MANVILLE CORP, 8-K, 1995-11-01

MANVILLE CORP
8-K, 1995-11-01
PAPER MILLS

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

--------------------------

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) October 25, 1995

Manville Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)

Delaware 1-8247 84-0856796
- --------------------------------------------------------------------------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)

717 17th Street, Denver, Colorado 80202
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code (303) 978-2000

Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)

<PAGE> 2
ITEM 5. OTHER EVENTS.

On October 26, 1995 Manville Corporation ("Manville")
announced that its 81.5% owned subsidiary, Riverwood International Corporation
("Riverwood") entered into an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of October 25, 1995, with CDRO Holding Corporation
("Parent") and CDRO Acquisition Corporation (the "Purchaser"). Based on the
merger price of $20.25 per share of Riverwood Common Stock, Manville would
receive gross proceeds from the merger of Manville of approximately $1.1
billion for its Riverwood investment.

Manville also announced that it has entered into a Profit
Sharing Exchange Agreement, dated as of October 25, 1995, (the "Exchange
Agreement") with Manville Personal Injury Settlement Trust (the "PI Trust")
pursuant to which, among other things, the PI Trust would agree to eliminate
its right to receive annually 20% of Manville's adjusted net earnings, certain
rights to receive a portion of unutilized proceeds from certain asset sales and
certain affirmative and negative covenants binding on Manville, in exchange for
(the "Exchange") the issuance by Manville to the PI Trust of shares of Manville
common stock, par value $.01 per share (the "Manville Common Stock") in an
amount representing 20% of the Common Stock of Manville assuming exercise of
all outstanding options and warrants and after giving effect to the Exchange.
It is contemplated that the Exchange would take place in connection with a pro
rata dividend to all stockholders of the net proceeds to Manville from the
Riverwood merger. Under the Exchange Agreement before paying any dividend,
Manville may elect to apply a portion of the proceeds of a Riverwood
disposition to the redemption of all or part of its outstanding Cumulative
Preference Stock, Series B having an aggregate liquidation preference of
approximately $231 million plus accrued dividends and its outstanding $26
million of 9% Sinking Fund Debentures. The closing of the transactions
contemplated under the Exchange Agreement is subject to the satisfaction or
waiver of a number of conditions. Manville's obligation to declare and pay a
dividend is also subject to a number of conditions.

Manville also announced that it has entered into a Voting and
Indemnification Agreement, dated as of October 25, 1995 with Parent and the
Purchaser (the "Voting and Indemnification Agreement"). Pursuant to the Voting
and Indemnification Agreement, Manville has agreed that until the earliest of
(A) the effective time of the merger under the Merger Agreement, (B) the date
on which the Merger Agreement is terminated in accordance with its terms or (C)
March 31, 1996, (i) subject to receipt of stockholder approval and certain
other conditions, Manville will vote its shares of Riverwood Common Stock in
favor of the approval and adoption of the Merger

<PAGE> 3
Agreement, and approval of the Merger and the other transactions contemplated
thereby and (ii) against certain acquisition transactions for Riverwood or
certain other proposed corporate actions of Riverwood; unless the Manville
Board of Directors determines in its good faith, reasonable judgment, after
consultation with its counsel, that voting as described above could reasonably
be expected to constitute a breach of the Board's fiduciary duties under
applicable law. The Voting and Indemnification Agreement also provides that,
subject to certain limitations, Manville will provide certain indemnities to
Parent and the Purchaser against losses resulting from or arising out of any
breach of or inaccuracy in certain representations or warranties of Riverwood
set forth in the Merger Agreement. Notwithstanding the foregoing,
(i) Manville will not be required to indemnify unless and until the aggregate
amount of all losses exceeds $20,000,000 and then only to the extent the
losses exceed $20,000,000; (ii) the obligation to indemnify is limited to an
amount equal to 80% of the amount of losses in excess of $20,000,000; and
(iii) the aggregate liability of Manville for indemnification will not exceed
$100,000,000.

Manville, Riverwood, Parent and the Purchaser have also
entered into a Tax Matters Agreement, dated as of October 25, 1995, relating to
certain United States federal, state and local, and foreign, taxation matters,
effective upon the effectiveness of the proposed merger.

The Exchange Agreement, the Voting and Indemnification
Agreement, the Tax Matters Agreement, the Merger Agreement and the press
release issued by Manville in connection therewith are filed herewith as
Exhibits 10.1, 10.2, 10.3, 10.4 and 99.1, respectively, and are incorporated
herein by reference. The descriptions of the Exchange Agreement, the Voting
and Indemnification Agreement and the Tax Matters Agreement set forth above do
not purport to be complete and are qualified in their entirety by reference to
the provisions of such agreements. The Exchange Agreement also provides for
the execution of the Second Amended and Restated Supplemental Agreement between
Manville and the PI Trust and the Ninth Amendment to the Manville Personal
Injury Settlement Trust Agreement. The forms of Second Amendment and the Ninth
Amendment are attached as Exhibits A and B, respectively, to the Exchange
Agreement.

<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(a) Financial Statements of Business Acquired. Not applicable.

(b) Pro Forma Financial Information.

Not applicable.

<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
10.1 Profit Sharing Exchange Agreement dated October 25, 1995, between Manville Corporation and Manville
Personal Injury Settlement Trust (including exhibits thereto).

10.2 Voting and Indemnification Agreement, dated as of October 25, 2995, by and among Manville Corporation,
CDRO Holding Corporation and CDRO Acquisition Corporation.

10.3 Tax Matters Agreement, dated as of October 25, 1995, by and among Manville Corporation, Riverwood
International Corporation, CDRO Holding Corporation and CDRO Acquisition Corporation.

10.4 Agreement and Plan of Merger, dated as of October 25, 1995, by and among Riverwood International
Corporation, CDRO Holding Corporation and CDRO Acquisition Corporation.

99.1 Press Release issued by the Company on October 26, 1995.
</TABLE>

<PAGE> 5
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

Manville Corporation

By: /s/ RICHARD B. VON WALD
-------------------------
Richard B. Von Wald
Senior Vice President,
General Counsel and
Secretary

Dated: October 31, 1995

<PAGE> 6
EXHIBIT INDEX

10.2 Voting and Indemnification Agreement, dated as of October 25, 2995, by and among Manville Corporation,
CDRO Holding Corporation and CDRO Acquisition Corporation.

10.3 Tax Matters Agreement, dated as of October 25, 1995, by and among Manville Corporation, Riverwood
International Corporation, CDRO Holding Corporation and CDRO Acquisition Corporation.

10.4 Agreement and Plan of Merger, dated as of October 25, 1995, by and among Riverwood International
Corporation, CDRO Holding Corporation and CDRO Acquisition Corporation.

99.1 Press Release issued by the Company on October 26, 1995.
</TABLE>

<PAGE> 1
PROFIT SHARING EXCHANGE AGREEMENT

AGREEMENT dated October 25, 1995 between Manville Corporation,
a Delaware corporation (the "Company"), and Manville Personal Injury Settlement
Trust (the "Trust").

WHEREAS, the Trust was created pursuant to a Trust Agreement
dated as of November 28, 1988 to which the Company is a party (as amended, the
"Trust Agreement") to implement those provisions of the Second Amended and
Restated Plan of Reorganization of the Company and certain affiliated
corporations (the "Manville Plan") that relate to the settlement and payment of
asbestos-related health claims against the Company and such affiliated
corporations;

WHEREAS, in connection with the Manville Plan and the Trust
Agreement, the Company and Manville entered into the Supplemental Agreement
dated as of November 28, 1988, which was amended and restated on November 15,
1990 and further amended on August 25, 1993 and September 22, 1994 (as so
amended and restated, the "Supplemental Agreement");

WHEREAS, the purposes of the Trust as set forth in the Trust
Agreement include enhancing the Trust estate and using the assets in the Trust
estate to deliver fair, adequate and equitable compensation to bona fide
beneficiaries of the Trust;

WHEREAS, the Company is exploring various alternatives with
respect to its investment in Riverwood International Corporation ("RIC"), which
alternatives may include the disposition by the Company of all or a substantial
portion of such investment; and

WHEREAS, in furtherance of the Trust's purposes and to further
the long-term objectives of the Company, the Company and the Trust are willing,
in connection with any such disposition, on the terms and subject to the
conditions of this Agreement, to eliminate certain obligations and covenants of
the Company contained in the Supplemental Agreement in exchange for the
issuance to the Trust of a specified number of shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), and the Company's
payment, on the terms and subject to the conditions of this Agreement, of a
dividend on the Common Stock of the net proceeds of any such disposition which
remain after certain uses of such proceeds specified herein.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and for other good and valuable consideration, the adequacy
and receipt of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Terms Defined. The following terms
used herein have the meanings ascribed to them in this Article I. The
definitions of terms indicated below as having the meaning set forth in the
Supplemental Agreement are incorporated by reference herein. The phrases
"transactions contemplated by this Agreement," "transactions contemplated
hereby" and "transactions contemplated hereby and thereby," as used in this
Agreement, shall be understood not to refer to or include the Disposition.

"Board" means the Board of Directors of the Company.

"Class 6 Interest Debentures" shall have the meaning set forth
in the Supplemental Agreement.

"Class 6 Interest Indenture" shall have the meaning set forth
in the Supplemental Agreement.

"Closing" is defined in Section 4.01.

"Closing Date" is defined in Section 4.01.

"Common Stock" is defined in the recitals to this Agreement.

"Company" is defined in the heading of this Agreement.

"Conversion Shares" means the number of shares of Common Stock
equal to the product of (A) the quotient of (i) the Fully Diluted Shares as of
the Closing Date divided by (ii) 0.8 multiplied by (B) 0.2.

"Court" is defined in Section 4.02(c).

"Declaration Date" is defined in Section 3.03(b).

"Disposition" is defined in Section 3.03(a).

"Dividend" means the dividend on, or other payment with
respect to, the outstanding shares of Common Stock of the Company on a pro rata
basis in the full amount of the remaining balance of the Transfer Proceeds
after deduction of the amounts applied

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in accordance with clauses (i) and (ii) of the first sentence of Section
3.03(a); it being understood that, for all purposes under this Agreement
(including, without limitation, for purposes of determining whether or not the
Company is obligated to declare or pay any dividend or other payment pursuant
to Section 3.03 and whether or not the condition set forth in Section
4.03(e)(ii) has been satisfied) the term "Dividend" shall not mean a dividend
or other payment of less than the full amount of such remaining balance.

"Final Order" shall have the meaning set forth in the
Supplemental Agreement.

"Fiscal Year" shall have the meaning set forth in the
Supplemental Agreement.

"Fully Diluted Shares" as of a given date means the number of
issued and outstanding shares of Common Stock of the Company as of such date
together with all shares of Common Stock issuable by the Company upon the
exercise of all options, warrants, calls, rights, agreements, convertible or
exchangeable securities or other commitments outstanding or in effect as of
such date pursuant to which the Company is obligated, or would upon the
satisfaction of certain conditions become obligated, to issue or sell shares of
Common Stock or securities or rights entitling the holder thereof to acquire
Common Stock.

"Governmental Agency" means any domestic, foreign,
supranational, national, federal, state, regional or local government and any
department, bureau, agency, authority, commission, board, court, tribunal, or
other legislative, executive, judicial, regulatory or administrative body or
instrumentality of any such government or any official empowered to act on
behalf of any of the foregoing, or any arbitral tribunal acting within the
proper scope of its jurisdiction.

"Government Proceeds" shall have the meaning set forth in the
Supplemental Agreement.

"Independent" shall have the meaning set forth in the
Supplemental Agreement.

"Manville Plan" is defined in the recitals to this Agreement.

"Non-Trust Directors" means the members of the Board (i) who
are not Trustees or (ii) whose nomination for election as members of the Board
has not been approved by the Trust pursuant to Section 4.02(j) of the
Supplemental Agreement.

"Order" is defined in Section 4.02(c).

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"PD Supplemental Agreement" means the Amended and Restated
Property Damage Supplemental Agreement dated as of November 15, 1990 among the
Company, the Trust and the PD Trust.

"PD Trust" means Manville Property Damage Settlement Trust.

"Permitted Date" is defined in Section 3.03(a).

"Person" means any individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or government or any
agency or political subdivision thereof, including any Governmental Agency.

"Proceeds" is defined in Section 3.03(a).

"Profit Period" is defined in Section 3.02.

"Profits" shall have the meaning set forth in the Supplemental
Agreement.

"Record Date" is defined in Section 3.03(b).

"RIC" is defined in the recitals to this Agreement.

"SCB" means the Selected Counsel for the Beneficiaries
appointed pursuant to the Manville Plan.

"Second Amended and Restated Supplemental Agreement" is
defined in Section 2.01.

"Series B Preference Stock" shall have the meaning set forth
in the Supplemental Agreement.

"Supplemental Agreement" is defined in the recitals to this
Agreement.

"Transfer Proceeds" is defined in Section 3.03(a).

"Trust" is defined in the heading of this Agreement.

"Trust Agreement" is defined in the recitals to this Agreement.

"Trust Agreement Amendment" is defined in Section 2.03.

"Trustees" shall have the meaning set forth in the
Supplemental Agreement.

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ARTICLE II

TERMINATION OF OBLIGATIONS AND COVENANTS

SECTION 2.01. Second Amended and Restated Supplemental
Agreement. On the Closing Date, the parties shall enter into the Second
Amended and Restated Supplemental Agreement substantially in the form attached
as Exhibit A hereto (the "Second Amended and Restated Supplemental Agreement"),
whereupon the Supplemental Agreement shall be amended and restated as set forth
therein, effective as of the Closing Date, and shall thereafter continue in
full force and effect as so amended.

SECTION 2.02. PD Supplemental Agreement. From and after the
date hereof, upon the request of the Company, the Trust shall consent to the
termination of the PD Supplemental Agreement or the amendment of the PD
Supplemental Agreement in such manner as may be requested by the Company,
provided that in the Trust's good faith judgment the terms and conditions of
any such amendment or termination, or the consideration related thereto, would
not, directly or indirectly, adversely affect the Trust (it being understood
and agreed that the terms, conditions and consideration proposed jointly by the
Company and the Trust to the PD Trust prior to the date hereof shall not be
deemed to adversely affect the Trust for purposes of this Section 2.02 if the
payment of such consideration is shared by the Company and the Trust in the
proportions agreed by them prior to the date hereof).

SECTION 2.03. Trust Agreement Amendment. On the Declaration
Date, immediately prior to the declaration of the Dividend, the parties shall
enter into an amendment to the Trust Agreement in the form attached as Exhibit
B hereto (the "Trust Agreement Amendment"), whereupon the Trust Agreement shall
be amended as set forth therein, effective as of the date thereof, and shall
thereafter continue in full force and effect as so amended (subject to the
terms of the Trust Agreement Amendment); provided, however, that the obligation
hereunder of each of the parties to enter in the Trust Agreement Amendment
shall be subject to the satisfaction, or waiver by such party, of each of the
conditions set forth in (i) Section 4.02(b) and Section 4.02(c) hereof, in the
case of the Company, and (ii) Section 4.03(b) and Section 4.03(c) hereof, in
the case of the Trust.

ARTICLE III

COMMON STOCK ISSUANCE AND PROFIT SHARING PAYMENT

SECTION 3.01. Issuance of Common Stock. On the Closing Date,
the Company shall issue the Conversion Shares to the Trust, by delivering to
the Trust one or more certificates (as requested by the Trust) representing the
Conversion Shares

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duly registered in the name of the Trust, and the Company shall cause the
transfer agent to record the Trust as sole holder of record of the Conversion
Shares on and as of the Closing Date and shall provide the Trust with a
certificate of the transfer agent with respect to such recordation (or other
reasonably available written proof thereof) at the Closing. Prior to the
Closing, the Company shall apply for and take all necessary steps to obtain the
approval (to the extent required) of the listing of the Conversion Shares on
any stock exchange on which the Common Stock is listed or traded.

SECTION 3.02. Profit Sharing Payment. The Company shall pay
to the Trust an amount equal to 20% of the sum of Profits (or zero if Profits
is a negative number) and Government Proceeds within 30 days following the last
day of the month during which the Closing Date occurs, for the period beginning
on the first day of the Fiscal Year in which the Closing Date occurs and ending
on the day prior to the Closing Date. Such amount shall be determined in good
faith by management of the Company based on the financial results of the
Company and reasonable assumptions and estimates, in each case determined in a
manner consistent with past practice for the determination of Profits for the
Company's Fiscal Years under the Supplemental Agreement. When the Company
makes the payment of Profits pursuant to this Section 3.02, it shall deliver to
the Trust a certificate signed by the chief executive officer, the chief
financial officer or the controller of the Company setting forth in reasonable
detail the computation of such Profits and explaining any material assumptions
or estimates used in such computation. If the Closing Date occurs on a day
other than the first day of a month, Profits for the period from the first day
of such month to the day prior to the Closing Date (the "Profit Period") shall
be the product of (A) Profits for such month multiplied by (B) the quotient of
(i) the number of days in the Profit Period divided by (ii) the number of days
in such month. Notwithstanding anything to the contrary contained in this
Agreement or in the Second Amended and Restated Supplemental Agreement, the
Company shall remain obligated to make the payment required by Section 2.03(a)
of the Supplemental Agreement with respect to any Fiscal Year of the Company
which ends prior to the Fiscal Year in which the Closing Date occurs and for
which such payment has not been made as of the date of this Agreement. The
parties agree that Profits shall be determined by not giving effect to any
Disposition or the transactions contemplated by this Agreement, including,
without limitation, any payment of Profits pursuant to this Section 3.02, the
issuance of the Conversion Shares pursuant to Section 3.01, the Dividend or any
accounting or tax effects relating to any of the foregoing.

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SECTION 3.03. Use of Proceeds of Disposition.

(a) If the Company, directly or indirectly, sells or
otherwise disposes of all or a substantial portion of its investment in RIC (a
"Disposition"), regardless of the form of such disposition (including, without
limitation, any sale or other disposition by RIC of all or substantially all of
its assets), then within 60 days following receipt by the Company of the
proceeds of such Disposition (the "Proceeds"), the Company shall apply the net
Proceeds after payment of, or reasonable provision for, all out-of-pocket fees,
expenses, taxes and other costs paid or incurred (including reasonable reserves
for out-of-pocket fees, expenses, taxes and costs accrued but not paid at such
time) reasonably related to the effectuation of such Disposition (the "Transfer
Proceeds") as follows: (i) first, to repayment, prepayment or redemption of
the Class 6 Interest Debentures to the extent that the Board, by vote of a
majority of the Non-Trust Directors, determines that such repayment, prepayment
or redemption would be in the best interests of the Company and authorizes and
directs that such repayment, prepayment or redemption be made, (ii) second, to
the extent of the balance of Transfer Proceeds after deduction of the amount
applied in accordance with clause (i), to the repurchase or redemption of
Series B Preference Stock to the extent that the Board, by vote of a majority
of the Non-Trust Directors, determines that such repurchase or redemption would
be in the best interests of the Company and authorizes and directs that such
repurchase or redemption be made, and (iii) third, to the extent of the balance
of Transfer Proceeds after deduction of the amount applied in accordance with
clauses (i) and (ii), subject to the fourth sentence of Section 3.03(b) and the
second sentence of Section 3.03(c), to the payment of the Dividend in the full
amount of such remaining balance. The Company shall be deemed to have applied
Transfer Proceeds in accordance with (x) clause (i) or clause (ii) of this
Section 3.03(a) in the event that the Company shall have within 60 days of a
Disposition issued an irrevocable notice of redemption with respect to the
Class 6 Interest Debentures or the Series B Preference Stock and shall have
paid the redemption price therefor within 60 days of such notice relating to
the Class 6 Interest Debentures or within 90 days of such notice relating to
the Series B Preference Stock, and (y) clause (i) of this Section 3.03(a), in
the event that there is no June 30 or December 31 (a "Permitted Date") that is
at least 30 days, but not more than 60 days, following the receipt by the
Company of the Proceeds, if the Board of Directors shall have authorized and
directed within 60 days following a Disposition that such redemption be
effected on the Permitted Date next following the thirty-first day following
the receipt by the Company of the Proceeds and the Company shall have paid the
redemption price therefor on such Permitted Date. In the event that the
Company should fail to apply Transfer Proceeds in accordance with clause (i) or
clause (ii) of this Section 3.03(a), any amount of Trans-

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fer Proceeds reserved or deducted for such purpose from the amount of the
Dividend shall promptly be declared and paid as a further dividend on, or other
payment with respect to, the outstanding shares of Common Stock of the Company
subject to the fourth sentence of Section 3.03(b) and the second sentence of
Section 3.03(c). The Company shall not, without the express prior written
consent of the Trust, effect any Disposition pursuant to which the Company
receives any consideration other than cash payable in full upon consummation
thereof.

(b) The Company shall, subject to the fourth
sentence of this Section 3.03(b), declare the Dividend within 46 days following
the Company's receipt of the Proceeds (the date of such declaration being
referred to herein as the "Declaration Date"). On the Declaration Date, the
Company shall deliver to the Trust written notice of the declaration of the
Dividend and shall make a public announcement in accordance with applicable
law, regulations and the rules of any securities exchange on which the Common
Stock is then listed or traded, stating that the Dividend has been declared and
announcing the Record Date and the payment date with respect to the Dividend.
The record date for determining stockholders entitled to receive the Dividend
(the "Record Date") shall be not less than five days following receipt by the
Trust of written notice of the declaration but in no event more than 10 days
following the Declaration Date (or such greater minimum number of days
following the Declaration Date as may then be required pursuant to applicable
laws and regulations and the rules of any stock exchange on which the Common
Stock is listed or traded). Notwithstanding anything in this Agreement to the
contrary, the Company's obligation to declare the Dividend shall be subject to
the satisfaction, or the waiver by the Company, of each of the following
conditions precedent at the time of the declaration of the Dividend:

(i) the Company shall have received with
respect to the Dividend all necessary licenses, permits,
consents, approvals, authorizations, qualifications and orders
of Governmental Agencies (if any) becoming necessary after the
date hereof, on terms reasonably acceptable to the Company;

(ii) the Company shall have received an
opinion of counsel substantially to the effect that the
declaration and payment of the Dividend are lawful under the
Delaware General Corporation Law, which opinion shall be in
form and substance reasonably satisfactory to the Board;

(iii) the Company shall be solvent and have
reasonably adequate capital under applicable law and if
requested by the Board, shall have received an opinion from
American Appraisal Associates, pursuant to the

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<PAGE> 9
engagement letter dated August 16, 1995 and executed by the
Company on August 22, 1995, which opinion shall be reasonably
satisfactory to the Board.

(iv) no suit, action or other proceeding by
any Governmental Agency shall be pending before any tribunal
of competent authority which challenges the validity or
legality of the Dividend that has a reasonable likelihood of
success as determined by Independent counsel selected by the
Company and the Trust;

(v) there shall not be any effective
injunction, writ, preliminary restraining order or any order
of any nature issued by a court of competent jurisdiction
directing that the payment of the Dividend not be made or
imposing any conditions on the payment unless the consequences
to the Company of failing to comply with such injunction,
writ, preliminary restraining order or other order or for
being subject to such conditions would not subject the Company
to substantial cost or liability and would not subject any
employee, officer, director or agent of the Company to any
civil or criminal liability (for purposes hereof,
"substantial" shall mean actual or probable cost, liability or
penalty (including any prepayment penalties) in excess of
$250,000 or any obligations to prepay principal in excess of
$20,000,000);

(vi) the Order shall be in full force and
effect;

(vii) the Trust Agreement Amendment shall
have been executed and delivered, and shall be in full force
and effect; and

(viii) all conditions to the Closing set
forth in Sections 4.02 and 4.03 (other than Section
4.03(e)(ii)) shall have been satisfied, or shall have been
waived by the party entitled to waive such conditions;
provided, however, that, notwithstanding anything in this
Agreement to the contrary, the Company shall not have the
power to waive the condition precedent set forth in this
paragraph (viii) without the express prior written consent of
the Trust.

(c) The Company shall, following the occurrence of
the Declaration Date and subject to the immediately following sentence, pay the
Dividend within 4 business days after the Record Date and no later than 60 days
following the receipt by the Company of the Proceeds. Notwithstanding Section
3.03(a) or the first sentence of this Section 3.03(c), the Company's obligation
hereunder to pay the Dividend shall be subject to the satis-

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faction, or the waiver by the Company, of the condition precedent set forth in
Section 3.03(b)(v) at the time of payment of the Dividend; it being understood
that the foregoing shall not affect any rights (other than under this
Agreement) that the Trust may have in its capacity as a stockholder of Manville
with respect to the Dividend.

(d) At least 5 days prior to any date on which the
Company expects the Board to vote on the declaration of the Dividend, the
Company shall deliver to the Trust a certificate signed by the chief executive
officer, chief financial officer or controller of the Company setting forth in
reasonable detail the computation of (x) the amount of Transfer Proceeds, (y)
the amount applied (or, if intended to be so applied after the date of such
certificate, expected to be applied) in accordance with Sections 3.03(a)(i) and
(ii) and (z) the remainder of (x) minus (y), certifying that, to the best of
such person's knowledge, the computations are true and accurate in all material
respects and made in accordance with Section 3.03(a).

(e) The Trust hereby consents to the application of
Transfer Proceeds as provided in Sections 3.03(a)(i) and (ii) (subject to
approval of the Board, by vote of a majority of the Non-Trust Directors, as set
forth in Section 3.03(a)) and will evidence such consent in such appropriate
instruments as may be reasonably requested by the Company.

SECTION 3.04. Computations. In the event the Trust takes
exception to the computation by the Company of any amount under this Agreement,
the procedures set forth in Section 4.03 of the Supplemental Agreement (which
are incorporated herein by reference, mutatis mutandis) shall be followed in
resolving any dispute relating to the computation of such amount.

ARTICLE IV

CLOSING

SECTION 4.01. Closing. In the event that there is a
Disposition, then the transactions contemplated by Sections 2.01, 3.01 and 3.02
shall be consummated (the "Closing") at the offices of Skadden, Arps, Slate,
Meagher & Flom, 919 Third Avenue, New York, New York, at 10:00 A.M., on a date
selected by mutual agreement of the parties (the "Closing Date"), following the
Declaration Date, which date shall be at least one business day before the
Record Date and no earlier than the third business day following receipt by the
Trust of written notice of the declaration of the Dividend.

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SECTION 4.02. Conditions Precedent to the Obligations of the
Company. The obligations of the Company to consummate the transactions
contemplated by Sections 2.01, 3.01 and 3.02 are subject to the satisfaction,
or waiver by the Company, of each of the following conditions:

(a) the representations and warranties of the Trust
contained in this Agreement are true and correct in all material respects as of
the date when made and as of the Closing Date and all agreements contained in
this Agreement to be performed by the Trust prior to or on the Closing Date
shall have been performed in all material respects;

(b) the SCB shall have given their concurrence to
this Agreement, the Second Amended and Restated Supplemental Agreement and the
Trust Agreement Amendment, and the transactions contemplated hereby and
thereby, in a form reasonably acceptable to the Company;

(c) the issuance of an order of the United States
Bankruptcy Court for the Southern District of New York (the "Court") granting
the application of the Trustees to approve the Trust's execution and
performance of this Agreement and the Second Amended and Restated Supplemental
Agreement and the transactions contemplated hereby and thereby and the
Trustees' execution and performance of the Trust Agreement Amendment and the
transactions contemplated thereby, after notice to all beneficiaries of the
Trust (by notice to the appropriate class and subclass representatives'
counsel), the legal representative for the future asbestos health claimants,
the SCB, and any additional persons who appeared in Findley v. Falise (the
"Order"), in a form reasonably acceptable to the Company, which Order shall be
in full force and effect but may be subject to appeal or discretionary review
by another court; provided, however, that if upon its review of objections
raised to the issuance of the Order, the Company believes in good faith after
consultation with the Trust that, as a condition to the Company's obligations
referred to above in this Section 4.02 (or in Section 2.03 or 3.03(b), as the
case may be), the Order should be a Final Order, then for purposes of this
condition the Company may require that the Order be a Final Order;

(d) the approval of this Agreement and the
transactions contemplated by this Agreement by the common stockholders of the
Company and the approval (to the extent required) of the listing of the
Conversion Shares on any stock exchange on which the Common Stock is listed or
traded;

(e) (i) the Company shall have received all
necessary licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Agencies (if any) becoming necessary
after the date hereof, on terms reasonably

11
<PAGE> 12
acceptable to the Company, and (ii) there shall not be any effective
injunction, writ, preliminary restraining order or any order of any nature
issued by a court of competent jurisdiction prohibiting the consummation of the
transactions contemplated hereby unless the consequences to the Company of
failing to comply with such injunction, writ, preliminary restraining order or
other order or for being subject to such conditions would not subject the
Company to substantial cost or liability and would not subject any employee,
officer, director or agent of the Company to any civil or criminal liability
("substantial" being as defined in Section 3.03(b)(v)); and

(f) receipt by the Company of a certificate signed
as of the Closing Date by an authorized executive officer of the Trust
certifying as to the satisfaction of paragraph (a) above.

SECTION 4.03. Conditions Precedent to the Obligations of the
Trust. The obligations of the Trust to consummate the transactions
contemplated by Sections 2.01, 3.01 and 3.02 are subject to the satisfaction,
or waiver by the Trust, of each of the following conditions:

(a) the representations and warranties of the
Company contained in this Agreement are true and correct in all material
respects as of the date when made and as of the Closing Date and all agreements
contained in this Agreement to be performed by the Company prior to or on the
Closing Date shall have been performed in all material respects;

(c) the Order shall have been issued in a form
reasonably acceptable to the Trust, which Order shall be in full force and
effect but may be subject to appeal or discretionary review by another court;
provided, however, that if upon its review of objections raised to the issuance
of the Order, the Trust believes in good faith after consultation with the
Company that, as a condition to the Trust's obligations referred to above in
this Section 4.03 (or in Section 2.03, as the case may be), the Order should be
a Final Order, then for purposes of this condition the Trust may require that
the Order be a Final Order;

(d) (i) the Trust shall have received all necessary
licenses, permits, consents, approvals, authorizations, qualifications and
orders of Governmental Agencies (if any) becoming necessary after the date
hereof, on terms reasonably acceptable to the Trust and (ii) there shall not be
any effective

12
<PAGE> 13
injunction, writ, preliminary restraining order or any order of any nature
issued by a court of competent jurisdiction prohibiting the consummation of the
transactions contemplated hereby unless the consequences to the Trust of
failing to comply with such injunction, writ, preliminary restraining order or
other order or for being subject to such conditions would not subject the Trust
to substantial cost or liability and would not subject any employee, trustee or
agent of the Trust to any civil or criminal liability ("substantial" being as
defined in Section 3.03(b)(v));

(e) (i) receipt by the Company of the Proceeds of
a Disposition and (ii) the declaration of the Dividend;

(f) the approval (to the extent required) of the
listing of the Conversion Shares on any stock exchange on which the Common
Stock is listed or traded; and

(g) receipt by the Trust of a certificate signed as
of the Closing Date (i) by an authorized executive officer of the Company
certifying as to the satisfaction of paragraph (a) above and (ii) by the chief
executive officer, chief financial officer or controller of the Company
certifying the number of Fully Diluted Shares on the Closing Date, together
with a schedule, in form similar to Exhibit C hereto, detailing such
computation.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

SECTION 5.01. Representations and Warranties of the Company.
The Company represents and warrants to the Trust as of the date of this
Agreement and as of the Closing Date that:

(a) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware.

(b) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms except to the extent that such enforceability is limited by
bankruptcy, insolvency, moratorium or similar laws relating to the enforcement
of creditors' rights generally and by the availability of equitable remedies of
general applicability.

(c) Neither the execution and delivery by the
Company of this Agreement, the consummation by the Company of the transactions
contemplated by it nor compliance by the Company

13
<PAGE> 14
with its terms and conditions, will (A) conflict with or result in a breach of,
or constitute a default under, or require any consent or waiver under, any of
the terms, obligations, covenants, conditions or provisions of (i) any
indenture, mortgage, deed of trust, pledge, bank loan or credit agreement, or
other agreement or instrument to which the Company is a party or by which it
may be bound or (ii) the certificate of incorporation or by-laws of the Company
or (B) conflict with or result in a breach of any of the terms, conditions or
provisions of any statute, judgment, order, writ, injunction, decree, rule or
regulation of any Governmental Agency; except for the approval of the Company's
common stockholders as provided in Section 4.02(d), consents that may be
required in connection with the redemption by the Company of its outstanding
Class 6 Interest Debentures or Series B Preference Stock and, in the case of
(A)(i) or (B) for any such conflict, breach or default, that would not,
individually or in the aggregate, have a material adverse effect on the Company
and its Subsidiaries taken as a whole.

(d) Upon the issuance of the Conversion Shares on
the Closing Date, the Conversion Shares shall be duly authorized, validly
issued, fully paid and nonassessable.

(e) As of the date hereof, the number of Fully
Diluted Shares is 130,402,483, as described in Exhibit C hereto.

SECTION 5.02. Representations and Warranties of the Trust.

(a) The Trust has been duly organized and is validly
existing as a trust under the laws of the State of New York.

(b) This Agreement has been duly authorized,
executed and delivered by the Trust and constitutes a valid and binding
obligation of the Trust enforceable against the Trust in accordance with its
terms except to the extent that such enforceability is limited by bankruptcy,
insolvency, moratorium or similar laws relating to the enforcement of
creditors' rights generally and by the availability of equitable remedies of
general applicability.

(c) Neither the execution and delivery by the Trust
of this Agreement, the consummation by the Trust of the transactions
contemplated by it nor compliance by the Trust with its terms and conditions,
will (A) conflict with or result in a breach of, or constitute a default under,
or require any consent or waiver under, any of the terms, obligations,
covenants, conditions or provisions of (i) any indenture, mortgage, deed of
trust, pledge, bank loan or credit agreement, or other agreement or instrument
to which the Trust is a party or by which it may be bound or (ii) the Trust
Agreement or (B) conflict with or result

14
<PAGE> 15
in a breach of any of the terms, conditions or provisions of any statute,
judgment, order, writ, injunction, decree, rule or regulation of any
Governmental Agency; except, for the concurrence of the SCB as provided in
Sections 4.02(b) and 4.03(b), the issuance and effectiveness of the Order in
respect of the Trust's execution, delivery and performance of the Trust
Agreement Amendment, and in the case of (A)(i) or (B) for any such conflict,
breach or default that would not, individually or in the aggregate, have a
material adverse effect on the Trust.

ARTICLE VI

MISCELLANEOUS

SECTION 6.01. Best Efforts by the Trust.

(a) The Trust shall use its reasonable best efforts
to obtain as soon as reasonably possible after the date hereof (i) all consents
necessary for it to perform the terms of this Agreement, the Second Amended and
Restated Supplemental Agreement and the Trust Agreement Amendment, and to
consummate the transactions contemplated hereby and thereby, including, without
limitation, the concurrence of the SCB as provided in Sections 4.02(b) and
4.03(b) and (ii) the Order. At any meeting of stockholders called to consider
approval of this Agreement and the transactions contemplated by this Agreement,
the Trust shall vote all of its shares of Common Stock in favor of such
approval; it being understood that nothing contained in this Agreement shall
constitute or be deemed to constitute a consent, approval or waiver by the
Trust, or an agreement by the Trust to consent, approve or grant any waiver,
with respect to any Disposition or other transaction relating to RIC or the
Company's investment in RIC.

(b) The Trust will not voluntarily take any action
that would reasonably be expected to cause a termination of the Trust other
than pursuant to Section 6.02(a)(i) or Section 6.02(a)(iv) of the Trust
Agreement.

(c) The Trust shall cooperate in all reasonable
respects with the Company to obtain as soon as reasonably possible the
termination or amendment of the PD Supplemental Agreement on such terms and
conditions, and for such consideration, as to which the Trust shall have
consented pursuant to Section 2.02.

SECTION 6.02. Best Efforts by the Company. The Company
shall use its reasonable best efforts to obtain as soon as reasonably possible
after the date hereof all consents necessary for it to perform the terms of
this Agreement, the Second Amended and Restated Supplemental Agreement and the
Trust Agree-

15
<PAGE> 16
ment Amendment, and to consummate the transactions contemplated hereby and
thereby, including, without limitation, to obtain requisite stockholder
approval of this Agreement and the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing, the Company agrees after the
date hereof, to (i) prepare, file and distribute appropriate proxy solicitation
material with respect to such stockholder approval, in compliance with
applicable securities laws and regulations and the rules of any stock exchange
on which the Common Stock is listed or traded, (ii) call a special meeting of
its common stockholders for the purpose of voting upon such approval, (iii) use
efforts consistent with past practice to solicit proxies from its common
stockholders other than the Trust, and (iv) to the extent consistent with the
exercise by the Board of its fiduciary duties under applicable law, recommend
in its proxy solicitation material that stockholders vote in favor of such
approval.

SECTION 6.03. Termination. If the Closing Date shall not
have occurred on or prior to the later of (A) January 31, 1997, or (B) the
first anniversary of the date on which the Company receives the Proceeds of a
Disposition if such Disposition shall have been consummated on or prior to
January 31, 1997, then either party shall have the right to terminate this
Agreement by giving written notice of termination to the other party hereto.
If the Order is denied by the Court upon the Trust's application therefor in
accordance with Section 4.02(c), or if, on or prior to the Closing Date, the
Order is vacated, reversed, modified or amended, in whole or in part, so as to
eliminate or materially limit the Court's approval of the Trust's execution and
performance of this Agreement, the Second Amended and Restated Supplemental
Agreement, the Trust Agreement Amendment or the transactions contemplated
hereby or thereby, either party shall have the right to terminate this
Agreement, by giving written notice of termination to the other party. No
termination of this Agreement pursuant to this Section 6.03 shall in any way
relieve either party of liability for any willful breach of any of the
provisions of this Agreement prior to termination hereof.

SECTION 6.04. Amendments; Waivers. This Agreement may be
modified, supplemented or amended at any time and from time to time only by a
writing signed by each party hereto. Any waiver or consent granted in respect
of any term or condition of this Agreement shall be effective only if given in
a writing signed by the party giving same and expressly stating that it is a
waiver or consent, and any such waiver or consent shall constitute a waiver or
consent only of the specific provision(s) and for the specific purpose(s) set
forth therein.

SECTION 6.05. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given:

16
<PAGE> 17
if to the Trust, to:

Manville Personal Injury Settlement Trust
8260 Willow Oaks Corporate Drive, Suite 600
P.O. Box 10415
Fairfax, Virginia 22031
Fax: (703) 205-6249
Attention: David T. Austern, Esq.

with a copy to:

Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
Fax: (212) 632-3321
Attention: Andrew J. Trubin, Esq.

if to the Company, to:

Manville Corporation
717 17th Street
Denver, Colorado 80202
Fax: (303) 978-4842
Attention: Richard B. Von Wald, Esq.

with copies to:

Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Fax: (212) 735-2001
Attention: Franklin M. Gittes, Esq.

and

Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Fax: (212) 450-4800
Attention: Stephen H. Case, Esq.

and

17
<PAGE> 18
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Fax: (212) 836-8689
Attention: Herbert S. Edelman, Esq.

SECTION 6.06. Counterparts; Integration. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement together with its exhibits constitutes the entire
agreement and understanding between the parties hereto relating to the subject
matter hereof and supersedes any and all prior agreements and understandings,
oral and written, relating to the subject matter hereof.

SECTION 6.07. Severability. Should any provision in this
Agreement be determined to be invalid or unenforceable in any jurisdiction,
such determination shall in no way limit or affect the validity or
enforceability and operative effect of any of the provisions of this Agreement
in any other jurisdiction.

SECTION 6.08. Headings. The headings used in this Agreement
are inserted for convenience only and neither constitute a portion of this
Agreement nor in any manner affect the construction of the provisions of this
Agreement.

SECTION 6.09. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns except that neither the Company nor
the Trust may assign or otherwise transfer any of its rights or delegate
obligations under this Agreement.

SECTION 6.10. Survival of Representations and Warranties.
The representations and warranties of the parties contained in this Agreement
shall survive the Closing Date for a period of 18 months from the Closing Date.

SECTION 6.11. Expenses. All costs and expenses incurred in
connection with this Agreement, including without limitation all brokers' fees,
investment banking fees and legal fees, shall be paid by the party incurring
such cost or expense. Nothing contained in this Section 6.11 shall be
construed as creating an obligation of the Company or the Trust to indemnify
any Person.

SECTION 6.12. Specific Performance. Each of the Company and
the Trust agrees that the other party would be irreparably damaged if for any
reason the Company or the Trust, as the case may be, failed to perform its
obligations under this Agreement and that such other party would not have an
adequate

18
<PAGE> 19
remedy at law for money damages in such event. Accordingly, the Company and
the Trust each agrees that the other party shall, to the maximum extent
permitted, be entitled to specific performance and injunctive and other relief
to enforce the performance of this Agreement. This provision is without
prejudice to any other rights that the Company or the Trust may have against
the other party for any failure of such other party to perform its obligations
hereunder.

SECTION 6.13. Third Parties. This Agreement constitutes an
agreement solely between the parties hereto, and is not intended to and shall
not confer any rights, remedies, obligations or liabilities, legal or
equitable, on any Person other than the parties hereto and their respective
successors or assigns, or otherwise constitute any Person a third-party
beneficiary under or by reason of this Agreement.

SECTION 6.14. Governing Law; Submission to Jurisdiction.
This Agreement shall be governed by and construed in accordance with the laws
of the State of New York, without regard to choice of law principles applied in
such jurisdiction. The Company and the Trust hereby submit to the nonexclusive
jurisdiction of the United States Bankruptcy Court for the Southern District of
New York for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. Each of the Company
and the Trust irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

19
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.

MANVILLE CORPORATION

By /s/ RICHARD B. VON WALD
------------------------------------
Name: Richard V. Von Wald
Title: Senior Vice President
General Counsel & Secretary

MANVILLE PERSONAL INJURY
SETTLEMENT TRUST

By /s/ ROBERT A FALISE
------------------------------------
Name: Robert A. Falise
Title: Chairman and Managing
Trustee

20
<PAGE> 21
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

EXHIBIT A
TO PROFIT SHARING
EXCHANGE AGREEMENT

================================================================================

FORM OF

MANVILLE PERSONAL INJURY
SETTLEMENT TRUST

SECOND AMENDED AND RESTATED
SUPPLEMENTAL AGREEMENT

__________

DATED AS OF ______ __, 199__

__________

================================================================================
<PAGE> 22
SECOND AMENDED AND RESTATED
SUPPLEMENTAL AGREEMENT

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I

DEFINITIONS

ARTICLE II

PAYMENTS
2.01. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.02. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.03. Certain Payment Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.04. Reimbursement Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.05. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE III

STOCK
3.01. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.02. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.03. Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.04. Registration Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE IV

GENERAL COVENANTS
4.01. Covenants of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.02. Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.03. Computation Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.01. Organization, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.02. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ARTICLE VI

MISCELLANEOUS
6.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.02. Amendments; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>

i
<PAGE> 23
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
6.03. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.05. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.06. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.07. Entire Agreement; No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.08. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.10. Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.11. Survival of Representations, Warranties, Covenants and Agreements . . . . . . . . . . . . . . . . . . 27
6.12. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.13. Agreements of the Company and the Trust with Respect to Certain Liens . . . . . . . . . . . . . . . . 27
6.14. Automatic Waivers under the PD Supplemental Agreement . . . . . . . . . . . . . . . . . . . . . . . . 27
6.15. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>

ii
<PAGE> 24
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

SECOND AMENDED AND RESTATED
SUPPLEMENTAL AGREEMENT

Agreement dated as of _______ __, 199_ between Manville
Personal Injury Settlement Trust (the "Trust") and Manville Corporation (the
"Company").

WHEREAS, the Company and the Trust have heretofore entered
into the Supplemental Agreement dated November 28, 1988, which was amended and
restated as of November 15, 1990 and further amended on August 25, 1993 and
September 22, 1994 (as so amended and restated, the "Supplemental Agreement");

WHEREAS, the Company and the Trust are parties to a Profit
Sharing Exchange Agreement, which, inter alia, contemplates the execution of
this Second Amended and Restated Supplemental Agreement; and

WHEREAS, pursuant to Section 6.02 of the Supplemental
Agreement the Company and the Trust are empowered to modify, supplement or
amend the Supplemental Agreement (other than Section 6.13 thereof).

NOW, THEREFORE, the parties hereto agree to amend and restate
the Supplemental Agreement in its entirety as follows:

ARTICLE I

DEFINITIONS

Unless the context requires otherwise, all capitalized terms
not otherwise defined herein have the meanings assigned to them in Exhibit A
hereto. Terms defined in Exhibit A hereto are not intended to change any of
the definitions used in the Plan. All references to the Supplement Agreement
hereinafter made or made in any other document or instrument shall refer to the
Supplemental Agreement as amended and restated hereby.

ARTICLE II

PAYMENTS

2.01. [Reserved]

2.02. [Reserved]

1
<PAGE> 25
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

2.03. Certain Payment Obligations.

(a) [Reserved]

(b) The Company shall pay to the Trust for each Fiscal
Year from and including the Fiscal Year in which this Agreement enters into
effect so long as the Trust exists, on or before April 30 of the next Fiscal
Year, an amount equal to the Insurance Indemnification Amount for such Fiscal
Year, provided that the payment under this Section 2.03 with respect to any
Fiscal Year shall not exceed an amount equal to 30% of Profits for such Fiscal
Year.

2.04. Reimbursement Obligations. (a) The Trust shall
indemnify the Company in respect of all costs, expenses, losses and damages
(including, except as limited by Paragraph (c) below, fees and expenses of
counsel and other litigation and settlement costs) when and as incurred by the
Company in connection with any Trust Claim or Indemnification Liability
asserted against the Company, provided that the Company shall use its best
efforts to cause such Trust Claim or Indemnification Liability to be redirected
against the Trust, as contemplated by and in accordance with the Plan and the
Trust Agreement.

(b) The Company shall indemnify the Trust in respect of all
costs, expenses, losses and damages (including, except as limited by Paragraph
(c) below, fees and expenses of counsel and other litigation and settlement
costs) when and as incurred by the Trust in connection with any obligations or
liabilities of the Debtors not assumed by the Trust pursuant to the Trust
Agreement, any obligations or liabilities imposed upon the Company by the terms
of the Plan, any income taxes imposed upon the Trust at any time, or any
challenge to the Plan.

(c) Each party indemnified under the provisions of this
Section 2.04, upon receipt of written notice of any claim or the service of
summons or other initial legal process upon it in any action instituted against
it, in respect of which indemnity may be sought on account of any indemnity
agreement contained in this Section 2.04, shall promptly give written notice of
such claim, or the commencement of such action, or threat thereof, to the party
from whom indemnity shall be sought hereunder. Such indemnifying party shall
be entitled at its own expense to participate in the defense of such claim or
action, or, if it shall elect, to assume such defense, in which event (i) such

2
<PAGE> 26
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

defense shall be conducted by counsel chosen by such indemnifying party, which
counsel shall be satisfactory to the indemnified party against whom such claim
is asserted or who is the defendant in such action, and (ii) such indemnified
party may retain additional counsel provided that such indemnified party shall
bear the fees and expenses of any additional counsel retained by it. If the
indemnifying party shall elect not to assume the defense of such claim or
action, such indemnifying party will reimburse such indemnified party for the
reasonable fees and expenses of any counsel retained by it, and shall be bound
by the results obtained by the indemnified party; provided that no such claim
or action shall be settled without the written consent of the indemnifying
party.

2.05. [Reserved]

ARTICLE III

STOCK

3.01. [Reserved]

3.02. [Reserved]

3.03. Right of First Refusal.

(a) Sales Other than by Tender Offer. Prior to any sale by
the Trust (other than pursuant to a Tender Offer or pursuant to an underwritten
public offering) of any shares of Manville Common Stock to a Person or "group"
(as defined in Rule 13d-5(b) under the Exchange Act) which, to the knowledge of
the Trust, owns, or will own as a result of such purchase, of record or
beneficially, more than 15% of the shares of Manville Common Stock then
outstanding, the Trust shall give the Company (or its designee(s)) the
opportunity to purchase such shares in the following manner:

(i) The Trust shall give written notice (the
"Offering Notice") to the Company of such proposed sale, specifying
the number of shares proposed to be sold, the price per share, the
identity of the purchaser and the form of the transaction.

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SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

(ii) The Company shall have the right, exercisable
by written notice (the "Offering Exercise Notice") to the Trust given
within 30 Business Days after the date the Offering Notice is given,
to purchase (or to cause its designee(s) to purchase) all, but not
less than all, of the shares specified in such Offering Notice for
cash at the price set forth therein.

(iii) The price per share to be paid by the Company
(or its designee(s)) (the "Purchase Price") in a purchase pursuant to
an Offering Exercise Notice shall be the third party buyer's price, or
shall be determined in the manner the third party buyer's price was to
be determined.

(iv) Upon delivery of the Offering Exercise Notice
(and notwithstanding any designation by the Company of a third person
as purchaser), the Company shall be legally obligated to consummate
the purchase contemplated thereby, and shall be liable in damages to
the Trust if the purchase is not consummated for any reason other than
the fault of the Trust. The closing of the purchase of the shares of
Manville Common Stock pursuant to an Offering Exercise Notice shall
take place on a date designated by the Company, which date shall not
be later than seven Business Days after the date the Offering Exercise
Notice is given. At such closing, an aggregate amount equal to the
Purchase Price times the number of shares proposed to be sold shall be
paid by the Company to the Trust and the certificate or certificates
representing such shares, accompanied by stock powers duly executed in
blank or duly executed instruments of transfer and any other documents
that are necessary to transfer good and marketable title to such
shares, shall be delivered by the Trust to the Company (or its
designee(s)).

(v) If the Company does not timely give the Offering
Exercise Notice hereunder, the shares as to which the Offering Notice
was given may be sold in the transaction described in such Offering
Notice within 30 days after the expiration of the Company's right to
give the Offering Exercise Notice.

(b) Tender Offers. The Trust may tender shares of Manville
Common Stock into any Tender Offer provided that the Trust shall not tender
shares of Manville Common Stock prior to the date by which the Company is
required to take a position with

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SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

respect to the Tender Offer pursuant to Rule 14e-2 under the Exchange Act (or
any successor provision), and provided, further, that prior to any tender of
shares by the Trust pursuant to any Tender Offer which the Company has opposed
in a Schedule 14D-9 filed with the Commission and in which, to the knowledge of
the Trust, the offeror, together with any "group" (as defined in Rule 13d-5(b)
under the Exchange Act) of which such offeror is a member, owns, or would own
if the offeror purchased the maximum number of shares sought pursuant to the
Tender Offer, of record or beneficially, more than 15% of the shares of
Manville Common Stock then outstanding, the Trust shall give the Company (or
its designee(s)) the opportunity to purchase such shares in the following
manner:

(i) Prior to tendering any shares of Manville Common
Stock pursuant to any such Tender Offer, the Trust shall give written
notice (the "Tender Notice") to the Company of its intention to
tender, specifying the number of shares proposed to be tendered (the
"Tendered Shares"). A Tender Notice shall be deemed to relate to any
Tender Offer outstanding at the time such Tender Notice is given,
provided that a Tender Notice shall not be deemed to relate to a
Tender Offer outstanding at the time the Tender Notice is given if (x)
the Tender Notice was given less than five Business Days prior to the
then scheduled expiration of such Tender Offer and (y) such scheduled
expiration was not subsequently changed to a time more than five
Business Days after the time when the Tender Notice was given. A
Tender Notice shall also be deemed to relate to any Tender Offer not
outstanding at the time such Tender Notice is given if such Tender
Offer is outstanding at any time prior to the Cutoff Time (as
hereinafter defined) of any other Tender Offer to which the Tender
Notice relates. The "Cutoff Time" for any Tender Offer shall mean the
earlier of (x) two Business Days prior to the earliest expiration of
such Tender Offer (the term "expiration" as used herein shall not be
deemed to include termination by the offeror prior to the scheduled
expiration) and (y) two Business Days prior to the end of any
proration period relating to such Tender Offer (provided that this
Clause (y) shall only apply if the Tender Notice was given at least
five Business Days prior to the end of such proration period). If,
after giving a Tender Notice, the Trust determines not to tender into
any Tender Offer to which the Tender Notice relates (which the Trust
may do at any time prior to receipt of a Tender Exer-

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<PAGE> 29
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

cise Notice, as hereinafter contemplated), the Trust shall promptly
advise the Company thereof by giving written notice rescinding such
Tender Notice.

(ii) The Company shall have the right, exercisable
by written notice to the Trust (the "Tender Exercise Notice") actually
received by the Trust prior to the earliest Cutoff Time of any Tender
Offer to which the Tender Notice relates (the "Tender Exercise
Deadline"), to purchase (or to cause its designee(s) to purchase) all,
but not less than all, of the Tendered Shares specified in such Tender
Notice, for cash, at the Purchase Price (as hereinafter defined with
respect to this Section 3.03(b)). No extension of the expiration date
or proration period under any Tender Offer, which extension occurs
subsequent to the Tender Exercise Deadline, shall be deemed to
reinstate or extend beyond the Tender Exercise Deadline the Company's
right to give a valid Tender Exercise Notice under this Section
3.03(b). The "Purchase Price" as used in this Section 3.03(b) shall
mean the highest price per share of Manville Common Stock paid or
payable (or if no price was paid or payable, the highest price per
share offered) at any time by any offeror pursuant to any Tender Offer
to which the Tender Notice relates.

(iii) Upon delivery of the Tender Exercise Notice
(and notwithstanding any designation by the Company of a third party
as purchaser), the Company shall be legally obligated to consummate
the purchase contemplated thereby and shall be liable in damages to
the Trust if for any reason the purchase is not consummated. An
aggregate amount equal to the Purchase Price times the number of
Tendered Shares shall be paid by the Company to the Trust not more
than ten Business Days after the earlier of the date on which (x) all
Tender Offers to which the Tender Notice relates have expired or been
terminated without any shares of Manville Common Stock being purchased
thereunder and (y) shares of Manville Common Stock are first purchased
by any offeror pursuant to a Tender Offer to which the Tender Notice
relates. The certificate or certificates representing the Tendered
Shares, accompanied by stock powers duly executed in blank or duly
executed instruments of transfer and any other documents that are
necessary to transfer good and marketable title to such Tendered
Shares, shall promptly be delivered by the Trust to the Company (or
its de-

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<PAGE> 30
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

signee(s)) upon the Trust's receipt of such payment. If any Tender
Offer to which the Tender Notice relates remains outstanding at the
date such payment is to be made by the Company to the Trust, the
amount of such payment shall be calculated as though each such
outstanding Tender Offer would expire without any increase in the
price being offered thereunder. If at any time shares of Manville
Common Stock are purchased by any offeror pursuant to any Tender Offer
to which the Tender Notice relates at a price per share which exceeds
the per share amount previously paid by the Company to the Trust with
respect to Tendered Shares, the Company shall pay to the Trust within
three Business Days after such higher price is paid or becomes payable
an amount in cash equal to the product of the number of Tendered
Shares times such excess.

(iv) If the Company does not give a Tender Exercise
Notice prior to the Tender Exercise Deadline, the Tendered Shares may
be sold to any offeror pursuant to any Tender Offer to which the
Tender Notice relates, provided that if such Tendered Shares are not
tendered pursuant to any such Tender Offer, the Company shall again
have a right of first refusal under the terms of this Section 3.03(b)
with respect to any shares of Manville Common Stock subsequently
proposed to be tendered by the Trust pursuant to any other Tender
Offer.

(c) Purchase Price. For purposes of this Section 3.03, if
the consideration paid or offered by any third party consists of all cash, the
price paid or offered for purposes of determining the Purchase Price shall be
the amount of the cash paid or offered. If the consideration paid or offered
by any third party consists in whole or in part of property (including debt
instruments) other than cash, the price paid or offered for purposes of
determining the Purchase Price shall be the amount of cash paid or offered, if
any, plus the value of the property other than cash. If the Trust has a choice
between cash and property other than cash, the price paid or offered for
purposes of determining the Purchase Price shall be the higher of the cash or
the value of such property. The value of any property other than cash will be
determined as promptly as practicable by agreement between a nationally
recognized investment banker selected by the Company and a nationally
recognized investment banker selected by the Trust (or if such investment
bankers have not agreed upon a value for such property within three Business

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<PAGE> 31
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

Days after appointment, by a third nationally recognized investment banker
selected by the investment bankers for the Trust and the Company, or if such
investment bankers cannot agree on a third investment banker, by an investment
banker selected by the President of the Securities Industry Association). If
either the Trust or the Company fails to appoint an investment banker within
two Business Days after the other's request, the investment banker appointed by
the other shall make the determinations contemplated by this Section 3.03(c) in
its sole professional judgment. The value of any securities shall be the fair
market value of such securities determined on a fully distributed basis, and
the value of any property other than cash that does not consist of securities
shall be the fair market value of such property. In the event a determination
of the value of property other than cash under this Section 3.03(c), is
required, the payment provided for in Section 3.03(a) or (b) shall initially be
made with respect to any cash that had been offered to the Trust and any
property to the extent to which its value has been agreed upon. Any additional
payment due to the Trust on account of property other than cash for which a
value determination is required hereunder shall be made immediately following,
and in accordance with, such value determination.

3.04. Registration Rights.

(a) Shelf Registration. Whenever, from time to time, the
Trust shall so request in writing and to the extent permitted by law, the
Company shall use its best efforts to register all shares of Manville Common
Stock held by the Trust (or a portion of such shares, if so requested by the
Trust) under Rule 415 under the Securities Act (or an equivalent or successor
provision) (a "Shelf Registration") and shall keep such registration in effect
at all times that the Trust holds any shares of Manville Common Stock or until
the Trust notifies the Company in writing that the registration no longer need
remain effective. If either the Trust or the Company deems it necessary to
obtain a determination from the appropriate regulatory authorities that a Shelf
Registration is permitted by law, the Company shall use its best efforts, in
cooperation with the Trust, to obtain such a determination.

(b) Registration Upon Request. If at any time a Shelf
Registration is not in effect with respect to all shares of Manville Common
Stock issued directly to the Trust by Manville and held at such time by the
Trust, and the Trust shall request

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<PAGE> 32
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

in writing that the Company effect the registration under the Securities Act of
any shares of Manville Common Stock held by it (which request shall specify the
aggregate number of shares intended to be offered and sold by the Trust, shall
describe the nature or method of the proposed offer and sale thereof and shall
contain an undertaking by the Trust to cooperate with the Company in order to
permit the Company to comply with all applicable requirements of the Securities
Act and the rules and regulations thereunder and to obtain acceleration of the
effective date of the registration statement), the Company shall, as
expeditiously as possible, use its best efforts to effect the registration of
the shares which the Trust has requested it to register on an appropriate form
under the Securities Act and to keep such registration in effect for a period
of nine months or for such lesser period as shall be required to complete the
distribution of all the shares covered thereby. The registration rights
contemplated by this Section 3.04(b) may be exercised from time to time in the
discretion of the Trust with respect to all or any part of the shares of
Manville Common Stock that the Trust is permitted under this Agreement to sell
at any such time, provided that the Company shall have no obligation to file a
registration statement in any January or earlier than two months after the date
on which any other registration statement filed pursuant to Sections 3.04(a) or
(b) of this Agreement ceases to be in effect.

(c) Registration Procedures. At any time that the Company is
obligated to use its best efforts to effect the registration under the
Securities Act of any shares of Manville Common Stock held by the Trust
pursuant to Sections 3.04(a) or (b), the Company shall, as expeditiously as
possible:

(i) prepare and file with the Commission a
registration statement on the appropriate form with respect to such
shares and use its best efforts to cause such registration statement
to become effective;

(ii) before filing a registration statement or
prospectus or any amendments or supplements thereto, furnish to the
Trust and its counsel (and to any Person designated by the Trust or
such counsel) copies of all documents proposed to be filed with the
Commission, which documents will be subject to the review and comment
of the Trust and such counsel, and, if requested by such counsel, to
the insertion of material that, in the judgment of such counsel,
should be

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<PAGE> 33
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

included (subject, however, to the reasonable approval of counsel to
the Company);

(iii) take such action (including filing with the
Commission amendments and supplements to the registration statement
and the prospectus used in connection therewith) as may be necessary
to keep such registration statement effective for the period of time
required under Section 3.04(a) or (b);

(iv) furnish to the Trust and each underwriter of
the shares being sold such number of copies of (w) such registration
statement (including all exhibits thereto), (x) each amendment and
supplement thereto (in each case including all exhibits thereto), (y)
the prospectus included in such registration statement (including each
preliminary prospectus) and (z) such other documents, as the Trust and
each such underwriter may reasonably request in order to facilitate
the distribution of such shares;

(v) promptly deliver to the Trust, each managing
underwriter of the shares, and their respective counsel copies of all
correspondence between the Commission and the Company, its counsel or
auditors and all memoranda relating to discussions with the Commission
with respect to any such registration statement;

(vi) furnish, at the request of the Trust, on each
date that such shares are delivered to underwriters for sale pursuant
to such registration statement or, if such shares are not being sold
through underwriters, on each date the registration statement with
respect to such shares becomes effective (or, if the shares are
registered pursuant to a Shelf Registration, on the date such Shelf
Registration becomes effective and on each date a post-effective
amendment of such Shelf Registration becomes effective) (x) an
opinion, dated such date, of counsel representing the Company for the
purposes of such registration, addressed to the underwriters, if any,
and to the Trust, substantially to the effect that (A) the
registration statement, related prospectus, and each amendment or
supplement thereto (including documents incorporated by reference
therein), complied, when declared effective with respect to
registration statements and otherwise when filed, as to form in all
material respects with the requirements of the Securities Act or the

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<PAGE> 34
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

Exchange Act, as the case may be, and the applicable rules and
regulations of the Commission thereunder (except that such counsel
need express no opinion as to the financial statements and other
financial data contained therein), (B) such counsel believes that the
registration statement (and any amendment thereto or document
incorporated by reference therein), at the time such registration
statement became effective (or in the case of an amendment or document
incorporated by reference, at the time it was filed), did not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and that the prospectus as amended or
supplemented, if applicable (including documents incorporated by
reference therein), on the date of such opinion, does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading (except that
such counsel need express no belief as to the financial statements and
other financial data contained in the registration statement or the
prospectus), (C) all of the shares of Manville Common Stock then
outstanding have been duly authorized, validly issued and are fully
paid and nonassessable, and (D) such other legal matters with respect
to the registration statement and the Company as the underwriters, if
any, or the Trust may reasonably request and (y) a letter, dated such
date, from the Independent certified public accountants of the
Company, addressed to the underwriters, if any, and to the Trust,
stating that they are "independent" certified public accountants
within the meaning of the Securities Act and that the financial
statements and other financial data of the Company included in the
registration statement or the prospectus, or any amendment or
supplement thereto (including, in each case, documents incorporated by
reference therein), comply as to form in all material respects with
the applicable accounting requirements of the Securities Act; such
letter from the accountants shall additionally cover such other
financial matters (including information as to the period ending not
more than five Business Days prior to the date of such letter) with
respect to the registration statement that is of the type ordinarily
included in accountants' "comfort letters" to underwriters as the
underwriters, if any, or the Trust may reasonably request;

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<PAGE> 35
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

(vii) use its best efforts to register or qualify
the shares covered by such registration statement under the securities
or blue sky laws of such jurisdictions in the United States as the
Trust shall reasonably request, considering the nature and size of the
offering, and do any and all other acts and things which may be
necessary or desirable to enable the Trust and any underwriter of such
shares to consummate the public sale or other disposition in each such
jurisdiction of such shares, provided that in connection therewith the
Company shall not be required to file a general consent to service of
process in any jurisdiction or to qualify to do business in any
jurisdiction where it is not then qualified;

(viii) notify the Trust and any underwriter of such
shares, at any time when a prospectus relating to such shares is
required to be delivered under the Securities Act, of the happening of
any event as a result of which the prospectus included in such
registration statement contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and promptly
prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such shares, such 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;

(ix) enter into such customary agreements (including
an underwriting agreement in customary form) and take all such other
customary actions as the Trust or the underwriters of such shares
reasonably request in order to expedite or facilitate the disposition
of the shares;

(x) make available, upon reasonable notice and
during business hours, for inspection by the Trust, any underwriter
participating in any distribution pursuant to such registration
statement and any attorney, accountant or other agent retained by the
Trust or any such underwriter (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company and its officers,

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SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

directors and employees to supply all information reasonably requested
by any such Inspector, in connection with such registration statement;
provided that none of such Records shall be photocopied by the
Inspectors and any such inspection shall be conducted in a manner that
does not unreasonably interfere with the normal business operations of
the Company. Records which the Company determines, in good faith, to
be confidential and which it notifies the Inspectors in writing are
confidential shall not be disclosed to the Inspectors and only may be
reviewed by counsel for the Trust and for any underwriter;

(xi) notify the Trust of any stop order issued or,
to the knowledge of the Company, threatened by the Commission and take
all reasonable actions required to prevent the entry of such stop
order or to remove it if entered;

(xii) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission; and

(xiii) if the Trust has requested registration of
shares pursuant to Section 3.04(b), notify the PD Trust that the Trust
has requested a registration of shares of Manville Common Stock
pursuant to this Agreement and give the PD Trust an opportunity to
participate in such registration.

The Company may request that the Trust furnish to the Company
information regarding the Trust and the disposition of the Trust's shares, and
the Trust agrees to furnish such information to the Company and any other
information as the Company may reasonably request.

The Trust agrees that, upon receipt of any notice from the
Company of any event of the kind described in Paragraph (viii) of this Section
3.04(c), the Trust will forthwith discontinue distribution of shares of
Manville Common Stock pursuant to the registration statement covering such
shares until the Trust's receipt of the copies of the supplemented or amended
prospectus contemplated by such Paragraph. If the Company shall give any such
notice, the period stated in Section 3.04(b) during which the Company must keep
a registration statement in effect, if applicable, shall be extended by the
number of days during the period from and including the date of the giving of
such notice

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<PAGE> 37
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

pursuant to Paragraph (viii) of this Section 3.04(c) to and including the date
when the Trust shall have received the copies of the supplemented or amended
prospectus contemplated by Paragraph (viii) of this Section 3.04(c).

If any such registration statement refers to the Trust by name
or otherwise as the holder of any shares of Manville Common Stock, then the
Trust shall have the right to require the insertion therein of language, in
form and substance satisfactory to the Trust and the Company, to the effect
that the holding by the Trust of such shares is not to be construed as a
recommendation by the Trust or any of the Trustees of the investment quality of
the shares covered thereby and that such holding does not imply that the Trust
will assist in meeting any future financial requirements of the Company.

(d) Registration Expenses. The Company agrees to pay all
costs and expenses in connection with any registration pursuant to this Section
3.04 (whether or not any such registration shall become effective), including,
without limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the shares), printing and duplicating expenses, messenger and
delivery expenses, fees and disbursements of counsel for the Company and all
independent certified public accountants (including the expenses of any annual
audit, special audit or "cold comfort" letters required by or incident to such
performance), securities acts liability insurance (if the Company elects to
obtain such insurance), the reasonable fees and expenses of any special experts
retained for the Company in connection with such registration and fees and
expenses of other Persons retained by the Company; provided that costs and
expenses to be paid by the Company shall not include fees and expenses of
counsel retained by the Trust and other out-of-pocket expenses of the Trust
(and any persons retained by the Trust to act as Inspectors) incurred in
connection with any registration and any underwriting discounts or commissions
attributable to the sale of the Trust's shares of Manville Common Stock.

(e) Indemnification.

(i) In each case of a registration of shares of
Manville Common Stock under the Securities Act pursuant to this
Section 3.04, the Company will indemnify and hold harm-

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<PAGE> 38
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

less the Trust, each Trustee, each officer of the Trust, each
underwriter for the Trust (as defined in the Securities Act) and each
other Person, if any, who controls the Trust or any such underwriter
within the meaning of the Securities Act or the Exchange Act from and
against any and all losses, claims, damages and liabilities (including
the fees and expenses of counsel in connection with any governmental
or regulatory investigation or proceeding), caused by an untrue
statement or alleged untrue statement of a material fact contained in
any registration statement under which such shares of Manville Common
Stock were registered under the Securities Act and/or under the
securities or blue sky laws of any jurisdictions in the United States,
any prospectus or preliminary prospectus contained therein or any
amendment or supplement thereto (including, in each case, documents
incorporated by reference therein), or caused by 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 that the Company shall not be liable to indemnify a
party seeking indemnification insofar as such losses, claims, damages
or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating
to the party seeking indemnification and furnished to the Company in
writing by such party expressly for use therein; provided that the
foregoing indemnification with respect to a preliminary prospectus as
then amended or supplemented shall not inure to the benefit of any
underwriter (or to the benefit of any Person controlling such
underwriter) from whom the Person asserting any such losses, claims,
damages or liabilities purchased shares of Manville Common Stock if a
copy of the final prospectus as then amended or supplemented had not
been sent or given to such Person at or prior to written confirmation
of the sale of such shares to such Person and the untrue statement or
omission of a material fact contained in such preliminary prospectus
was corrected in the final prospectus as then amended or supplemented.

(ii) In each case of a registration of shares of
Manville Common Stock under the Securities Act pursuant to this
Section 3.04, the Trust will indemnify and hold harmless the Company,
its directors, its officers who sign the registration statement and
each Person, if any, who controls the Company within the meaning of
the Securities Act or the

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<PAGE> 39
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Trust, but only with reference to information relating
to the Trust and furnished to the Company in writing by the Trust
expressly for use in the registration statement, any prospectus or
preliminary prospectus contained therein or any amendment or
supplement thereto. The Trust will use best efforts to cause any
underwriters of shares of Manville Common Stock to be sold by the
Trust to indemnify the Company on the same terms as the Trust agrees
to indemnify the Company, but only with reference to information
relating to such underwriters.

(iii) In case any proceeding (including any
governmental investigation) shall be instituted involving any Person
in respect of which indemnity may be sought pursuant to this Section
3.04, such Person (the "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying
Party") in writing and the Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others
the Indemnifying Party may designate in such proceeding and shall pay
the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any Indemnified Party shall have the right to
retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (x) the
Indemnifying Party has agreed to the retention of such counsel at its
expense or (y) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the
Indemnified Party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more
than one separate firm qualified in such jurisdiction to act as
counsel for all such Indemnified Parties, except that, if the Company
is the Indemnifying Party, it shall be responsible for up to two such
firms, one for the Trust (and all of its affiliated Indemnified
Parties) and one for all of the underwriters as a group (and all of
their affiliated Indemnified Parties). Such firm shall be approved as
satisfactory in writing by the Trust in the case of parties
indemnified pursuant to Paragraph (i) of

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<PAGE> 40
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

Section 3.04(e) and by the Company in the case of parties indemnified
pursuant to Paragraph (ii) of Section 3.04(e). The Indemnifying Party
shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if
there be a final, nonappealable judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and
against any loss or liability by reason of such settlement or
judgment.

(iv) The indemnification of any underwriter pursuant
to Paragraphs (i) and (ii) of Section 3.04(e) shall be on such other
terms and conditions as are at the time customary and reasonably
required by underwriters in public offerings, including providing for
contribution in the event indemnification provided in this Section
3.04 is unavailable or insufficient.

ARTICLE IV

GENERAL COVENANTS

4.01. Covenants of the Trust.

(a) [Reserved]

(b) The Trust shall provide to the Company, as and when
available, the reports prepared pursuant to Section 3.02(d) of the Trust
Agreement and the budgets and projections prepared pursuant to Section 3.02(e)
of the Trust Agreement.

(c) The Trust shall provide all information to, and
otherwise fully cooperate with, the Company, to the extent necessary to permit
the Company to timely file such income tax and other returns or statements as
required to comply with applicable provisions of the Internal Revenue Code and
of any state law and the regulations promulgated thereunder and shall provide to
the Company all other information reasonably requested by the Company to enable
it to prepare and file any reports or other documents required by any
governmental agency.

(d) The Company has the right to inspect the accounts of
the Trust and to discuss the affairs, finances and accounts of the Trust with,
and to be advised as to the same by, the Trustees

17
<PAGE> 41
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

and the officers of the Trust, all at such reasonable times and intervals as
the Company may desire and at the expense of the Company.

4.02. Covenants of the Company.

(a) [Reserved]

(b) [Reserved]

(c) Maintenance of Corporate Existence. The Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect the corporate existence, rights (charter and statutory) and
franchises of the Company and its Subsidiaries; provided that the Company shall
not be required to preserve any right or franchise if its board of directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries and that the loss
thereof is not disadvantageous in any material respect to the Trust.

(d) [Reserved]

(e) To Keep Books; Reports to the Trust. The Company and
its Subsidiaries at all times will keep on a consolidated basis true and
complete books of record and account, in accordance with generally accepted
accounting principles, and will furnish to the Trust:

(i) [Reserved]

(ii) [Reserved]

(iii) [Reserved]

(iv) [Reserved]

(v) within 100 days after the end of each Fiscal
Year and within 55 days after the end of the first, second and third quarterly
periods of each Fiscal Year, a certificate of any two responsible officers (for
purposes of this Agreement, a "responsible officer" shall mean any of the chief
executive officer, the chief financial officer, the general counsel, the
Treasurer, the Controller and the Vice-President Corporate Finance of the
Company who is knowledgeable as to the matters

18
<PAGE> 42
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

subject to certification) and (x) stating, to the best of such officers'
knowledge after reasonable inquiry, that the Company has observed or performed
all its covenants and other agreements under Sections 2.03, 2.04 and 4.02, and
that the representations and warranties contained in Article V are true in all
material respects, or if in their opinion the Company has failed in any such
respect and the Company has not previously disclosed such failure in writing to
the Trust, specifying the nature and status of all such failures and (y)
stating that, to the best of such officers' knowledge after reasonable inquiry,
no Default or Event of Default exists under the Second Bond or the Other
Agreements or if in their opinion a Default or Event of Default exists,
specifying the nature and status thereof; and

(vi) [Reserved]

(vii) promptly, such other information as the Trust
may, from time to time, reasonably request.

(f) Inspection. The Trust has the right, except as to trade
secrets and similar confidential information, to visit and inspect any of the
properties of the Company and its Subsidiaries and to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with, and to be
advised as to the same by, its and their officers, all at such reasonable times
and intervals as the Trust may desire, and the Company will use its best
efforts to make such right available to the Trust with respect to any Affiliate
of the Company. All out-of-pocket expenses of the Trust incurred in connection
with the foregoing shall be borne by the Trust.

(g) [Reserved]

(h) [Reserved]

(i) [Reserved]

(j) Trust Directors. Management's nominees for any election
of the directors of the Company will include two nominees approved by the Trust
and the Company shall use its best efforts, consistent with its efforts on
behalf of its other nominees, to have such nominees elected.

(k) [Reserved]

19
<PAGE> 43
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

(l) [Reserved]

(m) [Reserved]

(n) Confidentiality. The Company shall retain in strict
confidence all information supplied to it by the Trust pursuant to Section
4.01, except to the extent that (i) the Company is compelled to disclose such
information as a result of court order, subpoena or similar legal duress or, in
the opinion of counsel to the Company, is otherwise required to disclose such
information to any governmental department, agency, authority, commission or
other body, it being understood that the Company shall consult with the Trust
upon receiving such an order or subpoena or in connection with obtaining such
an opinion as part of its good faith determination as to whether disclosure is
required, (ii) any such information is or becomes generally available to the
public other than as a result of a disclosure by the Company or its
Subsidiaries or any of their employees, representatives or agents or (iii) any
such information is obtained or developed by the employees, representatives or
agents of the Company or any of its Subsidiaries independently of, and without
reference to or use of, information supplied by the Trust pursuant to Section
4.01.

(o) [Reserved]

(p) [Reserved]

(q) Amendment of Class 6 Indenture. The Company shall not
enter into any amendments to the Class 6 Indenture or the Class 6 Interest
Indenture or any supplemental Class 6 Indentures or Class 6 Interest Indentures
if such amendment or supplemental indenture would impair any of the rights of
the Trust under this Agreement, the Second Bond or the Other Agreements.

(r) Certain Transactions Restricted. So long as the Trust
shall own more than 20% of the then issued and outstanding shares of Manville
Common Stock, the Company shall not, without the prior written consent of the
Trust:

(i) enter into any joint venture or similar arrangement,

20
<PAGE> 44
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

(ii) sell, issue or otherwise dispose of less than all of the
stock or of any other securities of any Subsidiary, or

(iii) amend the articles of incorporation or by-laws of any
Subsidiary,

if any such action, arrangement or any document relating to any of the above,
contains provisions which would (A) impair or otherwise limit the right of the
Trust or any transferee of the Trust to vote its shares of Manville Common
Stock or (B) impose any penalty on the Company or, as a stockholder of the
Company, on the Trust or any transferee of the Trust, upon a change in control
of the Company.

(s) Limitation on Liens. Until the date on which the Second
Bond is paid, prepaid or repurchased in full, at which time the provisions of
this Section 4.02(s) shall automatically cease to have any force or effect, the
Company shall not secure, and shall not permit any of its Subsidiaries to
secure, the Class 6 Interest Debentures by any mortgage, pledge, charge, lien,
security interest or other encumbrance upon any of the present or future
revenues or assets of the Company or its Subsidiaries without at the same time
equally and ratably securing the Second Bond so as to rank pari passu with the
Class 6 Interest Debentures.

(t) Adjusted Consolidated Tangible Net Worth. Until the
date on which the Second Bond is paid, prepaid or repurchased in full, the
Company's Adjusted Consolidated Tangible Net Worth (as defined below) at the
end of each quarterly fiscal period of each Fiscal Year shall not be less than
$150,000,000. "Adjusted Consolidated Tangible Net Worth" of the Company, at
the end of a quarterly fiscal period of a Fiscal Year, means total
stockholders' equity of the Company and its consolidated Subsidiaries as of
such date determined on a consolidated basis in accordance with generally
accepted accounting principles, less amounts (net of applicable deferred taxes
relating to such amounts) attributable to unamortized deferred charges,
unamortized debt discount and expense, goodwill, patents, trademarks, service
marks, trade names, copyrights, franchises, licenses and similar rights,
organization, reorganization or developmental expenses, increases in the book
value of any assets of the Company and its consolidated Subsidiaries as a
result of any revaluation of such assets (other than any such increases result-

21
<PAGE> 45
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

ing from regular periodic revaluations required under generally accepted
accounting principles) and other intangible items; it being understood that (x)
deferred net tax assets to the extent determined in accordance with generally
accepted accounting principles and included in the Company's consolidated
financial statements for such quarterly fiscal period, shall not be deducted in
determining Adjusted Consolidated Tangible Net Worth and (y) assets relating to
the Company's pension plans shall be deducted, net of applicable deferred taxes
relating to such assets, in determining Adjusted Consolidated Tangible Net
Worth.

4.03. Computation Dispute Resolution. The Company's
computations of Adjusted Consolidated Tangible Net Worth made pursuant to
Section 4.02(t) shall be deemed to be accepted by the Trust and shall be
conclusive for the purposes of this Agreement and the Second Bond unless the
Trust, within 20 Business Days after the date on which the computation in
question was delivered to the Trust and the work sheets and other documents
prepared in connection therewith made available for inspection by or delivered
to the Trust, shall have delivered a written notice to the Company stating each
and every item to which it takes exception as not being computed in accordance
herewith or as having computation errors, specifying in detail the nature and
extent of any such exception. In the event that the Trust gives written notice
within such period of any such exception to a computation made pursuant to
Section 4.02(t), then the Company and the Trust, or the Company's accountants
and the Trust's accountants, respectively, shall attempt to resolve all
differences on a mutually acceptable basis. To the extent that such
differences are not so resolved within ten Business Days after the delivery of
the written exceptions to the disputed computation, the questions giving rise
to such differences shall be submitted as soon as practicable (and, in any
event, not later than 20 Business Days thereafter) to any nationally recognized
firm of Independent certified public accountants acceptable to both the Company
and the Trust (the "Accountants") for final determination. The Company and the
Trust each shall pay one-half of any fees charged by the Accountants in
connection with any such determination. Any agreement by the Company and the
Trust or by the Company's accountants and the Trust's accountants, or any
determination by the Accountants as to the proper resolution of any item shall
be conclusive and binding upon the Company and the Trust for the purposes
hereof; and the computation of Adjusted Consolidated Tangible Net Worth
referred to in Section 4.02(t) as so reconciled shall be deemed to be the
computation made pursuant to

22
<PAGE> 46
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

Section 4.02(t) for all purposes of this Agreement, the Second Bond, the Plan
and any Schedule, Annex or Exhibit to any of the foregoing. Payments due under
this Agreement, the Second Bond and the Other Agreements shall be made on the
dates required herein and therein to the extent mandated by those portions of
the computations which are undisputed on such payment dates. Additional
payments which are mandated by the binding computations reached after dispute
resolution pursuant to this Section 4.03 shall be made promptly following such
dispute resolution, with interest on such additional payments from the required
payment date to the actual payment date at a rate of 10% per annum.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

5.01. Organization, Etc. The Company represents and warrants
that it and each of its Subsidiaries (a) is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation; and (b) has all requisite corporate power and authority,
licenses, permits and franchises to own or lease and operate its properties and
carry on its business as presently being conducted. The Company further
represents and warrants that it has all requisite corporate power and authority
to execute and deliver, and perform its obligations under, this Agreement.

5.02. Authorization. The Company represents and warrants
that (a) it has taken all necessary corporate action to authorize the execution
and delivery of, and performance of its obligations under, this Agreement and
(b) this Agreement has been duly and validly authorized, executed and delivered
by the Company and constitutes the valid and binding obligation of the Company
in accordance with its terms.

ARTICLE VI

MISCELLANEOUS

6.01. Termination. This Agreement shall terminate and the
provisions hereof be of no further force and effect as of the Termination Date;
provided that this Agreement may be terminated

23
<PAGE> 47
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

at any time, and the provisions hereof be thereupon of no further force and
effect, if the Company and the Trust so agree in writing.

6.02. Amendments; Waiver. This Agreement, other than Section
6.13, may be modified, supplemented or amended, or the provisions hereof
waived, at any time and from time to time in writing signed by each party
hereto. If either party hereto shall request an amendment of the definition of
"Fiscal Year" as it applies to such party, the other party hereto shall agree
thereto, provided that if the definition of "Fiscal Year" is so amended,
corresponding amendments shall be made to this Agreement, the Second Bond and
any other agreements between the Trust and the Company so that payments from
the Company to the Trust hereunder and under the Second Bond and such other
agreements (as so amended) shall be substantially the same as those provided
for in this Agreement, the Second Bond and such other agreements as originally
executed and delivered.

6.03. Severability. Should any provision in this Agreement
be determined to be invalid or unenforceable in any jurisdiction, such
determination shall in no way limit or affect the validity or enforceability
and operative effect of any other provisions of this Agreement or affect the
validity or enforceability of any of the provisions of this Agreement in any
other jurisdiction.

6.04. Notices. Any notices or other communications required
or permitted in connection with this Agreement shall be in writing and
delivered at the addresses designated below, or sent by telex or telecopy
pursuant to the instructions listed below, or mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows, or to
such other address or addresses as may hereafter be furnished by one party to
the other in compliance with the terms hereof.

24
<PAGE> 48
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

To the Trust: with a copy to:

Manville Personal Injury Donovan Leisure Newton &
Settlement Trust Irvine
8260 Willow Oaks Corporate Drive 30 Rockefeller Plaza
Suite 600 New York, New York 10112
P.O. Box 10415 Fax: (212) 632-3315
Fairfax, VA 22031 Attention: ANDREW J. TRUBIN
Fax: (703) 205-6249
Attention: DAVID T. AUSTERN

To the Company: with a copy to:

Manville Corporation Davis Polk & Wardwell
717 17th Street 450 Lexington Avenue
Denver, Colorado 80202 New York, New York 10017
Fax: (303) 978-4842 Fax: (212) 450-4800
Attention: RICHARD B. VON WALD Attention: STEPHEN H. CASE

and and

Kaye, Scholer, Fierman, Skadden, Arps, Slate,
Hays & Handler Meagher & Flom
425 Park Avenue 919 Third Avenue
New York, New York 10022 New York, New York 10022
Fax: (212) 836-8689 Fax: (212) 735-2001
Attention: HERBERT S. EDELMAN Attention: FRANKLIN M. GITTES

and

Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Fax: (212) 558-3588
Attention: WILLIAM E. WILLIS

in each case, with a copy to:

Fried, Frank, Harris,
Shriver & Jacobson
1 New York Plaza
New York, New York 10004
Fax: (212) 747-1526
Attention: LEON SILVERMAN

25
<PAGE> 49
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

All such notices and communications shall be effective when
delivered at the designated addresses or when the telex or telecopy
communication is received at the designated addresses and confirmed by the
recipient by return telex or telecopy in conformity with the provisions hereof.

6.05. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original, but such
counterparts shall together constitute but one and the same instrument.

6.06. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that neither the Trust nor
the Company may assign or otherwise transfer any of its rights or obligations
under this Agreement except, in the case of the Trust, as contemplated by
Section 6.02 of the Trust Agreement.

6.07. Entire Agreement; No Waiver. The entire agreement of
the parties relating to the subject matter of this Agreement, the Second Bond,
and the Other Agreements is contained herein and therein, and this Agreement,
the Second Bond, and the Other Agreements supersede any other prior oral or
written agreements concerning the subject matter hereof and thereof. No
failure or delay to exercise any right, power or privilege hereunder or
thereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
further exercise thereof or of any other right, power or privilege. The rights
and remedies herein and therein provided are cumulative and not exclusive of
rights under law or in equity.

6.08. Headings. The headings used in this Agreement are
inserted for convenience only and neither constitute a portion of this
Agreement nor in any manner affect the construction of the provisions of this
Agreement.

6.09. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.

6.10. Third Parties. This Agreement constitutes an agreement
solely between the parties hereto, and, except as

26
<PAGE> 50
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

provided in Section 3.04(e) and Section 6.13. is not intended to and shall not
confer any rights, remedies, obligations or liabilities, legal or equitable, on
any person other than the parties hereto and their respective successors or
assigns, or otherwise constitute any Person a third party beneficiary under or
by reason of this Agreement.

6.11. Survival of Representations, Warranties, Covenants and
Agreements. All representations, warranties, covenants and agreements made in
this Agreement or in certificates delivered pursuant hereto shall be deemed to
have been relied upon by the party to whom made, notwithstanding any
investigations heretofore or hereafter made by such party or on such party's
behalf. Unless clearly worded otherwise, all such representations, warranties,
covenants and agreements shall continue in full force and effect so long as
this Agreement is in effect.

6.12. [Reserved]

6.13. Agreements of the Company and the Trust with Respect to
Certain Liens. For the express benefit of the holders of the Class 6 Notes,
the indenture trustee for the Class 6 Notes, the Class 6 Interest Debentures,
the indenture trustee for the Class 6 Interest Debentures and the Designated
Debt, the Company agrees that it will not grant, and the Trust agrees that it
will not accept, receive or hold any mortgage, pledge, charge, lien, security
interest or other encumbrance securing the Designated Debt to be received by
the Trust under the Plan if any instrument governing or relating to any of the
Designated Debt, the Class 6 Notes or the Class 6 Interest Debentures (i)
prohibits the granting of the same to secure such Designated Debt or (ii)(A)
requires the same to equally and ratably secure any of the Designated Debt, the
Class 6 Notes or the Class 6 Interest Debentures and (B) such requirements for
equal and ratable securing are not complied with. The Company and the Trust
hereby acknowledge that the indenture trustee for the Class 6 Notes, the
indenture trustee for the Class 6 Interest Debentures, any holder of any Class
6 Notes, Class 6 Interest Debenture or any Designated Debt shall have standing
and power to enforce this Section 6.13.

6.14. Automatic Waivers under the PD Supplemental Agreement.
To the extent the Trust has the exclusive right under Section 6.02 of the PD
Supplemental Agreement to waive compliance by the Company and its Subsidiaries
with any of the covenants set forth in Article IV of the PD Supplemental
Agreement, the Trust hereby irrevocably waives such compliance to the extent
the

27
<PAGE> 51
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

Company's covenants thereunder are different than the Company's covenants under
Article IV hereof.

6.15. Effective Date. The amendment and restatement of the
Supplemental Agreement pursuant to this Agreement shall be effective as of the
date first above written, and from and after said date the Supplemental
Agreement shall continue in full force and effect as amended and restated
hereby.

28
<PAGE> 52
SECOND AMENDED AND RESTATED SUPPLEMENTAL AGREEMENT

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

MANVILLE CORPORATION

By: /s/
-----------------------------------
Name:
Title:

MANVILLE PERSONAL INJURY
SETTLEMENT TRUST

By: /s/
-----------------------------------
Name:
Title:

29
<PAGE> 53
GLOSSARY

EXHIBIT A TO
SECOND AMENDED AND RESTATED
SUPPLEMENTAL AGREEMENT

GLOSSARY OF DEFINED TERMS*

Adjusted Consolidated Net Earnings for any Fiscal Year means
Consolidated Net Earnings of the Company computed without giving effect to any
accretion of, or dividend payment on, the Series B Preference Stock and before
giving effect to any payments made pursuant to Section 2.03 of the Supplemental
Agreement, in each case whether or not in accordance with generally accepted
accounting principles.

Affiliate of a Person means (i) a Subsidiary of such Person, (ii) a
Person which owns, either alone or with or through one or more Affiliates,
directly or indirectly, securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such Person and (iii) a Subsidiary of any
Affiliate of such Person; provided that neither the Trust nor the PD Trust
shall be deemed an Affiliate of any of the Debtors.

Aggregate Value of the PD Trust Estate as of any date, shall be equal
to the sum, on such date, of (i) all cash then held in the PD Trust Estate,
(ii) all Cash Settlement Proceeds payable to the PD Trust with respect to all
Settlement Agreements then in effect, (iii) the amount specified in clause
(iv)(y) of the definition of Aggregate Value of the Trust Estate, (iv) the
excess of (x) the aggregate value of the PD Insurance Coverage equal to the
maximum amount of Non-Cash Settlement Proceeds available with respect thereto
(less any portion thereof already utilized) to pay Property Claims and PD Trust
Expenses as determined by a Settlement Agreement or by Final Order, or, if
there is no Settlement Agreement or Final Order with respect to such PD
Insurance Coverage, to the amount of Non-Cash Settlement Proceeds estimated by
agreement of the PD Trustees and the Chief Financial Officer of the Company to
be collectible from the insurer with respect to such PD Insurance Coverage to
pay Property Claims under such Policy in respect of Property Claims and PD
Trust Expenses, over (y) any amount, which would be payable to the Trust
pursuant to Section 2.06(e) of the PD Supplemental Agreement with respect to
such PD Insurance Coverage, as so valued, (v) the aggregate Market Value of

____________________

* Unless the context requires otherwise, all capitalized terms used within
these definitions have the meanings assigned to them elsewhere in this
Glossary.
<PAGE> 54
GLOSSARY

any securities then held by the PD Trust and (vi) the fair market value, as
determined by the PD Trustees on any reasonable basis, of all other assets then
held by the PD Trust (which assets shall not be deemed to include the Second
Bond or amounts payable under the PD Supplemental Agreement). In valuing Cash
Settlement Proceeds and Non-Cash Settlement Proceeds under Clauses (ii) and
(iv) above, no value shall be assigned to any amount that is or may be payable
by an insurance company whose rating at the time of valuation by Best's
Insurance Reports is lower that "A" for any reason, unless such payment is
secured by an irrevocable letter of credit or comparable security arrangement
acceptable to the PD Trust.

Aggregate Value of the Trust Estate as of any date shall be equal to
the sum, on such date, of (i) all cash then held in the Trust Estate, (ii) all
Cash Settlement Proceeds payable to the Trust with respect to all Settlement
Agreements then in effect, (iii) the amount specified in clause (iv)(y) of the
definition of Aggregate Value of the PD Trust Estate, (iv) the excess of (x)
the aggregate value of Insurance Coverage equal to the maximum amount of
Non-Cash Settlement Proceeds available with respect thereto (less any portion
thereof already utilized) to pay Trust Claims and Trust Expenses, as determined
by a Settlement Agreement or by Final Order, or if there is no Settlement
Agreement or Final Order with respect to such Insurance Coverage, to the amount
of Non-Cash Settlement Proceeds estimated by agreement of the Trustees and the
Chief Financial Officer of the Company to be collectible from the insurer with
respect to such Insurance Coverage to pay Trust Claims and Trust Expenses, over
(y) any amount which would be payable to the PD Trust pursuant to Section
2.06(d) of the PD Supplemental Agreement with respect to such Insurance
Coverage, as so valued, (v) the aggregate Market Value of any securities then
held by the Trust and (vi) the fair market value, as determined by the Trustees
on any reasonable basis, of all other assets then held by the Trust (which
assets shall not be deemed to include the Second Bond or amounts payable under
the Supplemental Agreement). In valuing Cash Settlement Proceeds and Non-Cash
Settlement Proceeds under Clauses (ii) and (iv) above, no value shall be
assigned to any amount that is or may be payable by an insurance company whose
rating at time of valuation by Best's Insurance Reports is lower than "A" for
any reason, unless such payment is secured by an irrevocable letter of credit
or comparable security arrangement acceptable to the Trust. The Aggregate
Value of the Trust Estate shall include the value of any assets held in escrow
pursuant to Section 3.05 of the PD Supplemental Agreement.

<PAGE> 55
GLOSSARY

AH Claims means (a) all Claims (under any theory of law, equity or
admiralty) for death, personal injuries or personal damages (whether physical,
emotional or otherwise) to the extent caused or allegedly caused, directly or
indirectly, by exposure to asbestos (alone or as contained in
asbestos-containing products) and arising or allegedly arising, directly or
indirectly, from acts or omissions prior to the Confirmation Date of one or
more of the Debtors or the Canadian Companies including, without limitation,
all Claims for compensatory damages (such as loss of consortium, wrongful
death, survivorship, proximate, consequential, general and special damages) and
punitive damages and (b) all warranty, guarantee, indemnification or
contribution liabilities or obligations of any of the Debtors or Canadian
Companies to any other Person to the extent that such warranties, guarantees,
indemnifications or contribution responsibilities cover claims against such
other Person that would, if such claims had been made directly against any of
the Debtors or Canadian Companies, constitute AH Claims under Clause (a) above.

With respect to Claims for compensatory damages only, the substantive
law applicable to the settlement or trial of AH Claims against the Claims
Resolution Facility shall be the law which would have been applicable but for
the pendency of the Cases. In determining the applicable law, it will be
assumed that the action against the Claims Resolution Facility was (1) filed or
commenced (if not actually filed or commenced against any of the Debtors) at
the same time as an action by the Beneficiary asserting a claim that would have
been an AH Claim if asserted against any of the Debtors was filed against any
other Person and (2) tried or settled at the same time as the Beneficiary's
action was tried or settled (if actually tried or settled) with substantially
all defendants thereto, so that the law applicable will be the same as the law
applicable to the action against such other defendants. If the claim is
against any of the Debtors (or the Claims Resolution Facility) alone, it will
be assumed that the action against the Claims Resolution Facility was filed or
commenced (if not actually filed or commenced against any of the Debtors) at
the earliest time when the cause of action accrued and would have been reached
for trial when a similar action in the same venue on the same calendar would
have been reached for trial. All claims actually filed or commenced against
any of the Debtors shall be deemed to have been filed or commenced on such
actual date of filing or commencement. Notwithstanding and supplementing the
foregoing, the Beneficiary shall have the benefit of any revival statute
enacted in any jurisdiction where venue is proper which has the effect of
removing or tolling the bar or extending the period of the statute of
limitations, irrespective of whether the statute is deemed substantive or
procedural.

3
<PAGE> 56
GLOSSARY

Allowed means:

A. With respect to a Claim or that portion of a Claim that is
liquidated as to amount on the Consummation Date, a Claim or such a portion of
a Claim (1) that has been timely filed with the Clerk of the Court or such
other party as the Court may direct (or may have directed) and which has not
been objected to or which is listed by the Debtors as not contingent,
unliquidated or disputed in the Schedules, in each case within such time as may
be prescribed by the Bankruptcy Rules promulgated by the Supreme Court of the
United States which became effective on August 1, 1983, as heretofore or
hereafter amended, or by a Final Order of the Court or (2) that has been
allowed by a Final Order of the Court;

B. With respect to a Claim or that portion of a Claim (other than a
Claim for contribution or indemnity which constitutes an AH Claim or Property
Claim) that is disputed, unliquidated as to amount or contingent on the
Consummation Date, a Claim or such portion of a Claim (1) that has been timely
filed with the Clerk of the Court or such other party as the Court may direct
(or may have directed) pursuant to a Final Order of the Court and (2)(a) has
been liquidated and fixed as to amount in accordance with the terms of the
Trust Agreement or the PD Trust Agreement, as the case may be, or (b) with
respect to Claims or portions of Claims other than AH Claims and Property
Claims, has been allowed by a Final Order of the Court; or

C. With respect to a Claim for contribution or indemnity which
constitutes an AH Claim or Property Claim and that is disputed, unliquidated as
to amount or contingent on the Consummation Date, a Claim which has been
allowed and the amount of which has been determined (1) if a Contribution Claim
or an Indemnity Claim, in accordance with the Co- Defendants Procedures, (2) if
a Property Claim, in accordance with the terms of the PD Trust Agreement and
(3) otherwise, by a Final Order of the Court or by a binding settlement
agreement.

Amended and Restated PD Supplemental Agreement means the agreement
dated as of November 15, 1990, among the Company, the Trust and the PD Trust,
as the same may be amended from time to time in accordance with Section 6.02
thereof.

Annual Bond Contingent Amount with respect to any Fiscal Year
commencing with Fiscal Year 2000 means (a) the aggregate dollar amount of Trust
Claims which became Liquidated during such Fiscal Year (whether or not actually
paid during such Fiscal Year) and all Trust Expenses other than Insurance
Indemnification Expenses paid

4
<PAGE> 57
GLOSSARY

by the Trust during such Fiscal Year plus (b) the Bond Carryforward, if any,
from the Prior Fiscal Year.

Annual Contingent Amount means, for each Fiscal Year commencing with
Fiscal Year 1991 (i) the aggregate amount of Trust Claims which became
Liquidated during such Fiscal Year (whether or not actually paid during such
Fiscal Year) and all Trust Expenses, other than Insurance Indemnification
Expenses, paid by the Trust during such Fiscal Year plus (ii) the Carryforward,
if any, from the prior Fiscal Year minus (iii) (x) the amount, if any, required
to be paid in such Fiscal Year under the Second Bond and (y) with respect to
Fiscal Year 1991 through Fiscal Year 2014 the Aggregate Value of the Trust
Estate as of the end of such Fiscal Year, divided by the number of Fiscal
Years, if any, remaining from the beginning of such Fiscal Year until the end
of Fiscal Year 2014 (e.g., 24 with respect to Fiscal Year 1991; one with
respect to the Fiscal Year 2014).

Annual PD Bond Contingent Amount with respect to any Fiscal Year
commencing with the later of 2000 or the Fiscal Year immediately prior to the
First PD Fiscal Year means (a) the aggregate dollar amount of Property Claims
which became Liquidated during such Fiscal Year (whether or not actually paid
during such Fiscal Year) and all PD Trust Expenses paid by the PD Trust during
such Fiscal Year plus (b) the PD Bond Carryforward, if any, from the prior
Fiscal Year.

Annual PD Contingent Amount means, for each Fiscal Year commencing
with Fiscal Year 1991, (i) the aggregate amount of Property Claims which became
Liquidated during such Fiscal Year (whether or not actually paid during such
Fiscal Year) and all PD Trust Expenses paid by the PD Trust during such Fiscal
Year (less the amount of any payments to the PD Trust pursuant to Section 2.07
of the PD Supplemental Agreement) plus (ii) the PD Carryforward, if any, from
the prior Fiscal Year minus (iii) (x) the amount, if any, required to be paid
to the PD Trust in such Fiscal Year under the Second Bond and (y) with respect
to Fiscal Year 1991 through Fiscal Year 2014, the Aggregate Value of the PD
Trust Estate as of the end of such Fiscal Year, divided by the number of Fiscal
Years, if any, remaining from the beginning of such Fiscal Year until the end
of Fiscal Year 2014 (e.g., 24 with respect to Fiscal Year 1991; one with
respect to the Fiscal Year 2014).

Asbestos Committee means the "Official Committee of Asbestos-Health
Related Litigants and/or Creditors" appointed in the Cases by the Acting United
States Trustee for the Southern District of New York pursuant to an Order of
the Court dated October 8, 1982, as amended.

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GLOSSARY

Basic PD Trust Fund has the meaning assigned to it in Section 4.01 of
the PD Trust Agreement.

Basic Trust Fund has the meaning assigned to it in Section 4.01 of the
Trust Agreement.

Beneficiary means any Person holding a Trust Claim.

Bond Carryforward from any Fiscal Year commencing with Fiscal Year
2000 means the excess, if any, of the Annual Bond Contingent Amount for such
Fiscal Year (including the component thereof representing the Bond Carryforward
from the prior Fiscal Year) over the aggregate amount actually paid by the
Company in such Fiscal Year pursuant to Subsection 2.03(a) of the Supplemental
Agreement as in effect prior to ___________, 199__, and the Second Bond, as the
case may be.

Bonds Repurchase Agreement means the Bonds Repurchase Agreement dated
September 22, 1994 between the Company and the Trust, as amended from time to
time in accordance with the terms thereof.

Business Day means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.

Bylaws means the Bylaws of the Trust, substantially in the form of
Annex A to the Trust Agreement, as they may be amended from time to time.

Canadian Companies means Johns-Manville Canada, Inc. and
Johns-Manville Amiante Canada, Inc.

Carryforward from any Fiscal Year commencing with Fiscal Year 1991
means the excess, if any, of the Annual Contingent Amount for such Fiscal Year
(including the component thereof representing the Carryforward from the prior
Fiscal Year) over the amount actually paid by the Company with respect to such
Fiscal Year pursuant to Subsection 2.03(a) of the Supplemental Agreement as in
effect prior to ____________, 199__.

Cases means the reorganization cases under Chapter 11 of the Code of
the Debtors, collectively, jointly administered pursuant to order of the Court
dated August 26, 1982 and presently captioned "In re Johns-Manville
Corporation, et al., Debtors" (Case Nos. 82 B 11656 through 82 B 11658,
inclusive, 82 B 11660 through 82 B 11662, inclusive, and 82 B 11665 through
11676, inclusive).

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<PAGE> 59
GLOSSARY

Cash Settlement Proceeds means any and all amounts payable by the
Settling Insurance Company under any Settlement Agreement, other than amounts
payable pursuant to coverage in place provisions contained in such Settlement
Agreement, i.e. on the claims as made or expenses as incurred basis, and
includes cash, cash proceeds pursuant to a letter of credit or other security
device or other cash equivalent.

Charter means the Company's Restated Certificate of Incorporation as
the same may be amended from time to time in accordance with the provisions
thereof and the General Corporation Law of the State of Delaware.

Claim means a claim against one or more of the Debtors within the
meaning of Section 101(4) of the Code that arose prior to the Confirmation
Date, excluding current commercial payables incurred in the ordinary course of
business existing on the Confirmation Date.

Claims Resolution Facility means the Claims Resolution Facility set
forth in Annex B to the Trust Agreement.

Class Action Lawsuit means an action to be commenced in United States
District Court, on behalf of all present and future beneficiaries of the Trust,
against each of the Trustees of the Trust, in their capacity as Trustees,
seeking an equitable distribution of the assets of the Trust among all the
beneficiaries of the Trust and seeking entry of an order determining that the
present and anticipated liabilities of the Trust to its beneficiaries exceed
the present and expected future assets of the Trust, and declaring the
beneficiaries' rights and priorities with respect to those assets, and in which
certification as a class action on behalf of all beneficiaries of the Trust
(who shall be deemed members of the class with no right to opt out of the
class) will be sought pursuant to Rule 23(b)(1)(B) of the Federal Rules of
Civil Procedure and in respect of which, the Limited Fund Proceeding, the Trust
is seeking a determination, inter alia, as to whether the Trust constitutes a
limited fund for purposes of Rule 23(b)(1)(B) of the Federal Rules of Civil
Procedure.

Class 6 Indenture means the indenture dated as of the Consummation
Date between Manville and the trustee thereunder, substantially in the form of
Exhibit E to the Plan (subject to reasonable modifications requested by the
trustee thereunder that do not adversely affect any other party thereto, the
holders of the Class 6 Notes, the Trust or the PD Trust), as it may be modified
or amended from time to time.

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GLOSSARY

Class 6 Interest Debentures means the debentures evidencing
indebtedness of the Debtors to the holders of Class 6 Claims issued from time
to time on or after the Consummation Date in accordance with the Provisions of
Subparagraph 3.6.B of the Plan, which are more fully described in the Class 6
Interest Indenture.

Class 6 Interest Indenture means the indenture dated as of the
Consummation Date between Manville and the trustee thereunder, substantially in
the form of Exhibit G to the Plan (subject to reasonable modifications
requested by the trustee thereunder that do not adversely affect any other
party thereto, the holders of the Class 6 Interest Debentures, the Trust or
the PD Trust), as it may be modified or amended from time to time.

Class 6 Notes means the notes evidencing indebtedness of the Debtors
to the holders of Class 6 Claims issued from time to time on or after the
Consummation Date in accordance with the provisions of Paragraph 3.6.B of the
Plan, which are more fully described in the Class 6 Indenture.

Code means the Bankruptcy Code, 11 U.S.C. Sections 101 et seq., as in
effect on the Filing Date, as it has been or may be amended from time to time
to the extent such amendments are applicable to the Cases.

Co-Defendant means the holder of an Indemnify Claim or a Contribution
Claim.

Co-Defendants' Committee means the "Official Committee of Asbestos
Litigation Co-Defendants" appointed in the Cases by the Acting United States
Trustee for the Southern District of New York pursuant to an order of the Court
dated March 19, 1984, as amended.

Co-Defendants' Procedures means the procedures set forth in Annex F to
the Trust Agreement, as the same may be amended from time to time.

Commission means the Securities and Exchange Commission.

Company means Manville Corporation, a Delaware corporation.

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<PAGE> 61
GLOSSARY

Comparable Industries Index for any Fiscal Year means the sum,
determined as of April 15 of the following Fiscal Year, of (a) the average
Return on Equity for the most recently completed fiscal year for which audited
financial statements are publicly available of the five largest companies
(based on net sales) included in Standard & Poor's Index of Building Materials
Companies multiplied by a fraction, the numerator of which is the net sales of
the Company and its Subsidiaries or such Fiscal Year attributable to its
building materials businesses and the denominator of which is the aggregate net
sales of the Company and its Subsidiaries for such Fiscal Year attributable to
its building materials businesses and its forest products businesses and (b)
the average Return on Equity for the most recently completed fiscal year for
which audited financial statements are publicly available of the five largest
companies (based on net sales) included in Standard & Poor's Index of Forest
Products Companies multiplied by a fraction the numerator of which is the net
sales of the Company for such Fiscal Year attributable to its forest products
businesses and the denominator of which is the aggregate net sales of the
Company and its Subsidiaries for such Fiscal Year attributable to its forest
products businesses and its building materials businesses.

Confirmation Date means the date on which the Confirmation Order
becomes a Final Order, unless, under mandatory provisions of law and as
determined by a Final Order of the Court, the Confirmation Date is required to
be the date of issuance of the Confirmation Order, in which case Confirmation
Date means such date of issuance.

Confirmation Order means the order or orders of the Court confirming
the Plan.

Consolidated Net Earnings for any Fiscal Year means the Company's
consolidated net earnings (on an after tax basis) for such Fiscal Year as shown
on the audited consolidated statement of operations of the Company included in
the Form 10-K with respect to such Fiscal Year filed by the Company with the
Commission (or, if the Company is not required to file a Form 10-K with respect
to such Fiscal Year with the Commission, then as shown on the consolidated
statement of operations of the Company for such Fiscal Year prepared in
accordance with generally accepted accounting principles and examined in
accordance with generally accepted auditing standards by the Company's
independent auditors, which auditors shall be approved by the Trust and the PD
Trust (whose approval shall not be unreasonably withheld), so long as each of
them is in existence).

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GLOSSARY

Consolidated Net Worth of the Company, as of any date, means the total
stockholders' equity of the Company as of such date determined on a
consolidated basis in accordance with generally accepted accounting principles,
less any items of the following types that are included in the assets of the
Company and its consolidated Subsidiaries: (a) goodwill, (b) unamortized
organization or reorganization expense, (c) unamortized debt discount and
expense, (d) patents, trademarks, trade names, copyrights, franchises and
similar rights, and (e) increases in the book value of any assets of the
Company and its consolidated Subsidiaries above the book value thereof as of
the Consummation Date as a result of any revaluation of such assets (other than
any such increases resulting from regular periodic revaluations required under
generally accepted accounting principles).

Consummation Date means November 28, 1988.

Consummation Date Value means:

(a) with respect to the Cash Settlement Proceeds payable
under the Travelers Agreement, the stated amount thereof exclusive of
any interest or other income payable thereon;

(b) with respect to any other Cash Settlement Proceeds
payable, and Non-Cash Settlement Proceeds received other than pursuant
to a Settlement Agreement, on or before the date six months after the
Consummation Date, the stated amount thereof inclusive of any interest
or other income payable thereon under the terms of the applicable
Settlement Agreement up to the Consummation Date;

(c) with respect to any Cash Settlement Proceeds payable, and
Non-Cash Settlement Proceeds received other than pursuant to a
Settlement Agreement, more than six months following the Consummation
Date, the present value calculated by discounting the stated amount
thereof from the scheduled payment date (or date of receipt in the
case of such Non-Cash Settlement Proceeds) to the date six months
after the Consummation Date using an interest rate of 8.2% per annum;
and

(d) with respect to any amount payable pursuant to coverage
in place provisions contained in a Settlement Agreement, the present
value calculated by discounting the stated amount thereof from the
date 18 months after the Consummation Date to the Consummation Date
using an interest rate of 8.2% per annum;

10
<PAGE> 63
GLOSSARY

provided, however, that no Consummation Date Value shall be assigned to any
Cash Settlement Proceeds or amount payable pursuant to coverage in place
provisions which is payable by a Settling Insurance Company whose rating by
Best's Insurance Reports shall be lower than "A" for any reason, unless such
payment is secured by an irrevocable letter of credit or comparable security
arrangement acceptable to the trust and the PD Trust, provided further that,
notwithstanding the foregoing, the Consummation Date Value ascribed to the
Midland Coverage at any date shall be equal to the amount, if any, of Insurance
Proceeds and/or PD Insurance Proceeds paid under the Midland Coverage on or
before such date discounted in the same manner as provided in (c) if paid more
than six months following the Consummation Date, unless the Company, the
Asbestos Committee, certain representatives of the PD Beneficiaries and the
Legal Representative agree on another Consummation Date Value to be ascribed
thereto solely for the purpose of meeting the condition set forth in Paragraph
9.2.D of the Plan and provided further that if the condition set forth in
Paragraph 9.2.D of the Plan will not otherwise be met, the Company may elect to
pay an amount in cash equal to the shortfall to the Trust on the Consummation
Date, the amount of which payment will be deemed to be Consummation Date Value
for the purpose of meeting such condition.

Contribution Claim means an AH Claim or Other Asbestos Obligation for
contribution, as that term is defined by the non-bankruptcy law of the relevant
jurisdiction, that is (i) held by (A) any Person (other than a past or present
officer, director or employee of any of the Debtors) who has been, is or may be
a defendant in an action seeking damages for asbestos-related personal injury,
or (B) any assignee or transferee of such Person and (ii) is asserted against
any of the Debtors or the Trust for reimbursement of a portion of any damages
such Person has paid or may pay to the plaintiff in such action.

Court means the United States Bankruptcy Court for the Southern
District of New York (or such other court as may be administering the Cases)
and, with respect to any particular proceeding within a Case, any other court
which may be exercising jurisdiction over such proceeding.

Debt means (a) all indebtedness for the repayment of money borrowed,
whether or not represented by bonds, debentures, notes or other securities, (b)
all other indebtedness represented by bonds, debentures, notes or other
securities (including the Schuller Notes transferred to the Trust in payment of
certain bond obligations (whether or not still held by the Trust) and the
Second Bond), (c) all deferred indebtedness for the payment of the purchase
price of property or assets purchased, (d) all Guarantees, endorsements,

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<PAGE> 64
GLOSSARY

assumptions and other contingent obligations in respect of, or to purchase or
otherwise to acquire, indebtedness of another Person (other than Guarantees of
the Company's or any of its Subsidiaries' indebtedness to a third party), (e)
all indebtedness secured by an encumbrance existing on property owned by the
Person whose indebtedness is being determined, whether or not the indebtedness
secured thereby shall have been assumed by such Person and (f) all obligations
under capital leases required to be recorded on the Company's consolidated
financial statements in accordance with generally accepted accounting
principles.

Debtors means the following corporations, each of which filed a
petition for reorganization under Chapter 11 of the Code with the Court on the
Filing Date and includes such corporations as reorganized after Consummation as
well as prior thereto:

Johns-Manville Corporation
Manville Corporation
Manville International Corporation
Manville Export Corporation
Johns-Manville International Corporation
Manville Sales Corporation (f/k/a Johns-Manville Sales
Corporation, successor by merger to Manville Building
Materials Corporation, Manville Products Corporation
and Manville Service Corporation)
Manville International Canada, Inc.
Manville Canada, Inc.
Manville Investment Corporation
Manville Properties Corporation
Allan-Deane Corporation
Ken-Caryl Ranch Corporation
Johns-Manville Idaho, Inc.
Manville Canada Service, Inc.
Sunbelt Contractors Inc.

Default, as used with respect to the Second Bond, means the occurrence
and continuance of an Event of Default or an event that, after notice or lapse
of time or both, would become an Event of Default.

Deferred Amount, during 2014, shall mean the excess, if any, of
$75,000,000 over the aggregate amount paid to the Trust and the PD Trust during
2013 pursuant to Section 2.1 of the Second Bond.

Designated Debt means the Second Bond.

12
<PAGE> 65
GLOSSARY

Disputed Class 6 Claim means a Class 6 Claim or any portion thereof
which, as of the Consummation Date or any date subsequent thereto, is not
Allowed.

Distribution Record Date means the tenth Business Day preceding the
Consummation Date.

Encumbrance means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset.

Equity Committee means the "Official Committee of Equity Security
Holders" appointed in the Cases by the Acting United States Trustee for the
Southern District of New York pursuant to an order of the Court dated February
14, 1983, as amended, which was disbanded pursuant to an order of the Court
dated July 31, 1986.

Equity Subsidiary means any Subsidiary of Manville or any other entity
for which Manville is entitled to account under principles of equity accounting
and with respect to which Manville has previously delivered to the Trust and
the PD Trust a certificate of Manville's chief financial officer stating that
Manville is entitled to use such accounting treatment.

Event of Default, as used with respect to the Second Bond, has the
meaning assigned to it in Section 3.1 of the Second Bond.

Exchange Act means the Securities Exchange Act of 1934, as amended.

Filing Date means August 26, 1982, the date on which each of the
Debtors filed a petition under Chapter 11 of the Code.

Final Order means (a) a judgment, order or other decree issued and
entered by the Court or by any state or other federal court or other tribunal
located in one of the states, territories or possessions of the United States
or the District of Columbia, which judgment, order or decree (x) has not been
reversed or stayed and as to which the time to appeal has expired and as to
which no appeal or petition for review, rehearing or certiorari is pending or
(y) with respect to which any appeal has been finally decided and no further
appeal or petition for certiorari can be taken or granted; or (b) stipulation
or other agreement entered into which has the effect of any such judgment,
order or other decree.

First Amended and Restated Supplemental Agreement means the Manville
Personal Injury Settlement Trust Amended and Restated

13
<PAGE> 66
GLOSSARY

Supplemental Agreement dated as of November 15, 1990 between the Trust and the
Company.

First Amendment to the Trust Agreement means the amendment to the
Trust Agreement dated as of February 14, 1989, between the Company, as
successor to the Trustors, and the Trustees.

Fiscal Year means the fiscal year of the Trust or the PD Trust or the
Company, as the case may be, which shall in each case be the calendar year.

Government Proceeds for any Fiscal Year means the net proceeds, if
any, received in such Fiscal Year by the Company or any of its Subsidiaries (or
that the Company or any such Subsidiary would have received but for any
assignment or other transfer of the proceeds thereof to another Person or any
set-off by the United States in respect of claims by the United States against
the Company or any such Subsidiary) with respect to claims made by the Company
or any of its Subsidiaries against the United States relating to claims
against, or debts, obligations or liabilities of, any of the Debtors (a) for
death, personal injuries or personal damages caused or allegedly caused,
directly or indirectly, by exposure to asbestos (alone or as contained in
asbestos-containing products) and arising or allegedly arising, directly or
indirectly, from acts or omissions prior to the Confirmation Date of one or
more of the Debtors or (b) for other damages arising or allegedly arising from
the presence in buildings or other structures of asbestos (alone or as
contained in asbestos-containing products), which was sold, supplied or
produced, or allegedly sold, supplied or produced, by one or more of the
Debtors prior to the Confirmation Date, or for which one or more of the Debtors
is otherwise liable or allegedly liable due to the acts or omissions of one or
more of the Debtors prior to the Confirmation Date.

Governmental Unit means any government or political subdivision or any
agency or instrumentality thereof.

Guarantee means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt of any other Person or in any
manner providing for the payment of any Debt of any other Person or otherwise
protecting the holder of such Debt against loss (by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, or to take or pay otherwise), provided that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary course
of business. The word Guarantee when used as a verb shall have a correlative
meaning.

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<PAGE> 67
GLOSSARY

Indemnification Liabilities means (a) all liabilities of the "JM
Responsible Entity" to the "Settling Insurer" as defined in and pursuant to the
Travelers Agreement and (b) the obligation to indemnify any person who is or
was a party to any pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including, without
limitation, any action, suit or proceeding by or in the right of the Trust, any
of the Debtors, any of the Debtors' Subsidiaries or any of the Canadian
Companies) by reason of the fact that he is or was a director, officer,
employee or agent of any of the Debtors, any of the Debtors' Subsidiaries or
any of the Canadian Companies against all expenses (including attorneys' fees
and expenses), judgment, fines and amounts paid with the Trust's consent to the
fullest extent and in the manner that a corporation organized under Delaware
law is from time to time permitted to indemnify its directors, officers,
employees and agents if the Claim against such person in such action, suit or
proceeding would, if such Claim had been made and timely filed against the
Debtors or the Canadian Companies, have constituted an AH Claim or an Other
Asbestos Obligation under clause (a) of the definition of either of such terms.

Indemnity Claim means an AH Claim or Other Asbestos Obligation,
whether based in contract or tort, that is (i) held by (A) any Person (other
than a past or present officer, director or employee of any of the Debtors) who
has been, is or may be a defendant in an action seeking damages for
asbestos-related personal injury, or (B) any assignee or transferee of such
Person and (ii) is asserted against any of the Debtors or the Trust for
indemnification of all damages and costs such Person has or may suffer as a
result of such action. Indemnity Claim shall not include any Claim for
Transferee Indemnification Liability.

Independent means, when used with respect to any specified Person, a
Person who (a) is in fact independent, (b) does not have any direct financial
interest or any material indirect financial interest in the Trust, the PD
Trust, the Company or any Affiliate of the Company, and (c) is not connected
with the Company, any Affiliate of the Company, the Trust or the PD Trust as an
officer, employee, promoter, underwriter or person performing similar
functions.

Industry-Wide Claims Handling Facility means an industry-wide
arrangement among subscribing insurers and subscribing past or current
producers and manufacturers of asbestos or asbestos-containing products
established for the purposes of resolving and discontinuing disputes concerning
insurance coverage for asbestos-related personal injury claims and establishing
a method for the

15
<PAGE> 68
GLOSSARY

liquidation and resolution of asbestos-related personal injury claims and the
insurance arrangements pertaining thereto. By way of example an arrangement
implementing the "Agreement Concerning Asbestos-Related Claims" dated May, 1985
known as the "Wellington Agreement" would constitute an Industry-Wide Claims
Handling Facility.

Insurance Carryforward from any Fiscal Year means the difference
between the Insurance Indemnification Amount for such Fiscal Year (including
the component thereof representing the Insurance Carryforward from the prior
Fiscal Year) and the amount actually paid by the Company with respect to such
Fiscal Year pursuant to Subsection 2.03(b) of the Supplemental Agreement.

Insurance Coverage means the insurance coverage, not reduced to Cash
Settlement Proceeds, available in respect of Trust Claims and/or Trust Expenses
(i) pursuant to any Settlement Agreement or (ii) under any Policy.

Insurance Indemnification Amount means for any Fiscal Year, (i) the
aggregate amount of all Insurance Indemnification Expenses paid by the Trust
during such Fiscal Year plus (ii) the Insurance Carryforward from the prior
Fiscal Year.

Insurance Indemnification Expenses means those amounts paid by the
Trust in respect of liabilities of the "JM Responsible Entity" to the "Settling
Insurer" as defined in and pursuant to the Travelers Agreement.

Insurance Proceeds means (i) all Cash Settlement Proceeds paid or
payable to the Trust pursuant to Settlement Agreements and (ii) all Non-Cash
Settlement Proceeds of Insurance Coverage. Insurance Proceeds shall be deemed
received by the Trust when actually received by the Trust or when paid to
another Person in respect of a Liquidated Trust Claim or Trust Expense.

Interest means the rights of the owners and holders of issued and
outstanding shares of Old Preferred Stock or Old Common Stock.

Internal Revenue Code means the Internal Revenue Code of 1986, as it
may be amended from time to time, and the regulations promulgated from time to
time thereunder.

Legal Representative means the "Legal Representative for Future
Asbestos Health Claimants" or his successor appointed pursuant to an order of
the Court dated August 14, 1984.

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<PAGE> 69
GLOSSARY

Limited Fund Proceeding means the proceeding commenced by the Trust
captioned In re Joint Eastern and Southern District Asbestos Litigation, Index
No. 4000 (E.D.N.Y. and S.D.N.Y.), and In re Johns-Manville Corporation, et al.,
Case Nos. 82B-11656 through 82B-11676 (BRL) (Bankr. S.D.N.Y.), seeking a
determination, inter alia, as to whether the Trust constitutes a limited fund
for purposes of Rule 23(b)(1)(B)of the Federal Rules of Civil Procedure.

Liquidated AH Claims means those AH Claims which, prior to the Filing
Date, were settled as to validity and amount (a) by one or more of the Trustors
in writing (by stipulation, settlement agreement or otherwise) or (b) by the
order of any court having jurisdiction with respect thereto to the extent such
order was a Final Order on the Filing Date or became a Final Order at any time
following the Filing Date, whether or not prior to the Consummation Date (to
the extent any such order is subsequently reversed by any appellate court or is
vacated by the court issuing it, the related AH Claim shall not be a Liquidated
AH Claim).

Liquidation occurs (i) with respect to any Property Claim or Trust
Claim which, as of the Consummation Date, the validity and amount thereof have
been acknowledged by one or more of the Trustors in writing (by stipulation or
settlement agreement approved by Final Order of the Court or by inclusion
thereof on schedules filed with the Court pursuant to Bankruptcy Rule 1007(b)),
on the date of such acknowledgment, (ii) with respect to any other Property
Claim or Trust Claim (other than as set forth in (iii) or (iv)), on the date on
which the validity and amount thereof is finally determined pursuant to the PD
Claims Resolution Facility or the Claims Resolution Facility, respectively,
(iii) with respect to a Claim for contribution which constitutes an AH Claim
(other than as set forth in (i) or (iv)), on the date on which the amount of
such Claim has been determined by a Final Order of the Court, (iv) with respect
to a Contribution Claim or an Indemnity Claim, on the date on which the
liability of the Co-Defendant to the plaintiff on the underlying
asbestos-related personal injury claim from which such Claim arises is finally
determined and (v) with respect to a Claim for contribution which constitutes a
Property Claim (other than as set forth in (i)), on the date on which the
amount of such Claim has been determined pursuant to the PD Trust Agreement.
For purposes of this definition, a Co-Defendant's liability to a plaintiff in
an underlying asbestos-related personal injury action is finally determined on
the date payment is made by the Co-Defendant pursuant to (a) an order of
judgment of a court of competent jurisdiction fixing the amount of damages to
be paid by such Co-Defendant to such plaintiff or (b) an acknowledgment in
writing (whether by stipulation,

17
<PAGE> 70
GLOSSARY

settlement agreement or otherwise) by such Co-Defendant and such plaintiff of
the amount of damages to be paid by such Co-Defendant to such plaintiff in
settlement of such action. The words Liquidate and Liquidated shall have
correlative meanings, except when used in the term Liquidated AH Claims.

Manville Common Stock means the Common Stock, $.01 par value per
share, of the Company issued under the Charter and outstanding from time to
time on or after the Consummation Date.

Market Value of any security on any date means the average of the
daily closing prices for the 20 consecutive Business Days ending on the
Business Day before the date in question. The closing price for each day shall
be the last reported sales price on the composite tape or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on the principal national securities exchange
on which such security is listed or admitted to trading or, if such security is
not then listed or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices on the National Association of
Securities Dealers Automated Quotation System or, if such security is not then
so quoted, the market value of such security as determined by a nationally
recognized investment banking firm selected by the Trust or the PD Trust, as
the case may be, and reasonably acceptable to the Company.

Midland Coverage means the Insurance Coverage and/or PD Insurance
Coverage to be provided by Midland Insurance Company under the terms of the
Settlement Agreement dated January 29, 1985 with Insurance Company of North
America, Midland Insurance Company, and Allstate Insurance Company.

Modification has the meaning assigned to it in Section 6.03 of the PD
Trust Agreement.

Non-Cash Settlement Proceeds means any amounts payable under any
Settlement Agreement pursuant to coverage in place provisions contained in such
Settlement Agreement with respect to Trust Claims, Trust Expenses, Property
Claims or PD Trust Expenses, i.e. on a claims as made or expenses incurred
basis, and any other proceeds of Insurance Coverage or PD Insurance Coverage,
as the case may be, payable other than pursuant to a Settlement Agreement
(e.g., pursuant to the Policy itself or pursuant to a court order or decree in
respect of the Policy).

18
<PAGE> 71
GLOSSARY

Official Committees means the Asbestos Committee, the Unsecured
Creditors' Committee and the Co-Defendants Committee, collectively.

Other Agreements means the Supplemental Agreement, the Bonds
Repurchase Agreement and the Trust Agreement.

Other Asbestos Obligations means (a) all debts, obligations or
liabilities (under any theory of law, equity or admiralty), other than AH
Claims, for death, personal injuries or personal damages (whether physical,
emotional or otherwise) to the extent caused or allegedly caused, directly or
indirectly, by exposure to asbestos (alone or as contained in
asbestos-containing products) and arising or allegedly arising, directly or
indirectly, from acts or omissions prior to the Confirmation Date of one or
more of the Debtors including, without limitation, all obligations or
liabilities for compensatory damages (such as loss of consortium, wrongful
death, survivorship, proximate, consequen- tial, general and special damages)
and punitive damages and (b) all warranty, guarantee, indemnification or
contribution liabilities or obligations, if any, of any of the Debtors to any
other Person to the extent that such warranties, guarantees, indemnifications
or contribution responsibilities cover claims against such other Person that
would, if such claims had been made directly against any of the Debtors,
constitute Other Asbestos Obligations under Clause (a) above.

Outstanding Amount of any Debt at any time means the principal amount
outstanding of such Debt at such time, unless such Debt was issued at a
discount, in which case the Outstanding Amount of such Debt means the original
issue price of such Debt plus the accretion to such time of the original issue
discount and less all payments of principal on the Debt to such time, or unless
such Debt is represented by any debt instrument issued at a discount under the
Plan, the Supplemental Agreement or the PD Supplemental Agreement in which case
the Outstanding Amount of such Debt means the carrying amount of the Debt at
issuance (the difference between the principal amount and the original issue
discount reflected on the audited financial statements of the Company) plus the
accretion to such time of the original issue discount and less all payments of
principal on the Debt to such time.

Payment Date means August 31 and November 30 in each year.

PD Beneficiary means any Person holding a Property Claim.

PD Bond Carryforward from any Fiscal Year commencing with 2000 means
the excess, if any, of the Annual PD Bond Contingent Amount for such Fiscal
Year (including the component thereof representing

19
<PAGE> 72
GLOSSARY

the PD Bond Carryforward from the prior Fiscal Year) over the aggregate amount
actually paid by the Company with respect to such Fiscal Year pursuant to
Sections 2.02 and 2.07 of the PD Supplemental Agreement or Section 2 of the
Second Bond.

PD Bylaws means the Bylaws of the PD Trust, substantially in the form
of Annex A to the PD Trust Agreement, as the same may be amended from time to
time.

PD Carryforward from any Fiscal Year commencing with Fiscal Year 1991
means the excess, if any, of the Annual PD Contingent Amount for such Fiscal
Year (including the component thereof representing the PD Carryforward from the
prior Fiscal Year) over the amount actually paid by the Company with respect to
such Fiscal Year pursuant to Section 2.02 of the PD Supplemental Agreement.

PD Claims Resolution Facility means the PD Claims Resolution Facility
set forth in Annex B to the PD Trust Agreement; it being understood that the PD
Trustees, by a majority vote after consultation with the Company,
representative counsel for the PD Beneficiaries selected by the PD Trustees and
any other interested parties whom the PD Trustees desire to consult, may amend,
delete or add to any of the procedural provisions with respect to the operation
of the PD Claims Resolution Facility except for Modifications, provided that no
such amendment, deletion or addition may affect any of the substantive
provisions set forth in such Annex B, including, without limitation, the
provisions relating to the standards and methods of asbestos hazard abatement
and the percentage of abatement costs to be borne by the PD Trust, and PD
Claims Resolution Facility shall thereafter mean the PD Claims Resolution
Facility as so amended deleted from or added to.

PD Deferred Amount at any time means the Deferred Amount at the
Termination Date, if earlier than the maturity of the Second Bond provided
that, if the Trust terminates on or prior to December 31, 2013, the PD Deferred
Amount during 2014 shall mean the excess, if any, of $75,000,000 over the
amount paid to the Trust and the PD Trust during 2013 pursuant to Section 2.1
of the Second Bond.

PD Insurance Coverage means insurance coverage, not reduced to Cash
Settlement Proceeds, available in respect of Property Claims and/or PD Trust
Expenses (i) pursuant to any Settlement Agreement or (ii) under any Policy.

PD Insurance Proceeds means (i) all Cash Settlement Proceeds paid or
payable to the PD Trust pursuant to Settlement Agreements and (ii) all Non-Cash
Settlement Proceeds of PD Insurance Coverage. PD Insurance Proceeds shall be
deemed received by the PD Trust when

20
<PAGE> 73
GLOSSARY

actually received by the PD Trust or when paid to another Person in respect of
a Liquidated Property Claim or a PD Trust Expense.

PD Stock Proceeds Fund has the meaning assigned to it in Section 4.01
of the PD Trust Agreement.

PD Supplemental Agreement means the agreement dated as at the
Consummation Date between the Company, the PD Trust and the Trust substantially
in the form of Annex C to the PD Trust Agreement, as the same may be amended
from time to time in accordance with Section 6.02 thereof.

PD Termination Date has the meaning assigned to it in Section 6.02 of
the PD Trust Agreement.

PD Transfer Amount and PD Transfer Distribution have the meanings
assigned to them in Subsection 4.02(n) of the PD Supplemental Agreement.

PD Trust means the Manville Property Damage Settlement Trust
established pursuant to Article II of the PD Trust Agreement.

PD Trust Agreement means the trust agreement between the Debtors and
the PD Trustees dated as at the Consummation Date substantially in the form of
Exhibit D to the Plan, as it may be amended or modified from time to time in
accordance with Section 6.03 thereof.

PD Trust Assets means the assets of the PD Trust as more fully
described in Article II of the PD Trust Agreement.

PD Trust Estate at any time means all assets of the PD Trust at such
time.

PD Trust Expenses means all expenses of the PD Trust determined on a
cash basis (including, without limitation, compensation, legal, accounting and
other professional fees, expenses relating to the operation of the PD Claims
Resolution Facility, disbursements and related expenses, corporate overhead and
reimbursement and indemnification payments) other than payments in respect of
Property Claims.

PD Trustees means the Persons approved by the Court to act as trustees
under the PD Trust Agreement and their successors pursuant to Article V
thereof.

21
<PAGE> 74
GLOSSARY

Person, except when used in the Plan, means any individual,
corporation, partnership, joint venture, association, trust, unincorporated
organization or government or any agency or political subdivision thereof.

Plan means the Debtors' "Second Amended and Restated Plan of
Reorganization," as it may be amended or modified from time to time, which
shall be deemed to amend, modify and supersede in all respects the Debtors'
"Joint Plan of Reorganization" dated October 17, 1983 and filed with the Clerk
of the Court on November 21, 1983 and the Debtors' "First Amended and Restated
Plan of Reorganization" dated February 14, 1986 and filed with the Clerk of the
Court on February 14, 1986.

Policy means any insurance policy covering any of the Debtors or any
predecessor thereto in effect at or prior to the Consummation Date under which
any claim may be made in respect of any AH Claim, Other Asbestos Obligation or
Property Claim, including, without limitation, any insurance policy listed in
Schedule II to the Plan and any other insurance policy which is at the
Consummation Date the subject of a Settlement Agreement listed on Schedule III
to the Plan if such Settlement Agreement subsequently terminates.

Postpetition Interest Rate means with respect to an Allowed Class 6
Claim and at any time (i) the pre-default contractual interest rate applicable
at the Filing Date as provided for under the instrument or agreement giving
rise to such Allowed Class 6 Claim, or (ii) in the absence of any such
contractual interest rate, the rate of 9% per annum.

Postpetition Interest Ratio means with respect to an Allowed Class 6
Claim the ratio obtained by dividing (i) the amount of interest on the amount
of such Allowed Class 6 Claim from the Filing Date to the Consummation Date, by
(ii) the aggregate amount of interest from the Filing Date to the Consummation
Date on all Allowed Class 6 Claims (other than Allowed Class 6 Claims paid in
accordance with Paragraph 3.6.A of the Plan), such amounts and aggregate
amounts of interest calculated in each case using the applicable Postpetition
Interest Rate; provided, that (w) if such Allowed Class 6 Claim (or any Allowed
portion thereof) was contingent or unliquidated as of the Filing Date and
became fixed or liquidated, as the case may be, after the Filing Date but
before the Consummation Date, the amount of interest shall be calculated on
such claim (or Allowed portion thereof) from the date such claim (or portion
thereof) became fixed or liquidated to the Consummation Date, (x) if such
Allowed Class 6 Claim (or any Allowed portion thereof) was contingent or
unliquidated as of the Filing Date and

22
<PAGE> 75
GLOSSARY

did not become fixed or liquidated, as the case may be, before the Consummation
Date, the amount of interest with respect to such Claim (or Allowed portion
thereof) shall be zero (y) any Allowed Class 6 Claim (or any Allowed portion
thereof) which is solely a Claim for damages shall be deemed to be unliquidated
for purposes of Clauses (w) and (x) hereof, and (z) with respect to any Class 6
Claim (or any portion thereof) which is a Disputed Class 6 Claim as of the
Consummation Date, the amount of interest with respect to such Claim shall be
zero.

Profits for any Fiscal Year means the Company's Adjusted Consolidated
Net Earnings for such Fiscal Year (less dividends declared (unless not
thereafter paid) on Financing Preferred Stock in such Fiscal Year, provided
that for purposes only of the Supplemental Agreement, dividends on Financing
Preferred Stock shall only be deducted to the extent that the sum of such
dividends plus dividends declared (unless not thereafter paid) on Series B
Preference Stock exceeds $25 million in such Fiscal Year) adjusted (without
double counting) by not giving effect to (a) any profit or loss on any sales or
other dispositions of assets of the Company or any of its consolidated
Subsidiaries (including securities of any Subsidiary of the Company but not
including any other securities) not in the ordinary course of business or
writedowns for discontinuance of operations of any portion of the Company or
any of its consolidated Subsidiaries, (b) any accruals or payments required in
connection with the Company's obligations to the PD Trust under the PD
Supplemental Agreement, or the Second Bond or to the Trust under the
Supplemental Agreement, the Bonds Repurchase Agreement, the Second Bond, except
to the extent that accruals under the Bonds Repurchase Agreement or payments
of principal under the Second Bond are treated as interest expense when
determining net earnings under generally accepted accounting principles, (c)
any reserves or other contingencies with respect to asbestos related personal
injury or property damage claims other than reserves or contingencies resulting
from annual accruals with respect to workers' compensation performed on a basis
consistent with the Company's past practice, (d) any amortization of goodwill,
(e) Government Proceeds and (f) any payments, accruals or accretions with
respect to the Class 6 Interest Debentures.

Property Claims means (a) all Claims timely filed in accordance with
the order of the Court issued on October 17, 1984, as amended and clarified by
the Court, against one or more of the Debtors (under any theory of law, equity
or admiralty), other than AH Claims and other Claims for death, personal
injuries or personal damages, for damages arising or allegedly arising from the
presence in buildings or other structures of asbestos (alone or as contained in
asbestos- containing products), which was sold, supplied or

23
<PAGE> 76
GLOSSARY

produced, or allegedly sold, supplied or produced, by one or more of the
Debtors prior to the Confirmation Date, or for which one or more of the Debtors
is otherwise liable or allegedly liable due to the acts or omissions of one or
more of the Debtors prior to the Confirmation Date, including, without
limitation, all Claims for compensatory damages (such as proximate,
consequential, general and special damages) and punitive damages, (b) all
Claims timely filed in accordance with the order of the Court issued on October
17, 1984, as amended and clarified by the Court, or in accordance with any
subsequent applicable order of the Court, against one or more of the Debtors in
respect of warranty, guarantee, indemnification or contribution liabilities or
obligations of any of the Debtors to any other Person to the extent that such
warranties, guarantees, indemnifications or contribution responsibilities cover
claims against such other Person that would, if such claims had been made
directly against any of the Debtors, constitute Property Claims under Clause
(a) above and (c) all Claims timely filed against one or more of the Canadian
Companies where such Claims, if made and timely filed against one or more of
the Debtors instead, would constitute Property Claims under Clause (a) or (b)
above. Where the context requires, Property Claims shall also mean claims in
respect of Property Claims filed with the PD Claims Resolution Facility in
accordance with the provisions thereof.

Reaffirmation Order means an order of the Court (a) reaffirming the
injunctive provisions ( 29) of the Confirmation Order and (b) declaring that
those injunctive provisions are not subject to revocation or modification
thereafter.

Related Party of any attorney means any other attorney who is or was a
partner of such attorney, or is or was a shareholder in a professional
corporation in which such attorney is or was also a shareholder.

Return on Equity means, for any company for any year, the percentage
determined by dividing (a) the consolidated net income of such company for such
year, before extraordinary items and discontinued operations and after taxes
and less the amount of any preferred dividends paid during such year, by (b)
the average of the common stockholders' equity of such company at the end of
such year and at the end of the preceding year.

Schedules means the schedules heretofore filed by the Debtors with the
Clerk of the Court pursuant to Bankruptcy Rule 1007, as they have been or may
be amended from time to time.

Schuller Notes means the Senior Notes due 2004 of Schuller
International Group, Inc. (or any successor obligor under such

24
<PAGE> 77
GLOSSARY

notes) transferred by the Company to the Trust pursuant to the Bonds Repurchase
Agreement.

Second Amended and Restated Supplemental Agreement means the Second
Amended and Restated Supplemental Agreement dated as of _______________, 199_,
between the Company and the Trust, as the same may be amended from time to time
in accordance with Section 6.02 thereof.

Second Amendment to the Trust Agreement means the amendment to the
Trust Agreement dated as of November 15, 1990, between the Company, as
successor to the Trustors, and the Trustees.

Second Bond means the Manville Settlement Trusts Second Bond Due March
31, 2015, issued by the Company to the Trust and the PD Trust pursuant to
Paragraph 4.1 of the Plan and substantially in the form of Annex E to the Trust
Agreement, as it may be amended from time to time.

Securities Act means the Securities Act of 1933, as amended.

Selected Counsel for the Beneficiaries means three lawyers to be
designated from time to time in a writing addressed to the Trustees with a copy
to the Company by the Board of Trustees of the Asbestos Litigation Group.

Selected Representatives for the PD Beneficiaries means five (5)
individuals to be designated from time to time (in a writing addressed to the
Company and to the PD Trustees) as follows: one (1) Person selected by each of
the National Association of Attorneys General, National Association of School
Boards, American Hospital Association, National Association of College and
University Business Officers and National Institute of Municipal Law Officers,
or their respective successor organizations.

Series B Preference Stock means the Cumulative Preference Stock,
Series B, par value $1.00 per share, of the Company.

Settlement Agreement means (i) each settlement agreement listed in
Schedule III to the Plan and (ii) any other settlement agreement with respect
to any Policy or relating to claims against any insurance broker.

Settlement Order means an order of settlement that the class
representatives and the Trustees in the Class Action Lawsuit will propose and
request the entry of (after notice to all class members and a hearing) by the
Court, which order will (i) approve the actions of the Trustees in causing the
Trust to commence the

25
<PAGE> 78
GLOSSARY

Limited Fund Proceeding, (ii) approve the settlement of the Class Action
Lawsuit on terms and conditions satisfactory to the class representatives and
the Trustees, (iii) authorize and approve the execution, delivery and
performance by the Trustees and the Trust of a master agreement in the form
agreed to between the Company and the Trust and the agreements and actions
contemplated therein and of all documents and agreements necessary to
effectuate the settlement of the Class Action Lawsuit, (iv) direct the class
representatives to execute on behalf of themselves and all class members and to
deliver to the Trustees and the Company unconditional releases of the Company
and its former, present and future affiliates and successors and cognate
covenants not to sue in form and substance reasonably satisfactory to the
Company, (v) enjoin all class members from commencing or maintaining any action
or proceeding based on asbestos claims against the Trust, except as provided in
the Settlement Order, or against the Company or its former, present or future
affiliates or successors and (vi) reaffirm the injunctive provisions
(paragraph 29) of the Confirmation Order.

Settling Insurance Company means any insurance company or insurance
broker which has entered into, or subsequently enters into, a Settlement
Agreement.

Special Fund Trust means the trust established pursuant to the
Asbestos Victims Special Fund Trust Agreement dated as of February 6, 1986
among Stanley J. Levy, Frederick M. Baron, Thomas W. Henderson, Gene Locks and
Ronald L. Motley as trustors and as trustees, a copy of which is attached to
the Plan as Exhibit I. It is understood that the Trustees will be added as
additional trustees of the Special Fund Trust to serve effective as of the
Consummation Date.

Stock Proceeds Fund has the meaning assigned to it in Section 4.01 of
the Trust Agreement.

Supplemental Agreement means the Manville Personal Injury Settlement
Trust Supplemental Agreement dated as of November 28, 1988 between the Company
and the Trust, with respects to the period from November 28, 1988 to and
November 14, 1990 (inclusive); the First Amended and Restated Supplemental
Agreement, with respect to the period from November 15, 1990 to
________________*, and from and after ___________________*, the Second Amended
and Restated

____________________

* Effective date of Second Amended and Restated Supplemental Agreement to
be inserted.

26
<PAGE> 79
GLOSSARY

Supplemental Agreement, as the same may thereafter be amended, modified, or
amended and restated by the parties in accordance with the terms thereof.

Subsidiary means with respect to any Person any corporation or other
entity of which securities or other ownership interest having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned by such Person.

Tender Offer means an offer to acquire shares of Manville Common Stock
with respect to which a Schedule 14D-1 is required to be filed with the
Commission pursuant to Rule 14d-3 under the Exchange Act.

Termination Date has the meaning assigned to it in Section 6.02 of the
Trust Agreement.

Transfer means, with respect to any share of Manville Common Stock,
any sale, transfer, assignment or exchange of, or pledge or other hypothecation
of or imposition of an Encumbrance on, or granting of an option to purchase
with respect to, or any donation or gifting of, or any other disposition of any
type whatsoever of any record or beneficial interest in such shares of Manville
Common Stock. The words Transfer when used as a verb and Transferee shall have
correlative meanings.

Transferee Indemnification Liability means a Claim arising from the
sale following the Filing Date of any of the Debtors' businesses that is
asserted by the purchaser of any of such businesses.

Travelers Agreement means the settlement agreement dated July 18,
1984, with Travelers Insurance Co., Home Insurance Co. and the Lloyd's
Syndicates and British Companies named therein, providing for $314,415,000 in
cash, plus accrued interest thereon.

Trust means the Manville Personal Injury Settlement Trust established
pursuant to Article II of the Trust Agreement.

Trust Agreement means the Manville Personal Injury Settlement Trust
Agreement between the Debtors and the Trustees dated as at the Consummation
Date, as it may be amended or modified from time to time in accordance with
Section 6.03 thereof.

Trust Assets means the assets of the Trust as more fully described in
Article II of the Trust Agreement.

27
<PAGE> 80
GLOSSARY

Trust Claim means any claim asserting Trust Liabilities to a
Beneficiary.

Trust Estate at any time means all assets of the Trust at such time.

Trust Expenses means all expenses of the Trust determined on a cash
basis (including, without limitation, compensation, legal, accounting and other
professional fees, expenses relating to the operation of the Claims Resolution
Facility, disbursements and related expenses, corporate overhead and
reimbursement and indemnification payments) other than payments in respect of
Trust Claims.

Trust Liabilities means all Other Asbestos Obligations and Allowed AH
Claims.

Trustees means the Persons approved by the Court to act as trustees
under the Trust Agreement and their successors pursuant to Article V thereof.

Trustors means the Debtors and the Canadian Companies.

Unliquidated means, with respect to any Trust Claim or Property Claim,
a Trust Claim or Property Claim as to which Liquidation has not yet occurred.

Unsecured Creditors' Committee means the "Official Committee of
Unsecured Creditors" consisting of those heretofore or hereafter appointed in
the Cases by the Acting United States Trustee for the Southern District of New
York.

Warrant Agreement means the agreement, dated as of the Consummation
Date, between the Company and the Warrant Agent thereunder, substantially in
the form of Exhibit C to the Plan, as it may be modified or amended from time
to time.

Warrants mean the warrants to purchase shares of Manville Common Stock
issued pursuant to the Warrant Agreement.

28
<PAGE> 81
EXHIBIT B
TO PROFIT SHARING
EXCHANGE AGREEMENT

FORM OF
NINTH1 AMENDMENT TO
MANVILLE PERSONAL INJURY
SETTLEMENT TRUST AGREEMENT

NINTH AMENDMENT, dated as of __________ __, 199__ (the "Ninth
Amendment") to the Trust Agreement, dated as of November 28, 1988 by and among
Johns-Manville Corporation, Manville Corporation (the "Company"), Manville
Sales Corporation, Manville Canada Inc., Manville Investment Corporation,
Ken-Caryl Ranch Corporation and SAL Contract & Supply, Inc. as Trustors
(collectively, the "Trustors") and Donald M. Blinken, Daniel Fogel, Francis H.
Hare, Jr., John C. Sawhill (the "Former Trustees") and Christian E. Markey,
Jr., as trustees for the Manville Personal Injury Settlement Trust (the
"Trust"), as amended by the First, Second and Third Amendments to the Trust
Agreement dated as of February 14, 1989, November 15, 1990, and December 6,
1991, respectively between the Company, Mr. Markey and the Former Trustees, and
as further amended by the Fourth, Fifth, Sixth, Seventh and Eighth Amendments
to the Trust Agreement dated as of August 6, 1992, December 9, 1992, November
5, 1993, September 22, 1994, and ________, 1995, respectively between the
Company, Mr. Markey, Robert A. Falise, Louis Klein, Jr., and Frank J.
Macchiarola, and, in the case of the Seventh Amendment, Charles T. Hagel, as
trustees of the Trust (the Trust Agreement and all eight prior Amendments being
collectively referred to herein as the "Trust Agreement").

WHEREAS, Section 6.03(a) of the Trust Agreement provides for
the amendment of the Trust Agreement by the Company (as successor to the
Trustors for such purpose) and the Trustees of the Trust after consultation
with Selected Counsel for the Beneficiaries (as defined in Exhibit A to the
Second Amended and Restated Plan of Reorganization of

____________________

1 This Amendment shall be appropriately numbered at the time of its adoption.
<PAGE> 82
the Company and the other Debtors (as therein defined)(the "Plan of
Reorganization")); and

WHEREAS, the Trustees of the Trust and the Company (as
successor to the Trustors for this purpose pursuant to Section 6.03(a) of the
Trust Agreement) wish to amend the Trust Agreement in the manner provided
herein; and

WHEREAS, the Selected Counsel for the Beneficiaries have been
consulted and have given their concurrence with respect to the amendment to the
Trust Agreement effectuated hereby; and

WHEREAS, the Profit Sharing Exchange Agreement, dated
___________, 1995, between the Company and the Trust (the "Exchange Agreement")
contemplates the execution of this Ninth Amendment, and in accordance with such
Profit Sharing Exchange Agreement, the execution and performance by the
Trustees of this Ninth Amendment and the transactions contemplated hereby have
been approved by order of the United States Bankruptcy Court for the Southern
District of New York pursuant to the jurisdiction retained by such Court under
the Plan of Reorganization; and

WHEREAS, the execution, delivery and effectiveness of this
Ninth Amendment is a condition precedent to the Company's obligation to declare
a dividend or other payment from Proceeds (as defined in the Exchange
Agreement) pursuant to the terms of Section 3.03 of the Exchange Agreement,
notice of the intended declaration of which on the date hereof has been
provided to the Trust (the "Dividend").

NOW THEREFORE, the parties hereto agree to amend the Trust
Agreement as follows:

1. Section 6.02(b) of the Trust Agreement is hereby
amended to read in its entirety as follows:

"(b) On the Termination Date, all Trust Claims shall
be extinguished, the Trust shall be dissolved, the Company
shall assume all of the Trust's liabilities other than Trust
Claims and the injunction provided for in Paragraph 9.2.A.3 of
the Plan shall be modified in accordance with the order
issuing such injunction, and all of

<PAGE> 83
the Trust's assets shall, except as provided in Subsections
(c) and (d) below, be transferred and assigned to (i) the PD
Trust, if the PD Trust is then in existence, or (ii) the
Company or any designees of the Company, if the PD Trust is
not then in existence, and the Trustees and the Company agree
to execute and deliver, or cause to be executed and delivered,
such agreements, instruments and other documents as may be
necessary or advisable to implement the foregoing."

2. Except as specifically amended pursuant to Paragraph
1 above, the Trust Agreement shall remain in full force and effect and is
ratified and confirmed in all respects.

3. This Ninth Amendment shall be governed by and
construed in accordance with the laws of the State of New York and for all
purposes shall be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely within such
State.

4. This Ninth Amendment may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument. Terms not defined herein
shall, unless the context otherwise requires, have the meanings assigned to
such terms in the Trust Agreement.

5. The terms of this Ninth Amendment shall be effective
as of the date first above written; provided, however, that if the Dividend is
not declared by the Company on the date first above written, then on the day
immediately following such date this Ninth Amendment shall terminate and be of
no further force and effect and Section 6.02(b) shall re-enter into effect as
it read immediately prior to the effectiveness of this Ninth Amendment.

3
<PAGE> 84
IN WITNESS WHEREOF, the Company as successor to the Trustors,
has caused this Ninth Amendment to be executed by its duly authorized officer
and attested by another duly authorized officer, and the Trustees of the Trust
have executed this Ninth Amendment, all as of the day and year first above
written.

MANVILLE CORPORATION

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

- -----------------------------------

TRUSTEES

as Trustee
-----------------------------
Robert A. Falise

as Trustee
-----------------------------
Louis Klein, Jr.

as Trustee
-----------------------------
Frank J. Macchiarola

as Trustee
-----------------------------
Christian E. Markey, Jr.

4
<PAGE> 85
EXHIBIT C
TO PROFIT SHARING
EXCHANGE AGREEMENT

CALCULATION OF
FULLY DILUTED SHARES

<TABLE>
<CAPTION>
Number of Shares
----------------
<S> <C>

Issued and outstanding shares
of Common Stock as of October 25, 1995 . . . . . 122,745,154

Shares of Common Stock issuable
upon the exercise of stock options
under the Company's Stock Incentive
Plan as of October 25, 1995 . . . . . . . . . . . 633,700

Shares of Common Stock issuable
upon the exercise of Warrants
under the Warrant Agreement
dated as of November 28, 1988
as of October 25, 1995 . . . . . . . . . . . . . . 6,977,472

Shares of Common Stock issuable
upon the exercise of all options,
warrants, calls, rights, agree-
ments, convertible or exchangeable
securities or other commitments
outstanding or in effect as of
October 25, 1995 (without
duplication of shares
accounted for above): . . . . . . . . . . . . 0

Warrants . . . . . . . . . . 0

Options . . . . . . . . . . 0

Total . . . . . . . . . . . . . . . . . . . 130,356,326
</TABLE>

C-1

<PAGE> 1

VOTING AND INDEMNIFICATION AGREEMENT

by and among

MANVILLE CORPORATION,

CDRO HOLDING CORPORATION

and

CDRO ACQUISITION CORPORATION

dated as of

October 25, 1995
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I

Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Representations and Warranties of the Stockholder . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3. Representations and Warranties of Parent and the Purchaser . . . . . . . . . . . . . . . . . . . 6

ARTICLE II

Section 4. Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5. Adjustments; Additional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 6. Restrictions on Transfer, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7. No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 8. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE III

Section 9. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE IV

Section 10. Certain Deliveries of Parent and the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 11. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 12. Hart-Scott-Rodino Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 14. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 15. Certain Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

ARTICLE V

Section 16. Reasonable Efforts, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 17. Non-survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 18. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 19. Amendment; Waiver; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 20. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 21. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 22. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 23. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 24. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 25. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 26. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 27. Post-Closing Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 28. Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 29. Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>

i
<PAGE> 3
VOTING AND INDEMNIFICATION AGREEMENT, dated as of October
25, 1995 (this "Agreement"), by and among Manville Corporation, a Delaware
corporation (the "Stockholder"), CDRO Holding Corporation, a Delaware
corporation ("Parent"), and CDRO Acquisition Corporation, a wholly owned
subsidiary of Parent and a Delaware corporation (the "Purchaser").

WHEREAS, Riverwood International Corporation, a Delaware
corporation (the "Company"), Parent and the Purchaser have entered into an
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
which provides, among other things, that upon the terms and subject to the
conditions set forth therein (i) the Purchaser will be merged with and into the
Company in accordance with the General Corporation Law of the State of Delaware
(the "Merger") and (ii) each share of common stock, par value $.01 per share,
of the Company (referred to herein as "Company Common Stock") issued and
outstanding immediately prior to the Effective Time (as defined in the Merger
Agreement) will, except as otherwise expressly provided in the Merger
Agreement, be cancelled and retired and converted into the right to receive the
Merger Consideration (as defined in the Merger Agreement);

WHEREAS, as of the date hereof, the Stockholder is the
record and beneficial owner of, and has the sole right to vote and dispose of,
53,399,558 shares (the "Shares") of Company Common Stock; and

WHEREAS, in order to induce Parent, the Purchaser and the
Company to enter into the Merger Agreement, the Stockholder has agreed to enter
into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
below, the parties hereto agree as follows:
<PAGE> 4
ARTICLE I

Section 1. Certain Definitions. Capitalized terms used
but not otherwise defined herein shall have the meanings assigned to such terms
in the Merger Agreement.

Section 2. Representations and Warranties of the
Stockholder. The Stockholder represents and warrants to Parent and the
Purchaser, as of the date hereof and as of the Closing Date, as follows:

(a) The Stockholder is a corporation duly organized,
validly existing and in good standing under the laws of Delaware. The
Stockholder has made available to Parent and the Purchaser its Restated
Certificate of Incorporation and By-laws as currently in effect.

(b) The Stockholder has the requisite corporate power and
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.

(c) The execution, delivery and performance by the
Stockholder of this Agreement and the consummation by the Stockholder of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Stockholder (the "Stockholder's Board") and, except for
obtaining the approval of the Merger and the transactions contemplated by the
Merger Agreement by the Stockholder's stockholders, no other corporate
proceedings on the part of the Stockholder are necessary to authorize the
execution, delivery and performance of this Agreement by the Stockholder and
the consummation by the Stockholder of the transactions contemplated hereby or
the consummation by the Company of the transactions contemplated by the Merger
Agreement.

(d) This Agreement has been duly executed and delivered
by the Stockholder and, assuming due authorization, execution and delivery of
this Agreement by Parent and the Purchaser, is a valid and binding obligation
of the Stockholder enforceable against the Stockholder in accordance with its
terms, except that such enforcement may be subject to or limited by (i)
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally and (ii) the effect

2
<PAGE> 5
of general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).

(e) Neither the execution, delivery and performance of
this Agreement by the Stockholder nor, assuming the receipt of the approval of
the Merger and the transactions contemplated by the Merger Agreement by the
Stockholder's stockholders, the consummation by the Stockholder of the
transactions contemplated hereby will (i) violate any provision of the Restated
Certificate of Incorporation or By-Laws of the Stockholder; (ii) assuming the
receipt of the approvals described in Schedule 2(e) to this Agreement, conflict
with, result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration or to the imposition of
any Lien (as defined in Section 2(g)) on the Shares) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, guarantee or
other evidence of indebtedness, lease, license, contract, agreement, plan or
other instrument or obligation to which the Stockholder is a party or by which
it or any of its assets may be bound or (iii) conflict with or violate any Laws
applicable to the Stockholder or any of its properties or assets; except in the
case of clauses (ii) or (iii) for such conflicts, violations, breaches or
defaults which would not individually or in the aggregate be reasonably
expected to prevent or materially impair or delay the consummation by the
Stockholder of the transactions contemplated hereby.

(f) Except as set forth in Schedule 2(f) to this
Agreement, no filing or registration with, declaration or notification to, or
order, authorization, consent or approval of, any Governmental Entity or any
other Person is required in connection with the execution, delivery and
performance of this Agreement by the Stockholder or the consummation by the
Stockholder of the transactions contemplated hereby, except (i) applicable
requirements under Competition Laws, (ii) applicable requirements under the
Exchange Act and (iii) such other consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings the failure of which to
be obtained or made individually and in the aggregate would not materially
impair or delay the consummation of the transactions contemplated hereby.

3
<PAGE> 6
Except as disclosed in Schedule 2(f) to this Agreement, no filing or
registration with, declaration or notification to, or order, authorization,
consent or approval of, Manville Personal Injury Settlement Trust (the "Trust")
or Manville Property Damage Settlement Trust is required in connection with the
execution, delivery and performance of this Agreement by the Stockholder or the
Merger Agreement by the Company or the consummation by the Stockholder and the
Company, respectively, of the transactions contemplated hereby and thereby.
The Stockholder is the "ultimate parent entity" of the Company within the
meaning of the HSR Act.

(g) The Stockholder is the sole record and beneficial
owner of 53,399,558 shares of Company Common Stock free and clear of any
mortgage, pledge, hypothecation, rights of others, claim, security interest,
encumbrance, title defect, title retention agreement, voting trust agreement,
interest, option, lien, charge or similar restrictions or limitations (each, a
"Lien") (including any restriction on the right to vote, sell or otherwise
dispose of the Shares), except as set forth in this Agreement or Schedule 2(e)
to this Agreement. There are no options or rights to acquire, or any
agreements to which the Stockholder is a party relating to the ownership or
voting of, the Stockholder's Shares, other than this Agreement and the
agreements set forth in Schedule 2(e) to this Agreement. The Stockholder holds
exclusive power to vote the Shares, subject to the limitations set forth in
this Agreement or Schedule 2(e) to this Agreement.

(h) All agreements, contracts, transfers of assets or
liabilities or other commitments or transactions, whether or not entered into
in the ordinary course of business, to or by which the Company or any of its
Subsidiaries, on the one hand, and the Stockholder or any of its affiliates
(other than the Company or any of its Subsidiaries), on the other hand, are or
have been a party or otherwise bound or affected, that (i) are currently
pending or in effect or (ii) involve continuing liabilities and obligations
that, individually or in the aggregate, have been, are or will be material to
the Company or any of its Subsidiaries taken as a whole, have either been
disclosed in the Company SEC Reports or are set forth in Schedule 3.23(a) of
the Disclosure Schedule referred to in the Merger Agreement.

4
<PAGE> 7
(i) None of the information provided by the Stockholder
specifically for use in the Schedule 13E-3 will at the time the Schedule 13E-3
or any amendments thereto are filed with the SEC and/or mailed to stockholders
of the Company, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading.

(j) None of the information provided by the Stockholder
specifically for use in the Offer Documents and any related schedules (and any
amendment or supplement to any of the foregoing), mailed to the registered
holders of the Notes of each series, as the case may be, in connection with the
Offers, at the date mailed will contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading.

(k) The affirmative vote of the holders of a majority of
the outstanding shares of the common stock, par value $.01 per share, of the
Stockholder (the "Stockholder Common Stock") entitled to vote on the
disposition of the Stockholder Shares pursuant to the Merger at the Stockholder
Special Meeting (as defined in Section 16(b)) is the only vote of any class of
capital stock of the Stockholder that will be required to approve the Merger
and the other transactions contemplated by the Merger Agreement. Except as set
forth in the preceding sentence, no vote of any class of capital stock of the
Stockholder is required to adopt this Agreement or approve the transactions
contemplated hereby.

(l) Except as set forth in Section 3.16 of the Merger
Agreement, no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement or the Merger Agreement based upon arrangements
made by or on behalf of the Stockholder or any of its Subsidiaries (other than
the Company or any of its Subsidiaries), that is or will be payable by the
Company or any of its Subsidiaries.

5
<PAGE> 8
(m) There is no Litigation pending or, to the actual
knowledge of the Stockholder, threatened, against the Stockholder or any of its
Subsidiaries (other than the Company or any of its Subsidiaries) or any of
their properties or assets which, individually or in the aggregate, if
determined adversely to the Stockholder or such Subsidiary, would reasonably be
expected to materially impair or delay the consummation of the transactions
contemplated hereby and by the Merger Agreement; and neither the Stockholder
nor any of such Subsidiaries is subject to any settlement or similar agreement
with any Governmental Entity, or to any order, judgment, decree, injunction or
award of any Governmental Entity or arbitrator, that individually or in the
aggregate would materially impair or delay the consummation of the transactions
contemplated hereby and by the Merger Agreement.

(n) The Stockholder has received a copy of a written
consent of the Selected Counsel to the Beneficiaries to the Exchange Agreement,
the Second Amended and Restated Supplemental Agreement and the Ninth Amendment
to the Trust Agreement and the consummation of the transactions contemplated
thereby. Such consent, if not amended, modified or revoked prior to the
Effective Time, would be sufficient to satisfy the condition set forth in
Section 4.02(b) of the Exchange Agreement.

(o) The Stockholder Common Stock is the only class of
capital stock of the Stockholder that will be entitled to vote at the
Stockholder Special Meeting with respect to the disposition of the Shares
pursuant to the Merger and the matters contemplated by this Agreement. There
are 175,000,000 shares of Stockholder Common Stock authorized, of which not
more than 123,000,000 are outstanding as of the date hereof. All of the
outstanding shares of Stockholder Common Stock are duly authorized, validly
issued, fully paid and nonassessable.

Section 3. Representations and Warranties of Parent and
the Purchaser. Parent and the Purchaser represent and warrant to the
Stockholder, as of the date hereof and as of the Closing Date as follows:

(a) Each of Parent and the Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.

6
<PAGE> 9
(b) Each of Parent and the Purchaser has the requisite
corporate power and authority to execute, deliver and perform this Agreement
and to consummate the transactions contemplated hereby.

(c) The execution, delivery and performance by Parent and
the Purchaser of this Agreement and the consummation by Parent and the
Purchaser of the transactions contemplated hereby have been duly authorized by
the respective Boards of Directors of Parent and the Purchaser and no other
corporate proceedings on the part of Parent or the Purchaser are necessary to
authorize the execution, delivery and performance of this Agreement by Parent
or the Purchaser and the consummation of the transactions contemplated hereby.

(d) This Agreement has been duly executed and delivered
by Parent and the Purchaser and, assuming due authorization, execution and
delivery of this Agreement by the Stockholder, is a valid and binding
obligation of each of Parent and the Purchaser enforceable against each of them
in accordance with its terms, except that such enforcement may be subject to or
limited by (i) bankruptcy, insolvency or other similar laws, now or hereafter
in effect, affecting creditors' rights generally, and (ii) the effect of
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).

(e) Neither the execution, delivery and performance of
this Agreement by Parent and the Purchaser nor the consummation by Parent and
the Purchaser of the transactions contemplated hereby will (i) violate any
provision of the respective certificates of incorporation or by-laws of Parent
or the Purchaser; (ii) conflict with, result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, guarantee or other evidence of indebtedness, license, lease,
contract, agreement, plan or other instrument or obligation to which Parent or
the Purchaser is a party or by which either of them or any of their assets may
be bound or (iii) conflict with or violate any Laws applicable to Parent or
Purchaser or any of their properties or assets; except in the case of clauses
(ii)

7
<PAGE> 10
and (iii) for conflicts, violations, breaches or defaults which would not
individually or in the aggregate be reasonably expected to prevent or
materially impair or delay the consummation by Parent or the Purchaser of the
transactions contemplated hereby.

(f) At and immediately after the Effective Time, and
after giving effect to the Merger, the Financing and any other transactions
contemplated in connection therewith (and any changes in the Surviving
Corporation's assets and liabilities as a result thereof), the Surviving
Corporation will not (i) be insolvent (either because its financial condition
is such that the sum of its debts is greater than the fair value of its assets
or because the present fair saleable value of its assets will be less than the
amount required to pay its probable liabilities on its debts as they mature),
(ii) have unreasonably small capital with which to engage in its business or
(iii) have incurred or plan to incur debts beyond its ability to pay as they
mature.

(g) Parent and the Purchaser have been advised as of the
date hereof by representatives of the Company that the members of management of
the Company identified on Schedule 3(g) hereto, solely in their capacity as
such, have reviewed the Company's representations and warranties set forth in
Article III of the Merger Agreement. Parent and the Purchaser have been
further advised as of the date hereof by representatives of the Company that,
based on such review by management and as of the date hereof, the Company has
no knowledge of (i) any breach of or inaccuracy in any representation or
warranty set forth in Article III of the Merger Agreement or (ii) any fact or
circumstance that it believes is reasonably likely to result in a breach of or
inaccuracy in any representation or warranty set forth in Article III of the
Merger Agreement which, in the case of each of clauses (i) and (ii), would
constitute a failure to satisfy any of the closing conditions set forth in
Sections 6.3(a) and 6.3(i) of the Merger Agreement.

(h) None of the information supplied in writing by Parent
or the Purchaser specifically for inclusion in the Stockholder Proxy Statement
(as defined in Section 16(c)) (including any amendments or supplements thereto)
will, at the date mailed to stockholders and at the time of the Stockholder
Special Meeting, contain any untrue

8
<PAGE> 11
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading.

(i) No filing or registration with, declaration or
notification to, or order, authorization, consent or approval of, any
Governmental Entity or any other Person is required in connection with the
execution, delivery and performance of this Agreement by Parent or the
Purchaser or the consummation by Parent or the Purchaser of the transactions
contemplated hereby, except (i) applicable requirements under Competition Laws,
(ii) applicable requirements under the Exchange Act and (iii) such other
consents, approvals, orders, authorizations, notifications, registrations,
declarations and filings the failure of which to be obtained or made
individually and in the aggregate would not materially impair or delay the
consummation of the transactions contemplated hereby.

(j) No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement or the Merger Agreement based upon
arrangements made by or on behalf of Parent and the Purchaser, that is or will
be payable by the Stockholder or, except as set forth in Section 4.8 of the
Merger Agreement following the occurrence of the Effective Time, the Company or
any of its Subsidiaries.

ARTICLE II

Section 4. Voting Agreement.

(a) The Stockholder hereby agrees that from and after the
Approval Date (as defined in Section 8) and until the earliest of (i) the
Effective Time, (ii) the date on which the Merger Agreement is terminated in
accordance with its terms, or (iii) March 31, 1996 (the earliest thereof
referred to herein as the "Expiration Date"), at the Stockholder Special
Meeting, the Stockholder shall vote, or cause to be voted, all of the shares of
Company Common Stock it beneficially owns at the time of such vote, including
without limitation the Shares (the "Stockholder Shares"), in favor of the
approval and adoption of the Merger Agreement, and approval

9
<PAGE> 12
of the Merger and the other transactions contemplated thereby; provided,
however, that the Stockholder shall not be required to vote, or cause to be
voted, Stockholder Shares pursuant to this Section 4 if the Stockholder's Board
determines in its good faith, reasonable judgment, after consultation with its
counsel, that voting the Stockholder's Shares, as provided in this Section
4(a), could reasonably be expected to constitute a breach of the Stockholder's
Board's fiduciary duties under applicable law.

(b) The Stockholder hereby agrees that from the date
hereof until the Expiration Date, at any special or annual meeting of
stockholders of the Company (including any adjournment or postponement
thereof), or in connection with any written consent of the stockholders of the
Company, the Stockholder shall vote, or cause to be voted, all of the
Stockholder Shares against (i) any Acquisition Transaction, or (ii) any other
significant proposed corporate action of the Company requiring stockholder
approval that would materially impair or delay the consummation of the
transactions contemplated hereby and by the Merger Agreement or (iii) any
action or agreement that would result in the breach by the Company of Section
5.1 of the Merger Agreement; provided, however, that the Stockholder shall be
permitted to vote, or cause to be voted, the Stockholder Shares in favor of any
such action described in clause (i), (ii) or (iii) above if the Stockholder's
Board determines in its good faith, reasonable judgment, after consultation
with its counsel, that voting the Stockholder Shares against such actions
described in clause (i), (ii) or (iii) above could reasonably be expected to
constitute a breach of the Stockholder's Board's fiduciary duties under
applicable law.

Section 5. Adjustments; Additional Shares.

(a) In the event (i) of any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of shares of
capital stock of the Company on, of or affecting the Shares or (ii) the
Stockholder shall become the beneficial owner of any additional shares of
Company Common Stock or other securities entitling the holder thereof to vote
or give consent with respect to the matters set forth in Section 4 hereof, then
the terms of this Agreement shall apply to the shares of capital stock held by
the Stockholder immedi-

10
<PAGE> 13
ately following the effectiveness of the events described in clause (i) or the
Stockholder becoming the beneficial owner thereof, as described in clause (ii),
as though they were Shares hereunder.

(b) The Stockholder hereby agrees, while this Agreement
is in effect, to promptly notify Parent of the number of any new shares of the
Company Common Stock acquired by the Stockholder, if any, after the date
hereof.

Section 6. Restrictions on Transfer, Etc. Except as
provided for herein, the Stockholder agrees, from the date hereof until the
Expiration Date, not to (i) tender into any tender or exchange offer or
otherwise sell, transfer, pledge, assign, hypothecate or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, pledge, assignment, hypothecation or other
disposition of the Stockholder Shares (including, without limitation, through
the disposition or transfer of control of another Person) or (ii) grant any
proxies with respect to the Stockholder Shares, deposit the Stockholder Shares
into a voting trust, enter into a voting agreement with respect to any of the
Stockholder Shares or otherwise restrict the ability of the Stockholder freely
to exercise all voting rights with respect thereto, provided, however, that the
Stockholder may take any action otherwise prohibited by clause (i) or (ii)
above if the Stockholder's Board determines in its good faith, reasonable
judgment, after consultation with its counsel, that not taking any such action
could reasonably be expected to constitute a breach of the Stockholder's
Board's fiduciary duties under applicable law.

Section 7. No Solicitation.

(a) The Stockholder shall not, from the date hereof until
the Expiration Date, directly or indirectly through its officers, directors,
employees or agents or any investment banker, financial advisor, attorney,
accountant or other representative retained by the Stockholder (i) initiate,
solicit or encourage the making of any Acquisition Proposal or (ii) engage in
negotiations or discussions with, or furnish any information or data to, any
third party relating to, or agree to, an Acquisition Proposal (other than the
transactions contemplated

11
<PAGE> 14
by the Merger Agreement). Notwithstanding clause (ii) above, the Stockholder,
the Stockholder's Board and any of such representatives (i) may participate in
negotiations or discussions (including, as a part thereof, making any
counterproposal) with or furnish information or data to any third party if the
Stockholder's Board determines in its good faith, reasonable judgment, after
consultation with its counsel, that the failure to participate in such
discussions or negotiations or to furnish such information could reasonably be
expected to constitute a breach of the Stockholder's Board's fiduciary duties
under applicable law and (ii) shall be permitted to (x) take and disclose to
the Company's and the Stockholder's stockholders a position with respect to the
Merger or another Acquisition Proposal, or amend or withdraw such position,
pursuant to Rules 14d-9 and 14e-2 under the Exchange Act or (y) make disclosure
to the Company's and the Stockholder's stockholders, in each case if the
Stockholder's Board determines in its good faith, reasonable judgment, after
consultation with its counsel, that the failure to take such action could
reasonably be expected to constitute a breach of the Stockholder Board's
fiduciary duties under applicable law.

(b) The Stockholder shall immediately advise Parent in
writing of the receipt of any Acquisition Proposal received by the Stockholder,
and any actions undertaken pursuant to the second sentence of Section 7(a),
specifying the material terms and conditions of such Acquisition Proposal and
identifying the person making such Acquisition Proposal. If any such inquiry
or proposal is in writing, the Stockholder shall promptly deliver to Parent a
copy of such inquiry or proposal, unless the Stockholder's Board determines in
its good faith, reasonable judgment, after consultation with its counsel, that
taking such action could reasonably be expected to constitute a breach of its
fiduciary duties under applicable law. The Stockholder shall not release any
third party from its obligations under any existing standstill agreement or
arrangement relating to an Acquisition Transaction unless the Stockholder's
Board determines in its good faith, reasonable judgment, after consultation
with its counsel, that failure to so release could reasonably be expected to
constitute a breach of its fiduciary duties under applicable law.

12
<PAGE> 15
(c) For purposes of this Section 7, the terms
"Acquisition Proposal" and "Acquisition Transaction" shall not refer to a
transaction that solely involves securities or assets of the Stockholder other
than Company Common Stock.

Section 8. Conditions. The obligation of the Stockholder
to vote the Stockholder Shares as provided in Section 4 shall be subject to the
satisfaction of the following conditions:

(a) The conditions to (i) the obligation of the
Stockholder to declare the Dividend under Section 3.03(b) of the Profit Sharing
Exchange Agreement, dated October 25, 1995 (the "Exchange Agreement"), a copy
of which is attached hereto as Annex A, between the Stockholder and the Trust
and (ii) the obligations of the Stockholder and the Trust under Section 4.02
and Section 4.03, respectively, of the Exchange Agreement, other than the
condition set forth in Section 4.03(e) thereof, shall have been satisfied or
waived;

(b) The holders of a majority of the outstanding shares
of the Stockholder Common Stock shall have approved the disposition by the
Stockholder of the Stockholder Shares pursuant to the Merger and the other
transactions contemplated by the Merger Agreement, and the Trust shall have
consented to the Merger and the transactions contemplated by the Merger
Agreement under the agreements set forth in Schedule 2(e) to this Agreement;
and

(c) There shall be no order or injunction (whether
temporary, preliminary or permanent) of a Governmental Entity of competent
jurisdiction in effect precluding, restraining, enjoining or prohibiting
consummation of the Merger or the transactions contemplated by the Merger
Agreement.

The date of the later to occur of the condition set forth
in clause (a) above and the condition set forth in clause (b) above is
sometimes referred to herein as the "Approval Date," provided that the
condition set forth in clause (c) above shall be satisfied.

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<PAGE> 16
ARTICLE III

Section 9. Indemnification.

(a) The Stockholder covenants and agrees, from and after
the Effective Time, to defend, indemnify and hold harmless each of Parent, the
Purchaser and their respective affiliates and their respective officers,
directors and employees (collectively, the "Indemnitees") from and against, and
pay or reimburse the Indemnitees for, any and all actual claims, demands,
liabilities, obligations, losses, fines, costs, expenses, deficiencies or
damages (collectively, "Losses"), whether or not resulting from third party
claims, including interest and penalties recovered by a third party with
respect thereto and out-of-pocket expenses and reasonable attorneys' and
accountants' fees and expenses incurred in the investigation or defense of any
of the same or in asserting, preserving or enforcing any of their respective
rights hereunder, in each case (A) resulting from or arising out of any breach
of or inaccuracy in, as of the date hereof or as of the Closing Date (subject
to Section 9(f)), any representation or warranty of the Company set forth in
Sections 3.5, 3.7 and 3.14 of the Merger Agreement other than any such breach
of or inaccuracy in any such representation or warranty as it relates to
Excluded Taxes (as defined below) or (B) resulting from or arising out of any
breach of or inaccuracy in, as of the date hereof or as of the Closing Date
(subject to Section 9(f)), any representation or warranty of the Company set
forth in Section 3.24 of the Merger Agreement other than any such breach of or
inaccuracy in any such representation or warranty as it relates to Excluded
Taxes (as defined below) solely to the extent that it relates specifically to
Sections 3.5, 3.7 and 3.14 of the Merger Agreement; provided, however, that in
connection with clause (B) above, in determining whether a breach of or
inaccuracy in such representations and warranties set forth in Section 3.24 of
the Merger Agreement exists or has occurred, the reference to "the actual
knowledge of the Company" contained in Section 3.24 of the Merger Agreement
shall be interpreted, for purposes of this Agreement, as referring to the
actual knowledge of the Stockholder. The term "Excluded Taxes" means Taxes,
other than (x) United States federal, state and local Taxes other than Income
Taxes (as such term is defined in the Tax Matters Agreement) and (y)
impositions in respect of

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<PAGE> 17
matters that are the subject of Section 3.14 of the Merger Agreement that are
denominated as taxes. Notwithstanding the foregoing, (i) the Stockholder shall
not be required to indemnify the Indemnitees with respect to Losses unless and
until the aggregate amount of all Losses exceeds $20,000,000 and then only to
the extent the Losses therefrom exceed $20,000,000; (ii) the obligation of the
Stockholder to indemnify and hold harmless the Indemnitees shall be limited to
an amount equal to 80% of the amount of Losses in excess of $20,000,000; and
(iii) the aggregate liability of the Stockholder for indemnification under this
Section 9 shall not in any event or circumstance exceed $100,000,000.

(b) Any claim for indemnification under this Section 9
must be asserted on or prior to the date that is 30 days after the delivery of
the opinion with respect to the annual audit by the Surviving Corporation's
independent auditors of the financial statements of the Surviving Corporation
for the fiscal year ended December 31, 1996, and in any event no later than May
31, 1997. Such a claim may be made whether or not any Losses in respect
thereof then have accrued; provided that, to the extent reasonably practicable,
the notice of claim shall include a reasonably detailed description of the
anticipated Loss.

(c) The Indemnitee shall give written notice to the
Stockholder promptly after such Indemnitee has actual knowledge of any claim as
to which indemnity may be sought (which notice shall state the basis of the
claim and the representations and warranties in the Merger Agreement alleged to
have been breached), and the Indemnitee, with respect to a third party claim,
shall permit the Stockholder (at the expense of the Stockholder) to assume the
defense of any claim or any Litigation resulting therefrom, provided, that
counsel for the Stockholder who shall conduct the defense of such claim or
litigation shall be reasonably satisfactory to the Indemnitee, and the
Indemnitee may participate in such defense at such Indemnitee's sole expense.
Should the Stockholder elect to assume the defense of a third party claim, it
shall notify the Indemnitee of its election and the Stockholder shall not be
liable to the Indemnitee for legal expenses subsequently incurred by the
Indemnitee in connection with the defense thereof. The failure of any
Indemnitee to give notice as provided in this Section

15
<PAGE> 18
9(c) shall not relieve the Stockholder of its indemnification obligation under
this Agreement except to the extent the Stockholder is materially prejudiced as
a result of such failure to give notice by the Indemnitee. The Indemnitee
shall promptly deliver to the Stockholder copies of all notices and documents
(including court papers) received by the Indemnitee relating to the third party
claim.

(d) If the Stockholder notifies an Indemnitee in writing
that the Stockholder does not believe that it is required to indemnify such
Indemnitee in respect of any claim asserted thereby (which notice shall state
the basis for the Stockholder's belief, such notice being referred to as the
"Non-Indemnity Notice"), the Stockholder or the Indemnitee shall, at the
request of the other, meet with the other to discuss the claim made and the
Stockholder's reason for not believing that it is required to indemnify
therefor. The Stockholder and the Indemnitee shall use their reasonable
efforts to attempt in good faith to resolve any dispute remaining following
such meeting within 150 days following the date of the Non-Indemnity Notice.
If the Stockholder and the Indemnitee are unable to resolve such claim to their
mutual satisfaction, then any Litigation seeking to enforce such claim for
indemnification must be commenced by the Indemnitee on or prior to the date
that is 180 days after the date of delivery of the Non-Indemnity Notice.

(e) Except with the prior written consent of the
Indemnitee, the Stockholder, in the defense of any such claim or Litigation,
shall not consent to entry of any judgment or enter into any settlement (x)
that provides for injunctive or other nonmonetary relief affecting the
Indemnitee, or (y) that does not include as an unconditional term thereof the
giving by each claimant or plaintiff to such Indemnitee of a release from all
liability with respect to such claim or Litigation. In the event that the
Indemnitee shall in good faith determine, based upon the advice of counsel,
that the Indemnitee may have available to it one or more defenses or
counterclaims that are inconsistent with one or more of those that may be
available to the Stockholder in respect of such claim or any Litigation
relating thereto, the Indemnitee shall have the right to participate in the
defense thereof, in which case the Stockholder shall be responsible for the
reasonable fees and expenses of one separate

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<PAGE> 19
counsel for all Indemnitees asserting claims for indemnification with respect
to such claim or Litigation. In the event that the Stockholder does not accept
the defense of any matter as above provided, the Indemnitee shall have the full
right to defend against any such claim or demand, and shall be entitled to
settle or agree to pay in full such claim or demand. In any event, the
Stockholder and the Purchaser shall cooperate in the defense of any claim or
litigation subject to this Section 9 and the records and relevant personnel of
each party shall be available to the other with respect to such defense.

(f) In determining whether there has occurred a breach of
or inaccuracy in a representation or warranty made under the Merger Agreement
that is indemnifiable hereunder, to the extent that the Disclosure Schedule
referred to in the Merger Agreement is supplemented pursuant to Section 5.7(b)
of the Merger Agreement, such determination shall be made after giving effect
to the supplementing of such Disclosure Schedule by the Schedule Supple- ments
as set forth in Section 5.7(b) of the Merger Agreement.

(g) Unless otherwise required by law, each of Parent and
the Purchaser agrees to treat and to cause their respective affiliates to
treat, for all Tax purposes, any indemnification payment made pursuant to this
Section 9 as an adjustment to the Merger Consideration paid to the Stockholder
(or, if applicable, as the satisfaction of a liability of the Company and its
Subsidiaries assumed by the Stockholder, the assumption of which was a
contribution by the Stockholder to the capital of the Company) or as a
reimbursement for or a payment of a liability that was properly an obligation
of the Stockholder, and not of Parent, the Purchaser, the Company or any of its
Subsidiaries. Any payment made by the Stockholder to an Indemnitee in respect
of any claim for which indemnification is provided under this Section 9 shall
be net of any net amounts recovered by the Indemnitee under insurance policies
with respect to such claim; and if such recovery is received following the date
of payment of indemnity hereunder with respect to such claim, then the
Indemnitee shall refund a portion of the indemnity, in the net amount of such
insurance recovery, to the Stockholder.

17
<PAGE> 20
ARTICLE IV

Section 10. Certain Deliveries of Parent and the
Purchaser. Parent and the Purchaser shall provide to the Stockholder when
available, and in any event prior to the Effective Time, (i) the letter
referred to in Section 4.10(b) of the Merger Agreement, addressed to the
Stockholder, who shall be entitled to rely thereon, (ii) any other solvency
letters or similar opinions relating to the solvency and capitalization of the
Surviving Corporation that are given on behalf of Parent or the Purchaser to
any banks or lenders in connection with the Financing, (iii) any appraisal
reports referred to in any such solvency letters and (iv) a certificate of an
executive officer of Parent and an executive officer of the Purchaser, as to
the representations and warranties set forth in Section 3(g).

Section 11. Access to Information. From the date of this
Agreement until the Effective Time, the Stockholder shall afford to Parent and
its authorized representatives reasonable access during normal business hours
upon reasonable prior notice to all of its books and records relating primarily
to, and personnel providing services to, the Company and its Subsidiaries.
Parent and its authorized representatives will use all reasonable efforts to
conduct all such inspections in a manner which will minimize disruptions of the
business and operations of the Stockholder. Parent and the Purchaser will hold
any such information in accordance with the provisions of the Confidentiality
Agreement, and will cause such information to be so held by their
Representatives (as defined in the Confidentiality Agreement). Upon a
termination of this Agreement pursuant to Section 23, Parent, the Purchaser and
their respective Representatives shall return or destroy (and hold
confidential) all information provided pursuant to this Section 11 pursuant to
the procedures set forth in the Confidentiality Agreement.

Section 12. Hart-Scott-Rodino Filing. Each of the
Stockholder and Parent shall, as soon as practicable, file (or, in the case of
Parent, cause its "ultimate parent entity" within the meaning of the HSR Act to
file) Notification and Report Forms under the HSR Act with the FTC and the
Antitrust Division, if required under applicable law, and shall use reasonable
efforts to respond as

18
<PAGE> 21
promptly as practicable to all inquiries received from the FTC or the Antitrust
Division for additional information or documentation. Each party hereto shall
use its reasonable efforts to take or cause to be taken all actions necessary,
proper or advisable to obtain any consent, waiver, approval or authorization
relating to any Competition Law that is required for the consummation of the
transactions contemplated by this Agreement.

Section 13. Insurance.

(a) In the event that, after the Effective Time, the
Company or any of its Subsidiaries (or any successor thereto) (an "Insured
Party") shall suffer any loss that would be covered by any insurance policy
maintained by the Stockholder for the benefit of the Company or any of its
Subsidiaries (but not any policy under which an Insured Party is entitled
directly as a named insured to present a claim) (an "Insured Claim"), the
Stockholder shall, at the expense (to the extent not paid or reimbursed by the
insurers) of the Insured Party promptly reimbursed to the Stockholder upon its
written request, present and diligently prosecute any reasonable claim for
payment under such policy in respect of such loss, and pay to such Insured
Party the proceeds of such claim under such policy as reimbursement in respect
of the amount of such loss, subject to the provisions of this Section 13.

(b) The Stockholder shall not be obligated to, or to
cause any of its affiliates to, present or prosecute any claim under any such
insurance policy with respect to any Insured Claim unless (i) such Insured
Claim is based upon a condition or event that arose or occurred (as determined
under the applicable insurance policy) prior to the Effective Time and (ii) the
relevant Insured Party cooperates fully at its expense (to the extent not paid
or reimbursed by the insurers) with the Stockholder's insurers in the
investigation and handling of such Insured Claim and (in the case of any
Insured Claim arising out of a third party claim) the defense thereof.

(c) With respect to any Insured Claim, the amount of
proceeds of any such insurance claim to be paid over to the Insured Party shall
be limited to the amount actually received by the Stockholder and its
affiliates

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<PAGE> 22
from its insurers with respect to such claim (net of any unpaid deductible
amount or other unpaid amount that the Stockholder is required to reimburse its
insurers under its contractual agreements with them, in each case with respect
to such claim. Notwithstanding the foregoing, the amount of proceeds of any
insurance claim in respect of domestic primary liability insurance or insured
workers compensation insurance shall be paid to or on behalf of an Insured
Party on a "first-dollar" basis and such amount shall include all self-insured
retention amounts paid or required to be paid by the Stockholder.

(d) Nothing contained in this Section 13 shall (i)
prevent any Insured Party from presenting a claim for payment in respect of any
loss under any insurance policy under which such Insured Party is entitled
directly as a named insured to present such a claim or (ii) prejudice in any
way the rights of any Insured Party in respect of any insurance policy
maintained by the Stockholder for the benefit of the Company or any of its
Subsidiaries on a "guaranteed cost" basis. Nothing contained in this Section
13 shall require the Stockholder or any of its affiliates to keep in force and
effect after the Closing any insurance coverage in effect prior to or at the
Effective Time.

Section 14. Publicity. Neither the Stockholder, Parent
nor any of their respective affiliates (other than the Company or any of its
Subsidiaries and their respective officers and directors) shall issue or cause
the publication of any press release or other announcement with respect to this
Agreement or the Merger Agreement or the other transactions contemplated hereby
or thereby without prior consultation with the other party, except as may be
required by law, a court filing or by any listing agreement with a national
securities exchange if all reasonable efforts have been made to consult with
the other party.

Section 15. Certain Arrangements. The Stockholder shall
cause all accounts payable, accounts receivable, contracts, agreements, plans,
instruments, commitments, claims and other obligations pursuant to which the
Company or any of its Subsidiaries has made, or is obligated to make, payments
or incur expenses to or for the benefit of the Stockholder or any of its
affiliates (other than the Company or any of its Subsidiaries) to be

20
<PAGE> 23
cancelled, terminated, waived and released at or prior to the Effective Time
without any consideration being paid or payable in respect thereof, pursuant to
appropriate agreements and instruments in form and substance mutually
satisfactory to Parent and the Stockholder in their reasonable judgment;
provided that the accounts payable, accounts receivable, contracts, agreements,
plans, instruments, commitments, claims and other obligations set forth in
Schedule 5.10 of the Disclosure Schedule referred to in the Merger Agreement
shall be treated in the manner expressly set forth in such Schedule.

ARTICLE V

Section 16. Reasonable Efforts, etc.

(a) Upon the terms and subject to the conditions herein
provided, each of the parties hereto agrees to use its reasonable efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations or
otherwise to consummate and make effective the transactions contemplated by
this Agreement. Without limiting the generality of the foregoing, the
Stockholder agrees after the date hereof, to (i) use its reasonable efforts to
obtain approval of the Merger and the other transactions contemplated by the
Merger Agreement by its stockholders, (ii) prepare, file and distribute to its
stockholders a proxy statement with respect to such stockholder approval, in
compliance with applicable securities laws and regulations and the rules of any
stock exchange on which the Stockholder Common Stock is listed or traded, (iii)
call a special meeting of stockholders for the purpose of voting upon such
approval, (iv) use efforts consistent with past practice to solicit proxies
from its stockholders, (v) to the extent consistent with the exercise by the
Board of its fiduciary duties under applicable law, recommend in its proxy
solicitation material that stockholders vote in favor of such approval, and
(vi) use reasonable efforts to satisfy the conditions set forth in Sections
3.03(b), 4.02 and 4.03 of the Exchange Agreement, including receipt of the
Order (as defined in the Exchange Agreement).

(b) The Stockholder shall, in accordance with applicable
law and the Restated Certificate of Incorpora-

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<PAGE> 24
tion and the By-laws of the Stockholder, duly call, set a record date for, give
notice of, convene and hold a special meeting of its stockholders as promptly
as practicable (it being understood that such meeting may be adjourned or
postponed as reasonably necessary to permit the occurrence of the Approval
Date) after the date hereof for the purpose of considering and taking action
upon this Agreement and the Merger and such other matters as may be appropriate
at such special meeting (such meeting, as so adjourned or postponed, being
referred to as the "Stockholder Special Meeting").

(c) As promptly as practicable after the date hereof, the
Stockholder shall prepare and file with the SEC, and Parent and the Purchaser
shall cooperate with the Stockholder in such preparation and filing, a
preliminary proxy statement relating to this Agreement and the Merger and the
transactions contemplated hereby and by the Merger Agreement and use its best
efforts to furnish the information required to be included by the SEC in the
Stockholder Proxy Statement (as hereinafter defined) and, after consultation
with Parent, to respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement and cause a definitive proxy statement (the
"Stockholder Proxy Statement") to be mailed to its stockholders. Subject to
the fiduciary duties of the Stockholder's Board under applicable law, the
Stockholder shall include in the Stockholder Proxy Statement the recommendation
of the Stockholder's Board that stockholders of the Stockholder approve and
adopt this Agreement and approve the Merger and the other transactions
contemplated by the Merger Agreement and shall use all reasonable efforts to
solicit from stockholders of the Stockholder proxies in favor of the approval
and adoption of the Merger and the transactions contemplated by the Merger
Agreement.

(d) Parent agrees that it will provide the Stockholder
with all necessary information concerning Parent or the Purchaser necessary or
reasonably appropriate to be included in the Stockholder Proxy Statement.

(e) The Stockholder shall cooperate with Parent and the
Purchaser in the preparation and filing of the Schedule 13E-3 and shall use all
reasonable efforts to promptly obtain and furnish the information required to
be included in the Schedule 13E-3 and to respond

22
<PAGE> 25
promptly to any comments or requests made by the SEC with respect to the
Schedule 13E-3. The Stockholder agrees to correct any information provided by
it for use in the Schedule 13E-3 which shall have become, or is, false or
misleading.

(f) The Stockholder shall give prompt notice to Parent
and Parent shall give prompt notice to the Stockholder, of (i) the occurrence
or nonoccurrence of any event the occurrence or nonoccurrence of which would
cause any representation or warranty of the Stockholder, or of Parent and the
Purchaser, as the case may be, contained in this Agreement to be untrue or
inaccurate in any material respect at the Effective Time and (ii) any material
failure of the Stockholder, or Parent or the Purchaser, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder.

(g) If at any time prior to the Stockholder Special
Meeting any event or circumstance relating to the Stockholder or any of its
Subsidiaries or affiliates, or its or their respective officers or directors,
should be discovered by the Stockholder that is required to be set forth in a
supplement to the Stockholder Proxy Statement, the Stockholder shall promptly
inform the Parent and the Purchaser, so supplement the Stockholder Proxy
Statement and mail such supplement to its stockholders. If at any time prior
to the Stockholder Special Meeting any event or circumstance relating to Parent
or any of its Subsidiaries or affiliates, or its or their respective officers
or directors, should be discovered by Parent that is required to be set forth
in a supplement to the Stockholder Proxy Statement, Parent shall promptly
inform the Stockholder; and upon receipt of such information the Stockholder
shall promptly supplement the Stockholder Proxy Statement and mail such
supplement to its stockholders.

(h) From and after the date of this Agreement, Parent and
the Purchaser shall, at the request of the Stockholder, advise the Stockholder
as to the status of negotiations to obtain the Financing and shall advise the
Stockholder promptly upon becoming aware of any event, circumstance or
condition that Parent or the Purchaser believes could reasonably be expected to
prevent the availability to the Purchaser of such Financing in a timely manner.
Parent and the Purchaser shall provide

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<PAGE> 26
the Stockholder's financial advisors with such information regarding the
financing plans and capital structure of the Surviving Corporation after giving
effect to the Merger and the Financing as may be reasonably requested by the
Stockholder's financial advisors for the purpose of reviewing the matters
referred to in Section 3(f), subject to appropriate confidentiality
undertakings by such advisors. In the event that the Merger Agreement shall be
terminated pursuant to Section 7.1 thereof, at the request of the Stockholder,
Parent and the Purchaser shall provide to the Stockholder a copy of each of the
Environmental Assessment and the Patent Review, but in no event shall Parent or
the Purchaser be liable for any costs or losses incurred by the Stockholder or
any of its Subsidiaries as a result of its receipt or use of the Environmental
Assessment or the Patent Review. In the event that a claim for indemnification
is made pursuant to Section 9 in respect of a breach of or inaccuracy in
Section 3.14 of the Merger Agreement or Section 3.24 of the Merger Agreement to
the extent it relates to Section 3.14 of the Merger Agreement, Parent and the
Purchaser shall provide to the Stockholder a copy of the Environmental
Assessment to the extent that it relates to the facts, circumstances or
conditions upon which such claim is based.

(i) Following the Closing Date, the Stockholder shall,
and shall cause each of its affiliates to, from time to time, execute and
deliver such additional instruments, documents, conveyances or assurances and
take such other actions as shall be necessary, or otherwise reasonably be
requested by Parent, to confirm and assure the rights and obligations provided
for in this Agreement and render effective the consummation of the transactions
contemplated hereby and by the Merger Agreement, or otherwise to carry out the
intent and purposes of this Agreement and the Merger Agreement other than
pursuant to Article III of this Agreement.

Section 17. Non-survival of Representations and
Warranties. None of the representations and warranties made by the
Stockholder, Parent or the Purchaser in this Agreement shall survive the
Effective Time. The covenants and agreements made herein shall survive in
accordance with their respective terms.

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<PAGE> 27
Section 18. Expenses. Each party shall bear its own
expenses and costs in connection with this Agreement and the transactions
contemplated hereby.

Section 19. Amendment; Waiver; Assignment. This
Agreement may not be modified, amended, altered or supplemented except by an
instrument in writing signed on behalf of each of the parties hereto. No
failure by any party to insist upon the strict performance of any covenant,
duty or agreement of this Agreement or to exercise any right or remedy
consequent upon a breach thereof shall constitute a waiver of any such breach
or of any other covenant, duty or agreement, any such waiver being made only by
a written instrument executed and delivered by the waiving party. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties; provided,
that Parent or the Purchaser may assign this Agreement to any Subsidiary of
Parent or the Purchaser, or to any lender to Parent or the Purchaser or any
Subsidiary or affiliate thereof as security for obligations to such lender, and
provided, further, that no assignment to any such lender shall in any way
affect Parent's or the Purchaser's obligations or liabilities under this
Agreement. Parent shall promptly notify the Stockholder of any assignment
(whether by operation of law or otherwise) permitted by the immediately
preceding sentence.

Section 20. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever, except as provided in Section 9
with respect to indemnification of Indemnitees.

Section 21. Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by facsimile or by registered or certified mail (postage prepaid,
return receipt requested), to the other party as follows:

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<PAGE> 28
(a) If to Parent or the Purchaser, to:

with a copy to:

Clayton, Dubilier & Rice, Inc.
126 Each 56th Street
New York, New York 10022
Telephone: (212) 407-5200
Facsimile: (212) 407-5252
Attention: Kevin J. Conway

and with a copy to:

Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telephone: (212) 909-6000
Facsimile: (212) 909-6836
Attention: David A. Brittenham, Esq.

(b) If to the Stockholder, to:

Manville Corporation
717 17th Street
Denver, Colorado 80202
Telephone: (303) 978-4911
Facsimile: (303) 978-4842
Attention: Richard B. Von Wald, Esq.

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<PAGE> 29
with a copy to:

Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telephone: 212-735-3000
Facsimile: 212-735-2000
Attention: Franklin M. Gittes, Esq.

or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.

Section 22. Governing Law. This Agreement shall be governed
by, construed and enforced in accordance with the law of the State of Delaware,
without regard to the principles of conflicts of law thereof.

Section 23. Termination. This Agreement shall be
terminable (i) by the Stockholder or Parent upon the termination of the Merger
Agreement in accordance with its terms or (ii) by the mutual consent of the
Board of Directors of Parent and the Board of Directors of the Stockholder. No
such termination shall relieve any party from liability for any breach of this
Agreement.

Section 24. Entire Agreement. This Agreement, together with
the Tax Matters Agreement, constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof. The parties hereto also acknowledge that
the Chief Financial Officer of the Stockholder has delivered to Parent and the
Purchaser the Tax letter.

Section 25. Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.

Section 26. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.

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<PAGE> 30
Section 27. Post-Closing Confidentiality. (a) From and after
the Effective Time and until the fifth anniversary thereof, the Stockholder
shall keep confidential and shall use reasonable efforts to cause its
affiliates, agents, advisors and representatives, and their respective
officers, directors or employees (the "Representatives) to keep confidential
all information of Parent, the Purchaser, the Company or their respective
Subsidiaries that has been acquired by the Stockholder through activities
carried out by it on behalf of the Company or otherwise, including but not
limited to information relating to pricing, technologies, trade secrets,
processes, customers, suppliers, financial data, statistics, or research and
development (collectively, "Information"); provided, that the foregoing shall
not apply to information that (i) is or hereafter becomes generally available
to the public other than as a result of a disclosure by the Stockholder or any
Representative, (ii) is hereafter disclosed to the Stockholder or its
Representatives by a third party who is not in default of any confidentiality
obligation to Parent or the Company, (iii) is reasonably required to be
submitted by the Stockholder or any Representative to any Governmental Entity,
including in connection with any action, suit or proceeding, (iv) is provided
by the Stockholder under confidentiality terms and conditions for the benefit
of the Company, substantially similar to those confidentiality arrangements set
forth in the Confidentiality Agreement and with a term of at least five years
from the date hereof, (x) to third parties for consulting, accounting, legal
and similar purposes, or (y) to prospective purchasers of the Stockholder or of
all or any portion of the securities or assets of the Stockholder to the extent
considered reasonably necessary by the Stockholder to facilitate such purchase,
(v) is necessary, in the Stockholder's reasonable judgment, to disclose in
order to assert or defend any claim against (or made by) any insurer or other
Person, provided that prior notice of such disclosure is provided to Parent,
(vi) is or was independently developed by the Stockholder or any of its
Subsidiaries (other than the Company and its Subsidiaries) or Representatives
without any use or knowledge of any Information, or (vii) is required to be
disclosed by the Stockholder or any Representative in compliance with
applicable laws or regulations or order by a Governmental Entity, provided that
in the event that the Stockholder or any Representative is requested by any
Governmental

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<PAGE> 31
Entity to disclose any such Information, the Stockholder shall give, or shall
use reasonable efforts to cause the Representative to give, Parent prompt
written notice of such request so that Parent or its relevant Subsidiary may
seek an appropriate protective order and in the absence of a protective order
the Stockholder or any Representative shall use reasonable efforts to obtain
assurances that confidential treatment will be accorded to such information.

(b) The Stockholder acknowledges that the Purchaser and
its affiliates would be irreparably damaged in the event of a breach or a
threatened breach of any of the Stockholder's obligations under this Section
27, and agrees (and shall use reasonable efforts to cause each other
Representative to agree) that, in the event of a breach or a threatened breach
of any such obligation, each of Parent and its Subsidiaries shall, in addition
to any other rights and remedies available to it in respect of such breach, be
entitled to an injunction from a court of competent jurisdiction granting it
specific performance of the provisions of this Section 27.

Section 28. Rights and Remedies. The rights and remedies
herein provided are not exclusive of any other rights or remedies that any
party may otherwise have at law or in equity.

Section 29. Merger Agreement. The term "Merger Agreement" as
used herein shall mean the Merger Agreement as it may be amended or modified
from time to time, but only to the extent that the Stockholder has provided to
Parent prior written consent to such amendment or modification.

29
<PAGE> 32
IN WITNESS WHEREOF, Parent, the Purchaser and the Stockholder
have caused this Agreement to be signed by their respective officers thereunto
duly authorized as of the date first written above.

CDRO HOLDING CORPORATION

By: /s/ KEVIN J. CONWAY
-----------------------------------
Name: Kevin J. Conway
Title: President

CDRO ACQUISITION CORPORATION

By: /s/ KEVIN J. CONWAY
-----------------------------------
Name: Kevin J. Conway
Title: President

MANVILLE CORPORATION

By: /s/ RICHARD B. VON WALD
-----------------------------------
Name: Richard B. Von Wald
Title: Senior Vice President
General Counsel & Secretary

30
<PAGE> 33
Exhibit A -- See tab 4.

<PAGE> 1
================================================================================

TAX MATTERS AGREEMENT

BY AND AMONG

MANVILLE CORPORATION

RIVERWOOD INTERNATIONAL CORPORATION

CDRO HOLDING CORPORATION

AND

CDRO ACQUISITION CORPORATION

DATED AS OF

OCTOBER 25, 1995

================================================================================
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section Page
<S><C> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. Termination of Existing Tax Sharing Agreements; Tax Sharing Payments; Indemnifiable Separate Taxes . . . . . . . . 5

3. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

4. Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

5. Refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

6. Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

7. Conduct of Tax Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

8. Section 338(h)(10) Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

9. Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

10. Tax Dispute Resolution Mechanism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

11. Cooperation on Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

12. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

13. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

14. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

15. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

16. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

17. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

18. Assignment; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

19. No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

20. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

21. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
22. Termination; Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

23. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

24. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>

ii
<PAGE> 4
TAX MATTERS AGREEMENT

TAX MATTERS AGREEMENT, dated as of October 25, 1995, by and
among Manville Corporation, a Delaware corporation ("Stockholder"), Riverwood
International Corporation, a Delaware corporation (the "Company"), CDRO Holding
Corporation, a Delaware corporation ("Purchaser"), and CDRO Acquisition
Corporation, a Delaware corporation ("Newco").

WHEREAS Stockholder currently owns more than 80% of the
outstanding capital stock of the Company;

WHEREAS the Company, Purchaser and Newco have entered into an
Agreement and Plan of Merger dated as of the date hereof (the "Merger
Agreement"), pursuant to which Newco will be merged with the Company, as a
result of which Purchaser will become the owner of all of the outstanding
capital stock of the survivor of the merger, and Stockholder and the other
shareholders of the Company will receive cash in exchange for their capital
stock of the Company;

WHEREAS Stockholder, Purchaser and Newco have entered into a
Voting and Indemnification Agreement dated as of the date hereof (the
"Indemnification Agreement") as contemplated by the Merger Agreement; and

WHEREAS the Company, Stockholder and Purchaser wish to set
forth their agreement with respect to certain tax matters as set forth below.

NOW THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto agree as follows:

1. Definitions. Except as specifically set forth herein,
capitalized terms as used herein have the meanings set forth in the Merger
Agreement. The following terms as used herein have the following meanings:

"Additional Section 338 Form": as defined in Section 8.2(c).

"Affiliate": of any Person means any other Person that,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with the first Person, including but
not limited to a Subsidiary of the first Person, a Person of which the first
Person is a Subsidiary, or another Subsidiary of a Person of which the first
Person is also a Subsidiary.
<PAGE> 5
"Code": the Internal Revenue Code of 1986, as amended.

"Combined State Tax Return": any Return relating to Combined
State Taxes.

"Combined State Taxes": any state or local Income Taxes with
respect to which the Company or any of its Subsidiaries has filed or is
required to file pursuant to Section 4.1(b) a state or local Income Tax Return
with a member of the Stockholder's Group on a consolidated, combined, or
unitary basis.

"Control": the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of a Person,
whether through the ownership of securities, by contract or otherwise.

"Federal Income Taxes": any federal Income Taxes with respect
to which the Company or any of its Subsidiaries has filed or is required to
file pursuant to Section 4.1(a) a consolidated federal Income Tax Return with
the Stockholder's Consolidated Group.

"Final Allocation": as defined in Section 8.3.

"Form 8023": as defined in Section 8.2(a).

"Income Tax": any federal, state, local, provincial, foreign
or other income, alternative, minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits or windfall
profits tax or other similar tax, estimated tax, duty or other governmental
charge or assessment or deficiencies thereof (including but not limited to all
interest and penalties thereon and additions thereto).

"Indemnifiable Separate Taxes": all state and local Income
Taxes (excluding Combined State Taxes) with respect to the Company and its
Subsidiaries for all Pre-Closing Tax Periods, other than (i) any such Taxes
shown on Returns relating to such Taxes as originally filed with the applicable
Taxing Authorities (as amended pursuant to Section 10(e)) and (ii) any Taxes
described in Section 8.6(b) or Section 8.6(c).

"Indemnified Party": as defined in Section 12.3.

"Indemnifying Party": as defined in Section 12.3.

2
<PAGE> 6
"IRS": the Internal Revenue Service.

"Losses": as defined in Section 12.1.

"Non-Company Affiliate": any Affiliate of Stockholder other
than the Company and its Subsidiaries.

"Obligated Party": as defined in Section 13.

"Person": any natural person, firm, partnership, joint
venture, association, corporation, company, trust, business trust, governmental
authority or other entity.

"Pre-Closing Tax Period": any taxable period with respect to
the Company or any of its Subsidiaries ending on or before the close of
business on the Closing Date.

"Pro Forma Combined State Return": as defined in Section
2.2(b).

"Pro Forma Federal Return": as defined in Section 2.2(b).

"Pro Forma Returns": as defined in Section 2.2(c).

"Purchaser Indemnitees": as defined in Section 12.1.

"Representatives": as defined in Section 13.

"Return": any return, report, declaration, form, claim for
refund or information statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

"Section 338 Election": an election pursuant to section 338
of the Code other than such an election made in conjunction with an election
pursuant to section 338(h)(10) of the Code, and any comparable or corresponding
election with respect to state or local Income Taxes, as applicable to the
Company and each of its Subsidiaries.

"Section 338 Forms": as defined in Section 8.2(a).

"Section 338(h)(10) Election": an election pursuant to
section 338(h)(10) of the Code, and any comparable

3
<PAGE> 7
or corresponding election with respect to Combined State Taxes, as applicable
to the Company and each of its Subsidiaries.

"Stockholder Indemnitees": as defined in Section 12.2.

"Stockholder's Consolidated Group": with respect to Federal
Income Taxes, any affiliated group of corporations for purposes of filing
consolidated Returns of which Stockholder (or any predecessor thereof or
successor thereto) is a member.

"Stockholder's Group": with respect to Combined State Taxes,
any consolidated, combined, or unitary group of Persons of which Stockholder or
any Non-Company Affiliate (or any predecessor thereof or successor thereto) is
a member.

"Subsidiary": of any Person means any other Person in which
the first Person owns or controls, directly or indirectly, capital stock or
other equity interests representing more than 50% of the outstanding voting
power (including but not limited to the ability to elect a majority of the
board of directors or other body performing similar functions for such other
Person) or more than 50% of the equity interests in such other Person.

"Tax": any federal, state, local, provincial, foreign or
other income, alternative, minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits, windfall
profits, gross receipts, value added, sales, use, excise, custom duties,
transfer, conveyance, mortgage, registration, stamp, documentary, recording,
premium, severance, environmental, real and personal property, ad valorem,
intangibles, rent, occupancy, license, occupational, employment, unemployment
insurance, social security, disability, workers' compensation, payroll, health
care, withholding, estimated or other similar tax, duty or other governmental
charge or assessment or deficiencies thereof (including but not limited to all
interest and penalties thereon and additions thereto).

"Tax Dispute Accountants": as defined in Section 10.

"Tax Dispute Resolution Mechanism": as defined in Section 10.

4
<PAGE> 8
"Tax Sharing Agreement": the Tax Sharing Agreement dated as
of June 17, 1992 between Stockholder and the Company, as amended to the date of
this Agreement.

"Taxing Authority": any federal, state, local or foreign
governmental authority responsible for any Tax.

2. Termination of Existing Tax Sharing Agreements; Tax
Sharing Payments; Indemnifiable Separate Taxes.

2.1 Tax Sharing Agreements. From the date hereof through the
Closing, the Tax Sharing Agreement shall remain in full force and effect and
shall not be amended without the consent of Purchaser and Newco, and the
parties thereto shall make all payments required thereunder. Any and all
existing Tax sharing agreements and arrangements (including but not limited to
the Tax Sharing Agreement) between the Company or any of its Subsidiaries on
the one side, and Stockholder or any Non-Company Affiliate, on the other side
(copies of which, together with all amendments thereto through the date hereof,
have been provided to Purchaser), shall be terminated effective upon the
Closing, and no additional payments shall be made thereunder. After the
Closing neither the Company, any of its Subsidiaries, Stockholder nor any
Non-Company Affiliate shall have any further rights or liabilities thereunder
for any taxable year (whether the current year, a future year, or a past year).

2.2 Tax Sharing Payments. The provisions of this Section 2.2
shall become effective upon the Closing:

(a) The Company shall pay to Stockholder an amount equal to
the estimated Federal Income Taxes and estimated Combined State Taxes with
respect to the Company and its Subsidiaries for all Pre-Closing Tax Periods,
for which Taxes Stockholder is responsible pursuant to Section 3.1(a) or
Section 3.1(b), and shall make each such payment no later than 5 business days
prior to the due date for the payment of such estimated Taxes to the applicable
Taxing Authority. The amount of such payment in respect of such estimated
Taxes shall be calculated in accordance with past practices pursuant to the
provisions of Article III of the Tax Sharing Agreement, based on Stockholder's
reasonable estimates of the income of the Company and its Subsidiaries and
reduced by the amount of any payments on account of such Taxes previously paid
to Stockholder.

(b) Stockholder shall deliver to Purchaser a pro forma
Federal Income Tax Return (each a "Pro Forma Federal Return") of the Company
and its Subsidiaries (i) for the

5
<PAGE> 9
period beginning January 1, 1995 and ending on December 31, 1995, which Return
shall be delivered no later than July 17, 1996, and (ii) for the period
beginning January 1, 1996 and ending at the close of business on the Closing
Date, which Return shall be delivered no later than July 17, 1997, in each case
calculated in accordance with the principles of Section 2.2(e). Stockholder
shall deliver to Purchaser a pro forma Combined State Tax Return (each a "Pro
Forma Combined State Return") for each jurisdiction in which a Combined State
Tax Return is filed no later than 60 days prior to the due date for the
applicable Return (including all extensions thereof) for the period beginning
January 1, 1995 and ending on December 31, 1995 and for the period beginning
January 1, 1996 and ending at the close of business on the Closing Date, in
each case calculated in accordance with the principles of Section 2.2(e).
Purchaser will and will cause the Company and its Subsidiaries to furnish Tax
information to Stockholder for preparation of the Pro Forma Returns in a timely
manner.

(c) Purchaser shall have the right at Purchaser's expense to
review all work papers and procedures used to prepare each of the Pro Forma
Federal Returns and the Pro Forma Combined State Returns (together, the "Pro
Forma Returns"). Unless Purchaser timely objects as specified in this Section
2.2(c), the Pro Forma Returns shall be final and binding on the parties without
further adjustment. If Purchaser objects to any item on any Pro Forma Return,
it shall, within 30 days after delivery of such Pro Forma Return, notify
Stockholder in writing that it so objects, specifying any such item and stating
the factual or legal basis for any such objection. If a notice of objection
shall be duly delivered, disputed items shall be resolved pursuant to the Tax
Dispute Resolution Mechanism. Upon resolution of all disputed items, the Pro
Forma Returns shall be adjusted to reflect such resolution and shall be final
and binding on the parties without further adjustment.

(d) Purchaser shall cause the Company to pay to Stockholder,
or Stockholder shall pay to the Company, as appropriate, together with interest
calculated in accordance with past practices pursuant to the provisions of the
Tax Sharing Agreement, an amount reflecting the difference between (i) the sum
of the liabilities shown on the final Pro Forma Returns for each period and
(ii) the aggregate of all amounts previously paid by the Company or any of its
Subsidiaries with respect thereto. The payment for the period beginning
January 1, 1995 and ending on December 31, 1995 shall be made at the time
Stockholder's Consolidated Group files its consolidated federal Income Tax
Return for

6
<PAGE> 10
the taxable year ending December 31, 1995, and the payment for the period
beginning January 1, 1996 and ending at the close of business on the Closing
Date shall be made at the time Stockholder's Consolidated Group files its
consolidated federal Income Tax Return for the taxable year ending December 31,
1996. If a Pro Forma Return for Federal Income Taxes or for a Combined State
Tax reflects a net operating loss, net capital loss, excess tax credit or other
similar tax attribute, then Stockholder shall pay to the Company, within 45
days after Stockholder's Consolidated Group files its consolidated federal
Income Tax Return for the relevant taxable year, together with interest
calculated in accordance with past practices pursuant to the provisions of the
Tax Sharing Agreement, an amount equal to the refund that the Company and its
Subsidiaries would have received as a result of the carryback of such attribute
to the relevant Pro Forma Return (or Pro Forma Riverwood Return, as such term
is defined in the Tax Sharing Agreement) previously prepared with respect to
Federal Income Taxes or the same Combined State Tax, as the case may be
(whether or not such attribute is actually carried back with respect to the
relevant Federal Income Tax Returns or Combined State Tax Returns). All such
payments shall be calculated in accordance with the principles of Section
2.2(e).

(e) The calculation of the amount of Tax liabilities and
attributes set forth on the Pro Forma Returns shall be made as if the Company
were filing its own consolidated, combined or unitary Income Tax Returns
including those of its Subsidiaries that are members of Stockholder's
Consolidated Group or the applicable group for which a Combined State Tax
Return is filed (with the Company as the common parent) for all Pre-Closing Tax
Periods (assuming that the Company and its Subsidiaries had not been in
existence before January 1, 1992), provided that (i) income, gains, deductions,
losses, credits and recapture of credits shall be computed, and relevant Tax
elections shall be given effect, in a manner consistent with past practices
pursuant to the provisions of Article III of the Tax Sharing Agreement
(including but not limited to the concept that the Pro Forma Returns shall not
include any deductions, losses or credits of the Company and its Subsidiaries
arising from the payment of certain expenses by Stockholder that have not been
and will not be reimbursed by the Company or any of its Subsidiaries) and (ii)
the applicable Tax rates shall be the appropriate statutory rates in effect
during the relevant taxable period. Stockholder and Purchaser agree that the
Pro Forma Federal Return for the period beginning January 1, 1996 and ending at
the close of business on the Closing Date will be prepared on the basis of a
closing of the books of

7
<PAGE> 11
the Company and its Subsidiaries as of the close of business on the Closing
Date, as adjusted to reflect income, gains, deductions, losses, credits and
recapture of credits shown on the Company's permanent records (including work
papers) pursuant to Treas. Reg. section 1.1502-76(b)(2)(i) and not on the basis
of proration pursuant to Treas. Reg. section 1.1502-76(b)(2)(ii). The
calculation of the liability for Combined State Tax set forth on each Pro Forma
Combined State Return for the period beginning January 1, 1996 and ending at
the close of business on the Closing Date shall be made in accordance with
comparable provisions under applicable law in accordance with past practices
pursuant to the provisions of Article III of the Tax Sharing Agreement. Except
as set forth to the contrary in this Section 2.2, the Pro Forma Returns shall
be prepared consistently with the applicable Returns as originally filed with
the applicable Taxing Authority, except for such inconsistencies as are
consistent with past practices pursuant to the provisions of Article III of the
Tax Sharing Agreement, and the Pro Forma Returns shall not be amended or
otherwise reflect any changes in or audit adjustments with respect to such
applicable Returns.

(f) Notwithstanding anything in this Section 2.2 to the
contrary, the Pro Forma Returns shall not include any amounts arising from (i)
the restoration of gain or loss on any deferred intercompany transaction (x)
between any of the Company and its Subsidiaries, on the one hand, and any of
Stockholder or any Non-Company Affiliate, on the other hand, that has
previously been taken into account in a Pro Forma Riverwood Return (as such
term is defined in the Tax Sharing Agreement) or (y) between any of the Company
and its Subsidiaries, or the inclusion in income of any excess loss account
with respect to the stock of the Company or any of its Subsidiaries, or (ii)
any income, gains, deductions, losses, credits or recapture of credits
resulting from the deemed sale of assets and other deemed transactions arising
from the Section 338(h)(10) Elections.

2.3 Payments and Returns with Respect to Indemnifiable
Separate Taxes. The provisions of this Section 2.3 shall become effective upon
the Closing:

(a) No later than 5 business days prior to the date on which
any Indemnifiable Separate Tax will actually be paid by the Company or any of
its Subsidiaries to the applicable Taxing Authority, Stockholder shall pay to
the Company the amount of such Tax. If the taxable period covered by any
Return with respect to Indemnifiable Separate Taxes shall include any period
ending after the Closing

8
<PAGE> 12
Date, then such Indemnifiable Separate Taxes shall be determined as if such
taxable period ended on the Closing Date, based on a closing of the books of
the Company and its Subsidiaries as of the close of business on the Closing
Date.

(b) The Company shall pay to Stockholder the amount of any
actual reduction in the amount of Income Taxes paid by the Company and its
Subsidiaries for any period beginning after the Closing Date that results from
any deduction of (i) the payment or accrual of Indemnifiable Separate Taxes by
the Company or any of its Subsidiaries or (ii) the payment or accrual of any
amount pursuant to this Section 2.3(b), in each case other than any such
payment or accrual that increases the purchase price for the deemed sale of
assets resulting from the making of the Section 338(h)(10) Elections or any
Section 338 Election. Each payment pursuant to this Section 2.3(b) shall be
made within 5 business days after the filing of the Return for such Income
Taxes (other than a Return for estimated Taxes) that reflects such reduction
(or in the case of a refund reflecting such reduction, after the receipt of
such refund).

(c) Stockholder shall pay to the Company the amount of any
actual increase in the amount of Income Taxes paid by the Company and its
Subsidiaries for any period beginning after the Closing Date that results from
any inclusion in income of the receipt or accrual of any amount pursuant to
Section 2.3(a) or this Section 2.3(c) other than any such receipt or accrual
that reduces the purchase price for the deemed sale of assets resulting from
the making of the Section 338(h)(10) Elections or any Section 338 Election.
Each payment pursuant to this Section 2.3(c) shall be made within 5 business
days after the filing of the Return for such Income Taxes (other than a Return
for estimated Taxes) that reflects such increase.

(d) Upon the making of any payment pursuant to Section 2.3(a),
Stockholder and the Company will in good faith attempt to negotiate a single
payment covering the net amount of the payments to be made pursuant to Section
2.3(b) and Section 2.3(c) relating to the Indemnifiable Separate Taxes covered
by such payment pursuant to Section 2.3(a), taking into account the tax
position of the Company and its Subsidiaries. If Stockholder and the Company
are able to negotiate such a single payment, then the making of such payment
shall discharge the obligations of each with respect to Section 2.3(b) and
Section 2.3(c) covered by such single payment.

9
<PAGE> 13
(e) Notwithstanding the other provisions of this Section 2.3,
(i) if Purchaser shall fail to provide notice to Stockholder with respect to an
Indemnifiable Separate Tax as provided in Section 6, Stockholder shall not be
required to pay to the Company pursuant to Section 2.3(a) any portion of such
Indemnifiable Separate Tax to the extent that such failure to give notice
results in a lack of actual notice to Stockholder and Stockholder is materially
prejudiced as a result of such failure, (ii) if the Company shall file any
Return (including amended Returns) relating to an Indemnifiable Separate Tax
without complying with the provisions of Section 2.3(f), Stockholder shall not
be required to pay to the Company pursuant to Section 2.3(a) any portion of
such Indemnifiable Separate Tax to the extent that Stockholder is materially
prejudiced as a result of such failure to comply, and (iii) in any such case,
and to such extent, the provisions of Section 2.3(b), Section 2.3(c) and
Section 2.3(d) relating to such Indemnifiable Separate Tax shall not apply.

(f) The Company shall not file any Return (including amended
Returns) relating to Indemnifiable Separate Taxes without first providing
Stockholder the opportunity to prepare a draft of such Return. The Company
shall furnish Tax information to Stockholder for preparation of a draft of each
such Return in a timely manner. Stockholder shall deliver to the Company a
draft of each such Return to be filed at any time after the Closing Date no
later than the date that is 60 days prior to date on which such Return is to be
filed. The Company shall have the right at its expense to review all work
papers and procedures used to prepare each such draft Return. Unless the
Company timely objects as specified in this Section 2.3(f), each such draft
Return shall be final and binding on the parties without further adjustment.
If the Company objects to any item on any such draft Return, it shall, within
30 days after delivery of such draft Return, notify Stockholder in writing that
it so objects, specifying any such item and stating the factual or legal basis
for any such objection. If a notice of objection shall be duly delivered,
disputed items shall be resolved pursuant to the Tax Dispute Resolution
Mechanism. Upon resolution of all disputed items, such Return shall be
adjusted to reflect such resolution and shall be final and binding on the
parties without further adjustment. If the Company shall provide Stockholder
the opportunity to prepare a draft of any such Return and shall furnish Tax
information to Stockholder for preparation of a draft of such Return, and if
Stockholder shall fail to provide a draft of such Return, in each case as
provided in this Section 2.3(f), the Company shall prepare the Return with
respect to such Indemnifiable

10
<PAGE> 14
Separate Tax in its sole discretion in accordance with the provisions of
Section 4.2.

3. Payments.

3.1 Stockholder's Responsibility. As between Stockholder and
the Non-Company Affiliates, on the one hand, and the Company and its
Subsidiaries, Purchaser, Newco and their respective Affiliates, on the other
hand, Stockholder shall pay or cause to be paid to the applicable Taxing
Authority (a) all Federal Income Taxes payable with respect to the Company and
its Subsidiaries for all Pre-Closing Tax Periods, (b) all Combined State Taxes
payable with respect to the Company and such Subsidiaries for all Pre-Closing
Tax Periods and (c) all Income Taxes for which the Company or any of its
Subsidiaries may be held liable, pursuant to section 1.1502-6(a) of the
Treasury Regulations, or any state or local law with respect to Income Taxes,
as a member of Stockholder's Consolidated Group or any Stockholder's Group.

3.2 Purchaser's Responsibility. As between Stockholder and
the Non-Company Affiliates, on the one hand, and the Company and its
Subsidiaries, Purchaser, Newco and their respective Affiliates, on the other
hand, Purchaser shall pay or cause to be paid to the applicable Taxing
Authority all Taxes payable with respect to the Company or any of its
Subsidiaries that are not described as being the responsibility of Stockholder
in Section 3.1.

4. Returns.

4.1 Stockholder's Responsibility. Stockholder and Purchaser
shall cause the Company and its Subsidiaries, to the extent permitted by law,
to join, for all Pre-Closing Tax Periods, in (a) the consolidated federal
Income Tax Returns of Stockholder's Consolidated Group, (b) the combined,
consolidated or unitary Returns for state and local Income Taxes of
Stockholder's Group with respect to which the Company or any of its
Subsidiaries (i) filed such a Return for the most recent taxable period for
which a Return has been filed prior to the Closing and may file such a Return
for subsequent taxable periods or (ii) is required by the applicable Taxing
Authority to file such a Return. Stockholder shall file or cause to be filed
all Returns set forth in the immediately preceding sentence. The income,
gains, deductions, losses, credits and recapture of credits of the Company and
such Subsidiaries for Pre-Closing Tax Periods shall be included in the
consolidated federal Income Tax Returns of Stockholder's Consolidated Group and
in the Combined State Tax Returns, where applic-

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<PAGE> 15
able. Stockholder shall file, or shall cause the Company to file or cause to
be filed, all other Returns relating to the business or assets of the Company
and its Subsidiaries required to be filed on or prior to the Closing Date. Any
such Returns shall, to the extent permitted by applicable Tax law, be filed on
a basis consistent with the last previous such Returns filed in respect of the
Company and its Subsidiaries.

4.2 Purchaser's Responsibility. Purchaser shall file, or
cause to be filed, all Returns relating to the business or assets of the
Company and its Subsidiaries other than those Returns described in Section 4.1
(including but not limited to any federal Income Tax Return filed by the
consolidated group of which Purchaser is a member with respect to any taxable
period ending after the Closing Date). The income, gains, deductions, losses,
credits and recapture of credits of the Company and its Subsidiaries, other
than those required to be included in the Returns described in Section 4.1,
shall be included in the Returns described in the immediately preceding
sentence, including but not limited to all items for periods after the Closing
Date. Any such Returns shall, insofar as they relate to items for periods
ended on or prior to the Closing Date and to the extent permitted by applicable
Tax law, be filed on a basis consistent with the last previous such Returns
filed in respect of the Company and its Subsidiaries.

5. Refunds. Subject to the provisions of this Section 5, (a)
Stockholder or the Non-Company Affiliates shall be entitled to retain, or
Stockholder shall be entitled to receive immediate payment from the Company or
Purchaser of, any refund or credit with respect to (i) Taxes (including but not
limited to refunds and credits arising by reason of amended Returns filed after
the Closing Date), plus any interest received with respect thereto from the
applicable Taxing Authorities, relating to the Company or any of its
Subsidiaries that are described as being the responsibility of Stockholder in
Section 3.1, and (ii) Indemnifiable Separate Taxes for which Stockholder shall
have made a payment to the Company pursuant to Section 2.3, plus any interest
received with respect thereto from the applicable Taxing Authorities, and (b)
Purchaser, the Company or its Subsidiaries shall be entitled to retain, or
Purchaser shall be entitled to receive immediate payment from Stockholder of,
any refund or credit with respect to Taxes (other than Indemnifiable Separate
Taxes for which Stockholder shall have made a payment to the Company pursuant
to Section 2.3), plus any interest received with respect thereto from the
applicable Taxing Authorities,

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<PAGE> 16
relating to the Company or any of its Subsidiaries that are described as being
the responsibility of Purchaser in Section 3.2, provided that neither the
Company nor any of its Subsidiaries shall carry back any item of loss,
deduction or credit from a Return described as being the responsibility of
Purchaser in Section 4.2, to a Return described as being the responsibility of
Stockholder in Section 4.1 (other than the next to last sentence thereof).
Purchaser and Stockholder shall cooperate, and shall cause the Company and its
Subsidiaries to cooperate with Stockholder, with respect to claiming any refund
or credit with respect to Taxes referred to in this Section 5. Such
cooperation shall include providing all relevant information available to
Stockholder or Purchaser (through the Company or otherwise), as the case may
be, with respect to any such claim; filing and diligently pursuing such claim
(including by litigation, if appropriate); paying over to Stockholder or
Purchaser, as the case may be, and in accordance with this provision, any
amount received by Purchaser (or the Company or any of its Subsidiaries) or
Stockholder (or the Non-Company Affiliates), as the case may be, with respect
to such claim; and, in the case of the party filing such a claim, consulting
with the other party prior to agreeing to any disposition of such claim,
provided that the foregoing shall be done in a manner so as not to interfere
unreasonably with the conduct of the business of the parties. The party that
is to enjoy the economic benefit of a refund under this Section 5 shall bear
the reasonable out-of-pocket expenses of the other party incurred in seeking
such refund. If one party is to enjoy the economic benefit of a refund under
this Section 5 but the refund involves an issue that reasonably could be
expected to have a material adverse effect on the other party, the party that
would enjoy the economic benefit shall give notice to the other party of such
issue, with respect to which the parties, each at its own expense, shall
jointly pursue such issue, and any disagreement between them as to such issue
shall be resolved pursuant to the Tax Dispute Resolution Mechanism.

6. Audits. Each of Purchaser and Stockholder shall promptly
notify the other in writing within 10 business days from its receipt of notice
of (a) any pending or threatened Tax audits or assessments of the Company or
any of its Subsidiaries, as long as any taxable periods ending on or prior to
the Closing Date remain open, and (b) any pending or threatened Tax audits or
assessments of Purchaser or Stockholder, or any of the Affiliates thereof, that
reasonably could be expected to affect the Tax liabilities of the Company or
any of its Subsidiaries, in each case for taxable periods ending on or prior to
the Closing Date.

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<PAGE> 17
Stockholder shall have the right to represent the interests of the Company and
its Subsidiaries in any Tax audit or administrative or court proceeding to the
extent relating to Indemnifiable Separate Taxes or to Taxes that are described
as being the responsibility of Stockholder in Section 3.1, and to employ
counsel of its choice at its expense, provided that Stockholder shall give
notice to Purchaser, keep Purchaser reasonably informed and consult with
Purchaser with respect to any issue relating to such audit or proceeding that
reasonably could be expected to have a material adverse effect on Purchaser,
the Company or any of its Subsidiaries. Purchaser shall have the right to
represent the interests of the Company and its Subsidiaries in any Tax audit or
administrative or court proceeding not described in the immediately preceding
sentence and to employ counsel of its choice at its expense. Purchaser and
Stockholder shall cooperate, and Purchaser shall cause the Company and its
Subsidiaries to cooperate with Stockholder, with respect to any Tax audit or
administrative or court proceeding relating to Taxes referred to in this
Section 6. Such cooperation shall include providing all relevant information
available to Stockholder or Purchaser (through the Company or otherwise), as
the case may be, with respect to any such audit or proceeding and making
personnel available at and for reasonable times, including, without limitation,
to prepare responses to requests for information, provided that the foregoing
shall be done in a manner so as not to interfere unreasonably with the conduct
of the business of the parties.

7. Conduct of Tax Affairs. (a) Through the Closing,
Stockholder, the Company and its Subsidiaries will conduct all Tax affairs
relating to the Company and its Subsidiaries only in the ordinary course, in
substantially the same manner as heretofore conducted and in good faith in
substantially the same manner as such affairs would have been conducted if this
Agreement had not been entered into.

(b) Notwithstanding any other provision of this Agreement,
Purchaser shall be responsible for, and neither Stockholder nor any of the
Non-Company Affiliates shall bear, any Taxes that arise due to the failure,
following the Closing, of Purchaser to cause the Company and its Subsidiaries
to carry on their business on the Closing Date in the ordinary course and in
substantially the same manner as heretofore conducted, taking into account the
Merger, the other transactions contemplated by the Merger Agreement and the
making of the Section 338(h)(10) Elections.

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<PAGE> 18
8. Section 338(h)(10) Election.

8.1 Election. Purchaser shall, and Stockholder shall, or
shall cause the proper Non-Company Affiliate to, join in all Section 338(h)(10)
Elections.

8.2 Forms. (a) Purchaser shall be responsible for the
preparation of all forms and schedules required to be filed in connection with
the Section 338(h)(10) Elections ("Section 338 Forms"), including IRS Form
8023-A and all attachments required to be filed therewith pursuant to
applicable Treasury Regulations ("Form 8023"). Stockholder and Purchaser shall
cooperate in drafting and making final the Section 338 Forms. Purchaser shall
be responsible for filing the Section 338 Forms with the proper Taxing
Authorities, provided that Stockholder shall be responsible for filing any
Section 338 Form that must be filed with a Return described in Section 4.1.

(b) At least 15 days prior to the Closing Date, Purchaser
shall furnish Stockholder with four copies (three for Purchaser and one for
Stockholder) of Form 8023 prepared by Purchaser. On or before the Closing
Date, Purchaser and Stockholder shall agree upon the form and content of Form
8023 to be filed on the Closing Date. At the Closing, Stockholder shall
deliver to Purchaser three copies of such Form 8023 executed by the proper
party on behalf of Stockholder. On the Closing Date, Purchaser shall cause
such Form 8023 to be executed by the proper party on behalf of Purchaser, and
shall file such Form 8023 with the IRS.

(c) Purchaser shall prepare (i) any corrections, amendments
or supplements to the Form 8023 as executed by Purchaser and Stockholder
pursuant to Section 8.2(b) and (ii) any state or local reports or forms that
are necessary or appropriate for purposes of complying with the requirements
for making the Section 338(h)(10) Elections (each an "Additional Section 338
Form"). Stockholder and Purchaser shall cooperate in drafting and making final
each Additional Section 338 Form. At least 30 days prior to the latest date
for the filing of each Additional Section 338 Form, Purchaser shall furnish
Stockholder with four copies of such Additional Section 338 Form (three for
Purchaser and one for Stockholder) prepared by Purchaser. At least 15 days
prior to the latest date for the filing of each Additional Section 338 Form,
Purchaser and Stockholder shall agree upon the final form and content of such
Additional Section 338 Form, and Stockholder shall deliver to Purchaser three
copies of such Additional Section 338 Form executed by the proper party on
behalf of Stockholder. Purchaser shall

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<PAGE> 19
cause each Additional Section 338 Form to be executed by the proper party on
behalf of Purchaser, and shall file such Additional Section 338 Form with the
applicable Taxing Authority.

8.3 Allocation. On or before the last day of the seventh
month beginning after the month that includes the Closing Date, Purchaser shall
provide to Stockholder a proposed allocation of the purchase price for the
deemed sale of assets resulting from the making of the Section 338(h)(10)
Elections, together with a report or reports in support of such allocation
prepared by the valuation services group of Deloitte & Touche LLP or of Coopers
& Lybrand L.L.P. or any other firm or firms of independent appraisers of
nationally recognized reputation selected by Purchaser, the fees and expenses
of which shall be borne by Purchaser, setting forth the estimated fair market
values of the assets of the Company and, to the extent relevant to such deemed
sale, its Subsidiaries. Stockholder and Purchaser shall cooperate in
determining the amount of the purchase price for the deemed sale of assets
resulting from the making of the Section 338(h)(10) Elections (including the
liabilities on the Closing Date of the Company and those of its Subsidiaries to
which the Section 338(h)(10) Elections apply) and the final allocation thereof
(the "Final Allocation"). The determination of the Final Allocation (other
than the determination of such liabilities) shall be at the sole discretion of
Purchaser. Any dispute with respect to the determination of such liabilities
shall be resolved pursuant to the Tax Dispute Resolution Mechanism. The
liabilities on the Closing Date of the Company and each of its Subsidiaries to
which the Section 338(h)(10) Elections apply and the Final Allocation shall be
reflected in an Additional Section 338 Form filed with the IRS on or before the
fifteenth day of the ninth month beginning after the month that includes the
Closing Date.

8.4 Modification; Revocation. Purchaser and Stockholder
agree that none of them shall, or shall permit any of their Affiliates to, take
any action to modify the Section 338 Forms following the execution thereof, or
to modify or revoke the Section 338(h)(10) Elections following the filing of
the Section 338 Forms, without the written consent of Stockholder and
Purchaser, as the case may be.

8.5 Consistent Treatment. Purchaser and Stockholder shall,
and shall cause their respective Affiliates to, file all Returns in a manner
consistent with the information contained in the Section 338 Forms and the
Additional Section 338 Forms as filed and the Final Allocation.

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<PAGE> 20
8.6 Taxes and Expenses Resulting from Elections.
Notwithstanding any other provision of this Agreement, (a) Stockholder shall
bear all federal Income Taxes and Combined State Taxes resulting from the
making of the Section 338(h)(10) Elections (including but not limited to any
effect on such Taxes of the making of a Section 338 Election with respect to
any non-United States Subsidiary of the Company), (b) the Company shall bear
all other Taxes resulting from the making of the Section 338(h)(10) Elections
(including but not limited to any effect on such Taxes of the making of a
Section 338 Election with respect to any non-United States Subsidiary of the
Company), (c) the Company shall bear all Taxes resulting from the making of a
Section 338 Election with respect to the Company or any United States
Subsidiary of the Company (including but not limited to any effect on such
Taxes of the making of a Section 338 Election with respect to any non-United
States Subsidiary of the Company), (d) Purchaser and its Affiliates (including
the Company and its Subsidiaries following the Closing), on the one side, and
Stockholder and the Non-Company Affiliates, on the other side, shall bear their
respective administrative, appraisal, legal, accounting and similar expenses
resulting from the making of the Section 338(h)(10) Elections, and (e)
Purchaser and its Affiliates (including the Company and its Subsidiaries
following the Closing) shall bear all administrative, appraisal, legal,
accounting and similar expenses resulting from the making of any Section 338
Elections.

8.7 Deemed Sale of Assets If Newco Is Survivor of Merger.
If Newco is the survivor of the merger of Newco and the Company pursuant to the
Merger Agreement, the parties hereto shall treat such merger for all Income Tax
purposes as a sale of all of the Company's assets for the sum of the Merger
Consideration and the liabilities of the Company on the Closing Date, and as a
complete liquidation of the Company to which the provisions of section 332 of
the Code apply and a distribution of the Merger Consideration to its
shareholders. In such case, the Section 338(h)(10) Elections will be
applicable only to the applicable Subsidiaries of the Company; IRS Form 8594
with respect to such deemed sale and all comparable or corresponding forms
under applicable state and local Income Tax law relating to Combined State
Taxes shall be treated as Section 338 Forms and, as applicable, Additional
Section 338 Forms; the provisions of Sections 2.2(f)(ii), 2.3(b), 2.3(c), 8.3,
8.6(a), 8.6(b), 8.6(d) and 11(d) and the definition of the term Indemnifiable
Separate Taxes shall be applied as if such deemed sale were a part of the
deemed sale of assets resulting from the making of the Section 338(h)(10)
Elections if those

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<PAGE> 21
elections were applicable to the Company as well as the applicable Subsidiaries
of the Company; and the provisions of Sections 2.3(b), 2.3(c), 8.6(c) and
8.6(e) and the definition of the term Indemnifiable Separate Taxes shall be
applied as if such deemed sale were a deemed sale of assets resulting from the
making of a Section 338 Election if that election were applicable to the
Company.

9. Transfer Taxes. Notwithstanding any other provision of
this Agreement, all transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees incurred in connection with the transactions
contemplated by the Merger Agreement (including but not limited to any New York
State Gains Tax, any New York City Transfer Tax and any similar Tax imposed in
other jurisdictions) shall be borne and paid by Purchaser, and Purchaser will,
at its own expense, file all necessary Returns and other documentation with
respect to all such Taxes and fees.

10. Tax Dispute Resolution Mechanism. Wherever in this
Agreement it shall be provided that a dispute shall be resolved pursuant to the
"Tax Dispute Resolution Mechanism," such dispute shall be resolved as follows:
(a) the parties will in good faith attempt to negotiate a prompt settlement of
the dispute; (b) if the parties are unable to negotiate a resolution of the
dispute within 30 days, the dispute will be submitted to the New York office of
a firm of independent accountants of nationally recognized standing reasonably
satisfactory to Stockholder and Purchaser (or, if Stockholder and Purchaser do
not agree on such a firm, then a firm chosen by the Arbitration and Mediation
Committee of the New York Society of Certified Public Accountants) (the "Tax
Dispute Accountants"); (c) the parties will present their arguments and submit
the proposed amount of each item in dispute to the Tax Dispute Accountants
within 15 days after submission of the dispute to the Tax Dispute Accountants;
(d) the Tax Dispute Accountants shall resolve the dispute, in a fair and
equitable manner and in accordance with applicable Tax law and the provisions
of this Agreement, by selecting, for each item in dispute, the proposed amount
for such item submitted by one party or the other party within 30 days after
the parties have presented their arguments to the Tax Dispute Accountants,
whose decision shall be final, conclusive and binding on the parties; (e)
notwithstanding any other provision of this Agreement, any payment to be made
as a result of the resolution of a dispute shall be made, and any other action
to be taken as a result of the resolution of a dispute shall be taken, on or
before the later of (i) the date on which such payment or action would
otherwise be required or (ii) the

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<PAGE> 22
third business day following the date on which the dispute is resolved (in the
case of a dispute resolved by the Tax Dispute Accountants, such date being the
date on which the parties receive written notice from the Tax Dispute
Accountants of their resolution), provided that if a dispute with respect to an
item in a Return shall not be resolved on or before the date that is three
business days prior to the latest date on which such Return may be filed under
applicable Tax law, then the party having the responsibility for filing such
Return pursuant to Section 4 shall file such Return reflecting all disputed
items that have been resolved in the manner so resolved, and reflecting all
unresolved disputed items in the manner proposed by such party, and shall, upon
the resolution of all such unresolved disputed items, file an amended Return
reflecting the resolution thereof in the manner so resolved; and (f) the fees
and expenses of the Tax Dispute Accountants in resolving a dispute will be
borne equally by Stockholder and Purchaser.

11. Cooperation on Tax Matters. (a) Purchaser and
Stockholder agree to furnish or cause to be furnished to each other, upon
request, as promptly as practicable, such information (including access to
books and records) relating to the Company and its Subsidiaries as is
reasonably necessary for the preparation of the Pro Forma Returns, for the
filing of all other relevant Returns, for the preparation for any audit, and
for the prosecution or defense of any claim, suit or proceeding relating to any
proposed adjustment and any claim subject to Section 12.3.

(b) The parties agree to use their reasonable good faith
efforts to cooperate in connection with the transition from the performance of
tax compliance services relating to the Company and its Subsidiaries by
Stockholder prior to the Closing to the performance of such services by the
Company after the Closing, taking into account the need to minimize both the
cost of such transition and the disruption to the ongoing business activities
of the parties.

(c) Purchaser and Stockholder agree to retain or cause to be
retained all books, records, Returns, schedules, documents, work papers and
other material items of information relating to Taxes with respect to the
Company and its Subsidiaries for periods prior to or ending on the Closing Date
for the longer of (i) the seven-year period beginning on the Closing Date or
(ii) the full period of the applicable statute of limitations, including any
extension thereof, and to abide by all record retention agreements entered into
with any Taxing Authority. Purchaser and Stockholder agree to give each other
reasonable notice prior

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<PAGE> 23
to transferring, discarding or destroying any such materials relating to Taxes
with respect to the Company and its Subsidiaries, and, if the other party so
requests, to allow the other party to take possession of such materials.

(d) Purchaser and Stockholder shall cooperate, and Purchaser
shall cause the Company and its Subsidiaries to cooperate with Stockholder,
with respect to the preparation and filing of any Return for which the other is
responsible pursuant to Section 4 (including but not limited to providing work
papers and schedules). Except as otherwise provided with respect to items
relating to the allocation of the purchase price for the deemed sale of assets
resulting from the making of the Section 338(h)(10) Elections, Purchaser shall
prepare or cause the Company to prepare, in a manner and at such time or times
as is consistent with past practice, the Tax work paper preparation package or
packages necessary to enable Stockholder to prepare consolidated federal and
combined, unitary or consolidated state, local and foreign Income Tax Returns,
and to prepare drafts of Returns (including amended Returns) relating to
Indemnifiable Separate Taxes pursuant to Section 2.3(f), for all taxable
periods from January 1, 1995 through the Closing Date.

12. Indemnification.

12.1 Indemnification by Stockholder. Stockholder covenants
and agrees, from and after the Effective Time, to defend, indemnify and hold
harmless each of Purchaser, Newco, their respective Affiliates, the Company and
its Subsidiaries (collectively, the "Purchaser Indemnitees") from and against,
and pay or reimburse the Purchaser Indemnitees for, any and all actual claims,
demands, liabilities, obligations, losses, fines, costs, expenses, deficiencies
or damages (collectively, "Losses"), whether or not resulting from third party
claims, including interest, additions and penalties with respect thereto and
out-of-pocket expenses and reasonable attorneys' and accountants' fees and
expenses incurred in the investigation or defense of any of the same or in
asserting, preserving or enforcing any of their respective rights under this
Agreement, in each case resulting from or arising out of any failure of
Stockholder to perform any agreement or covenant under Sections 2.1, 2.2, 2.3,
3.1, 4.1, 5, 6, 7(a), 8, 10, 11, 12.1, 12.3, 12.4, 13, 14 and 18 or fulfill any
other obligation in respect thereof. Stockholder shall not have any liability
under any provision of this Agreement for any Losses to the extent that any
such Losses arise from actions taken by Purchaser, any of its Affiliates, the
Company or any of its Sub-

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<PAGE> 24
sidiaries after the Closing, or from the failure of any thereof to take any
required action, except for failure to give notice as provided in Section 12.3.
Purchaser shall take and cause its Affiliates, the Company and its Subsidiaries
to take all reasonable steps to mitigate any Losses with respect to which
Stockholder could have an indemnification obligation under this Section 12.1
upon any of the Purchaser Indemnitees' becoming aware of any event which could
reasonably be expected to give rise thereto.

12.2 Indemnification by Purchaser. Purchaser covenants and
agrees, from and after the Effective Time, to defend, indemnify and hold
harmless each of Stockholder and the Non-Company Affiliates (collectively, the
"Stockholder Indemnitees") from and against, and pay or reimburse the
Stockholder Indemnitees for, any and all Losses, in each case resulting from or
arising out of any failure of Purchaser to perform any agreement or covenant
under Sections 2.1, 2.2, 2.3, 3.2, 4.2, 5, 6, 7(b), 8, 9, 10, 11, 12.2, 12.3,
12.4, 13, 14 and 18 or fulfill any other obligation in respect thereof.
Purchaser shall not have any liability under any provision of this Agreement
for any Losses to the extent that any such Losses arise from actions taken by
Stockholder or any of the Non-Company Affiliates after the Closing, or from the
failure of any thereof to take any required action, except for failure to give
notice as provided in Section 12.3. Stockholder shall take and cause its
Affiliates to take all reasonable steps to mitigate any Losses with respect to
which Purchaser could have an indemnification obligation under this Section
12.2 upon any of the Stockholder Indemnitees' becoming aware of any event which
could reasonably be expected to give rise thereto.

12.3 Indemnification Procedures. In the case of any claim
asserted by a third party against a party entitled to indemnification under
this Section 12 (the "Indemnified Party"), notice shall be given by the
Indemnified Party to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought (which notice shall
state the basis of the claim and the agreement or covenant alleged not to have
been performed), and the Indemnified Party shall permit the Indemnifying Party
(at the expense of such Indemnifying Party) to assume the defense of any claim
or any litigation resulting therefrom, provided that (a) the failure of any
Indemnified Party to give notice as provided in this Section 12.3 shall not
relieve the Indemnifying Party of its indemnification obligations under this
Section 12 except to the extent that

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<PAGE> 25
such failure results in a lack of actual notice to the Indemnifying Party and
such Indemnifying Party is materially prejudiced as a result of such failure to
give notice and (b) in the case of any such claim against any of Purchaser,
Newco, their respective Affiliates, the Company or any of its Subsidiaries
relating to Taxes other than those set forth in clauses (a) and (b) of Section
3.1, counsel for Stockholder who shall conduct the defense of such claim or
litigation shall be reasonably satisfactory to Purchaser, and Purchaser may
participate in such defense at Purchaser's expense. The Indemnified Party
shall promptly deliver to the Indemnifying Party copies of all notices and
documents (including court papers) received by the Indemnified Party relating
to the third party claim. Except with the prior written consent of the
Indemnified Party, no Indemnifying Party, in the defense of any such claim or
litigation, shall consent to entry of any judgment or enter into any settlement
(i) that provides for injunctive or other nonmonetary relief affecting the
Indemnified Party, (ii) that reasonably could be expected to affect adversely
any Tax liability of any Indemnified Party with respect to which the
Indemnifying Party has no indemnification obligation under this Section 12 or
(iii) that does not include as an unconditional term thereof the giving by each
claimant or plaintiff to such Indemnified Party of a release from all liability
with respect to such claim or litigation. In the event that the Indemnifying
Party does not accept the defense of any matter as above provided, the
Indemnified Party shall have the full right to defend against any such claim or
demand, and shall be entitled to settle or agree to pay in full such claim or
demand.

12.4 Tax Treatment of Indemnification Payments. Unless
otherwise required by law, each of Purchaser and Stockholder agrees to treat
and to cause their respective Affiliates to treat, for all Tax purposes, any
indemnification payment made pursuant to this Section 12 as an adjustment to
the Merger Consideration paid to Stockholder (or, if applicable, in the case of
a payment by Stockholder, as the satisfaction of a liability of the Company and
its Subsidiaries assumed by Stockholder, the assumption of which was a
contribution by Stockholder to the capital of the Company) or as a
reimbursement for or a payment of a liability that was properly an obligation
of the Indemnifying Party, and not of the Indemnified Party.

13. Confidentiality. Each of Purchaser, Newco and the
Company, on the one hand, and Stockholder, on the other hand, shall, and shall
use reasonable efforts to cause its respective Affiliates, agents, advisors and
representa-

22
<PAGE> 26
tives and its and their respective officers, directors or employees (the
"Representatives," neither party being treated as a Representative of the
other) to, keep confidential and not disclose to others or use in any way
except to further the purposes of this Agreement, without the written consent
of Stockholder or the Company, respectively, all information of the other party
and their respective Affiliates that has been acquired in connection with this
Agreement, provided that the foregoing shall not apply to information that (a)
is or hereafter becomes generally available to the public other than as a
result of a disclosure by the party that would otherwise have an obligation of
confidentiality hereunder (the "Obligated Party") or any Representative
thereof, (b) is hereafter disclosed to the Obligated Party or any
Representative thereof by a third party who is not in default of any
confidentiality obligation to the other party, (c) is reasonably required to be
submitted by the Obligated Party or any Representative thereof to any
Governmental Entity, including in connection with any action, suit or
proceeding, (d) is provided by Stockholder under confidentiality terms and
conditions for the benefit of the Company, substantially similar to those
confidentiality arrangements set forth in the Confidentiality Agreement and
with a term of at least five years from the date hereof, (i) to third parties
for consulting, accounting, legal and similar purposes or (ii) to prospective
purchasers of Stockholder or of all or any portion of the securities or assets
of Stockholder to the extent considered reasonably necessary by Stockholder to
facilitate such purchase, (e) is necessary, in the reasonable judgment of the
Obligated Party, to disclose in order to assert or defend any claim against (or
made by) any insurer or other Person, provided that prior notice of such
disclosure is provided to the other party, (f) is or was independently
developed by the Obligated Party or any Representative thereof, or (g) is
required to be disclosed by the Obligated Party or any Representative thereof
in compliance with applicable laws or regulations or order by a Governmental
Entity, provided that in the event that the Obligated Party or any
Representative thereof is requested by any Governmental Entity to disclose any
such information, the Obligated Party shall give, or shall use reasonable
efforts to cause such Representative to give, the other party prompt written
notice of such request so that the other party or its relevant Affiliate may
seek an appropriate protective order, and in the absence of a protective order,
the Obligated Party or such Representative shall use reasonable efforts to
obtain assurances that confidential treatment will be accorded to such
information. This obligation of confidentiality shall apply to all information
which

23
<PAGE> 27
(x) either party has reason to know is confidential or (y) is marked
confidential (or, if provided orally, is confirmed in writing as confidential
within 30 days of the date of disclosure to the other party), and this
obligation of confidentiality with respect to each matter disclosed to the
other party shall continue for a period of seven years after such disclosure.
Each of Purchaser, Newco and the Company, on the one hand, and Stockholder, on
the other hand, acknowledges that the other party and its Affiliates would be
irreparably damaged in the event of a breach or threatened breach of any of the
Obligated Party's obligations under this Section 13, and agrees (and shall use
reasonable efforts to cause each of its Representatives to agree) that, in the
event of a breach or threatened breach of any such obligation, the other party
and its Affiliates shall, in addition to any other rights and remedies
available to it in respect of such breach, be entitled to an injunction from a
court of competent jurisdiction granting it specific performance of the
provisions of this Section 13.

14. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed delivery
by a standard overnight carrier or when delivered by hand or (c) the expiration
of five business days after the day when mailed in the United States by
certified or registered mail, postage prepaid, addressed at the following
addresses (or at such other address for a party as shall be specified by like
notice):

(a) if to Stockholder, to:

Manville Corporation
717 17th Street
Denver, Colorado 80202
Telephone: (303) 978-4911
Facsimile: (303) 978-4842
Attention: Richard B. Von Wald, Esq.

with a copy to:

Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Attention: Franklin M. Gittes, Esq.

24
<PAGE> 28
and with a copy to:

Davis Polk & Wardwell
1300 "I" Street, N.W.
Washington, D.C. 20005
Telephone: (202) 962-7000
Facsimile: (202) 962-7111
Attention: Kathleen L. Ferrell, Esq.

(b) if to the Company, to:

Riverwood International Corporation
3350 Cumberland Circle
Suite 1400
Atlanta, Georgia 30339
Telephone: (770) 644-3000
Facsimile: (770) 644-2929
Attention: General Counsel

with a copy to:

[ON OR BEFORE THE CLOSING DATE]
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telephone: (212) 735-3000
Facsimile: (212) 735-2000
Attention: Franklin M. Gittes, Esq.

and with a copy to:

[ON OR BEFORE THE CLOSING DATE]
Davis Polk & Wardwell
1300 "I" Street, N.W.
Washington, D.C. 20005
Telephone: (202) 962-7000
Facsimile: (202) 962-7111
Attention: Kathleen L. Ferrell, Esq.

or with a copy to:

[AFTER THE CLOSING DATE]
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telephone: (212) 909-6000
Facsimile: (212) 909-6836
Attention: Robert J. Cubitto, Esq.

and

25
<PAGE> 29
(c) if to Purchaser or Newco, to:

CDRO Holding Corporation
CDRO Acquisition Corporation
c/o Clayton, Dubilier & Rice Fund V
Limited Partnership
270 Greenwich Avenue
Greenwich, Connecticut 06830
Telephone: (203) 661-3998
Facsimile: (203) 661-0544
Attention: CD&R Associates V Limited Partnership
Attention: CD&R Investment Associates, Inc.
Attention: Alberto Cribiore, Vice
President, Treasurer and
Secretary

with a copy to

Clayton, Dubilier & Rice, Inc.
126 East 56th Street
New York, New York 10022
Telephone: (212) 407-5200
Facsimile: (212) 407-5252
Attention: Kevin J. Conway

and with a copy to:

Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telephone: (212) 909-6000
Facsimile: (212) 909-6836
Attention: Robert J. Cubitto, Esq.

15. Governing Law. Except to the extent federal, state,
local or foreign Tax laws, rules, or regulations govern the filing of Returns
or the positions taken with respect to Taxes in Returns, and regardless of the
law that might otherwise be applied under principles of conflicts of laws, this
Agreement shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York.

16. Counterparts. This Agreement may be executed in more
than one counterpart, each of which shall be deemed an original, but all such
counterparts when executed shall constitute one and the same agreement.

26
<PAGE> 30
17. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

18. Assignment; Binding Effect. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law of otherwise) without the
prior written consent of the other parties, provided that Purchaser or Newco
may assign this Agreement to any Subsidiary of Purchaser or Newco, or to any
lender to Purchaser or Newco or any Subsidiary or Affiliate thereof as security
for obligations to such lender, and provided, further, that no such assignment
to any such lender shall in any way affect the assigning party's obligations or
liabilities under this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and permitted assigns.
Purchaser shall promptly notify Stockholder of any assignment (whether by
operation of law or otherwise) permitted by the provisions of this Section 18.

19. No Third Party Beneficiaries. Except as provided in
Section 12 with respect to indemnification of Indemnified Parties hereunder,
nothing in this Agreement, express or implied, is intended to or shall confer
any rights, benefits or remedies of any nature whatsoever upon any Person other
than the parties hereto and their respective successors and permitted assigns.

20. Waivers. Any party hereto may by written notice to the
other parties (a) extend the time for the performance of any of the obligations
or other actions of the other parties under this Agreement, (b) waive
compliance with any of the conditions or covenants of the other parties
contained in this Agreement and (c) waive or modify performance of any of the
obligations of the other parties under this Agreement. Except as provided in
the preceding sentence, no action taken pursuant to this Agreement shall be
deemed to constitute a waiver by the party taking such action of compliance
with any covenants or agreements contained herein. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach,

27
<PAGE> 31
and no failure by a party to exercise any right or privilege hereunder shall be
deemed a waiver of such party's rights or privileges hereunder or shall be
deemed a waiver of such party's rights to exercise the same at any subsequent
time or times hereunder.

21. Amendments. This Agreement may not be modified, amended,
altered or supplemented except by an instrument in writing executed on behalf
of each of the parties hereto.

22. Termination; Survival. This Agreement shall be
terminated upon the termination of the Merger Agreement in accordance with the
terms thereof. This Agreement shall survive the consummation of the Merger
pursuant to the Merger Agreement.

23. Headings. The headings contained in this Agreement are
for convenience of reference only and shall not be deemed for any purpose to
constitute a part of or to affect in any way the meaning or interpretation of
this Agreement.

24. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings (excluding the
Merger Agreement and the Indemnification Agreement), both written and oral,
between the parties with respect to the subject matter hereof. The

28
<PAGE> 32
parties hereto also acknowledge that the Chief Financial Officer of Stockholder
has delivered to Purchaser and Newco the Tax Letter.

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto duly authorized
as of the date first written above.

MANVILLE CORPORATION

By: /s/ RICHARD B. VON WALD
-----------------------------------
Name: Richard B. Von Wald
Title: Senior Vice President,
General Counsel & Secretary

RIVERWOOD INTERNATIONAL CORPORATION

By: /s/ THOMAS H. JOHNSON
-----------------------------------
Name: Thomas H. Johnson
Title: President and Chief Executive
Officer

CDRO HOLDING CORPORATION

By: /s/ KEVIN J. CONWAY
-----------------------------------
Name: Kevin J. Conway
Title: President

CDRO ACQUISITION CORPORATION

By: /s/ KEVIN J. CONWAY
-----------------------------------
Name: Kevin J. Conway
Title: President

<PAGE> 1
================================================================================

AGREEMENT AND PLAN OF MERGER

by and among

RIVERWOOD INTERNATIONAL CORPORATION,

CDRO HOLDING CORPORATION

and

CDRO ACQUISITION CORPORATION

dated as of

October 25, 1995

================================================================================
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<S> <C>
ARTICLE I THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Certificate of Incorporation; By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5 Directors and Officers of the Surviving Corporation . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE II CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Section 2.1 Conversion of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3 Company Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4 Dissenter's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Section 3.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.2 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.3 Authorization; Validity of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.4 No Violations; Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.5 SEC Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.6 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.7 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.8 Proxy Statement; Schedule 13E-3; Offer Documents . . . . . . . . . . . . . . . . . . . . . 14
Section 3.9 Employee Benefit Plans; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.10 Litigation; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.11 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.12 Identified Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.14 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.15 Required Vote by Company Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.16 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.17 Opinions of Financial Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.18 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.19 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.21 Labor Matters, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.22 No Stockholder-Related Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.23 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.24 Disclosure; No Other Representations or Warranties . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER . . . . . . . . . . . . . . . . . . . . . 33

Section 4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.2 Authorization; Validity of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.3 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.4 Information in Proxy Statement; Schedule 13E-3; Offer Documents . . . . . . . . . . . . . . 35
Section 4.5 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 4.6 Beneficial Ownership of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.7 No Prior Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.8 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.9 No Other Representations or Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.10 Surviving Corporation After the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Section 5.1 Interim Operations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.2 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.3 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.4 Further Action; Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.5 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.6 Stockholders' Meeting; Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.7 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.8 Directors' and Officers' Insurance and Indemnification . . . . . . . . . . . . . . . . . . 50
Section 5.9 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.10 Certain Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.11 Offers and Solicitations of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.12 Certain Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.13 Patent Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.14 Additional Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

ARTICLE VI CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Section 6.1 Conditions to Each Party's Obligation To Effect the Merger . . . . . . . . . . . . . . . . 55
Section 6.2 Conditions to the Obligation of the Company to Effect the Merger . . . . . . . . . . . . . 56
Section 6.3 Conditions to Obligations of Parent and the Purchaser to Effect the Merger . . . . . . . . 57
</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE VII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Section 8.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 8.2 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.3 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.5 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.6 Headings; Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.11 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
</TABLE>

iii
<PAGE> 5
TABLE OF DEFINED TERMS

<TABLE>
<CAPTION>
Term Section
<S> <C>
Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2(c)
Acquisition Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2(c)
affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5
Antitrust Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4(b)
Applicable Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18(a)
Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7
beneficial ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5
Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3(a)
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(b)(v)
Collective Bargaining Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.21
Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(c)
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
Company Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.11
Company SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5
Competition Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4(b)
Confidentiality Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(a)
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Employment and Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13(d)
Environmental Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(b)
Environmental Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14(e)(i)
Environmental Consultant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(b)
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14(e)(ii)
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
ERISA Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(b)
Exchange Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(f)
Expense Cap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(d)
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(f)
Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(b)
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
FTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4(b)
Fund V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5
</TABLE>

iv
<PAGE> 6
<TABLE>
<S> <C>
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(b)
Hazardous Substance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14(e)(iii)
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4(b)
Identified Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
Immaterial Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8(a)
Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.11
Involuntary Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(c)(v)
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4(a)
Leased Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(c)
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(c)
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18(b)
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10(a)
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
Minimum Tenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3(f)
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
Option Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Owned Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(c)
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Patent Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(c)
PD Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(e)
Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.10(c)
Permitted Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.18(c)
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2(a)
Prepaid Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8(b)
Proposed Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6(b)
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Purchaser Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
Purchaser Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3(b)
Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.19(c)
Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.14(e)(iv)
Restricted Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13(d)
RIUSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.22
SARs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Schedule Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7(b)
Schedule 13E-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8(b)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5
</TABLE>

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<PAGE> 7
<TABLE>
<S> <C>
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5
Secretary of State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6(a)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(c)
Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.13(d)
Tax Matters Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.11
Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(e)
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
</TABLE>

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<PAGE> 8
AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of October 25, 1995, by
and among Riverwood International Corporation, a Delaware corporation (the
"Company"), CDRO Holding Corporation, a Delaware corporation ("Parent"), and
CDRO Acquisition Corporation, a wholly owned subsidiary of Parent and a
Delaware corporation (the "Purchaser").

WHEREAS, the Boards of Directors of Parent, the Purchaser and
the Company have each approved, and deem it advisable and in the best interests
of their respective shareholders to consummate, the acquisition of the Company
by Parent upon the terms and subject to the conditions set forth herein; and

WHEREAS, in furtherance of such acquisition, (a) the Boards of
Directors of Parent, the Purchaser and the Company have each approved this
Agreement and the merger of the Purchaser with and into the Company in
accordance with the terms of this Agreement and the General Corporation Law of
the State of Delaware (the "DGCL"), and (b) in order to induce Parent and the
Purchaser to enter into the Merger Agreement, concurrently with the execution
and delivery hereof, Parent, the Purchaser and Manville Corporation, a Delaware
corporation ("Stockholder"), are entering into a Voting and Indemnification
Agreement dated as of the date hereof (the "Voting Agreement") among such
parties, and Parent, the Purchaser, Stockholder and the Company are entering
into a Tax Matters Agreement dated as of the date hereof (the "Tax Matters
Agreement");

NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:

ARTICLE I

THE MERGER

Section 1.1 The Merger. Upon the terms and subject to
conditions of this Agreement and in accordance with the DGCL, at the Effective
Time (as defined in Section 1.2 hereof), (a) the Purchaser shall be merged with
and into the Company or (b) at the Purchaser's election, the Company shall be
merged with and into the Purchaser (either such
<PAGE> 9
merger, the "Merger") and the separate corporate existence of the corporation
being merged into the other corporation shall cease. After the Merger, the
Company, in the case of clause (a) above, or the Purchaser, in the case of
clause (b) above, shall continue as the surviving corporation (sometimes
hereinafter referred to as the "Surviving Corporation"). The Merger shall have
the effect as provided in the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, upon the Merger, all the rights,
privileges, immunities, powers and franchises of the Company and the Purchaser
shall vest in the Surviving Corporation and all obligations, duties, debts and
liabilities of the Company and the Purchaser shall be the obligations, duties,
debts and liabilities of the Surviving Corporation.

Section 1.2 Effective Time. On or as promptly as practicable
following the Closing Date (as defined in Section 1.3), the Purchaser and the
Company will cause an appropriate Certificate of Merger (the "Certificate of
Merger") to be executed and filed with the Secretary of State of the State of
Delaware (the "Secretary of State") in such form and executed as provided in
the DGCL. The Merger shall become effective on the date on which the
Certificate of Merger has been duly filed with the Secretary of State or such
time as is agreed upon by the parties and specified in the Certificate of
Merger, and such time is hereinafter referred to as the "Effective Time."

Section 1.3 Closing. The closing of the Merger (the
"Closing") will take place at 10:00 a.m., New York time, on a date to be
specified by the parties, which shall be no later than the second business day
after satisfaction or waiver of all of the conditions set forth in Article VI
hereof (the "Closing Date"), at the offices of Debevoise & Plimpton, 875 Third
Avenue, New York, New York 10022, unless another date or place is agreed to in
writing by the parties hereto.

Section 1.4 Certificate of Incorporation; By-Laws. Pursuant
to the Merger, (x) the Certificate of Incorporation of the Purchaser, as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation (except that the name of the
Surviving Corporation set forth in the Certificate of Incorporation shall be
such name as may be determined by the Purchaser prior to the Effective Time)
and (y) the By-laws of the Purchaser, as in effect immediately prior to the
Effective

2
<PAGE> 10
Time, shall be the By-laws of the Surviving Corporation until thereafter
amended as provided by law, the Certificate of Incorporation and such By-laws.

Section 1.5 Directors and Officers of the Surviving
Corporation.

(a) The directors of the Purchaser immediately prior to the
Effective Time shall, from and after the Effective Time, be the directors of
the Surviving Corporation until their successors shall have been duly elected
or appointed and qualified or until their earlier death, resignation or removal
in accordance with the Surviving Corporation's Certificate of Incorporation and
By-laws.

(b) The officers of the Purchaser immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation and
shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.

ARTICLE II

CONVERSION OF SHARES

Section 2.1 Conversion of Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holders
of any shares of common stock, par value $.0l per share, of the Company
(referred to herein as "Shares" or "Company Common Stock") or the common stock,
par value $.01 per share, of the Purchaser (the "Purchaser Common Stock"):

(a) Each issued and outstanding share of Company Common Stock
(other than Shares to be cancelled in accordance with Section 2.1(c) and other
than Dissenting Shares covered by Section 2.4) shall be converted into the
right to receive $20.25 per share in cash, payable to the holder thereof,
without interest (the "Merger Consideration"), upon surrender of the
certificate formerly representing such share of Company Common Stock in the
manner provided in Section 2.2. All such shares of Company Common Stock, when
so converted, shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate representing any such Shares shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration therefor
upon the surrender of such certificate in accor-

3
<PAGE> 11
dance with Section 2.2. Any payment made pursuant to this Section 2.1(a) shall
be made net of applicable withholding taxes to the extent such withholding is
required by law; provided that, with respect to any such payment to be made to
any Person who (i) at any time during the shorter of the periods described in
section 897(c)(1)(A)(ii) of the Code and the Treasury Regulations thereunder,
beneficially owned more than five percent, taking into account the constructive
ownership rules described in section 897(c)(6)(C) of the Code and the Treasury
Regulations thereunder, of the fair market value of any class of stock of the
Company and (ii) has not delivered to the Purchaser, prior to the time for
making such payment, a certificate, as contemplated under and meeting the
requirements of section 1.1445-2(b)(2)(i) of the Treasury Regulations, to the
effect that such Person is not a foreign person within the meaning of the Code
and applicable Treasury Regulations, the Purchaser shall withhold from such
payment an amount equal to 10% thereof and pay over such amount to the Internal
Revenue Service.

(b) Each issued and outstanding share of the Purchaser Common
Stock shall be converted into and become one fully paid and nonassessable share
of common stock of the Surviving Corporation.

(c) All shares of Company Common Stock that are held by the
Company as treasury stock and any shares of Company Common Stock owned by
Parent, the Purchaser or any other subsidiary of Parent shall be cancelled and
retired and shall cease to exist and no Merger Consideration shall be delivered
in exchange therefor.

Section 2.2 Exchange of Certificates.

(a) Prior to the Effective Time, Parent shall designate the
Company's registrar and transfer agent, or Chemical Bank (or any successor
thereto), or such other bank or trust company as may be approved in writing by
the Company (which approval shall not be unreasonably withheld), to act as
paying agent for the holders of Shares in connection with the Merger, pursuant
to an agreement providing for the matters set forth in this Section 2.2 and
such other matters as may be appropriate and the terms of which shall be
reasonably satisfactory to the Company (the "Paying Agent"), to receive the
funds to which holders of Shares shall become entitled pursuant to Section
2.1(a). Immediately prior to the Effective Time, Parent will cause to be
deposited in trust with the Paying Agent for the

4
<PAGE> 12
benefit of holders of Company Common Stock the funds necessary to complete the
payments contemplated by Section 2.1(a) with respect to shares of Company
Common Stock other than Stockholder Shares (as such term is defined in the
Voting Agreement (as defined below)) on a timely basis.

(b) At the Effective Time, Parent will instruct the Paying
Agent to promptly, and in any event not later than three business days
following the Effective Time, mail (and to make available for collection by
hand) to each holder of record of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (the "Certificates"), whose Shares were converted pursuant
to Section 2.1(a) into the right to receive the Merger Consideration (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Paying Agent and shall be in such form and have such
other provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for payment of the Merger Consideration (which shall provide that at the
election of the surrendering holder Certificates may be surrendered, and
payment therefor collected, by hand delivery). Upon surrender of a Certificate
for cancellation to the Paying Agent or to such other agent or agents as may be
appointed by the Company, together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each share of Company Common
Stock formerly represented by such Certificate, to be mailed (or made available
for collection by hand if so elected by the surrendering holder) within three
business days of receipt thereof, and the Certificate so surrendered shall
forthwith be cancelled. If payment of the Merger Consideration is to be made
to a person other than the person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Merger
Consideration payable in respect of Certificates representing Company Common
Stock held by Stockholder shall be paid only to the person in

5
<PAGE> 13
whose name the surrendered Certificate is registered. Until surrendered as
contemplated by this Section 2.2, each Certificate (other than Certificates
representing Company Common Stock held by Parent or the Purchaser, or any
subsidiary of Parent or the Purchaser, or Dissenting Shares (as defined in
Section 2.4)) shall be deemed at any time after the Effective Time to represent
only the right to receive the Merger Consideration in cash as contemplated by
this Section 2.2.

(c) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person (as
defined in 3.1) claiming such Certificate to be lost, stolen or destroyed, the
Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect thereof as
determined in accordance with this Article II, provided that the Person to whom
the Merger Consideration is paid shall, as a condition precedent to the payment
thereof, give the Surviving Corporation a bond in such sum as it may direct or
otherwise indemnify the Surviving Corporation in a manner satisfactory to it
against any claim that may be made against the Surviving Corporation with
respect to the Certificate claimed to have been lost, stolen or destroyed.

(d) After the Effective Time, the stock transfer books of the
Company shall be closed and there shall be no transfers on the stock transfer
books of the Surviving Corporation of Shares which were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be cancelled and exchanged
for the Merger Consideration as provided in this Article II.

(e) Notwithstanding the provisions of this Section 2.2, at
the Effective Time, (i) the Purchaser shall pay to Stockholder by wire transfer
an amount equal to the Merger Consideration multiplied by the number of
Stockholder Shares to the account of the Stockholder designated at least two
business days prior to the Closing Date, net of applicable withholding taxes,
and (ii) the Stockholder shall deliver to the Purchaser, free and clear of any
Liens, one or more share certificates representing all of the Stockholder
Shares, duly endorsed in blank or accompanied by stock powers or other
instruments of transfer duly executed in blank, and bearing or accompanied by
all requisite stock transfer stamps.

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<PAGE> 14
Section 2.3 Company Option Plans. Except as Parent or the
Purchaser and the holder of an Award (as defined below) otherwise agree, the
Company shall take all actions necessary to provide that, upon the Effective
Time, (i) each outstanding restricted stock unit ("Restricted Stock Units") or
stock appreciation right (including any Premium, Option Replacement or SAR
Replacement stock appreciation right) ("SARs" and, together with the Restricted
Stock Units, the "Awards") outstanding under either of the Company's 1992
Long-Term Incentive Plan or 1994 Long-Term Incentive Plan (together, the
"Option Plans"), whether or not then exercisable or vested, shall become fully
exercisable and vested, (ii) each Award of an SAR which is then outstanding
shall be cancelled and each Award of a Restricted Stock Unit which is then
outstanding shall be repurchased and (iii) in consideration of such
cancellation or repurchase, as the case may be, the Company shall pay to the
holder of each such Award an amount in respect thereof equal to the product of
(A) the Applicable Amount, multiplied by (B) the number of units subject
thereto (such payment to be net of applicable withholding taxes); and provided
that the foregoing shall not require any action which violates the Option
Plans, the Awards or any agreement in effect in respect thereof. The term
"Applicable Amount" shall mean (i) in the case of Awards of Restricted Stock
Units, the Merger Consideration or (ii) in the case of Awards of SARS, the
excess of (A)(1) with respect to Awards of SARS granted under the 1994 Long
Term Incentive Plan, the greater of the Merger Consideration or the highest
price of a Share (as determined by the Committee administering the 1994 Long
Term Incentive Plan) paid in a bona fide transaction during the 60 day period
preceding and including the Effective Time or (2) with respect to all Awards of
SARS other than those specified in clause (ii)(A)(1), the Merger Consideration,
over (B) the applicable grant price of each such Award.

Section 2.4 Dissenter's Rights. Notwithstanding anything in
this Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has delivered a written demand for
appraisal of such shares in accordance with Section 262 of the DGCL, if such
Section 262 provides for appraisal rights for such Shares in the Merger
("Dissenting Shares"), shall not be converted into the right to receive the
Merger Consideration, as provided in Section 2.1(a) hereof, unless and until
such holder fails to perfect or effectively withdraws or otherwise loses his
right to

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<PAGE> 15
appraisal and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses his right to
appraisal, such Dissenting Shares shall thereupon be treated as if they had
been converted as of the Effective Time into the right to receive the Merger
consideration to which such holder is entitled, without interest or dividends
thereon. The Company shall give the Purchaser prompt notice of any demands
received by the Company for appraisal of Shares, and, prior to the Effective
Time, the Purchaser shall have the right to participate in all negotiations and
proceedings with respect to such demands. Prior to the Effective Time, the
Company shall not, except with the prior written consent of the Purchaser, make
any payment with respect to or offer to settle, any such demands.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and the
Purchaser, as of the date hereof and as of the Closing Date, that:

Section 3.1 Organization. Each of the Company and its
Subsidiaries (as hereinafter defined) is a corporation or other entity duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or organization, and has all requisite
corporate power and authority to own, lease, use and operate its properties and
to carry on its business as it is now being conducted. Each of the Company and
its Subsidiaries is qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which it owns real
property or in which the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed individually and in the aggregate would not have or
result in a Material Adverse Effect. The term "Material Adverse Effect" means
a material adverse effect on the business, assets, liabilities, results of
operations or financial condition of the Company and its Subsidiaries taken as
a whole. None of the Company or any of its Subsidiaries (other than any
Immaterial Subsidiary) is in breach or violation of any of its certificate of
incorporation, by-laws or other organizational documents. "Immaterial
Subsidiaries" shall mean those inactive or otherwise immaterial Subsidiaries of
the Company indicated

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<PAGE> 16
on Schedule 3.1 of the Disclosure Schedule. The Company has previously
delivered to Parent a complete and correct copy of each of its Restated
Certificate of Incorporation and By-Laws, as currently in effect. Schedule 3.1
of the disclosure schedule delivered by the Company to Parent on or prior to
the date hereof (the "Disclosure Schedule") sets forth a complete and correct
list of the Subsidiaries of the Company and their respective jurisdictions of
incorporation or organization. "Subsidiary" shall mean with respect to any
Person, any corporation or other entity of which 50% or more of the securities
or other interests having by their terms ordinary voting power for the election
of directors or others performing similar functions with respect to such entity
is directly or indirectly owned by such Person. "Person" shall mean any natural
person, firm, individual, partnership, joint venture, business trust, trust,
association, corporation, company, unincorporated entity or Governmental Entity
(as defined in Section 3.4(b)).

Section 3.2 Capitalization.

(a) The authorized capital stock of the Company consists of
100,000,000 shares of Company Common Stock and 100,000,000 preferred shares,
par value $1.00 per share (the "Preferred Stock"). The number of shares of
Company Common Stock issued and outstanding is 65,675,578 shares on the date
hereof, and at the Effective Time will be 65,675,578 shares plus not more than
150,000 shares issued after the date hereof as required pursuant to the terms
of the Riverwood International Hourly Savings Plan and Riverwood International
Savings Plan, as each such plan is in effect on the date hereof. No shares of
Company Common Stock are issued and held in the treasury of the Company, and
there are no shares of Preferred Stock issued and outstanding. All the
outstanding shares of the Company's capital stock are duly authorized, validly
issued, fully paid and nonassessable. There is outstanding $125,000,000
principal amount of 6 3/4% Convertible Subordinated Notes due 2003 (the
"Convertible Notes") that upon certain circumstances become convertible into
Company Common Stock and 7,126,250 shares of Company Common Stock are reserved
for issuance upon conversion of Convertible Notes. Complete and correct copies
of the indenture and any other agreement or instrument to which the Company is
a party governing the Convertible Notes, including any and all amendments,
modifications and supplements thereto, have been made available by the Company
to Parent and the Purchaser. Other than the Convertible Notes, and except as
set forth in Schedule 3.2(a) of the Disclosure Schedule, there are no

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<PAGE> 17
existing (i) options, warrants, calls, preemptive rights, subscriptions or
other rights, convertible securities, agreements or commitments of any
character obligating the Company or any of its Subsidiaries to issue, transfer
or sell any shares of capital stock or other equity interest in, the Company or
any of its Subsidiaries or securities convertible into or exchangeable for such
shares or equity interests, (ii) contractual obligations of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any capital
stock of the Company or any Subsidiary of the Company or (iii) voting trusts or
similar agreements to which the Company or any of its Subsidiaries is a party
with respect to the voting of the capital stock of the Company or any of its
Subsidiaries.

(b) Except as set forth in Schedule 3.2(b) of the Disclosure
Schedule and except for directors' qualifying shares (i) all of the outstanding
shares of capital stock (or equivalent equity interests of entities other than
corporations) of each of the Company's Subsidiaries are beneficially owned,
directly or indirectly, by the Company and (ii) neither the Company nor any of
its Subsidiaries owns any shares of capital stock or other securities of, or
interest in, any other Person (other than any shares and interests that have a
market or other fair value not in excess of $2,000,000 in the aggregate), or is
obligated to make any capital contribution to or other investment in any other
Person.

Section 3.3 Authorization; Validity of Agreement.

(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and, subject to approval of its
stockholders as contemplated by Section 5.6 hereof, to consummate the
transactions contemplated hereby. The execution, delivery and performance by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Company (the "Board") and, other than approval and adoption of
this Agreement by the holders of a majority of the outstanding shares of
Company Common Stock, no other corporate proceedings on the part of the Company
are necessary to authorize the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery of this Agreement by
Parent and the Purchaser, is a valid and binding obligation of the Company

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<PAGE> 18
enforceable against the Company in accordance with its terms, except that such
enforcement may be subject to or limited by (i) bankruptcy, insolvency or other
similar laws, now or hereafter in effect, affecting creditors' rights
generally, and (ii) the effect of general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).

(b) The provisions of Section 203 of the DGCL are
inapplicable to the transactions contemplated by this Agreement.

Section 3.4 No Violations; Consents and Approvals.

(a) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby will (i) violate any provision of the Restated
Certificate of Incorporation or By-Laws of the Company, (ii) except as set
forth in Schedule 3.4(a) of the Disclosure Schedule, conflict with, result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration, or to the imposition of any Lien (as defined in
Section 3.18(b))) under, or result in the acceleration or trigger of any
payment, time of payment, vesting or increase in the amount of any compensation
or benefit payable pursuant to, the terms, conditions or provisions of any
note, bond, mortgage, indenture, guarantee or other evidence of indebtedness,
lease, license, contract, agreement, plan or other instrument or obligation to
which the Company or any of its Subsidiaries is a party or by which any of them
or any of their assets may be bound or (iii) conflict with or violate any
federal, state, local or foreign order, writ, injunction, judgment, award,
decree, statute, law, rule or regulation (collectively, "Laws") applicable to
the Company, any of its Subsidiaries or any of their properties or assets;
except in the case of clauses (ii) or (iii) for such conflicts, violations,
breaches, defaults or Liens which individually and in the aggregate would not
have or result in a Material Adverse Effect or materially impair or delay the
consummation of the transactions contemplated hereby.

(b) Except as disclosed in Schedule 3.4(b) of the Disclosure
Schedule, no filing or registration with, declaration or notification to, or
order, authorization, consent or approval of, any federal, state, local or
foreign court,

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<PAGE> 19
legislative, executive or regulatory authority or agency (a "Governmental
Entity") or any other Person is required in connection with the execution,
delivery and performance of this Agreement by the Company or the consummation
by the Company of the transactions contemplated hereby, except (i) applicable
requirements under Competition Laws (as defined in Section 5.4(b)), (ii)
applicable requirements under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (iii) the filing of the Certificate of Merger with the
Secretary of State, (iv) applicable requirements under "blue sky" laws of
various states, (v) applicable requirements under Environmental Laws (as
defined in Section 3.14(d)(ii)) relating to transfer or assumption of Permits
(as defined in Section 3.10(c)) required thereunder for the conduct of business
by the Company and its Subsidiaries and (vi) such other consents, approvals,
orders, authorizations, notifications, registrations, declarations and filings
the failure of which to be obtained or made individually and in the aggregate
would not have or result in a Material Adverse Effect or materially impair or
delay the consummation of the transactions contemplated hereby.

Section 3.5 SEC Reports and Financial Statements. The
Company has filed with the Securities and Exchange Commission (the "SEC"), all
forms and documents required to be filed by it since January 1, 1992 under the
Exchange Act and has heretofore made available to Parent (i) its Annual Reports
on Form 10-K for the years ended December 31, 1992, December 31, 1993 and
December 31, 1994, respectively, (ii) its Quarterly Reports on Form 10-Q for
the periods ended April 1 and July 1, 1995, (iii) all proxy statements relating
to meetings of stockholders of the Company since January 1, 1993 (in the form
mailed to stockholders) and (iv) all other forms, reports and registration
statements filed by the Company with the SEC since January 1, 1992 (other than
registration statements on Form S-8 or Form 8-A, filings on Form T-1 or
preliminary materials and registration statements in forms not declared
effective). The documents described in clauses (i)-(iv) above (whether filed
before, on or after the date hereof, but in any event not after the Closing)
are referred to in this Agreement collectively as the "Company SEC Documents".
As of their respective dates, the Company SEC Documents (a) did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading and (b)
complied in all material respects with the applicable requirements of the
Exchange Act and the

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<PAGE> 20
Securities Act of 1933 (the "Securities Act"), as the case may be, and the
applicable rules and regulations of the SEC thereunder. The consolidated
financial statements included in the Company SEC Documents have been prepared
in accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved (except as
otherwise noted therein and except that the quarterly financial statements are
subject to year end adjustment and do not contain all footnote disclosures
required by GAAP) and fairly present in all material respects the consolidated
financial position and the consolidated results of operations and cash flows of
the Company and its consolidated Subsidiaries as at the dates thereof or for
the periods presented therein.

Section 3.6 Absence of Certain Changes. Except as disclosed
in the Company SEC Documents filed prior to the date hereof or as disclosed in
Schedule 3.6 to the Disclosure Schedule, since July 1, 1995, (i) the Company
and its Subsidiaries (other than any Immaterial Subsidiary) have conducted
their respective operations only in the ordinary course consistent with past
practice, (ii) there has not been a Material Adverse Effect and (iii) the
Company and the Subsidiaries have not taken action that if taken after the date
hereof would constitute a violation of Section 5.1 (other than clause (a)
thereof).

Section 3.7 Absence of Undisclosed Liabilities. Except (a)
as and to the extent disclosed in the Company's SEC Documents filed prior to
the date hereof, including as reflected or reserved against in the balance
sheet dated as of July 1, 1995 constituting a portion of the financial
statements included therein (the "Balance Sheet") or in the notes thereto, (b)
as and to the extent disclosed in Schedules 3.7 and 3.14 of the Disclosure
Schedule or (c) for liabilities or obligations relating to environmental
matters the existence of which was not required to be disclosed pursuant to the
representation set forth in Section 3.14, neither the Company nor any of its
Subsidiaries had as of that date any liabilities or obligations (accrued,
contingent or otherwise) which (x) would be material to the Company and its
Subsidiaries taken as a whole (except for obligations under executory contracts
incurred in the ordinary course of business consistent with past practice that
have yet to be performed and that individually and in the aggregate would not
have or result in a Material Adverse Effect) or (y) would be required to be set
forth in the Balance Sheet or the notes thereto in accordance with GAAP.
Except as set forth in Schedules 3.7 and 3.14 to the

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<PAGE> 21
Disclosure Schedule or for liabilities or obligations relating to environmental
matters the existence of which was not required to be disclosed pursuant to the
representation set forth in Section 3.14, since the date of the Balance Sheet,
neither the Company nor any of its Subsidiaries has incurred any liabilities or
obligations (accrued, contingent or otherwise) that would be required to be
reflected or reserved against in an audited consolidated balance sheet of the
Company and its Subsidiaries or the notes thereto prepared in accordance with
GAAP, or that would be material to the Company and its Subsidiaries taken as a
whole, except for such liabilities and obligations as were incurred in the
ordinary course of business consistent with past practice and as individually
and in the aggregate would not have or result in a Material Adverse Effect and
except for liabilities and obligations resulting from the execution and
delivery of this Agreement or relating to the transactions contemplated hereby.

Section 3.8 Proxy Statement; Schedule 13E-3; Offer Documents.

(a) The Proxy Statement (as defined in Section 5.6(d)) (and
any amendment thereof or supplement thereto) at the date mailed to Company
stockholders and at the time of the Special Meeting (as defined in Section
5.6(a)), (i) will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading and (ii) will comply in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder; except
that no representation is made by the Company with respect to statements made
in the Proxy Statement based on information supplied by Parent or the Purchaser
specifically for inclusion in the Proxy Statement.

(b) None of the information provided by the Company
specifically for use in any Rule 13e-3 Transaction Statement on Schedule 13E-3
required to be filed with the SEC under the Exchange Act and/or mailed to the
stockholders of the Company in connection with the Merger (the "Schedule
13E-3") will at the time the Schedule 13E-3 or any amendments thereto are so
filed and/or mailed, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading.

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<PAGE> 22
(c) None of the information provided by the Company
specifically for use in the offers to purchase and consent solicitations and
related letters of transmittal (collectively, together with any amendments or
supplements thereto, the "Offer Documents") and any registration statement and
any related schedules (and any amendment or supplement to any of the
foregoing), filed with the SEC and/or mailed to the registered holders of the
Notes (as defined in Section 5.11) of each series, as the case may be, in
connection with the Offers (as defined in Section 5.11) and solicitations of
consents to the Proposed Amendments (as defined in Section 5.11), at the date
so filed and/or mailed (i) will contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading.

Section 3.9 Employee Benefit Plans; ERISA.

(a) Schedule 3.9(a) of the Disclosure Schedule contains a
true and complete list of each bonus, deferred compensation, incentive
compensation, stock purchase, stock option or other equity based, severance,
termination, change in control, retention, employment, hospitalization or other
medical, life or insurance, disability, other welfare, supplemental
unemployment benefits, profit-sharing, pension, or retirement plan, program,
agreement or arrangement, and each other employee compensation or benefit plan,
program, agreement or arrangement, sponsored, maintained or contributed to by
the Company, any of its Subsidiaries or by any trade or business, whether or
not incorporated (an "ERISA Affiliate"), that together with the Company or any
of its Subsidiaries would be deemed a "single employer" within the meaning of
section 4001 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), for the benefit of any employee, former employee, director or former
director of the Company, any of its Subsidiaries or any ERISA Affiliate or with
respect to which the Company or any of its Subsidiaries has or could reasonably
be expected to have any material liability (matured or unmatured, absolute or
contingent) (the "Plans"). Schedule 3.9(a) identifies each of the Plans that
is an "employee benefit plan," subject to ERISA (the "ERISA Plans").

(b) With respect to each Plan, the Company has heretofore
delivered or made available to the Purchaser true and complete copies of each
of the following documents (including all amendments to such documents):

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<PAGE> 23
(i) the Plan or a written description of any Plan
not in writing;

(ii) the most recent annual report and actuarial
report if required under ERISA;

(iii) the most recent Summary Plan Description with
respect thereto if required under ERISA;

(iv) if the Plan or any obligations thereunder are
funded through a trust or any other funding vehicle, the trust or other
funding agreement and the latest financial statements thereof;

(v) the most recent determination letter received
from the Internal Revenue Service with respect to each Plan intended to
qualify under section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"); and

(vi) communications that the Company or any of its
ERISA Affiliates or Subsidiaries has received from or sent to the PBGC,
the Department of Labor, the Internal Revenue Service or any comparable
agency of any foreign governmental entity concerning any termination of,
withdrawal from or appointment of a trustee to administer any plan or
the failure or alleged failure to comply with any provision of ERISA,
the Code or comparable legislation of a foreign jurisdiction with
respect to any plan, including any existing written description of any
such oral communication.

(c) No liability under Title I or IV of ERISA, the penalty or
excise tax provisions of the Code relating to employee plans or equivalent
legislation of a foreign jurisdiction has been incurred by the Company or any
of its Subsidiaries or ERISA Affiliates that has not been satisfied in full,
and no condition exists or event has occurred that presents a material risk to
the Company or any of its Subsidiaries or ERISA Affiliates of incurring any
such liability, other than (i) liability for contributions due in the ordinary
course and premiums due the Pension Benefit Guaranty Corporation ("PBGC")
(which contributions and premiums have been paid when due) and (ii) such
liabilities that individually and in the aggregate would not have or result in
a Material Adverse Effect.

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<PAGE> 24
(d) Except as disclosed in Schedule 3.9(d), no ERISA Plan is
a "multiemployer plan," as defined in section 3(37) of ERISA, nor is any ERISA
Plan a plan described in section 4063(a) of ERISA.

(e) No ERISA Plan or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived. Each ERISA Plan
intended to be "qualified" within the meaning of section 401(a) of the Code has
been determined by the Internal Revenue Service to be so qualified; timely
application has been made for an updated determination of the Internal Revenue
Service as to the continued qualification of such ERISA Plan under section
401(a) of the Code as currently in effect; no condition exists or event has
occurred since the date of such initial determination that would adversely
affect the qualified status of any such ERISA Plan; and each trust maintained
thereunder has been determined by the Internal Revenue Service to be exempt
from taxation under section 501(a) of the Code. Each Plan has been operated
and administered in all respects in accordance with its terms and applicable
Law, including but not limited to ERISA, the Code and equivalent legislation of
a foreign jurisdiction, except any such failures to so operate or administer
that individually and in the aggregate would not have or result in a Material
Adverse Effect. There are no pending, or to the best knowledge of the Company,
threatened, material claims by or on behalf of any Plan, by any employee or
beneficiary covered under any such Plan or otherwise involving any such Plan or
the assets thereof (other than routine claims for benefits).

(f) Neither the Company nor any of the Company's
Subsidiaries or ERISA Affiliates would be liable for any amount pursuant to
section 4062, 4063 or 4064 of ERISA if any ERISA Plan were to terminate that
individually or in the aggregate would have or result in a Material Adverse
Effect. All contributions required to be made to each Plan under the terms of
such Plan, applicable Law or any applicable collective bargaining agreement
have been paid in full when due except where such failure individually and in
the aggregate would not be material to the Company and its Subsidiaries taken
as a whole.

Section 3.10 Litigation; Compliance with Law.

(a) Except as disclosed in the Company SEC Documents filed
prior to the date hereof or as set forth in

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<PAGE> 25
Schedule 3.10(a) of the Disclosure Schedule, and except for Environmental
Claims (which are the subject of Section 3.14), (i) there is no Litigation (as
defined below) pending or, to the actual knowledge of the Company, threatened,
against the Company or any of its Subsidiaries or any of their properties or
assets which, individually or in the aggregate, if determined adversely to the
Company or such Subsidiaries would reasonably be expected to have or result in
a Material Adverse Effect, and (ii) neither the Company nor any of its
Subsidiaries is subject to any settlement or similar agreement with any
Governmental Entity, or to any order, judgment, decree, injunction or award of
any Governmental Entity or arbitrator, that individually or in the aggregate
would have or result in a Material Adverse Effect. "Litigation" means any
action, claim, suit, proceeding, citation, summons, subpoena, inquiry or
investigation of any nature, civil, criminal or regulatory, in law or in
equity, by or before any Governmental Entity or arbitrator (including worker's
compensation claims).

(b) Except as disclosed in the Company SEC Documents filed
prior to the date hereof, and except for violations of Environmental Laws
(which are the subject of Section 3.14), the operations of the Company and its
Subsidiaries have not been and are not being conducted, and no Real Property
is, in violation of any Law or any Permit (as defined below), except where such
violations individually and in the aggregate would not have or result in a
Material Adverse Effect. Except as set forth in Schedule 3.10(b) of the
Disclosure Schedule, none of the Company or any of its Subsidiaries has
received any notice, or has knowledge of any claim, alleging any such
violation, except for such violations that individually and in the aggregate
would not have or result in a Material Adverse Effect.

(c) The Company and its Subsidiaries hold all licenses,
permits, variances, consents, authorizations, waivers, grants, franchises,
concessions, exemptions, orders, registrations and approvals of Governmental
Entities or other Persons necessary for the ownership, leasing, operation,
occupancy and use of the Real Property (as defined in Section 3.19(c)) and the
conduct of their respective businesses as currently conducted ("Permits"),
except for Permits under Environmental Laws (which are the subject of Section
3.14) and except where the failure to hold such Permits individually and in the
aggregate would not have or result in a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received notice

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<PAGE> 26
that any Permit will be terminated or modified or cannot be renewed in the
ordinary course of business, and the Company has no knowledge of any reasonable
basis for any such termination, modification or nonrenewal, except for such
terminations, modifications or nonrenewals as individually and in the aggregate
would not have or result in a Material Adverse Effect. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby do not and will not violate any Permit, or result in any
termination, modification or nonrenewals thereof, except for such violations,
terminations, modifications or nonrenewals thereof as individually and in the
aggregate would not have or result in a Material Adverse Effect.

Section 3.11 Intellectual Property. The Company and its
Subsidiaries own, or possess sufficient and legally enforceable licenses or
other sufficient and legally enforceable rights to use, any and all United
States and foreign patents, patent applications, patent disclosures, mask
works, computer software, trademarks, trade dress, trade names, copyrights and
service marks, including applications to register and registrations for any of
the foregoing, as well as trade secrets, know-how and other proprietary rights
and information (all of the foregoing, other than trademarks, trade names and
service marks, referred to as "Technology" and together with trademarks, trade
names and service marks, referred to as "Intellectual Property") necessary for
the conduct of, or otherwise material to, the business and operations of the
Company and its Subsidiaries as currently conducted ("Company Intellectual
Property"), free and clear of any Liens (except for any Permitted Liens).
Schedule 3.11 of the Disclosure Schedule lists as of the date hereof, all
patents, patent applications, patent disclosures, trademarks, trade dress and
service marks and any registrations and applications therefor, trade names,
copyrights, mask works and computer software owned by or licensed to the
Company or any Subsidiary and any material licenses thereof to or from the
Company or any Subsidiary. Except as disclosed in Schedule 3.11 of the
Disclosure Schedule, the conduct of the business of the Company and its
Subsidiaries as currently conducted does not infringe or conflict with any
Intellectual Property of any Person, and none of the Company or any of its
Subsidiaries has received notice or has actual knowledge of any such
infringement or conflict except such infringements and conflicts as
individually and in the aggregate would not have or result in a Material
Adverse Effect. Except as set forth on Schedule 3.11 of the Disclosure
Schedule, to the actual

19
<PAGE> 27
knowledge of the Company, no Person is infringing any Intellectual Property of
the Company or its Subsidiaries except such infringements as individually and
in the aggregate would not have or result in a Material Adverse Effect. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in the loss of, or any Lien
on, the rights of the Company or any Subsidiary with respect to the
Intellectual Property owned or used by them, except where such losses and such
Liens as individually and in the aggregate would not have or result in a
Material Adverse Effect. Each patent, patent application, trademark, trade
dress or service mark and any registration or application therefor, mask work,
copyright registration or application therefor included in any Company
Intellectual Property owned by the Company or any of its Subsidiaries is in
proper form, not disclaimed and has been properly maintained and has otherwise
been duly registered with, filed in or issued by, as the case may be, the
United States Patent and Trademark Office, United States Copyright Office or
such other filing offices, domestic or foreign, and the Company has taken such
other actions necessary to ensure full protection under any applicable laws,
and such registrations, filings, issuances and other actions remain in full
force and effect; and except as set forth in Schedule 3.11 of the Disclosure
Schedule there are no proceedings pending by or before any Governmental Entity
relating to any material Company Intellectual Property.

Section 3.12 Identified Contracts.

(a) Other than the contracts or agreements of the Company
included as exhibits to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 (the "Material Contracts") and contracts or agreements
between the Company and its wholly owned Subsidiaries or between wholly owned
Subsidiaries of the Company, Schedule 3.12(a) of the Disclosure Schedule lists
each of the following contracts and agreements to which the Company or any of
its Subsidiaries is a party or by which any of them is bound (contracts and
agreements of the types described below being "Identified Contracts"), in each
case as such Identified Contract is in effect on the date hereof:

(i) contracts and agreements for the purchase of inventories,
goods or other materials by, or for the furnishing of services to, the
Company or any of its Subsidiaries that (A) require payments by the
Company or any of its Subsidiaries in excess of $2,000,000 and (B) have
a term of one year or more and are not termi-

20
<PAGE> 28
nable by the Company or Subsidiary party thereto, as the case may be, on
notice of six months or less without penalty;

(ii) contracts and agreements for the sale of inventories,
goods or other materials, or for the furnishing of services, by the
Company or any of its Subsidiaries that (A) require payments to the
Company or any of its Subsidiaries in excess of $2,000,000 and (B) have a
term of one year or more and are not terminable by the Company or
Subsidiary party thereto, as the case may be, on notice of six months or
less without penalty;

(iii) manufacturer's representative, sales agency and
distribution contracts and agreements that (A) have a term of one year or
more and are not terminable by the Company or Subsidiary party thereto,
as the case may be, on notice of six months or less without penalty, or
(B) are otherwise material;

(iv) contracts and agreements (A) governing the terms of
indebtedness, or guarantees of indebtedness, of, or secured by assets
of, the Company or any of its Subsidiaries in excess of $2,000,000
principal amount in the aggregate, or (B) governing the terms of
"synthetic" or capital leases pursuant to which the Company or any of
its Subsidiaries has financial obligations in excess of $2,000,000, or
(C) providing for all obligations of the Company and its Subsidiaries in
respect of interest rate swap or similar agreements, commodity swaps or
options or similar agreements or foreign currency hedge, exchange or
similar agreements or any other derivative instrument (other than any
such agreement involving a notional amount of less than $50,000);

(v) contracts and agreements for the direct or indirect
benefit of (x) Stockholder other than contracts and agreements that
benefit all stockholders of the Company ratably, or (y) any of the
affiliates of Stockholder (other than the Company and its Subsidiaries
and their respective officers and directors in their capacities as
such);

(vi) shareholder, voting trust or similar contracts and
agreements relating to the voting of shares or other equity or debt
interests of the Company or any of its Subsidiaries;

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<PAGE> 29
(vii) contracts and agreements entered into since January 1,
1990 providing for the acquisition or disposition of assets having a
value in excess of $5,000,000, other than sales or purchases of
inventories in the ordinary course of business and sales of obsolete
equipment;

(viii) all of the Leases, and other leases, subleases, licenses
and other agreements relating to or constituting real property, each with
a term of one year or more and an annual payment obligation in excess of
$250,000;

(ix) joint venture agreements, partnership agreements and other
similar contracts and agreements involving a sharing of profits and
expenses;

(x) contracts and agreements governing the terms of
indebtedness of third parties (x) owed to the Company or any of its
Subsidiaries, other than receivables arising from the sale of goods or
services, or loans or advances not exceeding $250,000 in the aggregate
made to employees of the Company or any of its Subsidiaries, by the
Company or such Subsidiary in the ordinary course of business consistent
with past practice, or (y) to or guaranteed by the Company or any of its
Subsidiaries;

(xi) contracts and agreements prohibiting or materially
restricting the ability of the Company or any of its Subsidiaries to
conduct its business, to engage in any business or operate in any
geographical area or to compete with any Person, other than (x)
distribution (including independent sales representative) contracts and
agreements listed on Schedule 3.12(a) of the Disclosure Schedule or that
have a term of less than one year or are terminable by the Company or any
Subsidiary of the Company party thereto, as the case may be, on notice of
six months or less without penalty, and, in each case, which are not
material to the Company and its Subsidiaries taken as a whole and (y)
supplier and customer agreements relating to non-disclosure of
confidential information of the other party which are not material to the
Company and its Subsidiaries taken as a whole.

(xii) contracts and agreements providing for future payments
that are conditioned, in whole or in part, on a change in control of the
Company or any of its Sub-

22
<PAGE> 30
sidiaries (other than contracts and agreements providing for payments of
less than $250,000 in the aggregate); and

(xiii) contracts and agreements that are material to the
business, operations, results of operations, condition (financial or
otherwise), assets or properties of the Company and its Subsidiaries
taken as a whole.

(b) Each contract or agreement to which the Company or any of
its Subsidiaries is a party or by which any of them is bound is in full force
and effect, and neither the Company nor any of its Subsidiaries, nor, to the
actual knowledge of the Company, any other Person, is in breach of, or default
under, any such contract or agreement, and no event has occurred that with
notice or passage of time or both would constitute such a breach or default
thereunder by the Company or any of its Subsidiaries, or, to the actual
knowledge of the Company, any other Person, except for such failures to be in
full force and effect and such breaches and defaults as individually and in the
aggregate would not have or result in a Material Adverse Effect.

Section 3.13 Taxes.

(a) Except as set forth on Schedule 3.13(a) of the Disclosure
Schedule, (i) all Returns required to be filed with any taxing authority on or
before the Closing Date by, or with respect to, the Company, its United States
Subsidiaries and its non-United States Subsidiaries (since the date such
non-United States Subsidiaries became Subsidiaries of the Company) have (or by
the Closing Date will have) been filed in accordance with all applicable laws;
(ii) the Company and its Subsidiaries have (or by the Closing Date will have)
paid all Taxes shown as due and payable on the Returns that have (or will have)
been so filed, and as of the time of filing such Returns correctly reflected
the facts regarding the income, business, assets, operations, activities and
the status of the Company and its Subsidiaries in all material respects; (iii)
the Company and its Subsidiaries have (or by the Closing Date will have) made
provision for all material Taxes that are or may become payable by the Company
and its Subsidiaries relating to periods on or prior to the Closing Date for
which no Return has (or will have) been filed or in respect of which a final
determination has been made; (iv) all Employment and Withholding Taxes have
been either duly and timely paid to

23
<PAGE> 31
the proper governmental authority or properly set aside in accounts for such
purpose; (v) the charges, accruals and reserves for Taxes with respect to the
Company and its Subsidiaries reflected in the Balance Sheet are adequate under
GAAP to cover the Tax liabilities accruing through the date thereof; and (vi)
as of the Closing Date, there is no action, suit, proceeding, investigation,
audit or claim pending or, to the actual knowledge of the Seller or the
Company, threatened, against or with respect to the Company or any of its
Subsidiaries in respect of any Tax where there is a reasonable possibility of a
determination or decision against the Company or any of its Subsidiaries that
individually or in the aggregate would have or result in a Material Adverse
Effect.

(b) (i) The Company is (and will as of the Closing be)
and has been since January 1, 1979 a member of an affiliated group of
corporations, of which Stockholder is the common parent, eligible to file and
filing a consolidated Return for federal income Tax purposes; (ii) the entire
issue of the Convertible Notes is (and will as of the Closing be) and has been
since December 1, 1993 traded on or listed on and subject to the rules of the
New York Stock Exchange; (iii) Schedule 3.13(b) of the Disclosure Schedule sets
forth all outstanding (x) call options, warrants, convertible obligations,
convertible stock, redemption agreements (including rights to cause the
redemption of stock) and other instruments and agreements that provide,
provided or will provide for the right (whether currently existing or
contingent) to issue, acquire, redeem or transfer stock (including an option on
an option) and (y) cash settlement options, phantom stock, stock appreciation
rights and other similar interests (except for stock), in each case with
respect to the capital stock of the Company and each of its United States
Subsidiaries; and (iv) in determining the terms of the Executive Compensation
Plans set forth on such Schedule 3.13(b), the Company reviewed the terms of
comparable executive compensation arrangements of other companies, and based on
its review, the Company was not and is not of the view that the terms of such
plans were excessive by reference to the services performed by the employees to
whom the rights under such plans were granted.

(c) Schedule 3.13(c) of the Disclosure Schedule sets
forth each Person who, to the actual knowledge of the Company after review of
all relevant Schedules 13D and 13G filed with the SEC, at any time during the
shorter of the periods described in section 897(c)(1)(A)(ii) of the Code

24
<PAGE> 32
and the Treasury Regulations thereunder, beneficially owned more than five
percent, taking into account the constructive ownership rules described in
section 897(c)(6)(C) of the Code and the Treasury Regulations thereunder, of
the fair market value of any class of stock of the Company.

(d) "Code" means the Internal Revenue Code of 1986, as
amended. "Employment and Withholding Taxes" mean any federal, state, local,
foreign or other employment, unemployment, insurance, social security,
disability, workers' compensation, payroll, health care or other similar tax,
duty or other governmental charge or assessment or deficiencies thereof and all
taxes required to be withheld by or on behalf of each of the Company and any of
its Subsidiaries in connection with amounts paid or owing to any employee,
independent contractor, creditor or other party, in each case, on or in respect
of the business or assets thereof (including, but not limited to, all interest
and penalties thereon and additions thereto whether disputed or not). "Return"
means any return, report, declaration, form, claim for refund or information
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof, that relates to the business or assets of the
Company and its Subsidiaries. "Tax" means any federal, state, local, foreign
or other income, alternative, minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits, windfall
profits, gross receipts, value added, sales, use, excise, custom duties,
transfer, conveyance, mortgage, registration, stamp, documentary, recording,
premium, severance, environmental, real and personal property, ad valorem,
intangibles, rent, occupancy, license, occupational, employment, unemployment
insurance, social security, disability, workers' compensation, payroll, health
care, withholding, estimated or other similar tax, duty or other governmental
charge or assessment or deficiencies thereof (including but not limited to all
interest and penalties thereon and additions thereto).

Section 3.14 Environmental Matters.

(a) Except as disclosed in the Company SEC Documents filed
prior to the date hereof or as disclosed on Schedule 3.14(a) of the Disclosure
Schedule and except for those noncompliance matters that have been and are
resolved, the Company and its Subsidiaries have complied throughout the past
five years, and are in compliance, in all material respects with all applicable
Environmental Laws (as hereinafter defined), which compliance includes the
possession

25
<PAGE> 33
of all Permits required under applicable Environmental Laws and compliance with
the terms and conditions thereof and the making and filing with all applicable
Governmental Entities of all reports, forms and documents and the maintenance
of all records required to be made, filed or maintained by it under any
Environmental Law.

(b) Except as disclosed in the Company SEC Documents filed
prior to the date hereof or as disclosed on Schedule 3.14(b) of the Disclosure
Schedule, there are no Environmental Claims (as hereinafter defined) pending
or, to the actual knowledge of the Company, threatened, against the Company or
any of its Subsidiaries that individually or in the aggregate would have or
result in a Material Adverse Effect.

(c) Except as disclosed in Schedule 3.14(a) or 3.14(b) of the
Disclosure Schedule, none of the Company and its Subsidiaries is subject to,
any liability or obligation (accrued, contingent or otherwise) on the part of
any of the Company and its Subsidiaries, including the obligation to cleanup or
to take any response action in accordance with applicable or relevant and
appropriate cleanup standards under Environmental Laws, relating to (x) the
environmental conditions on, under, or about any of the properties or assets
owned, leased, operated or used by the Company or any of its Subsidiaries or
any predecessor thereto at the present time or in the past, including the air,
soil and groundwater conditions at such properties, or (y) the past or present
use, management, handling, transport, treatment, generation, storage, disposal
or Release (as defined below) of any Hazardous Substances (as defined below),
in either case other than liabilities or obligations that individually and in
the aggregate would not have or result in a Material Adverse Effect. The
Company has disclosed and, where requested, made available to Parent and the
Purchaser all material information, including such studies, analyses and test
results, in the possession, custody or control of or otherwise known and
available to the Company or any of its Subsidiaries relating to (1) the
environmental conditions on, under or about any of the properties or assets
owned, leased, operated or used by any of the Company and its Subsidiaries or
any predecessor in interest thereto at the present time or in the past, and (2)
any Hazardous Substances used, managed, handled, transported, treated,
generated, stored or Released by any Person on, under, about or from, or
otherwise in connection with the use or operation of, any of the properties,
assets and businesses of the Company or any of its Subsidiaries.

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<PAGE> 34
(d) The records referred to in Section 3.14(a) comply, and as
of their respective dates, the reports, forms and documents referred to in
Section 3.14(a) complied, in all material respects with the applicable
requirements of any Environmental Law and the applicable rules and regulations
of any Governmental Entity thereunder.

(e) As used in this Agreement:

(i) the term "Environmental Claim" means any written claim,
demand, suit, action, proceeding, investigation or notice to the Company or any
of its Subsidiaries by any Person or entity alleging any potential liability
(including, without limitation, potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resource damages, personal
injuries, or penalties) arising out of, based on, or resulting from (a) the
presence, or Release into the environment, of any Hazardous Substance (as
hereinafter defined) at any location, whether or not owned, leased, operated or
used by the Company or its Subsidiaries, or (b) circumstances forming the basis
of any violation, or alleged violation, of any applicable Environmental Law;

(ii) the term "Environmental Laws" means all Laws, relating
to pollution, cleanup, restoration or protection of the environment or to the
protection of flora or fauna or their habitat or to human or public health or
safety, including without limitation, (1) Laws relating to emissions,
discharges, Releases or threatened Releases of Hazardous Substances, or
otherwise relating to the manufacture, generation, processing, distribution,
use, sale, treatment, receipt, storage, disposal, transport or handling of
Hazardous Substances, including the Comprehensive Environmental Response,
Compensation and Liability Act and the Resource Conservation and Recovery Act,
and (2) the Occupational Safety and Health Act;

(iii) the term "Hazardous Substance" means (1) chemicals,
pollutants, contaminants, hazardous wastes, toxic substances, and oil and
petroleum products, (2) any substance that is or contains friable asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum or
petroleum-derived substances or wastes, radon gas or related materials, (3) any
substance that requires removal or remediation under any Environmental Law, or
is defined, listed or identified as a "hazardous waste" or "hazardous
substance" thereunder, or (4) any substance that is toxic, explosive,
corrosive, flammable, infectious, radioactive,

27
<PAGE> 35
carcinogenic, mutagenic, or otherwise hazardous; in each case in clauses
(1)-(4) above which is regulated under any Environmental Law; and

(iv) the term "Release" means any releasing, disposing,
discharging, injecting, spilling, leaking, pumping, dumping, emitting,
escaping, emptying, dispersal, leaching, migration, transporting, placing and
the like, including into or upon, any land, soil, surface water, ground water
or air, or otherwise entering into the environment.

Section 3.15 Required Vote by Company Stockholders. The
affirmative vote of the holders of a majority of the outstanding Shares
entitled to vote hereon is the only vote of any class of capital stock of the
Company required by the DGCL or the Restated Certificate of Incorporation or
the By-Laws of the Company to adopt this Agreement and approve the transactions
contemplated hereby.

Section 3.16 Brokers. Except for J.P. Morgan & Co.
Incorporated and Goldman Sachs & Co., no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company or any of its Subsidiaries, that is or will
be payable by the Company or any of its Subsidiaries. The Company is solely
responsible for the fees and expenses of J.P. Morgan & Co. Incorporated and
Goldman Sachs & Co. as and to the extent set forth in the engagement letters
dated April 10, 1995. The Company has previously delivered to the Purchaser
complete and correct copies of such engagement letters.

Section 3.17 Opinions of Financial Advisors. The Company has
received (a) an opinion of J.P. Morgan & Co. Incorporated to the effect that,
as of the date hereof, the Merger Consideration to be received by the holders
of Shares in the Merger is fair, from a financial point of view, to such
holders, and (b) an opinion of Goldman, Sachs & Co. to the effect that, as of
the date hereof, the Merger Consideration to be received by the holders of
Shares is fair.

Section 3.18 Assets.

(a) The Company and its Subsidiaries own, or otherwise have
sufficient and legally enforceable rights to use, all of the properties and
assets (real, personal or

28
<PAGE> 36
mixed, tangible or intangible), necessary for the conduct of, or otherwise
material to, their business and operations as it is currently conducted (the
"Assets"), other than Intellectual Property (which is the subject of Section
3.11). The Company and its Subsidiaries have valid title to, or in the case of
leased property have valid leasehold interests in, all such Assets (other than
Intellectual Property), including all such Assets (other than Intellectual
Property) reflected in the Balance Sheet or acquired since the date thereof
(except as may have been disposed of since July 1, 1995 or may be disposed of
after the date hereof in accordance herewith in either case in the ordinary
course of business consistent with past practice), in each case free and clear
of any Lien (as defined below), except Permitted Liens (as defined below).
Schedule 3.18(a) of the Disclosure Schedule sets forth a complete and correct
list of each of the countries in which Assets are located.

(b) "Lien" means any mortgage, pledge, deed of trust,
hypothecation, right of others, claim, security interest, encumbrance, burden,
title defect, title retention agreement, lease, sublease, license, occupancy
agreement, easement, covenant, condition, encroachment, voting trust agreement,
interest, option, right of first offer, negotiation or refusal, proxy, lien,
charge or other restrictions or limitations of any nature whatsoever.

(c) "Permitted Liens" means (a) Liens reserved against or
reflected in the Balance Sheet, to the extent so reserved or reflected or
described in the notes thereto, (b) Liens for Taxes not yet due and payable or
which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the Company's books in
accordance with GAAP, (c) those Liens set forth in Schedule 3.18(c) of the
Disclosure Schedule and (d) those Liens that, individually and in the aggregate
with all other Permitted Liens, do not and will not materially interfere with
the use of the properties or assets of the Company and its Subsidiaries taken
as a whole as currently used, or otherwise have or result in a Material Adverse
Effect.

Section 3.19 Real Property.

(a) Schedule 3.19(a) of the Disclosure Schedule contains a
complete and correct list of all Owned Real Property (as defined in Section
3.19(c)) setting forth information sufficient to specifically identify such
Owned Real Property and the legal owner thereof. The Company and

29
<PAGE> 37
its Subsidiaries have good, valid and marketable fee simple title to the Owned
Real Property, free and clear of any Liens other than Permitted Liens. There
are no outstanding options or rights of first refusal to purchase the Owned
Real Property (as defined in Section 3.19(c)), or any material portion thereof
or interest therein. Each Lease (as defined in Section 3.19(c)) grants the
lessee under the Lease the exclusive right to use and occupy the premises and
rights demised thereunder free and clear of any Lien other than Permitted
Liens. Each of the Company and its Subsidiaries has good and valid title to
the leasehold estate or other interest created under its respective Leases free
and clear of any Liens other than Permitted Liens. Each of the Company and its
Subsidiaries enjoys peaceful and undisturbed possession under its respective
Leases of its respective Leased Real Property (as defined in Section 3.19(c))
free and clear of any Lien other than Permitted Liens.

(b) The Real Property constitutes all the fee, leasehold and
other interests in real property held by the Company and its Subsidiaries, and
constitutes all of the fee, leasehold and other interests in real property,
necessary for the conduct of, or otherwise material to, the business of the
Company and its Subsidiaries as it is currently conducted, except for any fee,
leasehold or other interest acquired or disposed of in the ordinary course of
business after the date hereof and in accordance with this Agreement. The use
and operation of the Real Property in the conduct of the business of the
Company and its Subsidiaries does not violate any instrument of record or
agreement affecting the Real Property, except for such violations as
individually and in the aggregate would not have or result in a Material
Adverse Effect. No current use by the Company and its Subsidiaries of the Real
Property is dependent on a nonconforming use or other Governmental Approval,
the absence of which individually or in the aggregate would have or result in a
Material Adverse Effect.

(c) "Leases" means the real property leases, subleases,
licenses and use or occupancy agreements pursuant to which the Company or any
of its Subsidiaries is the lessee, sublessee, licensee, user or occupant of
real property, or interests therein, necessary for the conduct of, or otherwise
material to, the business of the Company and its Subsidiaries as it is
currently conducted, including, without limitation, timber deeds, cutting
rights or other timbering interests to the extent they constitute non-fee
interests in real property. "Leased Real Property" means

30
<PAGE> 38
all interests in real property pursuant to the Leases. "Owned Real Property"
means the real property owned by the Company and its Subsidiaries necessary for
the conduct of, or otherwise material to, the business of the Company and its
Subsidiaries as it is currently conducted. "Real Property" means the Owned
Real Property and the Leased Real Property.

(d) Except as set forth in Schedule 3.19(d) of the Disclosure
Schedule, since January 1, 1995 the Company's timber business has been operated
in the ordinary course of business consistent with past practice. As of
January 1, 1995, the Company owned, leased or held cutting rights with respect
to timberlands aggregating not less than 540,000 acres of land containing not
less than 500 million board feet of pine sawlogs, 2.7 million cords of pine
pulp wood, 95 million board feet of hardwood sawlogs and one million cords of
hardwood pulp wood.

Section 3.20 Insurance. Schedule 3.20 of the Disclosure
Schedule contains a complete and correct list and summary description of all
insurance policies maintained by or on behalf of any of the Company and its
Subsidiaries as of the date hereof. Such policies are in full force and
effect, and all premiums due thereon have been paid. The Company and its
Subsidiaries have complied in all material respects with the terms and
provisions of such policies. The insurance coverage provided by such policies
is believed by the Company to be suitable for the business and operations of
the Company and its Subsidiaries.

Section 3.21 Labor Matters, etc. Except as set forth on
Schedule 3.21 of the Disclosure Schedule, none of the Company and its
Subsidiaries is a party to or bound by and none of their employees is subject
to any collective bargaining agreement relating to the terms and conditions of
employment for any group of employees (any such agreement, memorandum or
document, a "Collective Bargaining Agreement"), and there are no labor unions
or other organizations representing or, to the actual knowledge of the Company
purporting to represent, any employees employed by any of the Company and its
Subsidiaries. No labor union is currently engaged in or, to the actual
knowledge of the Company, threatening, organizational efforts with respect to
any employees of the Company or any of its Subsidiaries. The Company and its
Subsidiaries are not in material breach of or default under any Collective
Bargaining Agreement. Except as set forth on Schedule 3.21 of the Disclosure
Schedule, since January 1, 1992, there has not occurred or

31
<PAGE> 39
been threatened, any strike, slowdown, picketing, work stoppage, concerted
refusal to work overtime or other similar labor activity with respect to any
employees of the Company or any of its Subsidiaries. Except as set forth on
Schedule 3.21 of the Disclosure Schedule, there are no labor disputes currently
subject to any pending grievance procedure, arbitration or litigation and there
is no representation petition pending or, to the actual knowledge of the
Company, threatened with respect to any employee of the Company or any of its
Subsidiaries. The Company and its Subsidiaries have complied with all
applicable Laws pertaining to the employment or termination of employment of
their respective employees, including, without limitation, all such Laws
relating to labor relations, equal employment opportunities, fair employment
practices, prohibited discrimination or distinction and other similar
employment activities, except for any failures so to comply that individually
and in the aggregate would not have or result in a Material Adverse Effect or
any material liability or obligation of the Company or any of its Subsidiaries.

Section 3.22 No Stockholder-Related Claims. Neither the
Company nor any of its Subsidiaries was ever engaged in the business of mining
asbestos or manufacturing or selling asbestos-containing products. The
Company's Subsidiary Riverwood International USA, Inc. ("RIUSA") was discharged
and released from all debts that arose before the date of confirmation of
RIUSA's plan of reorganization under Chapter 11 of the Bankruptcy Code,
including, without limitation, claims for damages relating to personal injuries
caused by asbestos. There is no reasonable basis for subjecting the Company or
any of its Subsidiaries or any of their respective assets to liability for any
claim relating to the mining, processing, manufacturing, distribution or sale
of asbestos or any other product containing asbestos for which Stockholder or
any of its affiliates may be liable.

Section 3.23 Affiliate Transactions. Schedule 3.23 of the
Disclosure Schedule contains a complete and correct list of all agreements,
contracts, transfers of assets or liabilities or other commitments or
transactions, whether or not entered into in the ordinary course of business,
to or by which the Company or any of its Subsidiaries, on the one hand, and
Stockholder or any of its affiliates (other than the Company or any of its
Subsidiaries), on the other hand, are or have been a party or otherwise bound
or affected, and that (i) are currently pending or in effect or (ii) involve
continuing liabilities

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<PAGE> 40
and obligations that, individually or in the aggregate, have been, are or will
be material to the Company and its Subsidiaries taken as a whole.

Section 3.24 Disclosure; No Other Representations or
Warranties. (a) To the actual knowledge of the Company, this Agreement and
each certificate or other instrument required to be furnished by or on behalf
of the Company to Parent or the Purchaser pursuant hereto at or prior to the
Closing, taken as a whole, do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated herein or therein
or necessary to make the statements contained herein or therein in light of the
circumstances under which they were made, not misleading.

(b) Except for the representations and warranties contained
in this Article III, neither the Company nor any other Person makes any other
express or implied representation or warranty on behalf of the Company or any
of its affiliates, and for the avoidance of doubt, neither the Company nor any
of its affiliates makes any express or implied representation or warranty with
respect to information contained in the confidential memoranda dated May, 1995,
and June, 1995, respectively, including any projections set forth therein, or
any projections otherwise provided to Parent or the Purchaser.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER

Parent and the Purchaser represent and warrant to the Company,
as of the date hereof and as of the Closing Date, as follows:

Section 4.1 Organization. Each of Parent and the Purchaser
is a corporation duly organized, validly existing and in good standing under
the laws of Delaware. Each of Parent and the Purchaser has all requisite
corporate power and authority to own, lease, operate or use its properties and
to carry on its business as now being conducted and is qualified or licensed to
do business as a foreign corporation and is in good standing in each
jurisdiction in which it owns real property or in which the nature of the
business conducted by it makes such qualification or licensing necessary,
except where the failure to be so qualified or licensed individually and in the
aggregate would not have or

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result in a material adverse effect on the business, assets, liabilities,
results of operations or financial or other condition of Parent and its
Subsidiaries, taken as a whole. Parent has previously delivered to the Company
complete and correct copies of its certificate of incorporation and by-laws and
the certificate of incorporation and by-laws of the Purchaser, in each case as
currently in effect.

Section 4.2 Authorization; Validity of Agreement. Each of
Parent and the Purchaser has the requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Parent and the
Purchaser of this Agreement and the consummation by Parent and the Purchaser of
the transactions contemplated hereby have been duly authorized by the
respective Boards of Directors of Parent and the Purchaser and no other
corporate proceedings on the part of Parent or the Purchaser are necessary to
authorize the execution, delivery and performance of this Agreement by Parent
and the Purchaser and the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Parent and the Purchaser
and, assuming due authorization, execution and delivery of this Agreement by
the Seller and the Company, is a valid and binding obligation of each of Parent
and the Purchaser enforceable against each of them in accordance with its
terms, except that such enforcement may be subject to or limited by (i)
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors rights generally, and (ii) the effect of general principles
of equity (regardless of whether enforceability is considered in a proceeding
at law or in equity).

Section 4.3 Consents and Approvals; No Violations.

(a) Neither the execution, delivery and performance of this
Agreement by Parent and the Purchaser nor the consummation by Parent and the
Purchaser of the transactions contemplated hereby will (i) violate any
provision of the respective certificate of incorporation or by-laws of Parent
or the Purchaser, (ii) conflict with, result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, guarantee or other evidence of indebtedness, license, lease,
contract, agreement, plan or other instrument or obligation to which Parent or
any of

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its Subsidiaries is a party or by which any of them or any of their assets may
be bound or (iii) conflict with or violate any Laws applicable to Parent, any
of its Subsidiaries or any of their properties or assets; except in the case of
clauses (ii) and (iii) for conflicts, violations, breaches, defaults or Liens
which individually and in the aggregate would not have or result in a material
adverse effect on the business, results of operations or financial condition of
Parent and its Subsidiaries, taken as a whole, or materially impair or delay
the consummation of the transactions contemplated by this Agreement.

(b) Except as set forth in Schedule 4.3(b) of the disclosure
schedule delivered by Parent and the Purchaser to the Seller and the Company on
or prior to the date hereof (the "Purchaser Disclosure Schedule") and assuming
that the representations and warranties of the Company set forth in Section
3.4(b) and of Stockholder set forth in Section 2(e) of the Voting Agreement are
true and correct, no filing or registration with, declaration or notification
to, or order, authorization, consent or approval of, any Governmental Entity is
required in connection with the execution and delivery of this Agreement by
Parent or the Purchaser or the consummation by Parent or the Purchaser of the
transactions contemplated hereby, except (i) applicable requirements under
Competition Laws, (ii) applicable requirements under the Exchange Act, (iii)
the filing of the Certificate of Merger with the Secretary of State, (iv)
applicable requirements under "blue sky" laws of various states, (v) applicable
requirements under Environmental Laws and (vi) such other consents, approvals,
orders, authorizations, notifications, registrations, declarations and filings
(x) required to be obtained or made by the Seller, the Company or any of its
Subsidiaries or (y) the failure of which to be obtained or made individually
and in the aggregate would not have a material adverse effect on the business,
results of operations or financial condition of Parent and its Subsidiaries,
taken as a whole, or materially impair or delay the consummation of the
transactions contemplated by this Agreement.

Section 4.4 Information in Proxy Statement; Schedule 13E-3;
Offer Documents.

(a) None of the information supplied in writing by Parent or
the Purchaser specifically for inclusion in the Proxy Statement (including any
amendments or supplements thereto) will, at the date mailed to stockholders and
at the time of the Special Meeting, contain any untrue statement of

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<PAGE> 43
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.

(b) The Offer Documents (and any amendment or supplement to
any of the foregoing) in connection with the Offers (i) will not, at the date
such documents are filed with the SEC and/or mailed to the registered holders
of the Notes of each series, as the case may be, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading and (ii) will comply
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder; except that no representation is made by Parent and
the Purchaser with respect to statements made in any such document based on
information supplied by the Company specifically for inclusion therein.

(c) The Schedule 13E-3 (and any amendment or supplement
thereto) (i) will not, at the date such Schedule 13E-3 is filed with the SEC
and/or mailed to the stockholders of the Company contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading and (ii) will comply
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder; except that no representation is made by Parent or
the Purchaser with respect to statements made in the Schedule 13E-3 based on
information supplied by the Company specifically for inclusion therein.

Section 4.5 Financing. The Purchaser has received (i) a
commitment letter from Chemical Bank and Chemical Securities Inc., whereby such
financial institutions have committed, upon the terms and subject to the
conditions set forth therein, to provide debt financing in the amount of
$1,550,000,000, (ii) a letter from Chemical Securities Inc. expressing
confidence in its ability to place an additional $650,000,000 in debt financing
and (iii) letters from each of Clayton, Dubilier & Rice Fund V Limited
Partnership ("Fund V") and The 1818 Fund II, whereby such investors have
committed, upon the terms and subject to the conditions set forth therein, to
provide equity financing of not less than $275,000,000, and preliminary
indications of

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<PAGE> 44
interest from other investors to provide additional equity financing, for an
aggregate amount of equity financing of not less than $750,000,000 (less the
amount of any equity not to exceed $25,000,000 to be provided by employees and
members of management of the Company and its Subsidiaries, which to the extent
not provided at the Closing shall be subject to a back-up capital commitment by
Fund V or one or more other equity investors). The Purchaser has delivered a
complete and correct copy of each letter referred to in this Section 4.5 as in
effect on the date hereof to the Company, and the Purchaser will deliver to the
Company correct and complete copies of the definitive agreements for the
financing of the Merger (the "Financing"). As of the date hereof, the
Purchaser believes that the aggregate proceeds of the Financing will be
sufficient to (i) pay the Merger Consideration and to perform the obligations
of Parent and the Purchaser hereunder, including the payment of all of the
expenses of Parent and Purchaser, (ii) refinance any indebtedness of the
Company or its Subsidiaries which is required to be prepaid by virtue of any of
the transactions contemplated hereby or otherwise contemplated to be refinanced
in connection with the transactions contemplated hereby, including the
indebtedness set forth in Schedule 4.5 of the Purchaser Disclosure Schedule,
together with all related premia, fees and expenses and (iii) together with
cash available to the Surviving Corporation, perform the obligations of the
Surviving Corporation under this Agreement. The Purchaser knows of no fact or
circumstance that it believes will prevent it from obtaining the Financing.

Section 4.6 Beneficial Ownership of Shares. None of Parent
or the Purchaser "beneficially owns" (as defined in Rule 13d-3 under the
Exchange Act) more than l% of the outstanding shares of Company Common Stock or
any securities convertible into or exchangeable for Company Common Stock.

Section 4.7 No Prior Activities. Except for obligations or
liabilities incurred, and business and activities arising, in connection with
its incorporation or organization or the negotiation and consummation of this
Agreement, the Voting Agreement and the Tax Matters Agreement and the
transactions contemplated hereby and thereby, including the Financing, the
Purchaser has neither incurred any material obligations or liabilities nor
engaged in any material business or activities of any type or kind whatsoever
or entered into any material agreements or arrangements with any person or
entity.

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Section 4.8 Brokers. Except for James D. Wolfensohn
Incorporated, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent and the Purchaser, that is or will be payable by the
Company or any of its Subsidiaries other than following the occurrence of the
Effective Time. Parent and the Purchaser are solely responsible for the fees
and expenses of James D. Wolfensohn Incorporated.

Section 4.9 No Other Representations or Warranties. Except
for the representations and warranties contained in this Article IV, neither
Parent, the Purchaser nor any other Person makes any other express or implied
representation or warranty on behalf of Parent, the Purchaser or any of their
affiliates.

Section 4.10 Surviving Corporation After the Merger. (a) At
and immediately after the Effective Time, and after giving effect to the
Merger, the Financing and any other transactions contemplated in connection
therewith (and any changes in the Surviving Corporation's assets and
liabilities as a result thereof), the Surviving Corporation will not (i) be
insolvent (either because its financial condition is such that the sum of its
debts is greater than the fair value of its assets or because the present fair
saleable value of its assets will be less than the amount required to pay its
probable liabilities on its debts as they mature), (ii) have unreasonably small
capital with which to engage in its business or (iii) have incurred or plan to
incur in debts beyond its ability to pay as they mature.

(b) Parent and the Purchaser have engaged or will engage an
appraisal firm to deliver a letter relating to the matters set forth in Section
4.10(a), the addressees of which will include the Company, and on which the
Company will be entitled to rely.

ARTICLE V

COVENANTS

Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that, except as (i) permitted or required by this
Agreement, (ii) required by applicable law or (iii) agreed to in writing by
Parent

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(which agreement shall not be unreasonably withheld), after the date hereof and
prior to the Effective Time:

(a) the business of the Company and its Subsidiaries shall be
conducted only in the ordinary course consistent with past practice and, to the
extent consistent therewith, each of the Company and its Subsidiaries shall use
its reasonable efforts to preserve its business organization and the business
organization of its Subsidiaries intact and maintain existing relations with
customers, suppliers, employees and creditors;

(b) the Company shall not amend its Restated Certificate of
Incorporation or By-Laws;

(c) except as set forth in Schedule 5.1(c) of the Disclosure
Schedule, the Company shall not declare, set aside or pay any dividend (other
than regular quarterly dividends consistent with past practice and in no event
exceeding $0.04 per share per quarter) or other distribution payable in cash,
stock or property with respect to its capital stock; and neither the Company
nor any of its Subsidiaries shall (i) issue, sell, transfer, pledge, dispose of
or encumber any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any
kind to acquire, any shares of capital stock of any class of the Company or any
of its Subsidiaries, other than issuances of shares of Company Common Stock
pursuant to securities, options, warrants, calls, commitments or rights
existing at the date hereof and previously disclosed to the Purchaser in
writing (including as disclosed in the Company SEC Documents); (ii) incur any
long-term indebtedness (whether evidenced by a note or other instrument,
pursuant to a financing lease, sale-leaseback transaction, or otherwise) or
incur short-term indebtedness other than under lines of credit existing on the
date hereof; (iii) redeem, purchase or otherwise acquire directly or indirectly
any of its capital stock or other securities; or (iv) enter into or amend in
any material respect any (x) Material Contract or (y) Identified Contract
except in the ordinary course of business consistent with past practice;

(d) except as set forth in Schedule 5.1(d) of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries shall (i) except for
normal increases in the ordinary course of business consistent with past
practice, grant any increase in the compensation or benefits payable or to
become payable by the Company or any of its

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Subsidiaries to any employee; (ii) adopt, enter into, amend or otherwise
increase, or accelerate the payment or vesting of the amounts, benefits or
rights payable or accrued or to become payable or accrued under any bonus,
incentive compensation, deferred compensation, severance, termination, change
in control, retention, hospitalization or other medical, life, disability,
insurance or other welfare, profit sharing, stock option, stock appreciation
right, restricted stock or other equity based, pension, retirement or other
employee compensation or benefit plan, program agreement or arrangement; or
(iii) enter into or amend in any material respect any employment or collective
bargaining agreement or, except in accordance with the existing written
policies of the Company or existing contracts or agreements, grant any
severance or termination pay to any officer, director or employee of the
Company or any of its Subsidiaries;

(e) neither the Company nor its Subsidiaries shall change the
accounting principles used by it unless required by GAAP (or, if applicable
with respect to Subsidiaries, foreign generally accepted accounting
principles);

(f) except as set forth in Schedule 5.1(f) of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries shall acquire by
merging or consolidating with, by purchasing an equity interest in or a portion
of the assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof, or
otherwise acquire any assets of any other Person (other than the purchase of
assets from suppliers or vendors in the ordinary course of business consistent
with past practice) for an amount that in the aggregate is material,
individually or in the aggregate, to the Company and its Subsidiaries, taken as
a whole;

(g) except as set forth in Schedule 5.1(g) of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries shall sell, lease,
exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange,
transfer or otherwise dispose of, any of its Assets, except in the ordinary
course of business consistent with past practice;

(h) neither the Company nor any of its Subsidiaries shall
release any third party from its obligations (i) under any existing standstill
agreement or arrangement relating to an Acquisition Transaction (as defined in
Section 5.2(c)), unless the Board determines in

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its good faith, reasonable judgment, after consultation with its counsel, that
the failure to do so could reasonably be expected to constitute a breach of the
Board's fiduciary duties under applicable law, or (ii) otherwise under any
confidentiality or other similar agreement, except for modifications of any
such obligations under existing commercial arrangements in the ordinary course
of business consistent with past practice;

(i) except as set forth on Schedule 5.1(i) of the Disclosure
Schedule, the Company and its Subsidiaries shall not mortgage, pledge,
hypothecate, grant any security interest in, or otherwise subject to any other
Lien other than Permitted Liens, any of the Assets;

(j) neither the Company nor its Subsidiaries shall
compromise, settle, grant any waiver or release relating to or otherwise adjust
any Litigation, except for any such compromise, settlement, waiver, release or
adjustment (x) in the ordinary course of business consistent with past
practice, or involving a payment by the Company or any of its Subsidiaries not
in excess of $2,000,000 in the aggregate, or (y) set forth in Schedule 5.1(j)
of the Disclosure Schedule, following prior notice to and consultation with the
Purchaser; and

(k) neither the Company nor any of its Subsidiaries will
enter into an agreement, contract, commitment or arrangement to do any of the
foregoing.

Section 5.2 Acquisition Proposals.

(a) The Company and its Subsidiaries shall not, directly or
indirectly through their respective officers, directors, employees or agents or
any investment banker, financial advisor, attorney, accountant or other
representative retained by the Company or any of its Subsidiaries, (i)
initiate, solicit or encourage the making of any Acquisition Proposal (as
hereinafter defined) or (ii) except as permitted below, engage in negotiations
or discussions with, or furnish any information or data to, any third party
relating to, or agree to an Acquisition Proposal (other than the transactions
contemplated by this Agreement). Notwithstanding clause (ii) of the foregoing
sentence, the Company and its Subsidiaries and their respective boards of
directors and representatives (i) may participate in negotiations or
discussions (including, as a part thereof, making any counterproposal) with or
furnish information or data to any third party if the Board

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determines in its good faith, reasonable judgment, after consultation with its
counsel that the failure to participate in such discussions or negotiations or
to furnish such information could reasonably be expected to constitute a breach
of the Board's fiduciary duties under applicable law, and (ii) shall be
permitted to (x) take and disclose to the Company's stockholders a position
with respect to the Merger or another Acquisition Proposal, or amend or
withdraw such position, pursuant to Rules 14d-9 and 14e-2 under the Exchange
Act or (y) make disclosure to the Company's stockholders, if the Board
determines in its good faith, reasonable judgment, after consultation with its
counsel, that failure to take such action could reasonably be expected to
constitute a breach of the Board's fiduciary duties under applicable law. The
actions of any officer or director of the Company who is also a director and/or
officer of Stockholder shall be governed by the provisions of Section 7 of the
Voting Agreement and not by this Section 5.2(a) solely to the extent that such
actions are taken in their capacity as an officer or director of Stockholder.

(b) The Company shall immediately advise Parent in writing of
the receipt of any inquiries or proposals relating to an Acquisition Proposal
and any actions taken pursuant to Section 5.2(a), specifying the material terms
and conditions of such Acquisition Proposal and identifying the person making
such Acquisition Proposal. If any such inquiry or proposal is in writing, the
Company shall promptly deliver to Parent a copy of such inquiry or proposal,
unless the Board determines in its good faith, reasonable judgment, after
consultation with its counsel, that taking such action could reasonably be
expected to constitute a breach of its fiduciary duties under applicable law.

(c) For purposes of this Agreement, (i) "Acquisition
Proposal" shall mean any inquiry or proposal made by a third party relating to,
or that could reasonably be expected to lead to, an Acquisition Transaction,
and (ii) "Acquisition Transaction" shall mean (other than the transactions
contemplated by this Agreement) (x) a merger, consolidation or other business
combination, share exchange, sale of shares of capital stock, tender offer or
exchange offer or similar transaction involving the Company or any of its
Subsidiaries, (y) acquisition in any manner, directly or indirectly, of a
material interest in any voting securities of, or a material equity interest in
a substantial portion of the assets of, the Company or any of its Subsidiaries,
including any single or multi-step transaction or series of

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related transactions which is structured to permit a third party to acquire
beneficial ownership of a majority or greater equity interest in the Company,
or (z) the acquisition in any manner, directly or indirectly, of any material
portion of the business or assets of the Company.

Section 5.3 Access to Information.

(a) From the date of this Agreement until the Effective Time,
the Company shall, and shall cause each of its Subsidiaries to, (i) afford to
Parent and its authorized representatives reasonable access during normal
business hours upon reasonable prior notice to all of its premises, properties,
contracts, commitments, data, books and records and personnel; provided,
however, that any such access for purposes of any environmental review shall be
provided pursuant to the terms of Section 5.3(b), and (ii) shall use its
reasonable efforts to cause its customers, suppliers, lenders and other
creditors to be available to Parent and the Purchaser. In addition, during
such period, the Company shall, and shall cause each of its Subsidiaries to,
furnish promptly to Parent (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period
pursuant to the requirements of the Exchange Act and (b) such other information
concerning its business, properties and personnel as Parent may reasonably
request. Parent and its authorized representatives will use all reasonable
efforts to conduct all such inspections in a manner which will minimize
disruptions of the business and operations of the Company and its Subsidiaries.
Until the Effective Time, Parent and the Purchaser will hold any such
information in accordance with the provisions of the confidentiality agreement
between the Company, Stockholder and Clayton, Dubilier & Rice, Inc., dated as
of September 12, 1995 (the "Confidentiality Agreement"), and will cause such
information to be so held by their Representatives (as defined in the
Confidentiality Agreement) of Parent and the Purchaser. Upon a termination of
this Agreement pursuant to Section 7.1, Parent, the Purchaser and their
respective Representatives shall return or destroy (and hold confidential) all
information provided pursuant to this Section 5.3 and all other Evaluation
Material (as defined in the Confidentiality Agreement) pursuant to the
procedures set forth in the Confidentiality Agreement.

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(b) From the date of this Agreement until the Effective Time,
Parent, its authorized representatives, and Dames & Moore (the "Environmental
Consultant"), shall have reasonable access, upon reasonable notice and during
normal business hours, to the operations, properties, assets, books, records
and personnel of the Company and each of its Subsidiaries for the purpose of
conducting the Environmental Assessment (as defined below). The scope of the
Environmental Assessment shall be agreed upon by the parties within one month
of the date hereof, and it shall include, at Parent's option, an inspection of
the facilities of the Company and its Subsidiaries, a compliance review of the
operations of the Company and its Subsidiaries, review of relevant records,
audits and internal reports, review of relevant agency records, and interviews
with personnel, of the Company and its Subsidiaries. The Company shall, and
shall cause its Subsidiaries to, offer all reasonable assistance and
cooperation to Parent, its representatives and the Environmental Consultant in
connection with the Environmental Assessment. The Environmental Consultant
shall maintain insurance reasonably satisfactory to the Company. Parent and
the Purchaser shall be liable for, and shall cause the Environmental Consultant
to repair, any damage to the properties of the Company and its Subsidiaries to
the extent such damage is caused by the gross negligence or willful misconduct
of the Environmental Consultant. In no event shall Parent or the Purchaser be
liable for any other costs or losses incurred by the Company or any of its
Subsidiaries as a result of the Environmental Assessment. The term
"Environmental Assessment" means the evaluation and review, and related written
report thereon, prepared by the Environmental Consultant for counsel to Parent
and the Purchaser, concerning environmental aspects of the past and present
activities and operations of the Company and its Subsidiaries and their
respective predecessors, including as to the use or condition of properties or
assets of any of them or of any other Person and as to compliance with
applicable Environmental Laws.

Section 5.4 Further Action; Reasonable Efforts.

(a) Upon the terms and subject to the conditions herein
provided, each of the parties hereto agrees to use its reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including using reasonable efforts to satisfy the conditions precedent to the
obligations of any

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of the parties hereto, to obtain all necessary authorizations, consents and
approvals, and to effect all necessary registrations and filings and in the
case of Parent and the Purchaser to obtain the Financing and consummate the
Offers. Each of the parties hereto will furnish to the other parties such
necessary information and reasonable assistance as such other parties may
reasonably request in connection with the foregoing and will provide the other
parties with copies of all filings made by such party with any Governmental
Entity or any other information supplied by such party to a Governmental Entity
in connection with this Agreement and the transactions contemplated hereby.

(b) Parent, the Purchaser and the Company shall use their
respective reasonable efforts to resolve such objections, if any, as may be
asserted with respect to the transactions contemplated hereby under the laws,
rules, guidelines or regulations of any Governmental Entity. Without limiting
the foregoing, each of the Company and Parent shall, as soon as practicable,
file (or cause its respective "ultimate parent entity" within the meaning of
the HSR Act to file) Notification and Report Forms under the HSR Act (as
defined below) with the Federal Trade Commission (the "FTC") and Antitrust
Division of the Department of Justice (the "Antitrust Division") and shall use
reasonable efforts to respond as promptly as practicable to all inquiries
received from the FTC or the Antitrust Division for additional information or
documentation. Each party hereto shall use its reasonable efforts to take or
cause to be taken all actions necessary, proper or advisable to obtain any
consent, waiver, approval or authorization relating to any Competition Law that
is required for the consummation of the transactions contemplated by this
Agreement. "Competition Laws" means statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines, and other laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization, lessening of competition or restraint of
trade, and includes the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act") and, to the extent applicable, equivalent laws of
the European Union or the Member States thereof, Australia and Brazil.

Section 5.5 Employee Benefits.

(a) Parent and the Purchaser hereby agree to honor, and agree
to cause the Surviving Corporation to

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honor, and to make required payments when due under, all contracts and
agreements of the Company and its Subsidiaries in effect as of the date hereof
with any employee, officer, director or executive or former employee, officer,
or executive of the Company or any Subsidiary thereof, including any such
compensation, employment and employee or director agreements in existence as of
the date hereof (or as modified to the extent permitted by Section 5.1 or by
agreement of the parties thereto).

(b) In addition to the foregoing, Parent hereby agrees that
for a period of one year immediately following the Effective Time, it shall, or
shall cause the Surviving Corporation to, continue to maintain employee
benefit, incentive compensation and welfare plans, programs and policies (each
referred to for purposes of this subsection as a "plan") for the benefit of
employees of the Company and its Subsidiaries which in the aggregate provide
benefits that are substantially comparable to those provided to them under the
Plans on the date hereof. Without limiting the foregoing, for a period of one
year following the Effective Time, Parent and the Purchaser also shall, or
shall cause the Surviving Corporation to, provide as follows:

(i) that salaried and nonunion hourly employees shall
generally be paid total base salary compensation or hourly rates that
are substantially equivalent to the total base salary compensation or
hourly rates applicable to such employees immediately prior to the
Effective Time;

(ii) that the relocation plan of the Company as in effect on
the date hereof shall be continued generally in accordance with its
current terms and any employee whose relocation is initiated by Parent,
the Purchaser or the Surviving Corporation within twelve months following
the Effective Time will receive benefits under such relocation package;

(iii) that any employee terminated by Parent, the Company or its
Subsidiaries within twelve months after the Effective Time will be
entitled to benefits under a severance policy, policies or agreements
(including any career assistance) that are generally comparable to the
policy, policies or agreements in effect on the date hereof for such
employee; and

(iv) that any employee terminated by Parent, the Company or its
Subsidiaries within twelve months after

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the Effective Time shall be l00 percent vested in any defined benefit or
defined contribution retirement Plan in which such employee was
participating at the time of such termination, and each such Plan shall
be amended, effective as of the Effective Time, to provide for such
vesting.

(c) If the Effective Time occurs prior to January 1, 1996,
with respect to each ERISA Plan that is intended to qualify under Section
401(a) of the Code and that provides for a variable match, Parent and the
Purchaser shall cause to be contributed the full amount of the variable match
that would have been made thereunder in respect of the 1995 Plan year as if all
performance or similar targets specified thereunder had been achieved. If the
Effective Time is after December 31, 1995, each such Plan shall be continued
until at least December 31, 1996 and the variable match in respect of the 1996
Plan Year shall be determined using the actual performance of the Company and
its subsidiaries for such year, but adjusted to exclude any extraordinary
charges, expenses or other adjustments which result from or arise out of the
transactions contemplated by this Agreement.

(d) With respect to each incentive, bonus or profit sharing
plan, program or arrangement that may be in effect for calendar year 1995 or
1996, the awards thereunder shall be determined with respect to 1996 and, if
the Effective Time occurs prior to January 1, 1996, with respect to 1995, based
upon the actual performance of the Company and its Subsidiaries for such year,
but adjusted to exclude any extraordinary charges, expenses or other
adjustments which result from or arise out of the transactions contemplated
under this Agreement. Unless otherwise required by this Agreement, payment to
participating employees under any such plan, program or arrangement shall be
made in accordance with the terms of such plan, program or arrangement.

(e) Parent and the Purchaser acknowledge that for purposes of
those of the Company's Plans listed on Schedule 5.5(e) of the Disclosure
Schedule the consummation of the Merger will constitute a "Change in Control"
of the Company (as that term is defined in such plans, agreements and
arrangements).

(f) To the extent required by applicable law or the terms of
any contract or agreement disclosed on Schedule 3.12(a) of the Disclosure
Schedule, Parent shall recog-

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nize any union recognized by the Company or its Subsidiaries at the Effective
Time and assume the terms of any collective bargaining agreement in effect with
such union, and shall, or shall cause the Surviving Corporation to, honor
without modification all collective bargaining agreements as in effect at the
Effective Time.

Section 5.6 Stockholders' Meeting; Proxy Statement.

(a) The Company shall in accordance with applicable law and
the Restated Certificate of Incorporation and the By-laws of the Company, duly
call, set a record date for, give notice of, convene and hold a special meeting
of its stockholders as promptly as practicable after the date hereof for the
purpose of considering and taking action upon this Agreement and such other
matters as may be appropriate at the Special Meeting (which meeting may be
adjourned or postponed as reasonably necessary to permit the satisfaction of
conditions to this Agreement or the Voting Agreement) (such meeting, as so
adjourned or postponed, being referred to as the "Special Meeting").

(b) As promptly as practicable after the date hereof, the
Company shall prepare and file with the SEC, and Parent and the Purchaser shall
cooperate with the Company in such preparation and filing, a preliminary proxy
statement relating to this Agreement and the transactions contemplated hereby
and use its best efforts to furnish the information required to be included by
the SEC in the Proxy Statement (as hereinafter defined) and, after consultation
with Parent, to respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement and cause a definitive proxy statement (the
"Proxy Statement") to be mailed to its stockholders. Subject to the fiduciary
duties of the Board under applicable law, the Board shall recommend, and the
Company shall include in the Proxy Statement the recommendation of the Board,
that stockholders of the Company approve and adopt this Agreement and approve
the Merger and the other transactions contemplated hereby, and the Company
shall use all reasonable efforts to solicit from stockholders of the Company
proxies in favor of the approval and adoption of this Agreement, approval of
the Merger and the transactions contemplated hereby.

(c) Parent agrees that (i) it will provide the Company with
all information concerning Parent or the Purchaser necessary or reasonably
appropriate to be included in the Proxy Statement and (ii) at the Special
Meeting, if

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<PAGE> 56
held, or any postponement or adjournment thereof (or at any other meeting at
which the Merger or this Agreement are considered by stockholders), it will
vote, or cause to be voted, all of the Shares then owned by it, the Purchaser
or any of its other Subsidiaries, if any, in favor of the approval and adoption
of this Agreement and the transactions contemplated hereby.

(d) The Company, Parent and Purchaser shall cooperate with
one another in the preparation and filing of the Schedule 13E-3 and shall use
all reasonable efforts to promptly obtain and furnish the information required
to be included in the Schedule 13E-3 and to respond promptly to any comments or
requests made by the SEC with respect to the Schedule 13E-3. Each party hereto
shall promptly notify the other parties of the receipt of comments of, or any
requests by, the SEC with respect to the Schedule 13E-3, and shall promptly
supply the other parties with copies of all correspondence between such party
(or its representatives) and the SEC (or its staff) relating thereto. The
Company, Parent and Purchaser each agrees to correct any information provided
by it for use in the Schedule 13E-3 which shall have become, or is false or
misleading.

Section 5.7 Notification of Certain Matters.

(a) The Company shall give prompt notice to Parent and Parent
shall give prompt notice to the Company, of (i) the occurrence or nonoccurrence
of any event the occurrence or nonoccurrence of which would cause any
representation or warranty of the Company, or of Parent and the Purchaser, as
the case may be, contained in this Agreement to be untrue or inaccurate in any
material respect at the Effective Time and (ii) any material failure of the
Company, or Parent or the Purchaser, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder. The Company shall give prompt notice to Parent of the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would cause any information set forth in the Tax Letter to be or become
untrue or incorrect, such that the condition set forth in Section 6.3(l)(ii)
would not be satisfied as of the Effective Time.

(b) The Company may supplement any of the Schedules to the
Disclosure Schedule by delivering to Parent and the Purchaser a written
supplement to such Schedule or Schedules ("Schedule Supplements") at any time
prior to the day that is ten days prior to the Closing Date, provided

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<PAGE> 57
that no such supplement shall be effective unless (i) the information contained
therein (x) is necessary, in the good faith judgment of such party, to make the
information set forth on the applicable Schedule to be supplemented true and
correct and (y) relates solely to events occurring or conditions arising
subsequent to the date of this Agreement or facts, circumstances or conditions
coming to the attention of the Company after the date hereof, and such
supplement is accompanied by an officer's certificate, signed by an officer of
the Company, so certifying, and (ii) the Closing shall have occurred. From and
after the Closing, the Schedule Supplements shall form a part of this
Agreement, and, to the extent the representations and warranties of the Company
contained in Article III are qualified by reference to any such Schedule
Supplement, any such Schedule Supplements thereto shall have the effect of
modifying the representation and warranty so qualified as if it had been set
forth on the corresponding Schedule of the Disclosure Schedule delivered by the
Company to the Purchaser on the date hereof.

(c) If at any time prior to the Special Meeting any event or
circumstance relating to the Company or any of its Subsidiaries or affiliates,
or its or their respective officers or directors, should be discovered by the
Company that is required to be set forth in a supplement to the Proxy
Statement, the Company shall promptly inform Parent and the Purchaser, so
supplement the Proxy Statement and mail such supplement to its stockholders.
If at any time prior to the Special Meeting any event or circumstance relating
to Parent or any of its Subsidiaries or affiliates, or its or their respective
officers or directors, should be discovered by Parent that is required to be
set forth in a supplement to the Proxy Statement, Parent shall promptly inform
the Company; and upon receipt of such information the Company shall promptly
supplement the Proxy Statement and mail such supplement to its stockholders.

Section 5.8 Directors' and Officers' Insurance and
Indemnification.

(a) The Surviving Corporation shall indemnify, defend and
hold harmless the present and former officers, directors, employees and agents
of the Company and its Subsidiaries in such capacities ("Indemnified Parties")
to the fullest extent permitted by Law against all losses, damages, expenses or
liabilities resulting from any claim, suit, action, proceeding or investigation
to the extent that it was based on the fact that such Indemnified Party is or

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<PAGE> 58
was a director, officer or employee of the Company or any of its Subsidiaries
and arising out of actions or omissions or alleged actions or omissions
occurring at or prior to the Effective Time.

(b) For a period of six years after the Effective Time,
Parent and the Surviving Corporation shall maintain in effect directors' and
officers' liability insurance covering the directors and officers of the
Company and its Subsidiaries who are currently covered by the Company's
existing directors' and officers' liability insurance with respect to claims
arising from facts or events which occurred before the Effective Time, on terms
and conditions no less favorable to such directors and officers than those in
effect on the date hereof; provided that notwithstanding the foregoing, Parent
and the Surviving Corporation shall be entitled to maintain such insurance
pursuant to a six-year pre- paid insurance policy with a limit of liability of
$90 million in the aggregate for such six-year period (the "Prepaid Policy")
that provides for the payment of a single premium payment at the commencement
of such policy covering the entire life thereof; provided, further that, if
Parent and the Purchaser do not so maintain such Prepaid Policy, in no event
shall Parent or the Surviving Corporation be required to make annual premium
payments for such insurance to the extent such premiums exceed $1,750,000.
Parent and the Surviving Corporation shall provide Stockholder with 30 days
prior written notice of any reductions in the level of insurance resulting from
the proviso to the second sentence of this Section 5.8(b).

(c) The Certificate of Incorporation and By-Laws of the
Surviving Corporation shall contain provisions with respect to indemnification
identical to those set forth in Article X of the Company's Restated Certificate
of Incorporation and Article VI of the Company's By-Laws on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise
modified (except as required by applicable Law) for a period of six years after
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who at any time prior to the Effective Time were
directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time.

(d) The provisions of this Section 5.8 are intended for the
benefit of, and shall be enforceable by, the respective Indemnified Parties.

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Section 5.9 Publicity. Neither the Company, Parent nor any
of their respective affiliates (other than the Stockholder) shall issue or
cause the publication of any press release or other announcement with respect
to the Merger, this Agreement or the other transactions contemplated hereby
without the prior consultation of the other party, except as may be required by
law or by any listing agreement with a national securities exchange if all
reasonable efforts have been made to consult with the other party.

Section 5.10 Certain Arrangements. The Company shall cause
all accounts payable, accounts receivable, contracts, agreements, plans,
instruments, commitments, claims and other obligations pursuant to which the
Company or any of its Subsidiaries has made or is obligated to make payments or
incur expenses to or for the benefit of Stockholder or any of its affiliates
(other than the Company or any of its Subsidiaries) to be canceled, terminated,
waived and released at or prior to the Effective Time without any consideration
being paid or payable in respect thereof, pursuant to appropriate agreements
and instruments in form and substance mutually satisfactory to Parent and
Stockholder in their reasonable judgment; provided that the accounts payable,
accounts receivable, contracts, agreements, plans, instruments, commitments,
claims and other obligations set forth in Schedule 5.10 of the Disclosure
Schedule shall be treated in the manner expressly set forth in such Schedule.

Section 5.11 Offers and Solicitations of Consents. Parent
and the Purchaser shall use reasonable efforts to make, at their expense,
tender offers (the "Offers") for all of the Notes (as defined below) upon terms
and subject to conditions to be determined by Parent and the Purchaser, and the
Company shall cooperate therewith. The Offers may be accompanied by such
solicitations of consents from the holders of the Notes as may be determined by
the Purchaser to be necessary or appropriate, relating to certain amendments
(the "Proposed Amendments") to the indentures under which each series of Notes
was issued (the "Indentures"). In the event that any registration statement is
required in connection with the Offers or such solicitations, Parent and the
Purchaser shall use reasonable efforts, at their expense, to prepare, file and
cause to become effective any such registration statement, and the Company
shall cooperate therewith as the registrant thereunder. At the Closing
(provided that the requisite consents of Note holders necessary to effect the
Proposed

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Amendments to any Indenture are received) the Company shall execute and deliver
a supplemental indenture (each, a "Supplemental Indenture") with the relevant
indenture trustee party to such Indenture (each, a "Trustee") to so amend the
Indenture. The term "Notes" means the indebtedness of the Company listed in
Schedule 5.11 of the Purchaser Disclosure Schedule.

Section 5.12 Certain Information. From and after the date of
this Agreement, Parent and the Purchaser shall at the request of the Company
advise the Company as to the status of negotiations to obtain the Financing and
shall advise the Company promptly upon becoming aware of any event,
circumstance or condition that it believes could reasonably be expected to
prevent the availability to the Purchaser of such Financing in a timely manner.
Parent and the Purchaser shall provide the Company's financial advisors with
such information regarding the financing plans and capital structure of the
Surviving Corporation after giving effect to the Merger and the Financing as
may be reasonably requested by the Company's financial advisors for the purpose
of reviewing the matters referred to in Section 4.10 and any appraisal report
referred to therein, subject to appropriate confidentiality undertakings by
such advisors. At or prior to the Closing, Parent and the Purchaser shall
provide to the Company the letter referred to in Section 4.10(b). In the event
that this Agreement shall be terminated pursuant to Section 7.1, at the request
of the Company, Parent and the Purchaser shall provide to the Company a copy of
each of the Environmental Assessment and the Patent Review, but in no event
shall Parent or the Purchaser be liable for any costs or losses incurred by the
Company or any of its Subsidiaries as a result of its receipt or use of the
Environmental Assessment or the Patent Review.

Section 5.13 Patent Review. Within 70 days following the
date hereof, Parent and its outside patent counsel shall have the right to
perform legal due diligence with respect to (a) the validity and enforceability
of the Company's and its Subsidiaries' Technology and (b) whether the conduct
of the business of the Company and its Subsidiaries may infringe or otherwise
conflict with the Technology of any other Person, in each case as Parent shall
reasonably deem appropriate (the "Patent Review").

Section 5.14 Additional Consents. (a) In the event that the
Purchaser wishes to exercise its option to have the Company merge with and into
the Purchaser in the

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Merger, as provided in Section 1.1(b), the Purchaser shall notify the Company
of its desire to do so not later than 45 days after the date hereof. The
Company thereupon may propose a supplement to one or more Schedules of the
Disclosure Schedule by delivering to Parent and the Purchaser a proposed
written supplement thereto not later than 15 days after receipt of such notice
from the Purchaser and in no event more than 10 days prior to the Closing;
provided that no such supplement shall be effective unless (i) the information
contained therein (x) is necessary, in the good faith judgment of the Company,
to make the information set forth on such Schedule true and correct and (y)
relates solely to the fact that the Company will not be the Surviving
Corporation following the Merger, and such supplement is accompanied by an
officer's certificate, signed by an officer of the Company, so certifying, and
(ii) the Purchaser shall agree in its sole discretion to the contents of such
supplement. In the event that such supplement is acceptable to the Purchaser,
the Purchaser shall so notify the Company, and the Schedules of the Disclosure
Schedule to be so supplemented shall be deemed modified by such supplement. In
the event that such supplement is not acceptable to the Purchaser, the
Purchaser shall so notify the Company, and if the Purchaser and the Company are
not able to agree upon another form of such supplement that is acceptable to
the Purchaser within 15 days of the Company's receipt of such notice from the
Purchaser, such Schedules shall not be deemed so modified, and the Purchaser's
election pursuant to Section 1.1(b) shall accordingly be deemed rescinded. The
Purchaser shall be entitled to supplement Schedule 4.3(b) of the Purchaser
Disclosure Schedule by delivering to the Company a written supplement thereto
in no event more than 10 days prior to the Closing; provided that no such
supplement shall be effective unless the information contained therein (x) is
necessary, in the good faith judgment of the Purchaser, to make the information
set forth on such Schedule true and correct and (y) relates solely to the fact
that the Company will not be the Surviving Corporation following the Merger,
and such supplement is accompanied by an officer's certificate, signed by an
officer of the Purchaser, so certifying. Upon delivery of such supplement,
such Schedule shall be deemed modified thereby.

(b) Each of the Company and the Purchaser shall use its
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations or otherwise to obtain all necessary

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<PAGE> 62
authorizations, consents and approvals, and to effect all necessary
registrations and filings, set forth on its respective supplement to such
Schedules. The Purchaser may rescind its election pursuant to Section 1.1(b)
at any time prior to 10 days before the Special Meeting. Any additional costs
incurred by the Company solely as a result of the Purchaser's election pursuant
to Section 1.1(b) shall be borne by the Purchaser, provided that the Company
shall provide the Purchaser with reasonably detailed evidence of such costs.

ARTICLE VI

CONDITIONS

Section 6.1 Conditions to Each Party's Obligation To Effect
the Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by the parties hereto
in writing, in whole or in part, to the extent permitted by applicable law):

(a) No statute, rule, order, decree or regulation shall have
been enacted or promulgated by any Governmental Entity of competent
jurisdiction (whether temporary, preliminary or permanent) which is in effect
and has the effect of prohibiting the consummation of the Merger or making the
Merger illegal;

(b) There shall be no order or injunction of a Governmental
Entity of competent jurisdiction (whether temporary, preliminary or permanent)
in effect precluding, restraining, enjoining or prohibiting consummation of the
Merger and there shall be no suit, action, proceeding or investigation by a
Governmental Entity seeking to restrain, enjoin or prohibit the Merger;

(c) The applicable waiting period under the HSR Act with
respect to the actions contemplated by this Agreement shall have expired or
been terminated;

(d) Other than filing the Certificate of Merger in accordance
with the DGCL, all authorizations, consents and approvals of all Governmental
Entities required to be obtained prior to consummation of the Merger shall have
been obtained, except for such authorizations, consents, and approvals the
failure of which to be obtained individually

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<PAGE> 63
and in the aggregate would not have or result in a Material Adverse Effect; all
authorizations, consents and approvals of other Persons set forth on Schedule
6.1(d) of the Disclosure Schedule shall have been obtained;

(e) This Agreement shall have been approved and adopted by
the affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock, and the Merger shall have been approved by the
affirmative vote of the holders of a majority of the outstanding shares of the
common stock of the Stockholder; and all authorizations, consents and approvals
of the Manville Personal Injury Settlement Trust (the "Trust") and the Manville
Property Damage Settlement Trust (the "PD Trust") required to be obtained in
connection with the execution, delivery and performance of this Agreement, the
Voting Agreement and the Tax Matters Agreement, and the consummation of the
transactions contemplated hereby and thereby, shall have been obtained; and

(f) (i) The conditions to (x) the obligation of Stockholder
to declare the Dividend under Section 3.03(b) of the Profit Sharing Exchange
Agreement, dated October 25, 1995, between Stockholder and the Trust (the
"Exchange Agreement"), and (y) the obligations of Stockholder and the Trust
under Section 4.02 and Section 4.03, respectively, of the Exchange Agreement,
other than the condition set forth in Section 4.03(e) thereof, shall have been
satisfied or waived or (ii) the parties to the Exchange Agreement shall have
determined and shall have provided evidence of such determination that the
conditions to the obligations described in clauses (i) (x) and (y) of this
Section 6.1(f) are not conditions to the obligations of the Company to effect
the Merger hereunder.

Section 6.2 Conditions to the Obligation of the Company to
Effect the Merger. The obligation of the Company to effect the Merger is
further subject to the satisfaction or waiver at or prior to the Effective Time
of the following conditions:

(a) The representations and warranties of Parent and the
Purchaser contained in this Agreement shall be true and correct in all material
respects at and as of the date hereof, and true and correct in all material
respects at and as of the Effective Time as if made at and as of such time; and

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<PAGE> 64
(b) Each of Parent and the Purchaser shall have performed in
all material respects its obligations under this Agreement required to be
performed by it at or prior to the Effective Time pursuant to the terms hereof.

(d) The Tax Matters Agreement shall be in full force and
effect with respect to Parent and the Purchaser;

(e) The Company shall have received (i) an opinion, addressed
to it and dated the Closing Date from Debevoise & Plimpton, special counsel to
Parent and the Purchaser, in form and substance reasonably satisfactory to the
Company, and (ii) a certificate executed by a duly authorized officer of the
Purchaser to be delivered at the Closing and dated the Closing Date to the
effect that the conditions set forth in Sections 6.2(a) and 6.2(b) have been
satisfied; and

(f) The terms and provisions of the definitive agreements
relating to the Financing shall not cause the Board in the exercise of its good
faith, reasonable judgment, after consultation with its counsel and its
financial advisor, to conclude that, notwithstanding the delivery of the letter
contemplated by Section 4.10(b), the representation set forth in Section
4.10(a) is not true and correct in all material respects at and as of the
Effective Time.

Section 6.3 Conditions to Obligations of Parent and the
Purchaser to Effect the Merger. The obligations of Parent and the Purchaser to
effect the Merger are further subject to the satisfaction or waiver at or prior
to the Effective Time of the following conditions:

(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
at and as of the date hereof, and true and correct in all material respects at
and as of the Effective Time as if made at and as such time;

(b) The Company shall have performed in all material respects
each of its obligations under this Agreement required to be performed by it at
or prior to the Effective Time pursuant to the terms hereof;

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(c) The representations and warranties of Stockholder
contained in the Voting Agreement shall be true and correct in all material
respects at and as of the date hereof, and true and correct in all material
respects at and as of the Effective Time as if made at and as such time;
Stockholder shall have performed in all material respects each of its
obligations under the Voting Agreement required to be performed by it at or
prior to the Effective Time pursuant to the terms thereof and the Voting
Agreement shall be in full force and effect with respect to Stockholder;

(d) The Environmental Consultant shall have completed the
Environmental Assessment relating to the business and operations of the Company
and its Subsidiaries and shall have submitted its report in respect thereof,
which Environmental Assessment and report shall be satisfactory in scope and
substance to Parent and the Purchaser in their reasonable judgment;

(e) Parent and the Purchaser shall have completed financing
arrangements, and entered into definitive financing agreements on terms
satisfactory to them in their reasonable judgment, and shall have received
funds thereunder sufficient to pay the Merger Consideration, repay or redeem
all of the existing indebtedness of the Company and its Subsidiaries (except
for the indebtedness, if any, set forth on Schedule 6.3(e) of the Purchaser
Disclosure Schedule), and otherwise enable Parent and the Purchaser to
consummate the transactions contemplated hereby;

(f) At least 51% in aggregate principal amount of the
outstanding Notes of each series shall have been validly tendered and not
withdrawn pursuant to the Offers prior to the Expiration Date (the "Minimum
Tenders"); and the Purchaser or the Company, as the case may be, shall have
accepted for payment and paid for all Notes validly tendered pursuant to the
Offers, provided that for purposes of satisfying this condition, such
acceptance and payment by the Purchaser shall be deemed to have occurred if the
Purchaser fails to accept for payment and pay for any Notes tendered pursuant
to the Offers in violation of the terms of the Offers and the Solicitation; and
the Company and the applicable Trustee shall have executed the Supplemental
Indentures with respect to the Notes of each series implementing the Proposed
Amendments to the Indentures;

(g) The indebtedness of the Company and its Subsidiaries
set forth on Schedule 6.3(g) of the Purchaser Disclosure Schedule shall have
been repaid in full (at the

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Purchaser's expense), on terms satisfactory to Parent and the Purchaser in
their reasonable judgment, and Parent and the Purchaser shall have received
evidence to such effect satisfactory to them;

(h) The number of Dissenting Shares shall not exceed ten
percent (10.0%) of the outstanding shares of Company Common Stock;

(i) No event, occurrence, fact, condition, change,
development or effect shall exist or have occurred since the date of the
Balance Sheet that, individually or in the aggregate, has had or resulted in,
or could reasonably be expected to become or result in, a Material Adverse
Effect;

(j) The Tax Matters Agreement shall be in full force and
effect with respect to Stockholder and the Company;

(k) Parent and the Purchaser shall have received (i)
opinions, addressed to them and dated the Closing Date, from each of (x)
Skadden, Arps, Slate, Meagher & Flom, counsel to the Company, in form and
substance reasonably satisfactory to Parent and the Purchaser, which opinion
shall state among other things that each lender, underwriter and investor
providing any portion of the Financing shall be entitled to rely thereon, and
(y)counsel to Stockholder, in form and substance reasonably satisfactory to
Parent and Purchaser, which opinion shall be from such counsel as is reasonably
satisfactory to Parent and the Purchaser, and shall state among other things
that each lender, underwriter and investor providing any portion of the
Financing shall be entitled to rely thereon, and (ii) a certificate executed by
a duly authorized officer of the Company to be delivered at the Closing and
dated the Closing Date to the effect that the conditions set forth in Sections
6.3(a) and 6.3(b) have been satisfied;

(l) Each of (i) the representations and warranties of the
Company set forth in Section 3.13(b) and (ii) the information set forth in the
letter dated the date hereof from Robert E. Cole, Senior Vice President,
Corporate Finance and Chief Financial Officer of Stockholder, addressed to
Parent and the Purchaser (the "Tax Letter") shall be true and correct at and as
of the date hereof, and at and as of the Effective Time as if made at and as of
such time;

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<PAGE> 67
(m) The Patent Review shall not have revealed any facts or
circumstances that would reasonably be expected individually or in the
aggregate to result in (i) a Material Adverse Effect, (ii) any costs, damages
or liabilities that would be material to the Company and its Subsidiaries taken
as a whole, (iii) equitable remedies against the operation of any material
portion of the business of the Company and its Subsidiaries, or (iv) the
inability to enforce the Company's or any of its Subsidiaries' Technology
(except as against improvements developed by any other Person without
infringement or misappropriation of any such Technology) so as to materially
impair the competitive position of the Company and its Subsidiaries taken as a
whole; provided, however, that this Section 6.3(m) shall no longer be a
condition to the obligations of Parent or the Purchaser hereunder if this
Agreement shall not have been terminated on or prior to the 90th day following
the date hereof; and

(n) The Schedule Supplements referred to in Section 5.7(b)
shall be in form and substance satisfactory to the Purchaser in its sole
discretion.

ARTICLE VII

TERMINATION

Section 7.1 Termination. Notwithstanding anything herein to
the contrary, this Agreement may be terminated and the Merger may be abandoned
at any time prior to the Effective Time, whether before or after stockholder
approval thereof:

(a) By the mutual consent of the Board of Directors of Parent
and the Board of Directors of the Company.

(b) By either the Company, on the one hand, or Parent and the
Purchaser, on the other hand, if: (i) the Merger has not been consummated on or
prior to March 31, 1996, or such other date, if any, as Parent and the Company
shall agree upon (provided that the right to terminate this Agreement under
this Section 7.1(b)(i) shall not be available to a party whose failure to
fulfill any obligation under this Agreement has been the cause of or resulted
in the failure of the Effective Time to occur on or before such date); or (ii)
any Governmental Entity shall have issued a statute, order, decree or
regulation or taken any other action (which statute, order, decree, regulation
or other action the parties hereto shall use their best efforts to

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lift), in each case permanently restraining, enjoining or otherwise prohibiting
the Merger or making the Merger illegal and such statute, order, decree,
regulation or other action shall have become final and non-appealable.

(c) By the Company, upon 10 days' prior written notice after
Parent has received from the Company written notice of the Company's receipt of
a Superior Proposal (as defined below) in accordance with Section 5.2, if prior
to the Effective Time the Board of Directors of the Company shall have
withdrawn, or modified or changed in a manner adverse to Parent or the
Purchaser its approval or recommendation of this Agreement or the Merger in
order to approve and permit the Company to execute a definitive agreement
relating to such Superior Proposal; provided that such termination shall not be
effective until the Company has made payment to Parent of the Fee (as defined
in Section 8.1(b)) and has either paid to Parent or deposited with a mutually
acceptable escrow agent $6,700,000 toward reimbursement to Parent and the
Purchaser of Expenses (as defined in Section 8.1(e)), in each case in
accordance with Section 8.1. The term "Superior Proposal" shall mean any
Acquisition Proposal that the Board determines in its good faith, reasonable
judgment, after consultation with its financial advisor, is more favorable to
the Company or the holders of Company Common Stock than the transactions
contemplated hereby.

(d) By the Company, upon 30 days' prior written notice, in
the event of a breach of or inaccuracy in any representation, warranty,
covenant or agreement on the part of Parent or the Purchaser such that any
conditions set forth in Section 6.2(a) or 6.2(b) would not be satisfied as of
the Effective Time, which breach or inaccuracy is not cured prior to the
expiration of such 30 day period; provided that if such breach or inaccuracy is
not curable, the Company may terminate this Agreement immediately under this
Section 7.1(d).

(e) By Parent, if (i) the stockholders of the Company fail to
approve and adopt this Agreement and the transactions contemplated hereby at
the Special Meeting (including any postponement or adjournment thereof); (ii)
the Board of Directors of the Company withdraws, modifies or changes its
recommendation of this Agreement or the Merger in a manner adverse to Parent or
the Purchaser or shall have resolved to do any of the foregoing or the Board of
Directors of the Company shall have recommended to the stockholders of the
Company any Acquisition Transaction or

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resolved to do so; (iii) the stockholders of Stockholder fail to approve this
Agreement and the consummation of the transactions contemplated hereby at the
Stockholder Special Meeting (as defined in the Voting Agreement) (including any
postponement or adjournment thereof); (iv) the Board of Directors of
Stockholder withdraws, modifies or changes its recommendation of the Merger or
the transactions contemplated hereby in a manner adverse to Parent or the
Purchaser or shall have resolved to do any of the foregoing or the Board of
Directors of Stockholder shall have recommended to the stockholders of
Stockholder any Acquisition Transaction or resolved to do so; (v) any
authorization, consent or approval of the Trust or the PD Trust required to be
obtained in connection with the execution, delivery and performance of this
Agreement, the Voting Agreement and the Tax Matters Agreement, and the
consummation of the transactions contemplated hereby and thereby, shall not
have been obtained prior to the date of the Special Meeting or the Stockholder
Special Meeting, or if earlier March 29, 1996 (provided that at the date of any
termination hereof pursuant to this Section 7.1(e), (1) if such date were the
Closing Date and the time of such termination were the Effective Time, the
conditions set forth in Sections 6.1(a), 6.1(b), 6.1(c), 6.1(d), 6.1(f),
6.2(a), 6.2(b) and 6.2(d) would be satisfied or waived, (2) the Purchaser shall
have entered into definitive agreements for the Financing, (3) the Purchaser
shall have delivered to the Company the letter referred to in Section 4.10(b),
or an unsigned form of such letter with an accompanying letter from the
Purchaser to the effect that the Purchaser would be prepared to deliver a
signed form thereof at the Closing, and (4) the Company shall not have
delivered written notice to the Purchaser that the Board has made the
determination referred to in Section 6.2(f)); or (vi) any Person shall have
acquired beneficial ownership or right to acquire beneficial ownership of, or
any "group" (as such term is defined under Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder), shall have been formed
that beneficially owns, or has the right to acquire beneficial ownership of,
outstanding shares of capital stock of the Company then representing 20% or
more of the combined power to vote generally for the election of directors.

(f) By Parent, in the event that (i) the Court (as defined in
the Exchange Agreement) shall have denied the application of the Trustees (as
defined in the Exchange Agreement) referred to in Section 4.02(c) of the
Exchange Agreement, or (ii) the condition set forth in Section 6.1(f)

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shall otherwise not have been satisfied prior to March 29, 1996.

(g) By Parent, upon 30 days' prior written notice, in the
event of a breach of or inaccuracy in any representation, warranty, covenant or
agreement on the part of the Company such that the conditions set forth in
Section 6.3(a), 6.3(b) or 6.3(l)(i) would not be satisfied as of the Effective
Time, or in the event of a breach of or inaccuracy in any representation,
warranty, covenant or agreement on the part of Stockholder contained in the
Voting Agreement such that the condition set forth in Section 6.3(c) would not
be satisfied as of the Effective Time, or in the event that the information set
forth in the Tax Letter shall be found to be or become untrue or incorrect,
such that the condition set forth in Section 6.3(l)(ii) would not be satisfied
as of the Effective Time, which breach or inaccuracy is not cured or such
information is not made true and correct prior to the expiration of such 30 day
period; provided that if such breach or inaccuracy or failure of such
information to be true and correct is not curable, Parent may terminate this
Agreement immediately under this Section 7.1(g).

(h) By Parent, on or prior to the 90th day after the date
hereof, in the event that the Patent Review shall have revealed any facts or
circumstances that would reasonably be expected individually or in the
aggregate to result in (i) a Material Adverse Effect, (ii) any costs, damages
or liabilities that would be material to the Company and its Subsidiaries taken
as a whole, (iii) equitable remedies against the operation of any material
portion of the business of the Company and its Subsidiaries, or (iv) the
inability to enforce the Company's or any of its Subsidiaries' Technology
(except as against improvements developed by any other Person without
infringement or misappropriation of any such Technology) so as to materially
impair the competitive position of the Company and its Subsidiaries taken as a
whole.

Section 7.2 Effect of Termination. In the event of the
termination of this Agreement as provided in Section 7.1, written notice
thereof shall forthwith be given by the terminating party or parties to the
other party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and void,
and there shall be no liability on the part of Parent, the Purchaser or the
Company, except as set forth in Section 8.1 hereof and except with respect to
the

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requirement to comply with the Confidentiality Agreement and return, destroy or
hold Evaluation Material pursuant to the procedures set forth therein set forth
in Section 5.3; provided that nothing herein shall relieve any party from any
liability or obligation with respect to any wilful breach of this Agreement.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Fees and Expenses.

(a) Except as contemplated by this Agreement, all costs and
expenses incurred in connection with this Agreement and the consummation of the
transactions contemplated hereby shall be paid by the party incurring such
expenses.

(b) The Company shall promptly pay to Parent a termination
fee of $37,500,000 (the "Fee") in the event that (i) this Agreement is
terminated pursuant to Section 7.1(c) or 7.1(e), or (ii) (x) this Agreement is
terminated pursuant to Section 7.1(f) and (y) prior to the first anniversary of
such termination an Acquisition Transaction is consummated (other than an
Acquisition Transaction that solely involves securities or assets of the
Stockholder, other than Company Common Stock or other securities of the
Company).

(c) Subject to the final sentence of this Section 8.1(c),
the Company shall promptly pay to Parent an amount equal to all Expenses (as
defined below) in the event that:

(i) this Agreement is terminated pursuant to Section 7.1(c),
7.1(e) or 7.1(f),

(ii) this Agreement is terminated pursuant to Section 7.1(a),
7.1(b)(i) or 7.1(g) and (x) at that time the condition set forth in
Section 6.3(d) shall not have been satisfied and (y) the representation
and warranty set forth in Section 3.14 shall not have been true and
correct at and as of the date hereof, or at and as of the date of such
termination as if made at and as of such date,

(iii) this Agreement is terminated pursuant to Section 7.1(a),
7.1(b)(i) or 7.1(g) and at that time

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the condition set forth in Section 6.3(m) shall not have been satisfied,
or is terminated pursuant to Section 7.1(h),

(iv) this Agreement is terminated pursuant to Section 7.1(a)
or 7.1(b)(i) and at that time there shall exist, or pursuant to Section
7.1(g) in the event of, any material breach of any covenant or agreement
on the part of the Company contained in this Agreement or the
Stockholder contained in the Voting Agreement, or

(v) this Agreement is terminated pursuant to Section 7.1(a) or
7.1(b)(i) and at that time there shall exist, or pursuant to Section
7.1(g) in the event of, any material breach or inaccuracy of any
representation or warranty on the part of the Company contained in this
Agreement or the Stockholder contained in the Voting Agreement, or any
failure of the information set forth in the Tax Letter to be true and
correct, other than any breach or inaccuracy (an "Involuntary Breach")
of any such representation or warranty (x) as to which, as of the date
hereof, the Company and the Stockholder have no knowledge, after due
inquiry, of any facts or circumstances that cause such representation or
warranty not to be true and correct in all material respects at and as
of the date hereof, or that could reasonably be expected to cause such
representation or warranty not to be true and correct at and as of the
Effective Time, and (y) that shall not be a result of any wilful action
or inaction on the part of the Company or the Stockholder.

Notwithstanding the foregoing sentence, (A) the aggregate amount of any payment
required to be made by the Company in respect of the Fee pursuant to Section
8.1(b) and any Expenses pursuant to this Section 8.1(c) shall be limited to (i)
in the case of a termination of this Agreement prior to January 15, 1996,
$44,200,000, and (ii) in the case of a termination of this Agreement on or
after such date, $44,200,000 plus, in the event that prior to such termination
the Purchaser shall have become obligated to pay commitment fees to any of its
lenders in respect of the Financing ("Commitment Fees") upon any such
termination, the aggregate amount of such Commitment Fees, and (B) if, at the
time of any termination of this Agreement that but for this clause (B) would
result in payment of Expenses pursuant to this Section 8.1(c), there is in
effect an order or injunction of the type referred to in Section 6.1(b), then

65
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Expenses shall be payable by the Company under Section 8.1(d) and not this
Section 8.1(c).

(d) Except in any case in which the Company has made any
payment in respect of Expenses pursuant to Section 8.1(c), the Company shall
promptly pay to Parent an amount equal to the lesser of the Expense Cap and all
Expenses in the event that (i) this Agreement is terminated pursuant to Section
7.1(a) or 7.1(b) and at the time one or more of the conditions in Sections
6.1(a), 6.1(b), 6.1(c), 6.1(d), 6.2(f), 6.3(h) and 6.3(i) shall not have been
satisfied or (ii) this Agreement is terminated pursuant to Section 7.1(g)
solely in the event of any Involuntary Breach. The term "Expense Cap" means
(x) with respect to any termination of this Agreement prior to January 15,
1996, $10,000,000, and (y) with respect to any termination of this Agreement on
or after such date, $20,000,000 plus the aggregate amount of any Commitment
Fees payable upon any such termination.

(e) All payments pursuant to this Section 8.1 shall be in
immediately available funds. In the event that the Company shall pay Parent an
amount in respect of Expenses as contemplated by the proviso to Section 7.1(c),
and such amount shall subsequently prove to exceed the amount of Expenses
actually incurred, Parent shall refund the excess to the Company. In the event
that the Company shall pay Parent an amount in respect of Expenses as
contemplated by the proviso to Section 7.1(c), and such amount shall
subsequently prove to be less than the amount of Expenses actually incurred,
the Company shall remain liable to reimburse Parent for such remaining Expenses
as and to the extent set forth in Section 8.1(c). The term "Expenses" means
all out-of-pocket fees, costs and other expenses incurred or assumed by Parent
or the Purchaser or incurred on their behalf in connection with this Agreement
or any of the transactions contemplated hereby, including but not limited to in
connection with the negotiation, preparation, execution and performance of this
Agreement, the structuring and financing of the Merger and the other
transactions contemplated hereby, or any commitments or agreements relating to
such financing, including, without limitation, fees and expenses (other than
fees that become payable solely as the result of the termination of this
Agreement) payable to all banks, investment banking firms, other financial
institutions and other Persons and their respective agents and counsel for
arranging, committing to provide or providing any financing for the Merger and
any other transactions contemplated hereby or structuring such transactions or
such financing (other than any such fee

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payable to Clayton, Dubilier & Rice, Inc. or any affiliate thereof), and all
fees and expenses of counsel, accountants, experts and environmental,
actuarial, insurance and other consultants to Parent, the Purchaser or Clayton,
Dubilier & Rice, Inc.

(f) This Section 8.1 shall survive any termination of this
Agreement.

Section 8.2 Amendment; Waiver.

(a) This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval by the stockholders of the Company of the matters
presented in connection with the Merger, but after any such approval no
amendment shall be made without the approval of such stockholders if such
amendment changes the Merger Consideration or alters or changes any of the
other terms or conditions of this Agreement if such alteration or change would
materially adversely affect the rights of such stockholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.

(b) At any time prior to the Effective Time, the parties may
(i) extend the time for the performance of any of the obligations or other acts
of the other parties hereto, (ii) waive any inaccuracies in the representations
and warranties of the other parties contained herein or in any document,
certificate or writing delivered pursuant hereto or (iii) waive compliance with
any of the agreements or conditions of the other parties hereto contained
herein. Any agreement on the part of any party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf
of such party. Any such waiver shall constitute a waiver only with respect to
the specific matter described in such writing and shall in no way impair the
rights of the party granting such waiver in any other respect or at any other
time. Neither the waiver by any of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure by any
of the parties, on one or more occasions, to enforce any of the provisions of
this Agreement or to exercise any right or privilege hereunder, shall be
construed as a waiver of any other breach or default of a similar nature, or as
a waiver of any of such provisions, rights or privileges hereunder. The rights
and remedies herein provided are cumulative and

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none is exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity.

Section 8.3 Survival.

(a) The respective representations and warranties of Parent,
the Purchaser and (except as provided in Section 8.3(b)) the Company contained
herein or in any certificates or other documents delivered prior to or as of
the Effective Time shall not survive beyond the Effective Time. The covenants
and agreements of the parties hereto (including the Surviving Corporation after
the Merger) shall survive the Effective Time without limitation (except for
those which, by their terms, contemplate a shorter survival period).

(b) The representations and warranties of the Company
contained in Sections 3.5, 3.7, 3.14 and (solely as it relates to the foregoing
Sections) 3.24 shall survive the Effective Time until the date that is 30 days
after the delivery of the opinion with respect to the annual audit by the
Surviving Corporation's independent auditors of the financial statements of the
Surviving Corporation for the fiscal year ended December 31, 1996, and in any
event no later than May 31, 1997.

Section 8.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed delivery
by a standard overnight carrier or when delivered by hand, (c) the expiration
of five business days after the day when mailed in the United States by
certified or registered mail, postage prepaid, or (d) delivery in person,
addressed at the following addresses (or at such other address for a party as
shall be specified by like notice):

(a) if to Stockholder, to:

Manville Corporation
717 17th Street
Denver, Colorado 80202
Telephone: (303) 978-4911
Facsimile: (303) 978-4842
Attention: General Counsel

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with a copy to:

Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telephone: (212) 735-3000
Facsimile: (212) 735-2001
Attention: Franklin M. Gittes, Esq.

(b) if to the Company, to:

Riverwood International Corporation
3350 Cumberland Circle
Suite 1600
Atlanta, Georgia 30339
Telephone: (404) 644-3000
Facsimile: (404) 644-2929
Attention: General Counsel
and
Attention: J. Steven Beabout, Esq.

with a copy to:

Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Telephone: (212) 735-3000
Facsimile: (212) 735-2001
Attention: Franklin M. Gittes, Esq.

and

CDRO Holding Corporation
CDRO Acquisition Corporation
c/o Clayton, Dubilier & Rice
Fund V Limited Partnership
270 Greenwich Avenue
Greenwich, Connecticut 06830
Facsimile: (203) 661-0544
Telephone: (203) 661-3998
Attention: Alberto Cribiore

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with a copy to:

Clayton, Dubilier & Rice, Inc.
126 East 56th Street
New York, New York 10022
Facsimile: (212) 407-5252
Telephone: (212) 407-5200
Attention: Kevin J. Conway

and with a copy to:

Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Telephone: (212) 909-6000
Facsimile: (212) 909-6836
Attention: David A. Brittenham, Esq.

Section 8.5 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation". The phrase "made available" when used in this
Agreement shall mean that the information referred to has been made available
to the party to whom such information is to be made available. The word
"affiliates" when used in this Agreement shall have the respective meanings
ascribed to them in Rule 12b-2 under the Exchange Act. The phrase "beneficial
ownership" and words of similar import when used in this Agreement shall have
the meaning ascribed to it in Rule 13d-3 under the Exchange Act.

Section 8.6 Headings; Schedules. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Disclosure of any matter
pursuant to any Schedule to the Disclosure Schedule shall not be deemed to be
an admission or representation as to the materiality of the item so disclosed.

Section 8.7 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which shall be considered one and the same agreement.

Section 8.8 Entire Agreement. This Agreement, together with
the Confidentiality Agreement, the Tax Matters Agreement and the Tax Letter,
constitutes the entire

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agreement, and supersedes all prior agreements and understandings (written and
oral), among the parties with respect to the subject matter hereof. The
parties understand that in order to induce Parent and the Purchaser to enter
into this Agreement, the Stockholder has entered into the Voting Agreement and
the Tax Matters Agreement as of the date hereof with Parent and the Purchaser.

Section 8.9 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

Section 8.10 Governing Law. This Agreement shall be
governed, construed and enforced in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of law thereof.

Section 8.11 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties; provided, that Parent or the Purchaser
may assign this Agreement to any Subsidiary of Parent or the Purchaser, or to
any lender to Parent or the Purchaser or any Subsidiary or Affiliate thereof as
security for obligations to such lender, and provided, further, that no
assignment to any such lender shall in any way affect Parent's or the
Purchaser's obligations or liabilities under this Agreement. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by, the parties hereto and their respective successors
and assigns, and except for the provisions of Section 5.8 with respect to
indemnification of Indemnified Parties, the provisions of this Agreement are
not intended to confer upon any person other than the parties hereto any rights
or remedies hereunder.

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IN WITNESS WHEREOF, Parent, the Purchaser and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.

RIVERWOOD INTERNATIONAL
CORPORATION

By: /s/ THOMAS H. JOHNSON
-----------------------------------
Name: Thomas H. Johnson
Title: President and Chief
Executive Officer

CDRO HOLDING CORPORATION

By: /s/ KEVIN J. CONWAY
-----------------------------------
Name: Kevin J. Conway
Title: President

CDRO ACQUISITION CORPORATION

By: /s/ KEVIN J. CONWAY
-----------------------------------
Name: Kevin J. Conway
Title: President

<PAGE> 1
Contact: Sharon Sweet
(212) 885-0403

MANVILLE ANNOUNCES RIVERWOOD SALE
AND PROFIT SHARING EXCHANGE

Denver, Colo. (October 26, 1995) -- Manville Corporation (NYSE: MVL)
announced that its 81.3 percent owned subsidiary, Riverwood International
Corporation (NYSE: RVW), has entered into a definitive merger agreement
providing for the acquisition of Riverwood by a group including funds managed
by Clayton, Dubilier & Rice, Inc. and Brown Brothers Harriman & Co. and senior
management of Riverwood. Based on the merger price of $20.25 per share of
Riverwood common stock, Manville would receive gross proceeds from the merger
of approximately $1.081 billion for its Riverwood investment.

Manville and Manville Personal Injury Settlement Trust also announced that
they have agreed to a transaction in which the Trust would exchange its right
to receive annually 20 percent of Manville's adjusted net earnings for Manville
common stock representing 20 percent of the common stock of Manville assuming
exercise of all outstanding options and warrants and after giving effect to the
exchange. If the exchange were to occur today, approximately 32.6 million
shares of common stock would be issued to the Trust, resulting in an
approximately $400 million pretax extraordinary loss based on yesterday's
closing price of Manville common stock. This loss will be recognized upon the
closing of the transaction.

Manville Chairman Tom Stephens said, "Our evaluation of strategic
alternatives for Riverwood has resulted in the realization of significant value
for the shareholders of Manville and Riverwood. In addition, the profit sharing
exchange removes the last unique Manville obligation resulting from our
bankruptcy. Now our balance sheet is normal, and the Trust becomes merely a
large shareholder of Manville. The Riverwood transaction will also allow us to
sharpen our focus on our remaining core building products business -- Schuller
International."

-(more)-

<PAGE> 2
2-2-2

Manville has agreed to vote its Riverwood shares for the merger, subject to,
among other things, approval by the stockholders of Manville of the disposition
of its Riverwood investment, receipt of necessary consents from Manville
Personal Injury Settlement Trust and the satisfaction of certain of the
conditions to the exchange and the dividend described below.

The merger is subject to approval by the holders of a majority of the
outstanding shares of Riverwood common stock. The merger is also subject to the
receipt of all necessary financing, termination or expiration of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, as well
as the receipt of other regulatory approvals, and other customary conditions.
The entity formed by the acquisition group to acquire Riverwood has received
commitments from The Clayton, Dubilier & Rice Private Equity Fund V Limited
Partnership and Brown Brothers Harriman & Co. for $275 million of the $750
million of equity financing necessary to consummate the merger. In addition,
the acquiring entity has received commitments from Chemical Bank and Chemical
Securities Inc. to provide $1.55 billion of debt financing, and a letter from
Chemical Securities Inc. expressing a high degree of confidence in its ability
to place an additional $650 million of debt financing. It is anticipated that
an aggregate of approximately $2 billion of debt financing will be necessary to
consummate the proposed transaction.

It is contemplated that the profit sharing exchange would take place in
connection with a pro rata dividend to all stockholders of the net proceeds to
Manville from the merger. Under the exchange agreement, before paying any
dividend, Manville may elect to apply a portion of the proceeds of the merger
to the redemption of all or part of its outstanding Cumulative Preference
Stock, Series B, having an aggregate liquidation preference of approximately
$231 million plus accrued dividends, and its outstanding $26 million of Nine
Percent Sinking Fund Debentures. Approximately $261 million would be necessary
to redeem such Preference Stock and Debentures. The exchange is subject to a
number of conditions, including bankruptcy court approval and the declaration
of the dividend, and there can be no assurance that the transactions
contemplated thereby will be consummated.

Manville and Riverwood are being advised on the sale by J.P. Morgan and
Goldman, Sachs & Co.

-(more)-

<PAGE> 3
3-3-3

Manville Corporation is a holding company with two principal
subsidiaries -- wholly owned Schuller International Group, Inc. and
81.3-percent owned Riverwood International Corporation. Products sold by
Schuller International include insulation for buildings and equipment,
commercial and industrial roofing systems, high-efficiency air filtration
media, and nonwoven mats used as reinforcements in building and industrial
applications. Riverwood International is a global paperboard, packaging and
packaging machinery company. Founded in 1858, Manville Corporation and its
subsidiaries employ approximately 14,000 people at more tha 50 locations
worldwide. Manville and its subsidiaries had approximately $3.8 billion in
assets as of December 31, 1994.

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