CLADWOOD INFORMATION

JEFFERSON SMURFIT'S DESCRIPTION OF THEIR CLADWOOD SIDING:

"CLADWOOD IS A WOOD COMPOSITE PANEL USED BY THE HOUSING INDUSTRY, MANUFACTURED FROM SAWMILL SHAVINGS AND OTHER WOOD RESIDUALS AND OVERLAID WITH RECYCLED NEWSPRINT"

CLASS ACTION SETTLEMENT AGREEMENT:

1. DEFINITIONS 1.1 Action means Cave-Woods, et al. v. Jefferson Smurfit Corporation, et. Al., No. 97-2-19958-ISEA (King County Superior Court, WA)

IMPORTANT DATES AND DEADLINES

"Opt-Out" Postmark Deadline May 3, 1999
Comment/Objection Postmark Deadline May 3, 1999
Fairness Hearing May 26, 1999
CLOSE OF CLAIMS PERIOD FEBRUARY 1, 2002*
(*The claim period could be extended if two-and-a-half years from the date on which the Court enters a Final Order and Judgment, is later than February 1, 2002)

The Settlement Agreement contains a COMPENSATION FORMULA, which will be the measure of payment an eligible Claimant is entitled to recover for claims found to be compensable under the Settlement. As agreed by the parties, the Compensation Formula is the NUMBER OF SQUARE FEET of siding deemed to have Product Failure, as defined in the Settlement Agreement, MULTIPLIED BY $4.25 per square foot of affected siding (or $136.00 FOR A 4' X 8' PANEL).

If ANY PART of a board or panel shows Product Failure not excluded by a Causation Exception set forth in the Settlement Agreement, the ENTIRE BOARD OR PANEL will be considered to have compensable damage.
If 50% OR MORE of the siding on an outside wall section of a structure is found to have compensable damage, an eligible Claimant will receive COMPENSATION FOR THE ENTIRE WALL section. If 65% OF THE SIDING square footage OF THE STRUCTURE has compensable damage, an eligible Claimant will receive compensation for ALL OF THE CLADWOOD® SIDING on the structure.

To be entitled to RECOVER PAYMENT under the Settlement, a Claimant must establish that Product FAILURE HAS OCCURRED. Product Failure is defined in the Settlement Agreement to include: (1) BOWING of siding; (2) FUNGAL DEGRADATION into the substrate or fungal degradation which results in soft board in which thumb pressure exhibits sponginess (springiness) deforming the board or produces a significant indentation in the board or which causes the board to deconsolidate; or (3) BUCKLING of siding in excess of 1/4" between studs placed not more than 18" on center. Product Failure does not include: (1) intentional or reckless PHYSICAL DAMAGE to the siding; (2) NEGLIGENT PHYSICAL DAMAGE to the siding unrelated to installation or maintenance; or (3) damage to the siding from INSURED LOSS, such as fire, hurricane, flood, earthquake, or earth movement (except hail).

A Claimant will NOT BE ENTITLED TO RECOVER for loss clearly caused by ERRORS IN THE APPLICATION of the siding, or caused by the DELIVERY OR SETUP OF THE STRUCTURE. The Settlement Agreement sets forth certain limited Causation Exceptions for which Claimants are not eligible to recover compensation under the Agreement. In summary terms, the Causation Exceptions include the following: (a) FRAMING MISALIGNMENT; (b) BOWED STUDS; (c) FAILURE TO FOLLOW APPLICATION INSTRUCTIONS; (d) FOREIGN OBJECTS between panel and framing, (e) siding WITHIN SIX INCHES OF CONCRETE, GROUND, LANDSCAPE OR HARDSCAPE, pursuant to HUD standards, or WITHIN 3/8" of ancillary structures such as DECKS, or WITHIN 1/4" OF DIRECT CONTACT with CONCRETE or MASONRY FOUNDATIONS; (f) LEAKS which result in damage to the siding (other than leaks resulting from failure of the siding); (g) FAILURE to provide GROUND MOISTURE BARRIER or proper VENTING; (h) failure to REPAINT SIDING installed BEFORE DECEMBER 31, 1992 SINCE THAT DATE; (i) failure to PROPERLY MAINTAIN CAULK on and around the trim and windows; (j) permanently installed SPRINKLER SYSTEMS which consistently cause a direct spray against the siding in an unusual manner; and (k) use of mill grade product (i) in contravention of a building code or (ii) where failure is caused by the difference in quality between mill grade and standard grade. For a CAUSATION EXCEPTION TO APPLY, the condition giving rise to the Exception MUST BE OBSERVABLE to the Independent Inspector without intrusive testing and must be determined to be the CLEAR CAUSE OF THE DAMAGE. ALL DOUBTS about such causation shall be resolved in FAVOR OF THE CLAIMANT.

The Settlement provides for a claim adjustment based on the use of the siding prior to filing a claim. For siding manufactured in 1993 AND AFTER, there is NO ADJUSTMENT. For siding manufactured on or BEFORE DECEMBER 31, 1992, there will be an INITIAL REDUCTION OF 16%, plus 8% PER YEAR for each year that the date of installation precedes 1992. The MAXIMUM reduction will be 65%.

The Settlement permits eligible Claimants to make A MAXIMUM OF TWO CLAIMS on a property. After processing of an initial claim, a Claimant may elect to defer any initial payment due and to file a Deferred Claim. A Deferred Claim would include any subsequent damage incurred. Regardless of the number of claims made, there will only be one payment for each property under the settlement. Accordingly, once a Claimant accepts payment under the Settlement, no further claims will be paid.

To make a claim, an eligible Claimant must submit a properly completed Claim Form to the Claims Administrator selected by the parties and approved by the Court with proof that the siding on their structure is Cladwood® siding. A Claimants must submit ONE OR MORE of the following to establish that the Siding is Cladwood®: (1) A PRIOR COMMUNICATION FROM DEFENDANTS which confirms that the siding is Cladwood®; (2) a BROCHURE, WARRANTY, OR MANUFACTURER'S OR BUILDER'S DESCRIPTION establishing that the siding is Cladwood®; (3) PHOTOGRAPHS showing each side of the structure claimed to have Cladwood® siding; (4) a 2" X 2" SAMPLE of the siding with a certification from the Claimant that the sample is from their structure; or (5) A CHECK OR MONEY ORDER in the amount of $100.00 or the actual cost of inspection (whichever is less) to pay for the cost of an inspection to determine the identification of the siding.

After receipt of a properly completed Claim Form, Defendants may elect to authorize an offer of SETTLEMENT OF THE CLAIM PRIOR TO AN INSPECTION of the Claimant's property. If the Claimant accepts that offer, the Claims Administrator will authorize payment, and no further claims may be made for that property. The Claimant may "defer" the offer. Payment of a deferred offer is guaranteed by Defendants, and the Claimant reserves the right to submit a subsequent claim. If the Claimant takes no action on the offer, it will be withdrawn at the conclusion of the Claim Period. In the event the offer is rejected, it will be deemed withdrawn and will not be guaranteed by Defendants.

If Defendants do not authorize an offer without inspection, or if a Claimant rejects or does not defer the offer, an INDEPENDENT INSPECTOR from a firm selected by the parties and approved by the Court will inspect the property to VERIFY THE AMOUNT, if any, of compensable DAMAGE under the Settlement Agreement. After completion of the inspection, the Independent Inspector will forward a report to the Claims Administrator, who will then determine the amount of payment (if any) due the Claimant according to the Compensation Formula. If calculation of the claim results in a payment due the Claimant, the Claims Administrator will authorize payment. If a Claimant accepts payment of a calculated claim, no further claims may be made for that property.