EXHIBIT 10.4 STOCK PURCHASE AGREEMENT

Stock Purchase Agreement

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Title: EXHIBIT 10.4 STOCK PURCHASE AGREEMENT
Governing Law: Delaware Date: 5/10/2005
Industry: Conglomerates Law Firm: Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd.; Evans Keane, LLP;Weil, Gotshal & Manges LLP Sector: Conglomerates

Exhibit 10.4

EXECUTION COPY

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STOCK PURCHASE AGREEMENT

BY AND AMONG

LEUCADIA NATIONAL CORPORATION

AND

THE SELLING SHAREHOLDERS NAMED HEREIN

DATED AS OF MAY 2, 2005

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TABLE OF CONTENTS

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PAGE

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ARTICLE I DEFINITIONS....................................................................................1

Section 1.1 Definitions..........................................................................1

Section 1.2 Other Definitional Provisions.......................................................10

ARTICLE II PURCHASE OF SHARES; PURCHASE PRICE............................................................10

Section 2.1 Sale and Purchase of Shares.........................................................10

Section 2.2 Consideration.......................................................................10

Section 2.3 Net Working Capital Adjustment......................................................11

Section 2.4 Escrow..............................................................................13

Section 2.5 Sales and Transfer Taxes............................................................13

Section 2.6 Further Assurances..................................................................14

ARTICLE III CLOSING; CLOSING DELIVERIES...................................................................14

Section 3.1 Closing.............................................................................14

Section 3.2 Deliveries by the Sellers at Closing................................................14

Section 3.3 Deliveries by the Purchaser at Closing..............................................16

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS.................................................16

Section 4.1 Due Organization and Status.........................................................17

Section 4.2 Authority; Enforceability...........................................................17

Section 4.3 Noncontravention....................................................................17

Section 4.4 Capital Stock of the Companies; Transactions in Equity Securities..................18

Section 4.5 Subsidiaries........................................................................19

Section 4.6 Assets and Properties of the Business...............................................19

Section 4.7 Financial Statements................................................................20

Section 4.8 Absence of Changes..................................................................20

Section 4.9 Legal Compliance....................................................................21

Section 4.10 Taxes...............................................................................21

Section 4.11 Contracts...........................................................................23

Section 4.12 Related Party Agreements............................................................24

Section 4.13 Litigation..........................................................................24

Section 4.14 Employee Matters....................................................................24

Section 4.15 Customers; Suppliers................................................................25

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Section 4.16 Authorizations......................................................................26

Section 4.17 Insurance...........................................................................26

Section 4.18 Real Property.......................................................................26

Section 4.19 Environmental Matters...............................................................27

Section 4.20 Brokers' Fees.......................................................................28

Section 4.21 Intellectual Property...............................................................28

Section 4.22 Accounts Receivable.................................................................29

Section 4.23 Powers of Attorney..................................................................29

Section 4.24 Warranties..........................................................................29

Section 4.25 Bank Accounts.......................................................................29

Section 4.26 Absence of Undisclosed Liabilities..................................................29

Section 4.27 Disclaimer Regarding Estimates and Projections.....................................29

ARTICLE V REPRESENTATIONS OF THE PURCHASER..............................................................30

Section 5.1 Organization........................................................................30

Section 5.2 Authority; Enforceability...........................................................30

Section 5.3 Noncontravention....................................................................31

Section 5.4 Brokers' Fees.......................................................................31

Section 5.5 Financing...........................................................................31

Section 5.6 Investment Purpose..................................................................31

Section 5.7 Independent Investigation...........................................................32

ARTICLE VI COVENANTS OF THE PARTIES PRIOR TO CLOSING.....................................................32

Section 6.1 Consents and Filings................................................................32

Section 6.2 Operation of Business...............................................................32

Section 6.3 Access..............................................................................35

Section 6.4 Notice of Developments..............................................................35

Section 6.5 Title Insurance.....................................................................36

Section 6.6 Prepayment of Indebtedness; Release of Security Interests..........................36

Section 6.7 Prior Agreements Regarding Shares...................................................36

ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS...........................................37

Section 7.1 Representations and Warranties; Performance of Obligations.........................37

Section 7.2 No Litigation.......................................................................37

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Section 7.3 Authorizations......................................................................37

Section 7.4 HSR Act.............................................................................37

Section 7.5 Additional Items....................................................................37

ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER.........................................38

Section 8.1 Representations and Warranties; Performance of Obligations.........................38

Section 8.2 No Litigation.......................................................................38

Section 8.3 Authorizations......................................................................38

Section 8.4 HSR Act.............................................................................38

Section 8.5 No Material Adverse Effect..........................................................39

Section 8.6 Title Insurance Policies............................................................39

Section 8.7 No Claim Regarding Stock Ownership or Sale Proceeds................................39

Section 8.8 Additional Items....................................................................39

ARTICLE IX CONTINUING COVENANTS OF THE PURCHASER AND THE SELLERS........................................39

Section 9.1 Tax Matters.........................................................................39

Section 9.2 Proprietary Information.............................................................42

Section 9.3 Sharing of Information..............................................................43

Section 9.4 Cooperation in Litigation...........................................................43

ARTICLE X INDEMNIFICATION...............................................................................43

Section 10.1 Survival of Representations and Warranties.........................................43

Section 10.2 Indemnification Provisions for the Benefit of the Purchaser........................44

Section 10.3 Indemnification Provisions for the Benefit of the Sellers..........................45

Section 10.4 Indemnification Claims..............................................................45

Section 10.5 Determination of Adverse Consequences...............................................47

Section 10.6 Exclusive Remedy....................................................................47

Section 10.7 Special Environmental Indemnification for the Benefit of the Purchaser.............48

ARTICLE XI TERMINATION OF AGREEMENT......................................................................49

Section 11.1 Termination of Agreement............................................................49

Section 11.2 Effect of Termination...............................................................50

ARTICLE XII EMPLOYEES.....................................................................................50

Section 12.1 Employment by the Purchaser.........................................................50

iii

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ARTICLE XIII GENERAL.......................................................................................50

Section 13.1 The Seller Representative...........................................................50

Section 13.2 Press Releases and Public Announcements.............................................51

Section 13.3 No Third-Party Beneficiaries........................................................52

Section 13.4 Entire Agreement....................................................................52

Section 13.5 Succession and Assignment...........................................................52

Section 13.6 Counterparts........................................................................52

Section 13.7 Headings............................................................................52

Section 13.8 Notices.............................................................................53

Section 13.9 Governing Law.......................................................................54

Section 13.10 Amendments and Waivers..............................................................54

Section 13.11 Severability........................................................................54

Section 13.12 Expenses............................................................................55

Section 13.13 Construction........................................................................55

Section 13.14 Incorporation of Exhibits and Schedules.............................................55

Section 13.15 Specific Performance................................................................55

Section 13.16 Waiver of Jury Trial................................................................55

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EXHIBITS AND SCHEDULES

Exhibit A List of Sellers

Exhibit B Current Ownership of Companies

Exhibit C Sample Net Working Capital Calculation

Exhibit D Relative Value

Exhibit E Form of Escrow Agreement

Exhibit F-1 Form of Opinion of Sellers' Counsel

Exhibit F-2 Form of Opinion of Sellers' Counsel

Exhibit G-1 Form of Non-Competition Agreement

Exhibit G-2 Form of Non-Competition Agreement

Exhibit H Term Sheet for Incentive Plan

Schedule 2.2 Adjustments to Proceeds

Schedule 2.3 Methodologies for Balance Sheet

Schedule 3.2(g) List of Non-Competition and Non-Solicitation

Agreements

Schedule 4.3 Noncontravention

Schedule 4.4(a) Capital Stock

Schedule 4.4(c) Voting or Shareholder Agreements

Schedule 4.5(b) Operations of Administrators, Inc.

Schedule 4.6 Exceptions to Title

Schedule 4.7 Financial Statements

Schedule 4.8 Absence of Changes

Schedule 4.10 Taxes

Schedule 4.11 Contracts

Schedule 4.12 Related Party Agreements

Schedule 4.13 Litigation

Schedule 4.14(a) Employees and Multiemployer Plans

Schedule 4.14(b) Company Plans

Schedule 4.14(c) Accelerated Payments

Schedule 4.15(a) Customer Agreements

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Schedule 4.15(b) Significant Customers and Suppliers

Schedule 4.16 Authorizations

Schedule 4.17 Insurance

Schedule 4.18 Real Property

Schedule 4.19 Environmental Matters

Schedule 4.20 Brokers' Fees

Schedule 4.21(a) Intellectual Property

Schedule 4.21(b) Exceptions to Intellectual Property Ownership

Schedule 4.21(d) Licenses

Schedule 4.24 Terms and Conditions of Sale

Schedule 4.25 Bank Accounts

Schedule 4.26 Undisclosed Liabilities

Schedule 5.3 Required Purchaser Filings

Schedule 10.7 Environmental Conditions

Schedule 12.1 Non-continuing Employees

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STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this "AGREEMENT") is made and entered

into as of May 2, 2005, by and among Leucadia National Corporation, a New York

corporation (the "PURCHASER"), and each of the individuals listed on Exhibit A

attached hereto (each, a "SELLER" and collectively referred to as the

"SELLERS"). The Purchaser and the Sellers are referred to collectively as the

"PARTIES."

RECITALS:

WHEREAS, each of the Sellers owns the number of shares (and

applicable percentages) set forth on the ownership schedule attached as Exhibit

B, which shares, collectively, constitute all of the outstanding capital stock

(collectively, the "SHARES") of: (i) Idaho Timber Corporation, an Idaho

corporation ("ITC"), (ii) Idaho Timber Corporation of Boise, Inc., an Idaho

corporation, (iii) Idaho Timber Corporation of Texas, Inc., an Idaho

corporation, (iv) Alumni Forest Products, Inc., a Georgia corporation, (v) Idaho

Timber Corporation of Kansas, Inc., an Idaho corporation, (vi) Idaho Timber

Corporation of North Carolina, Inc., an Idaho corporation, (vii) Idaho Timber

Corporation of Albuquerque, Inc., an Idaho corporation, (viii) Idaho Timber

Corporation of Montana, Inc., an Idaho corporation, (ix) Idaho Timber

Corporation of Idaho, Inc., an Idaho corporation, (x) Idaho Timber Corporation

of Mountain Home, Inc., an Idaho corporation ("ITC MOUNTAIN"), (xi) Idaho Timber

Corporation of Carthage, Inc., an Idaho corporation and (xii) Idaho Cedar Sales,

Inc., an Idaho corporation (the companies listed in clauses (i) through (xii)

above are hereinafter referred to collectively as the "COMPANIES");

WHEREAS, the Companies are, collectively, engaged in the business of

manufacturing, remanufacturing, truss fabrication and selling of lumber products

(the "BUSINESS") at various locations throughout the United States; and

WHEREAS, the Purchaser desires to purchase, and each of the Sellers

desires to sell, all of the Shares held by such Seller as set forth on Exhibit

B, on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, to induce the Purchaser to purchase the Shares, and

to induce the Sellers to sell the Shares, and for other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, the

Parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions.

In addition to capitalized terms defined elsewhere in this Agreement,

the following capitalized terms used in this Agreement have the following

meanings for all purposes of this Agreement:

"ADJUSTMENT REPORT" has the meaning set forth in Section 2.3(c)

below.

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"ADVERSE CONSEQUENCES" shall mean any and all debts, obligations and

other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or

whether known or unknown, or due or to become due or otherwise), monetary

damages, fines, fees, penalties, Taxes, liens, interest obligations,

deficiencies, losses and expenses (including amounts paid in settlement,

interest, court costs, reasonable costs of investigators, reasonable fees and

expenses of attorneys, accountants, financial advisors and other experts, and

other expenses of litigation or alternative dispute resolution).

"AFFILIATE" has the meaning set forth in Rule 12b-2 of the

regulations promulgated under the Securities Exchange Act.

"AGREED AMOUNT" shall mean part, but not all, of the Claimed Amount.

"AGREEMENT" has the meaning set forth in the preface above.

"AS IF CONSOLIDATED BASIS" has the meaning set forth in Section

2.3(b) below.

"AUTHORIZATION" shall mean any approval, authorization, certificate,

certification, consent, order, variance, permission, license or permit to or

from, or filing, notice or recordings to or with, any Governmental Body.

"AUTHORIZED ACTION" has the meaning set forth in Section 13.1(c)

below.

"BUSINESS DAY" means any day of the year on which national banking

institutions in New York are open to the public for conducting business and are

not required or authorized to close.

"CAP" has the meaning set forth in Section 10.2 below.

"CERCLA" means the Comprehensive Environmental Response, Compensation

and Liability Act of 1980.

"CLAIM NOTICE" shall mean written notification which contains (i) a

description of the Adverse Consequences incurred or reasonably expected to be

incurred by the Indemnified Party and the Claimed Amount of such Adverse

Consequences, to the extent then known, (ii) a statement that the Indemnified

Party is entitled to indemnification under Article X for such Adverse

Consequences and a reasonable explanation of the basis therefor, and (iii) a

demand for payment in the amount of such Adverse Consequences.

"CLAIMED AMOUNT" shall mean the amount of any Adverse Consequences

incurred or reasonably expected to be incurred by the Indemnified Party.

"CLOSING" has the meaning set forth in Section 3.1 below.

"CLOSING DATE" has the meaning set forth in Section 3.1 below.

"CODE" means the Internal Revenue Code of 1986, as amended.

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"COMPANIES" has the meaning set forth in the recitals above.

"COMPANY EMPLOYEE" has the meaning set forth in Section 4.14(a)

below.

"COMPANY PLAN" has the meaning set forth in Section 4.14(b) below.

"CONFIDENTIALITY AGREEMENT" has the meaning set forth in Section 6.3

below.

"CONTROLLING PARTY" shall mean the party controlling the defense of

any Third Party Claim.

"DEBT" means any amount or other obligation payable by any of the

Companies under the Business Loan Agreement, dated as of September 18, 2003,

between Bank of America, N.A., as lender, and Idaho Timber Corporation and the

other parties thereto listed as borrowers, or any other document or instrument

evidencing indebtedness for borrowed money of any of the Companies, including,

without limitation, the aggregate principal amount of and accrued but unpaid

interest on any outstanding borrowings thereunder.

"DEBT HOLDER" means any holder of notes or other instruments

evidencing any Debt.

"DOJ" has the meaning set forth in Section 6.1.

"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred

compensation or retirement plan or arrangement, (b) qualified defined

contribution or defined benefit retirement plan or arrangement which is an

Employee Pension Benefit Plan, or (c) Employee Welfare Benefit Plan or material

fringe benefit or other retirement, bonus, severance, incentive, change in

control, equity or equity-based compensation, salary continuation for

disability, or vacation or other paid time off plan, program, agreement or

arrangement (whether written or otherwise).

"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA

Section 3(2) (excluding any Multiemployer Plan).

"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA

Section 3(l) (excluding any Multiemployer Plan).

"ENVIRONMENTAL CAP" has the meaning set forth in Section 10.7(e).

"ENVIRONMENTAL CONDITIONS" has the meaning set forth in Section

10.7(a).

"ENVIRONMENTAL DEDUCTIBLE" has the meaning set forth in Section

10.7(d).

"ENVIRONMENTAL LAWS" means any applicable statute, code, ordinance,

regulation, permit, judgment, Order, decree or injunction, or other legal

requirement, whether local, state, or national, and the common law, relating to

pollution or the protection of the environment, natural resources or exposure of

Persons or property to Hazardous Materials, including any statute, regulation,

administrative decision or order pertaining to (i) treatment, storage, disposal,

<PAGE>

generation and transportation of toxic or hazardous substances or solid or

hazardous waste; (ii) air, water and noise pollution; (iii) groundwater and soil

contamination; (iv) the Release or threatened Release into the environment of

toxic or hazardous substances, or solid or hazardous waste, including without

limitation emissions, discharges, injections, spills, escapes or dumping of

pollutants, contaminants or chemicals; (v) the protection of wild life, marine

sanctuaries and wetlands, including without limitation all endangered and

threatened species; (vi) storage tanks, vessels and containers; (vii)

underground and other storage tanks or vessels, abandoned, disposed or discarded

barrels, containers and other closed receptacles; and (viii) manufacture,

processing, use, distribution, treatment, storage, disposal, transportation or

handling of pollutants, contaminants, chemicals or industrial, toxic or

hazardous substances or oil or petroleum products, radioactive materials,

asbestos or asbestos-containing material, or solid or hazardous waste. As used

above, the term "environment" shall have the meaning set forth in CERCLA.

"ENVIRONMENTAL MATTERS" means any liability or obligation arising

under Environmental Law, whether arising under theories of contract, tort,

negligence, successor or enterprise liability, strict liability or other legal

or equitable theory, including (i) any failure to comply with an applicable

Environmental Law and (ii) any liability or obligation arising from the presence

of, Release or threatened Release of, or exposure of persons or property to,

Hazardous Materials at the locations where the Companies are conducting or have

conducted operations.

"ERISA" means the Employee Retirement Income Security Act of 1974, as

amended.

"ERISA AFFILIATE" means any trade or business (whether or not

incorporated) that is treated as a single employer with any Company under

Section 414(b), (c), (m) or (o) of the Code.

"ESCROW AGENT" means Wilmington Trust Company.

"ESCROW AGREEMENT" has the meaning set forth in Section 2.4 below.

"ESCROW AMOUNT" means the aggregate of the Indemnification Escrow

Amount and the Working Capital Escrow Amount.

"ESTIMATED NET WORKING CAPITAL" has the meaning set forth in Section

2.3(a) below.

"EXCLUDED LIABILITIES" has the meaning set forth in Section 10.7(f).

"EXPECTED CLAIM NOTICE" shall mean a notice stating (i) that, as a

result of a legal Proceeding instituted by or written claim made by a third

party, an Indemnified Party reasonably expects to incur Adverse Consequences for

which it is entitled to indemnification under Article X, (ii) the reasonable

explanation concerning this expected basis for indemnification and (iii) the

estimated amount of Adverse Consequences based on facts available to the

Indemnified Party.

"FINANCIAL STATEMENTS" has the meaning set forth in Section 4.7

below.

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"FTC" has the meaning set forth in Section 6.1.

"GAAP" means United States generally accepted accounting principles

as in effect from time to time; provided, that as and where indicated by this

Agreement GAAP shall be applied on an "as if consolidated basis" among the

Companies.

"GOVERNMENTAL BODY" means any government or governmental or

regulatory body thereof, or political subdivision thereof, whether federal,

state, local or foreign, or any agency, instrumentality or authority thereof, or

any court or arbitrator (public or private).

"HAZARDOUS MATERIALS" means any pollutants, contaminants or hazardous

substances (as such terms are defined under CERCLA or any Environmental Law),

pesticides, solid wastes and hazardous wastes (as such terms are defined under

the federal Resources Conservation and Recovery Act or any Environmental Law),

chemicals, other hazardous, radioactive or toxic materials, oil, petroleum and

petroleum products (and fractions thereof), asbestos or any other material (or

article or mixture containing such material), substance or waste listed or

subject to regulation under any Environmental Law.

"HSR ACT" has the meaning set forth in Section 6.1 below.

"INCOME TAX" or "INCOME TAXES" means any Taxes imposed on or measured

by net income.

"INCOME TAX RETURN" means any Tax Return relating to Income Taxes,

including any schedule or attachment thereto.

"INDEMNIFICATION ESCROW ACCOUNT" has the meaning set forth in Section

2.4 below.

"INDEMNIFICATION ESCROW AMOUNT" means $15,000,000.

"INDEMNIFIED PARTY" means a party entitled, or seeking to assert

rights, to indemnification under Article X of this Agreement.

"INDEMNIFYING PARTY" means the party from whom indemnification is

sought by the Indemnified Party.

"INDEPENDENT AUDITORS" has the meaning set forth in Section 2.3(d)

below.

"INTELLECTUAL PROPERTY" shall mean all (a) patents, patent

applications, patent disclosures and all related continuation,

continuation-in-part, divisional, reissue, reexamination, utility model,

certificate of invention and design patents, patent applications, registrations

and applications for registrations; (b) trademarks, service marks, trade dress,

Internet domain names, logos, trade names and corporate names and registrations

and applications for registration thereof; (c) copyrights and registrations and

applications for registration thereof; (d) computer software, data and

documentation; (e) inventions, trade secrets and confidential business

information, whether patentable or nonpatentable and whether or not reduced to

<PAGE>

practice, know-how, manufacturing and product processes and techniques, research

and development information, copyrightable works, financial, marketing and

business data, pricing and cost information, business and marketing plans and

customer and supplier lists and information; (f) other proprietary rights

relating to any of the foregoing (including remedies against infringements

thereof and rights of protection of interest therein under the laws of all

jurisdictions); and (g) copies and tangible embodiments thereof.

"INTERNAL SYSTEMS" shall mean the internal computer hardware systems,

software applications and embedded systems of the Companies that are used in its

business or operations.

"IRS" has the meaning set forth in Section 4.10(i) below.

"ITC" has the meaning set forth in the recitals above.

"KNOWLEDGE OF THE SELLERS" or "SELLERS' KNOWLEDGE" means the actual

knowledge (after due inquiry of appropriate personnel of the Companies) of any

of Larry Williams, Ted Ellis, Bryant Rudd, Scott Beechie, Rob Luce, George Karr,

Jack Beverage, Rusty Yazdanpour, Dave Taugher or Keith Larue.

"LATEST BALANCE SHEET" means the audited balance sheet prepared for

the Companies on an "as if consolidated basis" as of March 26, 2004.

"LAW" means any foreign, federal, state or local law (including

common law), statute, code, ordinance, rule, regulation or other requirement.

"LEASED REAL PROPERTY" has the meaning set forth in Section 4.18

below.

"MATERIAL ADVERSE EFFECT" means a material adverse change, event,

circumstance or development with respect to, or material adverse effect on, (i)

the business, assets, liabilities, operations or condition (financial or

otherwise) of the Companies taken as a whole (other than any adverse change,

event, circumstance, development or effect arising from or relating to (1)

general business or economic conditions, except for such conditions specifically

related to the industry in which the Companies conduct their business, (2)

national or international political or social conditions, including the

engagement by the United States in hostilities, whether or not pursuant to the

declaration of a national emergency or war or the occurrence of any military or

terrorist attack upon the United States or any of its territories, possessions

or diplomatic or consular offices or upon any military installation, equipment

or personnel of the United States, or (3) changes in GAAP or any other

accounting requirement), or (ii) the ability of the Sellers to consummate the

transactions contemplated by this Agreement. For the avoidance of any doubt, the

Parties agree that the terms "material", "materially" or "materiality" as used

in this Agreement with an initial lower case "m" shall have their respective

customary and ordinary meanings, without regard to the meaning ascribed to

Material Adverse Effect.

"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Section

3(37).

<PAGE>

"NET WORKING CAPITAL" means an amount equal to (A) all "current

assets" of the Companies (taken as a whole), minus (B) all liabilities of the

Companies (taken as a whole) that are classified as "current liabilities"

(which, for purposes hereof, shall exclude accrued interest on Debt, accrued

corporate income Taxes, bonus and profit sharing amounts accrued (or for which

checks have been issued and remain outstanding as of the Closing Date) by any of

the Companies during the fiscal year ended March 25, 2005, and any checks

outstanding for dividends or other equity-related distributions to any of the

Sellers), each as determined as of the Closing Date in accordance with GAAP in a

manner consistent with prior practices, methodologies and procedures and the

application of the accounting principles applied in preparing the Financial

Statements (to the extent such principles are consistent with GAAP). The

determination of Net Working Capital shall in any event be consistent with

Exhibit C and shall use the methodologies and treatment for certain items as set

forth on Schedule 2.3 attached hereto.

"NET WORKING CAPITAL BALANCE SHEET" has the meaning set forth in

Section 2.3(b) below.

"NET WORKING CAPITAL CALCULATION" has the meaning set forth in

Section 2.3(b) below.

"NON-CONTROLLING PARTY" shall mean the party not controlling the

defense of any Third Party Claim.

"NORMALIZED WORKING CAPITAL AMOUNT" means $44,115,758.00. The

Normalized Working Capital Amount shall be prepared consistent with Exhibit C

(which shows an example of the determination of such Normalized Working Capital

Amount) and shall use the methodologies and treatment for certain items as set

forth on Schedule 2.3 and shall in any event be calculated in accordance with

the principles and adjustments used in the determination of Net Working Capital

as set forth in the definition thereof.

"ORDER" means any order, injunction, judgment, decree, ruling, writ,

assessment or arbitration award of a Governmental Body.

"ORDINARY COURSE OF BUSINESS" means the ordinary course of business

consistent with past custom and practice.

"OWNED REAL PROPERTY" has the meaning set forth in Section 4.18

below.

"PARTIES" has the meaning set forth in the preface above.

"PERSON" means an individual, a partnership, a limited liability

company, a corporation, an association, a joint stock company, a trust, a joint

venture, an unincorporated organization, or a Governmental Body.

"PROCEEDING" has the meaning set forth in Section 9.4 below.

"PURCHASE PRICE" has the meaning set forth in Section 2.2 below.

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"PURCHASER" has the meaning set forth in the preface above.

"PURCHASER'S INVESTIGATIONS" has the meaning set forth in Section

10.7(b).

"REAL ESTATE LEASES" has the meaning set forth in Section 4.18 below.

"REAL PROPERTY" has the meaning set forth in Section 4.18 below.

"RELATIVE VALUE" means, as applied to any Seller, the ratio of the

value of such Seller's Shares to the value of all Shares being sold by the

Sellers in the aggregate, with the agreed upon percentages to be determined as

set forth on Exhibit D attached hereto.

"RELEASE" means any spilling, leaking, pumping, pouring, emitting,

emptying, discharging, injections, escaping, leaching, dumping, disposing of or

migrating into or through the environment or any natural or man-made structure.

"REMEDIAL ACTION" has the meaning set forth in Section 10.7(f).

"REMEDIAL LIABILITIES" has the meaning set forth in Section 10.7(f).

"RESPONSE" shall mean a written response containing the information

provided for in Section 10.4(b) below.

"SECTION 338(H)(10) ELECTIONS" has the meaning set forth in Section

9.1(e)(i) below.

"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,

as amended.

"SECURITY INTEREST" means any mortgage, pledge, charge, lien or other

encumbrance (whether arising by contract or operation of Law), other than (a)

liens for Taxes or assessments not yet due and payable, (b) mechanics'

materialmen's, carriers', workers', repairers', landlords' and other similar

liens arising or incurred in the Ordinary Course of Business relating to

obligations as to which there is no material default on the part of any of the

Companies or the validity of which are being contested in good faith, (c)

zoning, entitlement, conservation restriction and other land use and

environmental regulations imposed by a Governmental Body (provided that such

regulations have not been violated) or under the terms of leases of Real

Property, and (d) such other liens, imperfections in title, easements, leases,

licenses, restrictions, activity and use limitations, conservation easements,

encumbrances and encroachments that currently exist and which would be disclosed

by a survey or inspection of the Real Property leased or owned by the Companies

and which do not materially detract from the value or marketability of or

materially interfere with the present use of any Real Property subject thereto

or affected thereby.

"SELLER REPRESENTATIVE" has the meaning set forth in Section 13.1(a)

below.

"SELLER REPRESENTATIVE ACCOUNT" has the meaning set forth in Section

2.2 below.

"SELLERS" has the meaning set forth in the preface above.

<PAGE>

"SETTLEMENT DATE" has the meaning set forth in Section 2.3(e) below.

"SHARES" has the meaning set forth in the recitals above.

"SUBSIDIARY" means any Person with respect to which a specified

Person (or a Subsidiary thereof) owns a majority of the common stock or other

equity interests or has the direct power to vote or direct the voting of

sufficient securities to elect a majority of the directors or managers.

"TAX" or "TAXES" means (i) any and all taxes, charges, fees, levies

or other similar assessments or liabilities in the nature of a tax, including,

without limitation, income, gross receipts, ad valorem, premium, value-added,

net worth, capital stock, capital gains, documentary, recapture, alternative or

add-on minimum, disability, estimated, registration, recording, excise, real

property, personal property, sales, use, license, lease, service, service use,

transfer, withholding, employment, unemployment, insurance, social security,

business license, business organization, environmental, workers compensation,

payroll, profits, severance, stamp, occupation, windfall profits, customs,

duties, franchise and other taxes of any kind whatsoever imposed by the United

States of America or any state, local or foreign government, or any agency or

political subdivision thereof, (ii) any interest, fines, penalties, assessments

or additions to tax imposed with respect to such items or any contest or dispute

thereof and (iii) any liability in respect of the items described in (i) and

(ii) by reason of contract, assumption, transferee liability, operation of law,

Treasury regulation Section 1.1502-6(a) (or any predecessor or successor thereof

or any analogous or similar provision of state or local law) or otherwise.

"TAX RETURNS" shall mean any and all reports, returns, declarations,

or statements relating to Taxes, including any schedule or attachment thereto

and any related or supporting workpapers or information with respect to any of

the foregoing, including any amendment thereof.

"THIRD PARTY CLAIM" has the meaning set forth in Section 10.4(a)

below.

"TITLE COMMITMENTS" has the meaning set forth in Section 6.5 below.

"TITLE COMPANIES" has the meaning set forth in Section 6.5 below.

"TITLE POLICIES" has the meaning set forth in Section 8.6 below.

"TRANSACTION DOCUMENTS" has the meaning set forth in Section 4.2

below.

"WORKING CAPITAL ESCROW ACCOUNT" has the meaning set forth in Section

2.4 below.

"WORKING CAPITAL ESCROW AMOUNT" means $5,000,000.

<PAGE>

Section 1.2 Other Definitional Provisions.

All accounting terms not otherwise defined herein shall have the

meaning ascribed thereto by GAAP. All terms defined in this Agreement in the

singular shall have comparable meanings when used in the plural and vice-versa.

The words "hereof," "herein" and "hereunder" and words of similar import when

used in this Agreement shall refer to this Agreement as a whole and not to any

particular provision of this Agreement. Underlined references to Articles,

Sections, Schedules and Exhibits shall refer to those portions of this

Agreement. The use of the masculine, feminine or neuter gender herein shall not

limit any provision of this Agreement. The use of the terms "including" or

"include" shall in all cases herein mean "including, without limitation" or

"include, without limitation," respectively.

ARTICLE II

PURCHASE OF SHARES; PURCHASE PRICE

Section 2.1 Sale and Purchase of Shares.

Subject to the terms and conditions hereof, and in reliance upon the

representations, warranties, covenants and agreements made herein by the Sellers

and the Purchaser, the Purchaser shall purchase and accept from the Sellers, and

the Sellers shall sell, transfer, convey, assign and deliver to the Purchaser,

on the Closing Date, the Shares in the amounts, as applicable to each of the

Sellers and the Companies, set forth on Exhibit B.

Section 2.2 Consideration.

The aggregate purchase price payable by the Purchaser for the Shares

shall be an amount equal to One Hundred Thirty-Two Million Dollars

($132,000,000), subject to adjustment pursuant to Section 2.3 below (the

"PURCHASE PRICE"). At the Closing, the Purchaser shall pay (i) the Purchase

Price less (A) the Escrow Amount, (B) the amounts set forth on Schedule 2.2

hereto, (C) the aggregate amount of all outstanding loans by any of the

Companies to Affiliates of the Companies as set forth on Schedule 4.12 hereto,

and (D) any other amounts which the Purchaser and the Seller Representative

agree shall be paid directly by the Purchaser at the Closing in respect of

costs, expenses and other amounts which are the obligation of the Sellers

hereunder, to the Seller Representative by wire transfer of immediately

available federal funds to an account designated by the Seller Representative in

writing to the Purchaser at least two (2) Business Days prior to the Closing

Date (the "SELLER REPRESENTATIVE ACCOUNT") and (ii) the Escrow Amount to the

Escrow Agent in accordance with the terms of Section 2.4. In accordance with the

authority granted to the Seller Representative described in Section 13.1 hereof,

the Seller Representative shall be solely responsible for distributing any

payments from the Seller Representative Account on account of the Purchase

Price, including any payment, if applicable, made pursuant to Section 2.3(f)

below, to the Sellers. Seller Representative agrees to cause all such amounts to

be distributed from the Seller Representative Account to the Sellers based upon

the Relative Value (except to the extent otherwise agreed among the Sellers).

<PAGE>

Section 2.3 Net Working Capital Adjustment.

The Purchase Price shall be subject to adjustment as follows:

(a) At least two (2) Business Days prior to the Closing Date, the

Seller Representative shall estimate the Net Working Capital of the Companies

(taken as a whole) as of the close of business on March 25, 2005 (the "ESTIMATED

NET WORKING CAPITAL"); provided that, in the event Purchaser disagrees, in good

faith, with the Seller Representative's estimate, the Parties shall mutually

determine such estimate. The Estimated Net Working Capital shall be prepared

consistent with Exhibit C and shall use the methodologies and treatment for

certain items as set forth on Schedule 2.3 and shall in any event be calculated

in accordance with the principles and adjustments used in the determination of

Net Working Capital as set forth in the definition thereof. The cash

consideration payable at Closing by Purchaser to the Seller Representative

Account pursuant to Section 2.2 shall be (i) increased by the amount, if any, by

which the Estimated Net Working Capital exceeds the Normalized Working Capital

Amount or (ii) decreased by the amount, if any, by which the Normalized Working

Capital Amount exceeds the Estimated Net Working Capital.

(b) Within forty-five (45) days following the Closing, the Purchaser

shall have prepared and delivered to the Seller Representative (i) a balance

sheet of the Companies (prepared as if the Companies reported on a consolidated

basis with each other (an "AS IF CONSOLIDATED BASIS") as of the Closing Date

(the "NET WORKING CAPITAL BALANCE SHEET"), using the methodologies and treatment

for certain items as set forth on Schedule 2.3, and (ii) a calculation of the

Net Working Capital of the Companies as of the Closing Date, prepared on the

basis of the Net Working Capital Balance Sheet, which shall (A) be prepared

consistent with Exhibit C, (B) use the methodologies and treatment for certain

items as set forth on Schedule 2.3, (C) be calculated in accordance with the

principles and adjustments used in the determination of Net Working Capital as

set forth in the definition thereof, and (D) notwithstanding anything else in

the definition of Net Working Capital to the contrary, include as "current

liabilities" of the Companies any costs incurred by, or attributable to, the

Sellers that are obligations of any of the Companies, including, without

limitation, any amounts reflected in the Net Working Capital Balance Sheet in

respect of the items set forth on Schedule 2.2 hereto that are in excess of such

amounts set forth on Schedule 2.2 hereto (the "NET WORKING CAPITAL

CALCULATION"). The Net Working Capital Balance Sheet and Net Working Capital

Calculation shall be prepared in a manner consistent with the application of the

accounting principles applied in preparing the Estimated Net Working Capital. In

connection with the preparation of the Net Working Capital Balance Sheet, the

Seller Representative and Purchaser shall jointly cause to be performed a

physical inventory of all raw materials, work-in-process and finished goods

normally reflected as "inventory" on the financial statements of the Companies,

except with respect to consigned goods (for which actual March 25, 2005 figures

will be adjusted to the Closing Date based on the Companies' records) and

rolling stock.

Sheet and the Net Working Capital Calculation are delivered to the Seller

Representative pursuant to Section 2.3(b) hereof, the Seller Representative

shall complete its examination thereof and shall deliver to the Purchaser either

<PAGE>

(i) a written acknowledgment accepting the Net Working Capital Balance Sheet and

the Net Working Capital Calculation; or (ii) a written report setting forth in

reasonable detail any proposed adjustments to the Net Working Capital Balance

Sheet and the Net Working Capital Calculation (the "ADJUSTMENT REPORT"). If the

Seller Representative fails to respond to the Purchaser within such forty-five

(45) day period, the Seller Representative shall be deemed to have accepted and

agreed to the Net Working Capital Balance Sheet and the Net Working Capital

Calculation as delivered pursuant to Section 2.3(b) hereof. In the event of the

delivery of an Adjustment Report, the Purchaser and the Seller Representative

shall attempt to resolve the adjustments proposed therein within thirty (30)

days after delivery of the Adjustment Report, and the Seller Representative

shall be deemed to have accepted and agreed to the Net Working Capital Balance

Sheet and the Net Working Capital Calculation except as to the proposed

adjustments set forth in the Adjustment Report.

(d) In the event the Seller Representative and the Purchaser fail to

agree on any of the Seller Representative's proposed adjustments contained in

the Adjustment Report within thirty (30) days after the Purchaser receives the

Adjustment Report, then the Seller Representative and the Purchaser mutually

agree to jointly engage KPMG LLP, certified public accountants (the "INDEPENDENT

AUDITORS"), to resolve such dispute(s). As promptly as practicable thereafter,

the Seller Representative and the Purchaser shall each prepare and submit a

presentation to the Independent Auditors and shall cause the Independent

Auditors to make a determination as to each disputed item based upon the

presentations by the Seller Representative and the Purchaser and in light of the

terms and provisions of this Agreement; provided that the Independent Auditors

shall not make a final determination as to any particular item which is higher

than the highest position set forth by either of the Parties or lower than the

lowest position set forth by either of the Parties. The fees and expenses of the

Independent Auditors shall be apportioned between the Seller Representative and

the Purchaser in inverse proportion to the aggregate amounts reflected in the

determinations made by the Independent Auditors on all disputes in relation to

the respective positions of the Seller Representative and the Purchaser. All

determinations made by the Independent Auditors will be final, conclusive and

binding on the Parties.

(e) The Net Working Capital Calculation shall be determined based on

the Net Working Capital Balance Sheet delivered pursuant to Section 2.3(b), as

adjusted, if at all, pursuant to this Section 2.3. The date on which the Net

Working Capital Calculation is finally determined pursuant to this Section 2.3

shall hereinafter be referred to as the "SETTLEMENT DATE."

(f) In the event the Net Working Capital Calculation is less than the

Estimated Net Working Capital, the Seller Representative (on behalf of the

Sellers) shall (i) deliver written instructions signed by the Seller

Representative to the Escrow Agent directing the Escrow Agent to release to the

Purchaser from the Working Capital Escrow Account an amount equal to such

deficiency (with the remainder of such Working Capital Escrow Amount, if any,

being concurrently delivered to the Seller Representative), and (ii) to the

extent that the Working Capital Escrow Amount is less than such deficiency, pay

to the Purchaser within three (3) Business Days after the Settlement Date an

amount equal to the difference between (A) such deficiency and (B) the Working

<PAGE>

Capital Escrow Amount. In the event the Net Working Capital Calculation is

greater than the Estimated Net Working Capital, the Purchaser shall, within

three (3) Business Days after the Settlement Date (i) deliver written

instructions signed by the Purchaser to the Escrow Agent directing the Escrow

Agent to release the entire Working Capital Escrow Amount to the Seller

Representative and (ii) pay to the Seller Representative an amount equal to the

difference between (A) the Net Working Capital Calculation and (B) the Estimated

Net Working Capital. Any payment required pursuant to this Section 2.3(f) shall

be deemed to be an adjustment to the Purchase Price, and shall be made by the

wire transfer of immediately available federal funds for credit to the

recipient, at a bank account designated by such recipient in writing (or, if

amounts are owed to the Sellers, to the Seller Representative Account).

Section 2.4 Escrow.

In order to partially secure the indemnity obligations of the Sellers

as set forth herein (including the indemnities set forth in Article X and the

obligation to pay any deficiency owed pursuant to Section 2.3(f)), Purchaser and

the Seller Representative (on behalf of the Sellers) shall execute at the

Closing an escrow agreement in the form attached hereto as Exhibit E (the

"ESCROW AGREEMENT") with the Escrow Agent whereby each of the Indemnification

Escrow Amount and the Working Capital Escrow Amount shall be held in separate

interest-bearing escrow accounts (such accounts, the "INDEMNIFICATION ESCROW

ACCOUNT" and the "WORKING CAPITAL ESCROW ACCOUNT", respectively). The

Indemnification Escrow Amount shall be used to satisfy amounts payable by the

Sellers to the Purchaser pursuant to Article X hereof; provided that any

remaining amounts in the Indemnification Escrow Account shall be paid to the

Seller Representative on December 31, 2006, less the amount equal to any

unresolved claim or claims for indemnification against the Sellers pursuant to

Article X hereof, all as more fully described in the Escrow Agreement. The

Working Capital Escrow Amount shall be used to satisfy the Sellers' obligation

to pay any deficiency owed pursuant to Section 2.3(f) hereof and shall be paid

to the Purchaser and/or the Seller Representative, as the case may be, within

three (3) Business Days after the Settlement Date in accordance with Section

2.3(f) hereof and as more fully described in the Escrow Agreement. The Purchaser

and the Sellers agree that the Escrow Amount shall be treated as owned for all

Tax purposes by the Sellers and all income earned with respect to the Escrow

Amount shall be owned by Sellers and allocated to the Sellers for all Tax

purposes.

Section 2.5 Sales and Transfer Taxes.

The Sellers shall pay the cost of any and all stamp, transfer, goods

and services, sales, purchase, use, filing, value added, excise and similar

Taxes and fees which arise out of the transactions contemplated by this

Agreement, including, without limitation, any stamp or transfer Tax or filing

fee relating to the transfer of the Shares, whether now in effect or hereafter

adopted and regardless of upon whom said Tax or fee is imposed. The Purchaser

and the Sellers shall take all commercially reasonable steps to eliminate, to

the extent possible, all such Taxes arising out of the transactions effected

pursuant to this Agreement.

<PAGE>

Section 2.6 Further Assurances.

At any time and from time to time after the Closing, at the request

of the Purchaser and without further consideration, the Sellers shall execute

and deliver such other instruments of sale, transfer, conveyance and assignment

and take such actions as the Purchaser may reasonably request to more

effectively transfer, convey and assign to the Purchaser, and to confirm the

Purchaser's rights to, title in and ownership of, the Shares and to place the

Purchaser in actual possession and operating control of the Business to the

extent purchased hereunder. Notwithstanding the foregoing, the Sellers shall be

entitled to reimbursement from the Purchaser of all costs and expenses related

to any non-routine instruments or extraordinary actions requested by the

Purchaser.

ARTICLE III

CLOSING; CLOSING DELIVERIES

Section 3.1 Closing.

The consummation of the transactions contemplated by this Agreement

(the "CLOSING") shall take place on the date on which the conditions set forth

in Articles VII and VIII are satisfied or waived (the "CLOSING DATE") or at such

other time and date as the Parties may agree. The Closing shall be held at 10:00

a.m. at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York,

New York, or such other place as the parties may agree.

Section 3.2 Deliveries by the Sellers at Closing.

At Closing, the Sellers will deliver or cause to be delivered to the

Purchaser the following:

(a) certificates representing the Shares, duly endorsed (or

accompanied by duly executed stock powers) with signatures notarized, together

with any other documents reasonably required for the sale, conveyance, transfer

and delivery of the Shares to Purchaser;

(b) a certificate, dated the Closing Date and signed by the Seller

Representative, certifying the fulfillment of the matters set forth in Sections

8.1, 8.2 (insofar as it relates to Proceedings involving the Sellers or the

Companies) and 8.3;

or an Assistant Secretary of each of the Companies, certifying as to (i) the

completeness and correctness of attached copies of such Company's certificate of

incorporation and bylaws (including amendments thereto), (ii) resolutions of the

stockholders of the Companies approving the execution, delivery and performance

of this Agreement and the consummation of the transactions contemplated hereby,

and (iii) the incumbency and signatures of the officers of the Companies

executing this Agreement and any other certificate or document delivered in

connection herewith;

<PAGE>

(d) the resignation of such officers and directors of the Companies

as the Purchaser shall have previously requested in writing;

(e) certificates, dated as of a date not more than twenty (20) days

prior to the Closing Date, duly issued by the appropriate Governmental Body for

each of the Companies in the states of their respective organization, showing

the Companies are in good standing and authorized to do business in such

jurisdictions;

(f) the original minute books, stock books, ledgers and registers and

other similar corporate records of the Companies;

(g) each of the persons listed on Schedule 3.2(g) shall have entered

into a non-competition and non-solicitation agreement on terms substantially

similar to those contained in Exhibit G-1 (for any Seller who will be an

employee of the Companies following the Closing) or Exhibit G-2 (for any Seller

who will not be an employee of the Companies following the Closing), as

applicable, and such non-competition and non-solicitation agreements shall be in

full force and effect;

(h) a signed counterpart to the Escrow Agreement;

(i) evidence of all consents and Authorizations required to be

obtained under Schedule 4.3;

(j) evidence reasonably satisfactory to Purchaser that the prepayment

of all Debt, the release of all Security Interests in favor of any Debt Holder

(including obtaining authorization for the filing of all necessary termination

statements), and the release from any and all guarantees under the Debt, in each

case, as required by Section 6.6 hereof, has occurred or will occur concurrently

with the Closing;

(k) opinions of legal counsel to the Sellers in substantially the

form of Exhibits F-1 and F-2 hereto;

(l) certificates of non-foreign status for each Seller that comply

with Section 1445 of the Code;

(m) such customary affidavits and GAP undertakings as are reasonably

required by the Title Companies for the issuance of the Title Policies as

contemplated by Section 8.6 hereof;

(n) a copy of the amendment to the Idaho Timber Corporation Profit

Sharing and 401(k) Plan, containing provisions to permit special deferral

elections of quarterly bonus payments, which amendment shall have been executed

by the appropriate officers of ITC and shall be in full force and effect, in

form and substance reasonably acceptable to the Purchaser;

(o) an IRS Form 8023 for each Seller, executed by such Seller; and

<PAGE>

(p) such additional documents, instruments or items reasonably

requested by Purchaser to evidence the transactions contemplated hereby or to

transfer to the Purchaser access to and control over the Business, properties

and assets of the Companies.

Section 3.3 Deliveries by the Purchaser at Closing.

At the Closing, the Purchaser will deliver or cause to be delivered

to the Sellers the following:

(a) payment of the Purchase Price in accordance with Section 2.2

hereof;

(b) a certificate, dated the Closing Date and signed by an officer of

the Purchaser, certifying the fulfillment of the matters set forth in Sections

7.1, 7.2 (insofar as it relates to Proceedings involving the Purchaser) and 7.3;

prior to the Closing Date, duly issued by the appropriate Governmental Body in

its state of organization, showing the Purchaser is in good standing and

authorized to do business in such jurisdiction;

(d) a certificate, dated the Closing Date and signed by the Secretary

or an Assistant Secretary of the Purchaser, certifying as to the completeness

and correctness of attached copies of the Purchaser's charter, by-laws and

resolutions of the board of directors approving the Purchaser entering into this

Agreement and the consummation of the transactions contemplated hereby;

(e) counterpart signatures to each of the non-competition and

non-solicitation agreements described in Section 3.2(g);

(f) a signed counterpart to the Escrow Agreement;

(g) a summary of the terms of an equity-like incentive plan in the

form of Exhibit H hereto, outlining certain incentive rights to be granted to

management employees of the Companies following the Closing Date; and

(h) such additional documents, instruments or items reasonably

requested by the Seller Representative to evidence the transactions contemplated

hereby.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

As an inducement to the Purchaser to enter into and perform its

obligations under this Agreement, and in consideration of the covenants of the

Purchaser contained herein, the Sellers jointly and severally (except for the

representations made in Sections 4.2 and 4.4(b) below, which are made on a

several and not a joint basis) represent and warrant to the Purchaser that the

statements contained in this Article IV are true and correct as of the date

hereof and will be true and correct as of the Closing as though made as of the

Closing, except to the extent such representations and warranties are

<PAGE>

specifically made as of a particular date (in which case such representations

and warranties will be true and correct as of such date).

Section 4.1 Due Organization and Status.

Each of the Companies is a corporation duly organized, validly

existing and in good standing under the Laws of the state of its organization.

Each of the Companies is duly authorized to conduct business and is in good

standing under the Laws of each jurisdiction where such qualification is

required, except where the lack of such qualification has not had and would not

reasonably be expected to have a Material Adverse Effect. Each of the Companies

has full power and authority to carry on the businesses in which it is engaged

and to own and use the properties owned and used by it. The Sellers have

furnished to the Purchaser complete and accurate copies of the certificate of

incorporation and bylaws of each of the Companies. None of the Companies is in

default under or in violation of any provision of its certificate of

incorporation, bylaws or other organizational documents.

Section 4.2 Authority; Enforceability.

Each Seller warrants and represents that such Seller has the

requisite power, authority and capacity to execute and deliver this Agreement

and the other documents, instruments and agreements (such other documents,

instruments and agreements referred to as the "TRANSACTION DOCUMENTS") entered

into by such Seller in connection with this Agreement and to perform its

obligations hereunder and thereunder. Each Seller warrants and represents that

this Agreement has been duly and validly executed and delivered by such Seller

and constitutes, and each other Transaction Document to be executed and

delivered by each such Seller in connection herewith, upon its execution and

delivery by a Seller, will constitute, a valid and legally binding obligation of

such Seller, enforceable against such Seller in accordance with its terms,

subject to applicable bankruptcy, insolvency, reorganization, moratorium and

similar laws affecting creditors' rights and remedies generally, and subject, as

to enforceability, to general principles of equity (regardless of whether

enforcement is sought in a Proceeding at law or in equity).

Section 4.3 Noncontravention.

Except as set forth on Schedule 4.3, neither the execution, delivery

and performance of this Agreement or any other Transaction Document, nor the

consummation of the transactions contemplated hereby or thereby, will (a) result

in any violation of or default (with or without notice or lapse of time, or

both) under (i) any statute, regulation, rule, injunction, judgment, Order,

Authorization or other restriction of any Governmental Body applicable to any

Seller or any Company or by which any of the properties or assets of any Seller

or any Company are bound or (ii) the certificate of incorporation and bylaws or

comparable organizational documents of any Company, or (b) conflict with, result

in a breach of, constitute a default under, result in the acceleration of,

require any consent under, create in any party the right to accelerate,

terminate, modify, or cancel any agreement, contract, lease, license,

instrument, Authorization or other arrangement to which any Seller or any

Company is a party or by which any of them is bound or to which any of their

<PAGE>

respective assets is subject, except where such violation, conflict, breach,

default, acceleration, termination, modification or cancellation would not

reasonably be expected to have a Material Adverse Effect. Except as contemplated

by Section 6.1(a) or as set forth on Schedule 4.3, none of the Sellers nor any

of the Companies needs to give any notice to, make any filing or registration

with, or obtain any Authorization of any Governmental Body in connection with

the execution, delivery and performance by the Sellers of this Agreement or in

order for the Sellers to consummate the transactions contemplated by this

Agreement, except pursuant to the Hart-Scott-Rodino Antitrust Improvements Act

of 1976, as amended (the "HSR ACT"), or where the failure to give notice, to

file, or to obtain any Authorization would not reasonably be expected to have a

Material Adverse Effect.

Section 4.4 Capital Stock of the Companies; Transactions in Equity

Securities.

(a) Schedule 4.4(a) sets forth the authorized capital stock of each

of the Companies. The Shares are the only issued and outstanding equity in any

of the Companies. The Shares have been duly authorized and validly issued, are

fully paid and nonassessable and were offered, issued, sold and delivered by the

Companies in compliance with exemptions from registration under applicable state

and federal laws concerning the issuance of securities. The certificate number

ten (10) representing three hundred (300) shares of common stock, par value

$1.00 per share, of ITC, originally issued to Arden Dunker and subsequently

redeemed by ITC, has been cancelled in the books and records of ITC.

(b) Each Seller owns beneficially and of record all of the Shares

owned by such Seller as set forth opposite such Seller's name on Exhibit B. Each

Seller owns, and at the Closing will own, his or her Shares free and clear of

all Security Interests, voting trusts, restrictions and claims of every kind

(subject only to agreements existing immediately prior to the date hereof, all

of which shall be deemed to be terminated immediately prior to the Closing).

Each Seller represents that the Shares being sold by him or her are freely

assignable to the Purchaser. No Seller has granted any Person (other than the

Purchaser) the right or option to acquire any of his or her Shares. No Seller

has, and each Seller hereby waives, any preemptive or other right to acquire

equity interests in any of the Companies that such Seller has or may have had.

Each Seller hereby agrees to, and grants its consent and waives any claim

whether under contract, applicable Law or otherwise with respect to (i) the

termination at or prior to the Closing of any existing agreements or

arrangements with respect to (A) the Companies, (B) the transfer, sale, pledge

or other disposition by such Seller of such Seller's Shares and (C) the

transfer, sale, pledge or other disposition by any other Seller of the Shares

held by such other Seller, with termination of all such agreements or

arrangements to be effective without further action of any of the Sellers upon

satisfaction or waiver of all other conditions to Closing, (ii) each transfer of

Shares by each other Seller pursuant to the terms of this Agreement and (iii)

any other transaction which is required or reasonably requested to occur in

accordance with this Agreement or the transactions contemplated hereby.

commitment of any kind exists which obligates any of the Companies to issue any

of its authorized but unissued equity securities or to grant any right to

<PAGE>

acquire such equity securities. No Company has any obligation (contingent or

otherwise) to purchase, redeem or otherwise acquire any of its equity securities

or any interests therein or to pay any dividend or make any distribution in

respect thereof. There are no outstanding or authorized stock appreciation,

phantom stock or similar rights with respect to the Companies. Except as set

forth on Schedule 4.4(c), no Seller is a party to any agreement, voting trust or

proxy with respect to the voting, registration, redemption, sale, transfer or

other disposition of the Shares.

Section 4.5 Subsidiaries.

(a) All of the outstanding Shares are owned beneficially and of

record by the Sellers in the amounts set forth on Exhibit B. Except for (a) the

overlapping ownership of the Companies among the Sellers consistent with the

preceding sentence and (b) Administrators, Inc., an Idaho corporation, which is

a wholly-owned Subsidiary of ITC, none of the Companies has any Subsidiaries.

ITC is the sole owner of all of the outstanding capital stock of Administrators,

Inc., free and clear of all Security Interests, voting trusts, restrictions,

claims, options, warrants, rights, contracts, calls, commitments, equities and

demands. Each Subsidiary has all requisite corporate or entity power and

authority to own its properties and carry on its business as presently

conducted. All of the issued and outstanding shares of capital stock of each

Subsidiary are duly authorized, validly issued, fully paid, nonassessable and

free of preemptive rights. There are no outstanding or authorized options,

warrants, rights, agreements or commitments to which the Company or any

Subsidiary is a party or which are binding on any of them providing for the

issuance, disposition or acquisition of any capital stock of any Subsidiary.

There are no voting trusts, proxies or other agreements or understandings with

respect to the voting of any capital stock of any Subsidiary. None of the

Companies has any obligation to acquire equity or to make any capital investment

in any other Person.

(b) Except as set forth on Schedule 4.5(b), Administrators, Inc. (i)

owns no assets and is not subject to any liabilities of any kind (whether known

or unknown, contingent or otherwise, except for payment of wages to employees of

the Companies) and (ii) conducts no business or operations other than in

connection with effecting payroll transactions on behalf of ITC.

Section 4.6 Assets and Properties of the Business.

Except as set forth on Schedule 4.6, the Companies collectively own,

and have good and marketable title to, all of the operating assets, properties

and rights used or held for use in connection with the conduct of the Business,

free and clear of all Security Interests. All such tangible assets of the

Companies which, individually or in the aggregate, are material to the operation

of the Business are in operating condition and in a state of good maintenance

and repair (ordinary wear and tear excepted) and are suitable for the purposes

for which they presently are used and are sufficient for the Purchaser to

conduct the Business in the Ordinary Course of Business as it has been conducted

by the Sellers from and after the Closing Date without interruption.

<PAGE>

Section 4.7 Financial Statements.

The Seller Representative has provided to the Purchaser (i) the

audited consolidated balance sheet of the Companies, their Subsidiaries and

certain other Affiliates on an "as if consolidated basis" as at March 26, 2004

and the related audited consolidated statements of income and of cash flows of

the Companies, their Subsidiaries and certain other Affiliates for the year then

ended and (ii) the unaudited consolidated balance sheet of the Companies and

their Subsidiaries on an "as if consolidated basis" as at March 25, 2005 and the

related consolidated statement of income of the Companies and their Subsidiaries

for the twelve month period then ended (such audited and unaudited statements,

including the related notes and schedules thereto, are referred to herein as the

"FINANCIAL STATEMENTS"). The Financial Statements have been prepared in

accordance with GAAP applied on a consistent basis, are correct and complete and

fairly present in all material respects the financial condition of the Business

now being conducted by the Companies as of such dates and the results of

operations of the Business for such periods and are consistent with the books

and records of the Companies, subject, in the case of interim financial

statements, to normal and recurring year end adjustments and, in the case of the

unaudited financial statements, the absence of notes.

Section 4.8 Absence of Changes.

Except as set forth on Schedule 4.8, since March 26, 2004, none of

the Companies, individually or in the aggregate, has:

(a) suffered any Material Adverse Effect;

(b) canceled any material indebtedness owing to any of the Companies

or waived any material claims or rights, except in the Ordinary Course of

Business;

disposed of any material assets or properties except in the Ordinary Course of

Business;

(d) made any material change in any method of accounting or

accounting practice except to the extent required by GAAP;

(e) made any single capital expenditure (other than with respect to

timber) in excess of $150,000 or made any such capital expenditures in excess of

$500,000 in the aggregate;

(f) borrowed or agreed to borrow any funds, assumed, guaranteed or

otherwise become liable or responsible for the obligations of any Person (other

than by endorsement of checks for collection in the Ordinary Course of Business)

or made any loans, advances or capital contributions to, or investments in, any

Person other than any of the Companies;

(g) issued or sold any stock, equity interests or other securities or

any options, warrants or other rights to acquire any such stock, equity

interests or other securities;

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