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                                                           August 12, 1998


Mr. Richard Luse
Payless Cashways, Inc.
2300 Main, Suite 300
Kansas City, Missouri  64180

Ladies and Gentlemen:

         Please refer to: (a) that certain Amended and Restated  Promissory Note
dated  February 26, 1998 (the "Note")  executed by Payless  Cashways,  Inc. (the
"Maker") in favor of LaSalle  National Bank, as Trustee for UBS Mortgage Finance
Inc.,  as assigned to  Fortress  IOFP,  LLC,  (the  "Seller"),  in the amount of
$102,689,450.00; (b) the Loan Agreement dated as of December 2, 1997 between the
Maker and UBS Mortgage Finance,  Inc., dated December 2, 1997, as amended by the
First  Amendment to Amended and Restated Loan Agreement  dated February 26, 1998
(the  "Loan  Agreement");  (c) the  Security  Documents  as  defined in the Loan
Agreement  (the  "Security  Documents");  and (d) all other  documents  securing
Maker's  obligations  under the Note  (together  with the Loan Agreement and the
Security  Documents,  the "Loan  Documents").  You are  advised as follows  (the
"Notice"), effective as of the date of this letter.

         Assignment.  Seller has,  pursuant to that  certain  Master  Repurchase
Agreement  for  Mortgage  Loans and REO  Property,  dated as of August 12, 1998,
assigned all the Loan Documents to Greenwich  Capital Financial  Products,  Inc.
(the  "Purchaser").  This  assignment  shall  remain in effect  unless and until
Purchaser has notified Maker otherwise in writing.

         Payments. Please refer to any and all payments otherwise required to be
made to  Seller on  account  of  Maker's  obligations  under the Loan  Documents
(collectively, the "Payments"). Except to the extent, if any, that Purchaser has
instructed  Maker  otherwise in writing,  Maker shall make all Payments  only to
Purchaser in care of the following bank account:

                           Chase Manhattan Bank, New York
                           ABA #021-000-021
                           Account Name:  Greenwich Capital Financial Products
                           Account Number:  1400-95961
                           Reference:

or such other  account as Purchaser  shall  specify from time to time by written
notice to Maker.  Any payments made directly to Seller shall be null,  void, and
of no force or  effect,  and shall not be  deemed to  discharge,  in whole or in
part, or be applied  against or reduce,  any obligations of Maker under the Loan
Documents.

         Modifications  and  Waivers,  Etc.  No material  modification,  waiver,
deferral,  or release (in whole or in part) of any of Maker's  obligations under
the  Loan  Documents  shall  be  effective  without  prior  written  consent  of
Purchaser.


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         Please sign and return to Purchaser  one  counterpart  of the foregoing
Notice to Maker to confirm and evidence Maker's receipt of the foregoing.

Very truly yours,

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.


By:   /s/ Mark R. Jarrell
-----------------------------
Name: Mark R. Jarrell
Title: Senior Vice President

Seller  confirms the above Notice to Maker and directs  Maker to comply with the
Notice,  notwithstanding any contrary instructions or directions that Seller may
give  Maker at any  time,  unless  Purchaser  has  consented  to those  contrary
instructions or directions in writing.

FORTRESS IOFP, LLC


By:   /s/ Randall A. Nardone
---------------------------------
Name: Randall A. Nardone
Title:  Chief Operating Officer of Fortress Investment Corp.,
         the general partner of Fortress Partners, L.P., 
         the sole member of Fortress IOFP, LLC

CONFIRMATION BY MAKER

         The  undersigned,  Maker of the foregoing  Note and a party to the Loan
Documents, confirms the following:

         Receipt of Notice.  Maker has received the foregoing Notice to Maker.

         No Offsets or Defenses.  Maker has no offsets or defenses against
Maker's obligations under the Loan Documents.


Very truly yours,

PAYLESS CASHWAYS, INC.


By:    /s/ Richard G. Luse
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Name: Richard G. Luse
Title:   Senior Vice President - Finance

Date:   August 12, 1998
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