Registrable

13

 

Securities is discontinued pursuant to this Section 5.3(b) during any consecutive
12-month period, together with any other Blackout Periods in such 12-month period, exceed an
aggregate of 120 days. In the event the Company gives any such notice, the period of time for
which a Registration Statement must remain effective as set forth in Section 2.3 will be
extended by the number of days during the time period from and including the date of giving of such
notice to and including the date when each selling Holder of Registrable Securities covered by such
Registration Statement receives (i) a supplemented or amended Prospectus or Issuer Free Writing
Prospectus describing the event giving rise to the aforementioned suspension or (ii) notice from
the Company that use of the applicable Prospectus or Issuer Free Writing Prospectus may resume.

     5.4 Registration Expenses.

          (a) All fees and expenses incurred by the Company in complying with Articles II and
III and Section 5.1 (“Registration Expenses”) will be borne by the Company.
These fees and expenses will include without limitation (i) all registration, filing and
qualification fees, (ii) printing, duplicating and delivery expenses, (iii) fees and disbursements
of counsel for the Company, (iv) fees and expenses of complying with state securities or “blue sky”
laws (including the fees and expenses of any local counsel in connection therewith), (v) fees and
disbursements of all independent certified public accountants referred to in Section
5.1(h)(ii) (including the expenses of any special audit and “comfort” letters required by or
incident to such performance) and (vi) fees and expenses in connection with listing the Registrable
Securities on the New York Stock Exchange.

          (b) The Company will also reimburse or pay, as the case may be, the standard fees and
out-of-pocket expenses of one law firm retained by all Holders, considered collectively, relating
to any action taken pursuant to Article II within 10 days of presentation of a detailed
invoice approved by the Investor.

          (c) Notwithstanding anything contained herein to the contrary, all underwriting fees,
discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable
Securities will be borne by the Holder owning such Registrable Securities.

Article VI. Indemnification

     6.1 Indemnification by the Company. The Company will indemnify and hold harmless, to
the fullest extent permitted by law, each Holder owning Registrable Securities registered pursuant
to this Agreement, such Holder’s Affiliates, officers, directors, managers, partners, stockholders,
employers, advisors, agents and other representatives, and each Person who controls such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) from and
against all losses, claims, damages, liabilities, costs (including without limitation reasonable
attorneys’ fees and disbursements) and expenses (collectively, “Losses”) arising out of or
based upon any untrue or alleged untrue statement of a material fact contained or incorporated by
reference in any Registration Statement, Prospectus or preliminary

14

 

prospectus or Issuer Free Writing Prospectus, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as the same are based solely upon
information furnished in writing to the Company by or on behalf of such Holder expressly for use
therein; provided, however, that the Company will not be liable to any Holder to the extent that
any Losses arise out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary prospectus if either (a) such untrue statement
or alleged untrue statement or such omission or alleged omission was corrected in a Prospectus or
Issuer Free Writing Prospectus provided to such Holder prior to the confirmation of the sale of
Registrable Securities to the Person asserting the claim from which such Losses arise, and such
Holder thereafter failed to send or deliver a copy of the Prospectus or Issuer Free Writing
Prospectus with or prior to the delivery of written confirmation of such sale in any case in which
such delivery is required under the Securities Act or (b) such untrue statement or alleged untrue
statement or omission or alleged omission was corrected in an amendment or supplement to the
Prospectus or Issuer Free Writing Prospectus previously furnished by or on behalf of the Company
and such Prospectus or Issuer Free Writing Prospectus as so amended or supplemented was provided to
such Holder prior to the confirmation of the sale of Registrable Securities to the Person asserting
the claim from such Losses arise, and such Holder thereafter failed to send or deliver such
Prospectus or Issuer Free Writing Prospectus as so amended or supplemented with or prior to the
delivery of written confirmation of such sale in any case in which such delivery is required under
the Securities Act. The indemnity provided in this Section 6.1 shall survive any transfer
or disposal of the Registrable Securities by the Holders.

     6.2 Indemnification by Holders. In the event of the filing of any registration
statement relating to the registration of any Registrable Securities, each Holder (severally and
not jointly) will indemnify and hold harmless, to the fullest extent permitted by law, the Company,
its Affiliates, officers, directors, managers, partners, stockholders, employers, advisors, agents
and other representatives, and each Person who controls the Company (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) from and against all Losses arising out
of or based upon any untrue or alleged untrue statement of a material fact contained or
incorporated by reference in any Registration Statement, Prospectus or preliminary prospectus or
Issuer Free Writing Prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in conformity with
information so furnished in writing by or on behalf of such Holder to the Company expressly for use
in such Registration Statement, Prospectus or preliminary prospectus or Issuer Free Writing
Prospectus. In no event will the liability of any Holder be greater in amount than the dollar
amount of the net proceeds (after any discounts, commissions, transfer taxes, fees and expenses)
received by such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.

15

 

     6.3 Conduct of Indemnification Proceedings. If any Person becomes entitled to
indemnity hereunder (an “Indemnified Party”), such Indemnified Party will give prompt
notice to the party from which indemnity is sought (the “Indemnifying Party”) of any claim
or of the commencement of any action or proceeding with respect to which the Indemnified Party
seeks indemnification or contribution pursuant hereto; provided, however, that the failure to so
notify the Indemnifying Party will not relieve the Indemnifying Party from any obligation or
liability except to the extent that the Indemnifying Party has been prejudiced materially by such
failure. If such an action or proceeding is brought against the Indemnified Party, the
Indemnifying Party will be entitled to participate therein and, to the extent it may elect by
written notice delivered to the Indemnified Party promptly after receiving the notice referred to
in the immediately preceding sentence, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. Notwithstanding the foregoing, the Indemnified Party will
have the right to employ its own counsel in any such case, but the fees and expenses of that
counsel will be at the expense of the Indemnified Party unless (a) the employment of the counsel
has been authorized in writing by the Indemnifying Party, (b) the Indemnifying Party has not
employed counsel to take charge of such action or proceeding within a reasonable time after notice
of commencement thereof or (c) the Indemnified Party reasonably concludes, based upon the opinion
of counsel, that there are defenses or actions available to it which are different from or in
addition to those available to the Indemnifying Party which, if the Indemnifying Party and the
Indemnified Party were to be represented by the same counsel, could result in a conflict of
interest for such counsel or materially prejudice the prosecution of defenses or actions available
to the Indemnified Party. If any of the events specified in clause (a), (b) or (c) of the
immediately preceding sentence are applicable, then the reasonable fees and expenses of separate
counsel for the Indemnified Party will be borne by the Indemnifying Party; provided, however, that
in no event will the Indemnifying Party be liable for the fees and expenses of more than one
separate firm for all Indemnified Parties. If, in any case, the Indemnified Party employs separate
counsel, the Indemnifying Party will not have the right to direct the defense of the action or
proceeding on behalf of the Indemnified Party. All fees and expenses required to be paid to the
Indemnified Party pursuant to this Article VI will be paid periodically during the course
of the investigation or defense, as and when reasonably itemized bills therefor are delivered to
the Indemnifying Party in respect of any particular Loss that is incurred. Notwithstanding
anything contained in this Section 6.3 to the contrary, an Indemnifying Party will not be
liable for the settlement of any action or proceeding effected without its prior written consent.
The Indemnifying Party will not, without the consent of the Indemnified Party (which consent will
not be unreasonably withheld), consent to entry of any judgment or enter into any settlement or
otherwise seek to terminate any action or proceeding in which any Indemnified Party is or could be
a party and as to which indemnification or contribution could be sought by such Indemnified Party
under this Article VI, unless such judgment, settlement or other termination provides
solely for the payment of money and includes as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release, in form and substance reasonably
satisfactory to the Indemnified Party, from all liability in respect of such claim or litigation
for which such Indemnified Party would be entitled to indemnification hereunder.

16

 

     6.4 Contribution, etc.

          (a) If the indemnification provided for in this Article VI is unavailable to an
Indemnified Party under Sections 6.1 or 6.2 in respect of any Losses or is
insufficient to hold the Indemnified Party harmless, then each applicable Indemnifying Party
(severally and not jointly), in lieu of indemnifying the Indemnified Party, will contribute to the
amount paid or payable by the Indemnified Party as a result of the Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party or Indemnifying Parties, on the
one hand, and the Indemnified Party, on the other hand, in connection with the actions, statements
or omissions that resulted in the Losses as well as any other relevant equitable considerations.
The relative fault of the Indemnifying Party or Indemnifying Parties, on the one hand, and the
Indemnified Party, on the other hand, will be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission of a material fact, has been taken or made by, or related to
information supplied by, the Indemnifying Party or Indemnifying Parties or the Indemnified Party,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such action, statement or omission.

          (b) The parties hereto agree that it would not be just and equitable if contribution pursuant
to this Section 6.4 were determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding anything contained in this Section 6.4 to
the contrary, an Indemnifying Party that is a selling Holder will not be required to contribute any
amount in excess of the amount by which the total net proceeds (after any discounts, commissions,
transfer taxes, fees and expenses) received by such Holder upon the sale of the Registrable
Securities exceeds the amount of any damages which such selling Holder has, in the aggregate,
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.

Article VII. Free Writing Prospectuses

     Each Holder represents that it has not prepared or had prepared on its behalf or used or
referred to, and agrees that it will not prepare or have prepared on its behalf or use or refer to,
any Free Writing Prospectus, and has not distributed and will not distribute any written materials
in connection with the offer or sale of Common Stock without the prior written consent of the
Company and, in connection with any Underwritten Offering, the underwriters. Any such Free Writing
Prospectus consented to by the Company and the underwriters, as the case may be, is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company represents and agrees
that it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as
an Issuer Free Writing Prospectus, including in respect of timely filing with the SEC, legending
and record keeping.

17

 

Article VIII. Rule 144

     To the extent the following make available the benefits of certain rules and regulations of
the SEC which may permit the sale of registered securities to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to (a) make and keep public information
available as those terms are understand and defined in Rule 144; (b) use its reasonable efforts to
file with the SEC in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; (c) furnish to any Holder promptly upon written request a
written statement by the Company as to its compliance with the reporting requirements of Rule 144
and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly
report of the Company and such other reports and documents as any Holder reasonably may request in
availing itself of any rule or regulation of the SEC allowing such Holder to sell any Registrable
Securities without registration; and (d) take such other actions as may be reasonably required by
the Company’s transfer agent to consummate any distribution of Registrable Securities in accordance
with the terms and conditions of Rule 144.

Article IX. Participation in Underwritten Offerings

     Notwithstanding anything contained herein to the contrary, no Person may participate in any
Underwritten Offering pursuant to a registration hereunder unless that Person (a) agrees to sell
its securities on the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.

Article X. Miscellaneous

     10.1 Notices. All notices and other communications in connection with this Agreement
will be in writing and will be deemed given (and will be deemed to have been duly given upon
receipt) if delivered personally, sent via facsimile (with confirmation), mailed by registered or
certified mail (return receipt requested) or delivered by an express courier (with confirmation) to
the parties at the following addresses (or at such other address for a party as will be specified
by like notice):

          (a) If to the Company:

USG Corporation

125 South Franklin Street

Chicago, Illinois 60606-4647

Attention: Stanley L. Ferguson

Facsimile: (312) 606-5316

18

 

with a copy to:

Jones Day

222 E. 41st Street

New York, New York 10017

Attention: Robert A. Profusek

Facsimile: (212) 755-7306

          (b) If to the Investor:

Berkshire Hathaway Inc.

1440 Kiewit Plaza

Omaha, Nebraska 68131

Attention: Marc D. Hamburg

Facsimile: (402) 346-3375

with a copy to:

Munger, Tolles & Olson LLP

355 South Grand Avenue

35th Floor

Los Angeles, California 90071-1560

Attention: Robert E. Denham

Facsimile: (213) 687-3702

          (c) If to any Holder (other than the Investor), to such Holder’s address on file with the
Company’s transfer agent.

     10.2 Confidentiality. Each Holder will, and will cause its officers, directors,
employees, legal counsel, accountants, financial advisors and other representatives to, hold in
confidence any material nonpublic information received by them pursuant to this Agreement,
including without limitation any material nonpublic information included in any Registration
Statement or Prospectus proposed to be filed with the SEC (until such Registration Statement or
Prospectus has been filed) or provided pursuant to Section 5.1(i). This Section
10.2 shall not apply to any information which (a) is or becomes generally available to the
public, (b) was already in the Holder’s possession from a non-confidential source prior to its
disclosure by the Company, (c) is or becomes available to the Holder on a non-confidential basis
from a source other than the Company, provided that such source is not known by the Holder to be
bound by confidentiality obligations or (d) is required to be disclosed by law.

     10.3 Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement will be assigned by any of the parties
(whether by operation of law or otherwise) without the prior written consent of the other party.
This Agreement will be binding upon, inure to the benefit of and be enforceable by each of the
parties and their respective successors and assigns. This Agreement (including the documents and
instruments referred to in this Agreement) is

19

 

not intended to and does not confer upon any person other than the parties hereto any rights
or remedies under this Agreement.

     10.4 Entire Agreement. This Agreement (including the documents and instruments
referred to in this Agreement) constitutes the entire agreement of the parties and supersedes all
prior agreements and understandings, whether written or oral, between the parties with respect to
the subject matter of this Agreement, except that the parties hereto acknowledge that any
confidentiality agreements heretofore executed among the parties shall continue in full force and
effect.

     10.5 Waivers and Amendments. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions of this Agreement may be waived, only
by a written instrument signed by the parties or, in the case of a waiver, by the party waiving
compliance. No delay on the part of any party in exercising any right, power or privilege pursuant
to this Agreement will operate as a waiver thereof, nor will any waiver on the part of any party of
any right, power or privilege pursuant to this Agreement, nor will any single or partial exercise
of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege pursuant to this Agreement. The
rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any
rights or remedies which any party otherwise may have at law or in equity.

     10.6 Counterparts. This Agreement may be executed in any number of counterparts, all
of which will be considered one and the same agreement and will become effective when counterparts
have been signed by each of the parties and delivered to the other party (including via facsimile
or other electronic transmission), it being understood that each party need not sign the same
counterpart.

     10.7 Governing Law; Venue. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ANY APPLICABLE
CONFLICT OF LAWS PRINCIPLES. EACH PARTY TO THIS AGREEMENT IRREVOCABLY SUBMITS TO THE JURISDICTION
OF, AND VENUE IN, THE DISTRICT COURTS OF THE UNITED STATES SITTING IN THE STATE OF DELAWARE OR THE
COURTS OF THE STATE OF DELAWARE AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS.

     10.8 Headings. The headings in this Agreement are for reference purposes only and
will not in any way affect the meaning or interpretation of this Agreement.

     10.9 Specific Performance. The parties acknowledge and agree that any breach of the
terms of this Agreement would give rise to irreparable harm for which money damages would not be an
adequate remedy, and, accordingly, the parties agree that, in addition to any other remedies, each
will be entitled to enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy and without the necessity of
posting bond.

20

 

     10.10 Termination. Notwithstanding anything to the contrary contained herein, this
Agreement will terminate simultaneously with the termination of the Equity Commitment Agreement if
the Rights Offering (as defined in the Equity Commitment Agreement) is not consummated prior to
such termination of the Equity Commitment Agreement.

[Signature Page Follows]

21

 

     IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first
written above.

	 	 	 	 	 
	 	USG CORPORATION

 	 
	 	By:  	/s/ William C. Foote
 	 
	 	 	Name:  	William C. Foote 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	BERKSHIRE HATHAWAY INC.

 	 
	 	By:  	/s/ Marc D. Hamburg
 	 
	 	 	Name:  	Marc D. Hamburg 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page of Registration Rights Agreement]<PAGE>
                                                                     EXHIBIT 4.4

                                    FORM OF
                              AMENDED AND RESTATED
                                ESCROW AGREEMENT

     This ESCROW AGREEMENT, effective on November 10, 2005, as amended and
restated as of __________, 2006 by and among WELLS TIMBER REAL ESTATE INVESTMENT
TRUST, INC., a Maryland corporation ("COMPANY"), WELLS INVESTMENT SECURITIES,
INC., a Georgia corporation ("DEALER MANAGER"), and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association ("ESCROW AGENT").

                                   WITNESSETH:

     WHEREAS, Company proposes to offer to the public (the "PUBLIC OFFERING") up
to a maximum of 85,000,000 shares of its common stock, par value $0.01 per share
("SHARES") pursuant to the terms of, and at the prices set forth in, Company's
prospectus ("PROSPECTUS") contained in the registration statement (the
"REGISTRATION Statement") filed with the Securities and Exchange Commission
("COMMISSION") (capitalized terms used but not otherwise defined herein shall
have the respective meanings given in the Prospectus);

     WHEREAS, the Dealer Manager will distribute the Shares on behalf of Company
on a "best efforts" basis;

     WHEREAS, it is anticipated that prospective investors will subscribe for
Shares and will provide Dealer Manager with subscription payments for such
Shares (the "SUBSCRIPTION PAYMENTS"), which subscriptions will be contingent
upon (i) their respective acceptances by Company and (ii) Company's acceptance
of subscriptions aggregating at least $2,000,000 in subscription proceeds (the
"MINIMUM SUBSCRIPTION");

     WHEREAS, Escrow Agent has agreed to receive and hold in escrow all
Subscription Payments until the earlier of (i) such time as subscriptions for
the Minimum Subscription have been received and accepted by Company or (ii) the
close of business on the date exactly one year after the original effective date
of the Registration Statement (the "MINIMUM SUBSCRIPTION TERMINATION DATE"), and
to hold and distribute such Subscription Payments in accordance with the terms
and conditions herein set forth;

     WHEREAS, pursuant to the Prospectus, if prospective investors have not
subscribed for at least the Minimum Subscription by the Minimum Subscription
Termination Date, the Public Offering shall be terminated, and all Subscription
Payments shall be returned to the prospective investors together with any
earnings thereon;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

     1. APPOINTMENT OF ESCROW AGENT. Company and Dealer Manager hereby appoint
Escrow Agent to serve as escrow agent hereunder, and Escrow Agent hereby accepts
such appointment in accordance with the terms of this Escrow Agreement. Company
and Dealer Manager hereby acknowledge that the status of Escrow Agent is that of
agent only for the limited purposes set forth herein, and hereby agree that they
will not represent or imply that Escrow Agent has investigated the desirability
or advisability of investment in the Shares or has approved, endorsed or passed
upon the merits of the investment therein. Company and Dealer Manager further
agree that the name of the Escrow Agent shall not be used in any manner in
connection with the offer or sale of the Shares other than to state that the
Escrow Agent has agreed to serve as escrow agent for the limited purposes set
forth herein.

<PAGE>

     2. DEPOSIT INTO ESCROW. Until such time as prospective investors have
subscribed for the Minimum Subscription, and, thereafter, whenever the Dealer
Manager receives a check made payable to the Escrow Agent, the Dealer Manager
will (i) by 12:00 p.m. Eastern Time on the next business day following Dealer
Manager's receipt of the same, deposit with Escrow Agent, or cause to be
deposited with Escrow Agent, all Subscription Payments received by it,
accompanied by a list of the names, social security numbers or tax
identification numbers, and addresses (and any other information required for
withholding purposes) of, and amounts paid by, each prospective investor, and
(ii) allow such Subscription Payments to remain in escrow with Escrow Agent and
not withdraw, or attempt to withdraw, such Subscription Payments from Escrow
Agent, except as herein provided. Notwithstanding the foregoing, if any
prospective investor shall exercise any right provided by law to rescind his or
her subscription, Escrow Agent shall, upon notice from Company or Dealer
Manager, return to such prospective investor all Subscription Payments
pertaining to such subscription, together with any earnings thereon during the
period that such Subscription Payments were held by Escrow Agent under this
Escrow Agreement. Instruments of payment and wired funds received from residents
of Pennsylvania shall be placed in a separate escrow account established
specifically for such subscribers.

     All Subscription Payments delivered to Escrow Agent by Dealer Manager
pursuant hereto shall be deposited immediately by Escrow Agent in a separate
account designated as the "Escrow Account for the Benefit of Subscribers for
Common Stock of Wells Timber Real Estate Investment Trust, Inc." (the "ESCROW
ACCOUNT"). The Escrow Account shall be created and maintained subject to the
terms of this Escrow Agreement and the customary rules and regulations of Escrow
Agent pertaining to such accounts.

     If any of the instruments of payment for the subscription of Shares are
dishonored or returned to Escrow Agent for nonpayment prior to receipt of the
Minimum Subscription, Escrow Agent shall promptly notify Dealer Manager in
writing of such nonpayment and return such instruments of payment to Dealer
Manager. In any such instance, Escrow Agent is authorized to debit the Escrow
Account in the amount of such return payment as well as any earnings on the
investment represented by such payment.

     3. INVESTMENT OF THE FUNDS IN THE ESCROW ACCOUNT. Escrow Agent shall hold
funds delivered to it under the terms of this Escrow Agreement and shall from
time to time invest and reinvest the funds held in the Escrow Account, as and
when instructed pursuant to joint written instructions by Company and Dealer
Manager, in any one or more of the following:

     (a) obligations of the United States of America;

     (b) obligations guaranteed or collateralized by the United States of
America;

     (c) money market accounts of any national banks or state banks insured by
the Federal Deposit Insurance Corporation, including Escrow Agent; and

     (d) certificates of deposit of any national banks or state banks insured by
the Federal Deposit Insurance Corporation, including Escrow Agent.

     No investment shall be made in any instrument or security that has a
maturity of greater than three (3) months. If no joint written instructions are
received by Escrow Agent as provided above, Escrow Agent may invest amounts held
in the Escrow Account in money market funds of the type described in
subparagraph (c) above. Any income or interest realized from the investments
made by Escrow Agent pursuant hereto shall be reinvested by Escrow Agent until
directed otherwise under the terms of this Escrow Agreement. Dealer Manager and
Company may examine any and all documentation regarding the investment of the
Escrow Account during normal business hours at the offices of Escrow Agent.

                                       -2-

<PAGE>

     4. DISBURSEMENTS FROM ESCROW ACCOUNT.

     (a) Rejected Subscriptions. No later than five (5) business days after
receipt by Escrow Agent of written notice from Company or Dealer Manager that
Company intends to reject a potential investor's subscription, Escrow Agent
shall pay, by certified or bank check and by first-class mail, the amount of the
Subscription Payment paid by such potential investor (together with all earnings
thereon) or Escrow Agent shall return the instruments of payment delivered to
Escrow Agent with respect to any Subscription Payment if such instruments have
not been processed for collection prior to such time directly to such potential
investor.

     (b) Termination of Public Offering. In the event that on the Minimum
Subscription Termination Date, Escrow Agent is not in receipt of evidence of
subscriptions accepted on or before such date, and instruments of payment dated
not later than that date (or actual wired funds), for the purchase of Shares at
least equal to the Minimum Subscription, Escrow Agent shall promptly notify
Company and Escrow Agent shall promptly return all funds received in full to
subscribers, together with their pro rata share of any interest earned thereon,
pursuant to instructions made by Company, upon which Escrow Agent may
conclusively rely.

     (c) Receipt of Minimum Subscription Payments. Subject to the provisions of
Section 2 and Section 4(a) and (b) hereof, Escrow Agent shall hold all
Subscription Payments deposited with Escrow Agent in the Escrow Account under
the terms of this Escrow Agreement until such date ("MINIMUM SUBSCRIPTION
SATISFACTION DATE") as Company and Dealer Manager shall have delivered to the
Escrow Agent a joint written instruction notifying Escrow Agent that the Minimum
Subscription has been received and accepted (the "MINIMUM SUBSCRIPTION NOTICE
AND DISBURSEMENT INSTRUCTION"). Within two (2) business days of the Minimum
Subscription Notice and Disbursement Instruction, Escrow Agent shall deliver all
Subscription Payments in the Escrow Account and all earnings thereon to Company
in the manner, amounts and to the bank accounts set forth in the Minimum
Subscription Notice and Disbursement Instruction. If after the Escrow Agent has
received the Minimum Subscription Notice and Disbursement Instruction, the
Dealer Manager shall send the Escrow Agent Subscription Payments made payable
to the Escrow Agent after the Escrow Agent has received the Minimum
Subscription Notice and Disbursement Instruction, the Escrow Agent will deposit
the Subscription Payments into the Escrow Account, as described herein and,
within twenty four (24) hours of such deposit, deliver the Subscription
Payments in the Escrow Account in the manner, amounts and to the bank accounts
set forth in the Minimum Subscription Notice and Disbursement Instruction.

     5. ESCROW AGENT COMPENSATION. Escrow Agent shall be entitled to receive
compensation for its services as Escrow Agent hereunder as set forth on the
schedule attached hereto and made a part hereof as Exhibit A, which compensation
shall be paid by Company. Notwithstanding anything contained in this Escrow
Agreement to the contrary, in no event shall any fee, reimbursement for costs
and expenses, indemnification for any damages incurred by Escrow Agent, or
monies whatsoever be paid out of or chargeable to the income or assets in the
Escrow Account held by Escrow Agent.

     6. RESIGNATION AND REMOVAL OF ESCROW AGENT. Escrow Agent may resign at any
time from its obligations under this Escrow Agreement by providing written
notice to Company and Dealer Manager. Such resignation shall be effective on the
date specified in such notice, which shall be not less than thirty (30) days
after such written notice has been given. In addition, Company and Dealer
Manager may jointly remove Escrow Agent as the escrow agent at any time with or
without cause, by a written instrument executed by both of them (which may be
executed in counterparts) given to Escrow Agent, which instrument shall
designate the effective date of such removal. In the event of any such
resignation or removal, a successor escrow agent, which shall be a bank or trust
company organized under the laws of the United States of America, shall be
appointed by the mutual agreement of Company and Dealer Manager. Any such
successor escrow agent shall deliver to Company and Dealer Manager a written
instrument accepting such appointment, and thereupon it shall succeed to all the
rights and duties of Escrow Agent hereunder and shall be entitled to receive the
Escrow Account. If no successor escrow agent is named by Company and Dealer
Manager, Escrow Agent may apply to a court of competent jurisdiction for
appointment of a successor Escrow Agent.

                                       -3-

<PAGE>

     7. LIABILITY OF ESCROW AGENT. Escrow Agent shall not be liable to anyone
for any losses, claims, damages, liabilities or expenses that it may incur as a
result of any act or omission of Escrow Agent, unless such losses, claims,
damages, liabilities or expenses are caused by Escrow Agent's bad faith, willful
misconduct or gross negligence. Accordingly, Escrow Agent shall not incur any
such liability with respect to (i) any action taken or omitted in good faith
upon the advice of Escrow Agent's counsel or counsel for any other party hereto,
given with respect to any question relating to the duties and responsibilities
of Escrow Agent under this Escrow Agreement or (ii) any action taken or omitted
in reliance upon any instrument, including execution, or the identity or
authority of any person executing such instrument, its validity and
effectiveness, but also as to the truth and accuracy of any information
contained therein that Escrow Agent shall, in good faith, believe to be genuine,
to have been signed by a proper person or persons and to conform to the
provisions of this Escrow Agreement.

     8. INDEMNIFICATION OF ESCROW AGENT. Company and Dealer Manager hereby
jointly and severally agree to indemnify and hold Escrow Agent (and its
officers, directors, employees and agents) harmless from and against any and all
losses, claims, damages, liabilities and expenses, including reasonable
attorney's fees and expenses, that may be imposed on Escrow Agent or incurred by
Escrow Agent in connection with Escrow Agent's acceptance of its appointment
hereunder, or the performance of Escrow Agent's duties hereunder, except where
such losses, claims, damages, liabilities and expenses result from Escrow
Agent's bad faith, gross negligence or willful misconduct.

     9. DISPUTES. In the event of any disagreement among any of the parties to
this Escrow Agreement, or among them or any other person resulting in adverse
claims and demands being made in connection with or from any property in the
Escrow Account, Escrow Agent shall be entitled to refuse to comply with any such
claims or demands as long as such disagreement may continue, and in so refusing,
shall make no delivery or other disposition of any property then held by it in
the Escrow Account under this Escrow Agreement, and in so doing Escrow Agent
shall be entitled to continue to refrain from acting until (i) the right of
adverse claimants shall have been finally settled by binding arbitration or
finally adjudicated in a court assuming and having jurisdiction of the property
involved herein or affected hereby or (ii) all differences shall have been
adjusted by agreement and Escrow Agent shall have been notified in writing of
such agreement signed by the parties hereto.

     In the event of such disagreement (or a resignation by Escrow Agent under
the terms of this Escrow Agreement), Escrow Agent may tender into the registry
or custody of any court of competent jurisdiction all money or property in its
hands under the terms of this Escrow Agreement, together with instituting any
other legal proceeding it deems appropriate, and thereupon Escrow Agent shall be
discharged from all further duties under this Escrow Agreement. The filing of
any such legal proceeding shall not deprive Escrow Agent of its compensation
earned prior to such filing.

     10. REPRESENTATIONS AND WARRANTIES. Each of Company and Dealer Manager
respectively makes the following representations and warranties to Escrow Agent:

     (a) It is a corporation, duly organized, validly existing, and in good
standing under the laws of the state of its incorporation, and has full power
and authority to execute and deliver this Escrow Agreement and to perform its
obligations hereunder.

     (b) This Escrow Agreement has been duly approved by all necessary corporate
action, including any necessary shareholder approval, has been executed by its
duly authorized officers, and constitutes its valid and binding agreement,
enforceable in accordance with its terms.

     (c) The execution, delivery, and performance of this Escrow Agreement will
not violate, conflict with, or cause a default under its articles of
incorporation or bylaws, any applicable law or

                                       -4-

<PAGE>

regulation, any court order or administrative ruling or decree to which it is a
party or any of its property is subject, or any agreement, contract, indenture,
or other binding arrangement to which it is a party or any of its property is
subject. The execution, delivery and performance of this Escrow Agreement is
consistent with the Prospectus, and the Prospectus properly describes the
allocation of interest and other earnings to potential investors pursuant to
this Escrow Agreement.

     (d) All of its representations and warranties contained herein are true and
complete as of the date hereof and will be true and complete at the time of any
deposit to or disbursement from the Escrow Account.

     11. IDENTIFYING INFORMATION. Company and Dealer Manager acknowledge that
the identifying information set forth on Exhibit B is being requested by Escrow
Agent in connection with the USA Patriot Act, Pub.L.107-56 (the "ACT"), and
Company and Dealer Manager agree to provide any additional information
reasonably requested by Escrow Agent in connection with the Act or any similar
legislation or regulation to which Escrow Agent is subject, in a timely manner.
Company and Dealer Manager each represents that its respective identifying
information set forth on Exhibit B, including without limitation, its Taxpayer
Identification Number assigned by the Internal Revenue Service or any other
taxing authority, is true and complete on the date hereof and each agrees to
notify Escrow Agent of any change with respect thereto during the term of this
Escrow Agreement.

     12. NOTICES. All notices, demands or other communications to be given or
delivered under or by reason of any provision of this Escrow Agreement shall be
in writing and shall be deemed to have been given (i) on the date delivered in
person, (ii) on the date indicated on the return receipt if mailed postage
prepaid, by certified or registered U.S. Mail, with return receipt requested,
(iii) on the date transmitted by facsimile, if sent by 5:00 P.M., Eastern Time
on a business day (or the next business day if after such time or if sent on a
day other than a business day), and confirmation of receipt thereof is obtained,
or (iv) on the next business day after delivery (in time for and specifying next
day delivery) to Federal Express or other nationally recognized overnight
courier service or overnight express U.S. Mail, with service charges or postage
prepaid. The addresses and facsimile numbers of the parties for purposes of this
Escrow Agreement are:

     If to Company:        Wells Timber Real Estate Investment Trust, Inc.
                           6200 The Corners Parkway
                           Norcross, Georgia 30092
                           Facsimile No.: (770) 243-8198
                           Attention: Leo F. Wells, III, President

     With a copy to:       Alston & Bird LLP
                           One Atlantic Center
                           1201 West Peachtree Street
                           Atlanta, Georgia 30309-3424
                           Facsimile No.: (404) 881-7777
                           Attention: Rosemarie A. Thurston

     If to Dealer Manager: Wells Investment Securities, Inc.
                           6200 The Corners Parkway
                           Norcross, Georgia 30092
                           Facsimile No.: (770) 243-8198
                           Attention: Philip M. Taylor, President

     With a copy to:       Alston & Bird LLP
                           One Atlantic Center

                                       -5-

<PAGE>

                           1201 West Peachtree Street
                           Atlanta, Georgia 30309-3424
                           Facsimile No.: (404) 881-7777
                           Attention: Rosemarie A. Thurston

     If to Escrow Agent:   Wachovia Bank, N.A.
                           360 Interstate North Parkway SE
                           Suite 500 - GA4605
                           Atlanta, Georgia 30339-2216
                           Facsimile No.: (770) 644-6869
                           Attention: April Bright, Trust Officer

or to such other address or facsimile number, or to the attention of such other
person, as the receiving party has specified by prior written notice to the
sending party pursuant to this Section 12.

     13. BINDING EFFECT. This Escrow Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.

     14. TERM. This Escrow Agreement shall terminate within thirty (30) days
receipt of written notice by the Escrow Agent that the Company and the Dealer
Manager have agreed to terminate this Escrow Agreement.

     15. AMENDMENTS. This Escrow Agreement shall not be modified, revoked,
released or terminated except upon the mutual consent of Company and Dealer
Manager, given in writing and delivered to the Escrow Agent. Should, at any
time, any attempt be made to modify this Escrow Agreement in a manner that would
increase the duties and responsibilities of Escrow Agent or to modify this
Escrow Agreement in any manner that Escrow Agent deems undesirable, Escrow Agent
may resign by notifying Company and Dealer Manager in writing, by certified
mail, and until (i) acceptance by a successor escrow agent appointed jointly by
Company and Dealer Manager or (ii) thirty (30) days following the date upon
which such notice was delivered by Escrow Agent, whichever occurs sooner, Escrow
Agent's only remaining obligation shall be to perform its duties hereunder in
accordance with the terms of the Escrow Agreement without regards to any such
modification.

     16. ASSIGNMENT. Except as otherwise provided herein, no party may, without
the express written consent of each other party, assign or transfer this Escrow
Agreement in whole or in part.

     17. GOVERNING LAW. This Escrow Agreement is governed by, and shall be
construed and enforced in accordance with, the laws of the State of Georgia
without regard to its conflict of laws rules.

     18. SEVERABILITY. Whenever possible, each provision of this Escrow
Agreement shall be interpreted in such manner as to be effective and valid under
Georgia law, but if any provision shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Escrow Agreement.

     19. HEADINGS. The headings as to contents of particular sections of this
Escrow Agreement are inserted for convenience and shall not be construed as a
part of this Escrow Agreement or as a limitation on or expansion of the scope of
any terms or provisions of this Escrow Agreement.

     20. COUNTERPARTS. This Escrow Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                       -6-

<PAGE>

It shall not be necessary for every party hereto to sign each counterpart but
only that each party shall sign at least one such counterpart.

     21. ENTIRE AGREEMENT. This Escrow Agreement contains the entire
understanding between and among the parties hereto and supersedes any previous
understandings, written or oral, that the parties may have reached, with respect
to the subject matter of this Escrow Agreement.

                            [Signatures on Next Page]

                                       -7-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have made and entered into this
Escrow Agreement on the date first hereinabove set forth.

                                        COMPANY:

                                        WELLS TIMBER REAL ESTATE
                                        INVESTMENT TRUST, INC.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        DEALER MANAGER:

                                        WELLS INVESTMENT SECURITIES, INC.

                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                        ESCROW AGENT:

                                        WACHOVIA BANK, NATIONAL ASSOCIATION

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                                       -8-

<PAGE>

                                    EXHIBIT A

                                ESCROW AGENT FEES

One-Time Escrow Services Fee - Payable in advance - $2,500

                                       A-1

<PAGE>

                                    EXHIBIT B

                             IDENTIFYING INFORMATION

Taxpayer Identification Numbers:

     Company:        20-3536671

     Dealer Manager: 58-1572141

                                       B-1

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