FIBREBOARD CORP /DE, 10-K405, 1996-03-29

FIBREBOARD CORP /DE
10-K405, 1996-03-29
SAWMILLS & PLANTING MILLS, GENERAL

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
[XX] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required] for the fiscal year ended December 31, 1995
-----------------
or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period from
______________ to _________________

Commission file number 0-016951
--------

FIBREBOARD CORPORATION
----------------------
(exact name of registrant as specified in charter)

Delaware 94-0751580
--------------------------------------------------------
(State or other juris- (I.R.S. Employer Iden-
diction of incorporation) tification No.)

2121 N. California Blvd., Suite 560, Walnut Creek, CA 94596
------------------------------------------------------------
(Address of principal executive offices)

(510) 274-0700
--------------
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 Par Value
--------------------------------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes XXX . No .
------------ ------------

<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K XXX .
---------
The aggregate market value of voting stock held by nonaffiliates of the
Registrant as of March 18, 1996 was $188,066,032.

As of the close of business on March 18, 1996, the Registrant had outstanding
8,448,704 shares of common stock.

Documents Incorporated by Reference

Portions of Fibreboard Corporation's Proxy Statement relating to its 1996
Annual Meeting of Stockholders, which will be filed pursuant to Regulation 14A
not later than April 30, 1996, are incorporated by reference in Part III.

<PAGE>

PART I

ITEMS 1 AND 2. BUSINESS AND PROPERTIES

Fibreboard Corporation (Fibreboard) is a Delaware corporation incorporated in
1917. Between June 1978 and June 1988, Fibreboard was a wholly-owned subsidiary
of Louisiana-Pacific Corporation (L-P). In June 1988, L-P distributed
Fibreboard's common stock to its shareholders, and Fibreboard once again became
an independent, publicly held company. Fibreboard operates in two primary
industry segments: building products and resort operations.

Sales in 1995 for each segment were as follows:

In Millions %
----------- --
<S> <C> <C>
Building Products --
Residential Products $276.2 72
Industrial Products 59.7 16
Resort Operations 44.9 12
------
$380.8
------
------

</TABLE>

Building Products consists of the Residential Products Group and the
Industrial Products Group. Residential Products manufactures vinyl siding and
related accessories for exterior residential applications at three manufacturing
facilities in North America. Vinyl products are sold through two primary
channels: 1) A company-owned distribution network of more than 100 branches,
which also sell a wide variety of other exterior building products; and 2) a
network of independent distributors. Industrial Products, sold under the trade
name of Pabco, manufactures molded insulation for high temperature and
industrial applications, fireproofing board used in commercial construction and
metal jacketing.

Prior to 1995, Building Products included the Wood Products Group. This
business was sold in September 1995 and is now accounted for as a discontinued
operation. Wood Products 1995 sales, which have been excluded from the table
above, were $111.8 million.

Resort Operations includes Northstar-at-Tahoe, a year-round destination
resort including ski and golf facilities, Sierra-at-Tahoe, a day ski area, both
located near Lake Tahoe, California, and Bear Mountain, a day ski area located
approximately two hours from Los Angeles, California.

Fibreboard employs approximately 3,500 people (including approximately 1,700
seasonal employees in Resort Operations), substantially all of whom are non-
union.

Information concerning the revenues, operating results and identifiable
assets of each of Fibreboard's industry segments can be found in Note 12 to
Fibreboard's consolidated financial statements, "Industry Segment Information"
on page 35.

<PAGE>

BUILDING PRODUCTS --

RESIDENTIAL PRODUCTS GROUP

PRODUCTS

Fibreboard's wholly-owned subsidiaries, Norandex Inc. and Vytec Corporation,
manufacture vinyl siding and related accessories. Norandex produces vinyl
siding and accessories at its highly efficient manufacturing facility in
Claremont, NC. More than 95% of Norandex manufactured products are sold through
a 102 branch company-owned distribution network operating in 31 states.
Norandex manufactured vinyl siding and accessories account for approximately 35%
of distribution sales. Purchased windows and doors make up an additional 30% of
sales. Other resale products include aluminum and steel siding and other
primarily exterior building products and installation supplies. Norandex
products are used in residential remodeling (60% to 65% of sales) and new
construction (35% to 40% of sales).

Fibreboard purchased Vytec Corporation on November 30, 1995. Vytec produces
vinyl siding and accessories at two manufacturing facilities in London, Ontario,
and Mission, British Columbia, Canada. While a portion of Vytec's products are
sold through Norandex branches, the majority of Vytec's products are sold
through independent distributors, principally in the Great Lakes, mid-west,
mid-Atlantic and southeastern states. Approximately 65% of Vytec's sales are to
customers located in the United States, with the remainder shipped to customers
in Canada or to affiliates in Poland, Australia and New Zealand.

MARKET POSITION, COMPETITION AND ENTRY BARRIERS

Fibreboard is one of the top five producers of vinyl siding in North America.
The industry consists of 21 producers which supply an overall vinyl siding
market of approximately 32 million squares (a square is material sufficient to
cover a 10 foot by 10 foot area). Fibreboard believes it has a 8% to 9% market
share in vinyl siding. Fibreboard believes it is among the industry's low cost
producers with production yields substantially higher than the industry average.

Norandex is one of four vinyl siding producers that has a captive
distribution network, and Fibreboard believes the Norandex distribution network
to be the most extensive. Norandex distribution competes regionally with many
privately-owned distribution companies which offer products manufactured by
competitors.

Barriers to entry in the manufacture of vinyl siding are significant,
requiring a substantial investment in manufacturing equipment. By contrast,
barriers to entry in the distribution business are modest.

The principal means of competition are service and quality.

SUPPLIERS

The primary raw material used in the manufacture of vinyl siding is polyvinyl
chloride (PVC) resin. Fibreboard has supply agreements at current market prices
with three major manufacturers of PVC resin. Fibreboard has not experienced any
difficulty in securing sufficient raw material to meet its manufacturing needs.
The price of PVC resin is subject

<PAGE>

to price swings. Fibreboard has historically been able to pass the impact of
raw material price increases on through increased end product prices.

CUSTOMERS

Norandex's distribution network is concentrated in the mid-west, mid-Atlantic
and northeast areas of the country. Acquisitions of additional branches during
1995 extended Norandex's geographic reach into the southern states. Customers
are typically residential siding installers and construction and remodeling
contractors. Norandex believes its manufacturing flexibility and ability to
meet short order delivery times provide it a competitive advantage.

Customers of Vytec products are generally independent distributors, who sell
the products to residential siding installallers and construction and remodeling
contractors. Many of Vytec's independent distributors compete directly with
Norandex branches. Vytec's sales force concentrates its efforts on assisting
distributors in developing their markets and attracting new customers.

FACILITIES

VINYL SIDING MANUFACTURING

<TABLE>
<CAPTION>
Practical Annual
Production Capacity
Plant Location (squares) Production Schedule
- -------------- ----------------------- -------------------
<S> <C> <C>
Claremont, NC 1,860,000 3 shifts-7 days/week
London, Ontario 1,040,000 3 shifts-7 days/week
Mission, British Columbia 250,000 3 shifts-7 days/week

</TABLE>

BRANCH LOCATIONS

Norandex branches located in the following states: Alabama, Arkansas,
Colorado, Delaware, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New
York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South
Carolina, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia and
Wisconsin. Branches are typically 10,000 to 20,000 square feet in size. The
vast majority of branch locations are leased.

CAPITAL SPENDING

Historical capital expenditures have averaged $2 to $3 million per year,
primarily for maintenance and improvement of manufacturing and branch equipment.

SEASONALITY

Sales activity is seasonal and dependent on weather patterns. Historically,
sales are low in the first quarter of the year, before picking up in the second
and third quarters and falling off in the fourth quarter. Manufacturing
activity, while somewhat heavier during the high-activity summer months, is more
evenly spread throughout the year.

<PAGE>

OPERATING RESULTS - RESIDENTIAL PRODUCTS GROUP

Historical Performance *
(000's omitted)

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Sales $276,180 $85,607 NA

Pre-tax operating income 18,031 8,096 NA
Depreciation & amortization 6,303 1,815 NA
Capital expenditures** ( 4,048) ( 585) NA
---------- --------
Operating cash flow 20,286 9,326 NA

</TABLE>

* Operating results include Norandex Inc. from August 31, 1994 and Vytec
Corporation from November 30, 1995. See Note 13 to Fibreboard's
Consolidated Financial Statements for further information.
** Does not include amounts paid to acquire Vytec on November 30, 1995
or Norandex on August 31, 1994.

INDUSTRIAL INSULATION PRODUCTS GROUP (PABCO)

PRODUCTS

Pabco produces molded industrial insulation, fireproofing board and metal
jacketing. Molded industrial insulation (calcium silicate - "CalSil") is
produced in a variety of standard sizes and configurations for use in industrial
construction and maintenance, primarily for high temperature piping and boiler
applications. The panel industrial fireproofing board (Super Firetemp-TM-, also
a form of calcium silicate insulation) can be used in industrial and commercial
applications such as protecting columns, flues, cable trays, tanks and
bulkheads.

Super Firetemp competes with a number of generic fireproofing products.
Super Firetemp retains its shape, size and strength under continuous service at
temperatures in excess of 2,000DEG F. and may be re-used after exposure to
extreme temperatures. Super Firetemp is exceptionally easy to cut and handle,
and can be applied directly to the surface it is protecting, unlike competing
products which require clearance space. Consequently, Super Firetemp's
durability, space efficiency and ease of application may provide greater cost
savings to users than competing products.

Metal jacketing and metal elbows are used to cover and protect insulation
products after installation.

MARKETS

Nearly all of Pabco's products are sold into industrial markets, with a
small percentage sold into commercial markets. Approximately 90% of sales are
domestic, with the remainder primarily to South America and the Middle East.

<PAGE>

MARKET POSITION, COMPETITION AND ENTRY BARRIERS

Fibreboard believes there are four significant producers of calcium silicate
industrial insulation used in North America. Pabco is the largest producer of
this specialized product category which directly competes with fiberglass,
mineral wool, foam glass and ceramic fibers in the industrial insulation market.
Pabco's CalSil production facilities are the largest, single product plants in
its segment of the domestic industrial insulation industry. Pabco's
precision-molded, modular technology allows for more efficient operation at a
wider range of volumes than can be achieved by major competitors. Pabco's key
insulation and metal plants include operations in the Gulf States region where
buyers and sales are currently concentrated. Pabco believes its products are
preferred in construction projects where ease of installation is paramount since
Pabco's product is more easily field fabricated. Each of Pabco's major
competitors operates single-facility, older plants located in the Midwest and
eastern states. Fibreboard believes these may be higher-cost facilities in
areas of inherent labor cost disadvantages.

Barriers to entry in CalSil production are significant due to capital
requirements. However, in certain applications, other types of insulation may
be substituted.

Fibreboard believes that there are only three major domestic producers of
metal elbows and jacketing material for insulation protection with each having a
roughly equal share of the domestic market. The three producers have
substantial excess capacity compared to market demand.

Pabco is the only North American producer of calcium silicate-based
industrial fireproofing board which it manufactures under an exclusive foreign
license. However, competing foreign products have been sold in the United
States with some limited success.

The principal means of competition are price, quality and service.

SUPPLIERS

The primary raw materials in calcium silicate insulation are diatomaceous
earth and limestone. There are several sources of supply of diatomaceous earth
of a quality which Pabco considers acceptable for production of calcium silicate
insulation. Pabco has entered into long term material supply contracts on
favorable terms. The raw materials for the metal operations are aluminum,
stainless steel, vinyl and paper materials. Pabco has not experienced any
difficulties in obtaining adequate supplies and does not anticipate any such
difficulties, although metal pricing has varied significantly over the last
three years. Depending on inventory positions and purchase commitments, metal
market price volatility can have a significant impact, both positive and
negative, on operating profits.

CUSTOMERS

A majority of Pabco's revenues are derived in the maintenance market.
Primary customers include insulation contractors and distributors concentrated
in the Gulf States region. Products are marketed by Pabco's sales force to
insulation distributors and contractors. Although industrial insulation sales
are price sensitive, Fibreboard believes Pabco's low-cost facilities, material
and energy costs give Pabco a significant cost advantage over competitors.

<PAGE>

FACILITIES

MOLDED INDUSTRIAL INSULATION

Normal Annual
Production Capacity
Plant Location (cubic feet) Production Schedule
- -------------- ------------------- -------------------
<S> <C> <C>
Ruston, LA 2,300,000 3 shifts-7 days/week
Grand Junction, CO 2,300,000* 3 shifts-7 days/week
---------
TOTAL 4,600,000

</TABLE>

* Facility was operated for three months during 1995 to match production with
demand. Facility is not expected to operate during 1996.

PANEL INDUSTRIAL FIREPROOFING BOARD

Normal Annual
Production Capacity
Plant Location (pounds) Production Schedule
- ------------------ ------------------- -------------------
<S> <C> <C>
Grand Junction, CO 7,500,000 3 shifts-7 days/week

</TABLE>

METAL JACKETING

Plant Location Production Capacity Production Schedule
- ------------------- ------------------- -------------------
<S> <C> <C>
Palestine, TX (1) 1 shift-5 days/week
Poca, WV (1) 1 shift-5 days/week
Huntington Beach, CA (1) 1 shift-5 days/week

</TABLE>

(1) Capacity cannot be expressed in a standard unit of measure.

CAPITAL SPENDING

The industrial insulation group requires minimal capital expenditures,
primarily for maintenance purposes, averaging less than $500,000 per year.
Fibreboard's management does not believe any significant capital expenditures
will be required for the foreseeable future.

SEASONALITY

Industrial insulation products are impacted by petrochemical and general
economic cycles affecting industrial capital expenditure programs. In general,
sales activity is not significantly impacted by seasonality.

<PAGE>

OPERATING RESULTS - INDUSTRIAL PRODUCTS GROUP

Historical Performance
(000's omitted)

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Sales $59,671 $56,376 $49,215

Pre-tax operating income 7,694 6,452 5,382
Depreciation & amortization 867 788 1,041
Capital expenditures ( 484) ( 327) ( 324)
--------- ------- -------
Operating cash flow 8,077 6,913 6,099

</TABLE>

RESORT OPERATIONS --

FACILITIES

Fibreboard is the largest ski area operator in the state of California.
Fibreboard is the owner, developer and operator of Northstar-at-Tahoe, a 6,800
acre year-round destination resort near the north shore of Lake Tahoe,
California. In addition, Fibreboard owns Sierra-at-Tahoe, a day ski area
located near the south shore of Lake Tahoe, and Bear Mountain, a day ski area
located approximately two hours from Los Angeles.

Northstar-at-Tahoe (Northstar), features extensive ski facilities located on
an 8,600 foot mountain with a vertical ski trail drop of 2,280 feet. Facilities
include eight chair lifts and a high-speed gondola plus a day lodge, various
restaurants, shops, entertainment and group conference facilities. Summer
facilities include riding stables, mountain bike and hiking trails, an 18-hole
championship golf course, tennis courts, a swimming pool and other recreational
amenities.

Northstar includes 642 building lots and 654 condominium units, all of which
have been sold. Participating owners may offer homes or condominiums for rental
through Northstar's rental management program. The building lots include 44
lots developed as phase one of a multi-phase 158 lot single family home
subdivision. During 1995, Northstar sold 31 lots at an average sales price
$162,000 per lot, and sales of the remaining 13 lots are scheduled to close
during the first quarter of 1996. Northstar will continue offering lots for
sale on a phased basis over several years. Northstar has significant
dditional land which is suitable for real estate development.

During 1993, Fibreboard purchased the assets of Sierra Ski Ranch. The ski
area, renamed Sierra-at-Tahoe (Sierra), features 44 ski trails located on an
8,900 foot mountain with a vertical drop of 2,200 feet. Facilities include nine
chairlifts, three restaurants and retail and ski rental shops. Sierra is a day
use only area, and has no lodging facilities. Lodging is available in South
Lake Tahoe, 14 miles away.

During 1995, Fibreboard purchased the assets of Bear Mountain, a day ski area
located on an 8,800 foot mountain near Big Bear Lake, California. Bear Mountain
consists of 35 trails with a vertical drop of 1,665 feet serviced by 11 chair
lifts. Bear Mountain has one of the most extensive snowmaking systems in the
western United States, covering 100% of

<PAGE>

the trail system. Bear Mountain includes two restaurants, retail and ski rental
operations. A 9-hole golf course operates during the summer months only. Bear
Mountain is a day use area only, and has no owned lodging facilities. Lodging
is available in nearby Big Bear Lake.

MARKETS

Fibreboard's resorts are marketed through a variety of public media,
including magazines, newspapers, radio, television and outdoor advertising, as
well as through direct convention sales and contacts with business and trade
groups.

Northstar is located approximately 200 highway miles east of San Francisco
and approximately 40 miles west of Reno, Nevada, and Sierra is located
approximately 190 highway miles east of San Francisco. Bear Mountain is located
in the San Bernadino Mountains, a two-hour drive from Los Angeles, Orange County
and San Diego. The primary market area is the state of California. Fibreboard
estimates that approximately 71% of Northstar's skiers, and 79% of Sierra's, are
from northern California with 12% and 6% from southern California compared to
Bear Mountain where an estimated 94% of skiers are from southern California.
Fibreboard believes Northstar's location, ease of access, quality of facilities,
service, amenities and image appeal directly to the family and high income skier
segments of its market while Sierra appeals primarily to the value-conscious day
skier. Bear Mountain's marketing focus is its diversity of terrain, outstanding
beginner programs, snowmaking capacity, superior grooming and excellent weather.

MARKET POSITION AND COMPETITION

Northstar is one of the better known year-round destination resorts in the
Lake Tahoe vicinity. Northstar competes directly with other ski resorts in the
area as well as with major ski and year-round destination resorts throughout the
western United States. Sierra's competition is primarily limited to ski areas
located in the central Sierra Nevada mountains, although it does attract some
destination skiers from the South Lake Tahoe area. Bear Mountain competes with
other southern California resorts.

CAPITAL SPENDING

Over the past several years, Northstar has made substantial capital
expenditures to improve efficiency and competitiveness. Major projects included
high speed quad chairlifts, additional snow making and a new mountaintop
restaurant. Northstar has expanded its snowmaking capability to reduce the
effect of weather patterns and add stability to the revenue stream. Snowmaking
also improves the attractiveness of the ski mountain to a broader as well as
more experienced range of skiers. Fibreboard anticipates that 1996 resort
operations capital expenditures, primarily to replace three chair lifts at
Sierra, for annual maintenance and additional resort amenities, will approximate
$9.0 - $11.0 million. Fibreboard expects an additional $1.0 - $1.2 million
will be spent in 1996 for real estate lot development.

SEASONALITY

Operations are highly seasonal with more than 75% of revenues realized during
the ski season from late November through early-April. The length of the ski
season and the profitability of operations are significantly affected by
weather. Although Northstar and Bear Mountain have snowmaking capacity to
mitigate some of the effects of adverse weather

<PAGE>

conditions, abnormally warm weather or lack of adequate snowfall can materially
reduce revenues. Sierra lacks significant snowmaking capability but generally
benefits from higher annual snowfall. Depending on the weather and other
factors, annual skier visits have varied from 300,000 to 500,000 at Northstar,
230,000 to 350,000 at Sierra and 230,000 to 360,000 at Bear Mountain over the
last decade.

OPERATING RESULTS - RESORT OPERATIONS

Historical Performance
(000's omitted)
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Sales $44,955 $41,413 $25,501

Pre-tax operating income* 8,262 8,020 2,325
Depreciation & amortization 5,707 3,447 2,514
Capital expenditures** ( 7,018) ( 6,229) ( 4,813)
-------- -------- --------
Operating cash flow 6,951 5,238 26

</TABLE>

* Includes negative impact of 1) October 1995 acquisition of Bear
Mountain which incurred expenses in excess of revenues of
approximately $600; and 2) 1993 mid-year acquisition of Sierra which
had anticipated expenses in excess of revenues of approximately $1
million.
** Does not include amounts paid to acquire Bear Mountain in 1995 or
Sierra-at-Tahoe in 1993.

DISCONTINUED OPERATIONS --

In September 1995, Fibreboard sold the assets of its wood products business
to Sierra Pacific Industries for approximately $239 million after purchase price
adjustments. The wood products business consisted of approximately 80,000 acres
of northern California timberland, two sawmills, a hardwood plywood plant, a
moulding and millwork facility and a bark processing plant.

All financial data contained herein has been restated to reflect the wood
products business as a discontinued operation. The following table presents
wood products operating results through the date of sale.

<TABLE>
<CAPTION>
(000's omitted)

1995* 1994 1993
----- ---- ----
<S> <C> <C> <C>
Sales $111,750 $180,309 $190,494

Pre-tax operating income 5,653 12,670 18,468
Pre-tax gain on asset disposition 121,245 18,858 --

</TABLE>

* Nine months activity only.

<PAGE>

ENVIRONMENTAL MATTERS --

All of Fibreboard's production facilities are subject to regulation by
federal and state environmental agencies. Fibreboard believes its facilities
substantially meet applicable environmental requirements in all material
respects. Although compliance with environmental requirements is currently not
materially burdensome, given the uncertainties associated with environmental
matters generally, and with changing laws and regulations in particular, there
can be no assurance that continued compliance will not be materially burdensome
in the future.

Information concerning Fibreboard's involvement in landfill clean-ups is
incorporated herein by reference to Note 15 of Fibreboard's consolidated
financial statements, "Other Litigation and Contingencies," on page 43.

ITEM 3. LEGAL PROCEEDINGS

ASBESTOS-RELATED PERSONAL INJURY CLAIMS

At December 31, 1995, Fibreboard was a defendant in approximately 48,000
personal injury claims. Approximately 30,600 of these claims were filed on or
after August 27, 1993 and will be covered by the Global and Insurance
Settlements discussed below, if approved. Additional claims are anticipated in
the future. These claims typically allege injury or death from asbestos
exposure. Fibreboard is generally only one of several defendants. These claims
seek compensatory, and in many cases, punitive damages in varying amounts
depending on injury severity. Claims are pending in federal and state courts
throughout the United States.

During 1993 Fibreboard reached settlement agreements (the Global Settlement
and Insurance Settlement) with its insurers and plaintiff representatives which,
if approved by the courts, should resolve Fibreboard's existing and future
asbestos-related personal injury liabilities within insurance resources and
existing corporate reserves. These settlements require court approval. The
Global Settlement action is titled Gerald Ahearn, James Dennis and Charles W.
Jeep, on Behalf of Themselves and Others Similarly Situated, Plaintiffs, v.
Fibreboard Corporation, Defendant, Continental Casualty Company and Pacific
Indemnity Company, Intervenors, Civil Action No. 6:93cv526, U.S. District Court
for the Eastern District of Texas, Tyler Division. The Insurance Settlement
action is titled Continental Casualty Company, CNA Casualty Company of
California, Columbia Casualty Company and Pacific Indemnity Company, Plaintiffs,
v. Daniel Herman Rudd, Jr., Beverly White and John Hansel, on Behalf of
Themselves and Others Similarly Situated, and Owens-Illinois, Inc., on Behalf of
Itself and Others Similarly Situated, and Penn Mutual Life Insurance Company,
Defendants, Civil Action No. 6:94cv458, U.S. District Court for the Eastern
District of Texas, Tyler Division. The U.S. District Court issued its judgments
approving both settlements in July 1995. Both judgments have been appealed to
the Fifth Circuit Court of Appeals.

Additional information concerning personal injury claims can be found in
Note 14 to Fibreboard's consolidated financial statements, "Asbestos-Related
Litigation," which begins on page 37.

ASBESTOS-IN-BUILDINGS CLAIMS

<PAGE>

At December 31, 1995, Fibreboard was a defendant in 8 asbestos-in-buildings
claims pending in federal and state courts throughout the United States.
Fibreboard is typically only one of several defendants. Based on its experience
to date, Fibreboard believes the ultimate resolution of asbestos-in-building
claims will not have a material adverse effect on its financial condition.

Additional information concerning Fibreboard's asbestos-in-buildings claims
can be found in Note 14 to Fibreboard's consolidated financial statements,
"Asbestos-Related Litigation," which begins on page 37.

INSURANCE COVERAGE FOR PERSONAL INJURY CLAIMS

Fibreboard is litigating with two insurers, Continental Casualty Company and
Pacific Indemnity Company, to determine the amount of insurance available to
Fibreboard under policies issued by these companies (In Re Asbestos Insurance
Coverage Cases, Judicial Council Coordination Proceeding No. 107). The
litigation has been completed at the trial court level, with judgments favoring
Fibreboard on all issues. These judgments were appealed to the California Court
of Appeal by the insurers. In November 1993, the Court of Appeal issued its
ruling on the trigger and scope of coverage issues which upheld the favorable
trial court judgments in these areas, except the court held the period for
coverage would begin at the time of exposure to Fibreboard's asbestos products
rather than at the time of exposure to any company's asbestos product, with the
presumption that those periods are the same. At the request of Fibreboard,
Continental and Pacific Indemnity, the Court of Appeal withheld its ruling on
certain issues which were unique between Fibreboard and its insurers while the
parties seek approval of the Global and Insurance Settlements.

In January 1994 the California Supreme Court granted review of the decision
of the Court of Appeal, but withheld further action until its decision in
another case (Montrose Chemical Corp. v. Admiral Ins. Co.) then pending before
the Supreme Court was finalized. On July 3, 1995, the Supreme Court issued a
decision in Montrose Chemical confirming a trigger of coverage consistent with
the trigger the Court of Appeal applied to the Fibreboard policies.

By an order of October 19, 1995, the Supreme Court transferred the
Fibreboard case back to the Court of Appeal, which, after receiving supplemental
briefs and perhaps conducting further argument, will review its decision on
trigger and other issues in light of Montrose Chemical and any other
considerations the Court of Appeal deems relevant. After the Court of Appeal
reissues a decision, the parties can again petition for review to the California
Supreme Court.

If the Global and/or Insurance Settlements are ultimately approved,
Fibreboard and its insurers will seek to dismiss the insurance coverage
litigation.

Further information concerning this litigation can be found in Note 14 to
Fibreboard's consolidated financial statements, "Asbestos-Related Litigation,"
which begins on page 37.

INSURANCE COVERAGE FOR ASBESTOS-IN-BUILDINGS CLAIMS

Fibreboard believes the total limits of insurance policies in effect from
1932 to 1985 which may provide coverage for the asbestos-in-buildings claims
aggregated approximately $390 million (approximately $295 million of which has
been confirmed through settlements during 1993 and 1994), which is in addition
to the personal injury insurance coverage and

<PAGE>

does not include additional policies which contain no aggregate limit. The
remaining insurers dispute coverage. Fibreboard is pursuing an insurance
coverage suit (Fibreboard vs. Continental Casualty, et al; Superior Court of the
State of California for the City and County of San Francisco). Trial in this
action has been continued. During the continuance, Fibreboard and its insurers
are attempting to settle their disputes.

Additional information concerning this litigation can be found in Note 14 to
Fibreboard's consolidated financial statements, "Asbestos-Related Litigation,"
which begins on page 37.

OTHER LITIGATION

Fibreboard has been named as a potentially responsible party in two
California landfill clean ups, the Operating Industries Inc. site in Monterey
Park and the GBF landfill in Pittsburg, and has been named as a defendant in a
private lawsuit related to the Acme landfill in Martinez, CA. Additional
information concerning Fibreboard's involvement can be found in Note 15 to
Fibreboard's consolidated financial statements, "Other Litigation and
Contingencies," on page 43.

Fibreboard is involved in a number of additional disputes arising from its
operations. Fibreboard believes resolution of these disputes will not have a
material adverse impact on its financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

Information with respect to executive officers of Fibreboard follows:

<TABLE>
<CAPTION>
- ------------------------------------------------------------
NAME AGE POSITION
- ------------------------------------------------------------
<S> <C> <C>
John D. Roach 52 Chairman, President and Chief
Executive Officer
James P. Donohue 55 Senior Vice President, Finance
and Administration and Chief
Financial Officer
Michael R. Douglas 42 Senior Vice President, General Counsel
and Secretary
Stephen L. DeMaria 55 Vice President, Corporate Relations
Herbert M. Elliott 57 Vice President, Industrial Insulation Products
William A. Jensen 43 Vice President, Resort Operations
Robert W. Johnston 59 Vice President, Vinyl Products
Garold E. Swan 43 Vice President and Controller

</TABLE>

<PAGE>

Officers serve at the discretion of the board of directors.

Mr. Roach was elected Chairman, President and Chief Executive Officer of
Fibreboard on July 2, 1991. Prior to his election, Mr. Roach was Executive Vice
President of Manville Corporation, where he served as President of its Mining
and Minerals Group and President of Celite Corporation, a wholly-owned Manville
subsidiary. In addition, Mr. Roach served as President of Manville Sales
Corporation, now known as Schuller International, from 1988 to 1989, and as
Chief Financial Officer of Manville Corporation from 1987 to 1988. Prior to
Manville, Mr. Roach was a strategy consultant and Vice Chairman of Braxton
Associates; Vice President and Managing Director of the Strategic Management
Practice for Booz, Allen, Hamilton; and Vice President and Director of The
Boston Consulting Group. Previous experience at Northrop Corporation included
Director of strategic planning, economic analysis, accounting, management
information systems and co-manager of a venture capital subsidiary. Mr. Roach
serves as a director of Thompson PBE, Inc.

Mr. Donohue was elected Senior Vice President, Finance and Administration and
Chief Financial Officer in October 1991. Prior to joining Fibreboard, he was an
Executive Vice President of Continental Bank in Chicago where he held a wide
variety of senior management positions during his 25 years with the bank.

Mr. Douglas became General Counsel to Fibreboard in September 1987 and was
elected Secretary in November 1990. He was elected Vice President in August
1991 and Senior Vice President in October 1993. From March 1986 to September
1987 he was employed by the Asbestos Claims Facility, of which Fibreboard was a
member, as Senior Legal Counsel and then as Director of Law-West Coast Region.
From 1982 to 1986 he was an attorney in the asbestos litigation group of Jim
Walter Corporation.

Mr. DeMaria joined Fibreboard in May 1989 as Director-Corporate
Communications and Investor Relations and was elected Vice President, Corporate
Relations in August 1991. Prior to joining Fibreboard, he was Executive Vice
President of the California Forest Protective Association, an industry trade
association representing the interests of industrial timberland owners before
the California legislature and regulatory agencies.

Mr. Elliott was appointed General Manager of Pabco in October 1991 and was
elected Vice President, Industrial Insulation Products in February 1992. Prior
to joining Fibreboard, Mr. Elliott was a partner in Management Resource
Partners, a professional management firm advising corporations on financial and
operating matters and functioned as CEO, CFO or a director of several companies.
Mr. Elliott has been CFO of Consolidated Fibers and Itel Corporation, Vice
President Corporate Development of Alexander and Baldwin and a consultant for
A.T. Kearney.

Mr. Jensen joined Fibreboard in October 1991 as General Manager of
Northstar-at-Tahoe and was elected Vice President in June 1993. From 1989 to
1991, Mr. Jensen was Vice President of Marketing and Sales for Sunday River Ski
Resort in Bethel, Maine. From 1986 to 1989, Mr. Jensen was Vice President,
Tracked Vehicles for Kassbohrer of North America, a manufacturer of ski resort
snow grooming vehicles and equipment.

Mr. Johnston joined Fibreboard with the acquisition of Norandex Inc. on
August 31, 1994 at which time he was elected Vice President. Mr. Johnston has
been employed with Norandex Inc. for 20 years and has held the office of
President since 1985. He was formerly

<PAGE>

Vice President of Sales and Branch Operations for Norandex. Mr. Johnston was
previously employed by Kaiser Aluminum Corporation and Reynolds Metals Company.

Mr. Swan has been Controller of Fibreboard since October 1988, and was
elected Vice President in October 1991. He previously was an Audit and
Financial Consulting Manager in the Portland, Oregon office of Arthur Andersen
LLP.

<PAGE>

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

As of March 18, 1996, there were 11,029 holders of record of Fibreboard
common stock. Fibreboard's common stock is traded on the American Stock
Exchange under the symbol FBD. Information with respect to the quarterly high
and low market sales prices for Fibreboard's common stock for 1995 and 1994,
based upon sales transactions reported by the American Stock Exchange, is
provided below. All per share prices have been adjusted to reflect a 2-for-1
stock split on May 19, 1995.

Market Prices of Fibreboard Common Stock

<TABLE>
<CAPTION>
1995 1994
--------------- ---------------
High Low High Low
---- --- ---- ---
For The Quarters Ended
- ----------------------
<S> <C> <C> <C> <C>
March 31 17 13 3/4 19 11/16 16 6/16
June 30 27 15 5/16 19 7/16 11 7/8
September 30 26 3/8 21 7/8 15 3/8 12 9/16
December 31 26 3/4 19 5/8 15 13/16 13 1/16

</TABLE>

The closing price of Fibreboard's common stock on March 18, 1996 was $21
3/4.

Since its spin-off from Louisiana-Pacific Corporation on June 6, 1988,
Fibreboard has not paid cash dividends. Fibreboard's Structured Settlement
Program contains restrictions on the amount of dividends or distributions to
shareholders. At December 31, 1995, no amounts were available for the payment
of dividends, share repurchases or other distributions.

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

Fibreboard sold its wood products business on September 25, 1995. All data
presented below has been restated to reflect wood products as a discontinued
operation for all periods. In addition, the results of the following
acquisitions are included only for the periods since the transaction date:

Sierra-at-Tahoe July 1993
Norandex August 1994
Bear Mountain October 1995
Vytec November 1995

Year Ended December 31
--------------------------------------

1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(Dollar amounts in thousands except per share)
<S> <C> <C> <C> <C> <C>
Net sales $380,806 $183,396 $ 74,716 $ 70,062 $ 68,955
Income (loss)
from continuing
operations (1) 14,524 8,276 817 (352) (28,322)
Income (loss)
from continuing
operations per
share (fully diluted) (1) 1.62 0.92 0.09 (0.04) (3.54)
Operating assets 359,556 368,177 255,118 217,178 218,515
Asbestos-related
assets 830,064 812,347 969,136 826,582 363,015
Total assets 1,189,620 1,180,524 1,224,254 1,043,760 581,530

Long-term debt (2) 9,365 101,293 23,539 13,306 17,508

</TABLE>

NOTES:

(1) Includes pre-tax $3,762 gain on surplus real estate sales in 1993; pre-tax
$2,353 pension gain and $2,998 gain on surplus real estate sales in 1992;
cumulative effect of a change in accounting principle of $(1,954), net of
tax in 1991; pre-tax unusual items of $(6,016) in 1991; and pre-tax
asbestos-related items of $4,000 in 1995 and ($20,000) in 1991. See notes
to financial statements for additional information concerning these items.

(2) Does not include amounts for asbestos claims settlements. See Note 14 to
the financial statements, "Asbestos-Related Litigation," on Page 37 for
additional information. Also does not include asbestos-related long term
debt of $23,711 in 1995, $22,360 in 1994, $21,361 in 1993, $20,572 in 1992
and $19,726 in 1991. Does include $3,765, $4,870, $5,905, $6,875 and
$7,785 of long-term debt for which Fibreboard receives offsetting interest
and principal payments from notes receivable -- see Note 5, "Long-Term
Debt."

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

During 1995, Fibreboard sold its wood products business, which, prior to the
acquisition of Norandex in August 1994, accounted for the majority of
Fibreboard's sales and a significant portion of operating profits. As required,
all financial data contained herein has been restated to reflect wood products
as a discontinued operation. The discussion which follows reflects that
presentation as well. Such restatement dramatically impacts comparisons of
consolidated operating results between years.

1995 VS. 1994

Net sales of continuing operations increased 108%. Of the increase, $190.6
million is attributable to a full year of Norandex operations in 1995 compared
to only four months in 1994. The remaining increase resulted from increases in
industrial insulation products ($3.3 million) and resort operations ($3.5
million). Income from continuing operations was $14.5 million compared to $8.3
million in 1994. Operating income increased 123% for residential products, 19%
for industrial products and 3% for resort operations.

Net income, which includes discontinued operations, was $95.8 million in
1995 and $27.0 million in 1994. After-tax operating income of discontinued
operations was $3.5 million compared to $7.5 million. Net income includes an
after-tax gain on the disposal of wood products of $77.8 million in 1995 and an
after-tax gain of $11.2 million from the sale of surplus timberlands in 1994.

BUILDING PRODUCTS

Residential products sales increased from $85.6 million to $276.2 million,
reflecting a full year of Norandex operations compared to four months in 1994.
The November 30, 1995 acquisition of Vytec Corporation added revenues of only
$2.5 million for the one month it was included in Fibreboard's results. On a
pro forma basis, Norandex sales increased 19.2% between years. Same store sales
increased 3.2% with the remainder of the increase attributable to new branches
acquired or opened during 1995.

Operating profit for the residential products group increased from $8.1
million for the last four months of 1994 to $18.0 million. The last four months
of 1994 are not indicative of the results of a full year's operations due to the
seasonality of the business. Because of the limited nature of pro forma
adjustments, Fibreboard does not believe pro forma operating results comparisons
between years are meaningful. Current year operating results were impacted by
significant fluctuations in PVC resin prices, which reached historical highs
during the early part of the year before dropping to 3-year lows near year end.
Additionally, Norandex was adversely impacted by lower than expected housing
starts and remodeling expenditures. Fibreboard believes Norandex achieved
comparatively better operating results than its competitors due to its
manufacturing efficiency and the flexibility afforded by the combination of
manufacturing and company-owned distribution.

Industrial products sales increased 6% due principally to higher sales
prices of metal products reduced by declines in molded industrial insulation
sales. Operating income increased to $7.7 million from $6.5 million in 1994.
Metal products profitability increased as average sales prices increased in
advance of corresponding raw material cost increases.

<PAGE>

RESORT OPERATIONS

Resort revenues increased from $41.4 million to $44.9 million. Sales of
residential lots aggregated $5.0 million while skier visits declined 7% from the
record levels of 1994.

Operating income improved from $8.0 million to $8.3 million. The change in
operating profit was due to several factors: 1) In 1994, the high volume, high
profit week between Christmas 1993 and New Years was the first week of the first
quarter. The week between Christmas 1994 and New Year's was the last week of
the fourth quarter and thus was not included in 1995 operating results.
Fibreboard believes the 1994 operating results would have been at least $1
million lower had the week between Christmas 1993 and New Year's not been
included in 1994. 2) Fibreboard acquired Bear Mountain in October 1995, which
incurred an operating loss of $0.6 million during the fourth quarter of 1995.
3) All of Fibreboard's resorts experienced unseasonably warm temperatures in the
fourth quarter of 1995 which inhibited Fibreboard's snowmaking ability. This,
coupled with a later snowfall than experienced in recent years, delayed the
opening of all three resorts until mid-December, whereas both Northstar and
Sierra opened before Thanksgiving in 1994. 4) The positive contribution
provided by the Northstar lot sales program more than offset the negative
factors referred to above.

GENERAL CORPORATE EXPENSES

Unallocated costs declined from $7.4 million to $7.0 million. Unallocated
costs were impacted by a number of factors: 1) Fibreboard's phantom stock
program expense was $3.1 million in 1995 vs. zero in 1994. 2) In 1994 a
contingent liability was resolved, resulting in a gain of $1.0 million. 3) As
more fully explained below, in 1995 Fibreboard recorded a $4.0 million reversal
of reserves for asbestos-related costs.

ASBESTOS-RELATED COSTS

As more fully discussed in Note 14 to the consolidated financial statements,
at December 31, 1991, Fibreboard estimated its potential liability for asbestos-
related personal injury claims to be received through the end of the decade at
$1,610 million and that it would ultimately receive insurance proceeds of $1,584
million related to those claims. Although Fibreboard, its insurers and
plaintiffs' representatives entered into the Insurance and Global Settlements
discussed elsewhere, Fibreboard does not believe these settlements impact its
estimate of liability through the end of the decade. However, during 1995
Fibreboard recorded a $4.0 million reversal of previously established reserves
for anticipated unreimbursable costs as a result of a reduction in its estimate
of the amounts which will be needed for such purpose in the event neither the
Global nor Insurance Settlements are finally approved. Fibreboard will
periodically evaluate its estimates and make adjustments as circumstances and
future developments dictate.

During 1995, $2.0 million of unreimbursed costs related to the asbestos
litigation were incurred and charged against the reserve established in prior
years.

<PAGE>

OTHER ITEMS

Interest expense increased from $4.9 million to $6.5 million, as Fibreboard
had higher average borrowings (due to the Norandex purchase on August 31, 1994)
offset by lower average interest rates.

Interest and other income declined to $3.1 million from $3.7 million. Other
income included gains from the sales of surplus real estate of zero in 1995 vs.
$1.6 million in 1994. Interest income increased to $3.1 million from $2.1
million as additional amounts were available for investment during the fourth
quarter of 1995.

Fibreboard's effective tax rate was 38% in 1995 and 41% in 1994. The
reduced rate was attributable to differences in the methods used by the various
states to tax the gain on disposal of the wood products business.

DISCONTINUED OPERATIONS

In September 1995, Fibreboard sold its wood products business to Sierra
Pacific Industries for approximately $239 million after purchase price
adjustments, resulting in a gain of $121.2 million ($77.8 million after tax).
In 1994 Fibreboard recorded a $18.9 million gain ($11.2 million after tax) from
the sales of surplus timberlands.

Pre-tax operating income was $5.7 million in 1995, down from $12.7 million
1994. The reduction was due to: 1) Nine months operations in 1995 vs. a full
year in 1994. 2) Net sales were down 38% between years. All three major
product lines incurred lower shipment volumes and production volumes. Reduced
production volumes resulted in higher unit costs which, when combined with lower
average selling prices, lowered operating margins.

LIQUIDITY AND CAPITAL RESOURCES

Fibreboard generated cash flows from continuing operations of $14.7 million
in 1995. In addition, cash flow generated by discontinued operations was $179.2
million. After-tax proceeds from the sale of wood products were used to retire
$100 million in outstanding debt and complete $68.0 million in acquisitions
(First Coastal Building Supply, Bear Mountain, B&J Siding Distributors and Vytec
Corporation) during the fourth quarter of 1995.

At December 31, 1995, Fibreboard had two revolving credit facilities, a $125
million facility which expires September 30, 2000 (the Fibreboard facility) and
a $30 million facility dedicated to support resort operations which expires May
31, 2000 (the resorts facility). Borrowings aggregated $5.0 million at December
31, 1995, and $137.6 million remained available. Both credit facilities have
subsequently been amended. The resorts facility was increased from $30 million
to $40 million in aggregate availability. The Fibreboard facility aggregate
availability was increased from $125 million to $150 million to accommodate a
$25 million 5-year term loan, the proceeds of which were received in February
1996. In addition, a new $15 million revolving credit facility was established
in March 1996 to support Fibreboard's Canadian operations.

In addition to working capital needs, Fibreboard anticipates primarily
discretionary capital expenditures of approximately $16 million to $19 million
during 1996. Major anticipated expenditures include $1.6 million to upgrade and
improve the Norandex vinyl siding manufacturing plant, $6.0 - $7.0 million to
replace three chairlifts at Sierra and infrastructure

<PAGE>

development costs of $1.0 - $1.2 million to support the lot sales program
at Northstar, as well as replacements and improvements of machinery and
equipment and additional ski area amenities. Capital expenditures will be
funded from operating cash flow and borrowings under Fibreboard's credit
facilities as needed.

Fibreboard has scheduled principal reductions of long-term debt due in 1996
of $1.3 million. Of this amount, Fibreboard will receive $1.1 million from
notes receivable which have interest and payment terms identical to a like
amount of Fibreboard's revenue bonds.

In addition to cash needs related to continuing operations, Fibreboard must
fund its modest on-going asbestos-related costs. To date, substantially all
such costs, other than the cost of litigating insurance coverage issues, have
been funded from insurance resources. At December 31, 1995, Fibreboard had $2.2
million in cash on hand restricted for asbestos-related uses.

Fibreboard and its insurer, Continental Casualty, have entered into an
interim agreement under which Continental agreed to make certain funds available
for defense and indemnity costs associated with asbestos-related personal injury
claims during the period pending final approval of the Global and/or Insurance
Settlements discussed below, or if neither are approved, through the final
conclusion of the insurance coverage litigation, however long that may take.
Fibreboard believes the amounts to be paid by Continental under this interim
agreement and amounts available under settlements with asbestos-in-buildings
insurers will be adequate to satisfy its asbestos-related cash requirements as
they come due.

During 1993, Fibreboard and its insurers entered into the Insurance
Settlement Agreement, and Fibreboard, its insurers and plaintiffs
representatives entered into the Global Settlement Agreement. These agreements
are interrelated. Trial court approval of these agreements was received in July
1995. However, both judgments have been appealed. Oral argument before the
Fifth Circuit Court of Appeals took place in early March, 1996. These appeals
and subsequent appeals, if any, will delay potential final approval of the
settlements until 1997 or later.

If both the Global and Insurance Settlement Agreements are approved,
Fibreboard believes its existing and future personal injury asbestos liabilities
will be resolved through insurance resources and existing corporate reserves.
If the Insurance Settlement is approved but the Global Settlement is not
approved, the insurers will provide Fibreboard with up to $2 billion to resolve
claims pending as of August 27, 1993 and all future claims, and will pay claims
settled but not yet paid as of August 27, 1993.

Fibreboard believes it is probable its insurance coverage for personal
injury claims will ultimately be confirmed on appeal or the settlements
discussed above will be approved by the court. However, if neither the Global
Settlement nor Insurance Settlement is approved and if the trial court decisions
in the insurance coverage litigation are subsequently overturned or
substantially modified on appeal, Fibreboard would not have adequate resources
to fund its asbestos personal injury liabilities.

1994 VS. 1993

Net sales of continuing operations increased 145%, from $74.7 million to
$183.4 million. Of the increase, $85.6 million was due to the addition of
Norandex Inc. on August 31, 1994. The remaining increase resulted from
increases in industrial products ($7.2 million) and resort

<PAGE>

operations ($15.9 million). Income from continuing operations was $8.3 million
compared to $0.8 million in 1993. Norandex contributed pre-tax operating income
of $8.1 million for the last four months of the year. Operating income
increased 20% for industrial insulation products and 245% for resort operations.

Net income, which includes earnings of discontinued operations, was $27.0
million in 1994 compared to $11.7 million. The 1994 amount includes an after-
tax gain of $11.2 million from the sale of surplus timberlands.

BUILDING PRODUCTS

From its acquisition on August 31, 1994 through the end of the year,
Norandex generated sales of $85.6 million and operating income of $8.1 million.
Norandex sales activity is seasonal, and is driven by the weather and
construction activity in its primary market areas. Construction activity is
typically at a peak in June-October. Mild early winter weather in Norandex's
market areas extended the building season into December and increased Norandex
generated profits beyond expectations.

Industrial products sales increased 15% due principally to increased
shipments and higher sales prices of metal products with some improvement in
molded industrial insulation sales. Operating income increased to $6.5 million
from $5.4 million in 1993. Metal products profitability increased as average
sales prices increased in advance of corresponding raw material cost increases.
However, this improvement was offset somewhat by lower profits from molded
insulation due to higher material costs.

RESORT OPERATIONS

Resort revenues increased from $25.5 million to $41.4 million on a 100%
increase in skier visits. The increase in skier visits was a result of the
addition of Sierra-at-Tahoe (which operated only 23 days subsequent to its
acquisition in 1993), a heavy early season snow fall in the fourth quarter of
1994 and the inclusion of two high-volume Christmas to New Years weeks in 1994,
one as the first and one as the last week of the year, versus only one such week
in 1993's results. Operating income improved from $2.3 million to $8.0 million
driven primarily by the revenue increase as well as aggressive cost controls.

GENERAL CORPORATE EXPENSES

Unallocated costs declined from $8.3 million to $7.4 million, reflecting the
1994 resolution of a contingent liability related to post-retirement benefits
which resulted in a gain of $1.0 million.

ASBESTOS-RELATED COSTS

The 1994 and 1993 results of operations do not include any asbestos-related
costs. During 1994, $2.2 million of unreimbursed costs related to the asbestos
litigation were incurred and charged against the reserve established in prior
years.

OTHER ITEMS

<PAGE>

Interest expense increased from $3.6 million to $4.9 million, as Fibreboard
had higher average borrowings (due to the Norandex purchase on August 31, 1994)
offset by lower rates under its new revolving credit facility.

Interest and other income declined to $3.7 million from $5.6 million. Other
income included gains from the sales of surplus real estate of $1.6 million in
1994 and $3.8 million in 1993. Interest income increased to $2.1 million from
$1.8 million as additional amounts were available for investment than in 1993.

Fibreboard's effective tax rate was 41% in 1994 and 1993.

DISCONTINUED OPERATIONS

After-tax earnings of the discontinued wood products business were $18.8
million in 1994 compared to $10.9 million in 1993. An after-tax gain on the
sale of surplus timberlands of $11.2 million is included in the 1994 results.
Wood products sales declined 5%. The majority of the decrease was due to the
early 1994 sale of the agricultural container business, which in 1993 generated
sales of approximately $9.7 million. For 1994, lumber sales were higher
(increased volume reduced by slightly lower average product sales prices) while
decreases were experienced in plywood sales (lower shipment volume) and moulding
and millwork (lower volume and sales prices). Wood products operating income
declined from $18.5 million to $12.7 million driven by higher log costs in 1994
and slightly lower product sales prices compared to 1993.

IMPACT OF INFLATION

Inflation has not had any significant impact on Fibreboard's operations
during the three years ended December 31, 1995.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

Fibreboard has included forward-looking statements concerning its business
and operations in this Form 10-K. These forward-looking statements are subject
to certain risks and uncertainties, including those described below, that could
cause actual results to differ materially from those projected. Fibreboard
expressly disclaims any obligation to release publicly any updates or revisions
to such forward-looking statements to reflect any change in its expectations
with regard thereto or any change in events or circumstances on which any such
statement is based.

--With respect to Fibreboard's building products operations, such risks and
uncertainties include: the level of housing starts; changes in the general
economy and in economic conditions in the various markets served by Fibreboard's
distribution operations, which could affect demand for product; increased
competitive activity and resulting price pressures; increased raw material
prices, particularly for resin (impacting vinyl siding product margins) and
aluminum (impacting metal jacketing product margins); the impact of adverse
weather on building and remodeling activities; Fibreboard's ability to maintain
supplier relationships and adequate manufacturing capacity.

<PAGE>

--With respect to Fibreboard's resort operations, such risks and
uncertainties include: weather and snowfall levels affecting ability to
generate continued high levels of skier visits, particularly during critical
holiday periods; competitive pressures affecting the number of skier visits and
ticket prices; the success of marketing efforts to maintain and increase skier
visits; the possibility of equipment failure; continued access to water for
snowmaking; and the potential for personal injury lawsuits.

--With respect to Fibreboard as a whole, such risks and uncertainties
include, in addition to the factors described above: the resolution of
Fibreboard's asbestos personal injury litigation issues, including the outcome
of the appeals of the Global and Insurance Settlement Agreements; and the
success of Fibreboard's growth strategy and its ability to make additional
strategic acquisitions which are accretive to earnings.

Fibreboard's revenues and earnings are subject to fluctuation due to the
cyclicality of its building products operations and the seasonality of its
resort operations. Although Fibreboard has achieved record operating earnings
over the past four years, its past performance may not be indicative of future
performance due to the factors discussed above. Additionally, Fibreboard common
stock could be subject to significant price volatility should financial results
fail to meet expectations of the investment community.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements and Supplementary Data

PAGE
----

Consolidated Statements of Income for 19
each of the three years in the period ended
December 31, 1995

Consolidated Balance Sheets as of December 31, 20
1995 and 1994

Consolidated Statements of Cash Flows for each 22
of the three years in the period ended
December 31, 1995

Consolidated Statements of Stockholders' Equity 24
for each of the three years in the period
ended December 31, 1995

Notes to Consolidated Financial Statements 25

Report of Independent Public Accountants 44

Report of Management 45

Supplementary Data (unaudited) -
Selected Quarterly Financial Data for each of the 46
two years in the period ended December 31, 1995

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

YEAR ENDED DECEMBER 31
--------------------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>

(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE)

Net sales $380,806 $183,396 $ 74,716
Cost of sales 280,926 132,861 58,966
--------- --------- ---------
Gross margin 99,880 50,535 15,750
Other expenses:
Selling and administrative 76,909 35,392 16,342
Asbestos-related items(Note 14) (4,000) -- --

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

Operating income 26,971 15,143 (592)
Interest expense (6,476) (4,931) (3,575)
Interest and other income 3,101 3,697 5,551
--------- --------- ---------
Income from continuing operations
before income taxes 23,596 13,909 1,384

Income taxes relating to continuing
operations (9,072) (5,633) (567)
--------- --------- ---------
Income from continuing operations 14,524 8,276 817

Discontinued operations (Note 13)
Income from operations less
applicable income taxes of
$2,174, $5,132 and $7,572 3,479 7,538 10,896

Gain on surplus asset sales less
applicable income taxes of $7,637 -- 11,221 --

Gain on disposal less applicable
income taxes of $43,432 77,813 -- --
--------- --------- ---------
Net income $ 95,816 $ 27,035 $ 11,713
--------- --------- ---------
--------- --------- ---------

Earnings per share--primary
Income from continuing operations $1.62 $0.92 $0.09
Income from discontinued operations 0.39 0.84 1.24
Gain on surplus asset sales -- 1.25 --
Gain on disposal 8.66 -- --
--------- --------- ---------
Net income per share $10.67 $3.01 $1.33
--------- --------- ---------
--------- --------- ---------
Earnings per share--fully diluted
Income from continuing operations $1.62 $0.92 $0.09
Income from discontinued operations 0.39 0.84 1.22
Gain on surplus asset sales -- 1.25 --
Gain on disposal 8.65 -- --
--------- --------- ---------
Net income per share $10.66 $3.01 $1.31
--------- --------- ---------
--------- --------- ---------
Common equivalent shares (thousands)
Primary 8,979 8,986 8,792
Fully diluted 8,990 8,992 8,940

</TABLE>

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

DECEMBER 31
----------------------------
1995 1994
---- ----
<S> <C> <C>
(DOLLAR AMOUNTS IN THOUSANDS)
ASSETS

Current assets:

Cash and cash equivalents (Note 1) $ 12,382 $ 8,842
Receivables (Notes 2, 4 and 5) 48,199 31,213
Current portion of
notes receivable (Note 5) 7,357 1,317
Inventories (Notes 1, 4 and 5) 57,905 40,272
Prepaid expenses 3,941 1,649
Deferred income taxes (Note 1) 13,086 9,270
------------ ----------
142,870 92,563
Net assets of discontinued operations -- 109,242
------------ -----------

Total current assets 142,870 201,805

Property, plant and equipment, at cost:
(Notes 1, 4 and 5)
Land and improvements 25,676 13,745
Buildings 37,015 28,451
Machinery and equipment 90,534 72,243
Construction in progress 643 620
------------ -----------
153,868 115,059
Accumulated depreciation (49,391) (40,973)
------------ -----------

Net property, plant and equipment 104,477 74,086
Notes receivable (Note 5 and 6) 5,271 12,451
Goodwill (Notes 1 and 13) 89,302 64,623
Other assets 17,636 15,212
------------ -----------

Total operating assets 359,556 368,177

Cash restricted for asbestos costs (Note 14) 2,199 1,893
Asbestos costs to be reimbursed (Note 14) 827,865 810,454
------------ -----------

Total assets $1,189,620 $1,180,524
------------ -----------
------------ -----------

</TABLE>

See attached notes to financial statements

<PAGE>
FIBREBOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

DECEMBER 31
-------------------------
1995 1994
---- ----
<S> <C> <C>
(DOLLAR AMOUNTS IN THOUSANDS)

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Notes payable to banks (Note 4) $ 1,423 $ --
Current portion of long-term debt (Note 5) 1,346 2,045
Accounts payable and accrued liabilities 63,966 53,239
(Note 3)
Reserve for asbestos-related costs (Note 14) 2,700 2,700
------------ ------------

Total current liabilities 69,435 57,984

Long-term debt (Note 5) 9,365 101,293
Reserve for asbestos-related costs (Note 14) 8,625 14,584
Other long-term liabilities (Note 7 and 8) 12,730 24,109
Deferred income taxes (Note 1) 13,861 19,440
------------ ------------

Total operating liabilities 114,016 217,410

Asbestos claims settlements (Note 14) 811,952 795,365
Long-term debt associated with asbestos (Note 5) 23,711 22,360
------------ ------------

Total liabilities 949,679 1,035,135

Minority interest 185 --

Commitments & Contingencies (Notes 11, 14 and 15)

Stockholders' equity (Notes 7, 9 and 10):
Preferred stock, $.01 par value, 3,000,000
shares authorized; none issued -- --
Common stock, $.01 par value, 15,000,000
shares authorized; 8,631,388 and
4,224,225 shares issued 86 42
Additional paid-in capital 77,293 76,166
Retained earnings 169,568 73,752
Minimum pension liability adjustment (Note 7) (1,400) (4,571)
Treasury stock, at cost, 215,700 shares (5,215) --
Foreign currency translation adjustment ( 576) --
------------ ------------

Total stockholders' equity 239,756 145,389
------------ ------------

Total liabilities and $1,189,620 $1,180,524
stockholders' equity ------------ ------------
------------ ------------

</TABLE>

See attached notes to financial statements

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31
-----------------------------------
1995 1994 1993
---- ---- ----

(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 95,816 $ 27,035 $ 11,713
Adjustments to reconcile income
to net cash provided by
continuing operating activities:
Income of discontinued operations (81,292) (18,759) (10,896)
Depreciation and amortization 13,797 6,983 4,177
Deferred income taxes 4,979 928 300
Deferred long term benefits (2,395) (671) 1,606
Compensation for stock grants 212 129 1,039
Income applicable to minority interest 18 -- --
Gain on sale of assets (342) (2,080) (3,762)
Asbestos-related reserve (4,000) -- --
Change in working capital:
Receivables (172) 6,447 (1,325)
Inventories (3,402) (30) (202)
Prepaid expenses (2,022) 159 (463)
Accounts payable and accrued liabilities (6,538) (4,293) (1,243)
-------- -------- --------
Net cash provided by continuing operations 14,659 15,848 944

Discontinued operations:
Income of discontinued operations 81,292 18,759 10,896
Pre-tax gain on sale of assets (121,245) (19,190) --
Proceeds from sale of assets 238,994 23,860 --
Expenses of sale of assets (10,643) -- --
Depreciation, amortization and depletion 3,057 4,151 6,340
Deferred income taxes (16,858) 207 1,927
Net assets change 4,621 28,769 (31,131)
--------- -------- ---------
Net cash provided (used) by discontinued
operations 179,218 56,556 (11,968)

Cash flows from investing activities:
Non-cash net assets of
acquired operations (81,944) (119,894) (13,054)
Proceeds from asset sales 348 2,163 5,313
Property, plant and equipment changes (11,784) (7,412) (6,161)
Reductions of notes receivable 2,213 1,611 996
Decrease (increase) in other assets (700) (747) (1,542)
--------- -------- --------
Net cash used by investing activities (91,867) (124,279) (14,448)

</TABLE>

(continued)

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)

YEAR ENDED DECEMBER 31
-----------------------------------
1995 1994 1993
---- ---- ----
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from financing activities:
New borrowings $ 28,434 $ 93,000 $15,000
Repayment of debt (120,243) (35,622) (10,799)
Purchase of treasury stock (5,215) -- --
Employee stock plan transactions 509 201 534
--------- --------- --------
Net cash provided (used) by
financing activities (96,515) 57,579 4,735
--------- --------- --------
Net cash provided (used) by
business activities 5,495 5,704 (20,737)

Cash flows from asbestos-related activities:
Receipts from insurers 4,754 7,657 19,848
Structured settlement program
activity 33 476 (1,638)
Other asbestos-related cash
transactions (6,422) (9,251) (13,832)
Change in cash restricted for
asbestos costs (306) (1,066) 5,670
--------- --------- --------
Net cash provided (used) by
asbestos-related activities (1,941) (2,184) 10,048
--------- --------- --------

Effect of exchange rate changes on
cash and cash equivalents (14) -- --
--------- --------- --------
Net increase (decrease) in cash 3,540 3,520 (10,689)
Cash at beginning of year 8,842 5,322 16,011
--------- --------- --------
Cash at end of year $ 12,382 $ 8,842 $ 5,322
--------- --------- --------
--------- --------- --------
Cash paid during the year for:
Interest $ 6,673 $ 2,986 $ 3,011
Income taxes 66,645 12,718 5,538
Non-cash items:
Decrease in accrued asbestos -
related legal costs (203) (198) (574)
Increase in asbestos
claims settlements 105,908 151,498 244,072
Payments made to claimants on
Fibreboard's behalf 89,354 309,537 88,230
Increase in receivables from sale
of surplus real estate 697 2,949 250
Acquisition of businesses --
Fair value of assets acquired 95,180 155,440 13,954
Cash paid 81,944 119,894 13,054
--------- --------- --------
Liabilities assumed 13,236 35,546 900

</TABLE>

See attached notes to financial statements

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEAR ENDED DECEMBER 31
-----------------------------------
1995 1994 1993
---- ---- ----

(DOLLAR AMOUNTS IN THOUSANDS)

<S> <C> <C> <C>
Common stock:
Beginning balance, 15,000,000 shares
authorized; 4,224,225, 4,201,420
and 4,142,300 issued $ 42 $ 42 $ 41
Shares issued under employee
stock plans, 159,376,
22,805 and 59,120 shares 2 -- 1
Two-for-one stock split 4,247,787 shares 42 -- --
---------- ---------- ----------
Ending balance, 15,000,000 shares
authorized; 8,631,388, 4,224,225
and 4,201,420 issued $ 86 $ 42 $ 42
---------- ---------- ----------
---------- ---------- ----------

Additional paid-in capital:
Beginning balance $ 76,166 $ 75,836 $ 74,264
Employee stock plans 1,229 330 1,572
Two-for-one stock split (102) -- --
---------- ---------- ----------
Ending balance $ 77,293 $ 76,166 $ 75,836
---------- ---------- ----------
---------- ---------- ----------

Retained earnings:
Beginning balance $ 73,752 $ 46,717 $ 35,004
Net income 95,816 27,035 11,713
---------- ---------- ----------
Ending balance $ 169,568 $ 73,752 $ 46,717
---------- ---------- ----------
---------- ---------- ----------

Minimum pension liability adjustment:
Beginning balance $ (4,571) $ (2,427) $ (1,439)
Changes during the year 3,171 (2,144) (988)
---------- ---------- ----------
Ending balance $ (1,400) $ (4,571) $ (2,427)
---------- ---------- ----------
---------- ---------- ----------

Treasury stock, at cost:
Beginning balance $ -- $ -- $ --
215,700 shares acquired (5,215) -- --
---------- ---------- ----------
Ending balance $ (5,215) $ -- $ --
---------- ---------- ----------
---------- ---------- ----------

Foreign currency translation adjustment:
Beginning balance $ -- $ -- $ --
Changes during the year ( 576) -- --
---------- ---------- ----------
Ending balance $ ( 576) $ -- $ --
---------- ---------- ----------
---------- ---------- ----------

</TABLE>

See attached notes to financial statements

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF PRESENTATION

The consolidated financial statements include the accounts of Fibreboard
Corporation, a Delaware Corporation, and all its wholly-owned subsidiaries
(collectively Fibreboard) after elimination of intercompany balances and
transactions. Foreign subsidiaries in Australia and New Zealand have fiscal
year-ends of October 31 to facilitate consolidation of the subsidiaries'
financial statements.

Certain reclassifications of prior year amounts have been made to
conform with the current presentation. In addition, all prior year per share
data has been restated to reflect the impact of a two-for-one stock split in May
1995.

NATURE OF OPERATIONS

Fibreboard operates in two primary industry segments: Building Products
and Resort Operations. Building products are further broken down into
residential products and industrial products. In 1995, residential building
products accounted for 72% of sales, industrial building products 16% of sales
and resort operations 12% of sales. Residential products manufactures vinyl
siding and related accessories, which are sold to residential siding installers
and construction and remodeling contractors. Manufactured products are sold 1)
through a company-owned distribution network, which also sells other exterior
building products and 2) independent distributors. Principal market areas are
east of the Mississippi River with some concentrations in mid-west and Great
Lakes states. Industrial building products manufactures molded insulation for
high temperature applications, fireproofing board and protective metal
jacketing. Markets are concentrated in the Gulf Coast states. Resort
operations includes a year-round destination resort and two day ski areas, all
located in California.

No single customer accounts for a significant portion of Fibreboard's
sales.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimated.

WARRANTY COSTS

Fibreboard provides, by a current charge to income, an amount it estimates
will be needed to cover future warranty obligations for products sold during the
current year. The accrued liability for warranty costs is included in accounts
payable and accrued liabilities.

EARNINGS PER SHARE

Earnings per common and common equivalent share are calculated using the
weighted average number of common shares outstanding during the year plus the
net additional number of shares which would be issuable upon the exercise of
stock options, assuming Fibreboard used the proceeds received to purchase
additional shares at market value.

CASH AND CASH EQUIVALENTS

Fibreboard utilizes a centralized cash management system to minimize the
amount of cash on deposit with banks and maximize interest income from amounts
not required for immediate disbursement. Cash includes cash on hand or in banks
available for immediate disbursal. Cash equivalents are short-term investments
that have an original maturity date of less than 90 days.

INVENTORY VALUATION

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)

Inventories are valued at the lower of cost (first-in, first-out) or
market. Inventory costs include material, labor and operating overhead.
Operating supplies are priced at average cost. Inventories are valued as
follows:

DECEMBER 31
-----------------------

1995 1994
---- ----

<S> <C> <C>
Finished goods $49,223 $32,914
Raw materials 6,898 6,770
Supplies 1,784 588
------- -------

Total inventories $57,905 $40,272
------- -------
------- -------

</TABLE>

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation is
provided on the straight-line method based upon the estimated service lives (3-
30 years) of the various units of property. Depreciation expense for continuing
operations in 1995, 1994 and 1993 was $8,715, $5,578 and $3,797.

Fibreboard capitalizes interest on borrowed funds incurred during
construction periods. Capitalized interest is amortized over the lives of the
related assets. Interest capitalized in 1995, 1994 and 1993 was $0, $0 and
$183.

GOODWILL

Fibreboard records the excess of purchase price over the fair value of
net assets of businesses acquired as goodwill and amortizes such amounts on a
straight-line basis over 30 years. Accumulated goodwill amortization was $3,079
and $709 on December 31, 1995 and 1994. The carrying value of goodwill is
reviewed periodically to determine its recoverability through future operations.

During 1995, the goodwill associated with the acquisition of Norandex
was reduced by $2,496 to reflect purchase price adjustments.

INCOME TAX POLICIES

The income tax provision includes the following:

YEAR ENDED DECEMBER 31
------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Continuing Operations
---------------------
Current income taxes $ 5,662 $ 4,972 $ 2,323
Benefit of operating loss carry forward -- -- (118)
Deferred income taxes 3,410 661 (1,638)
------- ------- -------
$ 9,072 $ 5,633 $ 567
------- ------- -------
------- ------- -------

Discontinued Operations
-----------------------
Current income taxes $62,464 $12,562 $ 6,256
Benefit of operating loss carry forward -- -- (611)
Deferred income taxes (16,858) 207 1,927
------- ------- -------
$45,606 $12,769 $ 7,572
------- ------- -------
------- ------- -------

</TABLE>

The following table summarizes the differences between the statutory
federal and effective tax rate:

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)

YEAR ENDED DECEMBER 31
--------------------------
1995 1994 1993
---- ---- ----
Continuing Operations
---------------------
<S> <C> <C> <C>
Federal tax rate 35% 35% 35%
State income taxes, net of Federal benefit 3 6 6
Non-deductible goodwill 3 -- --
Other (3) -- --
--- --- ---
38% 41% 41%
--- --- ---
--- --- ---

YEAR ENDED DECEMBER 31
--------------------------
1995 1994 1993
---- ---- ----
Discontinued Operations
-----------------------
<S> <C> <C> <C>
Federal tax rate 35% 35% 35%
State income taxes, net of Federal benefit 3 6 6
Basis difference of subsidiary sold ( 2) -- --
---- ---- ----
36% 41% 41%
--- --- ---
--- --- ---

</TABLE>

Effective January 1, 1993, the Company implemented the provisions of
Statement of Accounting Standards No. 109, Accounting for Income Taxes (SFAS
109). SFAS 109 utilizes the liability method and deferred taxes are determined
based on the estimated future tax effects of differences between the financial
statements and tax bases of assets and liabilities given the provisions of the
enacted tax laws. The adoption of SFAS 109 had no effect on reported net income
in the Consolidated Statements of Income.

The tax effect of significant temporary differences representing
deferred tax assets and liabilities are as follows:

YEAR ENDED DECEMBER 31
--------------------------

1995 1994
----- ----
<S> <C> <C>
Deferred tax assets:
Accrued liabilities $ 5,327 $ 4,560
Current portion asbestos reserve 1,142 1,134
AMT credit -- 1,258
Environmental reserve 2,674 784
State taxes 2,373 --
Other 1,570 1,534
------- -------
Total deferred tax assets $13,086 $ 9,270
------- -------
------- -------

Deferred tax liabilities:
Property, plant and equipment $ 8,802 $15,751
Timber 593 8,230
Post retirement benefits (4,772) (7,187)
Long-term asbestos assets and reserve 3,243 (144)
State taxes 270 (1,142)
Contingent liabilities 7,243 7,323
Other (1,518) (3,391)
------- -------
Total deferred tax liabilities $13,861 $19,440
------- -------
------- -------

</TABLE>

FOREIGN CURRENCY TRANSLATION

The functional currency of the majority of Fibreboard's foreign
operations is the applicable local currency. Translation from the applicable
foreign currency to U.S. dollars is performed for balance sheet accounts using
exchange rates in effect at the balance sheet date and for sales and expense
accounts using a weighted average exchange rate during the period. The
resulting translation adjustment is reflected as a component of stockholders'
equity.

2. RECEIVABLES
<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)

DECEMBER 31
--------------------

1995 1994
---- ----

<S> <C> <C>
Trade receivables $47,752 $31,476
Less reserves for bad debts (2,560) (2,010)
Other receivables 3,007 1,747
------- -------
$48,199 $31,213
------- -------
------- -------

</TABLE>

3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

DECEMBER 31
-------------------

1995 1994
---- ----

<S> <C> <C>
Accounts payable $27,948 $20,642
Accrued pension expense 4,417 4,518
Salaries and wages payable 9,089 6,892
Taxes other than income taxes 2,205 2,520
Workers compensation 5,965 6,330
Environmental reserves 6,402 1,822
Other 7,940 10,515
------- -------

$63,966 $53,239
------- -------
------- -------

</TABLE>

The December 31, 1995 environmental reserve balance includes $5,000
which was recorded upon the sale of the Wood Products Group to indemnify the
acquirer for specified adverse environmental conditions which may have occurred
prior to September 25, 1995. The acquirer of the Wood Products Group has made
no significant claim impacting the reserve since the date of the sale.

Fibreboard is self-insured for the majority of its workers compensation
benefits. Workers compensation expense was $1,981, $1,410 and $268 in 1995,
1994 and 1993 based on actual and estimated claims incurred.

4. NOTES PAYABLE

In 1994, Fibreboard had a $5,000 operating line of credit dedicated for
the seasonal cash needs of its resort operations. The facility was replaced in
1995 with a $30,000 credit facility described in Note 5.

Fibreboard's Canadian subsidiary has a $6,000 operating line of credit
at prime plus 1/4% (7.65% at December 31, 1995) guaranteed by a letter of credit
drawn against Fibreboard's $125,000 credit facility which is described in Note
5. Fibreboard has a commitment from a bank to provide a $15,000 operating line
of credit, which will replace this facility. Borrowings will have interest at
LIBOR plus 0.45% to 0.90%. This facility will be secured by substantially all
the assets of the Canadian subsidiary. Fibreboard expects to finalize this
facility during the first quarter of 1996.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN THOUSANDS)

5. LONG-TERM DEBT

Fibreboard's long-term debt not associated with asbestos consists of the
following:

DECEMBER 31
------------------------------
1995 1994
------ -----

<S> <C> <C>
Revolving credit facility interest at LIBOR + 0.45% to 0.925%
(6.39% at December 31, 1995), secured by machinery
and equipment, receivables and inventories of Fibreboard
and certain subsidiaries $ 5,000 $ 86,000

Reducing revolving credit facility, interest at LIBOR
+ 1.0% to 1.375% secured by the assets of
Fibreboard's resort subsidiaries -- 6,700

Term loan, interest at prime plus 1/2%, secured
by the assets of a resort subsidiary -- 4,500

Pollution control project revenue bonds,
6.6%, payable annually through 1999, unsecured 4,870 5,905

Other debt--6.8% to 10.7% payable in
varying amounts 841 233
-------- --------
10,711 103,338
Less: Current portion (1,346) (2,045)
-------- --------
$ 9,365 $101,293
-------- --------
-------- --------

</TABLE>

Required repayment of long-term debt is as follows:

YEAR ENDING
DECEMBER 31
-----------
<S> <C>
1996 $ 1,346
1997 1,306
1998 1,621
1999 1,438
2000 5,000
-------

$10,711
-------
-------

</TABLE>

Fibreboard has entered into an agreement under which it will receive an
interest payment on $50,000 to the extent LIBOR exceeds 7.5% for the period
November 1995 through October 1996. The cost of this transaction will be
recognized during 1996.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

Fibreboard has notes receivable with terms and payment dates which are
substantially identical to $4,870 of revenue bonds included in the above table.
Payments under these notes are as follows:

YEAR ENDING
DECEMBER 31
-----------
1996 $ 1,105
1997 1,175
1998 1,255
1999 1,335
-------
$ 4,870
-------
-------

Fibreboard obtained a $175,000 revolving credit facility in 1994.
Initial borrowings were used to replace a prior credit facility, repay
certain term loans and fund a portion of the purchase of Norandex Inc.
(see Note 13). In conjunction with the sale of the wood products business,
the facility was reduced to $125,000. The facility expires September 30,
2000 unless the maturity date is extended by Fibreboard and its lenders.
Proceeds may be used for general corporate purposes and acquisitions.
Amounts available aggregated $108,761 at December 31, 1995. This facility
was amended subsequent to December 31, 1995 to increase the maximum commitment
to $150,000 in the form of a five year, $25,000 term loan. The term loan bears
interest at the same rate as the existing facility.

Fibreboard's resort operations reducing revolving credit facility
provides for maximum availability of $30,000. Subsequent to December 31,
1995, this facility was increased to $40,000. Maximum availability reduces
to $37,471 on April 30, 1996, $34,943 on April 30, 1997, $32,872 on October
30, 1997, $28,272 on April 30, 1998 and $23,672 on April 30, 1999 with any
remaining outstanding amounts due May 31, 2000.

Fibreboard's loan agreements contain various financial covenants, the
most restrictive of which impose limitations on dividends and other
distributions and require the maintenance of minimum levels of net worth and
certain coverage ratios. At December 31, 1995, these covenants were met.

Fibreboard's asbestos related long-term debt consists of the following
and is due upon conclusion of the asbestos bodily injury insurance coverage
litigation. In the event Fibreboard prevails in the insurance coverage
litigation, the amounts will be repaid from insurance proceeds.

DECEMBER 31
---------------------
1995 1994
----- -----

Amounts advanced under reimbursement
agreement, interest at prime minus 2%
(6.75% at December 31, 1995) $23,711 $22,360

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate that value:

CASH AND SHORT-TERM INVESTMENTS

Carrying amount approximates fair value because of the short maturity of these
investments.

NOTES RECEIVABLE

Fair value of notes receivable is estimated by discounting future cash flows
using current rates at which similar loans would be made.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

NOTES PAYABLE TO BANKS

Carrying amount approximates fair value based on current rates offered to the
corporation for similar debt.

LONG-TERM DEBT

Fair market value is estimated by discounting the future cash flows using the
current rates at which similar debt could be placed.

The estimated fair values of financial instruments are as follows:

1995 1994
--------------------- --------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Financial assets:
Cash and short-term investments $ 14,581 $14,581 $ 10,735 $ 10,735
Notes receivable 12,628 12,784 13,768 14,087
Interest rate instruments 292 -- 350 841

Financial liabilities:

Notes payable to banks $ 1,423 $ 1,423 $ -- $ --
Long-term debt 10,711 10,770 103,338 101,907

</TABLE>

Fibreboard's consolidated balance sheets include financial instruments
resulting from the asbestos-related litigation, asbestos costs to be
reimbursed, asbestos claims settlement obligations and asbestos-related
long-term debt. These are unique financial instruments. Consequently,
these instruments are not traded nor is it likely a willing buyer could be
found for them. Therefore, it is not practicable to estimate a market value.
The balance sheets as of December 31, 1995 and 1994 reflects asbestos costs to
be reimbursed of $827,865 and $810,454, asbestos claims settlements of $811,952
and $795,365 and asbestos-related long-term debt of $23,711 and $22,360.

7. PENSION PLANS

Fibreboard has pension plans covering substantially all employees.
Contributions to defined benefit plans are based on actuarial calculations
of amounts necessary to cover current cost and amortization of prior service
costs. All defined benefit plan participants' benefits have vested and been
frozen. Contributions to defined contribution plans are nondiscretionary and
based on varying percentages of eligible compensation for the year.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

The status of Fibreboard's defined benefit pension plans at December 31,
1995 and 1994 is as follows:

<TABLE>
<CAPTION>
Assets Accumulated Accumulated
exceed benefits benefits
accumulated exceed exceed
benefits assets assets

DECEMBER 31, 1995 DECEMBER 31, 1994
------------------------- -----------------

<S> <C> <C> <C>
Vested benefit obligation $ 8,602 $ 70,986 $ 73,674
-------- --------- ---------
-------- --------- ---------

Accumulated benefit obligation $ 8,602 $ 73,714 $ 76,503
-------- --------- ---------
-------- --------- ---------

Projected benefit obligations $ 8,602 $ 73,714 $ 80,977
Plan assets 9,117 59,101 55,336
-------- --------- ---------

Projected benefit obligations in
excess of (less than)
plan assets 515 (14,613) (25,641)
Unrecognized obligation at transition -- 1,086 1,206
Unrecognized net loss in past service (338) 2,334 7,318
Adjustment required to recognize
minimum liability -- (3,420) (8,889)
-------- --------- ---------

Prepaid pension cost
(pension liability) $ 177 $(14,613) $(26,006)
-------- --------- ---------
-------- --------- ---------

</TABLE>

Of the accrued expense, $4,417 and $4,518 is included in accounts
payable and accrued liabilities in 1995 and 1994 (Note 3).

The actuarial assumptions used to determine accrued pension expense
and the funded status of the plans for 1995 were: 8.25% discount rate (net
pension expense) 7.5% discount rate on funded status and 8% expected long-term
rate of return on plan assets. The assets of the plan at December 31, 1995
and 1994 consist of bonds, both corporate and government, stocks, cash and
cash equivalents.

As required by Statement of Accounting Standards No. 87, Employers'
Accounting for Pensions, Fibreboard has recognized a minimum pension liability
associated with its frozen defined benefit plan. As a result, Fibreboard
recorded an after tax reduction in equity of $1,400 at December 31, 1995 and
$4,571 at December 31, 1994.

Pension expense for 1995, 1994 and 1993 included the following
components:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------
1995 1994 1993
---- ---- ----

<S> <C> <C> <C>
Benefits earned by employees $ 904 $ 296 $ --
Interest cost on projected
benefit obligation 6,380 5,774 5,489
Return on plan assets (15,336) 433 (5,832)
Net amortization and deferral 11,208 (4,659) 1,729
Curtailment gain (1,384) -- --
-------- ------- -------

Net pension cost of defined
benefit plans 1,772 1,844 1,386
Contributions to defined contribution
pension plans for continuing operations 1,330 971 731
-------- ------- -------

Net pension expense $ 3,102 $ 2,815 $ 2,117
-------- ------- -------
-------- ------- -------

</TABLE>

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

On December 31, 1995, Fibreboard's Norandex subsidiary with a defined
benefit pension plan with assets in excess of obligations was frozen, resulting
in a curtailment gain of $4,762. The assets of the plan were merged with
Fibreboard's other defined benefit pension plan. Of the curtailment gain,
$3,378 was utilized to reduce goodwill and $1,384 to reduce 1995 pension
expense.

8. NON-PENSION POST-RETIREMENT BENEFITS

The status of Fibreboard's non-pension post retirement benefits which
are primarily available to certain collective bargaining units of facilities
which have been sold at December 31, 1995 and 1994 are as follows:

Year Ended December
---------------------
Net Periodic Post-Retirement Benefit Cost 1995 1994
- ----------------------------------------- ---- ----
<TABLE>
<CAPTION>
<S> <C> <C>
Interest cost $ 94 $ 176
Net other (182) (1,456)
------- --------
Total $ (88) $(1,280)
------- --------
------- --------

Accrued Benefit Cost

Accumulated post-retirement benefit obligation
Retirees $ 976 $ 1,331
Eligible actives 219 267
Other active plan participants 28 163
------- --------
1,223 1,761
Unrecognized net gain (595) (360)
------- --------
Total $1,818 $ 2,121
------- --------
------- --------

</TABLE>

Amounts recorded in 1994 as net other includes a gain of $1,164 from
the resolution of a post retirement benefit obligation of facilities sold in
1988.

An 8.5% annual rate of increase in the per capita cost of covered health
care benefits was assumed for 1996. The cost trend rate was assumed to
decrease slightly until 2001 at which time the rate was assumed to stabilize at
6%. Increasing the assumed health care cost trend rates by 1% in each year
would increase the accumulated post retirement benefit obligation as of
December 31, 1995 by $33 and increase the aggregate of the service and interest
cost components of net periodic post retirement cost for the year then ended by
$5. The weighted average discount rate used in determining the accumulated post
retirement benefits was 7.5% while 8.25% was used to determine the 1995
post-retirement benefit cost.

9. STOCK OPTION AND STOCK PURCHASE PLANS

Fibreboard has a stock option and rights plan for certain officers,
directors and key employees. The plan provides for the granting of stock
options, stock appreciation rights, limited stock appreciation rights and
restricted stock awards. Awards under the plan are determined by the
compensation committee of the Board of Directors. The maximum number of
shares available for award under the plan is 1,600,000. Option prices are
set by the committee. Option prices for grants must be at least 85% of the
fair market value on the date of grant. The time limit within which options
may be exercised and other exercise terms are fixed by the committee. At
December 31, 1995, 31,060 shares were available for awards under this plan.

In 1995, Fibreboard adopted a new stock incentive plan, under which a
maximum of 500,000 shares are available for grants of stock options, stock
appreciation rights, stock unit and restricted stock awards. In addition,
any shares which remain available for award under the existing plan, or which
become available in the future through forfeiture or cancellation, will be
added to shares available under the new plan. Options to purchase 123,500
shares at $21.38 have been awarded under this plan. The plan is subject to
shareholder approval at the 1996 annual meeting. Awards are determined by
the committee; however, no option may be granted at an exercise price less
than 100% of market value on the grant date nor may any individual receive
stock option or stock appreciation right grants in any year covering more
than 200,000 shares.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

When stock options are exercised, the proceeds (including any tax
benefits to Fibreboard resulting from the exercise) are credited to the
appropriate common stock and additional paid-in capital accounts.
Compensation related to restricted stock awards and certain option grants
(measured at the grant date) is recognized as expense over the term of the
related award.

Information about Fibreboard's stock incentive plans is summarized below:

Restricted
Options Stock Units
------- -----------

<S> <C> <C>
Outstanding at December 31, 1992 1,110,100 60,000
Granted at $5.97-$12.07 per share 24,000 30,000
Exercised at $2.03-$6.59 per share (122,700) --
Cancelled (12,600) --
---------- ---------
Outstanding at December 31, 1993 998,800 90,000
Granted at $12.69-$14.94 per share 24,000 26,000
Exercised at $0.94-$6.59 per share (9,500) (46,000)
Cancelled (6,000) --
---------- ---------
Outstanding at December 31, 1994 1,007,300 70,000
Granted at $21.38-$24.00 per share 147,500 --
Exercised at $1.63-$3.53 per share (222,800) (14,000)
Cancelled -- (4,800)
---------- ---------
Outstanding at December 31, 1995 932,000 51,200
---------- ---------
---------- ---------

Shares exercisable at December 31,
1995 784,500 --
1996 65,167 30,000
1997 41,167 21,200
1998 41,166 --

</TABLE>

Option awards for 132,000 shares include limited stock appreciation
rights for a like number of shares. Each limited stock appreciation right
entitles the holder, in certain limited circumstances, to surrender the
underlying option in exchange for cash equal to the difference between fair
market value at the date of surrender and the option price for such shares.

In addition, Fibreboard has an employee stock purchase plan. The plan
allows employees to purchase Fibreboard stock with an aggregate purchase price
of up to 15% of the employee's base salary at the beginning of each purchase
period. The purchase price is set by the committee, but cannot be less than
the lesser of 85% of fair market value at the beginning of each purchase period
or 85% of fair market value at the actual purchase date. The maximum number
of shares issuable under the plan is 500,000. During 1995, 1994 and 1993, no
shares of Fibreboard stock were sold to employees under this plan. At
December 31, 1995, 246,532 shares remain available for issuance under this
plan.

Fibreboard has a long-term equity incentive plan, which provides for
awards of phantom stock units. Each phantom stock unit entitles the grantee
to a cash payment equal to the fair market value of one share of Fibreboard
common stock at the maturity date less the fair market value on the grant date.
At December 31, 1995, 376,000 phantom stock units had been awarded with grant
prices of $13.75 to $15.00 per share, which mature 158,000 units in 1996 and
218,000 units in 1997. During 1995, cash payments of $808 were made in
satisfaction of 94,800 phantom stock units.

Compensation expense recognized for these plans was $3,298, $129 and
$1,039 in 1995, 1994 and 1993.

10. PREFERRED STOCK PURCHASE RIGHTS

In 1988, Fibreboard implemented a stockholder rights plan and
distributed to stockholders one preferred share purchase right for each
share of Fibreboard common stock then outstanding. Under

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

the rights plan, as amended in 1994, each right entitles the registered holder
to purchase from Fibreboard 1/200th of a share of Series A Junior Participating
Preferred Stock at an exercise price of $53 per 1/200th share, subject to
adjustment. The rights will not be exercisable until a party acquires
beneficial ownership of 15% or more of Fibreboard's then outstanding common
shares. The rights, which do not have voting rights, expire in February 2004
and may be redeemed in whole by Fibreboard, at its option, at a price of $.01
per right prior to the expiration or exercise of the rights.

In the event Fibreboard is acquired in an unsolicited merger or other
business combination transaction, each right will entitle the holder to receive,
upon exercise of the right, common stock of the acquiring company having a
market value of two times the then current exercise price of the right. In the
event a party acquires 15% or more of Fibreboard's outstanding common shares,
each right will entitle the holder to receive upon exercise Fibreboard common
shares having a market value of two times the exercise price of the right.

11. COMMITMENTS

Fibreboard leases certain office and warehouse space and machinery and
equipment under operating leases. Minimum lease payments for the next five
years are as follows:

Year Ending
December 31
-----------
<S> <C>
1996 $ 8,500
1997 7,220
1998 5,808
1999 4,175
2000 3,344
-------
$29,047
-------
-------

</TABLE>

In addition, Fiberboard leases property from the U.S. Forest Service for two
of its resort operations. Lease payment terms are based on a percentage of
revenues. Total rent expense of continuing operations for all operating leases
amounted to $11,184, $4,646 and $1,581 in 1995, 1994 and 1993.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

12. INDUSTRY SEGMENT INFORMATION

Information about Fibreboard's industry segments is set forth below.
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31
---------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Outside sales
Building products:
Residential $ 276,180 $ 85,607 $ --
Industrial 59,671 56,376 49,215
---------- ---------- ----------
Total building products 335,851 141,983 49,215
Resort operations 44,955 41,413 25,501
---------- ---------- ----------
Consolidated $ 380,806 $ 183,396 $ 74,716
---------- ---------- ----------
---------- ---------- ----------

Operating profit
Building products:
Residential $ 18,031 $ 8,096 $ --
Industrial 7,694 6,452 5,382
---------- ---------- ----------
Total building products 25,725 14,548 5,382
Resort operations 8,262 8,020 2,325
---------- ---------- ----------
Total operations 33,987 22,568 7,707

Unallocated expense, net (7,016) (7,425) (8,299)
Interest expense (6,476) (4,931) (3,575)
Interest and other income 3,101 3,697 5,551
---------- ---------- ----------
Income from continuing operations
before income taxes $ 23,596 $ 13,909 $ 1,384
---------- ---------- ----------
---------- ---------- ----------

Identifiable assets
Building products:
Residential $ 216,542 $ 147,066 $ --
Industrial 27,715 27,268 25,831
---------- ---------- ----------
Total building products 244,257 174,334 25,831
Resort operations 68,726 39,536 36,100
Discontinued operations, net -- 109,242 149,310
Unallocated assets 46,573 45,065 43,877
Asbestos-related assets 830,064 812,347 969,136
---------- ---------- ----------
Total assets $1,189,620 $1,180,524 $1,224,254
---------- ---------- ----------
---------- ---------- ----------

Identifiable assets
U.S. $1,143,045 $1,180,524 $1,224,254
Canada 43,481 -- --
Other 3,094 -- --
---------- ---------- ----------
$1,189,620 $1,180,524 $1,224,254
---------- ---------- ----------
---------- ---------- ----------

</TABLE>

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

YEAR ENDED DECEMBER 31
-------------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Depreciation and amortization
Building products:
Residential $ 6,303 $ 1,815 $ --
Industrial 867 788 1,041
-------- -------- ---------
Total building products 7,170 2,603 1,041
Resort operations 5,707 3,447 2,514

Capital expenditures
Building products:
Residential (1) 15,913 28,628 --
Industrial 484 327 324
-------- -------- --------
Total building products 16,397 28,955 324
Resort operations (2) 27,301 6,229 17,794

</TABLE>

(1) Includes acquisition assets of $11,865 and $28,043 in 1995 and 1994.
(2) Includes acquisition assets of $20,283 and $12,981 in 1995 and 1993.

13. ACQUISITIONS AND DISPOSITIONS

In August 1994, Fibreboard acquired the stock of Norandex Inc., a
manufacturer and distributor of residential exterior building products, for
$119,894 in cash including acquisition costs. The acquisition, which was
accounted for as a purchase, resulted in $62,836 of goodwill which will be
amortized over 30 years. Norandex operating earnings have been included in
Fibreboard's consolidated statement of income since the date of acquisition.

On November 30, 1995, Fibreboard acquired the stock of Vytec
Corporation, a Canadian manufacturer of exterior vinyl siding products, for
$38,576 in cash including acquisition costs. The acquisition, which was
accounted for as a purchase, resulted in $19,918 of goodwill which will be
amortized over 30 years. Vytec operating earnings have been included in
Fibreboard's consolidated statement of income since the date of acquisition.

The following unaudited table presents the pro forma combined results
of Fibreboard, Norandex and Vytec assuming Norandex was acquired on January 1,
1993 and assuming Vytec was acquired on January 1, 1994.

YEAR ENDED DECEMBER 31
----------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net sales $424,472 $370,717 $267,347

Income from continuing operations 14,190 13,108 7,587

Earnings per share from continuing
operations:
Primary 1.58 1.46 .86
Fully diluted 1.58 1.46 .85

</TABLE>

The pro forma results include only adjustments necessary to 1) reflect
the allocation of the purchase price resulting in changes in depreciation and
amortization; 2) recognize the interest cost associated with the purchase; 3)
adjust sales to reflect intercompany sales between Vytec and Norandex; and 4)
recognize the income tax effects of these adjustments.

Because the pro forma results include only the adjustments indicated
above, they should not be considered indicative of the results that would have
occurred if the combination had been in effect on the dates indicated or which
may be obtained in the future. No attempt has been made to quantify

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

in the pro forma results additional costs which may be incurred as a result of
the combination, even though certain costs are expected to increase.

In July 1993, Fibreboard acquired the net assets of Sierra Ski Ranch, a
ski facility located in the Lake Tahoe region of northern California, for
$13,054 in cash. The acquisition was accounted for as a purchase of assets.
The ski area was subsequently renamed Sierra-at-Tahoe.

On October 23, 1995, Fibreboard acquired the net assets of Bear
Mountain, a ski and golf facility located in southern California, for $20,604 in
cash. The acquisition was accounted for as a purchase of assets.

During 1995, Fibreboard acquired the net assets of 23 building products
distribution branches for $22,764 in cash. These acquisitions resulted in
$9,913 of goodwill which will be amortized over 30 years.

On September 25, 1995, Fibreboard sold substantially all of its wood
products related assets for $238,994 cash, net of purchase price adjustments,
and recorded a pre-tax gain of $121,245 ($77,813 net of income taxes). Retained
balances primarily include notes receivable from prior assets sales, a former
plant site and nominal timberlands adjacent to Fibreboard's Northstar Resort
facility. Fibreboard also retained liabilities for workers compensation claims
that arose prior to September 25, 1995 and established a $5,000 reserve for
future environmental costs related to wood products activities prior to the
sale. As a result of the sale, Fibreboard has restated its financial statements
to reflect the wood products operations as discontinued.

The net assets of discontinued operations at December 31, 1994 are
summarized as follows:

<TABLE>
<CAPTION>
<S> <C>
Current assets $ 45,770
Timber and timberlands 27,880
Property, plant and equipment 40,881
Other assets 170
Current liabilities (5,459)
--------
$109,242
--------
--------

</TABLE>
Operating results of the discontinued wood products operations
were as follows:

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Sales $111,750 $180,309 $190,494
Pre-tax operating profit 5,653 12,670 18,468
Net operating income 3,479 7,538 10,896
Net gain on surplus asset sales -- 11,221 --
Net gain on disposal 77,813 -- --

</TABLE>

In July 1994, Fibreboard sold 8,900 acres of non-essential
timberlands for $21,500 and realized an $18,858 pre-tax gain ($11,221 net of
tax).

14. ASBESTOS-RELATED LITIGATION

CONTINGENT LIABILITY FOR ASBESTOS-RELATED CLAIMS

Overview:

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

Fibreboard's ability to continue to operate in the normal course of
business is dependent upon its ongoing capability to fund asbestos-related
defense and indemnity costs. Prior to 1972, Fibreboard manufactured insulation
products containing asbestos. Fibreboard has since been named as a defendant in
many thousands of personal injury claims for injuries allegedly caused by
asbestos exposure and in asbestos-in-buildings actions involving many thousands
of buildings.

Fibreboard believes it has unique insurance coverage for personal injury
claims, as the trial court has held (with the issue on appeal) that claims with
initial exposure to asbestos prior to 1959 are covered by two no-aggregate-limit
policies.

During 1993, Fibreboard and its insurers entered into the Insurance
Settlement Agreement, and Fibreboard, its insurers and plaintiffs
representatives entered into the Global Settlement Agreement. These agreements
are interrelated. Final court approval of these agreements is required. Trial
court approval of both settlements was obtained in July, 1995. Both judgments
have been appealed, which will potentially delay final approval of the
settlements until 1997 or later.

If both the Global and Insurance Settlement Agreements are approved,
Fibreboard believes its existing and future personal injury asbestos liabilities
will be resolved through insurance resources and existing corporate reserves.
If the Insurance Settlement is approved but the Global Settlement is not
approved, the insurers will provide Fibreboard with up to $2,000,000 to resolve
claims pending as of August 27, 1993 and all future claims, and will pay claims
settled but not yet paid as of August 27, 1993.

Claims Activity:

Fibreboard has already resolved 158,100 personal injury claims for
approximately $1,779,500, not including legal defense costs. Substantially all
of the settlements have been achieved through 1) payments by Fibreboard's
insurers; 2) assignments of Fibreboard's rights to insurance payments, most of
which have been converted to three-party agreements between Fibreboard, its
insurer and plaintiffs; or 3) deferring payments pending resolution of the
personal injury insurance coverage litigation discussed below. An additional
30,600 claims have been disposed of at no cost to Fibreboard other than legal
defense costs. At December 31, 1995, Fibreboard estimates that approximately
48,000 claims have been filed against it which remain unresolved. Approximately
30,600 of these claims were initially filed against Fibreboard on or after
August 27, 1993 and will be covered by the Global Settlement, if approved.
Fibreboard is unable to determine the exact number of claims that may be filed
in the future, although the number is expected to be substantial.

Fibreboard has achieved excellent results in resolving asbestos-in-
buildings actions. At December 31, 1995, of the 152 actions served against it,
Fibreboard has been dismissed from 135 (31 of which joined the National Schools
class action), settled 8, tried one to a defense verdict and remains a defendant
in 8 actions.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

The following tables illustrate asbestos-related personal injury claims
activity for the last three years:
<TABLE>
<CAPTION>

Year Ended December 31
----------------------
1995 1994 1993
---- ---- ----

Personal Injury Claims
- ----------------------
<S> <C> <C> <C>
New claims received (1) 20,731 3,500 35,100

Claims disposed
Settled 10,672 15,185 27,902
Dismissed 3,775 2,685 2,716
"Green Card" settlements (2) 96 189 429
Judgments (3) -- 1 48
Adjustments (4) -- 1,366 2,300

Average settlement amount
per claim settled (5)--
pre-1959 claims $ 10 $ 8 $ 12
post-1959 claims $ 13 $ 7 $ 4
Claims pending at year end(6) 48,000 41,900 57,800

</TABLE>

1. Fibreboard believes new claims received increased during 1993 in
anticipation of the Global and Insurance Settlements in 1993 and due to
significant year end settlements of outstanding claims in 1992 that
included a significant number of unfiled claims incorporated into large
group settlements. Of the claims received in 1995, 1994 and 1993,
15,900, 2,900 and 14,600 claims were filed on or after August 27, 1993,
and will be covered by the Global Settlement, if approved.

2. Under Green Card Settlements, there is no determination of liability by
Fibreboard to a claimant. Instead, Fibreboard waives the statute of
limitations should a claimant develop an asbestos-related impairment in
the future.

3. Judgments represent defense verdicts in favor of Fibreboard, or
plaintiff verdicts where the net amount payable by Fibreboard is zero
after applying prior settlement amounts or plaintiff verdicts where the
judgment has been paid. Since 1988, only 42 judgments have resulted in
monetary payments, aggregating $8,038. Additional judgments favoring
plaintiffs have been entered. Fibreboard is appealing these judgments.
The amount of such judgments is included in Fibreboard's overall
liability estimate discussed below.

4. Often, multiple claims are filed for the same injury. In addition,
Fibreboard's claims database was constructed by merging several third-
party databases in 1988. During 1993, Fibreboard attempted to identify
duplicate claims and remove them from the database. It is often not
possible to fully identify duplicate claims until the claims are
prepared for trial. Fibreboard anticipates additional future
adjustments.

5. These averages are for claims where the initial year of exposure is
known.

6. Of the 1995 pending claims, 30,600 were filed on or after August 27,
1993, and will be covered by the Global settlement, if approved.

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

Insurance Coverage for Personal Injury Claims:

During 1993, Fibreboard entered into a settlement agreement with
Continental Casualty Company (Continental) and Pacific Indemnity Company
(Pacific) (the Insurance Settlement). In addition,

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

Fibreboard, Continental, Pacific and plaintiffs' representatives entered into a
settlement agreement (the Global Settlement). These agreements are
interrelated. Final court approval of the agreements is required.

The United States District Court for the Eastern District of Texas
approved both settlements in July 1995. Both judgments have been appealed. The
Fifth Circuit Court of Appeals has scheduled oral argument of the issues in
early March 1996. These appeals, and subsequent appeals, if any, will
potentially delay final approval of the settlements until 1997 or later.

If both the Global Settlement and Insurance Settlement are approved,
Fibreboard believes its existing and future personal injury asbestos liabilities
will be resolved through insurance resources and existing corporate reserves.
Fibreboard will contribute $10,000 toward a $1,535,000 settlement trust, which
it will obtain from other remaining insurance sources and existing reserves.
The Home Insurance company has paid $9,892 into the trust on behalf of
Fibreboard, in satisfaction of an earlier settlement agreement. At December 31,
1995, Fibreboard owed the escrow account $221. The remainder of the trust will
be funded by Continental and Pacific. The insurers have placed $1,525,000 in an
escrow account pending court approval of the settlements. The balance of the
escrow account was $1,651,886 at December 31, 1995 after payment of interim
expenses associated with the Global Settlement. The trust will be used to
compensate "future" plaintiffs, defined as those plaintiffs who had not filed a
claim against Fibreboard before August 27, 1993. If the Global Settlement is
approved such future plaintiffs only source of compensation will be the trust,
as an injunction will be entered prohibiting future claims against Fibreboard or
the insurers.

If the Global Settlement is not approved, but the Insurance Settlement
is approved, the insurers will instead provide Fibreboard with up to $2,000,000
to resolve pending and future claims and will pay the deferred payment portion
of existing settled claims.

While Fibreboard is optimistic, there is no assurance final court
approval of either the Global Settlement or the Insurance Settlement can be
obtained. If neither the Global Settlement nor the Insurance Settlement is
approved, the parties will be bound by the outcome of the insurance coverage
litigation, unless other settlements are reached. All insurance proceeds due
from other insurers under previous settlements have been received.

In the event the settlements discussed above are not approved,
Fibreboard believes it has substantial insurance coverage for asbestos-related
defense and indemnity costs. Fibreboard's disputes with Continental and Pacific
have been the subject of litigation which began in 1979. Trial court judgments
rendered in 1990 give Fibreboard virtually unlimited insurance coverage for
asbestos-related personal injury claims where the initial exposure to asbestos
occurred prior to March 1959. Under the judgments, these insurers can be
required to pay up to $500 for each occurrence (defined as each individual
claim) with no limitation on the aggregate number of occurrences.

The insurers appealed to the California Court of Appeal. Among other
issues, Continental disputed the definition of an occurrence under its policy as
well as the trigger and scope of coverage as determined by the trial court,
while Pacific argued that its policy contained an aggregate limit as well as
disputing the trigger and scope of coverage issues. In November 1993, the Court
of Appeal issued its ruling on the trigger and scope of coverage issues,
confirming the favorable trial court judgments, except the court held the period
for coverage would begin at the time of exposure to Fibreboard's asbestos
products rather than at the time of exposure to any company's asbestos product,
with the presumption that these periods are the same. At the request of
Fibreboard, Continental and Pacific, the Court of Appeal withheld its ruling on
the remaining issues while the parties seek approval of the Global and Insurance
Settlements. If the Global and/or Insurance Settlements are ultimately
approved, Fibreboard and its insurers will seek to dismiss the insurance
coverage litigation.

In January 1994 the California Supreme Court granted review of the
decision of the Court of Appeal, but withheld further action until its decision
in another case (MONTROSE CHEMICAL CORP. V. ADMIRAL INS. CO.) then pending
before the Supreme Court was finalized. On July 3, 1995, the Supreme Court
issued a decision in MONTROSE CHEMICAL confirming a trigger of coverage
consistent with the trigger the Court of Appeal applied to the Fibreboard
policies.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

By an order of October 19, 1995 the Supreme Court transferred the
Fibreboard case back to the Court of Appeal which, after receiving supplemental
briefs and perhaps conducting further argument, will review its decision on
trigger and other issues in light of MONTROSE CHEMICAL and any other
considerations the Court of Appeal deems relevant. After the Court of Appeal
reissues a decision, the parties can again petition for review to the California
Supreme Court.

Fibreboard has entered into an interim agreement with Continental under
which Continental agreed to provide a full defense to Fibreboard on pre-1959
claims and make certain funds available as needed to pay currently due
Structured Settlement Obligations and other personal injury defense costs for
which Fibreboard does not otherwise have insurance available during the period
pending final approval of the Global and/or Insurance Settlement, or if neither
is approved, through the ultimate conclusion of the insurance coverage appeal,
however long that may take. In exchange for the benefits provided under this
agreement, Fibreboard agreed not to settle additional pre-1959 personal injury
claims without Continental's consent.

If neither the Global Settlement nor the Insurance Settlement are
approved and Fibreboard prevails in the appeal of the insurance coverage
litigation, Continental has agreed to provide Fibreboard with $315,000 to
$425,000 to resolve personal injury claims alleging first exposure to asbestos
after March 1959, less any amounts Fibreboard recovers from the Pacific
settlement described below. Continental would also continue to have
responsibility for all pre-1959 personal injury claims against Fibreboard up to
$500 per claim.

In March 1992, Fibreboard and Pacific entered into a settlement
agreement (the Pacific Agreement). If the Global Settlement or Insurance
Settlement is approved, the Pacific Agreement will be of no effect. If neither
of the settlements is approved, the Pacific Agreement establishes amounts
payable to Fibreboard if the trial court judgments are upheld. Fibreboard
received $10,000 upon signing the agreement and received an additional $10,000
during 1993. In addition, if the judgments are affirmed on appeal, Fibreboard
will receive from $80,000 to $105,000 to be used for claims costs for which it
does not otherwise have insurance.

In the event the trigger and scope of coverage judgments are reversed on
appeal, Pacific will owe Fibreboard nothing and will have a right to repayment
of interim funds previously advanced.

Fibreboard believes amounts available under the settlements discussed
above will be adequate to fund defense and indemnity costs until the insurance
coverage appeal is concluded, whether as a result of the final approval of the
Global and/or Insurance Settlements or the final resolution of the insurance
coverage litigation.

Liability Quantification:

At the end of 1991, Fibreboard attempted to quantify its liability for
asbestos-related personal injury claims then pending as well as anticipated to
be received through the end of the decade. There are many opportunities for
error in such an exercise. Assumptions concerning the number of claims to be
received, the disease mix of pending and future claims and projections of
defense and indemnity costs may or may not prove correct. Fibreboard's
assumptions are based on its historical experience, modified as appropriate for
anticipated demographic changes or changes in the litigation environment.

Notwithstanding the inherent risk of significant error in such a
calculation, Fibreboard estimated that the amount necessary to defend and
dispose of asbestos-related personal injury claims pending at December 31, 1991
and anticipated through the end of the decade plus the costs of prosecuting its
insurance coverage litigation would aggregate $1,610,000. Because of the
dynamic nature of this litigation, it is more difficult to estimate how many
personal injury claims will be received after 1999 as well as the costs of
defending and disposing of those future claims. Consequently, Fibreboard's
estimated liability contains no amounts for personal injury claims received
after the end of the decade, although it is likely additional claims will be
received thereafter.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

Fibreboard believes it is probable that it will ultimately receive
insurance proceeds of $1,584,000 for the defense and disposition of the claims
quantified above. Fibreboard's opinion is based on its understanding of the
disputed issues, the financial strength of the insurers and the opinion of
outside legal counsel regarding the outcome of the litigation.

As a result, Fibreboard recorded a liability, net of anticipated
insurance proceeds, of $26,000 at December 31, 1991, representing its best
estimate of the unreimbursed cost of resolving personal injury claims then
pending and anticipated through the remainder of the decade as well as the costs
of prosecuting the insurance coverage litigation. Although there likely will be
claims filed beyond the end of the decade, these have not been estimated.
During 1995, 1994 and 1993, unreimbursed costs of $1,959, $2,211 and $1,802 were
charged against this reserve.

Although Fibreboard, its insurers and plaintiffs' representatives
entered into the Insurance and Global Settlements discussed above, Fibreboard
does not believe these settlements impact its estimate of liability through the
end of the decade. However, during 1995, Fibreboard recorded a $4,000 reversal
of previously established reserves for anticipated unreimbursable costs as a
result of a reduction in its estimate of the amounts which will be needed for
such purpose. Fibreboard will continue to reevaluate its estimates and will
make adjustments to the effect dictated by changes in the personal injury
litigation.

Asbestos-in-Buildings Liabilities:

At December 31, 1995 Fibreboard was a defendant in 8 asbestos-in-
buildings claims. Fibreboard does not believe it is presently possible to
reasonably estimate potential liabilities for asbestos-in-buildings claims, if
any. Fibreboard believes that its asbestos-containing products, properly used,
cause no damage to buildings. Further, Fibreboard can frequently identify its
asbestos-containing products and aggressively pursues dismissals of claims where
its products are not identified.

Fibreboard has been named as a defendant in a total of 152 asbestos-in-
buildings claims, all but 8 of which have been resolved. To date, Fibreboard
has successfully defended these claims or settled the claims for modest amounts
compared to the damages sought. Further, although personal injury claims have
similar characteristics, the same cannot be said for asbestos-in-buildings
claims. Each claim can involve from one to several thousand buildings, each of
which may vary as to age, ability to identify various producers products
contained in the building as well as the extent of a producer's product present,
building use, difficulty of abatement (if required) and so on. Thus, while
extrapolation of personal injury claims disposition experience may provide
useful information for estimating future personal injury liability, such an
analysis cannot be applied to asbestos-in-buildings claims. However, based on
its experience to date, Fibreboard believes the ultimate resolution of asbestos-
in-buildings claims will not have a material adverse effect on its financial
condition.

Insurance for Asbestos-in-Buildings Claims:

Fibreboard has reached final settlements with four of its primary
insurers and several of its excess level insurers. The final settlements
confirm more than $295,000 of insurance as needed to defend and dispose of
asbestos-in-buildings claims. Substantially all of the confirmed insurance
remains available.

Fibreboard is also litigating with its remaining insurance carriers and
believes the total limits of insurance policies in effect from 1932 to 1985
which may provide coverage for asbestos-in-buildings claims, aggregate
approximately $390,000 (including the $295,000 referred to in the prior
paragraph), which is in addition to the personal injury insurance coverage and
does not include additional policies which contain no aggregate limit. The
remaining insurers dispute coverage, although to date substantially all of
Fibreboard's costs of defending asbestos-in-buildings claims have been paid by
primary carriers.

Fibreboard is seeking a declaration that the underlying asbestos-in-
building claims are covered under various insurance policies. Barring
settlement, final resolution of the insurance available for

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

asbestos-in-buildings claims may not be known for some time as an appeal of the
trial court decision is likely. The trial has been continued. No date has been
set for the trial to recommence. Fibreboard is continuing settlement
discussions with the remaining insurers. While optimistic, Fibreboard cannot
predict whether such discussions will result in settlements.

EVENTS IMPACTING ASBESTOS-RELATED LIABILITIES

A number of events could impact Fibreboard's ability to continue to
manage its asbestos-related liabilities within available resources. The
potential impact of the personal injury issues which follow are largely
dependent on whether the Global and/or Insurance Settlements are approved.

Insurance Assignment Program:

During 1991, Fibreboard introduced its Insurance Assignment Program as a
settlement vehicle for large groups of claims. Under this program, the
plaintiffs accept an assignment of Fibreboard's right to insurance monies from
Continental as complete settlement of their claims against Fibreboard.
Consequently, these settlements involve no cash payments by Fibreboard. This
contrasts with settlements under Fibreboard's Structured Settlement Program, in
existence since 1988, wherein partial payments are made by Fibreboard using
insurance funds with the remainder of the settlement deferred pending resolution
of insurance coverage.

The settlement agreements entered into to date under the Insurance
Assignment Program do not require Fibreboard to pay cash unless insurance
proceeds are ultimately not available. Additional provisions of certain
settlement agreements provide that Fibreboard and the plaintiffs return to the
"status quo" existing prior to settlement if certain specified court actions are
not obtained. The plaintiffs have a right to return to the status quo should
Continental declare bankruptcy prior to the final resolution of the personal
injury insurance coverage litigation.

During 1992, Fibreboard obtained widespread acceptance of this program
to resolve large numbers of pending and not yet filed claims. Most of the
assignment agreements have subsequently been converted to three-party agreements
among Fibreboard, Continental and the plaintiffs. A 1992 judicial
determination in California state court supporting the right of Fibreboard to
settle claims via the Insurance Assignment Program was reversed by the appellate
court in 1994. However, the issue of the validity of the Insurance Assignment
Program has been rendered moot by the three-party agreements discussed above.

Insurance Assignment Program and three-party settlements are recorded as
a liability when the settlement is executed. A corresponding asset for
anticipated insurance proceeds is also recorded. This accounting treatment
differs from the handling of unresolved claims, where no gross liability is
recorded until such time as the claim is settled.

Structured Settlement Program:

Beginning in 1988, Fibreboard has used its Structured Settlement Program
(SSP) to settle personal injury claims. Under the SSP, Fibreboard and the
plaintiff agree to a settlement amount. Fibreboard agrees to pay 40% of the
settlement amount of pre-1959 claims in cash, and the remainder is deferred
until September 1, 1996 or upon approval of the Global and/or Insurance
Settlements. Settlements of post-1959 claims result in deferring 100% of the
settlement amount.

As a consequence of the insurance settlements with Continental and
Pacific in 1993, the SSP now has been superseded by three-party agreements among
Continental, Fibreboard and the plaintiffs, whereby Continental or Fibreboard
agrees to pay certain amounts depending upon the resolution of the insurance
coverage case or the final approval or disapproval of the Global and Insurance
Settlements. These three-party agreements typically provide a partial cash
payment from Continental on pre-1959 claims.

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLAR AMOUNTS IN THOUSANDS)

Other Issues (Punitive Damage Claims):

Most of the personal injury claims and many of the asbestos-in-buildings
actions also seek punitive damages. Fibreboard has not paid any punitive
damages judgments except when funded by insurance. It is uncertain whether
punitive damages would be covered by insurance as the law in this area varies
from state to state. During 1991, Fibreboard received a ruling by the 9th
Circuit Court of Appeal that punitive damages awarded by the Cimino jury in
Texas and by a West Virginia jury in a consolidated trial similar to Cimino were
covered by insurance. However, this ruling may have limited applicability in
view of the varying state rules regarding punitive damage awards.

RESOURCES AVAILABLE FOR ASBESTOS-RELATED COSTS

Under the terms of the interim agreement, Continental will provide a
full defense to Fibreboard on pre-1959 claims and make certain funds available
as needed to pay currently due Structured Settlement obligations and other
personal injury defense costs for which Fibreboard does not have insurance
available during the period pending final approval of the Global and/or
Insurance Settlement, or if neither is approved, through the ultimate conclusion
of the insurance coverage appeal, however long that may take. At December 31,
1995, Fibreboard had approximately $2,199 in cash on hand restricted for
asbestos-related expenditures. Fibreboard believes restricted cash on hand,
amounts available under the interim agreement with Continental and amounts
available under settlement agreements with Fibreboard's asbestos-in-
buildings insurers will be adequate to fund defense and indemnity costs of
personal injury and asbestos-in-buildings claims plus any amounts due under
current and future Structured Settlement Program settlements.

15. OTHER LITIGATION AND CONTINGENCIES

Fibreboard has been named as a potentially responsible party in two
separate landfill clean-ups in the state of California, the Operating
Industries, Inc. landfill in Monterey Park and the GBF landfill in Pittsburg.
In addition, Fibreboard has been named a defendant in a private party lawsuit
seeking to recover costs of clean-up and remediation of the Acme landfill in
Martinez, California. In all cases, Fibreboard's former container products
division was responsible for materials deposited at the landfills. Fibreboard
is attempting to determine its allocable share of investigation and remediation
costs. The ultimate liability may change upon 1) determination of total costs
of remediation and 2) resolution of Fibreboard's allocable share of such costs.
Fibreboard has established a reserve against which the costs of study and
cleanup, as well as ongoing legal and administrative costs, will be charged. As
of December 31, 1995, the reserve had a remaining balance of $1,246.

Fibreboard is involved in a number of additional disputes arising from
its operations. Fibreboard believes resolution of these disputes will not have
a material adverse impact on its financial condition or results of operations.

<PAGE>

Report of Independent Public Accountants

To the Stockholders of Fibreboard Corporation:

We have audited the accompanying consolidated balance sheets of
Fibreboard Corporation (a Delaware corporation) and subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Fibreboard
Corporation and subsidiaries as of December 31, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1995, in conformity with generally accepted accounting
principles.

As discussed in more detail in Note 14 to the accompanying financial
statements, Fibreboard has been subject to significant asbestos-related
litigation and claims allegedly caused by products that the Company manufactured
prior to 1972. The amounts involved are substantial. During 1993, Fibreboard,
its insurance carriers, and counsel for personal injury claimants entered into
agreements which, if finally approved by the court, would resolve the Company's
asbestos-related personal injury liabilities within available insurance and
existing reserves. However, if these agreements are not approved by the court,
the ultimate resolution of these claims and litigation could be materially
adverse to Fibreboard causing a substantial doubt about the Company's ability to
continue as a going concern. The accompanying financial statements have been
prepared assuming that Fibreboard will continue as a going concern and do not
include any adjustments that might result from the final resolution of these
asbestos-related uncertainties.

Arthur Andersen LLP

San Francisco, California,
February 2, 1996

<PAGE>

REPORT OF MANAGEMENT

The objectivity and integrity of the consolidated financial statements
are the responsibility of Fibreboard Corporation management. To discharge this
responsibility, management maintains a system of internal controls designed to
provide reasonable assurance that assets are safeguarded and that accounting
records are reliable. Management supports an internal audit program to provide
assurance that the system of internal controls is operating effectively. The
consolidated financial statements and notes thereto and other financial
information included in this annual financial report have been prepared by
management in accordance with generally accepted accounting principles, and by
necessity include some items determined using management's best judgment,
tempered by materiality.

The Board of Directors discharges its responsibility for reported
financial information through its Audit Committee. This Committee, composed of
all outside directors, meets periodically with management, the internal audit
department and Arthur Andersen LLP to review the activities of each.

John D. Roach James P. Donohue
Chairman, President and Senior Vice President,
Chief Executive Officer Finance and Administration

Garold E. Swan
Vice President and Controller

<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE)
(UNAUDITED)

Earnings
Income Per Share
from from Net
Gross Continuing Net Continuing Income
Quarter Net Sales Margin Operations Income Operations Per Share
------- --------- ------ ---------- ------ ---------- ---------

<S> <C> <C> <C> <C> <C> <C>
1995
----
1st $ 87,414 $ 25,781 $ 3,870 $ 5,645 $ .43 $ .63
2nd 87,942 23,413 3,442 4,350 .38 .48
3rd 102,284 27,342 3,747 80,353 (1) .42 8.93
4th 103,166 23,344 3,465 5,468 (2) .39 .62
-------- -------- -------- --------

TOTAL $380,806 $99,880 $14,524 $95,816 1.62 10.67
-------- -------- -------- --------
-------- -------- -------- --------

1994
----
1st $ 38,220 $ 13,341 $ 4,558 $ 7,458 $.51 $ .83
2nd 15,657 3,370 462 2,105 .05 .23
3rd 38,707 9,758 1,418 13,015 (3)(4) .16 1.45
4th 90,812 24,066 1,838 4,457 (3) .21 .50
-------- -------- -------- --------

TOTAL $183,396 $50,535 $ 8,276 $27,035 .92 3.01
-------- -------- -------- --------
-------- -------- -------- --------

</TABLE>

(1) Includes a net gain on the sale of the wood products group of $75,897.
(2) Includes an adjustment on the sale of the wood products group of $1,916 net
of tax.
(3) Includes the results of operations of Norandex Inc. acquired on August 31,
1994.
(4) Includes an after tax gain of $11,221 on surplus asset sales.

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information with respect to the Directors of Fibreboard is incorporated
herein by reference from "Election of Directors" and "Directors Not Standing for
Election" of Fibreboard Corporation's Proxy Statement to be filed pursuant to
Regulation 14A not later than April 30, 1996. See also "Executive Officers of
the Registrant" in Part I of this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Information with respect to Executive Compensation is incorporated herein by
reference from "Compensation of Directors" and "Executive Compensation" of
Fibreboard's Proxy Statement to be filed pursuant to Regulation 14A not later
than April 30, 1996.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information with respect to Security Ownership of Certain Beneficial Owners
and Management is incorporated herein by reference from "Security Ownership of
Management and Principal Stockholders" of Fibreboard's Proxy Statement to be
filed pursuant to Regulation 14A not later than April 30, 1996.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not applicable.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON
FORM 8-K

(A) FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND EXHIBITS
FILED IN THIS REPORT.

1. Index to Financial Statements and Supplementary Data. See page
18.
2. Index to Financial Statement Schedules. See page 53.
3. The following exhibits are filed as part of this Form 10-K:

<PAGE>

EXHIBIT
NUMBER EXHIBIT DESCRIPTION

3.1 Fibreboard's Restated Certificate of Incorporation (incorporated
herein by reference from Fibreboard Corporation's Registration
Statement on Form 10 dated May 23, 1988, as amended on June 28,
1988).

3.2 Fibreboard's Restated Bylaws as amended June 8, 1993
(incorporated herein by reference from Fibreboard Corporation's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1993).

4.1 Specimen Common Stock Certificate, $.01 par value (incorporated
herein by reference from Fibreboard Corporation's Registration
Statement on Form 10 dated May 23, 1988, as amended on June 28,
1988).

4.2 Rights Agreement dated as of August 25, 1988 between Fibreboard
Corporation and Bank of America, N.T.&S.A. as Rights Agent
(incorporated herein by reference from Fibreboard Corporation's
Current Report on Form 8-K dated August 25, 1988).

4.2.1 Amendment No. 1 to Rights Agreement, dated as of February 11,
1994, between Fibreboard Corporation and The First National Bank
of Boston (incorporated herein by reference from Fibreboard
Corporation's Form 8-A/A dated February 15, 1994).

10.1* Form of Indemnification Agreement between Fibreboard Corporation
and each director and officer of Fibreboard Corporation
(incorporated herein by reference from Fibreboard Corporation's
Registration Statement on Form 10 dated May 23, 1988, as amended
on June 28, 1988).

10.2 Asset Purchase Agreement dated February 22, 1988, between
Fibreboard Corporation and Gaylord Container Corporation
(incorporated herein by reference from Fibreboard Corporation's
Registration Statement on Form 10 dated May 23, 1988, as amended
on June 28, 1988).

10.3 Fibreboard Corporation Restated 1988 Employee Stock Option and
Rights Plan (incorporated herein by reference from Fibreboard
Corporation's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1992).

10.3.1 Amendment No. 1 to Fibreboard Corporation Restated 1988 Employee
Stock Option and Rights Plan (incorporated herein by reference
from Fibreboard Corporation's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994).

10.3.2 Amendment No. 2 to the Fibreboard Corporation Restated 1988
Employee Stock Option and Rights Plan, dated as of May 19, 1995
(incorporated herein by reference from Fibreboard Corporation's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1995).

48
<PAGE>

10.4 Form of Fibreboard Corporation Profit Sharing 401(k) Plan
(incorporated herein by reference from Fibreboard Corporation's
Annual Report on Form 10-K for the year ended December 31, 1992).

10.5 Fibreboard Corporation 1988 Employee Stock Purchase Plan
(incorporated herein by reference from Fibreboard Corporation's
Annual Report on Form 10-K for the year ended December 31, 1988).

10.5.1 Prospectus Supplement (Appendix) to Registration Statement on
Form S-8 No. 33-26449 for Shares issuable under the Fibreboard
Corporation 1988 Employee Stock Purchase Plan (incorporated
herein by reference from Fibreboard Corporation's Annual Report
on Form 10-K for the year ended December 31, 1989).

10.5.2 Amendment No. 1 to the Fibreboard Corporation 1988 Employee Stock
Purchase Plan, dated as of May 19, 1995 (incorporated herein by
reference from Fibreboard Corporation's Quarterly Report on Form
10-Q for the quarter ended June 30, 1995).

10.6 Agreement of Compromise, Settlement and Release dated May 27,
1987, between Fibreboard Corporation and The Home Insurance
Company (incorporated herein by reference from Fibreboard
Corporation's Registration Statement on Form 10 dated May 23,
1988, as amended on June 28, 1988).

10.6.1 Agreement dated February 6, 1995 between Fibreboard Corporation
and The Home Insurance Company (incorporated herein by reference
from Fibreboard Corporation's Annual Report on Form 10-K for the
year ended December 31, 1994).

10.7 Fibreboard Corporation Structured Settlement Program Description
dated November 8, 1988 (incorporated herein by reference from
Fibreboard's Current Report on Form 8-K dated November 8, 1988).

10.8 Form of Structured Settlement Agreement (incorporated herein by
reference from Fibreboard's Current Report on Form 8-K dated
November 8, 1988).

10.9 Form of Stipulation Regarding Settlement Negotiations and Right
to Alternative Dispute Resolution (incorporated herein by
reference from Fibreboard's Current Report on Form 8-K dated
November 8, 1988).

10.10 Amended and Restated Trust Agreement dated September 29, 1989 by
and among Fibreboard Corporation, the Trustees and the Directors
and Officers of Fibreboard (incorporated herein by reference from
Fibreboard Corporation's Annual Report on Form 10-K for the year
ended December 31, 1989).

10.11 Consulting/Sales Representation Agreement dated February 20, 1989
between Distribution International and Pabco Metals Corporation,
a wholly-owned subsidiary of Fibreboard Corporation (incorporated
herein by reference from Fibreboard Corporation's Current Report
on Form 8-K dated February 20, 1989).

<PAGE>

10.12* Summary description of Fibreboard Corporation incentive
compensation arrangements (incorporated herein by reference from
Fibreboard Corporation's Annual Report on Form 10-K for the year
ended December 31, 1993).

10.13* Amended and Restated Employment Agreement dated January 1, 1995
between Fibreboard Corporation and John D. Roach (incorporated
herein by reference from Fibreboard Corporation's Annual Report
on Form 10-K for the year ended December 31, 1994).

10.14 Third Amended and Restated Credit Agreement dated February 6,
1996 among Fibreboard Corporation, as Borrower, Certain
Commercial Lending Institutions and Bank of America National
Trust and Savings Association, as Administrative Co-Agent, and
NationsBank N.A. as Documentation Co-Agent.

10.15 Stock Purchase Agreement among Noranda Aluminum, Inc., Norandex
Inc. and Fibreboard Corporation dated as of August 31, 1994
(incorporated herein by reference from Fibreboard Corporation's
Current Report on Form 8-K dated August 31, 1994).

10.16* Form of Officer Severance Agreement dated December 11, 1995.

10.17 Agreement and related documents dated March 27, 1992 between
Fibreboard Corporation and Pacific Indemnity Company
(incorporated herein by reference from Fibreboard Corporation's
Annual Report on Form 10-K for the year ended December 31, 1991).

10.18 Rescission of Insurance Policies dated March 27, 1992 between
Fibreboard Corporation and Pacific Indemnity Company
(incorporated herein by reference from Fibreboard Corporation's
Annual Report on Form 10-K for the year ended December 31, 1991).

10.19* Amended and Restated Fibreboard Corporation Supplemental
Retirement Plan (incorporated herein by reference from Fibreboard
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994).

10.20 Settlement Agreement dated January 1, 1993 between Fibreboard
Corporation and Continental Casualty Company (incorporated herein
by reference from Fibreboard Corporation's Annual Report on Form
10-K for the year ended December 31, 1992).

10.21 Settlement Agreement dated January 1, 1993 between Fibreboard
Corporation and Fireman's Fund Insurance Company, Insurance
Company of North America and Royal Insurance Company
(incorporated herein by reference from Fibreboard Corporation's
Annual Report on Form 10-K for the year ended December 31, 1992).

10.22 Settlement Agreement between Fibreboard Corporation and American
Home Assurance Company, et al (incorporated herein by reference
from Fibreboard Corporation's Annual Report on Form 10-K for the
year ended December 31, 1992).

<PAGE>

10.23 Agreement of Purchase and Sale between Fibreboard Corporation and
Sierra Ski Ranch, Inc. dated as of June 11, 1993 (incorporated
herein by reference from Fibreboard Corporation's Quarterly
Report on Form 10-Q for the period ended June 30, 1993).

10.24 Settlement Agreement among Fibreboard Corporation, Continental
Casualty Company and Ness, Motley, Loadholt, Richardson & Poole
and certain affiliated law firms dated as of August 5, 1993
(incorporated herein by reference from Fibreboard Corporation's
Quarterly Report on Form 10-Q for the period ended June 30,
1993).

10.25 Asset Purchase and Sale Agreement dated September 6, 1995 among
Sierra Pacific Industries, Fibreboard Box & Millwork Corporation
and Fibreboard Corporation (incorporated herein by reference from
Fibreboard Corporation's Current Report on Form 8-K dated
September 25, 1995).

10.25.1 Amendment No. 1 to the Asset Purchase and Sale Agreement dated
September 6, 1995 among Sierra Pacific Industries, Fibreboard Box
& Millwork Corporation and Fibreboard Corporation (incorporated
herein by reference from Fibreboard Corporation's Current Report
on Form 8-K dated September 25, 1995).

10.26 Agreement between Fibreboard Corporation and Continental Casualty
Company dated April 9, 1993 (incorporated herein by reference
from Fibreboard Corporation's Current Report on Form 8-K dated
April 9, 1993).

10.27 Agreement to Amend, Consolidate and Lend dated May 31, 1995
between First Interstate Bank of Nevada, N.A., as lender, and
Sierra-at-Tahoe and Trimont Land Company, as borrowers
(incorporated herein by reference from Fibreboard Corporation's
Quarterly Report on Form 10-Q for the period ended June 30,
1995).

10.27.1 Amendment No. 1 to the Agreement to Amend, Consolidate and Lend,
dated as of November 22, 1995 among First Interstate Bank of
Nevada, N.A., Trimont Land Company, Sierra-at-Tahoe, Inc. and
Bear Mountain, Inc.

10.27.2 Amendment No. 2 to the Agreement to Amend, Consolidate and Lend,
dated as of January 30, 1996 among First Interstate Bank of
Nevada, N.A., Trimont Land Company, Sierra-at-Tahoe, Inc. and
Bear Mountain, Inc.

10.28 Settlement Agreement dated October 12, 1993 among Fibreboard
Corporation, Continental Casualty Company, CNA Casualty Company
of California, Columbia Casualty Company and Pacific Indemnity
Company (incorporated herein by reference from Fibreboard
Corporation's Quarterly Report on Form 10-Q for the period ended
September 30, 1993).

10.29 Supplemental Agreement dated October 12, 1993 between Fibreboard
Corporation and Continental Casualty Company (pursuant to Rule
24b-2 promulgated under the Securities Exchange Act of 1934, as
amended, confidential treatment has been requested for this
exhibit. This agreement has been placed under court seal.)

<PAGE>

10.30 Global Settlement Agreement among Fibreboard Corporation,
Continental Casualty Company, CNA Casualty Company of California,
Columbia Casualty Company, Pacific Indemnity Company and The
Settlement Class, together with Exhibits A-E (incorporated herein
by reference from Fibreboard Corporation's Current Report on Form
8-K dated December 23, 1993).

10.30.1 Amendment No. 1 to the Global Settlement Agreement, dated
December 15, 1994, by and among The Settlement Class, Fibreboard
Corporation, Continental Casualty Company, CNA Casualty Company
of California, Columbia Casualty Company, Pacific Indemnity
Company and the Trustees of the Fibreboard Asbestos Compensation
Trust (incorporated herein by reference from Fibreboard
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994).

10.30.2 Amendment No. 2 to the Global Settlement Agreement, dated
February 6, 1995, by and among the Settlement Class, Fibreboard
Corporation, Continental Casualty Company, CNA Casualty Company
of California, Columbia Casualty Company and Pacific Indemnity
Company (incorporated herein by reference from Fibreboard
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994).

10.30.3 Amendment No. 1 to the Escrow Agreement, dated February 6, 1995,
by and among Continental Casualty Company, Pacific Indemnity
Company, Fibreboard Corporation and The First National Bank of
Chicago (incorporated herein by reference from Fibreboard
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994).

10.31 Agreement dated March 1994 among Representative Plaintiffs,
Fibreboard Corporation, Continental Casualty Company, CNA
Casualty Company of California, Columbia Casualty Company and
Pacific Indemnity Company (incorporated herein by reference from
Fibreboard Corporation's Quarterly Report on Form 10-Q for the
period ended June 30, 1994).

10.32 Settlement Agreement dated October 28, 1994 between Fibreboard
Corporation, CIGNA Specialty Insurance Company, Central National
Insurance Company of Omaha, Century Indemnity Company, CIGNA
Property and Casualty Insurance Company and Insurance Company of
North America (pursuant to Rule 24b-2 promulgated under the
Securities Exchange Act of 1934, as amended, confidential
treatment has been requested for this exhibit).

10.33* Fibreboard Corporation Long-Term Equity Incentive Plan
(incorporated herein by reference from Fibreboard Corporation's
Annual Report on Form 10-K for the year ended December 31, 1993).

10.33.1* Amendment No. 1 to the Fibreboard Corporation Long-Term Equity
Incentive Plan, dated as of May 19, 1995 (incorporated herein by
reference from Fibreboard Corporation's Quarterly Report on Form
10-Q for the quarter ended June 30, 1995).

10.34 Asset Purchase Agreement dated October 6, 1995 among Bear
Mountain, Inc., Fibreboard Corporation, Bear Mountain Ltd. and S-
K-I Ltd. (incorporated herein

<PAGE>

by reference from Fibreboard Corporation's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1995).

10.34.1 Amendment No. 1 to Asset Purchase Agreement dated October 6, 1995
among Bear Mountain, Inc., Fibreboard Corporation, Bear Mountain
Ltd. and S-K-I Ltd. (incorporated herein by reference from
Fibreboard Corporation's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995).

10.35 Agreement dated November 30, 1995 among Andrew M. Spriet, et al,
1155714 Ontario Inc. and Fibreboard Corporation regarding the
purchase and sale of Vytec International Corporation
(incorporated herein by reference from Fibreboard Corporation's
Current Report on Form 8-K dated November 30, 1995).

10.36 Fibreboard Corporation 1995 Stock Incentive Plan effective as of
November 28, 1995.

21. Fibreboard Corporation Subsidiaries.

23. Consent of Arthur Andersen LLP.

27 Financial Data Schedule.

* Denotes management contract or compensation plan identified
pursuant to Item 14(a)(3) of Form 10-K.

(b) REPORTS ON FORM 8-K

The following Current Report on Form 8-K was filed during the period October
1, 1995 to December 31, 1995:

Date Event Reported
--------------- ---------------------------------------------------------

November 30, 1995 Fibreboard's purchase of the stock of Vytec Corporation.

INDEX TO FINANCIAL STATEMENT SCHEDULES
TO FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995

Schedule Page
- -------- ----
III Valuation and qualifying accounts for each of the three 54
years in the period ended December 31, 1995.

Report of independent public accounts on financial 55
statement schedules.

53
<PAGE>

FIBREBOARD CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31
(000's Omitted)

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -------- -------- -------- -------- --------
ADDITIONS
BALANCE AT CHARGED TO UNCOLLECTIBLE
BEGINNING COSTS AND ACCOUNTS BALANCE AT
DESCRIPTION OF PERIOD EXPENSES WRITTEN OFF OTHER (a) END OF PERIOD
- ----------- --------- -------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C>
1993
- ----
Reserve for:
Doubtful accounts 504 362 (451 ) -- 415

Asbestos related costs 21,297 -- -- (1,802 ) 19,495

1994
- ----
Reserve for:
Doubtful accounts 415 378 (174 ) 1,391 2,010
Asbestos related costs 19,495 -- -- (2,211 ) 17,284

1995
- ----
Reserve for:
Doubtful accounts 2,010 1,050 (931 ) 431 2,560
Asbestos related costs 17,284 (4,000 ) -- (1,959 ) 11,325
</TABLE>
- -----------------
(a) Consists of reserve for doubtful accounts of acquired company and asbestos
related payments

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENTS SCHEDULES

To the Stockholders of
Fibreboard Corporation:

We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements of Fibreboard Corporation included in this
Form 10-K, and have issued our report thereon dated February 2, 1996. Our
report on the consolidated financial statements includes an explanatory
paragraph with respect to the significant uncertainty surrounding the asbestos
claims that have been filed against the Company as discussed in Note 14 to the
financial statements. Our audits were made for the purpose of forming an
opinion on those statements taken as a whole. Schedule II, Valuation and
Qualifying Accounts, is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

San Francisco, California
February 2, 1996

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

FIBREBOARD CORPORATION
(Registrant)

Dated: March 25, 1996 By: /s/ John D. Roach
--------------------
John D. Roach
Chairman, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated:

NAME TITLE DATE
- ------------------------------ -------------------- -----------

/s/ John D. Roach Chairman, President, March 25, 1996
- -------------------------- Chief Executive Officer
John D. Roach and Director (Principal
Executive Officer)

/s/ James P. Donohue Senior Vice President, March 25, 1996
- ------------------------ Finance and Adminis-
James P. Donohue tration and Chief
Financial Officer
(Principal Financial Officer)

/s/ Garold E. Swan Vice President and March 25, 1996
- -------------------------- Controller (Principal
Garold E. Swan Accounting Officer)

/s/ Philip R. Bogue Director March 25, 1996
- ----------------------------
Philip R. Bogue

<PAGE>

NAME TITLE DATE
- ------------------------------- -------------------- -----------

/s/ William D. Eberle Director March 25, 1996
- ----------------------------
William D. Eberle

/s/ G. Robert Evans Director March 25, 1996
- ----------------------------
G. Robert Evans

/s/ George B. James Director March 25, 1996
- ----------------------------
George B. James

/s/ John W. Koeberer Director March 25, 1996
- ----------------------------
John W. Koeberer

/s/ James F. Miller Director March 25, 1996
- ----------------------------
James F. Miller

<PAGE>

EXHIBIT 10.14
EXECUTION COPY

THIRD AMENDED AND RESTATED
CREDIT AGREEMENT,

dated as of February 6, 1996

among

FIBREBOARD CORPORATION,

as the Revolving Borrower,

VYTEC CORPORATION,

as the Term Borrower

and

CERTAIN COMMERCIAL LENDING INSTITUTIONS,

as the Lenders,

and

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,

as the Administrative Co-Agent for the Lenders

and

NATIONSBANK N.A.

as the Documentation Co-Agent for the Lenders

<PAGE>

TABLE OF CONTENTS

PAGE

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

1.1 Definitions................................................... 2
1.2 Use of Defined Terms ......................................... 31
1.3 Cross-References ............................................. 31
1.4 Accounting and Financial Determinations....................... 31

ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES

2.1 Commitments ...................................................33
2.1.1 Loan Commitment ...............................................33
2.1.2 Commitment to Issue Letters of Credit .........................33
2.1.3 Lenders Not Permitted or Required To Make Loans
or Issue or Participate in Letters of Credit
Under Certain Circumstances ...................................33
2.1.4 Extension of Commitment Termination Dates and
Stated Maturity Date ..........................................34
2.2 Mandatory and Optional Reductions of Revolving
Commitment Amounts ............................................35
2.2.1 Mandatory Reductions ..........................................35
2.2.2 Optional Reductions ...........................................35
2.3 Procedure for Committed Borrowings ........................... 36
2.4 Continuation and Conversion Elections .........................36
2.5 Bid Borrowings ............................................... 37
2.6 Procedure for Bid Borrowing .................................. 37
2.7 Swingline Loans .............................................. 42
2.8 Funding ...................................................... 45
2.9 Notes ........................................................ 45

ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

3.1 Repayments and Prepayments ................................... 46
3.2 Interest Provisions .......................................... 47
3.2.1 Rates ........................................................ 48
3.2.2 Post-Default Rate ............................................ 50
3.2.3 Payment Dates ................................................ 51
3.2.4 Interest Rate (Canada) ....................................... 52
3.3 Fees ......................................................... 52
3.3.1 Commitment Fees ...............................................52
3.3.2 Participation Fees ............................................53
3.3.3 Reserved ......................................................53
3.3.4 Administrative Agent's Fees ...................................53
3.3.5 Letter of Credit Face Amount Fee ..............................53

<PAGE>

3.3.6 Letter of Credit Issuing Fee ..................................54

ARTICLE IV
LETTERS OF CREDIT

4.1 Issuance Requests .............................................55
4.2 Issuance and Extensions .......................................56
4.3 Expenses ......................................................57
4.4 Other Lenders' Participation ..................................57
4.5 Disbursements .................................................58
4.6 Reimbursement .................................................59
4.7 Deemed Disbursements...........................................59
4.8 Nature of Reimbursement Obligations ...........................60
4.9 Indemnity .....................................................61
4.10 Conflicts with Letter of Credit Related Documents .............61

ARTICLE V
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS

5.1 Eurodollar Rate Lending Unlawful ..............................61
5.2 Deposits Unavailable ..........................................62
5.3 Increased Eurodollar Loan Costs, etc ..........................62
5.4 Funding Losses ................................................62
5.5 Increased Capital Costs .......................................63
5.6 Taxes .........................................................64
5.7 Payments, Computations, etc ...................................65
5.8 Sharing of Payments ...........................................65
5.9 Set-off .......................................................66
5.10 Use of Proceeds ...............................................67
5.11 Other Increased Costs .........................................67
5.12 Obligation to Mitigate; Substitution of Lenders................68
5.13 Certain Restatement Effective Date Transitional
Matters .......................................................69

ARTICLE VI
CONDITIONS PRECEDENT

6.1 Conditions to Restatement Effective Date ......................70
6.1.1 Agreement .....................................................70
6.1.2 Resolutions, etc ..............................................70
6.1.3 Delivery of Notes .............................................71
6.1.4 Guarantees ....................................................71
6.1.5 Security Agreements and Confirmations .........................71
6.1.6 Pledge Agreement ..............................................72
6.1.7 Opinions of Counsel ...........................................72
6.1.8 Solvency, valuation, Etc ......................................72
6.1.9 Insurance Certificates ........................................73
6.1.10 Purchase of Loans, Closing Fees, Expenses, etc ................73
6.2 Conditions to All Credit Extensions ...........................73
6.2.1 Compliance with Warranties, No Default, etc ...................73
6.2.2 Credit Request ................................................74

-ii-

<PAGE>

6.2.3 Satisfactory Legal Form....................................... 74
6.2.4 Advances to Resort Subsidiaries .............................. 74
6.3 Notice of Restatement Effective Date ......................... 75
6.4 Failure to Reach Restatement Effective Date .................. 75

ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 Organization, etc ............................................ 75
7.2 Due Authorization, Non-Contravention, etc .................... 75
7.3 Government Approval, Regulation, etc ......................... 76
7.4 Validity, etc ................................................ 76
7.5 Financial Information ........................................ 76
7.6 No Material Adverse Change ................................... 77
7.7 Litigation, Labor Controversies, etc ......................... 77
7.8 Subsidiaries ................................................. 77
7.9 Ownership of Properties ...................................... 77
7.10 Taxes ........................................................ 77
7.11 Pension and Welfare Plans .................................... 78
7.12 Environmental Waranties....................................... 78
7.13 Regulations G, U and X ....................................... 79
7.14 Accuracy of Information ...................................... 80
7.15 Compliance of Laws ........................................... 80
7.16 Absence of Default ........................................... 80
7.17 Financial Condition .......................................... 80
7.18 Settlement Agreements ........................................ 81
7.19 Subsidiaries and Obligors .................................... 81

ARTICLE VIII
COVENANTS

8.1 Affirmative Covenants ........................................ 81
8.1.1 Financial Information, Reports, Notices, etc ................. 81
8.1.2 Compliance with Laws, etc. ................................... 84
8.1.3 Maintenance of Properties and Existing Lines of
Business ......................................................83
8.1.4 Insurance .................................................... 84
8.1.5 Books and Records ............................................ 85
8.1.6 Environmental Covenant ....................................... 85
8.1.7 New Significant Subsidiaries ................................. 86
8.2 Negative Covenants ........................................... 86
8.2.1 Business Activities .......................................... 87
8.2.2 Indebtedness ................................................. 87
8.2.3 Liens ........................................................ 89
8.2.4 Financial Condition .......................................... 91
8.2.5 Approved Acquisitions and other Investments .................. 92
8.2.6 Restricted Payments, etc ..................................... 94
8.2.7 Consolidation, Merger, etc ................................... 95
8.2.9 Modification of Certain Agreements ........................... 96
8.2.10 Transactions with Affiliates ................................. 97

-iii-

<PAGE>

8.2.11 Negative Pledges, Restrictive Agreements, etc..................97
8.2.12 Fiscal Year of Borrowers.......................................98

ARTICLE IX
EVENTS OF DEFAULT

9.1 Listing of Events of Default...................................98
9.1.1 Non-Payment of Obligations.....................................98
9.1.2 Breach of Warranty.............................................98
9.1.3 Non-Performance of Certain Covenants and
Obligations....................................................98
9.1.4 Non-Performance of Other Covenants and
Obligations....................................................98
9.1.5 Default on Other Indebtedness or Settlement Obligations........99
9.1.6 Judgments......................................................99
9.1.7 Pension Plans.................................................100
9.1.8 Control of the Borrower.......................................100
9.1.9 Bankruptcy, Insolvency, etc...................................100
9.1.10 Impairment of Security, etc...................................101
9.1.11 Asbestos Litigation Payments..................................101
9.1.12 Asbestos Qualification........................................101
9.2 Action if Bankruptcy..........................................102
9.3 Action if Other Event of Default..............................102

ARTICLE X
THE ADMINISTRATIVE AGENT

10.1 Appointment and Authorization...............................102
10.2 Delegation of Duties..........................................103
10.3 Liability of Administrative Agent and Issuers.................103
10.4 Reliance by Administrative Agent..............................103
10.5 Notice of Default.............................................104
10.6 Credit Decision...............................................105
10.7 Indemnification...............................................105
10.8 Administrative Agent in Individual Capacity...................106
10.9 Successor Administrative Agent................................107
10.10 Collateral Matters............................................107
10.11 Funding Reliance, etc.........................................109
10.12 Copies, etc...................................................109
10.13 Co-Agents.....................................................109

ARTICLE XI
MISCELLANEOUS PROVISIONS

11.1 Waivers, Amendments, etc......................................110
11.2 Notices.......................................................111
11.3 Payment of Costs and Expenses.................................111
11.4 Indemnification...............................................112
11.5 Survival......................................................114
11.6 Severability..................................................114

-iv-

<PAGE>

11.7 Headings......................................................114
11.8 Execution in Counterparts, Effectiveness, etc.................114
11.9 Governing Law; Entire Agreement...............................114
11.10 Successors and Assigns........................................115
11.11 Sale and Transfer of Loans and Notes;
Participations in Loans and Notes.............................115
11.11.1 Assignments...................................................115
11.11.2 Participations................................................117
11.12 Other Transactions............................................118
11.13 Forum Selection and Consent to Jurisdiction...................118
11.14 Waiver of Jury Trial..........................................118
11.15 Confidentiality...............................................119
11.16 Transition Provisions.........................................119

-v-

<PAGE>

SCHEDULE I - Disclosure Schedule
SCHEDULE II - Bank Percentages
SCHEDULE III - Guaranteed Facility Indebtedness

EXHIBIT A-1 - Form of Third Amended and Restated Revolving Note
EXHIBIT A-2 - Form of Term Note
EXHIBIT B-1 - Form of Revolving Borrowing Request
EXHIBIT B-2 - Form of Term Borrowing Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Lender Assignment Agreement
EXHIBIT E-1 - Form of Opinion of Borrower's Counsel
EXHIBIT E-2 - Form of Opinion of Borrower's Canadian Counsel
EXHIBIT F - Form of Opinion of Administrative Agent's Counsel
EXHIBIT G - Form of Solvency Certificate
EXHIBIT H - Insurance Certificates
EXHIBIT I-1 - Form of Guaranty
EXHIBIT I-2 - Form of Fibreboard Guaranty
EXHIBIT J - List of Settlement Agreements
EXHIBIT K - Borrower's Cash Management Policy
EXHIBIT L - Form of Invitation for Competitive Bids
EXHIBIT M - Form of Competitive Bid Request
EXHIBIT N - Form of Competitive Bid
EXHIBIT O - Form of Fibreboard Pledge Agreement
EXHIBIT P - Form of Subsidiary Security Agreement

-vi-

<PAGE>
THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 6,
1996 is among FIBREBOARD CORPORATION, a Delaware corporation (the "REVOLVING
BORROWER"), VYTEC CORPORATION, a corporation organized under the laws of the
province of Ontario, Canada (the "TERM BORROWER"), the various financial
institutions which are or may become parties hereto (collectively, the
"LENDERS"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
administrative co-agent for such Lenders (the "ADMINISTRATIVE AGENT"), and
NATIONSBANK N.A., as documentation co-agent for such Lenders (the "DOCUMENTATION
AGENT"; each of the Administrative Agent and the Documentation Agent sometimes
hereinafter referred to individually as a "CO-AGENT" and together as "CO-
AGENTS").

R E C I T A L S:

A. The Revolving Borrower has entered into a Credit Agreement, dated as
of June 30, 1994, as amended and restated as of September 29, 1994 and as
amended and restated as of October 4, 1995, with Bank of America National Trust
and Savings Association, as the Administrative Co-Agent and Collateral Co-Agent
and certain of the Lenders (the "ORIGINAL CREDIT AGREEMENT").

B. The Revolving Borrower is engaged directly and through its various
Subsidiaries in the Existing Lines of Business (as defined herein).

C. The Revolving Borrower and/or its Subsidiaries may from time to time
make Approved Acquisitions (as defined herein).

D. Under the Original Credit Agreement, the Revolving Borrower has
obtained commitments from the Lenders which are parties thereto pursuant to
which

(a) Revolving Loans will be made to the Revolving Borrower from time
to time prior to the Commitment Termination Date; and

(b) Letters of Credit will be issued by an Issuer for the account of
the Revolving Borrower and under the several responsibilities of the
Lenders from time to time prior to the Commitment Termination Date.

E. In connection with the acquisition of all the issued and outstanding
capital stock of the Term Borrower, the Revolving Borrower has requested the Co-
Agents and the Lenders to amend and restate the Original Credit Agreement to
provide, among other things, for:

<PAGE>

(a) Term Loans to be made to the Term Borrower;

(b) The Revolving Borrower to guaranty such Term Loans;

(c) The Term Borrower to incur Indebtedness in an amount up to U.S.
$20,000,000 or its Dollar Equivalent (as defined herein) pursuant to a
Qualified Working Capital Facility (as defined herein) and to pledge its
assets to secure such Indebtedness; and

(d) Such other changes, all on the terms and conditions set forth
herein.

F. The Lenders are willing, on the terms and subject to the conditions
hereinafter set forth (including ARTICLE VI), to so amend and restate the
Original Credit Agreement.

G. The proceeds of Revolving Loans and Letters of Credit have been and
will be used to finance Approved Acquisitions (as defined herein) and for
general corporate purposes of the Revolving Borrower other than Restricted
Payments and the proceeds of Term Loans will be used to refinance Indebtedness
of the Term Borrower to the Revolving Borrower incurred in connection with the
acquisition by the Revolving Borrower of all the issued and outstanding stock of
the Term Borrower.

NOW, THEREFORE, the parties hereto agree that, effective on the Restatement
Effective Date (as hereinafter defined), the Original Credit Agreement shall be
and hereby is amended and restated in its entirety to read as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1 DEFINITIONS.

(a) GENERAL DEFINITIONS. The following terms (whether or not underscored)
when used in this Agreement, including its preamble and recitals, shall, except
where the context otherwise requires, have the following meanings (such meanings
to be equally applicable to the singular and plural forms thereof):

"ABSOLUTE RATE" has the meaning specified in SUBSECTION 2.6(c).

"ABSOLUTE RATE AUCTION" means a solicitation of Competitive Bids setting
forth Absolute Rates pursuant to SECTION 2.6.

-2-

<PAGE>

"ABSOLUTE RATE BID LOAN" means a Bid Loan that bears interest at a rate
determined with reference to the Absolute Rate.

"ACQUISITION" means one or more of a series of related transactions in
which the Revolving Borrower or any of its Subsidiaries (a) acquires any
material portion of the assets, liabilities, capital stock and/or other
ownership interest or any material portion of the assets of any division or any
business group thereof of any Person that is not an Affiliate of the Revolving
Borrower or any of its Subsidiaries or (b) purchases any in-place facilities
(not including the purchase of equipment in the ordinary course of business),
excepting from CLAUSES (a) and (b) any acquisitions of stock or assets, or
purchases of any in-place facilities, for an aggregate purchase price not to
exceed $5,000,000 in any Fiscal Year.

"ACQUIRED NET OPERATING CASH FLOW" means, with respect to any Approved
Acquisition for any period, (i) the net income, PLUS (ii) the interest expense,
PLUS (iii) all United States Federal, state, local and foreign income tax, PLUS
(iv) any extraordinary losses, MINUS (v) any extraordinary gains, PLUS, (vi) all
depletion, depreciation and amortization expense for such period, as each of the
items specified in CLAUSES (i) through (vi) are reasonably allocable to the
assets, capital stock, division or business group acquired in such Approved
Acquisition.

"ADMINISTRATIVE AGENT" is defined in the PREAMBLE and includes BofA acting
in its capacity as collateral agent for the Banks and each other Person which
shall have subsequently been appointed as the successor Administrative Agent
pursuant to SECTION 10.9.

"ADMINISTRATIVE AGENT/RELATED PERSONS" means the Administrative Agent in
its capacity as such and any successor agent arising under SECTION 10.9,
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.

"AFFECTED LENDER" is defined in CLAUSE (b) of SECTION 5.12.

"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power

(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or

-3-

<PAGE>

(b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.

"AGREEMENT" means, on any date, this Third Amended and Restated Credit
Agreement as originally in effect on the Restatement Effective Date and as
thereafter from time to time amended, supplemented, amended and restated, or
otherwise modified and in effect on such date.

"ALTERNATE BASE RATE" means, on any date and with respect to all Base Rate
Committed Loans, a fluctuating rate of interest per annum equal to the higher of

(a) the rate of interest most recently established by the
Administrative Agent at its Domestic Office as its reference rate; and

(b) the Federal Funds Rate most recently determined by the
Administrative Agent PLUS 0.50%.

The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Administrative Agent in connection with extensions of
credit. Changes in the rate of interest on that portion of any Loans maintained
as Base Rate Committed Loans will take effect simultaneously with each change in
the Alternate Base Rate. The Administrative Agent will give notice promptly to
the Borrowers and the Lenders of changes in the Alternate Base Rate.

"APPLICABLE LAW" means, with respect to any Person or matter, any law,
rule, regulation, order, decree or other requirement having the force of law
relating to such Person or matter and, where applicable, any interpretation
thereof by any Person having jurisdiction with respect thereto or charged with
the administration or interpretation thereof.

"APPLICABLE MARGIN" is defined in CLAUSE (c) of SECTION 3.2.1.

"APPROVED ACQUISITION" means any Acquisition

(i) which is not contested at any time by the majority of the
existing directors of the acquired entity or the Person from whom the
Acquisition is to be made;

(ii) with respect to which all or substantially all of the acquired
properties are used in the operations or expansion of an Existing Line of
Business or a substantially similar line of business;

-4-

<PAGE>

(iii) after giving effect to which, including any Indebtedness
incurred or assumed by the Revolving Borrower and its Subsidiaries in
connection therewith, the Revolving Borrower and its Subsidiaries would be
in compliance with the provisions of SECTION 8.2.4 calculated as if such
Acquisition had occurred on the last day of the immediately preceding
Fiscal Quarter; and

(iv) which, if such Acquisition is to be financed with Credit
Extensions in an aggregate amount in excess of $50,000,000, has been
approved in writing by (a) the Majority Lenders or (b) if, after giving
effect to the applicable Acquisition, the PRO FORMA Consolidated Funded
Debt to Cash Flow Ratio would exceed 2.5:1, the Required Lenders.

"ASBESTOS LITIGATION" means any litigation, suit, action, arbitration or
proceeding instituted or made against the Revolving Borrower or any of its
Subsidiaries, or between the Revolving Borrower or any of its Subsidiaries and
any insurer, or including the Revolving Borrower or any of its Subsidiaries and
involving any insurance policy of the Revolving Borrower or any of its
Subsidiaries, in each case, arising from or related to any liability, claim,
judgment, order or decree related to asbestos, including, without limitation,
any Personal Injury Asbestos Claim and any Asbestos Building Material Claim.

"ASBESTOS QUALIFICATION" means, relative to the opinion or certification of
any independent public accountant delivering such opinion or certification
pursuant to CLAUSE (b) of SECTION 8.1.1 as to any financial statement of the
Revolving Borrower, any qualification or exception to such opinion or
certification for any liability or potential liability of the Revolving Borrower
relating to asbestos or Asbestos Litigation.

"ASSIGNEE LENDER" is defined in SECTION 11.11.1.

"AUTHORIZED OFFICER" means, relative to any Obligor, those of its officers
or other designees whose signatures and incumbency shall have been certified to
the Administrative Agent and the Lenders pursuant to SECTION 6.1.2. Any
reference herein to a "senior Authorized Officer" shall be deemed to include a
chief financial officer or chief accounting officer.

"BOFA" means Bank of America National Trust and Savings Association, a
national banking association.

"BASE RATE COMMITTED LOAN" means a Loan bearing interest at a fluctuating
rate determined by reference to the Alternate Base Rate.

-5-

<PAGE>

"BID BORROWING" means a Borrowing hereunder consisting of one or more Bid
Loans made to the Revolving Borrower on the same day by one or more Lenders.

"BID LOAN" means a Loan by a Lender to the Revolving Borrower under SECTION
2.5, which may be a Eurodollar Bid Loan or an Absolute Rate Bid Loan.

"BID LOAN LENDER" means, in respect of any Bid Loan, the Lender making such
Bid Loan to the Revolving Borrower.

"BID LOAN NOTE" has the meaning specified in SECTION 2.9.

"BORROWER" means each of the Revolving Borrower and the Term Borrower and
"Borrowers" means both the Revolving Borrower and the Term Borrower.

"BORROWING" means the Loans of the same Type and made by all Lenders to the
same Borrower on the same Business Day, or a Swingline Loan or Loans or Bid Loan
or Loans made to the Revolving Borrower on the same day by the Swingline Lender
or Bid Loan Lender, respectively, in each case pursuant to ARTICLE II, and, in
the case of the Term Borrower, is a Committed Borrowing and, in the case of the
Revolving Borrower, may be a Committed Borrowing, a Swingline Borrowing, or a
Bid Borrowing and, in either case with respect to Eurodollar Committed Loans,
having the same Interest Period.

"BORROWING REQUEST" means a loan request and certificate duly executed by
an Authorized Officer of the applicable Borrower, substantially in the form of
EXHIBIT B-1 hereto in the case of the Revolving Borrower and EXHIBIT B-2 hereto
in the case of the Term Borrower.

"BUSINESS DAY" means

(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in San Francisco,
California; and

(b) relative to the making, continuing, prepaying or repaying of any
Eurodollar Committed Loans, any day on which dealings in Dollars are
carried on in the eurodollar interbank market of the Administrative Agent's
Eurodollar Office.

"CAPITAL EXPENDITURES" means, for any period, the sum of

(a) the aggregate amount of all expenditures of the Revolving
Borrower and its Subsidiaries for fixed or capital assets (other than
Approved Acquisitions) made during such

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period which, in accordance with GAAP, would be classified as capital
expenditures; and

(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.

"CAPITALIZED LEASE LIABILITIES" means all monetary obligations of the
Revolving Borrower or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as capitalized
leases, and, for purposes of this Agreement and each other Loan Document, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a penalty.

"CASH EQUIVALENT INVESTMENT" means, at any time,

(I) with respect to investments denominated in Dollars:

(a) any evidence of Indebtedness, maturing not more than one year
after such time, issued or guaranteed by the United States Government;

(b) commercial paper, maturing not more than nine months from the
date of issue, which is issued by

(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any state of the United States or of the
District of Columbia and rated at least A-l by Standard & Poor's
Ratings Services or P-l by Moody's Investors Service, Inc., or

(ii) any Lender (or its holding company);

(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by either

(i) a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000, or

(ii) any Lender; or

(d) any repurchase agreement entered into with any Lender (or other
commercial banking institution of the stature referred to in CLAUSE (c)(i))
which

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(i) is secured by a fully perfected security interest in any
obligation of the type described in any of CLAUSES (a) through (c);
and

(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such Lender (or other commercial banking institution) thereunder, and

(II) with respect to investments denominated in Canadian Dollars,

(a) any securities issued or fully guaranteed or insured by the
government of Canada or any agency or instrumentality thereof,

(b) any time deposit, certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued by:

(i) any bank listed under Schedule I to the Bank Act (Canada),

(ii) any bank other than one listed in CLAUSE (i), having capital
and surplus in excess of $500,000,000 and the commercial paper of the
holding or parent company of which is rated at least A-1 or the
equivalent thereof by Standard & Poor's Ratings Services or at least
P-1 or the equivalent thereof by Moody's Investors Service, Inc.,

(iii) any Lender; or

(iv) any Canadian bank the short-term debt or deposit ratings of
which have been assigned an investment grade credit rating by CBRS,
Inc. or the Dominion Bond Rating Service Limited;

(c) commercial paper, maturing not more than nine months from the
date of issue, issued by a corporation (other than an Affiliate of any
Obligor) organized under the laws of Canada or any province of Canada and
that is rated at least A1 or the equivalent by CBRS, Inc. and R1 (high) or
R1 (middle) by the Dominion Bond Rating Service Limited.

"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.

"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.

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<PAGE>

"CHANGE OF CONTROL" (a) with respect to the Revolving Borrower, means the
occurrence of either

(i) any Person or any Persons acting together that would constitute a
"group" (for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended, or any successor provision thereto) (a "Group"), together
with any Affiliates thereof, shall beneficially own (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended, or any
successor provision thereto) at least 15% of the outstanding shares of
voting stock of the Revolving Borrower, or

(ii) any Person, or Group, together with any Affiliates thereof, shall
succeed in having sufficient of its nominees elected to the Board of
Directors of the Revolving Borrower such that such nominees, when added to
any existing director remaining on the Board of Directors of the Revolving
Borrower after such election who is an Affiliate of such Group, will
constitute a majority of the Board of Directors of the Revolving Borrower;
and

(b) with respect to the Term Borrower, means the occurrence of either

(i) the failure of the Revolving Borrower to beneficially own, free
and clear of all Liens not permitted by the Collateral Documents, 100% of
the issued and outstanding shares of the voting and nonvoting stock
(including warrants, options, conversion rights, and other rights of
purchase or convert into such stock) of the Term Borrower on a fully
diluted basis, or

(ii) the creation or imposition of any Lien not permitted by the
Collateral Documents on any shares of capital stock of the Term Borrower.

"CO-AGENT" and "CO-AGENTS" are defined in the PREAMBLE.

"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

"COLLATERAL" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Revolving Borrower and its
Subsidiaries in or upon which a Lien now or hereafter exists in favor of the
Lenders, or the Administrative Agent on behalf of the Lenders, whether under
this Agreement or under any other documents executed by any such Persons
pursuant to or in connection with the transactions contemplated hereby and
delivered to the Administrative Agent or the Lenders.

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"COLLATERAL DOCUMENTS" means, collectively, (i) the Security Agreement, the
Subsidiary Security Agreements, the Fibreboard Guaranty, the Guaranty, the
Fibreboard Pledge Agreement, and all other security agreements, mortgages, deeds
of trust, patent and trademark assignments, lease assignments, guarantees and
other similar agreements between the Revolving Borrower or any of its
Subsidiaries and any of the Lenders or the Administrative Agent for the benefit
of the Lenders now or hereafter delivered to any of the Lenders or the
Administrative Agent pursuant to or in connection with the Loan Documents, and
all financing statements (or comparable documents) now or hereafter filed in
connection with the Loan Documents in accordance with the UCC (or comparable
law) against the Revolving Borrower or any of its Subsidiaries as a debtor in
favor of the Lenders or the Administrative Agent for the benefit of the Lenders
as secured party and (ii) any amendments, supplements, modifications, renewals,
replacements, consolidations substitutions and extensions of any of the
foregoing.

"COLLATERAL RELEASE DATE" means the date upon which the Administrative
Agent releases the Collateral pursuant to CLAUSE (c) of SECTION 10.10.

"COMMITMENT" means, relative to any Lender, such Lender's obligation to
make Committed Revolving Loans pursuant to CLAUSE (a) of SECTION 2.1.1 and
Committed Term Loans pursuant to CLAUSE (b) of SECTION 2.1.1 and to issue (in
the case of an Issuer) or participate in (in the case of all Lenders) Letters of
Credit pursuant to SECTION 2.1.2.

"COMMITMENT TERMINATION EVENT" means

(a) the occurrence of any Default described in CLAUSES (a) through
(d) of SECTION 9.1.9 with respect to the Revolving Borrower or any of its
Subsidiaries; or

(b) the occurrence and continuance of any other Event of Default and
either

(i) the declaration of the Loans to be due and payable pursuant
to SECTION 9.3, or

(ii) in the absence of such declaration, the giving of notice by
the Administrative Agent, acting at the direction of the Required
Lenders, to the Borrowers that the Commitments to make Loans and issue
Letters of Credit have been terminated.

"COMMITTED BORROWING" means a Borrowing hereunder consisting of Committed
Loans made on the same day by the Lenders ratably according to their respective
Percentages and, in the case of Eurodollar Committed Loans, having the same
Interest Periods.

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<PAGE>

"COMMITTED LOAN" means a Committed Revolving Loan or a Committed Term Loan.

"COMMITTED LOAN NOTE" means a Revolving Loan Note or a Term Loan Note.

"COMMITTED REVOLVING LOAN" has the meaning specified in SECTION 2.1, and
may be a Eurodollar Committed Loan or a Base Rate Committed Loan.

"COMMITTED TERM LOAN" has the meaning specified in SECTION 2.1 and may be a
Eurodollar Committed Loan or a Base Rate Committed Loan.

"COMPETITIVE BID" means an offer by a Lender to make a Bid Loan in
accordance with SUBSECTION 2.6(b).

"COMPETITIVE BID REQUEST" has the meaning specified in SUBSECTION 2.06(a).

"COMPLIANCE CERTIFICATE" is defined in CLAUSE (c) of SECTION 8.1.1.

"CONSOLIDATED EBIT" means, for any period, the sum of

(a) Consolidated Net Income for such period; PLUS

(b) Consolidated Interest Expense for such period; PLUS

(c) all United States federal, state, local and foreign income taxes
of the Revolving Borrower and its Subsidiaries for such period deducted in
arriving at Consolidated Net Income for such period; PLUS

(d) losses from discontinued business operations and extraordinary
losses of the Revolving Borrower and its Subsidiaries for such period;
MINUS

(e) gains from discontinued business operations and extraordinary
gains of the Revolving Borrower and its Subsidiaries for such period; MINUS

(f) without duplication with any of the foregoing, any Settlement
Gains for such period.

"CONSOLIDATED EBITDA" means, for any period, the sum of

(a) Consolidated EBIT for such period; PLUS

(b) all depletion, depreciation and amortization expense for such
period, determined on a consolidated basis

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for the Revolving Borrower and its Subsidiaries for such period.

"CONSOLIDATED FUNDED DEBT" means all Funded Debt of the Revolving Borrower
and its Subsidiaries (other than (a) the Gaylord Debt and (b) Funded Debt
related to or resulting from Asbestos Litigation, including, without limitation,
Debt under any Settlement Agreement).

"CONSOLIDATED FUNDED DEBT TO CAPITALIZATION RATIO" means, on any date, the
ratio of

(a) Consolidated Funded Debt on such date

(b) Total Capitalization on such date.

"CONSOLIDATED FUNDED DEBT TO CASH FLOW RATIO" means, on the last day of any
Fiscal Quarter, the ratio of

(a) Consolidated Funded Debt on such date

(b) (i) Consolidated Net Operating Cash Flow for the four
consecutive Fiscal Quarters ending on such date PLUS

(ii) with respect to each Approved Acquisition made during the
four consecutive Fiscal Quarters immediately preceding the last day of such
Fiscal Quarter, the aggregate amount of Acquired Net Operating Cash Flow
for the period beginning four Fiscal Quarters before the last day of such
Fiscal Quarter and ending on the date each such Approved Acquisition was
made.

"CONSOLIDATED INTEREST COVERAGE RATIO" means, for any period, the ratio of

(a) Consolidated EBIT for such period

(b) Consolidated Interest Expense for such period.

"CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate
interest expense of the Revolving Borrower and its Subsidiaries for such period
determined in accordance with GAAP.

"CONSOLIDATED NET INCOME" means, for any period, all amounts which, in
conformity with GAAP, would be included under net

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income on a consolidated income statement of the Revolving Borrower and its
Subsidiaries for such period.

"CONSOLIDATED NET OPERATING CASH FLOW" means, for any period, the excess,
if any, of

(a) Consolidated EBITDA for such period

OVER

(b) Capital Expenditures for such period.

"CONSOLIDATED NET WORTH" means, on any date, the consolidated net worth of
the Revolving Borrower and its Subsidiaries on such date, as calculated in
accordance with GAAP.

"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the debt,
obligation or other liability guaranteed thereby or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.

"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of applicable
Borrower, substantially in the form of EXHIBIT C hereto.

"CONTROLLED GROUP" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with either Borrower, are
treated as a single employer under Section 414 of the Code or Section 4001 of
ERISA.

"CREDIT EXTENSION" means and includes

(a) the advancing of any Loans by the Lenders in connection with a
Borrowing, and

(b) any issuance or extension by an Issuer of a Letter of Credit.

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"CURRENT QUARTER" is defined in CLAUSE (b) of SECTION 3.2.1.

"DEFAULT" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.

"DISBURSEMENT DATE" is defined in SECTION 4.5.

"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented or otherwise modified from time
to time by the Revolving Borrower with the written consent of the Administrative
Agent and the Required Lenders.

"DOCUMENTATION AGENT" is defined in the PREAMBLE and includes each other
Person which shall have subsequently been appointed as the successor
Documentation Agent pursuant to SECTION 10.9.

"DOCUMENTATION AGENT/RELATED PERSONS" means the Documentation Agent in its
capacity as such and any successor agent arising under SECTION 10.9, together
with their respective Affiliates, and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.

"DOLLAR" and the sign "$" mean lawful money of the United States.

"DOLLAR EQUIVALENT" means, at any time as to any amount denominated in a
currency other than Dollars, the equivalent amount in Dollars as determined by
the Revolving Borrower at such time on the basis of the exchange rate for the
purchase of Dollars with such currency as published in THE WALL STREET JOURNAL
or substitute publication approved by the Administrative Agent on the third
Business Day preceding the time of such determination.

"DOMESTIC OFFICE" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to the Administrative
Agent.

"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release into, or
injury to, the environment, or otherwise alleging liability or responsibility
for damages (punitive or otherwise), cleanup, removal, remedial or response
costs, restitution, civil or criminal penalties, injunctive

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relief, or other type of relief, resulting from or based upon (a) the presence,
placement, discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental placement, spills, leaks, discharges, emissions or releases) of
any Hazardous Material at, in, or from property, whether or not owned by the
Revolving Borrower or any Subsidiary of the Revolving Borrower, or (b) any other
circumstances forming the basis of any violation, or alleged violation, of any
Environmental law.

"ENVIRONMENTAL LAWS" means all applicable federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental matters, including CERCLA,
the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Solid
Waste Disposal Act, the Federal Resource Conservation and Recovery Act, the
Toxic Substances Control Act, the Emergency Planning and Community Right-to-Know
Act, the California Hazardous Waste Control Law, the California Solid Waste
Management, Resource, Recovery and Recycling Act, the California Water Code and
the California Health and Safety Code.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.

"EURODOLLAR AUCTION" means a solicitation of Competitive Bids setting forth
a Eurodollar Bid Margin pursuant to SECTION 2.6.

"EURODOLLAR BID LOAN" means any Bid Loan that bears interest at a rate
based upon the Eurodollar Rate.

"EURODOLLAR BID MARGIN" has the meaning specified in subsection
2.06(C)(II)(C).

"EURODOLLAR COMMITTED LOAN" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the Eurodollar Rate (Reserve Adjusted).

"EURODOLLAR OFFICE" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) as designated from time to time by notice from such
Lender to the Borrowers and the Administrative Agent, whether or

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not outside the United States, which shall be making or maintaining Eurodollar
Committed Loans of such Lender hereunder.

"EURODOLLAR RATE" is defined in SECTION 3.2.1.

"EURODOLLAR RATE (RESERVE ADJUSTED)" is defined in SECTION 3.2.1.

"EURODOLLAR RESERVE PERCENTAGE" is defined in SECTION 3.2.1.

"EVENT OF DEFAULT" is defined in SECTION 9.1.

"EXISTING LINES OF BUSINESS" means the following lines of business operated
by the Revolving Borrower or any of its Subsidiaries primarily in the United
States or Canada:

(i) the building materials business, including the manufacture,
distribution, and wholesale marketing and sale of building materials;

(ii) the industrial products business, consisting of the production,
distribution, and wholesale marketing and sale of molded industrial
insulation, fireproofing board and metal jacketing and other materials for
use in industrial construction applications; and

(iii) the ski resort operations business, including the ownership,
development, marketing and operation of ski facilities (and any associated
off-season, golf, tennis, swimming, riding, biking, hiking and other
recreational facilities) and related hotel, housing (including related
residential developments for sale or lease), restaurant, shopping,
entertainment and group conference facilities.

"FEDERAL FUNDS RATE" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
"H.15(519)") on the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Administrative Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Administrative Agent.

"FIBREBOARD GUARANTY" means a guaranty by Fibreboard Corporation
substantially in the form attached hereto as EXHIBIT

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I-2, as amended, supplemented, restated or otherwise modified from time to time.

"FIBREBOARD PLEDGE AGREEMENT" means a pledge agreement substantially in the
form attached hereto as EXHIBIT O, as amended, supplemented, restated or
otherwise modified from time to time.

"FISCAL QUARTER" means each fiscal quarter of the Revolving Borrower's
Fiscal Year.

"FISCAL YEAR" means each fiscal year of the Revolving Borrower, ending on
the last Saturday in December of each year.

"F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
or any successor thereto.

"FUNDED DEBT" means, with respect to any Person and as of any date of
determination, the sum of (i) all Indebtedness of such Person under this
Agreement PLUS (ii) all other Indebtedness of such Person that matures more than
one year from the date of the creation of such Indebtedness, or matures within
one year from the date of the creation of such Indebtedness but is renewable or
extendable, at the option of the debtor, to a date more than one year from such
date, or arises under a revolving credit or similar agreement that obligates the
lender or lenders thereunder to extend credit during a period of more than one
year from such date of determination (in each case including amounts of Funded
Debt required to be paid or prepaid within one year from the date of
determination).

"GAAP" is defined in SECTION 1.4.

"GAAP CHANGES" is defined in SECTION 1.4.

"GAYLORD DEBT" means any amounts outstanding under the 1974 Pollution
Control Revenue Bonds (Fibreboard Corporation) Series A issued by the California
Pollution Control Financing Authority in the original principal amount of
$13,300,000.

"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

"GUARANTEED FACILITY INDEBTEDNESS" means Indebtedness of any Subsidiary of
the Revolving Borrower or the Term Borrower that is guaranteed by the Revolving
Borrower or the Term Borrower, respectively, and incurred by such Subsidiary and
guaranteed by

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such Borrower pursuant to agreements approved in writing by and on terms and
conditions satisfactory to the Administrative Agent and the Required Lenders in
their sole discretion, as such agreements may be amended, supplemented, restated
or otherwise modified from time to time with the consent of the Administrative
Agent and the Required Lenders. (a) The Subsidiary Indebtedness described on
SCHEDULE III hereto and as in effect on the date hereof and (b) the Indebtedness
incurred by the Term Borrower and guaranteed by the Revolving Borrower in
connection with a credit facility established with The Bank of Nova Scotia on
the terms and conditions substantially identical to those set forth in a term
sheet relating to such facility that has been approved by the Required Lenders,
shall, in each case, constitute Guaranteed Facility Indebtedness.

"GUARANTY" means that certain Guaranty (which shall replace the Guaranty
dated September 29, 1994) executed and delivered by each Significant Subsidiary
in substantially the form of EXHIBIT I-1 hereto, as amended, supplemented,
restated or otherwise modified from time to time.

"HAZARDOUS MATERIAL" means

(a) any "hazardous substance", as defined by CERCLA;

(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended;

(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other applicable
federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or
imposing liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or material, all as amended or hereafter
amended.

"HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities of
such Person under currency or interest rate swap agreements, currency or
interest rate cap agreements and currency or interest rate collar agreements,
and all other agreements or arrangements designed and used by such Person to
protect such Person against fluctuations in interest rates or currency exchange
rates.

"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.

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"IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or
certification of Arthur Andersen & Co. or other independent public accountants
acceptable to the Administrative Agent and the Required Lenders as to any
financial statement of the Revolving Borrower, any qualification or exception to
such opinion or certification

(a) which is of a "going concern" or similar nature;

(b) which relates to the limited scope of examination of matters
relevant to such financial statement;

(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Revolving Borrower to be in default of any of its obligations under
SECTION 8.2.4; or

(d) which is an Asbestos Qualification.

"INCLUDING" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of EJUSDEM GENERIS
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.

"INDEBTEDNESS" of any Person means, at any time, without duplication:

(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;

(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;

(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities;

(d) net liabilities of such Person under all Hedging Obligations;

(e) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services (other than accounts payable arising in the ordinary
course of such

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Person's business payable on terms customary in the trade), and
indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such Person or
is limited in recourse; and

(f) all Contingent Liabilities of such Person in respect of any of
the foregoing;

PROVIDED, THAT, funding obligations under a Pension Plan, whether or not
attributable to past services, shall not constitute Indebtedness. For all
purposes of this Agreement, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer.

"INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.

"INDEMNIFIED PARTIES" is defined in SECTION 11.4.

"INTEREST PERIOD" means, relative to (i) any Eurodollar Committed Loans,
the period beginning on (and including) the date on which such Loan is made or
continued as, or converted into, a Eurodollar Committed Loan pursuant to SECTION
2.3 or 2.4 and ending on (but excluding) the day which numerically corresponds
to such date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), (ii) any
Eurodollar Bid Loans, the period beginning on (and including) the date on which
such Loan is made and ending on (but excluding) the day which numerically
corresponds to such date in any of the twelve months ending immediately
thereafter (or, if such month has no numerically corresponding day, on the last
Business Day of such month), and (iii) any Absolute Rate Bid Loan, a period of
not less than 7 days and not more than 365/366 days, as applicable for the year
in which such Loan is made, in each case as the applicable Borrower may select
in its relevant notice pursuant to SECTION 2.3, 2.4 or 2.5; PROVIDED, HOWEVER,
that

(a) neither Borrower shall be permitted to select Interest Periods to
be in effect at any one time for such Borrower which have expiration dates
occurring on more than five different dates;

(b) Interest Periods commencing on the same date for Loans comprising
part of the same Borrowing shall be of the same duration;

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end on the next following Business Day (unless, in the case of a Eurodollar Bid
Loan or a Eurodollar Committed Loan, such next following Business Day is the
first Business Day of a calendar month, in which case such Interest Period shall
end on the Business Day next preceding such numerically corresponding day); and

(d) no Interest Period (x) for any Revolving Loans may end later than
the date set forth in CLAUSE (a) of the definition of "REVOLVING COMMITMENT
TERMINATION DATE" and (y) for any Term Loan may end later than the Stated
Maturity Date, as each such date may be extended in accordance with this
Agreement.

"INVESTMENT" of any Person means,

(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees, and accounts receivable, made in the ordinary course of
business);

(b) any Contingent Liability of such Person in respect of obligations
of any other Person; and

The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.

"INVITATION FOR COMPETITIVE BIDS" means a solicitation for Competitive
Bids, substantially in the form of EXHIBIT L.

"ISSUANCE REQUEST" means a properly completed application for a Letter of
Credit on the applicable Issuer's standard form, executed by the chief
executive, accounting or financial Authorized Officer of the Revolving Borrower.

"ISSUER" means any affiliate, unit or agency of BofA, or any other Lender
which has agreed to issue one or more Letters of Credit at the request of the
Revolving Borrower and with the consent of the Administrative Agent, and which
has notified the Administrative Agent in writing prior to such issuance that it
is an Issuer hereunder with respect to such Letter of Credit.

"LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement
substantially in the form of EXHIBIT D hereto.

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"LENDERS" is defined in the PREAMBLE and shall include the Swingline Lender
acting in its capacity as such.

"LETTER OF CREDIT" is defined in SECTION 4.1.

"LETTER OF CREDIT AVAILABILITY" means, at any time, the lesser of

(a) the excess of

(i) $15,000,000

OVER

(ii) the then Letter of Credit Outstandings,

(b) the Commitment Availability at such time.

"LETTER OF CREDIT OUTSTANDINGS" means, at any time, an amount equal to the
sum of

(a) the aggregate Stated Amount at such time of all Letters of Credit
then outstanding and undrawn (as such aggregate Stated Amount shall be
adjusted, from time to time, as a result of drawings, the issuance of
Letters of Credit, or otherwise),

PLUS

(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.

"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever or the filing of any UCC-1 financing statement or
any similar financing statement (other than a financing statement not filed in
respect of a security interest (as defined in the UCC)).

"LOAN" means a Revolving Loan or a Term Loan.

"LOAN DOCUMENT" means this Agreement, any Note, any Collateral Document,
any Letter of Credit, any application for a Letter of Credit and any other
instrument or agreement executed and/or delivered by an Obligor pursuant hereto
or thereto or otherwise in connection herewith or therewith, as each may be
amended, supplemented, restated or otherwise modified from time to time.

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<PAGE>

"MAJORITY LENDERS" means (a) at any time prior to the Commitment
Termination Date, Lenders having at least 51% of the Commitments, and (b)
otherwise, Lenders holding at least 51% of the then aggregate unpaid principal
amount of the Loans.

"MATERIAL ADVERSE EFFECT" means, relative to any condition or occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration, or governmental investigation or proceeding and the enactment,
issuance or amendment of any Applicable Law), a material adverse effect on:

(a) the consolidated business, assets, revenues, financial condition,
or operations or (but only with respect to Asbestos Litigation related
matters) prospects of the Revolving Borrower and its Subsidiaries, taken as
a whole; or

(b) the ability of the Revolving Borrower and its Subsidiaries, taken
as a whole, to perform any of the payment or other material obligations
under any Loan Document to which any Obligor is a party.

"MATERIAL POST-COLLATERAL RELEASE ASBESTOS LITIGATION" means any Asbestos
Litigation the payment or satisfaction of which is not adequately provided for
by

(i) if the Global Approval Judgment shall have occurred, the Global
Settlement Agreement or the Insurance Settlement Agreement to the extent
applicable (or any other agreement referred to in such agreements),

(ii) if the Settlement Agreement Approval Judgment shall have occurred
(and the Global Approval Judgment shall not have occurred), the Insurance
Settlement Agreement (or any agreement referred to therein), or

(iii) available insurance coverage which has been confirmed in writing
to the Revolving Borrower (whether by binding settlement agreement of by
other writing) and/or existing reserves as shown on the Revolving
Borrower's [March 31, 1994] financial statements

which (in any such case), if determined adversely to the Revolving Borrower or
any of its Subsidiaries, as the case may be, could reasonably be expected to
have a Material Adverse Effect.

"NOTE" means a Revolving Note or a Term Note and "NOTES" means both the
Revolving Notes and the Term Notes.

"OBLIGATIONS" means all obligations (monetary or otherwise) of each
Borrower and each other Obligor to the Co-Agents and the

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Lenders and their respective successors and assigns arising under or in
connection with this Agreement, the Notes and each other Loan Document,
howsoever created, arising or evidenced, whether direct or indirect, joint or
several, absolute or contingent, or now or hereafter existing, or due or to
become due, including, without limitation, all indebtedness of any kind arising
under, and all amounts of any kind which at any time become due or owing to
either Co-Agent or any of the Lenders under or with respect to, the Loan
Documents, all of the covenants, obligations, indemnifications and agreements of
each Obligor (and the truth of all representations and warranties of each
Obligor to the Co-Agents and the Lenders) in, under or pursuant to the Loan
Documents, any and all advances, costs or expenses paid or incurred by the
Documentation Agent, the Administrative Agent or any of the Lenders or any agent
or trustee therefor to protect any or all of the Collateral, to perform any
obligation of each Borrower or any other Obligor under any of the Loan
Documents, or to collect any amount owing to the Documentation Agent, the
Administrative Agent or any of the Lenders which is secured thereunder; interest
on all of the foregoing (including, without limitation, interest accruing after
the maturity of the Loans and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to any Obligor whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding); and all costs of
enforcement and collection of the Obligations, the Loan Documents and any other
document relating to the Obligations.

"OBLIGOR" means each Borrower or any other Person (other than either Co-
Agent, any Issuer or any Lender) obligated under, or otherwise a party to, any
Loan Document.

"ORGANIC DOCUMENT" means, relative to any Obligor, its certificate or
articles of incorporation, its by-laws and all shareholder voting agreements,
voting trusts and similar arrangements applicable to any of its authorized
shares of capital stock.

"ORIGINAL CREDIT AGREEMENT" is defined in RECITAL A.

"ORIGINAL EFFECTIVE DATE" means June 30, 1994.

"ORIGINAL PERCENTAGE" means, relative to any Lender, the percentage set
forth with respect to such Lender on SCHEDULE II.

"PARTICIPANT" is defined in SECTION 11.11.2.

"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

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"PENSION PLAN" means a "pension plan", as such term is defined in section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in section 4001(a)(3) of ERISA), and to which either Borrower or
any corporation, trade or business that is, along with either Borrower, a member
of a Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.

"PERCENTAGE" means, relative to any Lender (i) on any date before the
Restatement Effective Date, such Lender's Original Percentage and (ii) on and
after the Restatement Effective Date, such Lender's Restated Percentage, or on
any date, the percentage set forth in the Lender Assignment Agreement, as any of
such percentages may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to SECTION 11.11.

"PERSON" means any natural person, corporation, partnership, firm, limited
liability company, association, trust, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other capacity.

"PLAN" means any Pension Plan or Welfare Plan.

"PRECEDING QUARTER" is defined in CLAUSE (c) of SECTION 3.2.1.

"QUALIFIED WORKING CAPITAL FACILITY" means one or more agreements under
which the Term Borrower or any of its Subsidiaries may, from time to time, incur
working capital Indebtedness to financial institutions in an aggregate amount at
any one time not to exceed U.S. $20,000,000 or the Dollar Equivalent thereof, as
such agreements may be amended, supplemented, restated or otherwise modified
from time to time with the consent of the Administrative Agent and the Required
Lenders. The Indebtedness described in Schedule III hereto and as in effect on
the date hereof and the Indebtedness incurred by the Term Borrower and
guaranteed by the Revolving Borrower in connection with a credit facility
established with The Bank of Nova Scotia on the terms and conditions
substantially identical to those set forth in a term sheet relating to such
facility that has been approved by the Required Lenders, shall, in each case,
constitute a Qualified Working Capital Facility; PROVIDED that the aggregate
amount of such Indebtedness, when taken together with the aggregate amount of
all other Indebtedness under a Qualified Working Capital Facility, at no time
exceeds U.S. $20,000,000 or the Dollar Equivalent thereof.

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"QUARTERLY PAYMENT DATE" means the last day of each March, June, September,
and December or, if any such day is not a Business Day, the next succeeding
Business Day.

"RECONCILIATION STATEMENT" means a written statement of the applicable
Borrower, signed by an Authorized Officer, in form and substance satisfactory to
the Administrative Agent reconciling the effect of changes in GAAP as
contemplated or permitted by SECTION 1.4.

"REIMBURSEMENT OBLIGATION" is defined in SECTION 4.6.

"RELEASE" means a "release", as such term is defined in CERCLA.

"REQUIRED LENDERS" means (a) at any time prior to the Commitment
Termination Date, Lenders having at least 66-2/3% of the Commitments, and (b)
otherwise, Lenders holding at least 66-2/3% of the then aggregate unpaid
principal amount of the Loans.

"RESORT SUBSIDIARIES" means, collectively, Trimont Land Company, a
California corporation, Sierra-at-Tahoe, Inc., a Delaware corporation, Bear
Mountain, Inc., a Delaware corporation, and each other Subsidiary now owned or
hereafter acquired by the Revolving Borrower or any of its Subsidiaries that is
engaged in the ski resort operations business as described in CLAUSE (III) of
the definition of Existing Lines of Business, the acquisition or capitalization
of which Subsidiary is not financed in whole or in part with the proceeds of any
Credit Extension.

"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, ET SEQ., as in effect from time to
time.

"RESTATED PERCENTAGE" means, relative to any Lender, the percentage set
forth with respect to such Lender on SCHEDULE II.

"RESTATEMENT EFFECTIVE DATE" means the date this Agreement becomes
effective pursuant to SECTION 6.1.

"RESTRICTED PAYMENT" means any payment or distribution which if made by
the Revolving Borrower or any of its Subsidiaries would be in violation of
SECTION 8.2.6.

"REVOLVING BORROWER" is defined in the PREAMBLE.

"REVOLVING COMMITMENT AMOUNT" means, on any date, $125,000,000, as such
amount may be reduced from time to time pursuant to SECTION 2.2.

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"REVOLVING COMMITMENT AVAILABILITY" means, on any date, the excess of

(a) the Revolving Commitment Amount,

OVER

(b) the sum of

(i) the outstanding principal amount of all Revolving Loans on
such date,

PLUS

(ii) the Letter of Credit Outstandings on such date.

"REVOLVING COMMITMENT TERMINATION DATE" means the earliest of

(a) September 30, 2000, as such date may be extended pursuant to
SECTION 2.1.4;

(b) the date on which the Revolving Commitment Amount is terminated
in full or reduced to zero pursuant to SECTION 2.2; and

Upon the occurrence of any event described in CLAUSE (a), (b) or (c), the
Commitments shall terminate automatically and without any further action.

"REVOLVING LOAN" means an extension of credit by a Lender to the Revolving
Borrower under ARTICLE II, and may be a Committed Loan, a Bid Loan or a
Swingline Loan.

"REVOLVING NOTE" means a third amended and restated promissory note of the
Revolving Borrower payable to the order of any Lender, in the form of EXHIBIT A-
1 hereto (as such promissory note may be amended, endorsed or otherwise modified
from time to time), or any Committed Loan Note or Bid Loan Note in each case
evidencing the aggregate Indebtedness of the Revolving Borrower to such Lender
resulting from outstanding Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.

"SECURITY AGREEMENT" means the Security Agreement executed and delivered by
the Revolving Borrower pursuant to Section 6.1.6

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of the Original Credit Agreement, as amended, supplemented, restated or
otherwise modified from time to time.

"SETTLEMENT AGREEMENT MODIFICATION" is defined in SECTION 8.2.9.

"SETTLEMENT AGREEMENTS" means the agreements listed on EXHIBIT J.

"SETTLEMENT GAINS" means, on any date, the cumulative amount since the
Restatement Effective Date of all amounts which would be recorded as gains from
asbestos litigation reserves or the positive adjustment of other Asbestos
Litigation related balance sheet items that have an effect on the consolidated
income statement of the Revolving Borrower and its Subsidiaries in accordance
with GAAP.

"SIGNIFICANT SUBSIDIARY" means each Subsidiary of the Revolving Borrower
(except the Resort Subsidiaries) that

(a) is designated with an asterisk in ITEM 7.8 ("Subsidiaries") of
the Disclosure Schedule;

(b) accounted for at least 5% of consolidated revenues of the
Revolving Borrower and its Subsidiaries or 5% of Consolidated EBIT, in each
case for the four Fiscal Quarters ending on the last day of the last Fiscal
Quarter immediately preceding the date as of which any such determination
is made; or

(c) has assets which represent at least 5% of the consolidated assets
of the Revolving Borrower and its Subsidiaries as of the last day of the
last Fiscal Quarter immediately preceding the date as of which any such
determination is made,

all of which, with respect to CLAUSES (b) and (c), shall be as reflected on the
audited consolidating financial statements of the Revolving Borrower for the
period, or as of the date, in question.

"STATED AMOUNT" of each Letter of Credit means the maximum amount that
could be drawn under such Letter of Credit assuming that all conditions
precedent to drawings thereunder have been complied with.

"STATED EXPIRY DATE" is defined in SECTION 4.1.

"STATED MATURITY DATE" means (a ) with respect to Revolving Loans, the
Revolving Commitment Termination Date and (b) with respect to Term Loans, five
years and one day after the Restatement Effective Date set forth in a notice
delivered by the

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Administrative Agent to each Borrower and each Lender, in each case, as such
date may be extended pursuant to SECTION 2.1.4.

"SUBSIDIARY" means, with respect to any Person, any corporation of which
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.

"SUBSIDIARY SECURITY AGREEMENT" means each of the Subsidiary Security
Agreements executed and delivered by a Significant Subsidiary (including the
Subsidiary Security Agreement executed and delivered by Vytec Sales in
substantially the form of EXHIBIT P hereto), as each is amended, supplemented,
restated or otherwise modified from time to time.

"SWINGLINE LENDER" means BofA.

"SWINGLINE BORROWING" means a Borrowing hereunder consisting of one or more
Swingline Loans made to the Revolving Borrower on the same day by the Swingline
Lender.

"SWINGLINE CLEAN-UP DAY" has the meaning specified in SUBSECTION 3.1(D).

"SWINGLINE COMMITMENT" has the meaning specified in SECTION 2.7.

"SWINGLINE LOAN" has the meaning specified in SECTION 2.7.

"TAXES" is defined in SECTION 5.6.

"TERM BORROWER" is defined in the PREAMBLE.

"TERM COMMITMENT AMOUNT" means, on any date, $25,000,000.

"TERM LOAN" means an extension of credit by a Lender to the Term Borrower
under ARTICLE II.

"TERM NOTE" means a promissory note of the Term Borrower payable to the
order of any Lender, in the form of EXHIBIT A-2 hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Term Borrower to such Lender resulting from
outstanding Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.

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"TOTAL CAPITALIZATION" means, on any date, the sum of (i) an amount equal
to Consolidated Net Worth on such date, PLUS (ii) an amount equal to
Consolidated Funded Debt on such date.

"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Committed Loan or a Eurodollar Committed Loan.

"UCC" means the Uniform Commercial Code as in effect in any jurisdiction.

"UNITED STATES" or "U.S." means the United States of America, its fifty
States and the District of Columbia.

"VYTEC SALES" means Vytec Sales Corporation, a corporation organized under
the laws of Delaware.

"WELFARE PLAN" means a "welfare plan", as such term is defined in section
3(1) of ERISA.

(b) CERTAIN ASBESTOS-RELATED DEFINITIONS. The following terms (whether or
not underscored) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the following
meanings, and other capitalized terms used and not defined in this SECTION 1.2
shall have the meanings set forth in the Global Settlement Agreement or the
Insurance Settlement Agreement, as applicable each as modified by the Plant
Agreement (such meanings to be equally applicable to the singular and plural
forms thereof):

"CNA CASUALTY" means CNA Casualty Company of California, a California
corporation.

"COLUMBIA" means Columbia Casualty Company, an Illinois corporation.

"CONTINENTAL" means Continental Casualty Company, an Illinois corporation.

"FIBREBOARD" means Fibreboard Corporation; Fibreboard Paper Corporation;
Fibreboard Products, Incorporated; Paraffine Companies, Incorporated; Plant
Rubber & Asbestos Works; Pabco Products, Incorporated; and Pabco Insulation
Corporation; and each of their respective predecessors, Subsidiaries and
divisions, and with respect to Fibreboard Corporation's liability only, each of
their respective successors in interest.

"GLOBAL APPROVAL JUDGMENT" has the meaning set forth in the Global
Settlement Agreement as modified by the Plant Agreement.

"GLOBAL SETTLEMENT AGREEMENT" means the settlement agreement, dated as of
August 27, 1993, among Continental, CNA

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Casualty, Columbia, Pacific, the Revolving Borrower and the Representative
Plaintiffs as representatives of the Settlement Class.

"INSURANCE SETTLEMENT AGREEMENT" means the Settlement Agreement, dated
October 12, 1993, among the Revolving Borrower, Continental, CNA Casualty,
Columbia and Pacific.

"INSURERS" means (i) Continental, CNA Casualty, Columbia and all insurance
or indemnity companies controlling, controlled by or under common control with
any of them and (ii) Pacific and all insurance or indemnity companies
controlling, controlled by or under common control with it.

"PACIFIC" means Pacific Indemnity Company, a California corporation.

"PLANT AGREEMENT" shall mean that certain agreement, dated as of March,
1994, by and among the representatives of the Settlement Class, the Revolving
Borrower, Continental, CNA Casualty, Columbia, and Pacific.

"SETTLEMENT AGREEMENT APPROVAL JUDGMENT" has the meaning set forth in the
Insurance Settlement Agreement as modified by the Plant Agreement.

SECTION 1.2 USE OF DEFINED TERMS. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each Note,
Borrowing Request, Continuation/Conversion Notice, Loan Document, notice and
other communication delivered from time to time in connection with this
Agreement or any other Loan Document.

SECTION 1.3 CROSS-REFERENCES. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.

SECTION 1.4 ACCOUNTING AND FINANCIAL DETERMINATIONS.

(a) Unless otherwise specified, all accounting terms used herein or in any
other Loan Document shall be interpreted, all accounting determinations and
computations hereunder or thereunder (including under SECTION 8.2.4) shall be
made, and all financial statements required to be delivered hereunder or
thereunder shall be prepared in accordance with, those generally accepted
accounting principles in the United States or Canada, as applicable ("GAAP")
applied in the preparation of the financial

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statements referred to in SECTION 7.5. Notwithstanding the immediately
preceding sentence, if any changes in GAAP from those used in the preparation of
the financial statements referred to in SECTION 7.5 ("GAAP CHANGES") hereafter
occasioned by the promulgation of rules, regulations, pronouncements or opinions
by or required by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (or successors thereto or agencies
with similar functions) result in a change in the method of calculation of, or
in different components in, any of the financial covenants, definitional
provisions, standards or other terms or conditions found in this Agreement, (i)
the parties hereto agree to enter into good faith negotiations with respect to
amendments to this Agreement to conform those covenants, definitional
provisions, standards or other terms and conditions as criteria for evaluating
the Revolving Borrower's and its Subsidiaries, financial condition and
performance to substantially the same criteria as were effective prior to such
GAAP Change, and (ii) the Revolving Borrower and its Subsidiaries shall be
deemed to be in compliance with the affected covenant or other provision during
the 90-day period following any such GAAP Change if and to the extent that the
Revolving Borrower and its Subsidiaries would have been in compliance therewith
under GAAP as in effect immediately prior to such GAAP Change; PROVIDED,
HOWEVER, that this SECTION 1.4 shall not be deemed to require either Borrower,
the Co-Agents or the Lenders to agree to modify any provision of this Agreement
or any other Loan Document to reflect any such GAAP Change and, if the parties,
in their sole discretion, fail to reach agreement on such modifications prior to
the end of the 90-day period referred to in CLAUSE (II), the terms of this
Agreement shall remain unchanged and the compliance of the Revolving Borrower
and its Subsidiaries with the covenants and other provisions contained herein
shall, upon the expiration of such 90-day period, be calculated in accordance
with GAAP without giving effect to such GAAP Change.

(b) If any GAAP Change occurs with respect to which the parties fail to
reach agreement after negotiation as provided in CLAUSE (a) of this SECTION 1.4,
then all financial covenants, definitional provisions, standards or other terms
or conditions for evaluating the Revolving Borrower's and its Subsidiaries'
financial condition and performance shall be calculated without giving effect to
such GAAP Change. At the time of any such change, the Revolving Borrower shall
furnish to the Administrative Agent, with sufficient copies for each Lender, a
statement of the Revolving Borrower's independent public accountants that such
accountants concur with such change and a Reconciliation Statement, and
following such change, the Revolving Borrower shall furnish the Administrative
Agent, with sufficient copies for each Lender, Reconciliation Statements (i)
with each financial statement furnished thereafter under this Agreement, and
(ii) with each certificate or other data or information furnished by the
Revolving Borrower under this

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Agreement to show the Revolving Borrower's and its Subsidiaries' compliance with
all applicable financial covenants, definitional provisions, standards or other
terms or conditions for evaluating the Revolving Borrower's and its
Subsidiaries' financial condition and performance hereunder.

ARTICLE II

COMMITMENTS, BORROWING PROCEDURES AND NOTES

SECTION 2.1 COMMITMENTS. On the terms and subject to the conditions of
this Agreement (including ARTICLE V), each Lender severally agrees as follows:

SECTION 2.1.1 LOAN COMMITMENTS. Subject to SECTION 2.1.3,
(a) From time to time on any Business Day occurring prior to the
Revolving Commitment Termination Date, each Lender will make Loans
(relative to such Lender, its "COMMITTED REVOLVING LOANS") to the Revolving
Borrower equal to such Lender's Percentage of the aggregate amount of the
Borrowing of Committed Revolving Loans requested by the Revolving Borrower
to be made on such day up to an aggregate principal amount not exceeding at
any time outstanding the Revolving Commitment Amount. On the terms and
subject to the conditions hereof, the Revolving Borrower may from time to
time borrow, prepay and reborrow Committed Revolving Loans.

(b) On the Restatement Effective Date, each Lender will make Loans
(relative to such Lender, its "COMMITTED TERM LOANS") to the Term Borrower
equal to such Lender's Percentage of the aggregate amount of the Borrowing
of Committed Term Loans requested by the Term Borrower to be made on such
date up to an aggregate principal amount not exceeding the Term Commitment
Amount.

SECTION 2.1.2 COMMITMENT TO ISSUE LETTERS OF CREDIT. From time to time on
any Business Day, each Issuer will issue, and each Lender will participate in,
the Letters of Credit, in accordance with ARTICLE IV.

SECTION 2.1.3 LENDERS NOT PERMITTED OR REQUIRED TO MAKE LOANS OR ISSUE OR
PARTICIPATE IN LETTERS OF CREDIT UNDER CERTAIN CIRCUMSTANCES. No Lender shall
be permitted or required to

(a) make any Loan if, after giving effect thereto, the aggregate
outstanding principal amount

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(i) of all Revolving Loans of all Lenders, together with all
Letter of Credit Outstandings, would exceed the Revolving Commitment
Amount, or

(ii) of all Revolving Loans of such Lender (other than any Bid
Loans or Swingline Loans of such Lender), together with its Percentage
of all Letter of Credit Outstandings, would exceed such Lender's
Percentage of the Revolving Commitment Amount, or

(iii) of all Term Loans of all Lenders would exceed the Term
Commitment Amount, or

(iv) of all Term Loans of such Lender would exceed such Lender's
Percentage of the Term Commitment Amount; or

(b) issue (in the case of any Issuer) or participate in (in the case
of each Lender) any Letter of Credit if, after giving effect thereto

(i) the aggregate amount of all Letter of Credit Outstandings
would exceed $15,000,000,

(ii) all Letter of Credit Outstandings together with the
aggregate outstanding principal amount of all Revolving Loans of all
Lenders would exceed the Revolving Commitment Amount, or

(iii) such Lender's Percentage of all Letter of Credit
Outstandings together with the aggregate outstanding principal amount
of all Revolving Loans of such Lender (other than any Bid Loans or
Swingline Loans of such Lender) would exceed such Lender's Percentage
of the Revolving Commitment Amount.

SECTION 2.1.4 EXTENSION OF COMMITMENT TERMINATION DATES AND STATED
MATURITY DATE. (a) Not less than 60 days nor more than 120 days before (i) the
first anniversary of the date of the Restatement Effective Date and/or (ii) the
then current Revolving Commitment Termination Date and Stated Maturity Date for
Term Loans, the Revolving Borrower and the Term Borrower may, by written request
delivered to the Administrative Agent, request that the Revolving Commitment
Termination Date and Stated Maturity Date for Term Loans be extended by all the
Lenders for a period of one year from the then-current Revolving Commitment
Termination Date and Stated Maturity Date for Term Loans. The Administrative
Agent shall notify the Lenders of any such request. Such extension shall only
be effective upon approval thereof in writing by the Administrative Agent and
all the Lenders, and the execution and delivery of such amendments to the Loan
Documents and other documents (including without limitation

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amendments to Collateral Documents) as the Administrative Agent may require in
connection with such extension. The Administrative Agent and each Lender may
accept or reject any request for an extension in its sole and absolute
discretion. The Administrative Agent and each Lender shall use reasonable
efforts to accept or reject any such request within 30 days after receiving
notice thereof, PROVIDED that any failure by the Administrative Agent or Lender
to respond to such a request shall be deemed to be a rejection thereof.

(b) If any Lender rejects any Borrower's request for an extension
hereunder, subject to SECTION 11.11, such Borrower may: (i) request one or more
of the other Lenders to acquire and assume (in such Lender's sole discretion)
all or part of such rejecting Lender's Loans and Commitments; or (ii) designate
a replacement bank or financial institution to acquire and assume all or part of
such rejecting Lender's Loans and Commitments. Any such designation of a
replacement bank or financial institution under CLAUSE (ii) shall be subject to
the prior written consent of the Administrative Agent and the other Lenders
(which consent shall not be unreasonably withheld).

SECTION 2.2 MANDATORY AND OPTIONAL REDUCTIONS OF REVOLVING COMMITMENT
AMOUNTS.

SECTION 2.2.1 MANDATORY REDUCTIONS. At no time shall the Swingline
Commitment exceed the Revolving Commitment Amount, and any reduction of the
Revolving Commitment Amount which reduces the Revolving Commitment Amount below
the then current amount of the Swingline Commitment shall result in an automatic
corresponding reduction of the Swingline Commitment to the amount of the
Revolving Commitment Amount, as so reduced, without any action on the part of
the Swingline Lender.

SECTION 2.2.2 OPTIONAL REDUCTIONS. The Revolving Borrower may, from time
to time on any Business Day occurring after the time of the initial Borrowing
hereunder, voluntarily reduce the amount of the Revolving Commitment Amount;
PROVIDED, HOWEVER, that all such reductions shall require at least five Business
Days' irrevocable prior written notice to the Administrative Agent and be
permanent, and any partial reduction of the Revolving Commitment Amount shall be
in a minimum amount of $5,000,000 and in an integral multiple of $1,000,000;
PROVIDED FURTHER, HOWEVER, that no such reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Committed Revolving Loans
made on the effective date thereof, the outstanding principal amount of
Committed Revolving Loans, Swingline Loans and Bid Loans when taken together
with Letter of Credit Outstandings would exceed the Commitment Amount then in
effect. Once reduced in accordance with this SECTION 2.2.2, the reduction in
the Revolving Commitment Amount shall be applied to each Lender's Commitment in
accordance with such Lender's

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Percentage. All accrued commitment fees to the effective date of any reduction
of Commitments shall be paid on the effective date of such reduction or
termination.

SECTION 2.3 PROCEDURE FOR COMMITTED BORROWINGS. By delivering a Borrowing
Request to the Administrative Agent on or before 9:00 a.m., San Francisco time,
on a Business Day, the Revolving Borrower may from time to time irrevocably
request, on not less than one nor more than five Business Days' notice, in the
case of Base Rate Committed Loans, and on not less than three nor more than five
Business Days' notice, in the case of Eurodollar Committed Loans, that a
Committed Borrowing be made in a minimum amount of $5,000,000 and an integral
multiple of $1,000,000, or in the unused amount of the Revolving Commitment
Amount. By delivering a Borrowing Request to the Administrative Agent on or
before 9:00 a.m., San Francisco time, the Term Borrower shall irrevocably
request, on not less than one nor more than five Business Days' notice, in the
case of Base Rate Committed Loans, and on not less than three nor more than five
Business Days' notice, in the case of Eurodollar Committed Loans, that a
Committed Borrowing be made in the amount of the Term Commitment Amount.
Promptly upon receipt of such notice, the Agent shall advise each Lender
thereof. On the terms and subject to the conditions of this Agreement, each
Committed Borrowing shall be comprised of the Type of Loans, and shall be made
on the Business Day, specified in such Borrowing Request. On or before 11:00
a.m. (San Francisco time) on such Business Day each Lender shall deposit with
the Administrative Agent same day funds in an amount equal to such Lender's
Percentage of the requested Committed Borrowing. Such deposit will be made to
an account which the Administrative Agent shall specify from time to time by
notice to the Lenders. To the extent funds are timely received from the
Lenders, the Administrative Agent shall make such funds available to the
applicable Borrower by wire transfer on such Business Day to the accounts such
Borrower shall have specified in its Borrowing Request. No Lender's obligation
to make any Loan shall be affected by any other Lender's failure to make any
Loan.

SECTION 2.4 CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 9:00
a.m., San Francisco time, on a Business Day, the Revolving Borrower and/or Term
Borrower, as applicable, may from time to time irrevocably elect,

(i) on not less than three nor more than five Business Days' notice,
in the case of any conversion of Base Rate Committed Loans to Eurodollar
Committed Loans or continuation of Eurodollar Committed Loans, and

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(ii) on not less than one nor more than five Business Days' notice, in
the case of any conversion of Eurodollar Committed Loans to Base Rate
Committed Loans,

that all, or any portion in an aggregate minimum amount of $5,000,000 and an
integral multiple of $1,000,000, of any Committed Loans be, in the case of Base
Rate Committed Loans, converted into Eurodollar Committed Loans or, in the case
of Eurodollar Committed Loans, converted into a Base Rate Committed Loan or
continued as a Eurodollar Committed Loan (in the absence of delivery of a
Continuation/Conversion Notice with respect to any Eurodollar Committed Loan at
least three Business Days before the last day of the then current Interest
Period with respect thereto, such Eurodollar Committed Loan shall, on such last
day, automatically convert to a Base Rate Committed Loan); PROVIDED, HOWEVER,
that (x) each such conversion or continuation shall be pro rated among the
applicable outstanding Committed Loans of all Lenders, and (y) no portion of the
outstanding principal amount of any Loans may be continued as, or be converted
into, Eurodollar Committed Loans when any Default has occurred and is
continuing.

SECTION 2.5 BID BORROWINGS. In addition to Committed Borrowings pursuant
to SECTION 2.1, each Lender severally agrees that the Revolving Borrower may, as
set forth in SECTION 2.6, from time to time prior to the Commitment Termination
Date, request the Lenders to submit offers to make Bid Loans to the Revolving
Borrower; PROVIDED, HOWEVER, that the Lenders may, but shall have no obligation
to, submit such offers and the Revolving Borrower may, but shall have no
obligation to, accept any such offers; and PROVIDED, FURTHER, that at no time
shall the sum of (i) the outstanding aggregate principal amount of all Bid
Loans, Committed Loans and Swingline Loans made by the Lenders, PLUS (ii) the
Letter of Credit Outstandings exceed the Revolving Commitment Amount.

SECTION 2.6 PROCEDURE FOR BID BORROWINGS. (a) When the Revolving
Borrower wishes to request the Lenders to submit offers to make Bid Loans
hereunder, it shall transmit to the Administrative Agent by telephone call
followed promptly by facsimile transmission a notice in substantially the form
of EXHIBIT M (a "COMPETITIVE BID REQUEST") so as to be received no later than
7:00 a.m. (San Francisco time) (x) four Business Days prior to the date of a
proposed Bid Borrowing in the case of a Eurodollar Auction, or (y) two Business
Days prior to the date of a proposed Bid Borrowing in the case of an Absolute
Rate Auction, specifying:

(i) the date of such Bid Borrowing, which shall be a
Business Day;

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(ii) the aggregate amount of such Bid Borrowing, which
shall be a minimum amount of $5,000,000 or in multiples of $1,000,000
in excess thereof;

(iii) whether the Competitive Bids requested are to be for
Eurodollar Bid Loans or Absolute Rate Bid Loans or both; and

(iv) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of "Interest
Period" herein.

Subject to SUBSECTION 2.6(c), the Revolving Borrower may not request Competitive
Bids for more than three Interest Periods in a single Competitive Bid Request
and may not request Competitive Bids more than once in any period of five
Business Days.

(b) Upon receipt of a Competitive Bid Request, the Administrative
Agent will promptly send to the Lenders by facsimile transmission an Invitation
for Competitive Bids, which shall constitute an invitation by the Revolving
Borrower to each Lender to submit Competitive Bids offering to make the Bid
Loans to which such Competitive Bid Request relates in accordance with this
SECTION 2.6.

(c) (i) Each Lender may at its discretion submit a Competitive
Bid containing an offer or offers to make Bid Loans in response to any
Invitation for Competitive Bids. Each Competitive Bid must comply
with the requirements of this SUBSECTION 2.6(c) and must be submitted
to the Administrative Agent by facsimile transmission at the
Administrative Agent's office for notices set forth on the signature
pages hereto not later than (i) 6:30 a.m. (San Francisco time) three
Business Days prior to the proposed date of Borrowing, in the case of
a Eurodollar Auction or (2) 6:30 a.m. (San Francisco time) on the
proposed date of Borrowing, in the case of an Absolute Rate Auction;
PROVIDED that Competitive Bids submitted by the Administrative Agent
(or any Affiliate of the Administrative Agent) in the capacity of a
Lender may be submitted, and may only be submitted, if the
Administrative Agent or such Affiliate notifies the Revolving Borrower
of the terms of the offer or offers contained therein not later than
(A) 6:15 a.m. (San Francisco time) three Business Days prior to the
proposed date of Borrowing, in the case of a Eurodollar Auction or
(B) 6:15 a.m. (San Francisco time) on the proposed date of Borrowing,
in the case of an Absolute Rate Auction.

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(ii) Each Competitive Bid shall be in substantially the
form of EXHIBIT N, specifying therein:

(A) the proposed date of Borrowing;

(B) the principal amount of each Bid Loan for which
such Competitive Bid is being made, which principal amount
(x) may be equal to, greater than or less than the quoting
Lender's Percentage of the Revolving Commitment Amount, (y) must
be $5,000,000 or in multiples of $1,000,000 in excess thereof,
and (z) may not exceed the principal amount of Bid Loans for
which Competitive Bids were requested;

(C) in case the Revolving Borrower elects a Eurodollar
Auction, the margin above or below the Eurodollar Rate (the
"EURODOLLAR BID MARGIN") offered for each such Bid Loan,
expressed in multiples of 1/1000th of one basis point to be added
to or subtracted from the applicable Eurodollar and the Interest
Period applicable thereto;

(D) in case the Revolving Borrower elects an Absolute
Rate Auction, the fixed rate of interest per annum expressed in
multiples of 1/1000th of one basis point (the "ABSOLUTE RATE")
offered for each such Bid Loan; and

(E) the identity of the quoting Lender.

A Competitive Bid may contain up to three separate offers by the
quoting Lender with respect to each Interest Period specified in the
related Invitation for Competitive Bids.

(iii) Any Competitive Bid shall be disregarded if it:

(A) is not substantially in conformity with EXHIBIT N
or does not specify all of the information required by SUBSECTION
(c)(ii) of this Section;

(B) contains qualifying, conditional or similar
language;

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(D) arrives after the time set forth in SUBSECTION
(c)(i).

(d) Promptly on receipt and not later than 7:00 a.m. (San Francisco
time) three Business Days prior to the proposed date of Borrowing in the case of
a Eurodollar Auction, or 7:00 a.m. (San Francisco time) on the proposed date of
Borrowing, in the case of an Absolute Rate Auction, the Administrative Agent
will notify the Revolving Borrower of the terms (i) of any Competitive Bid
submitted by a Lender that is in accordance with SUBSECTION 2.6(c), and (ii) of
any Competitive Bid that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid submitted by such Lender with respect to the same
Competitive Bid Request. Any such subsequent Competitive Bid shall be
disregarded by the Administrative Agent unless such subsequent Competitive Bid
is submitted solely to correct a manifest error in such former Competitive Bid
and only if received within the times set forth in SUBSECTION 2.6(c). The
Administrative Agent's notice to the Revolving Borrower shall specify (1) the
aggregate principal amount of Bid Loans for which offers have been received for
each Interest Period specified in the related Competitive Bid Request; and (2)
the respective principal amounts and Eurodollar Bid Margins or Absolute Rates,
as the case may be, so offered. Subject only to the provisions of SECTIONS 5.1,
5.2 and 6.2 hereof and the provisions of this SUBSECTION (d), any Competitive
Bid shall be irrevocable except with the written consent of the Administrative
Agent given on the written instructions of the Revolving Borrower.

(e) Not later than 7:30 a.m. (San Francisco time) three Business Days
prior to the proposed date of Borrowing, in the case of a Eurodollar Auction, or
7:30 a.m. (San Francisco time) on the proposed date of Borrowing, in the case of
an Absolute Rate Auction, the Revolving Borrower shall notify the Administrative
Agent of its acceptance or non-acceptance of the offers so notified to it
pursuant to SUBSECTION 2.6(d). The Revolving Borrower shall be under no
obligation to accept any offer and may choose to reject all offers. In the case
of acceptance, such notice shall specify the aggregate principal amount of
offers for each Interest Period that is accepted. The Revolving Borrower may
accept any Competitive Bid in whole or in part; PROVIDED that:

(i) the aggregate principal amount of each Bid Borrowing
may not exceed the applicable amount set forth in the related
Competitive Bid Request;

(ii) the principal amount of each Bid Borrowing must be
$5,000,000 or in any multiple of $1,000,000 in excess thereof;

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(iii) acceptance of offers may only be made on the basis of
ascending Eurodollar Bid Margins or Absolute Rates within each
Interest Period, as the case may be; and

(iv) the Revolving Borrower may not accept any offer that
is described in SUBSECTION 2.6(c)(III) or that otherwise fails to
comply with the requirements of this Agreement.

(f) If offers are made by two or more Lenders with the same
Eurodollar Bid Margins or Absolute Rates, as the case may be, for a greater
aggregate principal amount than the amount in respect of which such offers are
accepted for the related Interest Period, the principal amount of Bid Loans in
respect of which such offers are accepted shall be allocated by the
Administrative Agent among such Lenders as nearly as possible (in such
multiples, not less than $1,000,000, as the Administrative Agent may deem
appropriate) in proportion to the aggregate principal amounts of such offers.
Determination by the Administrative Agent of the amounts of Bid Loans shall be
conclusive in the absence of manifest error.

(g) (i) The Administrative Agent will promptly notify each Lender
having submitted a Competitive Bid if its offer has been accepted and, if
its offer has been accepted, of the amount of the Bid Loan or Bid Loans to
be made by it on the date of the Bid Borrowing.

(ii) Each Lender which has received notice pursuant to
SUBSECTION 2.6(g)(i) that its Competitive Bid has been accepted, shall
make the amounts of such Bid Loans available to the Administrative
Agent for the account of the Revolving Borrower by deposit to an
account designated by the Administrative Agent, by 11:00 a.m. (San
Francisco time) on such date of Bid Borrowing, in funds immediately
available to the Administrative Agent.

(iii) Promptly following each Bid Borrowing, the
Administrative Agent shall notify each Lender of the ranges of bids
submitted and the highest and lowest Bids accepted for each Interest
Period requested by the Revolving Borrower and the aggregate amount
borrowed pursuant to such Bid Borrowing.

(iv) From time to time, the Revolving Borrower and the
Lenders shall furnish such information to the Administrative Agent as
the Administrative Agent may request relating to the making of Bid
Loans, including the amounts, interest rates, dates of borrowings and
maturities thereof, for purposes of the

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allocation of amounts received from the Revolving Borrower for payment of
all amounts owing hereunder.

(h) If, on or prior to the proposed date of Borrowing, the Revolving
Commitment Termination Date shall not have occurred and if, on such proposed
date of Borrowing all applicable conditions to funding referenced in
SECTIONS 5.1, 5.2 and 6.2 hereof are satisfied, the Lenders whose offers the
Revolving Borrower has accepted will fund each Bid Loan so accepted. Nothing in
this SECTION 2.6 shall be construed as a right of first offer in favor of the
Lenders or to otherwise limit the ability of the Revolving Borrower to request
and accept credit facilities from any Person (including any of the Lenders),
provided that no Default or Event of Default would otherwise arise or exist as a
result of the Revolving Borrower executing, delivering or performing under such
credit facilities.

SECTION 2.7 SWINGLINE LOANS.

(a) Subject to the terms and conditions hereof, the Swingline Lender
severally agrees to make a portion of the Revolving Commitment Amount available
to the Revolving Borrower by making swingline loans (individually, a "SWINGLINE
LOAN"; collectively, the "SWINGLINE LOANS") to the Revolving Borrower on any
Business Day prior to the Revolving Commitment Termination Date in accordance
with the procedures set forth in this Section in an aggregate principal amount
at any one time outstanding not to exceed $15,000,000, notwithstanding the fact
that such Swingline Loans, when aggregated with the Swingline Lender's
outstanding Committed Loans, may exceed the Swingline Lender's Commitment (the
amount of such commitment of the Swingline Lender to make Swingline Loans to the
Revolving Borrower pursuant to this SUBSECTION 2.7(A), as the same shall be
reduced pursuant to SUBSECTION 2.2.1) or as a result of any assignment pursuant
to SECTION 11.11.1, the Swingline Lender's "SWINGLINE COMMITMENT"); PROVIDED,
that at no time shall (i) the sum of the outstanding principal amount of all
Swingline Loans PLUS the outstanding principal amount of all Committed Loans and
Bid Loans PLUS the Letter of Credit Outstandings exceed the Revolving Commitment
Amount, or (ii) the outstanding principal amount of all Swingline Loans exceed
the Swingline Commitment. Additionally, no more than four Swingline Loans may
be outstanding at any one time, and except as otherwise provided in SECTION
3.2.2, all Swingline Loans shall at all times bear interest at a rate per annum
equal to the Alternate Base Rate unless otherwise agreed to by the Swingline
Lender in its sole discretion. Within the foregoing limits, and subject to the
other terms and conditions hereof, the Revolving Borrower may borrow under this
SUBSECTION 2.7(a), repay pursuant to SECTION 3.1 and reborrow pursuant to this
SUBSECTION 2.7(a).

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(b) The Revolving Borrower shall provide the Administrative Agent
(with a copy to the Swingline Lender) with irrevocable written notice (including
notice via telephone call confirmed immediately by facsimile) in the form of a
Borrowing Request of any Swingline Loan requested hereunder (which notice must
be received by the Swingline Lender and the Administrative Agent prior to 12:00
noon (San Francisco time) on the requested Borrowing date) specifying (i) the
amount to be borrowed, and (ii) the requested Borrowing date, which must be a
Business Day.

Upon receipt of the Borrowing Request, the Swingline Lender will
immediately confirm with the Administrative Agent (by telephone or in writing)
that the Administrative Agent has received a copy of the Borrowing Request from
the Revolving Borrower, and, if not, the Swingline Lender will provide the
Administrative Agent with a copy thereof. Unless the Swingline Lender has
received notice prior to 2:00 p.m. on such Borrowing date from the
Administrative Agent (A) directing the Swingline Lender not to make the
requested Swingline Loan as a result of the limitations set forth in the PROVISO
set forth in the first sentence of SUBSECTION 2.7(a); or (B) that one or more
conditions specified in ARTICLE VI are not then satisfied; then, subject to the
terms and conditions hereof, the Swingline Lender will, not later than 3:00 p.m.
(San Francisco time) on the Borrowing date specified in such Borrowing Request,
make the amount of its Swingline Loan available to the Administrative Agent for
the account of the Revolving Borrower at an account designated by the
Administrative Agent in funds immediately available to the Administrative Agent.
The proceeds of such Swingline Loan will then promptly be made available to the
Revolving Borrower by the Administrative Agent crediting the account of the
Revolving Borrower on the books of BofA with the aggregate of the amounts made
available to the Administrative Agent by the Swingline Lender and in like funds
as received by the Administrative Agent. Each Borrowing pursuant to this
Section shall be in an aggregate principal amount equal to two hundred fifty
thousand dollars ($250,000) or an integral multiple of one hundred thousand
dollars ($100,000) in excess thereof, unless otherwise agreed by the Swingline
Lender.

(c) If (i) any Swingline Loans shall remain outstanding at 9:00 a.m.
(San Francisco time) on the Business Day immediately prior to a Swingline Clean-
Up Day and by such time on such Business Day the Administrative Agent shall have
received neither

(A) a Borrowing Request delivered pursuant to SECTION 2.3
requesting that Committed Revolving Loans be made pursuant to
SECTION 2.1 or Bid Loans be made pursuant to SECTION 2.5 on the
Swingline Clean-Up Day in an amount at least equal to the

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aggregate principal amount of such Swingline Loans, nor

(B) any other notice indicating the Revolving Borrower's
intent to repay such Swingline Loans with funds obtained from
other sources, or

(ii) any Swingline Loans shall remain outstanding during the existence
of a Default or Event of Default and the Swingline Lender shall in its sole
discretion notify the Administrative Agent that the Swingline Lender
desires that such Swingline Loans be converted into Committed Revolving
Loans,

then the Administrative Agent shall be deemed to have received a Borrowing
Request from the Revolving Borrower pursuant to SECTION 2.3 requesting that Base
Rate Committed Revolving Loans be made pursuant to SECTION 2.1 on such Swingline
Clean-Up Day (in the case of the circumstances described in CLAUSE (i) above) or
on the first Business Day subsequent to the date of such notice from the
Swingline Lender (in the case of the circumstances described in CLAUSE (ii)
above) in an amount equal to the aggregate amount of such Swingline Loans, and
the procedures set forth in SUBSECTIONS 2.3 shall be followed in making such
Base Rate Committed Loans; PROVIDED that such Base Rate Committed Revolving
Loans shall be made notwithstanding the Revolving Borrower's failure to comply
with SECTION 6.2.1; and PROVIDED, FURTHER, that if a Borrowing of Committed
Revolving Loans becomes legally impracticable and if so required by the
Swingline Lender at the time such Committed Revolving Loans are required to be
made by the Lenders in accordance with this SUBSECTION 2.7(c), each Lender
agrees that in lieu of making Committed Revolving Loans as described in this
SUBSECTION 2.7(c), such Lender shall purchase a participation from the Swingline
Lender in the applicable Swingline Loans in an amount equal to such Lender's
Percentage of such Swingline Loans, and the procedures set forth in SECTION 2.3
shall be followed in connection with the purchases of such participations. Upon
such purchases of participations, the prepayment requirements of SUBSECTION
3.1(d) shall be deemed waived with respect to such Swingline Loans. The
proceeds of such Base Rate Committed Revolving Loans, or participations
purchased, shall be applied to repay such Swingline Loans. A copy of each
notice given by the Administrative Agent to the Lenders pursuant to this
SUBSECTION 2.7(c) with respect to the making of Committed Revolving Loans, or
the purchases of participations, shall be promptly delivered by the
Administrative Agent to the Revolving Borrower. Each Lender's obligation in
accordance with this Agreement to make the Committed Revolving Loans, or
purchase the participations, as contemplated by this SUBSECTION 2.7(c), shall be
absolute and unconditional and shall not be affected by any circumstance,
including (1) any set-off, counterclaim, recoupment, defense or other right
which such

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Lender may have against the Swingline Lender, the Revolving Borrower or any
other Person for any reason whatsoever; (2) the occurrence or continuance of a
Default, an Event of Default or a Material Adverse Effect; or (3) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

SECTION 2.8 FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make Bid Loans or Swingline Loans based on the Eurodollar Rate or
to make, continue or convert Eurodollar Committed Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such Bid Loan, Swingline Loan or
Eurodollar Committed Loan; PROVIDED, HOWEVER, that such Loan shall nonetheless
be deemed to have been made and to be held by such Lender, and the obligation of
the applicable Borrower to repay such Loan shall nevertheless be to such Lender
for the account of such foreign branch, Affiliate or international banking
facility. In addition, each Borrower hereby consents and agrees that, for
purposes of any determination to be made for purposes of SECTION 5.1, 5.2, 5.3,
5.4 or 5.11, it shall be conclusively assumed that each Lender elected to fund
all Bid Loans and Swingline Loans based on the Eurodollar Rate and all
Eurodollar Committed Loans by purchasing Dollar deposits in its Eurodollar
Office's interbank eurodollar market.

SECTION 2.9 NOTES. (a) The Loans made by each Lender shall be evidenced
by one or more loan accounts or records maintained by such Lender in the
ordinary course of business. The loan accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Loans made by the Lenders to each Borrower and the interest
and payments thereon. Any failure so to record or any error in doing so shall
not, however, limit or otherwise affect the obligation of such Borrower
hereunder to pay any amount owing with respect to the Loans.

(b) Upon the request of any Lender made through the Administrative Agent,
the Committed Loans made by such Bank may be evidenced by one or more Committed
Loan Notes and the Bid Loans made by such Lender may be evidenced by one or more
applicable notes ("BID LOAN NOTES"), instead of or in addition to loan accounts.
Each such Lender shall endorse on the schedules annexed to its Note(s) the date,
amount and maturity of each Loan made by it and the amount of each payment of
principal made by the applicable Borrower with respect thereto. Each such
Lender is irrevocably authorized by the applicable Borrower to endorse its
Note(s) and each Lender's record shall be conclusive absent manifest error;
PROVIDED, HOWEVER, that the failure of a Lender to make, or an error in making,
a notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations

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of the applicable Borrower hereunder or under any such Note to such Lender.

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

SECTION 3.1 REPAYMENTS AND PREPAYMENTS. Each Borrower shall repay in full
the unpaid principal amount of each Loan made to it upon the Stated Maturity
Date therefor. Prior thereto

(a) each Borrower may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Loans; PROVIDED, HOWEVER, that

(i) any such prepayment of a Loan (other than a Bid Loan or a
Swingline Loan) shall be made PRO RATA among Loans of the same Type
and, if applicable, having the same Interest Period of all Lenders;

(ii) any such prepayment of any Loan (other than a Base Rate
Committed Loan or a Swingline Loan based on the Alternate Base Rate)
made on any day other than the last day of the Interest Period for
such Loan shall be subject to such Borrower's obligation to make
payment, if requested by any Lender, of an additional amount equal to
the amount due under SECTION 5.4 incurred as a result of such
prepayment being so made at such time;

(iii) all such prepayments shall require at least three but no
more than five Business Days' prior written notice (except in the case
of Base Rate Committed Loans and Swingline Loans based upon the
Alternate Base Rate which shall require one Business Day's prior
written notice) to the Administrative Agent and such notice of
prepayment shall be irrevocable and shall specify (i) the date and
amount of such prepayment, and (ii) whether such payment is of Base
Rate Committed Loans, Eurodollar Committed Loans or Swingline Loans,
or any combination thereof;

(iv) all such prepayments (A) in the case of Loans other than
Swingline Loans, shall be in an aggregate minimum amount of $5,000,000
(or if less, the aggregate outstanding amount of all Loans) and an
integral multiple of $1,000,000, and (B) in the case of Swingline
Loans, shall be in an aggregate minimum amount of $250,000 (or if
less, the aggregate outstanding amount of such Swingline Loan) and an
integral multiple of $100,000; and

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(v) notwithstanding the terms of SECTION 5.4(a), Bid Loans may
not be voluntarily prepaid.

(b) the Revolving Borrower shall, on each date when any reduction in
the Revolving Commitment Amount shall become effective, including pursuant
to SECTION 2.2, make a mandatory prepayment (which shall be applied (or
held for application and bear interest at the rate applicable under SECTION
4.7) as the case may be, by the Lenders first to the payment of the
aggregate unpaid principal amount of those Revolving Loans then
outstanding, and then to the payment of the then outstanding Letter of
Credit Outstandings) equal to the excess, if any, of the aggregate,
outstanding principal amount of all Revolving Loans and Letter of Credit
Outstandings over the Revolving Commitment Amount as so reduced;

(c) each Borrower shall, immediately upon any acceleration of the
Stated Maturity Date of any Revolving Loans or Term Loans pursuant to
SECTION 9.2 or SECTION 9.3, repay all such Loans, unless, pursuant to
SECTION 9.3, only a portion of all such Loans is so accelerated;

(d) the Revolving Borrower shall make a mandatory prepayment of
Swingline Loans (A) if following any reduction of the Swingline Commitment
pursuant to SUBSECTION 2.2.1 the aggregate outstanding principal amount of
Swingline Loans would exceed the Swingline Commitment as reduced, on the
reduction date in an amount equal to the excess of the Swingline Loans over
the Swingline Commitment, and (B) so that for at least one Business Day
during each successive two calendar week period the aggregate principal
amount of Swingline Loans shall be $0 (a "SWINGLINE CLEAN-UP DAY"), the
Revolving Borrower shall prepay on the Swingline Clean-Up Day the
outstanding principal amount of the Swingline Loans (which Swingline Loans
may not be reborrowed until such Swingline Clean-Up Day has ended); and

(e) shall repay each Bid Loan on the last day of the relevant
Interest Period.

Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by SECTION 5.4. No voluntary
prepayment of principal of any Revolving Loans shall cause a reduction in the
Revolving Commitment Amount.

SECTION 3.2 INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this SECTION 3.2.

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SECTION 3.2.1 RATES. Bid Loans shall accrue interest at the applicable
Eurodollar Rate PLUS the Eurodollar Bid Margin, in the case of a Eurodollar Bid
Loan, and at the Absolute Rate, in the case of any Absolute Rate Bid Loan, in
each case as determined in accordance with SECTION 2.6. Each Swingline Loan
shall bear interest on the principal amount thereof from the date when made
until such Loan becomes due at a rate PER ANNUM equal to the Alternate Base Rate
or such other rate agreed to by the Swingline Lender in its sole discretion.
Pursuant to an appropriately delivered Borrowing Request or
Continuation/Conversion Notice, each Borrower may elect that its Committed Loans
comprising a Borrowing accrue interest at a rate per annum:

(a) on that portion maintained from time to time as a Base Rate
Committed Loan, equal to the Alternate Base Rate from time to time in
effect; and

(b) on that portion maintained as a Eurodollar Committed Loan, during
each Interest Period applicable thereto, equal to the sum of the Eurodollar
Rate (Reserve Adjusted) for such Interest Period plus a margin equal to the
Applicable Margin in effect on the date such Eurodollar Committed Loan is
made.

The applicable margin to be added to each Eurodollar Committed Loan (the
"APPLICABLE MARGIN") will be determined by the Administrative Agent from time to
time for each quarter of each calendar year (the "CURRENT QUARTER") in
accordance with the table set forth below based on the Compliance Certificate
delivered by the Revolving Borrower for the immediately preceding calendar
quarter (the "PRECEDING QUARTER") under CLAUSE (c) of SECTION 8.1.1. Such
determination shall be based on the calculation of the Consolidated Funded Debt
to Cash Flow Ratio set forth in the Compliance Certificate for the Preceding
Quarter and shall apply from and including the first day of the Current Quarter
until and including the last day of the Current Quarter. Prior to the date in
the Current Quarter on which the Administrative Agent receives the Compliance
Certificate for the Preceding Quarter which is required to be delivered during
the Current Quarter, the Applicable Margin shall be the same as was applicable
in the Preceding Quarter, subject to any necessary adjustment pursuant to this
CLAUSE (b) upon receipt of such subsequent Compliance Certificate, effective as
of the beginning of the Current Quarter; PROVIDED that the Applicable Margin for
any day after the forty-fifth day of any calendar quarter during which the
Revolving Borrower shall not deliver a Compliance Certificate shall be 1.0% PER
ANNUM effective until the day such certificate is delivered. If the subsequent
Compliance Certificate shall indicate that the Applicable Margin should have
been increased for the Current Quarter pursuant to this CLAUSE (b), each
Borrower shall, on the date of delivery of such

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Compliance Certificate, pay to the Administrative Agent for the account of the
Lenders an amount equal to the difference between (A) the aggregate amount of
interest which would theretofore have been payable during such Current Quarter
had such increase been made on the first day of such Current Quarter and (B) the
amount of interest which was actually paid during such Current Quarter. If such
Compliance Certificate shall indicate that either Borrower paid more interest
than would have been required if any reduction therein required by this CLAUSE
(b) had commenced on the first day of such Current Quarter, any such excess
payment shall be credited to future payments of interest and other amounts
payable to such Borrower hereunder. Any such credit to future payments of
interest shall in each case be made first to the next occurring payment of
interest due hereunder. The ratios set forth in the table below are for the
purpose of interest calculation only and shall not affect the Revolving
Borrower's obligation to comply with SECTION 8.2.4.

Ratio Applicable Margin
----- -----------------

Less than 1.50:1 0.45%

1.50 or greater and less than
2.00:1 0.60%

2.00:1 or greater and less than
2.50:1 0.80%

2.50:1 or greater 0.925%

The "EURODOLLAR RATE (RESERVE ADJUSTED)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a Eurodollar Committed Loan
for any Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:

Eurodollar Rate Eurodollar Rate
= ------------------------------------
(Reserve Adjusted) 1.00 - Eurodollar Reserve Percentage

The Eurodollar Rate (Reserve Adjusted) for any Interest Period for Eurodollar
Committed Loans will be determined by the Administrative Agent on the basis of
the Eurodollar Reserve Percentage in effect on, and the applicable rates
furnished to and received by the Administrative Agent from its Eurodollar
office, two Business Days before the first day of such Interest Period.

"EURODOLLAR RATE" means the rate of interest PER ANNUM determined by the
Administrative Agent as the rate at which dollar deposits in the approximate
amount of any Loan to bear interest at a rate based upon the Eurodollar Rate or
BofA's Eurodollar Committed Loan, as applicable, for such Interest

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Period would be offered by BofA's Grand Cayman Branch, Grand Cayman B.W.I. (or
such other office as may be designated for such purpose by BofA), to major banks
in the offshore dollar interbank market at their request at approximately 11:00
a.m. (New York City time) two Business Days prior to the commencement of such
Interest Period.

"EURODOLLAR RESERVE PERCENTAGE" means, relative to any Interest Period for
Eurodollar Committed Loans, the reserve percentage (expressed as a decimal and
rounded upward to the nearest 1/100th of 1%) equal to the maximum aggregate
reserve requirements (including all basic, emergency, supplemental, marginal and
other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements) specified under regulations issued
from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.

All Eurodollar Committed Loans shall bear interest from and including the
first day of the applicable Interest Period to (but not including) the last day
of such Interest Period at the interest rate determined as applicable to such
Eurodollar Committed Loan.

The foregoing adjustment of the Eurodollar Rate on the basis of the
Eurodollar Reserve Percentage in order to determine the Eurodollar Rate (Reserve
Adjusted) shall be made by the Administrative Agent upon notice from time to
time by a Lender that it has become subject to reserves under applicable F.R.S.
Board regulations in respect of "Eurocurrency Liabilities" and that it shall
require compensation for costs it has incurred during an Interest Period as a
consequence of maintaining such reserves during such Interest Period. Such
compensation shall be limited to the actual costs of such reserves determined by
such Lender to be allocable to its Eurodollar Committed Loan or Loans. Any
determination by a Lender of the amount of such reserves shall, in the absence
of manifest error, be final, conclusive and binding on all of the parties
hereto.

SECTION 3.2.2 POST-DEFAULT RATE. At any time when any Event of Default
shall occur and be continuing, upon the request of the Administrative Agent, at
the direction of the Required Lenders, each Borrower shall pay, but only to the
extent permitted by law, interest (after as well as before judgment) on its
Loans and all other amounts due from it hereunder at the following rates: (i)
with respect to any amount payable on or in connection with a Base Rate
Committed Loan or Swingline Loan, from the date of such Event of Default until
such amount is paid in full, at a rate PER ANNUM equal to the sum of the
Alternate

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Base Rate in effect from time to time (but not less than the Alternate Base Rate
in effect at such date), or, in the case of any Swingline Loan, such other rate
at which such Loan bears interest, PLUS 2.0% PER ANNUM (the "POST-DEFAULT
RATE"), (ii) with respect to any amount payable on or in connection with a
Eurodollar Committed Loan or a Bid Loan, from the date of such Event of Default
until the end of the Interest Period for such Loan, at a rate PER ANNUM equal to
the sum of the applicable Eurodollar Rate (Reserve Adjusted), in the case of a
Eurodollar Committed Loan or the applicable Absolute Rate or Eurodollar Rate
PLUS the applicable Eurodollar Bid Margin in the case of any Eurodollar Bid Loan
PLUS, in each such case, 3.0% PER ANNUM, and, thereafter, at the Post-Default
Rate until such amount is paid in full, and (iii) with respect to any other
amount payable hereunder, from the date of such Event of Default until such
amount is paid in full, at the Post-Default Rate.

SECTION 3.2.3 PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:

(a) on the Stated Maturity Date therefor;

(b) on the date of any optional or required payment or prepayment, in
whole or in part, of principal outstanding on such Loan;

(c) with respect to Base Rate Committed Loans, and Bid Loans that
accrue interest at the Absolute Rate, on each Quarterly Payment Date
occurring after the date of the initial Borrowing hereunder;

(d) with respect to Eurodollar Committed Loans, or any Bid Loan or
Swingline Loan that accrues interest at a rate based upon the Eurodollar
Rate on the last day of each applicable Interest Period (and, if such
Interest Period shall exceed three months, on the date which would have
been the last day in an Interest Period of three months);

(e) with respect to any Base Rate Committed Loans converted into
Eurodollar Committed Loans on a day when interest would not otherwise have
been payable pursuant to CLAUSE (c), on the date of such conversion; and

(f) on that portion of any Loans the Stated Maturity Date of which is
accelerated pursuant to SECTION 9.2 or SECTION 9.3, immediately upon such
acceleration.

Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.

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SECTION 3.2.4 INTEREST RATE (CANADA).

For the purpose of the Interest Act (Canada) only, where interest is
calculated based on a year comprised of 360 days, 365 days, or 366 days, the
yearly rate or percentage of interest to which such interest rate is equivalent,
is the rate obtained by multiplying the rate by the actual number of days in the
year and dividing by 360, 365 or 366 as the case may be.

SECTION 3.3 FEES. Each Borrower agrees to pay the fees set forth in this
SECTION 3.3. All such fees shall be non-refundable.

SECTION 3.3.1 COMMITMENT FEES.

(a) The Revolving Borrower agrees to pay to the Administrative Agent for
the account of each Lender, for the period (including any portion thereof when
any of its Commitments are suspended by reason of the Revolving Borrower's
inability to satisfy any condition of ARTICLE VI) commencing on the Original
Effective Date and continuing through the final Revolving Commitment Termination
Date, a commitment fee on such Lender's Percentage of the sum of the average
daily unused portion of the Revolving Commitment Amount (as in effect from time
to time since the Original Effective Date) calculated at the rates PER ANNUM
determined from time to time for the Current Fiscal Quarter in accordance with
the table set forth below in CLAUSE (c) and the Compliance Certificate delivered
by the Revolving Borrower pursuant to CLAUSE (c) of SECTION 8.1.1. The amount
of any outstanding Bid Loans and Swingline Loans shall be disregarded for
purposes of calculating any Lender's Percentage of the average daily unused
portion of the Revolving Commitment Amount in accordance with the preceding
sentence except that, in determining such Percentage of the average daily unused
portion for any such Lender for any day, the outstanding principal amount of any
Bid Loans of such Lender on such day shall be subtracted from its Percentage of
the unused portion of the Revolving Commitment Amount in effect on such day.

(b) The determination of the commitment fee shall be based on the
calculation of the Consolidated Funded Debt to Cash Flow Ratio set forth in the
Compliance Certificate which is delivered during the Current Quarter or which
was delivered on the Original Effective Date, as the case may be, and shall
apply from and including the first day until and including the last day of the
Current Quarter. Subject to the terms of SECTION 2.2.2 hereof, such commitment
fees shall be payable by the Revolving Borrower in arrears on each Quarterly
Payment Date and on the Commitment Termination Date, commencing with the first
such day following the Original Effective Date, and on the Commitment
Termination Date and shall be determined on the basis of a 360 day year.

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(c) The ratios set forth in the table below are for the purpose of the
commitment fee calculation only and shall not affect the Revolving Borrower's
obligation to comply with SECTION 8.2.4.

Ratio Per Annum Commitment Fee
----- ------------------------
Less than 1.50:1 0.175%
1.50:1 or greater and less than 2.00:1 0.20%
2.00:1 or greater and less than 2.50:1 0.25%
2.50:1 or greater 0.30%

The Commitment Fee rate applicable for any day after the forty-fifth day of
any quarter of any calendar year during which the Revolving Borrower does not
deliver a Compliance Certificate, effective until the day such certificate is
delivered, shall be the highest rate set forth above.

SECTION 3.3.2 PARTICIPATION FEES. On the Restatement Effective Date, the
Term Borrower agrees to pay to the Administrative Agent for the account of each
Lender based upon the relative amount of such Lender's incremental Commitments,
an up-front participation fee in an amount equal to 0.05% TIMES the Term
Commitment Amount.

SECTION 3.3.3 [RESERVED].

SECTION 3.3.4 ADMINISTRATIVE AGENT'S FEES. The Revolving Borrower agrees
to pay to the Administrative Agent a non-refundable agency fee and certain other
fees (including bid auction fees) in the amounts and at the times set forth in a
separate agreements dated August 29, 1995 and December 9, 1995 between the
Revolving Borrower and the Administrative Agent.

SECTION 3.3.5 LETTER OF CREDIT FACE AMOUNT FEE. The Revolving Borrower
shall pay to the Administrative Agent for the benefit of the Lenders letter of
credit fees per annum based on the average daily maximum amount available to be
drawn on the outstanding Letters of Credit, payable quarterly in arrears on each
Quarterly Payment Date and determined on the basis of a 360 day year. The
applicable fees will be determined by the Administrative Agent from time to time
for the Current Quarter in accordance with the table set forth below based on
the Compliance Certificate delivered by the Revolving Borrower for the Preceding
Quarter under CLAUSE (c) of SECTION 8.1.1. Such determination shall be based on
the calculations of the Consolidated Funded Debt to Cash Flow Ratio set forth in
the Compliance Certificate delivered during the Current Quarter and shall apply
from and including the first day until and including the last day of the

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Current Quarter. The ratios set forth in the table below are for the purpose of
letter of credit fee calculation only and shall not affect the Revolving
Borrower's obligations to comply with SECTION 8.2.4.

Per Annum Letter
Ratio of Credit Fee
----- ----------------

Less than 1.50:1 0.45%
1.50:1 or greater and less than 2.00:1 0.60%
2.00:1 or greater and less than 2.50:1 0.80%
2.50:1 or greater 0.9250%

The Letter of Credit Fee rate applicable under this SECTION 3.3.5 (i) upon
the request of the Administrative Agent, at the direction of the Required
Lenders, for any day during which an Event of Default shall occur and be
continuing shall be 2.0% PER ANNUM, and (ii) for every day after the forty-fifth
day of any calendar quarter of any calendar year during which the Revolving
Borrower does not deliver a Compliance Certificate, effective until the day such
certificate is delivered, shall be the highest rate set forth above.

SECTION 3.3.6 LETTER OF CREDIT ISSUING FEE. The Revolving Borrower agrees
to pay to the Administrative Agent, for the account of the applicable Issuer, an
issuing fee for each Letter of Credit for the period from and including the date
of issuance of such Letter of Credit to (but not including) the date upon which
such Letter of Credit expires, of 0.125% PER ANNUM of the face amount of such
Letter of Credit and the Revolving Borrower further agrees to pay to the
Administrative Agent, for the account of the applicable Issuer, such Issuer's
customary administrative and processing fees and out-of-pocket expenses relating
to such Letter of Credit. Such issuing fee shall be determined on the basis of
a 360 day year, and together with other amounts shall be payable by the
Revolving Borrower in arrears on each Quarterly Payment Date and on the
Commitment Termination Date for any period then ending for which such fee shall
not theretofore have been paid, commencing on the first such date after the
issuance of such Letter of Credit.

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ARTICLE IV

LETTERS OF CREDIT

SECTION 4.1 ISSUANCE REQUESTS. By delivering to the Administrative Agent
and the applicable Issuer an Issuance Request on or before 10:00 a.m. San
Francisco time, the Revolving Borrower may request, from time to time prior to
the Commitment Termination Date and on not less than three nor more than fifteen
Business Days' notice, that such Issuer issue an irrevocable standby letter of
credit (each a "LETTER OF CREDIT"), in support of financial obligations of any
Borrower or its Subsidiaries incurred in such Borrower's or such Subsidiary's
ordinary course of business or in connection with an Approved Acquisition and
which are described in such Issuance Request. Upon receipt of an Issuance
Request, the Administrative Agent shall promptly notify the Lenders thereof.
Each Letter of Credit shall by its terms:

(a) be issued in a Stated Amount which

(i) is at least $100,000; and

(ii) does not exceed (or would not exceed) the then Letter of
Credit Availability; and

(b) be stated to expire on a date (its "STATED EXPIRY DATE") no later
than fifteen days prior to the then Revolving Commitment Termination Date.

So long as no Default has occurred and is continuing, by delivery to the
applicable Issuer and the Administrative Agent of an Issuance Request at least
five but not more than fifteen Business Days prior to the earlier of (i) the
Stated Expiry Date of any Letter of Credit and (ii) (if such Letter of Credit
contains provisions for automatic extension or renewal unless the Issuer advises
the beneficiary thereof that such Letter of Credit will not be extended or
renewed) the date upon which in accordance with the terms of such Letter of
Credit, the Issuer must provide notice to the Revolving Borrower that such
Letter of Credit will expire without renewal on the Stated Expiry Date, the
Revolving Borrower may request such Issuer to extend the Stated Expiry Date of
such Letter of Credit to a date no later than fifteen days prior to the then
Revolving Commitment Termination Date. Notwithstanding any provision contained
in the foregoing to the contrary, the Revolving Borrower may not request the
issuance of, and no Issuer shall have an obligation to issue, any Letter of
Credit at any time when, or if after giving effect to such issuance, and so long
as, the Letter of Credit Outstandings shall equal or exceed $15,000,000.

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SECTION 4.2 ISSUANCES AND EXTENSIONS.

(a) On the terms and subject to the conditions of this Agreement
(including ARTICLE VI), the Issuer shall issue Letters of Credit, and extend the
Stated Expiry Dates of outstanding Letters of Credit, in accordance with the
Issuance Requests made therefor. Each Issuer will make available the original
of each Letter of Credit which it issues in accordance with the Issuance Request
therefor to the beneficiary thereof (and will promptly provide the Revolving
Borrower and each of the Lenders with a copy of such Letter of Credit) and will
notify the beneficiary under any Letter of Credit of any extension of the Stated
Expiry Date or other renewal thereof.

(b) No Issuer is under any obligation to issue any Letter of Credit if:

(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Issuer from
issuing such Letter of Credit, or any Applicable Law with respect to the
Issuer or any request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over the Issuer shall by
its terms purport to direct the Issuer to refrain from the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the Issuer is not
otherwise compensated hereunder) not in effect on the Restatement Effective
Date, or shall impose upon the Issuer any unreimbursed loss, cost or
expense which was not applicable on the Original Effective Date and which
the Issuer in good faith deems material to it (unless the Revolving
Borrower elects to pay such losses, costs and expenses);

(ii) the Issuer has received written notice from any Lender, the
Administrative Agent or the Revolving Borrower, on or prior to the Business
Day prior to the requested date of issuance of such Letter of Credit, that
one or more of the applicable conditions contained in ARTICLE VI is not
then satisfied;

(iii) the expiry date of any requested Letter of Credit is prior to
the maturity date of any financial obligation to be supported by the
requested Letter of Credit;

(iv) any requested Letter of Credit is not in form and substance
acceptable to the Issuer, or the issuance of a Letter of Credit shall
violate any applicable policies of the Issuer; or

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(v) any standby Letter of Credit is for the purpose of supporting the
issuance of any letter of credit by any other Person.

SECTION 4.3 EXPENSES. The Revolving Borrower agrees to pay to the
Administrative Agent for the account of the applicable Issuer(s) all
administrative expenses of such Issuer(s) in connection with the issuance,
maintenance, modification (if any) and administration of each Letter of Credit
issued by such Issuer(s) upon demand from time to time.

SECTION 4.4 OTHER LENDERS' PARTICIPATION.

(a) Each Letter of Credit issued pursuant to SECTION 4.2 shall, effective
upon its issuance and without further action, be issued on behalf of all Lenders
(including the Issuer thereof) PRO RATA according to their respective
Percentages. Each Lender shall, to the extent of its Percentage, be deemed
irrevocably to have participated in the issuance of such Letter of Credit
(including, without limitation, Letters of Credit issued prior to the
Restatement Effective Date) and shall be responsible to reimburse promptly the
Issuer thereof for Reimbursement Obligations which have not been reimbursed by
the Revolving Borrower in accordance with SECTION 4.5, or which have been
reimbursed by the Revolving Borrower but must be returned, restored or disgorged
by such Issuer for any reason, and each Lender shall, to the extent of its
Percentage, be entitled to receive from the Administrative Agent a ratable
portion of the letter of credit fees received by the Administrative Agent
pursuant to SECTION 3.3.4, with respect to each Letter of Credit and which
accrue on or after the Restatement Effective Date.

(b) In the event that the Revolving Borrower shall fail to reimburse any
Issuer, or if for any reason Loans shall not be made to fund any Reimbursement
Obligation, all as provided in SECTION 4.5 and in an amount equal to the amount
of any drawing honored by such Issuer under a Letter of Credit issued by it, or
in the event such Issuer must for any reason return or disgorge such
reimbursement, such Issuer shall promptly notify each Lender of the unreimbursed
amount of such drawing and of such Lender's respective participation therein.
Each Lender shall make available to such Issuer, whether or not any Default
shall have occurred and be continuing, an amount equal to its respective
participation in same day or immediately available funds at the office of such
Issuer specified in such notice not later than 9:00 a.m., San Francisco time, on
the Business Day (under the laws of the jurisdiction of such Issuer) after the
date notified by such Issuer.

(c) In the event that any Lender fails to make available to any Issuer the
amount of such Lender's participation in any Letter of Credit as provided
herein, such Issuer shall be

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entitled to recover such amount on demand from such Lender together with
interest at the daily average Federal Funds Rate for three Business Days
(together with such other compensatory amounts as may be required to be paid by
such Lender to the Administrative Agent pursuant to the Rules for Interbank
Compensation of the council on International Banking or the Clearinghouse
Compensation Committee, as the case may be, as in effect from time to time) and
thereafter at the Alternate Base Rate.

(d) Nothing in this SECTION 4.4 shall be deemed to prejudice the right of
any Lender to recover from any Issuer any amounts made available by such Lender
to such Issuer pursuant to this Section in the event that it is finally
determined by a court of competent jurisdiction that the payment with respect to
a Letter of Credit by such Issuer in respect of which payment was made by such
Lender constituted gross negligence or wilful misconduct on the part of such
Issuer. Each Issuer shall distribute to each other Lender which has paid all
amounts payable by it under this SECTION 4.4 with respect to any Letter of
Credit issued by such Issuer such other Lender's Percentage of all payments
received by such Issuer from the Revolving Borrower in reimbursement of drawings
honored by such Issuer under such Letter of Credit when such payments are
received.

SECTION 4.5 DISBURSEMENTS. Each Issuer will notify the Revolving Borrower
and the Administrative Agent promptly of the presentment for payment of any
Letter of Credit, together with notice of the date (a "DISBURSEMENT DATE") such
payment shall be made. Subject to the terms and provisions of such Letter of
Credit, the applicable Issuer shall make such payment to the beneficiary (or its
designee) of such Letter of Credit. Prior to 10:00 a.m., San Francisco time, on
the Disbursement Date, the Revolving Borrower will reimburse the applicable
Issuer for all amounts which it has disbursed or is required to disburse under
the Letter of Credit on such date. To the extent the applicable Issuer is not
reimbursed in full in accordance with the THIRD SENTENCE of this Section, the
Revolving Borrower's Reimbursement Obligation shall accrue interest at a
fluctuating rate equal to the Alternate Base Rate through and including the
first Business Day after the Disbursement Date, and thereafter at a fluctuating
rate equal to the Alternate Base Rate plus a margin of 2.0% PER ANNUM, in each
case, payable on demand. The Revolving Borrower may borrow Revolving Loans
hereunder in order to pay any Reimbursement Obligation, subject to the terms and
conditions hereof (except for the minimum amounts for Borrowings set forth in
SECTION 2.3) including satisfaction of the conditions set forth in SECTION 6.2,
PROVIDED, HOWEVER, for the purpose of determining the availability of the
Commitments to make Revolving Loans immediately prior to giving effect to the
application of the proceeds of such Revolving Loans, such Reimbursement
Obligation shall be deemed not to be outstanding at such time.

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SECTION 4.6 REIMBURSEMENT. The Revolving Borrower's obligation (a
"REIMBURSEMENT OBLIGATION") under SECTION 4.5 to reimburse an Issuer with
respect to each Disbursement (including interest thereon), and each Lender's
obligation to make participation payments in each drawing which has not been
reimbursed by the Revolving Borrower, shall be absolute and unconditional under
any and all circumstances and irrespective of any setoff, recoupment
counterclaim, or defense to payment which the Revolving Borrower may have or
have had against any Lender or any beneficiary of a Letter of Credit, including
any defense based upon the occurrence of any Default, any draft, demand or
certificate or other document presented under a Letter of Credit proving to be
forged, fraudulent, invalid or insufficient, the failure of any Disbursement to
conform to the terms of the applicable Letter of Credit (if, in the applicable
Issuer's good faith opinion, such Disbursement is determined to be appropriate)
or any non-application or misapplication by the beneficiary of the proceeds of
such Disbursement, or the legality, validity, form, regularity, or
enforceability of such Letter of Credit; PROVIDED, HOWEVER, that nothing herein
shall adversely affect the right of the Revolving Borrower to commence any
proceeding against the applicable Issuer for any wrongful Disbursement made by
such Issuer under a Letter of Credit as a result of acts or omissions
constituting gross negligence or wilful misconduct on the part of such Issuer.

SECTION 4.7 DEEMED DISBURSEMENTS. Upon the occurrence and during the
continuation of any Event of Default after the Collateral Release Date or the
occurrence of the Revolving Commitment Termination Date, an amount equal to that
portion of Letter of Credit Outstandings attributable to outstanding and undrawn
Letters of Credit shall, at the election of the applicable Issuer acting on
instructions from the Required Lenders, and without demand upon or notice to the
Revolving Borrower, be deemed to have been paid or disbursed by such Issuer
under such Letters of Credit (notwithstanding that such amount may not in fact
have been so paid or disbursed), and, upon notification by such Issuer to the
Administrative Agent and the Revolving Borrower of its obligations under this
Section, the Revolving Borrower shall be immediately obligated to pay to the
Administrative Agent, the amount deemed to have been so paid or disbursed by
such Issuer. Any amounts so received by the Administrative Agent from the
Revolving Borrower pursuant to this SECTION 4.7 shall be held by the
Administrative Agent in a segregated account as collateral security for the
repayment of the Revolving Borrower's Obligations in connection with the Letters
of Credit issued by such Issuer and, subject to the prior payment of such
Obligations, the other Obligations of the Revolving Borrower. The Revolving
Borrower hereby assigns and pledges to the Administrative Agent, for the benefit
of the applicable Issuer, and hereby grants to the Administrative Agent, for the
benefit of the applicable Issuer, a security interest in

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and lien upon such account and all deposits in such account, all investments
arising out of such funds, all claims thereunder or in connection therewith and
all cash, securities, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of such account,
such funds or such investments. At such time when all Events of Default shall
have been cured or waived, the Administrative Agent shall return to the
Revolving Borrower all amounts then on deposit with the Administrative Agent
pursuant to this Section. All amounts on deposit pursuant to this Section
shall, until their application to any Reimbursement Obligation or other
Obligation or their return to the Revolving Borrower, as the case may be, bear
interest at the daily average Federal Funds Rate from time to time in effect
(net of the costs of any reserve requirements, in respect of amounts on deposit
pursuant to this Section, pursuant to F.R.S. Board Regulation D), which interest
shall be held by the Administrative Agent as additional collateral security for
the repayment of the Obligations.

SECTION 4.8 NATURE OF REIMBURSEMENT OBLIGATIONS. The Revolving
Borrower shall assume all risks of the acts, omissions, or misuse of any Letter
of Credit by the beneficiary thereof. Neither any Issuer nor any Lender (except
to the extent of its own gross negligence or wilful misconduct) shall be
responsible for:

(a) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;

(b) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or proceeds thereof in whole or in part, which may prove to be invalid or
ineffective for any reason;

(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;

(d) errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, or otherwise;
or

(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter
of Credit or of the proceeds thereof.

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None of the foregoing shall affect, impair, or prevent the vesting of any of the
rights or powers granted any Issuer or any Lender hereunder. In furtherance and
extension, and not in limitation or derogation, of any of the foregoing, any
action taken or omitted to be taken by any Issuer in good faith shall be binding
upon the Revolving Borrower and shall not put such Issuer under any resulting
liability to the Revolving Borrower.

SECTION 4.9 INDEMNITY. The Revolving Borrower hereby agrees to protect,
indemnify, pay and save each Issuer, the Administrative Agent and Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees and
allocated costs of internal counsel) which such Issuer, Co-Agent or Lender may
incur or be subject to as a consequence, direct or indirect, of

(a) the issuance of the Letters of Credit, other than as a result of
the gross negligence or wilful misconduct of such Issuer, the
Administrative Agent or Lender as determined by a court of competent
jurisdiction, or

(b) the failure of such Issuer, the Administrative Agent or Lender to
honor a drawing under any Letter of Credit as a result of any applicable
act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority.

SECTION 4.10 CONFLICTS WITH LETTER OF CREDIT RELATED DOCUMENTS. In the
event of any conflict between this Agreement and any of the agreements and
instruments entered into by the Revolving Borrower with (or in favor of) any
Issuer and relating to any Letter of Credit (other than the Letter of Credit
itself), including any Issuance Request, this Agreement shall control.

ARTICLE V

CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS

SECTION 5.1 EURODOLLAR RATE LENDING UNLAWFUL. If any Lender shall
determine (which determination shall, upon notice thereof to each Borrower and
the Lenders, be conclusive and binding on such Borrower) that the introduction
of or any change in or in the interpretation of any law makes it unlawful, or
any central bank or other governmental authority asserts that it is unlawful,
for such Lender to make Bid Loans based upon the Eurodollar Rate or to make,
continue or maintain any Loan as, or to convert any Loan into, a Eurodollar
Committed Loan of a certain Type, the obligations of such Lender to make,
continue, maintain or convert into any such Loans shall, upon such
determination, forthwith be suspended until such Lender shall

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notify the Administrative Agent that the circumstances causing such suspension
no longer exist, and all outstanding Bid Loans based upon the Eurodollar Rate
and all outstanding Eurodollar Committed Loans made by such Lender shall
automatically convert into Base Rate Committed Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such law
or assertion.

SECTION 5.2 DEPOSITS UNAVAILABLE. If the Majority Lenders shall have
determined that

(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to the Administrative Agent in its
relevant market; or

(b) by reason of circumstances affecting their relevant eurodollar
markets, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Bid Loans based on the Eurodollar Rate or to
Eurodollar Committed Loans,

then, upon notice from the Administrative Agent to each Borrower and the
Lenders, the obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to
make any Bid Loans based on the Eurodollar Rate or to make or continue any Loans
as, or to convert any Loans into, Eurodollar Committed Loans shall forthwith be
suspended until the Administrative Agent shall notify such Borrower and the
Lenders that the circumstances causing such suspension no longer exist.

SECTION 5.3 INCREASED EURODOLLAR LOAN COSTS, ETC. Each Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or, if applicable, of converting (or of its obligation
to convert) any Loans into, Bid Loans based on the Eurodollar Rate or Eurodollar
Committed Loans. Such Lender shall promptly notify the Administrative Agent and
each Borrower in writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the additional amount
required fully to compensate such Lender for such increased cost or reduced
amount (which shall include calculations in reasonable detail). Such additional
amounts shall be payable by each Borrower directly to such Lender within five
Business Days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on such Borrower.

SECTION 5.4 FUNDING LOSSES. In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other

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funds acquired by such Lender to make, continue or maintain any portion of the
principal amount of any Loan as, or, if applicable, to convert any portion of
the principal amount of any Loan into, a Bid Loan based upon the Eurodollar Rate
or a Eurodollar Committed Loan) as a result of

(a) any conversion or repayment or prepayment of the principal amount
of any Bid Loans or Eurodollar Committed Loans on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to SECTION 3.1 or otherwise;

(b) any Loans not being made in accordance with the Borrowing Request
therefor; or

(c) any Loans not being continued as, or converted into, Eurodollar
Committed Loans in accordance with the Continuation/Conversion Notice
therefor,

then, upon the written notice of such Lender to each Borrower (with a copy to
the Administrative Agent), which notice shall set forth the basis for requesting
such reimbursement, such Borrower shall, within five Business Days of its
receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss or
expense incurred with respect to Loans to such Borrower. Such written notice
(which shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on such Borrower.

SECTION 5.5 INCREASED CAPITAL COSTS. If any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in since the Restatement Effective Date of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other governmental authority
affects or would affect the amount of capital required or expected to be
maintained by any Lender or any Person controlling such Lender, and such Lender
determines (in its sole and absolute discretion) that the rate of return on its
or such controlling Person's capital as a consequence of its Commitments,
issuance of or participation in Letters of Credit or the Loans made by such
Lender is reduced to a level below that which such Lender or such controlling
Person could have achieved but for the occurrence of any such circumstance,
then, in any such case upon notice from time to time by such Lender to each
Borrower, such Borrower shall, within five Business Days of its receipt thereof
pay directly to such Lender additional amounts sufficient to compensate such
Lender or such controlling Person for such reduction in rate of return with
respect to such Borrower. A statement of such Lender as to any such additional
amount or amounts (including calculations thereof in reasonable detail)

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shall, in the absence of manifest error, be conclusive and binding on each
Borrower. In determining such amount, such Lender may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.

SECTION 5.6 TAXES. (a) All payments by each Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "TAXES"). In the event
that any withholding or deduction from any payment to be made by either Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then such Borrower will

(i) pay directly to the relevant authority the full amount required
to be so withheld or deducted;

(ii) promptly forward to the Administrative Agent an official receipt
or other documentation satisfactory to the Administrative Agent evidencing
such payment to such authority; and

(iii) pay to the Administrative Agent for the account of the Lenders
such additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.

Moreover, if any Taxes are directly asserted against the Administrative Agent or
any Lender with respect to any payment received by the Administrative Agent or
such Lender hereunder, the Administrative Agent or such Lender may pay such
Taxes and the applicable Borrower will promptly pay such additional amounts
(including any penalties, interest or expenses) as is necessary in order that
the net amount received by such person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount such
person would have received had not such Taxes been asserted.

(b) If the applicable Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent, for
the account of the Administrative Agent or Lenders, the required receipts or
other required documentary evidence, such Borrower shall indemnify the
Administrative Agent and Lenders for any incremental Taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a

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result of any such failure. For purposes of this SECTION 5.6, a distribution
hereunder by the Administrative Agent or any Lender to or for the account of any
Lender shall be deemed a payment by the applicable Borrower.

Each Lender that is organized under the laws of a jurisdiction other than
the United States shall, prior to the date such Lender becomes a party to this
Agreement and in a timely fashion thereafter, execute and deliver to each
Borrower and the Administrative Agent, one or more (as such Borrower or the
Administrative Agent may reasonably request) United States Internal Revenue
Service Forms 4224 or Forms 1001 or such other forms or documents (or successor
forms or documents), appropriately completed, as may be applicable to establish
the extent, if any, to which a payment to such Lender is exempt from withholding
or deduction of Taxes.

SECTION 5.7 PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by each Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by such Borrower to the Administrative
Agent for the PRO RATA account of the Lenders entitled to receive such payment.
All such payments required to be made to the Administrative Agent shall be made,
without setoff, deduction or counterclaim, not later than 9:00 a.m., San
Francisco time, on the date due, in same day or immediately available funds, to
such account as the Administrative Agent shall specify from time to time by
notice to such Borrower. Funds received after that time shall be deemed to have
been received by the Administrative Agent on the next succeeding Business Day.
The Administrative Agent shall promptly remit in same day funds to each Lender
its share, if any, of such payments received by the Administrative Agent for the
account of such Lender. All interest and fees shall be computed on the basis of
the actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on a Base Rate Committed
Loan (other than when calculated with respect to the Federal Funds Rate), 365
days or, if appropriate, 366 days). Whenever any payment to be made shall
otherwise be due on a day which is not a Business Day, such payment shall
(except as otherwise required by CLAUSE (c) of the definition of the term
"INTEREST PERIOD" with respect to Eurodollar Committed Loans) be made on the
next succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment.

SECTION 5.8 SHARING OF PAYMENTS. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Committed Loan (other than pursuant to the terms of
SECTIONS 5.3, 5.4 and 5.5) or Letter of Credit in excess of its PRO RATA

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share of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Committed Loans made by
them and/or Letters of Credit as shall be necessary to cause such purchasing
Lender to share the excess payment or other recovery ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of the excess payment or other
recovery is thereafter recovered from such purchasing Lender, the purchase shall
be rescinded and each Lender which has sold a participation to the purchasing
Lender shall repay to the purchasing Lender the purchase price to the ratable
extent of such recovery together with an amount equal to such selling Lender's
ratable share (according to the proportion of

(a) the amount of such selling Lender's required repayment to the
purchasing Lender

(b) the total amount so recovered from the purchasing Lender)

of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. Each Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including set-off, but subject to SECTION 5.9) with respect to such
participation as fully as if such Lender were the direct creditor of such
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a setoff to which this Section applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this Section to
share in the benefits of any recovery on such secured claim.

SECTION 5.9 SET-OFF. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists, each Lender is
authorized at any time and from time to time, without prior notice to either
Borrower, any such notice being waived by such Borrower to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of each Borrower against any and all Obligations owing to such Lender by
such Borrower, now or hereafter existing, irrespective of whether or not the
Administrative Agent or such Lender shall have made demand under this Agreement
or any Loan Document and although such Obligations may be contingent or
unmatured. Each Lender agrees promptly to notify each Borrower and the
Administrative Agent after any such

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set-off and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this SECTION 5.9 are in addition
to the other rights and remedies (including other rights of set-off) which the
Lender may have. Any Lender or Swingline Lender having outstanding Committed
Loans, Swingline Loans and Bid Loans at any time a right of set-off is exercised
by such Lender or Swingline Lender shall apply the proceeds of such set-off
first to such Lender's Committed Loans, until its Committed Loans are reduced to
zero, then to its Swingline Loans, and thereafter to its Bid Loans.
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE, OR ATTEMPT TO EXERCISE,
ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE ARISING UNDER OR IN CONNECTION
WITH THE LOAN DOCUMENTS AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF EITHER
BORROWER OR ANY SUBSIDIARY OF SUCH BORROWER HELD OR MAINTAINED BY THE LENDER
WITHOUT THE PRIOR WRITTEN CONSENT OF THE REQUIRED LENDERS AND THE ADMINISTRATIVE
AGENT.

SECTION 5.10 USE OF PROCEEDS. Each Borrower shall apply the proceeds of
each Borrowing in accordance with RECITAL G, PROVIDED, that, without limiting
the foregoing, no proceeds of any Loan will be used to acquire or carry any
equity security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, or any "margin stock", as defined
in F.R.S. Board Regulation U except for Approved Acquisitions in compliance with
F.R.S. Board Regulation U.

SECTION 5.11 OTHER INCREASED COSTS. If by reason of

(a) any change in applicable law, regulation, rule, decree or
regulatory requirement or any change in the interpretation or application
by any judicial or regulatory authority of any law, regulation, rule,
decree or regulatory requirement, or

(b) compliance by any Lender or any Issuer with any direction,
request or requirement (whether or not having the force of law) of any
governmental or monetary authority, including Regulation D of the F.R.S.
Board:

(i) any Lender or any Issuer shall be subject to any tax (other
than taxes on net income and franchises), levy, charge or withholding
of any nature or to any variation thereof or to any penalty with
respect to the maintenance or fulfillment of its obligations under
this Agreement, whether directly or by such being imposed on or
suffered by such Lender or Issuer;

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(ii) any reserve, deposit or similar requirement is or shall be
applicable, imposed or modified in respect of any Letters of Credit
issued by any Issuer or participations therein purchased by any Lender
or any Commitment or Loans made by any Lender, but excluding with
respect to any Eurodollar Committed Loan any such requirement included
in the calculation of the Eurodollar Rate (Reserve Adjusted); or

(iii) there shall be imposed on any Issuer any other condition
regarding any Letter of Credit or any other condition on any Lender
regarding this Agreement, any Commitment and Loans and any
participation in any Letter of Credit;

and the result of the foregoing is directly or indirectly to increase the cost
to such Issuer or such Lender of issuing, making or maintaining its Commitment,
any Loans or any Letter of Credit or of purchasing or maintaining any
participation therein or making any Loan or to reduce any amount receivable in
respect of any such Letter of Credit or any such Commitment or Loan by such
Issuer or such Lender, as applicable, then and in any such case such Issuer or
such Lender, as applicable, may, at any time after the additional cost is
incurred or the amount received is reduced, notify each Borrower thereof, and
such Borrower shall pay on demand such amounts as such Issuer or Lender, as
applicable, may specify to be necessary to compensate such Issuer or Lender, as
applicable, for such additional cost or reduced receipt attributable to such
Borrower, together with interest on such amount from the date demanded until
payment in full thereof at a rate equal at all times to the Alternate Base Rate.
The determination by such Issuer or Lender, as applicable, of any amount due
pursuant to this Section, as set forth in a statement setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest
error, be final and conclusive and binding on all of the parties hereto.

SECTION 5.12 OBLIGATION TO MITIGATE; SUBSTITUTION OF LENDERS. (a) Each
Lender agrees that as promptly as practicable after it becomes aware of the
occurrence of an event that would entitle it to give notice pursuant to this
ARTICLE V, and in any event if so requested by either Borrower, each Lender
shall use reasonable efforts to make, fund or maintain its affected Loans based
on the Eurodollar Rate through another Domestic Office, or a lending office
outside of the United States, if as a result thereof the increased costs would
be avoided or materially reduced or the illegality would thereby cease to exist
and if, in the opinion of such Lender, the making, funding or maintaining of
such Loans through such other office would not be disadvantageous to such Lender
or contrary to such Lender's normal banking practices.

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(b) Upon the receipt by either Borrower from any Lender (an "AFFECTED
LENDER") of a request for compensation or payment under this ARTICLE V, such
Borrower may: (i) request one or more of the other Lenders to acquire and
assume (in such Lender's sole discretion) all or part of such Affected Lender's
Loans and Commitments or Swingline Commitment, as the case may be; or (ii)
designate a replacement bank or financial institution to acquire and assume all
or part of such Affected Lender's Loans and Commitments or Swingline Commitment,
as the case may be. Any such designation of a replacement bank or financial
institution under CLAUSE (ii) shall be subject to the prior written consent of
the Administrative Agent and the other Lenders (which consent shall not be
unreasonably withheld). Nothing in this CLAUSE (b) shall relieve either
Borrower of any obligation to pay any amounts accrued under this ARTICLE V prior
to the date any Lender is replaced.

SECTION 5.13 CERTAIN RESTATEMENT EFFECTIVE DATE TRANSITIONAL MATTERS.

(a) On the Restatement Effective Date, each Lender hereby sells and
assigns, without recourse, an amount of Loans equal to the product of (i)
the excess (if any) of its Original Percentage over its Restated Percentage
times (ii) the aggregate principal amount of Loans outstanding on such date
and each Lender hereby purchases an amount of Loans equal to the product of
(i) the excess (if any) of its Restated Percentage over its Original
Percentage times (ii) the aggregate principal amount of Loans outstanding
on such date. Each Lender selling Loans under this SECTION 5.13 shall be
deemed to have sold (and each Lender purchasing Loans shall be deemed to
have purchased) a PRO RATA portion (based on the aggregate principal amount
of Loans then outstanding) of each of such selling Lender's Loans.
Payments by each Lender purchasing Loans under this SECTION 5.13 shall be
made to the Administrative Agent not later than 9:00 a.m., San Francisco
time in immediately available funds, without setoff, deduction or
counterclaim, for the PRO RATA account (based upon the outstanding
principal amount of Loans being sold) of each selling Lender in an amount
equal to the aggregate principal amount of outstanding Loans purchased by
such Lender.

(b) On and after the Restatement Effective Date, each Lender shall be
entitled to receive commitment fees under SECTION 3.3.1, letter of credit
fees under SECTION 3.3.5 and interest on Loans and on any other amount due
under any Loan Document, in each case, (i) accrued and unpaid before the
Restatement Effective Date in accordance with its Original Percentage and
at the applicable rates then in effect under the Original Credit Agreement
and (ii) accrued on and after the Restatement Effective Date in accordance
with its

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Restated Percentage and at the applicable rates under this Agreement.

(c) Each Lender acknowledges and agrees that in accordance with
SECTION 4.4 it shall be deemed to have participated in the issuance of each
Letter of Credit issued pursuant to SECTION 4.2 (including, without
limitation, Letters of Credit issued prior to the Restatement Effective
Date) in accordance with its Restated Percentage.

(d) On and after the Restatement Effective Date, to the extent that
any commitment and the other rights and obligations of any Lender existing
at the time immediately preceding the Restatement Effective Date have been
assigned or delegated, as applicable, to any Lender under this Agreement,
such Lender hereby assumes such commitment and other obligations and shall
have the rights and obligations of a Lender hereunder and under the other
Loan Documents and, to the extent that any commitment and other obligations
of any Lender existing at the time immediately preceding the Restatement
Effective Date have been delegated by any Lender pursuant to this
Agreement, such Lender shall be released from such commitment and its
obligations thereunder and under the other Loan Documents.

ARTICLE VI

CONDITIONS PRECEDENT

SECTION 6.1 CONDITIONS TO RESTATEMENT EFFECTIVE DATE. Unless otherwise
terminated pursuant to SECTION 6.4, this Agreement shall become effective on the
date (the "RESTATEMENT EFFECTIVE DATE") the conditions precedent set forth in
this SECTION 6.1 have been satisfied:

SECTION 6.1.1 AGREEMENT. The Administrative Agent shall have received
counterparts hereof executed on behalf of each Borrower, each Co-Agent and each
Lender (or notice thereof satisfactory to the Administrative Agent) shall have
been received by the Administrative Agent.

SECTION 6.1.2 RESOLUTIONS, ETC. The Administrative Agent shall have
received from each Obligor a certificate, dated the Restatement Effective Date,
of its Secretary or Assistant Secretary as to

(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Loan Document to be executed by it; and

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(b) the incumbency and signatures of those of its officers or other
designees authorized to act with respect to this Agreement, the Notes and
each other Loan Document executed by it,

upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of such Obligor canceling or
amending such prior certificate.

SECTION 6.1.3 DELIVERY OF NOTES. Upon request of any Lender pursuant to
SECTION 2.9(b) and on reasonable notice to the Revolving Borrower prior to the
Restatement Effective Date, the Administrative Agent shall have received or made
arrangements to receive within a reasonable time following the Restatement
Effective Date (in the case of Revolving Notes, in exchange for Notes previously
delivered by the Revolving Borrower under the Original Credit Agreement) for the
account of such Lender, its Revolving Note and/or Term Note payable to the order
of such Lender in a maximum principal amount equal to such Lender's Commitment
as to Committed Revolving Loans and/or Committed Term Loans, as applicable, in
effect as of the Restatement Effective Date and duly executed and delivered by
the applicable Borrower.

SECTION 6.1.4 GUARANTEES. The Administrative Agent shall have received
(a) the Guaranty, dated as of the date hereof, duly executed and delivered by
each Significant Subsidiary, and (b) the Fibreboard Guaranty, dated the date
hereof, duly executed on behalf of the Revolving Borrower.

SECTION 6.1.5 SECURITY AGREEMENTS AND CONFIRMATIONS. The Administrative
Agent shall have received executed counterparts of (x) written confirmation and
acknowledgement from each Significant Subsidiary party to a Subsidiary Security
Agreement, that such Subsidiary Security Agreement remains in full force and
effect after giving effect to the transactions contemplated by this Agreement
and the other Loan Documents, duly executed and delivered by each such
Significant Subsidiary and (y) a Subsidiary Security Agreement, in the form of
EXHIBIT P hereto, dated as of the date hereof, duly executed by Vytec Sales,
together with

(a) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens on the
assets and properties of Vytec Sales other than the Liens permitted by
SECTION 8.2.3 and other rights of any Person in any collateral described in
the Subsidiary Security Agreement to which Vytec Sales is a party
previously granted by any Person, together with such other Uniform
Commercial Code Form UCC-3 termination statements as the Collateral Agent
may reasonably request from Vytec Sales;

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(b) copies of search reports by a party acceptable to the
Administrative Agent, dated a date reasonably near to the Restatement
Effective Date, listing all effective financing statements which name Vytec
Sales (in each case under its present name and any previous names) as the
debtor and which are filed in the jurisdictions in which Uniform Commercial
Code financing statements (Form UCC-1) filings have been or should have
been made to perfect the security interest of the Administrative Agent
granted pursuant to the Subsidiary Security Agreement to which Vytec Sales
is a party and CLAUSE (a) above, together with copies of such financing
statements; and

(c) evidence that all other actions necessary or, in the opinion of
the Administrative Agent or the Lenders, desirable to perfect and protect
the first priority Lien created by the Collateral Documents, and to enhance
the Administrative Agent's ability to preserve and protect its interests in
and access to the Collateral, have been taken.

SECTION 6.1.6 PLEDGE AGREEMENT. The Administrative Agent shall have
received the Fibreboard Pledge Agreement, dated the date hereof, duly executed
on behalf of the Revolving Borrower together with the certificates evidencing
sixty-five (65%) of the issued and outstanding stock of the Term Borrower
pledged to the Administrative Agent pursuant to the Fibreboard Pledge Agreement,
which certificates shall be accompanied by undated stock powers duly executed in
blank.

SECTION 6.1.7 OPINIONS OF COUNSEL. The Administrative Agent shall have
received opinions, dated the date of the Restatement Effective Date and
addressed to the Co-Agents and all Lenders, from

(a) Brobeck, Phleger and Harrison, counsel to the Obligors, in
substantially the form of EXHIBIT E-1 hereto;

(b) Fraser & Beatty, Canadian counsel to the Term Borrower, in
substantially the form of EXHIBIT E-2 hereto; and

SECTION 6.1.8 SOLVENCY, VALUATION, ETC. The Administrative Agent shall
have received a certificate of an Authorized Officer of each Borrower, which
officer shall be the chief accounting or financial Authorized Officer, dated the
Restatement Effective Date, substantially in the form of EXHIBIT G.

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SECTION 6.1.9 INSURANCE CERTIFICATES. The Administrative Agent shall have
received certificates of Marsh & McLennan, the insurance brokers of the
Revolving Borrower and Vytec Sales, in substantially the form set forth in
EXHIBIT H, together with copies of the insurance policies and any other
documents referred to in each such certificate.

SECTION 6.1.10 PURCHASE OF LOANS, CLOSING FEES, EXPENSES, ETC. The
Administrative Agent shall have received for its own account, or for the account
of the applicable Lender or the Documentation Agent, as the case may be, all
payments due on the Restatement Effective Date from any Lender in respect of
Loans assigned pursuant to SECTION 5.13 and all fees, costs and expenses due and
payable pursuant to SECTIONS 3.3 and 11.3, if then invoiced.

SECTION 6.2 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Lender to make any Credit Extension (including the initial Credit Extension on
or after the Restatement Effective Date) and the obligation of any Lender to
make any Bid Loan as to which the Revolving Borrower has accepted the relevant
Competitive Bid shall be subject to the satisfaction of each of the conditions
precedent set forth in this SECTION 6.2.

SECTION 6.2.1 COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in SECTION 9.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of any Borrowing) the following statements shall be
true and correct

(a) the representations and warranties set forth in ARTICLE VII
(excluding, however, those contained in SECTION 7.7) shall be true and
correct (both before and after giving PRO FORMA effect to any Acquisition
to be financed with the proceeds of such Credit Extension) with the same
effect as if then made (unless stated to relate solely to an earlier date,
in which case such representations and warranties shall be true and correct
as of such earlier date); PROVIDED that SECTION 7.5 shall be deemed to
refer to the most recent date of the delivery of the financial statements
referred to therein;

(b) except as disclosed by each Borrower to the Administrative Agent
and the Lenders pursuant to SECTION 7.7

(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to the
knowledge of such Borrower, threatened against such Borrower or any of
its Subsidiaries which (A) if determined adversely to such

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Borrower or such Subsidiary, as the case may be, could reasonably be expected to
have a Material Adverse Effect (except, but only to the extent, the statement in
this SUBCLAUSE (A) is made or deemed made with respect to any time prior to the
Collateral Release Date, for Asbestos Litigation) or (B) which purports to
affect the legality, validity or enforceability of this Agreement, the Notes or
any other Loan Document; and

(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental investigation or
proceeding disclosed pursuant to SECTION 7.7 which if determined
adversely to such Borrower or any of its Subsidiaries, as the case may
be, could reasonably be expected to have a Material Adverse Effect
(except, but only to the extent that the statement in this CLAUSE (ii)
is made or deemed made with respect to any time prior to the
Collateral Release Date, for Asbestos Litigation);

(c) no Default shall have then occurred and be continuing, and
neither of the Borrowers nor any of their respective Significant
Subsidiaries are in material violation of any applicable law or
governmental regulation or court order or decree; and

(d) at any time after the Collateral Release Date, there exists no
Material Post-Collateral Release Asbestos Litigation.

SECTION 6.2.2 CREDIT REQUEST. The Administrative Agent shall have
received a Borrowing Request or Issuance Request, as the case may be, from the
applicable Borrower for such Credit Extension. Each of the delivery of a
Borrowing Request or an Issuance Request and the acceptance by the applicable
Borrower of the proceeds of the Borrowing or the issuance of the Letter of
Credit, as applicable, shall constitute a representation and warranty by such
Borrower that on the date of such Borrowing (both immediately before and after
giving effect to such Borrowing and the application of the proceeds thereof) or
the issuance of the Letter of Credit, as applicable, the statements made in
SECTION 6.2.1 are true and correct.

SECTION 6.2.3 SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on behalf of each Borrower or any of its
Subsidiaries shall be satisfactory in form and substance to the Administrative
Agent and its counsel.

SECTION 6.2.4 ADVANCES TO RESORT SUBSIDIARIES. If such Credit Extension
would cause the aggregate outstanding principal amount of the Revolving Loans
(other than Swingline Loans) to exceed $30,000,000, no loan or advance to any
Resort Subsidiary,

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other than any loan or advance in the ordinary course of business otherwise
permitted by SECTION 8.2.5(f), by the Revolving Borrower or any of its
Subsidiaries which are not Resort Subsidiaries shall be outstanding at the time
of such Credit Extension.

SECTION 6.3 NOTICE OF RESTATEMENT EFFECTIVE DATE. Upon satisfaction of
all the conditions set forth in SECTION 6.1, the Administrative Agent shall
deliver to each Borrower, the Documentation Agent and each Lender a notice
stating that such conditions have been satisfied and setting forth the
Restatement Effective Date.

SECTION 6.4 FAILURE TO REACH RESTATEMENT EFFECTIVE DATE. If all the
conditions set forth in SECTION 6.1 shall not have been satisfied on or prior to
February 29, 1996, this Agreement shall be of no further force or effect unless
each Lender and the Administrative Agent shall have consented, in writing, to an
extension of such date. Prior to the Restatement Effective Date (or if the
Restatement Effective Date does not occur) the Original Credit Agreement shall
continue in effect according to its terms.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders and the Co-Agents to enter into this
Agreement and to make Loans and issue Letters of Credit hereunder, each Borrower
represents and warrants unto the Co-Agents and each Lender as set forth in this
ARTICLE VII.

SECTION 7.1 ORGANIZATION, ETC. Each Borrower and each of its Subsidiaries
is a corporation validly organized and existing and in good standing under the
laws of the jurisdiction of its incorporation, is duly qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which a
failure to have such authority could reasonably be expected to have a Material
Adverse Effect, and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform its
Obligations under this Agreement, the Notes and each other Loan Document to
which it is a party and to own and hold under lease its property and to conduct
its business substantially as currently conducted by it.

SECTION 7.2 DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by each Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each other Obligor of each Loan Document executed or
to be executed by it are within such Borrower's and each such Obligor's

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corporate powers, have been duly authorized by all necessary corporate action,
and do not

(a) contravene such Borrower's or any such Obligor's Organic
Documents;

(b) contravene (i) any material contractual restriction, or (ii) any
law or governmental regulation or court decree or order binding on or
affecting such Borrower or any such Obligor; or

(c) result in, or require the creation or imposition of, any Lien
(other than the Liens of the Collateral Documents) on any of such
Borrower's or any Obligor's properties.

SECTION 7.3 GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or regulatory body or other Person is required for the due execution,
delivery or performance by each Borrower or any other Obligor of this Agreement,
the Notes or any other Loan Document to which it is a party. Neither of the
Borrowers nor any of their respective Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

SECTION 7.4 VALIDITY, ETC. Each Loan Document executed by an Obligor
will, on the due execution and delivery thereof, constitute, the legal, valid
and binding obligations of such Obligor enforceable in accordance with its
respective terms, except as such enforceability thereof may be limited by (a)
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

SECTION 7.5 FINANCIAL INFORMATION. The consolidated balance sheets of the
Revolving Borrower and its Subsidiaries as at December 31, 1994, and September
30, 1995 and of the Term Borrower and its Subsidiaries as at November 30, 1994
and May 31, 1995 and, in each case, the related statements of income,
stockholders' equity, if applicable, and cash flows of such Borrower and its
Subsidiaries, copies of which have been furnished to the Administrative Agent
and each Lender, have been prepared in accordance with GAAP consistently applied
(except, in the case of the September 30, 1995 and May 31, 1995 quarterly
financial statements, for the absence of notes thereto and for year-end
adjustments), and present fairly the consolidated

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financial condition of the corporations covered thereby as at the dates thereof
or, as the case may be, the results of their operations for the periods then
ended.

SECTION 7.6 NO MATERIAL ADVERSE CHANGE. Since December 31, 1994, there
has been no material adverse change in the financial condition, operations,
assets, business, properties or (but only with respect to Asbestos Litigation
related matters) prospects of the Revolving Borrower and its Subsidiaries, taken
as a whole.

SECTION 7.7 LITIGATION, LABOR CONTROVERSIES, ETC. Except as disclosed in
ITEM 7.7 ("Litigation") of the Disclosure Schedule, there is no pending or, to
the knowledge of each Borrower, threatened litigation, action, proceeding, or
labor controversy affecting such Borrower or any of its Subsidiaries, or any of
their respective properties, businesses, assets or revenues, which, if
determined adversely to such Borrower or such Subsidiaries could reasonably be
expected to have a Material Adverse Effect (other than, but only prior to the
Collateral Release Date, Asbestos Litigation) or which purports to affect the
legality, validity or enforceability of this Agreement, the Notes or any other
Loan Document. At any time following the Collateral Release Date, there is no
Material Post-Collateral Release Asbestos Litigation.

SECTION 7.8 SUBSIDIARIES. Each Borrower has no Subsidiaries, except those
Subsidiaries

(a) which are identified in ITEM 7.8 ("Existing Subsidiaries") of the
Disclosure Schedule or successors thereto; or

(b) the establishment or acquisition of which would not contravene
the terms of this Agreement.

SECTION 7.9 OWNERSHIP OF PROPERTIES. Except as set forth in Item 7.9
("Ownership of Properties"), each Borrower and each of its Subsidiaries owns
good and marketable title to all of their properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges or claims (including infringement claims with respect to patents,
trademarks, copyrights and the like) except as permitted pursuant to SECTION
8.2.3 or, in the case of claims, charges or defaults to title to any such
property or assets not constituting Liens as permitted pursuant to
SECTION 8.2.3, where the existence thereof could not give rise to a Material
Adverse Effect.

SECTION 7.10 TAXES. Each Borrower and each of its Subsidiaries has filed
all income and other material tax returns and reports required by law to have
been filed by it and has paid

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all taxes and governmental charges thereby shown to be owing, except any such
taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.

SECTION 7.11 PENSION AND WELFARE PLANS. During the twelve-consecutive-
month period prior to the date of the execution and delivery of this Agreement
and prior to the date of any Borrowing hereunder after the Restatement Effective
Date, no steps have been taken to terminate any Pension Plan, and no
contribution failure has occurred with respect to any Pension Plan sufficient to
give rise to a Lien under section 302(f) of ERISA. No condition exists or event
or transaction has occurred with respect to any Pension Plan which might result
in the incurrence by either Borrower or any member of the Controlled Group of
any material liability, fine or penalty. Except as disclosed in ITEM 7.11
("Employee Benefit Plans") of the Disclosure Schedule, neither of the Borrowers
nor any member of the Controlled Group of either Borrower has any contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Title I of
ERISA.

SECTION 7.12 ENVIRONMENTAL WARRANTIES. Except as set forth in ITEM 7.12
("Environmental Matters") of the Disclosure Schedule, to the best of each
Borrower's knowledge:

(a) all facilities and property (including underlying groundwater)
owned or leased by such Borrower or any of its Subsidiaries have been, and
continue to be, owned or leased by such Borrower and its Subsidiaries in
compliance with all Environmental Laws unless the failure to so comply
would not, or could not reasonably be expected to, have a Material Adverse
Effect;

(b) there have been no past, and there are no pending or threatened

(i) claims, complaints, notices or requests for information
received by such Borrower or any of its Subsidiaries with respect to
any alleged violation of any Environmental Law, or

(ii) complaints, notices or inquiries to such Borrower or any of
its Subsidiaries regarding potential liability under any Environmental
Law

which, in any such case, could, if determined adversely to such Borrower or
its Subsidiary, as the case may be, reasonably be expected to have a
Material Adverse Effect;

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(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by such Borrower or
any of its Subsidiaries that, singly or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect;

(d) such Borrower and its Subsidiaries have been issued and are in
material compliance with all permits, certificates, approvals, licenses and
other authorizations required by any Environmental Law, except for any such
permits, certificates, approvals, licenses or other authorizations the
possible consequences of the failure to obtain or comply with which could
not reasonably be expected to have a Material Adverse Effect;

(e) no property now or previously owned or leased by such Borrower or
any of its Subsidiaries is listed or (with respect to owned property only)
proposed for listing on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar state list of sites requiring investigation
or clean-up;

(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by such Borrower or any of its Subsidiaries
that, singly or in the aggregate, have, or could reasonably be expected to
have, a Material Adverse Effect;

(g) neither Borrower nor any Subsidiary of either Borrower has
directly transported or directly arranged for the transportation of any
Hazardous Material, other than asbestos, to any location which is listed or
proposed for listing on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations which
may lead to material claims against either Borrower or such Subsidiary
thereof for any remedial work, damage to natural resources or personal
injury, including claims under CERCLA other than with respect to Asbestos
Litigation; and

(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by either
Borrower or any Subsidiary of either Borrower that, singly or in the
aggregate, have, or could reasonably be expected to have, a Material
Adverse Effect.

SECTION 7.13 REGULATIONS G, U AND X. Neither Borrower is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loans will be used for a purpose which violates,
or would be

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inconsistent with, F.R.S. Board Regulation G, U or X. Terms for which meanings
are provided in F.R.S. Board Regulation G, U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.

SECTION 7.14 ACCURACY OF INFORMATION. All factual information heretofore
or contemporaneously furnished by or on behalf of each Borrower in writing to
either Co-Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of each Borrower in writing to
either Co-Agent or any Lender will be, taken as a whole, true and accurate in
every material respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of this Agreement by each
Co-Agent and such Lender, and such information is not, or shall not be, as the
case may be, in light of the circumstances in which furnished, incomplete by
omitting to state any material fact necessary to make such information not
misleading.

SECTION 7.15 COMPLIANCE OF LAWS. Except as disclosed in ITEM 7.15
("Compliance with Laws") of the Disclosure Schedule, each Borrower and its
Subsidiaries is, and will on the Restatement Effective Date (both before and
after giving effect to the transactions contemplated hereby) be, in compliance
with the requirements of all Applicable Laws (including maintenance of all
necessary permits, approvals, certificates, licenses and other authorization
relating thereto), except for any noncompliance which does not have, and could
not reasonably be expected to have, a Material Adverse Effect.

SECTION 7.16 ABSENCE OF DEFAULT. Neither Borrower nor any of its
Subsidiaries is in default in the payment of, or in default in any material
respect in the performance of, any obligation applicable to any outstanding
Indebtedness.

SECTION 7.17 FINANCIAL CONDITION. After giving effect to the incurrence
by each Borrower and each Obligor of the Obligations and other transactions
contemplated to occur on the date hereof and on the date of each Credit
Extension:

(a) the net worth of each Borrower and each Obligor determined in
accordance with GAAP, consistently applied, will not be less than zero,

(b) the respective assets of each Borrower and each Obligor, at fair
valuation, will exceed its respective liabilities, including contingent
liabilities,

(c) the respective capital of each Borrower and each Obligor will not
be unreasonably small to conduct its respective business, and

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(d) none of the Borrowers nor any other Obligor will have incurred
debts, or intends to incur debts, beyond its respective ability to pay such
debts as they mature.

For purposes of this Section, "debt" means any liability with respect to (a) a
right to payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (b) a right to an equitable remedy
for breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.

SECTION 7.18 SETTLEMENT AGREEMENTS. Except for the Settlement Agreements,
as of the Restatement Effective Date, neither Borrower nor any of its
Subsidiaries is a party to any material agreement relating to Asbestos
Litigation to which one or more Insurers is a party (except for any agreement
related to the Revolving Borrower's "Structured Settlement Program" or its
"Insurance Assignment Program" or any third party agreement pursuant to which
the Revolving Borrower and CNA Casualty have settled any Personal Injury
Asbestos Claim on terms which are no less favorable to the Revolving Borrower
than under any "Structured Settlement Program" or its "Insurance Assignment
Program").

SECTION 7.19 SUBSIDIARIES AND OBLIGORS. References in the representations
and warranties to Subsidiaries and Obligors shall be deemed to include any
Person which becomes a Subsidiary or Obligor on or after the Restatement
Effective Date, commencing with the making or deemed making of any such
representation or warranty in connection with the first Credit Extension which
relates to the Acquisition pursuant to which such Person becomes a Subsidiary,
or at the time such Person becomes an Obligor, as the case may be.

ARTICLE VIII

COVENANTS

SECTION 8.1 AFFIRMATIVE COVENANTS. Each Borrower agrees with each Co-
Agent and each Lender that, until all Commitments and the Swingline Commitment
have terminated, all Obligations have been paid and performed in full, and all
Letters of Credit have expired or are terminated, such Borrower will perform or,
as the case may be, comply with the obligations set forth in this SECTION 8.1.

SECTION 8.1.1 FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. Each Borrower
will furnish, or will cause to be furnished, to the

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Administrative Agent copies of the following financial statements, reports,
notices and information:

(a) subject to SECTION 8.1.1(f), as soon as available and in any
event within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year of each Borrower, a consolidated balance sheet
of such Borrower and its Subsidiaries as of the end of such Fiscal Quarter,
a consolidated statement of income of such Borrower and its Subsidiaries
for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, and a
consolidated statement of cash flows of such Borrower and its Subsidiaries
for the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter certified by a senior financial
Authorized Officer of such Borrower;

(b) subject to SECTION 8.1.1(f), as soon as available and in any
event within 90 days after the end of each Fiscal Year of each Borrower, a
copy of the annual audit report for such Fiscal Year for the Revolving
Borrower and its Subsidiaries, including therein a consolidated and
consolidating balance sheet of the Revolving Borrower and its Subsidiaries
as of the end of such Fiscal Year and consolidated and consolidating
statements of stockholders' equity, income and cash flows of the Revolving
Borrower and its Subsidiaries for such Fiscal Year, in each case certified
(without any Impermissible Qualification other than, in the case of the
financial statements of the Revolving Borrower and its Subsidiaries and
prior to the Collateral Release Date, an Asbestos Qualification) in the
case of all consolidating financial statements, in a manner consistent with
the report of Arthur Andersen LLP dated February 1, 1995 on the Revolving
Borrower's consolidating financial statements and, in all other cases, in a
manner acceptable to the Administrative Agent and the Required Lenders by
Arthur Andersen LLP or other independent public accountants acceptable to
the Administrative Agent and the Required Lenders, together with (A) in the
case of the Revolving Borrower, a reliance agreement between the
Administrative Agent and such accounting firm in form and substance
satisfactory to the Administrative Agent, and (B) in the case of the
Revolving Borrower, a report from such accountants to the effect that, in
making the examination necessary for the signing of such annual report for
the Revolving Borrower by such accountants, they have reviewed computations
prepared by the Revolving Borrower showing compliance with each of the
financial ratios and restrictions contained in SECTION 8.2.4 and that such
accountants have not become aware of any Default that has occurred and is
continuing, or, if they have become aware of

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such Default, describing such Default and the steps, if any, being taken to
cure it; PROVIDED that such accountants shall not be liable by reason of
any failure to obtain knowledge of any Default that would not be disclosed
in the course of their audit examination;

(c) as soon as available and in any event within 45 days after the
end of each Fiscal Quarter, a certificate (the "COMPLIANCE CERTIFICATE"),
executed by a senior Authorized Officer of the Revolving Borrower, showing
(in reasonable detail and with appropriate calculations and computations in
all respects satisfactory to the Administrative Agent) compliance with the
financial covenants set forth in SECTION 8.2.4 and compliance by the Term
Borrower and its Subsidiaries with the maximum Dollar Equivalent of
Indebtedness permitted in connection with any Qualified Working Capital
Facility;

(d) as soon as possible and in any event within three Business Days
after the occurrence of each Default, a statement of a senior financial
Authorized Officer of each Borrower setting forth details of such Default
and the action which such Borrower has taken and proposes to take with
respect thereto;

(e) as soon as possible and in any event within three days after (x)
the occurrence of any materially adverse development with respect to any
litigation, action, proceeding, or labor controversy described in SECTION
7.7 or (y) the commencement of any labor controversy, litigation, action,
proceeding of the type described in SECTION 7.7, notice thereof and if
requested by the Required Lenders, copies of such pleadings or motions
filed or served in connection therewith as the Required Lenders may
reasonably request;

(f) promptly after the sending or filing thereof, copies of all
reports which each Borrower sends to any of its public securityholders
generally, and all reports and final registration statements (without
exhibits, unless requested by the Administrative Agent, at the request of
any Lender) which such Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission or any national securities exchange
(copies of all such reports provided to the Administrative Agent that
include the information to be provided pursuant to SECTION 8.1.1(a) or
8.1.1(b) shall be deemed to satisfy the requirements of SECTION 8.1.1(a) or
8.1.1(b), as the case may be);

(g) immediately upon becoming aware of the institution of any steps
by either Borrower or any other Person to terminate any Pension Plan (other
than any voluntary

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termination which does not result in any liability of either Borrower or
such Person), or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under section
302(f) of ERISA, or the taking of any action with respect to a Pension Plan
which could result in the requirement that either Borrower furnish a bond
or other security to the PBGC or such Pension Plan, or the occurrence of
any event with respect to any Pension Plan which could result in the
incurrence by either Borrower of any material liability (other than ongoing
funding obligations and PBGC premiums), fine or penalty, or any material
increase in the contingent liability of either Borrower with respect to any
post-retirement Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto;

(h) such other information respecting the condition or operations,
financial or otherwise, of each Borrower or any of its Subsidiaries as any
Lender through the Administrative Agent may from time to time reasonably
request.

SECTION 8.1.2 COMPLIANCE WITH LAWS, ETC. Each Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation):

(a) the maintenance and preservation of its corporate existence and
qualification as a foreign corporation; and

(b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books;

where the failure to so comply with any such laws, rules, regulations, or
orders, singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

SECTION 8.1.3 MAINTENANCE OF PROPERTIES AND EXISTING LINES OF BUSINESS.
Each Borrower will, and will cause each of its Subsidiaries to, maintain,
preserve, protect and keep its properties in good repair, working order and
condition, and make necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted
at all times and will not discontinue any Existing Lines of Business.

SECTION 8.1.4 INSURANCE. Each Borrower will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with

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respect to its properties and business (including business interruption
insurance) against such casualties and contingencies and of such types and in
such amounts as is customary in the case of similar businesses and will, upon
request of the Administrative Agent, furnish to each Lender at reasonable
intervals a certificate of an Authorized Officer of such Borrower setting forth
the nature and extent of all insurance maintained by such Borrower and its
Subsidiaries in accordance with this Section.

SECTION 8.1.5 BOOKS AND RECORDS. Each Borrower will, and will cause each
of its Subsidiaries to, keep books and records which accurately reflect all of
its business affairs and transactions and permit the Administrative Agent and
each Lender or any of their respective representatives, at reasonable times and
intervals, to visit all of its offices, to discuss its financial matters with
its officers and independent public accountant (and each Borrower hereby
authorizes such independent public accountant to discuss such Borrower's
financial matters with each Lender or its representatives whether or not any
representative of such Borrower is present) and to examine (and, at the expense
of such Borrower, photocopy extracts from) any of its books or other corporate
records. Each Borrower shall pay any fees of such independent public accountant
incurred in connection with the Administrative Agent's or any Lender's exercise
of its rights pursuant to this Section.

SECTION 8.1.6 ENVIRONMENTAL COVENANT. Each Borrower will, and will cause
each of its Subsidiaries to,

(a) use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with
all applicable Environmental Laws;

(b) immediately notify the Administrative Agent and provide copies
upon receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or compliance
with Environmental Laws (other than with respect to Asbestos Litigation);
and

(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to evidence
compliance with this SECTION 8.1.6;

except, in the case of the foregoing CLAUSE (a) or (b), with respect to
circumstances which could not reasonably be expected to have a Material Adverse
Effect.

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SECTION 8.1.7 NEW SIGNIFICANT SUBSIDIARIES.

(a) Promptly after the date any Subsidiary of the Revolving Borrower
(other than the Term Borrower and any other Subsidiary organized under the laws
of Canada, Australia, New Zealand, Poland or any province, commonwealth,
territory or political subdivision thereof, which was formed or acquired in
connection with the acquisition of the Term Borrower and Affiliates thereof by
the Revolving Borrower) becomes a Significant Subsidiary and, in any event,
within three Business Days following receipt by the applicable Borrower from the
Administrative Agent of a security agreement substantially in the form of the
Subsidiary Security Agreements and a guaranty of the Obligations in
substantially the form of the Guaranty, the applicable Borrower will cause such
Subsidiary to execute and deliver such guaranty and security agreement to the
Administrative Agent; PROVIDED, that at the request of the Revolving Borrower,
assets or the assets of any Person that would constitute Collateral if such
assets were subject to a Subsidiary Security Agreement, acquired by the
Revolving Borrower in any one Approved Acquisition and securing an aggregate
amount of Indebtedness not in excess of (i) $5,000,000 with respect to such
Approved Acquisition and (ii) $10,000,000 in the aggregate at any time for all
Approved Acquisitions, shall not be subject to the Lien of such Subsidiary
Security Agreement if, after reasonable efforts, the Revolving Borrower was
unable to obtain the required consent to a junior lien in favor of the
Administrative Agent for the benefit of the Lenders from any Person holding a
Lien on such assets.

(b) Within ten days after the date such Subsidiary becomes a Significant
Subsidiary, the applicable Borrower will cause such Subsidiary to have executed
and filed any UCC-1 financing statements furnished by the Administrative Agent
in each jurisdiction in which such filing is necessary to perfect the security
interest of the Administrative Agent in the Collateral of such Significant
Subsidiary and in which the Administrative Agent requests that such filing be
made.

(c) Within sixty days after the date such Subsidiary becomes a Significant
Subsidiary, the applicable Borrower and such Subsidiary shall have executed and
delivered to the Administrative Agent and the Administrative Agent, such other
items as reasonably requested by the Administrative Agent or the Administrative
Agent in connection with the foregoing, including, without limitation,
resolutions, incumbency and officers certificates, opinions of counsel, search
reports and other certificates and documents.

SECTION 8.2 NEGATIVE COVENANTS. Each Borrower agrees with the
Administrative Agent and each Lender that, until all Commitments and the
Swingline Commitment have terminated and all Obligations have been paid and
performed in full, and all Letters

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of Credit have expired or are terminated, such Borrower will comply with the
obligations set forth in this SECTION 8.2.

SECTION 8.2.1 BUSINESS ACTIVITIES. Each Borrower will not, and will not
permit any of its Subsidiaries to, engage in any business activity, except the
Existing Lines of Business and business activities arising from Approved
Acquisitions.

SECTION 8.2.2 INDEBTEDNESS. The Revolving Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:

(a) Indebtedness in respect of the Loans and other Obligations;

(b) Indebtedness (i) existing as of the Restatement Effective Date
which is identified in ITEM 8.2.2(b) ("ONGOING INDEBTEDNESS") of the
Disclosure Schedule or that has (ii) otherwise been specified in writing to
the Administrative Agent and the Lenders prior to the Restatement Effective
Date as being Indebtedness to be permitted under this CLAUSE (b);

(c) Indebtedness (including Capitalized Lease Liabilities) in an
aggregate principal amount not to exceed $5,000,000 (or the Dollar
Equivalent thereof) at any time outstanding which is purchase money
Indebtedness incurred for the acquisition of personal property, real
property or improvements thereto, provided that such Indebtedness is
incurred at the time of such acquisition or improvement or within thirty
days thereafter;

(d) unsecured Indebtedness incurred in the ordinary course of
business with respect to open accounts extended by suppliers on normal
trade terms in connection with purchases of goods and services, but
excluding Indebtedness incurred through the borrowing of money or
Contingent Liabilities;

(e) unsecured Indebtedness of either Borrower and its respective
Subsidiaries (other than the Resort Subsidiaries) in an aggregate principal
amount for all such Persons not to exceed $5,000,000 at any time
outstanding;

(f) Funded Debt of Persons acquired by the Revolving Borrower in
Approved Acquisitions which is in existence at the time of such Approved
Acquisitions and which is not incurred or created by such Persons in
connection with or in contemplation of such Approved Acquisitions;

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(g) Indebtedness of the Revolving Borrower's Subsidiaries owing to
the Revolving Borrower, and unsecured Indebtedness of the Revolving
Borrower owing to any of its Subsidiaries (which, in the case of the Resort
Subsidiaries shall not exceed $5,000,000 at any time outstanding);

(h) Indebtedness of the Resort Subsidiaries in an aggregate principal
amount not to exceed (i) $40,000,000 at any time outstanding after October
4, 1995 and before October 4, 1996, (ii) $35,000,000 at any time
outstanding on and after October 4, 1996 and before October 4, 1997 and
(iii) $30,000,000 at any time outstanding on October 4, 1997 and at all
times thereafter, PROVIDED that the creditors to which such Indebtedness is
owed have no recourse to either Borrower or any Subsidiary of such Borrower
(other than the Resort Subsidiaries), or to any of their properties or
assets, for payment of such Indebtedness;

(i) (A) Guaranteed Facility Indebtedness of the Term Borrower
incurred in connection with a Qualified Working Capital Facility, (B)
Guaranteed Facility Indebtedness of any Subsidiary of the Term Borrower
incurred in connection with a Qualified Working Capital Facility or (C)
Indebtedness of the Term Borrower or any Subsidiary of the Term Borrower
incurred in connection with a Qualified Working Capital Facility; and

(j) Contingent Liabilities attributable to performance bonds
(including timber bonds issued for the benefit of the Revolving Borrower or
any of its Subsidiaries) not issued hereunder in an aggregate face amount
outstanding at any time not to exceed $10,000,000;

(k) Contingent Liabilities of the Revolving Borrower or the Term
Borrower in respect of the obligations of any of its Subsidiaries (other
than the Resort Subsidiaries) permitted hereunder;

(l) extensions, renewals and refinancings of Indebtedness of the
Revolving Borrower or any Subsidiary of the type referred to in CLAUSES
(b), (c) and (f) above, PROVIDED that the principal amount of such
Indebtedness being extended, renewed or refinanced does not increase above
the amounts specified in the Disclosure Schedule or other writings referred
to in CLAUSE (b), the amount referred to in CLAUSE (c) or above the amounts
in existence at the time of the applicable Approved Acquisition, as the
case may be; and

(m) Hedging Obligations of the Revolving Borrower or any of its
Subsidiaries incurred (i) to hedge Obligations or

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(ii) in the ordinary course of the Revolving Borrower's or such
Subsidiary's business.

PROVIDED, HOWEVER, that no Indebtedness otherwise permitted by CLAUSES (c), (e),
(f), or (i) shall be permitted to be incurred if, after giving effect to the
incurrence thereof, any Default shall have occurred and be continuing.

SECTION 8.2.3 LIENS. The Revolving Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any of its property, revenues or assets, whether now owned or hereafter
acquired, except:

(a) Liens securing payment of the Obligations, granted pursuant to
any Loan Document;

(b) Liens on the assets of the Resort Subsidiaries to secure payment
of Indebtedness permitted in CLAUSE (h) of SECTION 8.2.2 and Liens on the
assets of the Term Borrower or any of its Subsidiaries to secure payment of
Guaranteed Facility Indebtedness of the Term Borrower or any such
Subsidiary permitted in CLAUSE (i) of SECTION 8.2.2;

(c) Liens granted to secure payment of Indebtedness of the type
permitted and described in CLAUSE (c) of SECTION 8.2.2 and covering only
those assets leased or acquired with the proceeds of such Indebtedness;

(d) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside
on its books;

(e) Liens imposed by law, such as carriers, warehousemen, mechanics,
lumberjacks, materialmen and landlords liens and other similar liens
incurred in the ordinary course of business for sums not more than 60 days
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books;

(f) Liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits;

(g) judgment Liens (other than judgment Liens on the Collateral) (i)
in existence less than 30 days after the entry thereof or with respect to
which execution has been stayed, or the payment of which is covered in full
by

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insurance maintained with responsible insurance companies which have confirmed
in writing (whether by settlement agreement or other writing) their liability
for the full amounts of such judgments, or (ii) for payment of any order or
judgment not in excess of $5,000,000 (or the Dollar Equivalent thereof) which is
not stayed by reason of pending appeal, contract or otherwise so long as no
enforcement proceedings have been commenced;

(h) Liens covering assets or the assets of Persons acquired by the
Revolving Borrower in Approved Acquisitions and which were not incurred or
created in connection with or in contemplation of such Approved
Acquisitions; PROVIDED, that if such Liens cover assets or the assets of
any Person that would constitute Collateral if such assets were subject to
a Subsidiary Security Agreement or the Security Agreement such assets shall
have been (A) acquired by the Revolving Borrower in any one Approved
Acquisition and shall secure an aggregate amount of Indebtedness not in
excess of (i) $5,000,000 with respect to such Approved Acquisition and (ii)
$10,000,000 in the aggregate at any time for all Approved Acquisitions, or
(B) acquired by the Revolving Borrower in any Approved Acquisition approved
in writing by the Majority Lenders so long as such Liens were disclosed to
the Lenders in accordance with SECTION 8.2.5 in connection with any request
by the Revolving Borrower for approval of any proposed acquisition to be
financed with a Credit Extension in excess of $50,000,000;

(i) Utility easements, rights of way, building restrictions and such
other encumbrances or charges against real property, and minor title
defects and irregularities, as are of a nature generally existing with
respect to properties of a similar character and which do not materially
detract from the value of the property subject thereto;

(j) Liens existing on the date hereof in respect of property, assets
or revenues of each Borrower or any of its Subsidiaries which are described
in ITEM 8.2.3(j) ("Ongoing Liens") of the Disclosure Schedule;

(k) Liens incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by the Liens described in CLAUSES
(c), (h), (i) and (j) above, PROVIDED that any extension, renewal or
replacement Lien shall be limited to (i) the property encumbered by the
existing Lien and (ii) to the existing amount of such Indebtedness (or, in
the case of a revolving credit, the existing commitment amount), except in
the case of CLAUSE (c) to the extent permitted by CLAUSE (c) of SECTION
8.2.2;

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(l) Bankers' liens, rights of setoff and similar rights of banks and
other financial institutions;

(m) Any other consensual or nonconsensual Liens if the aggregate
amount of obligations of each Borrower or any of its Subsidiaries that is
secured by such Liens does not exceed $2,500,000 (or the Dollar Equivalent
thereof) for all such Persons in the aggregate at any time;

(n) Liens covering assets or the assets of Persons acquired by the
Revolving Borrower in Approved Acquisitions that are not otherwise
permitted by this SECTION 8.2.3 and that are (i) described in a schedule
delivered to the Administrative Agent no later than three Business Days
following the date such Approved Acquisition was consummated which shall
set forth the names of the debtor and secured party, the assets subject to
such lien and the principal amount of indebtedness secured by such lien;
and (ii) released and discharged and any UCC-3 or similar termination
statement filed within 60 days after the date such Approved Acquisition was
consummated; PROVIDED that, if for reasons beyond the control of the
Revolving Borrower and notwithstanding its good faith efforts, the
schedules, deliveries, releases, filings or other actions required by
CLAUSES (i) or (ii) have not been made or taken within the applicable time
period, the period during which such schedules, deliveries, releases,
filings or other actions shall be made or taken shall be extended to the
date 120 days after the date such Approved Acquisition was consummated;
PROVIDED, FURTHER, that in connection with any such extension, the
Revolving Borrower shall have provided evidence of such good faith efforts
reasonably satisfactory to the Administrative Agent, if so requested by the
Administrative Agent.

(o) Deeds of trust, security agreements and other collateral
documents covering the Collateral, but junior to the Collateral Documents,
securing Hedging Obligations of either Borrower to one or more Lenders,
provided that each such Lender which is so secured shall have agreed in
writing (1) with the Administrative Agent, that such Lender will not cause
its junior collateral documents to be enforced unless the Administrative
Agent is then enforcing the Collateral Documents covering the same
Collateral, and (2) that it will permit its junior collateral documents to
be supplemented so as to secure Hedging Obligations of such Borrower owed
to other Lenders on a PARI PASSU basis with the Hedging Obligations owed to
it.

SECTION 8.2.4 FINANCIAL CONDITION. The Revolving Borrower will not
permit:

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(a) Consolidated Net Worth at any time to be less than the sum of (i)
$200,000,000 PLUS (ii) 50% of the cumulative amount of Consolidated Net
Income for each Fiscal Quarter (which, if less than zero for any Fiscal
Quarter, shall be deemed to be an amount equal to zero for such quarter)
ending at December 31, 1995 and thereafter;

(b) the Consolidated Interest Coverage Ratio for any period of four
consecutive Fiscal Quarters to be less than 2.50:1 calculated as of the
last day of such period; and

SECTION 8.2.5 APPROVED ACQUISITIONS AND OTHER INVESTMENTS. Each Borrower
will not, and will not permit any of its Subsidiaries to make any Acquisition,
or to make, incur, assume or suffer to exist any Investment in any other Person,
except:

(a) Approved Acquisitions; PROVIDED, that the Revolving Borrower has
complied with the provisions of this SECTION 8.2.5 with respect to such
Approved Acquisitions;

(b) Investments existing on the Restatement Effective Date and
identified in ITEM 8.2.5(b) ("Ongoing Investments") of the Disclosure
Schedule;

(c) Cash Equivalent Investments and other Investments made in
accordance with the Revolving Borrower's Cash Management Policy as in
effect on the date hereof, a copy of which is attached hereto as EXHIBIT K,
as such policy may be amended from time to time; PROVIDED that any such
amendments have been furnished to the Lenders (through the Administrative
Agent) and the Majority Lenders have not objected thereto within fifteen
days of receipt thereof;

(d) without duplication, Investments permitted as Indebtedness
pursuant to SECTION 8.2.2;

(e) without duplication, Capital Expenditures (other than Capital
Expenditures constituting an Acquisition) of each Borrower or any of its
Subsidiaries;

(f) in the ordinary course of business, Investments by each Borrower
in any of its wholly-owned Subsidiaries, or by any such Subsidiary in any
of its wholly-owned Subsidiaries, by way of contributions to capital or
loans or advances;

(g) other Investments in an aggregate amount at any one time not to
exceed $5,000,000 (or the Dollar Equivalent thereof);

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(h) demand loans by the Revolving Borrower to Resort Subsidiaries, in
an aggregate amount not to exceed $30,000,000, which are incurred by such
Resort Subsidiaries for the purpose of (a) purchasing Bear Mountain Resort
in California, (b) repaying revolving credit indebtedness of such Resort
Subsidiaries or (c) paying for capital expenditures or operating expenses
of such Resort Subsidiaries, PROVIDED, that (i) such loans bear interest at
an arms-length rates which are no lower than the rates such Resort
Subsidiaries would pay to lenders which are not its Affiliates and (2) such
loans are paid in full no later than the business Day before the Revolving
Commitment Termination Date; and

(i) promissory notes executed by a purchaser in favor of a Resort
Subsidiary with respect to any loan by a Resort Subsidiary to such
purchaser for the purchase price (or part thereof) of any residential real
estate lot sold to such purchaser by the Resort Subsidiary;

PROVIDED, HOWEVER, that

(A) any Investment which when made complies with the requirements of
the definition of the term "CASH EQUIVALENT INVESTMENT" may continue to be
held notwithstanding that such Investment if made thereafter would not
comply with such requirements; and

(B) no Investment otherwise permitted by CLAUSE (a), (f) or (g) shall
be permitted to be made if, immediately before or after giving effect
thereto, any Default shall have occurred and be continuing.

In the event that the Revolving Borrower wishes to make any Acquisitions,
the Revolving Borrower will deliver to the Administrative Agent a written notice
thereof, containing a description in detail reasonably satisfactory to the
Administrative Agent of the businesses, Persons and assets proposed to be
acquired and the terms and conditions of such proposed Acquisition. Such notice
must also include a summary calculation of Acquired Net Operating Cash Flow
prepared with respect to such Acquisition for each of the four consecutive
Fiscal Quarters ending on the last day of the immediately preceding Fiscal
Quarter, and must be delivered not less than 45 days prior to the desired
closing date of such Acquisition in the case of an Acquisition which will be
financed with Credit Extensions in excess of $50,000,000, or within 10 days
before the closing date in the case of any other Acquisition. In the case of
any Approved Acquisition to be financed with Credit Extensions in excess of
$50,000,000, such notice shall also provide in detail satisfactory to the
Administrative Agent information relating to any Lien (other than a Lien
permitted by SECTION

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8.2.3) that will not be released in connection with such Approved Acquisition
and that is in favor of any Person other than the Administrative Agent on
acquired assets that would be subject to a Subsidiary Security Agreement
executed and delivered in connection with such Approved Acquisition pursuant to
SECTION 8.1.7. The Revolving Borrower shall also deliver to the Administrative
Agent such financial statements and appraisals for the Persons, businesses or
other assets which the Revolving Borrower proposes to acquire as may be
reasonably requested by the Administrative Agent. Such notice shall be
accompanied by (A) PRO FORMA financial statements of the Revolving Borrower
prepared by the Revolving Borrower demonstrating to the reasonable satisfaction
of the Required Lenders that such Acquisition will comply with the requirements
of CLAUSE (iii) of the definition of Approved Acquisition, and (B) a certificate
of a senior financial Authorized Officer of the Revolving Borrower certifying
that (subject to any necessary approvals of the Lenders) such Acquisition will
be an Approved Acquisition.

The Administrative Agent will promptly deliver copies of all materials
which it receives from the Revolving Borrower pursuant to this SECTION 8.2.5 to
the Lenders.

SECTION 8.2.6 RESTRICTED PAYMENTS, ETC. On and at all times after the
Restatement Effective Date:

(a) the Revolving Borrower will not declare, pay or make any dividend
or distribution (in cash, property or obligations) on any shares of any
class of capital stock (now or hereafter outstanding) of the Revolving
Borrower or on any warrants, options or other rights with respect to any
shares of any class of capital stock (now or hereafter outstanding) of the
Revolving Borrower (other than dividends or distributions payable in its
common stock or warrants to purchase its common stock or splitups or
reclassifications of its stock into additional or other shares of its
common stock) or apply, or permit any of its Subsidiaries to apply, any of
its funds, property or assets to the purchase, redemption, sinking fund or
other retirement of, or agree or permit any of its Subsidiaries to purchase
or redeem, any shares of any class of capital stock (now or hereafter
outstanding) of the Revolving Borrower, or warrants, options or other
rights with respect to any shares of any class of capital stock (now or
hereafter outstanding) of the Revolving Borrower (collectively,
"DISTRIBUTIONS"); and

(b) the Revolving Borrower will not, and will not permit any
Subsidiary to, make any deposit for any of the foregoing purposes;

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PROVIDED, that following the Restatement Effective Date, the Revolving Borrower
may make Distributions in cash if all the following conditions are met:

(A) no Default shall have occurred and be continuing both prior to and
after giving effect to the declaration and payment of any such Distribution;

(B) the aggregate cumulative amount of Distributions made after the
Restatement Effective Date shall not exceed 50% of the cumulative amount of
Consolidated Net Income for the period after September 30, 1995;

(D) prior to payment of such Distribution, the Revolving Borrower shall
deliver to the Administrative Agent a certificate signed by a senior financial
Authorized Officer of the Revolving Borrower, certifying compliance with the
foregoing CLAUSES (a) and (b).

SECTION 8.2.7 CONSOLIDATION, MERGER, ETC. The Revolving Borrower will
not, and will not permit any of its Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other corporation, or purchase or
otherwise acquire all or substantially all of the assets of any Person (or of
any division thereof) except (provided no Event of Default shall arise
therefrom)

(a) any Approved Acquisition which does not result in the
liquidation, dissolution, merger or consolidation of the Revolving
Borrower, and

(b) (i) any such Subsidiary (other than any Resort Subsidiary) may
liquidate or dissolve voluntarily into, and may merge with and into, the
Revolving Borrower or any other Subsidiary (other than any Resort
Subsidiary); PROVIDED that, in the case of any such merger including the
Revolving Borrower or the Term Borrower, such Borrower is the surviving
corporation, and (ii) the assets or stock of any Subsidiary (other than any
Resort Subsidiary) may be purchased or otherwise acquired by the Revolving
Borrower or any other Subsidiary (other than any Resort Subsidiary).

SECTION 8.2.8 ASSET DISPOSITIONS, ETC. Each Borrower will not, and will
not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable and
capital stock of Subsidiaries) to any Person, other than

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(a) sales of inventory in the ordinary course of such Borrower's or
its Subsidiaries' business;

(b) sales for fair market value of equipment, which is surplus, worn-
out or obsolete and no longer useful in such Borrower's operations;

(c) sales of assets not constituting Collateral hereunder, the net
book value of which, together with the net book value of all other assets
sold, transferred, leased, contributed or conveyed otherwise than in the
ordinary course of business by such Borrower or any of its Subsidiaries
pursuant to this clause since the Restatement Effective Date, does not
exceed $10,000,000 (or the Dollar Equivalent thereof);

(d) sales of properties described in Item 8.2.8(d) ("Properties Held
for Sale") of the Disclosure Schedule; and

(e) sales of residential real estate lots by Resort Subsidiaries in
the ordinary course of business.

SECTION 8.2.9 MODIFICATION OF CERTAIN AGREEMENTS. The Revolving Borrower
will not consent to any amendment, supplement, waiver or other modification of
any of the terms or provisions contained in, or applicable to, any of the
Settlement Agreements (each a "SETTLEMENT AGREEMENT MODIFICATION") if such
Settlement Agreement Modification would, or could reasonably be expected to:

(a) increase or accelerate the payment date of any amounts payable by
the Revolving Borrower or any of its Subsidiaries under the Settlement
Agreements, or require the Revolving Borrower or any of its Subsidiaries to
pay any material amounts which would not otherwise have been payable by
them under the Settlement Agreements;

(b) reduce or delay in any material respect the payment or funding of
any amounts which the parties to the Settlement Agreements (other than the
Revolving Borrower and its Subsidiaries) are obligated to pay to or on
behalf of the Revolving Borrower or any of its Subsidiaries (including
without limitation (i) the payment of any claims, judgments, settlements or
other amounts payable in respect of asbestos or Asbestos Litigation, and
(ii) the funding of any trusts, escrows or other funding mechanisms
provided for in the Settlement Agreements);

(c) change in any material respect the "spendthrift" limitations
applicable to any payments which are to be made from any trusts, escrows or
other funds which are established or to be established pursuant to the
Settlement Agreements;

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(d) modify in any way which is materially adverse to the Revolving
Borrower or any of its Subsidiaries any of the components contained in the
definition of Global Approval Judgment or Insurance Settlement Agreement
Approval Judgment as in effect on the Original Effective Date; or

(e) otherwise have a Material Adverse Effect.

To the extent reasonably practicable prior to entering into any Settlement
Agreement Modification or other modification of any of the terms, or provisions
contained in or applicable to any of the Settlement Agreements, the Revolving
Borrower will deliver to the Administrative Agent a copy thereof and, if the
Revolving Borrower believes that such Settlement Agreement Modification does not
violate this SECTION 8.2.9, a written explanation of the reason for such belief.

SECTION 8.2.10 TRANSACTIONS WITH AFFILIATES. Each Borrower will not, and
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement or contract is fair and equitable to such Borrower or
such Subsidiary and is an arrangement or contract of the kind which would be
entered into by a prudent Person in the position of such Borrower or such
Subsidiary with a Person which is not one of its Affiliates.

SECTION 8.2.11 NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. Each
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement and any other Loan Document):

(a) (other than in connection with a Qualified Working Capital
Facility) prohibiting or restricting the creation or assumption of any Lien
on any Collateral and, at any time on and after the Collateral Release
Date, any asset that would have been subject to any Lien under the
Collateral Documents if the Collateral Release Date had not occurred and,
in either case, the proceeds thereof whether now owned or hereafter
acquired, unless the Liens under the Collateral Documents, whether or not
then existing, are expressly permitted by such agreement;

(b) restricting the ability of such Borrower or any other Obligor to
amend or otherwise modify this Agreement or any other Loan Document; or

(c) except in the case of the Resort Subsidiaries or as otherwise
approved in writing by the Required Lenders, prohibiting or restricting the
ability of any Subsidiary of either Borrower to make any payments, directly
or indirectly, to such Borrower by way of dividends, advances,

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repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or indirectly,
to such Borrower.

Section 8.2.12 FISCAL YEAR OF BORROWERS. Each Borrower will not, and will
not permit any of its Significant Subsidiaries to, change its Fiscal Year from
that in effect on the Restatement Effective Date, except to change the Fiscal
Year of a Significant Subsidiary acquired in an Approved Acquisition to conform
its Fiscal Year to the Revolving Borrower's.

ARTICLE IX

EVENTS OF DEFAULT

SECTION 9.1 LISTING OF EVENTS OF DEFAULT. Each of the following events or
occurrences described in this SECTION 9.1 shall constitute an "EVENT OF
DEFAULT".

SECTION 9.1.1 NON-PAYMENT OF OBLIGATIONS. Either Borrower shall default
in the payment or prepayment when due of any principal of any Loan or of any
Reimbursement Obligation (and such default shall continue for one Business Day),
or either Borrower shall default in the payment when due of interest on any Loan
or any Commitment Fee or Letter of Credit fee (and such default shall continue
for three Business Days) or either Borrower shall default in the payment when
due of any other Obligation (and such default shall continue for five Business
Days).

SECTION 9.1.2 BREACH OF WARRANTY. Any representation or warranty of
either Borrower or any other Obligor made or deemed to be made hereunder or in
any other Loan Document or any other writing or certificate furnished by or on
behalf of either Borrower or any other Obligor to either Co-Agent or any Lender
for the purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to ARTICLE VI) is or
shall be incorrect when made in any material respect.

SECTION 9.1.3 NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS.
Either Borrower shall default in the due performance and observance of any of
its obligations under SECTION 8.2.3 (and such default shall continue for 30 days
after the occurrence thereof) or SECTION 8.2.4, 8.2.5, 8.2.6, 8.2.7, 8.2.9,
8.2.10 or 8.2.12.

SECTION 9.1.4 NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Obligor shall default in the due performance

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and observance of any other agreement contained herein or in any other Loan
Document, and such default shall continue unremedied for a period of 30 days
after notice thereof shall have been given to the Revolving Borrower by the
Administrative Agent or any Lender.

SECTION 9.1.5 DEFAULT ON OTHER INDEBTEDNESS OR SETTLEMENT OBLIGATIONS.

(a) A default shall occur in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of any
Indebtedness (other than Indebtedness described in SECTION 9.1.1) of either
Borrower or any of its Subsidiaries having a principal amount, individually
or in the aggregate, in excess of $1,000,000 (or the Dollar Equivalent
thereof) (or, in the case of Hedging Obligations, a notional principal
amount of $10,000,000 or the Dollar Equivalent thereof), or a default shall
occur in the performance or observance of any obligation or condition with
respect to such Indebtedness (i) if the effect of such default is to
accelerate the maturity of any such Indebtedness or (ii) such default shall
continue unremedied for any applicable period of time sufficient to permit
the holder or holders of such Indebtedness, or any trustee or agent for
such holders, to cause such Indebtedness to become due and payable prior to
its expressed maturity and, in the case of CLAUSE (ii), such default shall
continue unremedied for a period of 30 days after the earlier of notice
having been given to the Revolving Borrower by the Administrative Agent or
any Lender or after an Authorized Officer becomes aware thereof.

(b) Any amounts which individually or in the aggregate exceed
$5,000,000, and which are or may be payable by the Revolving Borrower or
any of its Subsidiaries to any asbestos personal injury or death claimant
pursuant to settlement agreements entered into between the Revolving
Borrower or such Subsidiary and such claimants (or their representatives),
whether under the Revolving Borrower's "Structured Settlement Program", its
"Insurance Assignment Program" or otherwise, the payment of which has been
deferred under the terms of such settlement agreements, shall be
accelerated so as to be payable by the Revolving Borrower or any of its
Subsidiaries from its own funds (other than funds from available insurance)
prior to the date to which such payments were deferred pursuant to such
settlement agreements.

SECTION 9.1.6 JUDGMENTS. Any judgment or order for the payment of money
in excess of $5,000,000 (or the Dollar Equivalent thereof) in the aggregate
shall be rendered against either Borrower or any of its Subsidiaries and either

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(a) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order;

(b) (except for judgments and orders in respect of Asbestos
Litigation) there shall be any period of 30 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal, contract or otherwise, shall not be in effect; and

(c) in the case of any Asbestos Litigation during the period
following the Collateral Release Date, there shall be any period of 90
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal, contract or otherwise, shall not be
in effect.

SECTION 9.1.7 PENSION PLANS. Any of the following events shall occur with
respect to any Pension Plan

(a) the institution of any steps by either Borrower, any member of
its Controlled Group or any other Person to terminate a Pension Plan (other
than a voluntary termination of a Pension Plan in existence, and in respect
of which such Borrower was a member of a Controlled Group, on the Original
Effective Date) if, as a result of such termination, such Borrower or any
such member could be required to make a contribution to such Pension Plan,
or could reasonably expect to incur a liability or obligation to such
Pension Plan, in excess of $1,000,000; or

(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA.

SECTION 9.1.8 CONTROL OF THE BORROWER. Any Change of Control of either
Borrower shall occur.

SECTION 9.1.9 BANKRUPTCY, INSOLVENCY, ETC. Either Borrower or any of its
Subsidiaries shall

(a) become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness to pay, debts as they become due;

(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for either Borrower or
any of its Subsidiaries or any property of any thereof, or make a general
assignment for the benefit of creditors;

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trustee, receiver, sequestrator or other custodian for either Borrower or
any of its Subsidiaries or for a substantial part of the property of any
thereof, and such trustee, receiver, sequestrator or other custodian shall
not be discharged within 60 days, PROVIDED that each Borrower, hereby
expressly authorizes the Administrative Agent and each Lender to appear in
any court conducting any relevant proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents;

(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or liquidation
proceeding, in respect of either Borrower or any of its Subsidiaries, and,
if any such case or proceeding is not commenced by either Borrower or such
Subsidiary, such case or proceeding shall be consented to or acquiesced in
by either Borrower or such Subsidiary or shall result in the entry of an
order for relief or shall remain for 60 days undismissed, PROVIDED that
each Borrower hereby expressly authorizes the Administrative Agent and each
Lender to appear in any court conducting any such case or proceeding during
such 60-day period to preserve, protect and defend their rights under the
Loan Documents; or

(e) take any corporate action authorizing, or in furtherance of, any
of the foregoing.

SECTION 9.1.10 IMPAIRMENT OF SECURITY, ETC. Any Loan Document, or any
Lien granted thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; either
Borrower, any other Obligor or any other party shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or
enforceability; or any Lien securing any Obligation shall, in whole or in part,
cease to be a perfected first priority Lien, subject only to SECTION 10.10 and
to those exceptions expressly permitted by such Loan Document.

SECTION 9.1.11 ASBESTOS LITIGATION PAYMENTS. The Revolving Borrower or
any of its Subsidiaries shall be required to pay from its own funds (other than
(i) from existing reserves or (ii) funds from available insurance) any judgment
or settlement with respect to asbestos or Asbestos Litigation in an aggregate
amount after the Restatement Effective Date in excess of $5,000,000.

SECTION 9.1.12 ASBESTOS QUALIFICATION. At any time after the Collateral
Release Date, the Revolving Borrower shall receive any notice or other
information from Arthur Andersen & Co. or any other independent public
accounting firm retained by the

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Revolving Borrower to audit its financial statements that a substantial
likelihood exists that the next annual audit report issued by such firm will
contain an Asbestos Qualification; PROVIDED that no Event of Default shall occur
under this SECTION 9.1.12 if within 60 days after receipt of such notice or
other information the Revolving Borrower executes and delivers to the
Administrative Agent the Collateral Documents substantially in the form in
effect at the time immediately preceding the Collateral Release Date, in each
case, together with the items set forth in Sections 6.1.5 and 6.1.6 of the
Original Credit Agreement, as applicable.

SECTION 9.2 ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) through (d) of SECTION 9.1.9 shall occur, the Commitments to make
Loans and issue Letters of Credit (but not the Lender's Commitments to
participate in outstanding Letters of Credit) and the Swingline Commitment to
make Swingline Loans, if not theretofore terminated, shall automatically
terminate and the outstanding principal amount of all outstanding Loans and all
other Obligations shall automatically be and become immediately due and payable,
without notice or demand.

SECTION 9.3 ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default
(other than any Event of Default described in CLAUSES (a) through (d) of SECTION
9.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to either or both Borrowers declare all or any portion
of the outstanding principal amount of the Loans and other Obligations of such
Borrower to be due and payable and/or the Commitments to make Loans and issue
Letters of Credit (but not the Commitments to participate in outstanding Letters
of Credit) and the Swingline Commitment to make Swingline Loans, if not
theretofore terminated, to be terminated, whereupon the full unpaid amount of
all Loans and other Obligations which shall be so declared due and payable shall
be and become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Commitments shall terminate.

ARTICLE X

THE ADMINISTRATIVE AGENT

SECTION 10.1 APPOINTMENT AND AUTHORIZATION. Each of the Lenders hereby
irrevocably authorizes the Administrative Agent to execute the Collateral
Documents and appoints, designates and authorizes the Administrative Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are

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reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall have no duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.

SECTION 10.2 DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.

SECTION 10.3 LIABILITY OF ADMINISTRATIVE AGENT AND ISSUERS. None of the
Administrative Agent/Related Persons shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by either Borrower or any
Subsidiary of such Borrower, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document, or for
the value of any Collateral or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of either Borrower or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Administrative
Agent/Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of either Borrower or any of its
Subsidiaries or Affiliates.

SECTION 10.4 RELIANCE BY ADMINISTRATIVE AGENT.

(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to either
Borrower), independent

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accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders or Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Lenders, Required Lenders
or Lenders, as applicable, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Lenders.

(b) For purposes of determining compliance with the conditions
specified in ARTICLE VI, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter either sent or made available by the Administrative
Agent to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender, unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender prior to the applicable Credit Extension
specifying its objection thereto and either such objection shall not have been
withdrawn by notice to the Administrative Agent to that effect or (with respect
to any Loan) such Lender shall not have made available to the Administrative
Agent such Lender's ratable portion of any Borrowing.

SECTION 10.5 NOTICE OF DEFAULT. The Administrative Agent shall be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or either
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default". In the event that the Administrative
Agent receives such a notice, the Administrative Agent will give notice thereof
to the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be requested by the Required Lenders
in accordance with ARTICLE IX; PROVIDED, HOWEVER, that unless and until the
Administrative Agent shall have received any such request, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, subject to the provisions of SECTION 9.3, with respect to
such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.

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SECTION 10.6 CREDIT DECISION. Each Lender expressly acknowledges that
none of the Administrative Agent/Related Persons has made any representation or
warranty to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of either Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of each Borrower and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated thereby, and made its
own decision to enter into this Agreement and extend credit to each Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, evaluations and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of each Borrower.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Administrative Agent, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of either Borrower which may
come into the possession of any of the Administrative Agent/Related Persons.

SECTION 10.7 INDEMNIFICATION. The Lenders shall indemnify upon demand the
Administrative Agent/Related Persons and the Documentation Agent/Related Persons
(to the extent not reimbursed by or on behalf of either Borrower and without
limiting the obligation of each Borrower to do so), ratably according to its
respective Percentage from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind whatsoever which may at any time (including at any
time following the termination of the Letters of Credit, the repayment of the
Loans and the termination or resignation of the Administrative Agent or the
Documentation Agent, as applicable) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
any such Person under or in connection with any of the foregoing; PROVIDED,
HOWEVER, that no Lender shall be liable for the payment to the Administrative
Agent/Related Persons or Documentation

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Agent/Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent and the Documentation Agent upon demand for its ratable
share according to its respective Percentage of any reasonable costs or out-of-
pocket expenses including the fees and disbursements of legal counsel incurred
by the Administrative Agent or the Documentation Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein
to the extent that the Administrative Agent or the Documentation Agent is not
reimbursed for such expenses by or on behalf of either Borrower. Without
limiting the generality of the foregoing, if the Internal Revenue Service or any
authority of the United States or other jurisdiction asserts a claim that
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered, was
not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason),
such Lender shall indemnify Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to Administrative Agent under this SECTION
10.7, together with all costs and out-of-pocket expenses, including the fees and
disbursements of legal counsel. The obligation of the Lenders in this Section
shall survive the payment of all Obligations hereunder.

SECTION 10.8 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each Borrower and its Subsidiaries and Affiliates as
though it were not the Administrative Agent hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, the Administrative Agent or its Affiliates may receive information
regarding either Borrower or its Subsidiaries or Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Borrower or such Subsidiary or Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans and participation in Letters of Credit, the
Administrative Agent

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shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
the terms "Lender" and "Lenders" shall include the Administrative Agent in its
individual capacity.

SECTION 10.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign from its capacity as Administrative Agent upon 30 days' notice to the
Lenders. If the Administrative Agent shall resign as Administrative Agent under
this Agreement, the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders. If no successor Administrative Agent is
appointed prior to the effective date of the resignation of a retiring
Administrative Agent, the Administrative Agent shall appoint, after consulting
with the Lenders and the Revolving Borrower, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "Administrative Agent" shall mean
such successor agent and the retiring Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this ARTICLE X and SECTIONS 11.3 and 11.4 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. The resignation or retirement of the
Administrative Agent shall not become effective until a successor Administrative
Agent shall have accepted its appointment as such and all necessary action shall
have been completed to transfer all rights and benefits of the resigning or
retiring Administrative Agent with respect to all Collateral and the Loan
Documents to the successor Administrative Agent.

SECTION 10.10 COLLATERAL MATTERS.

(a) The Administrative Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the Liens upon the Collateral granted pursuant to the Collateral
Documents.

(b) The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Commitments
and payment and performance in full of all Loans then outstanding and all other
Obligations then due and payable under this Agreement and under any other Loan
Document and the expiration or termination of all Letters of Credit; or (ii)
constituting property sold or to be sold or disposed of as part of or in

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connection with any disposition permitted hereunder, including SECTION 8.2.8 and
CLAUSE (c) of this SECTION 10.10. Upon request by the Administrative Agent at
any time, the Required Lenders will confirm in writing the Administrative
Agent's authority to release particular types or items of Collateral pursuant to
this CLAUSE (b) of this SECTION 10.10.

(c) The Revolving Borrower may request the Administrative Agent to
release the Collateral upon the satisfaction of all of the following conditions:

(i) no Default shall have occurred and be continuing on the date
of such notice, or shall have occurred and be continuing on the date of the
release of the Collateral, both before and after giving effect to such
release;

(ii) the representations and warranties of each Borrower set
forth in ARTICLE VII shall be true and correct on the date of such notice
and shall be true and correct on the date of the release of the Collateral,
both before and after giving effect to such release;

(iii) either a Global Approval Judgment or a Settlement
Agreement Approval Judgment shall have been issued and entered as to which
any appeal (and subsequent remand, if any) has been finally decided and no
further appeal or petition for certiorari can be taken or granted; and

(iv) Arthur Andersen LLP shall have delivered the opinion with
respect to the December 31 audited annual consolidated financial statements
of the Revolving Borrower and its Subsidiaries and such opinion shall
contain no Impermissible Qualification (including, without limitation, the
Asbestos Qualification).

Following such a request by the Revolving Borrower, the Administrative
Agent will be authorized to release the Collateral if the Administrative Agent
and all the Lenders, in their sole discretion based upon such certificates,
documents, opinions and other information as they may require, shall have
determined to, and instructed the Administrative Agent to release the
Collateral.

(d) The Administrative Agent is hereby instructed by the Lenders to
sign all applicable agreements and other documents respecting a Collateral
release permitted hereunder. The Administrative Agent will report each release
of Collateral effected under this SECTION 10.10 to the Lenders promptly
thereafter.

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SECTION 10.11 FUNDING RELIANCE, ETC. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender or
Bid Loan Lender by 3:00 p.m., San Francisco time, on the day prior to a
Borrowing that such Lender will not make available the amount which would
constitute its Percentage of such Borrowing on the date specified therefor, or
such Bid Loan Lender shall not make available the amount of its Bid Loan on the
date specified therefor the Administrative Agent may assume that such Lender or
Bid Loan Lender, as the case may be, has made such amount available to the
Administrative Agent and, in reliance upon such assumption, may (but shall not
be obligated to) make available to the applicable Borrower a corresponding
amount. If and to the extent that such Lender shall not have made such amount
available to the Administrative Agent, such Lender or Bid Loan Lender, as the
case may be, and the applicable Borrower severally agree to repay the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative Agent made such
amount available to such Borrower to the date such amount is repaid to the
Administrative Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing.

SECTION 10.12 COPIES, ETC. The Administrative Agent will give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by each Borrower pursuant to the terms of this
Agreement or the other Loan Documents (unless concurrently delivered to the
Lenders by such Borrower). The Administrative Agent will distribute to each
Lender each document or instrument received for its account and copies of all
other communications received by it from each Borrower for distribution to the
Lenders in accordance with the terms of this Agreement or the other Loan
Documents.

SECTION 10.13 CO-AGENTS. None of the Lenders identified on the facing
page or signature pages of this Agreement as a "co-agent" (other than BofA in
its capacity as Administrative Agent) or "documentation co-agent" shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders so identified as a "co-agent" (including BofA in
its capacity as Administrative Agent) or "documentation co-agent" shall have or
be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.

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ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.1 WAIVERS, AMENDMENTS, ETC. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by each Borrower and the Required Lenders; PROVIDED, HOWEVER, that no such
amendment, modification or waiver which would:

(a) modify any requirement hereunder that any particular action be
taken by all the Lenders, the Majority Lenders or by the Required Lenders
shall be effective unless consented to by each Lender;

(b) modify this SECTION 11.1 or SECTION 10.10(C), change the
definition of "REQUIRED LENDERS" or "MAJORITY LENDERS", increase any
Revolving Commitment Amount or Term Commitment Amount or the Percentage of
any Lender, reduce any fees described in ARTICLE III, release all or
substantially all collateral security except as otherwise specifically
provided in any Loan Document or extend any Commitment Termination Date
shall be made without the consent of each Lender and each holder of a Note;

(c) extend the due date for, or reduce the amount of, any scheduled
repayment or prepayment of principal of or interest on any Loan (or reduce
the principal amount of or rate of interest on any Loan) shall be made
without the consent of the Lender holding such Loan;

(d) affect adversely the interests, rights or obligations of any
Issuer QUA the Issuer shall be made without the consent of such Issuer;

(e) affect adversely the interests, rights or obligations of the
Administrative Agent QUA the Administrative Agent shall be made without
consent of the Administrative Agent; and

(f) affect adversely the interests, rights or obligations of the
Documentation Agent QUA the Documentation Agent shall be made without the
consent of the Documentation Agent.

No failure or delay on the part of the Administrative Agent, any Lender or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice

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to or demand on either Borrower in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval by the
Administrative Agent, any Lender or the holder of any Note under this Agreement
or any other Loan Document shall, except as may be otherwise stated in such
waiver or approval, be applicable to subsequent transactions. No waiver or
approval hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder. EACH LENDER AGREES WITH AND IN FAVOR OF
EACH OTHER LENDER (WHICH AGREEMENT SHALL NOT BE FOR THE BENEFIT OF EITHER
BORROWER OR ANY OF ITS SUBSIDIARIES) THAT NO OBLIGOR'S OBLIGATIONS TO SUCH
LENDER UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE OR WILL BE SECURED
BY ANY REAL PROPERTY COLLATERAL NOW OR HEREAFTER ACQUIRED BY SUCH LENDER.

SECTION 11.2 NOTICES. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
transmitted and receipt thereof has been electronically confirmed.

SECTION 11.3 PAYMENT OF COSTS AND EXPENSES. The Revolving Borrower agrees
to pay on demand all reasonable expenses of the Administrative Agent (including
the fees, charges and out-of-pocket expenses of counsel (including allocated
costs of internal counsel) to the Administrative Agent and of local counsel, if
any, who may be retained by counsel to the Administrative Agent) in connection
with

(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from time
to time hereafter be required, whether or not the transactions contemplated
hereby are consummated, and

(b) the filing, recording, refiling or rerecording of any deed of
trust or similar instrument or any deed of reconveyance and/or any Uniform
Commercial Code financing statements relating thereto and all amendments,
supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be

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filed or recorded or refiled or rerecorded by the terms hereof or of the
Collateral Documents,

(c) all audit (including the allocated costs of internal audit
services), search, recording, filing and similar costs, fees and expenses
incurred or sustained by the Administrative Agent or any of their
Affiliates in connection with this Agreement or the Collateral; and

(d) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.

The Revolving Borrower further agrees to pay, and to save the Administrative
Agent and the Lenders harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution or delivery of this
Agreement, the Borrowings hereunder, the issuance of the Notes, the issuance of
the Letters of Credit, or any other Loan Documents. The Revolving Borrower also
agrees to reimburse the Administrative Agent and each Lender upon demand for all
reasonable out-of-pocket expenses (including attorneys' fees and charges and
legal expenses, including allocated costs of internal counsel)) incurred by the
Administrative Agent or such Lender in connection with (x) the negotiation of
any restructuring or "work-out", whether or not consummated, of any Loan
Documents or Obligations and (y) the enforcement of any Loan Documents or
Obligations.

SECTION 11.4 INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by the Administrative Agent and the Documentation
Agent and each Lender and the extension of the Commitments, the Revolving
Borrower hereby agrees to indemnify, exonerate and hold the Administrative
Agent, the Documentation Agent and the Issuer and each Lender and each of their
respective officers, directors, employees and agents (collectively, the
"INDEMNIFIED PARTIES") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees, charges and disbursements (including
allocated costs of internal counsel) (collectively, the "INDEMNIFIED
LIABILITIES"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to

(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan or the use of any
Letter of Credit;

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(b) the entering into and performance of this Agreement and any other
Loan Document by any of the Indemnified Parties (including any action
brought by or on behalf of either Borrower as the result of any
determination by the Required Lenders pursuant to ARTICLE VI not to make
any Credit Extension);

(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by either Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not the Administrative Agent or such Lender is party thereto;

(d) any pending or threatened investigation, litigation or
proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising out of or related to the Release by either
Borrower or any of its Subsidiaries of any Hazardous Material on the
Collateral or any other property owned, leased, occupied or used by such
Borrower or its Subsidiaries subject to any Collateral Document;

(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by either Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the control
of, such Borrower or such Subsidiary; or

(f) any Asbestos Litigation,

except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. No action taken by legal counsel chosen by the
Administrative Agent the Documentation Agent or any Lender in defending against
any such investigation, litigation or proceeding or requested remedial, removal
or response action shall vitiate or in any way impair the Revolving Borrower's
obligation and duty hereunder to indemnify and hold harmless the Administrative
Agent, the Documentation Agent and each Lender. In no event shall any site
visit, observation, or testing by the Administrative Agent, the Documentation
Agent or any Lender be deemed a representation or warranty that Hazardous
Materials are or are not present in, on, or under the site, or that there has
been or shall be compliance with any Environmental Law. Neither Borrower nor
any other Person is entitled to rely on any site visit, observation, or testing
by either Co-Agent or any Lender. Neither the Administrative Agent nor any
Lender owes any duty of care to protect either Borrower or any other Person
against, or

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to inform either Borrower or any other party of, any Hazardous Materials or any
other adverse condition affecting any site or Property. Neither the
Administrative Agent the Documentation Agent nor any Lender shall be obligated
to disclose to either Borrower or any other Person any report or findings made
as a result of, or in connection with, any site visit, observation, or testing
by either Co-Agent or any Lender. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Revolving Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.

SECTION 11.5 SURVIVAL. The obligations of each Borrower under SECTIONS
5.3, 5.4, 5.5, 5.6, 5.11, 11.3 and 11.4, and the obligations of the Lenders
under SECTION 10.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments. The representations and warranties made by each Obligor in this
Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.

SECTION 11.6 SEVERABILITY. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.

SECTION 11.7 HEADINGS. The various headings of this Agreement and of each
other Loan Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.

SECTION 11.8 EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be executed by each Borrower, the Administrative Agent and the
Documentation Agent and be deemed to be an original and all of which shall
constitute together but one and the same agreement.

SECTION 11.9 GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES
AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, PROVIDED THAT THE
ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW. This Agreement, the Notes and the other Loan Documents constitute
the entire understanding among the parties

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hereto with respect to the subject matter hereof and supersede any prior
agreements, written or oral, with respect thereto.

SECTION 11.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that:

(a) no Borrower may assign or transfer its rights or obligations
hereunder without the prior written consent of the Administrative Agent and
all Lenders; and

(b) the rights of sale, assignment and transfer of the Lenders are
subject to SECTION 11.11.

SECTION 11.11 SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS IN
LOANS AND NOTES. Each Lender may assign, or sell participations in, its Loans
and Commitments to one or more other Persons in accordance with this SECTION
11.11.

SECTION 11.11.1 ASSIGNMENTS. Any Lender,

(a) with the written consents of each Borrower (except that no
consent of either Borrower shall be required after the occurrence and
during the continuance of a Default), the Administrative Agent, and any
Issuer (which consents shall not be unreasonably delayed or withheld and
which consent, in the case of each Borrower, shall be deemed to have been
given in the absence of a written notice delivered by each Borrower to the
Administrative Agent, on or before the fifth Business Day after receipt by
such Borrower of such Lender's request for consent, stating, in reasonable
detail, the reasons why such Borrower proposes to withhold such consent)
may at any time assign and delegate to one or more commercial banks or
other financial institutions, and

(b) with notice to either Borrower and the Administrative Agent, but
without the consent of either Borrower or the Administrative Agent, may
assign and delegate to any of its Affiliates or to any other Lender

(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "ASSIGNEE LENDER"), (x) all or any fraction of such Lender's total Loans
and Commitments, or (y) in the case of the Swingline Lender, all of its
Swingline Loans and Swingline Commitment (which assignment and delegation shall
be of a constant, and not a varying, percentage of all the assigning Lender's
Loans (other than Bid Loans) and Commitments and, in connection with any
assignment by BofA, its Swingline Commitment and Swingline Loans may be in whole
but not in part included as part of the assignment transaction) in a minimum

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aggregate amount of $10,000,000; PROVIDED, HOWEVER, that any such Assignee
Lender will comply, if applicable, with the provisions contained in SECTION 5.12
and in the last sentence of SECTION 5.6 and FURTHER, PROVIDED, HOWEVER, that,
each Borrower, each other Obligor and the Administrative Agent shall be entitled
to continue to deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee Lender until

(c) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to each Borrower, the
Administrative Agent and any Issuer by such Lender and such Assignee
Lender,

(d) such Assignee Lender shall have executed and delivered to each
Borrower, the Administrative Agent and any Issuer a Lender Assignment
Agreement, accepted by the Administrative Agent, and

(e) the processing fees described below shall have been paid.

From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. If requested as provided in SECTION 2.9, within five Business
Days after its receipt of notice that the Administrative Agent has received an
executed Lender Assignment Agreement, each Borrower shall execute and deliver to
the Administrative Agent (for delivery to the relevant Assignee Lender) new
Notes evidencing such Assignee Lender's assigned Loans and Commitment or
Swingline Commitment, as the case may be, and, if the assignor Lender has
retained Loans and a portion of its Commitment hereunder, replacement Notes in
the principal amounts of the Loans and Commitment retained by the assignor
Lender hereunder (such Notes to be in exchange for, but not in payment of, the
Notes then held by such assignor Lender). Each such Note shall be dated the
date of the predecessor Note. Following receipt of the replacement Notes and
new Notes by the Assigning Lender and the Assignee Lenders, the assignor Lender
shall mark the predecessor Notes "exchanged" and deliver them to the applicable
Borrowers. Accrued interest on that part of the predecessor Notes evidenced by
the Notes, and accrued fees, shall

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be paid as provided in the Lender Assignment Agreement. Accrued interest on
that part of the predecessor Notes evidenced by replacement Notes shall be paid
to the assignor Lender. Accrued interest and accrued fees shall be paid at the
same time or times provided in the predecessor Notes and in this Agreement.
Such assignor Lender or such Assignee Lender must also pay a processing fee to
the Administrative Agent upon delivery of any Lender Assignment Agreement in the
amount of $2,000.

SECTION 11.11.2 PARTICIPATIONS. Any Lender may at any time sell to one or
more commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "PARTICIPANT") participating interests (or a sub-
participating interest, in the case of a Lender's participating interest in a
Letter of Credit) in any of the Loans (including its Bid Loans), Commitment, or
other interests of such Lender hereunder; PROVIDED, HOWEVER, that

(a) no participation or sub-participation contemplated in this
SECTION 11.11 shall relieve such Lender from its Commitment or Swingline
Commitment, as the case may be, or its other obligations hereunder or under
any other Loan Document,

(b) such Lender shall remain solely responsible for the performance
of its Commitment and such other obligations,

(c) each Borrower and each other Obligor and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and each of
the other Loan Documents,

(d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take any actions of
the type described in CLAUSE (B) or (C) of SECTION 11.1, and

(e) neither Borrower shall be required to pay any amount under
SECTION 5.6 that is greater than the amount which it would have been
required to pay had no participating interest been sold.

Each Borrower acknowledges and agrees that each Participant, for purposes of
SECTIONS 5.3, 5.4, 5.5, 5.6, 5.8, 5.9, 11.3 and 11.4, shall be considered a
Lender.

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SECTION 11.12 OTHER TRANSACTIONS. Nothing contained herein shall preclude
the Administrative Agent or any other Lender from engaging in any transaction,
in addition to those contemplated by this Agreement or any other Loan Document,
with either Borrower or any of its Affiliates in which such Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.

SECTION 11.13 FORUM SELECTION AND CONSENT TO JURISDICTION.

(A) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, THE LENDERS OR EITHER BORROWER SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF CALIFORNIA OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF CALIFORNIA AND OF THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF CALIFORNIA FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH BORROWER FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF CALIFORNIA.

(B) EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT EITHER BORROWER HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH
BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

SECTION 11.14 WAIVER OF JURY TRIAL.

THE ADMINISTRATIVE AGENT, THE LENDERS AND EACH BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, THE LENDERS OR EITHER

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BORROWER. EACH BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND THE LENDERS ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

SECTION 11.15 CONFIDENTIALITY.

The Administrative Agent and each Lender agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" or "secret" by either Borrower and
provided to it by such Borrower or any of its Subsidiaries, or by the
Administrative Agent on such Borrower's or Subsidiary's behalf, under this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information other than in connection with or in enforcement
of this Agreement and the other Loan Documents; except to the extent such
information (i) was or becomes generally available to the public other than as a
result of disclosure by the Administrative Agent or any Lender, or (ii) was or
becomes available on a non-confidential basis from a source other than such
Borrower, PROVIDED that such source is not bound by a confidentiality agreement
with such Borrower known to the Administrative Agent or such Lender, as the case
may be; PROVIDED, HOWEVER, that the Administrative Agent or any Lender may
disclose such information (A) at the request or pursuant to any requirement of
any Governmental Authority to which the Administrative Agent or Lender is
subject or in connection with an examination of the Administrative Agent or
Lender by any such authority; (B) pursuant to subpoena or other court process;
(C) when required to do so in accordance with the provisions of any Applicable
Law; (D) to the extent reasonably required in connection with any litigation or
proceeding to which the Administrative Agent, any Lender or their respective
Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; (F)
to the Administrative Agent's or such Lender's independent auditors and other
professional advisors; (G) to any Participant or Assignee Lender, actual or
potential, and to any Affiliate of the Administrative Agent or Lender provided
that such Person agrees in writing to keep such information confidential to the
same extent required of the Lenders hereunder, and (H) as to the Administrative
Agent or any Lender, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which such Borrower is party
or is deemed party with the Administrative Agent or such Lender.

SECTION 11.16 TRANSITION PROVISIONS. (a) On the Restatement Effective
Date, the Revolving Borrower agrees to pay to the Agent for the benefit of the
Lenders (as defined in the

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Original Credit Agreement), all Commitment Fees, fees with respect to Letters of
Credit and other amounts which have accrued and remain unpaid pursuant to the
Original Credit Agreement as of the Restatement Effective Date.

(b) Concurrently with the effectiveness of the Original Credit Agreement,
the Philadelphia National Bank (formerly known as Corestates Bank N.A.) ceased
to be a "Lender" under and for all purposes of this Agreement and no longer has
any rights or obligations hereunder, except for (i) rights to receive payment of
indemnities, reimbursements and other similar obligations and (ii) obligations
to indemnify, reimburse or make payment to the Administrative Agent, any Lender
or the Revolving Borrower with respect to actions, failures to act, conditions,
circumstances or events, in either case on or prior to October 4, 1995.

* * * * *

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

FIBREBOARD CORPORATION

By /s/ Garold E. Swan
-------------------------------------------
Title: Vice President and Controller

Address: 2121 North California Boulevard
Suite 560
Walnut Creek, California 94596

Facsimile No.: (510) 274-0714

Attention: Garold E. Swan

VYTEC CORPORATION

By /s/ Garold E. Swan
-------------------------------------------

Title: Vice President

Address: 2121 North California Boulevard
Suite 560
Walnut Creek, California 94596

Facsimile No.: (510) 274-0714

Attention: Garold E. Swan

S-1

<PAGE>

BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION,
as Administrative Co-Agent

By /s/IVO BAKOVIC
-------------------------------------------
Title: Vice President

Address: 1455 Market Street
12th Floor
San Francisco, California 94103

Facsimile No.: (415) 436-2700

Attention: Ivo Bakovic

S-2

<PAGE>

LENDERS

BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION

By /s/MICHAEL BALOK
-------------------------------------------
Title: Managing Director

Domestic
Office: 555 California Street
41st Floor
San Francisco, California 94104

Facsimile No.: (415) 622-2018

Attention: Michael Balok

Eurodollar
Office: 1850 Gateway Boulevard
Concord, California 94520

Facsimile No.: (510) 675-7531

Attention: Terry Peach
Account Administrator

S-3

<PAGE>

ABN AMRO BANK N.V.
SAN FRANCISCO INTERNATIONAL BRANCH
By: ABN AMRO NORTH AMERICA, INC.,
AS AGENT

By /s/DIANNE D. WAGGONER
-------------------------------------------
Name: Dianne D. Waggoner
Title: Group V.P. & Director

ABN AMRO BANK N.V.
SAN FRANCISCO INTERNATIONAL BRANCH
By: ABN AMRO NORTH AMERICA, INC.,
AS AGENT

By /s/DANIEL P. TAYLOR
-------------------------------------------
Name: Daniel P. Taylor
Title: Officer

Domestic
Office: 101 California Street
Suite 4550
San Francisco, California 94111

Facsimile No.: (415) 362-3524

Attention: Dianne D. Waggoner
Title: Group V.P.

Eurodollar
Office: 101 California Street
Suite 4550
San Francisco, California 94111

Facsimile No.: (415) 362-3524

Attention: Gloria Lee

S-4

<PAGE>

NATIONSBANK N.A.,
as Documentation Co-Agent and Lender

By /s/MICHAEL TOUSIGNANT
-------------------------------------------
Title: Vice President

Domestic
Office: One NationsBank Plaza
NC1-002-06-19
Charlotte, North Carolina 28255

Facsimile No.: (704) 386-8694

Attention: Michael Tousignant

Eurodollar
Office: One NationsBank Plaza
NC1-002-06-19
Charlotte, North Carolina 28255

Facsimile No.: (704) 386-8694

Attention: Michael Tousignant

S-5

<PAGE>

FIRST INTERSTATE BANK OF CALIFORNIA

By /s/ JOELLEN ADEMSKI /s/
-----------------------------------------------
Title: Vice President Vice President

Domestic
Office: 1221 Broadway
Suite 240
Oakland, California 94612

Facsimile No.: (510) 891-2007

Attention: Joellen Ademski

Eurodollar
Office: 1221 Broadway
Suite 240
Oakland, California 94612

Facsimile No.: (510) 891-2007

Attention: Joellen Ademski

S-6

<PAGE>
WELLS FARGO BANK, NATIONAL ASSOCIATION

By /s/ JOE ALEXIS
--------------------------------------------
Title: Vice President

Domestic
Office: Mid-Valley RCBO
P.O. Box 949
Modesto, California 95353-0949

Facsimile No.: (209) 523-3686

Attention: Joe Alexis

Eurodollar
Office: Mid-Valley RCBO
P.O. Box 949
Modesto, California 95353-0949

Facsimile No.: (209) 523-3686

Attention: Joe Alexis

S-7

<PAGE>
THE BANK OF NOVA SCOTIA

By /s/ MAARTEN VAN OTTERLOO
--------------------------------------------
Title: Officer

Domestic
Office: 101 California Street
48th Floor
San Francisco, California 94111

Facsimile No. (415) 397-0791

Attention: Maarten Van Otterloo

Eurodollar
Office: 101 California Street
48th Floor
San Francisco, California 94111

Facsimile No. (415) 397-0791

Attention: Maarten Van Otterloo

S-8

<PAGE>
SANWA BANK CALIFORNIA

By /s/ DAN STEVENS
------------------------------------------
Title: Vice President

Domestic
Office: 1800 Sutter Street
Suite 360
Concord, California 94520

Facsimile No.: (510) 827-2557

Attention: Dan Stevens

Eurodollar
Office: 1800 Sutter Street
Suite 360
Concord, California 94520

Facsimile No.: (510) 827-2557

Attention: Dan Stevens

S-9

<PAGE>

EXHIBIT 10.16

SEVERANCE AGREEMENT
--------------------

This Severance Agreement (this "Agreement") is made as of December 11,
1995 by and between FIBREBOARD CORPORATION, a Delaware corporation (the
"Company"), and ____________________________ ("Executive").

RECITALS
--------

WHEREAS the Company and Executive have previously entered into a
Severance Agreement dated as of January 1, 1992 (the "Prior Agreement")
providing for certain benefits to be conferred upon Executive under specified
circumstances in the event that (i) Executive's employment is terminated by the
Company or (ii) Executive voluntarily terminates his employment with the
Company, all upon the terms and conditions set forth therein; and

WHEREAS the Board of Directors of the Company has approved a new
severance agreement to provide Executive with certain additional benefits and to
conform the terms of such agreement to the current policy of the Company
regarding an officer's entitlement to benefits upon the termination of his
employment;

NOW THEREFORE, the parties hereto agree as follows:

1. TERMINATION ABSENT A CHANGE OF CONTROL.

(a) If (i) the Company terminates Executive's employment for any reason
other than Permanent Total Disability or Cause, or (ii) Executive
voluntarily terminates his employment under circumstances involving a
Constructive Termination, Executive will be entitled to the following
compensation:

(1) One year's Base Salary; and

<PAGE>

(2) An amount equal to the Target Level Bonus (as defined in
Paragraph 10(f) below) for the fiscal year of termination;
and

(3) An amount equal to the Target Level Bonus for the fiscal
year of termination, prorated for the period of Executive's
actual employment during the fiscal year of termination.

(b) The compensation payable under subparagraphs 1(a)(1), (2) and (3)
above shall be paid in a single lump sum within thirty (30) days
following the last date of Executive's employment.

2. TERMINATION UPON A CHANGE OF CONTROL.

(a) If within a one-year period after a Change of Control (i) the Company
or the surviving entity terminates Executive's employment for any
reason other than Permanent Total Disability or Cause or (ii)
Executive voluntarily terminates his employment under circumstances
involving a Constructive Termination, Executive will be entitled to
the following compensation:

(1) Eighteen (18) months' Base Salary; and

(2) An amount equal to the greater of:

(A) The Target Level Bonus for the fiscal year of
termination, or

(B) The average of the total annual bonus payments made to
Executive under the Company's Annual Cash Incentive
Program for the three fiscal years preceding the fiscal
year of termination; and

(3) An amount equal to the payment provided for under 2(a)(2)
above, prorated for the period of Executive's actual
employment during the fiscal year of termination.

(b) If within a three-month period following a Change of Control,
Executive voluntarily terminates his employment under circumstances
not involving a Constructive Termination, Executive will be entitled
to the following compensation:

<PAGE>

(i) One year's Base Salary; and

(ii) An amount equal to the Target Level Bonus for the fiscal year
of termination.

(c) The compensation payable under paragraphs 2(a) or (b) above will be
paid in a single lump sum within thirty (30) days after the last date
of Executive's employment.

(d) In the event of a termination of Executive's employment under the
circumstances described in paragraph 2(a) (but not 2(b)) above:

(i) All outstanding options, restricted stock rights and phantom
stock units (valued as of the date of termination of
Executive's employment) previously awarded to Executive shall
immediately vest and the Company shall promptly issue stock or
cash, as the case may be, to Executive as called for by the
terms of such awards; and

(ii) All of Executive's non-qualified deferred compensation or
retirement benefits, if any, accrued through the date of
termination under any non-qualified deferred compensation plan
or arrangement shall immediately vest and be payable, to the
extent permissible under the terms of such plan or
arrangement.

3. BONUS PAYMENT FOR YEAR PRECEDING TERMINATION. If Executive's employment is
terminated for any reason other than Cause prior to the date that the Board
of Directors has determined to award bonuses for a prior fiscal year,
Executive shall receive a bonus equal to the bonus he would have received
if his employment had not been terminated.

4. VOLUNTARY TERMINATION. If Executive voluntarily terminates his employment
other than as provided in paragraph 1 or 2 above, Executive shall not be
entitled to any benefits under this Agreement.

5. TERMINATION DUE TO DEATH OR DISABILITY. If Executive's employment
terminates due to death or Permanent Total Disability, Executive shall be
paid an amount equal to the

<PAGE>

Target Level Bonus for the fiscal year of termination, prorated for the
period of Executive's actual employment during the fiscal year of
termination. Executive shall not be entitled to any other benefits under
this Agreement.

6. CONTINUATION OF INSURANCE BENEFITS.

In the event Executive's employment terminates under the circumstances
described in paragraphs 1 or 2 of this Agreement, the Company will continue
Executive's participation and coverage for a period of one year from
Executive's last day of employment with the Company under all the Company's
life, medical and dental plans (but excluding the Company's disability
plans) ("Insurance Benefits"), and all fringe benefit plans and programs
(other than the Company's Profit Sharing/401(K) Plan) in which Executive is
participating immediately prior to such employment termination, under the
same coverages and on the same terms as in effect immediately prior to
termination; provided, that if his continued participation is not possible
under the general terms and provisions of such plans and programs, the
Company shall arrange to provide him with substantially similar benefits.

7. NO OTHER SEVERANCE BENEFITS. The foregoing severance benefits will be in
lieu of all severance payments and benefits to which Executive might
otherwise be entitled under the Company's general severance policy, if any.

8. TERM. This Agreement shall be effective for a period of two years from the
date hereof and shall thereafter automatically be extended on each
anniversary of the execution hereof for a period of one additional year,
provided that this Agreement may be terminated by the Company at any time
prior to its expiration upon one years' prior written notice to Executive.

9. ATTORNEYS' FEES. The Company will pay the reasonable attorneys' fees of
Executive that were incurred by him in enforcing his rights under this
Agreement if Executive subsequently obtains any benefits under this
Agreement, whether by way of settlement or litigation.

<PAGE>

10. CERTAIN DEFINED TERMS. As used herein, the following terms shall have the
following meanings:

(a) "Base Salary" shall mean the greater of the annual salary paid to
Executive as of the date of termination of his employment or the date
of the Change of Control, as the case may be.

(b) "Cause" shall mean:

(i) any act of fraud in the performance of Executive's duties as
an executive of the Company,

(ii) conviction of any felony,

(iii) engaging in any action with the intention of causing serious
detriment to any of the operations of the Company or to any of
its subsidiaries, or

(iv) willful and continued failure to substantially perform his
duties as an Executive of the Company (other than as a result
of total or partial incapacity due to physical or mental
illness (habitual drunkenness or abuse of drugs or controlled
substances not being considered a physical or mental illness
for purposes of this paragraph)).

(i) the holders of the voting securities of the Company shall have
approved a merger or consolidation of the Company with any
other entity, unless (1) the proposed merger or consolidation
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of
the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately
after such merger or consolidation; or (2) prior to the
effective date of such merger or consolidation, the Board of
Directors (as constituted immediately prior to such effective
date) adopts a resolution that for purposes of this Agreement,
no Change Of Control has occurred (which resolution may

<PAGE>

be revoked by the Board of Directors at any time, in which
case a Change of Control will be deemed to have occurred as of
the date such revocation becomes effective);

(ii) a plan of complete liquidation of the Company shall have been
adopted or the holders of voting securities of the Company
shall have approved an agreement for the sale or disposition
by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company's
assets; or

(iii) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 ("1934 Act")) shall
become the "beneficial owner" (as defined in Rule 13d-3 under
the 1934 Act), directly or indirectly, of 15% or more of the
combined voting power of the Company's then outstanding
shares, unless, within 30 business days after notice to the
Company of such event, the Board of Directors (as constituted
immediately prior to such event) adopts a resolution that for
purposes of this Agreement no Change of Control has occurred
(which resolution may be revoked by the Board of Directors at
any time, in which case a Change of Control will be deemed to
have occurred as of the date such revocation becomes
effective);

(iv) during any period of two consecutive years, members who at the
beginning of such period constituted the Board of Directors
shall have ceased for any reason to constitute a majority
thereof, unless the election, or nomination for election by
the Company's stockholders, of each director shall have been
approved by the vote of at least two-thirds of the directors
then still in office and who were directors at the beginning
of such period; or

(v) the occurrence of any other change of control of a nature that
would be required to be reported in accordance with Form 8-K
pursuant to Sections 13 or 15(d) of the 1934 Act or in the
Company's proxy statement in accordance with Schedule 14A of
Regulation 14A promulgated under the 1934 Act, or in any
successor forms or

<PAGE>

regulations to the same effect; unless, within 30 business
days after notice to the Company of such events, the Board of
Directors (as constituted immediately prior to such event)
adopts a resolution that for purposes of this Agreement no
Change of Control has occurred (which resolution may be
revoked by the Board of Directors at any time, in which case a
Change of Control will be deemed to have occurred on the date
such revocation becomes effective).

(d) A "Constructive Termination" shall be deemed to have occurred if (i)
Executive's Base Salary is decreased by more than 10% during the term
of this Agreement without his consent, or (ii) Executive's annual
compensation potential (consisting of Base Salary plus total annual
bonus potential) is decreased by more than 10% during the term of this
Agreement without his consent, or (iii) Executive is required by the
Company without his consent to relocate to a new place of business
that is more than fifty miles from his current place of business, or
(iv) there occurs a material adverse change in Executive's general job
responsibilities or duties. In the event of the acquisition of
Fibreboard by a public or private entity, a Constructive Termination
shall not be triggered by a change in Executive's titles or reporting
responsibilities, as long as there is no material adverse change in
Executive's general job responsibilities or duties.

(e) "Permanent Total Disability" shall mean: If at the end of any month
Executive then is, and has been, for six (6) consecutive full calendar
months then ending, or eighty (80) or more of the normal working days
during the twelve (12) consecutive full calendar months then ending,
unable to perform his duties in the normal and regular manner due to
mental or physical illness or injury, Executive will be deemed to be
in a state of Permanent Total Disability. Any determination of such
inability to perform shall be made only by the Board of Directors of
the Company with such professional advice as they deem appropriate.
Such determination shall be final and conclusive.

(f) "Target Level Bonus" shall mean the bonus that would have been payable
to Executive under the Company's Annual Cash Incentive Program for the
fiscal

<PAGE>

year of termination assuming that Executive's employment had continued
for the full year and the Company or the applicable business unit, as
the case may be, had achieved the "Target" level of earnings for the
year previously set by the Board of Directors under this Program.

(g) For purposes of subparagraphs 1(a)(3), 2(a)(3) and 5 of this
Agreement, applicable bonus amounts shall be "prorated" for the period
of Executive's actual employment during the fiscal year of termination
by multiplying the applicable bonus amount by a fraction, the
numerator of which shall be the number of days of Executive's
employment during such year and the denominator of which shall be 365.

11. MODIFICATION AND WAIVER OF BREACH. No waiver or modification of this
Agreement shall be binding unless it is in writing, signed by the parties
hereto. No waiver of a breach hereof shall be deemed to constitute a
waiver of a further breach, whether of a similar or dissimilar nature.

12. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit
of any successors of the Company. As used herein, "successors" shall
include any person, firm, corporation or other business entity which at any
time, whether by merger, purchase or otherwise, acquires substantially all
of the assets or business of the Company.

13. NOTICE. Any written notice to be given hereunder to Executive may be
delivered to him personally or shall be deemed to have been given upon
deposit thereof in the U.S. mail, certified mail, postage prepaid,
addressed to Executive at the address as it shall appear on the records of
the Company.

14. CONSTRUCTION OF AGREEMENT. This Agreement is made and entered into in the
State of California and shall be construed under the laws of California.

<PAGE>

15. ENTIRE AGREEMENT. This Agreement supersedes and replaces the Prior
Agreement in its entirety, and after the execution hereof by Executive and
the Company, the Prior Agreement shall no longer be of any further force or
effect. This Agreement constitutes the entire understanding between the
parties with respect to Executive's severance pay in the event of a
termination of Executive's employment with the Company, superseding all
negotiations, prior discussions and preliminary agreements, written or
oral, concerning said severance pay. This Agreement may not be amended
except in writing by the parties hereto.

16. COUNTERPARTS. This Agreement may be executed in counterparts.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

FIBREBOARD CORPORATION

By
------------------------------------
John D. Roach
Chairman, President and
Chief Executive Officer

----------------------------------------
Executive

<PAGE>

EXHIBIT 10.27.1
AMENDMENT TO AGREEMENT TO AMEND,
CONSOLIDATE AND LEND

This Amendment to Agreement to Amend, Consolidate and Lend ("AMENDMENT") is
made as of November 22, 1995, by and among FIRST INTERSTATE BANK OF NEVADA, N.A.
("BANK"), TRIMONT LAND COMPANY, a California corporation doing business as
Northstar-at-Tahoe ("TRIMONT"), SIERRA-AT-TAHOE, INC., a Delaware corporation
("SIERRA") and BEAR MOUNTAIN, INC., a Delaware corporation ("BMI"). Trimont,
Sierra, and BMI are referred to herein individually as "BORROWER" and
collectively as "BORROWERS."

FACTUAL BACKGROUND

A. Bank, Trimont, and Sierra entered into a certain Agreement to Amend,
Consolidate and Lend dated May 31, 1995 (the "ACL AGREEMENT") in which Bank
agreed to extend credit (the "Loan") to Trimont and Sierra in the aggregate
amount of Thirty Million and no/100 Dollars ($30,000,000.00). Trimont and
Sierra are wholly owned subsidiaries of Fibreboard Corporation, a Delaware
corporation ("FIBREBOARD"). All capitalized words not defined herein are used
as defined in the ACL Agreement.

B. Section 1.4 of the ACL Agreement provides that Loan proceeds may be
used for non-hostile acquisitions, mergers or other business combinations by
Trimont, Sierra, or their affiliates, of an existing ski resort or golf course,
or for general working capital purposes.

C. Bank, Trimont, Sierra, and Fibreboard entered into a certain
Subordination Agreement dated May 31, 1995 (the "SUBORDINATION AGREEMENT"),
which, among other things,

<PAGE>

subordinates repayment of obligations owed to Fibreboard by any "Borrower" to
repayment of the Loan.

D. BMI is a wholly-owned subsidiary of Fibreboard and an affiliate of
Trimont and Sierra which has acquired the assets of a ski resort commonly known
as Bear Mountain in San Bernardino County, California. Bank, Trimont and Sierra
desire that BMI be added as a borrower under the ACL Agreement and the Note, and
that notwithstanding Section 1.4 of the ACL Agreement and the Subordination
Agreement, BMI be permitted to use Loan proceeds to repay a loan to BMI made by
Fibreboard, interest thereon, and certain other amounts advanced by Fibreboard,
up to an aggregate amount of $23,250,000 (all such indebtedness hereinafter
being referred to as the "SUBORDINATED LOAN"), on the terms and conditions
provided in this Amendment.

AMENDMENT

1. CONSENT. Bank hereby consents to the repayment of the Subordinated
Loan by BMI to Fibreboard, subject to the terms and conditions of the ACL
Agreement, including financial covenants, other than Section 1.4 of the ACL
Agreement.

2. ADDITIONAL BORROWER. Upon satisfaction of the conditions to this
Amendment as stated in Section 3 below, BMI shall be deemed to be a "Borrower"
under the ACL Agreement, the Note, and all of the Loan Documents. BMI hereby
assumes, jointly and severally with Trimont and Sierra, all obligations of a
Borrower under the ACL Agreement, the Note, and the Loan Documents, including
the obligations to repay amounts which Bank has advanced, or may advance
hereafter, to or for the benefit of or at the request of Trimont or Sierra.
Trimont and

- 2 -

<PAGE>

Sierra agree to repay amounts which Bank may advance hereafter to or for the
benefit of or at the request of BMI.

3. CONDITIONS PRECEDENT. As a condition to the effectiveness of this
Amendment, Bank shall have received each of the following, in form and substance
acceptable to Bank, duly executed by the appropriate parties:

a. Amendment to Secured Reducing Revolving Line of Credit Promissory Note;

b. Amendment to the Subordination Agreement;

c. Pledge Agreement executed by Fibreboard pledging to Bank all of the
corporate shares of BMI as collateral for the Loan;

d. Any stock certificates evidencing the corporate shares of BMI;

e. Security Agreement pertaining to personal property (the "PERSONAL
PROPERTY") located on or otherwise related to the Real Property (as defined
below);

f. UCC-1 Financing Statement pertaining to the Personal Property;

g. An opinion of BMI's counsel, which counsel shall be acceptable to Bank
and Bank's counsel, which opinion shall be in form and substance acceptable to
Bank and Bank's counsel, which opinion shall provide that (i) BMI is a Delaware
corporation duly organized and existing pursuant to the laws of the State of
Delaware and is presently in good standing and authorized to do business in the
State of California, and (ii) the Loan, if enforced according to its terms as
expressed in the Note, is not usurious under the existing applicable laws of the
State of California.
- 3 -

<PAGE>

h. Copies of BMI's Articles of Incorporation and Bylaws certified by the
Secretary of BMI;

i. Corporate Resolution to Borrow certified by the corporate secretary of
BMI authorizing BMI to enter into this Amendment and to borrow under the ACL
Agreement;

j. Corporate Resolution to Pledge certified by the corporate secretary of
Fibreboard authorizing Fibreboard to execute, deliver and perform the Pledge
Agreement.

k. Payment of Bank's reasonable out-of-pocket costs and expenses,
including reasonable attorney's fees, in connection with this Amendment and the
transactions contemplated hereby.

4. ADDITIONAL COLLATERAL. BMI further agrees, as consideration for
Bank's entering into this Amendment and Bank's consent to repayment of the
Subordinated Loan, to execute and deliver to Bank, upon Bank's written request,
any or all of the following in form and substance satisfactory to BMI and Bank:

a. Deed of Trust and Assignment of Rents, Issues and Profits and Leases
("DEED OF TRUST"), affecting certain real property owned by BMI described in
EXHIBIT A to this Amendment (the "DEED OF TRUST PROPERTY");

b. Agreement Concerning First Interstate Bank of Nevada Loan for Holder
of Term Special Use Permit No. 4267-01 executed by the United States Department
of Agriculture, Forest Service, Bank, and BMI pertaining to certain real
property described

- 4 -
<PAGE>

in EXHIBIT B to this Amendment, which is owned by the Forest Service and
subject to Permit No. 4267-01 (with the Deed of Trust Property, the "REAL
PROPERTY").

c. Special Covenants and Agreements Regarding Ski Permit pertaining to
Term Special Use Permit No. 4267-01, executed by Bank and BMI;

d. Assignment of Permits, Licenses, Variances, Approvals, Plans and
Specifications;

e. Environmental Indemnity pertaining to the Real Property executed by
BMI; and

f. Third Amendment to Deed of Trust executed by Trimont amending a
certain Deed of Trust and Assignment of Rents, Issues and Profits and Leases
dated May 3, 1993 and recorded May 4, 1993, in the Official Records of Placer
County, California, as Document No. 93-031617

g. Payment of Bank's reasonable out-of-pocket costs and expenses,
including reasonable attorney's fees, in connection with all of the foregoing
documents.

5. TITLE POLICY. If Bank obtains the Deed of Trust as provided in
Section 4.a above, Borrower will provide to Bank, at Borrower's sole expense,
an ALTA Loan Policy of title insurance insuring the validity and priority of
the Deed of Trust as a lien on the Deed of Trust Property, issued by an issuer
acceptable to Bank, subject only to exceptions approved by Bank and with any
endorsements reasonably requested by Bank.

6. SURETYSHIP WAIVERS. Bank and Borrowers acknowledge and agree that the
intention of the parties is that each Borrower shall each be a direct and
primary "BORROWER" with respect to

- 5 -

<PAGE>

all obligations under the ACL Agreement and the Loan Documents, now or
hereafter existing, whether such obligations result from borrowings by Trimont,
Sierra or BMI. However, in the event that for any reason either Trimont, Sierra
or BMI is held or deemed to be a guarantor of or surety for the payment and
performance by another Borrower of said Borrower's obligations under this
Agreement or any of the Loan Documents, Borrowers hereby waive:

a. All statutes of limitations as a defense to any action or proceeding
brought against Borrower by Bank, to the fullest extent permitted by law;

b. Any right each Borrower may have to require Bank to proceed against
the other Borrower, proceed against or exhaust any security held from the other
Borrower, or pursue any other remedy in Bank's power to pursue; and, without
limiting the foregoing, each Borrower waives all rights and defenses arising out
of an election of remedies by Bank, even though that election of remedies, such
as a nonjudicial foreclosure with respect to security for a guaranteed
obligation, has destroyed the Borrower's rights of subrogation and reimbursement
against the principal by the operation of Section 580d of the California Code of
Civil Procedure or otherwise;

c. Any defense based on any claim that Borrower's obligations exceed or
are more burdensome than those of the other Borrower;

d. Any defense based on: (i) any legal disability of the other Borrower,
(ii) any release, discharge, modification, impairment or limitation of the
liability of the other Borrower to Bank from any cause, whether consented to by
Bank or arising by operation of law or from any bankruptcy or other voluntary or
involuntary proceeding, relationships

- 6 -

<PAGE>

("INSOLVENCY PROCEEDING") and (iii) any rejection or disaffirmance of the Loan,
or any part of it, or any security held for it, in any such Insolvency
Proceeding;

e. Any defense based on any action taken or omitted by Bank in any
Insolvency Proceeding involving the other Borrower, including any election to
have Bank's claim allowed as being secured, partially secured or unsecured, any
extension of credit by Bank to the other Borrower in any Insolvency Proceeding,
and the taking and holding by Bank of any security for any such extension of
credit;

f. Except as provided in the Loan Documents, all presentments, demands
for performance, notices of nonperformance, protests, notices of protest,
notices of dishonor, notices of acceptance, and demands and notices of every
kind;

g. Any defense based on or arising out of any defense that the other
Borrower may have to the payment of performance of the Loan or any part of it;
and

h. Any defense based on or arising out of the exercise by Bank of any
right or remedy under this Agreement or any other Loan Document that may or
would, in combination with any previous or subsequent exercise by Bank of such
rights and remedies, impair or destroy Borrower's rights of subrogation,
reimbursement or contribution from or against the other Borrower.

- 7 -

<PAGE>

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
stated above.
FIRST INTERSTATE BANK OF
NEVADA, N.A.

By /S/ DARBY WATSON
---------------------
Its VICE PRESIDENT
---------------------

TRIMONT LAND COMPANY, a
California corporation doing business as
Northstar-at-Tahoe

By /S/ JAMES P. DONOHUE
---------------------
Its VICE PRESIDENT
---------------------

SIERRA-AT-TAHOE, INC., a Delaware
corporation

By /S/ JAMES P. DONOHUE
---------------------
Its VICE PRESIDENT
---------------------

BEAR MOUNTAIN, INC., a Delaware
corporation

By /S/ JAMES P. DONOHUE
---------------------
Its VICE PRESIDENT
---------------------

- 8 -
<PAGE>
Exhibit B

All that real property situated in the State of California, County of San
Bernardino, described as follows:

Portions of National Forest System lands in Sections 26, 27, 34 and 35, T.2N.,
R.1E., SBB&M as shown on the attached map dated June 22, 1990.

<PAGE>

EXHIBIT 10.27.2
SECOND AMENDMENT TO AGREEMENT

TO AMEND, CONSOLIDATE AND LEND

This Second Amendment to Agreement to Amend, Consolidate and Lend
("AMENDMENT") is made as of January 30, 1996, by and among FIRST INTERSTATE BANK
OF NEVADA, N.A. ("BANK"), TRIMONT LAND COMPANY, a California corporation doing
business as Northstar-at-Tahoe ("TRIMONT"), SIERRA-AT-TAHOE, INC., a Delaware
corporation ("SIERRA") and BEAR MOUNTAIN, INC., a Delaware corporation ("BMI").
Trimont, Sierra, and BMI are referred to herein individually as "BORROWER" and
collectively as "BORROWERS."

FACTUAL BACKGROUND

A. Bank, Trimont, Sierra, and BMI entered into a certain Agreement to
Amend, Consolidate and Lend dated May 31, 1995 as previously amended by
Amendment to Agreement to Amend, Consolidate and Lend dated November 22, 1995
(the "ACL AGREEMENT") in which Bank agreed to extend credit (the "Loan") to
Borrowers in the aggregate amount of Thirty Million and no/100 Dollars
($30,000,000.00). All capitalized words not defined herein are used as defined
in the ACL Agreement.

B. Bank and Borrowers desire to further amend the ACL Agreement on the
terms and conditions provided in this Amendment.

AMENDMENT

1. INCREASE IN COMMITMENT. The amount of Thirty Million Dollars
($30,000,000.00) as stated in Recital C of the ACL Agreement is hereby changed
to Forty Million Dollars ($40,000,000.00).

- 1 -

<PAGE>

2. AMENDMENTS TO ACL AGREEMENT (OTHER THAN FINANCIAL COVENANTS AND
QUARTERLY COMPLIANCE CERTIFICATE).

A. The first paragraph of Section 1.3 of the ACL Agreement (through
and including the chart at the top of page 5 of the ACL Agreement) is amended to
read in full as follows:

"1.3 INTEREST RATE. Interest shall be calculated by applying a margin to
the LIBOR Rate corresponding to the Borrowers' Debt-to-Cash Flow Ratio as
follows:

<TABLE>
<CAPTION>
DEBT-TO-CASH FLOW RATIO LIBOR MARGIN
<S> <C>
less than 1.5:1.0 1.00%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 1.125%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 1.25%
greater than 2.5:1.0 1.375%
</TABLE>

"Debt-to-Cash Flow Ratio" means consolidated interest-bearing indebtedness
of the Borrowers determined as of each fiscal quarter end in accordance
with GAAP, including (a) the daily average of capitalized lease
liabilities, (b)the daily average of the outstanding principal owing under
this Agreement for the ninety- (90-) day period immediately preceding each
fiscal quarter end, and (c) the daily average of all other interest-bearing
indebtedness as of the end of the applicable fiscal period under review,
DIVIDED BY Adjusted Consolidated EBITDA less capital expenditures.

"Adjusted Consolidated EBITDA" means the sum of (x)earnings before
interest, taxes, depreciation and amortization for the Borrowers on a
consolidated basis for the four consecutive fiscal quarters ending on the
determination date and (y) with respect to each acquisition, merger or
other business combination made by a Borrower during the four consecutive
fiscal quarters of such Borrower immediately preceding the fiscal quarter
end for which the ratio is then being calculated, the aggregate amount of
earnings before interest, taxes, depreciation and amortization of the
assets, capital stock, division or business group acquired in such
acquisition, merger or other business combination (as reasonably allocable
thereto) for the period beginning four fiscal quarters before the fiscal
quarter end for which the ratio is then being calculated and ending on the
date such acquisition, merger or other business combination was made."

B. Section 1.4 of the ACL Agreement is amended as follows:

- 2 -

<PAGE>

1. The first paragraph of Section 1.4 is amended to read in
full as follows:

"1.4 USE OF PROCEEDS; PERMITTED ACQUISITIONS. Unless the Bank has agreed
otherwise in a writing provided by it to the Borrowers, the Loan proceeds
may only be used for or with respect to:

"(i) non-hostile acquisitions, mergers or other business combinations
by a Borrower or an affiliate of a Borrower of an existing ski resort or
golf course, provided that the aggregate purchase price for each such
acquisition, merger or other business combination is less than or equal to
FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00) or, if the purchase price
exceeds such amount, the Bank has consented thereto (which consent will be
reasonably granted) prior to the closing of such transaction (in connection
therewith, the Bank agrees to use its best efforts to respond to such
request within ten (10) Business Banking Days following the date of such
request);

"(ii) general working capital purposes of the Borrowers and their
subsidiaries; and

"(iii) repayment of Parent Obligations incurred on or after
September 3, 1995, to the extent permitted under the Subordination
Agreement dated May 31, 1995, as amended by Amendment to Subordination
Agreement dated November 22, 1995 and Second Amendment to Subordination
Agreement dated January 30, 1996 (the "Subordination Agreement")."

2. The third paragraph of Section 1.4 is amended by changing
"Ten Million and no/100 Dollars ($10,000,000.00)" to "Five Million and no/100
Dollars ($5,000,000.00)."

C. Section 1.9 of the ACL Agreement is amended to read in full as
follows:

"1.9 REPAYMENT; REDUCTION IN FACILITY; RIGHT OF PREPAYMENT. Borrowers
shall pay all accrued interest upon Reference Rate Advances quarterly in
arrears on the last day of each January, April, July and October (or, if
Bank is not open for business on that day, the next succeeding day on which
Bank is open for business). Interest on LIBOR loans is payable on the last
day of the applicable Interest Period, but in no case less frequently than
quarterly.

"The outstanding principal balance of each LIBOR Advance shall be payable
on the last day of the Interest Period applicable to such LIBOR Advance and
on the Maturity Date.

- 3 -

<PAGE>

"Borrowers may, from time to time in their discretion, seek advances under
the Loan in accordance with the provisions of Article III hereinbelow;
provided, however, that, except to the extent of accrued interest not yet
due for payment, the amount outstanding under the Loan may at no time
exceed the Maximum Permissible Loan Balance. The "Maximum Permissible Loan
Balance" shall initially be FORTY MILLION AND NO/100 DOLLARS
($40,000,000.00), but the Maximum Permissible Loan Balance shall be reduced
as follows:

<TABLE>
<CAPTION>
EFFECTIVE DATE REDUCTION AMOUNT MAXIMUM PERMISSIBLE LOAN
BALANCE AFTER REDUCTION
<S> <C> <C>
April 30, 1996 $5,314,375.00 $34,685,625.00
April 30, 1997 $6,028,570.00 $28,657,055.00
April 30, 1998 $6,028,570.00 $22,628,485.00
April 30, 1999 $6,028,570.00 $16,599,915.00
</TABLE>

"All remaining principal and accrued interest shall be due and payable on
the Maturity Date.

"Any amount outstanding under the Note may be prepaid at any time, without
penalty, but no such prepayment shall modify, reduce, or delay the
repayment obligations hereof.

"Prepayment may be made upon at least three (3) Business Banking Days'
prior written or faxed notice (or telephone notice promptly confirmed by
written or faxed notice) to the Bank; PROVIDED, HOWEVER, that each partial
prepayment shall be in an amount which is an integral multiple of ONE
MILLION AND NO/100 DOLLARS ($1,000,000.00) and not less than ONE MILLION
AND NO/100 DOLLARS ($1,000,000.00). Each notice of prepayment shall
specify the prepayment date and the principal amount to be prepaid, shall
be irrevocable and shall commit the Borrowers to prepay such amount stated
therein on the date stated therein. All prepayments shall include accrued
interest on the principal amount being prepaid to the date of payment and
shall be applied to payment of interest before application to principal.

"On the date of any termination or reduction of the Maximum Permissible
Loan Balance pursuant to this Section 1.9, the Borrowers shall pay or
prepay so much of the outstanding balance as shall be necessary in order
that the aggregate principal amount of the outstanding balance will not
exceed the Maximum Permissible Loan Balance after giving effect to such
termination or reduction."

D. The chart in Section 1.13 of the ACL Agreement is amended to read
in full as follows:

- 4 -

<PAGE>

<TABLE>
<CAPTION>
FEE
DEBT-TO-CASH FLOW RATIO (PER ANNUM)
<S> <C>
less than 1.5:1.0 0.1875%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 0.25%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 0.3125%
greater than 2.5:1.0 0.375%

</TABLE>

E. The chart contained in Section 1.14 of the ACL Agreement is
amended to read in full as follows:

<TABLE>
<CAPTION>
LETTER OF CREDIT FEE
(PER ANNUM)
DEBT-TO-CASH FLOW RATIO (SET AT ISSUANCE OF CREDIT)
<S> <C>
less than 1.5:1.0 1.00%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 1.125%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 1.25%
greater than 2.5:1.0 1.375%
</TABLE>

F. Section 4.11 of the ACL Agreement is amended by adding, following
the word "in" in the first line, "that certain Environmental Site Audit: Bear
Mountain Ski Resort And Golf Course prepared by Roy C. Hampson & Associates
dated October 12, 1995 and."

3. AMENDMENTS TO ACL AGREEMENT (FINANCIAL COVENANTS).

A. Section 5.17 of the ACL Agreement is amended to read in full as
follows:

"5.17 LEVERAGE. Borrowers will maintain a consolidated Leverage Ratio
not greater than 3.0 to 1.0 calculated on a rolling four-quarter basis.
"Leverage Ratio" means the sum of (a) the Maximum Permissible Loan Balance,
plus (b) the aggregate principal amount of all interest-bearing debt
(excluding Intercompany Debt) other than the Loan ("Other Permitted
Indebtedness"), divided by Adjusted Consolidated EBIDTA. "Intercompany
Debt" means all Parent Obligations as defined in the Subordination
Agreement, to the extent permitted under the Subordination Agreement, and
any debts, obligations, or credit extended by any of the Borrowers to any
other Borrower."

- 5 -

<PAGE>

B. Section 5.19 of the ACL Agreement is amended to read in full as
follows:

"5.19(a) FIXED CHARGE COVERAGE RATIO. Borrowers will maintain a minimum
consolidated Fixed Charge Coverage Ratio, calculated on a rolling four-
quarter basis, not less than:

Quarters ending on or before September 30, 1996 1.35 to 1.00
Thereafter 1.50 to 1.00

"5.19(b) ADJUSTED FIXED CHARGE COVERAGE RATIO. Borrowers will maintain a
minimum consolidated Adjusted Fixed Charge Coverage Ratio, calculated on a
rolling four-quarter basis, not less than 1.00 to 1.00.

"5.19(c) DEFINITIONS. As used in this Section 5.19:

"Adjusted Fixed Charge Coverage Ratio" means Adjusted Consolidated EBITDA
less Excluded Items, less tax distributions, less dividends, less
Maintenance Capital Expenditures, plus Capital Injections, DIVIDED by Fixed
Charges.

"Capital Injections" means the sum of any amounts contributed or loaned to
a Borrower by a shareholder of Borrower as equity or as debt subordinated
to the Loan by the Subordination Agreement."

"Excluded Items" means (i) any gain or loss arising from the sale of
capital assets (real estate sales are not excluded), (ii) any gain arising
from any write-up of assets, (iii) earnings of any other Person,
substantially all of the assets of which have been acquired by Borrowers in
any manner to the extent that such earnings were realized by such other
person prior to the date of such acquisition, (iv) net earnings of any
Person in which Borrowers has an ownership interest, unless such earnings
have actually been received by Borrowers in the form of cash distributions,
(v) the earnings of any Person to which assets of Borrowers shall have been
sold, transferred, or disposed of, or into which Borrowers shall have
merged, to the extent that such earnings arise prior to the date of such
transaction, and (vi) any gain arising from the acquisition of any
securities of Borrowers.

"Fixed Charge Coverage Ratio" means Adjusted Consolidated EBITDA less
Excluded Items, less tax distributions, DIVIDED by Fixed Charges.

"Fixed Charges" means the sum of (i) amounts to be required to be repaid
pursuant to scheduled facility reductions hereunder (if any), plus (ii)
cash interest expense,

- 6 -

<PAGE>

plus (iii) principal and interest expenses on Other Permitted Indebtedness
plus (iv) payments on capitalized leases and other fixed noncontingent
obligations.

"Maintenance Capital Expenditures" means four percent (4%) of Borrowers'
consolidated gross revenues."

C. Section 5.20 of the ACL Agreement is amended by deleting the
period at the end of the Section and adding ", or (e) Intercompany Debt."

D. Section 5.22 of the ACL Agreement is amended by striking the
words "TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00)" and inserting in
their place "FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00), or (h)
Liens securing Intercompany Debt."

4. QUARTERLY COMPLIANCE CERTIFICATE. Notwithstanding any provisions of
the ACL Agreement, the form of Quarterly Compliance Certificate or other
Compliance Certificate shall be that form attached as Exhibit C to this
Amendment.

5. ADDITIONAL AMENDMENTS TO ACL AGREEMENT UPON FIBREBOARD GUARANTY. Upon
Bank's receipt of (i) a guaranty of the Loan by Fibreboard Corporation, a
Delaware corporation, in form and substance acceptable to Bank, and (ii)
notwithstanding and in addition to any fee payable under Section 1.13 of the ACL
Agreement, a fee in the amount of five one-hundredths of one percent (0.05%) of
the Maximum Permissible Loan Balance, then:

(a) the pricing of the loan, as stated in Paragraphs 1.3, 1.13, and
1.14 of the ACL Agreement, shall be amended as follows:

<TABLE>
<CAPTION>
DEBT-TO-CASH FLOW RATIO LIBOR MARGIN
<S> <C>
less than 1.5:1.0 0.45%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 0.60%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 0.80%

- 7 -

<PAGE>

greater than 2.5:1.0 0.925%

</TABLE>

<TABLE>
<CAPTION>
FEE
DEBT-TO-CASH FLOW RATIO (PER ANNUM)
<S> <C>
less than 1.5:1.0 0.175%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 0.20%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 0.25%
greater than 2.5:1.0 0.30%
</TABLE>

<TABLE>
<CAPTION>
LETTER OF CREDIT FEE
(PER ANNUM)
DEBT-TO-CASH FLOW RATIO (SET AT ISSUANCE OF CREDIT)
<S> <C>
less than 1.5:1.0 0.45%
equal to or greater than 1.5:1.0 but less than 2.0:1.0 0.60%
equal to or greater than 2.0:1.0 but less than 2.5:1.0 0.80%
greater than 2.5:1.0 0.925%
</TABLE>

(b) the amount of "25 basis points" in Section 1.3 of the ACL
Agreement shall be changed to "Zero (0) basis points;" and

6. CONDITIONS PRECEDENT. As a condition to the effectiveness of this
Amendment and each of the documents described below to be executed by Bank, Bank
shall have received, on or before January 31, 1996 (except as otherwise provided
below), in form and substance acceptable to Bank, duly executed by the
appropriate parties, each of the following:

a. Second Amendment to Secured Reducing Revolving Line of Credit
Promissory Note;

b. Second Amendment to the Subordination Agreement;

- 8 -

<PAGE>

c. Deed of Trust and Assignment of Rents, Issues and Profits and
Leases ("BMI DEED OF TRUST"), affecting certain real property owned by BMI
described in EXHIBIT A to this Amendment (the "BMI DEED OF TRUST PROPERTY");

d. Agreement Concerning First Interstate Bank of Nevada Loan for
Holder of Term Special Use Permit No. 4267-01 executed by the United States
Department of Agriculture, Forest Service, Bank, and BMI pertaining to certain
real property described in EXHIBIT B to this Amendment, which is owned by the
Forest Service and subject to Permit No. 4267-01 (with the BMI Deed of Trust
Property, the "BMI REAL PROPERTY").

e. Special Covenants and Agreements Regarding Ski Permit pertaining
to Term Special Use Permit No. 4267-01, executed by Bank and BMI;

f. Assignment of Permits, Licenses, Variances, Approvals, Plans and
Specifications;

g. Environmental Indemnity pertaining to the BMI Real Property
executed by Borrowers;

h. Assignment of Agreement For Water Service and UCC-2 amendment
relating thereto; and on or before February 29, 1996, a Consent to such
Assignment executed by Big Bear Municipal Water District;

i. Third Amendment to Deed of Trust executed by Trimont amending a
certain Deed of Trust and Assignment of Rents, Issues and Profits and Leases
dated May 3, 1993 and

- 9 -

<PAGE>

recorded May 4, 1993, in the Official Records of Placer County, California, as
Document No. 93-031617 (the "TRIMONT DEED OF TRUST");

j. Corporate Resolutions to Borrow certified by the corporate
secretaries of each of the Borrowers authorizing them respectively to enter into
this Amendment and to borrow the increased amount under the ACL Agreement;

k. Amended and Restated Undertaking;

l. An ALTA Loan Policy of title insurance insuring the validity and
priority of the BMI Deed of Trust as a lien on the BMI Deed of Trust Property,
issued by an issuer acceptable to Bank, subject only to exceptions approved by
Bank and with any endorsements reasonably requested by Bank;

m. Endorsements to the Policy of Title Insurance insuring the
Trimont Deed of Trust, insuring that the Trimont Deed of Trust, as modified,
continues to secure the secured obligations as provided therein, subject only to
exceptions approved by Bank; and

n. Payment of Bank's reasonable costs and expenses, including
attorney's fees, in connection with this Amendment and the transactions
contemplated hereby.

7. MISCELLANEOUS. Except as expressly amended herein, the ACL Agreement
and the Loan Documents shall remain in full force and effect. This Amendment is
a Loan Document and is governed by California law. This Amendment and the
agreements, documents and instruments to be delivered hereunder fully state the
agreements of the parties hereto and thereto relating to their subject matter,
and supersede all prior discussions, negotiations, and communications, written
or oral, including but not limited to the commitment letter by Bank to William
Jensen and Nanci Northway dated October 26, 1995.

- 10 -

<PAGE>

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
stated above.

FIRST INTERSTATE BANK OF
NEVADA, N.A.

By /S/ DARBY WATSON
---------------------
Its VICE PRESIDENT
---------------------

TRIMONT LAND COMPANY, a
California corporation doing business as
Northstar-at-Tahoe

By /S/ JAMES P. DONOHUE
---------------------
Its VICE PRESIDENT
---------------------

SIERRA-AT-TAHOE, INC., a Delaware
corporation
By /S/ JAMES P. DONOHUE
---------------------
Its VICE PRESIDENT
---------------------

BEAR MOUNTAIN, INC., a Delaware
corporation
By /S/ JAMES P. DONOHUE
---------------------
Its VICE PRESIDENT
---------------------

- 11 -

<PAGE>

EXHIBIT 10.36

FIBREBOARD CORPORATION

1995 STOCK INCENTIVE PLAN

(ADOPTED EFFECTIVE NOVEMBER 28, 1995)

<PAGE>

TABLE OF CONTENTS

ARTICLE 1. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 2. ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . . . . 1

2.1 Committee Composition . . . . . . . . . . . . . . . . . . . . 1

2.2 Committee Responsibilities. . . . . . . . . . . . . . . . . . 2

ARTICLE 3. SHARES AVAILABLE FOR GRANTS.. . . . . . . . . . . . . . . . . 2

3.1 Basic Limitation. . . . . . . . . . . . . . . . . . . . . . . 2

3.2 Unused Shares Under This Plan . . . . . . . . . . . . . . . . 2

3.3 Unused Shares Under Prior Plan. . . . . . . . . . . . . . . . 2

3.4 Dividend Equivalents. . . . . . . . . . . . . . . . . . . . . 3

ARTICLE 4. ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . 3

4.1 General Rules . . . . . . . . . . . . . . . . . . . . . . . . 3

4.2 Outside Directors . . . . . . . . . . . . . . . . . . . . . . 3

4.3 Incentive Stock Options . . . . . . . . . . . . . . . . . . . 4

ARTICLE 5. OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

5.1 Stock Option Agreement. . . . . . . . . . . . . . . . . . . . 5

5.2 Number of Shares. . . . . . . . . . . . . . . . . . . . . . . 5

5.3 Exercise Price. . . . . . . . . . . . . . . . . . . . . . . . 5

5.4 Exercisability and Term . . . . . . . . . . . . . . . . . . . 5

5.5 Effect of Change in Control . . . . . . . . . . . . . . . . . 5

5.6 Modification or Assumption of Options.. . . . . . . . . . . . 5

<PAGE>

ARTICLE 6. PAYMENT FOR OPTION SHARES . . . . . . . . . . . . . . . . . . 6

6.1 General Rule. . . . . . . . . . . . . . . . . . . . . . . . . 6

6.2 Surrender of Stock. . . . . . . . . . . . . . . . . . . . . . 6

6.3 Exercise/Sale . . . . . . . . . . . . . . . . . . . . . . . . 6

6.4 Exercise/Pledge . . . . . . . . . . . . . . . . . . . . . . . 6

6.5 Promissory Note . . . . . . . . . . . . . . . . . . . . . . . 6

6.6 Other Forms of Payment. . . . . . . . . . . . . . . . . . . . 6

ARTICLE 7. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . 7

7.1 SAR Agreement . . . . . . . . . . . . . . . . . . . . . . . . 7

7.2 Number of Shares. . . . . . . . . . . . . . . . . . . . . . . 7

7.3 Exercise Price. . . . . . . . . . . . . . . . . . . . . . . . 7

7.4 Exercisability and Term . . . . . . . . . . . . . . . . . . . 7

7.5 Effect of Change in Control . . . . . . . . . . . . . . . . . 7

7.6 Exercise of SARs. . . . . . . . . . . . . . . . . . . . . . . 7

7.7 Modification or Assumption of SARs. . . . . . . . . . . . . . 8

ARTICLE 8. RESTRICTED SHARES AND STOCK UNITS . . . . . . . . . . . . . . 8

8.1 Time, Amount and Form of Awards . . . . . . . . . . . . . . . 8

8.2 Payment for Awards. . . . . . . . . . . . . . . . . . . . . . 8

8.3 Vesting Conditions. . . . . . . . . . . . . . . . . . . . . . 8

8.4 Form and Time of Settlement of Stock Units. . . . . . . . . . 8

8.5 Death of Recipient. . . . . . . . . . . . . . . . . . . . . . 9

8.6 Creditors' Rights . . . . . . . . . . . . . . . . . . . . . . 9

<PAGE>

ARTICLE 9. VOTING AND DIVIDEND RIGHTS. . . . . . . . . . . . . . . . . . 9

9.1 Restricted Shares . . . . . . . . . . . . . . . . . . . . . . 9

9.2 Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE 10. PROTECTION AGAINST DILUTION . . . . . . . . . . . . . . . . . 9

10.1 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . 9

10.2 Reorganizations . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE 11. AWARDS UNDER OTHER PLANS. . . . . . . . . . . . . . . . . . . 10

ARTICLE 12. PAYMENT OF DIRECTOR'S FEES IN SECURITIES. . . . . . . . . . . 10

12.1 Effective Date . . . . . . . . . . . . . . . . . . . . . . . 10

12.2 Elections to Receive NSOs, Restricted Shares or
Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . 10

12.3 Number and Terms of NSOs, Restricted Shares or
Stock Units . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE 13. LIMITATION ON RIGHTS. . . . . . . . . . . . . . . . . . . . . 11

13.1 Retention Rights . . . . . . . . . . . . . . . . . . . . . . 11

13.2 Stockholders' Rights. . . . . . . . . . . . . . . . . . . . . 11

13.3 Regulatory Requirements . . . . . . . . . . . . . . . . . . . 11

ARTICLE 14 WITHHOLDING TAXES . . . . . . . . . . . . . . . . . . . . . . 11

14.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

14.2 Share Withholding . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE 15 ASSIGNMENT OR TRANSFER OF AWARDS. . . . . . . . . . . . . . . 12

15.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

15.2 Trusts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

<PAGE>

ARTICLE 16 FUTURE OF THE PLAN. . . . . . . . . . . . . . . . . . . . . . 12

16.1 Term of the Plan. . . . . . . . . . . . . . . . . . . . . . . 12

16.2 Amendment or Termination. . . . . . . . . . . . . . . . . . . 12

ARTICLE 17 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE 18 EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . 16

<PAGE>

FIBREBOARD CORPORATION

1995 STOCK INCENTIVE PLAN

(Adopted Effective November 28, 1995)

ARTICLE 1. INTRODUCTION.

The Plan was adopted by the Board on November 28, 1995, subject to approval
by the Company's stockholders at the annual meeting scheduled to be held on
June 10, 1996.

The purpose of the Plan is to promote the long-term success of the Company
and the creation of stockholder value by (a) encouraging Key Employees to focus
on critical long-range objectives, (b) encouraging the attraction and retention
of Key Employees with exceptional qualifications, including key employees who
may join the Company in the future as a result of acquisitions, and (c) linking
Key Employees directly to stockholder interests through increased stock
ownership. The Plan seeks to achieve this purpose by providing for Awards in
the form of Restricted Shares, Stock Units, Options (which may constitute
incentive stock options or nonstatutory stock options) or stock appreciation
rights.

The Plan shall be governed by, and construed in accordance with, the laws
of the State of Delaware (except their choice-of-law provisions).

ARTICLE 2. ADMINISTRATION.

2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of directors of the Company,
who shall be appointed by the Board. In addition, the composition of the
Committee shall satisfy:

(a) Such requirements as the Securities and Exchange Commission may
establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and

(b) Such requirements as the Internal Revenue Service may establish
for outside directors acting under plans intended to qualify for exemption
under section 162(m)(4)(C) of the Code.

The Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not satisfy the
foregoing requirements, who may administer the Plan with respect to Key
Employees who are not considered officers or directors of the Company under
section 16 of the Exchange Act, may grant Awards under the Plan to such Key
Employees and may determine all terms of such Awards.

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2.2 COMMITTEE RESPONSIBILITIES. The Committee shall:

(a) Select the Key Employees who are to receive Awards under the
Plan;

(b) Determine the type, number, vesting requirements and other
features and conditions of such Awards;

(d) Make all other decisions relating to the operation of the Plan.

The Committee may adopt such rules or guidelines as it deems appropriate to
implement the Plan. The Committee's determinations under the Plan shall be
final and binding on all persons.

ARTICLE 3. SHARES AVAILABLE FOR GRANTS.

3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Restricted Shares, Stock Units, Options and SARs awarded under the Plan shall
not exceed 500,000, plus the number of Common Shares that remained available for
issuance under the Prior Plan at the time of the adoption of this Plan. (No
additional awards shall be made under the Prior Plan after the approval of this
Plan by the Company's stockholders as provided in Section 16.1.) The limitation
of this Section 3.1 shall be subject to adjustment pursuant to Article 10.

3.2 UNUSED SHARES UNDER THIS PLAN. If Stock Units, Options or SARs are
forfeited or if Options or SARs terminate for any other reason before being
exercised, then the corresponding Common Shares shall again become available for
Awards under the Plan. If Restricted Shares are forfeited, then such Shares
shall again become available for Awards under the Plan to the extent permitted
by the rules of the Securities and Exchange Commission. If Stock Units are
settled, then only the number of Common Shares (if any) actually issued in
settlement of such Stock Units shall reduce the number available under
Section 3.1 and the balance shall again become available for Awards under the
Plan. If SARs are exercised, then only the number of Common Shares (if any)
actually issued in settlement of such SARs shall reduce the number available
under Section 3.1 and the balance shall again become available for Awards under
the Plan. Common Shares withheld under Section 14.2 shall again become
available for Awards under the Plan.

3.3 UNUSED SHARES UNDER PRIOR PLAN. If stock units, options or SARs
granted under the Prior Plan are forfeited after the adoption of this Plan or if
options or SARs granted under the Prior Plan terminate for any other reason
before being exercised but after the adoption of this Plan, then the
corresponding Common Shares shall become available for Awards under this Plan.
If restricted shares granted under the Prior Plan are forfeited after the
adoption of this Plan, then such shares shall become available for Awards under
this Plan.

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3.4 DIVIDEND EQUIVALENTS. Any dividend equivalents distributed under the
Plan shall not be applied against the number of Restricted Shares, Stock Units,
Options or SARs available for Awards, whether or not such dividend equivalents
are converted into Stock Units.

ARTICLE 4. ELIGIBILITY.

4.1 GENERAL RULES. Only Key Employees (including, without limitation,
independent contractors who are not members of the Board) shall be eligible for
designation as Participants by the Committee. Key Employees who are Outside
Directors shall only be eligible for the grants described in Section 4.2 and for
making an election described in Article 12.

4.2 OUTSIDE DIRECTORS. Any other provision of the Plan notwithstanding,
the participation of Outside Directors in the Plan shall be subject to the
following restrictions:

(a) Outside Directors shall receive no Awards except as described in
this Section 4.2 and Article 12.

(b) On the first business day in July of each year, each Outside
Director shall receive an NSO covering 4,000 Common Shares (subject to
adjustment under Article 10). Such NSO shall include an SAR exercisable
only during the 30-day period following a Change in Control with respect to
the Company. Such NSO shall be cancelled to the extent that such SAR is
exercised, and such SAR shall be cancelled to the extent that such NSO is
exercised. Such SAR shall be settled only in cash and shall be subject to
the same terms and conditions (including the Exercise Price and the
expiration date) as the related NSO.

(c) All NSOs granted to an Outside Director under this Section 4.2
shall become exercisable in full on the first anniversary of the date of
grant. Such NSOs shall also become exercisable in full in the event of a
Change in Control with respect to the Company.

(d) The Exercise Price under all NSOs granted to an Outside Director
under this Section 4.2 shall be equal to 100% of the Fair Market Value of a
Common Share on the date of grant, payable in one of the forms described in
Sections 6.1, 6.2, 6.3 and 6.4.

(e) All NSOs granted to an Outside Director under this Section 4.2
shall terminate on the earlier of:

(i) The 10th anniversary of the date of grant; or

(ii) The second anniversary of the termination of such Outside
Director's service for any reason.

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(f) Each Outside Director who first becomes a member of the Board
after the adoption of this Plan shall receive a one-time grant of 2,000
Stock Units (subject to adjustment under Article 10). Such Stock Units
shall be granted on the date when such Outside Director first joins the
Board.

(g) All Stock Units granted to an Outside Director under this
Section 4.2 shall be settled by issuing an equal number of Common Shares to
such Outside Director. The issuance shall occur on the earliest of:

(i) The third anniversary of the date of grant;

(ii) The date of a Change in Control with respect to the
Company; or

(iii) The date of the termination of such Outside Director's
service for any reason.

The foregoing notwithstanding, in the event of the termination of such
Outside Director's service, only the following percentage of such Stock
Units shall be settled (and the balance shall be forfeited):

Full Years of Service Com-
pleted by Outside Director Vested Percentage
-------------------------- -----------------

Less than 1 ......................... 0%
1 ......................... 40%
2 ......................... 70%
3 ......................... 100%

4.3 INCENTIVE STOCK OPTIONS. Only Key Employees who are common-law
employees of the Company, a Parent or a Subsidiary shall be eligible for the
grant of ISOs. In addition, a Key Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company or any
of its Parents or Subsidiaries shall not be eligible for the grant of an ISO
unless the requirements set forth in section 422(c)(6) of the Code are
satisfied.

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ARTICLE 5. OPTIONS

5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The Stock
Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a cash
payment or in consideration of a reduction in the Optionee's other compensation.
A Stock Option Agreement may provide that new Options will be granted
automatically to the Optionee when he or she exercises the prior Options.

5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 10. Options granted to any
Optionee in a single calendar year shall in no event cover more than 200,000
Common Shares, subject to adjustment in accordance with Article 10.

5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; which shall in no event be less than 100% of the Fair Market
Value of a Common Share on the date of grant. In the case of an NSO, a Stock
Option Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the NSO is outstanding.

5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify
the date when all or any installment of the Option is to become exercisable.
The Stock Option Agreement shall also specify the term of the Option; provided
that the term of an ISO shall in no event exceed 10 years from the date of
grant. A Stock Option Agreement may provide for accelerated exercisability in
the event of the Optionee's death, disability or retirement or other events and
may provide for expiration prior to the end of its term in the event of the
termination of the Optionee's service. Options may be awarded in combination
with SARs, and such an Award may provide that the Options will not be
exercisable unless the related SARs are forfeited. NSOs may also be awarded in
combination with Restricted Shares or Stock Units, and such an Award may provide
that the NSOs will not be exercisable unless the related Restricted Shares or
Stock Units are forfeited.

5.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the time
of granting an Option or thereafter, that such Option shall become fully
exercisable as to all Common Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company.

5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the

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<PAGE>

grant of new options for the same or a different number of shares and at the
same or a different exercise price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter or
impair his or her rights or obligations under such Option.

ARTICLE 6. PAYMENT FOR OPTION SHARES.

6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in cash at the time when such Common Shares
are purchased, except as follows:

(a) In the case of an ISO granted under the Plan, payment shall be
made only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be made
in any form(s) described in this Article 6.

(b) In the case of an NSO, the Committee may at any time accept
payment in any form(s) described in this Article 6.

6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, payment for all or any part of the Exercise Price may be made with
Common Shares which have already been owned by the Optionee for more than six
months. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan.

6.3 EXERCISE/SALE. To the extent that this Section 6.3 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Common Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.

6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Common Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.

6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
payment may be made with a full-recourse promissory note; provided that the par
value of the Common Shares shall be paid in cash.

6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.

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<PAGE>

ARTICLE 7. STOCK APPRECIATION RIGHTS.

7.1 SAR AGREEMENT. Each grant of an SAR under the Plan shall be evidenced
by an SAR Agreement between the Optionee and the Company. Such SAR shall be
subject to all applicable terms of the Plan and may be subject to any other
terms that are not inconsistent with the Plan. The provisions of the various
SAR Agreements entered into under the Plan need not be identical. SARs may be
granted in consideration of a reduction in the Optionee's other compensation.

7.2 NUMBER OF SHARES. Each SAR Agreement shall specify the number of
Common Shares to which the SAR pertains and shall provide for the adjustment of
such number in accordance with Article 10. SARs granted to any Optionee in a
single calendar year shall in no event pertain to more than 200,000 Common
Shares, subject to adjustment in accordance with Article 10.

7.3 EXERCISE PRICE. Each SAR Agreement shall specify the Exercise Price.
An SAR Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the SAR is outstanding.

7.4 EXERCISABILITY AND TERM. Each SAR Agreement shall specify the date
when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. An SAR Agreement may provide
for accelerated exercisability in the event of the Optionee's death, disability
or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee's service. SARs may
also be awarded in combination with Options, Restricted Shares or Stock Units,
and such an Award may provide that the SARs will not be exercisable unless the
related Options, Restricted Shares or Stock Units are forfeited. An SAR may be
included in an ISO only at the time of grant but may be included in an NSO at
the time of grant or thereafter. An SAR granted under the Plan may provide that
it will be exercisable only in the event of a Change in Control.

7.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the time
of granting an SAR or thereafter, that such SAR shall become fully exercisable
as to all Common Shares subject to such SAR in the event that a Change in
Control occurs with respect to the Company.

7.6 EXERCISE OF SARS. The exercise of an SAR shall be subject to the
restrictions imposed by Rule 16b-3 (or its successor) under the Exchange Act, if
applicable. If, on the date when an SAR expires, the Exercise Price under such
SAR is less than the Fair Market Value on such date but any portion of such SAR
has not been exercised or surrendered, then such SAR shall automatically be
deemed to be exercised as of such date with respect to such portion. Upon
exercise of an SAR, the Optionee (or any person having the right to exercise the
SAR after his or her death) shall receive from the Company (a) Common Shares,
(b) cash or (c) a combination of Common Shares and cash, as the Committee shall
determine. The amount of cash and/or the Fair Market Value of Common Shares
received upon exercise of SARs shall, in the aggregate,

7
<PAGE>

be equal to the amount by which the Fair Market Value (on the date of surrender)
of the Common Shares subject to the SARs exceeds the Exercise Price.

7.7 MODIFICATION OR ASSUMPTION OF SARS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may accept
the cancellation of outstanding SARs (whether granted by the Company or by
another issuer) in return for the grant of new SARs for the same or a different
number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an SAR shall, without the consent of the
Optionee, alter or impair his or her rights or obligations under such SAR.

ARTICLE 8. RESTRICTED SHARES AND STOCK UNITS.

8.1 TIME, AMOUNT AND FORM OF AWARDS. Awards under the Plan may be granted
in the form of Restricted Shares, in the form of Stock Units, or in any
combination of both. Restricted Shares or Stock Units may also be awarded in
combination with NSOs or SARs, and such an Award may provide that the Restricted
Shares or Stock Units will be forfeited in the event that the related NSOs or
SARs are exercised.

8.2 PAYMENT FOR AWARDS. To the extent that an Award is granted in the
form of newly issued Restricted Shares, the Award recipient, as a condition to
the grant of such Award, shall be required to pay the Company in cash an amount
equal to the par value of such Restricted Shares. To the extent that an Award
is granted in the form of Restricted Shares from the Company's treasury or in
the form of Stock Units, no cash consideration shall be required of the Award
recipients.

8.3 VESTING CONDITIONS. Each Award of Restricted Shares or Stock Units
shall become vested, in full or in installments, upon satisfaction of the
conditions specified in the Stock Award Agreement. A Stock Award Agreement may
provide for accelerated vesting in the event of the Participant's death,
disability or retirement or other events. The Committee may determine, at the
time of making an Award or thereafter, that such Award shall become fully vested
in the event that a Change in Control occurs with respect to the Company.

8.4 FORM AND TIME OF SETTLEMENT OF STOCK UNITS. Settlement of vested
Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any
combination of both, as determined by the Committee. The actual number of Stock
Units eligible for settlement may be larger or smaller than the number included
in the original Award, based on predetermined performance factors. Methods of
converting Stock Units into cash may include (without limitation) a method based
on the average Fair Market Value of Common Shares over a series of trading days.
Vested Stock Units may be settled in a lump sum or in installments. The
distribution may occur or commence when all vesting conditions applicable to the
Stock Units have been satisfied or have lapsed, or it may be deferred to any
later date. The amount of a deferred distribution may be increased by an
interest factor or by dividend equivalents. Until an Award of Stock Units is
settled, the number of such Stock Units shall be subject to adjustment pursuant
to Article 10.

8
<PAGE>

8.5 DEATH OF RECIPIENT. Any Stock Units Award that becomes payable after
the recipient's death shall be distributed to the recipient's beneficiary or
beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's death.
If no beneficiary was designated or if no designated beneficiary survives the
Award recipient, then any Stock Units Award that becomes payable after the
recipient's death shall be distributed to the recipient's estate.

8.6 CREDITORS' RIGHTS. A holder of Stock Units shall have no rights other
than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Award Agreement.

ARTICLE 9. VOTING AND DIVIDEND RIGHTS.

9.1 RESTRICTED SHARES. The holders of Restricted Shares awarded under the
Plan shall have the same voting, dividend and other rights as the Company's
other stockholders. A Stock Award Agreement, however, may require that the
holders of Restricted Shares invest any cash dividends received in additional
Restricted Shares. Such additional Restricted Shares shall be subject to the
same conditions and restrictions as the Award with respect to which the
dividends were paid. Such additional Restricted Shares shall not reduce the
number of Common Shares available under Article 3.

9.2 STOCK UNITS. The holders of Stock Units shall have no voting rights.
Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at
the Committee's discretion, carry with it a right to dividend equivalents. Such
right entitles the holder to be credited with an amount equal to all cash
dividends paid on one Common Share while the Stock Unit is outstanding. Dividend
equivalents may be converted into additional Stock Units. Settlement of dividend
equivalents may be made in the form of cash, in the form of Common Shares, or in
a combination of both. Prior to distribution, any dividend equivalents which are
not paid shall be subject to the same conditions and restrictions as the Stock
Units to which they attach.

ARTICLE 10. PROTECTION AGAINST DILUTION.

10.1 ADJUSTMENTS. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend payable in a form other than Common Shares in an amount that has a
material effect on the price of Common Shares, a combination or consolidation of
the outstanding Common Shares (by reclassification or otherwise) into a lesser
number of Common Shares, a recapitalization, a spinoff or a similar occurrence,
the Committee shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of:

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<PAGE>

(a) The number of Options, SARs, Restricted Shares and Stock Units
available for future Awards under Article 3;

(b) The limitations set forth in Sections 5.2 and 7.2.

(d) The number of Stock Units included in any prior Award which has
not yet been settled;

(e) The number of Common Shares covered by each outstanding Option
and SAR; or

(f) The Exercise Price under each outstanding Option and SAR.

Except as provided in this Article 10, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.

10.2 REORGANIZATIONS. In the event that the Company is a party to a merger
or other reorganization, outstanding Options, SARs, Restricted Shares and Stock
Units shall be subject to the agreement of merger or reorganization. Such
agreement may provide, without limitation, for the assumption of outstanding
Awards by the surviving corporation or its parent, for their continuation by the
Company (if the Company is a surviving corporation), for accelerated vesting and
accelerated expiration, or for settlement in cash.

ARTICLE 11. AWARDS UNDER OTHER PLANS.

The Company may grant awards under other plans or programs. Such awards may
be settled in the form of Common Shares issued under this Plan. Such Common
Shares shall be treated for all purposes under the Plan like Common Shares
issued in settlement of Stock Units and shall, when issued, reduce the number of
Common Shares available under Article 3.

ARTICLE 12. PAYMENT OF DIRECTOR'S FEES IN SECURITIES.

12.1 EFFECTIVE DATE. No provision of this Article 12 shall be effective
unless and until the Committee has determined to implement such provision.

12.2 ELECTIONS TO RECEIVE NSOS OR STOCK UNITS. An Outside Director may
elect to receive his or her annual retainer payments and meeting fees from the
Company in the form of cash, NSOs, Restricted Shares, Stock Units, or a
combination thereof, as determined by the Committee. Such NSOs, Restricted
Shares and Stock Units shall be issued

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<PAGE>

under the Plan. An election under this Article 12 shall be filed with the
Company on the prescribed form.

12.3 NUMBER AND TERMS OF NSOS, RESTRICTED SHARES OR STOCK UNITS. The
number of NSOs, Restricted Shares or Stock Units to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would otherwise
be paid in cash shall be calculated in a manner determined by the Committee.
The terms of such NSOs, Restricted Shares or Stock Units shall also be
determined by the Committee.

ARTICLE 13. LIMITATION ON RIGHTS.

13.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an employee,
consultant or director of the Company, a Parent or a Subsidiary. The Company
and its Parents and Subsidiaries reserve the right to terminate the service of
any employee, consultant or director at any time, with or without cause, subject
to applicable laws, the Company's certificate of incorporation and by-laws and a
written employment agreement (if any).

13.2 STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the issuance of a stock certificate for
such Common Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such certificate is
issued, except as expressly provided in Articles 8, 9 and 10.

13.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.

ARTICLE 14. WITHHOLDING TAXES.

14.1 GENERAL. To the extent required by applicable federal, state, local
or foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.

14.2 SHARE WITHHOLDING. The Committee may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Common Shares that otherwise would be
issued to him or her upon exercise or vesting of an Award under the Plan. Such
Common Shares shall be valued at their Fair Market

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<PAGE>

Value on the date when taxes otherwise would be withheld in cash. Any payment
of taxes by having Common Shares withheld by the Company may be subject to
restrictions, including any restrictions required by rules of the Securities and
Exchange Commission.

ARTICLE 15. ASSIGNMENT OR TRANSFER OF AWARDS.

15.1 GENERAL. Except as provided in Article 14, an Award granted under the
Plan shall not be anticipated, assigned, attached, garnished, optioned,
transferred or made subject to any creditor's process, whether voluntarily,
involuntarily or by operation of law. An Option or SAR may be exercised during
the lifetime of the Optionee only by him or her or by his or her guardian or
legal representative. Any act in violation of this Article 15 shall be void.
However, this Article 15 shall not preclude a Participant from designating a
beneficiary who will receive any outstanding Awards in the event of the
Participant's death, nor shall it preclude a transfer of Awards by will or by
the laws of descent and distribution.

15.2 TRUSTS. Neither this Article 15 nor any other provision of the Plan
shall preclude a Participant from transferring or assigning Restricted Shares to
(a) the trustee of a trust that is revocable by such Participant alone, both at
the time of the transfer or assignment and at all times thereafter prior to such
Participant's death, or (b) the trustee of any other trust to the extent
approved in advance by the Committee in writing. A transfer or assignment of
Restricted Shares from such trustee to any person other than such Participant
shall be permitted only to the extent approved in advance by the Committee in
writing, and Restricted Shares held by such trustee shall be subject to all of
the conditions and restrictions set forth in the Plan and in the applicable
Stock Award Agreement, as if such trustee were a party to such Agreement.

ARTICLE 16. FUTURE OF THE PLAN.

16.1 TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on November 28, 1995, subject to approval by the Company's
stockholders at the annual meeting scheduled to be held on June 10, 1996. In
the event that the Company's stockholders fail to approve the Plan at such
meeting, the Plan and all Awards granted under the Plan shall be rescinded, but
the Prior Plan shall remain in effect and available for making grants. This
Plan shall remain in effect until it is terminated under Section 16.2, except
that no ISOs shall be granted after November 27, 2005.

16.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the
Plan after the termination thereof. The termination of the Plan, or any
amendment thereof, shall not affect any Award previously granted under the Plan.

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<PAGE>

ARTICLE 17. DEFINITIONS.

17.1 "AWARD" means any award of an Option, an SAR, a Restricted Share or a
Stock Unit under the Plan.

17.2 "BOARD" means the Company's Board of Directors, as constituted from
time to time.

17.3 "CHANGE IN CONTROL" means:

(a) That the holders of the voting securities of the Company have approved
a merger or consolidation of the Company with any other entity, unless:

(i) The proposed merger or consolidation would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or

(ii) Prior to the effective date of such merger or consolidation, the
Board (as constituted immediately prior to such effective date) adopts a
resolution that for purposes of the Plan no Change in Control shall have
occurred; (which resolution may be revoked by the Board at any time in
which case a Change in Control shall be deemed to have occurred as of the
date such revocation becomes effective.

(b) That a plan of complete liquidation of the Company has been adopted or
the holders of voting securities of the Company have approved an agreement for
the sale or disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company's assets;

(c) That any "person" (as such term is used in sections 13(d) and 14(d) of
the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 15% or more of the combined voting
power of the Company's then outstanding shares, unless, within 30 business days
after notice to the Company of such event, the Board (as constituted immediately
prior to such event) adopts a resolution that for purposes of the Plan no Change
in Control shall have occurred (which resolution may be revoked by the Board at
any time, in which case a Change in Control shall be deemed to have occurred as
of the date such revocation becomes effective);

(d) That, during any period of two consecutive years, members who at the
beginning of such period constituted the Board have ceased for any reason to
constitute a majority thereof, unless the election, or nomination for election
by the Company's stockholders, of each director

13
<PAGE>

has been approved by the vote of at least two-thirds of the directors then still
in office who were directors at the beginning of such period; or

(e) The occurrence of any other change in control of a nature that would
be required to be reported in accordance with Item 1(a) of Form 8-K pursuant to
sections 13 or 15(d) of the Exchange Act or in the Company's proxy statement in
accordance with Schedule 14A of Regulation 14A promulgated under the Exchange
Act (or in any successor forms or regulations to the same effect), unless,
within 30 business days after notice to the Company of such events, the Board
(as constituted immediately prior to such event) adopts a resolution that for
purposes of the Plan no Change in Control shall have occurred (which resolution
may be revoked by the Board at any time, in which case a Change in Control shall
be deemed to have occurred as of the date such revocation becomes effective).

17.4 "CODE" means the Internal Revenue Code of 1986, as amended.

17.5 "COMMITTEE" means a committee of the Board, as described in
Article 2.

17.6 "COMMON SHARE" means one share of the common stock of the Company.

17.7 "COMPANY" means Fibreboard Corporation, a Delaware corporation.

17.8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

17.9 "EXERCISE PRICE," in the case of an Option, means the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement. "Exercise Price," in the
case of an SAR, means an amount, as specified in the applicable SAR Agreement,
which is subtracted from the Fair Market Value of one Common Share in
determining the amount payable upon exercise of such SAR.

17.10 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee as follows:

(a) If the Common Shares were traded over the counter on the date in
question but were not classified as a national market issue, then the Fair
Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the Nasdaq system for such
date;

(b) If the Common Shares were traded over-the-counter on the date in
question and were classified as a national market issue, then the Fair
Market Value shall be equal to the last-transaction price quoted by the
Nasdaq system for such date;

(c) If the Common Shares were traded on a stock exchange on the date
in question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date; and

14
<PAGE>

(d) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.

Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of THE WALL STREET
JOURNAL. Such determination shall be conclusive and binding on all persons.

17.11 "ISO" means an incentive stock option described in section 422(b) of
the Code.

17.12 "KEY EMPLOYEE" means (a) a common-law employee of the Company, a
Parent or a Subsidiary, (b) an Outside Director and (c) a consultant or adviser
who provides services to the Company, a Parent or a Subsidiary as an independent
contractor. Service as an Outside Director or as an independent contractor
shall be considered employment for all purposes of the Plan, except as provided
in Sections 4.2 and 4.3.

17.13 "NSO" means a stock option not described in sections 422 or 423 of
the Code.

17.14 "OPTION" means an ISO or NSO granted under the Plan and entitling the
holder to purchase one Common Share.

17.15 "OPTIONEE" means an individual or estate who holds an Option or SAR.

17.16 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not a
common-law employee of the Company, a Parent or a Subsidiary.

17.17 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent
on a date after the adoption of the Plan shall be considered a Parent commencing
as of such date.

17.18 "PARTICIPANT" means an individual or estate who holds an Award.

17.19 "PLAN" means this Fibreboard Corporation 1995 Stock Incentive Plan,
as amended from time to time.

17.20 "PRIOR PLAN" means the Fibreboard Corporation Restated 1988 Employee
Stock Option and Rights Plan.

17.21 "RESTRICTED SHARE" means a Common Share awarded under the Plan.

17.22 "SAR" means a stock appreciation right granted under the Plan.

15
<PAGE>

17.23 "SAR AGREEMENT" means the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to his
or her SAR.

17.24 "STOCK AWARD AGREEMENT" means the agreement between the Company and
the recipient of a Restricted Share or Stock Unit which contains the terms,
conditions and restrictions pertaining to such Restricted Share or Stock Unit.

17.25 "STOCK OPTION AGREEMENT" means the agreement between the Company
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.

17.26 "STOCK UNIT" means a bookkeeping entry representing the equivalent
of one Common Share, as awarded under the Plan.

17.27 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.

ARTICLE 18. EXECUTION.

To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to affix the corporate name and seal hereto.

FIBREBOARD CORPORATION

By :
--------------------------

<PAGE>

Exhibit 21

FIBREBOARD CORPORATION SUBSIDIARIES
As of December 31, 1995
<TABLE>
<CAPTION>

<S> <C>
Subsidiary State of Incorporation
- ------------------- ----------------------
Trimont Land Company, doing
business as Northstar-at-
Tahoe California

Pabco Metals Corporation Delaware

Fibreboard Box & Millwork Corporation Delaware

Sierra-at-Tahoe, Inc. Delaware

Norandex Inc. Delaware

Bear Mountain, Inc. Delaware

Vytec Corporation Ontario, Canada

Vytec Sales Corporation Delaware

</TABLE>

<PAGE>

Exhibit 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the
incorporation of our reports included in this Form 10-K, into Fibreboard
Corporation's previously filed Registration Statements on Form S-8, File No. 33-
60412, No. 33-26449 and No. 33-26450.

ARTHUR ANDERSEN LLP

San Francisco, California,
March 25, 1996.

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FIBREBOARDS
AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 12,382
<SECURITIES> 0
<RECEIVABLES> 50,759
<ALLOWANCES> 2,560
<INVENTORY> 57,905
<CURRENT-ASSETS> 142,870
<PP&E> 153,868
<DEPRECIATION> 49,391
<TOTAL-ASSETS> 1,189,620
<CURRENT-LIABILITIES> 69,435
<BONDS> 9,365
0
0
<COMMON> 86
<OTHER-SE> 239,670
<TOTAL-LIABILITY-AND-EQUITY> 1,189,620
<SALES> 380,806
<TOTAL-REVENUES> 380,806
<CGS> 280,926
<TOTAL-COSTS> 280,926
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,050
<INTEREST-EXPENSE> 6,476
<INCOME-PRETAX> 23,596
<INCOME-TAX> 9,072
<INCOME-CONTINUING> 14,524
<DISCONTINUED> 81,292
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 95,816
<EPS-PRIMARY> 10.67
<EPS-DILUTED> 10.67

</TABLE>