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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

SCHEDULE 13D


Under the Securities Exchange Act of 1934
(Amendment No. 3)


USG CORPORATION
(Name of Issuer)


Common Stock, par value $.10 per share
(Title of Class of Securities)


0009032931          
(CUSIP Number)


James B. McHugh, Esq.
The Goldman Sachs Group, L.P.
85 Broad Street
New York, NY  10004
(212) 902-1000
(Name, Address and Telephone Number of Person Authorized to Receive 
Notices and Communications)


March 9, 1994          
(Date of Event which Requires Filing of this Statement)


If the filing person has previously filed a statement on Schedule 13G to 
report the acquisition which is the subject of this Schedule 13D, and is 
filing this schedule because of Rule 13d-1(b)(3) or (4), check the 
following box.  [ ]


Check the following  box if a fee is being paid with the statement. [ ] (A 
fee is not required, only if the reporting person: (1) has a previous 
statement on file reporting beneficial ownership of more than five percent 
of the class of securities described in Item 1; and (2) has filed no 
amendment subsequent thereto reporting beneficial ownership of five 
percent or less of such class.) (See Rule 13d-7.)

Note:  Six copies of this statement, including all exhibits, should be 
filed with the Commission.  See Rule 13d-1(a) for other parties to whom 
copies are to be sent.

The remainder of this cover page shall be filled out for a reporting 
person's initial filing on this form with respect to the subject class of 
securities, and for any subsequent amendment containing information which 
would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be 
deemed to be "filed" for the purpose of Section 18 of the Securities 
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of 
that section of the Act but shall be subject to all other provisions of 
the Act (however, see the Notes).






	This statement constitutes Amendment No. 3 ("Amendment No. 3") 
to the Statement on Schedule 13D, dated May 6, 1993, as amended by 
Amendment No. 1, dated January 7, 1994, and Amendment No. 2, dated 
February 22, 1994 (collectively, the "Schedule 13D"), filed by Water 
Street Corporate Recovery Fund I, L.P. ("Water Street"), Goldman, Sachs & 
Co. ("Goldman Sachs") and The Goldman Sachs Group, L.P. ("GS Group" and 
together with Water Street and Goldman Sachs, the "Reporting Persons") in 
respect of the beneficial ownership by the Reporting Persons of shares of 
the common stock, par value $.10 per share (the "Common Stock"), of USG 
Corporation, a Delaware corporation (the "Company").  Capitalized terms 
used but otherwise not defined herein shall have the meaning ascribed to 
them in the Schedule 13D.

	Item 4 is hereby amended as follows:

	Item 4.	Purpose of the Transaction.

		On March 9, 1994, the Company filed a registration 
statement (the "Registration Statement") for an underwritten public 
offering of Common Stock (the "Offering").  The Registration Statement 
constitutes Post-Effective Amendment No. 1 to Registration Statement No. 
33-51845, as amended, which was originally filed on January 7, 1994 in 
respect of the Offering.  The Registration Statement covers the sale in 
the Offering of 5,500,000 shares of Common Stock by Water Street 
(6,475,000 shares if the underwriters' overallotment options are exercised 
in full).

	Item 5 is hereby amended as follows:

	Item 5.	Interest in Securities of the Issuer.

		On March 9, 1994, the Company filed the Registration 
Statement for an underwritten public offering of Common Stock of 7,000,000 
shares of Common Stock by the Company (7,900,000 shares if the 
underwriters' overallotment options are exercised in full) and 5,500,000 
shares of Common Stock by Water Street (6,475,000 shares if the 
underwriters' overallotment options are exercised in full).  

		The public offering price per share of Common Stock in 
the Offering is $29.875.  The closing of the Offering, which is subject to 
certain conditions that are customary for an underwritten public offering, 
is scheduled for 

March 16, 1994.  Assuming consummation of the Offering, 
Water Street would receive aggregate proceeds of $156,920,500 
($184,738,225 if the underwriters overallotment options are exercised in 
full), or $28.531 per share, in each case, net of the underwriting 
discount (but before payment of Water Street's other expenses).

	Assuming consummation of the Offering, (i) Water Street 
would beneficially own 10,393,231 shares of Common Stock (9,418,231 shares 
if the underwriters' overallotment options are exercised in full) and 
Warrants to purchase 116,070 shares of Common Stock and (ii) Goldman Sachs 
and GS Group would beneficially own 10,489,770 shares of Common Stock 
(9,514,770 shares if the underwriters' overallotment options are exercised 
in full) and Warrants to purchase 116,070 shares of Common Stock.  Based 
on the foregoing, Water Street, Goldman Sachs and GS Group would 
beneficially own (without giving effect to the Warrants owned by Water 
Street) 24% (21% if the underwriters' overallotment options are exercised 
in full) of the outstanding shares of Common Stock after the Offering.  
Assuming that Water Street exercises all of its Warrants, but that no 
other Warrants are exercised, Water Street, Goldman Sachs and GS Group 
would beneficially own 24% (21% if the underwriters' overallotment options 
are exercised in full) of the outstanding shares of Common Stock after the 
Offering.

	Item 6 is hereby amended as follows:

	Item 6.	Contracts, Arrangements, Understandings 
		or Relationships with Respect to Securities of the Issuer.

			In connection with the Offering, Water Street entered 
into a U.S. and International Underwriting Agreement containing customary 
terms and conditions, copies of which are filed as Exhibits G and H, 
respectively, to this Amendment No. 3 and incorporated by reference.

			In connection with the Offering, Goldman Sachs and 
Water Street agreed with the underwriters that during the 120-day period 
after the effective date of the Offering, Water Street and Goldman Sachs 
will not sell or otherwise dispose of any shares of Common Stock or 
Warrants, except that, at any time after 90 days after the effective date 
of the Offering, Water Street may distribute all or any portion of its 
shares of Common Stock or Warrants to its partners in accordance with its 
governing partnership agreement and except that Water Street and Goldman 
Sachs may exercise their Warrants.  A copy of that agreement is filed as 
Exhibit I to this Amendment No. 3 and incorporated by reference.



	Item 7.	Material to be Filed as Exhibits

(G)	U.S. Underwriting Agreement, dated March 8, 1994, 
between the Company, Water Street, and Salomon 
Brothers Inc, Lazard Freres & Co. and Smith Barney 
Shearson Inc., as representatives of the several 
U.S. underwriters.

(H)	International Underwriting Agreement, dated March 
8, 1994, between the Company, Water Street, and 
Salomon Brothers International Limited, Lazard 
Brothers & Co., Limited and Smith Barney Shearson 
Inc., as representatives of the several 
international underwriters.

(I)	Agreement, dated March 8, 1994, by Goldman Sachs 
and Water Street.



SIGNATURE


	Each of the undersigned certifies, after reasonable inquiry and 
to the best of its knowledge and belief, that the information set forth in 
this statement is true, complete and correct.


				WATER STREET CORPORATE RECOVERY FUND I, L.P.

					By:	GOLDMAN, SACHS & CO.
						General Partner

						By:  /s/ Richard A. Friedman
						Name: Richard A. Friedman
						Title:  General Partner



					GOLDMAN, SACHS & CO.

						By:  /s/ Richard A. Friedman
						Name: Richard A. Friedman
						Title:  General Partner


					THE GOLDMAN SACHS GROUP, L.P.

						By:  /s/ Richard A. Friedman
						Name:  Richard A. Friedman
						Title:  General Partner


Dated:  March 14, 1994



Index to Exhibits

Exhibit                     Description                     Page


(G)                      U.S. Underwriting                    7
                         Agreement, dated 
                         March 8, 1994, 
                         between the Company, 
                         Water Street, and 
                         Salomon Brothers 
                         Inc, Lazard Freres & 
                         Co. and Smith Barney 
                         Shearson Inc., as 
                         representatives of 
                         the several U.S. 
                         underwriters.

(H)                      International Underwriting          37
                         Agreement, dated 
                         March 8, 1994, 
                         between the Company, 
                         Water Street, and 
                         Salomon Brothers 
                         International 
                         Limited, Lazard 
                         Brothers & Co., 
                         Limited and Smith 
                         Barney Shearson 
                         Inc., as 
                         representatives of 
                         the several  
                         international 
                         underwriters.

(I)                      Agreement, dated March 8,              66
                         1994, by Goldman Sachs 
                         and Water Street.




	USG Corporation
Exhibit G




	12,500,000 Shares 1
	Common Stock
	($.10 par value)

	U.S. Underwriting Agreement


	New York, New York
	March 8, 1994     


Salomon Brothers Inc
Lazard Freres & Co.
Smith Barney Shearson Inc.
As Representatives of the Several Underwriters,
c/o Salomon Brothers Inc
7 World Trade Center
New York, New York  10048

Dear Sirs:

		USG Corporation, a Delaware corporation (the "Company"), 
proposes to sell to the underwriters named in Schedule I hereto (the 
"Underwriters"), for which you are acting as representatives (the 
"Representatives"), 5,950,000 shares (the "Company Underwritten 
Securities") of common stock, $.10 par value per share (the "Common 
Stock"), of the Company, and Water Street Corporate Recovery Fund I, L.P. 
("Water Street" or the "Selling Stockholder") proposes to sell to the 
Underwriters 4,675,000 shares of Common Stock (the "Selling Stockholder 
Securities" and together with the Company Underwritten Securities, the 
"Underwritten Securities").  In addition, solely for the purpose of 
covering overallotments, the Company proposes to grant to the Underwriters 
an option to purchase up to an additional 765,000 shares (the "Company 
Option Securities") of Common Stock and the Selling Stockholder proposes 
to grant to the Underwriters an option to purchase up to an additional 
828,750 shares of Common Stock (the "Selling Stockholder Option Securi-
ties" and together with the Company Option Securities, the "U.S. Option 
Securities").  The Underwritten Securities and the Option Securities are 
hereinafter referred to as the "U.S. Securities."  The parties hereto 
acknowledge that the underwriting discount on the sale of the Securities 
will be 4.5% of the aggregate price to the public.

		It is understood that the Company and the Selling Stockholder 
are concurrently entering into an International Underwriting Agreement 
dated the date hereof (the "International Underwriting Agreement") 
providing for the issue and sale by the Company of an aggregate of 
1,050,000 shares of Common Stock (the "International Company Underwritten 
Securities") and the sale by the Selling Stockholder of an aggregate of 
825,000 shares of Common Stock (the "International Selling Stockholder 
Underwritten Securities" and together with the International Company 
Underwritten Securities, the "International Underwritten Securities"), in 
each case, outside the United States and Canada through arrangements with 
certain underwriters outside the United States and Canada (the "Managers") 
for whom Salomon Brothers 
_________________
1  Plus options to purchase from USG Corporation up to 900,000 additional
shares and from the Selling Stockholder up to 975,000 additional shares
to cover overallotments.



International Limited, Lazard Brothers & Co., 
Limited and Smith Barney Shearson Inc. are acting as representatives (the 
"International Representatives"), and providing for the grant by the 
Company to the Managers of an option to purchase up to 135,000 additional 
shares of Common Stock (the "International Company Option Securities") and 
by the Selling Stockholder to the Managers of an option to purchase up to 
146,250 additional shares of Common Stock (the "International Selling 
Stockholder Option Securities," together with the International Company 
Option Securities, the "International Option Securities," and together 
with the International Underwritten Securities, the "International 
Securities") solely for the purpose of covering overallotments.  The U.S. 
Securities together with the International Securities are hereinafter 
called the "Securities."  It is further understood and agreed that the 
Managers and the Underwriters are entering into an agreement dated the 
date hereof (the "Agreement Between U.S. Underwriters and the Managers"), 
pursuant to which, among other things, the Managers may purchase from the 
Underwriters a portion of the U.S. Securities to be sold pursuant to the 
U.S. Underwriting Agreement and the Underwriters may purchase from the 
Managers a portion of the International Securities to be sold pursuant to 
International Underwriting Agreement.

		The terms which follow, when used in this Agreement, shall 
have the meanings indicated.  The term "the Effective Date" shall mean 
each date that the Registration Statement and any post-effective amendment 
or amendments thereto became or become effective.  "Execution Time" shall 
mean the date and time that this Agreement is executed and delivered by 
the parties hereto.  The "Preliminary Prospectus" shall mean any pre-
liminary prospectus with respect to the offering of the Securities 
referred to in Section 1(a)(i) below and any preliminary prospectus with 
respect to the offering of the Securities included in the Registration 
Statement at the Effective Date that omits Rule 430A Information; 
"Registration Statement" shall mean the registration statement referred to 
in Section 1(a)(i) below, including exhibits and financial statements, as 
amended at the Execution Time (or, if not effective at the Execution Time, 
in the form in which it shall become effective) and, in the event any 
post-effective amendment thereto becomes effective prior to the Closing 
Date, shall also mean such registration statement as so amended.  Such 
term shall include any Rule 430A Information deemed to be included therein 
at the Effective Date as provided by Rule 430A.  "Rule 424" and "Rule 
430A" and "Regulation S-K" refer to such rules under the Act.  "Rule 430A 
Information" means information with respect to the Securities and the 
offering thereof permitted to be omitted from the Registration Statement 
pursuant to Rule 430A when the Registration Statement becomes effective.

		1.  Representations and Warranties.  (a)  The Company 
represents and warrants to, and agrees with, each Underwriter as follows:  

		(i)  The Company has filed with the Securities and Exchange 
Commission (the "Commission") a registration statement (file number 
33-51845) on Form S-1, including a related preliminary prospectus, 
for the registration under the Securities Act of 1933, as amended 
(the "Act") of the offering and sale of the Securities.  The Company 
may have filed one or more amendments thereto, including the related 
preliminary prospectus, each of which has previously been furnished 
to you.  The Company will next file with the Commission either (i) 
prior to the effectiveness of such registration statement, a further 
amendment to such registration statement 

(including the form of 
final prospectus) or (ii) after the effectiveness of such regis-
tration statement, a final prospectus in accordance with Rules 430A 
and 424(b)(1) or (4).  In the case of clause (ii), the Company has 
included in such registration statement, as amended at the Effective 
Date, all information (other than Rule 430A Information) required by 
the Act and the rules thereunder to be included in the final 
prospectus with respect to the Securities and the offering thereof.  
As filed, such amendment and form of final prospectus, or such final 
prospectus, shall contain all Rule 430A Information, together with 
all other such required information, with respect to the Securities 
and the offering thereof and, except to the extent the 
Representatives shall agree in writing to a modification, shall be 
in all substantive respects in the form furnished to you prior to 
the Execution Time or, to the extent not completed at the Execution 
Time, shall contain only such specific additional information and 
other changes (beyond those contained in the latest Preliminary 
Prospectus) as the Company has advised you, prior to the Execution 
Time, will be included or made therein.

		The form of prospectus relating to the Securities as first 
filed pursuant to Rule 424(b) or, if no filing pursuant to Rule 
424(b) is made, such form of prospectus included in the Registration 
Statement at the Effective Date, is hereinafter called the 
"Prospectus."

		(ii)  On the Effective Date, the Registration Statement 
did or will, and when the Prospectus is first filed (if required) in 
accordance with Rule 424(b) and on each Closing Date (as defined in 
Section 3 hereof) the Prospectus (and any supplement thereto) will, 
comply in all material respects with the applicable requirements of 
the Act and the rules thereunder; on the Effective Date, the Reg-
istration Statement did not or will not contain any untrue statement 
of a material fact or omit to state any material fact required to be 
stated therein or necessary in order to make the statements therein 
not misleading; and, on the Effective Date, the Prospectus, if not 
filed pursuant to Rule 424(b), did not or will not, and on the date 
of any filing pursuant to Rule 424(b) and on each Closing Date, the 
Prospectus (together with any supplement thereto) will not, include 
any untrue statement of a material fact or omit to state a material 
fact necessary in order to make the statements therein, in the light 
of the circumstances under which they were made, not misleading; 
provided, however, that the Company makes no representations or 
warranties as to the information contained in or omitted from the 
Registration Statement, or the Prospectus (or any supplement 
thereto) in reliance upon and in conformity with information 
furnished in writing to the Company by or on behalf of any 
Underwriter through the Representatives, or Water Street 
specifically for use in connection with the preparation of the 
Registration Statement or the Prospectus (or any supplement 
thereto).

		(iii)  Each of the Company and its subsidiaries is a 
corporation duly organized, validly existing and in good standing 
under the laws of the jurisdiction of its incorporation; all of the 
issued shares of capital stock of each subsidiary have been duly and 
validly authorized and issued, are fully paid and nonassessable, and 
(except for directors' qualifying shares and those shares not held 
by the Company or any of its Affiliates) are owned directly or 
indirectly by the Corporation, free and clear of all liens, 
encumbrances, equities or claims, except for the shares of capital 
stock of USG Interiors (Europe) SA and except as provided under the 
Collateral Trust 

Agreement (as such term is defined in the 
Prospectus).  Each of the Company and its subsidiaries has the 
requisite corporate power and authority to own or lease and operate 
its properties and to carry on its business as described in the 
Prospectus except where the failure to have such power and authority 
would not reasonably be expected to result in a material adverse 
change in the financial condition, assets or operations of the 
Company and its subsidiaries taken as a whole (a "MAC").  The 
Company has the requisite power and authority to authorize the 
offering of the Securities to be sold by it, and to issue, sell and 
deliver the Securities to be sold by it.  The Company has the 
requisite power and authority to enter into each of the following 
agreements and to perform its obligations thereunder:  the letter 
agreement, dated February 25, 1993, as amended (the "Water Street 
Agreement"), among the Company, Water Street, Goldman, Sachs & Co. 
and The Goldman Sachs Group, L.P.; this Agreement; and the 
International Underwriting Agreement (collectively, the 
"Agreements").  It being understood and agreed that the Company will 
have to deliver good standing certificates and similar documentation 
only with respect to United States Gypsum Company, USG Interiors, 
Inc., L&W Supply Corporation, USG Industries, Inc., USG Foreign 
Investments, Ltd., La Mirada Products Co., Inc., Westbank Planting 
Company and American Metals Corporation (individually a "Major 
Subsidiary" and collectively the "Major Subsidiaries").

		(iv)  Each of the Company and its subsidiaries is duly 
qualified or licensed and in good standing as a foreign corporation 
duly authorized to do business in each jurisdiction in which it owns 
or leases properties, or conducts any business, so as to require 
such qualification or licensure, except where the failure to be so 
qualified and authorized would not reasonably be expected to result 
in a MAC.

		(v)  Except as may be disclosed in the Registration 
Statement and the Prospectus, there are no actions, proceedings or 
investigations pending or to the best of the Company's knowledge 
threatened (solely in the case of such actions, proceedings or 
investigations which would result in a MAC, in writing) which 
question the validity of this Agreement or the International 
Underwriting Agreement or any action taken or to be taken pursuant 
hereto or thereto which would result in a MAC, or which is required 
to be disclosed in the Registration Statement or Prospectus which is 
not adequately disclosed in the Registration Statement or 
Prospectus, as the case may be, and, to the Company's knowledge, 
there is no franchise, contract or other document required to be 
described in the Registration Statement or Prospectus, or required 
to be filed as an exhibit to the Registration Statement, which is 
not so described or filed.

		(vi)  The Company and its subsidiaries are not in breach 
or violation of any term or provision of any agreement, instrument, 
judgment, decree, order, statute, rule or governmental regulation, 
domestic or foreign, applicable to the Company or its subsidiaries 
or to any of their respective properties or assets, which breach, 
breaches, violation or violations would reasonably be expected to 
individually or in the aggregate result in a MAC, and the Company 
and its subsidiaries are not in violation of any term of their 
respective charters or by-laws.  The compliance by the Company with 
all of the provisions of the Agreements, and the performance of the 
transactions contemplated by the Agreements will not result in any 
such violation or be in conflict with or 

constitute a default under 
any such term, which conflict or default would result in a MAC or 
result in the creation of any mortgage, lien, charge or encumbrance 
upon any of the properties or assets of the Company pursuant to any 
such term which would reasonably be expected to result in a MAC.  No 
consent, approval, authorization or order of any court or 
governmental agency or body is required for the consummation by the 
Company and the subsidiaries of the transactions contemplated 
herein, except such as have been obtained under the Act and such as 
may be required under the Blue Sky Laws of any jurisdiction in 
connection with the distribution of the Securities and such other 
approvals as have been obtained.

		(vii)  The Securities to be issued and sold by the Company 
to the Underwriters have been duly and validly authorized and, when 
issued and delivered against payment therefor as provided herein, 
will be duly and validly issued and fully paid and nonassessable and 
will conform in all material respects to the description of the 
Common Stock contained in the Prospectus.

		(viii)  Each of the Agreements has been duly authorized 
and validly executed and delivered by the Company and constitutes a 
valid and legally binding agreement of the Company, enforceable 
against the Company in accordance with its terms (assuming the due 
execution and delivery by the parties thereto other than the 
Company) subject to the effect of bankruptcy, insolvency, 
reorganization, arrangement, moratorium, fraudulent conveyance and 
other similar laws relating to or affecting the enforcement of 
rights of secured or unsecured creditors generally.  

		(ix)  Except as disclosed in the Prospectus, no holder of 
any security of the Company has or will have any right to require 
the registration of such security by virtue of any transactions 
contemplated by this Agreement other than any such right that has 
been expressly waived in writing.  No holder of any of the 
outstanding shares of capital stock of the Company is entitled to 
preemptive or other rights to subscribe for the Securities.

		(x)  The Securities have been duly authorized for trading 
on the New York Stock Exchange, Inc., subject to official notice of 
issuance.

		(b)  The Selling Stockholder represents and warrants to, and 
agrees with, each Underwriter as follows:

		(i)  The Selling Stockholder is a partnership duly 
organized, validly existing and in good standing under the laws of 
the jurisdiction of its organization.  The Selling Stockholder has 
all necessary power and authority to enter into this Agreement and 
the International Underwriting Agreement.  Each of the Agreements 
has been duly authorized, executed and delivered by the Selling 
Stockholder and constitutes a valid and binding obligation of the 
Selling Stockholder, enforceable against it in accordance with its 
terms (subject, as to enforcement of remedies, to applicable 
bankruptcy, reorganization, insolvency, moratorium or other laws 
affecting creditors' rights generally from time to time in effect 
and to general principles of equity and except with respect to the 
indemnification provisions contained in the Agreements and assuming 
due execution 

by the parties thereto other than Water Street).  No 
consent, approval, authorization or order of any court or 
governmental agency or body is required for the consummation by 
Water Street of any of the transactions contemplated herein except 
for those under the Act or any state securities laws or Blue Sky 
laws.  The sale of the Securities by Water Street and the 
consummation by Water Street of the transactions contemplated by 
this Agreement and the International Underwriting Agreement will not 
conflict with, result in a breach or violation of, or constitute a 
default under any law, agreement of limited partnership of Water 
Street, the Water Street Agreement or the terms of any indenture or 
other agreement or instrument to which Water Street is a party or 
bound, or any judgment, order or decree applicable to Water Street 
of any court, regulatory body, administrative agency, governmental 
body or arbitrator having jurisdiction over Water Street.

		(ii)  Water Street has good and valid title to the 
Securities to be sold by Water Street and upon sale and delivery of, 
and payment for, such Securities, as provided herein, Water Street 
will convey good and valid title to such Securities, free and clear 
of all liens, encumbrances, equities and claims whatsoever.

		(iii)  On the Effective Date, the Registration Statement 
did not or will not contain any untrue statement of a material fact 
or omit to state any material fact required to be stated therein or 
necessary in order to make the statements therein not misleading; 
and on the Effective Date the Prospectus, if not filed pursuant to 
Rule 424(b), did not or will not, and on the date of any filing 
pursuant to Rule 424(b) and on the Closing Date, the Prospectus 
(together with any supplements thereto) will not, include any untrue 
statement of a material fact or omit to state a material fact 
necessary to make the statements therein, in light of the 
circumstances under which they were made, not misleading; provided 
that the Selling Stockholder makes no representations or warranties 
as to any statements in or omissions from the Registration Statement 
or Prospectus or any amendments or supplements thereto, except for 
statements or omissions made in reliance upon and in conformity with 
information furnished in writing to the Company by or on behalf of 
the Selling Stockholder specifically for use in connection with the 
preparation thereof.

		2.  Purchase and Sale.  (a)  Subject to the terms and 
conditions and in reliance upon the representations and warranties herein 
set forth, the Company and the Selling Stockholder agree, severally and 
not jointly, to sell to each Underwriter, and each Underwriter agrees, 
severally and not jointly, to purchase from the Company and the Selling 
Stockholder at a purchase price of $28.5306 per share, the amount of 
Underwritten Securities set forth opposite such Underwriter's name in 
Schedule I hereto.  The amount of Securities to be purchased by each 
Underwriter from the Company and the Selling Stockholder shall be as 
nearly as practicable in the same proportion to the total amount of 
Securities to be purchased by such Underwriter as the total amount of 
Securities to be sold by each of the Company and the Selling Stockholder 
bears to the total amount of Securities to be sold pursuant hereto.

		(b)  Subject to the terms and conditions and in reliance upon 
the representations and warranties herein set forth, the Company and the 
Selling Stockholder hereby grant, severally and not jointly, an option to 
the several Underwriters to purchase, severally and not jointly, up to 
765,000 shares and 

828,750 shares of the U.S. Option Securities, 
respectively, at the same purchase price per share as the Underwriter 
shall pay for the Underwritten Securities.  Said options may be exercised 
solely to cover overallotments in the sale of the Underwritten Securities.  
Said options may be exercised in whole or in part at any time (but not 
more than once) on or before the 30th day after the date of the Prospectus 
upon written or telegraphic notice by the Representatives to the Company 
and the Selling Stockholder setting forth the number of shares of the U.S. 
Option Securities as to which the several Underwriters are exercising the 
option and the settlement date.  Delivery of the shares of U.S. Option 
Securities, and payment therefor, shall be made as provided in Section 3 
hereof.  The number of shares of the U.S. Option Securities to be 
purchased by each Underwriter shall be the same percentage of the total 
number of shares of the U.S. Option Securities to be purchased by the 
several Underwriters as such Underwriter is purchasing of the Underwritten 
Securities, subject to such adjustments as you in your absolute discretion 
shall make to eliminate any fractional shares.

		3.  Delivery and Payment.  Delivery of and payment for the 
Underwritten Securities shall be made at the offices of Wachtell, Lipton, 
Rosen & Katz, 51 W. 52nd Street (or such other place as mutually may be 
agreed upon), New York, New York, at 10:00 a.m., New York City time, on 
March 16, 1994, or such later date (not later than April 1, 1994) as the 
Representatives shall designate, which date and time may be postponed by 
agreement among the Representatives, the Company and the Selling 
Stockholder or as provided in Section 9 hereof (such date and time of 
delivery and payment for the Securities being herein called the "First 
Closing Date").  Delivery of the Underwritten Securities shall be made to 
the Representatives for the respective accounts of the several 
Underwriters against payment by the several Underwriters through the 
Representatives of the purchase price therefor to or upon the order of the 
Company and the Selling Stockholder by certified or official bank check or 
checks drawn on or by a New York Clearing House bank and payable in next 
day funds.  The Underwritten Securities shall be registered in such names 
and in such denominations as the Representatives may request not less than 
three full business days in advance of the First Closing Date.

		The overallotment option may be exercised during the term 
thereof by written notice by you to the Company and the Selling 
Stockholder.  Such notice shall set forth the aggregate number of U.S. 
Option Securities as to which the option is being exercised, the name or 
names in which such U.S. Option Securities are to be registered, the 
authorized denominations in which such U.S. Option Securities are to be 
issued, and the time and date, as determined by you, when such U.S. Option 
Securities are to be delivered (an "Additional Closing Date"); provided, 
however, that no Additional Closing Date shall be earlier than the First 
Closing Date nor earlier than the third business day after the date on 
which the notice of the exercise of the option shall have been given nor 
later than the eighth business day after the date on which such notice 
shall have been given.  Delivery and payment for such U.S. Option Securi-
ties is to be at the offices set forth above for delivery and payment of 
the Underwritten Securities.  The First Closing Date and any Additional 
Closing Date are individually referred to as a "Closing Date" and 
collectively referred to as the "Closing Dates."

		The Company and the Selling Stockholder agree to use their 
best efforts to have the Underwritten Securities and the U.S. Option 
Securities, as the case may be, to be delivered at each Closing 

Date available for inspection, checking and packaging 
by the Representatives in 
New York, New York, not later than 1:00 p.m. on the business day prior to 
such Closing Date.  

		4.  Offering by Underwriters.  It is understood that the 
several Underwriters propose to offer the Securities for sale to the 
public as set forth in the Prospectus.  The Representatives agree to 
advise the Company promptly following the completion of the distribution 
of the Securities.

		5.  Agreements.  (a)  The Company agrees with the several 
Underwriters and Water Street that:

		(i)  The Company will use its best efforts to cause the 
Registration Statement, if not effective at the Execution Time, and 
any amendment thereof, to become effective.  Prior to the 
termination of the offering of the Securities, the Company will not 
file any amendment of the Registration Statement or supplement to 
the Prospectus without your prior consent, which consent shall not 
be unreasonably withheld.  Subject to the foregoing sentence, if the 
Registration Statement has become or becomes effective pursuant to 
Rule 430A, or filing of the Prospectus is otherwise required under 
Rule 424(b), the Company will cause the Prospectus, properly 
completed, and any supplement thereto to be filed with the 
Commission pursuant to the applicable paragraph of Rule 424(b) 
within the time period prescribed and will provide evidence 
satisfactory to the Representatives of such timely filing.  The 
Company will promptly advise the Representatives (i) when the Reg-
istration Statement, if not effective at the Execution Time, and any 
amendment thereto, shall have become effective, (ii) when the 
Prospectus, and any supplement thereto, shall have been filed (if 
required) with the Commission pursuant to Rule 424(b), (iii) when, 
prior to termination of the offering of the Securities, any 
amendment to the Registration Statement shall have been filed or 
become effective, (iv) of any request by the Commission for any 
amendment of the Registration Statement or supplement to the 
Prospectus or for any additional information, (v) of the issuance by 
the Commission of any stop order suspending the effectiveness of the 
Registration Statement or the Company becoming aware of the 
institution or threatening of any proceeding for that purpose, and 
(vi) of the receipt by the Company of any notification with respect 
to the suspension of the qualification of the Securities for sale in 
any jurisdiction or the initiation or threatening of any proceeding 
for such purpose.  The Company will use its best efforts to prevent 
the issuance of any such stop order and, if issued, to obtain as 
soon as possible the withdrawal thereof.

		(ii)  If, at any time when a prospectus relating to the 
Securities is required to be delivered under the Act, any event 
occurs as a result of which the Prospectus as then supplemented 
would include any untrue statement of a material fact or omit to 
state any material fact necessary to make the statements therein, in 
the light of the circumstances under which they were made, not 
misleading, or if it shall be necessary to amend the Registration 
Statement or supplement the Prospectus to comply with the Act or the 
rules thereunder, the Company will promptly prepare and file with 
the Commission, subject to the second sentence of Section 5(a)(i), 
an amendment or supplement which will correct such statement or 
omission or effect such compliance.

		(iii)  As soon as practicable, but in any event not later 
than sixteen (16) months after the Effective Date, the Company will 
make generally available to its security holders and to the 
Representatives an earnings statement or statements of the Company 
and its subsidiaries which satisfies the provisions of Section 11(a) 
of the Act and Rule 158 under the Act.  Filing reports under Section 
13 of the Securities Exchange Act of 1934 on a timely basis shall 
constitute compliance with this paragraph (iii), provided that the 
provisions of Section 11(a) of the Act and Rule 158 are thereby 
satisfied.

		(iv)  The Company will furnish to the Representatives and 
counsel for the Underwriters, without charge, two signed copies of 
the Registration Statement (including exhibits thereto) and to each 
other Underwriter a copy of the Registration Statement (without 
exhibits thereto) and, so long as delivery of a prospectus by an 
Underwriter or dealer may be required by the Act, as many copies of 
each Preliminary Prospectus and the Prospectus and any supplement 
thereto as the Representatives may reasonably request.  The Company 
will pay the expenses of printing or other production of all 
documents relating to the offering.

		(v)  The Company will cooperate with you and your counsel 
in connection with endeavoring to obtain qualification of the 
Securities for sale under the laws of such jurisdictions as the 
Representatives may designate, will maintain such qualifications in 
effect so long as required for the distribution of the Securities; 
provided, however, that the Company shall not be obligated to 
qualify as a foreign corporation to do business under the laws of 
any jurisdiction in which it shall not then be qualified but for the 
requirements of this Section 4(a)(v), to subject itself to taxation 
in any such jurisdiction to which it shall not then be so subject or 
to consent to general service of process in any such jurisdiction to 
which it shall not then be so subject.

		(vi)  For a period of 120 days following the Execution 
Time, the Company will not, without the prior written consent of the 
Representatives, offer, sell or contract to sell, or otherwise 
dispose of, directly or indirectly, or announce the offering of, any 
other shares of Common Stock or any securities convertible into, or 
exercisable or exchangeable for, shares of Common Stock, other than 
through the exercise of warrants or management stock options.

		(vii)  The Company will apply the net proceeds of the 
offering and the sale of the Securities in the manner set forth in 
the Prospectus under the caption "Purpose of the Offering and Use of 
Proceeds."

		(viii)  The Company confirms as of the date hereof that it 
is in compliance with all provisions of Section 1 of the Laws of 
Florida, Chapter 92-198, An Act Relating to Disclosure of Doing 
Business with Cuba, Section 517.075 of the Florida Securities and 
Investor Protection Act, and the Company further agrees that if it 
or any of its affiliates commences engaging in business with the 
government of Cuba or with any person or affiliate located in Cuba 
after the date the Registration Statement becomes or has become 
effective with the Commission or with the Florida 

Department of 
Banking and Finance (the "Department"), whichever date is later, or 
if the information reported in the Prospectus, if any, concerning 
the Company's business with Cuba or with any person or affiliate 
located in Cuba changes in any material way, the Company will 
provide the Department notice of such business or change, as 
appropriate, in a form acceptable to the Department.

		(ix)  The Company will comply with its obligations with 
respect to the Securities under Article 4 of the Water Street 
Agreement.

		(b)  Water Street agrees with the several Underwriters that:

		(i)  Water Street will not (and any assignees of Water 
Street's rights under Section 4.1 of the Water Street Agreement will 
not) request any registration of shares of Common Stock pursuant to 
Section 4.1 of the Water Street Agreement for a period of 120 days 
following the Effective Date.

		(ii)  For a period of 120 days following the Execution 
Time, Water Street and Goldman, Sachs & Co. will not, without the 
prior written consent of the Representatives, offer, sell or 
contract to sell, or otherwise dispose of, directly or indirectly, 
or announce the offering of, any other shares of Common Stock or any 
securities convertible into, or exercisable or exchangeable for, 
shares of Common Stock; provided, however, Water Street may 
distribute such shares or securities held by it to its partners at 
any time after 90 days following the Effective Date, which partners 
(other than Goldman, Sachs & Co.) shall not be bound by the 
limitations in this paragraph (ii); provided, further, that Water 
Street and Goldman, Sachs & Co. may exercise any of their Warrants 
to purchase Common Stock.

		(c)  Each Underwriter covenants and agrees with the Company 
and Water Street that it will comply with the obligations of an 
underwriter with respect to the Securities under Article 4 of the Water 
Street Agreement, it being understood that such obligations do not include 
those set forth under Sections 4.8(a), (b), (c), (d)(iii) and (d)(iv) of 
such Agreement.

		(d)  Each Underwriter agrees that (i) it is not purchasing any 
of the U.S. Securities for the account of anyone other than a United 
States or Canadian Person, (ii) it has not offered or sold, and will not 
offer or sell, directly or indirectly, any of the U.S. Securities or 
distribute any domestic Prospectus to any person outside the United States 
or Canada, or to anyone other than a United States or Canadian Person, and 
(iii) any dealer to whom it may sell any of the U.S. Securities will 
represent that it is not purchasing for the account of anyone other than a 
United States or Canadian Person and agree that it will not offer or 
resell, directly or indirectly, any of the U.S. Securities outside the 
United States or Canada, or to anyone other than a United States or 
Canadian Person or to any other dealer who does not so represent and 
agree; provided, however, that the foregoing shall not restrict (A) 
purchases and sales between the Underwriters on the one hand and the Man-
agers on the other hand pursuant to Section 1(b) of the Agreement Between 
Underwriters and Managers, (B) stabilization transactions contemplated 
under Section 2 of the Agreement Between 

Underwriters and Managers, 
conducted through Salomon Brothers Inc as part of the distribution of the 
Securities, and (C) sales to or through (or distributions of domestic 
Prospectuses or domestic Preliminary Prospectuses to) United States or 
Canadian Persons who are investment advisors, or who otherwise exercise 
investment discretion, and who are purchasing for the account of anyone 
other than a United States or Canadian Person.  "United States or Canadian 
Person" shall mean any person who is a national or resident of the United 
States or Canada, a corporation, partnership, or other entity created or 
organized in or under the laws of the United States or Canada or of any 
political subdivision thereof, or any estate or trust the income of which 
is subject to United States or Canadian federal income taxation, 
regardless of its source (other than any non-United States or non-Canadian 
branch of any United States or Canadian Person), and shall include any 
United States or Canadian branch of a person other than a United States or 
Canadian Person.  "US" or "United States" shall mean the United States of 
America (including the states thereof and the District of Columbia), its 
territories, its possessions and other areas subject to its jurisdiction.

		(e)  The agreements of the Underwriters set forth in paragraph 
(d) of this Section 5 shall terminate upon the earlier of the following 
events:

		(i)  a mutual agreement of the Representatives and the 
International Representative to terminate the selling restrictions 
set forth in paragraph (d) of this Section 5 and in Section 5(d) of 
the International Underwriting Agreement; or

		(ii)  the expiration of a period of 30 days after the 
Closing Date, unless (a) the Representatives shall have given notice 
to the Company and the International Representative that the 
distribution of the U.S. Securities by the Underwriters has not yet 
been completed, or (b) the International Representative shall have 
given notice to the Company and the Underwriters that the dis-
tribution of the International Securities by the Managers has not 
yet been completed.  If such notice by the Representatives or the 
International Representative is given, the agreements set forth in 
such paragraph (b) shall survive until the earlier of (1) the event 
referred to in clause (i) of this subsection (e) or (2) the 
expiration of any additional period of 30 days from the date of any 
such notice.  

		(f)  Each Underwriter represents and agrees to make any offer 
of the Securities in Canada only pursuant to an exemption from the 
Prospectus requirements in any jurisdiction in Canada in which such offer 
is made.

		6.  Conditions to the Obligations of the Underwriters.  The 
obligations of the Underwriters to purchase the Securities to be delivered 
at each Closing Date shall be subject to the accuracy of the 
representations and warranties on the part of the Company and Water Street 
contained herein as of the Execution Time and as of such Closing Date (as 
if made at such Closing Date), to the accuracy of the statements of the 
Company made in any certificates pursuant to the provisions hereof, to the 
performance by the Company and Water Street of their obligations hereunder 
and to the following additional conditions:

		(a)  If the Registration Statement has not become effective 
prior to the Execution Time, unless the Representatives agree in 
writing to a later time, the Registration Statement will become 
effective not later than (i) 6:00 p.m. New York City time on the 
date of determination of the public offering price, if such 
determination occurred at or prior to 3:00 p.m. New York City time 
on such date or (ii) 12:00 Noon on the business day following the 
day on which the public offering price was determined, if such 
determination occurred after 3:00 p.m. New York City time on such 
date; if filing of the Prospectus, or any supplement thereto, is 
required pursuant to Rule 424(b), the Prospectus, and any such 
supplement, will be filed in the manner and within the time period 
required by Rule 424(b); and no stop order suspending the effective-
ness of the Registration Statement shall have been issued and no 
proceedings for that purpose shall have been instituted or 
threatened.

		(b)  On each Closing Date, the Company shall have furnished to 
the Representatives and Water Street the opinion of Kirkland & 
Ellis, counsel for the Company as to paragraphs (i), (iv), (vii), 
(viii), (ix) and (x), and of the General Counsel or the Assistant 
General Counsel of the Company with respect to paragraphs (ii), 
(iii), (v), (vi), (xi) and (xii), each dated as of such Closing 
Date, to the effect that:

	(i)  The Company has been duly incorporated and the 
Company is validly existing as a corporation under the laws of 
the State of Delaware, with full corporate power and authority 
to own its properties and conduct its businesses as described 
in the Prospectus;

(ii)	  Each of the Major Subsidiaries has been duly 
incorporated and all the Major Subsidiaries are validly 
existing as corporations under the laws of their respective 
jurisdictions of incorporation, with full corporate power and 
authority to own their respective properties and conduct their 
respective businesses as described in the Prospectus, and the 
Company and each of the Major Subsidiaries are duly qualified 
to do business as foreign corporations under the laws of each 
jurisdiction in which the character of the business conducted 
or the location of the properties owned or leased make such 
qualifications necessary and in which the consequences of a 
failure to so qualify would have a material adverse effect on 
the properties or businesses of the Company and its 
subsidiaries taken as whole:

(iii)  all the outstanding shares of capital stock of 
each Major Subsidiary have been duly and validly authorized 
and issued and are fully paid and nonassessable, and have not 
been issued and are not owned or held in violation of any 
statutory preemptive right of stockholders; to the knowledge 
of such counsel after due inquiry, such shares are not held in 
violation of any other preemptive right of stockholders and, 
except as otherwise set forth in the Registration Statement, 
all outstanding shares of capital stock of the Major 
Subsidiaries are owned by the Company either directly or 
through wholly owned subsidiaries free and clear of any 
perfected security interest and, to the knowledge of such 

counsel, after due inquiry, any other material security 
interests, stockholders agreements or voting trusts;

(iv)  the Company's authorized equity capitalization is 
as set forth in the Prospectus; the capital stock of the 
Company conforms to the description thereof contained in the 
Prospectus; the Securities being sold hereunder and under the 
International Underwriting Agreement, as the case may be, have 
been duly and validly authorized, and, in the case of the 
Securities sold to the Underwriters by the Company, when 
issued and delivered to and paid for by the Underwriters 
pursuant to this Agreement or pursuant to the International 
Underwriting Agreement, will be fully paid and nonassessable; 
the Securities have been duly authorized for trading, subject 
to official notice of issuance, on the New York Stock 
Exchange, Inc.; and the holders of outstanding shares of capi-
tal stock of the Company are not entitled to statutory 
preemptive or, to the best of such counsel's knowledge after 
due inquiry, contractual rights to subscribe for the 
Securities;

(v)	  the outstanding shares of Common Stock have been 
duly and validly authorized and issued and are fully paid and 
nonassessable; 

(vi)  there is no pending or, to the knowledge of such 
counsel, threatened action, suit or proceeding before any 
court or governmental agency, authority or body or any 
arbitrator involving the Company or any of the subsidiaries of 
a character required to be disclosed in the Registration 
Statement which is not adequately disclosed in the Prospectus, 
and there is no contract or other document of a character 
required to be described in the Registration Statement or the 
Prospectus, or to be filed as an exhibit, which is not 
described or filed as required;

(vii)  the Registration Statement and all post-effective 
amendments thereto have become effective under the Act; any 
required filing of the Prospectus, and any supplements 
thereto, pursuant to Rule 424(b) and Rule 430A have been made 
in the manner and within the time period required by such 
Rules; to the best knowledge of such counsel, no stop order 
suspending the effectiveness of the Registration Statement has 
been issued, no proceedings for that purpose have been 
instituted or threatened and the Registration Statement and 
the Prospectus (other than the financial statements and other 
financial and statistical information contained therein as to 
which such counsel need express no opinion) comply as to form 
in all material respects with the requirements of the Act and 
the rules thereunder;

(viii)  each of the Agreements has been duly authorized, 
executed and delivered by the Company;

(ix)  no consent, approval, authorization, license, 
certificate, permit or order of any court or governmental 
agency or body is required for the consummation of the 

transactions contemplated herein, except such as have been 
obtained under the Act or as may be required under the blue 
sky laws of any jurisdiction in connection with the purchase 
and distribution of the Securities by the Underwriters (as to 
which such counsel need not opine) and such other approvals as 
have been obtained;

(x)  neither the execution and delivery of this 
Agreement or the International Underwriting Agreement nor the 
issue and sale of the Securities, nor the consummation of any 
other of the transactions contemplated herein or therein nor 
the fulfillment of the terms hereof or thereof will conflict 
with, result in a breach of, or constitute a default under the 
charter or by-laws of the Company or the terms of any 
agreement listed on Exhibit A attached hereto;

(xi)  neither the execution and delivery of this 
Agreement or the International Underwriting Agreement nor the 
issue and sale of the Securities, nor the consummation of any 
other of the transactions contemplated herein or therein nor 
the fulfillment of the terms hereof or thereof will conflict 
with, result in a breach of, or constitute a default under any 
agreement filed as an exhibit to the Registration Statement 
(other than any such agreement listed on Exhibit A to the 
opinion of Kirkland & Ellis delivered pursuant to this 
Agreement) or under any judgment, order or regulation known to 
such counsel to be applicable to the Company or any of its 
subsidiaries of any court, regulatory body, administrative 
agency, governmental body or arbitrator having jurisdiction 
over the Company or any of its subsidiaries; and 

(xii)  except as disclosed in the Prospectus, no holders 
of securities of the Company have rights to the registration 
of such securities under the Registration Statement.

		Each of such counsel shall state that it has participated in 
conferences with representatives of the Company, at which conferences the 
contents of the Registration Statement, the Prospectus, each amendment 
thereof and supplement thereto and related matters were discussed, and, 
although such counsel has not independently checked or verified and is not 
passing upon and assumes no responsibility for the factual accuracy, 
completeness or fairness of the statements contained in the Registration 
Statement, the Prospectus, any amendment thereof or supplement thereto, no 
facts have come to the attention of such counsel to cause such counsel to 
believe (A) that either the Registration Statement or any amendment 
thereto (other than the financial statements and related schedules and 
other financial and statistical information contained therein, or omitted 
therefrom), at the time the Registration Statement became effective 
contained an untrue statement of a material fact or omitted to state a 
material fact necessary to make the statements therein not misleading or 
(B) that the Prospectus, as amended and supplemented (other than the 
financial statements and related schedules and other financial and 
statistical information contained therein, or omitted therefrom), at the 
time the Registration Statement became effective or on each Closing Date 
contains an untrue statement of a material fact or omits to state a 
material fact necessary to make the statements therein, in the light of 
the circumstances under which they were made, not misleading.

		In rendering such opinions, each such counsel may rely (A) as 
to matters involving the application of laws of any jurisdiction other 
than the States of Illinois and Delaware or the United States, to the 
extent they deem proper and specified in such opinions, upon the opinion 
of other counsel of good standing whom they believe to be reliable and who 
are satisfactory to counsel for the Underwriters and (B) as to matters of 
fact, to the extent they deem proper, on certificates of responsible 
officers of the Company and public officials.  Reference to the Prospectus 
in this paragraph (b) include any supplements thereto at the Closing Date.

		(c)  On each Closing Date, Water Street shall have furnished 
to the Representatives the opinion of Fried, Frank, Harris, Shriver 
& Jacobson, counsel for Water Street, dated as of such Closing Date, 
to the effect that:

(i)  Each of this Agreement and the International 
Underwriting Agreement has been duly authorized, executed and 
delivered by the Selling Stockholder.  No consent, approval, 
authorization or order of any court or governmental agency or 
body of the State of New York or the United States of America 
is required for the consummation by Water Street of any of the 
transactions contemplated herein except for those under the 
Act or any state securities laws or Blue Sky laws.  The sale 
of the Securities to be sold by Water Street and the 
consummation by Water Street of the transactions contemplated 
by this Agreement and the International Underwriting Agreement 
will not result in a breach or violation of any term or provi-
sion of Water Street's agreement of limited partnership or the 
Water Street Agreement.

(ii)	  Assuming the Underwriters purchase the 
Securities to be transferred by Water Street on the applicable 
Closing Date in good faith and without notice of any adverse 
claim as such term is used in Section 8-302 of the Uniform 
Commercial Code in effect in the State of New York, valid 
title to such Securities, free and clear of all liens, encum-
brances, equities, or other adverse claims will pass to the 
Underwriters when appropriate entries to the accounts of the 
Underwriters are made on the books of The Depository Trust 
Company.

		(d)  The Representatives shall have received from Wachtell, 
Lipton, Rosen & Katz, counsel for the Underwriters, such opinion or 
opinions, dated as of each Closing Date, with respect to the 
issuance and sale of the Securities, the Registration Statement, the 
Prospectus (together with any supplement thereto) and other related 
matters as the Representatives may reasonably require, and the Com-
pany shall have furnished to such counsel such documents as they may 
reasonably request for the purpose of enabling them to pass upon 
such matters.

		(e)  The Company shall have furnished to the Representatives 
and to Water Street a certificate of the Company, signed by the 
Chief Financial Officer and the Vice President-Controller of the 
Company, each in his official capacity as an officer of the Company 
and not as an individual, dated as of each Closing Date, to the 
effect that the signers of such certificate have carefully 

examined the Registration Statement, the Prospectus, any supplement to the 
Prospectus, this Agreement and the International Underwriting 
Agreement and that:

(i)  the representations and warranties of the Company 
in this Agreement and the International Underwriting Agreement 
are true and correct in all material respects on and as of 
such Closing Date with the same effect as if made on the 
Closing Date and the Company has complied with all the 
agreements and satisfied all the conditions on its part to be 
performed or satisfied at or prior to the Closing Date;

(ii)	  no stop order suspending the effectiveness of 
the Registration Statement has been issued and no proceedings 
for that purpose have been instituted or, to the Company's 
knowledge, threatened; and

(iii)  since the date of the most recent financial 
statements included in the Prospectus (exclusive of any 
supplement thereto), there has been no MAC, whether or not 
arising from transactions in the ordinary course of business, 
except as set forth in or contemplated in the Prospectus 
(exclusive of any supplement thereto).

		(f)  Water Street shall have furnished to the Representatives 
a certificate of Water Street, dated as of each Closing Date, to the 
effect that the representations and warranties of Water Street in 
this Agreement are true and correct in all material respects on and 
as of such Closing Date with the same effect as if made on the 
Closing Date and Water Street has complied in all material respects 
with all the agreements and satisfied all the conditions on their 
part to be performed or satisfied at or prior to the Closing Date.

		(g)  At the Execution Time and at each Closing Date, Arthur 
Andersen & Co. shall have furnished to the Representatives a letter 
or letters, dated respectively as of the Execution Time and as of 
such Closing Date, in form and substance satisfactory to the 
Representatives, stating in effect that:

(i)  They are independent certified public accountants 
with respect to the Company and its subsidiaries within the 
meaning of the Act and the applicable published rules and 
regulations thereunder;

(ii)	  In their opinion, the financial statements and 
any supplementary financial information and schedules examined 
by them and included in the Prospectus or the Registration 
Statement comply as to form in all material respects with the 
applicable accounting requirements of the Act and the related 
published rules and regulations thereunder; and, if 
applicable, they have made a review in accordance with 
standards established by the American Institute of Certified 
Public Accountants of the unaudited consolidated interim 
financial statements of the Company for the periods specified 
in such 

letter, as indicated in their reports thereon, copies 
of which have been furnished to the Representatives;

(iii)  The unaudited summary, condensed and selected 
financial information with respect to the consolidated results 
of operations and financial position of the Company for the 
six most recent fiscal years (or such shorter period as 
applicable) included in the Prospectus agrees with the cor-
responding amounts (after restatements where applicable) in 
the audited consolidated financial statements for such period; 
and the pro forma financial information complies in all 
material respects as to form with all applicable accounting 
requirements of the Act;

(iv)  On the basis of limited procedures, not 
constituting an examination in accordance with generally 
accepted auditing standards, consisting of a reading of the 
unaudited financial statements and other information referred 
to below, a reading of the latest available interim financial 
statements of the Company and its subsidiaries, inspection of 
the minute books of the Company and its subsidiaries since the 
date of the latest audited financial statements included in 
the Prospectus, inquiries of officials of the Company and its 
subsidiaries responsible for financial and accounting matters 
and such other inquiries and procedures as may be specified in 
such letter, nothing came to their attention that caused them 
to believe that:

				(A)  the unaudited consolidated statements of 
income, consolidated balance sheets and consolidated 
statements of cash flows included in the Prospectus do 
not comply as to form in all material respects with the 
applicable accounting requirements of the Act and the 
related published rules and regulations thereunder, or 
are not in conformity with generally accepted accounting 
principles applied on a basis substantially consistent 
with the basis for the audited consolidated statements 
of income, consolidated balance sheets and consolidated 
statements of cash flows included in the Prospectus;

				(B)  any other unaudited income statement data and 
balance sheet items included in the Prospectus do not 
agree with the corresponding items in the unaudited 
consolidated financial statements from which such data 
and items were derived, and any such unaudited data and 
items, if any, were not determined on a basis substan-
tially consistent with the basis for the corresponding 
amounts in the audited consolidated financial statements 
included in the Prospectus;

				(C)  the unaudited financial statements which were 
not included in the Prospectus but from which were 
derived any unaudited condensed financial statements 
referred to in Clause A and any unaudited income 
statement data and balance sheet items included in the 
Prospectus and referred to in Clause B were 

not determined on a basis substantially consistent with the 
basis for the audited consolidated financial statements 
included in the Prospectus;

				(D)  any unaudited pro forma consolidated 
condensed financial statements included in the 
Prospectus do not comply as to form in all material 
respects with the applicable accounting requirements of 
the Act and the published rules and regulations 
thereunder or the pro forma adjustments have not been 
properly applied to the historical amounts in the 
compilation of those statements;

				(E)  as of a specified date not more than five 
days prior to the date of such letter, there have been 
any changes in the consolidated capital stock or any 
increase in the consolidated long-term debt of the 
Company and its Subsidiaries, or any decreases in 
consolidated net current assets or net assets or other 
items specified prior to the Execution Time by the 
Representatives, or any increases in any items specified 
prior to the Execution Time by the Representatives, in 
each case as compared with amounts shown in the latest 
balance sheet included in the Prospectus, except in each 
case for changes, increases or decreases which the 
Prospectus discloses have occurred or may occur or which 
are described in such letter; and

				(F)  for the period from the date of the latest 
financial statements included in the Prospectus to the 
specified date referred to in Clause E there were any 
decreases in consolidated net sales, operating profit 
data as compared to the preceding period or other items 
specified by the Representatives, or any increases in 
any items specified prior to the Execution Time by the 
Representatives, in each case as compared with the 
comparable period of the preceding year and with any 
other period of corresponding length specified prior to 
the Execution Time by the Representatives, except in 
each case for decreases or increases which the 
Prospectus discloses, have occurred or may occur or 
which are described in such letter; and

(v)  In addition to the examination referred to in their 
report(s) included in the Prospectus and the limited 
procedures, inspection of minute books, inquiries and other 
procedures referred to in paragraphs (ii) and (iv) above, they 
have carried out certain specified procedures, not 
constituting an examination in accordance with generally 
accepted auditing standards, with respect to certain amounts, 
percentages and financial information specified prior to the 
Execution Time by the Representatives, which are derived from 
the general accounting records of the Company and its 
Subsidiaries, which appear in the Prospectus, or in Part II 
of, or in exhibits and schedules to, the Registration 
Statement specified prior to the Execution Time by the 
Representatives, and have compared certain of such amounts, 
percentages and financial information with the accounting 
records of the Company and the Subsidiaries and have found 
them to be in agreement.

References to the Prospectus in this paragraph (g) 
include any supplement thereto at the date of the letter.

		(h)  Subsequent to the Execution Time or, if earlier, the 
dates as of which information is given in the Registration Statement 
(exclusive of any amendment thereof) and the Prospectus (exclusive 
of any supplement thereto), there shall not have been (i) any change 
or decrease specified in the letter or letters referred to in 
paragraph (g) of this Section 6 or (ii) any change, or any develop-
ment involving a prospective change, in or affecting the business or 
properties of the Company and its subsidiaries the effect of which, 
in any case referred to in clause (i) or (ii) above, is, in the 
judgment of the Representatives, so material and adverse as to make 
it impractical or inadvisable to proceed with the public offering or 
the delivery of the Securities as contemplated by the Registration 
Statement (exclusive of any amendment thereof) and the Prospectus 
(exclusive of any supplement thereto).

(i)  Prior to each Closing Date, the Company shall have 
furnished to the Representatives such further information, 
certificates and documents as the Representatives may 
reasonably request.

		If any of the conditions specified in this Section 6 shall not 
have been fulfilled in all material respects when and as provided in 
this Agreement, or if any of the opinions and certificates mentioned 
above or elsewhere in this Agreement shall not be in all material 
respects reasonably satisfactory in form and substance to the Repre-
sentatives and their counsel, this Agreement and all obligations of 
the Underwriters hereunder may be cancelled at, or at any time prior 
to, each Closing Date by the Representatives.  Notice of such 
cancellation shall be given to the Company and the Selling 
Stockholder in writing or by telephone or telegraph confirmed in 
writing.

		6A.  Conditions to the Obligations of Water Street.  The 
obligation of Water Street to sell the Securities to be delivered at each 
Closing Date shall be subject to the accuracy of the representations on 
the part of the Company contained herein as of the Execution Time and as 
of such Closing Date (as if made at such Closing Date), to the accuracy of 
the statements of the Company made in any certificates pursuant to the 
provisions hereof, to the performance by the Company of its obligations 
hereunder and to additional conditions identical to those set forth in 
Section 6 (other than paragraph (c) thereof).  If any of the conditions 
specified in this Section 6A shall not have been fulfilled in all material 
respects when and as provided in this Agreement, Water Street may, by 
written notice to the Company and the Representatives, terminate its 
obligations under this Agreement at, or at any time prior to, each Closing 
Date.  

		7.  Expenses.  The Company agrees with Water Street that it 
will pay or cause to be paid all Registration Expenses (as defined in the 
Water Street Agreement) in connection with the Registration Statement and 
this Agreement and the International Underwriting Agreement (it being 
understood that such Registration Expenses shall not include any expenses 
relating to the preparation of any amendment to the Water Street Agree-
ment).  If the sale of the Securities provided for herein is not 
consummated because any 

condition to the obligations of the Underwriters 
set forth in Section 6 hereof is not satisfied (other than the conditions 
specified in paragraphs 6(d) and, if the Underwriters shall have not 
exercised their judgment reasonably, 6(h)), because of any termination 
pursuant to Section 10 hereof or because of any refusal, inability or 
failure on the part of the Company to perform any agreement herein or com-
ply with any provision hereof other than by reason of a default by any of 
the Underwriters, the Company will reimburse the Underwriters severally 
upon demand for all out-of-pocket expenses (including reasonable fees and 
disbursements of counsel) that shall have been incurred by them in 
connection with the proposed purchase and sale of the Securities.

		8.  Indemnification and Contribution.  (a)  The Company agrees 
to indemnify and hold harmless each Underwriter, the directors, officers, 
employees and agents of each Underwriter and each person who controls any 
Underwriter within the meaning of either the Act or the Securities 
Exchange Act of 1934 (the "Exchange Act") against any and all losses, 
claims, damages or liabilities, joint or several, to which they or any of 
them may become subject under the Act, the Exchange Act or other Federal 
or state statutory law or regulation, at common law or otherwise, insofar 
as such losses, claims, damages or liabilities (or actions in respect 
thereof) arise out of or are based upon any untrue statement or alleged 
untrue statement of a material fact contained in the registration 
statement for the registration of the Securities as originally filed or in 
any amendment thereof, or in any Preliminary Prospectus or the Prospectus, 
or in any amendment thereof or supplement thereto, or arise out of or are 
based upon the omission or alleged omission to state therein a material 
fact required to be stated therein or necessary to make the statements 
therein not misleading, and agrees to reimburse each such indemnified 
party, as incurred, for any legal or other expenses reasonably incurred by 
them in connection with investigating or defending any such loss, claim, 
damage, liability or action; provided, however, that (i) the Company will 
not be liable in any such case to the extent that any such loss, claim, 
damage or liability arises out of or is based upon any such untrue 
statement or alleged untrue statement or omission or alleged omission made 
therein in reliance upon and in conformity with written information 
furnished to the Company by or on behalf of any Underwriter through the 
Representatives specifically for use in connection with the preparation 
thereof, (ii) the Company will not be liable for the amount paid in 
settlement of any litigation commenced or threatened or of any claim 
whatsoever arising out of or based upon any (actual or alleged) untrue 
statement or omission unless such settlement is effected with the written 
consent of the Company and (iii) such indemnity with respect to any Pre-
liminary Prospectus shall not inure to the benefit of an Underwriter (or 
any person controlling such Underwriter) from whom the person asserting 
any such loss, claim, damage or liability purchased the Securities which 
are the subject thereof if such person did not receive a copy of the 
Prospectus (or the Prospectus as supplemented) excluding documents 
incorporated therein by reference at or prior to the confirmation of the 
sale of such Securities to such person in any case where such delivery is 
required by the Act and the untrue statement or omission of a material 
fact contained in such Preliminary Prospectus was corrected in the 
Prospectus (or the Prospectus as supplemented).  This indemnity agreement 
will be in addition to any liability which the Company may otherwise have.

		(b)  The Selling Stockholder agrees to indemnify and hold 
harmless the Underwriter and each person who controls the Underwriter 
within the meaning of the Act or the Exchange Act to the same extent as 
the foregoing indemnity in paragraph (a) of this Section from the Company 
to the Underwriter, but 

only with reference to written information 
furnished to the Company by or on behalf of the Selling Stockholder 
specifically for use in preparation of the documents referred to in the 
foregoing indemnity.  This indemnity agreement will be in addition to any 
liability which the Selling Stockholder may otherwise have.  
Notwithstanding the provisions of this subsection (b), the Selling 
Stockholder shall not be required to pay an amount in excess of the net 
proceeds received by the Selling Stockholder from the Securities sold by 
it hereunder.  The Company, the Selling Stockholder and the Underwriters 
acknowledge that the statements set forth under the heading "Ownership of 
Common Stock -- Selling Stockholder and its Affiliates" in the Prospectus 
(and not any information to which reference is made under such heading) 
constitutes the only information furnished in writing by or on behalf of 
Water Street for inclusion in the documents referred to in the foregoing 
indemnity, and Water Street confirms that such statements are correct and 
complete.

		(c)  Each Underwriter severally agrees to indemnify and hold 
harmless the Company, each of its directors, each of its officers who 
signs the Registration Statement, and each person who controls the Company 
within the meaning of either the Act or the Exchange Act and the Selling 
Stockholder and its respective directors, officers, partners, employees 
and agents and each other person, if any, who controls the Selling Stock-
holder within the meaning of the Act or the Exchange Act, to the same 
extent as the foregoing indemnity in paragraph (a) of this Section from 
the Company to each Underwriter, but only with reference to written 
information relating to such Underwriter furnished to the Company by or on 
behalf of such Underwriter through the Representatives specifically for 
inclusion in the documents referred to in the foregoing indemnity.  This 
indemnity agreement will be in addition to any liability which any 
Underwriter may otherwise have.  The Company acknowledges that the 
statements set forth in the last paragraph of the cover page and under the 
heading "Underwriting" in any Preliminary Prospectus and the Prospectus 
constitute the only information furnished in writing by or on behalf of 
the several Underwriters for inclusion in any Preliminary Prospectus or 
the Prospectus, and you, as the Representatives, confirm that such 
statements are correct.

		(d)  Each of the Company and Water Street hereby confirms its 
indemnification obligations contained in Section 4.9 of the Water Street 
Agreement, which Section is incorporated herein by reference.

		(e)  Promptly after receipt by an indemnified party under this 
Section 8 of notice of the commencement of any action, such indemnified 
party will, if a claim in respect thereof is to be made against the 
indemnifying party under this Section 8, notify the indemnifying party in 
writing of the commencement thereof; but the failure so to notify the 
indemnifying party (i) will not relieve it from liability under paragraph 
(a), (b) or (c) above unless and to the extent it did not otherwise learn 
of such action and such failure results in the forfeiture by the 
indemnifying party of any material right or defense and (ii) will not, in 
any event, relieve the indemnifying party from any obligations to any 
indemnified party other than the indemnification obligation provided in 
paragraph (a), (b) or (c) above.  The indemnifying party shall be entitled 
to appoint counsel of the indemnifying party's choice at the indemnifying 
party's expense to represent the indemnified party in any action for which 
indemnification is sought (in which case the indemnifying party shall not 
thereafter be responsible for the fees and expenses of any separate 
counsel retained by the indemnified party or parties except as set forth 
below); provided, however, that such counsel shall be satisfactory to the 
indemnified party.  Notwithstanding the indemnifying party's election to 
appoint 

counsel to represent the indemnified party in an action, the 
indemnified party shall have the right to employ separate counsel 
(including local counsel), and the indemnifying party shall bear the 
reasonable fees, costs and expenses of such separate counsel if (i) the 
use of counsel chosen by the indemnifying party to represent the 
indemnified party would present such counsel in its reasonable judgment 
with a conflict of interest, (ii) the actual or potential defendants in, 
or targets of, any such action include both the indemnified party and the 
indemnifying party and the indemnified party shall have reasonably 
concluded that there may be legal defenses available to it and/or other 
indemnified parties which are different from or additional to those 
available to the indemnifying party, (iii) the indemnifying party shall 
not have employed counsel satisfactory to the indemnified party to 
represent the indemnified party within a reasonable time after notice of 
the institution of such action or (iv) the indemnifying party shall 
authorize the indemnified party to employ separate counsel at the expense 
of the indemnifying party.  It being understood and agreed that the 
indemnifying party shall bear the fees, costs and expenses of only one 
counsel pursuant to this paragraph.  An indemnifying party will not, 
without the prior written consent of the indemnified parties, settle or 
compromise or consent to the entry of any judgment with respect to any 
pending or threatened claim, action, suit or proceeding in respect of 
which indemnification or contribution may be sought hereunder (whether or 
not the indemnified parties are actual or potential parties to such claim 
or action) unless such settlement, compromise or consent includes an 
unconditional release of each indemnified party from all liability arising 
out of such claim, action, suit or proceeding.  No indemnifying party 
shall be liable for any settlement of any commenced or threatened action 
or proceeding effected without its written consent.

		(f)  In the event that the indemnity provided in paragraph 
(a), (b) or (c) of this Section 8 is unavailable to or insufficient to 
hold harmless an indemnified party for any reason, the Company, the 
Selling Stockholder and the Underwriters agree to contribute to the 
aggregate losses, claims, damages and liabilities (including legal or 
other expenses reasonably incurred in connection with investigating or 
defending same) (collectively "Losses") to which the Company, the Selling 
Stockholder and one or more of the Underwriters may be subject in such 
proportion as is appropriate to reflect the relative fault of the 
indemnifying party on the one hand and the indemnified party on the other 
hand; provided, however, that in no case shall any Underwriter (except as 
may be provided in any agreement among underwriters relating to the 
offering of the Securities) be responsible for any amount in excess of the 
underwriting discount or commission applicable to the Securities purchased 
by such Underwriter hereunder.  If the allocation provided by the 
immediately preceding sentence is unavailable for any reason, or if such 
allocation provides a lesser sum to the indemnified party than the amount 
hereinafter calculated then the Company, the Selling Stockholder and the 
Underwriters shall contribute in such proportion as is appropriate to 
reflect not only such relative fault but also the relative benefits of the 
indemnifying party and the indemnified party as well as any other 
equitable considerations.  Benefits received by the Company shall be 
deemed to be equal to the net proceeds from the offering (before deducting 
expenses) received by the Company, benefits received by the Selling 
Stockholder shall be deemed to be equal to the net proceeds from the 
offering (before deducting expenses) received by the Selling Stockholders 
and benefits received by the Underwriters shall be deemed to be equal to 
the total underwriting discounts and commissions, in each case as set 
forth on the cover page of the Prospectus.  Relative fault shall be 
determined by reference to whether any alleged untrue statement or 
omission relates to information provided by the Company, the Selling 
Stockholder or the Underwriters.  The Company, the Selling Stockholder and 
the Underwriters agree that it would not be just and equitable if 
contribution were 

determined by pro rata allocation or any other method of 
allocation which does not take account of the equitable considerations 
referred to above.  Notwithstanding the provisions of this Section 8(f), 
the Selling Stockholder shall not be required to contribute any amount 
under this Section 8(f) in excess of the amount by which the net proceeds 
received by the Selling Stockholder from the sale of Securities in the 
offering exceed the aggregate amount the Selling Stockholder has otherwise 
paid pursuant hereto and pursuant to Section 8(b); and no person guilty of 
fraudulent misrepresentation (within the meaning of Section 11(f) of the 
Act) shall be entitled to contribution from any person who was not guilty 
of such fraudulent misrepresentation.  For purposes of this Section 8, 
each person who controls the Underwriter within the meaning of either the 
Act or the Exchange Act and each director, officer, employee and agent of 
the Underwriter shall have the same rights to contribution as the 
Underwriter, each person who controls the Company within the meaning of 
either the Act or the Exchange Act, each officer of the Company who shall 
have signed the Registration Statement and each director of the Company 
shall have the same rights to contribution as the Company, and each person 
who controls the Selling Stockholder within the meaning of either the Act 
or the Exchange Act and each director, officer, partner, employee and 
agent of the Selling Stockholder shall have the same rights to 
contribution as the Selling Stockholder, subject in each case to the 
applicable terms and provisions of this paragraph (f).  Contribution 
payments made under this Section 8 are losses for purposes of Section 4.9 
of the Water Street Agreement.

		9.  Default by an Underwriter.  If any one or more 
Underwriters shall fail to purchase and pay for any of the Securities 
agreed to be purchased by such Underwriter or Underwriters hereunder, and 
such failure to purchase shall constitute a default in the performance of 
its or their obligations under this Agreement, the remaining Underwriters 
shall be obligated severally to take up and pay for (in the respective 
proportions which the amount of Securities set forth opposite their names 
in Schedule I hereto bears to the aggregate amount of Securities set forth 
opposite the names of all the remaining Underwriters) the Securities which 
the defaulting Underwriter or Underwriters agreed but failed to purchase; 
provided, however, that in the event that the aggregate amount of 
Securities which the defaulting Underwriter or Underwriters agreed but 
failed to purchase shall exceed 10% of the aggregate amount of Securities 
set forth in Schedule I hereto, the remaining Underwriters shall have the 
right to purchase all, but shall not be under any obligation to purchase 
any, of the Securities, and if such nondefaulting Underwriters do not 
purchase all the Securities, this Agreement will terminate without 
liability to any nondefaulting Underwriter, the Company or the Selling 
Stockholder.  In the event of a default by any Underwriter as set forth in 
this Section 9, the Closing Date shall be postponed for such period, not 
exceeding seven days, as the Representatives shall determine in order that 
the required changes in the Registration Statement and the Prospectus or 
in any other documents or arrangements may be effected.  Nothing contained 
in this Agreement shall relieve any defaulting Underwriter of its 
liability, if any, to the Company, the Selling Stockholder and any 
nondefaulting Underwriter for damages occasioned by its default hereunder.

		10.  Termination.  This Agreement shall be subject to 
termination in the absolute discretion of the Representatives, by notice 
given to the Company and the Selling Stockholder prior to the Closing Date 
if prior to such time (i) trading in the Company's Common Stock shall have 
been suspended by the Securities and Exchange Commission or the New York 
Stock Exchange or trading in securities generally on the New York Stock 
Exchange shall have been suspended or limited or minimum prices shall have 
been established on 

such Exchange, (ii) a banking moratorium shall have 
been declared either by Federal or New York State authorities or (iii) 
there shall have occurred any outbreak or material escalation of 
hostilities or other calamity or crisis the effect of which on the 
financial markets of the United States is such as to make it, in the 
judgment of the Representatives, impracticable to market the Securities.

		11.  Representations and Indemnities to Survive.  The 
respective agreements, representations, warranties, indemnities and other 
statements of the Company or its officers, of the Selling Stockholder, and 
of the Underwriters set forth in or made pursuant to this Agreement will 
remain in full force and effect, regardless of any investigation made by 
or on behalf of the Underwriters, the Selling Stockholder, or the Company 
or any of the officers, directors, partners or controlling persons 
referred to in Section 8 hereof, and will survive delivery of and payment 
for the Securities.  The provisions of Sections 7 and 8 hereof shall 
survive the termination or cancellation of this Agreement.

		12.  Notices.  All communications hereunder will be in writing 
and effective only on receipt, and, if sent to the Representatives, will 
be mailed, delivered or telecopied and confirmed to them at Salomon 
Brothers Inc, at 7 World Trade Center, New York, New York 10048, attn:  
Scott W. Stearns; or, if sent to the Company, will be mailed, delivered or 
telecopied and confirmed to it at USG Corporation, 125 S. Franklin Street, 
Chicago, Illinois 60606, attn:  Secretary, with a copy to Kirkland & 
Ellis, 200 E. Randolph Drive, Chicago, Illinois 60601, attn:  Francis J. 
Gerlits, P.C.; or, if sent to the Selling Stockholder, will be mailed, 
delivered or telecopied and confirmed to it at c/o Goldman, Sachs & Co., 
85 Broad Street, New York, New York 10004, attn:  Barry S. Volpert; with a 
copy to Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New 
York, New York 10004, attn:  David J. Greenwald, Esq.

		13.  Successors.  This Agreement will inure to the benefit of 
and be binding upon the parties hereto and their respective successors and 
the officers, directors, partners, employees, agents and controlling 
persons referred to in Section 8 hereof, and no other person will have any 
right or obligation hereunder.

		14.  Applicable Law.  This Agreement will be governed by and 
construed in accordance with the laws of the State of New York, without 
giving affect to the conflicts of laws principles thereof.

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

		16.  Entire Agreement.  This Agreement and the Water Street 
Agreement constitute the entire agreement among the parties hereto with 
respect to the transactions contemplated hereby.



		If the foregoing is in accordance with your understanding of 
our agreement, please sign and return to us the enclosed duplicate hereof, 
whereupon this letter and your acceptance shall represent a binding 
agreement among the Company, the Selling Stockholder and the several 
Underwriters.

Very truly yours,

USG CORPORATION


By:	
Its:	


WATER STREET CORPORATE
RECOVERY FUND I, L.P.


By:  GOLDMAN, SACHS & CO., 
     General Partner


By:                                  
                      
   Name:
   Title:

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

Salomon Brothers Inc
Lazard Freres & Co.
Smith Barney Shearson Inc.

By:  Salomon Brothers Inc


By:                                        

For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.


	SCHEDULE I

                                                   Number of Shares
Underwriters                                       to be Purchased  


SALOMON BROTHERS INC                                   1,923,334
LAZARD FRERES & CO.                                    1,923,333
SMITH BARNEY SHEARSON INC.                             1,923,333

BEAR, STEARNS & CO. INC.                                 145,000
CS FIRST BOSTON CORPORATION                              145,000
ALEX. BROWN & SONS INCORPORATED                          145,000
BT SECURITIES CORPORATION                                145,000
DEAN WITTER REYNOLDS INC.                                145,000
DILLON, READ & CO. INC.                                  145,000
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION      145,000
A.G. EDWARDS & SONS, INC.                                145,000
KIDDER, PEABODY & CO. INCORPORATED                       145,000
LEHMAN BROTHERS INC.                                     145,000
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED       145,000
MONTGOMERY SECURITIES                                    145,000
J.P. MORGAN SECURITIES INC.                              145,000
MORGAN STANLEY & CO. INCORPORATED                        145,000
NATWEST SECURITIES LIMITED                               145,000
OPPENHEIMER & CO., INC.                                  145,000
PRUDENTIAL SECURITIES INCORPORATED                       145,000
S.G. WARBURG & CO. INC.                                  145,000
WERTHEIM SCHRODER & CO. INCORPORATED                     145,000

WILLIAM BLAIR & COMPANY                                   75,000
DAIN BOSWORTH INCORPORATED                                75,000
KEMPER SECURITIES, INC.                                   75,000
LEGG MASON WOOD WALKER, INCORPORATED                      75,000
MCDONALD & COMPANY SECURITIES, INC.                       75,000
MORGAN KEEGAN & COMPANY, INC.                             75,000
PIPER JAFFRAY INC.                                        75,000
RAYMOND JAMES & ASSOCIATES, INC.                          75,000
THE ROBINSON-HUMPHREY COMPANY, INC.                       75,000
SUTRO & CO. INCORPORATED                                  75,000
TUCKER ANTHONY INCORPORATED                               75,000
WHEAT FIRST BUTCHER & SINGER CAPITAL MARKETS              75,000

ADVEST INC.                                               40,000
ARNHOLD AND S. BLEICHROEDER, INC.                         40,000
ROBERT W. BAIRD & CO. INCORPORATED                        40,000
BAIRD, PATRICK & CO., INC.                                40,000
GEORGE K. BAUM & COMPANY                                  40,000
THE CHICAGO CORPORATION                                   40,000



                                                   Number of Shares
Underwriters                                       to be Purchased   


CLEARY GULL REILAND & MCDEVITT INC.                       40,000
FIRST ALBANY CORPORATION                                  40,000
FIRST EQUITY CORPORATION OF FLORIDA                       40,000
FIRST MICHIGAN CORPORATION                                40,000
GENESIS MERCHANT GROUP SECURITIES                         40,000
HAMILTON INVESTMENTS, INC.                                40,000
JANNEY MONTGOMERY SCOTT INC.                              40,000
EDWARD D. JONES & CO.                                     40,000
LADENBURG, THALMANN & CO. INC.                            40,000
C.J. LAWRENCE/DEUTSCHE BANK SECURITIES CORPORATION        40,000
WR LAZARD, LAIDLAW & MEAD INCORPORATED                    40,000
LUTHER, SMITH & SMALL INC.                                40,000
NEEDHAM & COMPANY, INC.                                   40,000
THE OHIO COMPANY                                          40,000
PARKER/HUNTER INCORPORATED                                40,000
PENNSYLVANIA MERCHANT GROUP LTD                           40,000
THE PRINCIPAL/EPPLER, GUERIN & TURNER, INC.               40,000
RAGEN MACKENZIE INCORPORATED                              40,000
SAMUEL A. RAMIREZ & CO. INC.                              40,000
RAUSCHER PIERCE REFSNES, INC.                             40,000
RODMAN & RENSHAW, INC.                                    40,000
SOUTHCOAST CAPITAL CORPORATION                            40,000
STIFEL, NICOLAUS & COMPANY, INCORPORATED                  40,000
WEDBUSH MORGAN SECURITIES                                 40,000

TOTAL                                                 10,625,000


	EXHIBIT A
AGREEMENTS

		Letter Agreement, dated February 25, 1993, among USG 
Corporation, Water Street Corporate Recovery Fund I, L.P., Goldman, Sachs 
& Co. and The Goldman Sachs Group, L.P.

		Amendment No. 1, dated February 22, 1994, to Letter Agreement, 
dated February 25, 1993, among USG Corporation, Water Street Corporate 
Recovery Fund I, L.P., Goldman, Sachs & Co. and The Goldman Sachs Group, 
L.P.

		Amended and Restated Credit Agreement dated as of May 6, 1993 
between USG Corporation and USG Interiors, Inc. as borrowers; the 
Financial Institutions listed on the signature pages thereof, as senior 
lenders; Bankers Trust Company, Chemical Bank and Citibank, N.A., as 
agents; and Citibank, N.A., as Administrative Agent (the "Amended and 
Restated Credit Agreement")

		First Amendment, dated August 1, 1993, to Amended and Restated 
Credit Agreement

		Second Amendment, dated as of January 31, 1994, to Amended and 
Restated Credit Agreement

		Indenture, dated October 1, 1986, between USG Corporation and 
Harris Trust and Savings Bank, as supplemented

		Indenture, dated as of April 26, 1993, among USG Corporation, 
certain guarantors and State Street Bank and Trust Company, as Trustee 
(the "10 1/4% Senior Notes Indenture")

		Indenture, dated as of August 10, 1993, among USG Corporation, 
certain guarantors and State Street Bank and Trust Company, as Trustee

		Amended and Restated Subsidiary Guarantees, dated as of May 6, 
1993

		Contingent Payment Guarantees issued pursuant to the 10 1/4% 
Senior Notes Indenture

		Amended and Restated Collateral Trust Agreement, dated as of 
May 6, 1993 between USG Corporation, USG Interiors, Inc. and USG Foreign 
Investments, Ltd., as guarantors, and Wilmington Trust Company and William 
J. Wade, as trustees (the "Amended and Restated Collateral Trust 
Agreement")

		First Amendment, dated August 1, 1993, to Amended and Restated 
Collateral Trust Agreement

		Second Amendment, dated as of January 31, 1994, to Amended and 
Restated Collateral Trust Agreement.

		First Amendment, dated August 1, 1993, to Amended and Restated 
Subsidiary Guarantees

		Reaffirmation, dated as of January 31, 1994, of Guarantees.


	EXHIBIT B

	LOCK-UP AGREEMENT


							March   , 1994


Salomon Brothers Inc
Lazard Freres & Co.
Smith Barney Shearson Inc.
As Representatives of the 
  Several Underwriters,
c/o Salomon Brothers Inc
7 World Trade Center
New York, New York  10048

Salomon Brothers International Limited
Lazard Brothers & Co., Limited
Smith Barney Shearson Inc.
As International Representatives of the
  Several International Underwriters 
c/o Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London SW1W 0SB, England

Gentlemen and Ladies:

		The undersigned understand that USG Corporation, a Delaware 
corporation (the "Company"), has filed a Registration Statement on Form 
S-1 (file number 33-51845) (as amended, the "Registration Statement") with 
the Securities and Exchange Commission (the "SEC") in connection with a 
proposed underwritten public offering (the "Offering") of its Common 
Stock, par value $0.10 per share (the "Common Stock").  All capitalized 
terms not defined herein shall have the meanings ascribed in the Reg-
istration Statement.  

		At your request, and in consideration of your agreeing to act 
as underwriters in connection with the Offering and for other good and 
valuable consideration, the undersigned hereby agree that, without the 
prior written consent of the representatives (the "Representatives") of 
the U.S. Underwriters and the International Underwriters, for a period of 
120 days following the date hereof, the undersigned will not offer, sell 
or contract to sell, or otherwise dispose of, directly or indirectly, or 
announce the offering of, any other shares of Common Stock or any 
securities convertible into, or exercisable or exchangeable for, shares of 
Common Stock; provided, however, Water Street may distribute such shares 
or securities held by it to its partners at any time after 90 days 
following the effective date of the Registration Statement, which partners 
(other than Goldman, Sachs & Co.) shall not be bound by this Agreement; 
provided, further, that Water Street and Goldman, Sachs & Co. may exercise 
any of their Warrants to purchase Common Stock.



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

Very truly yours, 

GOLDMAN, SACHS & CO.


By:________________________________
	Name: 
	Title: 

WATER STREET CORPORATE RECOVERY
FUND I, L.P.

By:  GOLDMAN, SACHS & CO.,
	  General Partner


By:_________________________________
	Name: 
	Title: 

Accepted as of the date hereof: 

Salomon Brothers Inc
Lazard Freres & Co.
Smith Barney Shearson, Inc.

By:  Salomon Brothers Inc


By:
	Title:
	For itself and the Several
	  U.S. Underwriters

Salomon Brothers International Limited
Lazard Brothers & Co. Limited
Smith Barney Shearson Inc.

By:  Salomon Brothers International
		  Limited


By:							    
	Title:
	For itself and the Several Managers.


	USG Corporation
Exhibit H




	12,500,000 Shares 1
	Common Stock
	($.10 par value)

	International Underwriting Agreement


	London, England
	March 8, 1994


Salomon Brothers International Limited
Lazard Brothers & Co., Limited
Smith Barney Shearson Inc.
As Representatives of the Several
International Underwriters,
c/o Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London SW1W OSB, England

Dear Sirs:

		USG Corporation, a Delaware corporation (the "Company"), 
proposes to sell to the underwriters named in Schedule I hereto (the 
"International Underwriters"), for which you are acting as representatives 
(the "International Representatives"), 1,050,000 shares (the "Company 
Underwritten Securities") of common stock, $.10 par value per share (the 
"Common Stock"), of the Company, and Water Street Corporate Recovery Fund 
I, L.P. ("Water Street" or the "Selling Stockholder") proposes to sell to 
the International Underwriters 825,000 shares of Common Stock (the 
"Selling Stockholder Securities" and together with the Company 
Underwritten Securities, the "Underwritten Securities").  In addition, 
solely for the purpose of covering overallotments, the Company proposes to 
grant to the International Underwriters an option to purchase up to an 
additional 135,000 shares (the "Company Option Securities") of Common 
Stock and the Selling Stockholder proposes to grant to the International 
Underwriters an option to purchase up to an additional 146,250 shares of 
Common Stock (the "Selling Stockholder Option Securities" and together 
with the Company Option Securities, the "Option Securities").  The 
Underwritten Securities and the Option Securities are hereinafter referred 
to as the "International Securities."  The parties hereto acknowledge that 
the underwriting discount on the sale of the Securities will be 4.5% of 
the aggregate price to the public.

		It is understood that the Company and the Selling Stockholder 
are concurrently entering into a U.S. Underwriting Agreement dated the 
date hereof (the "U.S. Underwriting Agreement") providing for the issue 
and sale by the Company of an aggregate of 5,950,000 shares of Common 
Stock (the "U.S. Company Underwritten Securities") and the sale by the 
Selling Stockholder of an aggregate of 4,675,000 shares of Common Stock 
(the "U.S. Selling Stockholder Underwritten Securities" and together with 
the U.S. Company Underwritten Securities, the "U.S. Underwritten 
Securities") with certain underwriters (the "U.S. Underwriters") for whom 
Salomon Brothers Inc, Lazard Freres & Co., and Smith Barney Shearson Inc. 
are 

___________________
1  Plus options to purchase from USG Corporation up to 900,000 additional
shares and from the Selling Stockholder up to 975,000 additional shares to
cover overallotments.


acting as representatives (the "U.S. Representatives"), and providing 
for the grant by the Company to the U.S. Underwriters of an option to pur-
chase up to 765,000 additional shares of Common Stock (the "U.S. Company 
Option Securities") and by the Selling Stockholder to the U.S. 
Underwriters of an option to purchase up to 828,750 additional shares of 
Common Stock (the "U.S. Selling Stockholder Option Securities," together 
with the U.S. Company Option Securities, the "U.S. Option Securities," and 
together with the U.S. Underwritten Securities, the "U.S. Securities") 
solely for the purpose of covering overallotments.  The U.S. Securities 
together with the International Securities are hereinafter called the 
"Securities".  It is further understood and agreed that the International 
Underwriters and the U.S. Underwriters are entering into an agreement 
dated the date hereof (the "Agreement Between U.S. Underwriters and the 
Managers"), pursuant to which, among other things, the International 
Underwriters may purchase from the U.S. Underwriters a portion of the U.S. 
Securities to be sold pursuant to the U.S. Underwriting Agreement and the 
U.S. Underwriters may purchase from the International Underwriters a 
portion of the International Securities to be sold pursuant to the 
International Underwriting Agreement.

		The terms which follow, when used in this Agreement, shall 
have the meanings indicated.  The term "the Effective Date" shall mean 
each date that the Registration Statement and any post-effective amendment 
or amendments thereto became or become effective.  "Execution Time" shall 
mean the date and time that this Agreement is executed and delivered by 
the parties hereto.  The "Preliminary Prospectus" shall mean any pre-
liminary prospectus with respect to the offering of the Securities 
referred to in Section 1(a)(i) below and any preliminary prospectus with 
respect to the offering of the Securities included in the Registration 
Statement at the Effective Date that omits Rule 430A Information; 
"Registration Statement" shall mean the registration statement referred to 
in Section 1(a)(i) below, including exhibits and financial statements, as 
amended at the Execution Time (or, if not effective at the Execution Time, 
in the form in which it shall become effective) and, in the event any 
post-effective amendment thereto becomes effective prior to the Closing 
Date, shall also mean such registration statement as so amended.  Such 
term shall include any Rule 430A Information deemed to be included therein 
at the Effective Date as provided by Rule 430A.  "Rule 424" and "Rule 
430A" and "Regulation S-K" refer to such rules under the Act.  "Rule 430A 
Information" means information with respect to the Securities and the 
offering thereof permitted to be omitted from the Registration Statement 
pursuant to Rule 430A when the Registration Statement becomes effective.

		1.  Representations and Warranties.  (a)  The Company 
represents and warrants to, and agrees with, each International 
Underwriter as follows:  

		(i)  The Company has filed with the Securities and Exchange 
Commission (the "Commission") a registration statement (file number 
33-51845) on Form S-1, including a related preliminary prospectus, 
for the registration under the Securities Act of 1933, as amended 
(the "Act") of the offering and sale of the Securities.  The Company 
may have filed one or more amendments thereto, including the related 
preliminary prospectus, each of which has previously been furnished 
to you.  The Company will next file with the Commission either (i) 
prior to the effectiveness of such registration statement, a further 
amendment to such registration statement (including the form of 
final prospectus) or (ii) after the effectiveness of such regis-
tration statement, a final prospectus in accordance with Rules 430A 
and 424(b)(1) or (4).  In the case of clause (ii), the Company has 
included in such registration statement, as amended at the Effective 
Date, all information (other than Rule 430A Information) required by 
the Act and the rules thereunder to be 

included in the final 
prospectus with respect to the Securities and the offering thereof.  
As filed, such amendment and form of final prospectus, or such final 
prospectus, shall contain all Rule 430A Information, together with 
all other such required information, with respect to the Securities 
and the offering thereof and, except to the extent the International 
Representatives shall agree in writing to a modification, shall be 
in all substantive respects in the form furnished to you prior to 
the Execution Time or, to the extent not completed at the Execution 
Time, shall contain only such specific additional information and 
other changes (beyond those contained in the latest Preliminary 
Prospectus) as the Company has advised you, prior to the Execution 
Time, will be included or made therein.

		The form of prospectus relating to the Securities as first 
filed pursuant to Rule 424(b) or, if no filing pursuant to Rule 
424(b) is made, such form of prospectus included in the Registration 
Statement at the Effective Date, is hereinafter called the 
"Prospectus."

		(ii)  On the Effective Date, the Registration Statement did 
or will, and when the Prospectus is first filed (if required) in 
accordance with Rule 424(b) and on each Closing Date (as defined in 
Section 3 hereof) the Prospectus (and any supplement thereto) will, 
comply in all material respects with the applicable requirements of 
the Act and the rules thereunder; on the Effective Date, the Reg-
istration Statement did not or will not contain any untrue statement 
of a material fact or omit to state any material fact required to be 
stated therein or necessary in order to make the statements therein 
not misleading; and, on the Effective Date, the Prospectus, if not 
filed pursuant to Rule 424(b), did not or will not, and on the date 
of any filing pursuant to Rule 424(b) and on each Closing Date, the 
Prospectus (together with any supplement thereto) will not, include 
any untrue statement of a material fact or omit to state a material 
fact necessary in order to make the statements therein, in the light 
of the circumstances under which they were made, not misleading; 
provided, however, that the Company makes no representations or 
warranties as to the information contained in or omitted from the 
Registration Statement, or the Prospectus (or any supplement 
thereto) in reliance upon and in conformity with information 
furnished in writing to the Company by or on behalf of any 
International Underwriter through the International Representatives, 
or Water Street specifically for use in connection with the 
preparation of the Registration Statement or the Prospectus (or any 
supplement thereto).

		(iii)  Each of the Company and its subsidiaries is a 
corporation duly organized, validly existing and in good standing 
under the laws of the jurisdiction of its incorporation; all of the 
issued shares of capital stock of each subsidiary have been duly and 
validly authorized and issued, are fully paid and nonassessable, and 
(except for directors' qualifying shares and those shares not held 
by the Company or any of its Affiliates) are owned directly or 
indirectly by the Corporation, free and clear of all liens, 
encumbrances, equities or claims, except for the shares of capital 
stock of USG Interiors (Europe) SA and except as provided under the 
Collateral Trust Agreement (as such term is defined in the 
Prospectus).  Each of the Company and its subsidiaries has the 
requisite corporate power and authority to own or lease and operate 
its properties and to carry on its business as described in the 
Prospectus except where the failure to have such power and authority 
would not reasonably be expected to result in a material adverse 
change in the financial condition, assets or operations of the 
Company and its subsidiaries taken as a whole (a "MAC").  The 
Company has the requisite power and authority to authorize the 
offering of the Securities to be sold by it, and to issue, sell and 
deliver the Securities to be sold by it.  The Company has the 
requisite power and authority to enter 

into each of the following 
agreements and to perform its obligations thereunder:  the letter 
agreement, dated February 25, 1993, as amended (the "Water Street 
Agreement"), among the Company, Water Street, Goldman, Sachs & Co. 
and The Goldman Sachs Group, L.P.; this Agreement; and the U.S. 
Underwriting Agreement (collectively, the "Agreements").  It being 
understood and agreed that the Company will have to deliver good 
standing certificates and similar documentation only with respect to 
United States Gypsum Company, USG Interiors, Inc., L&W Supply 
Corporation, USG Industries, Inc., USG Foreign Investments, Ltd., La 
Mirada Products Co., Inc., Westbank Planting Company and American 
Metals Corporation (individually a "Major Subsidiary" and 
collectively the "Major Subsidiaries").

		(iv)  Each of the Company and its subsidiaries is duly 
qualified or licensed and in good standing as a foreign corporation 
duly authorized to do business in each jurisdiction in which it owns 
or leases properties, or conducts any business, so as to require 
such qualification or licensure, except where the failure to be so 
qualified and authorized would not reasonably be expected to result 
in a MAC.

		(v)  Except as may be disclosed in the Registration 
Statement and the Prospectus, there are no actions, proceedings or 
investigations pending or to the best of the Company's knowledge 
threatened (solely in the case of such actions, proceedings or 
investigations which would result in a MAC, in writing) which 
question the validity of this Agreement or the U.S. Underwriting 
Agreement or any action taken or to be taken pursuant hereto or 
thereto which would result in a MAC, or which is required to be dis-
closed in the Registration Statement or Prospectus which is not 
adequately disclosed in the Registration Statement or Prospectus, as 
the case may be, and, to the Company's knowledge, there is no 
franchise, contract or other document required to be described in 
the Registration Statement or Prospectus, or required to be filed as 
an exhibit to the Registration Statement, which is not so described 
or filed.

		(vi)  The Company and its subsidiaries are not in breach or 
violation of any term or provision of any agreement, instrument, 
judgment, decree, order, statute, rule or governmental regulation, 
domestic or foreign, applicable to the Company or its subsidiaries 
or to any of their respective properties or assets, which breach, 
breaches, violation or violations would reasonably be expected to 
individually or in the aggregate result in a MAC, and the Company 
and its subsidiaries are not in violation of any term of their 
respective charters or by-laws.  The compliance by the Company with 
all of the provisions of the Agreements, and the performance of the 
transactions contemplated by the Agreements will not result in any 
such violation or be in conflict with or constitute a default under 
any such term, which conflict or default would result in a MAC or 
result in the creation of any mortgage, lien, charge or encumbrance 
upon any of the properties or assets of the Company pursuant to any 
such term which would reasonably be expected to result in a MAC.  No 
consent, approval, authorization or order of any court or 
governmental agency or body is required for the consummation by the 
Company and the subsidiaries of the transactions contemplated 
herein, except such as have been obtained under the Act and such as 
may be required under the Blue Sky Laws of any jurisdiction in 
connection with the distribution of the Securities and such other 
approvals as have been obtained.

		(vii)  The Securities to be issued and sold by the Company 
to the International Underwriters have been duly and validly autho-
rized and, when issued and delivered against payment therefor as 
provided herein, will be duly and validly issued and fully paid and 
nonassessable and will conform in all material respects to the 
description of the Common Stock contained in the Prospectus.

		(viii)  Each of the Agreements has been duly authorized and 
validly executed and delivered by the Company and constitutes a 
valid and legally binding agreement of the Company, enforceable 
against the Company in accordance with its terms (assuming the due 
execution and delivery by the parties thereto other than the 
Company) subject to the effect of bankruptcy, insolvency, 
reorganization, arrangement, moratorium, fraudulent conveyance and 
other similar laws relating to or affecting the enforcement of 
rights of secured or unsecured creditors generally.  

		(ix)  Except as disclosed in the Prospectus, no holder of 
any security of the Company has or will have any right to require 
the registration of such security by virtue of any transactions 
contemplated by this Agreement other than any such right that has 
been expressly waived in writing.  No holder of any of the 
outstanding shares of capital stock of the Company is entitled to 
preemptive or other rights to subscribe for the Securities.

		(x)  The Securities have been duly authorized for trading 
on the New York Stock Exchange, Inc., subject to official notice of 
issuance.

		(b)  The Selling Stockholder represents and warrants to, and 
agrees with, each International Underwriter as follows:

		(i)  The Selling Stockholder is a partnership duly 
organized, validly existing and in good standing under the laws of 
the jurisdiction of its organization.  The Selling Stockholder has 
all necessary power and authority to enter into this Agreement and 
the U.S. Underwriting Agreement.  Each of the Agreements has been 
duly authorized, executed and delivered by the Selling Stockholder 
and constitutes a valid and binding obligation of the Selling 
Stockholder, enforceable against it in accordance with its terms 
(subject, as to enforcement of remedies, to applicable bankruptcy, 
reorganization, insolvency, moratorium or other laws affecting 
creditors' rights generally from time to time in effect and to 
general principles of equity and except with respect to the 
indemnification provisions contained in the Agreements and assuming 
due execution by the parties thereto other than Water Street).  No 
consent, approval, authorization or order of any court or govern-
mental agency or body is required for the consummation by Water 
Street of any of the transactions contemplated herein except for 
those under the Act or any state securities laws or Blue Sky laws.  
The sale of the Securities by Water Street and the consummation by 
Water Street of the transactions contemplated by this Agreement and 
the U.S. Underwriting Agreement will not conflict with, result in a 
breach or violation of, or constitute a default under any law, 
agreement of limited partnership of Water Street, the Water Street 
Agreement or the terms of any indenture or other agreement or 
instrument to which Water Street is a party or bound, or any 
judgment, order or decree applicable to Water Street of any court, 
regulatory body, administrative agency, governmental body or 
arbitrator having jurisdiction over Water Street.

		(ii)  Water Street has good and valid title to the 
Securities to be sold by Water Street and upon sale and delivery of, 
and payment for, such Securities, as provided herein, Water Street 
will convey good and valid title to such Securities, free and clear 
of all liens, encumbrances, equities and claims whatsoever.

		(iii)  On the Effective Date, the Registration Statement 
did not or will not contain any untrue statement of a material fact 
or omit to state any material fact required to be stated therein or 
necessary in order to make the statements therein not misleading; 
and on the Effective Date the Prospectus, if not filed pursuant to 
Rule 424(b), did not or will not, and on the date of any filing 
pursuant to Rule 424(b) and on the Closing Date, the Prospectus 
(together with any supplements thereto) will not, include any untrue 
statement of a material fact or omit to state a material fact 
necessary to make the statements therein, in light of the 
circumstances under which they were made, not misleading; provided 
that the Selling Stockholder makes no representations or warranties 
as to any statements in or omissions from the Registration Statement 
or Prospectus or any amendments or supplements thereto, except for 
statements or omissions made in reliance upon and in conformity with 
information furnished in writing to the Company by or on behalf of 
the Selling Stockholder specifically for use in connection with the 
preparation thereof.

		2.  Purchase and Sale.  (a)  Subject to the terms and 
conditions and in reliance upon the representations and warranties herein 
set forth, the Company and the Selling Stockholder agree, severally and 
not jointly, to sell to each International Underwriter, and each 
International Underwriter agrees, severally and not jointly, to purchase 
from the Company and the Selling Stockholder at a purchase price of 
$28.5306 per share, the amount of Underwritten Securities set forth 
opposite such International Underwriter's name in Schedule I hereto.  The 
amount of Securities to be purchased by each International Underwriter 
from the Company and the Selling Stockholder shall be as nearly as 
practicable in the same proportion to the total amount of Securities to be 
purchased by such International Underwriter as the total amount of 
Securities to be sold by each of the Company and the Selling Stockholder 
bears to the total amount of Securities to be sold pursuant hereto.

		(b)  Subject to the terms and conditions and in reliance upon 
the representations and warranties herein set forth, the Company and the 
Selling Stockholder hereby grant, severally and not jointly, an option to 
the several International Underwriters to purchase, severally and not 
jointly, up to 135,000 shares and 146,250 shares of the Option Securities, 
respectively, at the same purchase price per share as the International 
Underwriter shall pay for the Underwritten Securities.  Said options may 
be exercised solely to cover overallotments in the sale of the 
Underwritten Securities.  Said options may be exercised in whole or in 
part at any time (but not more than once) on or before the 30th day after 
the date of the Prospectus upon written or telegraphic notice by the 
International Representatives to the Company and the Selling Stockholder 
setting forth the number of shares of the Option Securities as to which 
the several International Underwriters are exercising the option and the 
settlement date.  Delivery of the shares of Option Securities, and payment 
therefor, shall be made as provided in Section 3 hereof.  The number of 
shares of the Option Securities to be purchased by each International 
Underwriter shall be the same percentage of the total number of shares of 
the Option Securities to be purchased by the several International Under-
writers as such International Underwriter is purchasing of the 
Underwritten Securities, subject to such adjustments as you in your 
absolute discretion shall make to eliminate any fractional shares.

		3.  Delivery and Payment.  Delivery of and payment for the 
Underwritten Securities shall be made at the offices of Wachtell, Lipton, 
Rosen & Katz, 51 W. 52nd Street (or such other place as mutually may be 
agreed upon), New York, New York, at 10:00 a.m., New York City time, on 
March 16, 1994, or such later date (not later than April 1, 1994) as the 
International Representatives shall designate, which date and time may be 
postponed by agreement among the International Representatives, the 
Company and the Selling Stockholder or as provided in Section 9 hereof 
(such date and time of delivery and payment for the Securities being 
herein called the "First Closing Date").  Delivery of the Underwritten 
Securities shall be made to the International Representatives for the 
respective accounts of the several International Underwriters against pay-
ment by the several International Underwriters through the International 
Representatives of the purchase price therefor to or upon the order of the 
Company and the Selling Stockholder by certified or official bank check or 
checks drawn on or by a New York Clearing House bank and payable in next 
day funds.  The Underwritten Securities shall be registered in such names 
and in such denominations as the International Representatives may request 
not less than three full business days in advance of the First Closing 
Date.

		The overallotment option may be exercised during the term 
thereof by written notice by you to the Company and the Selling 
Stockholder.  Such notice shall set forth the aggregate number of Option 
Securities as to which the option is being exercised, the name or names in 
which the Option Securities are to be registered, the authorized denomi-
nations in which such Option Securities are to be issued, and the time and 
date, as determined by you, when such Option Securities are to be deli-
vered (an "Additional Closing Date"); provided, however, that no 
Additional Closing Date shall be earlier than the First Closing Date nor 
earlier than the third business day after the date on which the notice of 
the exercise of the option shall have been given nor later than the eighth 
business day after the date on which such notice shall have been given.  
Delivery and payment for such Option Securities is to be at the offices 
set forth above for delivery and payment of the Underwritten Securities.  
The First Closing Date and any Additional Closing Date are individually 
referred to as a "Closing Date" and collectively referred to as the 
"Closing Dates."

		The Company and the Selling Stockholder agree to use their 
best efforts to have the Underwritten Securities and the Option 
Securities, as the case may be, to be delivered at each Closing Date 
available for inspection, checking and packaging by the Representatives in 
New York, New York, not later than 1:00 p.m. on the business day prior to 
such Closing Date.  

		4.  Offering by Underwriters.  It is understood that the 
several International Underwriters propose to offer the Securities for 
sale to the public as set forth in the Prospectus.  The International 
Representatives agree to advise the Company promptly following the 
completion of the distribution of the Securities.

		5.  Agreements.  (a)  The Company agrees with the several 
International Underwriters and Water Street that:

		(i)  The Company will use its best efforts to cause the 
Registration Statement, if not effective at the Execution Time, and 
any amendment thereof, to become effective.  Prior to the 
termination of the offering of the Securities, the Company will not 
file any amendment of the Registration Statement or supplement to 
the Prospectus without your prior consent, which consent shall not 
be unreasonably withheld.  Subject to the foregoing sentence, if the 
Registration Statement has 

become or becomes effective pursuant to 
Rule 430A, or filing of the Prospectus is otherwise required under 
Rule 424(b), the Company will cause the Prospectus, properly 
completed, and any supplement thereto to be filed with the 
Commission pursuant to the applicable paragraph of Rule 424(b) 
within the time period prescribed and will provide evidence 
satisfactory to the International Representatives of such timely 
filing.  The Company will promptly advise the International 
Representatives (i) when the Registration Statement, if not effec-
tive at the Execution Time, and any amendment thereto, shall have 
become effective, (ii) when the Prospectus, and any supplement 
thereto, shall have been filed (if required) with the Commission 
pursuant to Rule 424(b), (iii) when, prior to termination of the 
offering of the Securities, any amendment to the Registration 
Statement shall have been filed or become effective, (iv) of any 
request by the Commission for any amendment of the Registration 
Statement or supplement to the Prospectus or for any additional 
information, (v) of the issuance by the Commission of any stop order 
suspending the effectiveness of the Registration Statement or the 
Company becoming aware of the institution or threatening of any 
proceeding for that purpose, and (vi) of the receipt by the Company 
of any notification with respect to the suspension of the quali-
fication of the Securities for sale in any jurisdiction or the 
initiation or threatening of any proceeding for such purpose.  The 
Company will use its best efforts to prevent the issuance of any 
such stop order and, if issued, to obtain as soon as possible the 
withdrawal thereof.

		(ii)  If, at any time when a prospectus relating to the 
Securities is required to be delivered under the Act, any event 
occurs as a result of which the Prospectus as then supplemented 
would include any untrue statement of a material fact or omit to 
state any material fact necessary to make the statements therein, in 
the light of the circumstances under which they were made, not 
misleading, or if it shall be necessary to amend the Registration 
Statement or supplement the Prospectus to comply with the Act or the 
rules thereunder, the Company will promptly prepare and file with 
the Commission, subject to the second sentence of Section 5(a)(i), 
an amendment or supplement which will correct such statement or 
omission or effect such compliance.

		(iii)  As soon as practicable, but in any event not later 
than sixteen (16) months after the Effective Date, the Company will 
make generally available to its security holders and to the 
International Representatives an earnings statement or statements of 
the Company and its subsidiaries which satisfies the provisions of 
Section 11(a) of the Act and Rule 158 under the Act.  Filing reports 
under Section 13 of the Securities Exchange Act of 1934 on a timely 
basis shall constitute compliance with this paragraph (iii), 
provided that the provisions of Section 11(a) of the Act and Rule 
158 are thereby satisfied.

		(iv)  The Company will furnish to the International 
Representatives and counsel for the International Underwriters, 
without charge, two signed copies of the Registration Statement 
(including exhibits thereto) and to each other Underwriter a copy of 
the Registration Statement (without exhibits thereto) and, so long 
as delivery of a prospectus by an International Underwriter or 
dealer may be required by the Act, as many copies of each 
Preliminary Prospectus and the Prospectus and any supplement thereto 
as the International Representatives may reasonably request.  The 
Company will pay the expenses of printing or other production of all 
documents relating to the offering.

		(v)  The Company will cooperate with you and your counsel 
in connection with endeavoring to obtain qualification of the 
Securities for sale under the laws of such jurisdictions as the 
International Representatives may designate, will maintain such 
qualifications in effect so long as required for the distribution of 
the Securities; provided, however, that the Company shall not be 
obligated to qualify as a foreign corporation to do business under 
the laws of any jurisdiction in which it shall not then be qualified 
but for the requirements of this Section 4(a)(v), to subject itself 
to taxation in any such jurisdiction to which it shall not then be 
so subject or to consent to general service of process in any such 
jurisdiction to which it shall not then be so subject.

		(vi)  For a period of 120 days following the Execution 
Time, the Company will not, without the prior written consent of the 
International Representatives, offer, sell or contract to sell, or 
otherwise dispose of, directly or indirectly, or announce the 
offering of, any other shares of Common Stock or any securities 
convertible into, or exercisable or exchangeable for, shares of 
Common Stock, other than through the exercise of warrants or 
management stock options.

		(vii)  The Company will apply the net proceeds of the 
offering and the sale of the Securities in the manner set forth in 
the Prospectus under the caption "Purpose of the Offering and Use of 
Proceeds."

		(viii)  The Company confirms as of the date hereof that it 
is in compliance with all provisions of Section 1 of the Laws of 
Florida, Chapter 92-198, An Act Relating to Disclosure of Doing 
Business with Cuba, Section 517.075 of the Florida Securities and 
Investor Protection Act, and the Company further agrees that if it 
or any of its affiliates commences engaging in business with the 
government of Cuba or with any person or affiliate located in Cuba 
after the date the Registration Statement becomes or has become 
effective with the Commission or with the Florida Department of 
Banking and Finance (the "Department"), whichever date is later, or 
if the information reported in the Prospectus, if any, concerning 
the Company's business with Cuba or with any person or affiliate 
located in Cuba changes in any material way, the Company will 
provide the Department notice of such business or change, as 
appropriate, in a form acceptable to the Department.

		(ix)  The Company will comply with its obligations with 
respect to the Securities under Article 4 of the Water Street 
Agreement.

		(b)  Water Street agrees with the several International 
Underwriters that:

		(i)  Water Street will not (and any assignees of Water 
Street's rights under Section 4.1 of the Water Street Agreement will 
not) request any registration of shares of Common Stock pursuant to 
Section 4.1 of the Water Street Agreement for a period of 120 days 
following the Effective Date.

		(ii)  For a period of 120 days following the Execution 
Time, Water Street and Goldman, Sachs & Co. will not, without the 
prior written consent of the International Representatives, offer, 
sell or contract to sell, or otherwise dispose of, directly or 
indirectly, or announce the offering of, any other shares of Common 
Stock or any securities convertible into, or 

exercisable or 
exchangeable for, shares of Common Stock; provided, however, Water 
Street may distribute such shares or securities held by it to its 
partners at any time after 90 days following the Effective Date, 
which partners (other than Goldman, Sachs & Co.) shall not be bound 
by the limitations in this paragraph (ii); provided, further, that 
Water Street and Goldman, Sachs & Co. may exercise any of their 
Warrants to purchase Common Stock.

		(c)  Each International Underwriter covenants and agrees with 
the Company and Water Street that it will comply with the obligations of 
an underwriter with respect to the Securities under Article 4 of the Water 
Street Agreement, it being understood that such obligations do not include 
those set forth under Sections 4.8(a), (b), (c), (d)(iii) and (d)(iv) of 
such Agreement.

		(d)  Each International Underwriter agrees that (i) it is not 
purchasing any of the International Securities for the account of any 
United States or Canadian Person, (ii) it has not offered or sold, and 
will not offer or sell, directly or indirectly, any of the International 
Securities or distribute any international Prospectus to any person inside 
the United States or Canada, or to any United States or Canadian Person, 
and (iii) any dealer to whom it may sell any of the International 
Securities will represent that it is not purchasing for the account of any 
United States or Canadian Person and agree that it will not offer or 
resell, directly or indirectly, any of the International Securities inside 
the United States or Canada, or to any United States or Canadian Person or 
to any other dealer who does not so represent and agree; provided, 
however, that the foregoing shall not restrict (A) purchases and sales 
between the Underwriters on the one hand and the International 
Underwriters on the other hand pursuant to Section 1(b) of the Agreement 
Between Underwriters and Managers, (B) stabilization transactions 
contemplated under Section 2 of the Agreement Between Underwriters and 
Managers, conducted through Salomon Brothers Inc as part of the 
distribution of the Securities, and (C) sales to or through (or 
distributions of international Prospectuses or international Preliminary 
Prospectuses to) persons not United States or Canadian Persons who are 
investment advisors, or who otherwise exercise investment discretion, and 
who are purchasing for the account of United States or Canadian Persons.  
"United States or Canadian Person" shall mean any person who is a national 
or resident of the United States or Canada, a corporation, partnership, or 
other entity created or organized in or under the laws of the United 
States or Canada or of any political subdivision thereof, or any estate or 
trust the income of which is subject to United States or Canadian federal 
income taxation, regardless of its source (other than any non-United 
States or non-Canadian branch of any United States or Canadian Person), 
and shall include any United States or Canadian branch of a person other 
than a United States or Canadian Person.  "US" or "United States" shall 
mean the United States of America (including the states thereof and the 
District of Columbia), its territories, its possessions and other areas 
subject to its jurisdiction.

		(e)  The agreements of the International Underwriters set 
forth in paragraph (b) of this Section 5 shall terminate upon the earlier 
of the following events:

		(i)  a mutual agreement of the International Repre-
sentatives and the U.S. Representatives to terminate the selling 
restrictions set forth in paragraph (d) of this Section 5 and in 
Section 5(d) of the U.S. Underwriting Agreement; or

		(ii)  the expiration of a period of 30 days after the 
Closing Date, unless (a) the International Representatives shall 
have given notice to the Company and the U.S. Representatives that 
the distribution of the International Securities by the 
International 

Underwriters has not yet been completed, or (b) the 
U.S. Representatives shall have given notice to the Company and the 
International Underwriters that the distribution of the U.S. 
Securities by the U.S. Underwriters has not yet been completed.  If 
such notice by the International Representatives or the U.S. 
Representatives is given, the agreements set forth in such paragraph 
(b) shall survive until the earlier of (1) the event referred to in 
clause (i) of this subsection (e) or (2) the expiration of any 
additional period of 30 days from the date of any such notice.

		(f)  Each International Underwriter represents and agrees 
that:

		(i)  it has not offered or sold and will not offer or sell 
in the United Kingdom, by means of any document, any International 
Securities other than to persons whose ordinary business it is to 
buy or sell shares or debentures, whether as principal or agent or 
in circumstances which do not constitute an offer to the public 
within the meaning of the Companies Act 1985;

		(ii)  it has complied and will comply with all applicable 
provisions of The Financial Services Act 1986 with respect to 
anything done by it in relation to the International Securities in, 
from or otherwise involving the United Kingdom; 

		(iii)  it has only issued or passed on and will only issue 
or pass on to any person in the United Kingdom any document received 
by it in connection with the issue of the International Securities 
if that person is of a kind described in Article 9(3) of the 
Financial Services Act 1986 (Investment Advertisements) (Exemptions) 
Order 1988; and

		(iv)  it has not offered or sold and will not offer or sell 
any International Securities in violation of any applicable law or 
financial regulation in a country where such International Securi-
ties are to be sold.

		6.  Conditions to the Obligations of the International 
Underwriters.  The obligations of the International Underwriters to 
purchase the Securities to be delivered at each Closing Date shall be 
subject to the accuracy of the representations and warranties on the part 
of the Company and Water Street contained herein as of the Execution Time 
and as of such Closing Date (as if made at such Closing Date), to the 
accuracy of the statements of the Company made in any certificates pur-
suant to the provisions hereof, to the performance by the Company and 
Water Street of their obligations hereunder and to the following 
additional conditions:

		(a)  If the Registration Statement has not become effective 
prior to the Execution Time, unless the International 
Representatives agree in writing to a later time, the Registration 
Statement will become effective not later than (i) 6:00 p.m. New 
York City time on the date of determination of the public offering 
price, if such determination occurred at or prior to 3:00 p.m. New 
York City time on such date or (ii) 12:00 Noon on the business day 
following the day on which the public offering price was determined, 
if such determination occurred after 3:00 p.m. New York City time on 
such date; if filing of the Prospectus, or any supplement thereto, 
is required pursuant to Rule 424(b), the Prospectus, and any such 
supplement, will be filed in the manner and within the time period 
required by Rule 424(b); and no stop order suspending the effec-
tiveness of the Registration 

Statement shall have been issued and no 
proceedings for that purpose shall have been instituted or 
threatened.

		(b)  On each Closing Date, the Company shall have furnished to 
the International Representatives and Water Street the opinion of 
Kirkland & Ellis, counsel for the Company as to paragraphs (i), 
(iv), (vii), (viii), (ix) and (x), and of the General Counsel or the 
Assistant General Counsel of the Company with respect to paragraphs 
(ii), (iii), (v), (vi), (xi) and (xii), each dated as of such 
Closing Date, to the effect that:

(i)  The Company has been duly incorporated and the 
Company is validly existing as a corporation under the laws of 
the State of Delaware, with full corporate power and authority 
to own its properties and conduct its businesses as described 
in the Prospectus;

(ii)  Each of the Major Subsidiaries has been duly 
incorporated and all the Major Subsidiaries are validly 
existing as corporations under the laws of their respective 
jurisdictions of incorporation, with full corporate power and 
authority to own their respective properties and conduct their 
respective businesses as described in the Prospectus, and the 
Company and each of the Major Subsidiaries are duly qualified 
to do business as foreign corporations under the laws of each 
jurisdiction in which the character of the business conducted 
or the location of the properties owned or leased make such 
qualifications necessary and in which the consequences of a 
failure to so qualify would have a material adverse effect on 
the properties or businesses of the Company and its 
subsidiaries taken as whole;

(iii)  all the outstanding shares of capital stock of 
each Major Subsidiary have been duly and validly authorized 
and issued and are fully paid and nonassessable, and have not 
been issued and are not owned or held in violation of any 
statutory preemptive right of stockholders; to the knowledge 
of such counsel after due inquiry, such shares are not held in 
violation of any other preemptive right of stockholders and, 
except as otherwise set forth in the Registration Statement, 
all outstanding shares of capital stock of the Major 
Subsidiaries are owned by the Company either directly or 
through wholly owned subsidiaries free and clear of any 
perfected security interest and, to the knowledge of such 
counsel, after due inquiry, any other material security 
interests, stockholders, agreements or voting trusts;

(iv)  the Company's authorized equity capitalization is 
as set forth in the Prospectus; the capital stock of the 
Company conforms to the description thereof contained in the 
Prospectus; the Securities being sold hereunder and under the 
U.S. Underwriting Agreement, as the case may be, have been 
duly and validly authorized, and, in the case of the Securi-
ties sold to the International Underwriters by the Company, 
when issued and delivered to and paid for by the Underwriters 
pursuant to this Agreement or pursuant to the U.S. 
Underwriting Agreement, will be fully paid and nonassessable; 
the Securities have been duly authorized for trading, subject 
to official notice of issuance, on the New York Stock 
Exchange, Inc.; and the holders of outstanding shares of capi-
tal stock of the 

Company are not entitled to statutory 
preemptive or, to the best of such counsel's knowledge after 
due inquiry, contractual rights to subscribe for the Se-
curities;

(v)  the outstanding shares of Common Stock have been 
duly and validly authorized and issued and are fully paid and 
nonassessable; 

(vi)  there is no pending or, to the knowledge of such 
counsel, threatened action, suit or proceeding before any 
court or governmental agency, authority or body or any 
arbitrator involving the Company or any of the subsidiaries of 
a character required to be disclosed in the Registration 
Statement which is not adequately disclosed in the Prospectus, 
and there is no contract or other document of a character 
required to be described in the Registration Statement or the 
Prospectus, or to be filed as an exhibit, which is not 
described or filed as required;

(vii)  the Registration Statement and all post-effective 
amendments thereto have become effective under the Act; any 
required filing of the Prospectus, and any supplements 
thereto, pursuant to Rule 424(b) and Rule 430A have been made 
in the manner and within the time period required by such 
Rules; to the best knowledge of such counsel, no stop order 
suspending the effectiveness of the Registration Statement has 
been issued, no proceedings for that purpose have been 
instituted or threatened and the Registration Statement and 
the Prospectus (other than the financial statements and other 
financial and statistical information contained therein as to 
which such counsel need express no opinion) comply as to form 
in all material respects with the requirements of the Act and 
the rules thereunder;

(viii)  each of the Agreements has been duly authorized, 
executed and delivered by the Company;

(ix)  no consent, approval, authorization, license, 
certificate, permit or order of any court or governmental 
agency or body is required for the consummation of the 
transactions contemplated herein, except such as have been 
obtained under the Act or as may be required under the blue 
sky laws of any jurisdiction in connection with the purchase 
and distribution of the Securities by the International Under-
writers (as to which such counsel need not opine) and such 
other approvals as have been obtained;

(x)  neither the execution and delivery of this 
Agreement or the U.S. Underwriting Agreement nor the issue and 
sale of the Securities, nor the consummation of any other of 
the transactions contemplated herein or therein nor the 
fulfillment of the terms hereof or thereof will conflict with, 
result in a breach of, or constitute a default under the char-
ter or by-laws of the Company or the terms of any agreement 
listed on Exhibit A attached hereto;

(xi)  neither the execution and delivery of this 
Agreement or the U.S. Underwriting Agreement nor the issue and 
sale of the Securities, nor the consummation of any other of 
the transactions contemplated herein or therein nor the 
fulfillment of the terms 

hereof or thereof will conflict with, 
result in a breach of, or constitute a default under any 
agreement filed as an exhibit to the Registration Statement 
(other than any such agreement listed on Exhibit A to the 
opinion of Kirkland & Ellis delivered pursuant to this 
Agreement) or under any judgment, order or regulation known to 
such counsel to be applicable to the Company or any of its 
subsidiaries of any court, regulatory body, administrative 
agency, governmental body or arbitrator having jurisdiction 
over the Company or any of its subsidiaries; and 

(xii)  except as disclosed in the Prospectus, no holders 
of securities of the Company have rights to the registration 
of such securities under the Registration Statement.

		Each of such counsel shall state that it has participated in 
conferences with representatives of the Company, at which conferences the 
contents of the Registration Statement, the Prospectus, each amendment 
thereof and supplement thereto and related matters were discussed, and, 
although such counsel has not independently checked or verified and is not 
passing upon and assumes no responsibility for the factual accuracy, 
completeness or fairness of the statements contained in the Registration 
Statement, the Prospectus, any amendment thereof or supplement thereto, no 
facts have come to the attention of such counsel to cause such counsel to 
believe (A) that either the Registration Statement or any amendment 
thereto (other than the financial statements and related schedules and 
other financial and statistical information contained therein, or omitted 
therefrom), at the time the Registration Statement became effective 
contained an untrue statement of a material fact or omitted to state a 
material fact necessary to make the statements therein not misleading or 
(B) that the Prospectus, as amended and supplemented (other than the 
financial statements and related schedules and other financial and 
statistical information contained therein, or omitted therefrom), at the 
time the Registration Statement became effective or on each Closing Date 
contains an untrue statement of a material fact or omits to state a 
material fact necessary to make the statements therein, in the light of 
the circumstances under which they were made, not misleading.

		In rendering such opinions, each such counsel may rely (A) as 
to matters involving the application of laws of any jurisdiction other 
than the States of Illinois and Delaware or the United States, to the 
extent they deem proper and specified in such opinions, upon the opinion 
of other counsel of good standing whom they believe to be reliable and who 
are satisfactory to counsel for the Underwriters and (B) as to matters of 
fact, to the extent they deem proper, on certificates of responsible 
officers of the Company and public officials.  Reference to the Prospectus 
in this paragraph (b) include any supplements thereto at the Closing Date.

		(c)  On each Closing Date, Water Street shall have furnished 
to the International Representatives the opinion of Fried, Frank, 
Harris, Shriver & Jacobson, counsel for Water Street, dated as of 
such Closing Date, to the effect that:

(i)  Each of this Agreement and the U.S. Underwriting 
Agreement has been duly authorized, executed and delivered by 
the Selling Stockholder.  No consent, approval, authorization 
or order of any court or governmental agency or body of the 
State of New York or the United States of America is required 
for the consummation by Water Street of any of the trans-
actions contemplated herein except for those under the Act or 
any state securities laws or Blue Sky laws.  The sale of the 
Securities to be sold by Water Street and 

the consummation by Water Street of the transactions contemplated by this 
Agreement and the International Underwriting Agreement will 
not result in a breach or violation of any term or provision 
of Water Street's agreement of limited partnership or the 
Water Street Agreement.

(ii)  Assuming the International Underwriters purchase 
the Securities to be transferred by Water Street on the 
applicable Closing Date in good faith and without notice of 
any adverse claim as such term is used in Section 8-302 of the 
Uniform Commercial Code in effect in the State of New York, 
valid title to such Securities, free and clear of all liens, 
encumbrances, equities, or other adverse claims will pass to 
the International Underwriters when appropriate entries to the 
accounts of the International Underwriters are made on the 
books of The Depository Trust Company.

		(d)  The International Representatives shall have received 
from Wachtell, Lipton, Rosen & Katz, counsel for the International 
Underwriters, such opinion or opinions, dated as of each Closing 
Date, with respect to the issuance and sale of the Securities, the 
Registration Statement, the Prospectus (together with any supplement 
thereto) and other related matters as the International 
Representatives may reasonably require, and the Company shall have 
furnished to such counsel such documents as they may reasonably 
request for the purpose of enabling them to pass upon such matters.

		(e)  The Company shall have furnished to the International 
Representatives and to Water Street a certificate of the Company, 
signed by the Chief Financial Officer and the Vice 
President-Controller of the Company, each in his official capacity 
as an officer of the Company and not as an individual, dated as of 
each Closing Date, to the effect that the signers of such 
certificate have carefully examined the Registration Statement, the 
Prospectus, any supplement to the Prospectus, this Agreement and the 
U.S. Underwriting Agreement and that:

(i)  the representations and warranties of the Company 
in this Agreement and the U.S. Underwriting Agreement are true 
and correct in all material respects on and as of such Closing 
Date with the same effect as if made on the Closing Date and 
the Company has complied with all the agreements and satisfied 
all the conditions on its part to be performed or satisfied at 
or prior to the Closing Date;

(ii)  no stop order suspending the effectiveness of the 
Registration Statement has been issued and no proceedings for 
that purpose have been instituted or, to the Company's 
knowledge, threatened; and

(iii)  since the date of the most recent financial 
statements included in the Prospectus (exclusive of any 
supplement thereto), there has been no MAC, whether or not 
arising from transactions in the ordinary course of business, 
except as set forth in or contemplated in the Prospectus 
(exclusive of any supplement thereto).

		(f)  Water Street shall have furnished to the International 
Representatives a certificate of Water Street, dated as of each 
Closing Date, to the effect that the representations and warranties of 

Water Street in this Agreement are true and correct in all 
material respects on and as of such Closing Date with the same 
effect as if made on the Closing Date and Water Street has complied 
in all material respects with all the agreements and satisfied all 
the conditions on their part to be performed or satisfied at or 
prior to the Closing Date.

		(g)  At the Execution Time and at each Closing Date, Arthur 
Andersen & Co. shall have furnished to the International 
Representatives a letter or letters, dated respectively as of the 
Execution Time and as of such Closing Date, in form and substance 
satisfactory to the International Representatives, stating in effect 
that:

(i)  They are independent certified public accountants 
with respect to the Company and its subsidiaries within the 
meaning of the Act and the applicable published rules and 
regulations thereunder;

(ii)  In their opinion, the financial statements and any 
supplementary financial information and schedules examined by 
them and included in the Prospectus or the Registration 
Statement comply as to form in all material respects with the 
applicable accounting requirements of the Act and the related 
published rules and regulations thereunder; and, if 
applicable, they have made a review in accordance with 
standards established by the American Institute of Certified 
Public Accountants of the unaudited consolidated interim 
financial statements of the Company for the periods specified 
in such letter, as indicated in their reports thereon, copies 
of which have been furnished to the International 
Representatives;

(iii)  The unaudited summary, condensed and selected 
financial information with respect to the consolidated results 
of operations and financial position of the Company for the 
six most recent fiscal years (or such shorter period as 
applicable) included in the Prospectus agrees with the corre-
sponding amounts (after restatements where applicable) in the 
audited consolidated financial statements for such period; and 
the pro forma financial information complies in all material 
respects as to form with all applicable accounting 
requirements of the Act;

(iv)  On the basis of limited procedures, not 
constituting an examination in accordance with generally 
accepted auditing standards, consisting of a reading of the 
unaudited financial statements and other information referred 
to below, a reading of the latest available interim financial 
statements of the Company and its subsidiaries, inspection of 
the minute books of the Company and its subsidiaries since the 
date of the latest audited financial statements included in 
the Prospectus, inquiries of officials of the Company and its 
subsidiaries responsible for financial and accounting matters 
and such other inquiries and procedures as may be specified in 
such letter, nothing came to their attention that caused them 
to believe that:

				(A)  the unaudited consolidated statements of 
income, consolidated balance sheets and consolidated 
statements of cash flows included in the Prospectus do 
not comply as to form in all material respects with the applicable 

accounting requirements of the Act and the 
related published rules and regulations thereunder, or 
are not in conformity with generally accepted accounting 
principles applied on a basis substantially consistent 
with the basis for the audited consolidated statements 
of income, consolidated balance sheets and consolidated 
statements of cash flows included in the Prospectus;

				(B)  any other unaudited income statement data and 
balance sheet items included in the Prospectus do not 
agree with the corresponding items in the unaudited 
consolidated financial statements from which such data 
and items were derived, and any such unaudited data and 
items, if any, were not determined on a basis substan-
tially consistent with the basis for the corresponding 
amounts in the audited consolidated financial statements 
included in the Prospectus;

				(C)  the unaudited financial statements which were 
not included in the Prospectus but from which were 
derived any unaudited condensed financial statements 
referred to in Clause A and any unaudited income 
statement data and balance sheet items included in the 
Prospectus and referred to in Clause B were not 
determined on a basis substantially consistent with the 
basis for the audited consolidated financial statements 
included in the Prospectus;

				(D)  any unaudited pro forma consolidated 
condensed financial statements included in the 
Prospectus do not comply as to form in all material 
respects with the applicable accounting requirements of 
the Act and the published rules and regulations 
thereunder or the pro forma adjustments have not been 
properly applied to the historical amounts in the 
compilation of those statements;

				(E)  as of a specified date not more than five 
days prior to the date of such letter, there have been 
any changes in the consolidated capital stock or any 
increase in the consolidated long-term debt of the 
Company and its Subsidiaries, or any decreases in 
consolidated net current assets or net assets or other 
items specified prior to the Execution Time by the 
International Representatives, or any increases in any 
items specified prior to the Execution Time by the 
International Representatives, in each case as compared 
with amounts shown in the latest balance sheet included 
in the Prospectus, except in each case for changes, 
increases or decreases which the Prospectus discloses 
have occurred or may occur or which are described in 
such letter; and

				(F)  for the period from the date of the latest 
financial statements included in the Prospectus to the 
specified date referred to in Clause E there were any 
decreases in consolidated net sales, operating profit 
data as compared to the preceding period or other items 
specified by the International Representatives, or any 
increases in any items specified prior to the Execution 
Time by the International Representatives, in each case 
as compared with the comparable period of the preceding 
year and with any other period of corresponding length 
specified prior to the Execution Time by the Interna-
tional Representatives, except 

in each case for decreases or increases which the Prospectus discloses, 
have occurred or may occur or which are described in 
such letter; and

(v)  In addition to the examination referred to in their 
report(s) included in the Prospectus and the limited 
procedures, inspection of minute books, inquiries and other 
procedures referred to in paragraphs (ii) and (iv) above, they 
have carried out certain specified procedures, not 
constituting an examination in accordance with generally 
accepted auditing standards, with respect to certain amounts, 
percentages and financial information specified prior to the 
Execution Time by the International Representatives, which are 
derived from the general accounting records of the Company and 
its Subsidiaries, which appear in the Prospectus, or in Part 
II of, or in exhibits and schedules to, the Registration 
Statement specified prior to the Execution Time by the 
International Representatives, and have compared certain of 
such amounts, percentages and financial information with the 
accounting records of the Company and the Subsidiaries and 
have found them to be in agreement.

References to the Prospectus in this paragraph (g) 
include any supplement thereto at the date of the letter.

		(h)  Subsequent to the Execution Time or, if earlier, the 
dates as of which information is given in the Registration Statement 
(exclusive of any amendment thereof) and the Prospectus (exclusive 
of any supplement thereto), there shall not have been (i) any change 
or decrease specified in the letter or letters referred to in 
paragraph (g) of this Section 6 or (ii) any change, or any develop-
ment involving a prospective change, in or affecting the business or 
properties of the Company and its subsidiaries the effect of which, 
in any case referred to in clause (i) or (ii) above, is, in the 
judgment of the International Representatives, so material and 
adverse as to make it impractical or inadvisable to proceed with the 
public offering or the delivery of the Securities as contemplated by 
the Registration Statement (exclusive of any amendment thereof) and 
the Prospectus (exclusive of any supplement thereto).

		(i)  Prior to each Closing Date, the Company shall have 
furnished to the International Representatives such further 
information, certificates and documents as the International 
Representatives may reasonably request.

		If any of the conditions specified in this Section 6 shall not 
have been fulfilled in all material respects when and as provided in 
this Agreement, or if any of the opinions and certificates mentioned 
above or elsewhere in this Agreement shall not be in all material 
respects reasonably satisfactory in form and substance to the 
International Representatives and their counsel, this Agreement and 
all obligations of the International Underwriters hereunder may be 
cancelled at, or at any time prior to, each Closing Date by the 
International Representatives.  Notice of such cancellation shall be 
given to the Company and the Selling Stockholder in writing or by 
telephone or telegraph confirmed in writing.

		6A.  Conditions to the Obligations of Water Street.  The 
obligation of Water Street to sell the Securities to be delivered at each 
Closing Date shall be subject to the accuracy of the representations on 

the part of the Company contained herein as of the Execution Time and as 
of such Closing Date (as if made at such Closing Date), to the accuracy of 
the statements of the Company made in any certificates pursuant to the 
provisions hereof, to the performance by the Company of its obligations 
hereunder and to additional conditions identical to those set forth in 
Section 6 (other than paragraph (c) thereof).  If any of the conditions 
specified in this Section 6A shall not have been fulfilled in all material 
respects when and as provided in this Agreement, Water Street may, by 
written notice to the Company and the International Representatives, 
terminate its obligations under this Agreement at, or at any time prior 
to, each Closing Date.  

		7.  Expenses.  The Company agrees with Water Street that it 
will pay or cause to be paid all Registration Expenses (as defined in the 
Water Street Agreement) in connection with the Registration Statement and 
this Agreement and the U.S. Underwriting Agreement (it being understood 
that such Registration Expenses shall not include any expenses relating to 
the preparation of any amendment to the Water Street Agreement).  If the 
sale of the Securities provided for herein is not consummated because any 
condition to the obligations of the International Underwriters set forth 
in Section 6 hereof is not satisfied (other than the conditions specified 
in paragraphs 6(d) and, if the International Underwriters shall have not 
exercised their judgment reasonably, 6(h)), because of any termination 
pursuant to Section 10 hereof or because of any refusal, inability or 
failure on the part of the Company to perform any agreement herein or 
comply with any provision hereof other than by reason of a default by any 
of the International Underwriters, the Company will reimburse the Interna-
tional Underwriters severally upon demand for all out-of-pocket expenses 
(including reasonable fees and disbursements of counsel) that shall have 
been incurred by them in connection with the proposed purchase and sale of 
the Securities.

		8.  Indemnification and Contribution.  (a)  The Company agrees 
to indemnify and hold harmless each International Underwriter, the 
directors, officers, employees and agents of each International 
Underwriter and each person who controls any International Underwriter 
within the meaning of either the Act or the Securities Exchange Act of 
1934 (the "Exchange Act") against any and all losses, claims, damages or 
liabilities, joint or several, to which they or any of them may become 
subject under the Act, the Exchange Act or other Federal or state 
statutory law or regulation, at common law or otherwise, insofar as such 
losses, claims, damages or liabilities (or actions in respect thereof) 
arise out of or are based upon any untrue statement or alleged untrue 
statement of a material fact contained in the registration statement for 
the registration of the Securities as originally filed or in any amendment 
thereof, or in any Preliminary Prospectus or the Prospectus, or in any 
amendment thereof or supplement thereto, or arise out of or are based upon 
the omission or alleged omission to state therein a material fact required 
to be stated therein or necessary to make the statements therein not 
misleading, and agrees to reimburse each such indemnified party, as 
incurred, for any legal or other expenses reasonably incurred by them in 
connection with investigating or defending any such loss, claim, damage, 
liability or action; provided, however, that (i) the Company will not be 
liable in any such case to the extent that any such loss, claim, damage or 
liability arises out of or is based upon any such untrue statement or 
alleged untrue statement or omission or alleged omission made therein in 
reliance upon and in conformity with written information furnished to the 
Company by or on behalf of any International Underwriter through the In-
ternational Representatives specifically for use in connection with the 
preparation thereof, (ii) the Company will not be liable for the amount 
paid in settlement of any litigation commenced or threatened or of any 
claim whatsoever arising out of or based upon any (actual or alleged) 
untrue statement or omission unless such settlement is effected with the 
written consent of the Company and (iii) such indemnity with respect to 
any Preliminary Prospectus shall not inure to the benefit of an Inter-
national Underwriter (or any person controlling such International 

Underwriter) from whom the person asserting any such loss, claim, damage 
or liability purchased the Securities which are the subject thereof if 
such person did not receive a copy of the Prospectus (or the Prospectus as 
supplemented) excluding documents incorporated therein by reference at or 
prior to the confirmation of the sale of such Securities to such person in 
any case where such delivery is required by the Act and the untrue 
statement or omission of a material fact contained in such Preliminary 
Prospectus was corrected in the Prospectus (or the Prospectus as 
supplemented).  This indemnity agreement will be in addition to any 
liability which the Company may otherwise have.

		(b)  The Selling Stockholder agrees to indemnify and hold 
harmless the International Underwriter and each person who controls the 
International Underwriter within the meaning of the Act or the Exchange 
Act to the same extent as the foregoing indemnity in paragraph (a) of this 
Section from the Company to the International Underwriter, but only with 
reference to written information furnished to the Company by or on behalf 
of the Selling Stockholder specifically for use in preparation of the 
documents referred to in the foregoing indemnity.  This indemnity 
agreement will be in addition to any liability which the Selling 
Stockholder may otherwise have.  Notwithstanding the provisions of this 
subsection (b), the Selling Stockholder shall not be required to pay an 
amount in excess of the net proceeds received by the Selling Stockholder 
from the Securities sold by it hereunder.  The Company, the Selling Stock-
holder and the International Underwriters acknowledge that the statements 
set forth under the heading "Ownership of Common Stock -- Selling 
Stockholder and its Affiliates" in the Prospectus (and not any information 
to which reference is made under such heading) constitutes the only 
information furnished in writing by or on behalf of Water Street for 
inclusion in the documents referred to in the foregoing indemnity, and 
Water Street confirms that such statements are correct and complete.

		(c)  Each International Underwriter severally agrees to 
indemnify and hold harmless the Company, each of its directors, each of 
its officers who signs the Registration Statement, and each person who 
controls the Company within the meaning of either the Act or the Exchange 
Act and the Selling Stockholder and its respective directors, officers, 
partners, employees and agents and each other person, if any, who controls 
the Selling Stockholder within the meaning of the Act or the Exchange Act, 
to the same extent as the foregoing indemnity in paragraph (a) of this 
Section from the Company to each International Underwriter, but only with 
reference to written information relating to such International 
Underwriter furnished to the Company by or on behalf of such International 
Underwriter through the International Representatives specifically for 
inclusion in the documents referred to in the foregoing indemnity.  This 
indemnity agreement will be in addition to any liability which any 
International Underwriter may otherwise have.  The Company acknowledges 
that the statements set forth in the last paragraph of the cover page and 
under the heading "Underwriting" in any Preliminary Prospectus and the 
Prospectus constitute the only information furnished in writing by or on 
behalf of the several International Underwriters for inclusion in any 
Preliminary Prospectus or the Prospectus, and you, as the International 
Representatives, confirm that such statements are correct.

		(d)  Each of the Company and Water Street hereby confirms its 
indemnification obligations contained in Section 4.9 of the Water Street 
Agreement, which Section is incorporated herein by reference.

		(e)  Promptly after receipt by an indemnified party under this 
Section 8 of notice of the commencement of any action, such indemnified 
party will, if a claim in respect thereof is to be made against the 
indemnifying party under this Section 8, notify the indemnifying party in 
writing of the commencement 

thereof; but the failure so to notify the 
indemnifying party (i) will not relieve it from liability under paragraph 
(a), (b) or (c) above unless and to the extent it did not otherwise learn 
of such action and such failure results in the forfeiture by the 
indemnifying party of any material right or defense and (ii) will not, in 
any event, relieve the indemnifying party from any obligations to any 
indemnified party other than the indemnification obligation provided in 
paragraph (a), (b) or (c) above.  The indemnifying party shall be entitled 
to appoint counsel of the indemnifying party's choice at the indemnifying 
party's expense to represent the indemnified party in any action for which 
indemnification is sought (in which case the indemnifying party shall not 
thereafter be responsible for the fees and expenses of any separate 
counsel retained by the indemnified party or parties except as set forth 
below); provided, however, that such counsel shall be satisfactory to the 
indemnified party.  Notwithstanding the indemnifying party's election to 
appoint counsel to represent the indemnified party in an action, the 
indemnified party shall have the right to employ separate counsel 
(including local counsel), and the indemnifying party shall bear the 
reasonable fees, costs and expenses of such separate counsel if (i) the 
use of counsel chosen by the indemnifying party to represent the 
indemnified party would present such counsel in its reasonable judgment 
with a conflict of interest, (ii) the actual or potential defendants in, 
or targets of, any such action include both the indemnified party and the 
indemnifying party and the indemnified party shall have reasonably 
concluded that there may be legal defenses available to it and/or other 
indemnified parties which are different from or additional to those 
available to the indemnifying party, (iii) the indemnifying party shall 
not have employed counsel satisfactory to the indemnified party to 
represent the indemnified party within a reasonable time after notice of 
the institution of such action or (iv) the indemnifying party shall 
authorize the indemnified party to employ separate counsel at the expense 
of the indemnifying party.  It being understood and agreed that the 
indemnifying party shall bear the fees, costs and expenses of only one 
counsel pursuant to this paragraph.  An indemnifying party will not, 
without the prior written consent of the indemnified parties, settle or 
compromise or consent to the entry of any judgment with respect to any 
pending or threatened claim, action, suit or proceeding in respect of 
which indemnification or contribution may be sought hereunder (whether or 
not the indemnified parties are actual or potential parties to such claim 
or action) unless such settlement, compromise or consent includes an 
unconditional release of each indemnified party from all liability arising 
out of such claim, action, suit or proceeding.  No indemnifying party 
shall be liable for any settlement of any commenced or threatened action 
or proceeding effected without its written consent.

		(f)  In the event that the indemnity provided in paragraph 
(a), (b) or (c) of this Section 8 is unavailable to or insufficient to 
hold harmless an indemnified party for any reason, the Company, the 
Selling Stockholder and the International Underwriters agree to contribute 
to the aggregate losses, claims, damages and liabilities (including legal 
or other expenses reasonably incurred in connection with investigating or 
defending same) (collectively "Losses") to which the Company, the Selling 
Stockholder and one or more of the International Underwriters may be 
subject in such proportion as is appropriate to reflect the relative fault 
of the indemnifying party on the one hand and the indemnified party on the 
other hand; provided, however, that in no case shall any International 
Underwriter (except as may be provided in any agreement among underwriters 
relating to the offering of the Securities) be responsible for any amount 
in excess of the underwriting discount or commission applicable to the 
Securities purchased by such International Underwriter hereunder.  If the 
allocation provided by the immediately preceding sentence is unavailable 
for any reason, or if such allocation provides a lesser sum to the 
indemnified party than the amount hereinafter calculated then the Company, 
the Selling Stockholder and the International Underwriters shall 
contribute in such proportion as is appropriate to reflect not only such 
relative fault but also the relative benefits of the indemnifying party 
and the indemnified party as well as any other equitable considerations.  
Benefits 

received by the Company shall be deemed to be equal to the net 
proceeds from the offering (before deducting expenses) received by the 
Company, benefits received by the Selling Stockholder shall be deemed to 
be equal to the net proceeds from the offering (before deducting expenses) 
received by the Selling Stockholders and benefits received by the 
International Underwriters shall be deemed to be equal to the total 
underwriting discounts and commissions, in each case as set forth on the 
cover page of the Prospectus.  Relative fault shall be determined by 
reference to whether any alleged untrue statement or omission relates to 
information provided by the Company, the Selling Stockholder or the 
International Underwriters.  The Company, the Selling Stockholder and the 
International Underwriters agree that it would not be just and equitable 
if contribution were determined by pro rata allocation or any other method 
of allocation which does not take account of the equitable considerations 
referred to above.  Notwithstanding the provisions of this Section 8(f), 
the Selling Stockholder shall not be required to contribute any amount 
under this Section 8(f) in excess of the amount by which the net proceeds 
received by the Selling Stockholder from the sale of Securities in the 
offering exceed the aggregate amount the Selling Stockholder has otherwise 
paid pursuant hereto and pursuant to Section 8(b); and no person guilty of 
fraudulent misrepresentation (within the meaning of Section 11(f) of the 
Act) shall be entitled to contribution from any person who was not guilty 
of such fraudulent misrepresentation.  For purposes of this Section 8, 
each person who controls the International Underwriter within the meaning 
of either the Act or the Exchange Act and each director, officer, employee 
and agent of the International Underwriter shall have the same rights to 
contribution as the International Underwriter, each person who controls 
the Company within the meaning of either the Act or the Exchange Act, each 
officer of the Company who shall have signed the Registration Statement 
and each director of the Company shall have the same rights to 
contribution as the Company, and each person who controls the Selling 
Stockholder within the meaning of either the Act or the Exchange Act and 
each director, officer, partner, employee and agent of the Selling Stock-
holder shall have the same rights to contribution as the Selling 
Stockholder, subject in each case to the applicable terms and provisions 
of this paragraph (f).  Contribution payments made under this Section 8 
are losses for purposes of Section 4.9 of the Water Street Agreement.

		9.  Default by an International Underwriter.  If any one or 
more International Underwriters shall fail to purchase and pay for any of 
the Securities agreed to be purchased by such International Underwriter or 
International Underwriters hereunder, and such failure to purchase shall 
constitute a default in the performance of its or their obligations under 
this Agreement, the remaining International Underwriters shall be 
obligated severally to take up and pay for (in the respective proportions 
which the amount of Securities set forth opposite their names in Schedule 
I hereto bears to the aggregate amount of Securities set forth opposite 
the names of all the remaining International Underwriters) the Securities 
which the defaulting International Underwriter or International Under-
writers agreed but failed to purchase; provided, however, that in the 
event that the aggregate amount of Securities which the defaulting Inter-
national Underwriter or International Underwriters agreed but failed to 
purchase shall exceed 10% of the aggregate amount of Securities set forth 
in Schedule I hereto, the remaining International Underwriters shall have 
the right to purchase all, but shall not be under any obligation to pur-
chase any, of the Securities, and if such nondefaulting International 
Underwriters do not purchase all the Securities, this Agreement will 
terminate without liability to any nondefaulting International Under-
writer, the Company or the Selling Stockholder.  In the event of a default 
by any International Underwriter as set forth in this Section 9, the 
Closing Date shall be postponed for such period, not exceeding seven days, 
as the International Representatives shall determine in order that the 
required changes in the Registration Statement and the Prospectus or in 
any other documents or arrangements may be effected.  Nothing contained in 
this Agreement shall relieve any 

defaulting International Underwriter of 
its liability, if any, to the Company, the Selling Stockholder and any 
nondefaulting International Underwriter for damages occasioned by its 
default hereunder.

		10.  Termination.  This Agreement shall be subject to 
termination in the absolute discretion of the International 
Representatives, by notice given to the Company and the Selling 
Stockholder prior to the Closing Date if prior to such time (i) trading in 
the Company's Common Stock shall have been suspended by the Securities and 
Exchange Commission or the New York Stock Exchange or trading in 
securities generally on the New York Stock Exchange shall have been 
suspended or limited or minimum prices shall have been established on such 
Exchange, (ii) a banking moratorium shall have been declared either by 
Federal or New York State authorities or (iii) there shall have occurred 
any outbreak or material escalation of hostilities or other calamity or 
crisis the effect of which on the financial markets of the United States 
is such as to make it, in the judgment of the International 
Representatives, impracticable to market the Securities.

		11.  Representations and Indemnities to Survive.  The 
respective agreements, representations, warranties, indemnities and other 
statements of the Company or its officers, of the Selling Stockholder, and 
of the International Underwriters set forth in or made pursuant to this 
Agreement will remain in full force and effect, regardless of any 
investigation made by or on behalf of the International Underwriters, the 
Selling Stockholder, or the Company or any of the officers, directors, 
partners or controlling persons referred to in Section 8 hereof, and will 
survive delivery of and payment for the Securities.  The provisions of 
Sections 7 and 8 hereof shall survive the termination or cancellation of 
this Agreement.

		12.  Notices.  All communications hereunder will be in writing 
and effective only on receipt, and, if sent to the International 
Representatives, will be mailed, delivered or telecopied and confirmed to 
them at Salomon Brothers International Limited at Victoria Plaza, 111 
Buckingham Plaza Road, London SW1W OSB, attn:            ; or, if sent to 
the Company, will be mailed, delivered or telecopied and confirmed to it 
at USG Corporation, 125 S. Franklin Street, Chicago, Illinois 60606, attn:  
Secretary, with a copy to Kirkland & Ellis, 200 E. Randolph Drive, 
Chicago, Illinois 60601, attn:  Francis J. Gerlits, P.C.; or, if sent to 
the Selling Stockholder, will be mailed, delivered or telecopied and 
confirmed to it at c/o Goldman, Sachs & Co., 85 Broad Street, New York, 
New York 10004, attn:  Barry S. Volpert; with a copy to Fried, Frank, 
Harris, Shriver & Jacobson, One New York Plaza, New York, New York 10004, 
attn:  David J. Greenwald, Esq.

		13.  Successors.  This Agreement will inure to the benefit of 
and be binding upon the parties hereto and their respective successors and 
the officers, directors, partners, employees, agents and controlling 
persons referred to in Section 8 hereof, and no other person will have any 
right or obligation hereunder.

		14.  Applicable Law.  This Agreement will be governed by and 
construed in accordance with the laws of the State of New York, without 
giving affect to the conflicts of laws principles thereof.

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

		16.  Entire Agreement.  This Agreement and the Water Street 
Agreement constitute the entire agreement among the parties hereto with 
respect to the transactions contemplated hereby.



		If the foregoing is in accordance with your understanding of 
our agreement, please sign and return to us the enclosed duplicate hereof, 
whereupon this letter and your acceptance shall represent a binding 
agreement among the Company, the Selling Stockholder and the several 
International Underwriters.

Very truly yours,

USG CORPORATION


By:	
Its:	


WATER STREET CORPORATE
RECOVERY FUND I, L.P.


By:  GOLDMAN, SACHS & CO., 
     General Partner 

By:                                  
                      
   Name:
   Title:

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

Salomon Brothers International Limited
Lazard Brothers & Co., Limited
Smith Barney Shearson Inc.

By:  Salomon Brothers International Limited

By:                                                              

For themselves and the other several
International Underwriters named in
Schedule I to the foregoing Agreement.


	SCHEDULE I

                                                      Number of Shares
International Underwriters                            to be Purchased   

Salomon Brothers Interntional Limited                       537,500
Lazard Brothers and Co., Limited                            537,500
Smith Barney Shearson Inc.                                  537,500

ABN AMRO Bank N.V.                                           43,750
Banque Paribas                                               43,750
Barclays de Zoete Wedd Limited                               43,750
Deutsche Bank Aktiengsellschaft                              43,750
NatWest Securities Limited                                   43,750
Yamaichi International (Europe) Limited                      43,750

TOTAL                                                     1,875,000



	EXHIBIT A

AGREEMENTS


		Letter Agreement, dated February 25, 1993, among USG 
Corporation, Water Street Corporate Recovery Fund I, L.P., Goldman, Sachs 
& Co. and The Goldman Sachs Group, L.P.

		Amendment No. 1, dated February 22, 1994, to Letter Agreement, 
dated February 25, 1993, among USG Corporation, Water Street Corporate 
Recovery Fund I, L.P., Goldman, Sachs & Co. and The Goldman Sachs Group, 
L.P.

		Amended and Restated Credit Agreement dated as of May 6, 1993 
between USG Corporation and USG Interiors, Inc. as borrowers; the 
Financial Institutions listed on the signature pages thereof, as senior 
lenders; Bankers Trust Company, Chemical Bank and Citibank, N.A., as 
agents; and Citibank, N.A., as Administrative Agent (the "Amended and 
Restated Credit Agreement")

		First Amendment, dated August 1, 1993, to Amended and Restated 
Credit Agreement

		Second Amendment, dated as of January 31, 1994, to Amended and 
Restated Credit Agreement

		Indenture, dated October 1, 1986, between USG Corporation and 
Harris Trust and Savings Bank, as supplemented

		Indenture, dated as of April 26, 1993, among USG Corporation, 
certain guarantors and State Street Bank and Trust Company, as Trustee 
(the "10 1/4% Senior Notes Indenture")

		Indenture, dated as of August 10, 1993, among USG Corporation, 
certain guarantors and State Street Bank and Trust Company, as Trustee

		Amended and Restated Subsidiary Guarantees, dated as of May 6, 
1993

		Contingent Payment Guarantees issued pursuant to the 10 1/4% 
Senior Notes Indenture

		Amended and Restated Collateral Trust Agreement, dated as of 
May 6, 1993 between USG Corporation, USG Interiors, Inc. and USG Foreign 
Investments, Ltd., as guarantors, and Wilmington Trust Company and William 
J. Wade, as trustees (the "Amended and Restated Collateral Trust 
Agreement")

		First Amendment, dated August 1, 1993, to Amended and Restated 
Collateral Trust Agreement

		Second Amendment, dated as of January 31, 1994, to Amended and 
Restated Collateral Trust Agreement

		First Amendment, dated August 1, 1993, to Amended and Restated 
Subsidiary Guarantees

		Reaffirmation, dated as of January 31, 1994, of Guarantees



	EXHIBIT B

	LOCK-UP AGREEMENT


							March   , 1994


Salomon Brothers Inc
Lazard Freres & Co.
Smith Barney Shearson Inc.
As Representatives of the 
  Several Underwriters,
c/o Salomon Brothers Inc
7 World Trade Center
New York, New York  10048

Salomon Brothers International Limited
Lazard Brothers & Co., Limited
Smith Barney Shearson Inc.
As International Representatives of the
  Several International Underwriters 
c/o Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London SW1W 0SB, England

Gentlemen and Ladies:

		The undersigned understand that USG Corporation, a Delaware 
corporation (the "Company"), has filed a Registration Statement on Form 
S-1 (file number 33-51845) (as amended, the "Registration Statement") with 
the Securities and Exchange Commission (the "SEC") in connection with a 
proposed underwritten public offering (the "Offering") of its Common 
Stock, par value $0.10 per share (the "Common Stock").  All capitalized 
terms not defined herein shall have the meanings ascribed in the 
Registration Statement.  

		At your request, and in consideration of your agreeing to act 
as underwriters in connection with the Offerings and for other good and 
valuable consideration, the undersigned hereby agree that, without the 
prior written consent of the representatives (the "Representatives") of 
the U.S. Underwriters and the International Underwriters, for a period of 
120 days following the date hereof, the undersigned will not offer, sell 
or contract to sell, or otherwise dispose of, directly or indirectly, or 
announce the offering of, any other shares of Common Stock or any 
securities convertible into, or exercisable or exchangeable for, shares of 
Common Stock; provided, however, Water Street may distribute such shares 
or securities held by it to its partners at any time after 90 days 
following the effective date of the Registration Statement, which partners 
(other than Goldman, Sachs & Co.) shall not be bound by this Agreement; 
provided, further, that Water Street and Goldman, Sachs & Co. may exercise 
any of their Warrants to purchase Common Stock.



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

Very truly yours, 

GOLDMAN, SACHS & CO.


By:
	                                      
	Name: 
	Title: 

WATER STREET CORPORATE RECOVERY
FUND I, L.P.

By:  GOLDMAN, SACHS & CO.,
	  General Partner

By:	                                  
	Name: 
	Title: 

Accepted as of the date hereof: 

Salomon Brothers Inc
Lazard Freres & Co.
Smith Barney Shearson, Inc.

By:  Salomon Brothers Inc


By:                                            
	Title:
	For itself and the Several
	  U.S. Underwriters

Salomon Brothers International Limited
Lazard Brothers & Co. Limited
Smith Barney Shearson Inc.

By:  Salomon Brothers International
		  Limited


By:                                            	
	Title:
	For itself and the Several Managers



EXHIBIT I

LOCK-UP AGREEMENT


						March __, 1994



Salomon Brothers Inc
Lazard Freres & Co.
Smith Barney Shearson Inc.
As Representatives of the
	Several Underwriters
c/o Salomon Brothers Inc
7 World Trade Center
New York, New York  10048

Salomon Brothers International Limited
Lazard Brothers & Co., Limited
Smith Barney Shearson Inc.
As International Representatives of the
	Several International Underwriters
c/o Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London SW1W OSB, England

Gentlemen and Ladies:
The undersigned understand that USG Corporation, a Delaware 
corporation (the "Company"), has filed a Registration Statement on Form 
S-1 (file number 33-51845) (as amended, the "Registration Statement") with 
the Securities and Exchange Commission (the "SEC") in connection with a 
proposed underwritten public offering (the "Offering") of its Common 
Stock, par value $0.10 per share (the "Common Stock").  All capitalized 
terms not defined herein shall have the meanings ascribed in the 
Registration Statement.
At your request, and in consideration of your agreeing to act as 
underwriters in connection with the Offering and for other good and 
valuable consideration, the undersigned hereby agree that, without the 
prior written consent of the representatives (the "Representatives") of 
the U.S. Underwriters and the International Underwriters, for a period of 

120 days following the date hereof, the undersigned will not offer, sell 
or contract to sell, or otherwise dispose of, directly or indirectly, or 
announce the offering of, any other shares of Common Stock or any 
securities convertible into, or exercisable or exchangeable for, shares of 
Common Stock; provided, however, Water Street may distribute such shares 
or securities held by it to its partners at any time after 90 days 
following the effective date of the Registration Statement, which partners 
(other than Goldman, Sachs & Co.) shall not be bound by this Agreement; 
provided, further, that Water Street and Goldman, Sachs & Co. may exercise 
any of their Warrants to purchase Common Stock.
This Agreement shall be governed by and construed in accordance with 
the laws of the State of New York.

Very truly yours,
GOLDMAN, SACHS & CO.

By:	
Name:
Title:

WATER STREET CORPORATE RECOVERY 
FUND I, L.P.

By:	GOLDMAN, SACHS & CO.,
	General Partner

By:	
Name:
Title:



Accepted as of the date hereof:

Salomon Brothers Inc
Lazard Freres & Co.
Smith Barney Shearson, Inc.

By:  Salomon Brothers Inc

By:	
Title:
	For itself and the Several
	  U.S. Underwriters

Salomon Brothers International Limited
Lazard Brothers & Co. Limited
Smith Barney Shearson Inc.

By:  Salomon Brothers International
	    Limited

By:	
	Title:
	For itself and the Several Managers