8-K

               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                            FORM 8-K

       Current Report Pursuant to Section 13 or 15(d) of
              the Securities Exchange Act of 1934

   Date of Report (Date of earliest event reported):   October 14, 1998

                         OWENS CORNING
     (Exact name of registrant as specified in its charter)

     

      Delaware             1-3660         34-4323452
      (State or other      (Commission    (IRS Employer
      jurisdiction of      File Number)   Identification No.)
      incorporation)




   One Owens Corning Parkway, Toledo, Ohio             43659
   (Address of principal executive offices)            (Zip Code)


   Registrant's telephone number, including area code:    (419)248-8000






  Item 2.  Acquisition or Disposition of Assets.
       
           On September 30, 1998, Owens Corning, a Delaware
           corporation (the "Company"), completed the sale (the
           "Sale Transaction") of a 51% membership interest (the
           "Transferred Interest") in Advanced Glassfiber Yarns LLC,
           a Delaware limited liability company ("AGY"), to AGY
           Holdings, Inc., a Delaware corporation ("Holdings").
           Holdings is a wholly-owned subsidiary of Glass Holdings
           Corp., a Delaware corporation ("GHC") and a wholly-owned
           subsidiary of Groupe Porcher Industries, a French
           corporation ("Porcher").  Porcher and its affiliates are
           existing customers of AGY.  The Company has indirectly
           retained a 49% membership interest in AGY through
           Jefferson Holdings, Inc., a Delaware corporation and a
           wholly-owned subsidiary of the Company ("Jefferson").
       
           On July 1, 1998, the Company contributed to AGY
           substantially all of the assets (including, but not
           limited to, equipment, real estate, intellectual
           property, inventory, customer contracts and accounts
           receivables) comprising its glass fiber yarns and
           specialty materials business in exchange for a 100%
           membership interest in AGY.  On July 31, 1998, the
           Company contributed a 49% membership interest in AGY to
           Jefferson and entered into an LLC Interest Sale and
           Purchase Agreement (as amended by Amendment No. 1 to LLC
           Interest Sale and Purchase Agreement dated September 30,
           1998, the "Sale Agreement") with AGY and GHC pursuant to
           which the Company agreed to sell the Transferred Interest
           to GHC or its wholly-owned subsidiary for a purchase
           price of $331,500,000.  Upon the closing of the Sale
           Transaction, AGY made a special pro rata distribution of
           $390,000,000 to its members, including a $191.1 million
           distribution to Jefferson.  Additionally, in accordance
           with the Sale Agreement, Jefferson received a further
           distribution from AGY of $9,262,000 in regard to AGY's
           estimated closing date net asset valuation.  At the
           conclusion of the Sale Transaction and distributions, the
           Company and its subsidiaries received aggregate cash
           proceeds of $529,612,000 (net of certain transaction
           costs).
       
           Simultaneously with the closing of the Sale Transaction,
           the Company and AGY entered into a number of agreements
           pursuant to which the Company and AGY have agreed to sell
           or make available to one another various raw materials,
           certain services, capital equipment and products over a
           five to seven-year period on agreed terms and prices.
       
           All of the foregoing information is qualified in its
           entirety by reference to the copy of the Sale Agreement
           which is attached hereto as Exhibit 1 and incorporated
           herein by reference.


  Item 7. Financial Statements and Exhibits.

           Pro Forma Financial Statements


                            EXHIBITS

       
       Designation                Description           Method of Filing
       
      Exhibit 2               LLC Interest Sale and     Filed with this report
                                  Purchase Agreement       
      Exhibit 2.1             Amendment No. 1 to LLC    Filed with this report
                                  Interest Sale and 
                                  Purchase Agreement
      Exhibit 99              Pro Forma Financial       Filed with this report
                                  Statements
       
       
       
       
                                


                           SIGNATURES

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

                                   OWENS CORNING
                                   Registrant

Date: October 14, 1998             By: /s/Domenico Cecere
                                   Domenico Cecere
                                   Senior Vice President and
                                   Chief Financial Officer





                         EXHIBIT INDEX

                    
  Exhibit    2    LLC Interest Sale and Purchase Agreement

                  Amendment No 1
  Exhibit  2.1    LLC Interest Sale and Purchase Agreement

  Exhibit   99    Notes to Pro Forma Financial Statements
                  Pro Forma Financial Statements

EX-2

                 LLC INTEREST SALE AND PURCHASE AGREEMENT

                                   among

                              OWENS CORNING;

                          LINCOLN YARNS, LLC; and

                           GLASS HOLDINGS, CORP;


                         Dated as of July 31, 1998




                 LLC INTEREST SALE AND PURCHASE AGREEMENT



     This LLC Interest Sale and Purchase Agreement, dated as of July 31,

1998, among OWENS CORNING, a Delaware corporation ("Seller"); LINCOLN

YARNS, LLC, a Delaware limited liability Company (the "Company") and GLASS

HOLDINGS, CORP., a Delaware corporation ("Buyer").



                                WITNESSETH:

     WHEREAS, the Company is engaged in the business of manufacturing and

selling glass fiber yarns and specialty materials (the "Business");

     WHEREAS, Seller owns a 51% membership interest in the Company (the

"Buyer Interest").

     WHEREAS, Buyer desires to purchase from Seller and Seller desires to

sell to Buyer, on the terms and subject to the conditions of this

Agreement, the Buyer Interest;

     WHEREAS, capitalized terms used in this Agreement shall have the

meanings ascribed to them in Section 10.10 and all monetary amounts

specified in this Agreement are in United States Dollars.

     NOW, THEREFORE, in consideration of the premises and the mutual

promises and agreements contained herein, and for other good and valuable

consideration, the receipt and sufficiency of which are hereby

acknowledged, the parties hereby agree as follows:




1   SALE OF INTEREST; PURCHASE PRICE AND ADJUSTMENTS

    1.1  Sale of Interest.

          Subject to the satisfaction or waiver of the conditions set forth

in this Agreement, at the Closing and as of the Closing Date, Seller shall

sell, assign, transfer, convey and deliver to Buyer, free of all liens and

encumbrances, and Buyer shall purchase, the Buyer Interest.

    1.2  Purchase Price.

          The aggregate purchase price for the Buyer Interest shall be

three hundred fifty-seven million Dollars ($357,000,000) in the aggregate,

subject to adjustment as provided in Section 1.4 (the "Purchase Price").

    1.3  Payment of Purchase Price.

          The Purchase Price shall be payable on the Closing Date by wire

transfer of immediately available federal funds to such bank account or

accounts as shall be designated by Seller to Buyer prior to the Closing.

    1.4  Purchase Price Adjustment

          (a)  Calculation of the Purchase Price Adjustment.  The Purchase

Price shall be increased or decreased, on a dollar-for-dollar basis, by 51%

of the amount by which the Net Asset Value of the Company as of the Closing

Date (the "Closing NAV"), as finally determined pursuant to Section 1.4(d)

below, is greater or less than twenty nine million two hundred seventy

thousand dollars ($29,270,000) (the "Base NAV").  The calculation of the

Base NAV is set forth on Schedule 1.4(a).  If the Closing NAV is greater

than the Base NAV, then Buyer shall pay to Seller 51% of the amount of such

excess.  If the Closing NAV is less than the Base NAV, then Seller shall

pay to Buyer 51% of the amount of such deficiency.  Such Purchase Price

adjustment shall be paid as set forth in Sections 1.4(b) and (e) below.

          (b)  Estimated Adjustment.  On the Closing Date, Seller shall

deliver to Buyer a statement (the "Estimated Closing Statement") prepared

in accordance with GAAP setting forth a calculation of Seller's good faith






estimate of the Closing NAV (the "Estimated Closing NAV").  If the

Estimated Closing NAV as set forth on the Estimated Closing Statement is in

excess of the Base NAV, the Purchase Price payable at the Closing shall be

increased by an amount equal to 51% of such excess.  If the Estimated

Closing NAV as set forth on the Estimated Closing Statement is less than

the Base NAV, then the Purchase Price payable at the Closing shall be

decreased by an amount equal to 51% of such deficiency.

          (c)  Closing NAV.  Within ninety (90) days after the Closing,

Seller will prepare and deliver to Buyer a balance sheet of the Company as

of the Closing Date prepared in accordance with GAAP together with a

statement setting forth a calculation of the Closing NAV (the "Closing

Statement").  At the option of the Buyer, exercisable in writing on or

before the Closing Date, the Closing Statement shall be audited by

PricewaterhouseCoopers LLP, the cost of such audit shall be borne by the

Company.  Buyer shall cooperate fully and shall cause the Company to

provide Seller with all assistance and access to books and records

necessary for Seller to prepare the Closing Statement.  In connection

therewith, Buyer and Seller will jointly conduct a physical inventory of

the Inventory as of the Closing Date in accordance with the procedures to

be mutually agreed by Buyer and Seller acting reasonably and in good faith]

and, at Buyer's option, such physical inventory will be observed by Buyer's

auditors, PricewaterhouseCoopers LLP, and at Seller's option, such physical

inventory will be observed by Seller's auditors, Arthur Andersen LLP.

          (d)  Closing Calculation.

               (i)  Buyer shall be entitled to full access to the relevant

records and working papers prepared by or for Seller, and to Seller's

employees involved in such preparation, to aid in its review of the

calculation of the Closing NAV set forth on the Closing Statement.  If

Buyer believes that the Closing NAV calculation (hereinafter the "Closing

Calculation") has not been properly calculated in accordance with the

calculation methodologies set forth in this Section 1.4, it shall, within

thirty (30) days after receipt of the Closing Calculation, give written

notice (the "Buyer's Objection") to Seller, setting forth the basis of the





Buyer's Objection in reasonable detail and, to the extent practicable, the

adjustments to the Closing Calculation which Buyer believes should be made.

Failure to so notify Seller within such thirty (30) day period shall

constitute acceptance and approval of the Closing Calculation.  There shall

be no adjustment to the Closing Calculation unless the cumulative amount of

Buyer's Objection equals or exceeds one million dollars ($1,000,000.00) and

provided that any individual item of adjustment contained in Buyer's

Objection which is less than fifty thousand dollars ($50,000.00) shall be

excluded in its entirety.  If Seller agrees that any change proposed by

Buyer is appropriate, the change shall be made to the Closing Calculation,

whereupon Buyer shall be deemed to have accepted and approved the Closing

Calculation with respect to such change and any other non-disputed item of

the Closing Calculation.  If the proposed change is disputed by Seller,

then Seller and Buyer shall negotiate in good faith to resolve such dispute

as expeditiously as possible.  If, after a period of thirty (30) days

following the date on which Buyer gives Seller notice of any such proposed

change, any such proposed change still remains disputed, then:

               (ii) KPMG Peat Marwick LLP (the "Neutral Accounting Firm")

shall be engaged to resolve any remaining disputes.  The Neutral Accounting

Firm shall act as an arbitrator to determine, based solely on presentations

submitted by Seller and Buyer, and not by independent review, only those

issues still in dispute.  Each of Buyer and Seller shall have made its

complete submission to the Neutral Accounting Firm within ten (10) days

following the expiration of the thirty (30) day negotiation period

described in Section 1.4(d)(i).  The failure by either party to make a

complete submission prior to the expiration of such ten (10) day period

shall be deemed a waiver of such party's right to make a submission or a

further submission to the Neutral Accounting Firm.  The Neutral Accounting

Firm's determination, based upon the calculation methodologies set forth in

this Section 1.4, shall be made within thirty (30) days following the date

on which the dispute is submitted, shall be set forth in a written

statement delivered to Seller and Buyer, and shall be final, binding and

conclusive.  The fees and any expenses of the Neutral Accounting Firm shall

be shared equally by Seller and Buyer.  In the event a party does not





comply with the procedure and time requirements contained herein, the

Neutral Accounting Firm shall render a decision based solely on the

evidence it has which was timely filed by either of the parties.

          (e)  Payment of Cash Purchase Price Adjustment.  If the Closing

NAV shown on the Closing Statement exceeds the Estimated Closing NAV, then

the Purchase Price shall be increased by an amount equal to 51% of such

excess and if the Closing NAV shown on the Closing Statement is less than

the Estimated Closing NAV, then the Purchase Price shall be decreased by an

amount equal to 51% of such deficiency.  Payment of any adjustment in the

Purchase Price pursuant to this Section 1.4(e) shall be made by wire

transfer to an account designated by Seller or Buyer, as the case may be,

in United States Dollars, in immediately available federal funds within

three (3) business days after the Closing Calculation has been finally

determined together with interest from the Closing Date to the date of

payment at the "base rate" of Citibank, N.A. or any successor thereto in

New York, New York in effect on the Closing Date, based on a 360-day year.


2  REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Buyer that:

     2.1  Corporate Existence  

          Seller is a Delaware corporation duly incorporated, validly

existing and in good standing under the laws of the jurisdiction of its

incorporation.

      2.2  LLC Organization and Qualification  

          The Company is a limited liability company duly formed, validly

existing and in good standing under the laws of Delaware and the Company

has the requisite power and authority to own, lease and operate the Assets

and to carry on the Business as the same is now being conducted, except

where the failure to do so would not have a material adverse effect on the

results of operations, financial condition or business of the Business,

taken as a whole, or upon the ability of Seller or its Affiliates to

consummate the transaction contemplated hereby or perform their obligations





under the Agreement or the Ancillary Agreements (a "Material Adverse

Effect").  The Company is duly authorized, qualified or licensed to do

business as a foreign limited liability company and in good standing in

every jurisdiction wherein, by reason of the nature of the Business or the

character of the Assets, the failure to be so qualified would have a

Material Adverse Effect.  Seller has delivered to Buyer complete, true and

correct copies of the Company's Certificate of Formation and its Operating

Agreement.  The Company has no assets other than those related to the

Business and conducts no business other than the Business.  Except as may

be contemplated by Section 4.29, the Company has no subsidiaries and on the

Closing Date will have no subsidiaries.


    2.3   Capitalization of the LLC.

          The Company has authorized capitalization consisting solely of

ownership interests as described in the Operating Agreement (the "Interests").  

Seller is the owner of the Buyer Interest and Jefferson Holdings Inc.,

a Delaware corporation and a wholly-owned subsidiary of Seller, owns the

remaining 49% ownership interest of the Company.  All of the Interests have

been duly authorized, validly issued and are fully paid.  None of the

Interests has been issued in violation of any preemptive right.  The

Company has no other equity securities or other evidences of ownership

outstanding other than the Interests.  Except as contemplated by this

Agreement, there are no outstanding subscriptions, options, warrants,

rights, calls, commitments, conversion rights, rights of exchange, plans or

other agreements of any character providing for the purchase, issuance,

transfer or sale of any of the Interests or any other equity securities of

the Company or other evidence of ownership in the Company.  There are no

voting trusts, proxies or other agreements or understandings with respect

to the Interests.

        2.4.  Corporate Authority.

          The execution and delivery of this Agreement, the Ancillary

Agreements to which Seller, NVOC and OCC are parties and the consummation

of all of the transactions provided for herein and therein have been or, in






the case of NVOC and OCC, will be duly authorized by the Board of Directors

of each of Seller, NVOC and OCC and no other corporate or stockholder

approval is required to be obtained prior to the Closing.  The execution

and delivery of this Agreement has been duly authorized by the Company.

Each of Seller, NVOC and OCC has the corporate power and authority to

execute and deliver this Agreement and/or the Ancillary Agreements (as

applicable) and to perform its obligations hereunder and thereunder.  The

Company has the power and authority to execute and deliver this Agreement.

This Agreement has been and the Ancillary Agreements will be duly executed

and delivered by each of Seller and, to the extent they are parties

thereto, NVOC and OCC, and constitutes or will constitute a valid and

legally binding obligation of Seller, NVOC and OCC (as applicable)

enforceable in accordance with its terms, except as enforceability may be

(i) limited by bankruptcy, insolvency, fraudulent conveyance or other

similar laws affecting the enforcement of creditor's rights, or

(ii) subject to general principles of equity.  This Agreement has been duly

executed and delivered by the Company and constitutes a valid and legally

binding obligation of the Company enforceable in accordance with its terms,

except as enforceability may be (i) limited by bankruptcy, insolvency,

fraudulent conveyance or other similar laws affecting the enforcement of

creditor's rights, or (ii) subject to general principles of equity.

    2.5  No Conflicts.

          The execution and delivery of this Agreement and the Ancillary

Agreements do not and the performance by Seller of its obligations under

this Agreement and the consummation of the transactions contemplated hereby

and thereby will not (a) conflict with or result in a violation or breach

of any provision of the Certificate of Incorporation or By-Laws or any

similar documents of Seller, NVOC or OCC and, in the case of the Company,

conflict with or breach any provision of the Certificate of Formation of

the Company or its Operating Agreement; (b) assuming receipt of the

Required Consents, violate any provisions of Law to which Seller or the

Company, NVOC or OCC are subject, or by which the Assets are bound, except

for any such violation which would not have a Material Adverse Effect; or

(c) except as disclosed on Schedule 2.5, conflict with, result in a







violation or breach of or constitute a default or result in the creation of

any material Encumbrance upon any of the Assets under the terms of any

Material Contract to which Seller, the Company, NVOC or OCC is a party or

is otherwise subject or by which the Assets are bound, or violate any

material statute, rule, regulation, ordinance, code, order, judgment,

ruling, writ, injunction, decree or award to which Seller, the Company,

NVOC, OCC or the Assets are subject, except for any such violations,

breaches or defaults which individually or in the aggregate would not have

a Material Adverse Effect.

      2.6  Governmental Approvals: Consents.

          Neither Seller nor the Company, NVOC or OCC is subject to any

order, judgment or decree which would prevent the consummation of the

transactions contemplated hereby.  No claim, legal action, suit,

arbitration, governmental investigation, action or other legal or

administrative proceeding is pending or, to the knowledge of Seller,

threatened against Seller, the Company, NVOC or OCC which would enjoin or

delay the transactions contemplated hereby.  Except as set forth on

Schedule 2.6 hereto, no consent, approval, order or authorization of,

license or permit from, notice to or registration, declaration or filing

with, any governmental authority or entity, domestic or foreign, or any

third party under any Material Agreement is or has been required on the

part of Seller, the Company, NVOC or OCC in connection with the execution

and delivery of this Agreement or the consummation of the transactions

contemplated hereby, except for such consents, approvals, orders or

authorizations of, licenses or permits, notices, registrations,

declarations or filings which have already been obtained or made or the

failure to obtain or make would not have a Material Adverse Effect.

      2.7  Financial Statements.

          Schedule 2.7 contains a copy of (i) the audited Statement of Net

Assets of the Aiken and Huntingdon Manufacturing Facilities (including the

OCC Assets) as of December 31, 1996 and 1997 and the related Statements of

Revenues and Certain Expenses for the three years ended December 31, 1997

(the "Historical Annual Financial Statements"), (ii) the unaudited






statement of Net Assets of the Aiken and Huntingdon Manufacturing

Facilities (including the OCC Assets) as of March 31, 1998 and the related

Statement of Revenues and Certain Expenses for the three-month period ended

March 31, 1998 (the "Historical Interim Financial Statements" and, together

with the Historical Annual Financial Statements, the "Historical Financial

Statements") (iii) the Pro Forma Statements of Net Assets To Be Sold of the

Business, NVOC and OCC as of December 31, 1997 and the related Pro Forma

Statements of Revenues and Certain Expenses for the year ended December 31,

1997 and (iv) the Interim Pro Forma Statement of Net Assets to be sold of

the Business, NVOC and OCC as of March 31, 1998 and the related Interim Pro

Forma Statement of Revenues and certain expenses for the three month period

ended March 31, 1998 (the "Pro Forma Information " and together with the

Historical Financial Statements, the "Financial Statements").  The

Historical Annual Financial Statements have been prepared to present the

net assets of the Aiken and Huntingdon Manufacturing Facilities (including

the OCC Assets).  The Historical Annual Financial Statements present

fairly, in all material respects, the net assets of the Aiken and

Huntingdon Manufacturing Facilities (including the OCC Assets) as of

December 31, 1996 and 1997 and the related revenues and certain expenses of

the Aiken and Huntingdon Manufacturing Facilities for the three years ended

December 31, 1997, in conformity with GAAP on the basis specified in the

notes thereto. The Historical Interim Financial Statements have been

prepared in accordance with GAAP and present fairly, in all material

respects, the net assets of the Aiken and Huntington Manufacturing

facilities (including the OCC Assets) as of March 31, 1998 and the revenues

and certain expenses of the Aiken and Huntington Manufacturing facilities

(including the OCC Assets) for the three months ended March 31, 1998,

subject to normal year-end adjustments.  The Pro Forma Information has been

prepared to give effect to the events described in Notes 1 and 2 of the

Pro Forma Information and should be read in conjunction with the Historical

Financial Statements.  The Pro Forma Information is unaudited and is not

necessarily indicative of the results that would have actually occurred had

the sale been consummated, or of the results which may be obtained in the






future; however, subject to the foregoing, the Pro Forma Information

reasonably presents the assets and liabilities and revenues and certain

expenses of the Business as of the dates and for the periods presented,

pro forma for the events described in Notes 1 and 2 of the Pro Forma

Information.  All Financial Statements and Historical Interim Financial

Statements are qualified by the fact that the Business has not operated as

a separate "stand-alone" entity within Seller and as a result, the Business

received certain allocated charges and credits as discussed more fully in

the notes accompanying such Financial Statements.  Such charges and

credits, while believed by Seller to be reasonable, do not necessarily

reflect the amounts which would have resulted from arm's-length

transactions.  In order to present the Financial Statements and Historical

Interim Financial Statements for the Business, a number of significant

assumptions regarding the basis of presentation have been made, all of

which are believed by Seller to be reasonable and are outlined in the notes

to such Financial Statements.

          The books, records, and accounts of Seller maintained with

respect to the Business accurately and fairly reflect, in all material

respects, the assets and liabilities of the Business on the basis described

in the Notes to the Financial Statements.

2.8  Absence of Changes.

          Except as otherwise disclosed on Schedule 2.8 or as contemplated

by this Agreement or the ACA, since March 31, 1998, (i) the Business has

been conducted in all material respects in the ordinary course consistent

with past practice; and (ii) there has not been any:

               (i)  change in the Business, other than seasonal changes,

changes relating to the economy in general or changes relating to the

industry in which the Business operates in general, none of which

individually or in the aggregate has had a Material Adverse Effect;

               (ii) material change in accounting methods, principles or

practices utilized by Seller with respect to the Business, or the Company

except as required by law or by generally applicable changes instituted in

the accounting profession;





               (iii)     material damage, destruction or loss (whether or

not covered by insurance) to a material tangible Asset;

               (iv) waiver or release of any material right or claim of

Seller or the Company with respect to the Business;

               (v)  increase in the rate of compensation payable or to

become payable to any employee of the Business, except increases in the

ordinary course of business or pursuant to a collective bargaining

agreement;

               (vi) adverse change in employee relations having a Material

Adverse Effect;

               (vii)     amendment, cancellation or termination (other than

a scheduled termination as set forth therein) of any Material Contract;

               (viii)    sale, assignment or transfer of any material

portion of the Assets, other than pursuant to the Asset Contribution

Agreement or in the ordinary course of business of the Business;

               (ix) material changes in payment terms with material

customers or suppliers;

               (x)  failure to make capital expenditures in the ordinary

course consistent with past practice;

               (xi) failure to maintain the Assets in the ordinary course

consistent with past practice; or

               (xii)     agreement by Seller, the Company, NVOC or OCC (as

applicable) to do any of the things described in the preceding clauses (i)

through (xi) other than as expressly provided for herein.

2.9  Real and Personal Properties.

          (a)  The Company has or will have on the Closing Date good title

to, or a valid and binding leasehold interest in, the real or personal

property included in the Assets, free and clear of all liens, charges and






other encumbrances, except (i) as set forth on Schedule 2.9(a); (ii) as

disclosed in the Financial Statements; (iii) liens for Taxes not yet due

and payable or, if due, (A) not delinquent or (B) being contested in good

faith by appropriate proceedings during which collection or enforcement

against the property is stayed; (iv) mechanics', workmen's, repairmen's,

warehousemen's, carriers' or other like liens arising or incurred in the

ordinary course of business if the underlying obligations are not past due,

original purchase price conditional sales contracts and equipment leases

with third parties entered into in the ordinary course of business; (v)

with respect to real property, (A) easements, licenses, covenants,

rights-of-way and other similar restrictions, including, without

limitation, any other agreements or restrictions shown by the current title

reports described on Schedule 2.9(a)(v)(A), (B) any conditions that may be

shown by a current survey, title report or physical inspection and (C)

zoning, building and other similar restrictions, so long as none of (A),

(B) or (C) renders the title of such real property unmarketable or prevents

the use of such real property substantially as currently used; (vi) other

liens, charges or other encumbrances which would not have a Material

Adverse Effect and (vii) with respect to the Leased Real Property, liens or

encumbrances created by, through or under the lessor thereof or its

predecessors in interest, (such liens, charges and encumbrances described

in clauses (i)-(vii) hereof are referred to herein as "Permitted Liens").

          (b)  Schedule 2.9(b) contains a list of the Owned Real Property

and all Real Property Leases principally used in the Business (the real

property covered by such Real Property Leases is hereinafter referred to

the "Leased Real Property" and, together with the Owned Real Property, the

"Real Property"), including all buildings, structures and other

improvements situated thereon (individually referred to as a "Facility"

and, collectively, as the "Facilities").  Except as set forth on Schedule

2.9(b) and except in each case as would not have a Material Adverse Effect,

(i) there are no parties in possession of any portion of the Owned Real or

the Leased Real Properties included in the Assets as lessees, tenants at

sufferance or trespassers other than the Company; and (ii) to the knowledge

of Seller, there is no pending special assessment affecting the Owned Real






Properties or any part thereof included in the Assets.  Except as provided

on Schedule 2.9(b), Seller has received no actual notice, and Seller

otherwise has no actual knowledge, that the location, construction,

occupancy, operation or use of the buildings located on the Owned Real

Properties or the Leased Real Properties included in the Assets violates

any restrictive covenant or deed restriction or any other governmental

laws, orders, rules or regulations, except for such violations or

restrictions which would not have a Material Adverse Effect.

          (c)  All Inventory, whether reflected on the Financial Statements

or subsequently acquired, (i) has been or will be manufactured by Seller or

the Company in the ordinary course of business consistent with past

practice or acquired by Seller or the Company only in bona fide

transactions entered into in the ordinary course of business, (ii) is of

good and merchantable quality except to the extent adequately reserved for

in the Financial Statements consistent with past practice, (iii) is not now

and at the Closing Date will not be subject to any write-down or write-off

in excess of the reserves established based on past practice, and (iv) is

valued at the lesser of cost or net realizable market value, with

appropriate adjustments for stale and slow-moving Inventory in accordance

with GAAP.

          (d)  All Accounts Receivable shown on the Financial Statements

represent, and the Accounts Receivable of Seller or the Company outstanding

on the Closing Date will represent, sales actually made or services

actually performed in the ordinary course of business in bona fide

transactions completed materially in accordance with the terms and

provisions contained in any documents relating thereto.  The reserves for

uncollectible Accounts Receivable reflected on the Financial Statements

were established in accordance with GAAP and in accordance with Seller's

historical methods and practices in establishing such reserves.


  2.10  Contracts.

          (a)  Schedule 2.10(a) sets forth a true, correct and complete

list of all Contracts of the following categories (Contracts disclosed on







Schedule 2.10(a) are hereafter referred to as "Material Contracts"):

               (i)  Employment contracts and severance agreements,

including, without limitation, Contracts (A) to employ or terminate

executive officers or other personnel and other contracts with present or

former employees of the Business currently in effect or (B) that will

result in the payment by, or the creation of any commitment or obligation

(absolute or contingent) to pay on behalf of Seller or the Company any

severance, termination, "golden parachute," or other similar payments to

any present or former employees of the Business following termination of

employment or otherwise as a result of the consummation of the transactions

contemplated by this Agreement;

               (ii) Material distribution, franchise, license, sales,

commission, consulting agency or advertising contracts which are not

cancelable on thirty (30) calendar days notice;

               (iii)     Material options to buy or sell any property, real

or personal, included in the Assets;

               (iv) Contracts, NVOC Contracts and OCC Contracts each

individually involving aggregate expenditures of $100,000 or aggregate

receipts in excess of $1,000,000;

               (v)  Contracts containing covenants limiting the freedom of

the Company to compete with any Person during any period following the

Closing;

               (vi) Partnership and joint venture agreements related to the

Business; and

               (vii)     Commitments for capital expenditures that have

been approved or made prior to the date of this Agreement in excess of

$250,000 by Seller in respect of the Business or the Company and that

remain outstanding as of the date hereof.

          (b)  Each of Seller, the Company, NVOC or OCC (as applicable) has

furnished or shall have made available to Buyer prior to the Closing a true

and correct and complete copy of each Material Contract.  Each Material





Contract assigned or to be assigned (i) by Seller to the Company pursuant

to the ACA, (ii) by NVOC to the Company pursuant to the NVOC Asset Purchase

Agreement, or (iii) by OCC to the Company pursuant to the OCC Asset

Purchase Agreement, is valid and in full force and effect according to its

terms.  Except in regard to collective bargaining agreements (which is the

subject of Section 2.15), each of Seller, the Company, NVOC, or OCC (as

applicable) has duly performed all of its material obligations under such

Material Contracts to the extent those obligations to perform have accrued

and no material violation of, or material default or breach under, such

Material Contracts by Seller, the Company, NVOC or OCC (as applicable) has

occurred.  To the Knowledge of Seller, the Company, NVOC or OCC (as

applicable), the other parties to any of the Material Contracts are not in

material default or breach under any such Material Contract nor has Seller,

the Company, NVOC or OCC received notice that with notice or lapse of time

or both such other parties would be in violation or breach of or default

under any such Material Contract.

          (c)  Except for those Material Contracts listed on

Schedule 2.10(c), no Material Contract assigned to the Company pursuant to

the Asset Contribution Agreement, assigned by NVOC to the Company pursuant

to the NVOC Asset Purchase Agreement or assigned by OCC to the Company

pursuant to the OCC Asset Purchase Agreement requires the consent of any

other party thereto to effectuate the assignment thereof to the Company or

its subsidiaries.

          (d)  Except as indicated on Schedule 2.10(d), neither Seller nor

the Company has received written notice of any actual or threatened

termination, cancellation, or limitation of, or any amendment,

modification, or change to (i) any Material Contract, (ii) the business

relationship of Seller or the Company with any customer, distributor or

related group of customers or distributors whose purchases individually or

in the aggregate are material to the operations and financial condition of

the Business, (iii) the requirements of any customer or related group of

customers of Seller or the Company whose purchases individually or in the

aggregate are material to the operations and financial condition of the

Business, or (iv) the business relationship of Seller or the Company with

any material supplier to the Business, which termination, cancellation,





limitation, amendment, modification or change would have a Material Adverse

Effect.

  2.11  Litigation.

          Except as set forth on Schedule 2.11, there are no actions,

suits, proceedings or investigations pending or, to the Knowledge of

Seller, threatened in law or in equity, or before any governmental agency

(a) related to or affecting the Assets or the Business, (b) seeking to

delay, limit or enjoin the transactions contemplated by this Agreement or

(c) that would materially impair the abilities of Seller or its Affiliates

to perform their respective obligations under this Agreement or any of the

Ancillary Agreements.  Except as set forth on Schedule 2.11, neither Seller

nor the Company is in default under any judgment, order, injunction or

decree of any court or government agency relating to the Business.  There

are no unsatisfied judgments against the Assets or Seller, the Company,

NVOC or OCC.

  2.12  Intangible Property Rights.

          The Proprietary Rights, together with the Intellectual Property

Rights licensed to the Company pursuant to the Patent and Know How License

Agreement (the "Licensed Proprietary Rights"), constitute all of the

material Intellectual Property Rights as: (a) are in use, or have been

used, or are or were under development for use, in the Manufacturing

Facilities to manufacture Business Products on or before the Closing Date;

(b) are necessary to the use of the Business Manufacturing Technology; or

(c) are necessary to the continued manufacture of the Business Products

using the Business Manufacturing Technology.  Except as set forth on

Schedule 2.12, (a) the Company will on the Closing Date own and possess all

right, title and interest in and to all of the Proprietary Rights and will

have valid and subsisting licenses to continue to use the Licensed

Proprietary Rights in a manner consistent with past business practices of

the Business; (b) no claim by any third party contesting the validity,

enforceability, use or ownership of any of the Proprietary Rights or the

Licensed Proprietary Rights is pending or, to Seller's Knowledge, is

threatened and (c) neither Seller nor the Company has received any notice





of, and neither Seller nor the Company has any Knowledge of, any

infringement or misappropriation by any third party with respect to the

Proprietary Rights or the Licensed Proprietary Rights by the manufacture,

use or sale of Business Products, or any claim that any Proprietary Rights

or Licensed Proprietary Rights is invalid or unenforceable by Seller or the

Company; and (d) to Seller's Knowledge, the Company's use of the

Proprietary Rights is not infringing upon or otherwise violating the rights

of any third party.  All Proprietary Rights are assignable by Seller to the

Company, and all Licensed Proprietary Rights may be licensed by Seller or

one or more of its Affiliates to the Company in the manner contemplated by

the  Master Patent and Know How Assignment Agreement and the Patent and

Know How License Agreement.

  2.13.  Insurance.

          Seller has in force the policies of insurance set forth on

Schedule 2.13.  Seller has not been refused any insurance with respect to

the Business, by any insurance carrier to which it has applied for

insurance or with which it has carried insurance during the past five (5)

years. There are no outstanding requirements or recommendations by any

current insurer or underwriter with respect to the Business or the Assets

which require changes in the conduct of the Business, or require any

repairs or other work to be done with respect to any of the Assets or

operations of the Business.

  2.14  Tax Matters.

          (a)  Liens.  There are no liens (other than Permitted Liens) for

Taxes on any of the Assets.

          (b)  Safe Harbor Lease Property; Tax Exempt Use Property;

Security for Tax-Exempt Obligations.  None of the Assets (i) are required

to be treated as being owned by any other person pursuant to the so-called

safe harbor lease provisions of former Section 168(f)(8) of the Code; (ii)

directly or indirectly secures any debt the interest on which is tax-exempt

under Section 103(a) of the Code or (iii) is "tax-exempt use property"

within the meaning of Section 168(h) of the Code.






          (c)  United States Person.  Seller is a United States person

within the meaning of 7701(a)(30) of the Code.

  2.15  Employment and Benefits.

          (a)  Labor Controversies.  Except as described on

Schedule 2.15(a) or as a result of the transactions contemplated by the

ACA, (i) Seller and the Company are in compliance in all material respects

with all applicable laws respecting employment and employment practices,

terms and conditions of employment and wages and hours; (ii) Seller and the

Company have no material Liability for non-compliance with any collective

bargaining agreement related to the Business; (iii) there is no unfair

labor practice complaint against Seller or the Company pending before the

National Labor Relations Board; (iv) there is no labor strike, dispute,

slowdown or stoppage actually pending or threatened against or affecting

Seller or the Company; (v) within the past five years, neither Seller nor

the Company has experienced any strike, work stoppage or other labor

difficulty; and (vi) neither Seller nor the Company is a party to, or

subject to, a collective bargaining agreement, and no collective bargaining

agreement relating to employees included within the Business is currently

being negotiated.

          (b)  Employee Benefit Plans.

               (i)   For purposes of this Agreement, "Benefit Plans" shall

mean all employee benefit plans and programs (including any "employee

benefit plan" within the meaning of Section 3(3) of ERISA) maintained or

contributed to by Seller for the benefit of any Business Employee (or any

dependent thereof).  Schedule 2.15(b)(i) sets forth a list of each material

Benefit Plan.  No Benefit Plan is a multiemployer plan as defined in

Section 4001(a)(3) or 3(37) of ERISA.

               (ii) With respect to each material Benefit Plan, Seller has

made available to Buyer (A) copies of any written plan document relating

thereto and any description thereof, (B) the most recent determination or






opinion issued by the Internal Revenue Service, if applicable, (C) the most

recent Form 5500 filing, if applicable, and (D) lists of certain data

relating to Business Employees.

               (iii)     Except as described on Schedule 2.15(b)(iii), each

material Benefit Plan has been established and administered in accordance

with its terms and in material compliance with the applicable provisions of

ERISA, the Code and other applicable laws.  Each Benefit Plan intended to

qualify under Section 401(a) of the Code is the subject of a favorable

determination from the Internal Revenue Service as to its qualified status,

and to the knowledge of Seller, no event has occurred since the date of

such letter which would adversely affect such qualified status.

          (c)  Employment Contracts.  Except as described on

Schedule 2.15(c), there are no employment bonus, severance or similar

contracts between the Company, and any employee included within the

Business on the other hand, other than contracts representing the standard

terms and conditions prevailing between the Company and the Business

Employees.




  2.16  Compliance with Laws.

          To the best of Seller's knowledge, except as disclosed on

Schedule 2.16 and except for violations or defaults the existence of which

would not have a Material Adverse Effect, none of Seller, the Company, NVOC

or OCC is in any material respect in violation of or default under any Law

with respect to the operation of the Business or the Assets or has received

any notification thereof.

  2.17  Finders; Brokers.

          With the exception of fees and expenses payable to SBC Warburg

Dillon Read Inc., which shall be Seller's sole responsibility, neither

Seller nor the Company is a party to any agreement with any finder or

broker, or in any other way obligated to any finder or broker, for any

commissions, fees or expenses in connection with the origin, negotiation,

execution or performance of this Agreement.

  2.18  Environmental Matters.

          Except as disclosed on Schedule 2.18 and except as a result of

the transactions contemplated by the ACA:

          (a)  Seller is in compliance and on the Closing Date the Company

will be in compliance with all Environmental Laws applicable to the

Business as presently conducted, except for violations of such

Environmental Laws that would not have a Material Adverse Effect.

          (b)  Seller holds and is in compliance with, and on the Closing

Date the Company will hold and be in compliance with, all Licenses and

Permits required under Environmental Laws applicable to the Assets or the

conduct of the Business as presently conducted, except for the absence of,

or the noncompliance with, such Licenses and Permits that would not have a

Material Adverse Effect.

          (c)  Neither Seller nor the Company has received any written or,

to Seller's knowledge, other notice of any pending lawsuit, action,

proceeding, investigation or claim by any person or private or governmental

entity alleging a violation of or liability under any Environmental Law





arising from the conduct of the Business or with respect to any Real

Property, except in all such cases that would not have a Material Adverse

Effect.

          (d)  There has been no Release of any Hazardous Substance at any

Real Property or any real property previously owned, leased or operated by

Seller or the Company in respect of the Business that is in violation of or

is reasonably likely to lead to any liability arising under any

Environmental Law, except for any such violations or liability that would

not have a Material Adverse Effect.

          (e)  There is no material environmental assessment,

investigation, study, test, review, or audit report prepared by or for

Seller or the Company in relation to the Business or the Assets that has

not been delivered to or made available to Buyer prior to the date hereof.

          (f)  Neither Seller nor the Company has transported or arranged

for the treatment, storage, or disposal of any Hazardous Substances to any

off-site location in connection with the Business that has resulted in or

could result in a liability to Seller or the Company under applicable

Environmental Laws, except for any such liability that would not have a

Material Adverse Effect.

  2.19  Entire Business.

          Except as set forth on Schedule 2.19, the Assets, together with

the rights and services made available in the agreements described in

Sections 4.5, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17,

4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 4.24, 4.25, 4.26, 4.27, 4.28 and 4.29,

constitute all the assets, properties and rights necessary to conduct the

Business in all material respects as currently conducted.

  2.20  Disclaimer of Warranty.

          SELLER MAKES NO WARRANTY WITH RESPECT TO THE VALUE, CONDITION OR

USE OF THE ASSETS OWNED OR USED BY THE COMPANY, WHETHER EXPRESSED OR

IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF

MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.







  2.21  Inventory.

          Neither Seller, in respect of the Business, nor the Company is

under any liability or obligation with respect to the return of inventory

in the possession of distributors or other customers which shall not be

reserved against in the Closing Statement.

  2.22  Accounts Receivable.

          The Accounts Receivable outstanding on the Closing Date will be

subject to no defenses, counterclaims or rights of setoff other than those

arising in the ordinary course of business and for which adequate reserves

will have been established in the Closing Statement.








  2.23  No Other Representations or Warranties.

          Except for the representations and warranties contained in this

Section 2, none of Seller, the Company or any other person makes any other

express or implied representation or warranty on behalf of Seller or the

Company, including, without limitation, as to the probable success or

profitability of the ownership, use or operation of the Business or the

Assets by the Company after the Closing.


     Buyer represents and warrants that:

3  REPRESENTATIONS OF BUYER

   Buyer represents and warrants that:

   3.1  Corporate Existence. 

          Buyer is a corporation duly incorporated, validly existing and in

good standing under the laws of the jurisdiction of its incorporation and

has the requisite power and authority to acquire the Buyer Interest.  Buyer

is duly authorized, qualified or licensed to do business as a foreign

corporation and in good standing in every jurisdiction wherein, by reason

of the nature of the Business or the character of the Assets, the failure

to be so qualified would have a material adverse effect on the Company or

the ability of Buyer to consummate the transactions contemplated hereby (a

"Buyer Material Adverse Effect").

  3.2  Corporate Authority.

          The execution and delivery of this Agreement, the Ancillary

Agreements and the consummation of all of the transactions provided for

herein and therein have been duly authorized by the Board of Directors of

Buyer, and no other corporate or stockholder approval is required to be

obtained by Buyer prior to the Closing.  Buyer has the corporate power and

authority to execute and deliver this Agreement and the Ancillary

Agreements to which it is a party and to perform its obligations hereunder

and thereunder.  This Agreement has been duly executed and delivered by

Buyer, and constitutes a valid and legally binding obligation of Buyer,

enforceable in accordance with its terms, except as enforceability may be

(i) limited by bankruptcy, insolvency, fraudulent conveyance or other

similar laws affecting the enforcement of creditor's rights, or





(ii) subject to general principles of equity.

  3.3  No Conflicts.

          The execution and delivery of this Agreement by Buyer and the

Ancillary Agreements to which it is a party and the consummation by Buyer

of the transactions contemplated hereby and thereby will not violate or

conflict with any provision of the Certificate of Incorporation or By-Laws

of Buyer, or result in any breach or constitute any material default under

any contract, indenture, mortgage, lease, note or other agreement or

instrument to which Buyer is a party or otherwise subject, except for any

such violation, breach or default which would not have a Buyer Material

Adverse Effect.

  3.4  Governmental Approvals: Consents.

          Neither Buyer nor any of its Affiliates is subject to any order,

judgment or decree which would prevent the consummation of the transactions

contemplated hereby.  No claim, legal action, suit, arbitration,

governmental investigation, action or other legal or administrative

proceeding is pending or, to the knowledge of Buyer, threatened against

Buyer or any of its Affiliates which would enjoin or delay the transactions

contemplated hereby.  Except as set forth on Schedule 3.4 hereto, no

consent, approval, order or authorization of, license or permit from,

notice to or registration, declaration or filing with, any governmental

authority or entity, domestic or foreign, or of any third party, is or has

been required on the part of Buyer in connection with the execution and

delivery of this Agreement or the consummation of the transactions

contemplated hereby and, except for such consents, approvals, orders or

authorizations of, licenses or permits, notices, registrations,

declarations or filings which have already been obtained or made or the

failure of which to obtain or make would not have a Buyer Material Adverse

Effect.

  3.5  Finders; Brokers.

          With the exception of fees and expenses payable to First Union

Capital Markets, Buyer is not a party to any agreement with any finder or







broker, or in any other way obligated to any finder or broker, for any

commissions, fees or expenses in connection with the origin, negotiation,

execution or performance of this Agreement.

  3.6  Financial Capacity.

          Buyer has in hand cash and binding commitment letters (the

"Commitment Letters"), which are currently in effect and true and correct

copies of which are attached hereto as Schedule 3.6, with a reputable

financial institution or institutions, to provide all funds necessary to

enable Buyer and the Company to consummate the transactions described in

this Agreement (including the Company Financing, the "Financings").

  3.7  Knowledge of Buyer.

          In the course of performing its due diligence investigation,

neither Buyer nor its Affiliates, their respective officers, directors,

agents, employees or advisors have identified any facts which would render

any of Seller's representations incorrect, false or misleading.






  3.8  No Other Representations or Warranties.

          Except for the representations and warranties contained in this

Section 3, neither Buyer nor any other person makes any other express or

implied representation or warranty on behalf of Buyer.


4  AGREEMENTS OF BUYER AND SELLER

  4.1  Operation of the Business.

          Except as otherwise contemplated by this Agreement, the ACA or as

disclosed on Schedule 4.1, Seller covenants that until the Closing it will

and it will cause the Company to use all reasonable efforts to operate the

Business in a manner consistent with the past practices of the Business, to

maintain and preserve intact the Business and to maintain the ordinary and

customary relationships of the Business with its suppliers, customers and

others having business relationships with it with a view toward preserving

to and after the Closing Date the Business, the Assets and the goodwill

associated therewith.  Until the Closing Date, Seller shall cause the

Company to continue to operate and conduct the Business in the ordinary

course and maintain its books and records in accordance with Seller's past

practices with respect to the Business and will cause the Company not to,

without the prior written approval of Buyer or as otherwise contemplated by

this Agreement, Schedule 4.1 or the existing business plans related to the

Business, take any of the following actions:

          (a)  sell, transfer or otherwise dispose of or encumber any of

the properties or assets pertaining to the Business, other than (A) in the

ordinary course of business consistent with past practice, (B) any property

or asset which is not material to the results of operations, financial

condition or business of the Business and (C) the subdivision of Seller's

Aiken, South Carolina property as contemplated by the ACA;

          (b)  cancel any debt or waive any claim or right pertaining to

the Business, except in the ordinary course of business consistent with

past practice;

          (c)  grant any increase in the compensation of officers or






employees principally engaged in the Business (including any such increase

pursuant to any bonus, pension, profit sharing or other plan or commitment)

or enter into any employment agreement with any employee of the Business,

except for increases (i) in the ordinary course of business and consistent

with past practice, (ii) as a result of the collective bargaining described

on Schedule 4.1(c) or (iii) as required by any Benefit Plan;

          (d)  make any capital expenditure or commitment pertaining to the

Business or prepay any obligation related to the Business or the Assets,

other than (A) in the ordinary course of business consistent with past

practice, (B) pursuant to existing commitments disclosed to Buyer prior to

the execution of this Agreement or (C) those which are not material to the

results of operations, financial condition or business of the Business;

          (e)  except with respect to endorsement of negotiable instruments

in the ordinary course of the Business, incur, assume or guarantee any

indebtedness for borrowed money;

          (f)  dispose of or permit to lapse, other than through expiration

by operation of law (or in the case of the Licensed Proprietary Rights

pursuant to the terms of the relevant license) any rights to the

Proprietary Rights or the Licensed Proprietary Rights or any of the

intellectual property to be licensed to the Company under the Seller

License Agreement;

          (g)  enter into, materially modify, materially amend or terminate

any Material Contract, License or Permit intended to be assumed by the

Company pursuant to the ACA other than in the ordinary course of business

consistent with past practice (including the entering into any license in

respect of Proprietary Rights other than those described on Schedule

4.1(g));

          (h)  commence any litigation other than consistent with past

practice or settle any litigation involving liability for material money

damages or restrictions which will have a Material Adverse Effect on the

operation of the Business or the use of the Assets or on the ability of

Seller to perform its material obligations under this Agreement; or

          (i)  agree, whether in writing or otherwise, to do any of the

foregoing.







  4.2  Investigation of the Business; Confidentiality.

          (a)  Buyer may, prior to the Closing Date, make or cause to be

made such investigation of the business and properties of the Business and

of its financial and legal condition as Buyer deems necessary or advisable.

Seller will cause the Company to permit Buyer, Buyer's lenders and their

respective counsel, accountants, technical consultants and, to the extent

reasonably acceptable to Seller and the Company, other agents or

representatives of each of them, to have full access to the properties,

books and records of the Business at reasonable hours to review information

and documentation relative to the properties, books, contracts, commitments

and other records of the Business; provided, however, that Buyer shall not

have access to customer lists (or other customer-specific information) or

trade secrets prior to the Closing.

          (b)  Seller covenants that, from and after the date of this

Agreement (including after the Closing), it will not and it shall cause the

Company to not, without the prior written consent of the Buyer, disclose to

any person confidential information relating to or concerning the Company,

the Assets, the Business, or the Buyer obtained by, or in the possession

of, the Seller or the Company prior to the Closing Date (the "Buyer

Confidential Information"), except to its officers, directors, employees

and representatives who need to know such information for purposes of

taxes, accounting, litigation and other matters necessary in respect of the

Seller's ownership, prior to the Closing, of its Interest in the Company,

the Assets or the Business, unless, (i) upon the advice of the Seller's

counsel, disclosure is required to be made under the Securities Act of

1933, as amended, the Securities Exchange Act of 1934, as amended, any

other applicable Law or the Regulations of the New York Stock Exchange or

any other relevant securities exchange or trading market or (ii) disclosure

is necessary in the conduct of the Business.  In the event that Seller or

the Company is requested or required by subpoena, civil investigative

demand, interrogatories, requests for information, or other similar process

to disclose any Buyer Confidential Information which otherwise may not be

disclosed except as set forth in the preceding sentence, Seller will

provide Buyer with prompt notice of such request or demand or other similar





process so that Buyer may seek an appropriate protective order or, if such

request, demand or other similar process is not mandatory, waive Seller's

and the Company's compliance with the provisions of this Section 4.2(b), as

appropriate.  Notwithstanding the foregoing, neither Seller nor the Company

shall be obligated to comply with the terms of the immediately preceding

sentence if such compliance could result in the imposition of any

liability, civil or criminal on Seller or the Company.  The term "Buyer

Confidential Information" does not include information which (i) becomes

generally available to the public other than as a result of disclosure by

Seller or the Company, (ii) was available on a non-confidential basis prior

to its disclosure by Seller or the Company, or (iii) becomes available to

Seller or the Company on a non-confidential basis from a source other than

the Business, provided that such source is not bound by a confidentiality

agreement with Buyer or its representatives.

          (c)  Buyer covenants that, from and after the date of this

Agreement (including after the Closing), it will not, without the prior

written consent of Seller, disclose to any person confidential information

relating to or concerning Seller (the "Seller Confidential Information"),

except to its officers, directors, employees and representatives who need

to know such information for purposes of taxes, accounting, litigation and

other matters necessary in respect of Buyer's ownership, subsequent to the

Closing, of the Buyer Interest, unless, (i) upon the advice of Buyer's

counsel, disclosure is required to be made under the Securities Act of

1933, as amended, the Securities Exchange Act of 1934, as amended, any

other applicable Law or the regulations of any relevant securities exchange

or trading market or (ii) disclosure is reasonably necessary in the conduct

of the Business and such disclosure would not have an adverse effect on

Seller.  In the event the Buyer is requested or required by subpoena, civil

investigative demand, interrogatories, requests for information, or other

similar process to disclose any Seller Confidential Information which

otherwise may not be disclosed except as set forth in the preceding

sentence, Buyer will provide Seller with prompt notice of such request,

demand or other similar process so that Seller may seek an appropriate

protective order or, if such request, demand or other similar process is





not mandatory, waive Buyer's compliance with the provisions of this Section

4.2(c), as appropriate.  Notwithstanding the foregoing, Buyer shall not be

obligated to comply with the terms of the immediately preceding sentence if

such compliance could result in the imposition of any liability, civil or

criminal, on Buyer.  The term "Seller Confidential Information" does not

include information which (i) becomes generally available to the public

other than as a result of disclosure by Buyer, (ii) was available on a

non-confidential basis prior to its disclosure by Buyer, or (iii) becomes

available to Buyer on a non-confidential basis from a source other than

Seller, provided that such source is not bound by a confidentiality

agreement with Seller or its representatives.

          (d)  For purposes of Sections 4.2(b) and 4.2(c), "Seller" shall

include Seller, its subsidiaries and Affiliates, and any of their

respective directors, officers, employees and representatives, and "Buyer"

shall include Buyer, its subsidiaries and Affiliates, and any of their

respective directors, officers, employees and representatives.

          (e)  No failure or delay by either party hereto in exercising any

right, power or privilege under Section 4.2(b) or 4.2(c) shall operate as a

waiver thereof, nor shall any single or partial exercise thereof preclude

any other or further exercise thereof or the exercise of any other right,

power or privilege hereunder.

  4.3  Mutual Cooperation; No Inconsistent Action.

          (a)  Subject to the terms and conditions hereof, Seller and Buyer

agree to use their reasonable best efforts to take, or cause to be taken,

all actions and to do, or cause to be done, all things necessary, proper or

advisable to consummate and make effective the transactions contemplated by

this Agreement, including all of the following:  (i) obtain prior to the

Closing all licenses, certificates, permits, approvals, authorizations,

qualifications and orders of governmental authorities as are necessary for

the consummation of the transactions contemplated hereby and (ii) effect

all necessary registrations and filings.  Seller and Buyer shall cooperate

fully with each other to the extent reasonable in connection with the

foregoing.






          (b)  Buyer and Seller shall timely and promptly make all filings

which may be required by each of them in connection with the consummation

of the transactions contemplated hereby including but not limited to those

set forth on Schedule 4.3(b).  Each party shall furnish to each other such

necessary information and assistance as the other party may reasonably

request in connection with the preparation of any necessary filings or

submissions by it to any U.S. or foreign governmental agency.

          (c)  Each of Seller and Buyer shall notify and keep the other

advised as to (i) any litigation or administrative proceeding pending and

known to such party, or to its knowledge threatened, which challenges the

transactions contemplated hereby and (ii) any event or circumstance which

would constitute a breach of their respective representations and

warranties in this Agreement; provided, however, that the failure of Seller

or Buyer to comply with clause (ii) shall not subject Seller or Buyer to

any liability hereunder except as and to the extent Seller or Buyer would

be responsible for a breach of such representations and warranties pursuant

to Section 8 (including, without limitation, the limitations on recovery

and the time periods for bringing claims thereunder).  Subject to the

provisions of Section 8 hereof, Seller and Buyer shall not take any action

inconsistent with their obligations under this Agreement or which would

materially hinder or delay the consummation of the transactions

contemplated by this Agreement.

          (d)  Seller and Buyer shall use their reasonable efforts to

obtain at the earliest practicable date and prior to the Closing all

Contractual Consents contemplated herein, and will provide to each other

copies of each such Contractual Consent promptly after it is obtained.  To

the extent any such approval, waiver or consent is not received prior to

the Closing, Seller and Buyer shall continue for a reasonable time after

Closing to use their reasonable efforts to obtain at the earliest

practicable date all such approvals, waivers or consents.

  4.4  Public Disclosures.

          Prior to the Closing Date, no party to this Agreement will issue






any press release or make any other public disclosures concerning this

transaction or the contents of this Agreement without the prior written

consent of the other party.  Notwithstanding the above, nothing in this

Section will preclude any party from making any disclosures required by law

or regulation or necessary and proper in conjunction with the filing of any

Tax Return or other document required to be filed with any federal, state

or local governmental body, authority or agency; provided, however, that

the party required to make the release or statement shall allow the other

party reasonable time to comment on such release or statement in advance of

such issuance.

  4.5  Patent and Know How License Agreement.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, a

license agreement, substantially in the form attached as Exhibit A hereto

(the "Patent and Know How License Agreement"), pursuant to which Seller

shall grant to the Company, and Company shall grant to the Seller, a

license to use certain patents and know-how as set forth therein.

  4.6  Non-Solicitation.

          Until the Closing shall actually have occurred, Buyer

acknowledges that it remains subject to the term of the Confidentiality

Agreement dated February 24, 1998 by and between Seller and Groupe Porcher

Industries.

  4.7  Financing.

          If Buyer requires the Financings to consummate the transactions

contemplated by this Agreement, Buyer will use its best efforts to obtain,

and to cause the Company to obtain, and Seller shall reasonably cooperate

in obtaining and causing the Company to obtain the Financings on and

subject to substantially the same terms and conditions as those previously

set forth in the Commitment Letters.  Buyer shall use its best efforts to

satisfy at or before the Closing all requirements which are conditions to

its closing all transactions constituting the Financings and to its and the

Company's drawing down the cash proceeds thereunder.  Buyer expressly

acknowledges that the consummation of any financing transaction shall not

be a condition to Buyer's obligations under this Agreement.

  4.8  Services Agreement.

          Following the date hereof Seller and Buyer shall negotiate in

good faith a transitional services agreement to be executed at the Closing

pursuant to which Seller and the Company shall agree to provide each other

agreed upon transactional services for periods and upon terms to be agreed

between the parties.

  4.9  Glass Marbles Supply Agreement.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver,  an

agreement, substantially in the form attached hereto as Exhibit C (the

"Glass Marbles Supply Agreement"), pursuant to which Seller shall agree to

supply glass marbles to the Company on the terms and subject to the

conditions set forth therein.

  4.10  Alloy Services Agreement.






          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, an

agreement, substantially in the form attached hereto as Exhibit D (the

"Alloy Services Agreement"), pursuant to which Seller shall agree to

provide alloy services to the Company on the terms and subject to the

conditions set forth therein.

  4.11  Huntingdon Lease Agreement.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, an

agreement, substantially in the form attached hereto as Exhibit E (the

"Huntingdon Lease Agreement"), pursuant to which the Company shall agree to

lease a portion of the Huntingdon property to Seller on the terms and

subject to the conditions set forth therein.

  4.12  Battice Facility Supply Agreement.

          On the Closing Date, Seller shall cause NVOC and Buyer shall

cause the Company to and the Company shall execute and deliver an

agreement, substantially in the form attached hereto as Exhibit F (the

"Battice Facility Supply Agreement"), pursuant to which NVOC shall supply

heavy yarns to the Company through NVOC's facility in Battice, Belgium (the

"Battice Facility") on the terms and subject to the conditions set forth

therein.




  4.13  Guelph Facility Supply Agreement.

          On the Closing Date, Seller shall cause OCC and Buyer shall cause

the Company to and the Company shall execute and deliver, an agreement,

substantially in the form attached hereto as Exhibit G (the "Guelph

Facility Supply Agreement"), pursuant to which OCC shall supply heavy yarns

to the Company through OCC's Facility in Guelph, Ontario, Canada (the

"Guelph Facility") on the terms and subject to the conditions set forth

therein.

  4.14  Sanitary Sewer amd Stormwater Agreements.

          On the Closing Date, Seller shall execute and deliver 9i0 a Sanitary 
Sewer Agreement and (ii) a Stormwater Agreement substantially in the forms 

attached hereto as Exhibit H-1 and H-2 (the Sanitary Sewer and Stormwater 

Agreements").

  4.15  Non-Compete Agreement.

         On the Closing Date, Buyer Groupe Porcher Industries, the Company

and Seller shall execute and deliver a Non-Compete Agreement substantially in 

the form attached hereto as Exhibit I (the "Non-Compete Agreement").


  4.16  Manufacturing Services Agreement.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, an

agreement substantially in the form attached hereto as Exhibit J (the

"Manufacturing Services Agreement"), pursuant to which the Company shall

provide to Seller certain manufacturing services on the terms and subject

to the conditions set forth therein.

  4.17  Intentionally Omitted.

  4.18.  Air Modeling Agreements.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver (i) a





joint modeling agreement in respect of the Aiken facility and (ii) a joint

modeling agreement in respect of the Huntington facility, substantially in

the forms attached hereto as Exhibit, L-1 and L-2 (the "Air Modeling

Agreements").

  4.19  Wastewater Treatment Agreement.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to, and the Company shall, execute and deliver, a

Wastewater Treatment Services Agreement, substantially in the form attached

hereto as Exhibit M (the "Wastewater Treatment Agreement"), pursuant to

which the Company shall provide to Seller Waste Water Treatment Services

with respect to the retained portion of Seller's Aiken, South Carolina

Facility on the terms and subject to the conditions set forth therein.

  4.20  Operating Agreement.

          On the Closing Date, Seller shall cause Jefferson Holdings, Inc.

and Buyer shall execute and deliver the Lincoln Yarns LLC Amended and

Restated Limited Liability Operating Agreement, substantially in the form

attached hereto as Exhibit N (the "Operating Agreement").

  4.21  Trademark Assignment/Master Patent and Know How Assignment.

          On the Closing Date, Seller shall and shall cause Owens-Corning

Fiberglas Technology, Inc. to execute and deliver a (i) trademark

assignment (the "Trademark Assignment") and (ii) Master Patent and Know How

Assignment (the "Master Patent and Know How Assignment") substantially in

the form attached hereto as Exhibits O-1 and O-2, respectively.

  4.22  Use of Packaging.

          Buyer acknowledges that Seller and the Company have agreed that,

following the Closing Date, the Company may use the existing inventory of

packaging materials displaying Seller's trademarks for a period of six (6)

months.  After such six-month period, the Company shall destroy any such

unused packaging material; provided, however, that the Company shall not be

required to repackage any finished goods which on the Closing Date shall






have already been packaged in packaging material displaying the Company's

trademarks.  After such six (6) month period, Company may only continue to

use pallets and recyclable materials if any of Seller's trademarks thereon

are obliterated or obscured.  The Company shall not manufacture new pallets

or recyclable materials bearing Seller's trademarks.

  4.23  Sliver Supply Agreement.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, an

agreement substantially in the form attached hereto as Exhibit P (the

"Sliver Supply Agreement"), pursuant to which the Company shall supply

Seller certain products on the terms and subject to the conditions set

forth therein.

  4.24  Borates Supply Agreement.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, an

agreement substantially in the form attached hereto as Exhibit Q (the

"Borates Supply Agreement"), pursuant to which Seller shall supply the

Company certain products on the terms and subject to the conditions set

forth therein.

  4.25  Carly Sublease.

          On the Closing Date, Seller and the Company shall execute and

deliver an agreement substantially in the form attached hereto as Exhibit R

(the "Carly Sublease"), pursuant to which Seller shall sublease to the

Company certain equipment on the terms and subject to the conditions set

forth therein.

  4.26  Pitney Bowes 1997 Sublease.

          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, an

agreement substantially in the form attached hereto as Exhibit S (the

"Pitney Bowes 1997 Sublease"), pursuant to which Seller shall sublease to

the Company certain equipment on the terms and subject to the conditions

set forth therein.

  4.27  Pitney Bowes 1996 Sublease.







          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, an

agreement substantially in the form attached hereto as Exhibit T (the

"Pitney Bowes 1996 Sublease"), pursuant to which Seller shall sublease to

the Company certain equipment on the terms and subject to the conditions

set forth therein.


  4.28  Landfill Agreement.
 
          On the Closing Date, Seller shall execute and deliver, and Buyer

shall cause the Company to and the Company shall execute and deliver, an

agreement substantially in the form attached hereto as Exhibit U (the

"Landfill Agreement").

  4.29  NVOC and OCC Assets.

          (a)  Seller shall cause its subsidiary, NVOC, to execute and

deliver and Buyer shall cause the Company, or an Affiliate of the Company,

to and the Company shall execute and deliver an Asset Purchase Agreement in

the form of Exhibit V (the "NVOC Asset Purchase Agreement") concerning the

sale of the assets described therein (the "NVOC Assets") and the assumption

of the liabilities described therein by the Company or its wholly-owned

subsidiary.

          (b)  Seller shall cause its subsidiary, OCC, to execute and

deliver and Buyer shall cause the Company, or an Affiliate of the Company,

to and the Company shall execute and deliver an Asset Purchase Agreement in

the form of Exhibit W (the "OCC Asset Purchase Agreement") concerning the

sale of the assets described therein (the "OCC Assets") and the assumption

of the liabilities described therein by the Company or its wholly-owned

subsidiary.

  4.30  "GLAS Marks"

     Buyer acknowledges that, as between the parties, Seller is the owner

of all right, title and interest in and to the GLAS family of GLAS marks

(the "GLAS Marks") in any form or embodiment thereof and is also the owner

of the goodwill attached or which shall become attached to the GLAS Marks.

Neither Buyer nor the Company shall, at any time, knowingly do or permit to

be done any act or thing which may in any way adversely affect any rights






of Seller in and to the GLAS Marks or any registrations thereof or which,

directly or indirectly, may reduce the value of the GLAS Marks or detract

from their reputation, other than at the express request of Seller.

Neither Buyer nor the Company shall join any name or names with the GLAS

Marks so as to form a new mark.  Neither Buyer nor the Company shall use

any name or names in connection with the GLAS Marks in any advertising,

publicity, labeling, packaging or printed matter of any kind, unless and

until Seller consents to these particular uses in writing.  At Seller's

request, Buyer and the Company shall execute any documents reasonably

required by Seller to confirm Seller's ownership of all rights in and to

the GLAS Marks and the respective rights of  LALLC and the Surviving

Company pursuant to this Agreement.

  4.31  No Solicitation.

          (a)  Seller will not, and will ensure that the Company and their

respective directors, officers, employees or other Affiliates or

representatives do not, directly or indirectly encourage, solicit,

participate in or initiate discussions or negotiation with, or provide any

information to, any person or entity (other than Buyer or its directors,

officers, employees or other Affiliates or representatives) with respect to

any sale, disposition, lease or other transfer of any of the Assets (except

as contemplated by the ACA or sales of  inventory and other routine sales

of assets in the ordinary course of business consistent with past practice)

or the Business (an "Acquisition Transaction").  Seller shall notify Buyer

upon receipt of any bona-fide proposal concerning an Acquisition

Transaction and the terms thereof.

          (b)  In the period between the date of this Agreement and the

Closing and for 12 months after the Closing Date, neither Seller nor any of

its Affiliates shall, directly or indirectly, on its own behalf or in the

service or on behalf of others, initiate any solicitation of or offer

employment to any Business Employee until the employee rejects Company's

offer of employment or, as to any Transferred Employee, while such employee

is employed by Company or any of its Affiliates.  For this purpose, the

general posting of placement of job openings and descriptions by Seller on

newspapers, magazines, intranet or internet websites, bulletin boards or





any other form of communication or advertisement not specifically targeted

at the Business or Transferred Employees or through any other method of

general solicitation will not be deemed to be an act of initiating

solicitation of a Business or Transferred Employee.  The Business Employees

shall not be treated as employees of Seller or its Affiliates for the

purposes of any "hiring freeze" or "job transfer" program of Seller or any

of its Affiliates.

  4.32  Casualty to Assets; Eminent Domain.

          (a)  If on or prior to the Closing Date any of the tangible

Assets shall have suffered loss or damage on account of fire, flood,

accident, act of war, civil commotion, or any other cause or event beyond

the reasonable power and control of Seller or the Company (whether or not

similar to the foregoing) which has a Material Adverse Effect, Seller shall

promptly notify the Buyer and Buyer shall have the right to elect within

fourteen (14) days from and after such notice, by notice to Seller either

(a) to terminate this Agreement and all of Buyer's obligations hereunder

(other than those set forth in Section 4.2(c) hereof) without incurring any

liability to Seller as a result of such termination or (b) to consummate

the transactions provided for herein provided that the full amount of all

insurance proceeds, if any, paid or payable to Seller for the benefit of

the Company in respect of such loss plus an amount equal to any deductible

applicable to such loss shall be paid to the Company.  If under the

circumstances described in the foregoing sentence, Buyer shall elect to

consummate the transactions provided for herein, Seller shall, on demand,

pay, or assign its right to receive, to the Company at or after the Closing

the full amount of any insurance proceeds actually received by Seller for

the benefit of the Company in respect of any such loss together with the

amount of any deductible applicable to such loss.  If Buyer does not elect

to terminate this Agreement within the aforesaid fourteen (14) day period,

Buyer  shall be deemed to have elected to consummate the transactions

contemplated hereby.

          (b)  If, after the date hereof and prior to the Closing, Seller

or the Company receives notice of the commencement or threatened

commencement of eminent domain or other like proceedings against the Real

Properties or any portion thereof which has a Material Adverse Effect,






Seller shall promptly notify Buyer, and Buyer shall have the right to elect

within fourteen (14) days from and after such notice, by notice to Seller,

to terminate this Agreement and all of Buyer's obligations hereunder (other

than those set forth in Section 4.2(c)).  If Buyer does not make such

election within the aforesaid fourteen (14) day period, Buyer shall be

deemed to have elected to consummate the transactions contemplated hereby.


  4.33  Intentionally Omitted.

  4.34  Employees and Employee Benefits  

        (a)  Hiring of Employees.  Buyer shall cause the Company to offer 

employment as of the Closing Date to each employee of Seller engaged in 

the Business who is listed on Schedule 4.34(a) (collectively, the 

"Business Employees"), which schedule shall be provided as 

soon as practicable after the date hereof and shall be updated from time to time

prior to the Closing Date, and shall include current annual salary or wage 

rates; provided, however, that if any such Business Employee is on leave of 

absence as of the Closing, such offer of employment shall be effective upon the

employee's return to active employment, provided such return is within two

(2) years following the Closing Date.  Each such offer shall be on at least

the same wage rates or cash salary levels, and on such other terms and

conditions including benefit plan coverages) that are, in the aggregate, no

less favorable than those in effect immediately prior to the Closing Date.

With respect to each such Business Employee who accepts the Company's offer

of employment (a "Transferred Employee"), Buyer shall cause the Company to

(i) maintain such equivalent or higher cash salary levels and substantially

similar terms and conditions from the Closing Date until at least December

31, 1999 (or shall maintain such other terms and conditions and for such

period as may be required pursuant to any collective bargaining agreement

assumed pursuant to clause (iii) below), and (ii) credit periods of service

prior to the Closing for purposes of determining seniority, eligibility,

vesting and benefit entitlement under all compensation and benefit plans,

programs and policies maintained by the Company after the Closing .  If

Seller materially amends or terminates any Benefit Plan, the Company shall

have the right to amend or terminate its corresponding plan in the same or






similar manner.  Seller shall notify the Company of any such material

amendment or termination.

          (b)  Health and Life Coverages; Workers Compensation.  Without

limiting the scope of Section 4.34(a), Buyer shall cause the Company to

cause each Transferred Employee (and his or her eligible dependents) to be

covered immediately following the Closing by a group health plan that

provides health benefits (within the meaning of Section 5000(b)(1) of the

Code) that (i) does not limit or exclude coverage on the basis of any

pre-existing condition of such Transferred Employee or dependent, and (ii)

that provides each Transferred Employee full credit, for the year during

which the Closing occurs, with any deductible already incurred by the

Transferred Employee under Seller's group health plan and with any other

out-of-pocket expenses that count against any maximum out-of-pocket expense

provision of Seller's or the Company's group health plan (or if the

Company's plan does not provide such credit, Buyer will cause the Company

to reimburse each Transferred Employee for such deductibles and

out-of-pocket expenses incurred under Seller's plan during the calendar

year in which the Closing occurs).   In addition, from the Closing Date

until at least December 31, 1999 (or such other period as may be required

pursuant to any collective bargaining agreement assumed hereunder)

following the Closing Date, Buyer shall cause the Company to provide

Transferred Employees with post-retirement health and life coverage at

levels that are substantially similar to the levels provided to such

employees under Seller's group health and life plans immediately prior to

the Closing.  The Company shall be solely responsible for, and Buyer shall

indemnify Seller against, any and all claims by a Transferred Employee or

his dependents for retiree health and life benefits, and Seller shall

remain responsible for such benefits as to any employee or former employee

of the Business other than a Transferred Employee.  Following the Closing,

Buyer shall cause the Company to provide continuation health coverage to

all Transferred Employees or any qualified beneficiary thereof who incur a

qualifying event after the Closing in accordance with the continuation






health care requirements of "COBRA" and Seller shall provide such COBRA

coverage to any employee or former employee of the Seller engaged in the

Business, or any qualified beneficiary thereof who incurs a qualifying

event on or prior to the Closing.  Seller shall remain responsible for, and

shall indemnify the Company and Buyer against, any and all claims incurred

by Transferred Employees prior to the Closing Date that are covered (or

alleged to be covered) under Seller's group health plans.  For purposes of

clarity, a claim shall be considered incurred when the treatment for a

given condition is provided, and not when the condition arose.  Workers

Compensation benefits for any Transferred Employee shall be the

responsibility of Seller only if the claim therefor was properly filed by

the Transferred Employee prior to the Closing Date, and otherwise shall be

the responsibility of the Company.

          (c)  Severance.  Without limiting the scope of Section 4.34(a),

with respect to each Transferred Employee whose employment is terminated by

the Company within one year of the Closing Date, Buyer shall cause the

Company to provide severance benefits which are no less favorable than

those to which such Transferred Employee would have been entitled under

Seller's severance policies set forth on Schedule 2.15(b)(i) had such

Transferred Employee been terminated by Seller immediately prior to the

Closing.

          (d)  Accrued Vacation.  With respect to any accrued but unused

vacation time to which any Transferred Employee is eligible to take

pursuant to the vacation policy applicable to such Transferred Employee

immediately prior to Closing, Buyer shall cause the Company to allow such

Transferred Employee to use such accrued vacation.  The Company shall have

no obligation to provide any cash payments for unused vacation.

          (e)  Disability Benefits.  Without limiting the scope of Section

4.34(a), Buyer shall cause the Company to provide long-term disability

benefits to any Transferred Employee who becomes disabled after the Closing

Date.  Any Business Employee who was on short-term disability leave

immediately prior to the Closing and who subsequently satisfies the

eligibility requirements for long-term disability benefits on or after the






Closing Date (including any benefit elimination period) shall be covered

under Seller's long-term disability plan.  Any Business Employee who was on

short-term disability leave immediately prior to the Closing and who

subsequently is able to return to work before qualifying for long-term

disability coverage shall be offered employment by the Company as required

pursuant to Section 4.34(a).  If the offer of employment is accepted, Buyer

shall cause the Company to reimburse Seller its cost of providing

short-term disability payments to such employee from the Closing Date until

the date such employee commences employment with the Company.  Seller shall

retain responsibility for the making of long-term disability payments for

employees who are receiving long-term disability payments as of the

Closing.  If any former employee of the Business who is identified to Buyer

as receiving long-term disability payments as of the Closing is, subsequent

to the Closing, legally entitled to be re-employed by Seller, Buyer shall

cause the Company to offer employment to such employee as if such employee

were a Transferred Employee on the Closing Date.

          (f)  Flexible Spending Accounts.  Without limiting the scope of

Section 4.34(a), effective as of the Closing and through at least December

31, 1998, Buyer shall cause the Company to establish flexible spending

accounts for medical and dependent care expenses, and shall credit such

accounts with the amount credited as of the Closing under comparable

accounts maintained with Seller from the beginning of the plan year to the

Closing.  As soon as practicable after the Closing, (A) Seller shall pay to

the Company in cash the amount, if any, by which aggregate contributions

made by Transferred Employees to Seller's flexible spending accounts

exceeded the aggregate benefits provided to Transferred Employees as of the

Closing, or (B) Buyer shall cause the Company to pay to Seller in cash the

amount, if any, by which the aggregate benefits provided to Transferred

Employees under Seller's flexible spending accounts exceeded the aggregate

contributions made by Transferred Employees as of the Closing.  The Company






shall have no obligation to contribute to or allow contributions to any

flexible spending accounts that exceed Seller's prior obligation to

contribute or allow contributions.

          (g)  Defined Benefit Plans.  Seller shall cause each Transferred

Employee to become fully vested in his accrued benefit under any

tax-qualified defined benefit pension plan maintained by Seller (a "Seller

Pension Plan") in which such Transferred Employee participates as of the

Closing.  Seller will amend each Seller Pension Plan to provide for the

continuing eligibility for early retirement of each Transferred Employee

who does not, as of the Closing Date, qualify for an early retirement

benefit thereunder, and for this purpose shall treat service with the

Company as service with Seller.  If any such Transferred Employee remains

employed by the Company until he qualifies for early retirement, then such

plans will treat such Transferred Employee as having elected early

retirement when he retires from the Company.  Such early retirement benefit

shall be based solely upon service and compensation earned prior to the

Closing.  The Company will provide Seller with as much notice as possible

of the retirement of any such Transferred Employee.  Seller shall calculate

the difference between the lump sum benefit payable to such Transferred

Employee as an early retiree and the lump sum

benefit payable to such Transferred Employee as a deferred vested benefit

on the date of retirement from the Company and under the provisions of the

applicable Seller Pension Plan, determined in the same manner that such

plan calculates lump sum benefits at the time such Transferred Employee

shall retire.  The Company shall pay Seller such difference within 60 days

of such transferred Employee's retirement.  In addition, should the Company

institute any reduction in force, early retirement window program or

otherwise provide any financial inducement that results in the termination

of employment of any Transferred Employee who, as of the Closing, qualifies

for an early retirement benefit under a Seller Pension Plan, Buyer shall

cause the Company to promptly pay to Seller an amount equal to the

incremental cost of providing such early retirement benefit.  Such cost

shall be determined by an enrolled actuary engaged by Seller based on the

excess of the present value of such subsidized early retirement benefits

for all such Transferred Employees over the present value of the accrued





benefits for all such Transferred Employees determined as if such employees

had not elected to commence retirement benefits and using normal actuarial

assumptions with respect to projected retirement dates.

          (h)  401(k) Plan.  Without limiting the scope of Section 4.34(a),

as of the Closing, Buyer shall cause the Company to make available, and

maintain from the Closing Date until at least December 31, 1999 (or such

other period as may be required pursuant to any collective bargaining

agreement assumed hereunder), a tax-qualified defined contribution plan or

plans with a cash or deferred feature (a "Company 401(k) Plan") for the

benefit of each Transferred Employee who was eligible (or would have been

eligible but for any waiting period) to participate in a tax-qualified

defined contribution plan maintained by Seller with a cash or deferred

feature (a "Seller 401(k) Plan").  Immediately prior to the Closing, Seller

shall cause all account balances of all Transferred Employees under each

Seller 401(k) Plan to become fully vested as of the Closing, and as soon as

practicable after the Closing (or, if Transitional Coverage is provided

under a Seller 401(k) Plan, after cessation of such Transitional Coverage)

shall cause such account balance to be transferred to a Company 401(k)

Plan, and Buyer shall cause such Company 401(k) Plan to accept such

transfer.  Prior to such transfer, Buyer shall cause the Company to provide

to Seller such evidence or assurance as reasonably requested by Seller as

to the tax-qualified status of each Company 401(k) Plan (including an IRS

determination letter, a submission therefor and/or an opinion of counsel).

The transfer shall be made in cash, provided that (i) the portion of the

transferred accounts represented by participant loans shall be transferred

in kind, and (ii) the portion of  the transferred accounts invested in an

Owens Corning stock fund shall be transferred in kind.  The Company may, in

its discretion, prohibit additional investment into such stock fund, but

shall notify affected participants of its intention to liquidate such stock

fund at least two years prior to such liquidation; provided, however, that

liquidation of the Owens Coring stock fund shall be allowed at any time if

a fiduciary of the plan reasonably determines that failure to liquidate the

stock fund would cause the fiduciary to breach his fiduciary obligations

under ERISA.  The parties shall comply with all provisions of the Code and






ERISA applicable to such transfer, including Sections 414(l) and 411(d)(6)

of the Code and the corresponding provisions of ERISA.  After such

transfer, Buyer shall be solely responsible for, and shall indemnify Seller

against, all liabilities relating to the transferred accounts.  Each

Transferred Employee participating in a Seller 401(k) Plan as of the

Closing shall be eligible for an allocation of any profit sharing

contribution made by Seller thereto with respect to Seller's 1998 fiscal

year based on such Transferred Employee's participation therein through the

Closing, provided that such Transferred Employee would otherwise have been

eligible for an allocation had he remained an employee of Seller through

the end of such year.  The Company shall reimburse Seller for the profit

sharing contribution allocated to such Transferred Employees.

          (i)  Stock Options.  With respect to vesting and exercisability

of outstanding options to purchase Seller common stock held by Transferred

Employees as of the Closing, Seller shall treat employment with the Company

as employment with Seller.

          (j)  Performance Awards.  With respect to Seller's 1998 fiscal

year, the Company shall pay to Transferred Employees performance share

bonuses under Seller's Global Stock Plan and bonuses under Seller's Annual

Corporate Incentive Plan in the amounts that such employees would have been

paid by Seller had they remained employed by Seller through the end of such

fiscal year.

          (k)  Transitional Coverage.  If requested by Company, Seller

shall allow Transferred Employees to continue to participate in, be covered

by, or accrue benefits under any Benefit Plan of Seller that provides

pension or welfare coverage  (any such continued participation, coverage or

accrual hereinafter referred to as "Transitional Coverage ").  Such

Transitional Coverage shall be made available only to the extent permitted

by applicable law, and in any event shall not in extend beyond December 31,

1999.  Buyer shall cause the Company to reimburse Seller for the cost of

providing the Transitional Coverage.  Buyer agrees that the provision (or

subsequent cessation) of such Transitional Coverage shall not relieve Buyer

of its obligations contained elsewhere in the Section 4.35 (i.e., Buyer

shall remain responsible for the retiree medical obligations of all






Transferred Employees, even those who retire and are provided Transitional

Coverage through a Seller retiree medical plan).

          (l)  No Third-Party Beneficiary.  Nothing herein, expressed or

implied, shall confer upon any employee or former employee of Seller or

Company or any of their Affiliates (including, without limitation, the

Transferred Employees), any rights or remedies including, without

limitation, any right to employment or continued employment for any

specified period) of any nature or kind whatsoever, under or by reason of

this Agreement.

  4.35  Forward-Underwriting Commitment.

          Buyer agrees that if the Financings are not consummated by

October 15, 1998,  Buyer will consummate the Financing through the

execution of their bridge financing with First Union Capital Markets or by

other means.

  4.36  Cash Assets.

          Buyer agrees and acknowledges that immediately prior to the

closing all cash and cash equivalents, including, without limitation, bank

deposits, investments in so-called "money market" funds, commercial paper

funds, Certificates of Deposits, Treasury bills and accrued interest

thereon, of the Company will be withdrawn or otherwise transferred from the

Company to Seller and/or Jefferson Holdings, Inc.

  4.37  Contribution of Assets of the Company.

          On or prior to the Closing, Seller shall have consummated any and

all transactions contemplated in the ACA and shall have caused all of its

rights and title to the Business Assets to be transferred to the Company in

accordance with the terms of the ACA.

  4.38  Post-Closing Distributions by the Company.

          Immediately upon the Closing, the parties shall cause the Company

to and the Company shall make a cash distribution in the aggregate amount

of four hundred twenty-five million Dollars ($425,000,000) to its members,

pro rata in accordance with their then respective ownership interests in

the Company, and Buyer shall have caused the Company to obtain any and all

financing necessary to fund such  cash distribution (the "Company

Financing") in accordance with the terms and conditions set forth in the

Commitments.

     4.39 Toll Manufacturing.

          The parties agree that prior to Closing they will discuss the

possibility that Seller may be willing to toll manufacture for the Company

products with TEX up to 400 (including low TEX type 30) that have

historically been manufactured by the Business but are not Business

Products.

5  CONDITIONS

  5.1  Conditions Precedent to the Obligations of Buyer and Seller.

          The respective obligations of Buyer and Seller to consummate the

transactions contemplated by this Agreement shall be subject to the






satisfaction at or prior to the Closing Date of the following conditions:

          (a)  No Injunction, etc.  At the Closing Date, there shall be no

injunction, restraining order or decree of any nature of any court or

governmental agency or body of competent jurisdiction that is in effect

that restrains or prohibits the consummation of the purchase or the

transfer to Buyer by Seller of the Buyer Interest.

          (b)  Regulatory Authorizations.  All (i) consents, approvals,

authorizations and orders of federal, state and foreign governmental and

regulatory authorities as are necessary in connection with the transfer of

the Buyer Interest to Buyer or which if not obtained would be reasonably

likely to subject Buyer or Seller, or any officer, director or agent of any

such person, to civil or criminal liability or could render such transfer

void or voidable (the "Required Consents") shall have been obtained, except

for Required Consents the failure of which to obtain are not material,

individually or in the aggregate, to the operations of the Business taken

as a whole and the failure of which to obtain would not subject Buyer or

Seller, or any officer, director or agent of any such person, to civil or

criminal liability.

  5.2  Conditions Precedent to the Obligation of Seller.

          The obligation of Seller to consummate the transactions provided

for in this Agreement is subject to fulfillment of each of the following

conditions:

          (a)  Accuracy of Buyer's Representations and Warranties;

Covenants of Buyer.  The representations and warranties of Buyer contained

in this Agreement that are qualified as to materiality shall be true and

correct and the representations and warranties of Buyer set forth in this

Agreement that are not so qualified shall be true and correct in all

material respects, in each case on the date of this Agreement (except to

the extent cured prior to the Closing Date) and on the Closing Date as

though made on the Closing Date, except to the extent such representations

and warranties speak as of an earlier date; Buyer shall have complied in

all material respects with all covenants contained in this Agreement to be

performed by it prior to the Closing; and Seller shall have received a

certificate signed by an authorized officer of Buyer to such effect.





          (b)  Ancillary Agreements.  Buyer and the Company shall have

executed the Ancillary Agreements to which they are parties or shall have

caused the Company to and the Company shall have executed the Ancillary

Agreements to which it is a party.

          (c)  Company Financing.  Buyer and the Company shall have

executed and delivered any and all agreement, documents and instruments

required to effect the Company Financing and no further conditions shall

exist to the funding of the Company Financing other than the consummation

of the Closing.

  5.3  Conditions Precedent to the Obligation of Buyer.

          The obligation of Buyer to consummate the transactions provided

for in this Agreement is subject to fulfillment of each of the following

conditions:

          (a)  Accuracy of Representations and Warranties of Seller;

Covenants of Seller.  The representations and warranties of Seller

contained in this Agreement that are qualified as to materiality shall be

true and correct and the representations and warranties of Seller set forth

in this Agreement that are not so qualified shall be true and correct in

all material respects, in each case on the date of this Agreement (except

to the extent cured prior to the Closing Date) and on the Closing Date as

though made on the Closing Date, except to the extent such representations

and warranties speak as of an earlier date; Seller shall have complied in

all material respects with all covenants contained in this Agreement to be

performed by it prior to the Closing; and Buyer shall have received a

certificate signed by an authorized officer of Seller to such effect.

          (b)  Ancillary Agreements.  Seller, NVOC and OCC shall have

executed the Ancillary Agreements to which they are parties.

          (c)  Contractual Consents.  All contractual approvals, waivers

and consents set forth on Schedule 5.3(c) (" Contractual Consents") shall

have been obtained and shall remain in full force and effect.

6  CLOSING

  6.1  Closing Date.

          Unless this Agreement shall have been terminated and the

transactions herein shall have been abandoned pursuant to Section 8 hereof,

the closing of the transactions contemplated by this Agreement (the

"Closing") shall take place at the offices of Morgan, Lewis & Bockius LLP,

at 10:00 a.m., New York City time, on September 30,1998 (or as soon as

practicable thereafter as all of the conditions to the Closing set forth in

Section 5 hereof are satisfied or waived), or such other date, time and

place as shall be agreed upon by Seller and Buyer (the actual date and time

being herein called the "Closing Date").  The Closing shall be deemed

effective as of 12:01 a.m. on the Closing Date.

  6.2 Buyer Deliveries.

          At the Closing, Buyer shall deliver to Seller or one or more of

its Affiliates (as directed by Seller) (i) the Purchase Price as provided

in Section 1.2 hereof, (ii) the documents described in Section 5.2 hereof

and (iii) such other documents and instruments as counsel for Buyer and

Seller mutually agree to be reasonably necessary to consummate the

transactions described herein.

  6.3  Seller Deliveries.

          At the Closing, Seller shall deliver or cause one or more of its

Affiliates to deliver to Buyer (i) the documents described in Section 5.3

hereof, (ii) the Buyer Interest and (iii) such other documents and

instruments as counsel for Buyer and Seller mutually agree to be reasonably

necessary to consummate the transactions described herein.

7  TAX MATTERS

  7.1.  Asset Allocation.

          Buyer and Seller each agrees that Schedule 7.1 attached hereto

reflects (i) the fair market value of each category of Company assets

listed thereon, including all property of the Company that constitutes

"unrealized receivables" of the Company for purposes of Section 751 of the

Code, and (ii) the Seller's interest and gain in each such category of

Company assets.  The parties further agree that the valuations listed on

Schedule 7.1 shall be used by Buyer, Seller and the Company for any and all






income tax purposes, including, without limitation, adjustments to the tax

basis of the Company's assets pursuant to Section 743(b) of the Code.


8  INDEMNIFICATION

  8.1  Survival of Representations and Warranties; Time for Assertion of Claims.

          Subject to the limitations and other provisions of this

Agreement, and regardless of any investigation made by or on behalf of

Seller or Buyer, (i) the representations and warranties of the parties

hereto contained herein shall survive the Closing and shall remain in full

force and effect, for a period of one year after the Closing Date;

provided, however, that the representations and warranties set forth in

Section 2.18 (environmental) and Section 2.14 (tax) shall remain in full

force and effect for a period of five (5) years after the Closing Date and

(ii) the covenants and agreements of the parties hereto contained herein

shall survive the Closing and shall remain in full force and effect for a

period of one year after the date on which performance of such covenant or

agreement was due (in each case, the "Termination Date").  Any right of

indemnification pursuant to this Section 8 shall expire on the Termination

Date of the respective representation, warranty, covenant or agreement

claimed to be breached unless, on or prior to the Termination Date, a Claim

(as defined below) has been timely made to the party from whom

indemnification is sought, in which case such Claim may continue to be

asserted beyond the respective Termination Date.

  8.2  Indemnification by Seller.

          (a)  Seller shall defend, indemnify and hold Buyer and its

Affiliates (including the Company after the Closing) harmless from and

against and in respect of any and all actual losses, liabilities, damages,

demands, claims, suits, proceedings, judgments, settlements, assessments,

costs and expenses, including reasonable attorneys' fees, incurred directly

by Buyer or its Affiliates (hereinafter "Buyer Losses") which arise out of

(i) any breach of any of the representations and warranties contained in

Section 2 hereof or the certificate delivered pursuant to Section 5.3(a),

or (ii) any breach by Seller of any of its covenants in this Agreement but

not of any Ancillary Agreement which shall be governed by the terms





thereof.  Buyer shall give Seller prompt written notice of any third party

claim which may give rise to any indemnity obligation under this Section,

together with the estimated amount of such claim, and Seller shall have the

right to assume the defense of any such claim through counsel of its own

choosing, by so notifying Buyer within thirty (30) days of receipt of

Buyer's written notice; provided, however , that Seller's counsel shall be

reasonably satisfactory to Buyer.  Failure to give prompt notice shall not

affect the indemnification obligations hereunder in the absence of actual

prejudice.  If Buyer desires to participate in any such defense assumed by

Seller, it may do so at its sole cost and expense.  If Seller declines or

fails to assume any such defense, it shall be liable for all reasonable

costs and expenses of defending such claim incurred by Buyer, including

reasonable fees and disbursements of counsel.  Neither party shall, without

the prior written consent of the other party, which shall not be

unreasonably withheld, settle, compromise or offer to settle or compromise

any such claim or demand on a basis which would result in the imposition of

a consent order, injunction or decree which would restrict the future

activity or conduct of the other party or any subsidiary or Affiliate

thereof or if such settlement or compromise involves a finding or admission

of any violation of law, or if such settlement or compromise does not

include an unconditional release of the other party for any liability

arising out of such claim or demand or any related claim or demand.

          (b)  The foregoing obligation to indemnify Buyer set forth in

Section 8.2(a) shall be subject to each of the following limitations:

               (i)  No reimbursement for Buyer Losses asserted against

Seller under Section 8.2(a)(i) shall be required unless and until the

cumulative aggregate amount of such Buyer Losses equals or exceeds seven

million five hundred thousand dollars ($7,500,000) (the "Threshold") and

then only to the extent that the cumulative aggregate amount of Buyer

Losses, as finally determined, exceeds the Threshold; provided that in

calculating the Threshold any Buyer Losses which individually total less

than fifty thousand dollars ($50,000.00) each ("De Minimis Buyer Losses")

shall be excluded in their entirety and Seller in any event shall have no





liability hereunder to Buyer and its Affiliates for any such De Minimis

Buyer Losses.

               (ii) Seller's liability to Buyer under Section 8.2(a)(i) for

Buyer Losses in excess of the Threshold shall not exceed one hundred fifty

million dollars ($150,000,000.00).

               (iii)     Seller's indemnification obligation for any breach

of the representation and warranties contained in Section 2.18 with respect

to matters relating to the investigation, remediation, cleanup, removal or

monitoring of Hazardous Substances at or migrating from the Real Property

("Remedial Action") shall be limited to compliance with standards

established under applicable Environmental Laws, (including, without

limitation the imposition of institutional or engineering controls, deed

restrictions, natural attenuation, capping and site-specific risk-based

standards) based on the existing use of the relevant Real Property as of

the Closing Date.

               (iv) Notwithstanding anything to the contrary in this

Agreement or the ACA, Seller shall have satisfied its indemnification

obligation and shall be released from any further indemnification

obligation or liability for any Remedial Action in the event and to the

extent it receives a notice of final approval (including, without

limitation, a no further action letter, certificate of completion, or

release-and-covenant-not-to-sue) from a state or federal Governmental or

Regulatory Authority with jurisdiction over the relevant Real Property

pursuant to a clean-up program, voluntary or otherwise.

          (c)  The indemnities provided in this Section 8.2 shall survive

the Closing.  Except as expressly provided in this Agreement, the indemnity

provided in this Section 8.2 shall be the sole and exclusive remedy of the

indemnified party against the indemnifying party at law or equity for any

matter covered by Sections 8.2(a) and 8.2(b); provided, that nothing in

this Section 8 shall prevent or otherwise limit Buyer from seeking

temporary or permanent injunctive relief for any breach by Seller of

Section 4.2(b).

          (d)  In no event shall Seller be liable to Buyer for special,

indirect, incidental, consequential or punitive damages but, to the extent





Buyer is required to pay punitive damages to a third party, such payment

shall constitute an indemnifiable expense.

  8.3  Indemnification by Buyer.

          (a)  Buyer shall defend, indemnify and hold Seller and the

Company harmless from and against and in respect of any and all actual

losses, liabilities, damages, demands, claims, suits, proceedings,

judgments, settlements, assessments, costs and expenses, including

reasonable attorney's fees, incurred directly by Seller, the Company and

their respective Affiliates (hereinafter "Seller Losses"; together with

Buyer Losses, "Losses") arising out of (i) any breach of any of the

representations and warranties contained in Section 2 hereof or (ii) any

breach by Buyer of any of its covenants in this Agreement other than in the

Ancillary Agreements which shall be governed by the terms thereof.  Seller

shall give Buyer prompt written notice of any third party claim which may

give rise to any indemnity obligation under this section, together with the

estimated amount of such claim, and Buyer shall have the right to assume

the defense of any such claim through counsel of its own choosing, by so

notifying Seller within thirty (30) days of receipt of Seller's written

notice; provided, however , that Buyer's counsel shall be reasonably

satisfactory to Seller.  Failure to give prompt notice shall not affect the

indemnification obligations hereunder in the absence of actual prejudice.

If Seller desires to participate in any such defense assumed by Buyer, it

may do so at its sole cost and expense.  If Buyer declines or fails to

assume any such defense, it shall be liable for all costs and expenses of

defending such claim incurred by Seller, including reasonable fees and

disbursements of counsel.  Neither party shall, without the prior written

consent of the other party, which shall not be unreasonably withheld,

settle, compromise or offer to settle or compromise any such claim or

demand on a basis which would result in the imposition of a consent order,

injunction or decree which would restrict the future activity or conduct of

the other party or any subsidiary or Affiliate thereof or if such

settlement or compromise involves a finding or admission of any violation

of law, or if such settlement or compromise does not include an

unconditional release of the other party for any liability arising out of

such claim or demand.






          (b)  The foregoing obligation to indemnify Seller and the Company

set forth in Section 8.3(a) shall be subject to each of the following

limitations:

               (i)  No reimbursement for Seller Losses asserted against

Buyer under Section 8.3(a)(i) above shall be required unless and until the

cumulative aggregate amount of such Seller Losses equals or exceeds seven

million five hundred thousand dollars ($7,500,000.00) (the "Buyer

Threshold") and then only to the extent that the cumulative aggregate

amount of Seller Losses, as finally determined, exceeds the Buyer

Threshold; provided that in calculating the Buyer Threshold, any Seller

Losses which individually total less than fifty thousand dollars

($50,000.00) each ("De Minimis Seller Losses") shall be excluded in their

entirety and Buyer in any event shall have no liability hereunder to Seller

or the Company for any such De Minimis Seller Losses; and

               (ii) Buyer's liability to Seller and the Company under

Section 8.2(a)(i) for Seller Losses in excess of the Buyer Threshold shall

not exceed one hundred fifty million dollars ($150,000,000.00).

          (c)  The indemnities provided in this Section 8.3 shall survive

the Closing.  Except as expressly provided in this Agreement, the indemnity

provided in this Section 8.3 shall be the sole and exclusive remedy of the

indemnified party against the indemnifying party at law or equity for any

matter covered by paragraphs (a) and (b); provided, that nothing in this

Section 8 shall prevent or otherwise limit Seller from seeking temporary or

permanent injunctive relief for any breach by Buyer of Section 4.2(c).

          (d)  In no event shall Buyer be liable to Seller or its

Affiliates for special, indirect, incidental, consequential or punitive

damages but, to the extent Seller is required to pay punitive damages to a

third party, such payment shall constitute an indemnifiable expense.

  8.4  Indemnification Calculations.

          (a)  The amount of any Seller Losses or Buyer Losses for which

indemnification is provided under this Section 8.4 shall be computed net of

any insurance proceeds received by the indemnified party in connection with






such Losses.  If the amount with respect to which any claim is made under

this Section 8.4 (an "Indemnity Claim") gives rise to a currently

realizable Tax Benefit to the party making the claim, the indemnity payment

shall be reduced by the amount of the Tax Benefit available to the party

making the claim.  To the extent such Indemnity Claim does not give rise to

a currently realizable Tax Benefit, if the amount with respect to which any

Indemnity Claim is made gives rise to a subsequently realized Tax Benefit

to the party that made the claim, such party shall refund to the

indemnifying party the amount of such Tax Benefit when, as and if realized.

For the purposes of this Agreement, any subsequently realized Tax Benefit

shall be treated as though it were a reduction in the amount of the initial

Indemnity Claim, and the liabilities of the parties shall be redetermined

as though both occurred at or prior to the time of the indemnity payment.

For purposes of this Section 8.4, a "Tax Benefit" means an amount by which

the tax liability of the party (or group of corporations including the

party) is reduced (including, without limitation, by deduction, reduction

of income by virtue of increased tax basis or otherwise, entitlement to

refund, credit or otherwise) plus any related interest received from the

relevant taxing authority.  Where a party has other losses, deductions,

credits or items available to it, the Tax Benefit from any losses,

deductions, credits or items relating to the Indemnity Claim shall be

deemed to be realized proportionately with any other losses, deductions,

credits or items.  For the purposes of this Section 8.4, a "Tax Benefit" is

"currently realizable" to the extent it can be reasonably anticipated that

such Tax Benefit will be realized in the current taxable period or year or

in any Tax Return with respect thereto (including through a carry-back to a

prior taxable period) or in any taxable period or year prior to the date of

the Indemnity Claim.  In the event that there should be a determination

disallowing the Tax Benefit, the indemnifying party shall be liable to

refund to the indemnified party the amount of any related reduction

previously allowed or payments previously made to the indemnifying party

pursuant to this Section 8.4.

          (b)  The parties agree that any indemnification payments made

pursuant to this Agreement shall be treated for tax purposes as an






adjustment to the Purchase Price, unless otherwise required by applicable

law, in which case such payments shall be made in an amount sufficient to

indemnify the relevant party on a net after-tax basis.

  8.5  Cooperation.

          Each party will provide, and will cause its Affiliates to

provide, to the other party and its Affiliates, with reasonable access

during business hours to all records, documents and relevant personnel of

such party relating to any third party Claim asserted against such party or

its Affiliates or against such other party and its Affiliates in order to

assist each party in defending any such third party Claim.

9  TERMINATION

  9.1  Termination Events.

          Without prejudice to other remedies which may be available to the

parties by law or this Agreement, this Agreement may be terminated and the

transactions contemplated herein may be abandoned:

          (a)  by mutual consent of the parties hereto;

          (b)  by Seller, in its sole discretion, after the date which is

thirty (30) days after the date of this Agreement, if Seller shall not have

received either (i) evidence, in form and substance reasonably satisfactory

to Seller, that Buyer has sufficient cash on hand to consummate the

transactions contemplated by this Agreement or (ii) copies of definitive

written agreements (the "Definitive Financing Agreements") with reputable

financial institutions to provide at the Closing, subject only to customary

conditions, all of the Financing, in form and substance reasonably

satisfactory to Seller, or if at any time thereafter any such Definitive

Financing Agreements shall cease to be in full force and effect;

          (c)  by any party by notice to the other party if the Closing

shall not have been consummated on or before December 31, 1998, unless

extended by written agreement of the parties hereto, so long as the party





terminating this Agreement shall not be in default or breach hereunder;

          (d)  by Seller if Buyer shall fail to consummate the Financing by

October 15, 1998; and

          (e)  by Buyer under the circumstances described in Section 4.32.

  9.2  Effect of Termination.

          In the event of any termination of the Agreement as provided in

Section 9.1 above, this Agreement shall forthwith become wholly void and of

no further force and effect and there shall be no liability on the part of

Buyer or Seller, except that (i) the obligations of Buyer and Seller under

Sections 4.2 (relating to confidentiality only), 4.5 and 10.3 of this

Agreement shall remain in full force and effect and (ii) termination shall

not preclude either party from suing the other party for breach of this

Agreement.

10  MISCELLANEOUS AGREEMENTS OF THE PARTIES

  10.1.  Notices.

          All communications provided for hereunder shall be in writing and

shall be deemed to be given when delivered in person or by private courier

with receipt, when telecopied and received, or three (3) days after being

deposited in the United States mail, first-class, registered or certified,

return receipt requested, with postage paid and,

          If to Buyer:        Glass Holdings Corp.
                              3802 Robert Porcher Way
                              Greensboro, NC 27410
                              Fax: 336-545-7715
                              Attention: President

          With a copy to:     Alston & Bird LLP
                              601 Pennsylvania Avenue, N.W. , North Building
                              Washington, D.C. 20004-2601
                              Fax: 212-756-3333
                              Attention: Frank M. Conner III


          If to Seller :      Owens Corning World Headquarters
                              One Owens Corning Parkway
                              Toledo, Ohio  43659
                              Fax:  419-248-8445
                              Attention:  Corporate Secretary






          With a copy to:     Owens Corning World Headquarters
                              One Owens Corning Parkway
                              Toledo, Ohio  43659
                              Fax:  419-248-1723
                              Attention:  Law Department

or to such other address as any such party shall designate by written

notice to the other parties hereto.

  10.2  Transaction Taxes.

          Buyer and Seller agree that they shall cause the Company to

discharge any liability for the payment of all sales, use, transfer,

vehicle transfer, real property transfer (including any deed recording

fee), recording, gains and other similar taxes, if any, payable with

respect to Seller's contribution of the Assets to the Company or the sale

of the Buyer's Interest to the Buyer.  The Company shall file all necessary

documentation and Tax Returns with respect to such taxes and, to the extent

any exemptions from such taxes are available, Buyer and Seller shall

cooperate to prepare any certificates or other documents necessary to claim

such exemptions.  For purposes of Section 1.4, the amount of any taxes paid

or payable by the Company pursuant to this Section 10.2 shall not reduce

(or shall be added back to) the Closing NAV of the Company.

  10.3  Expenses.

          Subject to Section 10.2, Seller and Buyer shall each pay their

respective expenses (such as legal, investment banking and accounting fees)

incurred in connection with the origination, negotiation, execution and

performance of this Agreement.  The Company and Buyer shall be solely

responsible for any costs incurred in connection with the Financing.

  10.4  Non-Assignability.

          This Agreement shall inure to the benefit of and be binding on

the parties hereto and their respective successors and permitted assigns.

Except as otherwise expressly provided in this Agreement, this Agreement

shall not be assigned by either party hereto without the express prior






written consent of the other party, and any attempted assignment, without

such consents, shall be null and void.  Notwithstanding any non-assignment

provisions contained in this Section 10.4 Buyer may assign or otherwise

transfer all of its rights and/or obligations hereunder (i) to any entity

or entities, providing financing for the transactions contemplated by this

Agreement or to any entity or entities providing to Buyer or Buyer's

Affiliates financing relating to the Business or (ii) to any Affiliate of

Buyer, provided that (x) such Affiliate shall agree with Seller and its

permitted assignees or transferees, if any, in writing to assume the

Buyer's obligations hereunder and (y) any such assignment to an Affiliate

of the Buyer shall not relieve the Buyer from its obligations hereunder.

  10.5  Amendment; Waiver.

          This Agreement may be amended, supplemented or otherwise modified

only by a written instrument executed by the parties hereto.  No waiver by

either party of any of the provisions hereof shall be effective unless

explicitly set forth in writing and executed by the party so waiving.

Except as provided in the preceding sentence, no action taken pursuant to

this Agreement, including without limitation, any investigation by or on

behalf of any party, shall be deemed to constitute a waiver by the party

taking such action of compliance with any representations, warranties,

covenants or agreements contained herein, and in any documents delivered or

to be delivered pursuant to this Agreement and in connection with the

Closing hereunder.  The waiver by any party hereto of a breach of any

provision of this Agreement shall not operate or be construed as a waiver

of any subsequent breach.

  10.6  Schedules and Exhibits.

          All exhibits and schedules hereto are hereby incorporated by

reference and made a part of this Agreement.  Any fact or item which is

clearly disclosed on any Schedule or Exhibit to this Agreement or in the

Financial Statements in such a way as to make its relevance to a

representation or representations made elsewhere in this Agreement or to

the information called for by another Schedule or other Schedules (or

Exhibit or other Exhibits) to this Agreement readily a shall be deemed to





be an exception to such representation or representations or to be

disclosed on such other Schedule or Schedules (or Exhibit or Exhibits), as

the case may be, notwithstanding the omission of a reference or cross

reference thereto.  Any fact or item disclosed on any Schedule or Exhibit

hereto shall not by reason only of such inclusion be deemed to be material

and shall not be employed as a point of reference in determining any

standard of materiality under this Agreement.

  10.7  Third Parties.

          Except as provided herein, this Agreement does not create any

rights, claims or benefits inuring to any person that is not a party hereto

nor create or establish any third party beneficiary hereto.

  10.8  Governing Law.

          This Agreement shall be governed by, and construed in accordance

with, the laws of the State of New York applicable to a contract executed

and performed in such State without giving effect to the conflicts of laws

principles thereof, except that matters herein strictly within the purview

of the matters covered by the Limited Liability Company Act of the State of

Delaware shall be governed by such Limited Liability Company Act.

10.9 Consent to Jurisdiction.

          Each of the parties hereto, irrevocably submits to the exclusive

jurisdiction of the United States District Court for the Southern District

of New York located in the borough of Manhattan in the City of New York, or

if such court does not have jurisdiction, the Supreme Court of the State of

New York, New York County, for the purposes of any suit, action or other

proceeding arising out of this Agreement or any transaction contemplated

hereby.  Each of the parties hereto, further agrees that service of any

process, summons, notice or document by U.S. registered mail to such

party's respective address set forth in Section 10.1 shall be effective

service of process for any action, suit or proceeding in New York with

respect to any matters to which it has submitted to jurisdiction as set






forth above in the immediately preceding sentence.  Each of the parties

hereto, irrevocably and unconditionally waives any objection to the laying

of venue of any action, suit or proceeding arising out of this Agreement or

the transactions contemplated hereby in (a) the United States District

Court for the Southern District of New York or (b) the Supreme Court of the

State of New York, New York County, and hereby further irrevocably and

unconditionally waives and agrees not to plead or claim in any such court

that any such action, suit or proceeding brought in any such court has been

brought in an inconvenient forum.

  10.10  Definitions.

          (a)  As used in this Agreement, the following defined terms shall

have the meanings indicated below:

          "ACA" means the Amended and Restated Asset Contribution Agreement

dated as of July 30, 1998 by and between Seller and the Company.

          "Acquisition Transaction" has the meaning ascribed to it in

Section 4.31.

          "Affiliate" means any Person that directly, or indirectly through

one or more intermediaries, controls or is controlled by or is under common

control with the Person specified.  For purposes of this definition,

control of a Person means the power, direct or indirect, to direct or cause

the direction of the management and policies of such Person whether by

Contract or otherwise and, in any event and without limitation of the

previous sentence, any Person owning ten percent (10%) or more of the

voting securities of a second Person shall be deemed to control that second

Person.

          "Agreement" means this Asset Purchase Agreement and the Exhibits

and the Schedules hereto.

          "Alloy Services Agreement" has the meaning ascribed to it in

Section 4.10.

          "Ancillary Agreements" shall mean the Agreements contained in

Exhibits A through W.

          "Assets" means the Business Assets, the NVOC Assets and the OCC

Assets.






          "Base NAV" has the meaning ascribed to it in Section 1.4(a).

          "Battice Facility" has the meaning ascribed to in Section 4.12.

          "Battice Facility Supply Agreement" has the meaning ascribed to

it in Section 4.12.

          "Benefit Plans" has the meaning ascribed to it in Section

2.15(b).

          "Borates Supply Agreement" has the meaning ascribed to it in

Section 4.24.

          "Business" has the meaning ascribed to it in the forepart of this

Agreement.

          "Business Assets" means all of the assets, rights, properties,

claims, contracts and business of Seller, which, except as expressly

provided in the ACA, are principally related to the Business, other than

Excluded Assets.

          "Business Manufacturing Technology" means the manufacturing

equipment, machinery, tooling, and processes which are or have been in use,

operational, ordered, or being refurbished on or prior to the Closing: (i)

in the Manufacturing Facilities to manufacture Business Products; or (ii)

in the Battice or Guelph facilities dedicated exclusively to the

manufacture of Business Products.

          "Business Products" means glass fiber specialty products made of:

               (i)  untwisted glass fibers or filaments with a maximum

nominal diameter of 13.96 microns (micronage values herein shall refer to 

maximum or minimum nominal values in common usage in the industry, in this

instance, a K filament), which products have a linear density of a TEX

value of less than or equal to 300 g/km, and which filaments are

continuous;

               (ii) chopped strands or fibers having a maximum nominal

diameter of 13.96 microns and a fiber length greater than 1.5" as dry 

chop for use in carding processes;

               (iii)     any glass fiber products of any TEX or micronage

mechanically twisted and/or plied in a secondary operation;

               (iv) S Glass products in any form;

               (v)  conventional or assembled roving of glass fiber coated

with a conductive material to produce a roving having a resistance greater

than 3,000 ohms for use in applications in which such resistance is a





required property;

               (vi) air texturized glass fiber strands with a maximum

nominal diameter of greater than 12.70 microns; and

               (vii)     waste products from the production of  any of the

Business Products defined in (i) through (iii) in the form of chopped glass

fiber strands made with twisted bobbin input, dry chopped glass fiber with

starch-based sizing, and hanks (cut forming packages), provided that such

waste products not exceed 3% of the production of the underlying product;

          Business Products as defined in (i) through (iii) shall not

include:

               (viii)    any air texturized product made of glass filaments

or fibers having a minimum nominal diameter of 13.97 microns; or

               (ix) assembled or multiend roving of fibers except for the

purpose of making (i) texturized strands, (ii) textile yarn beams, or

(iii) wound products currently made at the Huntingdon, Pennsylvania

facility.

          "Buyer" has the meaning ascribed to it in the forepart of this

Agreement.

          "Buyer Confidential Information" has the meaning ascribed to it

in Section 4.2(b).

          "Buyer Interest" has the meaning ascribed to it in the forepart

of this Agreement.

          "Buyer Losses" has the meaning ascribed to it in Section 8.2(a).

          "Buyer Material Adverse Effect" has the meaning ascribed to it in

Section 3.1.

          "Buyer Threshold" has the meaning ascribed to it in Section

8.3(b).

          "Buyer's Objection" has the meaning ascribed to it in Section

1.4(d).

          "Carly Sublease" has the meaning ascribed to it in Section 4.25.

          "Claim" means a written notice asserting a breach of a

representation, warranty, covenant, agreement or obligation specified in

this Agreement, which shall reasonably set forth, in light of the

information then known to the party giving such notice, a reasonably

detailed description of and estimate (if then reasonable to make) of the

amount involved in such breach. "Closing" has the meaning ascribed

to it in Section 6.1.






          "Closing Calculation" has the meaning ascribed to it in Section

1.4(d).

          "Closing Date" has the meaning ascribed to it in Section 6.1.

          "Closing NAV" has the meaning ascribed to it in Section 1.4(a).

          "Closing Statement" has the meaning ascribed to it in

Section 1.4(c).

          "Commitment Letters" has the meaning ascribed to it in Section

3.6.

          "Company 401(k) Plan" has the meaning ascribed to it in Section

4.34(g).

          "Company Financing" has the meaning ascribed to it in Section

4.38.

          "Company Pension Plan" has the meaning ascribed to it in Section

4.34(f).

          "Contracts" means all commitments, contracts, indentures and

agreements, written or oral, to which Seller transferred to the Company

pursuant to the ACA.

          "Contractual Consents" has the meaning ascribed to it in Section

5.3(c).

          "Cross License Agreement" has the meaning ascribed to it in

Section 4.19.

          "Definitive Financing Agreements" has the meaning ascribed to it

in Section 9.1(b).

          "De Minimis Buyer Losses" has the meaning ascribed to it in

Section 8.2(b).

          "De Minimis Seller Losses" has the meaning ascribed to it in

Section 8.3(b).

          "Disclosed Contracts" has the meaning ascribed to in Section

2.10(a).

          "Environmental Law" means any applicable law, order, regulation,

decree, permit, license, ordinance, or other federal, state or local

governmental requirements relating to pollution, the protection of human

health and the environment, the discharge or Release of Hazardous

Substances into the environment, or the exposure to Hazardous Substances

(including odors) in the work place.

          "ERISA" means the Employee Retirement Income Security Act of

1974, as amended, and the rules and regulations promulgated thereunder.

          "Estimated Closing NAV" has the meaning ascribed to it in

Section 1.4(b).

          "Estimated Closing Statement" has the meaning ascribed to it in

Section 1.4(b).

          "Facilities" has the meaning ascribed to it in Section 2.9(b).





      
          "Financial Statements" has the meaning ascribed to it in Section

2.7.

          "Financing" has the meaning ascribed to it in Section 3.6.

          "GAAP" means United States generally accepted accounting

principles, consistently applied throughout the specified period and in the

immediately prior comparable period.

          "GLAS Marks" has the meaning ascribed to it in Section 4.30.

          "Glass Marbles Supply Agreement" has the meaning ascribed to it

in Section 4.9.

          "Governmental or Regulatory Authority" means any court, tribunal,

arbitrator, authority, agency, commission, official or other

instrumentality of the United States, any foreign country or any domestic

or foreign state, county, city or other political subdivision.

          "Guarantees" has the meaning ascribed to it in Section 4.33.

          "Guelph Facility" has the meaning ascribed to it in Section 4.13.

          "Guelph Facility Supply Agreement" has the meaning ascribed to it

in Section 4.13.

          "Hazardous Substance" means petroleum, petroleum by-products,

polychlorinated biphenyls and any other chemicals, materials, substances or

wastes which are currently defined or regulated as "hazardous substances,"

"hazardous materials," "hazardous wastes," "extremely hazardous wastes,"

"restricted hazardous wastes," "toxic substances," "toxic pollutants,"

"toxic air pollutants," "pollutants," or "contaminants" under any

Environmental Law.

          "Historical Annual Financial Statements" has the meaning ascribed

to it in Section 2.7.

          "Historical Financial Statements" has the meaning ascribed to it

in Section 2.7.

          "Historical Interim Financial Statements" has the meaning

ascribed to it in Section 2.7

          "Huntingdon Lease Agreement" has the meaning ascribed to it in

Section 4.11.

          "Indebtedness" of any Person means all obligations of such Person






(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or

similar instruments, (iii) for the deferred purchase price of goods or

services (other than trade payables or accruals incurred in the ordinary

course of business), (iv) under capital leases and (v) in the nature of

guarantees of the obligations described in clauses (i) through (iv) above

of any other Person.

          "Indemnity Claim" has the meaning ascribed to it in Section

8.4(a).

          "Intellectual Property Rights" means copyrights, patents,

trademarks, know how, design marks, service marks, logos and trade names

and other intangible property, including any and all related goodwill, and

foreign and domestic registrations and applications.

"Interests" has the meaning ascribed to it in Section 2.3.

          "Inventory" has the meaning ascribed to it in the ACA.

          "Knowledge of Seller, the Company, NVOC or OCC" means the actual

knowledge of any of the following individuals: Chuck Dana, Tim Winfrey, Pat

Lynch, Inger Eckert, Jay Harvey, Bob Fisher, Dennis Chalwick, John Christy,

Joseph Masciangelo and Jerry Hawkins.

          "Landfill Agreement" has the meaning ascribed to it in Section

4.28.

          "Law" means any law (including common law), statute, code, rule,

regulation, reporting, permitting or licensing requirement, ordinance and

other pronouncement having the effect of law of the United States, any

foreign country or any domestic or foreign state, county, city or other

political subdivision, including those promulgated or enforced by any

Governmental or Regulatory Authority.

          "Leased Real Property" has the meaning ascribed to it in Section

2.9(b).

          "Liabilities" means all Indebtedness, obligations and other

liabilities of a Person (whether absolute, accrued, contingent, fixed or

otherwise, or whether due or to become due).

          "Licensed Proprietary Rights" has the meaning ascribed to it in

Section 2.12.       

          "Licenses and Permits" means the licenses, permits, certificates of 

authority, authorizations, approvals, registrations, franchises and 

similar consents granted or issued by any Governmental or

Regulatory Authority transferred by Seller to the Company pursuant to the

ACA.






          "Losses" has the meaning ascribed to it in Section 8.3(a).

          "Manufacturing Facilities" means the portions of Seller's

facilities at Aiken, South Carolina, Huntingdon, Pennsylvania, and South

Hill, Virginia to be transferred to Buyer which do not include the portions

of the Aiken and Huntingdon facilities at which Seller manufactures

continuous filament mat or wet process mat.

          "Manufacturing Services Agreement" has the meaning ascribed to it

in Section 4.16.

          "Material Adverse Effect" has the meaning ascribed to it in

Section 2.1.

          "Material Contracts" has the meaning ascribed to it in Section

2.10(a).

          "Net Asset Value" means the sum of Other Current Assets less

Current Liabilities as reflected in the Pro Forma Statement of Net Assets

to be sold as of 12/31/97 but excluding Trade Payables (which shall be paid

in full immediately prior to the Closing Date), with such amounts

determined in accordance with GAAP using the same assumptions reflected in

the 12/31/97 Historical Financial Statements.

          "Neutral Accounting Firm" has the meaning ascribed to it in

Section 1.4(d)(ii).      

          "Non-Compete Agreement" has the meaning ascribed to it in Section 

4.15.

          "NVOC" shall mean N.V. Owens Corning S.A., a Belgian corporation

and a subsidiary of Seller.

          "NVOC Assets" has the meaning ascribed to it in Section 4.29(a).

          "NVOC Asset Purchase Agreement" has the meaning ascribed to it in

Section 4.29(a).

          "OCC" shall mean Owens-Corning Canada, Inc., a Canadian

corporation and a subsidiary of Seller.

          "OCC Assets" has the meaning ascribed to it in Section 4.29(b).

          "OCC Asset Purchase Agreement" has the meaning ascribed to it in

Section 4.29(b).





      
           "Owned Real Property" means those parcels of real property

transferred by Seller to the Company pursuant to the ACA Agreement.

          "Patent and Know How License Agreement" has the meaning ascribed

to it in Section 4.5.

          "Permitted Liens" has the meaning ascribed to it in Section

2.9(a).

          "Person" means any natural person, corporation, general

partnership, limited partnership, proprietorship, other business

organization, trust, union, association or Governmental or Regulatory

Authority.

          "Pitney Bowes 1997 Sublease" has the meaning ascribed to it in

Section 4.26.

          "Pitney Bowes 1996 Sublease" has the meaning ascribed to it in

Section 4.27.

          "Pro Forma Information" has the meaning ascribed to it in

Section 2.7.

          "Proprietary Rights" has the meaning ascribed to it in

Section 1.1(e) of the ACA.

          "Purchase Price" has the meaning ascribed to it in Section 1.2.

          "Real Property" has the meaning ascribed to it in Section 2.9(b).

          "Real Property Leases" means the leases and subleases of real

property transferred by Seller to the Company pursuant to the ACA.

          "Release" means any spilling, leaking, pumping, pouring,

emitting, emptying, discharging, injecting, escaping, leaching, dumping, or

disposing of a Hazardous Substance into the environment.

          "Required Consents" has the meaning ascribed to it in Section

5.1(b).

          "Schedule" means the record delivered to Buyer by Seller herewith

and dated as of the date hereof, containing all lists, descriptions,

exceptions and other information and materials as are required to be

included therein by Seller pursuant to this Agreement.

          "Seller" has the meaning ascribed to it in the forepart of this

Agreement.

          "Seller 401(k) Plan" has the meaning ascribed to it in Section

4.34(g).






          "Seller Confidential Information" has the meaning ascribed to it

in Section 4.2(c).

          "Seller Losses" has the meaning ascribed to it in Section 8.3(a).

          "Seller Pension Plan" has the meaning ascribed to it in Section

4.34(f).

          "Services Agreement" has the meaning ascribed to it in Section

4.8.

          "Sliver Supply Agreement" has the meaning ascribed to it in

Section 4.23.

          "Tax" or "Taxes" shall mean all federal, state, local or foreign

net or gross income, gross receipts, net proceeds, sales, use, ad valorem,

value added, franchise, bank shares, withholding, payroll, employment,

excise, property, alternative or add-on minimum, environmental or other

taxes, assessments, duties, fees, levies or other governmental charges of

any nature whatever, whether disputed or not, together with any interest,

penalties, additions to tax or additional amounts with respect thereto;

          "Tax Benefit" has the meaning ascribed to it in Section 7.4.

          "Termination Date" has the meaning ascribed to it in Section 8.1.

          "Threshold" has the meaning ascribed to it in Section 8.2(b).

          "Trade Payables" shall mean the obligations of the Business

recorded in the captions "Accounts Payable-Trade and Accounts

Payable-Marbles" in the Pro Forma Statement of Net Assets to be Sold.

          "Trademark Assignment" has the meaning ascribed to it in Section

4.21.

          "Transferred Employee" has the meaning ascribed to it in Section

4.34.

          "Transitional Coverage" has the meaning ascribed to it in Section

4.34.

          "Waste Water Treatment Services Agreement" has the meaning

ascribed to it in Section 4.19.

          (b)  Unless the context of this Agreement otherwise requires, (i)

words of any gender include each other gender, (ii) words using the

singular or plural number also include the plural or singular number,

respectively, (iii) the terms "hereof," "herein," "hereby" and derivative

or similar words refer to this entire Agreement, (iv) the term "Section"





refers to the specified Section of this Agreement, (v) the phrases

"ordinary course of business" and "ordinary course of business consistent

with past practice" refer to the business and practice of Seller in

connection with the Business.  All accounting terms used herein and not

expressly defined herein shall have the meanings given to them under GAAP.

  10.11  Entire Agreement.

          This Agreement, the Schedules and Exhibits and the other

agreements referred to herein hereto set forth the entire understanding of

the parties hereto, and no modifications or amendments to this Agreement

shall be binding on the parties unless in writing and signed by the party

or parties to be bound by such modification or amendment.

  10.12  Section Headings; Table of Contents.

          The section headings contained in this Agreement and the Table of

Contents to this Agreement are for reference purposes only and shall not

affect the meaning or interpretation of this Agreement.

  10.13  Severability.

          If any provision of this Agreement shall be declared by any court

of competent jurisdiction to be illegal, void or unenforceable, all other

provisions of this Agreement shall not be affected and shall remain in full

force and effect.

  10.14  Counterparts.

          This Agreement may be executed in counterparts, each of which

shall be deemed to be an original and all of which together shall be deemed

to be one and the same instrument.






          IN WITNESS WHEREOF, the parties have caused this Agreement to be

duly executed as of the date first above written.

                              OWENS CORNING



                              By: /s/ Glen H. Hiner
                                    Name:  Glen H. Hiner
                                    Title: Chairman of the Board
                                           and Chief Executive Officer

                              GLASS HOLDINGS CORP.


                              By: /s/ Robert Porcher 
                                      Name: Robert Porcher
                                      Title:President


                              LINCOLN YARNS, LLC
                              By: Owens Corning, Member


                              By: /s/ Glen H. Hiner
                                    Name:  Glen H. Hiner
                                    Title: Chairman of the Board
                                           and Chief Executive Officer  




                             TABLE OF CONTENTS

                                                                       Page


     
                                 Exhibits


EXHIBIT A -  Form of Patent and Know How License Agreements

EXHIBIT B -  Intentionally Omitted

EXHIBIT C -  Form of Glass Marble Supply Agreement

EXHIBIT D -  Form of Alloy Services Agreement

EXHIBIT E -  Form of Huntingdon Lease Agreement

EXHIBIT F -  Form of Battice Facility Supply Agreement

EXHIBIT G -  Form of Guelph Facility Supply Agreement

EXHIBIT H-1 - Form of Sanitary Sewer Agreement

EXHIBIT H-2 - Form of Stormwater Agreement

EXHIBIT I -  Form of Non-Compete Agreement

EXHIBIT J -  Form of Manufacturing Services Agreement

EXHIBIT K -  Intentionally Omitted

EXHIBIT L-1 - Form of Aiken Air Modeling Agreement

EXHIBIT L-2 - Form of Huntington Air Modeling Agreement

EXHIBIT M -  Form of Wastewater Treatment Agreement

EXHIBIT N -  Form of Amended and Restated Limited Liability Operating Agreement

EXHIBIT O-1 - Form of Trademark Assignment

EXHIBIT O-2 - Form of Master Patent and Know How Assignment

EXHIBIT P -  Form of Sliver Supply Agreement

EXHIBIT Q -  Form of Borates Supply Agreement

EXHIBIT R -  Form of Carly Sublease






EXHIBIT S -  Form of Pitney Bowes 1997 Sublease

EXHIBIT T -  Form of Pitney Bowes 1996 Sublease

EXHIBIT U -  Form of Landfill Agreement

EXHIBIT V -  Form of NVOC Asset Purchase Agreement

EXHIBIT W -  Form of OCC Asset Purchase Agreement

EX-2.1

                              AMENDMENT NO. 1

                                    TO

                 LLC INTEREST SALE AND PURCHASE AGREEMENT



       AMENDMENT  NO.  1  TO  LLC  INTEREST  SALE  AND  PURCHASE  AGREEMENT
("Amendment No. 1") dated as of September 30, 1998 among OWENS  CORNING,  a
Delaware  corporation ("Seller"), ADVANCED GLASSFIBER YARNS LLC  (formerly,
Lincoln  Yarns, LLC), a Delaware limited liability company (the "Company"),
and AGY HOLDINGS, INC., a Delaware corporation ("Buyer").

                            W I T N E S S E T H

      WHEREAS, Seller, the Company and Glass Holdings, Inc. entered into  a
LLC  Interest Sale and Purchase Agreement dated as of July 31, 1998 (the  "
Purchase  Agreement"),  which  Purchase Agreement  was  assigned  by  Glass
Holdings,  Inc.  to Buyer by an Assignment and Assumption  Agreement  dated
September 30, 1998; and

      WHEREAS,  Seller,  the  Company and  Buyer  desire  to  make  certain
amendments to the Purchase Agreement, all as set forth below;

      NOW  THEREFORE, for good and valuable consideration, the receipt  and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.    Defined  Terms.   Except  as  otherwise  expressly  provided  herein,
capitalized terms used herein which are defined in the Purchase  Agreement,
as  amended hereby, shall have the meanings specified for such terms in the
Purchase Agreement, as so amended.

2.   Amendments to Purchase Agreement.

     (a)  Section 1.2 of the Purchase Agreement shall be amended to read as
follows:

          "The  aggregate  purchase price for the Buyer  Interest
          shall  be three hundred thirty one million five hundred
          thousand   Dollars  ($331,500,000)  in  the  aggregate,
          subject  to adjustment as provided in Section 1.4  (the
          "Purchase Price")."

      (b)   Section 1.4 of the Purchase Agreement is hereby amended to read
as follows:

          "1.4 Cash Payment for Change in Net Asset Value.
          (a)   Calculation of the Cash Payment.  The Company shall make  a





          cash  payment (the "NAV Payment") in the amount by which the  Net
          Asset  Value of the Company as of the Closing Date (the  "Closing
          NAV"), as finally determined pursuant to Section 1.4(d) below, is
          greater  or  less  than thirty one million seven  hundred  thirty
          eight  thousand  dollars  ($31,738,000)(the  "Base  NAV").    The
          calculation of the Base NAV is set forth on Schedule 1.4(a).   If
          the  Closing  NAV is greater than the Base NAV, then the  Company
          shall   make   the  NAV  Payment  to  Jefferson  Holdings,   Inc.
          ("Jefferson").   If the Closing NAV is less than  the  Base  NAV,
          then  the Company shall make the NAV Payment to Buyer.  Such  NAV
          Payment  shall  be paid as set forth in Sections 1.4(b)  and  (e)
          below.
          
          (b)   Estimated  Adjustment.  On the Closing Date,  Seller  shall
          deliver  to Buyer a statement (the "Estimated Closing Statement")
          prepared in accordance with GAAP setting forth a calculation of
          Seller's  good faith estimate of the Closing NAV (the  "Estimated
          Closing NAV").  If the Estimated Closing NAV as set forth on  the
          Estimated  Closing Statement is in excess of the  Base  NAV,  the
          Company  shall make the NAV Payment to Jefferson at Closing.   If
          the  Estimated Closing NAV as set forth on the Estimated  Closing
          Statement is less than the Base NAV, then the Company shall  make
          the NAV Payment to Buyer at Closing.

          (c)   Closing  NAV.  Within ninety (90) days after  the  Closing,
          Seller  will prepare and deliver to Buyer a balance sheet of  the
          Company  as of the Closing Date prepared in accordance with  GAAP
          together  with  a  statement setting forth a calculation  of  the
          Closing  NAV  (the "Closing Statement").  At the  option  of  the
          Buyer, exercisable in writing on or before the Closing Date,  the
          Closing Statement shall be audited by PricewaterhouseCoopers LLP.
          The  cost  of  such audit shall be borne by the  Company.   Buyer
          shall  cooperate  fully and shall cause the  Company  to  provide
          Seller  with  all  assistance and access  to  books  and  records
          necessary  for  Seller  to  prepare the  Closing  Statement.   In
          connection  therewith, Buyer and Seller will  jointly  conduct  a
          physical  inventory of the Inventory as of the  Closing  Date  in
          accordance with the procedures to be mutually agreed by Buyer and
          Seller  acting  reasonably  and in good  faith  and,  at  Buyer's
          option,  such  physical  inventory will be  observed  by  Buyer's
          auditors,  PricewaterhouseCoopers LLP, and, at  Seller's  option,
          such  physical  inventory will be observed by Seller's  auditors,
          Arthur Andersen LLP.

          (d)  Closing Calculation.

                (i)  Buyer shall be entitled to full access to the relevant
          records  and  working papers prepared by or for  Seller,  and  to
          Seller's  employees involved in such preparation, to aid  in  its
          review  of  the calculation of the Closing NAV set forth  on  the
          Closing  Statement.   If  Buyer believes  that  the  Closing  NAV
          calculation (hereinafter the "Closing Calculation") has not  been
          properly   calculated   in  accordance   with   the   calculation
          methodologies  set forth in this Section 1.4,  it  shall,  within





          thirty  (30) days after receipt of the Closing Calculation,  give
          written notice (the "Buyer's Objection") to Seller, setting forth
          the  basis of the Buyer's Objection in reasonable detail and,  to
          the   extent   practicable,  the  adjustments  to   the   Closing
          Calculation which Buyer believes should be made.  Failure  to  so
          notify Seller within such thirty (30) day period shall constitute
          acceptance and approval of the Closing Calculation.  There  shall
          be no adjustment to the Closing Calculation unless the cumulative
          amount of Buyer's Objection equals or exceeds one million dollars
          ($1,000,000.00)  and  provided  that  any  individual   item   of
          adjustment  contained in Buyer's Objection  which  is  less  than
          fifty  thousand  dollars ($50,000.00) shall be  excluded  in  its
          entirety.  If Seller agrees that any change proposed by Buyer  is
          appropriate, the change shall be made to the Closing Calculation,
          whereupon Buyer shall be deemed to have accepted and approved the
          Closing Calculation with respect to such change and any other non-
          disputed item of the Closing Calculation.  If the proposed change
          is  disputed by Seller, then Seller and Buyer shall negotiate  in
          good  faith to resolve such dispute as expeditiously as possible.
          If,  after  a  period of thirty (30) days following the  date  on
          which Buyer gives Seller notice of any such proposed change,  any
          such proposed change still remains disputed, then:

                (ii)  KPMG Peat Marwick LLP (the "Neutral Accounting Firm")
          shall be  engaged to resolve any remaining disputes.  The Neutral
          Accounting  Firm  shall act as an arbitrator to determine,  based
          solely on presentations submitted by Seller and Buyer, and not by
          independent review, only those issues still in dispute.  Each  of
          Buyer and Seller shall have made its complete submission  to  the 
          Neutral Accounting  Firm  within  ten  (10)  days  following  the  
          expiration  of the thirty  (30) day negotiation  period described  
          in Section 1.4(d)(i).  The failure  by  either  party  to  make a 
          complete submission prior to the expiration  of such ten (10) day 
          period shall be deemed a waiver of such party's  right  to make a 
          submission or a further submission to the Neutral Accounting Firm.   
          The Neutral  Accounting  Firm's  determination,  based  upon  the  
          calculation methodologies  set  forth  in this Section 1.4, shall 
          be made within thirty (30) days following  the date  on which the 
          dispute is submitted, shall be set forth in  a written  statement 
          delivered to Seller and Buyer,  and  shall  be final, binding and 
          conclusive.  The fees and any expenses of the Neutral  Accounting 
          Firm shall be shared equally by Seller and Buyer.  In the event a 
          party does not comply with the procedure  and  time  requirements 
          contained  herein,  the  Neutral  Accounting  Firm shall render a 
          decision  based  solely  on  the evidence it has which was timely 
          filed by either of the parties.

          (e)   Payment of Cash NAV Payment.  If the Closing NAV  shown  on
          the Closing Statement exceeds the Estimated Closing NAV, then the
          Company  shall  make  the NAV Payment to Jefferson,  and  if  the
          Closing  NAV  shown on the Closing Statement  is  less  than  the
          Estimated  Closing  NAV,  then the Company  shall  make  the  NAV
          Payment  to  Buyer. Payment of any NAV Payment pursuant  to  this
          Section  1.4(e)  shall  be made by wire transfer  to  an  account





          designated by Jefferson or Buyer, as the case may be,  in  United
          States  Dollars,  in immediately available federal  funds  within
          three  (3) business days after the Closing Calculation  has  been
          finally  determined together with interest from the Closing  Date
          to  the  date of payment at the "base rate" of Citibank, N.A.  or
          any  successor  thereto in New York, New York in  effect  on  the
          Closing Date, based on a 360-day year."

      (c)   Schedule 1.4(a) of the Purchase Agreement is hereby amended  to
read as set forth on Exhibit A hereto.

      (d)  Section 2.20 of the Purchase Agreement is hereby amended to read
as follows:

          "Section 2.20  Disclaimer of Warranty.

          SELLER MAKES NO WARRANTY WITH RESPECT TO THE VALUE, CONDITION OR,
          SUBJECT TO SECTION 2.19, USE OF THE ASSETS OWNED OR USED  BY  THE
          COMPANY,   WHETHER  EXPRESSED  OR  IMPLIED,  INCLUDING,   WITHOUT
          LIMITATION,  ANY IMPLIED WARRANTY OF MERCHANTABILITY  OR  FITNESS
          FOR A PARTICULAR PURPOSE."

      (e)   Section  4.20  of the Purchase Agreement is hereby  amended  to
insert  the  words  "to   execute and deliver" after the  words  "Jefferson
Holdings, Inc." in the first line.

      (f)  Section 4.29 of the Purchase Agreement is hereby amended to read
as follows:

          "4.29        Purchase   of   Assets    from    Seller's
          Subsidiaries.   The parties acknowledge that,  pursuant
          to agreements dated September 29, 1998, the Company has
          purchased certain assets from, and has assumed  certain
          liabilities  of, Owens-Corning (Japan)  Ltd.,  OCC  and
          NVOC (the "Subsidiary Asset Purchase Agreements").  The
          parties  agree  that to the extent that  there  is  any
          adjustment  to the Purchase Price pursuant  to  Section
          2(b)   of   each  of  the  Subsidiary  Asset   Purchase
          Agreements,  any payment required to  be  paid  by  the
          Company shall be paid  by the  Seller, and  any  amount 
          required to be paid to the Company shall be paid to the 
          Seller."

      (g)   Section 4.34(i) of the Purchase Agreement is hereby amended  to
read as follows:

          "(i)  Stock Options.  Each outstanding option to purchase  Seller
          common stock held by Transferred Employees shall vest immediately
          upon  the  Closing and expire on the earlier of (a) December  31,
          1999 or (b) the date on which the option expires by the terms  of
          the  applicable option contract.  The Company agrees to indemnify
          Seller  for  any  costs or other damages incurred  by  Seller  in
          connection  with  the extension of any option beyond  six  months
          following the Closing."
      (h) Section 4.38 of the Purchase Agreement is hereby amended to read
          as follows:




          "4.38     Post-Closing Distributions by the Company.

                Immediately upon the Closing, the parties shall  cause  the
          Company  to,  and the Company shall, make a cash distribution  in
          the  aggregate  amount  of three hundred ninety  million  Dollars
          ($390,000,000) to its members, pro rata in accordance with  their
          then  respective  ownership interests in the Company,  and  Buyer
          shall  have  caused the Company to obtain any and  all  financing
          necessary   to   fund  such   cash  distribution  (the   "Company
          Financing") in accordance with the terms and conditions set forth
          in  the  Commitments.  In addition, the parties shall  cause  the
          Company  to,  and  the Company shall, make  the  NAV  Payment  in
          accordance  with and in the form and manner described in  Section
          1.4 of this Amendment No. 1."

      (i)  Schedule 7.1 of the Purchase Agreement is hereby amended to read
as set forth on Exhibit B hereto.

      (j)  Section 10.10(a) of the Purchase Agreement is hereby amended  to
revise  the definitions of "Material Adverse Effect" and "Net Asset  Value"
to read as follows:

           "  "Material Adverse Effect" has the meaning ascribed to  it  in
Section 2.2.

          "Net Asset Value" means the sum of Total Current Assets
          less  Current Liabilities as reflected in the Pro Forma
          Statement  of Net Assets to be sold as of 12/31/97  but
          excluding Trade Payables (which shall be paid  in  full
          immediately  prior  to  the Closing  Date),  with  such
          amounts  determined in accordance with GAAP  using  the
          same  assumptions reflected in the 12/31/97  Historical
          Financial Statements and methodology in calculating the
          Base NAV as set forth in Schedule 1.4(a)."

      (k)  Section 10.10(a) of the Purchase Agreement  is hereby amended to
add the following new definitions in appropriate alphabetical order:

          " "Jefferson" has the meaning ascribed to it in Section 1.4(a).

           "NAV  Distribution" has the meaning ascribed to  it  in  Section
1.4(a).

          "Subsidiary Asset Purchase Agreement" has the meaning ascribed to
          it in Section 4.29."





      (l)  Section 10.10(a) of the Purchase Agreement is hereby amended  to
delete  the  following  definitions:  "NVOC Assets," "NVOC  Asset  Purchase
Agreement," "OCC Assets" and "OCC Asset Purchase Agreement."

     (m)  The Purchase Agreement is hereby amended to delete Exhibits V and
W therefrom.

3.   Condition to Effectiveness of Amendment No. 1.

      The  amendments contained in this Amendment No. 1 are subject to  and
conditioned upon the Closing occurring on or before September 30, 1998.

4.   Representations and Warranties.

     (a)  Seller represents and warrants to Buyer that:

           (i)  Each of Seller and the Company has the corporate power  and
authority to execute and deliver this Amendment No. 1.

           (ii)  This  Amendment  No.  1 is the legal,  valid  and  binding
obligation  of Seller and the Company enforceable against each of  them  in
accordance with the terms hereof.

     (b)  Buyer represents and warrants to Seller that:

           (i)  Buyer has the corporate power and authority to execute  and
deliver this Amendment No. 1.

           (ii)  This  Amendment  No.  1 is the legal,  valid  and  binding
obligation  of  Buyer enforceable against it in accordance with  the  terms
hereof.

5.   Miscellaneous.

      (a)  Amendment to Purchase Agreement.  This Amendment No. 1 shall  be
construed, administered and applied in accordance with all of the terms and
provisions of the Purchase Agreement.

      (b)  Successors and Assigns.  This Amendment No. 1 shall inure to the
benefit  of  and  be  binding on the parties hereto  and  their  respective
successors and permitted assigns.

      (c)   Effect of Amendment No. 1.  The amendments hereunder  shall  be
limited  precisely  as  written  and  shall  not  constitute  a  waiver  or
modification  of any other covenants, terms or provisions of  the  Purchase
Agreement, which shall remain in full force and effect.

      (d)   Amendment;  Waiver.   This Amendment  No.  1  may  be  amended,
supplemented or otherwise modified only by a written instrument executed by
the  parties  hereto.  No waiver by either party of any of  the  provisions
hereof  shall  be  effective unless explicitly set  forth  in  writing  and
executed by the party so waiving.






      (e)   Governing Law. This Amendment No. 1 shall be governed  by,  and
construed  in accordance with, the laws of the state of New York applicable
to a contract executed and performed in such State without giving effect to
the  conflicts  of  laws  principles thereof, except  that  matters  herein
strictly within the purview of the matters covered by the Limited Liability
Company  Act  of  the State of Delaware shall be governed by  such  Limited
Liability Company Act.

      (f)   Counterparts.    This Amendment No. 1 may be  executed  by  the
parties hereto in separate counterparts, each of which when so executed and
delivered  shall be an original, but all such counterparts  shall  together
constitute  one and the same agreement, and all signatures need not  appear
on any one counterpart.





     IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be
duly executed as of the date first above written.



                              OWENS CORNING

                              By: /s/ Charles E. Dana
                                    Name:  Charles E. Dana
                                    Title: Vice President


                              GLASS HOLDINGS CORP.


                              By: /s/ Robert Porcher
                                     Name:  Robert Porcher
                                     Title: President


                              ADVANCED GLASSFIBER YARNS LLC
                              By: Owens Corning, Member


                              By: /s/ Charles E. Dana
                                    Name:  Charles E. Dana
                                    Title: Vice President

EX-99

                               OWENS CORNING
                          Pro Forma Balance Sheet
                            as of June 30, 1998
                                (UNAUDITED)
                                                        

                                         Eliminate
                                        the Business                Historical
                             Historical   Balance      Net Impact    Financial   
                             Financial     Sheet       of Gain on   Statements
                             Statements     (a)           Sale      as Adjusted
Current Assets:

 Cash                          $    42    $    -       $     -      $    42
 Receivables                       597       (25)            -          572
 Inventories                       535       (16)            -          519
 Insurance  for asbestos 
   claims-current portion          125         -             -          125
 Deferred income taxes             137         -             -          137
 Income taxes receivable            27         -             -           27
 Other current assets               64        (1)            -           63
                               -------    -------      -------      -------
       Total Current Assets      1,527       (42)            -        1,485

Property, plant and equip-
  ment, at cost                  3,647      (265)            -        3,382
    Less: Accumulated 
      Depreciation              (1,888)      147             -       (1,741)
                               -------    -------       ------      -------
        Net property, plant 
          and equipment          1,759      (118)            -        1,641
                               -------    -------       ------      -------

Other
 Insurance for asbestos 
   litigation claims               310         -             -          310
 Asbestos costs to be 
   reimbursed                       89         -             -           89
 Deferred income taxes             356         -           (15)(d)      341
 Goodwill                          788         -             -          788
 Investments in affiliates          50         -             -           50
 Other noncurrent assets           181         -             -          181
                               -------    ------        ------      -------
          Total Other            1,774         -           (15)       1,759
                               -------    ------        ------      -------

          Total Assets          $5,060    $(160)        $  (15)     $ 4,885
                               =======    =====         ======      =======


Current Liabilities:
 Accounts payable and accrued 
   liabilities                  $  793    $  (8)        $   22(d)   $   807
 Reserve for asbestos claims 
   - current portion               325        -              -          325
 Short-Term Debt                   119        -              -          119
 Current Portion LT Debt           128        -              -          128
                                ------    -----         ------      -------
    Total Current Liabilities    1,365       (8)            22        1,379
                                ------    -----         ------      -------
Long-Term Debt                   1,761        -           (525)(b)    1,236
                                ------    -----         ------      -------
Other
 Reserve for asbestos claims     1,121        -              -        1,121
 Asbestos liabilities 
   - Fibreboard                     96        -              -           96
 Other employee benefits 
   liability                       340      (10)             -          330
 Pension plan liability             61       (5)             -           56
 Other                             174        -            162(d)       336
                                ------    -----         ------      -------
      Total Other                1,792      (15)           162        1,939
                                ------    -----         ------      ------- 

Company obligated securities 
  of entities holding solely
  parent debentures                503        -              -          503
                                ------    -----         ------      -------
Minority Interest                   21        -              -           21
                                ------    -----         ------      -------

Stockholders' Equity
 Common Stock                      669        -              -          669
 Deficit                          (987)       -            189(c)      (798)
 Accumulated other 
   comprehensive income            (48)       -              -          (48)
 Other                             (16)       -              -          (16)
                                ------    -----         ------      -------   
     Total Equity                 (382)       -            189         (193)
                                ------    -----         ------      -------

Total Liabilities & 
   Stockholders' Equity         $5,060    $ (23)        $ (152)     $ 4,885
                                ======    =====         ======      =======



                       

                                              Owens Corning
                                    Pro Forma Statement of Income
                               For the six months ended June 30, 1998
                                               (UNAUDITED)

                                                                                

                                                  Eliminate
                                   Historical   the Business's                  Pro forma
                                   Financial     Operations       Pro forma    Financial
                                   Statements        (a)          Adjustments    Results

Net Sales                            $ 2,423       $  (140)         $   22(b)     $ 2,305

Cost of Sales (Note 2)                 1,923           (91)             19(b)       1,851
                                     -------       -------          ------        -------

   Gross Margin                          500           (49)              3            454
                                     -------       -------          ------        -------

Operating Expenses (Note 2)
   Marketing and administrative 
     expenses                            281            (4)              -            277
   Science and technology expenses        29            (1)              -             28
   Restructure costs                      87            (2)              -             85
   Other                                 (70)            2               -            (68)
                                     -------       -------          ------        ------- 
          Total operating expenses       327            (5)              -            322
                                     -------       -------          ------        -------         

Income from operations                   173           (44)              3            132

   Cost of borrowed funds                 73             -             (15)(c)         58
                                     -------       -------          -------       -------         

Income before provision for taxes        100           (44)              18            74

   Provision for income taxes             27           (17)               7(d)         17
                                     -------       -------          -------       -------    
Income before minority interest and
   equity income of affiliates            73           (27)              11            57

   Minority interest                     (10)            -                -           (10)

   Equity in net income of affiliates      4             -                -(e)          4
                                     -------       -------          -------       -------

 Net Income                          $    67       $   (27)         $    11       $    51      

 Net Income per Common Share 

 Basic net income per share          $  1.25                                      $  0.95             
                                     -------                                      -------  
 Diluted net income per share        $  1.20                                      $  0.94             
 

 Weighted average number of common
   shares outstanding and common 
   equivalent shares during the 
   period (in millions)

   Basic                                53.5                                         53.5            
   Diluted                              58.7                                         58.7   





                                   Owens Corning
                            Pro Forma Statement of Income
                         For the year ended December 31, 1997
                                    (UNAUDITED)


                                                                
                                            Eliminate
                             Historical   the Business's                           Pro forma
                             Financial      Operations      Pro forma       Financial
                             Statements        (a)         Adjustments      Results

Net Sales                    $    4,373    $    (277)       $    41(b)      $  4,137

Cost of Sales (Note 2)            3,446         (182)            36(b)         3,300

  Gross Margin                      927          (95)             5              837

Operating Expenses (Note 2)
  Marketing and administrative 
    expenses                        580           (7)             -              573
  Science and technology 
    expenses                         69           (1)             -               68
  Restructure costs                  68            -              -               68
  Other                              28            3              -               31
                              ---------      -------         ------         --------
     Total operating expenses       745           (5)             -              740
                              ---------      -------         ------         --------

Income from operations              182          (90)             5               97

  Cost of borrowed funds            111            -            (30)(c)           81
                              ---------      -------         ------         --------  

Income before provision for taxes    71          (90)            35               16

  Provision for income taxes          9          (34)            13(d)           (12)
                              ---------      -------         ------         -------- 

Income before minority 
  interest and equity 
  income of affiliates               62          (56)            21               28

  Minority interest                 (11)           -              -              (11)

  Equity in net income of 
    affiliates                       11            -              -(e)            11
                               --------       ------         ------         -------- 

 Income before cumulative
   effect of accounting
   change                      $     62       $  (56)        $   21         $     28
                               ========       ======         ======         ========

 Net Income per Common
   Share

 Basic net income per share    $   1.18                                     $   0.53
                               --------                                     --------
 Diluted net income per share  $   1.17                                     $   0.52
                               --------                                     --------

 Weighted average number of
   common shares outstanding
   and common equivalent
   shares during the period 
   (in millions)        

 Basic                             52.9                                         52.9 
 Diluted                           53.5                                         53.5  




                        OWENS CORNING
                              
           NOTES TO PRO FORMA FINANCIAL STATEMENTS
                         (UNAUDITED)

(1)  Basis of Presentation

  On July 1, 1998, Owens Corning (the "Company")
  contributed substantially all of the assets of its Glass
  Yarns and Specialty Materials Business (the "Business")
  to Advanced Glassfiber Yarns LLC, a Delaware Limited
  Liability Company ("AGY").  Prior to that time, the
  Business had been part of the Company's Composites
  Systems Business.  The Business has operations in Aiken,
  South Carolina, Huntingdon, Pennsylvania and South Hill,
  Virginia, and, additionally, purchases glass yarns
  products from facilities in Battice, Belgium and Guelph,
  Ontario that continue to be owned by subsidiaries of the
  Company.
  
  On September 30, 1998, the Company sold a 51% interest in
  AGY to AGY Holdings, Inc., a Delaware corporation
  ("Holdings"), for aggregate consideration of $331.5
  million (the "Disposition").  Holdings is a wholly-owned
  subsidiary of Glass Holdings Corp., a Delaware
  corporation, which itself is a wholly-owned subsidiary of
  Groupe Porcher Industries, a French corporation that
  (along with its affiliates) is a significant existing
  customer of the Business.  A wholly-owned subsidiary of
  the Company, Jefferson Holdings, Inc., a Delaware
  corporation ("Jefferson"), continues to hold a 49%
  interest in AGY.  Upon the closing of the Disposition,
  AGY made a special distribution to Holdings and
  Jefferson, of which Jefferson received $191.1 million
  (less certain transaction expenses) (the "Distribution").
  
  In connection with the Disposition, the Company entered
  into agreements to provide various raw materials, capital
  equipment and services to AGY (the "Supply Agreements")
  at contractually agreed upon prices.
  
  The pro forma consolidated statements of income for the
  year ended December 31, 1997, and for the six months
  ended June 30, 1998, give effect to the Disposition and
  the Distribution as if they occurred as of the beginning
  of the periods presented.  The pro forma consolidated
  statements of income include certain adjustments directly
  attributable to the Disposition and Distribution but do
  not reflect any non-recurring charges or credits.  The
  pro forma consolidated balance sheet at June 30, 1998 has
  been prepared assuming the Disposition and Distribution
  occurred on June 30, 1998.

  The pro forma adjustments are based upon available
  information and certain assumptions that the management
  of the Company believes are reasonable.  The pro forma
  consolidated financial statements do not purport to
  represent what the Company's financial position or
  results of operations actually would have been had such
  transactions in fact occurred on the dates indicated.
  These pro forma consolidated financial statements and the
  notes thereto should be read in conjunction with the
  Company's 1997 consolidated financial statements and the
  notes thereto.
  

 (2)  Restructuring, Other Actions and Dispositions

 During 1997, the Company recorded a charge for restructuring
 and other actions to close manufacturing facilities, enhance
 manufacturing productivity and reduce overhead.  The charge
 was comprised of a $68 million pretax charge associated with
 the restructuring of the Company's business segments and a
 $75 million pretax charge associated with asset impairments,
 including investments in certain affiliates.  The impact of
 these charges was to reduce income from operations for the
 year ended December 31, 1997 by $143 million and to reduce
 income before cumulative effect of accounting changes by
 $104 million.   (Please refer to the Company's previously
 filed Annual report on Form 10-K for further discussion of 
 these items.)

 During the first quarter of 1998, the Company recorded a
 charge for restructuring and other actions to enhance
 manufacturing productivity and reduce overhead.  This charge
 represented the Company's second phase of its strategic
 restructuring program announced at the beginning of 1998.
 The charge was comprised of an $87 million pretax charge
 associated with the restructuring of the Company's business
 segments, and an $8 million pretax charge associated with
 other actions.

 In addition, in the first quarter of 1998, the Company sold
 its 50% ownership interest in Alpha/Owens-Corning, LLC.
 With cash proceeds of approximately $103 million, the
 Company recorded a pretax gain of approximately $84 million.
 The pretax gain is recorded in other income on the
 accompanying Pro Forma Statement of Income for the six
 months ended June 30, 1998.

 The impact of the above items was to decrease income from
 operations and net income by $11 million for the six months
 ended June 30, 1998.  (Please refer to the Company's 
 previously filed Quarterly report on Form 10-Q for
 further discussion of these items.)
 
(3)  Pro Forma Adjustments - Statements of Income

  The following describes the adjustments made to reflect
  the transaction described above as if it had occurred at
  the beginning of the periods presented, as indicated in
  Note 1.

  (a)  Represents the elimination of the historical results of
       operations of the Business, and the related provision for
       income taxes at the Company's statutory rate.




  
  (b)  The following table reflects the recurring effects of
       the supply agreements on net sales and cost of sales:

                                                                
                                            
                                 Net Sales                      Cost of Sales
                        ---------------------------     --------------------------             
                                         Six Months                     Six Months
                           Year Ended      Ended         Year Ended       Ended
                           December 31,   June 30,      December 31,     June 30,
(In millions of dollars)      1997         1998            1997           1998 
                        ------------  -------------      ------------    ----------  
                                   
                     
                                                     
                                                    
  Raw material supply        
    agreements                $ 11         $   6            $   9           $   5
  Capital equipment                                   
    and service 
    agreements                   4             2                2               1
  Finished good                
    supply agreements           26            14               28              14  
  Employee benefits              -             -               (3)             (1)
                             -----         -----            -----           -----
                              $ 41          $ 22             $ 36           $  19
                             =====         =====            =====           =====



       Raw Material Supply Agreements
       
       The Company had historically provided the Business
       with certain raw materials, either purchased or
       manufactured by the Company, at cost.  Pursuant to
       the terms of certain raw material supply agreements,
       the Company will supply these raw materials at a
       contractually agreed upon price.
       
       Capital Equipment and Service Agreements
       
       The Company had historically provided certain
       capital equipment and fabrication services to the
       Business at cost.  Pursuant to the terms of certain
       capital equipment and services agreements, such
       equipment and related services will be provided to
       AGY at contractually agreed upon prices.
     
       Finished Good Supply Agreements
       
       The Company will continue to manufacture certain
       glass yarns products and other specialty materials
       and will sell these products to AGY under finished
       good supply agreements at contractually agreed upon
       prices.  The historical net sales and cost of sales
       associated with these products were eliminated as
       described in 3 (a) above and have been included in 
       the pro forma adjustments at the agreed upon prices.

       Employee Benefits

       Reflects the reduction of the net pension expense
       and net postretirement benefits expense over the
       amounts recorded historically, as a result of the
       transfer of employees to AGY.

  (c)  Reflects the reduction in interest expense due to the
       Company's use of the net proceeds to reduce certain
       outstanding debt.




  (d)  Reflects the tax effects of the pro forma adjustments at
       the Company's statutory tax rate.

  (e)  In connection with the Disposition and Distribution, AGY 
       made cash distributions to the Company and Glass Holdings 
       Corp. in excess of the total equity of AGY.  As a result, 
       the Company will not record its equity in the net 
       income or loss of AGY until such time as AGY eliminates 
       its equity deficit.  Accordingly, the pro forma Statements 
       of Income for the year ended December 31, 1997 and for the 
       six months ended June 30, 1998 do not include an adjustment 
       to record the Company's equity in the net income of AGY.

(4)  Pro Forma Adjustments - Balance Sheet

  The following adjustments reflect, among other items, the
  effects of certain non-recurring items resulting from the
  Disposition described in Note 1.

  (a)  Reflects the removal of the assets contributed to and
       the liabilities assumed by AGY from the Company's historical
       balance sheet.

  (b)  Reflects the net reduction in debt from receipt of the
       Disposition and Distribution proceeds.

  (c)  Reflects the net of tax impact of the Disposition and
       Distribution.

  (d)  Reflects the tax effects of the Disposition and
       Distribution, the accrual of certain transaction expenses
       and a contractual obligation of the Company to provide
       financial support to AGY in the event that AGY is unable to
       pay interest on its indebtedness for a period of three
       years.